Docs on the Visual Business Planner

• Clarify your product and business ideas before you start.

• Interactively play around with your ideas to consider them from all angles.

• Find guidance to get through the difficulties of creating a business plan.

• Plan in detail and realistically — reflect even advanced business models.

• Have certainty that your plan contains the necessary parameters.

• Remove spreadsheet complexity when making business plans.

• Use expert knowledge built into the app instead of re-inventing the wheel.

• Visual Business Planner is free, online and requires no login.

• Confidentiality is built-in. This means your business data are staying on your local device and never go to a central server.

• Take screenshots for your pitchdecks. Demonstrate, evaluate and discuss interactively or in front of interested parties.

• Select English (EN) or German (DE) for the Business Plan.

• Check out the red explanations that will come up. More explanations appear if you click on or hover over the corresponding headings or yellow buttons. Read the docs below for all the details and definitions.

The Visual Business Planner fulfills one purpose: it shall help people, entrepreneurs, founders, to-be-founders, project managers and other interested people in the context of enterprises, projects, businesses or startups to make a business plan. The business plan can be achieved with a few parameter inputs. It will help to plan not only the financial data, but also customer data and marketing costs. The Visual Business Planner may help to turn an initial product idea into a feasible product innovation.

The Visual Business Planner can also help you to explore various ideas about the business model of your startup. It can, furthermore, be used as part of a pitch to a venture capitalist or other capital provider, since you can demonstrate the development of your business interactively and simulated different cases.

After years of developing and testing in the alpha and beta-phase, the Visual Business Planner is now in the rc — release candidate state. The term rc means, that there will not be frequent changes to the Visual Business Planner. The Visual Business Planner has been properly tested and re-tested. There is a high level of confidence that the calculations are correct given the simplifying assumptions that the Visual Business Planner is making. But there may still be bugs. So double-check the numbers.

For the time being you can use the Visual Business Planner for free. It has a CC BY-ND 4.0 License.

This means, that if you take screenshots or if you make use of the Visual Business Planner in any other form you need to give credits and add the copyright field.

You cannot hold the provider of this business planner liable in case any of the calculations are wrong, mismatching or based on false assumption. Be aware, that any planning is always a simplification of reality and any planning tool needs to make assumptions in order to reduce complexity. You are using the Visual Business Planner at your own discretion and risk and you need to perform your own quality assurance on whatever planning you are performing. If you are in doubt about its correctness, don’t use the Visual Business Planner. The Visual Business Planner also offers the function to Download the parameter values and essential time series. Please use this function to further apply your quality testings.

• The typical product design of many other business plan products is input to output: you have a form, where you put in some parameters, and then on another window you get your result. The Visual Business Planner is designed in a slightly different manner. The input of the parameters is directly into the output window. So, there is no separate input form. This design choice has several advantages: you only work in one window, you see the immediate response from your parameter changes, and you can take a screenshot at any time and will always have all the parameters you used in the picture. The disadvantage is, of course, that we are a little confined in space and therefore need to use some abbreviations.

• If you hover with the mouse over the parameter names, you will get explanations. If you hover over the graphics you can read of individual data points.

The Visual Business Planner is responsive. This means it will change its appearance dependent on the size and direction of your display.

Due to the limited size of the display, some functionalities cannot be offered on a smartphone. You need to have at least a tablet to get access to most functions.

The Visual Business Planner is best used and viewed on a wide screen with a resolution of at least 1600 pixels. At this resolution the Visual Business Planner shows two columns in the ADVANCED mode which is best to get maximum overview. Most screens have this resolution. On smaller screens you can achieve this if you zoom out to a percentage that is lower than 100%.

To improve the interaction with the Visual Business Planner it is recommended to use the Full Screen mode. Normally, you can enter into it with Fn 11.

• Ω is the symbol used here to denote 1 person. The reason why Ω was chosen is, that there is no universally agreed symbol for people. I chose Ω, because the Ω resembles a head with shoulders.

• Π is the symbol to denote 1 product, piece or purchase. Π (Pi) is the greek letter for the uppercase P.

• For currencies, the default symbol is €. However, you can chose your currency under Settings.

