Transcript for [Forecasting Revenue |Entrepreneurship](https://www.youtube.com/watch?

v=BDVqWP31cIo) by [Merlin](https://merlin.foyer.work/)

Hello everyone, I created this video for your reference in our subject Entrepreneurship Quarter 2, Week
3 with the title Forecasting the Revenue of the. So before we start, let me first acknowledge the
development team of the module, the authors Joel Iacas, Dianis V. Dominguez, Nanette M. Balduesa,
Maricris A. Maquilan, Mary Linda T. Puzon, Denver E. Nery and the rest of the team. So we are very
thankful because in your write-ups, we are using a module. What is included in our module for Week 3
and 4? Lesson 1, Forecasting the Revenue of the Business and Lesson 2, Forecasting the Cost to be
Inclured. Why do we forecast? Usually, we watch a news about typhoon, and doon, they gave us a
forecast. When we say forecast, an advance information about the direction of the typhoon so that
everyone will be prepared and ready. And how about business? When we say forecasting, in terms of
business, it is a tool used in planning that aims to support management or a business owner on its desire
to adjust and cope up with the uncertainties of the future. Adjust and cope up with the uncertainties of
the future. So meaning, it is a tool or a tool used by business owners so that they will have an advance
information on what they can do, solution, in case of what they do not expect to happen in business.
Because of course, in terms of business, there are ups and downs. We are not sure of tomorrow. But
using the forecasting, we can assume what is possible to happen. Okay, so through forecasting, we can
also learn or we can make an assumption on the possible estimation of our revenue and cost. What are
the techniques that we can use to improve the business? So for our objective, in this topic, forecasting,
first is to identify, you should be able to identify essential factors in forecasting revenue and cost,
calculate markup and selling price of the product or merchandise, compute projected revenues and
projected costs, and be able to create a table showing projected revenue and costs.

and projected costs and be able to create a table showing projected revenue and costs so after this,
next is what I know and what I know, let us see what we already know about the forecasting revenue
and costs topic so let's know if you have an idea about our topic so let's not do research, let's try to
answer in your notebook ok, next ok, so let us proceed to lesson 1, forecasting the revenue of the
business let us answer first what's new in your notebook our estimation when traveling from home to
school last year, when we traveled, estimated time and actual time when we arrived, so put that
information in your notebook let us now start you estimate the time and distance from your house to
school so making informed estimates, we estimated requires careful consideration on the several factors
there are several factors that affect your travel from distance from home to school what are those? the
means of your transportation, maybe you're just walking or riding a motorcycle, bicycle, or tricycle if it's
tricycle, is it special? or how many passengers, maybe there's a passenger going to Carmelo so it also
affects your travel time considering these factors are essential also in making informed estimates by the
entrepreneur or the businessman since the business, since he is venturing, hasn't started yet it is very
important that the factors like the distance from your house to school the forecasting, so we can
determine what will help the entrepreneur in the decisions that he will make in his business then
revenue, after realizing the potential profit how much will I earn if this is my business then the next step
is to estimate how much revenue in daily, monthly, and annual basis like drawing, planning how much
will I earn, there's already an estimate it's not bad, it's good because we have advance thinking on
what's possible to happen in our business but first let us determine what does revenue mean because
you're also attacking the revenue in our first lesson I said it first, revenue is a result when sales exceed
 because you are also attacking the revenue in our first lesson what is it? what I said first revenue is a
result when sales exceed the cost to produce goods or render the service ok so revenue is the surplus in
our spending in producing our goods or when we give service ok we recognize when earned whether
paid in cash or charged to account of the customer in cash or accounts receivable you are expecting to
receive in debt ok we recognize it as revenue ok so there are other terms we use for that revenue
includes sales and service income when it comes to sales, this is what we use when it comes to facturing
business ok wait I just discussed it in the fundamentals what are the types of business so we have 4
types of business what are the 4 types first is the merchandising business when it comes to
merchandising this is buy and sell or retail you buy it in a big store and sell it again when it comes to
service business what is service giving services for example EIM installation of electricity that is a service
ICT installation of software or repair of computer that is also called service business ok in cookery it is
also called manufacturing if they are just making for example manufacturing companies they are just
making for example, they are making shumai but they are not selling they are just making but they are
selling so they are just a big producer but when there is a restaurant cookery established a restaurant
after graduation the restaurant is called hybrid hybrid business is a combination of businesses they are
manufacturing and service why it became like that because manufacturing they cook first and while they
are selling they have a service they are hiring they are preparing in a restaurant that is why it is called
hybrid business ok so sales and service income those are the terminologies we are using sales is from
merchandising revenue is sales service income is from service business ok manufacturing you have just
learned about what revenue is again, what is revenue? when we say revenue it is the exceed ok the
sales is the exceed from the cost minus the sales minus the cost of produced goods ok, just subtract the
remaining that is what we call revenue

