Adapted from content excerpted from the American Express® OPEN Small Business Network
Estimated sales for your business are based on your assessment
of: the advantages of your product or service, your customers, the
size of your market, and your competition. This should include
sales in units and dollars for the next three years, with the first
year broken down by quarter if that's appropriate for your
industry. These numbers will be crucial to other financial
documents you present later in the plan.
Use a one-paragraph summary to justify your projections. Be sure
to use a succinct statement of what sets apart your product or
service from other companies in the marketplace. Include a brief
discussion of any customer commitments. Also state why you envision
your customer base growing, and indicate how you will garner this
business. See samples in the
toolbox.
Tips
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- If you derive your average sale per customer from
trade association information, research, or interviews
with business owners in similar endeavors, cite those
sources in this section to provide credibility to the
numbers on which you base your sales projections.
- Do not use the word "conservative" when
describing your sales projections. Lenders are used to
seeing this term preceding projections that are usually
anything but conservative.
- Do not make outlandish projections. They will ruin
your credibility as a reputable business person. A common
mistake is assuming your business will have a few modest
years and then a dramatic increase in sales when
"the market takes off."
-
Use "best case," "worst case," and
"likely" scenarios to create a spectrum of
sales projections.
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