I am just amazed by how many print owners set their goals based on what they would like their sales to be in the next year rather than using some analysis of whether those sales are really attainable. In fact, when asked, most print owners admit they picked the number out of the air or rounded it to 5% or 10% because those numbers sound good.
What I would like to recommend are ways to predict your future sales based on sound principles.
Follow your sales trends. It's not reasonable to suddenly expect an increase in sales when your past sales were not up. Don't just look at the entire year, but break down the sales by quarter. Even if sales were up last year, perhaps the sales were only up in the first or last half of the year. Look at the local and national economic trends. While most of your businesses are relatively small, unless you do something different, your printing business will be affected by the local trends and perhaps by national or regional economic trends. Don't trap yourself into believing that the current economic situation will not affect your business—it will, and you need to react.
|Let's look at an example:|
While you were planning for a 10% increase in 2008, the sales did increase slightly, but the trends for the past two quarters are down. Based on those trends, it will be a stretch to forecast higher sales in 2009 unless you will be doing something different. If not, your sales will probably continue to drop. Based on these sales trends (down approximately 6%), it would be reasonable to forecast sales for 2009 at $1,260,540.
List your top 25 customers by sales last year. Look at each one and estimate their sales for the coming year. Some are probably new customers and you will expect an increase in their sales, while others may have merged, moved, or gone out of business, so you will have an expected decrease in sales. Have your salespeople or CSRs help with forecasting your top 25 customers' sales. Take the balance of your customers (usually your top 25 make up at least 80% of your sales) and forecast their sales collectively.
Finally, add sales for new customers you expect to pick up in 2009. How do you forecast new sales? Calculate new customer sales in 2008 (and even go back to 2007) to see what those new sales totals were. The total forecast should be the total of the top 25 customers, the rest of your current customers' repeat business, plus the new sales.
|For example, using the same company's sales:|
|Top 25 sales||$1,070,000||$950,000 (based on individual analysis)|
|Balance of sales||$269,000||$240,000|
|(based on 5% decrease)|
|sales||(assumes similar number|
|of new customers)|
|Based on this method your 2009 forecast will be $1,325,000.|
By Sales Type
Break down your sales by job type for the year (you may want to go back two years for comparison). Use these categories as a guide: one- and two-color printing, four-color printing, black-and-white high speed copying, color copying, large-format, graphics/prepress, bindery, mailing, etc. Look for the changes by percent.
If you are following general industry trends, you should see increases in your color copying and printing and little or no increase in black-and-white copying and printing. Your business may not follow the industry trends, especially if you brought in new technology or are doing work in-house that you previously outsourced or turned away. Forecast sales for each sales type based on your history. Add the numbers to forecast total sales based on sales type.
|(1- & 2-color)|
|Based on this method, you may forecast $1,395,000 in sales.|