How to Build a Sales Forecast
A step-by-step structure you can drop straight into a spreadsheet — no finance degree required.
Most sales forecasts fail for one reason: they're a single number pulled out of thin air instead of a structure built up from real inputs. A forecast you can actually trust needs three things — a pipeline, a set of realistic conversion rates, and a timeline. Here's how to put those together.
1. Start with your pipeline, not a guess
List every open deal or lead with three columns: expected value, stage (e.g. contacted, proposal sent, negotiating), and expected close date. This is the raw material for everything else — if this list doesn't exist yet, that's the first gap to fix, not the forecast itself.
2. Apply a conversion rate per stage
Not every deal in your pipeline will close. Look at your historical data (or a conservative industry estimate if you're new) and assign a rough probability to each stage — for example, 20% for "contacted," 50% for "proposal sent," 80% for "negotiating." Multiply each deal's value by its stage probability. That weighted total is a far more honest number than "sum of everything in the pipeline."
3. Lay it out by month, not just as one total
A single forecast number tells you little about cash flow timing. Break the weighted pipeline out by expected close month so you can see when revenue is likely to actually land — this matters as much for planning hiring and spend as the total itself.
4. Revisit it every week, not once a quarter
A forecast is only useful if it reflects reality. Deals move, slip, and die — update stages and dates weekly so the number stays honest instead of becoming a stale target nobody trusts.
Skip the setup work
If you'd rather not build this structure from scratch, our Sales Forecast Template already has the pipeline, weighted-probability logic, and monthly breakout built in — you just plug in your own deals. It pairs well with the Sales Pipeline Tracker if you don't have one running yet.