1. How are revenues growing? Which clients are most important?
2. What is the biggest factor in cost of goods sold? Do you think that this is realistic? Why or why not?
3. What are the largest operating expenses?
4. Examine the cost assumptions. Do you think that they are realistic? Why or why not?
5. Consider the comparable companies included. Do you think that these are good choices? Why or why not?
6. Do any part of the financial statements seem unrealistic to you? Explain.
Csse Gravyty: Understanding Your Market and Bullding Realistic Proformas' Basis of Presentatione Thirplan contahurismontha of projectiona: Whale wer belleve that the assumptions inderifing the projectlons are reasonable, there " ear be no sotatand thar these realis car be realized, the natare of the underfying assinnption wilt stay the singe, or that attual resalus will mect expectations. Top-Down vs. Bottom-Up Finaneiats Gravyty believes that "bottom-up" financial analysis is the best approach to business planning. This is in contrast to "lop-down" analynis, which states the percentage of a given total addressable market (TAM) an entrepreneur thinks can be captured. Bottom up finaocials allow us to think client-by-elient, month-by-month about the strategies and personnel necessary to build the business. Nonpeofits in the United States are required to file a Form 990 with the Internal Revenue Service (IRS) in order to maintain their status. Within the Form 990, is a National Taxonomy of Exempt Entities (NTIEB) code, which is used by the IRS to classify these organizations into 24 different groups. Management has chosen to focus ir itially on those segments in the chart below for their bottom up approach based on size of the market, acoess to early adopters, and the initial peroeived need based on the value proposition. Customer Acquisition Given the high touch nature of the business, we chose to control antly givemth to maximize lesming over revenue. Given our domain expertise, we had reveral existing connections to organtations who woild be beta terteds a potentlal carly clients. However, we docided that we would only believe we were onto something when the first "itrarger' bought for "full price." This moans a customer wowld boy their services bared on the merits of the value peoposition and noclication, rather than as if favor. When thinking about customet acqulsition, we wast to plan carefully aroend pensonsel nunbers. Since oer intention is to raise outside copital for the businets, we tested for a breeking point. Conid a cistoner theons mannger handlie 25.50, 76. or 200+ on an insilde and cutside sales team. act as lidele and outelle maline tram. View all sol Cost Assumptions We model both variable and fived costs for the business. There were otten aggregate percentage numbers that were used to simplify socan complexity within tbe finascial model-so lang as they cotild find rule of thumb nembers or teasonable enmparablers. We used a learniag curve as a means to quantify efficiency. Throcgh time, we betiene we will get betiec and faster at varioes processes, which will bring down costs. We alio believe that R\&D as a gercentage of Revenve will be on the lower end becanie most of the "RSD" coats wil be tied up in Developer calaries Similarly, wer briese that sced percentages will be on the lower end of comparahle companies due to initial 97 Dodel both tariable and foed costs for the baviness. These were ofen agoregate perceatage number that were used to: e complexity within the finascial model-so loeg as they could find rulo-of thumb numbect of reasonable comparables. We used a learning curve as a means to quantify effieiency. Throteh tirne, we beliew iw will get better and fister at varioas pooesses. whaicb will bring down weds. We also believe that RED as a percentage of Revease will be on the lower end because muat of the "MND' costs will be tied up in Drveloper alaries. Semilarly, we believe that scleA percentagos will be on the lawer end of camparable corpanies due to initial ales/advertiaing, efforts focused on the existing networks of the founding tram and the yord ef mouth nature of prodset adoptinn withis bonpenfit sector. Heome Statament Assumptione twhatien trun sevid difieted atwes Vatuation walurtiss trom mentek tistiesent it des. Velusision valution from meveral differet cades. Vatustlon valurtiss trom sevent tutiestet it des. Valueton valution from ieveral differet chales. Csse Gravyty: Understanding Your Market and Bullding Realistic Proformas' Basis of Presentatione Thirplan contahurismontha of projectiona: Whale wer belleve that the assumptions inderifing the projectlons are reasonable, there " ear be no sotatand thar these realis car be realized, the natare of the underfying assinnption wilt stay the singe, or that attual resalus will mect expectations. Top-Down vs. Bottom-Up Finaneiats Gravyty believes that "bottom-up" financial analysis is the best approach to business planning. This is in contrast to "lop-down" analynis, which states the percentage of a given total addressable market (TAM) an entrepreneur thinks can be captured. Bottom up finaocials allow us to think client-by-elient, month-by-month about the strategies and personnel necessary to build the business. Nonpeofits in the United States are required to file a Form 990 with the Internal Revenue Service (IRS) in order to maintain their status. Within the Form 990, is a National Taxonomy of Exempt Entities (NTIEB) code, which is used by the IRS to classify these organizations into 24 different groups. Management has chosen to focus ir itially on those segments in the chart below for their bottom up approach based on size of the market, acoess to early adopters, and the initial peroeived need based on the value proposition. Customer Acquisition Given the high touch nature of the business, we chose to control antly givemth to maximize lesming over revenue. Given our domain expertise, we had reveral existing connections to organtations who woild be beta terteds a potentlal carly clients. However, we docided that we would only believe we were onto something when the first "itrarger' bought for "full price." This moans a customer wowld boy their services bared on the merits of the value peoposition and noclication, rather than as if favor. When thinking about customet acqulsition, we wast to plan carefully aroend pensonsel nunbers. Since oer intention is to raise outside copital for the businets, we tested for a breeking point. Conid a cistoner theons mannger handlie 25.50, 76. or 200+ on an insilde and cutside sales team. act as lidele and outelle maline tram. View all sol Cost Assumptions We model both variable and fived costs for the business. There were otten aggregate percentage numbers that were used to simplify socan complexity within tbe finascial model-so lang as they cotild find rule of thumb nembers or teasonable enmparablers. We used a learniag curve as a means to quantify efficiency. Throcgh time, we betiene we will get betiec and faster at varioes processes, which will bring down costs. We alio believe that R\&D as a gercentage of Revenve will be on the lower end becanie most of the "RSD" coats wil be tied up in Developer calaries Similarly, wer briese that sced percentages will be on the lower end of comparahle companies due to initial 97 Dodel both tariable and foed costs for the baviness. These were ofen agoregate perceatage number that were used to: e complexity within the finascial model-so loeg as they could find rulo-of thumb numbect of reasonable comparables. We used a learning curve as a means to quantify effieiency. Throteh tirne, we beliew iw will get better and fister at varioas pooesses. whaicb will bring down weds. We also believe that RED as a percentage of Revease will be on the lower end because muat of the "MND' costs will be tied up in Drveloper alaries. Semilarly, we believe that scleA percentagos will be on the lawer end of camparable corpanies due to initial ales/advertiaing, efforts focused on the existing networks of the founding tram and the yord ef mouth nature of prodset adoptinn withis bonpenfit sector. Heome Statament Assumptione twhatien trun sevid difieted atwes Vatuation walurtiss trom mentek tistiesent it des. Velusision valution from meveral differet cades. Vatustlon valurtiss trom sevent tutiestet it des. Valueton valution from ieveral differet chales
