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What is Sales Projection and How to Do It More Effectively?

Sales projection is not just about predicting future, it’s about having a plan for success

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Sales projection is a great way to get a handle on the future. It’s not just about knowing what sales will be like in the next few months, but also what they’ll look like in 3-5 years.

In this article, we’ll walk you through what you should know about sales projection and how to do it right.

What is Sales Projection?

Sales projection is an estimate of future sales figures over a specific period. You can create sales projections based on scenarios, such as:

  • The current state of the market and your company’s position within it.
  • Economic factors that might affect your company.
  • How much you’re willing to spend to acquire new customers.

For example, if you have a new product that will be launched in six months, you can create three different sales projections: (1) the best-case scenario, (2) the worst-case scenario, and (3) the most likely scenario (which is usually somewhere in between). This will help you plan your marketing efforts better and decide what kind of resources you need to ensure success.

Sales Projection vs. Sales Forecast

Sales projection and sales forecast are both used to predict future sales. While they can be used interchangeably, they have slight differences.

A sales forecast is more like a prediction than a projection. It gives you an idea of what your sales will be over a certain period, but it doesn’t necessarily include any information about why those numbers might change or what factors could affect them.

On the other hand, a sales projection takes into account all those different aspects and provides you with more details about what kind of growth (or decline) is likely to happen over time.

Why Sales Projections Are Important

Why Sales Projections Are Important

One of the most important things in your business is ensuring you have the right inventory available at all times. That’s why sales projection is crucial: they help you estimate demand and determine how much inventory you need to keep on hand.

Sales projection can also help you plan out your marketing and sales efforts. If there’s a spike in demand for a certain product, it’s good to know about it ahead of time so that you can make sure you have enough inventory to meet it. This will save time (you won’t have to scramble to order more) and money (you won’t have to pay extra shipping costs).

Apart from that, sales projection gives you valuable information about your business to make smart decisions. For example, if your projection shows that the market is rapidly growing, it’s probably a good idea to start developing new products. But if it reveals the market growth has slowed down, you might need to focus on improving existing products instead.

Sales Projection Examples

Sales Projection Examples

You can use sales forecasting methods to start making sales projections. There are many different formulas you can use, depending on what kind of business you’re running. For example, historical performance, multivariable forecasting, or pipeline forecasting.

Read our detailed guide to sales forecasting examples for more information.

Sales Projection Templates

You can use Google Sheets or Microsoft Excel to create a simple sales projection template. However, if you’re looking for a way to make your projection template more accurate and streamlined, then you might want to consider using sales forecasting software.

A sales forecasting tool like Revenue Grid enables you to create a comprehensive sales projection based on real-time data. You can be sure your actual and forecasted revenue match up — no data discrepancies. All the numbers will also be automatically updated every time a change is made, saving you a lot of time.

Sales Projection Templates

Additionally, Revenue Grid’s sales forecasting tool provides intelligent insights that will help you diagnose why your sales projections have changed and pinpoint exactly what you should do to get back on track.

Tips to Create Effective Sales Projection

The process of creating a sales projection is straightforward, but it can be hard to get the numbers right.

Here are some tips for making sure your projections are accurate and reliable:

  • Know your market: If you don’t understand your audience and your competitors, you won’t likely see success. That’s why it’s important to do market research before setting up a sales projection.
  • Use up-to-date data: Your projection should always be based on current information about your business and industry, so make sure that all of the data you use is updated, accurate, and relevant.
  • Consider variables carefully: You don’t want any single variable in your model to have too much influence over the outcome of your projection. Consider everything carefully before making any assumptions about what will happen next.
  • Choose a projection method: How you forecast your sales is vital for creating effective results. There are many different methods available, so it’s best to choose one that will help you make the most of your sales.
  • Use an AI-powered sales forecasting tool: As said earlier, a sales forecasting tool can make your sales projection process much easier and quicker. So, consider integrating one into your tech stack.

Are you ready to take your sales projections to the next level? Try Revenue Grid today and enjoy a 14-day free trial with full access to all features.

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Take your sales projections to the next level with Revenue Grid

Core UX Writer at Booking.com

Lavender Nguyen is a Freelance Content Writer focusing on writing well-researched, data-driven content for B2B commerce, retail, marketing, and SaaS companies. Also known as an Email Marketing Specialist, she helps ecommerce B2C brands develop high-converting, customer-focused email strategies.