Why is the ceiling not my best month?

Because one excellent month proves you can do it, not that you can rely on it. The ceiling is the level you reached in at least half of the last twelve months without one-off work.

Does it use my bank data?

No. You enter revenue and cost lines yourself. The only figures inside it before you do are a worked example, invented and labelled as invented.

Tool

Revenue ceiling and cash forecast model for a services business

Find your sustainable ceiling from twelve months of revenue and set it against your own cost lines.

The methodThe Ceiling Test

Ships with Pipeline coverage ratio and the cash cliff in a services business, and is available on its own.

The cash cliff model is an interactive model that takes twelve months of your own revenue, finds the sustainable ceiling, and sets it against your direct-cost and overhead lines. The ceiling is the level reached in at least half of those months without one-off work. It is not your best month. One excellent month is evidence of capability, not of a run rate, and a services business that confuses the two can be months into a problem before it reaches the bank. The model exists so you can analyse (analyze) that gap before it does.

The inputs are twelve months of revenue with one-off work flagged, your direct-cost and overhead lines, and your pipeline entered as two lists: what is contracted and what is expected. From those the model finds the ceiling, sets breakeven against it, rebuilds the forecast from your own history rather than from hope, and reads the pipeline as two separate questions instead of one reassuring coverage percentage.

The outputs are the ceiling against the best month, the monthly gap between the cost base and the revenue you can rely on, a forecast rebuilt from your history, and the two pipeline answers. A worked example is loaded and is invented, and it says so on the page.

In 2019 the cost base of the business that became DevOpsGroup sat above its sustainable ceiling, and I knew the gap to the pound every month. This model is the arithmetic the board used, rebuilt so you can run it on your own numbers. It is in development and comes with its playbook, Pipeline coverage ratio and the cash cliff in a services business. The waitlist is open.

What you will get

01Your sustainable ceiling, found in twelve months of your own revenue and set against your best month.

02The monthly gap between your cost lines and the revenue you can rely on.

03A forecast rebuilt from your history, and pipeline coverage read as two questions.

04A worked example, invented and labelled as such.

Who it is for

Founders and managing directors of services businesses past their first few million.

Anyone growing, feeling fine, and not yet testing whether that is still true.

Leadership teams who want to see the gap months before it arrives.

Questions

Is the model available now?: No. It is in development and comes with its playbook, Pipeline coverage ratio and the cash cliff in a services business. The waitlist is open.
Why is the ceiling not my best month?: Because one excellent month proves you can do it, not that you can rely on it. The ceiling is the level you reached in at least half of the last twelve months without one-off work.
Does it use my bank data?: No. You enter revenue and cost lines yourself. The only figures inside it before you do are a worked example, invented and labelled as invented.

Terms this tool uses

Runs with

Pipeline coverage ratio and the cash cliff in a services business