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Question: What are statistics on people in your area?
Step 3 List and profile competitors selling in your trading area.
Refer back to data you collected in your market research.
Get out on street and study your competitors. Visit their stores or locations where their product is offered. Analyse location, customer volumes, traffic patterns, hours of operation, busy periods, prices, quality of their goods and services, product lines carried, promotional techniques, positioning, product catalogues and other handouts. If feasible, talk to customers and sales staff.
Step 4 Use your research to estimate your sales on a monthly basis for your first year.
The basis for your sales forecast could be average monthly sales of a similar-sized competitor's operations that are operating in a similar market. It is recommended that you make adjustments for this yearıs predicted trend for industry.
Be sure to reduce your figures by a start-up year factor of about 50% a month for start-up months.
Consider how well your competition satisfies needs of potential customers in your trading area. Determine how you fit in to this picture and what niche you plan to fill. Will you offer a better location, convenience, a better price, later hours, better quality, and better service?
Consider population and economic growth in your trading area. Using your research, make an educated guess at your market share. If possible, express this as number of customers you can hope to attract. You may want to keep it conservative and reduce your figure by approximately 15%.
Prepare sales estimates month by month. Be sure to assess how seasonal your business is and consider your start up months.
Further tips Sales revenues from same month in previous year make a good base for predicting sales for that month in succeeding year. For example, if trend forecasters in economy and industry predict a general growth of 4% for next year, it will be entirely acceptable for you to show each monthıs projected sales at 4% higher than your actual sales previous year.
Credible forecasts can come from those who have actual customer contact. Get salespersons most closely associated with a particular product line, service, market or territory to give their best estimates. Experience has proven grass roots forecasts can be surprisingly accurate. Sales Forecasting and Business Plan
Summarize data after it has been reviewed and revised. The summary will form a part of your business plan. The sales forecast for first year should be monthly, while forecast for next two years could be expressed as a quarterly figure. Get a second opinion. Have forecast checked by someone else familiar with your line of business. Show them factors you have considered and explain why you think figures are realistic. Your skills at forecasting will improve with experience particularly if you treat it as a "live" forecast. Review your forecast monthly, insert your actual, and revise forecast if you see any significant discrepancy that cannot be explained in terms of a one-time only situation. In this manner, your forecasting technique will rapidly improve and your forecast will become increasingly accurate.
Ben Botes is an author, entrepreneur and expert speaker on new venture creation. He is also the founder of http://www.my1stbusiness.com a web portal for 1st time business owners and entrepreneurs. Visit my1stbusiness.com today for the most extensive range of small business resources, courses, articles and tools. Contact; ben.botes@my1stbusiness.com