Tag: finance

UAE VAT for FinTech companies explained

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Everyone who lives in the UAE knows that on January 1, 2018 value-added tax (VAT) will come into effect. There is a lot of talk, and furthermore, uncertainty, with the date just around the corner. When it comes to the impact that this will have on the world of FinTech – the uncertainty just goes over the top!

As a result of my experience with both VAT and FinTech, I thought I’d write a post about the issue, and address the main points of uncertainty.

Most people will be familiar with VAT in general, but if not, you can email us to view the presentation from my last ‘VAT in the UAE training’ here that was organized by Astrolabs on the 29th of October, 2017.

So what is a FinTech and what attributes does it have which make VAT treatment so vague?

According to Patrick Schueffel, in his paper, Taming the Beast: A Scientific Definition of Fintech in the Journal of Innovation Management; “FinTech is a new financial industry that applies technology to improve financial activities. FinTech is the new applications, processes, products, or business models in the financial services industry, composed of one or more complementary financial services and provided as an end-to-end process via the Internet.”

Based on the definition above, I have come up with some unique features of FinTech companies, and what VAT complications they may face:

1. Provision of financial services

Financial services in relation to VAT is still a grey area in current VAT legislation. However, as draft cabinet decision on the Executive Regulations of UAE VAT law says, if the financial services are performed NOT in return for an explicit fee, discount, commission, rebate or similar, then they are exempt for VAT purposes. However, if the services above are performed for a fee, discount and commission, etc., then they should be taxed at 5 per cent to the extent of the amount of that separately identifiable charge. For example, the remittance operation itself is exempt from VAT however the fee that is charged by the financial institution is not. Therefore, there will be 5 per cent VAT added to the amount of the fee, but not to the amount being remitted. The last point – agreeing to do, or arranging financial services as per current UAE legislation also counts as the provision of financial services.

When it comes to the recovery of input VAT, tax incurred on costs wholly attributable to the standard rated supply of financial services can be fully recovered; and VAT incurred on costs in relation to exempt supplies – cannot be recovered. Therefore, companies should accurately distinguish which costs are attributable to the financial services that are exempt, and which are taxable supplies. If the company has both, then the following ratio should be applied:

Taxable supplies/Taxable + Exempt supplies

For more guidance on this, please have a look at the guidance published by the federal Tax Authority here.

2. Provision of services digitally

Another feature of a FinTech company, is the digital provision of its services. For this we have to be familiar with the place of supply concept, because if the services are provided to someone outside of the UAE, VAT is not applicable, and vice versa.

The place of supply for the goods, for instance, is where the goods are. When it comes to digital services, the provider has to know who is the recipient – whether it’s a company (B2B) or an individual (B2C).

In a B2B scenario, the purchaser is responsible for accounting for the invoice in accordance with a rule known as the reverse-charge mechanism. The purchaser accounts for the VAT of that invoice as an Output VAT (sounds strange but that is the way) and Input VAT at the same time, meaning there is no VAT liability, only reporting of the transaction.

With B2C, the scenarios are as follows:

3. Fintech companies registered in Dubai International Financial Centre and other free zones

There is a lot of talk around free-zones and how they are going to be treated for VAT purposes. The latest draft regulation says that if the company is registered in a designated zone which is a fenced free-zone, then it is considered as outside of the UAE VAT scope. If the free-zone is not fenced – like DIFC – then general UAE VAT rules apply.

I hope the above helps shed some light on VAT treatment for FinTech companies who, just like us are trying their best to navigate in this complex business world.

Please feel free to leave comments if you have more insight on the VAT situation described in this post, or any questions.

UAE-Based Fintech Start-Up Secures $700K Investment to Advance Financial Services Access for Underserved Migrant Workers

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NOW Money has secured an investment of $700,000 from two U.S.-based venture capital investors – Accion Venture Lab, the seed-stage investment initiative of financial inclusion leader Accion, and Newid Capital.

Both Accion Venture Lab and Newid Capital make investments that target the financially underserved.  Venture Lab invests capital in, and provides support to, innovative fintech start-ups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale. Newid Capital focuses on such investments outside of North America and Western Europe.

