Your monthly sales will start at zero. So it is important to be realistic about how quickly you are going to be able to build them up. You must ask yourself:
- When will you start selling?
- How much time can you spend selling?
- How long will it take to sell to each customer?
- What are your chances of success?
It is essential to no add extra sales to balance the figures; you could be storing up serious trouble in the future. So your market research will be valuable.
Face to face sales:
If you are going to be travelling to your customers, the important questions are how many sales visits are you going to be making and how many are likely to be successful?
You may estimate that you will be spending three afternoons a week travelling, visiting two customers each time. That’s six visits a week in total.
Three of those customers might tell you they are going to stick with their existing suppliers. Two might say they might be interested, but they won’t purchase from you until you are more established and one may agree to place a trial order of £500 (your total sales figure for the week).
Suppose you want to send direct mail to 1000 customers, asking them if they would be interested in a copy of your product catalogue.
A typical response rate could be 2 percent (20 out 1000 will order a catalogue). A quarter of those (5 people) may place an order, spending perhaps an average of £120, giving you a sales figure of £600.
If you are opening a shop, how many people are likely to come in and how many of these people will make a purchase in your shop?
For example, if the average daily ‘footfall’ of shoppers visiting the high street in which you plan to open your shop was 1600. A fraction of these people will be interested in what you are selling (1 in 20, a total of 80 a day). Then only around a fifth of these customers will decide to come in and have a look around the shop (16).
Then assume that half of these customers make a purchase, spending on average of £40. It would give you a daily sales figure of £320. A lot will depend on your costs. Maybe this figure would generate enough profit. This is for you to work out yourself in your forecast.