Why Sales Forecasting Is Important For SMEs
Sales forecasting is one of the most essential processes in an SME because every element of the business is tied back to sales. If you think about it, sales forecasting has a direct impact on your company’s financial performance and financial planning.
Let’s take it one step further – financial planning and sales forecasting affect all your growth targets, underpin your customer service guarantees, and make possible all future investments that your company can make. It also impacts how your SME can manage and maintain its very own sales force.
What Does Accurate Sales Forecasting Mean For Your Company As An SME?
Sales forecasts can also set quotas, in order to measure performance for each and every sales rep in your company. Although, if forecasts are not done correctly, they can have very big consequences. So your departments have to all be integrated and know how the sales process works, in order for them to make critical decisions and ensure that the sales team hit quotas. Business functions that need to be considered include resource allocation, cost of sales, sales strategy, and supply chain management. These elements all link to the ROI (return on investment) for the company from its sales and marketing strategy.
How Do You Keep Sales Forecasting Top Of Mind?
Adopting these five principles can help you get buy in from all the stakeholders in your business – a vital step if you are going to successfully link sales forecasting to your business goals.
1) Ensure You Get All Stakeholders & Higher Management Involved, in Order To Complete An All-Inclusive Sales Forecast
Collaboration is an absolutely vital element that is often forgotten by SMEs when they are busy with the sales forecasting process. When doing sales forecasts, you need to be able to work with the whole team – not just sales and/or marketing – and base the forecast on accurate analysed data; that way you have a solid statement to go back to for future projections.
2) Learn From Past Experiences To Inform Future Projections
When you are in the process of getting a sales forecast done, you need to remember that your team should be maintaining a certain balance. Take the time to look at past results and inform your future decisions, but remember that you have to have a mind-set that is open enough for you to adjust your forecast freely. Industry developments can change quickly and this means that your SME needs to be able to cater and adjust to that. So what tool helps with this? Well, to start with you would need a CRM tool that can track trends as well as real time data, so you know how to forecast accurately and adjust where need be.
3) Ensure Forecasting is Scheduled & Specific
It can be very easy to have an information overload when you’re constantly trying to monitor your sales forecasts. However, you simply need to turn data that has useful points into actions, and take them away from being just a bunch of numbers. This will allow your sales and marketing team to properly be on board at any given time, and know what the targets are.
4) Convert Opportunities Into Actionable Next Steps
When you forecast, remember that the point is to always refer back to your overall goals and your sales processes. In the end, sales forecasting is always about hitting your conversion quota, so you want your forecasts to always have actionable next steps. Take the time to teach your sales team about the current sales and lead generation situation, and where you want to go in the next week, month or three months as an example. Each opportunity needs to be turned into an actionable point, and dedicated to a specific person or team. This allows for consistency and proper measurability every time something is changed in your company’s sales forecast.
5) Use Technology To Boost Your Accuracy
When you have a strong sales forecasting tool, you will be able to measure sales per individual, with their data points all in one interface. You will also be able to track trends within your industry and look to be a differentiator much easier than if you tried to find trends manually.
In Closing – Sales Forecasts Are The Foundation Of Your Success
You, as an SME director or owner, need to know your buyers intimately and understand that your sales tell you who is buying your product, when where, how and why. This is the most important information – as you can create demographic and psychographic profiles of these customers and go out and find more of them “in their crowd”. This way, you will be able to make more sales, differentiate your product and USPs more, and essentially become a profitable hub.
Sales forecasting, to be successful, has to have wider input beyond the sales team. In fact, integration is key to the success of any business growth strategy. Working with a business development agency like JDR can be a real asset, because it reduces the strain on your internal resources and gives you access to a well of expert knowledge and resources that would be prohibitive to invest in in-house.
To chat about flexible growth plans that incorporate elements of both sales and marketing, please get in touch with one of our customer service team today.