Marketing Plan Financials in Plan English – Sales Projections – Part 13 of the 2009 Marketing Plan Series

by Steve Fisher on April 10, 2009


You can’t have a product discussion and not include financial for the number geeks in all of us. As we wrap up the written content sections of the marketing plan, we dive into the numbers section. As in our Business Plan Series our Marketing Plan Series contains three beloved “Marketing Plan Financials in Plan English” sections. The first of these deals with sales projections and market share so let’s get started.

What Are Components of Sales Projections?

Projection of sales is an important part of the marketing plan. Part of the sales projection work is planning for a better performance in the future and correcting past performance with which you are not satisfied. You do this by finding out what profit contribution each sales representative makes. One goal of measuring a sales representative’s performance is improvement assistance. This is done in the marketing personnel section of the marketing plan.

Cost of Goods per Unit Worksheet
This is the first preliminary worksheet you must complete. The reason you have to start here is because these are the basic costs of raw materials, production labor and other costs that, once added up, give you the cost of goods per unit number you will need to get the “Estimated Sales Table” completed. To see an example of one take a look at this image.

Estimated Sales Table Worksheet
This is a preliminary worksheet that helps you figure out what the total sales and cost of goods sold are for each product year by year. You need to include the units, or number of things, sold by each product line. Take each number times the selling price of each product and you will get the actual sales for each product.

Tally that number up and create a column called % of sales and divide each number by the total and you can see how much each product brings in as a share of the entire sales projection. You should already have the “Cost of Goods Sold” per unit from the previous section. Put that number in after the “% of sales” and then multiply that number times the units and put the result into a new column called “Cost of Goods sold total”. Once that is done, do the same thing we did with “% of sales” and create a “% of Cost of Goods Sold”.

To see an example of one, check out this image from Plan Magic.

Sales Projections Worksheet
This is where all the hard work comes into focus and you break things down by months that give you the total amount you put together in the estimated sales table. You will use a concept called “weighing” which is basically splitting 100% across 12 months as to when you think that total amount will be met each month. Think of busy periods where sales are way up and slow periods where it is way down. A good example is retail with busy holiday periods and slow winters and then busy back to school sales.

You will also include the cost of goods sold numbers and percentages that breakdown according to the “weighing” you set up for each month overall.

These projections are also used on the business plan financials as revenue projections in the way they organize the business. You should also be aware how important this is not only from running your marketing division but when investors want to dive a layer deeper in the business plan and your numbers are what will back things up. It will also be used in other business plan financials but we will get into that in the next two sections. You can see a good example of this worksheet here.

Next Time:

The next part of our Marketing Plan Financials in Plain English sections focuses on Breakeven Analysis. This part of the marketing plan financials are in support of the overall business financial data section and shows how with your objectives met, when you will breakeven with the revenue goals and expenses detailed out and tied with the various parts of the marketing action plan.

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