Sales forecasts are a great tool to minimize confusion and set yourself on a path to achieving sales goals. Let’s look at why you should use a sales forecast and a straightforward process to building your own.
What is sales forecasting and what are its main benefits?
Sales forecasting is an estimation process salespeople and business people use to anticipate their sales for the period: expected sales revenue.
A sales forecast’s greatest benefit is that they give salespeople direction: showing salespeople their route to their sales target. Additionally, sales forecasts act as early warning systems, helping salespeople to recognize waning progress before it’s too late.
Why should you keep your own sales forecast?
As a salesperson, having your own sales forecast helps you:
- Have peace of mind that you know where your numbers are going to come from.
- See how you’re progressing towards your target.
- Course correct when you notice you’re straying away from your target.
- Feel motivated from having a clear plan ahead of you.
Make sales forecasting easy with the 4 step sales forecast
On a piece of paper, or in a spreadsheet tool like Excel or Google Sheets, note down your target for the period and list all your customers.
Target for the period= $30,000.00
You have 7 customers.
Begin splitting up your target by allocating amounts beside each customer based on how much you’re expecting them to spend or buy over the period.
Customer 1= $4000
Customer 2= $7500
Customer 3= $960
Customer 4= $6670
Customer 5= $9000
Customer 6= $430
Customer 7= $900
Now plug these forecasted figures into a timeline. Your timeline will help you prioritize when customers should be contacted, when you’ll set up meetings, and when you’ll pitch offers.
Additionally, if you realize a customer might have the potential to spend/buy more, you can use your timeline to plan activities which could help you win a larger deal.
Need to achieve $30,000 target by 31 March.
- You’ll need to start contacting all customers early that month.
- You might need to schedule visits ahead of time to ensure you’ll be able to close deals before the period ends.
- Customer 6 may have the potential to spend $700 - what will you need to do, and when, to secure that extra spend by 31 March?
As the period goes on, make adjustments to your original forecast and timeline.
- Customer 5 isn’t looking like they’ll spend $9000, but Customer 1 might be able to spend another $2000.
- Adjust your activities timeline to reflect what’s required to secure an extra $2000 from Customer 1.
Over time, you’ll fine tune the 4-step sales forecast to suit your needs: don’t hesitate to switch it up! However, don’t forget to continually update your forecast. If your forecast isn't updated, you won’t have clear direction and the foresight to take action if your sales slow down.
If you’d like more sales tips, you might like to check out this blog here about what to include in a top-tier sales deck.