# The churn ceiling *Retention, not sales, sets your ceiling* --- You're building next year's revenue plan. £5m ARR. The board wants 20% growth - £6m. A million pounds of net new revenue. You open the model and start where plans always start: sales. Your team delivered £1.2m of new business last year. A million is less than that. --- Not quite. Before your sales team closes a single new deal, 12% of your base will churn. That's £600k of contracts not renewed, customers who downgrade, accounts you thought were solid. The real target isn't a million. It's £1.6m. Your team did £1.2m. The plan is short by a third. And the gap gets worse every year. At £8m, churn consumes £960k. Same £1.2m of sales, same effort — net growth drops to £240k. Three percent. At £9.5m, nearly all new business goes to replacing what left. Annual new sales ÷ churn rate = your ceiling. £1.2m ÷ 12% = £10m. You're already halfway there. The sales team is delivering, the dashboard shows wins, but the growth rate drops every year. The base got bigger. --- Run the plan again. Same team, same pipeline, same £1.2m. But retention improves from 88% to 93%. Churn drops from £600k to £350k. Net growth rises from £600k to £850k — over 40% more, from the same team. The ceiling lifts too. £1.2m ÷ 7% = £17m. Nearly double. --- When you write your next plan, don't start with sales. ---