The definition of sales projection is the amount of revenue a company expects to earn in the future from sales. It is also called as a sales forecast. These two terms allow you to determine the health of a company, in addition to knowing if sales trends are down or up.
Sales projections are generally shown in unit or dollar terms. To know the result, you work on a certain period of time. The sales forecast can be calculated on a monthly, quarterly or yearly basis. It is also quite common that these comparisons are made using figures from previous periods, reflecting the rise or fall compared to that period.
The term sales projection can also be done thinking long term. This will allow production managers to better plan and organize their departments.
Therefore, the sales forecast is a document prepared by the company's commercial department and I have the objective of setting goals for a certain period, which is usually one year. It is made based on historical results and trends identified by the commercial area. The conclusions of this document will serve as the basis for projecting the rest of the concepts that will facilitate the obtaining of said income. An adequate sales forecast will be very important to focus the proper path of the business projectwe have in mind.
Advantages of sales projections
Sales forecasts provide a number of advantages to companies. One of them is that it will make it easier to access loans from financial institutions. Projections also make it easy to market and other departments can plan projects and create budgets. Even a favorable sales forecast would serve to attract new investors.
Therefore, it is essential to include a sales projection in the feasibility plan of the company in which we demonstrate the possibility that a business can be profitable in the future.