What is a sales forecast?

A sales forecast is an estimate of future sales revenue, which plays a crucial role in business planning and decision-making. This estimate is based on various factors such as historical sales data, market trends, economic conditions, and sales team inputs. By projecting future sales, businesses can make informed decisions regarding inventory management, budgeting, resource allocation, and marketing strategies.

While analyzing past sales data is important for creating an accurate sales forecast, it is only one component of the overall forecasting process. Current market trends can provide valuable insights into potential demand, but they do not constitute a sales forecast themselves. Likewise, a plan for sales team structure pertains to organizational setup rather than revenue projections. Therefore, the most precise definition of a sales forecast is that it reflects an estimate of future sales revenue.