Dougal Cameron from GSTVC has used this tool for dozens of companies. Anyone who has partnered with GST over the years is certain to be familiar with it.
The model takes a top down approach pegging all expenses on activity units to support revenue growth or as a proportion of revenue. With all key measures on one page, the model is a great way to iteratively plan your business. It reveals cash and personnel as the two constraining resources and industry normative metrics as the guardrails to success.
When operating at a high level and leveraging this tool, the entrepreneur should be continually asking themselves:
- do I have enough cash to fund this revenue plan,
- do I have the people pipeline established to support (hear deploy) this revenue plan, and
- am I making crazy assumptions of operating far outside industry benchmarks.
Typically Dougal uses the KeyBank SaaS Survey (formerly the Pacific Crest Saas Survey) to peg the results of the model and ensure the growth, expenses, comp plans, and etc are all achievable.
