Discover why sales forecasting is just as important as cash flow forecasting
Fewer than 50% of businesses survive beyond five years. Visit government census or Depart of Industry web sites and if you look hard enough you will see irrefutable evidence
The analysts propose the reason for death is the unfortunate ones just ran out of cash. This explanation is of no value and so I decided to track down individuals directly and indirectly involved in failed businesses to see if I could determine the details, establish any consistent reasons for failure and publish them on the net in the hope that my results would help others avoid a similar fate. I found eight consistent reasons for business death. Here are three of them:
No Vision, mission or strategy
“If you don’t know where you are headed 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 it is essential to have a strategy. Strategy can be likened to a road map it shows you how to get there. It’s a systematic 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 instrument for tracking and measuring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about finding markets and testing strategies to position your offering in the minds of prospects and moving them into your sales channel. 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 engage prospects. Sales is the process of acquiring leads, forecasting sales and closing business. In well run organisations a decent marketing and sales system is consistently underpinned by a effective sales forecasting software system. Such a system gives you the ability to track and measure what is happening in the sales and marketing processes. Outcomes arederived from reports produced by the software which can then be used to compare what was planned with what actually happened. The bottom line is what gets measured gets improved or discontinued. This is the key formula for success.
Lack a system to get sales from their captive customer list
There is a well known saying that 80 percent of your sales should come from twenty percent of your customers. Your task is to achieve or exceed this number. Customers who have previously purchased from you are easier and cheaper to persuade to buy from you than prospects that haven’t. A combination of good web based crm software and sales forecasting software should give you the knowledge of past activity and allow you to find opportunities in your existing customer lists.
Mail this post