Sales Forecast: The Mirage in the Desert of Your Business Plan

"The goal of forecasting is not to predict the future but to tell you what you need to know to take meaningful action in the present." – Paul Saffo 

(Part 6 of the This Is Not An MBA Business Plan series.)

Sales: The Startup Struggle

For most startups, the number one challenge is sales and marketing. At the center of this challenge lies your Sales Forecast Assumptions. Ideally, this section follows your Sales and Marketing strategy, but honestly, it doesn’t matter where you place it in your business plan. What matters is that it’s there.

It’s the hub—your guiding post for how you envision your sales unfolding. It’s that crucial.

The Mirage

At first glance, it looks promising. The numbers lined up like an oasis on the horizon. But look closer, and the Sales Forecast often reveals itself as a shimmering illusion: vague, hopeful, and dangerously misleading.

It’s the most crucial section of your business plan, yet the most carelessly crafted.

From Guessing to Estimating

Many entrepreneurs say, “I’m just guessing. How can I predict the future?” I tell them to swap “guessing” with “estimating” or “providing a reasonable rationale.” There are no guarantees. But you are estimating based on assumptions and realistic projections tied to the marketing activities you’ll actually implement.

The purpose of the Sales Forecast Assumptions isn’t to be 100% accurate; it’s to help you decide where to focus your energy and your marketing dollars.

The Two-Part Forecast Blueprint

Part I: The Overall Assumptions

Start with the big picture. I recommend using the average dollar amount per sale. This figure tells you how many customers you’ll need to reach your monthly sales goal.

For example, let’s say you’re launching a vegan sauce business that sells to health food stores. It’s more actionable to say you aim to secure six new retailers (at an average sale of $128 per month) than to vaguely state that you want to make $800. Even though each customer might vary in their order size, knowing your target number of customers gives you a plan to work with.

You’ll also want to note factors like:

• Seasonal peaks

• Restocking cycles

• Key marketing initiatives that could spike sales in certain months (like attending a trade show)

  
  

You’re thinking through the process with imperfect information, but with intention.

Part II: Monthly Sales Rationale (Next 6 Months)

Here’s where you get into the details. Break down the next six months with:

• Estimated sales

• Estimated number of customers

• Specific marketing/sales activities

• Expected outcomes from those activities

  
  

Example: Vegan Sauce Business

I. Sales Forecast Assumptions

• Peak/slow seasons: Slight increase during Thanksgiving, Christmas, and New Year’s

• Average dollar amount per sale: $128 (16 jars at $8 wholesale)

• Average repeat buying: Once a month

• Major marketing initiative: Attend CHFA trade show in September

  
  

II. Monthly Sales Rationale (6 months)

May – $384 (3 customers x $128)

• Launch website

• Contact 10 health food stores in the GTA mid-month

• Secure 3 stores (3 x $128)

  
  

June – $1,152 (9 customers x $128)

• Contact 24 health food stores in the GTA

• Secure 6 new stores

• 3 stores reorder

• Conduct 5 in-store demos (3–5 hrs each)

• Post on Instagram every other day, featuring dish ideas using the sauces

• Gain 80–100 new followers

  
  

July (etc.) Continue this format for at least six months. Patterns will emerge.

Get Granular, Get Real

Notice how specific things get. That’s the point. You’re making assumptions: if you do X, you’ll likely get Y. Of course, things may shift. Maybe you land a big order from a national chain. Maybe some stores don’t reorder.

Stop chasing certainty. Start thinking in probabilities. That’s the real game.

A Living, Breathing Strategy

Your estimates should be grounded in:

• Market research

• Realistic marketing efforts

• Industry experience

• Professional conversations

  
  

Your Sales Forecast must be based on a detailed Sales and Marketing Plan. In [Blog 22], I broke down how to build your Sales and Marketing Strategy and Tactics using an example of an actual vegan sauce company.

All sections of your business plan connect:

• Your Company Profile defines your offering

• Your Market Research points to your best-fit Marketing Strategies

• Your Marketing Strategies inform your Tactics and your Sales Forecast

• Your Sales Forecast drives your Cash Flow Projections

  
  

From Plan to Action

There’s another benefit to being granular: you get better at realistically assessing both your sales potential and the actions required.

More importantly, you walk away with a plan you can execute.

Entrepreneurs are doers. They don’t just plan—they act. And the better your Sales Forecast, the better your chance of success.

Which, in the end, is why you’re writing a hands-on business plan in the first place.