What is a business model?
At a high-level, a model is a key tool that allows you to understand what future outcomes to expect given a set of key assumptions. Our business modelling and analytics services take budgeting and forecasting to a whole new level by providing the flexibility you need to see multiple forecast outcomes under many scenarios. This allows you to plan accordingly and optimize the best way to move your business forward.
A functional model contains a flexible set of assumptions as well as all the strategies and options being considered. If the model is a financial model, the outputs, namely, the balance sheet, income statement and cash flow statement should all be integrated. Ideally financial models will include a forecast output of any borrowing base or financial covenants. When a model is used to assess performance relative to the output, the model should also be built to automate this variance analysis.
A different kind of model
To plan for the future, you need to consider every possible business scenario. While this is unquestionably a complex undertaking, it doesn’t have to be incomprehensible. Business models are only effective if people understand them. That’s why we’re committed to providing our clients with tools that analyze forecast outcomes and provide direction for evidence-based decisions.
Our models are built by business people—not model jockeys. As a result, every model is custom designed with our clients’ needs in mind, in a format that makes sense.
Built in a user-friendly Excel format, our models are created to align with the outputs from a company’s software systems so they feel like a customized solution. With a simple click of a button, businesses can test out customized scenarios in one streamlined assumption page —and view their data. Convenient drop-down boxes make it easy to input different variables and compare them to the baseline when necessary.
All of these features result in a business model that’s very clearly business-driven, rather than formula-driven. Its purpose is to help companies easily uncover the answers they need—so they spend less time clicking through endless tabs, and more time making informed business decisions.
Model review and enhancement
Strategic partners, key decision makers, investors, or lenders often receive business models created by others which are relied on to make key decisions. While we hope these models are mechanically sound, oftentimes they can be prone to errors. Having a fresh set of eyes to review a model both formulaically as well as understanding the underlying business assumptions provides additional clarity before making that key decision based on the model’s outputs. Our team can undertake an independent review and identify weaknesses or areas of concern.
Business models are often created to forecast an outcome given a set of key assumptions. What if those assumptions change? Are there multiple mutually exclusive opportunities being considered? We can take an inflexible model and enhance it to provide the functionality you need to see multiple scenarios all within one model without creating multiple versions.