Making your first projections? This will help.

A couple of my friends asked about how to make the “excel sheet” aka projections for their startups. Here is what I did for mine. This will provide you a very basic idea of how to proceed and figure stuff out.

I took a question and answer approach to build projections. Whatever we did practically is in this document & excel.

What does your startup do?

A brief about my product KaroSell- is a market for your pre-owned fashion & accessories. You can buy and sell stuff like watches, perfumes, books, jewellery and more.

This question will help you to get your most important metrics. These metrics will be the building blocks for your excel sheet.

For us the most important metrics are- 1. Users 2. Products 3. Transactions

You get revenue when transactions happen.

Now the whole story will revolve around the number of users KaroSell can get in say 3 months.

I expect say 200 clicks on our website in month 1. And say 10% of them actually sign up. So we have 20 users every month. Your first metric.

Now out of these 20 users 25% will upload atleast one product. That implies KaroSell will have 5 products in month 1. Your second metric.

Now out of these 20 users & 5 products, let’s say there will be 20% transactions i.e. out of 5 one product is purchased. Say the average value of transaction is Rs. 500 and you charge 10% commission then in month 1 you make Rs.50.

This is your revenue from this source. Similarly there can be other revenue streams for your product. Please add them.

Now say if you grow by 20 % every month. So you will have in Month 2

Clicks on website- 240

Sign Ups- 24

Products- 6

Transactions- ~2

Revenue- Rs. 100 (assuming average value of Rs.500 for transaction)

You can build this up.

Now your costs

These are fixed expenses-

  1. Infrastructure- Office rent, bills, support staff
  2. Hardware cost- laptops, software licenses
  3. Technology Team- Salaries
  4. Operational Team- Salaries
  5. Any other team you have

Marketing Expense

  1. Any field sales people you have
  2. Customer support
  3. Social media marketing spends
  4. Any other marketing spends- think of events you sponsor, any interns you have etc.
  5. Miscellaneous- everything else. Every dinner, lunch, coffee :)

Now once you have your marketing spends you can figure out the customer acquisition cost and see what channel works for you.

Finally we all know Profits= Revenue-costs.

This is purely based on my experience and working logically. Please feel free to add your comments. This I believe is a work in progress.

Link to excel: https://docs.google.com/a/upside9.com/spreadsheets/d/1rK3Bxbhl5hNNXW-clSC338jWSLMvEOxDdIJHEQssnR4/edit?usp=sharing

Please Note: All figures & numbers are imaginary. You will need to add your numbers. All fields are related to a marketplace product. They will differ for other industries/products.