It’s September. You are setting your plan to build your 2025 plan. And the starting point to your future? Your past.
Because if you can’t understand what you have done up to now, you have little hope of predicting where you can go. Most of my work is with software companies, and at the core of it, we try to understand one thing.
Are we prioritizing our spending in the right ways?
But guess what? Good luck building your future if you can’t understand and analyze your past. Here’s a sampling of forecasting answers that must be supported by your data, especially if you expect the future to be different.
How many salespeople do you need to increase new logos by 25%?
What is your historical New Bookings / Quota-Carrying Sales Rep? (Analyzing this will cause you to review your sales comp plans and org structure. How do you use BDRs? Does Sales or Customer Success handle expansion bookings.)
Where is your growth coming from?
What is growth from new logos? How do your customers increase spending over time through expanding use cases or buying new products? Are some products plateauing? Are some customer segments growing faster than others?
How well is your pricing working?
How well do you understand customer-level profitability? Are a small number of customers driving a lot of your profitability? Is your growth coming from your most or least profitable customers? Are you leaving money on the table?
When we spend a dollar, we expect that dollar to create value for the company. And that dollar of investment inevitably creates both negative and positive cash flow beyond that first dollar spent. Revenues? Cash flow timing? Additional customer support costs? New go-to-market hires? Overhead (yep, office space, computers, new managers)?
If you haven’t done it yet, clean up your data, get your financials in order, and have someone own your analytics—you may not need a Ferrari BI team. If you know what you are doing, you can even start by using Excel/Sheets and PowerBI/Looker with the right processes and documentation. And fix your financial reporting. I rarely see a Series A/B company that has this set up correctly.
And if you need help? Let me know!