Most Important Revenue Number in the B-Plan

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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