SurvivalWare Version 3.0 – What’s New?

We’re targeting October 15th to make the formal announcement.  This version has been in “soft release” since August 31, 2009.  It has been available as a 30 day trial, or for purchase.  We just didn’t tell anyone about it (unless they stumbled onto our website).

Now we’re about to start telling the world.    Here’s the top 10 list of what’s new in SurvivalWare version 3.0:

  1. Drilldown enabled from Projections module
  2. Export to Excel;  streamlined import from Excel
  3. Comparanator now available in projections module for doing scenario comparisons
  4. Consolidation / comparison list builder
  5. KPI Customizer allows the user to define non-financial data to track, and calculations based on these and the financial data already loaded
  6. Dashboard customizer allows for user to select variables and color breaks for gauges and barcharts
  7. Report customizer runs off easily changed specifications in a master Excel file
  8. By Column reports – can now select any time period
  9. FortKnox foundation model (this will be sold separately at $295 when the introductory price expires).  In SurvivalWare version 2.0, the all purpose model was called FM2008 and was free.  Fort Knox is a big improvement over FM2008.  I
  10. Improvements to the Forecast Tool 

A few more words about the Fort Knox model:

  • 60 months of history instead of 24
  • 12 month moving avg columns available for reporting and Comparanator
  • 36 months of projections, up from 12 previously
  • Auto-balances the projections using negative cash or borrowing from a credit line – your option.
  • Makes full usage of Term Loan calculator
  •  Here are the improvements to the Forecast Tool:

    • Term Loan calculator
    • ARC Loan calculator
    • Can adjust seasonal forecast up or down
    • Can control which months each technique applies to
    • “Inflate as of” option
    • Simplified user interface

    SurvivalWare including the Fort Knox model is priced at $495 through the end of this month.  Starting November 1, the Fort Knox model will be sold separately at $295, or $790 bundled together with the SurvivalWare platform.

    Shining the light on Key Performance Indicators – works for personal life as well as business

    I decided to test the theory that analyzing and publishing Key Performance Indicators will improve performance by designing what I call the “FaceBook Diet.”  You can eat anything you want, but must publish your weight on FaceBook for friends and family to see every day.

    I used myself as a guinea pig and lost 15 pounds in 90 days.  See details at Rusty’s Blog: http://www.survivalware.com/rustysblog/?cat=5

    ARC Loan analysis using SurvivalWare

    We recently had a prospect (now customer) express the need for a tool to do the cash flow projections in support of his ARC Loan application.  I was putting the finishing touches on the new Fort Knox model (solid, substantial, money-focused, good as gold) for SurvivalWare Version 3.0, which according to an April blog post, is just around the corner.  

    He needed something right away so he could get his application in.  He had found SurvivalWare via Philip Campbell’s website.  I’ve kept the advertising turned off since February so the whole company can focus on getting this new release out the door.  Can’t be disturbed by pesky prospects asking questions about software not yet ready for sale.  But this guy was very nice, and educated me on the whole ARC loan program, and we worked out a deal where  I would load his historical data for him and walk him through the steps for doing a cash flow projection via a web session.  I figured it would be a good test of the new model, and especially the Term Loan Calculator I had just added.

    Naturally SurvivalWare flunked with flying colors.  We had to use a kludge to model the ARC Loan because its characteristics were not normal.  Plus, I had made room for a maximum of 24 months of projections – but less than that as each month of the current year passes.  So about 18 months at this point.  Plus there were no reports to show the projected Quarters instead of months.

    So I decided to add an additional 24 months for projections, so that the bank would not have an excuse to exclude an applicant because it showed 18 and not a full 24 months of projections.  Also I added a special ARC Loan option to the Term Loan Calculation in the Forecast Tool.  It models correctly one of these silly $35,000 SBA with a drawdown period, 12 month deferral, and interest picked up by the feds.  I couldn’t resist and added some analysis features to look at these loans from each of the three points of view:

    • Small Business Borrower
    • Bank making the Loan
    • SBA / Federal Government

    I’ll share the results of that analysis in another blog post.  I really hope that Tim Geithner and the other senior government officials look at things from “our” point of view when crafting the new Small Business program.  They have an opportunity to do it right this time.

