All you need to do is the assumptions, and we’ll take care of the rest. That’s why we created Caena - a user-friendly tool that makes building financial models easy. We try to make the daunting parts of building a startup less daunting, so that founders can focus on the exciting parts. So, instead of saying Revolutionary Product A will cost £200 and you will make ten sales every day, your assumptions can say Revolutionary Product A will cost £200 – £250, and you will make 5 – 10 sales daily. You can also use your historical data if you are already selling the product/service before creating your financial model.Īnother great way to go about this is to make range assumptions instead of point assumptions. However, if your startup idea is a business that does not precisely exist yet, you would need to do a bit more research into businesses that offer similar services or products. Then, you can pop into a few bakeries, buy a donut (or a dozen), and just sit and watch how the business works. Now, it might be easier to create assumptions for a bakery or some other ‘brick-and-mortar’ business that already exists somewhere. Are there peak periods in the year for selling baked goods? Will seasonal variance affect sales?Ĭhoosing Assumptions for Non-Existing Businesses.Will you be catering events as well as selling baked goods to retail customers?.How many working days are there in a year?.For example, for Dee’s Nook, you can identify some of the relevant assumptions by answering the following questions: You can input other assumptions that do not fall under the above. What other costs are you paying to be able to run my business smoothly? For example, are you providing perks such as free WiFi? How much would you be spending on that?.Would you be paying for any baking equipment upfront?.Don’t forget tax! How much would you need to pay for tax?.How much more would you pay for utilities such as electricity and heating?.How many baked goods will the ingredients yield?.What is the cost of the ingredients you need? For example, how much does it cost to buy flour, sugar, butter, etc.?.įor Dee’s Nook, you would have to answer questions like the following: These are assumptions you make about the cost of your business. What’s the average price of the baked goods you’ll sell?. ![]()
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