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Sales Forecast 2018: It’s Importance and How You Can Fill it with Inspiration

What is sales forecasting?

Sales forecasting refers to the process of making accurate future sales estimates in order to enable you make informed decisions regarding your business, as well as predict performance.

What are the best sales forecast methods?

There are two broads forecast methods, each with its own advantages and disadvantages.

Qualitative Forecasting

This method produces insights into future outcomes based on the knowledge of consultants and analysts. It is detail rich and can allow for innovation, but the problems with it are subjectivity in the interpretation of customer feedback and quality/authenticity of customer feedback.

Quantitative Forecasting

The focus here is measuring data and making numerical analyses using algorithms which may be hosted on the cloud. It is easier to interpret and analyse numerical data objectively, however, there typically isn’t sufficient data to show cause and effect.

The Importance of Building a Credible Sales Forecast

With an accurate forecast, there will hardly be a limit to how much your company can grow. It is a lot of work, but definitely worth it.

5 Key Reasons to Use Sales Forecasts

1.     They are necessary for managing business effectively
When you know just how much increased sales and opportunities you can get based on data, it becomes possible to make management decisions that are most likely to yield the desired results.
2.     They provide an outlook into the Near Term Predictable Future of the Business
It is easier to see the direction where a company is going by looking at credible sales forecasting reports based on actual data.
3.     Data-driven sales forecasts facilitate business planning, risk management and help with budgeting and goal setting for the company
Functions like risk management and business planning depend on accurate data and sales forecasts ensure that your company makes decisions based on verifiable facts and avoids making guesses.
4.     Accurate sales forecasts drive better business performance due to improved sales performance
Having the right numbers can go the long way in determining where your sales team should focus their efforts, which will in turn ensure better performance in that department.
5.     Identifying potential early warning signals and risks in the sales pipeline to help sales teams achieve their goals
You can’t put a price on the ability to spot potential issues with the sales pipeline. Once you are able to do that, you can take action to address issues before they become too much to handle.

Sales Forecast and Your Business – How to make the most of it

Strategy and analysis go hand in hand, so it is best to perfect your sales strategy in order to have a great sales forecast. It is also important to have a deep understanding of your buyers, so be sure to set up systems that help you do just that. For better forecasting, ensure that your pipeline processes address the most important milestones. Most importantly, continue to improve your forecasting for best results.

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