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Estimating Sales and importance to business

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How does your business go about estimating its sales? (This is often a confidential procedure.)

How does it estimate the demand for new products so that it can prepare a production run?

Which is more important for your business: lower cost, quality, customer expectations, or some other feature? Why?

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Solution Summary

The solution answers 3 questions related to general business situations. The questions are stated below. The answers are well explained and thorough.

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PROFESSIONAL DEVELOPMENT 1&2
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How does your business go about estimating its sales? (This is often a confidential procedure.) How does it estimate the demand for new products so that it can prepare a production run?
Which is more important for your business: lower cost, quality, customer expectations, or some other feature? Why?

Solution:
Estimating and projection sales for the business are likely the hardest part of completing your business, particularly if yours is a new business. There are a number of ways to estimate sales. All are estimates only and no one way will precisely predict what your sales will actually be. It is good idea to use a variety of different estimations for sales and come up with a figure that seems both realistic and attainable.

1. Existing Financial Statements & Similar Businesses:

If we have financial statements from an existing or previous business, which is similar to ours, then we can have good indication of the historical level of sales that the business achieved and what it is likely to achieve.

2. Average Family Expenditure Statistics:
Many government statistical institutions will provide information's & data's, which can be used for estimating the sales. For example, average family expenditure statistics provide estimates of what the average family in a particular area or country spends on specific goods and services. These can be applied to the population and number of households and families within a given trading area to determine the total potential market for a particular good or ...

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