NOW Money uses mobile banking technology to provide accounts, financial inclusion and a range of low-cost remittance options to low-income migrant workers in the Gulf region. It aims to provide access to affordable financial services for everyone.

The investment comes a year after NOW Money’s initial seed funding, which allowed the company to expand the team and develop the technology and brand. With the latest investment, also a part of its seed round, the team plans to launch the service across the United Arab Emirates and expand into the other Gulf Cooperation Council (GCC) countries.

Co-founder of NOW Money, Ian Dillon said, “Having what’s understood to be the first early stage investment from U.S. venture capital into the Middle East is testament to the opportunities available here and how far the GCC has come in making itself a destination for investment. We hope this will be the first of many U.S. venture capital investments in the region, and will help to grow the ecosystem further.”

“We’re excited to be making such a big social impact in the region. Accion is one of the leading global institutions promoting financial inclusion, and Newid Capital was co-founded by Nigel Morris, who previously co-founded Capital One Financial Services. We’re excited to be working with them to bring financial inclusion to the 26 million unbanked in the GCC,” he added.

“Each year, migrant workers contribute more than $400 billion to their home economies, and the United Arab Emiratesis among the top remittance-sending countries in the world,” said Michael Schlein, CEO and President of Accion. “NOW Money’s innovative approach and digital platform provide a faster and safer option for these workers to support their families and communities.”

“Our partnership with NOW Money marks a number of firsts for Accion Venture Lab – our first investment in the Middle East region, our first investment into a wholly-digital neobank, and our first opportunity to focus on reaching low-income migrant workers,” added Amee Parbhoo, Director of Investments at Accion Venture Lab. “As we reach this new group of financially underserved individuals, we’ll look to apply our learnings to Venture Lab’s work around the world.”

In the last 12 months, NOW Money has won six awards, including Chivas’ “The Venture” for the Gulf region. The co-founders Katharine Budd and Ian Dillon speak regularly at fintech events, such as Payfort and Wamda’s State of Fintech report, and are featured regularly in publications such as Entrepreneur Middle East and on the Dubai Eye radio station.

About NOW Money

NOW uses mobile banking technology to provide accounts, financial inclusion and a range of low-cost remittance options to low-income migrant workers in the Gulf Cooperation Council (GCC) countries, improving their lives and saving them and their families significant money, in a profitable and sustainable manner.

About Accion Venture Lab

Accion Venture Lab is the world’s leading seed-stage investor in fintech for the underserved. Venture Lab invests capital in, and provides support to, innovative fintech start-ups that increase access to, improve the quality of, or reduce the cost of financial services for the underserved at scale. Since launching in 2012, Venture Lab has deployed over US$10 millionacross more than 25 start-ups that work in over 20 countries worldwide. Venture Lab is a part of Accion, a global non-profit committed to creating a financially inclusive world, with a pioneering legacy in microfinance and fintech impact investing. Accion catalyzes financial service providers to deliver high-quality, affordable solutions at scale for the three billion people who are left out of – or poorly served by –  the financial sector. For more than 50 years, Accion has helped tens of millions of people through its work with more than 90 partners in 40 countries. For further information, visit https://www.accion.org/venturelab.

About Newid Capital

Newid Capital is a direct-investment fund focused on financial services and financial technology companies in developing markets. Through its investments, Newid Capital aims to expand financial services to currently underserved markets and individuals. Newid actively seeks early- and mid-stage start-ups that are looking for investment and operational assistance. Newid is able to leverage personal experience in building, and exiting, financial services companies from the viewpoint of both the entrepreneur and the investor.

Financial modelling for start-ups. Part 5: Projected Financial Statements

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Projected Financial Statements (otherwise known as pro-forma financial statements) refers to a set of financial statements which are an important part of a business model. No, not important, ESSENTIAL. It’s actually the apotheosis of the whole business model and is the first thing that’s turned to when someone looks at it. Whatever has been done before, is only in preparation for creating these statements.

The pro-forma should contain the following three statements:

  • Profit and Loss
  • Balance Sheet
  • Cash Flow
  • (You can also include Statement of Change in equity if you are willing to, but investors usually only want to see the first three)

In this post, I am going to look at the simplest way to produce the pro-forma Balance Sheet and Profit and Loss statement. In the next blog, I will look at the Cash Flow Statement and Statement of Changes in Equity.

