Estimating revenue

PUTTING AN IDEA INTO

PRACTICE

Specification detail

How businesses forecast sales volumes

and selling prices to estimate revenue

Estimating RevenueKeywords to learn and remember

Sales Forecasts: Estimates of the future level of sales

Sales Revenue: The total value of sales made within a period.(Value = Price X Quantity Sold)

Sales revenue:Brentford Football

ClubTicket Sales

Sponsorships

Car parking

Food and Drink

ProgrammesRaffle tickets

Transfers

Sales of Brentford kit

In your book list the various forms of revenue for

Kingston Lodge

Blueberries and ice-cream

What will happen to sales on a hot sunny day?

What will happen to sales on a cold wet day?

Pg 90

Sales forecast : Quantity

Sales forecast : Quantity

Hersham Butchers

What will happen to sales in Summer?

What will happen to sales in Winter?

Forecasting Sales volumes : Quantity

Some produces have elastic sales – The volume sold changes oftenSuch as : CDs, Rubber Boots and Gym Memberships

Some products have inelastic sales – The volume sold doesn’t change as oftenSuch as :Coffee, oil, bread, milk

Estimating Price (involving costs)

Prices cannot be estimated with FULL confidence.

In 2008 BP assumed prices would average £1.00, when they averages £1.15In March, 2008 Coffee farmers estimated they would receive 60p per pound for the year yet 3 months later received 50p.

Can you think of reasons why Prices may change?

Estimating QuantityUnlike Price, Quantity can be estimated with much more confidence.

When Robbie Williams tours they can expect the tickets to sell out, so it is usually safe to assume you will sell the same amount next time. Even Heinz have records that show ketchup sales, including seasonal peaks and troughs

Plenary : Estimating Price + Quantity

Using a restaurant think of reasons how Quantity may change?Using a restaurant think of reasons how price may change?

Why is it important to estimate revenue?

What will can you do with this information?