Sales Forecasting Report: Security Solutions Startup Analysis

This report provides a detailed analysis of sales forecasting for a tech startup specializing in tailored security solutions. It begins with an introduction to the importance of accurate sales data and strategic planning, followed by a comprehensive evaluation of both qualitative and quantitative forecasting techniques, including customer surveys, Delphi method, time-series analysis, and cause-effect analysis. The report examines the effects of poor sales forecasting, common causes of variances, and organizational responses to these variances, including the implementation of Just-in-Time (JIT) approaches. It also delves into setting realistic sales objectives and targets, outlining the steps involved in establishing sales goals, reviewing the target market, developing sales strategies, assessing organizational resources, and developing tracking schedules. Furthermore, the report provides guidelines for accurate sales forecasting, including the use of analytics, competitor analysis, and the consideration of internal and external factors. It explores the impact of product and service development plans on sales forecasts, emphasizing the importance of analyzing new opportunities, product launch timing, and diverse data sources. Finally, the report highlights the benefits of using software solutions for sales data capture and analysis, and concludes with a sales forecast report that considers internal and external factors, market conditions, and potential selling opportunities, including a sample sales target for a salesperson in London.

SALES FORECAST
1

Table of Contents
Introduction:....................................................................................................................................3
Task 1: Report on the efficiency of sales forecasting......................................................................3
Task 2: Preparing a sales forecast report.........................................................................................8
Conclusion:....................................................................................................................................10
References:....................................................................................................................................11
2

Introduction:
Selling own products and attaining significant share in a market is the ultimate goal of an
organization. Thus, forecasting the accurate sales data and crafting right strategies to achieve the
target is critical for every organization to reach the maximum number of customers and retain
their position in the market. In this assignment the sales forecasting for a tech-startup that
provides tailored security solutions to business organizations and individual clients are done. The
current report also includes a sample sales target for the salespersons of the team also.
Task 1: Report on the efficiency of sales forecasting
Evaluation of qualitative and quantitative forecasting techniques:
The qualitative sales forecasting techniques include customer surveys, Delphi method, sales-
force composite and test marketing. The customer surveys help an organization to get an insight
of what their customers are thinking (Möller & Parvinen, 2015). As it facilitates the organization
to involve customers directly to the forecasting process, analyzing whether a product seems
attractive to the customers and how the product attractiveness changes with the demographical
factors, becomes easier for the organization. Seeking help from a panel of experts is another
common technique used by organizations to forecast the sales trends. In this method, multiple
industry experts share their views which act as valuable information for the organization.
However, the experts in the panel often share their ideas and therefore, one’s thought’s may get
influenced by others (Spillecke & Brettel, 2017).
To mitigate the problems of the biased view, often Delphi method is used to forecast the sales. In
Delphi method, each industry expert is given with questionnaire and they do not get chance to
share their opinion with other experts. Therefore, any chance of getting biased view reduces.
Sales force composite is another method where each member of the sales team forecast the
possible sales of their lines and the individual forecasts are then composited. The sales force
composite is also an effective method to get a realistic idea on the potential sales data (Aydin &
Kaya, 2016). Test product launch helps organizations to understand whether the customers are
finding a product appealing or not by launching the product for a limited period. However,
3

launching a product on test basis requires significant capital investment (Jobber & Lancaster,
2009). Hence, using this technique may be difficult for the small organizations.
The quantitative techniques to sales forecast include the methods like time-series analysis and
cause-effect analysis. Use of time-series methods helps businesses to predict the future sales on
basis of the past data (Weymes, 1990). Cause and effect analysis is another method used for sales
forecasts. In this method, the factors that can influence sale of a particular product are identified
and their impact on the future sales is assessed.
The qualitative methods depend heavily on the personal opinion of individuals and therefore, the
findings of this method may be influenced by one’s perceptions and values (Mcdonald &
Leppard , 1986). On the contrary, the quantitative methods give an idea on the future sales in a
scientific way , but it does not get an insight on what others are actually thinking about the
product (Jobber & Lancaster, 2009).
Effects of poor sales forecasting: Accurate sales forecasting is essential to utilize the stream the
financial resources of an organization in the right way. Deviation of the actual sale from the
predicted data cause several costs for the organization including loss of inventory or working
capital and administrative costs and losses due to missed sale opportunities (Möller & Parvinen,
2015). Poor sales forecast also affects the relationship with suppliers which may have long term
effects on businesses.
Recommendations: In the present organization, a combination of quantitative and qualitative
methods or the techniques like cause-effect analysis, customer survey, sales-force composite and
Delphi method will be used together to forecast the future sales in a realistic way.
Common causes of variances:
The reasons for variances in sales forecast are –
Lack of skill: Sales forecast is a complex task and therefore it should be done using accurate
tools and by knowledgeable professionals only (Kaplan & Norton, 1996). Failure to use the right
tools in the right way can cause mistakes in the prediction. Use of inaccurate information such as
wrong past sales data, choosing the inaccurate timeline also can generate inappropriate results.
4