    In the meantime, if you are desperate for a tool to help with the projections, I am allowing pre-release versions of SurvivalWare to be sold on a limited basis.  Give me a call or shoot me an email.  Current estimate on release of version 3.0: early August, 2009.

    Computer Modeling in the News

    It really is amazing how important computer modeling has become.  This is where the computer really plays to its strengths.

    The latest Scientific American (July, 2009) has a cover story article entitled “Grassoline at the Pump” and goes on to paint a very optimistic picture of using non-food plant material to provide 50% of our liquid fueld needs.

    From page 55,” “Scientists.  have recently enjoyed an explosion of progress.  Powerful tools such as quantum-chemical computational models allow chemical engineers to build structures that can control reactions at the atomic level.” (Emphasis on models was mine).

    Then there is an article I clipped from the June 24, 2009 Wall Street Journal: “Dreamliner’s Delay points to difficulties with composites.”

    “Independent structural expers said Tuesday that even the most advanced computer models sometimes have difficulty accurately predicting how stress will affect the composite parts, or where they attach to aluminum or titanium.”

    This was a companion article to the surprise announcement from Boeing that they were delaying the flight test for the 787 Dreamliner in order to reinforce the attaching of the wings to the fuselage.

    SurvivalWare is, of course, a form of computer modeling.  It actually does two kinds: 

    1) basic Financial Modeling, which allows you to do full financial statement projections – i.e. the Income Statement, Balance Sheet, and Cash Flow Statement – based on your analysis of history (conveniently stored in the same model), and assumptions about Sales, Headcount, Expenses, Capital Expenditures, Loans, etc.  Building financial models takes a special skill, and that is part of what SurvivalWare customers get to tap into:  my 30+ years developing financial models for a broad range of industries and company sizes.  An immediate use of this kind of modeling is producing the two years of cash flow projections most lenders ask for when you apply for a loan.  The recently announced ARC Loan program run by the SBA has this requirement.

    2) Monte Carlo simulation – used by SurvivalWare’s Cash Planner.  Each and every cash disbursement and receipt is simulated over a 13 – 26 week period (or longer if you want.  Typcially the focus is on the short term).  Measurements are taken at various points to see how much cash is in the till. You can also include credit cards in the simulation.  You have to go to a fair amount of trouble to set up one of these simulations, but it can be a life saver when your back is against the wall, and survival at risk.

    SurvivalWare Version 3.0

    What a terrible communicator I have been recently: the last post to this blog was 3 months ago, about the same amount of time since the last newsletter.

    I am turning over a new leaf.  As a company, we finally figured out what we are good at, and what customers are willing to pay for.  Luckily there is some overlap.

    Version 3.0 is all about SurvivalWare coming of age as the ultimate small business analysis tool.  Every business is unique, and with version 3.0 we hope to make a quantum leap forward in the ability of customers to customize a Survivalware model.  You can customize in layers – for example, leave the model logic intact but create a new set of dashboards with your own targets contained therein. Report formats will be under your control, so format to your heart’s content.  If it’s just the Stats and the Key Performance Indicator (KPI) calculations you want to customize – not a problem.  The specs are housed in a separate Excel spreadsheet, and you are free to edit and re-generate the SurvivalWare model at any time.  The SurvivalWare model stays intact – it just adds on the newly created logic in a space reserved for PlugIns.

    Then there are the new and improved forecasting tools.  Recently I worked with a customer via a web session to help him learn how to use SurvivalWare to put together some financial projections.  This was in connection with his efforts to secure an SBA loan.  It sure would have been nice if SurvivalWare could have handled the modeling of the loan itself a little easier.  It’s embarrassing when you tell a customer to go do the loan amortization calculations in Excel and copy/ paste the principal repayments in one line (and reversing signs to create negative numbers representing cash outflows), and then figure out the interest rate and type it in a separate row.  There were some other glaring deficiencies as well in the ease of use of the underlying financial model. 

    So in version 3.0, a big effort has been made to make it easier to create and understand financial projections.  The more uncertainty there is in the economy, the more critical it is to update financial projections frequently, and watch key performance indicators like a hawk.  But if it is hard to do, it won’t get done.

