Join Whitney Johnson for an in-depth discussion in this video Building a financial model, part of Entrepreneurship Foundations.
- Once you put together your business plan,…it's time to build a financial model.…The purpose of a financial model is to set…short-term targets to keep you focused,…track costs, monitor cash, and to see…if you have a viable business.…In short, to tell the story of…your business using math.…As your business gains traction,…you may want to build an expansive, detailed model.…But as a start-up, you want to keep the calculations…simple, focusing on just a few line items.…The first item you forecast is revenue,…which is price times volume.…
From your business plan, you've made a first pass…at how much you'll sell and at what price.…Is this forecast data driven, meaning if…you're estimating you'll sell 100 units,…what are the assumptions behind that number.…For example, if you have an online business,…and you know that the average conversion rate…for your industry is three percent.…This implies 3,333 visitors to your website each month.…Is that realistic?…You probably won't get the right numbers initially.…That's ok. The point is to think logically…
- Cite the steps that can help you find an unmet need.
- Differentiate between a business and a hobby.
- Recognize how to decide between an online business and a brick and mortar business.
- Describe how to protect your intellectual property.
- Explain the best practices for hiring the right people.
- Recall the importance of tapping into networks of expertise.
- Cite the best practices for building a business website.
- Summarize the best metrics to use for your online business.
Skill Level Intermediate
Management Foundations (2013)with Britt Andreatta2h 9m Intermediate
1. Finding Your Big Idea
2. Starting Your Business
3. Building a Team
4. Marketing Your Business
5. Scaling Your Business
6. Funding Growth
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