Neglecting organizational factors: The organizational factors like production capacity, presence
of skillful salespersons, use of right marketing and promotional techniques also influence the sale
of a product. Ignoring these organizational factors leads to wrong prediction.
Unforeseen factors: The government policies and the environmental factors have major effect
on the sale of a product (Chrissy, 1982). An organization can end up predicting wrong sales data
if these factors are not taken in account.
Organization’s method to respond to variances: The organization relies on experienced
professionals only to predict accurate sales. In addition, the organization involves its own
salespersons to forecast as it let them to take the organizational factors such as limited resources
and other issues in account. Realizing the sudden changes in government policies and other
issues may not be possible always. To cope with such changes, the organization is now using a
JIT (Just in Time) approach for product development. Use of JIT reduces the chances of
inventory and other losses if the demand of products changes suddenly (Mcdonald & Leppard ,
1986).
Comparing past variances and actual sales and the reasons: After the recent ransomware
attack in May 2017, many organizations stopped using their existing security solutions. The
demand of more advanced solution increased suddenly. However the current organization was
not prepared for such situation and therefore, faced many difficulties initially to handle the
situation. Later, the situation was managed due to the effort of development team but, the
organization faced some losses as the demand of its old security solutions dropped suddenly and
the organization missed some sales opportunities.
Setting realistic sales objectives and targets:
The sales targets should be realistic, otherwise it should lead to loss of valuable organizational
resources (Evetts,1990). Setting the realistic and challenging sales targets takes place in the
following steps –
Setting sales goals: The process of developing sales objectives starts with setting the yearly
goals. At first it is decided that where the management wants to see the organization after one
5

year. Next, the goal is broken down to quarterly and monthly targets so that it becomes easier to
achieve.
Reviewing target market: The sales forecast needs to be based on then target market condition
(Jobber & Lancaster, 2009). Therefore, the factors that can influence sale of products are
analyzed and it is assessed that whether it is possible to asses set objectives or not.
Developing sales strategies: Once the targets are set, sales strategies are developed. As stated by
Patty (1982), achieving the sales goals is not possible without well-formulated strategies. The
promotional strategies are also set in this phase so that reaching the customers with products
becomes easier.
Assessing organizational resources: The sales strategies yield the expected result, only when the
resources of an organization are employed in the right way (Tack, 1975). In this phase, the
human resources abd the financial resources available to an organization are assessed and it is
decided how the resources will be employed to implement the sales strategies.
Developing tracking schedule: It is necessary to track the sales goals regularly and make
necessary amendments accordingly (Weymes, 1990). Hence, the last phase of developing sales
goals deals with creating tracking schedule so that the performance of sales team can be
measured regularly and the targets are adjusted.
Organization’s guidelines to sales forecasting and trends:
To keep the sales forecast accurate and realistic, some guidelines are followed:
Using analytics to predict sales data: To avoid errors, the organization uses software to analyze
the market data and generate the future sales data from previous information. Use of automated
system makes the information reliable.
Analyzing the sales information of competitors: Analyzing the activities of competitors make the
sales efforts more organized (Denny, 1988; Argyris, 1985). Therefore, the organization collects
the sales data of competitors and uses those to set goals.
Making the bigger sales data visible to all levels of the organization: Achieving their targets
becomes easier for the salespersons when they become aware of the bigger picture (Weymes,
6

