1. Business Development Services 1 What’s your sales forecast? Session 5

2. Business Development Services 2 Competition Review  Who else is selling your product/service in this industry?  What makes your business different? How will your business stand out from the competition?

3. Business Development Services 3  Collected information on your industry  Wrote an industry analysis to support the feasibility plan  Described and identified ways to reach your customer/target market  Defined your customer relationship (B2B and/or B2C)  Researched and analyzed your competition  Defined your product/service features, benefits and unique value proposition Look how far you’ve come!

4. Business Development Services 4  Define sales forecasting  Practise various methods of forecasting sales  Calculate units sold for your business  Write assumptions to support your sales forecast Session objectives

5. Business Development Services 5  What is a forecast?  Where do you see forecasting used in daily life? Forecasting

6. Business Development Services 6  Sales forecasting:  to predict or calculate how much product or service you could sell over a period of time  1 st Step:  Forecast the number of units you can sell Sales forecast: definition

7. Business Development Services 7  Today: forecast number of “units” you can sell over a period of time  Next session: look at strategies to set a price – to see the $$ you can sell  Later, in Session 10 (What are your costs?), you’ll check how much it costs you to make your product/service, and see if this price is realistic Developing your sales forecast is a step- by-step process

8. Business Development Services 8  A measurement that describes how sales are made in your business  What are some examples of a unit?  It is very important to determine (as soon as possible) what a “unit” is for your business.  Your sales forecast depends on this measurement. What do we mean by “unit”

9. Business Development Services 9 You are the captain of your ship

10. Business Development Services 10  Sales forecasts help you keep track of how your business is doing  Sales forecasts are the starting point for resource planning (staff, raw materials).  Sales forecasts help you see when your business will be past its capacity to operate, and it’s time to get new space, equipment, etc. Facts about sales forecasts

11. Business Development Services 11  A sales forecast is not a guess  Sales forecasts are done for a period of time (month, year, multiple years)  Like the weather forecast, sales forecasts are not perfect  Sales forecasts are supported by reasons (assumptions) More facts about forecasting

12. Business Development Services 12  For your sales forecast, you’ll do two things:  Session 5: Forecast your sales (how many “units” you’ll sell)  Session 6: Figure out how you will price your “units” Sales & pricing

13. Business Development Services 13  Do you have a product or service business, or both?  To get the best forecast, figure out sales forecast for each product/service sold, or revenue stream  To get the best forecast, do more than one method  If the results from two methods are very different, take a closer look Sales forecasting: getting started

14. Business Development Services 14  Sales/sqft is the average sales dollars that a business creates for every square foot of sales space  Popular for retail businesses (clothing, bookstores, etc.) Method #1: Sales per square foot

15. Business Development Services 15 Method #2 Top-Down Forecasting Size of your Industry Size of your target market Your customers

16. Business Development Services 16 You can estimate your market share with:  Number of customers in your target market  Total sales for your industry or target market  Population information for your area  Competitor analysis Method #2: top-down (cont’d)

17. Business Development Services 17  Is her forecast realistic?  Is it unrealistic?  What would you do to improve her forecast? Maria’s top-down forecast

18. Business Development Services 18 Method #3: Bottom-up forecasting Your customers today Building customers & sales Building MORE customers & sales

19. Business Development Services 19  Bottom-up forecasting can give you a more realistic forecast  You start with the number of customers you have now (even if zero)  How many new customers you can get each month, year?  How will you do it? (your assumptions: marketing, sales, etc.) Method #3: Bottom-up forecasting

20. Business Development Services 20  Talk to stores that could carry All-Natural Doggie treats. How many could she get in year 1? Year 2?  Can her customers recommend her treats to others?  Can she use social media or other forms of marketing to promote her treats?  What relationships could she create with organizations that serve dog owners ? (e.g. dog trainers, shows, daycares, etc.) How can Maria build her business from the bottom-up?

21. Business Development Services 21 Possible sales patterns

22. Business Development Services 22  Choose a sales strategy (steady sales, slow progress or big bang).  Develop a bottom-up forecast for 12 months (units, or packages for Maria)  One sales forecast per group  Remember that you can make decisions based on assumptions if you don’t have perfect information Sales forecasting activity

23. Business Development Services 23  Taxi service  Bookkeeper or accountant  Guitar teacher  Housecleaner  What’s a “unit” for your business? Service businesses: what would a “unit” be for these businesses?