Sales Models

Why Model Sales?

Offtoa is a tool that produces and analyzes pro forma financial statements for your company based solely on your statement of business assumptions. One of the key assumptions will be how much revenue your company will generate by selling its product(s) to the intended market(s). The expression “Modeling Sales” means the set of assumptions that enable Offtoa to determine how much revenue you will produce.

We can categorize sales modeling techniques into three rough groups: top-down, bottom-up, and wild-ass guesses.

Offtoa gives you the ability to predict revenues in multiple ways and save them simultaneously. Then you can easily click on any one of them and see what your company looks like when using that particular sales prediction technique.

Here are some of the techniques that Offtoa offers:

What are some examples of wild ass guess techniques for revenue prediction?

When you are trying to guess what your company's revenues will be, here are the techniques you can use:

1. Units Sold. For each product in each market in each year (or month), predict how many units you will sell.

What are some examples of top-down techniques for revenue prediction?

When you are trying to predict what your company's revenues will be using top-down techniques, here is the one technique you can use:

1. Market Penetration. For each market, estimate its size and annual growth rate. Then for each product sold in that market, predict the percent market penetration you will achieve in each year (or month).

What are some examples of bottom-up techniques for revenue prediction?

When you are trying to predict what your company's revenues will be using bottom-up techniques, here are the techniques you can use:

1. Market and Sales Dollars (or Effort) to Product. For each product in each market in each year (or month), estimate how many dollars (or person-hours) will be spent promoting and selling the product, and the relationship between those dollars (or person-hours) and eventual sales revenues.
2. Market and Sales Dollars (or Effort) to Customers. For each market in each year (or month), estimate how many dollars (or person-hours) will be spent promoting and selling, and the relationship between those dollars (or person-hours) and customer acquisition. Also predict how much money each customer will spend (and how often and for how long) and how many referrals that customer will make.

What are WAGs for revenue prediction?

What are top-down techniques for revenue prediction?

What are bottom-up techniques for revenue prediction?

What factors drive sales in a start up?

How to model sales in a start up?