This forces you to think carefully about what skills you will need and when. When do you bring in the salesperson – just before the product launch, or much earlier to help build the collaterals and reach out to key customers? How many engineers will it really take to get to a completed, salable product, and for how many months? Can you justify bringing in administrative help early?

This is where the grinding work really begins. This may seem irrelevant, or even unknowable; it is neither. Without a clear picture of what your business may look like, based only on today's limited knowledge, you cannot argue either for the growth potential of the business or the reality of your need, nor will you be able to convince potential investors of your ability to make these decisions as you progress. Projections are unlikely to come true exactly, but they are the best tool we have to make decisions today that will support tomorrow's growth. If you don't have the experience to make projections with which you feel comfortable, have another member of your team or your board, or an advisor, review or even draft the projections.

Go to te Draft Workbook at www.techbriefs.com/workbook and see the Personnel & Salaries page for an example.

Step Three: Develop a Revenue Plan

Now project actual sales by month, based on the events described in the Event Calendar and the staffing from the Schedule of Employees. Sales normally will not start until you have a final product, although some companies can sell services or even some products (which may include discounted beta versions) before the milestone called "Final Product" hits.

This generally is done from the "bottom-up" approach, which is based on a model matching the distribution method. If the company uses a direct sales force, create a model that tracks by salesperson, showing their likely sales per period. Build a learning curve into each salesperson's sales, reducing their sales in the early months and quarters to arrive at the expected run-rate sales per salesperson by the end of nine or 12 months.

Distributors and stores work in similar ways. Each distributor, store, or channel will be expected to add a certain amount to sales, once an initial ramp-up period is completed. Adding stores or distributors will correlate directly to the number of team members with that responsibility.

Here is where the hard work of the first two steps comes to fruition. It will often also drive you to go back and change your initial estimates of major milestones and of the team. This is a critical process, and making those constructs sound and supportable will not only make funding more likely, it will help accelerate your activities once you have the investment in your coffers.

However your revenue grows, show it on the same type of schedule used in the earlier steps, and show the first sale, first key lighthouse customer sale, and revenue milestones of $10k in one month, then $100k, then $1M.

In next month's article, we'll estimate costs to make these events happen, and roll them up in a standard financial format that banks, investors, and venture capital companies use to make investment decisions.

About the Authors

Bill Neill has over 20 years experience in bringing new products to market in the high-technology markets, including his work at Hewlett-Packard. Contact Bill at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it Drew Hession-Kunz has over 17 years experience bringing new products to market in high technology. He is currently CFO at a venture-funded company, and an Adjunct Professor at Carroll Graduate School of Business at Boston College. Contact Drew at This e-mail address is being protected from spam bots, you need JavaScript enabled to view it