How to Estimate Sales Forecasting in a Business Plan

Sales forecasting is one of the difficult and time-consuming steps in writing a business plan. This step becomes even more difficult when you are writing your first ever business plan and do not have previous sales experience to guide you. In fact, it is of the key components that most investors and lenders pay attention to. Even if this is not your full plan yet, forecasting sales is still important to develop your business goals and reports. In this article we will discuss a few key steps to help you calculate sales forecasting in a business plan.

1) Identify your market

The first step to begin with is to research about all your competitors that operate in the same geographical market with a similar customer base. Try to find out how big is your overall market and make sure your revenues will grow year by year, no matter if you are new in the market. The first step sales managers usually combine with all marketing and advertising strategies pursuing more accurate and predictable results.

There are three basic methods for forecasting sales in a new start business.

a. Marked based

This method focuses on specific location and number of competitors around you. You should measure how many households around for example, one miles to you, would choose your products over your competitors’. Additionaly try to find out also those of five miles far from you and use distances that will make sense to your location.

b. Value based

The second method would need you to calculate total value for each sales category, or in other words what you business has to sell. Business charts are much more than just pretty pictures; especially when you are putting them in your business plan. You should always create charts with this value based technique to illustrate and evaluate the projected numbers.

c. Resource based

The next important step is measure the maximum revenue your business can achieve given the present resources.This is a great indicator to show to your future investors how your company will produce and sell in case of limited resources available at your hand.

2) Prepare your sales forecast

Once you have the clear picture comparing these three sales forecasting methods mentioned above, it is time to prepare it in a format which any bank manager, or investor, will understand. You should now instill confidence by your explicitly demonstrated ability to analyze and pivot your tactics and strategy and show your reader your assumptions about growth rate. This really gives the investor the ability to assess you the entrepreneur – which is where the decision is going to inevitably end up.

Liberate Your Time by Developing Your Company Organization Chart

Your company’s organizational strategy is centred around the development and communication of your Organization Chart. The Organization Chart takes the form of a graphical representation of the positions in your company. The top Position in the company (i.e. CEO or General Manager) is placed at the top of the Organization Chart. The various layers of management and supporting Positions are then arranged under the relevant management Positions right down to the lowest levels of the Organization.

Your Organization Chart not only defines the Positions in your business but the Employees assigned to those Positions. The Organization Chart clearly communicates the management and reporting structure of your business, specifically who an Employee assigned to a Position reports to directly.

It is extremely useful when developing your Organization Chart to take the time to design how you want your company to be structured when it is finished the Business Development Process. This approach will have the effect of setting a path for the development of your company. Once defined you and your Employees take the actions required to make it a reality.

Develop the Positions in your Organization Chart to be representative of specific work roles in your company. You should not develop your Organization Chart based on the employees you currently have in the company, rather you should develop the Positions based on logical groupings of work. One of the benefits of developing an Organization Chart is that it enables your company to become less dependent on specific employees and more dependent on the structure that you have developed.

An Effective Organization Chart: – Communicates to your staff where you plan to take the business. – Makes it easy to show new employees where they fit into the business. – Gives you the opportunity to evaluate your current employees and how they fit into the future of your business. – Shows existing employees what options they have for career advancement. – Leaves no question as to who an Employee assigned to a Position should be reporting to.

Depending on where you are in the development of your company you will probably be filling many of the positions yourself. By choosing a position and actually defining and documenting the systems the position is responsible for, you can readily employ someone to fill the position. This allows you to begin the development of other positions in the company.
You will get to a point where all of the positions in the Organization Chart are developed and you will have employees assigned to these positions. This allows you to begin taking a more strategic role in the development of your business or to take a step back and enjoy the freedom that a well defined business allows you. This is a great place to reach and is a huge step in your business’s development and your own personal development.

Copyright 2006 [http://www.BusinessSystemsManager.com]

How to Think Differently in Business

To hit gold in business, you have to think gold. What is your business all about? How do you intend to maximize profits? Here are tips on how to think different in business:

Think back to the future

Don’t wait till the harsh business storm hits your business; rather, always think of what to do better or next. For example, what are the things you need to put in place to ensure business growth? What stage is your business on the business chart, that is, in areas of development, growth or decline? Is your business vision realistic? What is your current profit margin? What is your intended profit margin? How do you intend to speed up your productivity? Evaluating your business, keeps you prepared for the future.

Believe your ideas are valuable

Always think your glass is half full. Think about possibilities not only about likely constraints. As a business owner, you have to nurture a positive mental attitude; believe things will work out fine. If there are possible risks, device means to avoid or manage them. Risks are unforeseen, but you can plan ahead to avoid or mitigate them. Being positive in business enables you take a chance on yourself, be bold to take calculated risks, and believe you are adding value, even when the numbers say otherwise. That is a way of thinking differently in business.

Dig beyond your current offerings

Do not just view things on the surface. Think intensively and carry out research on other ways your business can benefit your target market. Reflect on the true realities of where your business stands at the moment. What are your business challenges? Classify them and analyse them to see how you can make a difference. Outline your business SWOT analysis (Strengths, weaknesses, opportunities and threats). Go beyond the surface; be realistic.

Your competitors are watching

Understand your business environment; be familiar with your competitors’ strategies – if you are not, you can bet that your competitors are doing their homework. What resources do they have that surpasses yours? How can you leverage to collaborate and partner to get the necessary resources? What’s the best way to build more goodwill? Do a survey on your business, and be cautious of the events happening in your business environment. It’s business, so be prepared for the competition. Business is about profit making and goodwill, be focused on these objectives.

Create a war-room

Now that you know who your competitors are and understand your type of business. Identify the threats and evaluate them. Compare your business to your closest competitor. Be battle-ready. Draft a graph of your sales and profits. Can your business survive in business storm or in an unstable economy? Figure out what you can do better? What is not working? Are your key employees performing as expected? Carry out a performance appraisal. Take action: pave the way for more business improvements, do some advertisements, up your business game. Remember it is a game of profit, and that should be your aim.

Thump your chest

What makes you outstanding makes you great. Build on your business competence and promote it. Every product or service must have its own uniqueness, that thing that makes it different from others. Device means to make your business goals and objectives unique. Distinctive competence is that special attribute that shows how your business is similar to your competitors, but different in aspects of branding, concept and product offerings.

Business is nothing without profits. A business seed can only grow if the business soil is fertile, and the fertility starts from your business thoughts. Be better by thinking differently.