1990). Hence, the organization makes the sales data of larger areas visible to the regional sales
persons so that they can get a holistic view.
Analyzing organization’s internal factors: The organization’s internal factors like change in
production process, launching of new products and availability of limited resources also impact
the sales. In this organization, sales targets are set analyzing all the internal factors so that the
targets remain realistic.
Impact of organization’s product and service development plans on sales forecasts:
While forecasting sales, the following aspects of a new product or service development needs to
be considered –
New opportunities: A new product or service usually comes with new opportunities
(Evetts,1990). Before forecasting the sales data, it is necessary to analyze whether the
organization will be able to target a new group of customers, or it will enter a new market or it
will strengthen the organization’s position in the existing market by beating the competitors.
Time to launch the product: Delayed introduction of a product in the market it increases the
numbers of missed opportunities (Hopkins, 1992; Tack, 1978; Patty, 1982). Therefore, an
organization should analyze whether there is any chance of delayed product launch before sales
forecasting.
Review of different sources:
Understanding how do the customers buy is necessary for forecasting the sales data (Greenberg
& Greenberg, 1990). According to Evetts, (1990), the market condition also needs to be
considered while predicting the future sales. The different sources of data required for
forecasting the sales are mentioned below –
The sources like public repository provide a good amount of generic data (Chrissy, 1982). On the
other hand, the findings of public opinion poll, demographic researches and the media reports are
reliable sources of data on a particular group of customers. The academic sources like books and
white papers give much useful information on the market trends and customer buying behavior.
However, the data collected from academic sources, too, are often found quite generic the
7

financial data, such as the data on stock markets also provide clear information on the market
trends. te social media has now become a reliable source for getting information on a particular
group of customers (Jobber & Lancaster, 2009; Tack, 1983; Mercer, 1988; Ellis 1992). The
security solution provider use information from social media also to stay aware of current trends.
Benefits of using software solutions for sales data capture and analysis: Use of software for
capturing and analyzing sales data helps the organization to avoid error. Additionally, it also
helps the organization to collect huge amount of data from multiple sources and predict the sales
in less time. Use of software also makes the system easy to access for multiple users across the
organization.
Task 2: Preparing a sales forecast report
Internal and external factors impacting on sales trends, market conditions and potential selling
opportunities:
The relational method is a simple but easy quantitative technique to predict the future sale. Here, the
relational method is used to create the sales forecast. The cyber security attacks are expected to cause
financial loss of about 6 trillion dollar every year by 2021 (Liu et al. 2015). The expenditure on cyber
security is going to exceed 1 trillion dollar within the period from 2017 to 2021 (Gordon et al. 2015). It
clearly indicates that the demand of security solution is going to increase in the coming years. Based on
this data, the sales forecast for one of our sales person in London is prepared.
Target Yearly target Quarterly target Monthly target
Increase sales in 2018 30% 7.5% 2.5%
Existing clients in London in
2017 (Small and Medium
businesses)
25 --
Target for 2018 33 Acquiring 2 new
clients in every
quarter
--
Existing individual customer 310 -- --
8

in London
Target for 2018 407 Acquiring minimum
34 new individual
customers every
quarter
--
Existing large organization
client in London in 2017
None -- --
Target in 2017 3 Acquiring 1 large
organization in every
quarter
--
Table 1: Sales Target for the London based salesperson
Not only the data on cyber security, but the sales data of the previous year are also used to set the target.
For the period of 2018-2019, the company aimed at 30% growth. As stated by Denny, (1993)
challenging targets encourage salespersons to perform better. Therefore, the aggressive target of 30%
growth will encourage the sales team of this tech start-up, too, for performing better and achieve
significant growth.
According to Burby,(1982), the large cities have a diverse population and therefore, in these cities an
organization can easily find out multiple customer groups. Hence, the aggressive target is set for the
London based salesperson. Measuring the number and quality of sales meetings gives an idea on whether
meeting the targets is possible or not (Anderson et al, 1992; Dalrymple, 1982; Forbes Ley, 1989;
Winkler, 1991). The sales meetings arranged by sales persons in London will be monitored to assess the
progress. Checking the sales targets periodically enables a business to assess the progress and reshape the
strategies accordingly. Therefore, monthly and quarterly reports will be collected from the sales person to
get an idea about the progress.
The development team of the tech startup is doing research on new product. If it manages to launch a new
product within next few months, the sale is expected to boost. The time table for measuring performance
of sales persons is described below –
Monthly report submission dates for the first
quarter
Quarterly Meeting
31st Jan 2018 31st March 2018
9

