Many small business owners and entrepreneurs seek advice on how to forecast sales. It's easy to be optimistic about your company's future, but it isn't as easy to work out the details. How do you predict future sales? How can you know how much money your business will bring in? Looking into the future can be an intimidating task. The good news is you don't need to be a fortune teller to make an accurate forecast.
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Sales Forecast Calculator
What Is A Sales Forecast?
What is sales forecasting? Sales forecasting is the process of estimating future demand over a specific period based on past sales data. Proper sales forecasting provides your business with valuable insights to allow you to make decisions about sales strategy, market potential, and pricing.
If you do not manage sales cycle forecasting you run the risk of making poor business decisions, whether it's sales targets, products, or target markets. Ill-informed decisions can heavily impact your business in a variety of key areas, from supply chain management and profitability to customer satisfaction, inventory management, and storage costs.
Read more: What is a Sales Forecast?
How To Make A Sales Forecast
How do you calculate sales forecasts? You have two options. The first is using the formula to do your forecast manually. The other, and the best way, to achieve accurate sales forecasts, is by using an online calculator.
There are different forecasting methods that you can use.
Qualitative forecasting is ideal if you are a newer business without much data to work with. It factors in market research, comparative analyses, and expert opinion, whether it's your sales team or sales leaders.
Time series analyses are forecasts based on a large amount of historical data to draw from. It helps you factor in patterns, sales trends, and seasonal fluctuations. For example, when you look at your sales revenue from the last three holiday seasons, you can factor that into your forecast. If your cash flow isn't as high as it was preceding the season, you can factor that in as well.
The casual model is the most complex because it factors in competitor information, weather, marketing, promotions, and socioeconomic and economic factors. Historical data is key to this forecasting method.
To save time, use the above sales forecast calculator to forecast your business's sales levels.
How To Use The Sales Forecast Calculator
Our calculator supports the straight-line method of forecasting sales. For this, all you need to do is input the starting year, your revenue and the estimated sales growth percentage. Press calculate and the calculator will give you a forecast for the next five years.
How QuickBooks can help
Sales forecasting can be difficult if you do not have quick access to all your financial data. QuickBooks Online enables you to access up-to-date financial reports, including balance sheets, cash flow statements, and profit and loss statements, and even create your own customized reports in just a few clicks. QuickBooks automatically records and organizes your financial information, so it's quick and easy to access up-to-date reports whenever you need them. Visit our pricing page to sign up for a free 30-day free trial.
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