The Sales Planning In the Business Plan: Business Loans

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Sales planning is the prelude to the financial plan in your business plan. You indicate how many products or services you are likely to sell at what prices in the years following your formation.

Many founders are too optimistic about their sales planning and estimate their revenues too high – also because they believe only in the bank discussion to get the commitment for a loan or the coveted funding. But only a few consultants are blinded by this. And at the latest, when the founders put their plans into action, their fancy sales plan will fall on their feet tremendously. They will find that their liquidity is under pressure and, in the worst case, they have to give up their business.

But too careful a sales forecast has disadvantages. It results in the financing being borrowed excessively high, resulting in high interest charges.

So it is important to estimate your future income neither too blackish nor too rosy, but as realistic as possible.

Granted, that’s no easy task, after all, none of us can look to the future. But there is a way that you can get reliable results for your business plan even without clairvoyant abilities.

Terms from sales planning

The turnover indicates how many units you sell at what price within a certain period of time. Sales planning is accordingly a forecast of your future sales and earnings. Another word for sales is proceeds.

A paragraph refers to the quantity of units sold within a certain period of time.

If you deduct the cost of purchasing from your sales, you will receive the gross profit (for products).

If you also deduct all other costs from your gross profit, from the electricity costs to the rent and the personnel costs, you will receive the profit .

Three steps to a realistic sales plan

Three steps to a realistic sales plan

1. Calculate the minimum sales

First, think about how much your revenue should at least be to cover your expenses and ensure your livelihood. How many units do you have to sell each month at what prices to live from your self-employment?

This is not a guide to wishful thinking, but helps you get closer to your sales plans. If you know how many pantsuits, hotel nights or haircuts you need to sell at least once a week or day, you’ve made a big step forward in your financial planning. Then at least you already know your minimum goal. Unfortunately, many start founders to independence without having faced ever this simple question!

By the way, it’s fine if your sales budget shows that you’re falling short of what you expect at the beginning. This is so many founders. After all, it takes time for the business to start, for you to build a solid clientele and get your offer across. But after a year or two, you should have increased your sales so much that you can live on your earnings.

2. Industry comparison

Of course, you do not simply include the backward calculated minimum turnover in your business plan, but put it to the test thoroughly. Sometimes common sense is enough to judge whether the numbers are realistic. For example, if you find that you need to sell 10 handbags of $ 99 each day in your small town boutique to earn your living, then you should rethink your business model .

Most of the time, though, things are not quite that obvious. Then take a look at the industry reports that you find on the Internet or from your bank, the IHK or a start-up advisory board. It shows how much turnover has been made in your sector over the last few years, what prices are common and what are the forecasts for the future. From these statistics, you can roughly derive what revenue you can expect as a business start-up. If your calculated minimum turnover is well above the usual numbers in the industry, this is a clear indication that you need to improve your business plan. You could, for example, revise the price, reduce costs or revise your sales strategy.

3. Market research with simple means

The scores you get from the industry reports are averages and can not be translated 1: 1 to your founding. Therefore, it is advisable to take a close look at the market you are entering.

You get important information from people who know your industry and know from their own experience which sales figures are realistic: your competitors. As long as you do not exactly ask your direct and toughest competitor, you will surely get valuable information and maybe even one or the other additional tip for getting started in self-employment. Suitable contact persons are, for example, entrepreneurs who are successful with a similar business idea in another city or who assert themselves on the market with another product but a comparable sales concept. Do not forget to summarize the results of these discussions afterwards in your business plan.

Even more helpful are surveys of potential customers. You do not have to hire an expensive market research institute for this. Just go and get the information you need. How about, for example, a small road survey at your desired location, where you determine the past consumption habits of your passing customers and query the interest in your offer? In this way, you not only get an idea of ​​whether your business idea appeals, but also gather valuable ideas on how to make your business model even more customer-friendly.

With B2B concepts, you can talk to potential customers at trade shows. But you can also pick up the phone directly and lead in the run-up to your founding first acquisition talks.

