How to Write the "Numerical Targets and Effects" Section: Setting KPIs and Evidence-Based Projections / Startup Funding Practice Series [Subsidy 9]

Introduction: Review of the previous session and today's theme

In the previous session [Subsidy 8], I explained how to write the "Innovation and Differentiation" section to catch the eyes of the review committee.
The key was to avoid clichés and concretely demonstrate your company's unique strengths.

This time, we continue with how to write the "Numerical Targets and Effects" section.

Even among subsidy applications, this is a section that many entrepreneurs "just fill out vaguely."

However, it is actually one of the points that the review committee scrutinizes most strictly.

Simply conveying enthusiasm or direction is not enough; persuasive, evidence-based numbers are the shortcut to being selected.

Why applications get rejected in the "Numerical Targets and Effects" section

In subsidy reviews, the committee judges whether "this project is worth spending the subsidy on," and a major pillar of that judgment criteria is "measurability of effects."

While reading the application, the committee members are asking themselves questions like:

"If this project succeeds, what exactly will change?" and "Is there a way to verify that change?"

Applications that fail to answer these questions tend to be difficult to select, no matter how attractive the business content may be.

Here are some common failure patterns.

First, cases where targets remain vague expressions like "increase sales" or "increase customer traffic."

The committee cannot judge anything based on this. Next, cases where there are numbers but no evidence is provided.
Even if you write "I aim for 10 million yen in sales in 3 years," if you don't show why that amount is chosen, it is no different from writing down mere wishes.

And finally, cases where the effects of the subsidized project and the results of the overall business are mixed up.Since subsidies are paid for specific initiatives, you need to separate and show "what changed because of the subsidized project."

What is a KPI, and how do you set one?

A KPI (Key Performance Indicator) is an index used to measure the degree of goal achievement.

In subsidy applications, it means defining "what numbers will be used to measure the results of this subsidized project."

When setting KPIs, the first thing I want you to be aware of is the distinction between "result indicators" and "process indicators."

Result indicators are numbers that show the actual outcomes of the business.
Typical examples include sales revenue, number of new customers, repeat rate, number of inquiries, and number of orders received.

Process indicators are numbers that show the volume of activities to produce those results.
This includes the number of SNS followers, website traffic, number of flyers distributed, and number of times exhibiting at trade shows.

What is highly evaluated in subsidy applications is a structure that centers on result indicators while showing the progress management mechanism through process indicators.

For example: "Acquire 20 new customers within 6 months after the subsidized project ends (result indicator). To achieve this, update SNS ads 3 times a week and maintain over 10,000 monthly impressions (process indicator)."

How to create evidence-based numbers

You might feel it's difficult when someone says "evidence-based numbers," but in reality, they can be constructed using the following three approaches.

1. The method of building up from market data

First, grasp the size of the target market you are aiming for using official statistics or industry association materials.
From there, set the percentage (market share) that your company can realistically capture, and multiply it by the customer unit price to derive your sales target.

For example: "There are about 2,000 target households in the trade area. Assuming 5% use it once a year, that's 100 cases per year. At an average unit price of 8,000 yen, that's 8 million yen in sales."2. The method of building up from your own experience or existing customers



Use your track record from your workplace before starting the business, order records from side jobs, or prospective orders from acquaintances and friends as evidence.If you can explain, "I have a track record of acquiring 30 customers in 6 months when I developed a similar service in my assigned area at my previous job. After becoming independent, I plan to start with half that, 15 customers, and expand to 30 in one year," the committee will feel convinced, thinking, "I see, this person has a track record."
3. The method of inferring from publicly available information of competitors

Build your company's plan by referring to store visits to competitors, the number of reviews on review sites, and sales scale inferred from recruitment information.This method provides indirect evidence, but it can be used like this: "In the case of Company A, which offers a similar service, they acquired 30 monthly reservations within 6 months of opening, and our company aims for 20 or more per month in the second half of the first year."

How to express effects: KPI description format

When actually writing in the application, including the following elements will make it easier for the committee to understand.

First, clearly state the "time axis" of when you will achieve it. Set specific points in time such as "within 3 months after the subsidized project is completed," "one year after the business starts," or "at the end of the subsidy target period."

Next, show the "quantitative target value" of what and how much you will achieve. Express it in numbers, such as "X cases," "X yen," or "X%."

Furthermore, briefly add the "evidence" for why that number is realistic. The market data and your own track record mentioned above will be useful here.

Finally, write the "measurement method" of how you will measure it. Showing specific methods such as "verify with monthly register sales data," "manage with the number of cases in the reservation management system," or "measure with Google Analytics traffic" will give the committee peace of mind, thinking, "This person will manage the effects properly while proceeding with the business."

Here is a specific description example: "Through this subsidized project (introduction of website production and SNS ad operation), we aim to increase the current monthly average of 5 new inquiries to 15 per month (3 times) within 6 months after the project is completed.
This number is set by considering our company's trade area size, referring to the SNS ad introduction case (10 increase per month) of Company B, which develops similar services in the same region.
Achievement status will be checked monthly by the number of inquiries on the official LINE account and the number of submissions on the Google Form we will set up."

Points to note when setting multiple KPIs

Depending on the type of subsidy, you may be required to set multiple KPIs. In this case, what I want you to be careful about is "consistency of goals."

For example, if you set a high sales target while your customer acquisition target is too modest, it will not add up.
If the plan is "acquire 5 new customers per month and aim for 15 million yen in annual sales," the calculation is 250,000 yen in annual unit price per customer, so you need to check if that is reasonable for the industry.

The committee checks "whether the logic of this plan holds up" while comparing multiple numbers.Please be sure to check that the numbers for each KPI are consistent with each other before submitting the application.

Also, being too greedy with targets is a problem. Unrealistic numbers like "increase sales 10 times in the first year" or "increase the number of customers 100 times in half a year" will actually damage the committee's trust.
A plan that is ambitious but has a buildup of base numbers is ideal.

Practice in the "Effects of Subsidized Project" section of the Small Business Sustainability Subsidy

What is required in how to write this section differs slightly depending on the type of subsidy, but I will convey a practical image using the Small Business Sustainability Subsidy as an example.

In this subsidy, you are required to show the "effects of market development."
It is important to write not just that sales will grow, but "which market can be developed" and "who will change and how as a result."

For example, if a restaurant owner applies for a subsidy for takeout-only menus and EC site construction, the following structure can be considered:

"Through the start of EC site sales of takeout products by this project, we will expand our current trade area from a 2km radius to nationwide. We aim to achieve monthly EC sales of 200,000 yen (average 3,500 yen per case x 60 cases) within 6 months from the completion of the subsidized project.

As evidence for this, since the response rate to announcements among our existing 800 Instagram followers is 8% on average in past posts, we have judged that acquiring at least 60 orders is realistic. Achievement status will be checked weekly on the Shopify management screen, and if there are months where the target is not met, we will review the budget allocation for SNS ads."

Summary

Applications selected in the "Numerical Targets and Effects" section have common characteristics.

It is clear when, what, and how much will be achieved, there is evidence for why that number is realistic, and a mechanism for how to measure it is shown.

If these three points are met, the committee will feel at ease and be more likely to select it, thinking, "This applicant is someone who can manage plans with numbers."

Target numbers that are too large or too small will lower the evaluation.

Carefully building up market data and your own track record to derive numbers that you feel confident you can achieve is the greatest persuasive material for the committee.

Next Preview

Subsidy selection is not the "goal" but the "start."
After selection, unexpected pitfalls such as performance reports, expense voucher management, and repayment risks are waiting.

Next time, [Subsidy 10], I will deliver "Pitfalls After Subsidy Selection: Preventing Performance Reports, Expense Processing, and Repayment Risks."

I will carefully explain the practical knowledge to avoid regrets after selection, based on actual support cases in the field. Please look forward to it.

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