As long as companies are in the business of making money, the sales forecast will be a driving force behind many business decisions.
It works exactly the way it sounds. Sales forecasting is the process through which businesses estimate future sales of services or products for a week, a month, a year, or a quarter – giving you a target for units sold and revenue coming into the business.
These projections are guiding winds for how businesses budget resources, set goals, hire, plan supply chain logistics, prepare for high or low seasons, and chart a course for success.
The short answer? Everyone. When properly leveraged, sales forecasting sets businesses up for successful growth and resource management – whether you’re a budding startup, business giant, or anything in between.
Beyond internal operations, sales forecasting impacts business development with external partners. For example, startups can use forecasting to attract investors. A sales forecast details for investors a business’ projected revenue, ability to meet demand, and the potential for growth so they know what they’re getting into from the get-go.
If sales projects look healthy (and convincing), you’re more likely to land seed funding or other partners. Large, public companies need sales forecasts for earnings calls and quarterly reporting to keep shareholders.
A sales forecast is much more than a target for the sales department. Whether you are an established giant or a small fry, sales forecasting gives you the power of prediction – telling you what to do, how to do it, and when. C-suite leadership, management, and associates across organizations all look to sales forecasts to set goals and measure success within their respective departments.
But it is not all about numbers, charts, and revenue goals. One other thing sales forecasting excels at is hyping people up. It’s a barometer showing teams when they’re excelling. And if your team falls behind, the numbers and insights behind a sales forecast help departments adjust and create learnings for the next forecast.
So how do companies know how much they’ll sell in a given period? It’s impossible to predict with 100% accuracy as there’s always the chance of market disruptions (i.e., a pandemic) or unpredictable consumer trends (e.g., Beanie Babies) throwing wrenches in the status quo. But, every business needs to take its absolute best swing at a sales forecast to get all departments moving in the same direction.
It is as much art as it is a science, as it takes a little creative ingenuity to combine quantitative and qualitative information into a solid plan. You’ll need to factor:
Newer businesses entering the market shouldn’t guess at a sales forecast. With research and maybe even a consultant at their back, these companies can build a sales forecast until they can look into historical data of their own. Market research, surveys, and competitor stats can go a long way.
Even as complexity rises in the sales process and consumer habits, sales forecasts will never go out of style. Yet with so many things impacting sales, businesses would do themselves a favor by building solid forecasts with flexibility to account for the inevitable curveballs.
It doesn’t hurt to have a math whiz on hand to build and adjust forecasts, but you can get pretty far with the right modeling and forecasting tools.
That’s where Causal comes in. Without the need for Excel or CSV files, you can track and manage all your critical data points and visualize them from easy-to-use dashboards.
This makes it easier to share data across the organization, find the trends, and make adjustments to keep the business aligned to growth goals year-round.