    We are systematically collecting support call data using IssueTrak, and will continue to cull “opportunities for improvement” based on what customers are having the most trouble with.   IssueTrak promises to be a great management tool as our customer base grows, and the support team along with it.  (Full disclosure, I am a director of IssueTrak, Inc.  My brother, Hank, is founder and CEO.  www.issuetrak.com)

    So when will this new version of SurvivalWare be available?  As soon as I quit bragging about it, and get back to work on it.  I’m shooting now for a May, 2009 release.  I have several customers in the middle of major customization projects I am applying the new technology to.  I want to have all of them up and running before final product release.

    We’ll also be publishing a ton of technical reference content covering the Automator (for creating applets), the Model Generator, Report specifications, and automated Graphics (including the Comparanator).  The hope is to make it attractive for third parties to build customer solutions on top of the SurvivalWare platform.  Lots of demo and training videos are planned as well.  Well – at least they’re past the “gleam in the eye” stage.  Look for the documentation and videos to appear a couple of months after the software.

    Year End Rollover

    Your SurvivalWare data file (.MTX) holds a limited amount of historical data.  At the end of each year, there is a process you go through called a “Rollover” to archive the oldest 12 months of data, and make room for the new year.

    rollover

     

    The time to do the rollover is when you are ready to load January data – which is probably some time in February.  You can do it right AFTER loading December data.  There is no harm in doing it then.

    NOTE: If you are on a fiscal year that ends in a month other than December, you would do the rollover after loading the first month of the new fiscal year, not January.

     

    To do the rollover, go to Rusty’s Toolbox from SurvivalWare’s main screen.

    rustys-toolbox

     

    As a way of preventing accidental rollovers, SurvivalWare requires the “Last Actual Month” be set to December (the last month of the Fiscal Year) before you are allowed to do a rollover.  From Rusty’s Toolbox you can set the Last Actual Month yourself – select Data / Set Last Actual Month.

     

    rollover-setlastactmonth

     

    When you are ready to do the Rollover, select Data / “Rollover this file”.

     

    rollover-budget-options

     

    The first box controls what the settings are to be AFTER the rollover.  Set the month to January (or the first month of the Fiscal Year if you are on a fiscal year).  Set the year to the new fiscal year.  (2009 for those rolling over from 2008).

     

    You have four options for dealing with the Budget:

     

    1. Clear budget columns – just sets all the budget values to zeroes, for both the 2009 Budget, and the 2010 budget.
    2. Preserve budget data – leaves the 2008 budget in the 2009 budget columns.
    3. Move projected values into Budget Columns – the monthly projections you made for 2009 are moved into the 2009 Budget columns.
    4. Move Next Year budget into Current Year Budget.  During 2008, you are allowed to work on the 2008 budget (Current Year) or the 2009 budget (Next Year).  All actual to budget reporting uses the Current Year.  If you’ve already prepared the 2009 Budget,  you can move it into the Current Year budget columns during Rollover. (This is the default).

     

    When you click OK, SurvivalWare saves a copy of the file pre-rollover in the Archive directory, and tells you its name.  Your current file will now show a current fiscal year of 2009.  You can select File / Properties, and click on “This Data File” tab to check.

     

    rollover-properties

     

     

    Time periods stored in a SurvivalWare MTX file

     

    2008 file prior to rollover:

     

    Months:  Dec 2005 to Dec 2009

    Years: 2010 to 2019

    Current Budget: 2008

    Next Year Budget: 2009

     

    2009 file after rolling over the 2008 file:

     

    Months:  Dec 2006 to Dec 2010

    Years: 2011 to 2020

    Current Budget: 2009

    Next Year Budget: 2010 

     

    Note:  The time periods stored may vary from model to model.  The example above is for the generic FM2008 model that comes with SurvivalWare.        

     

     

     

     

     

    “How to Take Control of Your Cash Flow” Webinar re-scheduled

    We’ve been doing webinars the last 3 or 4 months in an attempt to make the sales and training process more efficient.  Simultaneously, we cranked up the advertising and marketing efforts, and have created a steady flow of prospects who want to do a better job of forecasting cash flow and future liquidity.

