Entrepreneurship - Forecasting Revenues and Cost Department

Revenue

is a result when sales exceed the cost to produce goods or render the services. This is recognized when earned, whether paid in cash or charged to the account of the customer.

Sales and Service Income

Other terms related to revenue

Sales

is used especially when the nature of business is merchandising or retailing.

Service Income

is used to record revenues earned by rendering services.

The economic condition of the country

When the economy grows, its growth is experienced by the consumers. Consumers are more likely to buy products and services. The entrepreneur must be able to identify the overall health of the economy in order to make informed estimates. A healthy economy makes good business.

The competing business or competitors

Observe how your competitors are doing business. SInce you share the same market with them, information about the number of products sold daily or the number of items they are carrying will give you idea as to how much your competitors are selling. This will give you a benchmark on how much products you need to stock your business in order to cope with the customer demand. This will also giv eyou as better estimate as to how much market share is available fro you to exploit

Changes happening in the community

Changes happening in the environment such as customer demographic, lifestyle and buying behavior give the entrepreneur a better perspective about the market. The entrepreneur should always be keen in adapting to these changes in order to sustain the business. For example, teens usually follow popular celebrities especially in their fashion trend. Being able to anticipate these changes allows the entrepreneur to maximize sales potential.

The internal aspects of the business

Another factor that affects forecasting revenues in the business itself. Plant capacity often plays a very important role in forecasting.

Plan capacity

plays a very important role in forecasting

Mark Up

refers to the amount added to the cost to come up with the selling price.