If your forecast model is detailed, extending the forecast time frame by adding more columns is very easy. The difficulty is scaling your expense base so you do not have unbelievable margins and net income expansion. An area of the P&L that people struggle with is the sales team headcount forecast.
This headcount forecast model template creates precise monthly wage forecasts, but you do not have to manually add heads to ensure your sales team headcount (or even departmental headcount) is correctly scaling with your ARR or MRR bookings growth.
Ben has worked on some 3 to 5 year forecasts and templated an excel model that calculates the required sales headcount based on your bookings targets. The hard part is new hire timing for sales reps.
Sales Rep New Hire Timing
If you need a certain amount of money in bookings in 6 months, you cannot hire them in 6 months. You need to hire them now, depending on the ramp up time required for a new sales rep hire. This model will take the inputted ramp up time and hire them with plenty of time before you need to hit your bookings targets.
It will also forecast Sales Development Reps (SDR's), Sales Managers, and Sales Directors based on your ratio requirements.
This is important as you need to account for the cash required to have reps on stand who are learning still, but are not productive. Secondly, there is a realistic relationship between headcount requirements and your bookings forecast. It is impossible to model a new hire starting at the same moment that they are needed to be fully productive.
Ben assumes that sales reps do not contribute to quota during their ramp up period, but calculates the impact of any assumed partial productivity. Ben does not ramp up the other sales staff before they are required, they start when the ratio hits the inputter.
Sales Team Headcount Forecast Excel Template