The founder of an event agency has gone this way, whose business plan you can find next to more than 30 others on Catherine and can use as a model for your own business plan. In it he describes that he had come to his turnover forecasts on account of his “… preliminary talks for the purpose of exploring the market with corporate clients …” and that he is already negotiating with several customers whom he cites by name.

Especially the latter will have been an important argument for its financiers to support the project. Because the best basis for sound sales planning are first orders and pre-orders!

If, like our agency founder, you can already point to sales, go ahead in more detail: your readers are curious to know who your first buyers or clients are, how you won them and whether there is the prospect of follow-up orders.

What happens to the numbers?

What happens to the numbers?

Now you have calculated an approximate value for your target sales from several directions. Is your sales planning completed? Unfortunately not. Finally, there are some things to consider:

  • Frequently, a company’s sales are subject to seasonal fluctuations (summer / winter, holiday season, Christmas business).
  • Unfortunately, you have to assume that you will stay on a small part of your bills, which will negatively affect your sales performance. Try to estimate and plan the amount of your failures realistically.
  • Price increases or discount campaigns are also noticeable in your sales curve.
  • Most founders start with low sales, which increase within the first few months, until they reach the break-even point after about two years. But that is not a law – how is it with you?

It’s all about taking your revenue forecast into account for the first three years of your business. Therefore, it makes little sense to start from monthly average values. Instead, you should more or less individually calculate the expected income for each month.

Working with the Sales Assistant of Catherine Morland

Catherine Morland sales assistants make this task easy to solve. You will be accompanied step by step through your sales planning.

First, create a separate file with the basic information for each revenue item (Figure 1).

Catherine makes the revenue planning easy.

Among other things, you enter the name and price of the product, select the applicable VAT rate, and state what price increases you are planning for the coming years.

Then you tell our assistant what sales numbers you are launching, what your sales target is, and how the sales curve is developing. You can choose between a linear and a gradual increase (Figure 2).

Screenshot of sales development in Catherine Morland

How will your sales develop?

In the next step, your sales will be displayed monthly for three years. Here’s another chance to manually change every single number, for example, to price in seasonal sales peaks or falls.

Be careful not to overload your business plan. If you sell a great many different products or services, it makes sense to select only the five to eight most important revenue items or to group them together. Otherwise your readers will lose track.

You can then display your sales forecast as a table and a curve at the touch of a button (Figure 3).

Catherine Morland calculates your sales automatically.

Numbers are sound and smoke

Numbers are sound and smoke

Whether your sales curve is rising slowly or pointing steeply upwards, it does not say anything unless you declare that it is so and not otherwise. If your sales plan shows that you’re earning $ 800 in the first month, $ 1200 in the second month, and $ 1800 in the third, then you should be able to explain how that increase comes about. Is it a consequence of your marketing strategy? Are you looking for recommendations from satisfied customers?

Catherine Morland gives you as much space as you need for these explanations. You should definitely use, because a natural law, according to which the sales of start-ups in the first few months inevitably increase, there is not.

Alexander Reschke, who has become self-employed as a coach and career consultant and has also made his business plan available to our users as a role model, has understood this very well. He has set out for each revenue item on what assumptions his forecast is based. Although this makes his sales plan quite extensive, but his calculation for the reader very understandable.

Your business plan is one unit

Your business plan is one unit

The figures in the financial section of your business plan are therefore not alone, they only get their meaningfulness through the text section. This is especially true for the sales figures that can only be understood if you know

  • in which the customer benefits ,
  • how do you want to win customers,
  • what you do for customer loyalty ,
  • how you set your prices ,
  • how you position yourself in the market and
  • How to organize the sales .

Before submitting your business plan to your bank, I recommend that you check carefully to see if the numbers in the financial section match your statements in the body of the text. Experienced financiers have an unerring sense of contradictions and will not be dazzled by a positive sales trend alone. Only if you can prove how you meet your expectations will you score with them. And your own experiences count for more than any statistically representative statistics.

So venture out into the world, talk to customers, competitors, and experts about your intentions and test your hypotheses about your future sales as soon as possible. Then chances are good that you will be rewarded with a fulfilling and profitable life in self-employment.