forecasting

Forecast for Success

Forecast for Success

Forecasting is simultaneously one of the most important and challenging aspects of launching a new product line for your business.

When you create product and sales forecasts, you can use market information and your previous launch data to determine the potential rate of sale for your products and the amount of inventory you should keep on hand to fulfill customer demand. If you launched a similar product to a similar audience in the past 12-18 months, you can expect the results of your new product launch to mimic your previous launch or launches. If your market has changed in the last 12 months, you can use market data to determine what changes might have disrupted your industry or market since your last launch. If your new products are in line with the shifts in the market and customer preferences, you can expect similar results to your previous product launches.

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Set Goals and Create Business Projections

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Set Goals and Create Business Projections

As you roll out your new products and services to the market, it will be helpful to set goals and create business projections (also called forecasts) your business. Setting achievable, research-based goals and forecasts will help you to project your business growth and determine your business needs over time. I like to create annual and 3-year forecasts. Many companies find value in 5-year forecasts, and that may be a good idea for you as well. I believe that with a small business things can change very quickly, so if you do plan to create 5-year, and often even 3-year forecasts, you should also be prepared to adjust them up or down as your business evolves. When you set your goals and create your forecast, you can either use a top-down approach where you forecast total sales and then assign percentages to each element of your marketing mix, or you can use a bottom-up approach where you forecast each individual element and add up those numbers to get your total. Either method works well, but if you want to dig into the details of your marketing, bottom-up forecasting is great for that.