How to Forecast Health and Fitness Club Business Sales

Predicting possible sales for your Health and Fitness Club business is a very key process; you should have a clear-cut idea before you commence your business of your likely sales. It’s doubtful you will be right on the money but if you do not make a realistic effort your Health and Fitness Club business will likely fall short; forecasting is an crucial ingredient to your business stratgey.

Your sales forecast is the financial projection of the quantity of revenue your Health and Fitness Club business will create from the sales of its products or services. Your sales forecast can stand alone, but it will be closely connected to your Health and Fitness Club business plan. It is an essential and fundamental piece of the planning method and it will be a foremost part of your profit and loss account and cash flow forecast.

Why bother with a sales forecast?

A sales forecast is necessary in order to

1. Predict your cash flow – your forecast might predict slow times of business where you may need a cash injection to pay for products or just to pay the staff for example.
2. Manage Cash flow – fundamental to the success of your business, it is important that you appreciate how sales forecasting contributes to the computation of the cash flow forecast.
3. Plan future resource requirements – for example, the number of workers considered necessary to handle your orders and provide a certain level of service.
4. Plan marketing activities – and the consequent monetary strategies arising from these.

Without a doubt constructing a sales forecast for your Health and Fitness Club business is key to your business success – you should constantly re-evaluate your sales forecasts – by looking at actual sales to your forecasted sales firstly you can measure if you have done well or not.

What elements do you need to think about?

Your sales forecast should show sales by month for at least the next 12 months, and then by year for the following two years. Three years, in total, is generally enough for most business plans.

You need to consider

1. Are there any parallel products or services already being provided in the locale?
2. What is the magnitude of the market?
3. Is this an increasing/contracting market and if so; by what percentage?
4. What are the main factors that are currently influencing that market?
5. Have you seen any factors that may influence it in the future?
6. Is your business cyclic?
7. What trends or fashions are important to the sector?

Do you know who your customers are?

1. What percentage will purchase?
2. Why will they bring to a close buying from someone else to trade from you?
3. What is your pricing rule and how will it affect sales?
4. Can you in fact make available the products and services that you are predicting?
5. How many competitors do you have?
6. It is unlikely your business is the only one of its kind – what happens to your customers when additional businesses enter the market?

The entire planet is your marketplace with the invention of the internet – but what products/services can you supply? Almost all business has a number of competitor(s) – how can you hoover up your competitors customers? How can you thwart your competitors taking your customers? Can you amend your product prices up or down to go with new customers – can you simply add or adjust the services you offer to new and existing customers to increase your turnover and profits?

Preparing your Health and Fitness Club business forecast

All Health and Fitness Club businesses need to base their forecasts on certain assumptions regarding potential changes that may take place in the future. These can be quantified and could include:

1. Sector growth/decline by a certain percentage e.g. 5%.
2. Employees increase to increase production or sales – maybe 25%.
3. Different location – more customers – 30% increase in sales.

Preparing your forecast

If you trade more than one product or service, you should prepare a separate forecast for each item in your collection,and forecast:

1. By volume
2. By value
3. By a combination of both volume and value.

So what are the pitfalls when forecasting sales?

1. Make sure your forecast is based on confirmable,realistic and unbiased info.
2. Don’t be tempted to pay no attention to your investigation if it showed bad results.
3. Don’t make projections solely on the basis of historical performance. Put your business under a microscope – try and imagine what might influence your sales in the future – good or bad.
4. Understand what volume of goods you can produce. Is it physically possible to produce the amount of sales being forecast with the equipment,personnel and financial resources available to you?
5. Does the pricing policy you have used in calculating your sales forecast relate to what is really achievable?, or conversely, have the prices been set too low or too high so that either way your forecast is potentially unrealistic?
6. Is your business just starting out?, have you thought-out that it may well take longer for your business to become well-known, and have you set accordingly realistic sales goals?
7. Once early sales have dropped off subsequent to your business launch, have you allowed for the increased marketing costs your business might incur?
8. When you give reasons for your sales forecasts to prospective investors – are they believable?

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