{"id":18191,"date":"2013-05-28T00:05:12","date_gmt":"2013-05-28T05:05:12","guid":{"rendered":"http:\/\/crowdspring.wpengine.com\/?p=18191"},"modified":"2024-12-04T12:31:27","modified_gmt":"2024-12-04T18:31:27","slug":"spreadsheet-model","status":"publish","type":"post","link":"https:\/\/www.crowdspring.com\/blog\/spreadsheet-model\/","title":{"rendered":"Lean Business: The Very Model of a Modern Spreadsheet"},"content":{"rendered":"

“Model” is a verb. It traditionally means to fashion or shapes a three-dimensional out of a material such as clay or wax. In business, the verb usually refers to tools created to make projections of sales or profits. Still, it can also predict anything from website traffic to manpower requirements to employee healthcare costs. Since the days of the abacus and slide rule, the tool most often used for this purpose is the (not so) humble spreadsheet.<\/p>\n

For many, “spreadsheet modeling” can be daunting and sometimes cause otherwise intrepid entrepreneurs to run screaming in terror. The term brings to mind hugely complex programming tasks, massive computer files, and nerdy MBA students huddled in dark rooms staring at a computer monitor. In reality, spreadsheet modeling can be as simple as creating a sales sheet for your product line or as elaborate as a dynamic pricing tool with thousands of lines of complex code. If you use a spreadsheet program such as Microsoft Excel, chances are that you are already involved in modeling; you just might be calling it something else.<\/p>\n

Like large enterprises, small businesses need tools to help them create sales and revenue projections, analyze customer data, maintain product lists, and graphically visualize this critical information. Every day small business managers use spreadsheets in ways simple and intricate to help run their business, and they do it with applications designed specifically for their unique circumstances. These spreadsheets represent a cost-effective and easy-to-use and learn alternative to the powerful and sophisticated enterprise software many larger companies use.<\/p>\n

Below I discuss four commonly used spreadsheet models (and links to downloadable templates where available) that many small businesses employ daily. Of course, an infinite number of spreadsheet models can be created, each specific to a business or a problem the user is attempting to solve, but master these four. You will be on your way to mastering modeling.<\/p>\n

1. Project your sales. <\/strong>Many small businesses need a reliable, accurate tool to forecast sales and demand for their product or service. Restaurants use this data when ordering ingredients for their dishes and scheduling staff. Manufacturers use sales projections for inventory and supply-chain management. And at crowdspring, we use sales projections for tasks as diverse as planning customer service schedules to inform our decisions on capital expenditures and marketing budgets. For most businesses, a simple starting point is to divide your offerings into categories or groups, input last year’s (or last quarter’s) sales for each category, and then apply assumptions such as your best guess at a percentage increase for each category. For instance, if your “Widget #1” had total sales of $10,000 last year, and you believe sales will increase by 5% this year, you can input that assumption, set up a quick multiplication formula, and arrive at your projected sales of $10,500! Easy, right? Microsoft provides a nice template to get you started here<\/a>.<\/p>\n

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