Since I’ve been on the sales forecasting kick for the last couple of days, I decided to come up with a sample sales territory forecasting excel sheet. A couple of my customers have asked that I put one together. If you’re a small business owner looking to improve the accuracy of your sales forecasts, then this sample excel sheet might just be what you’re looking for. As a small business owner, improving your sales forecasting accuracy is of paramount importance. It not only helps improve your sales planning, but also helps to justify your investment in inventory. This particular sheet is based on using the principles found in PERT or more commonly called Project Evaluation & Review Technique.
No Sales Forecast is Ever 100% Accurate
Before going into how this sample excel sheet is set up, it’s important to remember that no forecast is ever 100% accurate. The fact is, even the best laid plans fail from time to time. Regardless of how accurate you may want your sales forecasts to be, it’s still reliant upon how well your sales team closes on opportunities. However, constantly updating that forecast is a must. The most aggressive companies continually raise the bar on improving their forecast accuracy. To succeed means to justify a company's investment in inventory.
This sample excel sheet is predicated on using the PERT (project evaluation & review technique) analysis and calculation to come up with a more accurate sales estimate within a given territory. Here’s a quick update on where PERT came from. The US Navy used PERT in their design of the Polaris submarine to mitigate the outcome of three variables. These three variables are based on the “best case scenario”, “most likely scenario” and “worst case scenario”.
These three variables are also used in this sample territory forecasting excel sheet in order to nail down a more accurate sales estimate. They also happen to be the typical questions a sales person would ask themselves about sales of a particular product to a given customer account.
- Best Case Scenario = A
- Most Likely Scenario = B
- Worst Case Scenario = C
- PERT calculation for sales forecast = {1(A)+4(B)+1(C)}/6
The above video explains several options you can use to improve your sales forecast accuracy. It includes PERT, but others that account for your business cycles and absolute error in forecast rates. You can read more by going to: How Do We Improve Our Sales Forecast Accuracy?
The sample sales territory forecast sheet above is based on a sales professional forecasting his or her sales for the first quarter of the year. In this case, I’ve structure the territory forecast around the number of “widget X’s” this particular sales professional plans to sell to the list of accounts on the left hand side.
In each case, the sales professional would ask themselves “what’s the best case scenario?” in terms of unit sales, “what’s the most likely scenario?” in terms of unit sales, and “what’s the worst case scenario?” in terms of unit sales. The excel sheet allows you to place those values into each variable heading A, B, & C and the calculation under “PERT Calculation {1(A)+4(B)+1(C)}/ 6” will then provide the answer.
This sample sales territory forecasting excel sheet is meant for those small business owners who simply can’t afford a forecasting software. Remember, no forecast is ever 100% accurate. It requires the time needed to improve upon the approaches and the willingness to constantly update the forecast itself. However, this will help your company’s sales professionals when they must ask those questions about how much they’ll likely sell to a given customer. It’s still no guarantee, but it helps to get the sales professional to review their approaches with a given customer account.
You can download the excel sheet here:
Download Sales Territory Forecasting Excel Sheet for Small Businesses
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