What is the scope and significance of sales forecasting?
Sales forecasting is especially difficult when you don’t have any previous sales history to guide you, as is the case when you’re working on preparing cash flow projections as part of writing a business plan. Here, Terry Elliott provides a detailed explanation of how to do sales forecasting. –Ed. There are all sorts of ways to estimate sales revenues for the purposes of sales forecasting. One point to remember when sales forecasting is that if you plan to work with a bank for financing, you will want to do multiple estimates so as to have more confidence in the sales forecast. How do you do this? Sales Forecasting Method #1 For your type of business, what is the average sales volume per square foot for similar stores in similar locations and similar size? This isn’t the final answer for adequate sales forecasting, since a new business won’t hit that target for perhaps a year. But this approach is far more scientific than a general 2 percent figure based on household incomes. Sales Fore
