Sales forecast examples for business plans
A business plan is a blueprint for a company’s future. As businesses prepare for their next sales cycles, strategy is laid out in a business plan; highlighting important steps to take, changes to make, and improvements to positively impact the business. Business plans work to provide the framework an entire organization should follow, give investors insight into what they can expect, and show an industry how the company will move forward. Before any set-in-stone plans can be made, sales forecasting must be executed to set a baseline for anticipated sales outcomes for future cycles.
What is a sales forecast in a business plan?
For company leaders preparing business plans, sales forecasting is just that: the process of determining an estimate for future sales cycles. Perhaps the most critical component to any business plan is the data behind the expectation of future sales. Combined with details relating to a company’s organizational structure, target market, pricing, and financials, a sales forecast can provide investors with a concrete idea of a company’s potential for revenue growth.
How do you write a sales forecast for a business plan?
Preparing a sales forecast in a business plan starts by identifying the key metrics to measure and the methods to use.
Measuring for success
Before choosing a method to forecast, determining what those forecasts will measure is key. Typically, brands will choose to measure sales by units and/or dollars. Let’s break down these sales forecast examples for business plans:
1. Units: When businesses measure sales based off of units, they are analyzing a total number of products. This is largely determined by what a business sells, and how in-depth they want their forecast to be. If a website sells various packages of products or different services, they might forecast based on unit groupings or individual products. When products are sometimes sold together, they may determine a package is a unit for data purposes.
2. Dollars: Purely based on income in a given time period. Forecasting for dollars limits analysis of individual product sales and often won’t account for individual transactions. This can really add to the difficulties of sales forecasting; if a business doesn’t know how they’ll reach a certain dollar amount, including the number of sales made and how large or small those sales are, it can leave a lot of guesswork to figure out day-to-day. In turn, it becomes difficult for sales professionals to prioritize the opportunities they have in order to reach the goal established by a sales forecast.
Choosing the right methods
Because forecasting is largely determined by a business’ own unique criteria, the methods chosen to forecast will contribute to the overall sales forecast, and ultimately to the business plan as a whole. Businesses use techniques and tools that fall into several categories to help them consider not just their historical data, but also the opinions of their sellers and the current marketplace.
Here are three sales forecast examples for business plans:
1. Opinion-based sales forecasting: Placing a focus on human instinct, opinion (also known as qualitative) sales forecasting methods seek to gather and analyze expert opinions to determine the most probable outlook. These are the oldest types of sales forecast. 2. Historical sales forecasting: A more updated set of historical techniques rely on different inputs (many relying on hard or quantitative data) to analyze historical trends in the business to help estimate what will happen in the future.
3. AI-enabled sales forecasting: Utilizing smart machine learning technology, modern AI-enabled sales forecasting connects all the dots (historical data and opinion as well as market trends) using a shared network of data to produce the most accurate market forecast example in business plans.
Organize for consumption
A business plan directly impacts a brand’s strategy. That’s why it is critical to share a plan that is concise and easy to digest. While trickling down the levels of employees, investors, decision makers, etc. that need to understand what comes next, there may be some who are still asking “what is a forecast in a business plan?” Be sure to analyze the data and create clear materials and content that showcases:
- Measurable factors, like units expected to sell or dollars anticipate to come in
- Comprehensive description of processes and methods used
- Data graphs and visual elements that highlight important KPIs
Get accurate forecasts in real-time with Collective[i]
The best sales forecast examples for business plans are ones that are based on the most data and provide prescriptive recommendations for reaching goals. For large brands, even a 10% margin of error in forecasts can lead to millions of dollars allocated improperly, staffing missteps, and more. With Collective[i]’s platform of connected data, we provide real-time updates about forecasts and even produce recommendations to make improvements and help sellers reach — or even exceed — their goals.
Are you ready to let machine learning take your forecast to the next level? Explore Collective[i] to see how we can get you there.Explore Collective[i]