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Detailed overviews are provided at the Business model analysis - quantitative page of Wingarra BMI's customised 5-year financial projection (5YFP) models. That page also links to several actual examples of the use of those models in assessing alternative proposed business models, including many screenshots of various features of the models.

By their nature, 5YFP models are also ideal for budgeting purposes using a zero-based budgeting approach (link here for definition). This is especially the case for SMEs without rigid departmental structures and entrenched corporate hierarchies and practices. By providing for the modelling of all variables likely to impact upon financial performance across the selected time horizon, these models allow business owners and managers to go back to basics in attempting to project future performance. It also allows them to adopt a rolling budgetary approach - i.e. updating the budget rapidly as circumstances change.

Instead of the typical incremental approach (previous year plus 10%), Wingarra BMI's budgeting models allow them to model revenue, direct costs and overheads at the technical or functional level. Instead of estimating salaries by reference to a dollar amount, for example, they will be estimated by reference to the following variables:

• Existing staff numbers
• Additional staff requirements across the, say, five year horizon
• The months in which each additional staff member will be engaged
• Base salaries for existing and additional staff
• On-costs for each category
• Uplift factors - i.e. anticipated increases in real salaries
• Termination months if any organisational restructuring is anticipated.

This approach can repeated for virtually all significant revenue, cost and overhead items. Together with monthly P&L, Balance Sheet and Cashflow projections, this allows for the application of much tighter budgeting standards. In particular, it allows for much more precise cashflow mapping and should provide early warnings of potential cash shortfalls. As noted above, the models can also be updated on a rolling basis.

Set out below are example screenshots showing just a few aspects of Wingarra BMI budgeting models. As noted above, there are also many example screenshots at pages linked from the Business model analysis - quantitative page.

 

Click on icon or label - larger screenshot will open in new page.

Note: models run on dummy data for screenshots.

Sales - units	Sales - revenue
Cost of Goods Sold (COGS)	Gross Margin
P&L summary	Cashflow adjustments
Cashflow summary	Balance Sheet
Ratio analysis	Yearly summary (maximum cash requirement in cell highlighted in red)

 

Like us to prepare a proposal for a budget modelling assignment for your company or project? Please go to our Request for proposal page for details.