What Assumptions Should You Make?

By pressing the Done/Next button at the bottom of every assumptions screen, Offtoa will walk you through every assumption you need to make. The assumptions include:

  1. What products will you sell? What features will they have ? See the www.offtoa.com/wp/?p=168 blog.
  2. Which markets will you sell to? Which vertical market will be your initial target market? What are their biggest pain points? See the www.offtoa.com/wp/?p=176 blog.
  3. At what price (s) will you sell each product for in each market? What type of promotions or sales will you conduct? See the www.offtoa.com/wp/?p=213 blog.
  4. How much will it cost you to acquire each new customer? This is called your customer acquisition cost (CAC). How long does it take to acquire them? This is called the sales cycle.
  5. For each customer who purchases from you, how much will they spend each time they purchase? This is called average order size (AOS). How often will they make such a purchase (it could be just one time, or it could be monthly, or quarterly, or annually, etc.). This is called purchase periodicity.
  6. How many customers remain customers after one year? This is called the retention rate.
  7. For each new customer, how many other customers do they refer? This is called the viral coefficient. How long does it take for them to make the referral? This is called the viral cycle.
  8. If you are a reseller, wholesaler, retailer, or distributor, what does it cost you to purchase your products? If you are a manufacturer, what do you raw materials cost and what does it cost you to manufacturer? This is called cost of goods sold.
  9. How many employees will you hire? How will you compensate them?
  10. Will you be paying commissions?
  11. What expenses will you incur? Travel? Legal? Rent? and so on.
  12. What major purchases will you be making? These are called fixed assets. Machinery? Computers? Real estate? and so on.
  13. What loans do you expect to receive? How much? When? What terms?
  14. What investments do you expect to receive? How much? When? What terms?
  15. Payments. How soon do you expect customers to pay you? How soon do you expect your suppliers will want you to pay them?

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