One of the most difficult things to do as an entrepreneur is to predict the future.
Yet, without having an idea of how much sales you will produce, you may find yourself struggling. That’s why you need to forecast your sales.
Sales forecasting is a smart move, because when you know how much money to expect you can plan better. They help you create a realistic budget. (Paying bills and managing cash flow is an important aspect to your business success, right?)
And sales forecasting can help you decide what to sell and how to sell it for the best results.
So besides looking into a crystal ball, how can one predict how much money he or she should be making in the next week, next month or next quarter?
If you are keeping good records, you are already halfway there. Just take a look at how you’ve done in the past. What’s worked well? What was surprising? And what didn’t do as hoped?
Then, ask yourself these questions:
- How much can you realistically sell in a month? Note here: the key is realistically. It’s great to have profit goals that stretch you. Yet if they stretch you too much, you may never meet them. And your predictions will be moot.
- What do you charge for the products and services you sell? Are those prices reasonable for both you and the customer?
- What are the costs involved to produce your products and services? This cost should also include your time from conceptualizing to creating.
- How much are your operating expenses? Sometimes we forget to include these things since they aren’t directly related to one business product or service. They include: utilities, hosting, autoresponders, bank fees, etc
- Do you need to hire employees or contractors? If so, how many, and how much will you pay them?
- How much do you pay yourself? (Or did you forget that?)
- What additional expenses do you have? For example, credit card debt for your business, even if you used a personal card.
Your sales forecast is a simple calculation of anticipated expenses versus anticipated income or profits. If you already have a budget and have been tracking sales putting together a sales forecast is a simple task.
Once you have an understanding about how to create your sales forecast, it’s time to plan. Put together your forecast as part of your planning activities, yearly, quarterly or monthly. And be ready to adjust forecasts when necessary. After all, we can only control certain things in our own businesses. The outside world does affect our outcomes.
Looking for more ways to predict your future and make the most of it? Check out http://OperationCleaout.com where I share with you a step-by-step guide to prepare for your success.