Why sales forecasting could save your business from extinction

Less than 50% of businesses survive more than five years. Check government statistics if you don’t believe me

The official state the reason for this tragedy is the failures basically ran out of funds. This deliberation is not helpful and so I decided to find those directly and indirectly associated with failed businesses to see if I could discover the details, establish any recurring reasons for failure and publish them on the internet in the hope that my results 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 have not decided where you are headed then how are you going to get there?” You must have a clear picture of what you want to achieve and how circumstances will be for your business if you achieve it. To achieve anything you must have a strategy. Strategy can be likened to a route map it tells you how to get to your destination. It’s a systematic plan of actions. 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 trying out strategies to position your offering in the minds of prospects and directing 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 tactics you employ to engage prospects. selling is the process of creating leads, forecasting sales and closing sales. In well run organisations a good marketing and sales system is consistently supported by a well designed sales forecasting software system. Such a system gives you the ability to track and measure the events and outcomes in the sales and marketing processes. Outcomes arederived from reports generated by the software which can then be used to compare what you predicted would happen versus the real outcomes. The point I am making is what gets measured gets improved or discontinued. This is the essential formula for success.

Lack a system to get sales from their captive customer base

There is a common saying that eighty percent of your sales should come from twenty percent of your customers. Your task is to achieve or surpass this number. Customers who have already purchased from you are easier and more cost effective to persuade to buy from you than prospects that haven’t. A combination of effective web based crm software and sales forecasting software will give you the information of recent activity and allow you to discover opportunities in your existing customer base.