She wants a small locale, just six tables of four. She wants to serve coffee and lunches.
All those sophisticated techniques depend on data from the past. We know that from the start. What you want is to understand the sales drivers and interdependencies, to connect the dots, so that as you review plan vs. If you think sales forecasting is hard, try running a business without a forecast.
Your sales forecast is also the backbone of your business plan. People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth. If nothing else, just forecast your sales, track plan vs. Make sure the way you organize the sales forecast in rows or items or groups matches the way your accounting or bookkeeping tracks them.
Match your chart of accounts, which is what accountants call your list of items that show up in your financial statements. If the accounting divides sales into meals, drinks, and other, then the business plan should divide sales into meals, drinks, and other.
So if your chart of accounts divides sales by product or service groups, keep those groups intact in your sales forecast. If your accounting summarizes categories for you — most systems do — consider using the summary categories in your business plan.
Accounting needs detail, while planning needs a summary.
It will take retyping and recalculating. Sample sales forecast for bicycle reteller The math for a sales forecast is simple. Multiply units times prices to calculate sales.
Total Unit Sales is the sum of the projected units for each of the five categories of sales. Total Sales is the sum of the projected sales for each of the five categories of sales.
Calculate Year 1 totals from the 12 month columns. Units and sales are sums of the 12 columns, and price is the average, calculated by dividing sales by units. The numbers for Year 2 and Year 3 are just single columns; unless you have a special case, projecting monthly results for two and three years hence is overkill.
Other experts will disagree, by the way; and there may be special cases in which extended monthly projections are worth the effort. Estimate Direct Costs A normal sales forecast includes units, price per unit, sales, direct cost per unit, and direct costs.
Direct costs are also called COGS, cost of goods sold, and unit costs. That stands for Cost of Goods Sold, and applies to businesses that sell goods. COGS for a manufacturer include raw materials and labor costs to manufacture or assemble finished goods.
COGS for a bookstore include what the storeowner pays to buy books. COGS for Garrett are what he paid for the bicycles, accessories, and clothing he sold during the month. Direct costs are the same thing for a service business, the direct cost of delivering the service.
Direct costs are specific to the business.Your sales forecast is also the backbone of your business plan.
People measure a business and its growth by sales, and your sales forecast sets the standard for expenses, profits and growth. The sales forecast is almost always going to be the first set of numbers you’ll track for plan vs.
actual use, even if you do no other numbers. Your sales forecast in a business plan should show sales by month for the next 12 months--at least--and then by year for the following two to five years. Three years, total, is generally enough for most business plans.
Projection of sales is one of the most important parts of the business plan. We have included tables for three years (monthly and quarterly) and five years (annual). Three years should be the minimum, some may wish to include projections for five years. Aug 11, · An accountant will know what type of expenses, sales and profits a well-run business in your industry can expect, and will be able to help you come up with realistic financial projections.
Use the market research you conducted in developing your business model and writing your business plan/5(42). In a business plan or presentation, you should probably use a chart to help communicate your forecast.
We've included a few sample charts, both for the first year's data as well as all 3 years. Remember to use charts that effectively and accurately communicate your sales to lenders and investors. Month Sales Forecast The one-year sales forecast predicts the sales revenue and calculates a total percentage for each month.
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