Jul
Discover why sales forecasting is just as important as cash flow forecasting
At least 50 percent of businesses worldwide fail in their first five years of existence. If you closely examine government figures you will see the evidence
The statisticians “broad brush” reason for death is the unfortunate ones basically ran out of money. This deliberation is useless and so I decided to look for individuals directly and indirectly connected with failed businesses to see if I could uncover the details, establish any common reasons for failure and post them on the net in the hope that my results would help others avoid a similar fate. I uncovered eight consistent reasons for business failure. Here are three of them:
No Vision, mission or strategy
“If you have not decided where you are going then how are you going to get there?” You have to have a clear picture of what you want to achieve and how the environment will be for your business if you achieve it. To achieve anything you need a strategy. Strategy is like a road map it shows you how to get to your destination. It’s a structured plan 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 monitoring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about exploring markets and trying out strategies to position your offering in the minds of prospects and drawing 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 improvement of the ways you employ to attract prospects. selling is the process of creating leads, forecasting sales and closing business. In effectively managed businesses a decent marketing and sales system is often underpinned by a effective sales forecasting software system. Such a system gives you the ability to track and measure the activity in the sales and marketing processes. These insights arederived from reports produced by the software 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 base
There is a well known saying that 80 percent of your sales should come from twenty percent of your customers. Your focus is to achieve or surpass this number. Customers that have already purchased from you are easier and more cost effective to reach than prospects that have not. A combination of good web based crm software and sales forecasting software should give you the knowledge of historical activity and allow you to find opportunities in your current customer base.