Slide 10: Financial projections (part 2)

(continued from part 1) The second thing your audience wants to know from this slide is:

2. Are your numbers realistic? Next to your big picture view, you’ll want to highlight some key assumptions and metrics. These will vary depending on your business. In each case, they’ll let your audience know what drives your numbers, and assess whether you are being realistic. Wherever possible, you’ll want to provide reality checks. For example:

Assumption / Metric Reality check.
It will take six months to develop our website using an outsourced vendor, at a cost of $200,000. We have bids from three vendors who have built similar websites before, and they are all safely within that range. We verified these numbers with their client references.
On average, it will take us 60 days to close a sale.  According to our advisors, our two competitors had sales cycles of about 60 days at our stage of development.
The average customer will renew their subscriptions for 180 days. This is an industry standard, as reported by ABC Industry Association.
Our margins will increase over time, because our revenue will grow faster than our expenses. At the end of Year 5, we’ll have margins of 40%. These margins are in-line with the numbers in our competitor’s annual report for their 5th year of operations.
We will reach sales of $10 million by the end of year three, which will give us about a 2% market share. Our closest competitor hit sales of $10 million after 3 years of operations.
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One Response to Slide 10: Financial projections (part 2)

  1. […] 10: Financial projections (Part 3) … continued from part 2.  The third thing your audience wants to know from this slide […]

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