BU121 Lecture 10: BU-121 Lecture 10
Document Summary
For all start-ups: sales forecast, headcount, expenses (fixed and variable), breakeven cash flow. + u(cid:374)i(cid:395)ue (cid:373)et(cid:396)ics : gross margin, inventory turns, occupancy, qualified leads (acquisition, retention, revenue, viral coefficient) Creation and capture of value: customer acquisition costs (cac) vs. Lifetime customer value (lcv: revenues per salesperson and time to revenue, contribution margin, monthly burn rate. No formula projections based on research and logic = educated guess you can defend. Market potential does not equal sales forecast: and forecast depends on plan scalability. Top-down forecasting (breakdown: market potential, not just number of households. With lawns / likely to mow lawn / care about benefits: still does(cid:374)"t e(cid:395)ual sales fo(cid:396)ecast. Consider the geographic market operating in and seasonality. Bottom-up forecasting (buildup: what you can do given capacity and marketing plan. Number of stores that sell mowers / number that will carry / number each must sell to meet targets make sense: compare to breakeven what you have to do.
