Sales Forecasting is a process used by companies to determine an expected sales revenue for a certain period of time. It allows businesses to make decisions and plan for the future. To create a sales forecast, businesses use data from past sales, current sales trends, market conditions, and customer buying habits.

Benefits of a Sales Forecast

Creating a sales forecast has a number of key benefits for small businesses.

  • Improved Decision Making: With the insight they gain from a sales forecast, businesses can make decisions based on actual data rather than guesswork. This can result in more sound decisions that are more likely to be successful.
  • Increased Cash Flow: Developing a realistic sales projection allows businesses to plan appropriately and have the resources they need at the right times.
  • Better Planning: A sales forecast gives a business the information it needs to create short-term and long-term objectives, which can help them reach larger goals more quickly.

Creating a Sales Forecast

Creating a sales forecast starts with gathering data. It’s important to review past sales performance to see what’s worked well and where there have been challenges. Then, using market research, you can assess current market trends, customer buying habits, and competitive landscape.

You can then use this information to create a realistic projection for the upcoming time period. To do this, you’ll need to create a spreadsheet which includes an estimate for each product or service you expect to sell, and how many units of that product or service you anticipate.

Using a Sales Forecast to Make Decisions

Once you’ve created a sales forecast, you can use it to make decisions about resources, personnel, and pricing. For example, if you’re expecting a high demand for a certain product, you’ll need to make sure you have enough inventory to meet it. You may also need to plan for additional personnel or adjust staffing accordingly. You may also want to consider whether there are opportunities to make changes to pricing to encourage more sales.


Sales forecasting is an essential tool for small businesses. It provides businesses with data they can use to improve decision making, increase cash flow, and better plan for the future. With the right preparation and data, businesses can create accurate forecasts that help them stay on track and achieve long-term success.