How helpful would it be to predict how much money your business would make next month, or even next year?
Then you could budget for costs, plan for growth, and adjust pricing and profit margins before small issues turn into expensive problems.
That kind of insight isn’t magic. It’s revenue forecasting—a process you can use to get accurate predictions for future sales, helping you gauge your business’s long-term health.
Learn how to forecast revenue, why it matters, and tips for prediction accuracy to help with financial planning, smarter spending, and profitability in this guide.
Revenue forecasting for home service pros:
What is revenue forecasting?
Revenue forecasting is a process used to predict how much money your business will make in the future, like the next week, month, or year.
It’s based on factors such as:
- Booked jobs in your calendar
- Any quotes or estimates you’ve sent out
- How much money you made during the same period in the previous year
- Changes in pricing, team size, service area, or offerings
A revenue forecast isn’t set in stone, but it can help you get an idea of how much you can expect to bring in over a specific period.
For example, say you run a lawn care business. You have $8,000 in monthly recurring revenue, $3,000 in one-off jobs, and $4,000 in pending quotes for next month.
If you typically win about half the jobs you provide estimates for, your rough revenue forecast would be $13,000 ($8000 + $3000 + $2000).
Once you factor in overhead costs and operating expenses, you’ll see how much profit you have left and whether you can afford to reinvest or should focus on reducing spending.
The benefits of forecasting revenue
Accurate revenue forecasting shows you what your business’s financial health will look like in the future so you can make more informed, strategic decisions.
For example, accurate forecasting revenue projections can:
1. Improve cash flow planning
Positive cash flow is essential for covering bills, purchasing supplies, and investing in your business’s growth by hiring employees or expanding your marketing efforts.
An accurate revenue forecast tells you when to expect positive or negative cash flow, so you can:
- Make better decisions about when to spend and when to save
- Avoid taking on jobs you can’t afford to staff or supply
- Plan for seasonal fluctuations
- Make big purchases when you have cash available
- Reduce the need to rely on loans or credit
For example, if you run a snow removal business and revenue forecasting predicts a drop in income for March, you could pause equipment purchases until the fall, when work picks up again.
2. Support smarter spending
Revenue forecasting isn’t just a good way to predict cash flow—it also helps you make smarter spending decisions and investments.
For example, revenue projections can show you when it makes the most sense to:
- Hire your first employee or expand your existing crew
- Try a different marketing channel or campaign
- Purchase costly equipment
- Expand to a new service area
- Increase your service offerings
That way, you reduce the risk of overextending your budget and spend strategically when it makes the most financial sense.
3. Help you stay profitable
If you forecast revenue three months ahead and it predicts you’ll have negative cash flow, it’s not a bad thing. It means you have an opportunity to change those numbers before they impact your bottom line.
For example, you can use that information to bring in more customers through:
- Google Ads
- Lead generation websites
- Promotions and discounts
- A referral program
- Email campaigns
Or you can use job costing to set a higher markup and profit margin on each job.
If you don’t have money to put into marketing and you’re already charging enough for your services, you can explore ways to reduce costs, like:
- Deferring large purchases
- Hiring subcontractors instead of full-time staff
- Finding new suppliers
- Using route optimization to boost fuel efficiency and cut down driving time
- Making supply purchases in bulk
What are the numbers that let you look ahead?
They might be leads that you’re getting. You can get a pretty good idea of really almost real time, ‘Hey, I’m starting to see a trend, I’ve got a problem.’ And then if you combine that with a budget that’s going to immediately kind of tell you, wow, I budgeted $100,000 of sales last month, I’ve only got $80,000. What’s going on here? What’s the reason for that?
4. Make long-term planning easier
Almost every business is affected by seasonality and downtimes. Revenue forecasting makes it easier to recognize and plan for those patterns, so you can save during the high season to cover quieter months.
It also helps with budgeting for bigger costs like tax payments, vehicle maintenance, or equipment purchases.
5. Identify financial issues early
Revenue forecasting is an effective method for identifying potential financial issues before they become major problems.
