English: average [select: monthly / annual] sales revenue of [specify the target group]
French: moyenne du chiffre d’affaires [sélectionnez: mensuel/ annuel] de [spécifiez le groupe cible]
Portuguese: media [seleccionar: mensal/anual] da receita das vendas [especificar grupo-alvo]
Czech: průměrná [určete: měsíční / roční] tržba [určete cílovou skupinu]
What is its purpose?
This indicator measures the sales that an individual or company receives from its business activities, usually the sale of goods or services. Given the quality issues with measuring net income, sales is often seen as the best proxy for measuring net income / profit.
How to Collect and Analyse the Required Data
Determine the indicator's value by using the following methodology:
1) Assess the extent to which the target individuals / companies are able to provide reliable data about their sales revenue. Companies and larger entrepreneurs in low-income countries are likely to keep accounts and should not have any problem with knowing what their sales were in the given time period. However, smaller producers and service providers often do not keep (accurate) records of the income they receive. In such instances, if you need to measure their sales, you should provide them with bookkeeping support so that they are able to provide reliable data. What matters most is that they need to be motivated to do so – if you ask them to systematically record sales without them seeing any (substantial) benefits of doing so, it is unlikely that they will do it accurately (or at all).
2) Decide on the reporting period (e.g. sales in the past 3 months). In doing so, be very careful about:
i) Seasonality: The income of many sellers and service providers is prone is often significant seasonal variations – for example, sellers of agricultural inputs are likely to record very high sales in the months before (and during) the agricultural season but their income shrinks in the remaining months. This means that you need to:
- be aware that your choice of the reporting period will influence the data you gain
- ensure that your baseline and endline data is collected using exactly the same reporting period, otherwise you will be comparing two incomparable data (e.g. sales in ‘high’ and ‘low’ season)
ii) Producers / service producers’ ability to provide data for the required reporting period. For example, will micro-enterprises be able and willing to keep accurate records for a period of 12 months?
3) Collect the required data by reviewing the records of the targeted individuals / companies. If you supported a very large number of individuals, collect the data using a representative sample of the supported individuals.
4) Sum up the sales of the surveyed individuals / companies.
5) Calculate the indicator’s value by dividing the total sales by the number of surveyed individuals / companies.
1) A similar methodology can be used also for assessing the sales from a specific product / service. If this is what you are interested in, you can re-phrase the indicator to: total sales generated by [specify the target groups] from selling the [specify the product/service] in the past [specify the period].
2) Be aware that some people / companies might be reluctant to share with you information about their sales (due to lacking trust, tax-related concerns, concerns that their competitors may see it, etc.). Before you decide to use this indicator, check whether it is likely that people will be open to sharing the data with you. Ensure that the data collectors clearly explain to the sellers that their sales data will be kept confidential and will not be shared (if you plan to collaborate directly with the companies, considering including this in your MoU / agreement with them).