First thing’s first, let’s talk about the Statement of Profit and Loss. It’s the easiest one to do, which you’ll remember if you’ve followed my blog from the beginning. If not, to make a Profit and Loss statement in Excel, you should have a detailed (ideally, monthly) budget, where all your expense items are attributed to certain expense types, as they are going to appear in your final Profit and Loss statement. Then simply, by using the Sumif function, you summarise all your budgeted figures on an annual basis. The process looks like this:

 

 

Once you have your Profit and Loss statement, you can use it as a starting point for creating your Balance Sheet.

From the Profit and Loss statement you need the Net Profit figure, which you will use for your Retained Earnings in the Balance Sheet (within the Equity section). For the first year the Retained Earnings will be equal to the Net Profit figure. Every subsequent year’s Retained Earnings is the Retained Earnings from the previous year, plus Net Profit for the current year.

Then you need to work out the components of your working capital, which I covered in Financial Modelling for Start-ups. Part 3: Working Capital.

Next, I suggest you calculate your Cash line. In order to do that, you need to make sure your budget has a line for cash (or bank – doesn’t really matter how you name it) at the bottom. This is where you summarise the income, (less expenses, plus investment) you are planning to receive and any loans. Ideally you should track it on a monthly basis against your actual cash in bank. Once you have that sorted, use the amount at the end of the year for your Balance Sheet Cash account. Then it needs to be adjusted for the accounts receivable and payable by decreasing it by the amount of receivables and decreasing it by the amount of your payables.

If you have investment coming in, include it in your Capital within Equity, and corresponding amount, to the Cash line. If you have a loan, add a line for Long or Short-term loans in Liabilities and the corresponding amount goes to Cash.

Capital line should include all capital put up as of the Balance Sheet date and the same amount should either be in Receivables from the owners or Cash (included in your budget in the Cash line as well).

That’s it for this blog, in the next one we will cover the other two financial statements to make your business model look even more beautiful!

 

Financial modelling for start-ups. Part 4: Hiring plan

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A hiring plan is an essential ingredient when it comes to building a successful business model, therefore, in this post I will show you how to construct one.

Staff-related costs are a huge component of the profit and loss and the hiring plan is something that will help you to calculate these costs precisely, allowing you to later change them accordingly in line with any developments in your forecasts.

Below is an example of how a hiring plan should look:

Below is a step-by-step guide to building your own:

1 – Make a list of the job roles with salaries. Salaries can be found on any local job search website. You might want to allow for salary increases once the company is launched, bearing in mind that there will be more responsibilities which should be awarded for.

2 – Each column to the right of the salaries serves as a month where you can input the number of people that you need to fulfil a particular position. They should all start with zero and grow over time.

3 – Identify the job roles which will require more people as the business grows, and list them in order of growth in sales volume. For our company these are the positions that involve working directly with the customers one-to-one, such as on-boarding, training, and sales managers. These are highlighted in grey in the picture above. Once these roles are identified, their number should be linked to the sales volume. To do that, you can create another table where you identify the number of customers to be covered by each role, as shown below:

This information should be included into your ‘costs assumption’ sheet and will be variable, changing over time. Once you have got this for these “customer-number-dependant” job positions you need to apply the following formula:

Number of training managers required = 1 / No of customers per 1 training manager X No of customers in that particular month / period

After this is done, you don’t need to worry about changing the number of sales agents required each time there is a change in sales pipeline or in the forecast number of customers.

4 – The last step is to multiply the number of employees from each job by their salaries and then link it back to your monthly budget in the staff related costs section (or maybe you have your own name for it)! This can be easily done using the Sumif function, which I’m sure you’re familiar with by now.

Until next time – happy modelling!

NOW Money wins Financial Inclusion award in the UK

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NOW Money has won the financial inclusion category of Pitch360, a competition at the Innovate Finance Global Summit 2017.

The competition took place on 11th April 2017 at the Guildhall in London, UK, and saw 24 FinTech startups compete for one of the eight winning spots covering different areas of FinTech, including Artificial Intelligence, Global Financial Inclusion, Block Chain, Personal Finance, Cross Border Payments, P2P Funding, Cyber Security and RegTech.

