{"id":1991,"date":"2021-01-26T08:04:20","date_gmt":"2021-01-26T08:04:20","guid":{"rendered":"https:\/\/c1mdevsite.com\/360consultingdfw.com\/?p=1991"},"modified":"2021-01-27T00:27:20","modified_gmt":"2021-01-27T00:27:20","slug":"how-sales-forecasting-can-increase-your-businesss-growth","status":"publish","type":"post","link":"https:\/\/c1mdevsite.com\/360consultingdfw.com\/how-sales-forecasting-can-increase-your-businesss-growth\/","title":{"rendered":"How Sales Forecasting Can Increase Your Business’s Growth"},"content":{"rendered":"

Focusing on the day-to-day activities or weekly\/monthly sales targets your team needs to hit is important for every sales leader<\/a>. But you also need to be keeping an eye on the future for your sales team as well. That\u2019s where sales forecasting comes in. Creating accurate sales forecasts can help you make the right decisions now to set up your team and your business for success in the future.<\/p>\n

However, creating realistic sales forecasts is harder than it looks for even experienced sales leaders.<\/strong> That\u2019s why in today\u2019s blog, we\u2019ll cover what there is to know about creating a sales forecast for your company, with a goal of growth in mind.<\/p>\n

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Components of Sales Forecasting<\/h2>\n

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What is a Sales Forecast? <\/strong><\/h3>\n

A sales forecast predicts what a sales rep, team, or business will sell in a fixed period of time. They\u2019re typically done on a weekly, monthly, quarterly, or annual basis. Sales forecasts are vital to any organization because they let you spot potential issues before they become big problems.<\/p>\n

With accurate sales forecasting, you can notice if your sales team is trending well below their quota amount and have time to take action<\/strong> and figure out what\u2019s going on.<\/p>\n

Discovering these problems right away, instead of waiting until the next month or quarter, can allow you to correct the course before it impacts the bottom line of the organization. Making this a sales best practice helps keep everyone on track in real-time.<\/p>\n

It\u2019s also highly motivating for your teams to see if they\u2019re<\/strong> on pace to hit their upcoming targets. Hence, sales forecasts can help get them excited to succeed.<\/p>\n

Sales forecasts also help leaders make smart and informed decisions about hiring, goal-setting, budgeting, and your <\/strong>overall sales strategy<\/a>.<\/strong> If your forecasts are predicting a big bump in opportunities in the next year, you can make a decision to hire another sales rep to meet anticipated demand. If forecasts are trending down, you can invest in additional marketing instead.<\/p>\n

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Sales Forecasting Methods <\/strong><\/h2>\n

There are many different sales forecasting techniques your business can use. Picking one depends on how your business and your sales team operate, and the goals you\u2019re trying to hit.<\/strong><\/p>\n

Here are a few common methods of sales forecasting:<\/p>\n

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Asking Your Reps<\/strong><\/h3>\n

This is a method many sales managers<\/a> pick because it\u2019s easy \u2013 just ask reps when they expect a deal to close, and how much it will close for.\u00a0 This is obviously an important thing to do, but it\u2019s not the best way to build a sales forecast.<\/p>\n

In fact, the downfall to using this method is that it’s a fast way to get an inaccurate sales forecast. Sales reps tend to overestimate, and there\u2019s no real repeatable or scalable action<\/strong> you can add as part of your sales process.<\/p>\n

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Looking at Past Sales <\/strong><\/h3>\n

Tracking sales and looking back at your year over year numbers can help you get a rough estimate of how your team is likely to do in the future. However, your historical sales data doesn\u2019t take into account any new hires you\u2019ve made, shifts<\/strong> in the market, or new and hungry competitors.<\/p>\n

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Using Deal Stages <\/strong><\/h3>\n

This is another simple but fairly effective method of sales forecasting.<\/p>\n

For this one, you assess the probability of closing a deal at each stage in your sales process<\/a>, and multiply that probability by the size of an opportunity, or all of the opportunities in that stage, to predict revenue.<\/p>\n

However, to make this method more accurate, you must constantly weed out old opportunities that are well past their closing dates and make sure the deals in each stage are viable and accurately valued. Tracking how long opportunities have been in the sales cycle<\/a> will help you remove those deals that have been in the pipeline too long and so are unlikely to close.<\/p>\n

This method can lead to accurate forecasting as long as timely, correct data about deals is <\/strong>logged regularly in the CRM<\/a>.<\/strong><\/p>\n

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Pipeline Forecasting <\/strong><\/h3>\n

Getting more sophisticated now, this forecasting method assesses opportunities in your sales pipeline by looking at a number of factors like:<\/p>\n