• Most symbols are clickable. If you click on the symbol it enters the next dimension, e.g. from Ω → TΩ → MΩ → Ω or € → T€ → M€ → €. You can tell that a switch is available, when you see an overline and the mouse pointer is turning into an index finger on hover. In some cases not all dimensions (-, T, M) are available. The reason for this is that I did not see a use case. Please let me know otherwise.

• T = Thousand, M = Million, B = Billion.

• Also, note, that the dimensions of the y-axes of charts change. The dimension of Billion is not offered on symbols but may appear on a y-axis as needed.

• In the ADVANCED mode there are three triangles: ▶︎, ◀︎, and ▼︎. The left and right facing triangle open a so-called drawer that helps you to display the value of one particular time series that you can pick. Clicking on the down-pointing triangle ▼︎ will open a section with Valuation, Ratios & Analysis and the Balance Sheet.

• Input fields are underlined. When you click on one of them it widens in order to facilitate the input of a new parameter. After the input you can hit Enter or press the OK button at the end of the line.

• To model a development or change of a parameter from the first month to the last months of your chosen time horizon, a number of parameters offer two input fields. For instance, you could assume that your new customers grow from 100 to 1000 of the time horizon. If the parameters for the first and last months have the same value, it is sufficient to only enter the first month and the last months changes automatically to the value of the first month.

• If you click on the sign between two input fields (which is initially a ’–’) you can toggle between a linear and an exponential development from the first to the last parameter value. However, you will only see a curve if the parameters for the first and last month differ significantly.

• Most numbers must be input as integer values, that means without decimals.

• Some fields that require a more fine grained planning are an exception to this rule: product prices, product (unit) costs, other income per paying or non-paying customer, costs per customer, marketing costs per lead, marketing costs per conversion, and customers lost.

• Decimal numbers can have maximum 1 decimal. Decimals need a point and not a comma.

• Many numbers have a maximum of 9999. If you want to go beyond this number change the dimension by clicking on the unit symbol and continue from there. You see that the unit symbol is clickable, if there is an overline on top of it. Most unit symbols are clickable.

• Number fields in the cash chart allow for a different input format, as here inputs relate to certain time points. Different time points can be space-separated or comma-separated.

• Subsequent inputs with corresponding information to the time points can than also be input in a space- or comma-separated format. If a subsequent field has less space- or comma-separated numbers than the corresponding time point field the in each case last number is used to replace all the missing ones.

• There are two types of modes: the BASIC and the ADVANCED mode. For a more sophisticated planning you will probably need the ADVANCED mode. However, as the ADVANCED mode offers more options, it comes with additional complexity.

• So, to have an easy start or in order for you to try out some first ideas without all the details the Visual Business Planner offers a BASIC mode.

• The BASIC mode also provides extra input boxes as alternative input forms. This is meant to help you to familiarize yourself with the behavior of the business plan on parameter changes. These alternative input boxes are not available in the ADVANCED mode.

ANALYSIS of RATIOS and planning of CASH FLOWS:

• Break Even, Equity Burn Rate, Growth, ROE, Profit Margin.

• Equity Value, Free Cash Flows, Balance Sheet development.

• Cash development, equity increases and dividend payments.

• Debt increases or leasing contracts.

• Investments into operating assets (e.g. PPEs or software).

• Assumptions about accounts receivables and payables.

More options on PRICING for planning REVENUE:

• A premium product with its own price and costs as an alternative to the standard product.

• A subscription contract with a definable duration as alternative to a purchases.

• Business models that are based on existing customers, e.g. freemium models.

• Other income from customer base, e.g. from ads.

• A trade margin for distributing your products through third party channels.

• Your business model may require more than one product line. This is for instance necessary for platform business models that distinguish between a buy and a sell side. Other business models may generate their income from a secondary income stream: e.g. the primary product is for free but the data generated from the first product will be used in a secondary mode. Again other business models may offer the some product but for different customer segments such as B2C or B2B. Of course, there are many more possibilities.

• For all these cases and more the Visual Business Planner offers up to three product lines. The results of all individual product lines are automatically added up in the summary chart.

• You can enter the MORE PRODUCT LINES mode by clicking on the ’#’ next to the Business Plan in the title page.

