Accurate sales forecasting is essential for any business that wants to plan effectively, allocate resources, and hit its revenue targets. While forecasting may sound daunting, a simple template can make the process much easier. By tracking key data points—such as deal value, probability of closing, and expected close dates—you can create a clear picture of your future revenue.
In this blog, we’ll walk you through using a Sales Forecasting Template from start to finish, helping you predict revenue accurately and ensure you’re on track to meet your goals.
Step 1: Setting Up Your Sales Forecasting Template
Before you can start forecasting, you need a well-structured template. Below is a simple example that you can create in a spreadsheet or use alongside your CRM. The template captures key metrics like deal value, probability of closing, and forecasted revenue.
Sales Forecasting Template:
| Deal Value (£) | Deal Value (£) | Forecasted Revenue (£) | Expected Close Date | Expected Close Date |
| Acme Corp | £10,000 | 70% | £7,000 | 15th October |
| Tech Solutions | £25,000 | 50% | £12,500 | 25th October |
| Global Ltd | £15,000 | 80% | £8,000 | 1st November |
This template will give you a weighted estimate of the revenue you can expect from each deal, taking into account the likelihood of closing each opportunity.
Step 2: Listing Your Open Deals
The next step is to list all the open deals in your pipeline. This ensures you have a full overview of potential revenue.
Why it’s important: It’s essential to have visibility of all active deals, regardless of their stage in the pipeline. Including everything ensures you’re not missing any potential revenue opportunities.
How to do it: Export a list of active opportunities from your CRM. Make sure to capture all deals, even those in the early stages, as these will progress over time and affect your forecast.
Stay organised by filtering out closed deals or deals unlikely to close in the near future so your focus remains on those still active.
Step 3: Inputting the Deal Value
Next, add the deal value for each opportunity. This is the expected revenue if the deal closes.
Why it’s important: Deal value is the foundation of your forecast. Without knowing the potential worth of each opportunity, it’s impossible to predict revenue accurately.
How to do it: Use the expected revenue from your CRM. This could include initial purchase amounts, as well as any expected upsell or cross-sell opportunities.
Be consistent in how you calculate deal value—whether it’s the total contract value, a one-off purchase, or projected lifetime value.
Step 4: Assigning a Probability of Closing
Assign a probability of closing to each deal. This percentage reflects how likely the deal is to close within the forecast period.
Why it’s important: This step adjusts your revenue forecast based on the likelihood of closing. Without this, your forecast may be overly optimistic or inaccurate.
How to do it: Use historical data or your CRM’s lead scoring system to estimate the probability of each deal closing. For instance, if a deal is in final negotiations, it might have a 70-80% chance of closing, while earlier-stage deals may only have a 30-50% probability.
Example:
- 30%: Early discussions, low commitment from the client.
- 50%: The client is engaging and discussing specific needs.
- 80%+: Final negotiations, highly likely to close.
Don’t inflate your probabilities. It’s better to be realistic or conservative to create more accurate forecasts.
Step 5: Calculating Forecasted Revenue
Once you’ve input the deal value and probability of closing, it’s time to calculate the forecasted revenue.
Why it’s important: This gives you a weighted estimate of the revenue each deal could generate, making your forecast more realistic.
How to do it: Use the formula:
Forecasted Revenue = Deal Value (£) x Probability of Closing (%)
Example:
If a deal is worth £10,000 and has a 70% chance of closing, the forecasted revenue for that deal is £7,000.
This calculation allows you to account for uncertainty while still providing a clear picture of potential revenue.
Step 6: Setting an Expected Close Date
The final piece of data is the expected close date. This helps you map out when you can expect the revenue to be realised.
Why it’s important: Knowing when revenue will be recognised is essential for planning resources and setting targets for specific time periods.
How to do it: Use your CRM to track how long deals typically take to close at different stages. For example, if the deal is in the proposal stage and your average sales cycle is three months, set the expected close date accordingly.
Don’t guess! Base the close date on historical data to improve the accuracy of your forecast.
Step 7: Analysing Your Forecasted Data
Now that your template is filled in, it’s time to analyse the data to understand your overall revenue forecast. This step is crucial for turning the numbers into actionable insights.
Total Forecasted Revenue: Start by summing the forecasted revenue from all deals. This gives you a top-line view of how much revenue you can expect during the forecast period.
Example:
Total Forecasted Revenue = £7,000 (Acme Corp) + £12,500 (Tech Solutions) + £12,000 (Global Ltd)
Total Forecasted Revenue = £31,500
Breakdown by Close Date: Review the expected close dates to understand when revenue is likely to hit. This helps you manage cash flow and resource planning. For instance, if most deals are expected to close in October, you can plan marketing or operational resources accordingly.
Probability Distribution: Look at the probability of closing across your deals. If many of your high-value deals are in the early stages with low probabilities, it may indicate that you need more effort to nurture those leads.
Focus on High-Potential Deals: Identify deals with high forecasted revenue but low probabilities. These are deals where extra effort could lead to significant returns. For example, a deal worth £20,000 with a 40% probability could be an opportunity to focus on to drive that percentage higher.
Regularly compare your forecasted revenue to your actual performance at the end of each period. This helps refine your probability estimates and improve forecast accuracy.
Remember to Adjust Regularly
Sales forecasting is a continuous process, not a one-off task. As deals progress and new information emerges, it’s crucial to update your forecasts to keep them accurate. Set a regular schedule—whether weekly or monthly—to review your pipeline, adjust deal probabilities, and refine expected close dates. This keeps your forecast reliable and ensures you’re always prepared to meet your revenue goals.
By maintaining an up-to-date forecast, you’re not only improving accuracy but also enabling better resource planning and decision-making.
BuddyCRM makes this process easier by providing real-time insights into your pipeline and helping you track the details needed to refine your forecasts with confidence.
Book a demo today to see how BuddyCRM can transform your sales forecasting and help you stay on track to hit your targets.