Sales Forecasting

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Having a few years under my belt as a CFO, I fortunately can recognize BSf (Bogus Sales forecast). The “f” is silent… Where does BSf come from? Who is promoting the BSf? Is the BSf out there intentionally trying to ruin an otherwise fine sales plan?

Whether you are a CFO, CEO or Sales VP we can all agree that there is a little bit of voodoo in all forecasts. How do so many companies get to their monthly, quarterly and annual sales forecasts? Well, usually educated guesses and a top-down look at the sales funnel. In other words, throwing monkeys at a wall to see if they hang on.

Some executives have little information to even deal with when developing BSf. An example from personal experience: “We have 100 reps, we should expect a 25% increase in sales over last quarter (month, year). We can assume an average rep will close X deals. The average deal size will be Y. We can then assume X*Y equals Z, where Z is our new sales forecast.” These are the ABCs of BSf…

I’ve done it and you’ve done it. We often times have had to rely on faulty assumptions and guesses to come up with a BSf. Boards and CEOs should be amazed when sales targets are met, not surprised when they are not (high or low). We may as well be playing darts for our forecasts, as we are relying on multiple assumptions that lack a strong foundation.

Click the link to figure out how to reasonably and accurately stop the BSf and have an accurate forecast for our sales goals.

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