This is the most fundamental part of any financial model. A good sales plan has clearly identified drivers — the key factors that increase sales. This can be hard, but it is arguably the most important part.
Here are a few examples:
- Number of visitors to your website in a month. From there a % of them may sign up for a free trial, after their trial ends, a % of them may become “Bronze” level customers, while another % of them become “Silver” level, and so on (based on your existing product/tier mix).
- Number of sales reps. Typically, they’ll have a certain quota of deals/customers/sign-ups they are required to close in a month. Perhaps they have a number of demos they have to book every month. From there there maybe a % of those demos that are actually completed and eventually a % of completed demos start a trial, and eventually become paying customers.
lightbulb_outlineThink: What is the ONE thing that my business needs to drive revenue?
Pro tip: do not just hardcode a revenue number and show it growing an arbitrary percent month-over-month (MoM). This is not well thought out. An investor wants to know the components of that number, so they can see how your business grows and becomes massive.