Know Your Numbers™ | Would you invest?
Funding The Journey™ explored how the right working relationship can help move an opportunity forward.
But however we choose to fund the journey, sooner or later we need to ask:
Do the numbers make sense?
That is the thinking behind Know Your Numbers™.
Early in an innovation journey, many of the numbers will be assumptions.
That is fine.
The important thing is knowing what you are assuming.
What will the product cost to make?
What could it realistically sell for?
How many might you sell?
What investment is needed before the first one reaches a customer?
And how long might it take to recover that investment?
Put those numbers together and the commercial picture begins to appear.
This is where Money Matters.
Not because every decision should be driven by cost.
Because money should be spent on the things that move the opportunity forward.
Or, as the in³ insight puts it:
Don’t spend like a student.
Know Your Numbers™ lets you test the assumptions rather than become attached to them.
Change the selling price.
Reduce the volume.
Increase the investment.
Compare different scenarios.
Then see what happens to break-even, investment recovery and potential profit.
The purpose is not to create a financial forecast.
It is to ask a much more useful early-stage question:
What needs to be true for this opportunity to make commercial sense?
Sometimes the numbers will build confidence.
Sometimes they will expose something that needs changing.
And sometimes they may tell you not to proceed at all.
That is still a useful answer.
The Know Your Numbers™ resource provides a practical way to explore those commercial assumptions before significantly more money is committed.
Explore Know Your Numbers™ in the incub8ideas Resource Hub.
Next in the journey: Plan The Pathway™.
Because once we understand what needs to be true financially, we can start turning the opportunity into a plan.
Innovation Simplified™
Practical tools. Shared insight. Better conversations. Stronger ideas.
