For many African startups, it’s a long road to success and industry recognition: a lot of small and medium-scale enterprises fail within the first three years. Nonetheless, relentless Africans are daily trying to get new organisations off the ground and this is the bright side – a growing number of inexpensive applications are available to aid business survival and growth. From financial modeling to number crushing and carrying out data analysis, there is hardly anything involving numbers that spreadsheets do not offer.
Spreadsheets store and retrieve numerical data in grid formats of columns and rows and are ideal for entering, calculating and analyzing company data such as sales figures, sales taxes or commissions. For instance, Microsoft Excel can turn a spreadsheet of numbers into a pie chart, bar diagram or a variety of other visual diagrams. Excel can also be used to store text-based data such as client lists, employee data and mailing lists.
Here are a few areas you can use spreadsheets for:
You can use spreadsheets to create company reports or the supporting data for written reports, which might include selecting a particular range of data by date, department or personnel. For example, monthly sales reports can be created according to customer, manufacturer, sales person or product using data sorting and selection capability which is based on previously defining data by attributes such as department name, manufacturer or acquisition date. Examples of company reports might include financial summaries, compliance documents or personnel reports outlining vacations and sick days.
Startups often investigate and research possible business or production models in “what-if” scenarios. These scenarios might illustrate comparisons among pricing structures, the cost of doing business in different markets or the cost of producing next year’s holiday products through different manufacturers. Spreadsheets can store and calculate data as directed using existing or new data. The data and calculations can be stored in separate workbooks (a workbook is a collection of spreadsheets accessed through a single file with each page of the file being a separate spreadsheet added as a new tab in the workbook).
Financial modeling is used regularly by operating businesses to make a variety of decisions. Small businesses can use spreadsheets to build complex models for investments and development projects. It can also be used to evaluate complex iterative scenarios with multiple options like revenue projections and future values of investments.
The overall opportunity is to integrate financial concepts with accessible but powerful tools to facilitate greater analytical accuracy and rapid investment analysis. To reduce financial costs and generate competitive advantage for your idea, spreadsheets are tools every entrepreneur should build proficiency in and have installed on tablets, smart phones, office computers and laptops.
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234Finance.com is strategic for promoting entrepreneurship through the power and effective use of information.