Want your business to run smoother? Forecast Is the Answer! Here are the tips

Have you ever felt like your business was stuck or stuck in place? Well, sales forecasting is the solution! In the business world, understanding the direction of sales is mandatory! A sales forecast is the key for those of you who want your business to run smoothly and with greater direction. 

Through accurate sales estimates, you can make decisions with more confidence. So, sales forecast is a tool that can make business strategies more mature, you know!

However, how do you make this sales forecast accurate and helpful? Calm! Here, we will discuss forecasts in detail and how to use them effectively. Come on, watch until the end!

Forecast is a mandatory strategy for businesses that want to grow!

Many business people only rely on instinct when making decisions. In fact, forecasting is a data-based strategy that can make a business more stable and planned. 

Through proper analysis, you can predict sales trends, stock of goods, and operational needs. When a business runs without a forecast, there is often an imbalance between stock of goods and customer demand. 

If there are too many goods, capital will be held up in the form of unsold stock. On the other hand, if there is too little stock, customers can be disappointed because the item they are looking for is not available. 

So, this is where sales forecasts are the best solution to prevent this problem. One type of forecasting that is widely used is rolling forecast, which is a forecasting system that is continuously updated regularly. 

This is certainly suitable for those of you who want to be more flexible in dealing with market changes. Rolling forecast allows you to always be updated with the latest trends, without having to wait for annual or monthly reports.

Apart from that, there is also a forecast order, which is a method that helps estimate the number of orders based on historical data. With this, you will no longer run out of stock or even have too many items not sell.

Through the use of historical data, this system can provide a clearer picture of customer purchasing patterns, so you can be more accurate in determining the amount of stock that must be stocked.

Read Also: Get to know various types of sales reports and how to make them

Why is a Sales Forecast Important?

Without clear sales estimates, a business can go aimlessly. You can sell with haphazard strategies without taking into account market trends and demand. 

As a result, you may face stockpiling of goods or even run out of goods when there is a surge in demand. So, here are some reasons why sales forecasting is something you shouldn't miss:

1. Make More Precise Decisions 

With sales forecasts that are accurate data, you can determine more strategic business steps. For example, when is the best time to hold a big promotion?

Or when to increase production, then estimate the right time to expand the business. Without forecasting, you can only rely on instinct, which is not necessarily accurate.

2. Avoid Overstock & Understock 

Forecast orders are an effective way to avoid excess stock or shortages of goods. You can more easily manage your inventory to keep it optimal. 

Retail businesses, for example, often face overstock problems when they don't have a good forecasting system. Goods that don't sell will sit in the warehouse and cause big losses.

On the other hand, if there is too little stock, you could lose customers. Think carefully, if you have a food business, and customers are often disappointed because their favorite menu is always out of stock. 

Of course, no one wants their business to be hampered like that, right? So, with forecasting, you can anticipate this and ensure there is always enough inventory.

3. Optimizing Resources 

With rolling forecasts, a system that is continuously updated, your business can be more adaptive to market changes. So, no more sudden decisions that make you panic! 

For example, if there is a new trend in your industry, rolling forecasts can help you adjust your strategy more quickly than static forecasting methods.

4. Increase Sales & Profits 

Correct predictions make marketing strategies more effective. A sales forecast is a tool that can help increase profits without a lot of trial & error. 

You can design promotional strategies that are more targeted, optimize product prices, and maximize resources. Of course, this is very helpful for businesses to scale up, right?

Types of Forecasts in Business

So, now, you must know that there are many types of forecasts. There are several types of forecasts that are often used to organize strategies for making appropriate decisions, here are some of them:

1. Production Forecast

This forecast is used to determine the amount of production that must be prepared in order to meet market demand. The impact is of course data accuracy, raw material stocks remain safe, production is more efficient, and products are always available when customers need them.

2. Sales Forecast

So that your business doesn't make a wrong move, it's important to know how many products or services will sell in the future. The goal is for companies to be able to manage stock, design marketing strategies and adjust production to be more effective.

3. Workforce Forecast

Sufficient and organized workforce keeps business operations running smoothly. This forecast helps companies determine the number of employees needed, organize recruitment, and prepare training so that the team becomes more solid.

4. Demand Forecast

Understanding market trends is mandatory, therefore, through this forecast, companies can see demand patterns and adjust production, stock and marketing strategies so that they remain in line with customer needs.

5. Technology Forecast

The business world continues to develop along with advances in technology, so this forecast is used to anticipate innovations that could have an impact on the industry. The hope is that companies can adapt more quickly and remain competitive.

How to Make an Accurate Sales Forecast

Do you understand the importance of forecasting? Now it's time to learn how to make it! 

1. Historical Data Analysis 

Look at previous sales data to understand patterns that occur. Sales forecasting is a method that is based on past trends in order to predict the future. 

Make sure you use long enough data so that the results are more accurate. If your business is just starting out, use existing data, even though it is still limited.

2. Use Rolling Forecast 

Try using a rolling forecast, a method that is updated every month or quarter to make it more accurate. This helps you adjust your strategy quickly. 

If there are seasonal trends, rolling forecasts can also help you adjust stock and promotional strategies more effectively.

3. Pay Attention to Seasonality and Market Trends 

Don't forget, sales forecasting is a tool that is also influenced by trends and seasons. Understand when sales increase and decrease so that your strategy is more effective. 

For example, a clothing business will experience increased sales in certain seasons, while a culinary business may be busier during holidays or weekends.

4. Use Technology for Accuracy 

It's better if there are lots of tools that can help the forecasting process. One of them is a forecast order, a system that uses data to predict orders more accurately. 

Through the use of technology, you can reduce the risk of manual errors and get more accurate prediction results. So, for an example, you can see below!

Source: jetorbit.com

This sales forecast is created in a spreadsheet format to monitor and predict revenue based on the agreement stages in the sales process. 

Every ongoing transaction is recorded according to month and quarter, starting from the initial stage as a Lead until finally entering the negotiation or even deal stage.

In the main table, there are several important columns. "Deal Stage" indicates the position of the transaction in the sales process. The further along the stage, the more likely the deal will be successful.

Therefore, on the right side of the table, there are probability numbers for completing an agreement for each stage, for example a Lead only has a 15% chance of making a deal, while someone who has entered the negotiation stage has a 90% chance. 

Source: jetorbit.com

To get accurate sales estimates, there is a "Deal Value" column which shows the transaction value, then multiplied by the probability of success at each stage.

The results go into "Weighted Forecast Value", which is the company's estimated revenue figure. So, in this way, businesses can be better prepared to organize strategies.

Source: jetorbit.com

This format is often used by companies to predict business performance. If the projected numbers do not meet the target, you can immediately evaluate and adjust your marketing strategy or approach to potential customers to make it more effective.

Read Also: Market Research Methods that Beginners Can Try

Conclusion

In the business world, planning is everything! A sales forecast is a tool that can help you understand trends and optimize strategies. To make it easier, take advantage of technology such as ESB Order.

This is a smart solution that can help restaurants increase sales with a sophisticated ordering system. 

Come on, don't hesitate to start forecasting and take your business to the next level! Try ESB Order now and feel the ease!