A chart will also highlight potentially unreasonable guesses at your sales growth. $100? For example, in 2015, more than 1.4 billion smartphones were sold worldwide. How to do a Sales Forecast: The Exponential Smoothing Technique. Technically speaking, making a sales forecast for a business plan is simple—you just need Microsoft Excel or Google Sheets. A chart will also highlight potentially unreasonable guesses at your sales growth. The easiest way to convert your sales forecast into a management tool is to have a monthly financial review meeting where you look at your business’s finances. Instead, you should focus on broader categories like lunch, dinner, and drinks. Your sales forecast is also your guide to how much you should be spending. If you are not familiar with these 2 methods of building financial estimates, these are explained in details in our article on how to do a market for a business plan. . Just remember that sales forecasting doesn’t have to be hard. What is a Sales Forecast? When you sit down to fill out your sales forecast template, you need to know: A). Now, you don’t always need to be profitable, especially if you are trying to expand aggressively. Update your forecast with the actual values as time progresses. The process of preparing a sales forecast for a new business involves researching your target market, your trading area and your competition and analyzing your research to guesstimate your future sales. //]]> She has run an IT consulting firm and designed and presented courses on how to promote small businesses. What is the purpose of your analysis? If you’re starting a clothing shop, forecast the key categories of clothing that you sell, like outerwear, casual wear, and so on. For a retail business with a brick-and-mortar location, for example, what is the average sales volume per square foot for similar stores in similar locations and similar size? There are many factors that can potentially affect sales that should form the basis for your sales forecast, including: Sales forecasting for an established business is easier than sales forecasting for a new business; the established business already has a sales forecast baseline of past sales. Plus, it’s easy to print or create PDF financial reports with the right level of detail to share with your team. I really recommend try recurrent neural networks to forecast, my tip is just use much more data. On average, do they spend $20? New entrepreneurs frequently ask me for advice about forecasting their sales. Promotional mix 3. Editor’s note: This article was originally published in March 2016, and was updated in August 2020. For example, if you plan on selling 1,000 units at $20 each, you’ll make $20,000. As you learn more about your business and your customers, you can change and adjust your forecast. Either way, knowing if you’re meeting your goals or not will help you determine if you need to make some shifts in strategy. Here we changed some sales value figure to get the accurate forecasting result as shown below. How are people finding out about this new smartphone company? to guess here, and the best way to refine your guess is to, go out and talk to your potential customers and interview them. If you only have a few months of data, use it to estimate the next 30 days or so. (If you do happen to be able to see into the future, please just skip the whole startup thing and go play the stock market. Forecast based on sales of existing products The most common forecasting method is to use sales volumes of existing products to forecast demand for a new one. To perform a moving average forecast, the revenue data should be placed in the vertical column. You’ll be surprised how accurate a number you can get with a few simple interviews. If you don't wish to contact them directly you can infer future activity based on the health of the customer industry. After creating an initial forecast using your best estimates create another forecast based on  optimistic numbers and another based on pessimistic ones. Start by thinking about how many potential customers you might be able to make contact with; this could be through advertising, sales calls, or other marketing methods. But beyond just setting the stage for a complete financial forecast, your sales forecast is really all about setting goals for your company. Before they have much historical sales data, lots of startups make this mistake—and it’s a big one. (function(){window.pagespeed=window.pagespeed||{};var b=window.pagespeed;function c(){}c.prototype.a=function(){var a=document.getElementsByTagName("pagespeed_iframe");if(0