Making a believable cash-flow plan for your new business
Posted 06-06-2009 at 09:47 AM by roydaya
Creating an excel cash flow plan for your new business?
Investors hate made up numbers with no solid reasoning or well documented ***umptions behind them.
A good exercise to do it to write a time / cost timeline for the key processes that the business will need such as:
- New customer from lead to initial acquisition -> pilot -> initial paid deployment -> further deployment and support.
- New partner / third party / distribution integration and training process.
- HR growth. Different people are needed at different stages and locating and keeping them is a process startups need to take seriously or they fail to grow. Finding a CEO is not like adding a developer. Training sales people needs to take into account turnover and repeated training until this learning curve is optimized for the business.
- Branding / PR and positioning process and budget / timeline. What is the marketing mix? Is it direct to customers or is it to partners or indirect to customers (affluence marketing)?
Each step with its own risk and cost.
Making a process tab and showing ***umptions at different stages will make the plan much stronger and will show that it is a business plan (spending resources to create more resources) and not a project plan (spending resources to create something). A business plan must show that energy used will bring in more energy than was spent. It is not enough to put numbers in excel and multiply them together, you have to show how you came up with them and let the reader ***ess if they are realistic.
An expert can then review your plan and replace the numbers behind the ***umptions with his own and see if the business still makes sense.
___________________________________
Roy Daya, CEO
www.digital-clay.com
DigitalClay is a smart application engine for building dynamic software solutions without coding.
http://roydaya.com
Investors hate made up numbers with no solid reasoning or well documented ***umptions behind them.
A good exercise to do it to write a time / cost timeline for the key processes that the business will need such as:
- New customer from lead to initial acquisition -> pilot -> initial paid deployment -> further deployment and support.
- New partner / third party / distribution integration and training process.
- HR growth. Different people are needed at different stages and locating and keeping them is a process startups need to take seriously or they fail to grow. Finding a CEO is not like adding a developer. Training sales people needs to take into account turnover and repeated training until this learning curve is optimized for the business.
- Branding / PR and positioning process and budget / timeline. What is the marketing mix? Is it direct to customers or is it to partners or indirect to customers (affluence marketing)?
Each step with its own risk and cost.
Making a process tab and showing ***umptions at different stages will make the plan much stronger and will show that it is a business plan (spending resources to create more resources) and not a project plan (spending resources to create something). A business plan must show that energy used will bring in more energy than was spent. It is not enough to put numbers in excel and multiply them together, you have to show how you came up with them and let the reader ***ess if they are realistic.
An expert can then review your plan and replace the numbers behind the ***umptions with his own and see if the business still makes sense.
___________________________________
Roy Daya, CEO
www.digital-clay.com
DigitalClay is a smart application engine for building dynamic software solutions without coding.
http://roydaya.com
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