Whether you are running your own business, or looking after a sales team, there are many reasons why you need to understand sales forecasting. In this article, I want to share with you the reasons why you need accurate sales forecasting within your business or your team.
Before I share these however, it is important to understand exactly what sales forecasting is.
Put very simply, a sales forecast predicts what a sales person, a team or even a company will sell weekly, monthly quarterly or annually.
Of course, it is very hard to become Mystic Meg and to forecast perfectly, however even if you are within 10-15% of your actual results can massively, positively, impact your business. Therefore, no matter your business size, it is so important to forecast your sales.
So, why should you have accurate sales forecasting?
Predict and Plan
Through good, solid, sales forecasting you will be able to plan ahead for any rises, or even nips in sales. Although sales are a very good and positive thing, an increase or a decrease can soon effect the business in a manner of ways.
Good sales forecasting will allow you to:
- Hire temporary staff.
- Move around projects to ensure operations aren’t crippled.
- Bring in additional equipment.
- Keep appropriate levels of stock.
We have all seen it too often whereby a business can suddenly have a massive increase in sales, but they don’t have the people power or inventory to keep up with orders, which leads to unhappy customers and refunded orders – no-one ever wants that!
Wise Investments and Decisions
The majority of businesses want to always look to the next steps for growth; whether this is a new location, more people, or new softwares. However, it is hard to predict how the business will look in a set period of time. Using sales forecasting will allow you to make those decisions with a bit more backing than just guess work.
To Nip Problems in the Bud
By having a sales forecast in place, you will be able to notice where trends are occurring and track them against your forecast. For example, if your team is trending 40% lower than where they should be at that point in the month or the quarter, you can then start investigating.
Improve Morale
Finally, one of the most important aspects of sales forecasting is the impact it can have on your entire sales team. There are a lot of benefits to sales forecasting which we have listed above. And of all these factors can provide assurances to employees, staff and management and can allow people to feel safe and secure in their roles.
On the flip side, a lack of forecasting can lead to poor decisions being made which could lead to layoffs, project delays, or undue pressure on team members.
As experience sales professionals, we here at C3 Sales and Consulting can support you and your business in understanding your sales forecasts, and to set up processes that will allow you to grasp the benefits of forecasting. If you feel a lot of your business decisions are being run on guess work – be sure to get in touch with us.
