This allows you to understand your sales operations better, from adjusting your budgets to anticipating future sales and expenses. Sales forecasting uses historical data and specific assumptions to identify trends that you can project into the future. Sales forecasts are anticipated measures of how prospects and customers will respond to your company’s go-to-market initiatives. We are going to focus on the data side of the equation in this article. Sales forecasting refers to the process of predicting your future revenue by using a combination of data, experience, and gut. In this guide, we’ll dive into what sales forecasting is, the different forecasting methods, how you can build a sales forecast in Google Sheets, and how exponential smoothing can be ‘exponentially’ better (see what I did right there?) What is Sales Forecasting? This produces “smoothed data,” making trends and patterns more visible. The exponential smoothing model allows you to analyze data from specific periods of time by focusing less on older data and more on the latest data.
This is where it helps to use exponential smoothing when building a sales forecast in Google Sheets. However, sales can fluctuate due to various trends, seasonality, and other factors, making accurate forecasting challenging. If you want to predict a sales forecast effectively, you need to use your historical data to build reliable and comprehensive forecasting models.