Forecasting process

It's the beginning of the year, and you and your team have been working hard to close deals to end the year strongly. Now, you're looking to get a strong start to the new year. Yet, it hasn’t been easy to understand how the results turned out—if you’ve been surprised (negatively or positively), it might be time to look into your forecasting process.

In this article, I will provide an overview of the fundamentals for good forecasting and how to set up forecasting in HubSpot (which requires Sales Hub Pro). Accurate forecasting leads to predictability and accuracy, helping companies plan, invest, and grow. This is especially true for smaller companies where resources can be more limited.

Here’s what will be covered:

• The fundamentals
• Reporting cadence
• Basic data points needed, and forecasting in HubSpot
• Final Thoughts (and an AI Tidbit)

The Fundamentals

Forecasting is more than just calling a number—it requires several components to do so accurately:

• Clear goals, metrics, processes, and terminology
• Defined roles and responsibilities
• The right data, accessible to your team
• Process adherence

Keep this in mind: if you struggle with forecasting, it might be an issue with the fundamentals. At a minimum, you should have a good overview of your deal stages.

You can go through the following exercise with your deal stages: Make a list of all your stage numbers and stage names.

A simple buying journey could look something like this:

• Stage 1: Connect Meeting (15%)
• Stage 2: Outline Goals and Scope (50%)
• Stage 3: Quote Ready and Sign (90%)

For each stage, you want to have a clear view of entry/exit criteria and actions/deliverables.

It can look something like this:

Connect Meeting (15%)

Entry Criteria:

• Prospect has shown initial interest.
• Basic contact information is collected.
• A brief company overview is obtained.

Exit Criteria:

• Meeting completed with key decision-maker.
• High-level pain points were identified.
• Next steps agreed upon.

Actions:

• Schedule and conduct the initial discovery call.
• Present company overview and value proposition.
• Ask probing questions to understand the prospect’s needs.
• Determine if there’s a potential fit.

Deliverables:

• Meeting notes documented in CRM.
• Initial assessment of prospect’s needs.
• Confirmation email with next steps sent to the prospect.

Once you have this for each stage, you and your team will have a clear overview of what is expected and what outcomes are required at each stage.

Deal Risk:

Another important aspect is understanding the risks in your deals, trying to understand what data points should be highlighted for you and the team, and making sure to address these in team meetings in 1/1, these data points could be:

• Lack of buyer engagement
• Budget concerns
• Competitor involvement
• No decision-maker involvement
• Single-threaded deals (only one stakeholder involved
• Deal stagnation (close date repeatedly pushed out)
• Opportunity age exceeding average sales cycle

Reporting Cadence

There are several ways to set up a reporting cadence. In my opinion, it depends a lot on your team. If you have a team with strong process adherence, I would skip 1-on-1s with the classic question: "Tell me about these deals and what is your number for the month."

The goal should be to move away from these time-wasters since the data should already be in the CRM if you’ve set up clear fundamentals for each stage. Holding meetings just to repeat data is not a good use of anyone’s time. These meetings should be focused on deal risks and how to move forward.

By setting clear expectations for each stage and having defined goals, reps should submit their forecasts as changes happen (for example, by using HubSpot's forecasting feature).

Realistically, most teams are not quite there yet. Sales reps who are new to their roles often need support. For that reason, you can set up a reporting cadence so that forecasting numbers can be used for better decision-making.

As an example, let’s say your team consists of sales reps, team managers, a VP of Sales, and a CRO. Here’s how the cadence could go:

• Friday: Sales reps/managers hold 1-on-1s where deals and individual numbers are discussed.
• Tuesday: Team meetings between sales reps and managers focus on deals and collaboration.
• Wednesday: Managers report numbers to the VP of Sales.
• Thursday: The VP of Sales reports numbers to the CRO, who provides the forecast.

This is a typical example of how a forecasting cadence can work. Again, in my opinion, the goal should be to create a fluid process where everyone updates numbers as pipeline changes occur—saving time on unnecessary 1-on-1s. HubSpot Forecasting makes this easy to implement, which I’ll explain further.

Basic Data Points Needed and Forecasting in HubSpot

The main data points for a basic forecast should include:

1. Goal
2. Gap
3. Forecast Submission
4. Open Pipeline
5. Open Pipeline Coverage

In HubSpot, if you set up forecasting functionality along with goals, you’ll get all this data in one view:

To set this up:

1. Define clear revenue goals for your sales reps.
2. Go to the “Goals” section in HubSpot.
3. Follow the templates provided by HubSpot—make sure to set up both team goals and individual rep goals.

Once you’ve set these goals up for both your team as a whole and individual reps, it will look something like this:

Final Thoughts (and an AI Tidbit)

Accurate forecasting is not just about predicting numbers—it’s about creating the fundamentals, enabling better decision-making, and equipping your team with the tools and processes they need to succeed. By focusing on the fundamentals, setting up a clear reporting cadence, and leveraging tools like HubSpot’s forecasting features, you can improve predictability.

As you refine your forecasting process, remember to prioritize clean data and proactive risk management. These steps will not only improve your current forecasts, but also prepare your team to take full advantage of AI-driven tools as they evolve. Hubspot has already implemented an AI forecast, and with solid fundamentals, this data will become more accurate.

I hope you found this article helpful. If you’d like support in setting up your forecasting in HubSpot, I’d be happy to connect and discuss further.

(this article was written by me, but improved with perplexity.ai for grammar and clarity purposes)