How Business Drivers function in the Pluvo App
An introduction to business drivers (as they are seen in Pluvo’s driver-based forecasting) and how to use them!
Explorers rely on their compass, vacationers trust their roadmaps, and sailors navigate by the stars.
In business, forecasting serves as your guiding light, ensuring you stay on course toward your goals. For financial decision-makers (FDMs), Pluvo turns business drivers into powerful tools that act as your compass, map, and North Star, providing the flexibility and accuracy needed to easily navigate your business’s complex financial journey.
Read on to learn how!
What Are Business Drivers?
Business drivers are the key variables that influence your financial outcomes. In Pluvo, you can create highly customizable forecasts by using drivers such as:
| Number of Expected Sales
| Operating Expenses
With Pluvo, drivers can be built using constants, growth equations, aggregations, or custom formulas, giving you the power to tailor your financial models precisely to your business needs.
P.S. Pluvo now allows users to integrate their organizational charts with business drivers, simplifying the process of creating operational forecasts. This feature is particularly useful for tasks like headcount planning, software deployment, and general utility forecasts.
Why Drivers Matter
Identifying and focusing on the key drivers of your business’s success or failure allows you to proactively influence outcomes by recognizing trends and patterns in financial and operational performance.
Example: Customer Acquisition Cost (CAC)
To calculate your CAC, which tells you the average cost of acquiring a new customer, you’ll need to create two drivers:
- Marketing & Sales Costs: Use Pluvo’s custom formula feature (with the # symbol) to pull in relevant expense accounts from QuickBooks/Xero.
- New Clients: Input the number of new clients gained during the period.
The CAC metric is then created by dividing the Marketing & Sales Costs driver by the New Clients driver. This simple yet powerful formula gives you clear insights into the efficiency of your marketing efforts.
Business drivers are especially valuable in scenario planning, where you can model different outcomes based on variations in these drivers. This approach provides clarity and control, enabling better decision-making.
How Pluvo Utilizes Business Drivers
Pluvo seamlessly integrates business drivers into its financial planning tools, allowing decision-makers to track, analyze, and adjust these critical factors with ease.
Users can categorize their drivers for streamlined access and audibility. For instance, consider a scenario where you want to forecast your revenue target:
| Revenue Target = FTE New Hires (This Month) * $5,000
Here, each full-time equivalent (FTE) sales employee is forecasted to generate $5,000 in revenue every month. Pluvo’s customizable formulas let you fine-tune each aspect of this calculation, ensuring that your drivers align perfectly with your business needs and leading to more precise financial modelling.
This integration empowers you to see the direct impact of changes in your drivers on your overall financial health, providing a clear line of sight from decision-making to outcomes.
What are the real-world benefits of business drivers?
By continuously monitoring and adjusting your business drivers, you can respond swiftly to market changes, optimize operations, and drive better financial results. Business drivers are more than just numbers—they are the pulse of your company’s financial health.
By understanding and leveraging these drivers, you transform uncertainty into clarity, enabling you to make informed, strategic decisions.
Ready to create highly customizable forecasts without spending hours in spreadsheets?
Discover how Pluvo’s driver-based forecasting can revolutionize your financial planning. Book a demo today! 🌧️
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