Business and Marketing Planning

If You Don't Plan to Fail, Then Don't Fail to Plan!

How to Develop Your Sales Forecast

Your sales forecast may be the most critical element of your business plan. It’s also the area of your plan that may face the greatest scrutiny from your potential investors.

The mechanics of assembling a sales plan are simple:

  • What products/services will you sell?
  • What’s the target price at which you will sell?
  • What’s the volume of sales?

Most sales forecasts can be built using a very simple spreadsheet. It’s a little more complex if there are residual sales to consider, but you can accomplish even complex forecasts with a spreadsheet as well.

The hard part is finding the balance between your optimism and your investor’s critical view of your optimism.

The best strategy is to document your assumptions and then adjust those assumptions for things that inevitably just don’t go as planned.

Need another set of eyes to look at your sales forecast? Send it our way for a no obligation review.

Free Sales Forecasting Consultation

How to Develop Your Pro-Forma Financial Forecast

One of the most difficult aspects of business planning for business owners who are not trained in finance and accounting is the development of their pro-forma financials.

There are three challenges many face in this area.

First, the relationship between the balance sheet, income statement and statement of cash flows must balance across all three financial statements. This can be challenging if you have to build a model from scratch that reflects the changes in one financial model and fails to reflect the corresponding changes in the other financial models.

Second, the complexity of forecasting sales, costs of goods sold and operating expenses is much more art than science. You need to have a deep understanding of the economics of your industry and your business. Many investors have access to industry “rules of thumb” and will reject your plan if they see large variances from standards.

Third, the business owner needs to find the right balance between confidence and conservatism. It’s well known that business owners see the glass as half-full, while investors see the glass as half-empty. If you take an ultra-conservative approach, you can still count on the investor to cut revenues in half, double expenses and double the timeline to profitability.

One of the first things we do in business and marketing planning is test our assumptions on our sales forecast.

As everything else will be driven by sales, including gross margins, profits and burn rate, it’s essential that sales be both aggressively and conservatively forecast. We don’t have a crystal ball, but we do have years of experience examining businesses across hundreds of industries to draw upon.

If you’re struggling to develop your pro-forma financial forecasts, it may be time to get some outside help to clearly see the financial future of your business.

Free Pro-Forma Financials Consultation

How to Assess Your Current Marketing Situation

Assessing your current situation is an essential step in developing your marketing plan.

A situation analysis is conducted by assessing your internal strengths and weaknesses as well as you external opportunities and threats. A SWOT Analysis provides a great opportunity to step back and look at your business from the inside out as well as from the outside in.

  • Strengths are things you do well. You should begin by listing every positive attribute of your business, then assess those strengths that make your business the strongest. The top 5-7 strengths will provide qualities of your business that you should build upon for the future in your marketing plan.
  • Weaknesses are things that you do not do well. Again, you should list every negative attribute of your business, then assess those weaknesses that are the greatest barriers to your success. The top 5-7 weaknesses will provide key areas of your business that must be improved for you to effectively execute your marketing plan.
  • Opportunities are external factors that present possibilities to do things you have not done before. Every business has opportunities if they can step back and look at their business without the constraints of their current business operations.
  • Threats are also external factors that could prevent your business from achieving your goals. These factors commonly include government regulation, the economy and competition. Although each of these factors is outside the control of the business, developing contingency plans in the event a threat materializes can often help s business respond more proactively to the threat.

Analyzing your current situation utilizing the SWOT technique is an essential step in any marketing plan.

What’s your situation?

Free Marketing Situation Analysis Consultation