     

    We still talk to people one on one – in fact we like doing that.  But as you can imagine, 20 or 30 people attending a webinar helps us leverage our time and reach more people for a relatively low per capita investment in time.   So we’ll continue to do both, and expect the webinar attendance to reach 75 to 100 at a time as we crank up the marketing surge next year.

     

    We finally hit on a format that is goes right to the core of a critical need facing small business / all business with “How to take control of your cash flow.”  Philip Campbell, author of the book “Never Run Out of Cash”, explains in plain English the difference between Net Income and Cash Flow, and why you positively cannot run a business well without doing cash flow projections.

     

    Then I follow with a very targeted demo of SurvivalWare – first doing an analysis of the latest cash flow for a mythical company, and then going through the steps of creating a cash flow projection for the next 18 months.

     

    We had about 20 attendees at the Dec 1, 2008 presentation of this webinar, and recorded it using the GoToWebinar recording feature.  It actually turned out pretty well.  Philip’s part was especially good. (www.survivalware.com/webinars.html)  I decided I needed to improve the dummy data for my demo.  I had used the “data disguise module” in Rusty’s Toolbox to create the dummy company data from a real live customer submission.  Unfortunately some of the randomizing caused weird things like negative cash to appear in a couple of months.  I’ve got that all fixed now for next time, and the numbers actually tell a story now.

     

    I’m toying with the idea of working with 100% real live data submitted just a day or two in advance if there are customers or prospects willing to participate.  We don’t have to reveal whose data it is.  But I find real live data more compelling than contrived examples.  The truth is stranger than fiction.  Send me an email if you want to volunteer.  It could be a cheap way (free!) to get your initial data mapped and loaded.

     

    So here I am burying my apology for what happened yesterday 6 paragraphs deep.  We had 22 signed up for yesterday’s webinar, and lo and behold with less than 10 minutes to go, I couldn’t get the audio portion to work (basically a conference call number that GoToWebinar provides).  The reason to use their audio service is that they seamlessly include the audio when you record the webinar.  No special microphones or cabling required.  It’s great when it works. 

     

    After about the 10th try, even using a different phone line, different telephone handset, I had to punt. I put up a lame message in a Word document and showed my screen to all attendees.  Anne Briggs is supposed to follow up with a personal email to each today.  Best laid plans and all that.  I am sorry for wasting your time.  Unfortunately, I can’t completely rule out user error.

     

    I’ve decided that next time we will have a backup conference call number just in case (and forgo recording the session if we have to).  Also, I’m going to make a renewed attempt to create some pre-recorded webinars of shorter duration, for specific topics like “loading data”,  “Valuation”, or “RMA Ratio Analysis”. Then you can view these at your convenience – no need to sign up for a webinar.

     

    So what’s a person to do when you’re so embarrassed you don’t want to show your face?  Well, it was 60 degrees outside in mid December.  I took a nice long bike ride.  The photo below is from a park just north of old town Alexandria, looking up toward Washington, D.C. in the distance.  This was about 9 miles by bike from the world headquarters of Luhring SurvivalWare, Inc.  Not all was lost. 

    alexandria_waterfront_12-15-2008_looking_north

    Einstein and Entrepreneurs – Traits in Common

    My son Nick, who is studying to be a theoretical physiscist (I think), sent me a link to this article that appeared on www.entrepreneur.com,   

    Here’s an excerpt:

    “Entrepreneurs have more in common with Einstein than they think. Many of the traits that led him to be named Time magazine’s Person of the Century–kind of an elite club–drive people to create businesses. Do you see a little of Einstein in you?”

    He goes on to list 10 traits, which I think are revealing (also makes me proud to be an entrepreneur).  I rate highest on trait #6 (naps).  See how you compare to Einstein.  Here’s the link to the full article:

    10 Traits that Einstein and Entrepreneurs share

    Einstein statue in Washington, D.C.

    Einstein statue in Washington, D.C.

