Many companies offer several products or services to their customers. When you don't have a lot of demand data, how do you estimate the average purchase amount any given customer would spend?
You typically have two choices:
- Project demand for each product
- Project how many customers you convert overall and assume an amount each customer would spend on average.
For modeling early-stage ventures, we recommend the latter approach.
Please watch our Youtube video for a detailed walk-through on how to calculate an average purchase amount as well as (and very importantly) how to formulate assumptions even for a pre-revenue startup.
Want to learn more? Sign up for our FREE MASTERCLASS "Build Credible Financials for Your Early-Stage Venture" to learn our unique framework for modeling early-stage ventures applicable to any product, software, and service startup!