Sales forecasting could save your business

Posted on August 22nd, 2009

Fewer than 50% of businesses survive beyond five years. Visit government census or Depart of Industry web sites and if you look hard enough you will see irrefutable evidence

The gurus propose the reason for death is the failures basically ran out of cash. This lack of detail is of no value and so I decided to find individuals directly and indirectly involved in failed businesses to see if I could uncover the details, establish any common reasons for failure and post them on the internet in the hope that my findings would help others avoid a similar fate. I uncovered eight consistent reasons for business death. Here are three of them:

No Vision, mission or strategy

“If you have not worked out where you are headed then how are you going to get there?” You have to have a clear view of what you want to achieve and how life will be for your business if you achieve it. To achieve anything you need a strategy. Strategy is like a route map it shows you how to get to where you want to go. It’s a systematic list of activities. Strategy is only effective if it is translated into a business plan which can be used as a benchmark for business performance. A key tool for monitoring business perfomance is the sales forecast.

Lack of a system for marketing or sales

Marketing is about seeking out markets and testing strategies to position your offering in the minds of prospects and directing them into your sales funnel. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and improvement of the tactics you use to acquire prospects. Sales is the process of acquiring leads, forecasting sales and closing business. In well run companies a good marketing and sales system is consistently underpinned by a effective sales forecasting software system. Systems like these enable you to track and measure the actions and results in the sales and marketing processes. These insights arederived from reports created by the system which can then be used to compare what was planned with what actually happened. The bottom line is what gets measured gets improved or discontinued. This is the key formula for success.

Lack a system to monetise their existing customer list

There is a well known phrase that 80 percent of your sales should come from 20% of your customers. Your task is to achieve or exceed this figure. Customers that have already made purchases from you are easier and more cost effective to sell to than prospects that haven’t. A combination of decent web based crm software and sales forecasting software will give you the knowledge of past activity and enable you to discover opportunities in your current customer lists.