Ian Dillon, Co-Founder of NOW, gave the six-minute pitch, where he explained how the company’s FinTech offering will bank the “unbanked” population of the UAE using mobile technology to solve the current problem in the Middle East. He also explained how the solution could be instrumental in increasing security and reducing money laundering.

Ian was selected as the winner of the Financial Inclusion category due to his clear and concise explanation of the situation, and by showing how NOW is using the latest technology to provide a solution for this large, 26 million-strong neglected population group, which helps not only those who are excluded but will indirectly benefit their families overseas, including through access to credit.

“It was a pleasure to introduce NOW to a whole new audience,” said Mr. Dillon.  “We’ve had lots of exposure across the GCC and there’s currently a huge buzz around the FinTech sector. To be able to demonstrate NOW to industry experts in London and globally was so exciting for us. It’s hard to explain the situation to those who don’t live in the Middle East and experience the problem first hand, so to sum it up in six-minutes was a challenge to say the least! But we’re thrilled with the overwhelming positive response; the support we receive from a network of partners, particularly Innovate Finance, is phenomenal and so important in helping us to be part of solving the financial inclusion problem globally.”

 

Financial Modelling for Start-ups. Part 3: Working Capital

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In this post I will look at a company’s working capital and how to calculate its components in order to build toward a financial model.

You may be wondering, however, what is working capital?

Working capital is the funds a company has for its day-to-day activities. It can also be described as the company’s current position, where  if we take all of its current assets, convert them to cash and pay off all of its liabilities– then whatever is left – positive or negative – describes the company’s current liquidity position. The firm should have enough cash left to support itself. If the figure is negative, it means that the business cannot sustain itself. On the other hand, if you end up with a large positive figure, it may indicate that the company doesn’t maintain its working capital sufficiently enough and is too cash heavy.

The formula for calculating working capital is very simple:

Working Capital = Current Assets – Current Liabilities.

However, this is only simple to calculate if you have a balance sheet in place and know where to get these figures from. If you are, like us, just starting out and in the process of preparing one, how can you derive your working capital figure?

In this case you may need to;

1) identify the components of the working capital based on a monthly budget, and…

2) calculate these components based on the duration of the working capital cycle which reflects the delay in time that cash takes to arrive in/out of your bank account as we all understand that cash doesn’t always flow simultaneously in and out once the transactions take place.

From the formula above, you might have guessed that the working capital consists of the following accounts (=components):

  • Accounts receivable – this is what is owed to the company for its services
  • Accounts payable – this is what the company owes for the purchases it makes
  • Accrued expenses – same as above, apart from these expenses will not yet be invoiced
  • Prepaid expenses – these are prepayments made for purchases in advance

Working capital also includes inventory, as well as other current liabilities and other current assets. For the purpose of this blog, I will not include these, as I want to a) keep this simple, and b) some of these are not relevant for a fintech start-up such as NOW Money.

In order to estimate the working capital duration cycle, I will use the simplified operating cycle method, which takes into consideration the time it takes for each business operation to convert an asset or liability into cash.

Firstly, you’ll need to look at each line of your monthly budget and assign each one a component from the list above.

Secondly, you’ll need to consider how long it will take to pay bills/receive the money. I suggest you use 1 month to start with for most of your AP/AR.

At the end of this exercise you should have a table that looks something like this:

With regard to the terms of payment, instead of using months, if you want to be more precise, you can use days.

Thirdly, by using the Excel Sumif formula with 2 conditions – accounts names (AP/AR/Other/etc) and the terms (1 month/2 months/1 year/etc), accumulate the working capital components on a separate sheet and calculate the amount for each one depending on the operating cycle. For example, 1 month (annual figure divided by 12 or if it’s a monthly budget – just use December figures), a year (if it’s one-off payment at the end of the year) – leave as it is, or even zero – if the payment should be made/received immediately – which is what happens with our revenues. If you used days before – divide the annual figure by 365 and multiply it by the number of days.

As you may have noticed, here we have LT assets as well, which are not part of the working capital, however we will need these later when we start preparing financial statements.

At the end of this exercise you will have calculated the components of the working capital ready to use in your future projected balance sheet and cash flow statements, which I will cover in my next blog!

