MATH 101: Financial Modeling Part 5 - Modeling Financial Growth

We have been talking a lot about financial modeling, and there seems to be some confusion around how to model the financial growth of your company. Instead of assuming, your company will just grow 10% each month, think about the drives that will cause it to grow and what it will take to get 10% each month. Will you hire more salespeople? Spend more on marketing? Attend more conferences? Run more seminars? Each business has different levers it can pull to acquire more customers. Use your model each month to test your assumptions on these levers. You will then quickly figure out what works and what doesn’t. Once you understand what levers to pull, you can generate the results you want, have control over your business, and make your business predictable. Doesn’t that sound better than praying that you will grow 10%…?