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# Sales Forecast Calculator

Contributor
Reviewed by Abhinash J
Editor

Published: April 11, 2023

Forecasting sales is not easy. Be it an SMB or enterprise, businesses need assistance to accurately forecast sales. A sales forecast calculator helps entrepreneurs and sales professionals answer one of the most critical questions - How much money will the sales operations bring in?

Current Year Sales

Total revenue generated in the current year
\$
25000

Previous Year Sales

Total revenue generated in the previous year
\$
25000
Sales Forecast Calculator
20% increase next year

See how it's calculated

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## What is Sales Forecast?

The purpose of sales forecasting is to predict the future demand for a certain product for a particular period based on the previous sales data. Accurate sales forecasting provides sales managers and entrepreneurs with clear visibility into the business’s financial health and simplifies decision-making.

A business without a sales forecasting system is running without a direction. This can lead to poor decision-making and half-baked strategies that don’t derive any results. Without a sales forecasting framework, some of the core areas of a business will be affected.

## How to Calculate Sales Forecast?

The simplest method to estimate sales forecasts is growth-based forecasting. This method is based on the previous year’s sales data. Here’s how you can calculate it:

Sales forecast growth = [ (Current year’s sales - Previous Year’s Sales) / (Previous Year’s Sales)] X 100

Sales Forecast= (\$5000 - \$4500)/ \$2000 * 100 = 25%

Therefore, the sales forecast for 2023 will be = (\$5000 * 0.25) + \$5000 = \$6250

## Why do Sales Forecast matter for Businesses?

Here’s why sales forecast matters for businesses:

• Sales forecast helps organizations streamline their budgeting, planning, and risk management systems. It is a critical part of business decision-making.
• Sales forecast provides great visibility into the cash flow of your company. As a result, entrepreneurs can efficiently allocate resources for different functions within the company.
• With efficient sales forecasting, businesses can identify the loopholes in their customer acquisition process and fix those to ensure a stronger sales pipeline.
• Accurate sales forecasting provides clear visibility into the costs of an organization. With this information, businesses can make decisions regarding workforce layoff, marketing investment, product development costs, etc.

## 5 Tips to Improve your Sales Forecast Process

### 1. Keep your sales records clean and well-documented

Accurate sales forecasting requires a lot of historical data. Therefore, every business should maintain clean and well-documented sales records to feed the finance team with historical datasets.

If your sales data is not maintained and is all over the place, it will be time-consuming to collate all those datasets. Therefore, if you can develop the forecasting process from the beginning, you can easily keep track of the numbers.

Keeping your records clean and organized should be a team effort. Here are a few practices to achieve this:

• Provide proper training to your sales and CRM team on data collection, management, and documentation.
• Managers should set up 1:1 meetings with different sales team members to understand if they are facing any blockers in the process of data management.
• Auditing the records regularly and fact checks to ensure that authentic data is being processed

### 2. Use sales forecasting tools, don’t go for a manual process

Manual sales forecasting is tedious with no assurance of accuracy. A smarter approach here would be to use sales forecast tools.

Some tools you can use:

Salesken's sales forecasting tool - It provide real-time visibility of the sales pipeline, enabling businesses to accurately forecast revenue and identify bottlenecks. The software also helps monitor quotas achieved and provides insights into the performance of individual sales reps, allowing businesses to take appropriate action to boost overall team performance. Leveraging Salesken's sales forecasting capabilities can help businesses increase their sales and revenue growth potential.

HubSpot forecasting software - HubSpot sales forecasting software can automatically analyze the sales data submitted by the reps and create customized forecasts. It can pull data from different sources and make accurate forecasts.

Zoho CRM - Zoho CRM can help sales teams create detailed sales forecasts based on factors like closed deals, pipeline deals, and storage in the sales pipeline. It can auto-create significant reports in your desired format.

Pipedrive - Pipedrive is another efficient tool that visualizes the different stages of your sales deal’s progress. It generates conditional, custom sales forecast reports based on the datasets you enter.

### 3. Make sure that all departments are collaborating

One person or a single department cannot create an entire sales forecasting report. It is the output of joint collaboration of all departments. Entrepreneurs should develop a system where different departments can collaborate and share their inputs and updates. All this information forms the cornerstone of an accurate and comprehensive sales forecasting report.

Internal collaboration ensures your sales forecast report is not filled with superficial data. Leverage teamwork and build trust by including diverse aspects within your forecasting report to make it unique.

### 4. A simple forecasting model is good to follow

A simple sales forecasting model is the way to go, especially for businesses in the initial stage. Figuring out and implementing a quantitative sales forecasting approach takes time. Hence, going for a complex framework like regression or time series can be time-consuming.

While planning for your forecasting model, keep track of the following aspects:

• Encourage the reps to ask questions and listen to their concerns.
• Make sure that all sales goals and forecasts are approved by the leadership team.

### 5. Focus on changing market trends, and competitors’ performance

Changing market trends and competitors’ performance can hugely impact sales forecasting reports. Certain elements within your sales forecast report will change depending on how demanding the market is or how aggressive your competitors are.

For example, suppose your competitors have already built a strong presence in the market and are holding a significant percentage of the market share. In that case, they will have a strong advantage over the customers. In that case, the ideal approach will be to lower your price, and accordingly, the sales forecast report will also change.

Free Resource

Sales Forecast Calculator

Use this Excel/Google Sheet template to forecast your sales. Forecast your future sales based on historical data and other factors with sales forecast calculator, so you can make informed decisions.

What are the key sales forecasting metrics?

Some critical sales forecasting metrics include cost per purchase, stock levels, product lead time, etc.

What is a good sales forecasting growth rate?

If your sales forecasting growth rate is increasing by 10% monthly, it can be considered a good rate.

## Want to Supercharge Your Sales Team?

See how Salesken can provide unparalleled insights into every customer interaction