    Models have personalities – Part 1: Overview

    kelly-rachael-027

    SurvivalWare is a software platform on which to run financial models.  A financial model is a mathematical representation of a company with an emphasis on financial results.  The idea is the same as with other models or simulations:  you tinker with the model instead of doing things in real life.  A financial model is just a list of variables, and formulas to apply to the variables.  Generally, you’ll have one set of formulas to apply to historical time periods in order to calculate Financial Ratios and Key Performance Indicators (KPI’s).  Another set of formulas will look into the future, and translate your assumptions about what you expect to happen into a complete set of financial statements for each time period in the planning horizon.  The planning horizon is typically “the rest of the year,” or “the next 12 months,” or “the next 3 to 5 years.”

     

    kelly-rachael-005-rachael-boats

     

    The model developer has a number of decisions to make:

    • What comprises the “Common Chart of Accounts?”  This can vary quite a bit from one industry to another.
    • What are the KPI’s for companies in this target market?  How are they calculated?
    • What non-financial data should be collected to support calculation of the KPI’s?
    • How much history should the model hold?
    • How far to project into the future?
    • What are the critical success factors that drive the projections?
    • Should I include the 12 month average option?
    • What variables are the most important and should be displayed in the dashboard?
    • How many reports and what does each include?
    • How many column sets?
    • How to divide the data into tabs for presentation in the DataViewer grids?
    • What SurvivalWare icons and options should be displayed on the main screen?
    • Should I develop some applets to automate certain things like the collection or distribution of data among participants in a group?
    • Should I go to the trouble of building consolidation logic in case there are multi-location owners?

     

     

     

     

     

     kelly-rachael-010-kelly2

    These and many other decisions combine to form the personality of a model

    FM2008 – the all purpose financial statement model

     

    FM2008 is a general purpose model, and is the one that comes with SurvivalWare when you buy it off the website. It allows for up to 10 product lines, and 40 or so operating expenses.  You can customize the product names, and several expense categories.  The Balance Sheet is fairly standard, and most importantly has “Other” categories for Current Assets, Long Term Assets, Current Liabilities, Long Term Liabilities, and Equity. 

    kelly-rachael-028-rachael-bridge1

    Cash Flow Statements are calculated in two different formats: the Traditional one blessed by the organization formerly known as FASB, and the Peace of Mind schedule promoted by Philip Campbell in his book Never Run Out of Cash

    The Working Capital section is real nice – calculates automatically the number of Days of Cash you have on hand each month, and also Days of Inventory on hand, Days Sales of Receivables, and Days Expenses of Payables.

    You can track your credit limit for Credit Cards and other Credit lines, and SurvivalWare will calculate the total amount of Cash and Available Credit each month so you can see how close to the edge you are. 

    There is a Valuation section that calculates a value of your business based on four different methods, and your assumptions about “multiples” of EBITDA, Sales, Net Income, or Equity. 

    The Non-Financial Data section is kind of bland – stuff like Headcount, Square Feet of retail or office space,  and then some high level stats for web-based businesses such as Website visitors,  new prospects, and new customers. 

    There is a Custom KPI section that was just recently revamped and documented so that you can specify additional variables to track and special calculations to make.  We don’t recommend doing this yourself unless you feel comfortable doing light programming tasks.

     

     

     

    Oddly the RMA ratios are available only in printed reports.  Not sure why.  These are the same ratios published by RMA based on the financial statements of thousands of companies as reported by their banks.  There are 700 some NAICS (formerly SIC) codes for which benchmark financial ratios exist. 

    The FM2008 model allows for 24 months of history, plus 12 months of the current year, and 12 months of additional projections.  Another 9 years of projections are possible beyond that. 

    You can view the data as months, quarters, year to date totals as of any month, full-year totals, or 12 month moving averages. 

    Alphagraphics – highly customized model and analysis system 

    At the other extreme is the Alphagraphics model.   This was started in the summer of 2005 and rolled out to their network of franchisees in early 2006.  After a year and a half of field experience, Alphagraphics agreed to fund some development in return for a promise to overhaul the user interface and make it easier for any franchisee to use, no matter how computer illiterate.  This effort took a long time to reach fruition, but is now in its fourth month as version 2.0.

