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Business Planning Sales Strategy and Forecast
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The purpose of your sales strategy is to define the process you will follow to close and transact the physical sales process. There is a fuzzy line between your marketing strategy and sales strategy for sure. Traditionally, your sales strategy focuses on processing or closing leads whereas your marketing strategy tends to focus on generating leads.
For your mobile car care operations, your sales strategy should be fairly straightforward. You really just need to focus on the basic questions of how you will best convert your sales leads and turn inital customers into highly satisfied, repeat clients and valuable references.
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At a minimum, your sales strategy should answer the following questions:
- Will I handle residential leads different than commercial leads?
- How will I prioritize my leads?
- For commercial clients, will I extend credit?
- What are the different forms of payment I am willing to accept?
- Will I expect payment before services are performed or afterwards?
- If I have a website, will I provide scheduling and payment options online?
- If I plan to employ a sales force, how will I compensate them? Will I pay them by the hour, a salary, a commission or a combination salary and commission?
- Will I offer various price levels based on different customer classes?
Once you have a better understanding of how to manage your sales leads, the next step is to prepare a sales forecast. Believe it or not, this process is fairly straightforward and simple to do. The hard part, however, is hitting the mark in terms of accuracy. Based on our experience, new business owners tend to be too optimistic in terms of their sales forecast. As such, we recommend applying a liberal amount of conservatism in your forecasted sales figures.
There is usually some debate in terms of the timeframe over which to forecast your sales. We feel that a three year forecast is good since it represents a nice balance of a longer-term perspective with the benefit of a certain sense of reliability. If you go out too far, there will simply be too many unknowns for any high degree of accuracy in your forecast. Conversely, if you keep your forecast to only a year you will lose the benefit of longer term planning
For the purposes of our sales forecast model, we will keep things simple and assume you plan to operate your mobile car wash and detailing business by yourself, at least for the first three years. This isn’t to say that we don’t think it’s a good idea to hire employees…quite the contrary. However, our goal here is to show you how to complete your sales forecast. We’re choosing to keep things simple. Once you get the hang of it you can always adjust sales volume.
You calculate your sales forecast by simply multiplying the number of car washes and detailing jobs you anticipate doing in a given period by the price you charge for those services. There are several assumptions we need to set ahead of time but the mathematics of the sales forecast are really straightforward.
As we mentioned earlier, we will forecast your mobile car wash and detailing sales figures over three years. Our assumptions are as follows – again, for purposes of our calculations we’re assuming that you will be the only employee in your business.
- Assumption: You can wash at most 8 cars per day
- Assumption: You will charge $40 per car wash
- Assumption: You can detail at most 4 cars per day
- Assumption: You will charge $125 per car detail
- Assumption: A typical full day will consist of 4 washes and 2 details
- Assumption: You will work 5 days per week, 20 days per month
- Assumption: For the first year you will operate at 60% capacity
- Assumption: For the second year you will operate at 75% capacity
- Assumption: For the third year you will operate at 90% capacity
For the capacity you will also need to factor in seasonality. If you live in a region with cold winters, the number of details and washes will likely drop during the cold winter months. For the purposes of this example, we've kept things simple and just used a straight average across each month.
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YEAR 1 |
YEAR 2 |
YEAR 3 |
| Sales Forecast |
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| Car Washes |
576 |
720 |
864 |
| Car Details |
288 |
360 |
432 |
| Sales from Car Washes |
$23,040 |
$28,800 |
$34,560 |
| Sales from Car Details |
$36,000 |
$45,000 |
$54,000 |
| Total Sales Forecast |
$59,040 |
$73,800 |
$88,560 |
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| Direct Cost of Sales |
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| Transportation (5%) |
$2,952 |
$3,690 |
$4,428 |
| Supplies (10%) |
$5,904 |
$7,380 |
$8,856 |
| Wages (70%) |
$41,328 |
$51,660 |
$61,992 |
| Total Direct Cost of Sales |
$50,184 |
$62,730 |
$75,276 |
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