Start with a clear business description, the decision the model needs to support and the operating information you already have. Useful inputs include historical performance, revenue drivers, costs, investment plans and funding assumptions. Missing information can be identified in the initial scope.
A driver-based revenue schedule makes inputs such as customer tiers, pricing and acquisition assumptions visible instead of hiding them inside a single sales target.
Explain how the business earns revenue
Describe what is sold, who buys it, how it is priced and what limits the amount the business can deliver. A software business may use customers and subscription plans; a hotel uses rooms, occupancy and rates; a service firm uses team capacity and pricing.
The model should follow the operating logic of the business. An explanation of that logic is often more useful than a single total revenue target.
Bring the information that already exists
For an operating business, historical information helps establish the starting position and understand the relationship between activity, costs and cash. Useful materials may include:
- Income statements, balance sheets and cash information.
- Sales by product, customer group, location or channel.
- Operating metrics such as customers, occupancy, orders or utilization.
- Staffing, compensation and major recurring costs.
- Receivables, payables, inventory and financing schedules.
Describe what will change
A forecast needs the plan as well as the history. Explain the new location, product, hiring, equipment or market the business is considering. Include the timing and any estimates or quotes already available.
For a retailer opening another store, the useful inputs may include the lease, fit-out estimate, initial stock, team schedule and expected sales ramp. Those inputs connect the opening investment to the operating forecast.
Separate evidence from estimates
Some inputs may be based on contracts or existing operations; others are assumptions about future demand or costs. Labeling the difference makes the model easier to review and update.
You can start before every input is final. The project scope should identify which assumptions need more evidence, which can be modeled as estimates and which deserve a separate scenario.
Clarify the audience and output
Tell us who will use the model, what they need to understand and whether a specific reporting format or forecast period is required. Share any existing workbook or requested financial schedule.
The first website brief stays short. Detailed files and business inputs are organized after the initial conversation, once the scope is clear.