Discover why sales forecasting is just as important as cash flow forecasting
Less than 50% of businesses survive more than five years. Head over to government census or Depart of Industry web sites and if you look at the detail you will see irrefutable evidence
The industry experts common reason for this tragedy is the failures eventually ran out of funds. This lack of detail is useless and so I decided to track down those directly and indirectly connected with failed businesses to see if I could uncover the details, establish any common reasons for failure and present them on the net in the hope that my discoveries would help others avoid a similar fate. I discovered eight common reasons for business failure. Here are three of them:
No Vision, mission or strategy
“If you haven’t a clue where you are heading for then how are you going to get there?” You have to have a clear illustration 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 can be likened to a road map it shows you how to get to your destination. 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 tracking and measuring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about identifying markets and testing strategies to position your proposition in the minds of prospects and pulling them into your sales pipeline. Sales is about engaging the prospect and getting them to buy your product or service. Marketing is a process of measuring and refinement of the tactics you use to attract prospects. selling is the process of creating leads, forecasting sales and closing business. In well run companies a decent marketing and sales system is often underpinned by a well designed sales forecasting software system. The tools in these systems help you to track and measure what is happening in the sales and marketing processes. Results arederived from reports created by the system which can then be used to compare what was planned with what actually happened. To sum up 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 used phrase that eighty 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 simpler and cheaper to sell to than prospects that haven’t. A combination of effective web based crm software and sales forecasting software will give you the insight of historical activity and allow you to uncover opportunities in your current customer base.
