Guide
Apr 25, 2024
In today’s data-driven business world, sales organizations need a strong forecasting strategy — otherwise, they’re already a step behind.
Unfortunately, most companies find it difficult to forecast successfully. Today, 91% of companies report that it's more difficult than ever to forecast bookings, and less than a quarter of sales organizations can forecast with 75% accuracy or greater.
Part of the challenge is putting the right processes and tools in place to set your forecasting strategy on the right track. One of those is a sales forecast template, also referred to as a sales projection template, the framework you use to track your sales data, measure key KPIs, and make data-driven decisions related to sales.
Read on for a step-by-step guide to building your own sales forecast template — the only one you’ll ever need — to fit your company’s unique product and service offerings, sales goals, and other forecasting preferences.
Creating a Sales Forecast Template: Quick Takeaways
- A one-size-fits-all sales forecasting method is limited in capturing unique sales goals, KPIs, and other factors.
- Sales organizations can build customized, effective sales projection templates using spreadsheet or software tools.
- Prior to building your template, it’s important to frame it out by outlining what you are forecasting, the time periods you’re covering, your goals, and your key KPIs.
- The best sales forecast templates provide both a holistic and granular view of sales performance using effective sales forecasting methods.
Step One: Frame Out Your Sales Forecast Template
What are you forecasting?
Your sales projection template will vary depending on what type of product or service you’re forecasting. For example, forecasting a core product offering based on high-volume historical data will look a lot different than forecasting sales for a brand new product going to market.
As a first step, think about what you’re forecasting and the best sales forecasting method to use. This will largely determine the format of your sales forecasting model and the exact fields you include to measure.
For example, a startup company with brand new offerings will likely use a top-down approach that takes into account external factors, like total available market. An established enterprise with a core software offering could use a bottom-up approach based heavily on historical sales performance data.
What time periods are you using?
Next, determine the time periods across which you’ll make your forecasts. This really depends on how granular you want to get with your data, and it may be situational. Do you need to forecast by week, month, quarter, or year?
You’ll likely want to include multiple time periods in one sales forecast template, which is easy to format in the spreadsheet and software tools you’ll use to build your template (more on those later).
What are your sales goals?
Setting the right sales goals are a key step to take prior to building your sales forecast model. These determine the benchmarks against which you’ll measure success and provide key starting data points to include in your template.
For example: if your goal is to capture 15% of your total addressable market (TAM) with your new product, you can calculate the total TAM to determine what that 15% figure looks like in revenue terms, then use it in your forecast (and measure your progress throughout the year).
If you don’t have clear sales goals established, take time to set them before you build out your sales forecast template.
Which KPIs will you measure?
The KPIs you use to measure sales performance typically become fields in your sales forecast template. Some of the most important KPIs to include in your forecast include:
- Sales Revenue - The money you earn from sales (could be calculated overall and/or by unit, sales rep, team, etc.)
- Sales Revenue Growth - Growth percentage compared to a prior time period (i.e. the month before, or the same month in the previous year)
- Sales Pipeline Coverage - Total value of opportunities in the pipeline vs. your sales goal quota
- Activity Data - Metrics around sales process activities that help determine overall sales health (ex: total meetings books, discovery calls conducted, product demos performed, lead magnets downloaded, etc.)
Step Two: Creating A Sales Forecast Template
Collect your data
Whether you’re using historical performance data or newly collected external data, start by collecting and organizing it in one place. Ensure consistent sourcing and accuracy, and clean it up so it can be easily dropped into your sales projection template when it’s ready.
Decide on a tool
Most sales organizations go one of two routes when it comes to the tool they choose for their sales forecasting model: spreadsheet or sales forecasting software. Our advice: when you can, go the software route. While a spreadsheet may seem more immediately attainable, they require a lot of manual entry that ultimately makes them difficult to manage and prone to human error.
The better option is to automate the process as much as possible by building your template as a centrally-visible dashboard in your sales forecasting software tool. This may be your CRM, or a platform (like Xactly) that’s integrated with your CRM.
Zoom in and out
The best sales forecasting templates allow sales leaders to see sales performance from both a holistic and granular perspective. This means you should be able to zoom in and out (so to speak) within the template to evaluate metrics at the right level. For example, sales leaders may want to see total revenue earned, but also evaluate it by individual product or sales team/rep.
In your template, start with larger metrics as your umbrella and drill down into smaller metrics underneath. For example, you may forecast and measure YOY revenue growth, but then also have the ability to zoom in to month-by-month or week-by-week growth to evaluate seasonal revenue trends over the course of the year.
Focus on usability
Your sales forecast template is only as powerful as the extent to which you use it. When you’re building your template, consider who needs to use it and how they’ll do so. Think about access, shareability, ease of use, and necessary training to get all stakeholders on board.
Why Do You Need a Sales Forecast Template?
Accurate sales forecasting models require consistency. To accomplish it, you need to track your data faithfully over time, using the same sources and methods to create comparable measurements period over period.
A sales forecast template provides the framework for doing this, all while serving as a central point of reference for sales leaders and other stakeholders. When built and shared correctly, your sales projection template can be the single source of truth for sales data as you create your forecasts and make decisions throughout the year.
A quick Google will undoubtedly find you dozens (or more) of free sales projection templates — but there is an inherent issue in this quick download method. Those templates aren’t built with your products and services in mind, and they don’t take into consideration the unique KPIs you need to measure or the goals you’re aiming to accomplish.
A better approach is to build your sales forecast template internally, designing exactly what you need to forecast sales of your offerings and track priority KPIs for your company. Fortunately, with the tools and technologies available today, building a custom sales forecast model is not only easy, it’s a process that will strengthen your understanding and execution of your sales strategy.
Execute Intelligent Sales Forecasting with Xactly
Xactly Forecasting® delivers data-informed pipeline analytics to drive consistent sales execution and accurate forecasting for ensuring a resilient revenue stream. It easily integrates with top CRM systems for seamless, real-time sales data tracking, setting the stage for insightful decision making.
