Question

Quite often, there are no enough track-records for early stage ventures. Explain how to forecast the sales for new ventures.

Answer 1

Followings are the ways to forecast sales for new venture:

• Unit sales projection is required at the beginning of every month in order to find out unit sales per month. So that it will be easy to forecast product oriented sales.
• Decision factors needs to be analyze before introduction of new product. As a result it can be able to attract the new target segment. It will help to increase the sales volume.
• Record of projected sales price per unit is must required to maintain track of all the quantity sales. Hence there will be no mismatch happen during year end audit activity.
• projected prices will set the average costs per unit. So business wants to set costs because a lot of financial analysis depends on gross margin, which is sales less cost of sales.
• Intuitive forecasting is required to measure the amount of closing sales by EOD. It ensures the management to take effective steps in regulating the inventory resources.

Thus these are the major ways to forecast sales for new venture.

All the best for your exam! Thank you.