Your sales forecast will help you answer all of these questions.
Your sales forecast is also your guide to how much you should be spending.
New entrepreneurs frequently ask me for advice about forecasting their sales.
These entrepreneurs are always optimistic about the future of their new company, but when it comes to talking about the details, most aren’t sure how to predict future sales and how much money they’re going to make.
So, instead of forecasting “from the top down,” do a “bottom-up” forecast. The word “unit” is just a generic way to talk about whatever it is that you are selling.
Just like the name suggests, bottom-up forecasting is more of an educated guess, starting at the bottom and working up to a forecast. to guess here, and the best way to refine your guess is to A “unit” is simply a stand-in for whatever it is that you are selling. Units help you think about the number of products, hours, meals, and so on that you are selling.
Sure, it looks like it might be credible on the surface, but you have to dig deeper. How are people finding out about this new smartphone company?
Of the people that find out about the new company, how many are going to buy?
You don’t want want to be too generic and just forecast sales for your entire company.
On the other hand, you don’t want to create a forecast for every individual product or service that you sell.