Forecasting potential sales in your Movie Theater business is a critical piece of starting up and running a business; it is a critical part of your Movie Theater business plan. Your Movie Theater business forecast will obviously not be right but you must be able to make credible, evidence-based projections in order to plot your Movie Theater business strategy.
The sum of money your Movie Theater business will achieve each year depends on how many sales of its products or services – but before you start the process of actually making these sales you should create a sales forecast. The sales forecast for your Movie Theater business will exist on its own virtues – it will of course be a part of your overall Movie Theater business plan.
Why bother with a sales forecast?
It is needed so you can
1. Plan cash flow – that you will need to include in your business plan when seeking investment, and to avoid unforeseen cash flow troubles by establishing if and when you will need to inject capital or have access to funds.
2. Manage Cash flow – innermost to the success of your business, it is crucial that you be aware of how sales forecasting contributes to the calculation of the cash flow forecast.
3. Plan future resource requirements – for example, the number of workers considered necessary to deal with your orders and provide a certain level of service.
4. Plan marketing activities – this will observably have a knock on effect to the sum of sales you make as well.
Whatever the situation, it is crucial that you research your anticipated sales frequently and realistically, and take proper action to have another look at your strategy. Your sales forecast is the point of reference alongside which you ought to continually quantify what really happens in your business with regards to sales and the important thing is to understand the variances and why they transpire, and to incorporate what you have learned into potential forecasts.
So what do you need to consider?
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.
Things to think about
1. Is there an customary market for your product or service?
2. What is the size of the market?
3. Is the market growing or declining, and if so,by what percentage each year?
4. What are the most important factors that are currently influencing that market?
5. Have you seen any factors that may influence it in the future?
6. How do recurring factors influence purchases of your product or service?
7. What trends or fashions are important to the sector?
Do you know who your customers are?
1. What % will buy?
2. Will they leave a different supplier to come to you?
3. What is your pricing policy and how will it affect sales?
4. Can you in point of fact provide the products and services that you are predicting?
5. How many competitors do you have?
6. Your business will not be unique; what happens when new-fangled competitors penetrate the market once you have done the groundwork to raise market awareness?
You must be clear about how your products or/and services match the marketplace. How can you differentiate your business from your competitors’ businesses? Can you modify your product prices up or down to go with new customers – can you straightforwardly add or adjust the services you present to new and existing customers to swell your turnover and profits?
Preparing your Movie Theater business forecast
You need to make certain future assumptions for your Movie Theater business in order to create a sales forecast
1. An expectation of market expansion/decline by a certain percentage, for example 10%.
2. Human resources increase to increase production or sales – maybe 25%.
3. Better location – more customers – 30% increase in sales.
Preparing your forecast
You ought to prepare a sales forecast for each product you trade,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 realistic, confirmable and unbiased info.
2. Don’t be tempted to close your eyes to your research if it showed negative results.
3. Do not make projections exclusively on the basis of historical performance. Put your business under a microscope – try and imagine what might change 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 monetary resources available to you?
5. Are your prices realistic?, or conversely, have the prices been set too low down or too high so that either way your forecast is potentially unrealistic?
6. Is your business new?, have you thought-out that it may possibly take longer for your business to become established, and have you set accordingly realistic sales targets?
7. Once primary sales have dropped off following your company launch, have you allowed for the increased marketing costs your company might incur?
8. Can you identify and justify the assumptions you have made in reaching the forecast, and explain them to interested parties if required?