If you sell more than one type of product or service, prepare a separate sales forecast for each service or product group.

There are many sources of information to assist with your sales forecast. Some key sources are: Competitors; Neighbouring Businesses; Trade suppliers; Downtown business associations Trade associations; Trade publications; Trade directories;

Factors that can affect Sales can be divided into external and internal influences. Examples of these are:

External: Seasons; Holidays; Special Events; Competition, direct or indirect Competition, External labour events; Productivity changes Family formations; Births and deaths; Fashions or styles; Population changes; Consumer earnings; Political events Weather

Internal: Product changes, style, quality; Service changes, type, quality; Shortages, production capability; Promotional effort changes Sales Motivation plans; Price changes; Shortages, inventory; Shortages/working capital; Distribution methods used Credit policy changes; Labour Problems

Creating a sales forecast can be divided into four steps.

Step 1 Develop a customer profile and determine trends in your industry.

Make some basic assumptions about customers in your target market. Experienced business people will tell you that a good rule of thumb is that 20% of your customers account for 80% of your sales. If you can identify this 20% you can begin to develop a profile of your principal markets.

Sample customer profiles: male, ages 20-34, professional, middle income, fitness conscious.

Young families, parents 25 to 39, middle income, home owners.

Small to medium sized magazine and book publishers with sales from $500,000 to $2,000,000

Determine trends by talking to trade suppliers about what is selling well and what is not. Check out recent copies of your industry's trade magazines. Search Business Periodicals Index (found in larger libraries) for articles related to your type of business.

Question: What are five customer profiles for your business?

Question: What are some customer trends for your customers/clients?

Step 2 Look at area where you will be trading

Establish approximate size and location of your planned trading area.

Use available statistics to determine general characteristics of this area.

Use local sources to determine unique characteristics about your trading area.

How far will your average customer travel to buy from your shop? Where do you intend to distribute or promote your product? This is your trading area.

Estimating number of individuals or households can be done with little difficulty using national census data to be found at your library or town hall. Your local statistics office or chamber of commerce can identify what average household spends on goods and services.

A specific group of people you will focus on selling your selling services to is your target market. This is not to be confused with problem you will be solving for this group.

Why choose a target market?, You need to decide exactly who your audience is before you sell your services. Deciding on your target market lays a critical foundation for your business. When you get clear about who your target market is, you will:

* know where to focus your selling and marketing efforts.

* know where to focus your research efforts. You want to intimately understand your market: problems they have and language they speak. The greater your level of understanding more magnetic you will become.

Your target market will determine your income and success. Choose wrong one and you will waste a lot of time and money with very little results.

Whatever target market -TM- you choose, check to see that it meets following 10 essential criteria:

1. Your TM has a big problem. They think about it all time, it keeps them awake at night.

2. Your TM wants problem solved. The impact and cost of problem is big enough that they will act to solve it (some people have problems they are quite happy to live with!).

3. You can easily find your TM. Do they belong to associations? Are there conferences for this target market? Are there publications? Where do they hangout? If it's not easy to find your target market, it will cost you a lot of money to find them.

4. Your TM has money to spend. No point having a terrific service if your target market hasn't money to pay for it. I know this sounds basic but it's often overlooked.