SaaS Start-Ups Sales Forecast Model

Description
One of the key questions any would be investor has when reviewing the Business Plan of a start-up is - how do you arrive at your sales forecasts?

Rather than pull figures out of the air, having a solid methodology behind the numbers is essential.

One method to achieve this is to segment your target market and then quantify your penetrations into each segment.

This financial model is one that can help you do this. It will also produce a first cut contribution analysis for you review.

You still make the key decisions and assumptions but using the model will help you think of all the elements that lie behind them and therefore enable you to explain them to your prospected investors.

The steps to follow are in logical order:
• Evaluate total market size
• Split the target market into up to 3 segmentation levels
• Add planned subscription rates, channel costs and estimated customer acquisition costs
• Enter planned market penetrations
• Enter split of subscriptions by type
• Enter split of subscriptions by channel
• Enter churn forecast rate for each segment
• Enter any special discounts to be given for each segment

Once completed ensure that you have the necessary justifications ready that make up the inputs that you can explain to investors.