How to Create a Sales Budget

by Greg DePersio

0 min read

A company’s budgeting process must begin with its sales budget. The sales budget is established first because its information is critical to formulating all other budgets within the company, including marketing, purchasing, and production. The sales budget is the foundation of the company’s financial plan, which dictates how resources should be allocated to achieve revenue objectives.

Forecasting sales is the most important element of creating a sales budget. Sales forecasting relies on marketing and industry data, historical trends, competitive analysis, economic forecasts, and statistical trend analysis. Once initial forecasts are developed, they are run down the chain for adjustments based on strategic variables, such as projected customer growth, product and pricing changes, promotional plans or events, and staffing or operational changes. Once all of the data is collected and processed, a final sales forecast is established, which is communicated back down the chain.

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