How to use the sales forecast calculator
- Enter your sales in the latest period, the one you are growing from.
- Enter the growth per period as a percent. It is a rate you choose, and a negative number means a decline.
- Choose how many periods to project and whether each one is a month, quarter or year.
- Optionally add seasonal factors, a repeating list of percents of trend such as 90, 95, 100. Read the projection table and totals.
Formula
Trend in period t = latest sales x (1 + growth %)^t
Sales in period t = trend x seasonal factor % / 100
Seasonal factors repeat in order, so factor k applies to periods k, k + cycle length, and so on
Total = the sum of the projected sales over all periods
With no seasonal factors, every factor is 100% and sales equal the trend.
$100,000 growing 5% a month
Month 1 is $100,000 x 1.05 = $105,000 and month 2 is $110,250. By month 12 the trend reaches $179,585.63, a rise of 79.59% over the latest period, and the 12 months add up to $1,671,298.28.
With seasonal factors of 90 and 110 repeating, month 1 becomes $105,000 x 90% = $94,500 and month 2 becomes $110,250 x 110% = $121,275. The factors shift the shape of the year, and the growth rate still drives the trend.
An illustration, not a prediction
The projection is arithmetic on the growth rate and seasonal factors you enter. It does not know your customers, pricing, competitors or the economy, and a constant growth rate rarely holds for long. Use it to explore what a plan implies.
Try several rates, including a low one, to see a range. If you have history, the sales growth rate calculator shows what rate your past sales actually grew at.
Using seasonal factors
A seasonal factor says how far a period sits above or below its trend, as a percent. Twelve factors, one per month, describe a yearly pattern, and four describe quarters. They should come from your own history.
To compare the forecast with a goal use the sales goal calculator. The break even calculator shows what sales you need to cover costs, and the cash flow forecast calculator adds timing.
Assumptions and limits
- Growth is the same percent every period.
- Seasonal factors repeat in the order entered and multiply the trend.
- Each period has the same length.
- Price changes, one-off events, costs and cash timing are not modeled.
Frequently asked questions
How do you forecast sales from a growth rate?
Multiply the latest period's sales by 1 plus the growth rate for the first period, and repeat for each later period. At 5% growth, $100,000 becomes $105,000 and then $110,250.
What are seasonal factors?
They are percents of trend that describe how a period usually sits compared with the trend, such as 120% for a busy month. The tool uses the factors you type and does not provide any.
Is the forecast reliable?
It is only as reliable as the assumptions you enter. Treat it as an illustration and run low and high rates to see a range of outcomes.
Can I use a negative growth rate?
Yes. A rate such as -3% reduces sales each period. Growth below -99% is not accepted.