Sheltowee Business Network Blog

Sales Forecasting Approaches Vary, But Must Be Done for 2020

Sales Forecasting Approaches Vary, But Must Be Done for 2020

Dec 20 2019

Sales Forecasting Approaches Vary, But Must Be Done for 2020

By Dawn Yankeelov

“The goals you set for yourself are a prelude to action, a track to run on, a course to take.”—Paul J. Meyer, Personal Development Entrepreneur, exceeding $3B in sales in his lifetime.

Planning for growth comes by actually doing the work of sales forecasting, because in the process of evaluation of your past months, demographic or related sales research, competitive analysis, and contemplation of industry trends known, you will find your path.

There is never one path forward in growing a business, but without assessment, knowledge-gathering, and strategic planning, new sales growth may become a distant hope for “next year.”

Sales forecasting often begins by asking your startup team tough questions and measuring past performance:

  • What did we achieve in growth this year? What have we learned about our business model?
  • What products and/or services are really ready for a full marketing launch or when will they be?
  • Do we know and understand our target audiences?
  • What sales goals do we have for Q1, Q2, Q3, and year-end of 2020?
  • What is known about our competition in the marketplace?
  • Do we have sales assigned to key players in our organization, and what are their strengths we can accentuate for achievement of the company vision?
  • Can we leverage existing contact lists, sales leads, and potential partners to our 2020 advantage and how are we going to do that?

Sales forecasting theories or techniques in business books may seem overly complicated, but really at their core, they are organizational and provide guidance to those who wish to achieve sales goals. Estimating future sales makes a company vision resonate with team members for action today. Sales forecasting techniques include those that are qualitative and quantitative in nature.  Quantitative are often considered objective, because they rely on data; but, as we know, many businesses rely on internal brain-trust information of seasoned executives, falling into brainstorming, intuition, or expert opinion approaches.

Looking to the past can be a wise step, if you have a least six months of data to analyze.  Time series analysis uses past sales records to predict future sales patterns.  This can be useful if you are in a seasonal sales cycle, for example, where you know there are annual peaks and valleys in moving product or services. Looking at the business economic cycle may be one step—particularly if you are in an industry affected by international trade issues, i.e. new tariffs, etc…If you have experienced tremendous success with one customer, look at what led to that sale and repeat with others in the same industry—known as random factor analysis.

Sifting through the activity of existing competitors can prove a rich resource.  If you have done your marketing research, you may find that you can turn known sales steps of a competitor to your advantage with digital marketing key words or other marketing campaign tactics.

Today’s software tools for sales forecasting include areas like:  sourcing management, demand optimization, inventory optimization, quality and compliance, and product lifecycle management.  These are clues to what you must consider in your sales areas, even if you are not ready for these types of tools. 

Where to find baseline tools:

Sales forecasting aids in many areas, including a better assignment of financial and other resources, and ultimately a real budget as well as an eye on cash flow calculation and even future employment.  Knowing your costs going into the year assists in achieving measurable results toward the bottom-line of productivity, sustainability, and most certainly profitability--the ultimate goal. 

Dawn Marie Yankeelov is Founder of Aspectx, her marketing firm of more than 30 years, Founder of the Technology Association of Louisville Kentucky, and Chief Communications Officer of the Sheltowee Business Network.