Sales Forecasting- What is It and how is it important
What is Sales Forecasting?
Sales Forecasting is a way to calculate and predict correctly the amount of revenue it will seek monthly, quarterly, half-yearly or annually. It’s an important data that can be used by Managers to estimate their business, directors to anticipate department sales. This data is shared among the company leaders along with the board members and stockholders as well.
Importance of Sales Forecasting
Sales forecast is a data that will allow you to spot issues that might occur which will hamper your business and take preventive measures to minimize the issue. Discovering any of those problems like if your company is trailing behind the competitor in terms of trending, then you can figure out what’s wrong and course-correct.
In fact, sales forecast also come into play in a number of making decisions and can influence your choice when it comes to hiring and making your resources.
Determining the sales forecast in terms of opportunity can encourage your hiring process whereas if they are predicted to go we g, then it’s better to pause your hiring efforts. On the other hand, sales forecast is a great motivational tool as well.
For example, each week you can revise and update your quarterly sales forecast to see if your team is on the track or not. You could also create a forecast every day for an individual sales rep on a performance plan to make sure he/she is not falling behind.
However, it’s better to know one thing when it comes to sales forecasting is that it’s not always perfect and might differ a bit from your results. Of course, wildly inaccurate results are problematic but with clean data and the correct method, it can help you grow your business