How We Forecast Sales
I was recently asked how we forecast sales for the next year. It’s a huge question for so many reasons.
We need to know whether we should invest further in the business and how. We need to know whether we should hire more people and when. We need to make sure that our sales team is ready. We’d prepare one way if sales are going to be up, another if sales are going to be down, another if they are going to be flat.
Our entire budgeting, planning, and goal-setting process depends on what we predict sales will be over the coming year.
So, how do we do it?
The answer is somewhat simple: Any way we possibly can. What I mean is, we read national and local news, we study reports from firms that specialize in it, we look at reporting from realtors, both national and local. Maybe most importantly, we talk to our customers… a lot.
Then, we do that every year all the time. You have to be aware that some news outlets are more reliable than others. Some reporting metrics mean more than others. Just like us, customers don’t always have full control over what they want to accomplish. And then, you never know when there is going to be an event that simply blows your forecasting out of the water.
All that to say, we put a lot of effort into our forecasting, which begs the question, what are we forecasting for 2024?
Bottom line: We believe that whereas it may be a bit of a slow winter, the South, and our market area in particular, is still in great shape for housing. We’re budgeting sales to be up in 2024.
Yes, it is an inexact science and I wish we were perfect at it. Until then we’ll keep doing what we know. Here’s to a successful new year.
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