Getting your sales projections right is important for maintaining a healthy cash flow and keeping third parties such as shareholders, banks and investors happy. This month our top tips are dedicated to helping you predict the future.
- Benchmark: Unless you’re in a completely new product or service category, you should look at competitors’ growth rates to learn what pace is realistic. We have access to sophisticated benchmarking systems if you need help. Also consider reviewing other industries for inspiration and new ideas.
- Look for patterns: Most industries experience seasonal fluctuations – don’t forget to factor the peaks and troughs into your forecast.
- Break it down: Separate your sales by channel and product category – the more detail included in your forecast the better as it will build confidence and reassure investors.
- What ifs: Build different scenarios into your forecast to test its validity and the strength of your cash flow and business plan. What if the market goes up or down by 15%? What steps should be put in place for the range of possible sensitivities?
- Allow time: If your sales depend on a growing sales team, factor in time for them to get up to speed – it will take time for them to build relationships, knowledge and confidence.
