The Importance of Sales Forecasting

When we ask our clients why they are using our consulting services, the most common response is "strategic planning." But what do they mean by that?

Strategic Planning

"Strategic planning" is a generic term that cannot adequately convey the impact of an accurate forecast on our clients' businesses. As every business professional knows, sales are the life of a company. They fund salaries, operating expenses, material purchases, and so on. But this still doesn’t explain why hundreds of businesses are using our sales forecasting to help with this nebulous “strategic planning.”

Simply put, an accurate sales forecast allows a business to

• foresee achievable sales revenue for the business
• effectively and efficiently apportion resources, and
• proactively prepare for future growth or decline.

With an accurate forecast, the business can manage its cash flow and workforce with precision.

All of this seems basic, but we often don’t stop to consider the contrary. 

What happens to a business when it doesn’t have accurate sales foresight?

• Layoffs
• Backlog Increases
• Loss of Market Share
• Missed Opportunity
• Bankruptcy

How many of you have experienced any of the above situations? 

What did it cost the business? How did you feel when it happened? If there had been a way to avoid the situation, what would that have been worth to you?

When you stop to consider how a more accurate sales forecast could keep you from having to lay off employees in the future, you can see the importance of our work together from a completely new perspective.

Knowing the time to hire, Knowing the time for that capital expenditure, Knowing the time to lower or raise your prices, Knowing the time to start focusing on other end-use markets –

creates a well-oiled business with a future of growth and prosperity.

Our unique leading indicator methodology for forecasting and underlying business cycle theory provide companies with accurate and timely foresight on which they may base their strategically planned movements. 

Kimberly Clark
Director of Sales and Marketing
ITR Economics