minus the sales minus the cost of produce goods ok, just deduct it the remaining is what we call
revenue ok, then the referee would want his or her forecast ok, for his or her small business as credible
and as accurate as possible to avoid complications in the future ok, of course, we will just do those
forecasts as much as we can ok and our forecasting is correct but of course, forecasting is like you can't
do it right but as much as we can to avoid complications in the future ok so, we also have factors that
need to be considered ok which is the external and the internal ok, what are those factors? here it is first
is the economic condition of the country when the economy grows it's also growth what is it? it's also
growth it's growth is experienced by the consumers ok so, of course, if the economy is good consumers
are more likely to buy products and services but in this pandemic many people lost their jobs ok so it has
a big effect on the economy and the business industry ok number 2 the competing businesses or
competitors observe how your competitors are doing business there it's important to look at our
competitors how are they doing their business? how much are they selling their products? but we have
SRP or suggested retail price we can't exceed that or else we can be sued ok then another one is this will
give you a benchmark on how much products you need to stock ok to stock your business in order to
cope up with the customers' demand maybe in your area, you don't have a competitor so everyone will
just buy from you so you need to use more products or else your customers will be in a hurry so check
that as well number 3 changes happening in the community ok so like the customer demographic how
many possible customers do you have? for example your product you are selling what is it? crop top
usually when it comes to crop top it's for women usually for men customer demographic in your area,
do you have a lot of women who are wearing crop tops? lifestyle maybe there are what is it called?
Filipino women there and the buying behavior maybe you know UK people they like it so you also need
to check or observe in your area ok then should always be keen in adapting to these changes in order to
sustain the business there

to your surroundings. Okay. Then, should always be keen in adapting to these changes in order to
sustain the business. So there, we need to be mature. For example, this one. Teens usually follow
popular celebrities especially in their fashion trend. Korean, right? So, there. So, we should also be the
base on building our business. What kind of business and how much we should produce. Okay. And,
number four, the internal aspect of the business. Internal. Another factor that affects forecasting
revenue in the business itself. The ability. What is it? Of our intrapreneur. Okay. For example, a puto
maker can only make 250 pieces of puto every day. Therefore, he or she can only sell as much as 250
pieces of puto. Of puto every day. Oh, my bashers there. It's my first time making a video. So, I
apologize. Okay. The number of products manufactured and made depends on the capacity of the plant.
When it comes to plant, it's the manufacturer. For example, if you can only do that, of course, that will
be based on your income. Not all factors are identified. There are still others. For example, the external
is the weather. You sell it mixed. Suddenly, the weather is cold. February, January, December, last year.
It's cold, right? So, we can't sell mixed. There. Weather. And then, what else? The other factors that are
not identified are the external factors. Suddenly, the electricity is dead. What you also sell is, for
example, milk tea. You need a blender or any machineries. You need to buy a generator. The table
below shows an example of revenue forecast in ready-to-wear online selling business. Online selling.
This is the example. Example, Miss Fashionista Wow! Fashionista recently opened her dream business
named Pitmoto Ready-to-Wear Online Selling Business. An online selling business which specializes in
ready-to-wear clothes for teens and young adults. Based on her initial interview among several online
selling businesses, the average number of shirts sold every day is 10 and the average pair of fashion
jeans sold every day is 6. From the information gathered, Miss Nista projected the revenue of her
Pitmoto Ready-to-Wear Online Selling Business. She gets her supplies at a local RTW dealer in the city.
The cost per piece of the T-shirt is P90 while a pair of fashion jeans cost P230 pesos rather per piece.
Since she then adds a 50% markup to every piece of RTW sold. So, markup. What is the markup that we
call?

