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Financial Modeling for Business Owners and Entrepreneurs: Developing Excel Models to Raise Capital, Increase Cash Flow, Improve Operations, Plan Projects, and Make Decisions by Tom Y. Sawyer

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CHAPTER 8

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Cost of Product Development Model: Ensure a Return on Your Investment

Product centric startup companies have two primary cost drivers:

  • Product development
  • Sales and marketing

The cost of product development is the cost the company incurs to design, build, and deliver its product to the market. A financial model, in and of itself, cannot define or articulate strategies for designing and developing products. It can, however, model the application of resources planned for the implementation of these strategies. The Cost of Product Development (DEV) model quantifies and forecasts the resources needed to the implement a company’s product ...

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