Sales forecasting is standard practice in business organization and marketing . Through their use, companies are able to calculate the future demand for their products in the market and, in this way, adjust their economic activity.
Through sales forecasting, companies obtain accurate and useful information when facing new business challenges or the implementation of significant changes in their product ranges.
It is, therefore, an indispensable section in any business plan and marketing plan , since it allows us to predict in a certain way the future of the company based on its characteristics and its historical evolution.
It is common for the sales forecast to be made for annual periods, coinciding with the different exercises. Thus the development of a good sales forecast is vital in relation to the preparation of a budget and the forecast of income and expenses of the firm.
This marketing concept is also known by its English name: forecast.
Main characteristics of the sales forecast
The sales forecasting method carries with it a number of important features for the company:
- It is a method of self-evaluation or self-knowledge for companies
- It is carried out with plans at different terms; that is, for specific periods
- Although based on real and measurable data and calculations, the forecasts are still estimates subject to all types of change.
- The highest possible accuracy must be pursued, according to a framework of reality and consistency with the size and market powerof each company
- It can be done by the company itself or resort to another specialized external one, by means of subcontracting
Factors that take into account the sales forecast
These are the main factors to consider:
- Internal factors:The historical data of the company itself in the sector or the evolution in product sales, as well as inventory management , its level of development in R&D or other bureaucratic and administrative factors.
- External factors:Importance of seasonal sectors, the fashions and trends of each sector, the general economic situation or even fluctuations in raw material prices, for example.