The following was edited by Dylan Lowe from a presentation by the author
In this blog we will discuss how to quantify past sales revenue and project future revenue during the Coronavirus outbreak. Obviously, it is impossible to have a wholly accurate crystal ball during these uncertain times. But we at the very least, we need the tools that help us get close to predicting what our future sales revenue will be. So, let's get started. Oh, and if you could please subscribe to the blog in the link above that would tell us you would like more content like this!
1. Know your historical data:
First you need to know some of your numbers over the past year, so make sure you accurately know and have recorded:
Cost of Goods Sold (COGS)
Try to include all your costs into your COGS whether you manufacture these items yourself or buy from overseas suppliers. You also need to separate your in-person sales (showroom) revenue from your digital sales (email, website, etc.) revenue as both have different COGS. After you note your pricing and profit, note your sales trends over the past year including the downtrend at the onset of the Coronavirus.
You need to know the who, what, where and when of your supply chain for the next year as every supply chain has been severely disrupted with various effects over the past few months. Evaluate the following:
Capacity of your current vendors
Capacity of your current clients
Profitability of adding new vendors
Profitability of adding new clients
It might be more feasible and predictable to buy local if your particular SKUs have been severely impacted overseas. It is important you are able to accurately evaluate your vendors. If you cannot, consider moving on.
Which clients are going to keep buying from you? If you are uncertain, consider reaching out to them and discreetly evaluate their capacity to keep buying from you. It's probably time to find as many new clients as you can. Digital sales will be the new method of wholesaling going forward so reach out to those clients who are used to making wholesale purchases without having to visit a physical showroom.
3. Set sales goals:
You should now have established a good baseline for estimating:
Your stabilized capacity
Your reasonable growth rates
How you can add profitable customers
Perhaps the hardest of these to project is adding new customers, but with nearly all wholesale sales moving online there are still many new customers to find. Search for virtual trade shows and online marketplaces like https://www.faire.com/ and https://www.rangeme.com/. It's important to note that many buyers have now switched to using wholesaler trade software like https://surefront.com/ to collaborate with buyers.
So let's look at your stabilized capacity, reasonable growth rates and finally your sales projections now. We have created an easy to use sales projection calculator just for for this. Just click on the link below, download a copy for yourself and start calculating. Note, you can change titles of any row to your own SKUs, the numbers and item names are simply examples and place holders. If you have any questions on how to use it email Karmstrong@smallbizla.org.
In an ever-changing, fluid environment it is imperative to understand and act and on new information quickly. Try your best to stay focused on the issues you can control which may help to curb your anxiety. Just remember, you are not alone in this and this is new for everyone, including your buyers.