• You will then get a new line in which you can enter the name of your product line. Also you get Plus and Minus buttons for creating or deleting additional product lines.

• But working with more than one product line comes with additional complexity, so this is why it is a little bit hidden. The MORE PRODUCT LINES mode works in both the BASIC and ADVANCED mode. It is recommended to use the MORE PRODUCT LINES mode only after you feel comfortable to use the SINGLE PRODUCT LINE mode.

• One of the additional requirement from working with MORE PRODUCT LINES is that you have to set cost ALLOCATIONS.

• Typically the fixed costs of a company and the costs resulting from Assets & Capital (e.g. depreciations, amortizations or interests) are overall costs to the company. They, therefore, need to be allocated to the individual product lines for the consideration of the profitability of this product line.

The objective of every business plan is to understand:

• The Profit After Tax over time.

• The Break Even Point or other performance ratios.

• The Customer Base development.

In order to see where the Profit After Tax or the Break Even Point result from, a business plan typically also shows the:

• Revenue.

• Variable Costs.

• Marketing Costs.

• Fixed Costs.

• Costs resulting from Assets & Capital.

The Time Horizon of a typical business plan is 5 years or 60 months. As an absolute minimum you can plan for 2 years. In general, business plans are not longer than 10 years.

Normally, a financial year starts in January. However, there are many companies which have a different financial year, e.g. from April to March. This is why the Visual Business Planner uses month numbers rather than month names.

Independent of when the financial year starts, your first operational months may not be the month 1. For this case you can choose the First Month in your first financial year.

Product:

• Product: The product is what you offer and what you ask the price for.

• Price: The price is what the paying customer pays per transaction for the product.

• Premium Product: You can have a standard product and a premium product and you can ask different prices for each.

Purchase or Contract:

• The combining link between a customer and a product is a Purchase or Contract.

• Purchase: In a purchase the customer gets the product and pays the money. This is a single transaction.

• Contract: A contract is the basis for several transactions that take place within this contract. It is important to understand the concept of a contract. A contract can be one transaction per month or it can be a subscription that has a longer duration. In each month of the contract duration there will be one transaction.

• As long as the contract runs, the customer is a paying customer. Once the contract ends the customer is not longer a paying customer unless the customer returns for another purchase or contract.

• HINT: Click on ‘Purchase’ or ‘Contract+Duration’ to choose between them.

Market Size: This field is only for informatory purposes and to compare it to the Customer Base for instance. It is always good to know the size of the market and any investor will ask for this. A change in the market segment does not change any computation.

Customers: The key to making a financial and marketing plan is to put the customer into the centre. There are two primary customer segments: new customers and existing customers. In your business model you need to decide if the focus is on selling to new customers, to existing customers or to both groups because your marketing efforts and customer interaction will differ. The Visual Business Planner helps you with planning the customer development in detail by using the following customer segments:

• Customer Leads: Potential customers who come across your business, either online or physical and who show interest in your product one way or another.

• Customers New: Customers that your company “knows” now, because maybe they have signed in into your shop, database, app or platform. However, they are not paying customers yet. Hint: In case the new customers are not known by the company and convert straight from customer leads to paying customers, leave the percentages of Customers New at 100%.

• Customers Paying: Customers who are paying for your product.

• Customers Rest Base: The customers that are not paying wander down into your company ’⇓ Rest Base’. You can later try to convert ‘Rest Base’ customers into ‘Paying’ customers. If your company does not keep the non-paying new customers in a database, you can click in the ’⇓‘-symbol and prevent that a ‘Rest Base’ is built.

• Customers Pausing: Customers who have already paid for your product and will buy it again, but only after a certain period. In this interim period the customer is considered a pausing customer. The reason for the pause is, that sometimes another purchase of the same product is not immediately needed.

• Pausing Months (≠): The period that a previously paying customer is pausing before returning. Revenue is stronger if the pausing months are as short as possible.

• Returning Customers: Customers who return from the group of paying customers and purchase again.

• Lost Customers: Some customers loose interest in your product and sign off of from your shop or platform. This is independent of whether or not they were paying for your product previously. These customers are customers lost and they reduce your customer base. The number of customers you loose in a month is applied to the Customer Rest Base from the previous month since they are non-purchasing at the moment.

