The Basics of a Sales Forecast Spreadsheet

The sales forecast is a process of estimating the future sales and thus, it is used for calculating future revenue. It is imperative for business owners and employees to estimate the future sales because they need to allocate the resources (e.g. human resource, land, inventory etc.). The sales forecast is very critical because all the major decision related to the business is dependent upon the estimated sales data. Other stakeholders which are outside of the companies also make many decisions based on the forecasted sales data. Once the sales data are forecasted, the firm can plan for future growth. Thus, it is also responsible for the long-term and short-term performance of the company.

How is it calculated?

Sales are forecasted for most of the companies based on previous years’ data. For example, if a firm’s sale has been increasing by 10% per year for last 5 years, we can forecast that the next year sales will be 10% more than the current year sales.

Since many data and assumptions are involved in real life, it is easier to use Excel where we can formulate certain formulas that can calculate the sales in future.

In new companies, it is relatively tedious to calculate the forecasted data as there is no past data available for the company. In that case, we can do market research and check similar companies; with some valid assumption, we do the sales forecasting for new companies.

Factors to consider while forecasting sales

There are few basic factors we consider while calculating the sales:

1. Data of past market sales
   1. Seasonal demands
2. Data of current market sales
   1. Current markets
   2. Potential markets
3. The economic condition of the country
   1. GDP of the country
   2. Per capita income
   3. Rate of inflation
4. The infrastructure of the firm
5. Human resources
6. Supply chain capability
7. Marketing effort
8. Cost of inventory and other resources
   1. Cost of inventory
   2. Cost of job markets (human resources)
9. The Growth of the company
   1. The growth rate of the firm
   2. The growth rate of the rival’s firm and the industry

Sales forecasting in Excel

If there are few products in the company, a simple sales forecast spreadsheet would be enough to calculate the forecast. We can have columns such as sales data (industry as well as the firm), growth rate assumption, build forecast and calculate the sales forecast. With the various charts available, we can easily and conveniently visualize the data with the sales forecast spreadsheet in Excel.

Sales forecasting spreadsheet template in Excel

There are many advanced sales forecasting spreadsheets available in Excel for complex calculations. You don’t need to build the model manually, which may be time-consuming and require extra skills. You can search the templates in File→New:

You can choose the best template based on your requirements.

Sales forecasting is essential for every organization. It is helpful at every level such as the company level, project level, or industry level. Following this article, you should be able to prepare a basic sales forecast spreadsheet and comprehend the complex sheet.