Tips for Improving Sales Forecasting

Any good business will have a system of sales forecasting as part of its critical management strategy. But most sales forecasts are, by nature, inexact. The trick, experts say, is to know in which direction they’re wrong, and turn that into a picture of how your business is doing.

For a small business—say, a restaurant—those assumptions could mean mapping activity in the dining room and keeping track of how many meals are sold at certain times of day. For a larger business, that could mean plotting all activity across departments to see how your products are matching up to industry standards. There’s a few ways to test the your sales forecasting to know whether you’re getting an accurate read or just dabbling in expensive soothsaying.

1. Use separate numbers.

2. Develop a flexible process.

3. Set aside time.

4. Use a consistent model.

5. Don’t get too complicated.

6. Be democratic.

7. Focus on exceptions.

Experts say it sometimes takes months of tweaking, adjusting and learning before you can have an accurate guess at how the forecasting will look in the future. There’s constant elements and dimensions you can refine all the time. It has to be a core competency, especially in the world we’re in today that’s very unpredictable.

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