Normally a sales forecast includes not just sales, but cost of sales as well. Although not all marketing plans even include cost of sales, it's actually a good idea and easier to do while you're doing your forecast than later on.
The standard sales forecast example, shown again here below, also includes a simple cost of sales projection as well. As with the sales in the top block, the costs are projected as educated guesses, row by row, and summed in the last row.
Sample from Marketing Plan Pro.
The unit cost projection shown below is really just a different view of the same forecast table shown as the unit sales forecast. Like that forecast, it is based on unit projections.
Just as the unit sales forecast projects price per unit and multiplies price times units for sales, the cost projection estimates cost per unit and multiplies units times unit cost to calculate total cost of sales for each item. The bottom row adds up the item rows to calculate total direct cost of sales.
Sample from Marketing Plan Pro.
You don't need to calculate all of your costs in a marketing plan. Your direct cost of sales might not be your total cost of sales. For example, in Palo Alto Software our direct cost of sales includes the packaging, CDs, manuals, and assembly of software products. The total cost of sales also includes additional costs of shipping, fulfillment, and royalties.
In both cases the source spreadsheet hides the monthly columns for April through October for the purpose of illustration, so you can see the annual total without scrolling. Those other months are there, even if they don't show.
This units-based cost forecast has the advantage of breaking your assumptions down into meaningful parts. Depending on your type of business, most people find it easier to guess units and cost per unit than to just guess cost values. Also, as you review and adjust your forecast, you can adjust either unit sales or price per unit as you make changes. And you can consider the impact of changes in either way.
A sales forecast is difficult for many people because they are unsure of how to project future revenue. Don't worry. If you know your business, you can still give an educated guess of future sales. You can then modify the forecast as you learn more through research or experience. Remember, one thing harder than creating a sales forecast is running a business without one.
