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How do I forecast sales? I'm currently writing a business plan for a startup car enthusiast oriented luxury tour company. There are many such companies in the world, and they seem quite successful. I have seen significant growth in the industry over the last two or so years. As of yet there are no such companies in my country, and there's plenty of rich people who do not necessarily want to add the hassle of flying to a different country to start a trip, then flying back at the end of it. Plus, lots of people here have terrible English. I can find statistical data on tourism, data on demographics and earnings. I can find data on readership of car magazines, and I can look for adwords searches. My problem is I have no idea how to put it all together into estimating a market size, nor do I have any idea how to estimate market penetration. Every article I've managed to find boils down to "Don't estimate you'll capture 1% of the market - instead, math out a target demographic size, then make up a random number for the sales conversion rate". A lot of articles I can find on the internet seems to be coddled Sillicon Valley bubble CEO types who give the most uselessly trite and hilariously optimistic (I literally found an article that said in the first year you should have $20-100m of sales or not bother  ) advice. And easily 80% of things I was able to find just assume you're doing SaaS because that's the only business in the world.
Zeppelin Insanity fucked around with this message at 10:03 on Mar 10, 2017 |
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Mar 10, 2017 09:57
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Both! For myself, I need to work out whether my idea is actually commercially viable, my break even point and timescale to profitability. Once I've assessed that, I will definitely need to look for funding as I don't really have assets to leverage.
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Mar 10, 2017 16:42
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I don't have any of that information yet as I'm in the very early stages still, but your post gave me a lot of food for thought. Next month there's a fairly big motor show in the city I'd choose as my location. I plan to attend and do some polling. Would the percentage of people who say in the poll they'd be interested be a reasonable indicator? Besides pricing and demographics, what are the main pitfalls of applying that percentage to the target market size?
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Mar 12, 2017 09:44
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Vulture Culture posted:It's better than nothing, but it's not an organic indicator. The best way to gauge organic interest, if you don't need to operate in stealth mode at this point, is to act like you have a fully-operational business, especially if it won't take long to actually bootstrap once you have funding. Set up a phone number for your business, even if it's just a Google Voice mailbox. Have brochures ready to go at the show you plan to attend. Put up a website with a clear call to action, like asking for calls or contacts through a form. All of these things will test the first stage of your conversion funnels. If nobody tries to buy your product, or find out more, there was no interest in the first place. You dust yourself off and try again. If you do get calls, those are leads you can call back once you're operating. If you've really cracked a good market, those leads may spread news about your business through word-of-mouth before you're even operating, broadening your base of leads. You're super helpful. Thank you. So, the motor show got back to me and while they would allow me to poll, they wanted a fee that is more than I can afford pre-investment. So now setting up a site to take email and preferences is the next step. What are some very low cost ways to get traffic to the site? I'm operating on the assumption that social media is the only real way, and the plan is to start putting in work to build brand awareness through that channel once I get some graphics finalised. Are there other avenues to explore that I'm missing? And lastly, a perhaps somewhat naive question. I don't get how not to advertise it as coming soon. Surely, if it's a landing page rather than a fully fleshed-out website it's very apparent it's not ready? And if I can get around that, wouldn't advertising it as ready when it's not create a negative customer experience? I'm sorry if those questions are all basic. I really appreciate the input.
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Mar 15, 2017 21:50
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