Sales Planning

You must forecast and target your sales - by season, by calendar event, even by time of day. Your potential backers will want to see how your venture will generate sales over time and when it becomes profitable. The sales forecast (budgeted sales) will be important data for your cash flow forecast. The targets will help to determine priorities and channel your energies.

You have no previous sales to analyse so how can you estimate?

• observe your competitors and try to gether intelligence on the typical spend per customer.
• what are your estimates for customers per month (your market share)?
• what is your capacity? Maximum production output, number of rooms in the hotel, number of tuition slots in the appointments book? What % utilisation do you expect to achieve in each month of the start-up period? Work this out by market segment? Estimate the spend per customer.
• list firm orders you have generated.

Sales will build up from small beginnings. Sales may be affected by fluctuations generally in the national economy e.g. level of unemploment, rising interest rates etc.

If you are selling to account customers, your profit and loss forecast must reveal all the sales you have invoiced for but for which no payment is yet received. Some customers may turn out to be bad debts.

Your sales machine

• Who will do the selling?
• How are sales and promotions linked?
• What expertise is required?
• Does selling involve lots of design work and submission of quotations? If so, generation of these is a necessary cost before any sales are secured.
• For the sole proprietor (a kitchen or double-glazing installer) such design and selling work may be outside of production hours. When a client has to be visited or spoken to in the workshop no other work can be done.
• What systems will be required to support the sales effort e.g. a point-of-sale system?

Business analysis and planning WWW-links