Before investing in an idea, it is important to know if it is worth your effort.
Can my idea generate enough income? How many customers are needed to reach my income goals? Is the market share I need realistic?
Estimating the revenue potential creates an understanding of the quality of your idea.
Your are testing your idea.
Judge on idea by looking at the total market and estimate the market share to capture. Another way it to benchmark with competition.
You can create good insight by calculating the number of customers you should serve. What does this to with your workload? Do you need to spend half of your time in serving your customers? If this is the case, the time to build your company is limited.
How many persons should know your business to have the paying customers you need? What outreach and promotion activities are needed to reach this?
The Bottom Up Calculation is a powerful way to create these insights. Start with the revenue goal and work your way up to the market size that’s needed.
This will force you to make assumptions. These are returned to in a later stage. Documenting them is enough at this step of your Startup Journey. The goal is to get a quick understanding of the revenue potential of your idea. The calculation should be done within the hour. This way you will save money and effort by validating your idea as early as possible.
An example
It shows a coaching service. It estimates the number of paid consults needed. Is also calculates the employees that should be reached.
This calculation creates insight on the workload. Aside from the paid consults the activity that generates the actual income, what effort is needed to attract them?
The basis for success is understanding your numbers. What is it you need to earn. How many customers are needed and how realistic is this? Know what your need. Make a conscious decision and work towards that goal to succeed.
How Will We Help?
Starting your own business can be an overwhelming process.
Building a startup is not simple; we managed to identify a pattern by helping many starters like you.
We call this curve the “Starters Journey”, a structured and systematic process for starters.
We providing bite-sized information online explaining each step with:
- Videos
- Examples
- Tips & Tricks
- Activity Sheets
Throughout this course, you will be constantly gaining new insights. This insight might require you to change your approach, pricing and even your solution!
You will learn to prioritize your actions and learn faster. You are given guidance and will feel less overwhelmed. If you are eager to learn more, go to this link.
