FORECASTING SALES AND REVENUE
How much income can your web-based business generate in the first quoter after start-up? The second quoter? The first year? You'll have to have at least some estimation of revenues in order to stay financially healthy. And if you intend on getting a business loan, investment, or grant forecasting sales and revenue is a must.
How do you do that?
First understand that there's a huge difference between forecasting and goals. Is your goal to earn £100,000 in income in your first year of business? Go for it! If you fall short by even 20 percent, you'll still be doing great. But a forecast has to be realistic.You, and perhaps other, will be making important decisions around what your forecasted revenue are, so you'll need to be as conservative as possible.
When creating a forecast, think of the most pessimistic person you know - and then pretend you are that guy or gal! Questions every assumption you make. Be ruthlessly realistic. Then, when you come up with much money you expect to bring in once your web-based business gets going, lower that estimate by 25 percent.
It's far better to understanding sales and revenues. That way, when you look at your figures each month, you'll have far more happy surprises than disappointments.
WARNING!!! Don't forecast a lot of sales and revenues for the first three months of your business. It takes time for customers to learn about your website, become familiar with its offerings, and then start placing orders or clicking on your affiliate program ads and links. Expect your website revenue activity to be very low at the beginning.
"The complete idiot's guide to starting a web-based business" by Steve Slaunwhite
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