Modeling an enterprise sales driven business is easy with Opstarts. The biggest difference between modeling enterprise-focused and lower-priced subscription businesses is that each individual customer is often unique in terms of contract size, payment terms, etc. Opstarts makes it easy to build operational plans incorporating both existing/sold customers and forecasted sales in the same model, and automatically keeping your GAAP, Cash Flow, and SaaS reports in sync. Here's a simple example of building an enterprise model:
First, create or import your existing customers. In this example, we'll use two:
Customer 1 - $100k annual license in Jan 2017.
Customer 2 - $50k annual license in Feb 2017.
Payment / Revenue Recognition
For each Customer, we can define the payment and revenue recognition policy. For Customer 1, we're receiving a one-time payment in 2 months. For Customer 2, we're receiving quarterly payments. These can be customized for any customer and Opstarts will automatically calculate the correct values for accrual, cash, and SaaS views.
The next thing to configure is your sales forecast. Here we'll use a single forecast item with an average contract price of $50k/year. In a real model, you'll generally have a few different forecast items for different products or different customer types (small, medium, large contracts).
It's also common to have a short-term forecast item with specific numbers entered based on your near-term sales pipeline, and a longer-term forecast item that has numbers generated based on sales pipeline and staffing.
There are multiple ways to model future sales, ranging from basic top-down to complex sales models. The simplest way to model top-down growth is to just enter an organic growth amount in the forecast item. In this example, we'll use a link from the Salesperson employee generating 1 sale a month. You can go beyond that and add sales team constraints, sales productivity ramp up, lead funnel requirements, and more using the Sales Planning module.
Many enterprise models involve linked sales for things like implementation fees, additional seats, and additional modules. In this example we'll add a group link from every sale (this could be done per individual product as well) to a sale of the implementation fee.
Opstarts automatically handles COGS calculations for expenses generated by a product (for example, if each sale is linked with a specific materials expense). In addition to that, you can designate any expense as a COGS item - here we're classifying Hosting expense as COGS allocated across all subscribers.
Like COGS, Opstarts automatically calculates expenses linked to sales generation (like the Salesperson in this example) as part of CAC. You can also designate other items as CAC for specific or all sales. Here we've defined a Sales Expenses item as part of CAC.
Reports and Metrics
Here's how that all comes together in this simple example.
First, we can see how the existing and future revenue flows are combined into cash, GAAP, and SaaS revenue streams based on the specified terms.
Similarly, both aggregate and individual product metrics are created using the model parameters.