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Ask HN: Projecting sales, growth, etc for proforma
My co-founder and I have been hard at working creating our first proforma and we'd really appreciate some tips from those with some experience.
One of the things we are really struggling with is projecting client acquisitions rates, growth, etc. It seems anything we come up with is pure speculation and could be argued against in some way. Are there any standard approaches to this estimation or is it always just guesswork and creative storytelling?
- daemon13 14y ago> just guesswork and creative storytelling No. Not to brag, but once I did a full P&L forecast for 15 years forward for $50M annual revenue and 250+ people by SKU, HC position and all major expense buckets, tied to FX and market/market share changes... in Excel... after 25 revisions by HQ it was still sane. I assume your case is less complicated. What you need to do is make a simple spreadsheet in Excel, lay down some assumtions and tie them to your revenue with formulas. After you have it done, you can either (1) optimize to find sweet spot, or (2) make several scenarios. This would help you play safe - all assumptions are transparent. Also, since you seem to have investors, they would have a choice and most probably they would push for a more agressive scenario. But that would be their choice. I would advise to distance yourself from assumptions. You own execution, NOT assumptions, which you / noone can control. Excel 2011 2012 2013 2014 Market Market Growth % of Market that is your Target Audience Average FY spend by customer Cost customer acquisition etc etc etc Gross Sales Discounts/Taxes/etc Net Sales COGS Marketing expenses etc etc Net Income can be as complicated as you want... try keep it [assumptions] simple, but P&L lines as detailed as possible. Also break forecasted year by month. Hope this helps