B2b sales forecasting for NPOs

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forecasting I think we can all agree that we all suck at it probably the primary reason especially in bdb SAS is that so few transactions those transactions have such poor data that you can't really take a quantitative method for forecasting you need to use qualitative measures so really probably the best recommendation is to take advantage of the little field called forecast category that most CRM systems offer so On Any Given opportunity you would identify if that opportunity is pipeline best case committed or you you may want to Omit from from the forecast and by using that field you can assemble a base forecast and a stretch forecast and what the base forecast should be representative of is all the deals that have closed in the period that you want to measure and then basically all the committed deals so all it is is close one and committed and so that would become your your base forecast that's the forecast that you want to hand over to your CFO or whoever's you know managing kind of the cash projections for the business and then as the internal Optimist that typically sales leaders are you may want to create a stretch forecast so all the the difference between stretch and base is simply that not only you're going to include committed deals and one deals you'll also include your best case deals so then the two of them set up your kind of range and you can present both to your CFO or your CEO but really the CFO being more conservative kind of conser conservative minded risk averse will probably just want to work from the kind of the base forecast but at least you're fulfilling your obligation of of providing both numbers and then they can choose to model now when you're really creating a forecast you ideally want to set up different money Fields right so typically in SAS deals you can have a million dollar deal but you maybe it's five years you know could be 100K in ARR 5 years makes 500 and then 500k in services or you know it made it's a million dollars in ARR like the makeup of that deal is going to really impact that kind of cash flow conversation right so ideally you're able to separate all the money Fields so you for example in Tech stack we would separate the AR value from the onetime fees value which is typically Services you know Andor Hardware from the total contract value which would be the combination of the one time plus the AR times the number of years on the term that you're closing so you ideally want to separate all that kind of stuff out if you're going to review deals taking a qualitative measure and you let's say you're looking at 40 deals and trying to figure out what you should have in that sales forecast there's a couple key indicators as a sales that you want to look for number one how long has that deal been in the current stage and how long did it stay in the first stage that is always a great indicator deals that to stay in the first stage for 180 days never close right but if the deal moved out of that first stage very quickly say discover discovered a you know demo or proposal and got it out of there fast that typically shows momentum the other great indicator is how much is your primary contact engaged with the seller you know so you really want to get a measure of that now texte we make it easy we present those two values on the opportunity you know front and center for the sales leader but you know generally you may have to hunt down that kind of information um a couple other key indicators on deals naturally want to keep all the close dates in in the future right so often you see deals that have past due close dates clearly there's a hygiene issue there you may want to look how long a deal has been kind of stuck in the current stage so you want to measure how many days in each stage so deals that have been you know stuck in the current stage for you know six months you know really question whether or not they should be on a forecast or or in the funnel at all for that for that measure those are kind of things you want to look out for is the rep actually filling in any information do you have stakeholders competitors on the deal are they filling in narrative information about the deal example current situation future State kind of new reality kind of stuff sometimes those narrative deals really give you an indication of the seller really understand understands what's going on in the deal as well so really good indication indicators to whether or not a deal is good or not and then naturally you want to be really selective over deals you throw into best case you know committed deals you should only do that when you get verbal and contracts are I would even say committed deals should should just be the deals that you're approaching contract signing so literally are an adobe sign or doy sign for for Signature you want to use that forecast category fairly sparingly but use best case to be deals that are showing the right level of activity so you have an alignment to the Clos date with with the stage deal is in right now and those would be like the best case deals everything else is just fodder just get rid of it hopefully that helps and any questions give us the bu