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How to Create 2 Sided Marketplace Financial Projections ( Guide & Template!) - YouTube
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[Music]
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[Applause]
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this is adam huxma co-founder of
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projection hub and i'm going to walk you
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through our two-sided marketplace
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financial projection template today
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so the first thing you need to know is
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that
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this
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template has a number of blue
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highlighted cells and these cells are
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assumptions that you can change
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throughout the model without without
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breaking anything
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so
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i'm going to walk you through each of
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these input tabs here and show you how
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to create your projections
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so you can select the start month here
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when you want the projections to start
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you can add investments for investors
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and when those investments are expected
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to come in
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you can set your own accounts payable
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terms
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you can add fixed assets as well
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and you can also add loans this is on
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that input assumptions tab
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now getting into the input revenue this
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is where a lot of the complexity of the
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model and the power of the model
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are really seen in this tab
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so the first thing you can do here is
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set the month that you expect your
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revenue to start so if you're trying to
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raise investment for your startup
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and
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you know you expect investors to
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put money in on month one of the model
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it might take you you know four five six
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months to build out the mvp
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of the
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marketplace platform and and you know
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take a little while before revenue is
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actually turned on and
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generating for you
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so that's what you can change and adjust
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here
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now
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we have
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some assumptions here for both the
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seller side of the market and the buyer
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side of the market
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and this
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this marketplace model is going to be
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really good for
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businesses like
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an airbnb or
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uber
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or
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upwork
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any time that there are there's a buyer
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and a seller and the business that
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you're making the financial protections
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for is really the platform that's
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bringing the buyers and sellers together
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um
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it's not actually the platform itself is
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not actually providing the goods or
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services it's just bringing
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bringing the market together
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and so
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based on that
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as a platform you are going to need to
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do some advertising to bring sellers to
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the platform as well as buyers so we
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have the ability here to add
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advertising spend
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for
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the seller side
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and a cost per click
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of what you expect
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it will take to get potential sellers to
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visit the site along with the ability to
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add organic
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visitors as well
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and then you'll have your total leads
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these are basically website visitors
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that are sellers and a conversion rate
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of what percentage you expect
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of those sellers to turn into
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sellers on the platform
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and then some percentage of those
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sellers will probably leave the platform
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each month and so that's what you have
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here
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now on the buyer side we do a similar
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thing
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we have
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ad spend to acquire buyers cost per
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click
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organic
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visitors and a conversion rate
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of some percentage of those buyers that
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actually end up
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turning into
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purchasers or buyers
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now
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what we want to do
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is and this is what makes a marketplace
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business really tricky
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is that you have to balance the supply
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and demand side
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of both the supply and demand
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side so you got to make sure that you
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have
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sufficient supply uh for
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for your buyer demand
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but if you don't if you don't have
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enough buyer demand this the sellers
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aren't going to want to list on your
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platform either
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and so
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what we're doing here in this section is
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making sure that that supply and demand
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model is
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is working and is balanced so you're
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going to put in
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let's for example here let's pretend
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this is a etsy marketplace and
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you've got a number of sellers and
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they're making handmade goods
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and they can only make five
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units
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of their goods per month
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and so this is going to calculate how
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many
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units what is the maximum number of
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units based on how many sellers you have
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that are available for sale
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each month on the platform
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now we have units demanded
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per buyer so we're saying that the
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average buyer is going to want 1.5 units
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per month
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and so the maximum demand here is based
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on the number of buyers we have is 942.
