OneUp Sales leveraged its new forecasting process to manage the crisis and work out how it’s going to achieve its long-term goals.
The productivity software company’s sales stopped when the crisis started. Developing a trial version allowed them to keep building their pipeline; customer data and effective forecasting meant they could start planning new milestones.
Strong forecasting allows you to move quickly
OneUp Sales wanted to reach £1m in annual recurring revenue by the end of the year. The crisis forced them into defensive mode, but they had the systems to allow them to adjust quickly.
OneUp hired a part-time finance director six months ago. Bringing that expertise in-house dramatically improved their forecasting, including building a three-year financial model.
“We were using it at board meetings and updating it every month when we knew what our actuals were. And then this all happens. At least we have our model, so we can now amend and change it,” said CEO Derry Holt.
The forecast is updated fortnightly now. The goal is to remain cash positive for nine months into the future; if their runway starts to shorten, they can adjust accordingly.
Look for data that helps forecast client behaviour
OneUp’s platform provides sales data to its clients, meaning Derry’s team can get a sense of how their businesses are performing and the likely demand for software licences.
“We can tell how much activity is being done. In two or three weeks time, that leads to revenue being realised for these companies,” explained Derry.
Free trials can devalue services, but there are options
Derry knew he was unlikely to close deals during the lockdown. People were cutting software spend and his client base included a lot of recruitment companies, which faced a dramatic drop in hiring.
OneUp doesn’t normally offer trials, but they quickly launched a stripped-down version of their product on a new website, which was free for three months.
“We got about 20 sign-ups in the first couple of weeks. That’s going to give us some backloaded revenue compared to signing it earlier in the year, but at least it’s there,” said Derry.
Three have already converted to the paid offering.
Derry historically avoided free trials because it devalues the offering and there’s a set up cost. Instead, they use a 12-month contract with a three-month break clause. That minimises the risk for clients and ensures they’re generating revenue straight away.
“If someone wants to try it but asks for a free trial, either we haven’t sold the value correctly, they don’t see that there’s massive ROI and it’s a no brainer to buy it, or they are so small that they do just want to give it a go,” he added.
Deciding when to hold on to cash
The pandemic caused OneUp’s sales to ground to a halt, but that hasn’t lasted long. They had their best quarter ever before the lockdown started too.
“That led to a high cash balance coming into this, which is great for us. So what we’ve done is just keep on stockpiling that. We’ve furloughed staff and got a Bounce Back Loan. This is the most we’ve ever had in our company bank account,” said Derry.
The plan is to get a sense of what the situation’s like when the furlough scheme ends and whether people start buying software again. At that point, they can start investing. The long-term goal is still to get to £1m annual recurring revenue, they’re just going to do it a year later than expected.
Have you made small tweaks to the way you handle your finances? How is your business emerging from lockdown? We’d love to hear about your experience. Here’s how.