We have created a new video illustrating how easy and powerful the Easy Business Case Financial Calculator is to use. The video walks through the setting of the assumptions for a small start up company. It discusses the results and metrics found in the app reports screens. It shows how to create alternate scenarios from the original scenario in seconds. The video highlights key differences between the base scenario and an alternate scenario using their respective report outputs. Check it out and let us know what you think! Here is the link:
So you want to open your own small business. You go down to the bank on the corner to ask for a loan and they ask for your business case. “Business what?” you say.
A business case, in simplest terms, is why a certain solution is the best way to move forward. You want to open your own small business. Why did you select this particular business? What were the alternatives and why was this one the best option? Have you done market research? How many potential customers are there for your business? Who will be your competitors? How are competitors pricing the product(s)? What is your operational timeline?
Now comes the dreaded financial projections and scenarios to be included in the business case. What is the expected IRR (Internal Rate of Return)? What is the payback period? Do you have a 5 year plan? What if sales are 5% lower than expected? What if inflation if higher than expected. This is where you can use a tool like Easy Business Case Calculator on your Iphone/Ipad.
You still have to do the ground work of coming up with the assumptions to feed the tool, but the calculations are done for you. Enter revenue items like expected unit sales and price per unit. Enter loan specs such as term, APR and money borrowed. Enter your tax rate. Expenses are a little more work. You will need to list your expected expenses and classify them into categories such as start up, fixed, per unit and percent of revenue. Start up are one-time expenses that are very short term in nature and are not expected to repeat. This may be the build out of a store or investment in equipment. Fixed are expenses that are fairly stable in amount such as rent, basic consumable supplies, certain type of insurance and maybe salaries/benefits. Per unit might be your cost of goods, distribution costs, etc. Percent of revenue might be credit card fees, salaries on scalable work force, commissions, lease clause based on sales, etc.
Once you have plugged in the assumptions, Easy Business Case Calculator does the rest. It produces useful business metrics like IRR, NPV, initial investment required, payback period and growth rates. It produces a 5 year plan and a nice chart portraying important elements of the 5 year plan graphically. You can vary your assumptions to create different scenarios or create competing business cases.
The app is free to download and you can review the financial projections for a sample set of assumptions. If you decide that this is the right tool for you, the cost is minimal.
Best of luck to you in starting your successful business!