Assess The Present

This one probably seems like a no-brainer, but make sure your model reflects the current way your company operates. If your business pivots, get into your model and shift assumptions so they reflect your new business model.


This one probably seems like a no-brainer, but make sure your model reflects the current way your company operates. If your business pivots, get into your model and shift assumptions so they reflect your new business model.

It is very rare for any company not to pivot something in the way they operate, whether in terms of customers, markets, employees, etc. 

As you choose these key assumptions, understand that they will flow into major other areas of your model. Turning down a key revenue driver like your advertising expenses will affect your revenue growth plans. If you’re looking at taking venture money or have already done that, VCs determine the key growth drivers of a business and infuse cash to ramp it up (like marketing spend or additional sales people). 

If you hire additional salespeople, your model should show each person generating a revenue book and ultimately grow your revenue and that should be captured in your financial model. This is what your Key Performance Indicators (KPIs) should be built from. And keep in mind that revenue growth could be accelerated or dampened by things like new market territories, new products, etc.