Reviewing and Validating Your Revenue Forecasting Model

Most leadership teams believe they have a growth plan. In practice, they have a revenue target and an expectation that the organization will figure out how to reach it. 

What sits between those two things is math. 

When I review a company’s forecast, the issue I most often come across is that the business still cannot clearly explain how growth happens. Data is being tracked, activity is being measured, and money is being spent, but those inputs are rarely connected in a way that confirms the plan is realistic.  They haven’t mathematically modelled the how. 

When growth is not grounded in math, decisions are driven by belief rather than evidence. 

Where Things Break Down Early 

Problems usually appear before forecasting even begins. They show up in how teams think about inputs and investments. 

In most cases: 

• Attribution is unclear. Teams cannot explain which go-to-market motions produce revenue and which ones do not. 
• Core costs are assumed. Customer acquisition and retention costs are discussed and assumed but not truly calculated. 
• Large investments go unquestioned. Trade shows, outbound efforts, and campaigns continue because they feel familiar, not because their unit economics are understood. 

These are not execution issues. They are modelling gaps. 

If you cannot explain what it costs to grow, or how efficient it is you are not managing growth. 

Turning a Revenue Target Into a Revenue Forecasting Model 

Growth targets are often set emotionally. A number is chosen, and the organization is expected to deliver. 

The work begins when that number is broken down. 

If the goal is $25 million and the average unit sells for $100,000, the business needs to sell 250 units. From there, you need to review historical trends: 

• How many units were sold last year?  
• What does the three-year average look like?  
• How often has the business achieved growth at the rate this target requires? 

If the company’s historical ceiling is 2,000 units and the plan requires 2,500, that is a 25 percent increase. If the business has never grown at that pace, the model needs to explain what has changed to support it. 

Math removes ambiguity. It does not negotiate with misplaced confidence. 

Pressure Testing Through Capacity and Channels 

Working backwards also exposes operational limits. 

If those 250 units are sold through a dealer or reseller network, the model has to reflect how that network performs today. For example: 

• If the average dealer sells ten units per year, reaching the target requires 250 productive dealers. 
• If the business has 200 dealers, it needs 50 more. 
• If onboarding a new dealer takes six months, the timeline becomes a constraint that cannot be ignored. 

When a plan assumes adding four or five dealers per month, but historical performance supports four or five per year, the gap is structural. 

Pressure testing exists to surface these constraints early, while there is still time to address them. 

What Makes Revenue Predictable 

In B2B sales, predictable revenue depends on understanding how the sales system behaves. 

Leadership needs clarity on a small set of ratios: 

• Average deal size 
• Conversion rate 
• Deal velocity 

With those numbers, forecasting becomes practical. 

For example, if the average deal size is $100,000, the conversion rate is 50 percent, and deals take 90 days to close, generating $5 million in new revenue requires 50 closed deals. To close 50 deals at a 50 percent conversion rate, the pipeline must contain at least 100 qualified opportunities. 

Because deals close in roughly 90 days, that pipeline must exist at the start of the quarter. That translates to approximately $3 million in active pipeline per quarter to close $1.5 million consistently and reach the annual target. 

This is arithmetic. Without it, forecasts rely on optimism. 

Why Validating the Model Changes the Plan 

Once a model is validated, growth plans usually change. In many cases, forecasts come down. 

That adjustment creates clarity. A grounded forecast allows leadership to resource deliberately, invest in motions that perform, and stop pushing teams toward outcomes the system cannot support. 

Validation also makes constraints visible. Those constraints might be process gaps, technology limitations, capacity shortfalls, or misaligned roles. Whatever they are, they become addressable once they are seen. 

When numbers are tracked consistently, they drive decisions. Facts demand action. 

Alignment Comes From Shared Understanding 

Many leaders still believe extra hero effort will close the gap. It will not. 

Execution improves when teams understand the math behind the goal. When they can see what needs to happen, how performance is measured, and where breakdowns occur, accountability becomes clearer and expectations become realistic. 

This creates alignment. Conversations move from pressure to problem-solving, and results follow. 

A Mathematical Model Must Be Maintained 

A growth model is not a one-time exercise. It should be reviewed regularly and updated as conditions change. 

In practice, that means: 

• Tracking outcomes weekly 
• Monitoring core ratios consistently 
• Reviewing cost of growth and cost of retention annually 
• Revalidating assumptions every six months 

Markets change. Costs shift. Teams evolve. The model has to reflect that reality. 

Until a company understands its true cost of growth, its cost of retention, and the efficiency of each go-to-market motion, growth will always feel harder than it needs to be. Once those numbers are understood, leaders gain leverage. 

Growth does not come from pushing harder. It comes from knowing where to push. 

When the math is right, progress compounds. 

Want the models we use at Roadmap?

Benchmark your own Go-To-Market Readiness 

If you want to understand whether your mathematical model is grounded in reality, the Go-To-Market Readiness Index Survey is a practical place to start. It gives leadership teams a clear benchmark of their go-to-market maturity, including how well their growth model holds up when the math is applied. 

For companies that qualify, the GTM Acceleration Fund exists to help close the most critical gaps identified in that assessment. It is designed for teams that are serious about building a disciplined, repeatable growth system and want support doing it the right way. 

If growth matters to you, benchmarking where you stand is a strong first move.