Many entrepreneurs are tempted to build their forecasts with a top-down approach. They look at the total market share and guess how much of it they can garner. While this approach can provide some interesting data to consider, most of the time it doesn’t give a company a realistic forecast.
The alternative is taking a bottom-up approach. With this method, the company’s internal sales drivers and capabilities are taken into consideration. This allows them to forecast with data that is more realistic and easier to capture, monitor and measure. And, in the end, they are able to analyze this data to make adjustments to the sales processes to improve a company’s overall bottom line.
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