3.3. Sales Forecast & Turnover Planning

The market is defined by supply and demand. The performance of a company represents the supply (products and services) on the market. Demand is defined by the actual need of customers for services. Sales are the quantity of services that can actually be sold in a certain period of time. This can mean hourly, daily, weekly, monthly or annual sales. Sales represent the service that can be sold.

The sales forecast is the strategic core of a business plan. It decides with which range of services the company wants to enter the market. The sales forecast therefore contains the entrepreneur's prediction and decision as to the extent and period of time in which his offer should find a demand. It is based on the market and competition analysis. While the market and customer potential tries to capture the qualitative and quantitative size of the market segment, the sales forecast is to determine the actual service offer - as worked out in the market matrix.

The assessment of demand is the most important entrepreneurial decision because it is the assumption about the economic success of the company. The sales forecast lays the economic foundation for the business concept. It decides on growth, consolidation or reduction. With the determination of the sales volume, the revenues or proceeds and thus the turnover are determined.

In reality, sales forecasting is the greatest entrepreneurial challenge. This is particularly difficult in the case of start-ups or new business projects that attempt to open up previously unknown markets or market sectors. But the annual sales forecast of small and medium-sized enterprises is also a prognostic challenge. Planning sales or customer demand is a matter that requires justification, even in known markets.

The sales forecast always contains assumptions that have a certain probability of occurring in reality. Of course, there are also assumptions that do not occur in reality despite the best needs analysis. However difficult it may seem, a sales forecast has the function of making the planning of entrepreneurial success more probable. Only with a sales forecast is it possible to confirm or reject the assumptions made in retrospect - in the sense of controlling. With increasing entrepreneurial experience, there is a probability that the sales forecast will achieve a high success rate.