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Define the model’s job
State whether the model supports budgeting, capacity planning, cash management or scenario comparison. Its usefulness comes from the clarity of its assumptions and relationships. A large projected sales total does not independently establish company value or an appropriate investment price.
Show the missing economics
Identify costs, channel allocations, retention, working capital and other inputs that are not yet confirmed. Keep financing assumptions separate from customer revenue. The model should reveal what management needs to learn rather than conceal uncertainty behind a precise valuation headline.
Use professional judgement for valuation
If an investment discussion moves to valuation or ownership, involve appropriately qualified advisers and provide the relevant evidence. Do not convert a speculative sales target into an investor-return promise. The operating model remains useful as a shared language for testing the business plan. Keep ownership percentages and financing terms outside the operating scenario unless they are explicitly agreed inputs. Mixing an illustrative sales case with assumed investor terms can make an internal planning exercise look like an offer or a promise of financial return. Identify which scenario inputs management can influence and which depend on external decisions, so the model supports realistic operating conversations.
Illustrative operating example
A hypothetical scenario of 300,000 cards at $400 produces $120 million in retail sales value. That arithmetic does not establish retained revenue, profit, valuation or investor returns. Each requires additional commercial, cost and financing information.
Make it practical.
Use this checklist as you read. Checks are not stored.Published by Tap Tap Go. Product availability and eligibility vary by programme and market. About our stories.