 

Financial modelling for start-ups, part 2: assumptions for revenue and cost

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In my previous post in this series I briefly described what constitutes a financial model and started to build an example of one by creating a budget and working on future cost projections. In order to do this properly I started accumulating assumptions. In this post I will delve further into what assumptions are.

In my opinion, a good financial model is built bottom-up, with assumptions accumulated on a separate sheet, which you can then transfer into the spreadsheet that lists your revenues and costs. The assumptions sheet is probably the only sheet in the model where the numbers are hard-coded and used throughout the model through links, meaning that if you need to change them, the formula will automatically update the rest of the figures. This makes the model live – by changing assumptions we can analyse how they impact the company’s cash flows, profits and other operating metrics.

When coming up with your assumptions, I would advise that you make them realistic. This is so that someone with no knowledge of your business was to review the model, they should not need to refer to anything other than the assumptions list; it should all make sense (unless there is industry specific data). This leads us onto the next step –  where to gather your assumptions from.

Every assumption should come from a certain source (guessing is not good enough). Ideally, on the assumptions tab you will have a column entitled “Source”.

Below, I have listed an example of the sources that we used for the assumptions in the financial model for NOW Money. As you may already know from our website, NOW uses mobile technology to provide accounts, financial inclusion and a range of low-cost remittance options to low-income migrant workers in the UAE, providing them with direct access to a current account, debit card and remittance directly from our proprietary smartphone app.

Revenue

Based on the statement above, in order to derive realistic figures of projected revenues, we, at NOW had to define our target market and its size. Therefore, our list of sources for the revenues is based around the answers to these questions:

  1. Population numbers by countries in GCC come from Gulf Labour Markets and Migration and the International Monetary Fund
  2. Same data but more specific to Dubai comes from the Dubai Statistics Centre.
  3. In order to derive the figures on migrant workers we used the World Bank.
  4. Research on the average migrant worker’s salary was done through talking to representatives within the target market, which was backed up by different articles on the web, e.g. Guide2Dubai.
  5. Figures on remittance were obtained from the World Bank.

Costs

Again, based on the description of the services that NOW provides, the IT costs are crucial, followed by regulatory fees. We are in the process of setting up our business which means high regulatory, licensing and legal fees, as well as other administrative expenses.

  1. IT costs which include technology set-up costs, authentication services, developers’ salaries
    1. All were provided by the potential service providers. We spoke to several and used the best one.
  2. Regulatory fees:
    1. Licencing costs are usually openly accessible, for instance, for Dubai this website can be used.
    2. Legal fees for documentation certification were obtained by approaching a legal company
  3. Administrative expenses:
    1. Office rent prices can be obtained from any local property rental website. Think of how big the space should be by looking at your HR count plan.
    2. Subscriptions to Dropbox, Microsoft accounts, Accounting software can all be obtained on their websites.
    3. Travel costs can be estimated by looking up ticket prices and multiplying them by the average number of trips.
  4. Staff-related expenses:
    1. Salary estimates can be obtained by speaking to someone who works in HR (use your LinkedIn contacts)!
    2. Visa fees can be looked-up on the government website.
    3. Relocation costs – can be worked up by estimating the ticket costs and possible stays in hotels.
  5. Marketing and selling expenses: for this type of expense (and for any other) when we don’t know exactly when it will be incurred, we can link it to the appropriate driver.

In our case we decided the driver to be our customer numbers, which we used to derive a ratio to obtain the projected costs based on the driver.

For example, for the PR campaign the ratio is N of customers/100,000 customers, and we know (from the potential service provider) that a PR campaign for our purposes will cost around 3,500 AED, therefore if we have 10,000 customers in Year 1, we will spend 10,000 / 100,000 x 3,500 = 350 AED. At the same time, we can set a minimum of spend meaning (by using Max function in Excel) that even if we have less than 100,000 customers, we still have to spend, for example, 10,000 AED on marketing.

Remember that when you use your assumptions, do use them through links. Another useful thing to do is to assign the most used ones with a name through the Define Name function in Excel, which makes the use of the model much more easier.

At the end of this exercise, you will have a list of assumptions that you will use (as the ultimate goal) to derive projected profit figures.

You may be wondering why we haven’t covered working capital. This is because I will look at this in my next post, so that we can draft projected balance sheets, cash flows and income statements.

