Happy New Year!
I am beginning to write a business plan for a future startup based on an innovative software technology I developed. An actual product is still in development.
I am using a dedicated tool that guides me through a systematic set of questions to come up with a quality plan.
One of the steps is to set objectives. One (or more) of the objectives is typically a sales figure in the first 1-5 years.
How do I project these figures, when I don't even have a clue what sales would be like?
I know that it might sound harsh, but stop writing the business plan.
The only valid reason I met so far to write a business plan is to get some, usually government-issued, funding (for instance, I saw that happening in Germany). Note also that seed investors usually don't read and don't ask for a business plan.
If the product is still in development the best use of your time is to go out and meet the potential customers of your product. Ask to meet them, present your product and ask for feedback. You will learn
Now, when you have learnt all these things, you can also go back to your business plan and fill the sales forecast. Otherwise, as you already figured out, it's just pulling numbers from thin air.
You need to create a sales model outside of this tool. The best way to do that is to find a similar company, with a similar product that is selling right now. Them you iterate on it until you come up with the sales you need/want.
If you search for Sales Modeling, there will be a couple of articles on how to do it (even by me).
Modeling is an iterative process that gets better over time. The most important thing to do is build a model and tweak it as you go. That way, when new information becomes available, you can adjust the model without having to redo everything.