So….it makes sense to ensure that your business can (make money)…before you start
Financial Modelling allows you to see into the future by working out how your business can make money and then allowing you to drive it for maximum return.
So what is a financial model?
It is a custom created dynamic spreadsheet model which inputs your various types of services, their volume and $ value, and then aligns them to your staff and overhead costs to show you – by month, the expected bottom line profit of your business. The result is based on your particular set of variables, with the dynamic nature meaning that you can quickly work through many different business activity combinations – to identify the best one.
By creating a financial model for your specific business, it is customised to your needs…..and not someone else’s. This means that you can work out cheaply and easily on paper how profitable your business model can be – rather than simply experimenting in the real world….with real money.
A financial model will provide the following;
Objectivity can be confronting!
But, when you use it for objective decision making – you will trade better…..as you know where you are going and what drives it