The benefits that can be gained from sales forecasting

So,  you are thinking of starting a small business and you need to know some basic things whether you are starting your business at home or at a place you are renting to run it.

Today I want to share some tips on sales forecasting because it is critical from a management and a sales point of view. A lack of history makes it challenging for business start-ups to estimate a figure.
Having accurate sales figures are the most important steps in developing your cash flow forecasts.
You need to know how much you plan to sell in the next 12 months in order to plan how much to spend.

Developing a monthly sales forecast:
To manage your business efficiently, you need a detailed monthly forecast.

Step 1. Look at the projected sales for the year and record the assumptions on which they are based
Step 2. Projecting a trend or a Growth curve.

Project a plausible growth curve , include any events planned or otherwise that may contribute to, or detract from your sales potential.
Do a quick draft of your first year in business. Do not think about actual sales numbers, think about the events and influences that will shape your business in the first 12 months. Remember to include the time it will take you to build sales, seasonal influences, special promotions, and when you can expect results from ads and your own sales efforts. 

• Will December be better than March
• Will back to school create income for you
• Do you plan to attend a major conference in June
• How long until you make your first sale
• Will sales rise quickly, or will your business require more time to grow/

If your product or service sales ebb and flow between Spring and Winter so will your income.

I hope this helps you with your start-up. Thank you for stopping by.
Author: Marsha Anderson

Improving income with cash-flow forecasting

Hello and welcome. Thank you for stopping by , enjoy your visit.

Cash is the lifeblood of every company. Cash determines whether a company can pay its bills and meet its obligations. Cash moves in and out of a company through cash-flow.
If you are starting up a business you need to know how and when cash comes in and  goes out of your company, this is critical to the financial stability, and ultimately to your ability to remain economically capable of living and surviving.

Cash does not come in steady flows. most cash receipts fluctuate from day to day, and from season to season. Budgets give a stationary snapshot of how much cash you are expecting, and where you expect to spend it. Cash-flow and its analysis are dynamic, in that it gives a motion picture view of what is happening in your business from a cash standpoint. Most importantly, it predicts what is going to happen in the future so you can plan and prepare for that situation.

Cash-flow forecasting involves the preparation of detailed revenue and expenditure items as they are actually being planned to occur. Documenting receipts of a revenue, or payment of an expense in the expected time period in which it is expected to occur. Therefore, if you are selling goods or services on credit, the amount would be put into the actual month in which the receivable is due.

At this point you can determine if the cash requirements for each period are consistent with the cash that is available for that period. If there is insufficient funds available, there are many options as to the resolution of the problem.

Analysis:

• Measure the flow of money in and out of your business
• Know when to spend
• Know when to reduce spending
• Know when more money is needed
• Forecast your monthly sales, expenses, and cash in the bank
• Measure your actual monthly sales and expenses against your forecasting
• Find out how much cash is needed for the operation of your business

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Marsha Anderson wishing you a profitable week ahead!