A quality Financial Model will allow your company to easily compare the broad effects of changes in any variables that affect your company or project using standard financial spreadsheet software (e.g. Microsoft Excel). For example, if you’d like to know how changing your product’s pricing would affect profitability, a financial model will answer that question. If you are trying to decide whether to hire more people or invest in automation or machinery in order to expand your production and sales, a great financial model will let you easily compare the financial ramifications of both options.
Also, when you want to approach either a bank or investors for money to establish or expand your company, they will typically require that you provide them with a corporate financial model covering three to five years of monthly forecasting of product or service sales, cost of goods sold, operating costs, fixed asset investments, payroll, loans, investor cash and so forth.
A well-designed financial model will provide any user with an inter-connected calculation of revenues, expenses, profits and cash flows, so that changing any variable(s) can be done at any time and its effects are apparent in real time. As many variables as possible are permanently changeable in a useful financial model, so the user can change one or more of them and immediately see how the change affects all other financial elements of the company’s forecasted operations.
Standard Pricing: Hourly ($40 – $60); Fixed ($500 – $2,000)
Typical Time Required: 10 –30 Hours
(Note: For a start-up company, add 30% to above pricing.)
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