Data Science
- 1. What does Sales Forecasting mean? Sales Forecasting is the process of estimating the number of sales for your business over a future period of time. This forecast period can be monthly, quarterly, half-yearly, or yearly. Sales Forecasting can be done for an individual sales rep or a sales team or a particular department in the company. It helps managers/executives keep track of the performance and take corrective action when needed. Usually, sales forecasts are based on past sales data, industry-wide comparisons, and current economic trends. It is easier to come up with a sales forecast if you have a good amount of data in hand. However, newly established companies who don’t have a substantial amount of historical data are forced to depend on market research and competitive intelligence to base their forecasts. But how is sales forecasting important? The goal of forecasting is not to just predicting the future but to tell you what you need to know to take meaningful action in the present. – Paul Saffo Sales forecasting is not just about predicting your sales numbers, it’s about having the necessary information that enables you to make the right decisions today that will help you in the future – that’s why businesses should forecast. •Spots Potential Issues: Sales forecasting allows you to spot potential issues and gives you time to avoid or alleviate them. For instance, midway through the quarter, you notice that your sales team is not hitting their targets. You dig deep and find out that there aren’t enough leads being generated for the sales team to convert. Shift your focus on to the marketing department and let them know that they’ll have to ramp up their operations and improve their lead generation strategy to bring in more leads. •Hiring and Resource Management: Sales forecasts also help you with hiring and resource/inventory management decisions. Assume that your sales forecast predicts an uptick in demand. To meet that demand, you’ll need to allocate budget and divert your effort towards hiring and getting resources. And on the other hand, if it is predicted that there will be a decline in sales, it is time to put a pause on hiring and resource plans and shift your focus into bringing in more business. •Drives Performance: Going by the popular saying, What gets measured gets done; having a forecast report in front of you lets you know what your goals are and keeps you focused. It gives you the necessary information you need to make decisions that will improve your results. https://blog.klenty.com/sales-forecasting-methods/ https://www.saleshacker.com/sales-forecasting-methods/