As your company grows, you will quickly discover the importance of an effective financial model. Without it, you will be flying blind in a rapidly changing business environment. You need a way to predict your cash flows, to make timely decisions on resources, incentive programs, and communications to the field. It is in the nature of a Direct Sales company that growth can be sudden and rapid, though when and to what extent cannot be predicted. Your model must take this into account.
At the same time, ours is a cyclical industry. Some of the cycles are easy to grasp, such as the impact of holidays or slow summer months when the kids are out of school. Others are subtler and unique to a volunteer distributor force. There are points where energy is likely to be high, with corresponding surges in sales and recruitment. There other points where energy is likely to drop, requiring swift action to energize the field.
Needless to say, inventory prediction is critical. A failure of product supply can kill the business, because you risk not only disappointing customers but also de-motivating distributors. Again, a robust financial model can help you ensure the most accurate as possible inventory needs.
The Sheffield Group has developed what we believe is the most sophisticated Pro Forma Financial Model in the Direct Sales industry. Our financial plan for you will “digest” the information developed during initial discussions, and together we will utilize this information to create a startup budget for your company. If you have selected our Pro forma module, we will be drilling down on key financial metrics that will allow us to begin laying the foundation for the Pro forma model. With various members of The Sheffield Group consulting team working together, we will conceptualize your master plan for a successful venture.