Predicting likely sales for your Veterinary Clinic business is a very valuable process; you should have a clear-cut idea before you commence your business of your likely sales. It’s unlikely you will be right on the money but if you don’t make a realistic endeavor your Veterinary Clinic business will likely crash; forecasting is an important part to your business stratgey.
The amount of money your Veterinary Clinic business will achieve each year depends on how many sales of its products or services – but before you start the process of actually making these sales you should create a sales forecast. The sales forecast for your Veterinary Clinic business will exist on its own merits – it will of course be a part of your overall Veterinary Clinic business plan.
So why do you need to forecast sales?
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 merely to pay the staff for example.
2. Manage Cash flow – central to the success of your business, it is essential that you appreciate how sales forecasting contributes to the computation of the cash flow forecast.
3. Plan future resource requirements – for example, you may want a new machine which produces more goods.
4. Plan marketing activities – and the consequent monetary strategies arising from these.
Quite clearly constructing a sales forecast for your Veterinary Clinic business is vital to your business success – you ought to constantly re-evaluate your sales forecasts – by looking at actual sales to your forecasted sales firstly you can measure if you have done good or not.
What components do you need to think about?
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.
Things to think about
1. Is there an traditional market for your product or service?
2. How extensive is the sector?
3. Is the market growing or declining, and if so,by what % each year?
4. What are the chief factors that are presently influencing that market?
5. Have you seen any factors that may influence it in the future?
6. Is your business seasonal?
7. What trends or fashions are related to the sector?
Who are your customers going to be?
1. How many customers will in reality pay money for your product or service?
2. Will they ditch a different supplier to move toward you?
3. How much will you charge?
4. Can you actually offer the products and services that you are predicting?
5. How many competitors do you have?
6. Your business will not be unique; what happens when additional competitors enter the market once you have done the groundwork to raise market awareness?
The entire world is your marketplace with the creation of the internet – but what products/services can you persuade somebody to buy How can you differentiate your business from your competitors’ businesses? Can you adjust your product prices up or down to match new customers – can you without difficulty add or change the services you offer to new and existing customers to swell your turnover and profits?
Preparing your Veterinary Clinic business forecast
You need to make certain future assumptions for your Veterinary Clinic business in order to create a sales forecast
1. An expectation of market expansion/decline by a certain percentage, for example 10%.
2. Planned expansion in the number of staff to generate an expected 20% increase in production.
3. A move to a different 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 volume and value.
So what are the pitfalls when forecasting sales?
1. Make sure your forecast is based on realistic, certifiable and unbiased info.
2. Don’t be tempted to ignore your study if it showed negative results.
3. Do not make projections exclusively on the basis of historical performance. Keep looking at what else might influence your sales in the future and amend your forecast accordingly.
4. What is the upper limit of products you can produce in a day?. Is it physically possible to produce the amount of sales being forecast with the equipment,personnel and monetary resources available to you?
5. Are your prices realistic?, or conversely, have the prices been set too low or too high so that either way your forecast is potentially unrealistic?
6. If you have just started up in business, your business may take longer than you believe to get well-known, and have you set accordingly realistic sales goals?
7. Once early sales have dropped off following your company launch, have you allowed for the increased marketing costs your business might incur?
8. When you make clear your sales forecasts to prospective backers – are they believable?