A sales projection is the amount of revenue a company expects to earn at some point in the future. It's a prediction that is synonymous with a sales forecast. Both help determine the health of a company and whether sales will trend upward or downward. Small companies use various input to determine sales projections. The initiative usually commences in the sales department. There are certain inherent advantages to calculating and using sales projections.
Sales projections usually are stated in terms of units and dollars. Small companies also allocate a certain time period for sales projections. For example, sales projections may be calculated on a monthly, quarterly or annual basis. Moreover, most companies compare their sales projections to past sales figures, showing a percent increase or decrease versus the earlier period. The earlier period may be from the same period a year earlier. Sales projections also may be made for multiple years, which helps production managers plan and run their departments more efficiently.