What are top-down techniques for revenue prediction? What are top-down sales models?

Top-down techniques are very popular and very easy. You do two things: (a) define the target market size and (b) predict what percent of that market you will capture each year (or month); this latter concept is called your predicted market penetration. Although requiring more research than a WAG, few people are going to believe the ridiculously high estimates that result. However, entrepreneurs usually perform a top-down estimate just because it is easy and to make sure they understand their upper bounds. The more market research that you perform, the more accurate the market size estimate will be, but the market penetration numbers are still just a pure guess.

Related Questions:

What are wild ass guess (WAG) techniques?

What are bottom-up techniques?


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