Startup financial forecast
How much can you gross and how soon? The answer may well seal the fate of a startup company.
The best way to find out is to simulate each revenue stream based on the company’s business model. Then, it’s far easier to explore different scenarios by experimenting with key variables on the streams and learn how they impact revenues and timing.
Typically, forecast revenues will follow a sigmoid curve, growing slowly in the beginning, then reaching a point of explosive growth of “hot merchandise” everyone wants, until finally decelerating as market saturation approaches.
After that, we can can more precisely think about teams, investments, costs and how much of a profit or loss we are generating as business unfolds — making it that much easier to calculate key information for funding, such as valuation, how much to raise, and when, even returns on investments for VCs and vesting for founders and key employees.
International expansion of a mature operation
Unlike startup simulations, here we know very well how a business performs in a given country or market, and want to evaluate how well we can expect it to perform after entering a new one, as well as required investments.
In those cases, we try and work with the leadership team to model key aspects and operations of the existing business — like a virtual “miniature” of an industrial plant and support structures. With that in hand, and based on sales projections for the new country, we can precisely calculate timing and quantities of infrastructure, machinery, utilities and supplies, as well as personnel, and price those based on the new market being entered.
We can even vary prices by location to directly compare alternate sites.
From there, we can develop accurate information on financing, cashflow and P&L, even taxes and payroll, to support scenario evaluation and design, detailed business and execution planning, even negotiations with the many stakeholder involved in entering a new country.