Introduction
There are many sample excel templates online, but there appears to be either a complexity or a confusion over emerging revenue models. Whether you are producing a physical product or a service, think about what is actually generating revenue for your business?
The below download, is a template laid out for a mixed revenue models.
The term product/service can be used interchangeable, when your end goal is to estimate your income. So do not worry too much about the terms, think more about, ‘what’ it is you are selling and if there are several variations, group these variations. Therefore, any template you use should list these as either- streams, products or services. Just make sure you define these sources of income for the reader, in the notes.
Sample calculator mixed model
I have below a sample calculator. As many businesses have unique features a one size fits all is not always possible, but thinking simply about what ‘drives’ a form of income. Also, The model is based on 3 years which is standard for banks and investors.
There are a number of formulas and links in this excel sheet. What I would stress here is that, I have tried to keep them simple to accommodate a mixed audience and those who like to use MACS.
Grey – cells you enter data into
Cream – cells that have been populated by formula- These are not locked so you can adjust as you feel appropriate for your business.
So please feel free to change as you feel appropriate. Also, as with any template always insert lines. Do not just copy rows into empty spaces. Empty areas are for presentation reasons.
Delete lines no longer needed. If you choose to hide them, make sure there are no values in them!
There are two worksheets, one to calculate estimated revenue, the other to show a summary that you may wish to copy and paste into summary documents/presentations. Points to note with the first worksheet “Sample Revenue Calculator”:
- Cell I4 - enter your accounting year end. This will auto-populated row 8.
- Enter your company name in cell J2
- To aid with scenario planning, I have a section from rows 10 to 17 to allow you to flex the number of customers per month.
- Rows 24 to 31 is a formatted area to calculate the revenue based on price and customer numbers.
- The formulas are set to round to the nearest cent/pence/penny.
- The corresponding prices are entered in column C. These should be net of VAT.
- Other income sector is for adhoc or non-customer driven income. Such as sponsorship, consulting fees and licencing fees etc.
- Cells U22 and UAI are for applying a flat price increases. As you are doing a simple estimate, this is a guide. Up to you if you want to use more complex manipulation within each month etc.
- There are a number of comment boxes which can be removed.
In the second worksheet “Summary” This just links to the calculator. So if you do insert or delete any lines, make sure to adjust this sheet accordingly.
Customer numbers
When preparing forecasts and projections for investors, bank etc, you have to remember you are not a fortune teller and no one expects you to be one. So be realistic and base your potential customer numbers on:
- Market size you are pursuing, i.e. if 10% of the market is 100,000 people, how many can you sell to in year 1, 2, 3 etc?
- How much can you actually provide to customers? So while there may be 1,000 customer, do you have the money/resources to provide for all of these people, or realistically, can you target 500 in your first year, while you invest and test the market?
- Are you going for a quality/premium brand, then your customer numbers will be lower, due to exclusivity?
There is a tendency to over think these numbers, stop and think about the bigger picture. Investors are looking for a future potential and are look at your pricing, marketability of your offering and THE TEAM.
Other points to note
- For ease of use, try to round off other incomes. Investors and banks are looking at the bigger picture, no need to fret over a pound/Euro/Dollar here and there.
- Change currency formatting as appropriate.
- There is print area set up based on A4 for both tabs.
- Keep presentation clean for readers. Too many bells and whistles is distracting for investors and bankers, they are just looking for the facts.
If you are looking for a more complex model or solution do get in touch for a quote. Prices start from £400.
