How to Project Sales
Start with expenses., Factor in income sources., Review past sales figures to determine the cycle your business operates in: its ebb and flow., Divide income by expenses to arrive at a baseline sales price.
Step-by-Step Guide
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Step 1: Start with expenses.
Consider fixed and variable expenses, from rents and fixed loans to payroll and utilities, plus capital equipment and inventory, as well as a marketing or advertising budget.
Allow for bad debt or returns and a profit margin. -
Step 2: Factor in income sources.
Any business, whether product or service, will have units to measure, even if it’s time itself (such as professionals billing by the quarter hour). , For example, most retail establishments can run in the red during summer vacation and make the bulk of their income during the holidays. , To manage your business going forward, tie this sales price back to the income units, such as by product type or by seasonality, so you can compare future figures to past sales. -
Step 3: Review past sales figures to determine the cycle your business operates in: its ebb and flow.
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Step 4: Divide income by expenses to arrive at a baseline sales price.
Detailed Guide
Consider fixed and variable expenses, from rents and fixed loans to payroll and utilities, plus capital equipment and inventory, as well as a marketing or advertising budget.
Allow for bad debt or returns and a profit margin.
Any business, whether product or service, will have units to measure, even if it’s time itself (such as professionals billing by the quarter hour). , For example, most retail establishments can run in the red during summer vacation and make the bulk of their income during the holidays. , To manage your business going forward, tie this sales price back to the income units, such as by product type or by seasonality, so you can compare future figures to past sales.
About the Author
Kenneth Richardson
Kenneth Richardson is an experienced writer with over 13 years of expertise in telecommunications. Passionate about sharing practical knowledge, Kenneth creates easy-to-follow guides that help readers achieve their goals.
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