• Premium Customers: If you offer a premium product, some of your paying customers may choose to switch from the standard to the premium product. Customers with the premium product are still part of the Customer Base Paying.

Conversions: In order to maximize the sales of your product you need to manage the flow of customers. The buzz word is conversion. Here are all the conversions offered in the Visual Business Planner:

• Leads → New: Potential customers that are converted into new (but not yet paying) customers. All new customers are added to the Customer Base. HINT: If you do not have non-paying customers, you can set this conversion rate to 100% and with this jump over it.

• New → Paying: Customers that are converted from new to paying customers. Customers that are paying will count as paying customers. Customers that are non-paying will be added to the Customer Base Rest.

• Rest Base → Paying: Customers that are converted from the rest base to paying customers. In this case customers are moved from the Customer Base Rest to the Customer Base Paying.

• Returning: Customers from the paying customer base that are returning and purchase again. HINT: The behavior is recursive, e.g. if the parameter is 10%, then from 100 paying customers return 10 and from these 10 customers 1 returns.

• Loyal: Customers from the Customer Base Paying that are returning. Once they have returned they will continue returning and purchasing forever.

• Rest Base → Lost: customers that are lost. Customers are lost from the Customer Rest Base. Building up a large customer base is important if one not only wants to sell to new customers. Therefore, it is recommendable to try to lose as few as possible customers. But it is unrealistic to plan that no customers will be lost.

• Active ↗︎ Premium: a customer who is convinced of your product may switch from buying the standard product to buying the premium product. The assumed behavior of the premium customers is otherwise the same as the one of the standard product.

Revenue:

• External Revenue: External Revenue = Price × Units sold. Units_sold equals the amount of paying customers per months.

• Internal Revenue: If you have help in selling your product either through a store (chain) or third party sales people, you have to normally pay a trade margin, commission or give rebates.

• Other Income from Customers: You may use your access to your customers for other sources of income, e.g. sending them advertising. Other income is generated from the whole customer base.

Variable Costs:

• Variable Product Costs: Physical products have unit costs attached to it. The variable product costs are the sum of all unit costs times the number of sold products.

• Variable Customer Costs: Independent of the variable product costs, in some cases there are also costs for holding and administering the customer base. They are variable because they vary with the amount of customers.

Marketing Costs. You have principally three types of marketing costs:

• General Marketing Costs that you choose to expend every month for general marketing purposes.

• Variable Marketing Costs which are also called customer acquisition costs, if you pay an amount per individual customer lead.

• Marketing Campaign Costs. A campaign has a start month and a duration. You need to estimate how many additional monthly customer leads or conversions will be generated for an additional amount of money that you will expend per month over the time of the campaign. You can access the campaign parameters by clicking on the ≣-symbol.

• Marketing Campaign Conversion Costs: It is assumed that you can only influence the following conversions by help of a marketing campaign: Leads → New, New → Pay, Rest → Pay, Returning. You can specify a cost which will be the same independent of the type of conversion. That a customer becomes loyal cannot be achieved by help of marketing.

Fixed Costs:

• Fixed Costs are all costs that you expend regularly on a monthly basis. Some people call them anyway-costs because they occur anyway, which means independent from how much revenue you make.

• Typically, fixed costs are comprised of costs for HR, IT or infrastructure, external services, space or rent, travel expenses or logistics, energy or waste, or other fixed costs.

• Some fixed cost types come with overhead. Overhead are additions to the cost type. E.g. HR costs are salaries. Overhead on HR costs are social security contributions that come on top and that you have to give to the state. Overhead on space are the running costs of being in the space, such as insurance, heating, cleaning or maintenance.

Costs resulting from Inventory:

• There are Inventory Fix Costs and Inventory Unit Costs. They are described under Inventory. Principally, they could be planned also under the cost section. However, planning them under inventory has the advantage of easier allocation across product lines.

Costs resulting from Assets:

• There are Asset Fix Costs. They are described under Assets. Principally, they could be planned also under the cost section, however, planning them under Assets has the advantage of planning the costs only for the useful lifetime of the asset and for easier allocation across product lines.

Costs resulting from Capital.

