Sales Forecasting is a term that recently got the limelight in the business sector. But still, there are doubts in the mind of many managers that why sales forecasting is important.
So here is the blog to help you to explain the importance of sales forecasting.
What is Sales Forecasting?
Sales forecasting is the process of predicting how much revenue will be generated through sales within a limited timeframe. This can be a week, month, quarter, or even a year.
The ability to forecast sales is important in bringing your business a strategic sight & run its day-to-day operations effectively.
Why Sales Forecasting is Important?
Sales forecast helps every company to take better business decisions. It helps in overall business planning, budgeting & risk management.
Sales forecasting allows companies to efficiently allocate resources for future growth & manage their cash flow. Sales forecasts help sales teams achieve their goals by identifying early warning signals in their sales pipeline & course-correct before it’s too late
Sales forecasting also helps businesses to estimate their costs and revenue accurately based on which they are able to predict their short-term & long-term performance.
For Example, By the end of 2019, the number of Amazon Video subscribers in the United States stood at 53.3 million, up from 50.2 million a year earlier. Further considerable growth in Amazon Video’s subscriber base is anticipated, with projections showing that Amazon Video could have over 100 million U.S. subscribers by the year 2026.
What is the Benefit of Sales Forecasting?
Here are some of the benefits that an accurate sales forecast:
- An accurate sales forecast allows companies to efficiently allocate resources for future growth & manage their cash flow.
- Sales forecasts help set benchmarks for future trends & allow leaders to course-correct them early. Revenue leaders can align sales quotas & revenue expectations and optimize for more wins.
- Conveys confidence to the board & the management team that your business is supported by a reliable forecasting machine that will scale well in the future.
- Sales projections facilitate strategic planning & tell you how soon you will be ready for executing & implementing your plans.
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