Businesses that don’t forecast sales inevitably fail
At least 50 percent of businesses worldwide fail in their first five years of existence. If you closely examine government figures you will see the evidence
The authorities “broad brush” reason for death is the unfortunate ones eventually ran out of cash. This explanation is useless and so I decided to look for people directly and indirectly connected with failed businesses to see if I could determine the details, establish any consistent reasons for failure and publish them on the blogosphere in the hope that my discoveries would help others avoid a similar fate. I found eight common reasons for business failure. Here are three of them:
No Vision, mission or strategy
“If you haven’t a clue where you are going then how are you going to get there?” You have to have a clear vision of what you want to achieve and how the future will be for your business if you achieve it. To achieve anything you it is essential to have a strategy. Strategy is like a route map it shows you how to get to where you want to go. It’s a structured series of activities. Strategy is only effective if it is translated into a business plan which can be used as a benchmark for business performance. A key instrument for tracking and measuring business perfomance is the sales forecast.
Lack of a system for marketing or sales
Marketing is about identifying markets and testing strategies to position your proposition in the minds of prospects and moving them into your sales funnel. 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 tactics you use to attract prospects. Sales is the process of acquiring leads, forecasting sales and closing business. In successful businesses a decent marketing and sales system is often underpinned by a effective sales forecasting software system. The tools in these systems help you to track and measure the actions and results in the sales and marketing processes. Outcomes arederived from reports produced by the software which can then be used to compare what was planned with what actually happened. The bottom line is what gets measured gets improved or discontinued. This is the key formula for success.
Lack a system to monetise their captive customer base
There is a well known rule that eighty percent of your sales should come from twenty percent of your customers. Your task is to achieve or exceed this figure. Customers who have already made purchases from you are easier and more cost effective to sell to than prospects that haven’t. A combination of good web based crm software and sales forecasting software should give you the insight of recent activity and allow you to discover opportunities in your current customer lists.