The market section of a business plan: Estimated sales

Estimated sales for your business are based on your assessment of: the advantages of your product or service, your customers, the size of your market, and your competition. This should include sales in units and Rands for the next three years, with the first year broken down by quarter if that's appropriate for your industry. These numbers will be crucial to other financial documents you present later in the plan.

Use a one-paragraph summary to justify your projections. Be sure to use a succinct statement of what sets apart your product or service from other companies in the marketplace. Include a brief discussion of any customer commitments. Also state why you envision your customer base growing, and indicate how you will garner this business. See samples in the market toolbox.

Tips

  • If you derive your average sale per customer from trade association information, research, or interviews with business owners in similar endeavors, cite those sources in this section to provide credibility to the numbers on which you base your sales projections.
  • Do not use the word "conservative" when describing your sales projections. Lenders are used to seeing this term preceding projections that are usually anything but conservative.
  • Do not make outlandish projections. They will ruin your credibility as a reputable business person. A common mistake is assuming your business will have a few modest years and then a dramatic increase in sales when "the market takes off."
  • Use "best case," "worst case," and "likely" scenarios to create a spectrum of sales projections.
     
Business plan FAQs  Creating a business plan – part 1: Introductory elements  Creating a business plan – part 2: Business descriptionCreating a business plan – part 3: The market
Creating a business plan – part 4: Development and productionCreating a business plan – part 5: Sales and marketingCreating a business plan – part 6: ManagementCreating a business plan – part 7: Financials

 

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