Revenue Math & the Funnel Model
Every plan works backward from the number. The math is the easy part. Whether it comes true depends on the reps in it, the pipeline under it, and the system that keeps both honest.
The math was right. The reps in it were not.
Every year we set an aggressive number and backed into it: here is what reps have done, here are the activities we need. And every year we missed, some years by a lot.
When we forecast the next year, we set quota off what our best reps could do. Salespeople are optimistic, and you have to be to do the job, but here we were overly optimistic. Only about 30% of the team performed like that. The other 70% were up and down, a good month then a bad one, and a good portion of their pipeline was phantom. We were sure we could coach the middle up to the top, and we would not stretch past our usual base to land a really strong rep. So we hired too many people who would not make it, kept them too long, replaced them, and started the ramp all over again. The activity math was fine. Everything downstream of it was fiction.
You need to grow 40% next year. Your plan works back from what your reps did last year.
What is most likely to break it?
What replaced it: the operating system in this course. Hire on evidence, ramp against gates, score the calls, coach from what you hear, keep the pipeline real, and design the pods and territories. Then the same math started coming true.
Which of these have you said, or heard?
From 30% of reps hitting their number to 70% hitting 90% or more, once hiring, real pipeline, call scoring and coaching were in place. Forecasting became predictable, and investing in more reps started paying back.
Plan on the reps you have, not the reps you wish you had.
Start from deals a month, not headcount. Then check every input against your whole team, not your top third. When the inputs are real, the math holds, and investing in more reps becomes easy because the return is predictable.
Work back from the number.
One rep, one month. Start with the deals the quota needs, then what it takes to find them. The worked quota is the course’s $100,000 a month; put in your own.
Now put your whole team into it.
Ten reps, each on the $100,000 monthly quota: $1,000,000 a month if every rep hits, which no team does. So set quota above the plan, and build the plan on the team you have. Here the plan is $800,000 a month, with quota set 25% above it. Set the team you actually have, and see where it lands.
A model, not measured actuals. Reps hitting land near 100% of quota, the middle near 60% (a good month, a bad month), reps on ramp or replaced near 25%. The plan is 80% of total quota: quota set 25% above plan, so a team with a few reps still being coached or replaced can make it. The before and after mixes are ours: 30% of reps hitting, then 70% hitting 90% or more.
Where the weak inputs get fixed
Every input in the plan has a module behind it.
The math in this module is free. Making the inputs real is the rest of the course.
Build your plan, and save it.
The Revenue Model works back from your target: what it takes in reps, what it takes if you move the levers instead, whether a second motion helps, whether the daily activity is physically possible, and whether the plan pays for itself. It is free, and it keeps nothing unless you save it, and then only in this browser.
One thing, with a date on it.
The module is finished when your plan is saved, and something is written here that somebody could check.
Stays on this device. Nobody else sees it.
Every quarter: rebuild the plan on the team you have.
Re-run the model with last quarter’s real numbers, count how many reps hit 90% or more, and fix the weakest input before you raise the target.
Every quarter. Rebuild the plan on your whole team’s numbers. Then take the course: every weak input in your plan has a module that fixes it, starting with Module 1, which finds the one to fix first.
30% to 70%. Same math, a different team under it.
We went from 30% of reps hitting their number to 70% at 90% or more. Not by changing the plan, but by building the system under it: who we hire, how they ramp, which pipeline is real, and how we coach. The other 23 modules are how, and each one catches one expensive mistake while it is still cheap.
Where this connects. Which input to fix first is Module 1’s Diagnostic. Capacity as a revenue ceiling is Module 3’s. Why paying more for a rep who hits is cheap is Module 4’s four percent. Running more than one motion is Module 8’s.