How do I create a sales forecast for my business?

A sales forecast like a weather forecast is at best an educated guess and at worst totally unreliable with factors that were unforeseeable changing the actual outcomes. So the first thing to know is that although you should create your forecast with all the data you can collect to make it as accurate as possible. It is just a forecast and as with any prediction of the future has the element of a crystal ball that can make it more interesting.

The first thing to do in creating a business forecast is to gather relevant data. Finding businesses like yours and how they have done. Checking on your location and what is the standard for businesses around you. Yes, finding out your competitors numbers is a great way to start collecting your data. Obviously taking into consideration whatever differences in service or product you plan to use to have an edge on your competition will be a part of your forecast as well. If you have a large budget you can hire someone to do the market research for you, but it is a valuable education for you to do for yourself as well. Finding out what the past has already done in your market is a great way to learn for the future.