Unfortunatley this is often the way. It is very hard to estimate revenue (or costs for that matter) until you are out there doing it. You might find it more useful to estimate the maximum you can do with your intial overheads/time etc, and then assume you are going to do a heck of a lot less than this. There is no way you are going to be able to guess correctly, other than by luck. I have been in business for quite a while, but I still have no idea how much revenue I will get in the next week - all the fun of the self employed. James Smith Chartered Accountant www.uktaxshop.co.uk 01284 764436
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James Smith
Chartered Accountant
www.jamesesmith.co.uk

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Your indispensable guide to Small Business Bookkeeping, Self-Assessment & VAT

Jendarlen "There is no certainty, only opportunity" as some Amarican guy said, whose name I can't recall at the moment. At a start up phase you should be able to do some research and get a good idea on base costs - there is little excuse for getting overheads wrong in a business plan. If you are still uncertain of costs in some areas you need to do some more work - I get the impression that you are already comfortable with your cost estimates. Revenues are the tough thing - even if there was a similar reference business in the market. If there is once certainty in forecasting revenues it is that the forecast will be wrong. All you can do is make a series of reasonable and carefully constructed assumptions, and build the combination of those assumptions up to a revenue projection. If you are looking for investment, investors wil test your assumptions and decide if they are reasonable. If you explain how you arrived at them they can then draw greater comfort that they have not just been plucked out of the air - even if they don't agree with them. So start with price - price has the greatest impact on profit - and it is also critical in 'positioning' yourself in the market - not to mention its most important potential effect on demand. You need to make some reasonably robust assumptions about what yor price will be and why you have set that price. (you can 'play' with the dynamics of price and other variables quickly with one of free break even models http://www.innovateur.co.uk/financial_plan.html). In terms of the critical sales volumes, you need to start putting together a series of assumptions: - who are my potentential customers (in terms of specific types of business) - how many are there (at least roughly) - how often do they buy (even if this is just an assumption) - how many can I seriuosly expect to secure in the early days - why do I think that - how can I expect that level of customer acquisition, and perhaps repeat custom, to grow over time ... So for example, if you were selling a consumer product you might say that you think you can get 10 stores to stock the product in the first two months, each of those stores will sell 4 products a week, and so on... Your assumptions will also be influenced by the sales ability of your team. Is there a guy/girl that has experience of securing customers in this type of business within your team. If you have such a person you will find it easier - if not you have to keep making assumptions and challenge them continuously to ensure they are reasonably sensible. I have waffled enough - if you want any more specific feedback on one area of this - post again. Good Luck Innovateur Venture Resources for High Growth Potential Projects http://www.innovateurs.com
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Innovateur
Venture Resources for High Growth Potential Projects
http://www.innovateurs.com