Jim Logan says that the most important number to focus on in a business plan is the nearest revenue number the company lists. Typically this is the Year 1 revenue projection. Hone in on that number (ignore all the others, I'd say) and ask the following questions to make sure the entrepreneur knows how s/he's going to hit their first revenue forecast. If they don't know how they're going to hit the first number, how will they hit any of the others?
- What is the profile of the person you’ll primarily be contacting?
- Who influences the person in their position?
- What does this person value or fear in their job?
- What are the steps to your target account’s typical purchase cycle? How do they make decisions?
- What are your sales steps?
- What is your anticipated sales cycle?
- What is the expected time for each of your sales steps? Did you factor in time for making contact, scheduling, negotiating, etc.?
- What is the expected value of your average transaction?
- What is your expected close ratio?
- What is your expected time to revenue?
- What is your expected time to cash?
- How many prospective accounts do you expect to have to engage with each month to meet your revenue forecast?
- How are you going to find these prospects?
- How are you going to contact them? What means?
- What lead generation activities do you have planned?
- What sales tools do you have?
- What sales forecasting and review process do you have in place?
- How accurate were you past forecasts? Did they adjust much weekly and monthly? (a really bad sign)
- What is the skill-set and number of sales people you must have to reach your revenue forecast?
- How will the first customers weigh on the organization’s ability to continue to sell?
- What are your booking and revenue recognition policies?
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Here are 50 side businesses you can start on your own. Here are 10 outstanding lessons from a failed start-up. Here's the founder of And1 talking about how he built his company.
3 Responses to Most Important Revenue Number in the B-Plan