growth, revenue, goalsI recently asked How to estimate the size of a market. I’m still processing info from some articles posted there and some that I’ve dug up myself. But I have another question along the same line of thought:
In the early stages of a startup while the business is still getting traction and starting to build momentum, how do you set revenue goals?
I can understand if your business has already been operating for a while and you have numbers for average monthly/quarterly/annual revenue then you can set a goal of growing X%.
But when your business doesn’t have historical data to build on, how do you go about setting revenue goals for those early stages?
I’m particularly interested in how to forecast that growth in a relatively untapped market (few if any direct competitors) - but information on how to set these goals in a market that has competition may be helpful as well.
EDIT:
In case it is not clear, I am not looking for a discussion of whether or not it is worthwhile to set business goals. That’s a discussion worth having, but it has NOTHING to do with answering this question. I have already determined that I want to set goals for my business - among those goals being a set of short term and longer term revenue goals. This question is not about why or if, but how.
I think it’s a great question and I want to lay down some facts to bring my perspective to light.
Every business starts out negative. The whole concept of initially having revenue higher than expenditure (aka profit is negative) is quite frankly, impossible. The only exception to this might be something rare like a contracting business starting out with a pre-arranged, pre-paid sale where you actually immediately start with revenue.
Every for-profit business has one goal. Revenue. They can say a lot of things about changing the world, but everyone knows that money changes the world and most businesses grow in a sense of revenue. Pretty sure there’s not a debate here.
These in consideration, how does any business set a revenue goal before it actually has revenue?
The short answer is, they make some educated postulations (that end up being 5-5000% off).
At the end of the day, though, it all depends on your estimation process. You’ve stated you aren’t asking about older businesses with models to work off of.
So if you’re asking about models, there’s just too much room to give opinions as it’s very particular to your business model. There are existing tools but beyond this there really isn’t much we can help you discover with the information we’ve been given.
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