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using-offtoa:assumptions:revenue-assumptions:sales-model:top-down [2016/05/28 14:34] mdavis |
using-offtoa:assumptions:revenue-assumptions:sales-model:top-down [2016/05/28 14:37] (current) mdavis |
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| * Usually result in highly optimistic estimates. | * Usually result in highly optimistic estimates. | ||
| * Usually seem like they are entirely reasonable because the entrepreneur says something like "look, all we have to do is capture ½ of 1% of the market, and see how much money we will make!" | * Usually seem like they are entirely reasonable because the entrepreneur says something like "look, all we have to do is capture ½ of 1% of the market, and see how much money we will make!" | ||
| - | * No educated third party will believe your top-down estimates, nor should they. However, they are helpful in that they provide you with an absolute ceiling of reasonableness when you perform your bottom-up estimations. | + | * No educated third party (e.g., investors, lenders, board members) will believe your top-down estimates, nor should they. However, they are helpful in that they provide you with an absolute ceiling of reasonableness when you perform your bottom-up estimations. |
| - | * Some fools will believe these estimates because they are based on "market research." | + | * Some fools may believe these estimates because they are based on "market research." |
| Only a few top-down approaches exist; they are: | Only a few top-down approaches exist; they are: | ||
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| * Predict market penetration by year. | * Predict market penetration by year. | ||
| - | Note: Some of the above has been extracted from Davis, A., //Will Your New Start Up Make Money//?, Scrub Oak Press, 2014. {{indexmenu_n>2}} | + | {{indexmenu_n>2}} |
