Sales Forecast Assumptions
Instead of entering the dollar amount of anticipated revenue in a given month, the model asks you to break that down into the units you will need to sell to get there. This sales unit forecast will be calculated using your pricing, recurring, retention, and cost assumptions to create a detailed overall forecast by month for each offering. This unit sales forecast will automatically be multiplied by your pricing assumptions and calculate all other inputs to produce a detailed sales forecast that includes units, revenue, etc. See the Offering Tabs for details on how this plays out.
You can create a sales forecast for each offering through one of several ways:
Link your sales forecast for this Offering to other sales forecasts you’ve already generated (for Offerings #2 - #10)
Link your forecast to your Sales Channels output
Link your sales forecast to your Website Conversion Rates output.
Create a sales forecast using "Auto-Fill" to automatically fill in the assumptions over the life of your plan based on a few inputs. When using this tool, remember that you are projecting the number of units sold, not the dollar amount of sales. Check the numbers in year 5 to make sure your business is scaling to a realistic size.
Select "Month-by-Month" to enter your sales forecast assumptions in each month. If you expect heavy seasonality or have other specific monthly sales expectations, you should enter your forecast using "Month-by-Month" input.
Your Sales Forecast numbers represent the number of NEW customers that are added each month. If you've selected a "Monthly Recurring" for your Sales Model for that Offering, then the sales forecast will result in the new customers each month being added to the existing customers, less any attrition (also modeled in the Type and Length of Sale input form). Be sure to verify on the Sales report the impact of Monthly Recurring vs. One-Time sales models to ensure you get the expected sales result.
To model sales, first select the method of forecast input:
Then fill out the appropriate section:
Sales Channel - Fill out the Sales Channel Assumptions for that sales channel in Section 1.1. See our Sales Channel Blog Post for details.
Website Conversion Rates - Fill out the Website Conversion Rate Assumptions in Section 1.2. See our Website Conversion Rates Blog Post for details.
Linked to Other Offering - Enter the % cross-sold from the other Offering. This number may be 100% or higher. Then, enter the number of months difference from the time a customer purchases the first Offering to the time they purchase the linked Offering.
Auto-Fill - Fill out growth assumptions to have the forecast automatically generated.
Month-by-Month Input - enter the desired monthly unit sales manually, or use Excel formulas to customize how sales are scaled.