People, such as investors, are especially interested in your business plan for growth, and your retail sales forecast is a big part of what they take into consideration. It should show your predicted monthly sales for the next year and by year for the next two-to-five years.
That doesn’t mean you have to get your sales forecast perfect; it is always part past data, part common sense, part research, and part guessing. These tips will help point you in the right direction to having a reasonable sales forecast.
- Project unit sales. Whether you are selling a product or service, start by forecasting your unit sales per month. It is easier to forecast by breaking things down to component parts. For example, a product-oriented business will show number of units, such as packs of notepads or number of cars sold. Don’t think this doesn’t apply to you because you have a service-oriented business. You can still apply this principle by breaking your forecast down, such as how a lawyer bills by the hour. Remember to take peak buying seasons into consideration; an accountant may forecast an increase in billable hours every year at tax time, while a florist may see a rise in the sale of roses around Valentine’s Day.
- Use past data. Recent sales data can be your best tool to forecasting the future. Statistical analysis, for example, will help you spot trends that you can apply to predict the future. Past data is also useful when forecasting sales of a new product. It is easier to make an educate guess on these sales when you can use an analysis of an existing product. Are you launching a new software product? Base your forecast on the sales of a similar software product.
- Project prices. After you developed your forecast that projected unit sales monthly for 12 months and then annually, you need to project your prices. This area is another where your research and analysis of past data will pay off. Use it to help you guess future pricing and any fluctuations you notice as a trend.
Forecasting your retail sales isn’t as difficult as it first seems. If you have any questions or need help with your sales forecast, contact us.
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