What is sales forecasting to you? What does it for your business? How do you calculate your forecasts and act on the results?

Most people don’t understand the point of it, because usually it doesn’t work, for them at least. But with the right techniques, sales forecasting can make a big difference in any business. Here’s how.

To me sales forecasting is fundamental to any business plan, and business owners, investors, accountants and bank managers all agree. Without some understanding of future sales, planning cash flow is impossible. Planning customer service is likewise difficult. Deciding how much to spend on variable costs – wages, materials and equipment – is gambling without a form book.

There’s another, and equally important, reason to forecast sales. Figuring out who will buy what and when, then checking what actually happens is the best way owners, managers and representatives can figure out what works for their business, and what doesn’t. And that includes just how good the sales people really are.

To summarise – without sales forecasting the business is like a ship without a rudder. There’s no way of controlling where it goes, and the wind usually blows ships onto the rocks.

Disaster is ever present for any business, or sales person, who doesn’t forecast sales. Regardless of whether the planning works out, or whether the forecast turns out to be accurate, or the type of business, failure to plan future income with sales forecasting is planning to fail.

Interested in finding out more about what sales forecasting is and how to use it to your competitive advantage, and business success? Our tutorial Sales Probability Process Management will lift your game in the race against competition.

We’ve developed sales forecasting from art into science and embedded in a total philosophy for sales management, including philosophy, strategy, tactics, processes, systems and tools all explained in our Success in Sales Management series.