Creating a sales forecast for a new business & product.
Discussion
I've been asked to create a sales forecast for a particular line of the products I produce. Having never done this before, does anyone have any advice on how I should go about preparing this?
My business is brand new and the products we make are novel too, so we don't have much trading history to go on and there's nothing to directly compare to. Although I could pluck some figures out of the air for how many units I think I can sell per month through my own channels, the sales forecast is to be used as part of a brand license application, which if granted will allow us to sell our stuff through official merchandise lines, so I have absolutely no idea on how much that could boost sales.
Any advice greatly appreciated!
My business is brand new and the products we make are novel too, so we don't have much trading history to go on and there's nothing to directly compare to. Although I could pluck some figures out of the air for how many units I think I can sell per month through my own channels, the sales forecast is to be used as part of a brand license application, which if granted will allow us to sell our stuff through official merchandise lines, so I have absolutely no idea on how much that could boost sales.
Any advice greatly appreciated!
jammy_basturd said:
The best method would be to create a Kickstarter/landing page and sell "pre-order" items, drive traffic to the page and see how many pre-orders you get.
If you can't get any pre-orders then don't bother bringing in the new line of products anyway!
That's actually how I raised the startup capital in the beginning! Although that worked for me individually, I don't think the figures would suit a three year forecast as they're a short term burst of activity and not representative of the longer term trends. Thanks for the suggestion though!If you can't get any pre-orders then don't bother bringing in the new line of products anyway!
Edited by Kozy on Friday 17th April 08:43
andy-xr said:
What are your competitors doing in revenues? How does their product compare to yours? Where would you sell, and what caitalisation does that market have?
There aren't any direct competitors, but even if there were they're only likely to be small outfits like myself, how would you go about finding out that sort of information about them?andy-xr said:
This is the Black Art thing? You're in the bespoke gift sector then, specialising in art works, focussed on automotive and it's a personal purchase rather than a business one. It's wall art, and your competitors in a customers eyes are anything else you'd put on a wall when they're thinking of buying something. You share competition with posters, clocks, paintings, drawings, calendars and canvases
If you run a SWOT, you'll find your market information from general knowledge, internet search and shopping trends. I dont know whether each piece you make is specific to a persons car or whether you can do any car you want, but what you could do is look at how long each piece takes to make. If you worked 8 hours a day, 5 days a week, how many could you actually make. Times that by 50, that's your yearly output if you're at 100%.
Now look at your market. Will you be stopped by Lotus for example in doing what you're doing? What infringements are you making and is that a threat to your business. Who might buy them, would it be individuals? Probably the more technical minded ones, or maybe it's a present for Dads 60th. Where would you sell them, what can the market take as a price, and how long would you need to be able to deliver them. Would someone put up £75 and be prepared to wait 3 weeks for delivery
I think if each piece is hand crafted, and takes you a day, and you need a yearly equivelent of 9 months of doing the quotes, the prep, the timewasters you've got 3 months of output time. It's 80/20. So in 2 and a bit months, running at full pelt, what output could you make, how many units and at what price. That's your pipeline. Divide that by 4 and that's your rough guess of how many sales you're making based on what doesnt come through that says it will, what gets refunded, what goes wrong and you have to write off
Thanks AndyIf you run a SWOT, you'll find your market information from general knowledge, internet search and shopping trends. I dont know whether each piece you make is specific to a persons car or whether you can do any car you want, but what you could do is look at how long each piece takes to make. If you worked 8 hours a day, 5 days a week, how many could you actually make. Times that by 50, that's your yearly output if you're at 100%.
Now look at your market. Will you be stopped by Lotus for example in doing what you're doing? What infringements are you making and is that a threat to your business. Who might buy them, would it be individuals? Probably the more technical minded ones, or maybe it's a present for Dads 60th. Where would you sell them, what can the market take as a price, and how long would you need to be able to deliver them. Would someone put up £75 and be prepared to wait 3 weeks for delivery
I think if each piece is hand crafted, and takes you a day, and you need a yearly equivelent of 9 months of doing the quotes, the prep, the timewasters you've got 3 months of output time. It's 80/20. So in 2 and a bit months, running at full pelt, what output could you make, how many units and at what price. That's your pipeline. Divide that by 4 and that's your rough guess of how many sales you're making based on what doesnt come through that says it will, what gets refunded, what goes wrong and you have to write off
Yes it's Black Art Graphics, in particular one single marque of vehicle. Far from causing infringements, a manufacturer is interested in issuing a brand license, and wants to see a three sales forecast to work out an agreeable license.
I have been advised to exclude sales that would arise from new channels being open due to being official merchandise and focus on what we can produce through our own channels which is a bit easier, however we've never actually promoted any specific marque before so haven't really got anything to go on, other than the fact that this particular marque has been our most popular one to date (mostly due to a group buy last year).
jammy_basturd said:
andy-xr said:
I think a bit of market research might be in order then, time to check facebook groups for specific marques with a 'if i do this would you buy it' type message
With all due respect, asking someone if they'd buy a product is no form of validation at all.jammy_basturd said:
andy-xr said:
I think a bit of market research might be in order then, time to check facebook groups for specific marques with a 'if i do this would you buy it' type message
With all due respect, asking someone if they'd buy a product is no form of validation at all.
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