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so we have demand for 942 but that sales
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cannot be more than the supply right if
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we only have 275 units available for
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sale
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this will automatically force your
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sales to
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just stay in line with whatever the
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supply is
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so let's just say we change this so if
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we ramp this up a lot
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and say now they can actually supply 40
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units per month
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now
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our
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sales is actually our buyer demand
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we have 2 200 units for sale but we only
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have buyer demand of 942 so we're going
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to say our sales
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is 942 units
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and you now down here you can um
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have
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this little matrix here this table
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filled out with different levels or
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types of units available so if you have
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you know kind of different price points
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um
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types of units that you want to
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categorize or it could be you know if
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it's like a
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an ebay for example you know you might
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put your different product categories
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like electronics or home goods
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that sort of thing
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listed here and different average prices
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and then a percentage what percentage of
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your total purchases so we say we have
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942 purchases this month
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what this is saying is five percent of
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those purchases are
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level one
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purchase
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a twenty dollar purchase fifteen percent
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of the nine forty two
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is level two purchases
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and so on so you can change these
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percentages but be aware that you don't
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want to go over a hundred percent here
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if you go over a hundred percent
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uh
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you're
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you're gonna be off uh you're gonna be
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over over projected on the sales side
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now this allows you to
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add an average annual growth rate of
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revenue per unit
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so you're saying okay these prices we
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think these prices are going to go up
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five percent on average
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and all that comes together to
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[Music]
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show a total
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amount of sales on the platform
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now the marketplace
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is probably taking
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this is not all the marketplace revenue
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marketplace revenue
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is
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some percentage or commission or fee
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of
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the total transaction volume on the
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marketplace so this section here allows
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you to add
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some different options so if you want to
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have a per transaction fee a flat rate
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so you can add you know five dollars
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or
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if you want to do
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and that would be per transaction so
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one customer might buy many units but
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they'd only be charged five dollars
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or if you want to say no we're going to
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charge
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per unit fee
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so maybe that's
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you know six dollars per unit
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you know that an example of what this
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really could be i mean it couldn't be
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anything the fee could be anything but
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it you know if it's a physical good this
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might be your shipping fee
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so you might say
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well we're gonna
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bundle all these
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together
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and so maybe there's a five dollar
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shipping fee
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and maybe some of that ends up getting
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passed along to the seller you know
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could be done different ways
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um
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and then probably the main way the
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marketplace is going to generate revenue
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is probably some percentage commission
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of the of the total sale and so maybe
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you know it could be 10
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commission
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and then down here we have a cost of
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goods sold as a percentage of revenue so
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this should be
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cost of goods sold for the marketplace
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itself so this might be you know the
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marketplace might have expenses like
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credit card transaction fees or
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infrastructure costs
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for the software that fall into cost of
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goods sold that's what you could put
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here
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we're jumping into our
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input other expenses
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we can
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add different expense categories here
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you the one thing i want to point out is
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that they can be a fixed dollar amount
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or a percentage of revenue
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so for example you could make
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your software and subscriptions maybe
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that's not a good example but
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maybe a better one is your transaction
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fees there could be a percentage of
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total revenue
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and you can see maybe a sales commission
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[Music]
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probably doesn't make sense in most
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marketplaces to have a sales commission
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but perhaps
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but you do have that flexibility to add
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expenses as a percentage of revenue or a
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fixed dollar amount
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now jumping onto our salaries
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tab you can add individual job titles
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positions their
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base salary benefits employer taxes
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what month they start
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month they end if you think that
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position's going to end and then how
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many of that particular employee do you
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have so
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if you have like
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a
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customer support or something you might
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have
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you know five or ten of those particular
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employees you don't have to add each one
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individually if they're all
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paid around the same salary and start at
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the same time you could just add you
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know
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10 all at once here
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and then you can add an annual raise
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here as well
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and then really
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from there once you have that done
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you'll be able to take a look at our
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at a glance
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tables so we've got a number of
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different tables and charts and graphs
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that can be helpful to be thrown into a
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pitch deck or be used for
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by your designer to then also put into a
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pitch deck
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can show you you know how much
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funding is required to start
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what was raised
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how those initial funds were used
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so a lot of helpful charts and graphs
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there
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and then you can
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take a look at the
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five year up to five year
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income statement
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projected income statement projected
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cash flow statement
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and
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projected balance sheet my numbers are
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too large here so it's going off the
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page
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and your projected balance sheet and
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then you have your projected income
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statement
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by month so you can see that each
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individual month for five years
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cash flow statement by month balance
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sheet by month
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and our investor dashboard which gives
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you some flexibility to
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allow
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to allow the investor to come in here
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and make their own changes
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so what it's going to do
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what this is going to do is going to
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pull in the numbers from your model here
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but then let's say the investor went to
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say well what if we invested more and we
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could really ramp this up
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and so the investor puts in their own
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assumptions here in blue
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and then they can see the impact
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on the modified income statement so this
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would be
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after the investor makes their changes
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what does the income statement
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projections look like versus your
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original projections over here
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so that it can be a helpful tool if
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you're looking to raise capital to be
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able to send this
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to your investor and let them play
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around and make their own
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projections as they go
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and that's it that is the model for your
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two-sided marketplace or online
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marketplace financial projections
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if you have any questions let us know
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you
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