5 examples of business / financial

models in Excel
Practical Guide how to check whether your business makes sense

1
 Business modeling is about capturing the logic of the business via
main KPIs and modeling this in Excel.

Cost of traffic
x

Rent
Ratio of visitors +
to searches
Total searches % conversion
People
Average cost of 1
x visit

Development

# transactions

Total revenue Total Costs

x
Average
revenue per
transaction
-

% Fee of the Average

Total margin
marketplace transaction value

2
There are 6 offline business models and 6 online models

Retail SaaS

B2C Service E-commerce

B2B Service Media site

FMCG 2-sided market

SMCG User Generated Content

Commodity Mobile Applications

3
 Bear in mind that big companies can operate many business
models

E-commerce 2-sided market Media site

SaaS B2B Service

UGC Retail B2C Service

4
In this presentation I will show you business / financial
models of 5 type of businesses

Retail Consulting Business E-commerce

Company selling
Restaurant hand made clay
goods

5
Thanks to this presentation you will
learn how to model businesses in
Excel and how to draw the right
conclusions

6
Retail business

7
Retail sounds very simple. You have to get the right stock in
front of the right customers at the right moment

8
 Yet there are some issues that simple make it difficult in
execution

You have many Their come with Demand is very Your supply
Product Range is
segments of different erratic / chain is very
huge
customers missions seasonal complex

9
Below you will find things that you have to concentrate on
Retail

Stock / Inventory Multichannel

Margin Management
Management Strategy

Managing customer
Managing price New product
experience across
across channels development
channels

Saturation of existing Expansion to new Format evolution

markets markets (possible death)

Disruption esp. from People rotation and

external forces / knowledge Automation
business models management

10
Before we move to Excel model we have to identify and connect
main KPIs. We start by estimating the total sales of Stores. That
depend on average transaction value (ATV) and the number of
transactions

# Transactions

x
Total store revenue
Average Value
Transaction

11
 We can estimate the number of transaction using the number of
visits and conversion rate

# of Visitors % Conversion

# Transactions

x
Total store revenue
Average Value
Transaction

12
 Average Transaction Value depends on the average value of basic
purchase as well as some suggested purchases (i.e. suggested
products)

# of Visitors % Conversion

# Transactions

x
Total store revenue
Average Value
Transaction

Average Value Average Value

Transaction of basic Transaction of
purchase additional purchase 13
 If we have the % Gross margin we can use it to estimate the total
gross margin generated by stores

# of Visitors % Conversion

# Transactions

x
Total store revenue % Gross Margin
Average Value
Transaction

x
+

Average Value Average Value

Gross Margin generated
Transaction of basic Transaction of
by the store
purchase additional purchase 14
 The last piece is getting the fixed costs (esp. rent and people

Others

Rent
# of Visitors % Conversion
+

x
People

# Transactions

x
Total store revenue % Gross Margin Total store costs
Average Value
Transaction

x -
+

Average Value Average Value

Gross Margin generated
Transaction of basic Transaction of Store EBITDA
by the store
purchase additional purchase 15
 We can also show what drives rent and salaries costs

# of sq. m Others

Fee per sq. m x Rent

# of Visitors % Conversion
+

x # of People
x People

Average wages
# Transactions

x
Total store revenue % Gross Margin Total store costs
Average Value
Transaction

x -
+

Average Value Average Value

Gross Margin generated
Transaction of basic Transaction of Store EBITDA
by the store
purchase additional purchase 16
 Now it is time to transform it into a model in Excel

# of sq. m Others

Fee per sq. m x Rent

# of Visitors % Conversion +

x # of People
x People

Average wages
# Transactions

x
Total store % Gross Total store
Average Value revenue Margin costs
Transaction

x
-
+

Average Value
Average Value Gross Margin
Transaction of
Transaction of generated by the Store EBITDA
additional
basic purchase store
purchase

17
For more go and check my online course. You will find there
the model in Excel

Retail for Business Analysts and

Management Consultants
$90
$15

Click to check my course

18
As well as presentation on Slideshare

Retail for Business Analysts and

Management Consultants
A practical guide

presentation

19
Consulting business

20
Consulting is a service company. Service companies in general
are all about converting your workers time into money

Man-hours

21
There are plenty of challenges in consulting business that you
have to face

People rotation and

Utilization of people knowledge Upsell and cross-sell
management

Seasonality of Standardization of
Price Discrimination
Demand services

Optimizing Capex Capacity

Automation
and Opex management

Growing new
Productization of Minimizing and
businesses using
services Managing Fixed Costs
customer base
22
 The typical model of a service model can be presented using
this logic

# hours ▪ % Utilization # of billable ▪ Hourly fee

Revenues
available hours

▪ % Gross ▪ Wages
Margin

▪ HQ costs
▪ Bonuses Operational Gross
Net Profit
▪ Interest Profit Margin

23
For more go and check my online course. You will find there
the model in Excel

Start and Run a successful consulting

business
$190
$15

Click to check my course

24
As well as presentation on Slideshare

Start and run consulting

company
A practical guide

presentation

25
Business model of e-
commerce in Excel

26
 Before we go to Excel let’s talk about the logic we used to
build the e-commerce Excel model

# of
Visits Revenues
transactions
▪ Conversion rate ▪ ATV

▪ % Gross
Margin

Operating ▪ Fixed Costs ▪ Cost of traffic Gross

Net Margin ▪ Cost of logistics
Profit ▪ Transaction fees
Margin

27
 Now it is time to transform it into a model in Excel

▪ Conversion # of
Visits Revenues
rate transactions
▪ ATV

▪ % Gross Margin

Operating ▪ Fixed Costs ▪ Cost of traffic Gross

Net Margin ▪ Cost of logistics
Profit Margin
▪ Transaction
fees

28
For more go and check my online course. You will find there
the model in Excel

On-line Business Models in Excel –

Practical Guide
$90
$15

Click to check my course

29
As well as presentation on Slideshare

On-line Business Models

A practical guide

presentation

30
Restaurant business model

31
Restaurant is extremely difficult. You don’t only have to
attract and manage customer but also manage quite a
big production happening in the back-office