For example, if revenue projections predict significantly less income this year compared to last, you can make adjustments now to avoid completely upending your business later.
That means looking at what is causing the drop, such as:
- Fewer bookings overall or for specific job types
- Lower conversion rates on your quotes and estimates
- Smaller average job sizes
- High customer cancellation rates
- Reduction in repeat business
- Slow market conditions overall
- Supply chain issues
Once you know what’s causing the discrepancy in your numbers, you can take steps to address it.
That may mean adjusting your pricing strategy, focusing on the most profitable jobs, or using software like Jobber to offer online booking, better quotes, and automated follow-ups that turn leads into customers.
6. Give you more control over your business
Revenue forecasting allows you to be proactive instead of reactive about scheduling, staffing, and spending. That way, you can feel more confident about making business decisions because they’ll be based on data, not just your gut feeling.
It helps you to be more strategic and thoughtful about how, when, and why you spend or save, so unexpected expenses don’t catch you off guard.
7. Steer strategic goals
Knowing you want to grow your business is one thing, but setting smart, strategic goals to get there is another.
Revenue forecasting supports realistic and attainable goal setting by showing you how much you have to spend and when. That way, you can set revenue growth goals based on real data, increasing your chances of actually hitting them.
Instead of crossing your fingers and hoping to make more next quarter, revenue forecasting helps you predict what to expect. Then you can plan accordingly and set growth goals like:
- Increasing revenue by a specific percentage over last year
- Boosting your average job size through upsells or bundling
- Focusing on more profitable job types and services
- Generating more repeat business
Ongoing forecasting will also help you monitor and adjust your goals as needed so you can stay on track to meet them.
The challenges of revenue forecasting
Even though revenue forecasting comes with many benefits, it’s not without its challenges. If you try forecasting revenue, it’s important to understand its limitations, such as:
1. It’s not always accurate
Revenue projections are based on estimates and past trends. If you overestimate how many quotes will turn into booked jobs, or bad weather leads to mass cancellations, your numbers will be off.
Use it as a guide, but don’t rely on it as your only data when making important or major decisions.
2. External factors impact results
Unexpected changes in supply costs, seasonality, and general market conditions can all throw a wrench in revenue forecasting. You can’t always account for them months in advance, so be sure to leave wiggle room and save whenever possible to give yourself a buffer.
3. It’s affected by unpredictable customer behavior
Having a large number of quotes out in the world doesn’t mean they’ll turn into paying jobs. Customer hesitation, delays, and cancellations all impact revenue forecasting and skew your numbers.
Tips to improve forecast accuracy
To ensure your revenue forecast is as accurate as possible, be sure to:
1. Track data
You can make revenue forecasts without historical numbers. Track sales data manually or using reporting software like Jobber to stay on top of your numbers.
The people that know their numbers, the people that dig in and take some time to learn them, are usually the ones that do the best.
2. Monitor your win rate
Your win rate tells you how many of the quotes you send out turn into paying jobs. Depending on the revenue forecasting model you use, that will impact the outcome.
If you plan to incorporate win rates into revenue forecasting, track them both short- and long-term to stay aware of any changes or trends and keep your numbers as accurate as possible.
3. Plan for buffers
Seasonality, risks, and internal and external factors can all impact revenue forecasting. Incorporating buffers into your revenue forecasting helps to them more realistic and prevents you from spending when you should have saved.
4. Review forecasts regularly
Revenue forecasts shouldn’t be something you do once a year. They should be a regular part of running your business. The more you do them, the more accurate they’ll be and the more information you can get from them.
Run them at least once every quarter so you have historical data to compare them to.
5. Use software
Manually tracking, recording, and calculating revenue projections is prone to human error, making it inaccurate and unreliable.
Using reporting software is the best way to handle revenue tracking and projections. And, because most programs automate the process, it saves you from a ton of extra admin work.
