The board asks about Q3. The answer is a guess.
At the monthly partners' meeting, the managing partner asks what revenue looks like for next quarter. The operations lead has a spreadsheet: signed engagements, some extensions everyone expects, and a pipeline list pulled from HubSpot, half of which has not been updated in weeks. Each partner adds deals they are 'pretty confident' about. The resulting forecast looks healthy. Two months later, three of those deals have slipped and one extension did not happen.
The firm hires, or does not hire, on the strength of that spreadsheet.
Why consulting forecasts miss
- Pipeline is recorded inconsistently, and some partners keep their deals out of the CRM.
- Probabilities reflect hope, not the firm's actual conversion rates.
- Deal values are not phased by month, so timing is guessed.
- Extensions and follow-ons are assumed rather than tracked as opportunities.
- Capacity is not checked, so the forecast may include work nobody could staff.
Consulting deals also move in ways other businesses' deals do not. Start dates slip while a client finalises budgets, scope shrinks after procurement gets involved, and an extension appears suddenly because a sponsor liked the interim findings. A static monthly spreadsheet cannot keep up.
What bad forecasts cost
| Forecast error | Effect |
|---|---|
| Too optimistic | Hires made ahead of work, bench grows |
| Too pessimistic | Associates engaged late, opportunities declined |
| Timing wrong | Cash flow surprises |
| No capacity view | Deals won that cannot be staffed well |
A poor forecast also muddies every other conversation. When partners do not trust the numbers, discussions about hiring, office space, associate budgets and partner drawings all start with an argument about the forecast rather than the decision.
How we build a consultancy forecast
- Signed engagements are read from your PSA, accounts or engagement records and phased by month from their plans.
- Pipeline comes from your CRM, such as HubSpot, Salesforce or Pipedrive, with a few required fields: value, expected start, duration and stage.
- Partners get a short weekly prompt to confirm their deals, which keeps the CRM current without a lecture.
- Stage probabilities are calibrated from your own history of won and lost deals, shown alongside the partner's own view.
- Extensions and follow-ons are tracked as opportunities, not assumptions.
- Weighted revenue is phased by month and compared with staffing capacity from your resourcing data.
- A forecast view shows committed, likely and possible revenue, with the gap to target and the capacity implied.
The calibrated probabilities are a check on optimism, not a verdict. Partners can override, and the forecast shows both views so the difference can be discussed.
We usually load a year or two of won and lost deals first, to calibrate stage probabilities, and show the partners the result before building the forecast. Seeing how their own past estimates compared with outcomes is usually the most persuasive part of the project.
The partners' meeting afterwards
The forecast is up to date before the meeting, with the gap to target clear and the deals it depends on listed. Conversations turn to which deals to push and where to focus business development.
Hiring and associate decisions are made on a forecast with a known level of confidence rather than a feeling.
Is your forecasting like this?
- The forecast is built in a spreadsheet each month.
- Some deals are only in partners' heads.
- Probabilities are set by feel.
- Extensions are assumed rather than tracked.
- Forecasts do not consider who would do the work.