Website Traffic Estimator for a Financial Projection
We have recently been working on a financial projection for a web based start-up and thought it would be useful for other entrepreneurs to get an insight into what’s involved in modelling the first part of any web based projection, which is traffic to the website. In our website revenue post we discuss how to use this traffic projection to produce a sales forecast. We’ve deliberately simplified this projection as we don’t believe in over complicating our projections, but feel free to use the website traffic estimator and add to it as you see fit.
Using the Website Traffic Estimator
In the website traffic estimator, we’ve simplified the traffic to the site into five areas and will deal with each in turn. For reference, you can view the projection in pdf format here.
Organic traffic represents people searching for your website or terms related to the content of your website. It will vary depending on your business and will be affected by such factors as seasonality.
For the purposes of this website traffic estimator projection, referral traffic represents any traffic coming from other sources. It might be as a result of a marketing campaign, a promotional article or write up, or a mention on a social network etc. To a certain extent it is controllable which can be reflected by changing the number of promotions. The referral traffic per promotion is an average obtained by monitoring website stats following promotions
Paid traffic comes from using CPC, CPM or CPA. The number of impressions will depend on numerous factors including the quality of your ad and the level of expenditure on advertising. In this website traffic estimator a base level of 250,000 has been set which is then adjusted for any changes in Ad spend. The click through rate will depend on your ranking and should grow over time.
Viral traffic represents the additional traffic generated by visitors mentioning your site to other people. It is calculated by applying a viral % to the traffic visiting the site in the previous period.
The email database is built up from an opening position, in this case 5000. Each month a proportion of your visitors will sign up to your email database; this is reflected by applying the sign up rate to the traffic to your site. By the same token a proportion will leave the database which is reflected by applying the churn rate to the opening database.To calculate the traffic from the email campaigns, the opening database is multiplied by the number of campaigns to give a total for the emails sent in the period. By applying a click through rate you can establish a figure for traffic generated by the email campaigns.
The traffic summary at the end of the sheet simply summarizes traffic from each of the 5 areas in the website traffic estimator.
So this is how we use the website traffic estimator to produce traffic projections for a web based start-up. As we mentioned at the start we like to keep things simple. There are numerous additions and refinements which could be made but ultimately it’s a projection, a guess at what you think might happen, so it’s best not to over complicate the situation. What’s your take? We’d love to see how this compares to other start-ups, so please leave a comment and let us know where you differ from us.
Website Traffic Estimator Download
The website traffic estimator template is available for download in Excel format by following the link below.
The website traffic forecast produced by this template can be used as the starting point for our Financial Projections Template, as part of a business plan for a website based business.
Users use the free website traffic estimator plan template to generate sales projections at their own risk. We make no warranty or representation as to its accuracy and we are covered by the terms of our legal disclaimer, which you are deemed to have read. This is an example of an website traffic estimator business plan forecasting software that you might use when considering how to start your own website based business. It is purely illustrative. This is not intended to reflect general standards or targets for any particular company or sector. If you do spot a mistake in the website traffic estimator projection template, please let us know and we will try to fix it.
About the Author
Chartered accountant Michael Brown is the founder and CEO of Plan Projections. He has worked as an accountant and consultant for more than 25 years and has built financial models for all types of industries. He has been the CFO or controller of both small and medium sized companies and has run small businesses of his own. He has been a manager and an auditor with Deloitte, a big 4 accountancy firm, and holds a BSc from Loughborough University.