For small businesses, it’s equally important to look forward and backward. Most business owners take time each month or quarter to look back on their previous sales results. But fewer take the added step of looking forward and making educated guesses about what’s to come.
Predicting future sales isn’t about staring into a crystal ball and getting a picture-perfect vision. It’s about taking time to project how their business might perform in the future, based on assumptions about what they want to do and what obstacles they might face.
Sales forecasts influence businesses’ hiring plans, how they manage their inventory, and a host of other strategic decisions. But many small businesses still rely on spreadsheets, or even gut instinct, to predict future sales trends.
That’s no way to run a business.
Enter sales forecasting software. These tools offer a great alternative to the guesswork of spreadsheets or estimations. In this article, we'll explore how to choose the best sales forecasting software for your business needs.
Don’t Start Without Understanding Your Business Needs
Before you even start thinking about which sales forecasting tool is right for you, step back for a minute and understand your business's specific needs.
Review your sales process and cycle: Do you sell to consumers with short sales cycles, or does your business depend on longer sales cycles with other businesses? Different tools may specialize in one type of business situation or another, so it’s important to understand what your specific needs are.
While some businesses may only need a high-level overview of total expected sales, others might need highly granular forecasts that split out projections across product lines or sales regions. The more detailed your forecasting needs, the more sophisticated your chosen software should be.
Key Features to Look For
One of the most important features to look for in forecasting software is its ability to incorporate your actual financial data into its projections
If you use accounting software like QuickBooks or Xero to track your actual results, look for sales forecasting tools that integrate with these platforms. These integrations are extremely powerful — they let you incorporate historical data from your business into your forecasts. This helps ground your numbers in reality.
Some tools also include the ability to adjust forecast parameters, incorporate different variables, or even create multiple forecast scenarios. If you’re going to invest in a sales forecasting tool, you need to be certain that its features are tailored to what your business needs to ensure the projections are accurate and useful.
Depending on the size of your team and the need to share information, you should also consider whether the software you choose is built for collaboration through shared dashboards, visual reports and the ability to comment on forecasts. Features like mobile-friendly financial reports and even AI-assisted sales forecasting options are emerging as well, so you should evaluate all of these features to see how they might benefit your business.
Accuracy and Reliability are Crucial
Don’t get hung up thinking that a forecast needs to be 100% accurate. That’s simply not possible. What's crucial is understanding how the software arrives at its predictions.
Choose a forecasting software that clearly explains its methodology and allows you to adjust parameters that influence the forecast and analyze historical data. You should be able to effectively analyze your past sales data, identify patterns like seasonality and trends that inform future predictions.
Consider the software's track record, as well. Read any case studies or testimonials you can find on the software provider’s website, or read reviews online. Many tools also offer free trial periods.
Pick a Tool That Scales With Your Business
Your business isn’t static; it grows and evolves over time. Look for software that can handle an increase in sales volume, product lines, or new markets without compromising performance or requiring a system overhaul.
Many of the leading sales forecasting software providers offer tiered pricing plans that give you the features you need now, and then expand your use of the platform as your business grows. Down the road, you may adopt new tools or systems, so your sales forecasting software should be able to integrate with a wide range of other business applications to ensure it can continue to access all relevant data.
You should also try to determine how frequently updates and improvements are made to the product. Software that releases updates and adds new features are more likely to remain relevant as your business grows and market conditions change.
User-Friendliness and Support
Even the most powerful sales forecasting tools won’t work for your business if your team struggles to use them effectively. Look for software that balances features with functionality and ease of use.
Consider the learning curve associated with the software. Most tools will require some amount of training, but it shouldn’t be a massive undertaking to get a basic grasp of the process. Look for solutions that offer tutorials, tips and guided workflows to help users get up to speed quickly.
Ongoing customer support is just as important. Does the software you’re considering offer support through phone calls, email, or live chats with customer support teams?
User communities or forums can be a valuable resource here as you consider which sales forecasting software to use. Read reviews to determine if other users have gotten help with their problems, or feel customer support for that particular tool is lacking.
Don’t Ignore Cost
Cost is of course an important factor when choosing a sales forecasting software. But it’s important to look beyond the sticker price and consider the overall value and potential return on investment that the software can provide.
How might the cost of the tool change as your business grows? Look for providers that offer flexible plans that can grow with your business, allowing you to add users or features as needed without a significant jump in cost.
It’s tempting to save yourself some money by taking the cheapest option that seems to get the job done. But sometimes a more expensive solution that provides more accurate forecasts could potentially save or earn your business far more than the difference in cost.
Don't overlook the potential savings in time and resources, either. If sales forecasting software can automate processes that your team currently handles manually, the time saved could justify a higher price point.
