2 Excel Templates

1) Revenue Forecast Model (by products)​​

In revenue forecasting, the most important is to define an approach and base for projection. I suggest building the most appropriate revenue structure (segments) suitable for forecasting).

In this template, you will see I created a model for revenue forecasting by product.

Depending on the business model, you can set up other segments as well:

By Customers: Focusing on individual customer contracts, subscription models, repeat purchases, etc. Ideal for businesses that rely on key accounts or have a subscription-based model.

By Sales Managers: For companies with diverse sales teams or territories, tracking performance and projections by each manager or team can provide a granular understanding of revenues.

By Sales Channels: E-commerce, brick-and-mortar, wholesalers, direct sales, etc. Ideal for businesses that sell through multiple avenues.

Later in this Newsletter, you can read more about sales prediction.

​Click here to get your Excel template​

The model can be adjusted very easily to any company. Keep you posted for the rest of templates.

2) Peer to Peer Financial Analysis (Adidas vs Puma)

How a sibling rivalry gave rise to two giants of the sports world. In the late 1940s with tensions between them rising after years of working together.

The two brothers split and formed two separate shoe companies.

Two world famous shoe brands – Puma and Adidas – were born from this rivalry.

These two companies would become iconic giants in the world of sporting goods.

Today, it is very interesting to observe and compare companies from the perspective of financial analysis.

That’s why I am sharing this analysis and the Excel model with you.

​Click here to get your Excel template​

Here are 2 Infographics for Today:

1) Financial Ratios List

​Get this infographic on a high-resolution PDF​​​​​​​​​​​​​​​

2) Sales Analysis

​Get this infographic on a high-resolution PDF​ ​​​​​​​​​​​​​​​​​​

Here’s today’s “How to” guide:​​​​

How to create reliable sales prediction

When it comes to sales prediction we usually start with assumptions.

The assumptions are informed judgments that consider past data, current market dynamics, and future projections. For sales, these assumptions can dictate production volumes, hiring needs, budget allocations, and more. Thus, determining these assumptions accurately is paramount to a company’s success.

Now I’m going to explain some of the most important.

Annual Growth Rate

Perhaps the most direct assumption, it estimates how much your sales are expected to grow year-over-year. It accounts for market dynamics, product life cycles, and expansion strategies.

Seasonality Factors

Not all months or seasons yield the same sales. Some products may sell more during the holiday season, while others might peak in summer. Understanding seasonality helps in inventory management, marketing campaigns, and cash flow projections.

One-time Revenues

These are non-recurring sales, perhaps from a special contract or a one-off event. Including these ensures you don’t mistake them for consistent, recurring revenue.

Historical Data on Units Sold

Historical sales data is often the starting point of any forecast. It provides tangible figures to work from and helps identify patterns and trends over time.

Updates on the Pricing Policy

Any changes to the pricing strategy, like discounts, mark-ups, or bundle pricing, can significantly impact sales figures. They need to be factored in to get a clear revenue picture.

Churn

A high churn rate can indicate customer dissatisfaction, and without addressing the root causes, acquiring new customers can become more expensive than retaining existing ones. So increasing the churn rate is not a good sign when we plan a sale.

Economic factors

Understanding industry growth helps businesses set realistic sales targets. If your industry is booming, there might be opportunities to capture a larger market share.

On the other hand, if the industry is contracting, businesses might need to focus on customer retention and operational efficiency.

Economic factors significantly influence consumer purchasing power and confidence. For instance, in a recession, consumers might cut back on non-essential purchases. Recognizing these trends can help businesses increase the accuracy in sales forecasting and planning.

New launches

New product launches can provide an opportunity for increased sales, especially if they meet a previously unaddressed need in the market.

Other factors to consider

Conducting thorough market research provides insights into customer preferences, gaps in the market, and potential growth areas. Assumptions drawn from market research directly impact sales forecasting by providing a more accurate picture of current demand and future potential.

Leveraging expert insights can offer a unique perspective on market trends, innovations, and potential disruptions. By considering these insights, businesses can make informed sales assumptions, particularly in industries that are rapidly evolving or are complex in nature.

As technology evolves, it can create new sales opportunities, change customer preferences, or render certain products obsolete. By keeping an eye on technology trends, businesses can anticipate shifts in demand and adjust their sales forecasts. For instance, the rise of smartphones drastically reduced the demand for digital cameras.

Create your checklist

After you consider all factors, you can start with data collection and reviews.

Start with this checklist.

  • Review historical records on sold quantities, per products, customers, lines,
  • Review historical prices, per products/ services and factors impacting prices,
  • Review historical records on quantity, financials and other discounts,
  • Analyze customer contracts, retention rate and customer churn,
  • Organize a meeting with sales manager and his/her team, discuss sales plans,
  • Review sales and marketing plans and find anomalies and risks,
  • Utilize industry reports, market research, and external data sources,
  • Make sure budgeted revenues, discounts etc.. are aligned with GAAP,
  • Analyze sales data to identify patterns, peak seasons etc..

More about revenue growth rate as key assumption

To estimate the growth rate, follow these steps:

  • Analyze revenue growth rates across several periods to recognize patterns and determine potential growth drivers.
  • Examine factors such as market size, customer demand, competition, technological advancements, and regulatory shifts that could influence revenue growth.
  • Assess the broader economic environment, taking into account metrics like GDP growth, inflation rates, interest rates, and trends in consumer spending.
  • Study the company’s market share to understand its potential for expansion within the market.
  • Evaluate the effectiveness of the company’s sales and marketing tactics. Grasp customer preferences, purchasing habits, and any noticeable changes in consumer behavior.