Is it going to rain tomorrow?

In lockdown, who cares! But in the real world, having some idea of what the future holds is pretty important. And for your business it can be vital!

Do you do sales forecasting? 

True, it’s difficult to get right, but forecasting is not about absolute accuracy, it’s having an idea of what is going to happen in the future within your business.

Does it really matter? Actually, yes. Without knowing what you are likely to invoice over the coming months, you have no ability to plan anything in your business. 

Knowing whether you have invoices going out and money coming in is important. 

But how to come up with that forecast? Try one of these ways:

If you have regular billings to contracted clients.

You have invoiced around the same for the last 6 months and nothing is going to change much. Your forecast is going to be close to last months billings. Simple.

 If you sell whatever you can buy.

In this case your constraint is what you bought, have in stock or can get your hands on at short notice. Your forecast can be taken from your stock in hand and whatever you have purchased and is being delivered.

 Sales vary depending on what our team sells.

Many call this traditional forecasting and it is the most challenging to predict because you are relying on each member of your sales team to accurately predict what they are likely to sell.  Your forecast will take account of sales peoples’ predictive abilities and also their customers’ buying processes.

Good luck!

To be effective, you can invest in a good sales CRM that allows you to track clients, quotes, opportunities, and sales in plenty of detail to be able to extract a considered prediction that you can refine over time to predict likely sales rates.

Summary

 In practice, most businesses will find that they need some element of all three of these approaches. 

The most important thing is to have a go, get some results then iterate so that over time you come to understand your sales cycles and your customers’ buying cycles better and can then predict the future better than a weather forecaster!