This post originally appeared on the UPilot Blog.
In a week, how much of your time goes into forecasting sales? Not much perhaps! A lot of small businesses do not spend enough time projecting sales as much as they should. Let’s face it, it’s time-consuming and you’ll never know if you’ve got it right. So why bother? Let’s find out.
For starters, sales forecasting is the art of being able to say when your money is coming in and from where. You can forecast sales based on Deals in the pipeline, Stage, Sales cycle, Sales rep’s intuition etc.
The purpose of sales forecasting is NOT about accurate predictions, but driving better business decisions using it. Here’s how forecasting helps you make informed decisions:
#1 Helps build a 360 Deg Business Plan
When you know the projections, you can plan for anything and everything in-between ‘the where’s and ‘the when’s to make sure business objectives are met. This knowledge has a great impact on overall business. With reliable forecasts, you can prep-up your production, hire resources etc.
#2 Helps Align Marketing and Sales
Knowing what future sales will look like, helps plan your marketing efforts today – both in terms of time and money. If your forecasts were to project a slump in sales, you can allocate more marketing budget to acquire sufficient deals in the pipeline to support sales.
#3 Helps Track Sales Efficiency
Sales projections help run a complete diagnostics of your sales machinery. When you know your projections (weekly, monthly, or quarterly) you can easily measure progress and get a sense of where things are headed, and correct course if need be. It’s best to use those data points to forecast sales that you track and measure as part of your routine. This will make it easy to compare your projections with the actual and it will go a long way in measuring performance to derive actionable insights. Example: Number of deals in the pipeline, average close rate, or sales cycle etc.
To sum things up, forecasting sales is easier compared to running a business without it. A great CRM platform just takes the efforts out of the sales managers, enabling them to stay focused on action.
This article is a part of the ‘Accurate Forecasting’ series. Articles in this series include: