Phil Castle, The Business Times
Tom Sawyer knows from personal experience the importance of financial modeling to business management.
A self-described serial entrepreneur with a long and varied career, Sawyer said he’s repeatedly relied on financial modeling to project everything from sales and revenues to production costs and staffing needs. The end result of the purposely deliberative process not only helps determine how a venture will make money, but also forecasts when and how much.
And that’s valuable information when it comes to raising capital, launching a new product or simply making better informed decisions, he said.
Sawyer has literally written the book on financial modeling while offering what he said entrepreneurs most need to know about starting and running businesses.
The book is part of a new focus for the 64-year-old Sawyer. While he continues to work as a strategist with the Ryan/Sawyer Marketing in Grand Junction, Sawyer said he also spends a considerable amount of his time these days sharing his experiences and expertise through writing as well as coaching and teaching.
The book — titled “Financial Modeling for Business Owners and Entrepreneurs: Developing Excel Models to Raise Capital, Increase Cash Flow, Improve Operations, Plan Projects and Make Decisions” — is published by Apress Publishing in New York.
Sawyer said the new book constitutes a revision of a previous book he said was incorrectly titled “Pro Excel Financial Modeling — Building Models for Technology Startups.”
While the book details the use of Excel in building financial models, it’s more about using financial modeling as a tool for starting and running businesses, he said. “This book is not a software book, it’s a management book.”
The benefit of financial modeling, Sawyer said, is that it helps entrepreneurs plan and think through important processes — from determining what product or service to sell and at what prices to projecting costs and revenues and, of course, calculating the bottom line of whether a venture will be profitable.
In fact, it’s better to develop financial models before writing a business plan, Sawyer said. That way, a business plan serves as a narrative for the models.
Financial modeling also helps entrepreneurs and business owners better explain their ventures and what they hope to accomplish, he said. “If you can model it, you can explain it in detail.”
Financial models are especially helpful in obtaining financing, Sawyer said, whether its from investors or banks. In projecting sales, revenues and expenses and the resulting profits, entrepreneurs will have done a lot of the work for potential investors and lenders. “You’re way ahead of the game.”
Entrepreneurs also will be able to answer important questions about how much capital they need, when they’ll need it and what they’ll do with the money, he said.
Moreover, financial modeling can help determine the value of a business in calculating an equity share for an investment as well as a purchase price, Sawyer said.
While Sawyer presents in his book a case study of a hypothetical business, he said the same principals apply to any business. “I’ve done this with real companies repeatedly.”
Sawyer brings to the book his education in finance, his experience in financial planning positions in banking, technology services and computer manufacturing and his perspective as an entrepreneur who’s launched new ventures.
Sawyer earned a bachelor’s of business administration degree in finance from the University of Florida and initially worked in banking and corporate finance. But he made the first of several career changes in switching to computers and technology.
Sawyer worked for more than 13 years for what was at the time the Martin Marietta aerospace contractor in Denver. He designed and programmed financial systems on various defense department programs. He went on to serve as manager and director of information technology for the Titan missile program.
Sawyer subsequently launched a business offering an Internet-based file backup system and served as president of a company in which he combined three regional Internet operations to sell the business.
Sawyer moved to Grand Junction in 2000 to live closer to the desert landscape he enjoys and was soon involved in technology startups providing software and consulting services to the moving industry and systems and services to the utility industry.
In 2009, Sawyer became a partner in what is now Ryan/Sawyer Marketing to provide marketing and strategy consulting, helping clients create and position their brands.
In addition to his passion for business, Sawyer long has studied meditation as technique for calming the mind, promoting awareness and thinking and perceiving more clearly. In 2012, he spent 64 days in a Buddhist monastery in Myanmar to learn the meditation techniques taught there.
Sawyer said the experience prompted him to shift his focus to sharing his expertise through writing, teaching and coaching.
Sawyer teaches meditation and plans to write his next book on the subject. “I want to talk to people normally not attracted to that.” He said meditation offers another powerful tool to business owners and managers to help them quiet their minds and increase their awareness. “It’s very valuable.”
Sawyer also studies Kung Fu, a martial art he said teaches awareness and whose movements promote physical flexibility and fitness. “It’s really good for you.”
In addition, Sawyer offers career coaching, meeting with clients through videoconferences to talk about what they want to do with their lives and how they can optimize their talents.
Meanwhile, Sawyer hopes to share through his book his experiences and expertise in using financial models to start and run businesses — and in the process, help other entrepreneurs. “Small businesses and entrepreneurs are the heart and soul of the economy. We need to help and encourage them as much as we can.”
“Financial Modeling for Business Owners and Entrepreneurs: Developing Excel Models to Raise Capital, Increase Cash Flow, Improve Operations, Plan Projects and Make Decisions” is available for purchase online by visiting www.apress.com/9781484203712.