Demand and sales of products are sometimes very unpredictable, like a pregnant woman’s mood swings or a C.E.O’S approach to leadership. They can be constantly changing leading businesses to either run out of stocks, dissatisfying key customers or pile up on them, lagging behind in trend and profits. Sales forecast is highly important in order to take comparative advantages and avoid making eloquently regressive pattern of losses due to excessively stocking up on obsolete inventory. It doesn’t cease there. It also helps to minimize costs, optimize sales, thus profits and increase cash flow. Read on for a few key tips on forecasting demand.
Take a Look At History.
Whilst one of the most common method, to predict sales, it can also be deemed to be an easy way to forecast your upcoming demand. But rather than just blandly looking at annual variances, rather inspect further in to months and weeks, and scrutinize for specific seasonal fluctuations. Check and evaluate, what kind of marketing campaigns and business promotion led to an increase in revenue and the scope of change that had taken place. Revenue never increases without a reason, and that’s why it’s important to look behind the driving patterns of demand and incorporate them in future sales forecasts.
Create a Flexible Process.
Most often when it comes to forecasting, managers simply stick to looking at the past pattern and getting an average number. And there is a huge misconception that this alone is sufficient for the forecast. Whilst that’s a typical restaurant owner’s tactic that usually works, it still doesn’t call for high accuracy. There needs to be a properly disciplined flexible process to determine demand, and look in to all aspects from, the history of each sales person to the efficiency of the delivery department. A single program to track past sales and predict the future quantity wouldn’t be adequate. Just like you search the internet for project management software Singapore, go ahead and look for a process that can be managed, reevaluated and modified according to your liking.
Don’t Stick To One Forecast.
Predicting the future isn’t easy, but we can always make an assumptionup to an extent given that we’vegot accurate and reliable information. Simply sticking to the forecast that your sales department made and cutting on bonus, when there is a huge variance isn’t the way to do it. It’s not merely enough to dwell on the accuracy of it but to check where they went wrong and make meaningful assumptions of it. and there isn’t just one set of numbers that reveal the truth, instead of sticking to one forecast, do take a look at what the different departments have to say about the forecast.