Your sales forecast sets your standards and goals for the next year. Going in with an ambitious but achievable forecast can push your business to lengths you didn’t even know it could reach. That’s all really exciting but first, you have to make sure you know exactly what you’re signing yourself up for. Planning ahead and defining reasonable goals for your business will keep you on track and allow you to make better business decisions in your future. So, how do you get started with your business forecast for 2020?
Where do you want to take your business?
The first question you should ask yourself is what are you hoping to achieve next year? Are you looking to expand a product line, add more services, increase outreach…? These things need to be carefully considered in order to make reasonable and sustainable goals for your next business cycle. Looking at profit/loss statements from previous years (if available) will help you gage what reasonable goals are and where your business model needs improvement. Think about how you can breakdown your business model into tangible sales categories that will help you organize your forecast and make it easier to keep track throughout the year.
Knowing the goals you have in mind for next year: how much should you be spending? Let’s say your goal is to increase sales of a certain product or increases awareness of a certain service, this means that not only do you have to account for that new product/service but you need to focus on new marketing strategies and hiring a new sales person. These things are absolutely doable but they do require thorough planning, especially if you have a limited budget.
How do I make my goals more tangible?
Breaking your goals and spending down into tangible units can help make the planning process a whole lot smoother. Whether you think about your sales in terms of units or dollars is up to you though. It just depends on whether you’re thinking in terms of individual components or total money. Knowing which of these is better for your business is up to you!
Using sales data from previous years can also help you gage which method is better for you and how you can use these units to improve your business model for the next year. Try out bottom-up forecasting if you’re struggling with tangible goals. This is when you work your way up from low-level company data to revenue to estimate your company’s future performance.
*Try using visuals to get a better overview of all your company stats!
How do I successfully integrate new products/services?
Use previously successful products as guides on how to successfully introduce a new product. Consider the marketing, product presentation, pricing etc. involved and see how you can emulate this to pave a successful path from the new products you’re introducing. Knowing how much the average customer spends at your store can also help you understand where this new item falls into your already established service line. Make sure to take into account other expenses associated with this product when estimating prices. If you’re struggling with this, another thing to consider may be how customers interact with and find out about your products and services. This can help you understand where you need to focus your resources in terms of successfully introducing new products.
What time frame should I be looking at?
You can make short and long term sales forecasts but always start with one year and then bump up if necessary for specific business goals that take longer. Just making a sales forecast doesn’t do you much good if you don’t keep regular track your progress, especially over longer periods of time. Refer back to your forecast throughout your business cycle to see how well your predictions align with your sales. This can help you make adjustments to your business plan as well as helping you create better future goals.
No doubt this whole process sounds daunting – but it doesn’t have to be! You know your business better than anybody. As long as you make tangible goals that make sense for your business, you can set up a successful sales forecast for 2020!
Need help with financing for 2020? Get started early, find out what options are available to you here: