The Three Biggest Mistakes in Forecasting (And How to Fix Them)

In this episode, Mike Simmons breaks down why forecasting is so difficult and how sales professionals can improve their accuracy. He highlights the three key variables that impact forecasts: closed dates, amounts, and stage definitions. By focusing on consistency, clarity, and data-driven decision-making, teams can create more reliable forecasts and set better expectations.

"Forecasting is tough. If your business sucks at it, it’s because you’re off on closed dates, amounts, or stage clarity."
"Use past tense in your stage definitions—this ensures clarity and makes probability calculations more reliable."
"Forecasting isn’t about being perfect; it’s about getting better over time by understanding the mechanics."
50-Word Summary
Sales forecasting is challenging, but Mike Simmons shares a clear framework to improve accuracy. He emphasizes the importance of using past-tense stage definitions, real financial numbers, and understanding probability of sale. By applying his three-variable approach—closed date, amount, and stage—organizations can build more reliable forecasts and drive better decision-making.

Five Key Takeaways
1. The Three Pillars of Forecasting
Closed Date: Forecasts rely on expected close dates, but they shift. Stay flexible.
Amount: Be honest about deal value—sandbagging throws off projections.
Stage: Define sales stages using past-tense criteria to improve probability calculations.
2. Why Most Businesses Struggle with Forecasting
Sales teams often misjudge close dates, leading to missed expectations.
Adjusting deal amounts inaccurately creates unrealistic revenue projections.
Lack of clear stage definitions makes probability of sale unpredictable.
3. How to Improve Forecast Accuracy
Use rolling forecasts to adjust to changes in real-time.
Encourage sales teams to update pipeline data consistently.
Adopt yes/no criteria for each stage to prevent guesswork.
4. The Importance of Sales Stage Consistency
Keep the same stage definitions for new sales, renewals, and expansions.
A single standard framework improves internal communication and alignment.
Using consistent language helps non-sales teams (e.g., product, engineering) understand forecasts.
5. Thinking Beyond the Quarter: Short-, Medium-, and Long-Term Planning
Short-term (90 days): Should be highly accurate.
Medium-term (Fiscal Year): Guides resource planning and hiring.
Long-term (90 + 270 days): Helps businesses set up for future success.

Final Thoughts & Call to Action
If your team struggles with forecasting, focus on clarity, consistency, and data-driven decision-making. Forecasting isn’t about being perfect—it’s about improving accuracy over time.

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