Artifacts #
What this step produces.
Revenue Forecast #
A projection of how much income the business will earn over the coming periods, with the assumptions behind it. It is the starting point of the financial plan.
Sales Plan #
A plan of what, to whom and how much will be sold in each period, with targets by product, channel or segment. It turns the revenue forecast into concrete sales goals.
Sales Funnel Model #
A model of the stages a prospect passes from first contact to purchase, with conversion rates between them. It shows how many leads are needed to reach the sales plan.
Techniques #
Techniques used in this step.
Scenario Analysis #
Building several versions of the forecast, usually pessimistic, base and optimistic, and comparing the results. It shows the range of possible outcomes instead of a single number.
Percentage-of-Sales Forecasting Model #
Forecasts many cost and balance items as a fixed share of sales, based on past ratios. It is a quick way to derive a full financial plan from the sales forecast.
Revenue Growth Rate Estimation #
Estimating how fast revenue will grow from period to period, using market data, comparable companies and the company's own results. The growth rate drives the whole forecast.
Top-Down / Bottom-Up Revenue Reconciliation #
Comparing a revenue estimate from the size of the market with one built from individual customers and prices, then explaining the gap. It makes the forecast credible.
Investment Scenario Tiering #
Grouping investment scenarios into levels, such as minimum, base and ambitious, each with its own funding and expected result. It makes the choice of investment size clear.
