Quick Start

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The eight assumptions are:

1. The name of your company. Offtoa will display this at the top of financial statements.
2. The industry in which your company will be doing business. Offtoa will use this to (a) estimate a valuation for the company in 5 years, (b) estimate how much inventory your company will need to maintain (if any), (c) estimate the gross margins and profitability that you will achieve based on industry averages.
3. The name of your product. Feel free to keep this as “my product,” or change it if you prefer to whatever you like. QuickStart allows you to have just one product. If you want to model more products, switch to the standard mode.
4. The price of the product. Enter the average price per unit that you expect to sell the product for during the first year.
5. Annual price increase. Enter the expected annual percentage increase in the price.
6. Number of units. Tell us how many units you expect to sell each year for the next 5 years. You may use the arrows to propagate any year's entry to later years.
7. Gross margin. If you expect your gross margin (price minus your cost to purchase or manufacture the product) to be the same as the industry average, you can leave this unchanged. If you expect to have lower costs or higher prices than the rest of your industry, increase this number. If you expect to have higher costs or lower prices than the rest of your industry, decrease this number.
8. EBITDA. This is your overall company profit after you subtract all your operating expenses. If you expect your operating expenses to be lower than industry averages, increase this number. If you expect your operating expenses to be higher than industry averages, decrease this number.

Additional Questions:

How often can I change values of these 8 assumptions in the QuickStartMode?

You may make changes to these 8 assumptions as many times as you like. After making each set of changes, you can examine the financial statements and see how your company will do.

How can Offtoa create all my financial from just eight assumptions?

Offtoa makes many additional assumptions based on your selection of industry. As a result, your financials will end up looking like an “average company.” In reality, no startup looks like an average company though! QuickStart is designed to do just that; it gives you an ability to get off to a quick start, and that's all. We highly suggest that after using QuickStart, you switch to the Standard Mode to enter more accurate values for all your assumptions. That way you can see what the financial statements for your company would really look like.

How much analysis of my company will Offtoa do when I select the QuickStart Mode?

In the Standard Mode, Offtoa looks for and reports to you roughly 100 different conditions that you should know about. For each, Offtoa also tells you which assumptions you can change to “fix” the problem. Because QuickStart Mode has just 8 assumptions, Offtoa is in effect making the rest of the assumptions for you . . . and making those assumptions to produce acceptable financial results. As a result, when using QuickStart you will see only about a dozen or so conditions that Offtoa will report to you.

Why would I use QuickStart Mode?

The only reason to use QuickStart is to get instant feedback on your business concept. It is like a back-of-the-envelope calculation. It is like the feedback you get when you stop an experienced colleague in the hallway and ask, “what do you think of this new business idea?” but the analysis that Offtoa does is all about the financials.

Why do I have no marketing and sales expenses when I use QuickStart Mode?

QuickStart allows you to enter 8 assumptions, and then makes very broad assumptions about every other aspect of your company. Concerning expenses, if the average company in your industry spends x% of its revenues on expenses, Offtoa assumes that you will spend x% of your revenues on expenses. You can of course override the value of x by changing the value of EBITDA in your assumptions. In any case, Offtoa makes no attempt to divide these expenses into categories such as marketing, sales, R&D, manufacturing, and so on. If you want to do this, switch to Standard Mode after using QuickStart Mode. Click on Other Expenses. There you will find one entry for miscellaneous expenses that was created by the QuickStart Mode. Feel free to zero this row out, and replace it with rows for actual expense categories.

What are the differences in available assumptions with QuickStart Mode vs. Standard Mode?

What are the differences in reports available when using QuickStart Mode vs. Standard Mode?