No one can perfectly predict the future. But luckily for sales teams, there are ways to estimate relatively accurate sales revenue. Enter sales forecasting.
Granted, sales forecasting can be intimidating, especially if you're a new business just growing your sales department. However, it's an essential process for your company.
An effective sales forecasting process allows you to track sales data, manage your sales pipeline, and improve your forecasting model over time. It helps you understand how many deals you need/expect to close, the status of each deal, and pinpoints any factors that might affect your company's future growth. Most importantly, sales forecasting helps you predict future revenue and shows your managers what to expect for the coming quarter/year.
That's why we've created this introductory sales forecast template — to help you easily get started with the sales forecasting process.
How to use the sales forecast template
This template includes two columns: Actual sales results by month and Projected sales results by month. Place the number of all monthly deals in the “Actual” column (sales forecasting works off of past information). Based on this information, insert your projections for each month of the upcoming year. You can also update the graph so you have a visual of your sales projections.
Let’s say that you sold 1400 of your company’s service subscriptions in October 2018. October is a good month for your business as you participate at a major conference filled with potential customers. You estimate that you’ll grow 40-50% year-on-year (or roughly 2000 subscriptions). The number of deals (or subscriptions in this case) predict future revenue. You can use different sales forecasting techniques to make these projections.
Also, customize the template as needed to match your company's needs. If your sales department works on the quarterly system, change from monthly to quarterly.
Use your projections to work backward and determine how many deals you need to close over the next period to reach the desired revenue. Answer questions like: How many leads do I already have in the pipeline? What is the value of each potential deal? How many more deals do I need to close? Where are my leads coming from?
If you discover at the end of each month (or quarter) that actual results didn’t align with your forecast, don't be discouraged. Maybe your pipeline needs cleaning. Or maybe your sales reps need more coaching. Use it as an opportunity to improve your sales forecasting process.
This sales forecast template works for businesses with small sales operations; it's not designed to provide the insights that larger companies need to grow.
A CRM is a better choice as your company scales. For example, with a CRM like Sell, sales reps can easily insert important sales data. Data is automatically organized and placed into a visual format such as these sales forecasting reports:
Get the free template to start improving your forecasting today.