Sales forecasting is one of the difficult managerial functions where a lot of experience and knowledge is required for accurate prediction and sustainable business development. Most managers believe they are good at forecasting, but as the practise proves, sales forecasts are by nature imperfect. Many marketers argue about whether it is a science or an art. The truth is: it's a bit of both.

Reasons for undertaking a sales forecast

This process is a critical one for most businesses. Sales forecasting is the foundation for the quantification of the entire business plan and a comprehensive budget of your business. Whether you are starting up a new business or launching a new product sales forecast can serve as the basis for your planning. It is the ground for production and inventory planning, for manpower planning, and purchasing planning for almost every type of business. When you look at the numbers, sales forecasting is a great way to look at the future from an objective standpoint and pragmatic prediction of how your business will perform. The term ''sales forecasting'', however, is still a mystery for many business managers.

The common errors to escape when forecasting your sales

• Establishing your initial sales forecast can be difficult, but there are procedures you can follow to make it as realistic and accurate as possible. Most forecasting errors are made when they are building a sales forecast around what they would like to sell, rather than what they are likely to sell. To escape from this error you should always keep in your mind these prior agreements on process that can greatly increase the value of forecasts. However, they are still difficult to achieve in many organizations, so let's check also the other common mistakes in sales forecasting by many salespersons.
• It is coordinately as important to accurately track your milestones, and if you dont currently have a management system in place, you should defiantly consider purchasing sales forecasting software to track both the progress of each sales rep and the actions of your customers. Check it daily and be sure to set up weekly meetings with each salesperson in order to discuss their progress. This is a good way to see if it is necessary to initiate weekly training meetings as well. You will also be able to see which salespeople are entitled to special recognition for their efforts.

To conclude, as the economy moves into the recovery phase, now is the time to invest in better sales forecasting and demand forecasting tools and tranings, that will eliminate expensive errors and give your company the flexibility to respond quickly to market changes. Run your company based on science, not on hunches, so you can cut costs and maximize productivity. Best of luck!