What Is Sales Forecasting?
If you can’t predict or guesstimate how much of your product or service you plan on selling, you’ll never be able to figure out overhead expenses for your business. Sales forecasting is simply determining how much you think you’ll sell in a certain period, usually annually.
Sure you can buy fancy software that promises to do all the work for you, but in reality, the sales numbers have to come from your research and that means using a sample sales forecast template to guide you.
Realistic sales forecasts are most favored by investors and lenders as they are trained to determine unrealistic sales data and may question you if sales are over-predicted. It’s also important to learn how to predict sales on your own because only then can you really develop a cash flow forecast and since cash is king, you need to know how much revenue you expect to come in each month.
Most business experts will tell you once you’ve set that sales forecast, it is set in stone and you better meet those goals. I disagree with those experts; actually, you can modify sales forecasts, especially if you are a new business owner and are developing an initial sales forecast.
The trick behind sales forecasting is knowing your product or service and understanding your customers.
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