From speculation to strategy: What is sales forecasting?


An introduction to sales forecasting and why it’s important to carry out a sales forecast for your business.

Planning for your business’s future is an important task, and at the forefront of this process lies the art of sales forecasting. It’s not just about throwing a dart at a target and hoping for the best; it’s a strategic practice that can reshape your business landscape when done right.

Sales forecasting might sound daunting, but fear not! We’re here to unravel the mystery and show you how to create forecasts that aren’t just hopeful guesses, but reliable guides for your business journey.

What is sales forecasting?

Sales forecasting is the process of guessing how much your company will sell in the future. A sales forecast is made using info from past sales and current market trends. While you can never predict things perfectly, having a sales forecast can give you a pretty good idea of what’s on the horizon for your business. 

It’s a bit like assembling a jigsaw puzzle. You take pieces from the past, current market trends, customer behaviors, and a sprinkle of context, and voilà! You have a sneak peek into what the future holds.

Why is sales forecasting important?

Sure, predicting the future is fascinating, but what’s the real deal? An accurate sales forecast isn’t just a magical number; it’s a ticket to smart decisions, resource optimization, and a glimpse into what your customers might crave. 

Think of it as a map that guides you through a jungle of possibilities, showing you the most promising paths. 

Here’s seven reasons why sales forecasting is important:

1. Strategic decision-making

Sales forecasts play an essential role in guiding critical decisions, such as production planning, resource allocation, and budgeting. They provide a navigational compass for your business strategy, helping you make well-informed choices that align with your long-term goals and market dynamics.

2. Goal setting and performance evaluation 

Sales forecasts serve as vital indicators for goal setting and performance evaluation. They empower you to establish achievable targets for both teams and individuals, while also serving as benchmarks for assessing progress and identifying areas for improvement.

3. Resource allocation

In the intricate landscape of your business operations, forecasts function as a tool to optimize resource allocation. They enable you to allocate your resources strategically to deliver exceptional products and services, improving customer satisfaction and loyalty.

4. Financial planning

Just as finances uphold the well-being of your business, forecasts serve as the stabilizer that ensures its financial health. By facilitating the creation of budgets, projecting revenue streams, and skillfully managing expenses, forecasts bolster your financial expertise and stability.

5. Inventory management

Efficient inventory management relies on the accuracy of forecasts. They guide inventory decisions, ensuring you maintain optimal stock levels to fulfill customer demands without incurring excess or scarcity.

6. Spotting market opportunities

Sales forecasts are like having a treasure map for growing your business. Think of it as finding secret spots of gold – they show you new markets, untapped opportunities, and exciting possibilities. It’s like broadening your business horizons with a strategic edge.

7. Risk mitigation

As any seasoned traveler knows, a journey is not without its challenges. Similarly, sales forecasts act as your vigilant travel companion, identifying potential obstacles like shifting market trends or competitive dynamics. By foreseeing these hurdles, you can proactively navigate around them, safeguarding your business from potential disruptions and uncertainties.

Make sales forecasting fun with Outbase

Now, you might be wondering: “How do I make this forecasting gig a breeze?” That’s where Outbase steps in – the solution to sales forecasting success. Outbase is a B2B sales engagement platform that combines cutting-edge tech with years of prospecting prowess. 

With Outbase by your side, you’ll be armed with a steady flow of leads and a roadmap to effective engagement. And once you have a steady stream of potential clients, forecasting becomes as easy as pie – no crystal ball required! Try Outbase for free today.

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