Predicting possible sales for your Fish Farm business is a very chief process; before you launch your business you must feel positive in future sales otherwise there is no point in setting up in the first place. It’s suspect you will be right on the money but if you don’t make a realistic attempt your Fish Farm business will likely not make the grade; forecasting is an important element to your business stratgey.
Your sales forecast is the fiscal projection of the quantity of turnover your Fish Farm business will make from the sales of its products or services. Your sales forecast can stand alone, but it will be closely connected to your Fish Farm business plan. It is an essential and fundamental element of the planning method and it will be a chief part of your profit and loss account and cash flow forecast.
Why bother with a sales forecast?
It is needed so you can
1. Predict your cash flow – your forecast might predict slow times of business where you may need a cash injection to pay for products or just to pay the staff for example.
2. Manage Cash flow – innermost to the success of your business, it is essential that you understand how sales forecasting contributes to the computation of the cash flow forecast.
3. Plan future resource requirements – for example, the quantity of staff considered necessary to manage your orders and provide a certain level of service.
4. Plan marketing activities – this will noticeably have a knock on effect to the sum of sales you make as well.
Quite clearly constructing a sales forecast for your Fish Farm business is crucial to your business success – you should continually re-evaluate your sales forecasts – by looking at concrete sales to your forecasted sales firstly you can measure if you have done well or not.
So what do you need to consider?
Your sales forecast should show sales by month for at least the next 12 months, and then by year for the following two years. Three years, in total, is generally enough for most business plans.
You need to consider
1. Are there any comparable products or services already being provided in the neighborhood?
2. What is the extent of the market?
3. Is the market growing or declining, and if so,by what % each year?
4. What are the major considerations for this market?
5. What might affect it in future?
6. How do cyclic factors affect purchases of your product or service?
7. Are there fashions in your business?
Who are your customers going to be?
1. What percentage will purchase?
2. Why will they cease trading from someone else to trade from you?
3. How much will you charge?
4. Can you in reality supply the products and services that you are predicting?
5. How many competitors do you have?
6. It is unlikely your business is the only one of its kind – what happens to your customers when new businesses enter the market?
The whole globe is your marketplace with the creation of the internet – but what products/services can you make available Virtually all business has a quantity of competitor(s) – how can you hoover up your competitors customers? How can you put a stop to your competitors taking your customers? Can you tweak your product prices up or down to match new customers – can you simply add or transform the services you offer to new and existing customers to mushroom your turnover and profits?
Preparing your Fish Farm business forecast
All Fish Farm businesses need to base their forecasts on certain assumptions regarding potential changes that may take place in the future. These can be quantified and could include:
1. Sector growth/decline by a certain percentage e.g. 5%.
2. Planned expansion in the number of personnel to generate an expected 20% increase in production.
3. A move to a better location that ought to produce a 40% increase in sales.
Preparing your forecast
If you sell more than one product or service, you should prepare a separate forecast for each item in your range,and forecast:
1. By volume
2. By value
3. By a combination of both value and volume.
So what are the pitfalls when forecasting sales?
1. Make sure your forecast is based on realistic, verifiable and unbiased info.
2. Do not be tempted to ignore your investigation if it showed negative results.
3. Do not make predictions only on the basis of historical performance. Keep examining at what else might change your sales in the future and alter your forecast in view of that.
4. Make sure you understand your capacity limits. Can you produce the amount of sales being forecast with the personnel, equipment and financial resources available to you?
5. Does the pricing policy you have used in calculating your sales forecast convey to what is really achievable?, or conversely, have the prices been set too low down or too high so that either way your forecast is potentially unrealistic?
6. Is your business brand new?, your business may take longer than you imagine to get recognized, and have you set accordingly realistic sales goals?
7. Have you permitted for the possibility that high sales based on an initial promotional rush may drop off, leading to a need for more intensive marketing and higher ongoing costs once initial interest has peaked?
8. When you give reasons for your sales forecasts to prospective backers – are they believable?