32
Let’s have a look at the main challenges in Restaurant
business

Minimizing and
Location Optimizing Capex
Managing Fixed Costs

Seasonality of
Price Discrimination Queue Management
Demand

Standardization of Capacity
Upsell and cross-sell
services management

Growing customer People rotation and

base despite knowledge Utilization of people
infrequent purchases management
33
When you want to set up a restaurant you have to not only
face the monthly recurring costs but also invest a huge amount
of money into the place

34
 Have a look what you will spend your money on long before
opening of the restaurant

Design
Furniture

Computer, cash
till, POS

Kitchen equipemt

Domestic
Appliances

Purchase of the place Uniforms for

employees
35
 There are plenty of monthly costs that have to be paid every
month

Food and
Utilities (water, drinks
electricity, gas, waste)

Services i.e. Cleaning costs

book-keeping

Stock
Rental of the place Personel
36
Remember that apart from current costs you usually froze a
lot of cash in the stock

37
 Let’s have a look at the simple model

▪ Number of meals per ▪ ATV - average

day # of
Restaurant ▪ Number of days
Revenues
transactions

▪ % Gross ▪ % Food
Margin ratio

▪ Fixed Costs
Operating ▪ Cost of marketing Gross
Net Margin ▪ Franchising Fee
Profit Margin
▪ Other Variable costs

38
In the part about the using store checks for location analysis
we were

Taking away

Engaged / stopping
In store
Passing by

Leaving

39
 Before we go to Excel let’s talk about the logic we used to
build the e-commerce Excel model

▪ Conversion rate to ▪ ATV for both

consumption at the # of subgroups
Visits restaurant Revenues
transactions
▪ Conversion rate into
takeaways
▪ % Gross ▪ % Food
Margin ratio

▪ Fixed Costs
Operating ▪ Cost of marketing Gross
Net Margin ▪ Franchising Fee
Profit Margin
▪ Other Variable costs

40
 Now it is time to transform it into a model in Excel

▪ Conversion rate to ▪ ATV for both

consumption at # of subgroups
Visits the restaurant Revenues
transactions
▪ Conversion rate
into takeaways
▪ % Gross
Margin

▪ % Food
ratio

Operating ▪ Fixed Costs ▪ Cost of marketing

Net Margin Gross Margin
Profit ▪ Franchising Fee
▪ Other Variable
costs

41
For more go and check my online course. You will find there
the model in Excel

How to open a successful restaurant?

$95
$10

Click to check my course

42
As well as presentation on Slideshare

How to open a successful

restaurant
A practical guide

presentation

43
Company selling hand made
clay goods

44
We will use real life example of company producing hand-
made products from clay
Ceramic chimneys
Ceramic dishes

Ceramic tubes Ceramic pots

45
To create a proper financial model you would have to model each
and every element below. I will show you how to model Working
Capital and Capex / Depreciation

Sales M&E CAPEX

External Depreciation – 6
services groups
Profit & Loss

Taxes &
Working Capital
Payments
Balance Sheet

Payroll Debt

Cash Flow
Taxes Equity changes

Other

46
Capex and depreciation

47
When it comes to assets the problem is that they have 3 different
components that you have to track. On top of that every asset has
to be tracked separately

Gross book value Depreciation Net book value

48
We get the net book value by deducting from gross book
value the sum of all depreciation ever done

Sum of all
Gross book value _ Depreciation = Net book value

49
Working Capital

50
We first divide the fixed assets into 6 groups

Land

Intangibles

Fixed Assets Buildings

Equipment and
Machinery

Transportation

Others

51
Working capital consists of 4 major groups of components

Cash and
Working Capital
equivalents

Inventory Receivables Liabilities

Payments in advance
Materials Trade liabilities
for deliveries

Prepayments for
WIP Trade receivables
deliveries

Receivables resulting Liabilities resulting

Finished Products
from taxes, subsidies from salaries

Liabilities resulting
Goods Other receivables
from taxes, charges

Short term accruals Accruals

52
We will draw data from other profit and loss sheets and on the basis of
the data we will calculate the working capital positions that in turn will be
fed into Balance and sheet as assets or liabilities

▪ Assets

P&L BS - Assets

M&E

Sales Working Capital

External
Services

BS - Liabilities
Other ▪ Liabilities

53
 When it comes to assets the problem is that they have 3 different
components that you have to track. On top of that every asset has to be
tracked separately

Basis i.e. sales / Position of Working

Turnover rotation in
operating costs / x ÷ 365 = capital i.e. inventory
days
materials / receivables

54
For more go and check my online course. You will find there
the model in Excel

Financial Modeling for Business

Analysts and Consultants
$90
$15

Click to check my course

55
As well as presentation on Slideshare

Financial Modeling for Business

Analysts and Management
Consultants
Step by step guide

presentation

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If you want to check how in practice to manage a consulting
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You can also find some useful tips on modeling in Excel offline
business in one of my presentations

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businesses in Excel
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Check overview of most important things you should know
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If you need more detailed version on productivity hacks you
can check our course on productivity hacks

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Check my presentation on restaurant business model to
understand it properly

How to open a successful

restaurant
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For more check also my on-line course

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Practical Guide
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