Deal Value Calc

Deal Value Calculator

Build a quantified business case for one deal - the arithmetic and the narrative together. The organising rule: "It's your job to build the math equation. It's their job to give you the assumptions." (Armand Farrokh, 30MPC). This skill owns the structure, formulas, and benchmark scaffolding; the buyer owns every company-specific input.

The documented failure it exists to prevent: "most business cases created by sellers are absolute BS" (30MPC) - inflated numbers the champion never validated, which burn the champion's internal credibility the moment finance pokes a hole.

Second rule: "An ROI model on its own isn't a business case. It's a future maybe, without context. Narratives bring meaning to your numbers." (30MPC). Always deliver both the visible math and the narrative document - never a bare ROI number. The real test of the output: it survives being forwarded to a CFO without the rep in the room.

Never invent a number

• Refuse to fabricate any input. When the user lacks a figure, ask for it, or insert a clearly labelled placeholder they must replace (e.g. [NEEDED: fully loaded hourly cost - ask the buyer]) - never a plausible-looking invented value.
• Label every input by who supplied it:
• buyer-supplied - a number the buyer stated or documented (their payroll, invoices, ops reports, public filings).
• benchmark - an external or market figure the rep brought, with its source named. "Companies like yours typically see 15%" with no named source does not qualify - it becomes rep-assumed.
• rep-assumed - the rep's own estimate, not confirmed by the buyer.
• Hard rule: a business case whose headline number rests materially on rep-assumed inputs must say so on its face - a visible line in the document, not a footnote.
• The cost side is the one exception: the rep's own pricing and fees are rep-owned by definition - document them with the written quote. Every value-side input takes one of the three labels.
• The strongest inputs come from the buyer's own records: invoices, payroll, production data, a public annual filing. Get the champion to state the numbers; finance checks the baseline before it opens the vendor proposal practice).

Interview

Ask one question per message; offer multiple-choice options wherever possible; skip anything the deal description already answers.

1. B2B, or considered high-ticket B2C (solar, home improvement, real estate, private education, financial advisory)?
2. Deal segment: transactional (single decider, low price), mid-market, or enterprise (buying committee, procurement/security in the path)? This sets the artifact size.
3. What date must the result land by? A hard near date promotes the drivers computable from documents the buyer already holds - retired contracts, the hiring plan - and deletes any driver needing a time study or a cohort analysis.
4. One-off win, or a compounding asset the buyer reuses as a renewal or QBR baseline?

• Compounding promotes error/rework and downtime avoided, whose measured baselines outlive the deal.
• One-off keeps the artifact at its lightest rung.

1. Effort ceiling: how many hours can the champion spend, and can they reach finance data at all? A low ceiling deletes error/rework, churn and revenue lift outright rather than ranking them last, and caps the artifact at a payback estimate.
2. Which value drivers are in play? Offer the taxonomy list below in its efficiency order as choices, re-ranked against the answers to 3-5.
3. For each driver: the raw inputs (volumes, rates, hours, costs) - and for each input, who supplied it: buyer, a named benchmark, or your own estimate?
4. The investment side:

• Subscription/licence price
• Implementation and integration cost
• Internal effort (hours and whose)
• Training
• Ongoing administration

Contract length?

1. Time horizon for the case: 1 year, 3 years (the enterprise-software standard), or the contract term?
2. Who is the document ultimately for - who will the champion forward it to (economic buyer, CFO, a committee, a spouse or co-signer in B2C)?
3. Will the buyer's finance function (or lender, in B2C) review it? If yes, the finance-reviewer additions in the workflow apply.

Right-size the artifact

Not every deal gets a full model deal-type guidance; the trigger for the full treatment is complexity - roughly 6+ stakeholders, procurement or security in the path, strategic rather than tactical spend - not a fixed dollar threshold):

• efficiency: payback estimate > one-page summary + light model > full model
• effort: full model > one-page summary + light model > payback estimate
• value: payback estimate == one-page summary == full model below the complexity trigger, then full model > one-page summary > payback estimate above it

Default to the lightest artifact the deal's complexity permits; each complexity trigger crossed moves the artifact up exactly one rung. The value axis ties below the trigger because extra depth genuinely buys nothing there - a formal case is overkill for a single decider - and it inverts above the trigger, where a payback estimate simply does not survive procurement.

Value drivers and per-driver formulas

Decompose the deal's value into drivers and compute each separately; 3-4 quantified drivers is the documented practitioner shape for the problem/solution section (30MPC). Rank them by case strength bought per hour of the buyer's time - never by headline size, and never by whichever number is easiest to produce. Effort here is not what the driver is worth: it is how hard the input is to source from the buyer, how much of the buyer's time that costs, and how long the resulting number stays arguable in a finance review.

• efficiency: direct cost > labour time > headcount avoidance > downtime avoided > error/rework > headcount reduction > capacity freed > revenue lift > churn > risk/compliance
• value (moves the headline _and_ survives finance): labour time > direct cost > error/rework > headcount reduction > downtime avoided > revenue lift == churn > headcount avoidance > risk/compliance > capacity freed
• effort (buyer hours to source the input, plus how long the number stays contestable): headcount reduction > risk/compliance == churn > error/rework > revenue lift > labour time == downtime avoided > capacity freed > headcount avoidance == direct cost
• compliance cost: risk/compliance == headcount reduction > every other driver, which carries none

Every tie is a real equality, never a dodge: