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using-offtoa:assumptions:revenue-assumptions:sales-model:wild-ass-guess-wag [2016/05/26 19:37] 127.0.0.1 external edit |
using-offtoa:assumptions:revenue-assumptions:sales-model:wild-ass-guess-wag [2016/05/28 14:32] (current) mdavis |
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| ==== Why Model Sales? ==== | ==== Why Model Sales? ==== | ||
| - | Offtoa is a tool that produces and analyzes //pro forma // financial statements for your startup company based solely on your statement of business assumptions. One of the key assumptions will be how much revenue your company will generate by selling its product(s) to the intended market(s). The expression "Modeling Sales" means the set of assumptions that enable<php>echo $conf['comp_name'];</php>to determine how much revenue you will produce. | + | Offtoa is a tool that produces and analyzes //pro forma // financial statements for your company based solely on your statement of business assumptions. One of the key assumptions will be how much revenue your company will generate by selling its product(s) to the intended market(s). The expression "Modeling Sales" means the set of assumptions that enable<php>echo $conf['comp_name'];</php>to determine how much revenue you will produce. |
| ==== What is a Wild Ass Guess Sales Modeling Technique? ==== | ==== What is a Wild Ass Guess Sales Modeling Technique? ==== | ||
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| * Ask you to estimate how many units you will sell (or customers you will have) each month (or year). | * Ask you to estimate how many units you will sell (or customers you will have) each month (or year). | ||
| - | * Educated third parties will not believe WAGs. However, a WAG may be all you have when you create your first financial plan. I highly recommend that you replace the WAG with something more reasonable before you show your financial plan to //__anybody__// else! | + | * Educated third parties (e.g., investors, lenders, board members) will not believe WAGs. However, a WAG may be all you have when you create your first financial plan. I highly recommend that you replace the WAG with something more reasonable before you show your financial plan to //__anybody__// else! |
| Many WAG approaches exist; for example: | Many WAG approaches exist; for example: | ||
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| * Predict number of customers you will have per month (or year) | * Predict number of customers you will have per month (or year) | ||
| * Predict how much revenue you will generate per month (or year) - the WAGgiest of the WAGs. | * Predict how much revenue you will generate per month (or year) - the WAGgiest of the WAGs. | ||
| - | Note: Some of the above has been extracted from Davis, A., //Will Your New Start Up Make Money//?, Scrub Oak Press, 2014. | + | |
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