By way of example, our very first client was a well-known, well-respected, high-end Oriental rug dealer in Pennsylvania. At our first meeting, the owner told me that 40% of his sales came in October because his clients were getting their homes ready for the holidays. In contrast, April was his worst month because he believed that his customers (mostly doctors and lawyers) were spending their discretionary income on year-end federal taxes. So, for the first few years, he spent 40% of his budget in October and none of his budget in April. What our client didn’t consider was that his business strategy was directly related to his belief system. He had created a self-fulfilling prophesy. More advertising leads to more sales. No advertising leads to no sales. So, I showed him research for sales trends of oriental rug dealers throughout the country which showed that most other dealers had more balanced monthly sales. Then, we reworked his monthly advertising schedule accordingly. In the end, this change was highly successful.

Predicting monthly and quarterly sales made easy

If you are like most businesses, sales fluctuate with the seasons. You know this, but often you are unsure of how or why. There seems to be way too many variables to make meaningful predictions. While the process of analyzing sales can be tedious, the results are absolutely worth it. The hardest part is having to maintain detailed, accurate records. Beginning with a monthly analysis of sales by-product for the last few years, you can calculate what percentage of total sales are made each month. Ideally, this should be done for every product and/or service you offer.

From there, the math is simple: After you analyze sales, you need to look for relevant factors such as overall business forecasts, potential price changes in raw materials, and increased competition. Now, take last year’s sales and multiply it by the rate of inflation. For example if widgets sales accounted for $100 in sales last year and the rate of inflation is 3%, you forecast $103 in sales in the coming year. In the end, looking at month to month sales by-product will significantly impact almost every aspect of your business. Then, just match this information with your advertising schedule and success will surely follow.

Utilize the data gathering capabilities you already have

Low cost software and accounting programs have made tracking sales and profitability much easier. More sophisticated software lets you take advantage of all the data you enter into the system to make sophisticated predictions about next year’s performance. The software can make forecasts by either mining data already in the system, or by helping you develop a step-by-step worksheet that collects all the necessary information to make the calculations. Most sales managers are already using this software to keep track of the performance of their sales staff. They can also use it to quantify the best sales leads and determine which products to promote. In the end, it is the best and most accurate way to develop a marketing plan and to measure the effectiveness of your advertising program. It forces you to take a good, hard look at what is and is not selling and what items are most profitable for your business. It’ not too soon to try seeing how predicting sales can increase business for you.