Creating Sales Forecasts

Break your forecast into pieces. Find a meaningful way to break a sales forecast down into smaller variables you can get a hold on. The most obvious example is making sales a matter of multiplying units by average price. That alone makes any sales forecast easier to understand. Even if you aren't selling products, you probably still have unit sales. For years I managed consulting forecasts in units of days of consulting. Attorneys and accountants use hours as units. Taxi drivers use trips.

Breaking forecasts down into component pieces will also help you track what went wrong as you compare actual results to planned results later on. And things will go wrong. What's important is being able to track your plan vs. reality to determine how assumptions should change, what worked, what didn't and why.