If you’re a small business owner, you have a lot of responsibilities to juggle on a daily basis.
Amidst this, it’s all too easy to neglect the pivotal role that sales forecasting plays in the enduring prosperity of your business.
What is sales forecasting?
Sales forecasting involves anticipating future sales, by drawing upon historical data, market trends, and other influential factors.
This process equips business owners with invaluable insights to inform their operational, marketing, and financial decisions.
A sales forecast provides a clear picture of expected revenue, empowering you to identify potential risks and opportunities, allocate resources suitably, and stimulate growth.
Why should SMEs prioritise sales forecasting?
Whilst offering a view into your projected business income and unveiling new opportunities, sales forecasting presents several additional benefits:
Accurate sales predictions assist you in making decisions about when to expand, allocate resources, or curb expenses. This is particularly vital for SMEs that often operate with limited financial resources.
By anticipating demand, you can streamline inventory levels, minimise waste, and ensure timely product availability.
This is especially pertinent for SMEs experiencing seasonal demand fluctuations or planning to introduce new products or services.
Moreover, comparing actual outcomes with your forecasts can help evaluate performance, identify areas for enhancement, and modify your strategies as necessary.
Approaches to sales forecasting
The best sales forecasting method for your SME depends on the nature of your business and the data at your disposal.
Here are three widespread methods:
By understanding how leads progress through your funnel, you can develop a more accurate sales forecast and pinpoint areas for improvement.
Struggling with sales forecasting?
Here are some helpful tips:
Contact us for support with sales forecasting and your business plan.