How to Calculate Average Deal Size in the UK

To calculate average deal size in the UK, you take the total revenue from all closed deals over a specific period and divide it by the number of deals closed in that same period. This gives you the average value of each deal, which helps you understand sales performance and forecast future revenue.

Why this comes up / what goes wrong

Many small business owners want to know their average deal size to understand how much revenue each customer or contract typically brings in. This figure is essential for setting realistic sales targets, managing cash flow, and planning growth. However, sales data is often scattered across WhatsApp chats, emails, and spreadsheets, leading to difficulties in gathering accurate totals or counts. Owners sometimes include deals still in progress or forget to update deal values, resulting in misleading calculations.

Step-by-step

1. Choose your time period: Decide whether to calculate your average deal size monthly, quarterly, or yearly. Use the same period consistently for accurate comparisons.
2. Gather closed deal data: Collect the total value of all deals that were fully completed and paid within your chosen period. Exclude any deals that are still in negotiation or pending.
3. Count the number of closed deals: Count every deal that was completed in the same period.
4. Calculate average deal size: Divide the total revenue from closed deals by the number of deals.

Formula: Average deal size = Total value of closed deals ÷ Number of closed deals

1. Double-check your numbers: Verify that all deals counted have clear, final values and fall within your selected period.
2. Review regularly: Calculate this figure monthly or quarterly to track trends and adjust your sales approach accordingly.

Using a CRM like HelloGrowthCRM can centralise your deal data and communications, reducing errors and missed deals. See how HelloGrowthCRM for the United Kingdom supports deal tracking and follow-ups.

Example (fictional figures)

A letting agency in Manchester wants to calculate its average deal size for Q1 2024 (01/01/2024 to 31/03/2024).

• Deal 1 closed for £8,500
• Deal 2 closed for £12,000
• Deal 3 closed for £10,000
• Deal 4 closed for £11,500
• Deal 5 closed for £9,000
• Deal 6 closed for £13,000
• Deal 7 closed for £7,000
• Deal 8 closed for £10,500
• Deal 9 closed for £12,500
• Deal 10 closed for £11,000
• Deal 11 closed for £9,500
• Deal 12 closed for £5,500

Step 1: Add all deal values £8,500 + £12,000 = £20,500 £20,500 + £10,000 = £30,500 £30,500 + £11,500 = £42,000 £42,000 + £9,000 = £51,000 £51,000 + £13,000 = £64,000 £64,000 + £7,000 = £71,000 £71,000 + £10,500 = £81,500 £81,500 + £12,500 = £94,000 £94,000 + £11,000 = £105,000 £105,000 + £9,500 = £114,500 £114,500 + £5,500 = £120,000

Step 2: Count the number of deals 12 deals closed

Step 3: Calculate average deal size Average deal size = £120,000 ÷ 12 Average deal size = £10,000

This means each letting contract brought in an average of £10,000 during Q1 2024.

Common mistakes

• Including open or pending deals: Only use deals that are fully closed and paid. Prevent this by checking deal status carefully.
• Mixing different time periods: Keep your total value and deal count from the exact same period to avoid skewed results.
• Forgetting to update deal values: Deal amounts can change after initial quotes. Always use the final agreed amount.
• Ignoring cancelled deals: Exclude deals that fell through to avoid inflating your average.
• Using inconsistent currencies or units: In the UK, always use GBP and standardised figures.
• Not tracking deals centrally: Using multiple tools like WhatsApp, email, and spreadsheets can lead to errors. Consider a CRM solution to consolidate data.

See how WhatsApp and SMS CRM can centralise communication and deal tracking.

Doing this in HelloGrowthCRM

HelloGrowthCRM offers a Deals (pipeline) feature that helps you track open opportunities from first contact through to close. For example, 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 keeps your sales process organised and makes calculating average deal size straightforward by having all deal values and statuses in one place. Learn more about the pipeline feature on the AI CRM page.

Frequently asked questions

How often should I calculate average deal size? Calculating average deal size monthly or quarterly is common. This frequency helps you spot trends and adjust sales strategies promptly.

Can average deal size include ongoing deals? No, only deals that are fully closed and paid should be included to ensure accuracy.

What if deal values change after quoting? Always update your records with the final agreed deal value before calculating average deal size.

Does average deal size help with sales forecasting? Yes, knowing your average deal size helps predict future revenue based on expected deal counts.

Can I calculate average deal size manually without software? Yes, by gathering your sales data from invoices or records and using the formula provided, but a CRM can simplify this process.

Key takeaways

• Average deal size = total value of closed deals ÷ number of closed deals in the same period.
• Use only fully closed and paid deals within the chosen time frame.
• Regular calculation helps track sales performance and forecast revenue.
• Avoid mixing deal statuses or inconsistent periods to prevent errors.
• Centralising deal tracking with a CRM like HelloGrowthCRM reduces mistakes and missed opportunities.

Start tracking your deals effectively and calculate your average deal size with ease. Start on the Free Forever plan (200 leads, no credit card).