Estimating Numbers: A Tool to Manage People’s Expectations

Estimating Numbers is Hard When There are Many Variables and the Expectation of Everyone is For You to Identify ‘the Number’.

A single number that is correct. Impossible. Trying to forecast a single number is like being on a treacherous tightrope. You will fail to identify that single number because in a million numbers, guessing that one number will not happen. This article is about recognising that you don’t need to find that elusive correct number because there is an alternative way. The PRO tool.

Calculating estimate using a calculator at an office desk

Imagine this Scenario for Estimating Numbers

Many years ago I launched a business ‘canned oxygen’. Yes, oxygen in a can. Putting that aside, an investor wanted me to forecast the sales numbers when we launch. An impossible task because the market was emerging, with very few players, no comparison, and completely innovative. This meant that finding the sales number for year 1 was never going to happen.

A Simple Tool – The P.R.O. Tool

This tool enables you to move away from that elusive number and manage people’s expectations when estimating numbers. The P.R.O. tool stands for:

  • Pessimistic
  • Realistic
  • Optimistic

The Pessimistic Number

This is the number that considers the worst position, or black hat thinking, as it is known. To identify this number, consider the worst-case scenario. The variables involved in the numbers go the wrong way and the number is the lowest.

The Realistic Number

This is the number that considers the middle-ground position. The number above the pessimistic and below the optimistic. This might be the number that would be the one you normally have forecasted. Yet, it is now surrounded by two other numbers.

The Optimistic Number

This is the number that is the best. The highest. If all the variables ‘go your way’, then this is the number that you want to happen. This is the number that you hope for. The one where you plan to achieve something great.

Managing People’s Expectations

I shared with my investor 3 numbers. The pessimistic number, the realistic number, and the optimistic number. A range of 3 numbers from low to medium to high. By seeing a range of numbers I was not proposing a single number that I would be highly likely to to forecast incorrectly. Instead, a range of numbers with their accompanying state of mind, e.g. pessimistic, allowed me to offered many numbers as the forecast.

Adding your list variables to the scenarios enables others to then tweak the forecast accordingly. For example, if anumber of sales next year is based on a ‘good Summer’ of weather, then each number can be reduced because of a bad Summer of weather.

Use the P.R.O. Tool when Forecasting Numbers – Example

Display showing the stock market recession

I forecast that in the first year we will sell:

Pessimistically: x’000 cans with assumptions of ABC.

Realistically: y’000 cans with assumptions of ABC.

Optimistically: z’000 cans with assumptions of ABC.

Related Articles:

Category Management 

e learning Course

e Learning Course Image

Great Related Articles

The Blog

Free e-Assessment

e assessment image

Buy Training Materials

The Shop

YouTube Playlist 

MBM YouTube Videos


MBM Infographics

Glossary of Terms

MBM banner for Effective Leadership terms

Weekly Newsletter 

Top Tips Image

Coaching Cards: £7.50

Five coaching cards, four purple and one white

Training Course

Training Courses

You may also like:

Category Management Tips
A pile of foods high in salt sugar and dat

HFSS Foods & Their New Legislation Around the Globe

The New HFSS Foods Legislation? What it Means… As part of the government’s intention to combat childhood obesity, new HFSS…
Top view of Oxford building

OISA: Oxford International Supplier Academy

What is the O.I.S.A (Oxford International Supplier Academy)? This is a subsidiary of Making Business Matter. MBM is a soft…
Woman checking shopping list

Category Creation: Use the Shopper’s Language or Get Left Behind

“Let’s Promote Top Fruit” says my apple buyer. The year is 2001, and I am in my first fruit buying…

Written By:

You must be logged in to post a comment.