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Category: Financials

How To Write Sales Projections

Cash flow and outgoing payments are an important part of owning a business; It would be nice to have an idea of your foreseeable income at any given time. It’s good to know the incoming funds that you’re able to count on, while at the same time having an estimate of your numbers to present to your potential investors. That’s why we do monthly sales projections.

Whether you’re an already established business owner or just starting a plan to capitalize on goods or services, sales projections and forecasting are an important part of moving forward. Projections will help you understand what you should expect in the coming months based on your history, or the history of the market that you’re in. This requires a bit of market research, but it’s not as tough as it might seem.

Find and Understand the Data
It’s no secret that market research means crunching numbers. Find sales figures from those in a similar business to the one you’ve got your eye on, both within your immediate area and outside of it. This will give you a good idea of your potential to earn, as well as any alarm bells. Get in touch with your local chamber of commerce for this information, or, at the very least they’ll be able to send you in the right direction. Remember that this is just an overall idea, and that it isn’t law. You’re basically going to use these numbers to get a feel for your field, and the competition.

Underestimate
Whenever you’re presenting numbers like this, it is best to err on the side of caution. You don’t want to oversell your worth because it will come back to bite you in the end. You can also present the numbers based on three different views; potential best case scenario, worst case scenario, and the likely scenario should fall somewhere in between.

Be Patient
As you do monthly projections, you will start to get the hang of it. Within a few months it will become second nature to you. This will obviously make yearly sales forecasts a cinch. It’s a matter of doing it and then seeing what works best for you, and how accurate your projections have been. You may have to alter your strategy a few times, and that’s okay. The important thing is that you start to get a handle on your business, sales, and your future.