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.