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Business plan: How can I predict sales if I don't anything? Where do sales numbers and projections come from?

1897 Views 3 Replies 4 Participants Last post by  Louie2010
I have a couple other posts up but I'm
Really looking for some advise from someone who has written or knows about business plans..

My specific question is about Financial projections and such.

How can I predict if I don't anything about anything, lmao.... Where do sales numbers and projections come from?

Like for instance, how can I know what my yearly revenue will be, if I don't know how many customers will be billed and at what price?
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Usually, a market assesment and competitor review will give you a nebulous starting point. Wishing numbers out of air kinda leads to absolute useless figures.
Another way, if you are producing goods already is figure what you can do, then figure out what you might do by using a %.
Say you can do 100 shirts a week. You need 50 to break even. Plan on 50, run your spreads and figure out how to guarantee 50 a week.
Computer spreads make the huge variable sku's a little quicker to hypothesize
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If you are asking about e-commerce, my advise is irrelevant and you can stop reading :)

However if you are going to be selling directly in some manner there are a few thing you can do. Keep in mind this is just a simple abbreviated 101 version and nothing shirt specific, but it should get you started thinking about some of the things which will point you in the right direction.

Try and find some closing ratios for you business type.

Survey your competition and try and find out some rough numbers of overall market share in your target selling region.

Now using the closing ratios project an approximate sales number based on the market share, and how many customers you will contact monthly.

Calculate your costs and expenses. Using those numbers calculate the markup required in order to achieve your gross profit margins, based on your initial sales estimate from above.

Play around with the mark ups and see how they effect selling prices, how they relate to the competition and how it effects you gross margins.

Again, this is just scratching the surface with planing sales goals, markups and profit margins. Work at it.

I wish you well with your business.
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