Bottom-Up Forecast for 2010 Planning

Three years ago I was at a TAG event listening to one of the more accomplished software CEOs talk about sales. Towards the end of the presentation, he made a statement that has stuck with me to today: build your sales goals for the following year from the bottom up based on your existing sales reps productivity in the current year. If your reps aren’t making quota now, don’t expect them to make quota next year without some serious overhaul. If you need to make a bigger number, don’t have good sales reps in your recruiting pipeline, and have a six month ramp up time before a rep is productive, include that in the model.

As much as technology companies are driven by cool, ground-breaking products, it really comes down to sales and revenues. My advice for entrepreneurs is to only do bottom-up sales forecasts as part of their planning process.

4 thoughts on “Bottom-Up Forecast for 2010 Planning

  1. Agreed, if you don’t change your sales process.

    But unless you are already getting stellar results, shouldn’t your sales process be something you seriously focus on improving?

  2. I agree as that it is the way to go if you don’t change your sales process. The problem I see too often is sales projections based on where entrepreneurs would like their company to be, rather than what is realistic with their staffing needs, sales cycles, and previous results.

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