How to Calculate the Sales Projections for Next Month Based on Previous Years

Sales managers rely on projections to determine budgets, plan marketing and advertising campaigns, set up sales personnel schedules and set product inventory levels. Accurately projecting sales figures is both an art and a science. One of the most important tools for calculating sales projections is historical data. Data from past years can help managers determine at what level to budget sales for the same months in current or future years. Managers who learn to evaluate historical data can improve the accuracy of their projections.


Pull sales data for at least the past five years. Review sales budgets, accounting records, sales receipts or any other tool that your organization uses to record sales information.


Research what external factors affected sales in previous years. List such events as major weather patterns or disasters, one-time events in your geographic location such as a tournament game or an election debate, openings or closings of competitors and economic booms or recessions.


Research what internal factors affected sales in previous years. List such internal factors as product launches, marketing campaigns, coupons, price increases or decreases, advertising and changes in sales force personnel or numbers.


Create a chart indicating the direction of sales over the past five years. Calculate how much sales have increased or decreased each year. Adjust the figures, where possible, to account for one-time external or internal events. Express this figure, also known as the expected market growth or shrink, as a percentage. Add the figures and divide by five to generate the average market growth or shrink.


Take the previous year's sales figure for the month and multiply it by the average market growth or shrink. Add the resulting amount to the previous year's sales figure if the figures were increasing or subtract if the figures were decreasing to project the month's sales figures for this year.


  • Where a product is in its life cycle will also affect its sales and the quality of historical information available.
  • The amount of detail and the quality of the historical data will contribute to, or detract from, the accuracy of the forecast.


  • Set your budget slightly lower than the sales forecast to account for the risks of forecasting.



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