From model to a simple forecast

Now we connect the revenue model and the costs into a simple picture of the future. A forecast is not a prophecy — it is a tool for making better decisions. The goal is not to be exactly right, but to understand what has to be true for things to go well, and how long the money lasts.

Build a simple revenue and cost forecast

You don't need an advanced model. A spreadsheet with a few rows goes a long way:

1. Customers: how many new customers do you get each month, and how many drop off?
2. Revenue: customers multiplied by average price.
3. Variable costs: follow the number of customers.
4. Fixed costs: salaries, rent, tools.
5. Result: revenue minus all costs.

The secret is that the whole forecast rests on a few assumptions: how many customers you manage to acquire, what they pay, and how long they stay. Write these assumptions clearly at the top, so anyone can see what the numbers rest on. A forecast is only as good as the assumptions underneath.

Break-even and runway

Two numbers are worth hunting for in the forecast:

• Break-even: the point where revenue exactly covers all costs. Simply put: fixed costs divided by contribution margin per unit tells you how many units you must sell to break even. Below break-even you lose money; above it you earn.
• Runway: how many months you can operate before the money runs out, given how much you burn per month. If you have 600,000 NOK in the bank and lose 50,000 NOK a month, the runway is 12 months. Runway is the founder's most important number, because it says how long you have to reach the next milestone. If the runway drops below half a year, that should ring a bell: you then have to either find new revenue, cut costs or raise capital — and all three take longer than you think. So always recalculate the runway whenever a big cost or a big customer changes.

Sensitivity analysis: what if the assumptions miss?

No assumption is perfect. So you should always ask: what happens if I'm wrong? This is called sensitivity analysis, and it is simpler than it sounds.

Make three versions of the forecast: a cautious one, an expected one and an optimistic one. Let the cautious one, for example, have half as many new customers and slightly higher churn. If even the cautious version survives, you can breathe easy. If only the optimistic one works, you know the model is fragile — and where you must work. Often you discover that a single number, like churn or price, drives almost the entire result. That number deserves the most attention.

A small warning about optimism: founders almost always overestimate how quickly customers arrive, and underestimate how long everything takes. A healthy rule of thumb is to plan around the cautious version and be pleasantly surprised, instead of building the whole operation on the optimistic one and being forced into abrupt cuts when reality catches up. Your runway is safest when it can withstand you missing a little on the most important assumptions.

Use numbers to decide, not to impress

The most common mistake is to build a beautiful forecast that shows rocket growth, present it, and then file it away. A forecast is not a display window — it is a steering tool. Use it to answer concrete questions: Can I afford to hire now? What happens to the runway if I double marketing? When at the latest must I have new revenue or new capital?

Update the forecast when reality gives you new numbers, and compare what you believed with what happened. That is how your assumptions get sharper month by month.

Do this now

Build a small spreadsheet covering 6–12 months. Write the three most important assumptions at the top (new customers per month, price, churn). Calculate your break-even and runway. Then make a "cautious" version with half as many new customers, and write one sentence about what you would do if that version became reality.