Business owners are obsessed with one number in their business. You guessed it… sales. Every business owner wants to continue to grow their sales line. This number is the result that almost every business owner looks at each month. However, this number is only looked at after the results happen. If the result is negative, then there is no way to change this. Businesses need to plan around their sales to make sure that their goals are being achieved.

At Mackey Advisors, we have created a sales forecast spreadsheet that helps us and our clients predict and plan for sales numbers each month (see below for example). We apply a percentage to each step in our sales process so we can accurately predict the final sales number. The percentage is based on the confidence level of signing the client based on past experience in the sales process. The percentage is then multiplied by the total sales amount for that client so then we are accurately accounting for our sales potential. The spreadsheet will then total the forecasted sales for the month and also for the year.

If we have a signed proposal from a client, then that sales amount is in our existing 100% category on the spreadsheet and 100% of the sales is forecasted as closed. If we have a verbal agreement from someone, but no signed proposal, this goes into our high probability category at 85% and 85% of the sales is forecasted as closed. This is because it is very likely that this verbal agreement will turn into a closed contract. If we have four prospects in our 50% category, the idea would be that we plan on closing two of those four prospects and only 50% of the sales amount is forecasted as closed. We have one last category that is at 15%. We use this to keep track of prospects that have just begun the process. We may not even have a sales amount for that client because it is too soon to estimate. However, it helps us keep track of the prospects that we need a follow up.

We have two categories for each percentage level. This is because we track existing client revenue and new client revenue separately. You may want to track recurring revenue and hourly revenue separately. You may not want to track your revenue into separate categories at all. This process is unique for each business. Every business has a unique sales process with different confidence levels of closing and different steps throughout the process. You can tailor the tool to meet your specific needs.

It will take some time to get used to this tool. It will not be 100% accurate because you will need to fine tune the categories and percentages to meet your needs. Once you have the tool set up to fit your needs, you will be able to accurately predict your sales. You can compare these numbers against your budget and determine what actions need to be taken, depending on the results of the comparison. You will want to update prior months with actual information so you can see actual year-to-date information and project out what your sales number will be for the year.

This tool should help you to ask yourself the right questions in terms of why you are or why you are not hitting your sales goals. If you see that next month you do not have enough in the pipeline to meet budget, you can start taking action now. Stop looking at your financial statements expecting great sales results and start actively planning around your sales.