Financial modelling for start-ups: preparing a budget in 5 easy steps

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If you are thinking of starting your own business or have already started one, sooner or later you will face questions such as:

  • What is my burn out rate?
  • Will I be able to afford to hire a sales director?
  • How many customers do we need to break-even?
  • How much does my company cost?

In order to answer these and many other questions, you need to have a financial model in place. More importantly, if you need to raise further funds to grow your company, a financial model is something which will prove invaluable.

As Winston Churchill once put it:

Plans are of little importance, but planning is essential.”

The same applies to a financial model. It doesn’t have to be precisely correct, however it does need to show that you, as a founder, know exactly how your business operates and what you are trying to achieve.

There are different templates available on the web for financial modelling, however, in my opinion, using someone else’s template is like wearing someone else’s suit – it just doesn’t feel right. If you want to feel comfortable you need to have one tailor-made just for you.

A good financial model has the following components:

  • Budget (monthly or quarterly)
  • Assumptions for revenue and cost
  • Projected financial statements (balance sheet, income statement, cash flow and statement of equity)
  • Headcount or hiring plan
  • Working capital assumptions
  • Key metrics
  • Sensitivity analysis

If you don’t have a financial background, the five easy steps listed below should be enough to get you going and prepare the first part of the financial model, the budget, which is a great starting point for drafting financial statements and other key financial and operating metrics.

The five steps

1 – Start gathering actual data

When starting a business, you may feel that keeping track of your expenses is an arduous and boring task. However, I would highly recommend that you remember, (no matter how boring it sounds) to separate your business expenses from your personal ones! Get a separate credit card, separate bank account – whatever works best for you – but make sure you keep everything separate, it’s highly important! After this is done, start collecting all of your business expenses’ receipts and invoices and inputting them into a simple Excel table which might look like this:

Excel data gather 1 HR

It is very crucial to add a date column, where you input the dates stated on your receipts and invoices, which ideally highlight when the product was purchased or service was rendered.

2 – Simplify the presentation of your expenses by type

After the data is gathered, you need to add another column and classify all expenses into several categories. For a start-up company these are the main expenses that most likely will be present:

  • Administrative expenses – office rent (probably in a shared area), stationery and subscription to admin software such as Dropbox, Microsoft, etc.
  • Staff related expenses – salaries – this can also fall into the administrative expenses category, but due to its significance it is better to separate them
  • Regulatory expenses – licensing, other legal fees, and notarial fees are significant in the first year, therefore also suggest to present them separately
  • Selling and Marketing expenses – google ads, attending marketing events and PR campaigns, etc.
  • IT costs – if you are a digital start-up, IT costs would constitute a major part of your profit and loss statement, therefore it is wise to present them separately as well.

After this exercise is done, your table might look like this:

Simplify data 2

3 – Accumulate your actuals by expense types and by periods (whether months or quarters)

This step simply means presenting your actuals in an aggregated format based on the expense types and periods. By using the Excel formula Sumif, your actual transactions will be accumulated and presented by expense types:

Accumulate 3

In this table, columns are months, meaning that this budget is prepared on a monthly basis. To do that, after the dates are inputted in step 2, by using Excel formula Month, they can be distributed to different months which they relate to.

4 – Start projecting your expenses and revenues for future periods

After you have finished inputting your data, it’s time for projections, which, in my opinion, is the most exciting part of financial modelling! If you have already incurred expenses, then it should be fairly easy to predict how much something will cost you later on. However, if there is a new expense – then you need to do some research on how much it will cost your business. And if you have no idea whatsoever on where to go for an answer – then you need to start making assumptions.

5- Accumulate assumptions

Create a separate sheet for assumptions where you will accumulate all data related to future expense and revenue drivers. One of the advantages to keeping them on a separate sheet, is that after you link them in your budget table, you can easily change your projected data by changing those assumptions. Another advantage is that it makes your calculations transparent for someone who wants to review them.

Assumptions can include the following:

  • Growth rate or your customers’ number or projected customers’ number in absolute amounts
  • Number of customers per sales agent
  • Office rent per year
  • Technology cost per user, etc.

