Once you are a registered and logged-in user, you can click ‘Assemble’ button within the description box for the Quick IRR Model on the Models/Tools page of the site. Alternatively you can select Quick IRR Model by launching assembler from your User Account page.

The online assembly of the Quick IRR Model is completed in two input screens, or Steps.

  • The first Step - as described below - deals with the structural parameters of the Model. Most of these cannot be easily altered once the Model is purchased. See section 2.1 of the Manual for details.
  • The second Step - as described below - allows for entry of business assumptions. This data can be changed later off-line. See section 2.2 of the Manual for details.

Unlike models from our Main Library, Quick IRR Model has a free version you can gain access to at the end of the assembly stage. Click ‘Request Free Model’ button to action the process. The Model is free and does not require a purchase.

When assembling a model - proceed to next Step by clicking on ‘Next’ or return to previous Step by clicking ‘Back’. ‘Save’ button remembers all entered data. After saving you can leave the assembly Steps and continue later by clicking ‘Continue’ button at the top of the User Account page.

If you wish to globally restore default dummy values for any Model navigate ‘Back’ to Step 1 and click ‘Restore Default’ button. You can always refer to on-line version of the Manual for more details by pressing the ‘Help’ button.

Step 1 configures key settings and parameters of the Model. Note that your choices of language and timeline are structural and cannot be changed once the Model is purchased. The following table summarise the choices available to users at Step 1 of the Model’s online assembly:

 

Input field

Comment

Model's Language is

Current available in English or Russian. Note that switching Model’s language would completely reset your language environment including entry forms and commentary fields.

Model's Start Date is

The Model assembler would only allow a first date of any month to be the Model’s start date. Non-conforming day of the month entry will automatically revert to the first day of the month chosen by user.

Model's Periods' Step is

Period Step can be set to year, quarter or month. By definition, the combination of the number of periods and periods’ step would set the timeline for your Model.

Exit Valuation Driver is

If you wish your free report and/or paid for Model to measure IRR on going concern basis you can assign terminal (exit) value to your project. Exit Valuation Driver can be set to Revenue, Cash Flows or Customers.

Model's Currency is

You can select currency from the pull down list. Manual entry is allowed for any currency for the paid for Model.

Currency Units are in

By default, the scale is in thousands, or 000s. Note that this input is a simple label. The Model does not self-adjust scales assumed by users.

Number of Periods in the Model is

Can be set to any integer value between 3 and 60. By definition, the combination of the number of periods and periods’ step would set the timeline for your Model.

Exit Driver Value is

Assigns value to your choice of Exit Valuation Driver. If you wish your free report and/or paid for Model to measure IRR on projected cash flow basis only (excluding any impact from Exit Value), you can leave this variable equal to zero as in default assumption.

 

Step 2 requires entry of business and operating assumptions for your project. The purchased copy of the Model allows changing any of these off-line. Please refer to section 3 of the Manual for more details.

Note that Step 2 field legends react to your choice of inputs from Step 1. For example, if you configured the Model to be Quarterly, USD and in 000’s, legends for Step 2 would incorporate your choices as shown in the table below (legends dependent on Step 1 are shown in [square brackets]).

At this Step you can:
 

Input field

Comment

[Quarters] to Launch

Measured in periods of your choice this input sets the date for the project’s commercial launch.

New Customers Acquired per [Quarter], [000’s]

Once the project is launched, this input would set the rate at which new customers are acquired during each post-launch forecast period.

Average Check per Customer, [USD]

This is the main revenue driver as it sets how much money each customer spends on your products or services in each forecast period. This is particularly useful approach if your customers spend cash on multiple things or your business has multiple revenue sources from each customer activity (e.g. subscription revenue and advertising revenue)

Customer Retention Rate (1-Churn), %

This is a very important operational metric for any customer driven business. As customers are acquired, some of them never return (churn) and some become repeat customers (e.g. retained). The Rate is expressed in annual terms. For example if retention is 60% annually, then 10% of your customer base will churn every quarter. 

Direct Margin per Customer, %

This input is an equivalent to Gross Profit margin that each customer delivers with each purchase. The ratio excludes pre-launch and launch costs as well as marketing and general overhead.

Pre-launch BD Costs, [USD 000's]

The Model will evenly spread pre-launch business development costs for your project between the Model’s start date and up to the assumed launch date.

Launch costs, [USD 000's]

Launch costs are a one-off expense like promotions and marketing campaigns at launch and which are not expected to continue on regular basis.

Regular Marketing per [Quarter], [USD 000's]

As the name suggest this is your regular marketing budget to maintain assumed rate of new customer acquisitions. Assumed to be fixed charges growing over time at assumed inflation rate.

Overhead per [Quarter], [USD 000's]

Allows to book general overhead expenses for your project such as rents, personnel, etc. Assumed to be a fixed charge growing over time at an assumed inflation rate.

Inflation, % per annum

This is a price-indexing factor for both revenues and cost items expressed in annual terms. For example, if your Model is quarterly, you do not have to apply a fraction of the annual growth rate; the Model will do it for you automatically: inserting 10% annual growth rate would translate in your revenues and fixed costs growing 2.5% quarter-on-quarter.


With completion of Step 2 you are done customising your Model. You can proceed to model request and purchase options as described in section 2.3 of the Manual.

After completing Step 2 you can click ‘Next’ and select ‘Request Free Model’ button. The free model would be assembled and appear in your User Account available for download. You will receive a notification via email that your model is ready. Note that you can always convert any of your free or demo models stored in the User Account to full paid versions by clicking on ‘Buy Model’ button next to its free/demo listing.

Alternatively, you can opt to purchase Full version of the model. In this case the next screen will take you to the payment options. Upon payment confirmation the full version would be assembled and appear in your User Account available for download. You will receive a notification via email that your model is ready. You can always download a copy of your model from your User Account archive.