Module 1 · Forecast shapes
Three shapes
Three simple forecast methods and the failure mode of each.
Run-rate
Take recent actuals and project them forward. Cheap, fast, and honest about being dumb. It misleads whenever the business is changing shape — a new product, a lost major account, or seasonality.
Pipeline-weighted
Multiply each open deal by a stage probability and sum. Better when the pipeline is well maintained. It misleads badly when stage hygiene is poor, and it inherits every data-quality problem in the CRM.
Commit / best case / worst case
Three explicit scenarios with the deals named in each. Most useful for a decision, because it exposes which conversations the number depends on.
Pick the simplest method the decision can live with, then spend your remaining time on the assumptions sheet. A simple forecast with clear assumptions beats an elaborate one nobody can inspect.
The assumptions sheet
- One row per assumption, each with a value and a source
- Mark which assumptions the number is most sensitive to
- Note what would make you revise, and when you will next look
Key takeaways
- Each method has a specific failure mode — name yours
- Simplicity plus inspectable assumptions beats sophistication
- Sensitivity means naming which inputs actually move the answer
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