Quality of forecast - Q oF F
“The most important number in a company is the forecast, and it’s moved from just talking to your sales manager to something that’s a combination of art and science”
Carl Eschenbach, Sequoia Capital
The Buyer's Most Important Question
What will happen in the future - next month, next quarter, next year?
What is QofF ?
A service to:
- Assess the company’s ability to meet its monthly revenue forecast
- Implement a methodical process for improving a company’s forecasting accuracy
Why is QofF is Necessary?
- Buyers desperately want to believe the Seller's forecast, but rarely have enough data-driven back-up to have confidence
- Accurate forecasting competency builds credibility with a Buyer
- Credible forecasts shrink due diligence time
Forecast Inputs
- PO's in the Backlog
- Unweighted High Probability Opportunities from the Sales Pipeline
- Management 'Best Estimates' of Future Revenue
QofF Outputs
- Monthly Revenue Scorecards - Star Rankings by Product Line and Sales Rep
- Detailed PVM (Price-Volume-Mix) Analysis
Key Success Factors
- Owner recognizing a historical record of forecasting competency is valuable
- Process must be driven by owner
- Improving forecasting accuracy is required time commitment
- Coordination amongst CFO, COO, Sales Leader
- Buy-in from sales team
- Training
- Disciplined monthly follow through
- Communication results
- CRM Utilization - basic functionality