Bottom-Up Revenue Forecast

Assemble the revenue build from business lines

The task is to make a three-year bottom-up revenue forecast for Example Company. Business Line A sells units, Business Line B serves customers, and Business Line C uses employee-based productivity. The Revenue Model owns the broader revenue area; this exercise owns the assembly of different supported methods.

Give each line its own explicit drivers

All periods are full calendar forecast years, 2026–2028. Line A uses prices of EUR 100, 105 and 110 and volumes of 4,000, 4,400 and 4,800. Line B uses 100, 120 and 140 customers with annual ARPU of EUR 2,000, 2,100 and 2,200. ARPU is an annual amount, not a monthly subscription price.

Line C links Employee Group A’s average FTE to annual revenue per FTE of EUR 150,000, 155,000 and 160,000. The group opens with five FTE and hires one on July 1, 2027. Annual salary is EUR 60,000, payroll burden 20%, bonus and one-time costs zero. Line A direct cost is EUR 50 × its linked volume; Line B direct cost is 20% of its own revenue. Remaining inputs and opening balances are zero.

Aggregate independently built lines

Line A revenue is 400, 462 and 528; Line B is 200, 252 and 308; Line C is 750, 853.14 and 960. The sum is 1,350, 1,567.14 and 1,796, all in EUR thousands. There is no additional top-down revenue amount layered on top.

The 2027 hire increases Line C’s average FTE to 5.5041 rather than six for the full year. Total direct costs are 240, 270.40 and 301.60. Personnel cost is 360, 396.30 and 432. Subtracting those costs from total revenue gives EBITDA of 750, 900.44 and 1,062.40. This cost check prevents a revenue build from silently omitting its employee input.

Top-down vs bottom-up: compare this particular forecast

A top-down 15% annual growth assumption on 1,350 would give 1,552.50 in 2027 and 1,785.375 in 2028. Those totals are close to this bottom-up build, but they do not explain which prices, customer counts or hire dates must occur. The similar total can therefore conceal very different operating requirements.

Top-down growth is useful as a high-level plausibility check or when little driver information is available. This case uses bottom-up construction because the three lines have explicit, different economics. It is a revenue-driver model using implemented methods, not a promise of a universal driver engine. Use Modeling Methods to select among the supported approaches.

Reproduce the multi-line build

1. Set up a Blank Example Company model for 2026–2028, zero actual years, three forecast years, December 31 year-end, EUR and thousands; switch to Advanced. Add Business Lines A, B and C under Revenue → Model.

2. Choose Price × Volume for A and Customers × ARPU for B in every year. Enter the drivers above; price and ARPU are EUR per unit/customer. For C choose FTE × Revenue / FTE, link Employee Group A and enter the annual productivity assumptions in thousands as 150, 155 and 160.

3. Under Personnel use Employee Groups and FTE × Compensation, salary Amount, the salary and burden above. The exact July hire and opening headcount are already represented in the synthetic bottom-up model file. Download it, then select Manage models → Import. This explicit import uses the existing file workflow: the current workspace has no editor for dated personnel events.

4. Inspect each line and its employee relationship. Under COGS add A’s Cost × Volume with volume linked to A, plus B’s % of its own revenue at 20%. Compare each output and the sum above; use the file to inspect the precise schedule without replacing event timing with a repeated closing-FTE target.

Keep construction, productivity and full statements separate

For the unit-sales method, use Price–Volume Revenue Forecast. For the employee relationship and its validity boundary, use Revenue per Employee Model. The COGS Model develops delivery costs, while the Financial Forecast Model adds the broader balance-sheet and cash-flow forecast. Displayed totals are rounded; calculations use unrounded schedule outputs. The main CTA does not load the example.