Forecasting Sales for Your Business Plan

Forecasting your sales is the most difficult, most important part of any business plan. The bottom line is you just have to start somewhere.

First, how big is the overall market? Find out

how many dollars are being spent per year on your product type, and how many units are being purchased. Once you know this, estimate your company's market share or the percentage of the total dollars and units you will capture. Unless you're creating a totally new market, your market share will likely start small and grow slowly each month.

How are you advertising your product? How many people will see your ad? Once you know this, you can estimate the percentage of people who will become purchasers. Then calculate the units sold.

What are your competitors' revenues and unit sales? Once you know this, you can figure your sales will be some percentage of this number.

How many salespeople will you hire, and how many units and dollars can each one sell per month? Once you have these numbers, you can calculate the monthly revenues you'll recognize.