Small-business owners can forecast future sales using a mix of quantitative data and qualitative research. Analyzing past performance and discussing potential trends can provide you with the combination of hard numbers and expert projections that will help you generate accurate information to manage your business.
One of the quickest ways to forecast sales is to contact your current customers and clients and discuss their purchasing plans for the coming year. If possible, pinpoint their spending by quarter so you can better plan your production and cash flow. Have your sales reps ask if customers would be interested in a pre-payment discount. This technique helps you lock in sales, since customers won’t go to a competitor if they’ve already pre-paid for an order with you. You also can talk to potential customers using focus groups, online surveys or phone calls to find out why they haven’t purchased from you in the past and if there’s anything you can do to get their business.
Review Previous Sales
While it might seem obvious, a review of last year’s sales can provide more than just raw numbers. If you discuss your historical sales figures with your marketing and sales teams, you can learn why you had peaks and valleys, take steps to strengthen shaky accounts, spot one-time sales spikes or drops that aren’t likely to happen again, and find opportunities that can help you increase sales. Analyze your data by territory to determine if a new rep or new customer base might affect your sales.
Research Industry Information
If you are in an industry with a professional association or society, visit the organization’s website and look for marketplace predictions, trends and other information that might affect your sales. For example, a new technology might make your product or service less necessary. New legislation might make your product more expensive to use, or make foreign companies more or less competitive. Government agencies, academic institutions and business magazines are also good sources of marketplace data.
Meet With Marketing
Talk with your marketing department to review last year’s advertising campaigns, promotions and other sales and communications programs. Determine if any were one-time efforts that won’t be repeated. Ask about the dates of any new campaigns that might cause a temporary increase in sales. Ask about new product launches, changes to existing products or new distribution channels that might affect sales volumes.
Talk to Vendors
Old-fashioned gossip and grapevines can also help you forecast sales. Ask your vendors and suppliers if they are aware of any new competitors, technologies, products or price increases that might affect consumer demand or sales volumes. An industry change that affects your suppliers can raise or lower your cost of manufacturing, which can force you to raise prices and possibly lose some sales volume.