A sales forecast , also known as a sales projection or forecast, is the estimate of possible resources that a business can obtain in a given time, whether monthly, quarterly or annually.
Have you ever wondered how to know if your business is growing to its full potential? Or if you are investing in the right areas? The answer to these questions can be given to you by a fundamental tool for any entrepreneur: the sales forecast .
This tool will help you make decisions, as it leads to different actions to reach the estimated figures. In this article, we will explain how to make an accurate forecast to boost the growth of your company.
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What is a sales forecast?
Sales forecasts are rigorous reports that estimate what a salesperson, sales team, or an entire company can sell over the course of a week, a month, a quarter, or an entire year.
This tool works for businesses of any size as it helps reduce uncertainty by creating a platform for planning business actions.
A sales forecast can usually be done in Excel, although it is also possible to work on it using CRM or data analysis software.
These reports are based on past sales and performance, along with other factors such as business strategy, market trends, different temporalities, etc., to create a more reliable estimate.
It is important to note that a company's sales forecasts are only an estimate, so they should not be taken as the exact performance of your business. It is always possible to make changes based on the actual sales you make.
What is a sales forecast for?
Sales forecasts for a company are important because all members of the company use this information to determine their goals. Other major objectives of a sales forecast include:
Plan your expenses and income better.
Predicting customer behavior.
Make strategic investments for the business.
Evaluate the performance of the sales team.
Determine upcoming hires.
Define the marketing budget.
Correct course if inconsistencies are noticed.
Determine the number of leads the marketing team needs to generate.
Support the search for financing.
Measure the progress of the company's objectives.