Sales Forecasting
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In order to obtain accurate sales forecasts, a business requires extensive data from previous years. This kind of information can be analyzed for trends and patterns which can be interpreted and tested for future results.
If a business does not have this information, they can use market research and other less accurate information to forecast the future of their sales performance.
Why is Sales Forecasting Important?
When a business has established their sales forecast, they gain competitive insight on how to manage their cash flow, marketing budget, and work processes.
Essentially, sales forecasting allows you to:
- Determining production capacity (i.e. availability of equipment, process of cash flow, costs of employment, etc.)
- Establishing a sales budget (i.e. for advertisements and other costs associated with customer acquisition)