Professional Documents
Culture Documents
When
When analysing
analysing ifif you
you should
should develop
develop aa new
new idea
idea or
or not,
not, then
then there
there is
is no
no point
point going
going any
any further
further ifif 1.
1. Enter
Enter Capital
Capital costs.
costs.
you
you cannot
cannot make
make any any money.
money.
2.
2. Enter
Enter Monthly
Monthly costs.
costs.
Many
Many businesses
businesses make
make the the mistake
mistake of
of coming
coming upup with
with aa really
really good
good idea
idea to
to add
add to
to their
their business,
business,
only
only to
to never
never work
work out
out ifif they
they can
can make
make aa profit.
profit. 3.
3. Go
Go to
to Revenue
Revenue calculator.
calculator.
Often
Often the
the new
new idea
idea drains
drains your
your cash,
cash, time,
time, employee
employee time
time and
and other
other resources.
resources. Remember
Remember that
that 4.
4. View
View the
the Summary.
Summary.
locking
locking in
in core
core business
business should
should always
always be
be aa priority.
priority.
Use
Use the
the sheet
sheet tabs
tabs at
at the
the
There
There are
are two
two key
key financial
financial areas
areas that
that you
you need
need to
to address.
address. These
These are:
are: bottom
bottom of
of the
the screen
screen toto
navigate
navigate to
to these
these sections.
sections.
1.
1. The
The potential
potential revenue
revenue
How
How much
much you
you can
can possibly
possibly make
make depending
depending on
on your
your capacity
capacity and
and pricing.
pricing.
2.
2. The
The costs
costs
The
The cost
cost of
of purchasing
purchasing the
the required
required equipment,
equipment, obtaining
obtaining licenses,
licenses, stock,
stock, training,
training, research
research etc.
etc.
What
What you
you need
need to
to spend
spend to
to produce
produce or
or deliver
deliver the
the new
new idea
idea into
into the
the market.
market.
Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or
professional advice. Seek professional advice before making any decision that could affect your business.
Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or professional
advice. Seek professional advice before making any decision that could affect your business.
These items have a limited life and will need to be replaced eventually. We have calculated the monthly cost of these items from your entry
in the previous Capital costs form. If you wish to ignore this factor indicate below:
Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or
professional advice. Seek professional advice before making any decision that could affect your business.
1. Enter
Enter your
your estimates
estimates for
for your
your
Revenue Example Your data new idea of the number of
customers and average sales you
Maximum number of possible customers (day) 80 5000 could expect into the boxes.
Number of days open (per year) 300 20 2. Try
Try experimenting
experimenting with
with the
the
figures to see what impact they
Total potential customers / year 24000 100000 have on your final net revenue
amount.
Percentage of customers who make a purchase 40% 80%
Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or
professional advice. Seek professional advice before making any decision that could affect your business.
Summary
Concept To
To conclude
conclude
The
The value
value or
or number
number of of sales
sales will
will
be
be affected
affected by
by the
the direct
direct cost
cost of
of
each
each sale
sale and
and the
the margin
margin you
you are
are
Description able
able to
to apply
apply to
to each
each sale.
sale.
AA mistake
mistake businesses
businesses oftenoften make
make isis
{Enter a description for your concept here} not
not including
including enough
enough profit
profit to
to cover
cover
the
the opportunity
opportunity costcost of
of being
being inin
business
business -- oror in
in other
other words
words making
making
sure
sure you
you get
get compensated
compensated for for not
not
Capital costs. To set up you need: $ - only
only your
your time
time in in your
your business,
business, butbut
also
also for
for the
the investment
investment you you have
have
made,
made, andand for
for the
the risk
risk you
you are
are
Monthly costs. Your idea will incur Monthly costs of: $ - undertaking
undertaking (as (as opposed
opposed to to having
having
aa relatively secure
relatively secure job).job).
Potential revenue. Additional revenue (after deducting annual
$ 8,000,000
expenses) for this idea is:
Please note that this is a guide only and should neither replace competent advice, nor be taken, or relied upon, as financial or
professional advice. Seek professional advice before making any decision that could affect your business.
In association
In association with
with TheThe Small
Small Business
Business Company
Company Limited.
Limited. www.tsbc.com
www.tsbc.com