A full E-Commerce Financial model in Excel to back-up your business plan.
SETTING UP PURPOSES AND FORMING A PLAN
The main questions E-Commerce business financial model can answer are as follows:
- to forecast working capital needed;
- to forecast cash flow;
- to forecast inventory demand;
- to understand, whether the business idea is profitable;
- to calculate overall costs of E-Commerce business launch;
- to estimate costs of debt and time needed to loan payback;
- to estimate the best prices for E-Commerce products;
- to craft an effective strategy for business development.
The model consists of:
- 3-year comprehensive financial projection
- 3 statements: Income Statement, Cash Flow Statement (direct & indirect method), and Balance Sheet Statement
- Dashboard with core assumptions, financials, and outputs
- Revenue calculations based on occupancy and price drivers;
- Inventory supply calculations
- Account Receivables and Account Payables calculations
- Debt repayment and capital inputs
- Expenses and Wages assumptions
- TOP Expense/Revenue reports
The E-Commerce business financial model rendered the answers to the underlying questions for the business possible:
- How much should I invest before starting an E-Commerce business?
- How to forecast cash flow for E-Commerce business?
- How to do the Break-Even Analysis before starting E-Commerce Business?
- How to make E-Commerce Business Profitable?
- What is a Good Profit Margin of E-Commerce Business?
BENEFITS OF USING ECMO FINANCIAL PROJECTION
First and foremost, we did not hard-code any assumptions.
It is very helpful both for the client and financial modeler, as all the variables could be edited directly from the dashboard or from the revenue/expense/wages sections.
Thanks to that, we could test different alternatives and make any edits literally on the fly.
Besides it, the action period of budget modeling was editable.
Last but not least, the E-Commerce financial model considered the interest and the repayment period of the debt.
In result, the user received maximally accurate financial statements summary.
Thus, our E-Commerce financial metrics was flexible and editable, which provided the client with great user experience and confidence in the profitability of his business idea.