If you own or manage a small business computer support firm, you know firsthand just how nerve-wracking the last week of the month can be if the revenue you’ve booked is way below your expectations.
But when you have a good handle on forecasting your future sales, and really understand your sales funnel pipeline, you can take a lot of the uncertainty and anxiety out of the equation.
In this article, we’ll look at how small business technology providers, such as those in computer support, can forecast their future sales.
The Crystal Ball
Besides tracking your weekly utilization rates, which is past tense, it’s important to look into the virtual “crystal ball” and forecast what kind of service and support revenue is coming down the pike.
Because B2B computer support services generally have some kind of sales cycle (sometimes it’s just a few days, other times it’s literally months), you must have at least some idea for planning purposes of what’s most likely to “close” in a given month.
Your “Guaranteed” Pipeline should include revenue projections on any projects that are already contracted.
For example, a network rollout project with three phases is due to complete this month. The third phase calls for $3,700 of consulting work that’s virtually “guaranteed” for this month – which would get added into your “Guaranteed” Pipeline for this month.
Another example: You have a small business client on an $800/month computer support agreement for outsourced IT work. Since your firm is virtually “guaranteed” to see a minimum of $800/month from that client, that revenue project would also get added into your “Guaranteed” Pipeline for this month.
Your “Anticipated” Pipeline should include revenue projections on any projects that have not yet closed – but are highly likely to. In other words, no contract has been signed yet and no deposit check has been received.
However, if you believe that there’s at least a 75% chance that you will see that contract close during the month, and will get the first deposit check in, that revenue should be recorded in your “Anticipated” Pipeline for that month.
Your “Anticipated” Pipeline should include both upcoming projects as well as new service agreements that you project (with 75%+ likelihood) will start during that month.
The Bottom Line
So if running your small business computer support firm causes anxiety near the end of month, when you’re way short of expected revenue, use the tips in this article to help you get a much better handle on your crystal ball – comprised of the “Guaranteed” and “Anticipated” pipeline.
What do you do to responsibly forecast what your firm’s revenue will look like this month, next month, and month after month? Let us know your favorite sales forecasting method in the Comments section below.
And to follow-through on the tips introduced in this short article, be sure to download your free copy of the special report on Seven IT Sales Secrets for Attracting High-Lifetime-Value Clients.
Creative Commons Image Source: flickr nandadevieast
Topics:- Computer Consulting Business