What is Forecasting?
Predicting future business outcomes — revenue, pipeline, growth, and resource needs — using historical data, current trends, and informed assumptions.
Understanding the Details
Forecasting enables proactive business management. Revenue forecasting predicts quarterly and annual outcomes from pipeline data. Pipeline forecasting estimates future pipeline from marketing activity. Resource forecasting determines hiring needs based on growth projections. Good forecasting combines quantitative methods (historical trends, conversion rates, regression models) with qualitative judgment (market conditions, competitive changes, team capabilities). The value of forecasting isn't perfect prediction — it's enabling better decisions today based on the best available information about tomorrow. Forecast accuracy should be tracked over time: consistently over-forecasting indicates optimism bias, while under-forecasting suggests conservative bias. Both undermine planning.
How It Works in Practice
Revenue forecasting
Combining weighted pipeline with historical conversion rates and seasonal patterns produces a quarterly forecast within 10% of actual results.
Pipeline forecasting
Based on marketing spend and historical lead-to-opportunity rates, the team projects next quarter's pipeline at £3M with 80% confidence.
Resource planning
Revenue and activity forecasts drive hiring plans: projected pipeline growth requires 3 additional SDRs and 2 AEs in Q3.
Why It Matters
Accurate forecasting enables confident business planning. Without it, companies over-hire, under-invest, miss targets, and make reactive decisions.
What People Often Get Wrong
Forecasting requires sophisticated models. Actually, simple approaches based on historical patterns and pipeline math produce useful forecasts for most companies.
Forecasts should always be accurate. Actually, forecasts are estimates — the goal is to be directionally correct and improve accuracy over time.
Only finance teams need to forecast. Actually, marketing, sales, product, and operations all benefit from forecasting their relevant metrics.
How We Handle Forecasting
We help build forecasting models that combine pipeline data with historical patterns, providing reliable predictions that enable confident planning and resource allocation.
Related Terms
Common Questions
Need Help With Forecasting?
If you'd like to discuss how forecasting applies to your business, we're happy to explain further.