Forecasting Your Sales
By Jon Miles
Marketing Plan Success
Sales forecasts are the core of budgeting and planning for your marketing plan. Forecasts are the foundation of many decisions, such as inventory and capacity, associated with your plan. Sales are also very difficult to accurately predict. Luckily, there are some guidelines that can help you with the development of your sales forecast.
In order to forecast your sales, you will need to determine the demand for your product within the markets you are targeting. This is known as the Market Potential. There is no real formula for determining the potential of your product. You will need to perform market research or hire a firm to perform the research for you to determine this figure.
After determining the total demand determine the how much of your product you would sell if all customers knew of your product and had access to your product. The Sales Potential of your product is dependant on many factors, including the price, design, and competition. You need to ask yourself how attractive your product would be as the solution for your available consumers.
After you have determined the market potential and sales potential, you are ready to forecast your sales. Your sales forecast is what you actually intend to sell. This takes reality into account – all customers won’t be aware of your product and they won’t all have access to it either. Your sales forecast is dependant on your advertising, production and distribution efforts.
Multiply total market potential by the percentage of the market that would purchase your product. Then multiply this number by the percentage of the market that you plan to serve. This is your sales forecast.
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