Forecasting Drivers

Forecasting drivers create dynamic forecasts by selecting a driver, a rate of change, a start date, and a start amount. The model does the rest. Prebuilt into all growth, revenue, and expense lines on Forecast.

A simple example: a 10% growth rate forecast works until it doesn't. Real-world growth rarely holds a constant rate — app downloads ramp up then decay, churn decreases as cohorts age. The drivers let you pick the pattern.

Seasonality works differently — it redistributes a year's change across calendar months rather than creating a rate.

Drivers also express things derived from an operating metric: revenue per user, cost per order, support staff per client. Instead of custom formulas, pick the driver from a dropdown.

How to use

Revenue and expense lines on Forecast have eight driver input columns. The prebuilt formulas use them to calculate each period.

Inputs

• Initial Value — starting amount for the first period. When Changing based on is % of or # per, this is the % or # used with the selected driver.
• Starts in period # — sets the period when the initial value starts. Period units depend on timescale on Get Started.
• Repeats every N months — cadence for repeating the value. 1 = every month, 6 = every 6 months.
• Changing based on — % change, # change, log change, % of, or # per. Drives which of the next columns apply.
• Changes every N months — when the change is applied. Example: expense repeats every month but changes every 12 (a salary).
• Changing by % or # — applies when Changing based on is % change, # change, or log change.
• Using Driver — applies when Changing based on is % of or # per. Dropdown populated from revenue, expense, and operating metrics. Typical use: cost as % of revenue, or cost per subscriber.
• For a max of N months — max number of months. Example: 12-month expense.
• To a max value of — caps the calculated value per period.
• Per-Row Data Flags — holds row-specific calculations.
• Use Seasonality — checkbox / TRUE/FALSE. Applies seasonality from Get Started to the row. Seasonality rebalances when things happen, not how much.
• Use Event Flag — opt in to a custom event flag set globally.
• Use Custom Flag — opt in to a custom flag set globally.
• Use Escalation Factor — opt in to an escalation / deceleration / inflation factor set globally.
• On Hiring Plan — extra column for Annual or Monthly Inputs so you can enter salary annually or monthly.

The Timeline Flag applies globally to all root calculations, testing whether the current period is within the limit on Get Started. The other flags are set globally but opted in per row.

For a max of N months, To a max value of, Use Event Flag, Use Custom Flag, Use Escalation Factor are new in Standard Model v5.3. Video will be updated.

Common Modifications

Modifying drivers themselves is rarely needed. To customize, overwrite the driver formula in the forecast columns with your own logic, or type inputs directly into the relevant months.