     

    kelly-rachael-kelly-bridge-strut 

    The SurvivalWare software platform is the same for FM2008 and for Alphagraphics.  You run the same EXE file – SurvWareV2.EXE.  You do drilldowns, trend charts, and reports the same way,  regardless of which model you are using.  But the variables and report formats are different.  And there are some special purpose modules written just for Alphagraphics that are accessible from the main screen, such as the Vital Metrics report, and the AG Rankings Update routine.

     

    kelly-rachael-020-kelly-phoneeiffel 

     

    SurvivalWare’s opening screen

     

    The opening screen reveals up to 15 modules and applets that can be accessed right away.  The FM2008 model makes use of 13, and includes one that Alphagraphic does not have – the Report Package module.  The AlphaGraphics model adds three modules and applets that do not appear when the FM2008 model is running:

     

    • Vital Metrics Report
    • Leaders and Stats
    • AG Rankings Update

    main-screen-fm2008-ag

    Little known fact:  you can run the FM2008 model in “retro” mode by logging in as the user “retro.”  The icons used then are the original edgy, whimsical icons created by Nick Luhring.

    main-screen-nick

     

    Part 2 of this article compares and contrasts these two models in more detail, delving further into their respective personalities, and explains what they actually do.

     

     

    Why I am a Solopreneur

    I love programming.  I like to solve big complicated problems.  Especially when there is a purpose, such as making money or helping a loved one.

     

    My love of problem solving is one of the reasons that I have evolved to become a Solopreneur.  It lets me indulge my passion for software design and programming.  I don’t have to let other people have all the fun.

     

    I’ve observed what it takes to become the successful leader of a growing company.  You have to spend time on it.  You spend a lot of time on people – recruiting, evaluating, meeting with, seeking out opinions from, and sometimes firing.

     

    I like to have a certain amount of alone time each day.  When I can concentrate with no distractions, and think about the problem at hand.  Maybe I need to break a larger problem into smaller parts.  Maybe I am writing code to solve one of those parts.  Maybe I am researching new stuff, or trying to find a bug.  This is how I get my jollies.  I get up early most mornings to make sure I get my quota of alone time, even in the midst of deadlines and scrambling for cash.

     

    I also like to help people.  I get a genuine kick out of doing something for someone else.  But I’d rather sit back and let them come to me rather than to seek them out.  Doing customer support is a natural outlet for this aptitude and desire.

     

    Solopreneur as software developer can make for some very happy customers, because the developer is forced to face the music if he gets things wrong.  There is no bureaucracy involved in the decision making.  The disadvantage is that it is just one person, and it is hard to get everything done.  As cash flow improves, certain tasks can be sub-contracted out without compromising product quality. The competition fields teams of dozens and hundreds of developers.  Being close to the customer is your only chance at competitive advantage.  Walking in your customers’ shoes, solving the right problem, and all that.

     

    Here is the other part of my Solopreneur strategy:  finding other Solopreneurs who can be close to their customers.  Other Solopreneurs to automate and customize using the Automator and the financial modeling language built into SurvivalWare.  If I can teach other people to do what I do, and make them efficient and productive, I extend my market and reach exponentially without having to hire people and build a real company.

     

    A modeler with some special industry knowledge can tackle micro-markets the big guys just can’t afford to go after.  This is the promise of SurvivalWare – for the Solopreneurs (including myself) who deliver their expertise in the form of models and applets, and for their clients who reap the benefits of specialized software without having to shoulder the full burden of development.

     

    There is an organization devoted to helping Solopreneurs called the International Association of Solopreneurs (http://www.solopreneurs.org).  I was interviewed by the founder, Donna Amos, earlier today, and I checked out the website.  Some great resources for entrepreneurs, whether flying solo or not.  But watch out for the interviews..

     

    I came across a couple of goodies I really liked on her original website:

     

    Are You Ready to Start Your Own Business?  The 4 Key Questions You Must Ask

     

    http://www.donnaamos.com/are-you-ready-to-start-your-own-business-the-4-key-questions-you-must-ask/

     

     

    A white paper on the benefits of creating white papers

     

    (you have to give her your name and email address to get the white paper, but it is well worth it)

     

    http://www.donnaamos.com/?s=white+paper