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Why is my revenue model not generating a revenue forecast?

tl;dr, Check your acquisitions and conversions.

A common question from users is some variation of:

Why isn’t the Revenue Model sheet generating any actual revenue figures given my revenue assumptions?

The reason is usually very simple: to generate revenue figures, you have to input your assumptions regarding prices and revenues and forecast acquisitions and conversions. Usually, people have input their pricing assumptions, but haven’t used the acquisition or conversion assumptions, thus there aren’t any units (e.g. users, customers, subscribers, clients) flowing in to generate revenues. In a generalized manner, calculating revenues per time period can be simplified to:

Revenues = Units per period * Price per unit per period

For example,

Subscription revenues = # of active subscribers that month * monthly subscription price

Transaction revenues = # of orders * average order value

When it comes to the revenue forecast in the Foresight models, if you are not seeing any revenues show up in your forecast, usually you have input the prices but there aren’t any units flowing through to generate revenues. If you’re experiencing this, first look at lines 77 to 80 on the Revenue Model sheet, and check to see if you’re generating any acquisitions.

Then look at the conversion percentage assumptions and the forecasts of users, customers, subscribers etc. to see if you are seeing any converted sales flowing through.

Full details on the default revenue model ›

A note on the sales channel

If you are using the sales acquisition channel - typically used for B2B sales for SMB or Enterprise businesses, but potentially for partnership sales channels - on the Revenue Model and are using the assumptions but don’t see any acquisitions flowing through, usually it is because you don’t have any sales hires - see lines 66 and 67 on Revenue Model sheet - so thus you don’t have any people selling and no acquisitions generated. If you add people to the hiring plan on the Costs and tag them as “sales” category of people 1, then they will flow into the revenue model sheet as sales hires and you’ll start to see acquisitions coming through.

Questions, ask anytime ›

  1. By default it is the Sales category that is used to determine the hires used for the sales channel, but the categories on the Costs sheet and the label for the Revenue Model can be edited to whatever category and label you wish. 

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