Harvard ManageMentor ® Preparing Accurate Sales Forecasts

2 Harvard ManageMentor: Preparing Accurate Sales Forecasts Discussion Topics  Barriers to developing accurate sales forecasts  Identifying key drivers of sales  Using historic data to predicts sales © Copyright 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

3 Harvard ManageMentor: Preparing Accurate Sales Forecasts Barriers to Developing Accurate Sales Forecasts  In your experience, how accurate are our unit’s sales forecasts?  What factors do you think prevent us from developing accurate sales forecasts? © Copyright 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

4 Harvard ManageMentor: Preparing Accurate Sales Forecasts Identifying Key Drivers of Sales  What do you see as driving sales in our business? What information do you want at your fingertips when predicting sales?  Having developed a list of what drives our sales, which do you see as the most important ones? © Copyright 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

5 Harvard ManageMentor: Preparing Accurate Sales Forecasts Using Historic Data to Predict Sales  To what extent can we use our sales data for the last year or two to help project future sales? What trends might affect our ability to use past sales to forecast sales over the next year?  Which type of historical data should we use in making sales projections? Run rates: Extrapolating sales forward from a month’s or quarter’s worth of sales data Annual data: Averaging sales for the last year or prior years © Copyright 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.

6 Harvard ManageMentor: Preparing Accurate Sales Forecasts Next Steps  Consider some of the specific steps you can take to develop more accurate sales forecasts for your group.  Review Tips for Setting Assumptions in the Tools section of the topic. © Copyright 2010 Harvard Business School Publishing. All rights reserved. Harvard Business Publishing is an affiliate of Harvard Business School.