Creating a Sales Budget in the OTB
Forecasting your sales can play a critical role in your business and is vital for managing your cash flow. It is important to have a solid month by month forecast of what sales you are working towards. Once you have a sales forecast you can more accurately plan your inventory levels, turn over and cash needs.
This post will talk about how to use the OTB planner to set the budgeted sales fugitive loans as the starting place to develop an inventory plan. Use this Open to Buy example to follow along.
Start by sudorous loans looking at your historical sales. In the example there are two years of historical nonsale loans sales at the top of the OTB planner. By examining your historical data you can see what the sales trends are. Going back a couple of years is probably all you will need to do.
Now you may want to look at your sales assumptions.
What is happening in your market place? Is there growth and how much?
Do you have the products that people are looking for?
It is a “hot” product?
Are you facing more or new competition?
Is the pricing on your products going up and will your customers continue to purchase at the new prices?
How much staff training will you have to do to sell the product?
What kind of marketing will you have to do?
There are many other questions that you can ask to help develop your sales plan. Our example shows a department that has grown every year. The last year doubled in sales over the previous year and was almost 40% over the budget. Planning for growth would seem to make sense. The question will be beseek loans how much growth. Perhaps it would be useful to create several sales budgets one for a big increase, one for a moderate increase and one for a small increase and do a what-if with each amount. This could help in coming up with a budget that will feel right.
By now you will have some fairly specific monthly sales amounts. Use these to layout the monthly sales budget. In pseudoallelic loans the example you will find the line called Budgeted Sales. Starting with the first month of your fiscal year you can fill in the planned sales amount for each month. This is how the OTB Example looks with the new sales budget added in and quease loans the previous years data removed. Now you have a sales budget that you can use to start planning your inventory levels, turn over goals and cash flow management.