Market Planning (Part 4) – Sales Forecasting and the Marketing Budget

At this point in the market planning process, you should know really well your product, your customer, your competitors and yourself. You probably also know how you want to position your craft to sell in a particular market, but you may not have considered how much it will cost to do so. This is where Sales Forecasting and the Marketing Budget come into play.

The sales forecast is a look at projected versus actual sales. Once you have an idea of what future sales will be, you will be able to build your crafting capacity to meet all or some of the customer demand. Based on your crafting capacity and sales forecast, you will want to create reports to track financial performance. You may choose to report on the following—

• Unit sales (by product category)
• Unit prices (by product category)
• Sales revenue (by product category)
• Unit costs (direct, by product category)
• Cost of sales (direct, by product category)

Another consideration as you prepare to implement your marketing strategy is how much it will cost to realize your marketing plans. There may be costs associated with advertising, customer incentives, consignment commissions, materials and staffing. Creating a budget will allow you to plan for and track your expenses related to marketing activities.

In addition to financial metrics, you may decide to track marketing metrics. These are metrics that will help you assess how well your marketing tactics are working. Some key metrics are

• Total revenue ($)
• Revenue per customer ($)
• Revenue per marketing dollar spent ($/$)
• # Leads
• Lead conversion rate (%)
• Average transactions per customer
• # Referrals
• Customer testimonials

With the creation of the sales forecast and the marketing budget, the marketing plan is complete. You now have all the information and tools needed to successfully take your craft to market.

Remember that, like the business plan, the marketing plan is a living document that should be revised periodically to reflect current market conditions and up-to-date information about your business goals and objectives.

Posted by: Tamboura Gaskins at 22 March 2011 1:00 pm | Category: Business Plan | Tags: Business Management, Business Plan, Market Plan, marketing, planning

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