• Capital: Capital is what is needed in order to fund a company. There are different forms of capital. The most important ones are equity, debt, and leasing. Equity capital reflects the ownership of the company.

• Cost of Capital: Equity capital does not immediately lead to payments, but investors that have an equity share in a company will expect that the business eventually makes profits so that the value of the company goes up. Also profits are the basis for dividend payments to the shareholders. Debt and leasing result in interest payments.

Profit Contribution, Tax & Profit after Tax:

• Profit Contribution: Profit Contribution is also know as Gross Profit. It is Internal Revenue minus all Variable Costs. Profit Contribution is an important concept. It is needed in order to see how much does the profit contribution of a product line contribute to covering the marketing, fix and A&C costs (allocations) of the company.

• Profit after Tax: Profit is Profit Contribution minus all remaining costs, e.g. Marketing Costs, Fixed Costs as well as Assets & Capital Costs. In other words: Internal Revenue minus all costs.

• Cumulated Profit before Tax: Sometimes, before a company becomes profitable it may take a number of years. The losses of these years are carried forwards and compensated with future profits. If you add all these profits and losses up over the years you’ll get the Profit after Tax Cumulated. The moment or year in which the Profit after Tax Cumulated turns positive for the first time is also named Break Even.

Network effects occur, when your existing customers bring extra customers that come on top of your marketing efforts. This can happen when your existing customers bring extra customers, for instance, through recommendations. This can also happen, when you get organizations as customers which then also bring the people connected to them as extra customers to your company. The mechanism behind network effects is that the value-added per customer increases the more customers use the product. So there is an inbuilt incentive for each customers to bring more.

You can only access NETWORK EFFECTs, when you are in the ADVANCED MODE and there in the MORE PRODUCT LINES MODE.

• Notation: NΩ : XΩ / Period in months, where\ NΩ = New Customers\ XΩ = Extra Customers\

• Example: 10 : 1 / 12m, means that 10 new customers will bring 1 extra customer over a period of 12 month. No extra customer is brought after this period. If you want to achieve that extra customers are also brought after 12 months, you can, for instance, specify 10 : 5 / 60m, which means that 10 new customers will bring 5 extra customers over a period of 60 months. Of course, you can also have multiplier effects, such as 1 : 10 / 12m, which means one new customer will bring 10 extra customers over a period of 12 months.

• As extra customers are also new customers, they obviously bring extra customers themselves.

• NOTE: Because network effects are calculated recursively, the computation of parameter effects may take a little longer than the computation of the other parameter effects.

• Free Cash Flow is the cash flow generated from the operations of the business after adjusted tax and before interest payments minus CAPEX. Free Cash Flow is a very useful figure because it shows what amount of cash is generated from the operations of the company.

• CAPEX stands for Capital Expenditure and it is the amount of cash that is invested into the operations of the business per year.

• Enterprise Value: The Free Cash Flows (FCFs) are the basis of Discounted Cash Flow (DCF) models which help to establish the Enterprise Value of the company. The Enterprise Value is calculated as PV = PV(Finance Rate, FCFs, Terminal Value), where PV stands for Present Value.

• Equity Value: The Equity Value results from the Enterprise Value by subtracting the liabilities (Debt and Leasing) and by adding Cash.

• Terminal Value: A company generates FCFs even after the chosen time horizon of the business plan. All the FCFs generated thereafter are subsumed in the so-called Terminal Value. The calculation of the Terminal Value is based on the reasoning of a lifelong perpetual annuity. To calculate the Terminal Value (TV) one uses the FCF from the last year, a Growth Rate g for the FCFs, and the Finance Rate r of the company. The formula from the valuation theory for calculating the Terminal Value is: TV = FCF_last × (1+g) / (r−g). Note, that r > g.

• Balance Sheet: The Balance Sheet shows you the status-quo of the company at the end of each year of your business plan. Some of the ratios for performance analysis refer to Balance Sheet positions.

The Visual Business Planner should allow to plan for most business models up to a certain level of complexity. If you are missing a functionality or behavior, please, check out the Roadmap. If you cannot find the desired functionality or behavior there, you may want to send me an email: prof.anders@online.de. Thank you.

Here you will find the features of the Visual Business Planner that I have currently planned to implement for an upcoming version.