One of our 15 points about things missing from most business plan models is too much detail in the wrong place and too little in other areas.

 

Check out the relative size in different parts of the model you are looking at. A common tendency is to have a lot of detail in things you are certain of, but very little detail in more uncertain areas.

 

Which section is bigger in your model- your support for revenues or your support for G&A? It can feel good to put all that detail in G&A, but is an investor really going to care?

 

Put more weight in the revenue section. The exercise will be good. Work backward in the sales cycle.  Challenge yourself.

 

• How many customers do you need?
• What will the average revenue per customer be?
• What frequency of buying?
• How does this break down by key product line?  By key service?

 

Some of the questions might not apply to your business.  Tailor it to your revenue sources.

 

One way that sometimes help is to start simpler, then drill down into more detail.  First project how much per month you are thinking of for revenues.  Then do a level deeper, such as number of customers.  Then go another level deeper, such as by product line.  Keep on going until you are satisfied you have a pretty good level of detail in place.

 

Another benefit of this is that the detail you put into the revenue part of the model can also translate over the margin section as well.

 

Now see how your model looks.  Is there more weight in the revenue and margin sections as compared to G&A?

 

I can’t recall anyone getting turned down by an investor for their G&A. But quite a number stumble on the revenues.  Put more weight into your revenue part of the model.