she then adds a 50% markup to every piece of rtw sold so mark up what is markup? when we say
markup this is the amount that we add to the cost before we sell it the formula for getting the markup
price is as follows markup is equal to cost times desired markup percentage so you will decide but here,
Ms. Fashionista used 50% 50% is this much okay so cost times desired markup percentage so she spent
P90 times 0.50 so the markup for t-shirt is 45 in calculating for the selling price, the formula is as follows
selling price is equal to cost plus markup so P90 plus 50% markup is 45 so the selling price for the t-shirt
is 135 so that is how she will sell she added the remaining markup so that she can earn more okay so
table 1 projected daily revenue so for the t-shirt, the cost per unit is P90 the markup, which is 50% she
added markup is 45 and for the selling price of the t-shirt for P90 plus P90 times P90 plus 45 is 135 how
many items sold? how many items sold? how many items estimated to be sold in a day? 10 so 10 times
135 is 1,350 the same with the jeans she has a markup of 50% 115 for the total cost of 230 she added
that 345 times 6 is 2,070 so that is what she added for the total so the estimated projected daily
revenue for both t-shirts and jeans is 3,420 is it easy? it's easy the formula is also there on the top B is
equal to A times 0.50 C is equal to A plus B and for the projected revenue is E is equal to C times D next
table 2 it shows the projected monthly and yearly revenue of Miss Passionista online reselling business
for one month by multiplying daily revenue to 30 days or 31 days in one month for example table 1 her
daily revenue is 3,420 so to get the monthly projected revenue she multiplied it by 30 days ok times 30
days so the project monthly revenue is 102,600 on the other hand the yearly is completed by multiplying
the monthly revenue by 12 months

on the other hand, the yearly is computed by multiplying the monthly revenue by 12 months after that,
the monthly is multiplied by 12 so 3420 times 365 days because it's daily, so it's fine monthly is 102,600
times 12 months the answer is the same Table 2, T-shirt, selling price, average number of sold items
monthly 300 projected revenue 40,500 the formula is also on the top Table 3, shows projected revenue
covering one year of the operation so it's multiplied by 12 Table shows the average increase of revenue
every month by 5% expect June, July, October, December while the month of June, the twice increase
from previous month, 10% the month of October, the half increase of revenue the month of October,
the half increase of revenue the month of October, the half increase of revenue the month of October,
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 now it's up to you, you are the one who will be the entrepreneur in the future important assumption,
this is it increase of 5% from February to May, June increase of 10% from free views July to August, the
same revenue September, it's less November increase and December, 10% increase it's bigger, it
depends on the time the numbers in the table in the last table are very attractive having revenue that
are increasing the numbers is a good sign that a business is growing as you can see in the upper table we
can see that as the time goes by, the monthly income is increasing it means that the business is getting
better of course, it depends on the income we are spending and now, pandemic, our raw materials are
getting expensive that's why it's getting bigger but their technique is instead of increasing the price, they
are reducing the content for example, before for example, a string of petchai string, before it was 10
pesos, a bit thick now, it's 10 pesos, a few pieces but it's still 10 but they reduced the quantity they are
using some factors so that it's not too heavy in the pocket of our customers I remember the video, the
feature that I saw on facebook the sinigang the meat is this small and vegetables the sinigang is just for
the rice and the meat is expensive pork after learning the calculation presented you can now compute
the projected revenue by the day, month, and year based on the business concept you can check your
module if you are going to answer please answer this template below using the table in your notebook
there it's for you it's like exercises afterwards it's like this in the table below there together and then this
is also table 2 please answer table 3 then let us proceed after you answer what I have learned ok so
what is in your notebook please fill out the underlined then for lesson 2 because this is a bit long I will
discuss this in another video so that's all I hope this video will help in your study happy learning class so
the assessment you will do later after lesson 2 bye