For example, with Jobber, you can easily generate financial, work, team, client, and expense reports so you can stay on top of your business’s numbers. That way, you save time, money, and get more accurate forecasts without having to worry about human error.
How to forecast revenue
If you think revenue prediction could help your service business, follow this revenue forecasting process.
1. Choose a time period
Revenue forecasting can be used for both long-term and short-term predictions. For example, you can look a week, a month, a quarter, or even a year ahead.
It just depends on whether you’re using it for day-to-day or big-picture planning. If you just want to see if you’re new marketing campaign is working, looking a month ahead might be good enough. But if you’re trying to decide when to hire new staff, 3-6 months may be a better timeframe.
2. Gather data from revenue sources
Revenue forecasting is based on past jobs and current estimates. Gather relevant revenue data for the timeframe you need, including:
- Recurring work
- One-off jobs
- Unapproved quotes
- Average win rate
3. Review internal factors
What’s happening within your business that could impact total revenue or growth rate? Are you hiring or losing staff? Have you changed your services or reduced or expanded your service area?
If you’re going to open a new location, we’re not going to do that overnight.
We’re thinking like six, nine months, a year, whatever. I want to build that into the budget. I want to build that into the forecast. What’s that going to cost us? How many trucks do we need? What’s our rent going to be? What’s our labor going to look like?
Make a note of anything that could influence your revenue forecast so you can take it into account when you do your calculations.
4. Consider external factors
Local conditions and market trends influence revenue. For example, do you have any new competitors? Is your business affected by the weather? Have any local regulations changed in a way that impacts your business?
As with internal factors, keep track of any obvious external influences on revenue. While you can’t control them, you can keep them on your radar.
5. Account for risks
Risks and uncertainties are part of every business. But revenue forecasting should include a buffer for unexpected costs like:
- Jobs that require additional staff, supplies, or equipment
- Supply chain issues
- Demand increases that influence material pricing
- Client delays, like late payments
Even schedule changes can throw off forecasting if they push jobs outside of your date range.
6. Pick a revenue forecasting method
While there are many sales forecasting methods to choose from, the most popular for home service businesses are historical forecasting and pipeline forecasting.
- Historical forecasting, or top down forecasting, is when you use past revenue to predict future revenue. As in, if you made $15,000 in June 2024, you would predict $15,000 for June 2025 as well.
- Pipeline forecasting, or bottom up forecasting, is when you focus on future income and add booked jobs and win rates to the mix. For example, if you have $15,000 in booked jobs for June 2025, an additional $5,000 in pending quotes, and an average win rate of 50%, your revenue forecast would be $17,500.
You can get these numbers by reviewing last year’s data manually or through reporting software like Jobber. Or you can use a tool like Jobber Copilot to automatically calculate your quote conversion rates and track when they dip or grow to keep up-to-date and accurate revenue forecasts.
7. Calculate your revenue forecast
You can calculate your revenue forecast manually or by using a free tool like Jobber’s free profit forecast tool.
To do it manually, you’ll need to:
- Choose a time period
- List expected revenue for that period, including recurring jobs, one-off jobs, and pending quotes
- Determine your average win rate (how many quotes turn into booked jobs)
- Add it all together
For example, let’s say you choose a three-month period. You have $15,000 in recurring jobs, $10,000 in one-off jobs, and $12,000 in pending quotes.
If you typically win four out of every 10 quotes, your average win rate is 40%, and you can expect $4,800 of revenue from those pending quotes.
With those numbers, here’s what your revenue forecast would look like:
$15,000 + $10,000 + $4,800 = $29,800 in predicted revenue for the next three months
Free profit forecast tool
Use this free profit forecasting tool to measure your business’s current profit and see which areas will have the greatest impact on your bottom line.
To use the tool, enter your current numbers into the first column on the left, including:
- Your average new leads per month
- Your lead-to-customer conversion rate
- Your repeat business rate
- Your average invoice price
- Your net operating profit margin
Next, set incremental increase targets for each one. For example, if you increase each variable by just 10%, you’ll see an overall profit increase of 60%.