What Numbers Do You Need?
There's a popular misconception among many business owners that you need a solid background in finance, accounting or some other discipline that deals a lot with numbers in order to develop a sales forecast. In actuality, all you really need is the ability to make relatively good "guesses" based on the information you have on hand.
Of course, more information tends to lead to better guesses, but in the end, a sales forecast is simply your best guess of how much money you'll make in sales over the forecast period. Business planning software progams, such as Business Plan Pro, generally include some type of tool that will help you develop a sales forecast. However, it's just as easy to create your exhibit in Excel – or almost any other spreadsheet application, for that matter.
With that in mind, it's still important to be able to explain what logic you used to come up with your guesses, especially if you need to include the forecast in your business plan or defend it to business partners or potential investors. Here, we'll take a look at how to develop a simple sales forecast in Microsoft Excel 2007.
Even though we'll just be constructing a very basic forecast, you can easily expand on this forecast and the methodologies used to develop it to incorporate more complex situations. The Excel forecast and spreadsheet that we are developing here is available in the Entrepreneurship Media Gallery under the title Sample Excel Sales Forecast. You're welcome to download the file and modify it to suit your own business planning needs.