A few years ago, a client—a small start-up manufacturing firm—asked if I would help prepare a business plan that could be presented to a financial institution for major funding for a new plant. The co-president/bookkeeper had never written or seen a business plan. Rather than teaching this business owner a “from scratch” approach, I looked for a software package that would allow the company to create as many plans as it needed with few support requirements.
After a short search, I discovered Planware from Invest-Tech Limited, based in Dublin, Ireland. I downloaded the free version, Exl-Plan Free (pronounced XL-PLAN), and tested it.
What a find! Within the hour, I had created a full set of financial projections including a balance sheet, income statement, and cash flow projections with backup worksheets for sales, cost of goods sold, expenses, taxes, and more.
I then introduced the software to my client. It took about an hour of instruction for the owner to learn how to use it, the financial assumptions involved, and how these financial assumptions affected the worksheets. In very little time, the owner had created a very professional plan that did, in fact, assist in securing project funding. You may find that your clients can do the same with this program.
Examining the software
Invest-Tech’s product list includes software, white papers, tools, templates, and checklists for improving cash flow or building business plans. The software pricing ranges from $39 U.S. for the Cash Flow Micro version to $795 U.S. for the Business Insight—Business Strategy Evaluator.
Exl-Plan Free is a fully operational version of the planning program for short-term (six months) projections. Users enter assumptions, and Exl-Plan then generates fully integrated projections (income statements, cash flows, balance sheets, etc.). One great feature is that it is available using either U.K./international or U.S./Canadian accounting conventions.
It’s an ideal tool to introduce to clients who are new to financial modeling, and also serves as a training tool for the other more extensive and powerful planners within the Exl-Plan group of software. Once you’ve mastered Exl-Plan Free, the upgrade path is seamless.
Getting up and running
The first step is to download a copy of Exl-Plan Free. Then unzip and run the .exe file. You’ll be guided through a simple installation routine.
To start the software, you can either:
- Load Excel and open the Exlplan.xls file.
- Go to Start | Programs | Exl-Plan Free US | Exl-Plan.
You’ll also need to enable macros for the program to work.
I recommend taking the program’s Quik Tour before you head into the main program application, Quik-Plan; it takes only a few minutes and can help acclimate you to the program.
Once you’ve opened the program, click on Quik-Plan. This will take you to a page with four buttons for the Quik-Plan Assumptions worksheet (see Figure A):
- Help About Quik-Plan
- Clear Quik-Plan Assumptions Report
- Enter Basic Data & Assumptions For Quik-Plan
- Run Quik-Plan
You’ll use menu items two, three, and four to create a new plan.
Below these buttons is the Quik-Plan Assumptions Report template, which gives the variables, including average monthly sales and interest rate for cash balances for your client’s business.
Click Clear Quik-Plan Assumptions Report to clear the sample data and click Enter Basic Data & Assumptions for Quik-Plan to enter your own figures, as shown in Figure B.
|The Quik-Plan Assumptions Report worksheet|
The plan template includes brief explanations, under the Guidance column, of each variable. For example, the Guidance for the variable Expected Federal/State Tax Rate is “Enter zero percentage if no tax payable within 6-month interval.” Fill in the numbers for each line—note that some are in dollars and some are in percentages.
When you’ve entered your client’s information, click on Run QuikPlan. Click Yes to replace the assumptions with the new assumptions. This will take a few minutes. Then click OK and let it run.
Once the plan is finished, you can review the created worksheets, which are listed on the tabs at the bottom of each worksheet. The application also populates worksheets for estimated income statements, cash flow projections, a balance sheet, a performance review, and a summary.
Because many tech organizations don’t have the same income and expenses every month, you may need to elaborate on the information used for your reports. For example, you can click on Monthly Assumptions, which will take you to the first assumption worksheet for sales. This worksheet features five groups that you can rename to different departments or revenue streams. You can then break out the revenues based on those groups. For enterprises with more than five departments in a particular plan, you’ll need to do another plan document.
Once you’ve finished with sales, you can move to the next assumption worksheet, Cost of Materials/Goods, Inventory. There are eight assumptions worksheets, from payroll to selling expenses, and all can be adjusted by month.
Included in the free software download are a copy of Free-Plan, a 44-page business-planning guide and template for Word, and a copy of the white paper “Writing a Business Plan.”
What Exl-Plan lacks
Exl-Plan's main downside is that there are no import/export capabilities built in to the program. For example, you can’t take last year's actual numbers and populate Exl-Plan fields automatically. Also, once you’ve built this wonderful plan, you can’t export the numbers to a financial package for comparative analysis.
This shortcoming can be reduced using ODBC and MS Query. In separate worksheets, you can build these features to work with your particular software. It would be nice to have some interfaces already built for some of the more popular accounting systems or at least some samples of how this could be done.
Another downside is the difficulty of unlocking protected data fields. You can unprotect and protect worksheets within the plan on the Protection menu. Even though it asks for a password when you unprotect, if you don't put one in, it will unprotect the worksheets anyway.
When you ask it to protect again, the password doesn’t come up. I’ve had problems with this when users have unprotected a worksheet, made changes, and then couldn’t balance. Once this happens, they usually have to go back to a previously saved worksheet or start over if they can't remember what they changed.
Despite these drawbacks, this software, along with the supporting documentation, can help any novice, no matter their financial acumen, create a dynamic business plan within a very short period of time.