3 MIN READ
Create a forecast: What can education services learn from sales?
A sales forecast is an expression of expected sales revenue. It estimates how much your company plans to sell within a certain time period—and the best sales forecasts are extremely accurate. All sales forecasts answer two key questions: 1) how much money each sales opportunity is projected to bring into your business; and 2) when your sales team expects the revenue to hit.
Accurate sales forecasts are extremely important to business health. They help the entire business allocate resources to ship products, pay for marketing, hire employees, or whatever else suits the company’s needs.
For example, an accurate sales forecast helps your company make better and wiser investments—such as how many people to hire, and more importantly when to hire, allocating for sufficient onboarding and ramp up periods. Accurate sales forecasting basically helps companies allocate resources to meet customer demand both today and in the future.
On the flip side, if forecasts are off, companies face challenges that can affect everything from pricing to customer satisfaction. Let’s say a company’s forecast drastically underestimates sales—the company can lose sales opportunities due to shortage of sales reps, support staff, even inventory in some cases. Overforecasting can lead to the opposite problem of overcommitting resources compared to demand.
When it comes to sales forecasting, sales teams are pros. While their forecasts might not always be perfect, they have a process for building them, and forecasts are part of their culture of managing by results.
So, what can education service teams learn from sales forecasting for the products their company sells?
A forecast is not so much a prediction as it is a plan
The first thing to learn is to look at the opportunity for growth. What is the potential for increasing actual sales and profits through customer training? Education service leaders must start seeing this as a key part of their jobs.
The second is to develop multiple scenarios of growth: most optimistic, most likely, and worst case scenarios. Forecasts should be developed for both ends--most optimistic so that the education service team is ready in case demand explodes, but must be able to break even based on the worst case scenario.
The third is to build the forecast in detail—month-to-month–so as to have a high level of confidence in what’s forecasted. The forecast should look at each training course, estimate the number of students per class, fees per student, how many classes can be run (online, in class, self-paced, instructor led and so on). It should also allocate the resources necessary including program developers, instructors, marketing and support resources for the department, any advertising budget, and the like. And of course, there will be three sets of these for the three scenarios.
Finally, the forecasts should result in a profit and loss (P&L) statement complete with contribution margin to profits.
This is what your company’s CEO and CFO would need to jump behind any budget request you may bring. If they can clearly see the breakeven points and the return on investment, they will likely increase your current budget by 50%, 100% or even more.
Taking this into consideration, education services teams have a lot to learn from sales teams. Sales forecasting is a roadmap to profitability—if education services can follow the processes of sales teams and put together accurate forecasts, they can directly contribute to business growth and customer satisfaction, leading to more sales and more loyal customers.
We are running a webinar on this
On Wednesday, November 18, we are running a webinar to walk you through how to create your 20201 education services plan. This will be a hands-on webinar. By hands-on, I mean you are going to start on your plan during the webinar. Bring a pencil. Then, we'll give you a template spreadsheet you can use to build your forecast. If you want to WOW your management team, this is it.
Click below and register. Don't miss this, if you want to get that seat at the table.