Why This Process Works: Tips for Success
Unless you already own or buy and existing business that offers true data you can analyze, you must start somewhere when learning how to forecast initial sales. In reality, even while you’re applying for a capital loan or seeking investors, it takes time to find lender and investors.
Both lenders and investors realize this, so while they analyze your business plan and background, your predicted sales forecast, as long as it’s realistic, is enough to garner interest in lenders and investors. If a lender or investor feels you are over-predicting sales, they will ask you after analyzing your data. Most likely the questions of lenders and investors (in the real world) comes to you slowly, giving you ample to adjust or reevaluate your projections. This shouldn’t worry, you, so expect it and be honest about any changes you make to your predictions.
New business owners should expect the loan process and lender interest to come slowly, which is common in the small business world. They do and will want to see at least your first three months of predictions versus actual sales along with how well you did on your cash flow forecasting and opening balance sheet to get an idea of the entire package you are submitting.
Finally, when you do present your initial sales forecasting data, make sure you include either a narrative or bullet points that explain how you came up with your predictions. If you researched competitors, state which competitors you analyzed. If you utilized a data research website, offer web links to prove your numbers.
No matter what you hear about lenders, investors or the willingness of government agencies to offer you funding for your business, in the real world, this process takes time and expect these agencies to ask many questions, including questions about how you determined your initial sales forecast.