Financial modelling

Building-up financial model of the Internet-business

Financial modelling is the final stage of planning E-Commerce start-up. The scope of works carried out by Retail Online specialists on this strage are based on the results of Internet-environment analysis, on-line strategy development, organizational modelling and marketing concept of the business.

As well as production is about managing production costs, E-Commerce is about managing the cost of the customer. Indeed, major part of Internet-business success lies in the field of ability evlauate and manage the cost of attracting a client. Correct measurment and competent use of this variable provides wide opportunities for operational project management.

Retail Online approach to building up financial forecasts of E-Commeerce projects is based on clear understanding of Internet-business cost structure, and expenses needed for attracting one client. Given that Retail Online specialists’ experience in building up E-Commerce businesses allows us to accurately consider other costs and potential incomes relared to goods delivery, resource promotion and other.

Costs of attracting one customer – is not the only specific parameter which is used for drawing financial model of the Internet-business. Generally thus financial model gives the estimetes of investment payback period, business profitability level, net income and other financial parameters. Moreover, the oportunity to plan linked with each other cost side and income side separately arises what can be used as a basis for building up budgeting process for the project. Usually time horizont for planning E-Commerce business doesn’t exceed 3 years, but the forecasting period is always discussed with the client.

After building up financial forecast for E-Commerce business the client can see not only strategic perspective of developing on-line business and expected net profitability level but also  overall investment into the project. This is the moment of making strategic decision on Internet business entry.