I’m studying for my Management class and don’t understand how to answer this. Can you help me study?
Overview: Predicting your revenue is never an easy task, and it will never be exact. Predicting your revenue will include the number of expected customers, their average expenditures throughout a year, and any other sources of income your business will generate. A month-to-month prediction will be important so you can recognize your seasonality, and estimate when you may need injections of cash.
The following Course Outcome is assessed in this Lab assignment:
MT499-1: Evaluate information management, planning, and control in business environments.
Access LivePlan by PaloAlto software®
In this Lab assignment, you will write the revenue forecast and assumptions for your company, focusing on the short, medium, and longer terms. In LivePlan, please access the financial plan, complete the assumptions section, then continue on to the revenue section.
Checklist: Go to the Plan Tab to access the Key Assumptions under the financial plan:
- Complete the financial assumption section and include the short, medium, and long term forecasts and assumptions.
- Complete the revenue section.
- Compare your numbers with the industry norms, and evaluate how your projections compare with similar businesses.
Consult the Unit 7 Lab assignment grading rubric from the spreadsheet downloaded in Units 1–3.
Download your Lab assignment in a Word document (not a PDF) and submit it to the Unit 7 Lab assignment Dropbox.
In the Unit 7 discussion, you will be outlining the assumptions you will be using to project your revenue. By presenting the assumptions here, your professor and your peers can comment on them and help you fine tune them.
Topic: Building the Revenue Forecast
What are the assumptions you are using that help build your revenue forecast?
- What share of the market do you intend to serve?
- How many customers does that share afford you?
- How much money, on average, will each customer spend per contact?
- How many times will each customer use your product or service per year?
- What are your monthly sales? Provide supporting calculations for how you reached your sales figure, and assure the calculations are realistic. For example, you might expect 100 visitors to your store the first month, 150 the second (and so forth) and they will each spend an average of $20. For the year, that might total $100,000.