Calculate Average Deal Size in Canada: A Practical Guide

Calculating the average deal size means finding the typical revenue value of your closed sales within a chosen time frame. To do this, take the total revenue from all deals that were successfully closed (won) during that period and divide it by the number of those deals. This number helps you understand your typical sale value and supports better sales forecasting, target setting, and performance analysis.

Why this comes up / what goes wrong

Small and mid-sized business owners in Canada often seek to calculate average deal size to measure sales effectiveness and adjust business strategies. Without this metric, you might misjudge your sales potential or overlook changes in deal values over time. Common problems include:

• Forgetting to include all closed deals.
• Mixing open, lost, or pending deals with closed deals.
• Using inconsistent or mismatched time periods for revenue and deal counts.
• Ignoring currency consistency, which is critical for Canadian businesses.
• Double counting deals or missing some due to poor data management.

These mistakes lead to inaccurate calculations, which can misinform your sales planning.

Step-by-step

1. Select your time period: Decide on the time range to analyse, such as last quarter, year-to-date, or the past six months.
2. Collect closed deals data: Gather the total revenue from all deals fully closed (won) within that period. Exclude open, lost, or pending deals.
3. Count the number of closed deals: Count only the deals that were successfully closed in the same time frame.
4. Calculate average deal size: Divide the total revenue by the number of closed deals.
5. Verify your data: Check for duplicates, omissions, or inconsistencies in your deal records.
6. Confirm currency consistency: Ensure all amounts are in Canadian dollars (C$) to maintain accuracy.

Using a CRM tool like HelloGrowthCRM with a Deals pipeline can help you track deals accurately, keep follow-ups timely, and maintain up-to-date deal statuses.

Example (fictional figures)

A staffing agency in Halifax, Nova Scotia, closed 12 deals between 2024-01-01 and 2024-03-31. The total revenue from these deals was C$480,000.

Calculate the average deal size as follows:

Total revenue = C$480,000

Number of deals = 12

Average deal size = Total revenue ÷ Number of deals

Average deal size = C$480,000 ÷ 12

Average deal size = C$40,000

So, the average deal size for this period is C$40,000.

Common mistakes

• Including open or lost deals: Only count deals fully closed (won). Prevent this by filtering your data carefully.
• Mixing different time frames: Use the same period for total revenue and deal count. Prevent this by setting clear, consistent date ranges.
• Ignoring currency consistency: Make sure all amounts are in Canadian dollars (C$). Prevent this by verifying currency before calculating.
• Double counting deals: Check your data source for duplicates. Prevent this by using reliable deal tracking systems.
• Not updating deal status: Revenue from deals still pending can distort averages. Prevent this by regularly updating your deals pipeline.
• Forgetting to track follow-ups: Without timely follow-ups, deals may stall or be lost unnoticed. Prevent this by setting reminders for each deal stage.

A CRM like HelloGrowthCRM helps avoid these errors by centralizing deal tracking and status updates, ensuring your sales data is accurate and current.

Doing this in HelloGrowthCRM

HelloGrowthCRM’s Deals pipeline lets you track each deal’s stage from first contact through to close. For instance, a quotation sent last week appears as a deal at the 'quote sent' stage with a follow-up date, so it is not forgotten. This helps keep your sales process organised and ensures your average deal size calculation is based on accurate, up-to-date closed deals. Learn more about the AI CRM and WhatsApp and SMS CRM features designed for Canadian businesses on HelloGrowthCRM for Canada.

Frequently asked questions

What is average deal size used for? Average deal size indicates the typical revenue per sale. It helps in sales forecasting, setting realistic sales targets, and evaluating the effectiveness of your sales team.

How often should I calculate average deal size? Calculate average deal size regularly, such as monthly or quarterly, to track trends and adjust your sales strategy accordingly.

Can I calculate average deal size for different product lines or services? Yes. Segment your deals by product or service categories to see which generate higher average deal sizes and focus your sales efforts accordingly.

Does HelloGrowthCRM help with deal tracking and follow-ups? Yes, HelloGrowthCRM’s Deals pipeline tracks deals through various stages, helping you keep follow-ups scheduled and deal statuses updated for accurate reporting.

What if some deals have partial payments or multiple invoices? Use the total revenue recognised from the deal after all payments are received or agreed upon to calculate average deal size accurately.

Key takeaways

• Average deal size = total revenue from closed deals ÷ number of closed deals.
• Use consistent time periods and currency (C$) for accurate calculations.
• Exclude open, lost, or pending deals from your calculation.
• Double-check your data to avoid duplicates or omissions.
• Keep deal statuses updated to reflect accurate revenue.
• HelloGrowthCRM’s Deals pipeline helps organise and track deals to support accurate average deal size calculations.

Start calculating your average deal size today to improve your sales insights and forecasting. To manage your deals efficiently, start on the Free Forever plan (200 leads, no credit card).