How Startups Can Make Better Forecasts

Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.

Forecasting is a key skill founders need for raising funding.

Investors want to know the founders' expectations for the business with the funds raised.

Here are some key steps to make better forecasts:

Start with a baseline.

If the startup has revenue, then use that as the starting point.

If the startup is pre-revenue, then look to similar startups to set a baseline.

Determine the drivers behind the revenue.

This could be leads generated, clients viewing a demonstration, or other.

Determine how much can be done with the team proposed.

Focus on the customers signed up rather than a percentage of the available market.

Use the sales cycle for the product to determine lead times.

The more you know about your customer buying cycles, the more accurate your forecasts.

This is called a bottom-up analysis.

For predicting explosive growth, look for trends in the market that can drive hyper sales growth.

Look to other startups for their sales forecast to calibrate your own.

Consider these points in making better forecasts.

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let's go startup something today.

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