After you have performed these 5 steps above, you will have a budget which will be a very important source of information for preparing projected financial statements, key metrics and valuation for your company.

Stay tuned to the blog for the rest of my “five easy steps” series, which will help you create the entire financial statement.

The story so far…

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As Forrest Gump said; life is like a box of chocolates, you never know what you’re going to get.

The same can be said for business.

Growing up, I always knew that I wanted to one day run my own business, I just didn’t know what in. I grew up in sleepy Suffolk, where high-flying professionals were farmers and doctors. My ambitions stemmed far beyond that.

I idolised my grandfather for starting and running his own business, not without its trials and tribulations, and I knew that I wanted to follow in his footsteps.

I was never into academia at school – I went to university because I felt I should, plus it looked good fun. After taking a gap year where I saw a glimpse of the wider world for the first time, I did quite well and ended up going to Cambridge to study economics – a subject I didn’t really know existed until after school. I’m glad I went to university, as I met some incredible people, one of which is now my business partner, and co-founder of NOW Money (NOW), Katharine Budd.

If someone asked me what a bank was when I was 18, I would have said it’s a branch in town, and if someone had asked who is a banker, I would have said it was the branch cashier.

After university I was excited by the business world, but nevertheless I was still young and naïve. It was the depths of the recession in 2009 and I needed some money and experience, so I applied for one of the only banks which was still accepting applications from graduates, HSBC.

I planned to work for three years, get some money and experience behind me and then leave to start my own business. However, six years later I had made good progress, had worked with some great people and was enjoying my job, so it proved harder than I expected to make the decision to leave.

During this time, Kat and I had only maintained sporadic contact since university. It wasn’t until very early on a cold February morning when I was cycling into work in London that we rekindled our friendship.

I got hit by a car. I have that slightly sleepy driver to thank for being able to start NOW.

Following the crash, I spent time in hospital and then was recuperating at home, when one day, out of the blue, I received a box of chocolates from Kat – dark chocolates, as she remembered that I way preferred them to milk chocolates. Little did I know it, but this was the beginning of an incredible partnership, and it’s where NOW began.

I thanked her for her kindness – not before scoffing all the chocolates – and we picked up conversation again. She had moved out to Dubai, so as a post recovery treat I booked myself on a flight out there to go and see her and see what Dubai was all about. When I got over, I realised that there was so much going on and so many unrealised opportunities.

I was working for a large bank, so was intrigued by the challenger banks in the UK who were building a solution around what a 21st century customer actually wants, but knew that the UK was very over-banked and I was behind the curve. Coming to Dubai and seeing a new market, I realised there was an opportunity to do something similar in markets where everyone had smartphones but couldn’t access banks.

Kat and I initially turned our attention to a retail data analytics solution for retail banks, to help them understand their customers better. However, it never really got much traction. We realised that the biggest population in the Middle East are the low-income migrant workers, who in the UAE, unlike in Europe, aren’t able to open a bank account unless they earn a certain amount of money. This gave us a massive population of people that we felt we could service properly for the first time, because if we ran everything online, we’d have a low cost-base and could profitably provide these guys with a high-quality solution. It seemed perfect – it offered a social benefit, solved a clear problem and was a credible business. And this is where the idea for NOW was born.

The difficulty of leaving a stable career, where I was earning a lot of money and had career progression, plagued me. All of a sudden I had no idea what I was doing and I was working day in day out with someone I was good friends with, but had never engaged in a professional relationship with. It was a new dynamic – Kat had my whole life in her hands, and vice versa. You spend every day looking back and living in anxiety.

I got lucky – in hindsight, I couldn’t have started NOW with anyone but Kat. However, starting a business from scratch, in a foreign country has been far more mentally challenging than I could have ever imagined. Everything that previously gave me security got pulled from beneath me.

Now we are on an upward trajectory and things are gaining momentum. We are a team of nine people and seeing how excited they are to come into work every day, and how much they truly get behind our vision and our goals, is a way better feeling than I ever thought it would be.

Of course, we had doubts. Our initial thought was “we can’t do this, we have no idea what we’re doing!”

It has taken a lot of willpower, patience and hard work (and a little luck) but will hopefully go to show that anything is possible!

Welcome to NOW – the financial inclusion company that is full of endless possibilities.