Forecast your revenue by using product bookings
This article will walk through an example of building a revenue forecast using drivers that create bookings against products.
For this example we will have the following products:
- Home Security Camera
- Monthly subscription
- Annual Subscription
Use the Import products template for Jirav to bring in your Company's products.
Create bookings drivers with assumptions based on what drives revenue. Please refer to the screen shot below.
In the screen shot above is the complete picture of the Driver which is made up of the following:
- Name - this can be any name that you prefer, in order to build a scalable model we recommend using a naming convention that can later be sorted; for example all drivers that relate to the same output, say travel expenses, start with Travel and then the thing it is - so when you sort they all club together. The key concept here is the name that you create here is what you will see in other areas of Jirav for vouching your driver.
- Output - this is the line in the model that you would like to have the result of the formula go to; in our example we are creating bookings for new sales of Cameras and subscriptions.
- Start and End date - this is what tells Jirav what period(s) to perform the calculation in; in the example above the first two lines, Camera Year 1 and Camera Year 2 we have the first line only for the period 2019 and Year 2 being from January 2020 till the end of the plan window.
- Description - these are notes that you can make to recall or share with others the thinking around your driver.
The UA picker is how we choose what goes into these columns and can be seen below or for a detailed help article please see The Universal Addressability Picker help article.
Next we need to define what is driving our revenue and at what rate.
What we are assuming for the revenue forecast in the drivers above is that we will sell a total of 1,000 cameras in the first year evenly throughout the year, starting in year 2 we believe that we will sell 100 cameras a month increasing by 25 every three months, so in month 12 we would be selling 200 a month. Please see our Periodic Drivers help article for further learning.
Next we assume that 30% of sales purchase the Annual subscriptions and 50% purchase the Monthly subscription. This is calculated by taking the Driver of all New Camera bookings and multiplying the news sales by a constant rate.
This completes the product bookings drivers, now we can have a look at the outputs.Outputs
In order to review our work we will go to the Bookings module within Planning.
The first thing you will see is a column chart that shows the bookings quantity and a second column chart for the bookings dollars:
The next thing you will see is the New section that includes tables for the New Customers Quantity and Dollars as well as the New Bookings Quantity and Dollars. Since we are only using the Products Bookings Driver in this example nothing appears for the Customers.
As you can see in the tables above we have our total Camera units sold which is 83.33 (1,000 / 12) and of that 30% purchase the Annual plan and 50% purchase the Monthly plan. These quantities are then multiplied by the List price from the Products table we imported in Step 1 above to get the resulting revenue dollars.
Note that in the table the months that are shaded blue indicate the forecast period, for further information on this please see Plan Management.
Finally, in order to determine what drivers are associated to the values in the table you can expand the line by either selecting the ellipses and choosing "Expand" or expanding each line one by one.
As you can see in the table below each line that is associated to a Driver has [Driver] then the name of the driver we made in Step 2 above. This is the output of the value from the Driver and Rate we made.
Note that the table cells that are in a shade of Blue allow for you to manually input a value though this is not recommended as this can cause confusion later.