Perhaps ‘bad’ is a little strong. You’re reading this and thinking ‘how can it be bad when you exceed your sales forecast? I should stop here and talk about forecasts a little more.

Some managers use more than one forecast: the ‘drop dead’, which is the forecast they say they’ll make come hell or high water; the ‘manager’s shout’, which is what the manager thinks will come in; the stretch forecast, what might come in if all the stars are aligned, there’s a following wind, that kind of thing. Other managers take a more scientific approach to forecasting, either based on probability assessed and averaged across the pipeline, or – better – based on which deals should close in the period, excluding altogether those deals that should not close in the period.

Another crucial relationship is that between whatever interpretation of your forecast you use and your target, the sales you’re supposed to make.

It’s bad when the actual sales you end up making exceed your sales forecast for a number of reasons:

– if you’re a publicly quoted company, it’s viewed in a fairly dim light because it doesn’t give the analyst and investment community confidence that your business is predictable and your business planning is solid

– the company might feel that your sales targets are set too low and you and team are making too much money too easily. They may either raise targets mid-stream or ask you to improve your forecasting so they can plan properly

– companies crave predictability. If you can smash it out of the park one quarter, there’s a chance you can crash and burn the next. This kind of ‘lumpy’ revenue stream causes jitters for the same reasons as already outlined

But wait, I hear you say, what about the bluebirds? The bluebird is the deal that comes in out of the blue. Well, ask yourself two questions: one, how often do these deals happen, to which I would say hardly ever. Two, if this was your deal and you genuinely didn’t know it was coming in, then how close are you to your customers, prospects and opportunities? Control is everything, guesswork is nothing.