Manufacturing / Hardtech
Demand you cannot produce is not revenue. Model an order book against real production capacity from machines, shifts, and yield, with output clamped to whichever is lower and unit cost moving with utilization.
Order book, capacity, yield
The problem
Every other forecasting tool assumes you can sell whatever you can sell. Manufacturing does not work that way. There is a ceiling made of machines, shifts, and yield, and a forecast that ignores it will happily project revenue you have no way to produce. The consequence is worse than an optimistic number: it hides the capital decision, because the month you needed to add a line is buried inside a revenue curve that never hit the wall.
What a SaaS template gets wrong
A demand-only model has no supply side at all. It cannot tell you when you run out of capacity, what a second shift would unlock, or how much of your cost per unit is just under-absorbed overhead from running a line half empty.
The drivers
How YourCFO models it
Monthly capacity is computed from equipment count, shifts per day, and yield. Output is clamped to the lower of demand and capacity, so the wall is in the forecast rather than discovered on the factory floor.
Demand above capacity becomes backlog rather than silently disappearing, so you can see how much revenue is sitting behind the constraint.
Labor carries a shift premium and equipment carries depreciation, both absorbed into unit cost. Running a line at half utilization raises cost per unit, which is exactly the behavior a flat cost assumption hides.
Adding a machine or a second shift is modeled as a growth initiative with a ramp, so you can see the capital going out, the ceiling lifting, and the payback, in the same forecast.
you add a second shift in July
labor cost rises in July at the shift premium, the capacity ceiling lifts, backlog converts into shipped units, and unit cost falls as fixed overhead spreads over more output.
The numbers that matter
How much of your capacity you are actually using, and what that does to cost per unit.
Demand you have won but cannot yet produce, which is the real case for capital expenditure.
What a unit costs once labor and depreciation are absorbed, not just materials.
How many months of growth the current line supports before the ceiling binds.
The chart of accounts seeds product revenue, direct materials and direct labor, manufacturing overhead, work in progress and finished goods inventory, and equipment as a capital asset with depreciation.
Common questions
Other models
Units, price, landed COGS
If you sell physical units, margin is made or lost after the sale. Model buyer cohorts, repeat purchase, and a channel margin waterfall across D2C, marketplace, and wholesale, on landed cost rather than list price.
Contracts, ACV, churn
Model B2B revenue the way it actually behaves: per-customer contracts, ACV, churn, and expansion, driven by a sales-led and marketing-led funnel rather than a growth percentage.
Cohorts, ARPU, retention
Consumer subscriptions do not churn at a flat rate. Model acquisition cohorts against a retention curve, with revenue as active users times ARPU, so month one drop-off and the long tail are both visible.
Further reading
Set up the model that matches your business, then watch what your next decision does to the bottom line.