Calculating Sales Forecast In A Business Plan:
Sales forecasting is an important step in preparing cash flow statement. It is the most difficult and time consuming step during the entire business plan writing. It is more difficult especially when you are starting a business and you don't have previous sales history to guide you.
For forecasting sales in your business plan first you have to identify how big is the overall market? Find out how much money you are able to invest in your product, per year, in purchasing the product.
Once you forecast your per year investment, estimate your company's market share. Make sure your market share will grow year by year, no matter, you are totally new in the market. All the prediction must be shown in the business plan. Next is to know what marketing and advertising strategy you are going to use to advertise your product. Once you target your market, estimate the sales percentage of your product.
There are three basic methods for forecasting sales in a business plan, these methods are: value based (what a business has to sell), market based (what a business could sell) and resource based (what the business can produce to sell).
Make sure the sales forecasting in a business plan must be realistic, otherwise, potential investors and lenders will not take your business plan seriously. Forecasting sales in a business plan is not an easy task. A business plan writer must be very careful in forecasting sales in a business plan. He must be proficient in forecasting. A good business plan is one that will take your business towards heights; on the other hand, business plan will also ruin your business, if it is not properly forecasted.
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