Business Growth Resources

Calculators

Sales Velocity

Sales velocity can be measured in both monetary terms and deals per unit of time, but it is most commonly expressed in monetary terms.

The formula for calculating sales velocity is:

Sales Velocity = (Number of Opportunities × Average Deal Size × Win Rate) / Sales Cycle Length

This formula typically results in a monetary value, such as dollars per day or dollars per month, indicating how much revenue is generated over a specific period.

For example, if the calculation yields $1,000 per day, it means that your sales team generates $1,000 in revenue each day on average. However, while the primary focus is on revenue, understanding the number of deals closed per month can also be valuable for evaluating sales efficiency and pipeline health. This aspect is more about the volume of deals rather than the monetary value.

Example:

Number of Opportunities: 100

Average Deal Size: $2,500

Win Rate: 20% (0.20)

Sales Cycle Length: 30 days

Sales Velocity = (100×$2,500×0.20)/30

Sales Velocity = $1,666.67 per day

In this example, the sales velocity is expressed in dollars per day. Still, you could also calculate the number of deals closed per month by multiplying the number of opportunities by the win rate and dividing by the sales cycle length in months.