Operating at home
tracking the trends
Sales projection
Estimate your potential sales for the next 12 months, and record them on a sales projection chart. This information is a critical source of information when preparing your cash flow forecast, so it is important that it is realistic. The level of activity shown in the sales projection chart becomes the basis of the estimates for the receipts and payments shown in the cash flow forecast.
A sales projection chart should reflect any seasonal or monthly variations, (eg number of trading days) and both the past history, and planned changes in the business.
Estimates need to be achievable, or you may find yourself consistently under-achieving.
Some businesses forecast sales in terms of dollars (billable hours), while others forecast in units sold (products). Businesses selling a service, (e.g. a bookkeeping service) will calculate expected billable hours, and multiply the number of hours by a charge-out rate to arrive at estimated billings.
Do not over-estimate your sales or billable hours, as falling short of the target could be embarrassing, and costly, if you are planning to present the figures to a bank manager as part of an application for a loan.
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