Start with the business model
For recurring revenue, begin with the existing revenue base and changes inside it. For one-time services or ecommerce, use period sales, contribution margin, repeat purchasing, and pipeline. Do not turn one-time project revenue into MRR or assume every business has a subscription model.
Build the recurring revenue bridge
Ending MRR = starting MRR + new MRR + expansion MRR + reactivation MRR − contraction MRR − churned MRR. Required new MRR = target ending MRR − starting MRR − expected expansion − expected reactivation + expected contraction + expected churn. Use the same period and currency throughout.
Illustrative target
Start at $100,000 MRR and target $120,000. Expect $8,000 expansion, $2,000 reactivation, $5,000 contraction, and $5,000 churn. You need $20,000 new MRR. At $500 MRR per new account, that means 40 new accounts. These are scenario assumptions, not forecasts or benchmarks.
Work backward to traffic
If 20% of qualified opportunities become customers, 40 customers require 200 opportunities. If 25% of leads become opportunities, you need 800 leads. If 4% of relevant visits become leads, you need 20,000 visits. Those stages must refer to consistent cohorts and allow for time lag. A visit is not the same as a unique person.
Use activation and retention as planning levers
If acquisition creates signups rather than paying customers, insert signup-to-activation and activation-to-paid stages. Do not multiply by activation again if the paid conversion rate already includes it. Better retention can reduce how much new acquisition is needed; contraction belongs in the plan even if no accounts fully cancel.
Reverse-engineer competitor patterns carefully
Study public pages, search results, offers, messaging, content, distribution, and friction. Record what you can observe, separate it from guesses, and test the mechanism with your own audience. Traffic estimates and public engagement do not reveal private CAC, conversion, retention, profit, or revenue.
Run scenarios
Create conservative, base, and optimistic assumptions. Change one rate at a time to see what drives the result. Choose a test for the most consequential uncertain assumption. Do not promise that a traffic target is obtainable on a particular budget or timetable.