Businesses that don’t forecast sales inevitably fail
More than 50% of businesses don’t survive more than 5 years. If you closely examine government figures you will see the evidence
The analysts most obvious reason for this tragedy is the unfortunate ones eventually ran out of funds. This deliberation is of no value and so I decided to track down those directly and indirectly associated with failed businesses to see if I could determine the details, establish any common reasons for failure and publish them on the web in the hope that my findings would help others avoid a similar fate. I found eight consistent reasons for business failure. Here are three of them:
No Vision, mission or strategy
“If you don’t know where you are going then how are you going to get there?” You must have a clear picture of what you want to achieve and how things will be for your business if you achieve it. To achieve anything you must have a strategy. Strategy is very similar to a road map it tells you how to get to where you want to go. It’s a structured plan of actions. To make a strategy work you have to create a business plan that not only contains the key actions and milestones but can used to measure business performance against. A key instrument for monitoring 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 proposition in the minds of prospects and directing 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 refinement of the methods you use to acquire prospects. Sales is the process of getting leads, forecasting sales and closing sales. In effectively managed companies a decent marketing and sales system is consistently underpinned by a effective sales forecasting software system. The tools in these systems help you to track and measure the activity in the sales and marketing processes. Outcomes arederived from reports generated by the software which can then be used to compare planned vs actual results. The point I am making is what gets measured gets improved or discontinued. This is the essential formula for success.
Lack a system to monetise their existing customer list
There is a well known saying that eighty percent of your sales should come from 20% of your customers. Your task is to achieve or exceed this figure. Customers who have already purchased from you are easier and cheaper to reach than prospects that have not. A combination of good web based crm software and sales forecasting software will give you the information of recent activity and enable you to search for opportunities in your current customer lists.
