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Input cells, change yellow
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Pay Attention, these cells change based on input cells and are useful to know
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No color are required or useful info, but are not as important to pay attention to
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COMPANY FINANCIALS
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Current ARR$2,000,000
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Target ARR (Next 12 Months)$6,000,000
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Gross Margin $ of Delta in ARR Next 12 months$4,000,000
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Gross Margin %80%
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Current Gross Profit$1,600,000
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Target Net New Gross Profit (Next 12 Months)$3,200,000
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Target Total Gross Profit (Next 12 Months)$4,800,000
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SALES OPS & ASSUMPTIONS
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AE Ramp-up Time (Days)5
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Sales Cycle Length (Days)60
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Average Deal Size (ACV)$60,000
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% Outbound Email to Activated Lead Rate0.05%
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% Dials to Activated Lead Rate2.50%
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Activated Lead to Demo Rate20.00%
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Demo-to-Opportunity Creation Rate80%
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Opportunity Creation to Win Rate25%
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Assuming Healthy Pipeline
Adjusted for Sales Cycle Length, Ramp-up Time to build pipeline from scratch
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Activated Leads Needed to Hit Goal Target ARR1,6671,995
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Emails Needed to hit Activated Leads Goal3,334,0003,989,869
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Calls Needed to hit Activated Leads Goal66,68079,798
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Calls/Day Needed183219
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Recommended # SDRs (50 dials/day, 25% conv)45
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AE ROLE PROFILE4x ratio5x ratio6x ratio
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Total $ Available to AEs$800,000$640,000$533,333
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Number of AEs2
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AE On-Target Earnings (OTE)$400,000$320,000$266,667
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AE Base Salary$200,000$160,000$133,333
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AE Commission$200,000$160,000$133,333
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Quota Per AE$2,000,000$2,000,000$2,000,000
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Employer Burden % (Taxes, Benefits)25%
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Cost Per AE$500,000
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Total AE Cost$1,000,000
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Assuming Healthy Pipeline
Adjusted for Sales Cycle Length, Ramp-up Time to build pipeline from scratch
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Avg Demos/Week Per AE3.2057692313.836538462
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*Activated Leads are defined as truly interested prospects in the solution/product, or a discussion around their problems based on what they've heard so far.
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**If running full cycle AEs, they need to bifurcate calling blocks of time. I'd assume 25 calls per day, with capacity for 2-3 demos per day. In this case, make sure Avg Demos/Week Per AE is 3 or less.
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***This entire calculation assumes a centralized RevOps role that is handling emails in a centralized fashion, leaving SDRs and AEs to focus solely on following up with activated leads, demos, and closing deals. Not any cold email management pre-activated lead.
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****It's important to make sure the metrics are realistic. The funnel metrics must be updated frequently, and activity needs to be reasonable, and based on activity that's possible, THAT is how you dictate headcount of roles needed and the OTEs.
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*****Commission plans should be uncapped as the math here ensures it works out. If you want to re-evaluate commission, ensure you do it at the end of year, and not intra-year or re-negging on a previously agreed upon compensation plan.
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