28th Feb 2018
31st March 2018
Table 2: Plan to measure sales performance
Conclusion:
Discussion in the current report indicates that sale forecast is an important factor that shapes the business
strategies. However, there are many factors that influence the accuracy of the forecast. On basis of the
collected data on cyber security, a sample sales target for a salesperson in London is also set. Keeping the
opportunities available in London in mind, the target is made challenging.
10

References:
Anderson R E, Hair J F, Busch A J, 1992 (second edition), Professional Sales Management, McGraw Hill
Argyris C, 1985. Personality and Organisation. Harper and Row. N York
Aydin, S., & Kaya, N. (2016). Authentic Leadership In Sales Management: The Effects On Salespeople’s
Task Related Outcomes. Business and Economic Research, 6(2), 133-155.
Burby R J,1982. Creative Selling. London, Addison Wesley.
Chrissy W, 1982. Salesmanship, the personal force in marketing. Wiley, London.
Dalrymple D J, 1982. Sales Management. NY/Chichester, Wiley.
Denny R, 1988. Selling to Win. Kogan Page, London.
Denny R, 1993. Motivate to Win. Kogan Page, London
Ellis P, 1992. Who dares sells Thorsons, London.
Evetts J, 1990. Seven Pillars of Sales Success, Sterling, London.
Forbes Ley D, 1989. The Best Seller, Kogan Page, London.
Gordon, L. A., Loeb, M. P., Lucyshyn, W., & Zhou, L. (2015). Externalities and the magnitude of cyber
security underinvestment by private sector firms: a modification of the Gordon-Loeb model. Journal of
Information Security, 6(1), 24.
11

Greenberg J & Greenberg H, 1990. What it takes to succeed in sales. Business One, Illinois
Hopkins T, 1992. The guide to greatness in sales, Harper Collins, London.
Jobber, D. & Lancaster, G. 2009. Selling and Sales Management, 8th ed. Pitman, London
Kaplan RS & Norton DP, January-February 1996,Using the Balanced Scorecard as a Strategic
Management System, Harvard Business Review
Liu, Y., Sarabi, A., Zhang, J., Naghizadeh, P., Karir, M., Bailey, M., & Liu, M. (2015, August). Cloudy
with a Chance of Breach: Forecasting Cyber Security Incidents. In USENIX Security Symposium (pp.
1009-1024).
Mcdonald M & Leppard J, 1986. How to sell a service, Heinemann, London.
Mercer D, 1988. The Sales Professional, Kogan Page, London.
Möller, K., & Parvinen, P. (2015). An impact-oriented implementation approach in business marketing
research: Introduction to the Special Issue on “Implementing Strategies and Theories of B2B Marketing
and Sales Management”. Industrial Marketing Management, 45, 3-11.
Patty R C, 1982. Managing Salespeople, Reston Publishing, Reston, VA.
Patty, R C, 1982. Sales Managers Handbook. Reston Publishing, Reston, VA.
Spillecke, S., & Brettel, M. (2017). The Effects of Informal Sales Management Controls on the Learning
and Entrepreneurial Orientation Within Sales. In The Customer is NOT Always Right? Marketing
Orientationsin a Dynamic Business World (pp. 336-336). Springer, Cham.
Tack A, 1975. How To Succeed In Selling, Tadworth, World's Work.
Tack A, 1978. Selling Your Way To Success, London, Business Books.
Tack A, 1983. How To Succeed As A Sales , Kingswood, World's Work.
Weymes P, 1990. A Handbook of Sales Training and Development. Kogan Page, London.
Winkler J, 1991. Winning Sales and Marketing Tactics. Butterworth Heinemann.
12

13