Development History of our Projection Software
This is a Time-Tested Tool!The original product was developed in the late 80s using a spreadsheet program called Lotus123. It was converted to Excel in the early 90s. The template was revamped in 1994 by a team of 3 professionals: A CPA, a Ph.D in math, and a semi-retired software developer. The accountant developed the tool with input from the other two.
The First Prototype:We theorized that each component of (income, expense, and cash flow) could be expressed as a predictive algorithm. If the formulas are sound, then financial activity would become predictable and scalable with reasonable accuracy.
Our goal was to create a forecasting tool that was interactive, predictive and professional looking:
Interactive so we could make changes quickly without re-doing formulas or reconfiguring the spreadsheet.
Predictive so it would be useful as a budgeting tool and an accurate predictor of cash flows and financial activity.
Professional looking so we could proudly present it to investors and bankers.
Our efforts were very successful! The tool was originally used by a multi-million dollar software company. Their internally generated projections were used to expand their line of credit by over 1,000%, to value the business for a possible IPO, and to streamline the internal budgeting process.
Our First Major Project:About four years later, we were hired to prepare projections for a Business Valuation. We had been using it for budgets, projections and management reports up to that time with a great deal of success. The company was extremely happy with the results and the valuation was much higher than they expected!
Since then, the software has been used for several IPOs, more than a dozen private placements, and dozens of bank financing proposals. Our firm had a track record of 100% success with these projections! IE: If we liked your business model, prepared the business plan for you, and took your plan to the bank; we were never turned down! This was true till November, 2008 when we were turned down by a bank for the first time in our 20 year history.
However; things still worked out well for the client. They took the business plan to their suppliers, who like it so much they gave them 6-month terms: That's creative thinking in a tough business environment!
Making the Projection Available to Everyone:Since that first experiment with Predictive Algorithms in the early 90s; my team has added 20 years of development and innovation. the original projection was a good product, but our current product barely resembles that first effort. We now have a product that rivals all others, no matter what the price!
We tripled our development efforts in the spring of 2008. Our goal was to create a financial analysis tool that was user-friendly enough to be used by anyone. We began selling downloadable versions of the product in September, 2009.
The Next Phase of Development:Our projection software was taken off the market in November, 2009 after it became a target of wide-spread theft and reverse-engineering. We began raising capital to develop the product as an online service. A Saas (aka Cloud-based) software delivery architecture would improve security and make the projections even more affordable.
We used a design-build development process to upgrade our software and develop our delivery architecture. That methodology helped us create a number of important features and innovations. Our newest generation of Projection/financial analysis software is extremely affordable, useful, and user-friendly!
- Simply enter numbers (or percentages) in the pre-determined algorithms. Some expenses have multiple
There are 15 financial ratios and indicators, a comparison to industry averages by NAISC code, and comparative
scoring based on a 5 point scale. Our industry database is populated by ValuSource.com.
ValuSource is one of the best financial analysis databases in the business! We're very fortunate to have them on board. Accounts are user defined! You can use the default accounts provided, you can upload accounts from your accounting program, or you can enter any number of accounts. Use as few as 50 or as many as 50,000! You can easily update (or upload) monthly actual activity. Also: Actual activity doesn't populate the projection till the Financial Statements are in balance (Patent pending).
IE: Your projection doesn't become useless while you're updating monthly numbers! You can enter up to 3 years of historical financial data. Historical financial data is not required, of course; but if you're not a new start-up, you should consider uploading it. The more data you enter, the more sophisticated the projection becomes. You can even enter your depreciation schedule totals to make the projected balance sheet even more accurate! Projected financials are based on a number of variables including headcount, hourly rates, expected sales, etc. Monthly Sales can be expressed as a multiple of production staff (or sales staff) and your expected business cycle. It's very interactive! If you add employees, you automatically buy a desk, a chair, hardware, and software; office expenses become incrementally more expensive; The depreciation schedule is updated; the cost of the Christmas party and the Summer picnic goes up.... you get the idea. This might be the most interactive projection tool available anywhere! Final reports are presented very professionally, but we also provide them in spreadsheet format; which allows you to alter the format in any way you like.
We are eager to get the new software in your hands, but you'll have to be patient.
Feel free to e-mail us if you are interested in our progress, or check our Announcements page for status updates.
I wish you all success as you endeavor to create or expand your business. Go make it happen!