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.

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.

A case study of detailed cash planning using SurvivalWare Cash Planner

Ivan Newton was kind enough to be interviewed about his usage of SurvivalWare to right his business and propel it forward.  His conclusion: “SurvivalWare is the best solution we’ve found that addresses the unique ‘balancing act’ of our small business.”

Here is his story as re-told by Mary Ritley:

The Challenge

While the business always looked profitable on paper, further review of the financials uncovered notable cash flow problems – enough that Newton had trouble paying the bills necessary to keep the business going. He found himself in the situation that every small business owner dreads. He was cash poor.

Newton made it his mission to better understand cash flow. He searched the internet for information that would help him understand where the money was going and why he wasn’t retaining more profit.

He purchased a variety of software programs that promised to help him understand ratios, make projections, and improve his business. But he quickly became frustrated with expensive “solutions” with complicated applications that offered little more than monthly comparisons. Newton found that these applications didn’t address his fundamental business problem. He needed something much more granular – something that gave him a magnified view of the cash going in and out the door on a weekly, even daily basis. 

The Solution

It wasn’t until Newton found an article about understanding cash flow by Rusty Luhring that he began to understand the basics of cash planning and how to better manage his resources. The article offered tips like identifying invoices that need to be paid immediately and those that can be put off without penalty, invoicing clients early, and offering incentives to pay within ten days. Newton found that Luhring was “speaking his language” and was pleased to learn that Luhring also developed a software package – SurvivalWare – that put those cash planning concepts into action.

After an online purchase and a simple installation process, Newton found himself up and running with SurvivalWare’s Cash Planner quickly. The interactive solution allowed him to assess his cash situation on a daily basis and made it easy to move numbers back and forth, see the impact of proposed spending, make changes, and smooth out his cash flow. SurvivalWare also offered the ability to convert numbers to charts and graphs that provided a visual representation of cash flow trends. This functionality also made it easy for Newton to share financial information with his operations manager and to understand the critical combination of primary factors – sales, cost of sales, and cost of labor – that drive profitability. 

The Results

According to Newton, “We began using the software in earnest three years ago when we found ourselves in a serious cash crunch. Since that time, SurvivalWare Cash Planner has helped us use our cash wisely, prepare for unexpected expenses, and ultimately maintain a higher cash-on-hand balance.” Newton was also able to meet his financial obligations and avoid bouncing checks.

The ability to actually see the impact of cash adjustments and the results of anticipated decisions was essential for Newton’s business.  “No other software package we found offered the ability to conduct an assessment of the business and see how things were changing on a monthly, weekly, and daily basis. With SurvivaWare, I can enter in my accounts payable, and based on accurate sales projections, chart my projected income,” says Newton. He also found the online help to be very beneficial. When he needed to speak with a support person, Luhring returned his call directly and solved the problem.

What’s Next

Newton has recently installed the beta version of SurvivalWare 2.0 scheduled for release in June. This new version has inspired Newton to experiment with features he had not previously used. SurvivalWare 2.0 has enabled him to categorize his sales vs. only seeing sales as a single number. He can now view his cost-of-sales, identify hot items, see items that are generating the most profit, and decide which items to promote. Newton anticipates this new knowledge of his sales mix will help him further improve his profitability.  He concludes, “SurvivalWare is the best solution we’ve found that addresses the unique ‘balancing act’ of our small business.”

Announcing the official release of SurvivalWare Version 2.0

$385 Introductory Pricing – until May 15th

You can purchase Survivalware with the All Purpose Model (FM2007) at the website for $385, including support for the first year.  Support is $95 per year after that.

(Customers with customized models – check with your group sponsor / franchisor for availability).

On May 15, 2008, the price goes up to $895. Here is the link to place your order:

Special Introductory Offer

It was a long time coming, but feels good to get it out the door.

If you go to our website today,  you’ll notice we’re a little behind in getting the news out.  Normally you’d plan the anouncement and the website way in advance of the release date.  We had to focus all our attention on coding, testing, stamping out bugs, and creating help files and documentation.  Not to mention helping real live customers using older versions of SurvivalWare, and others using pre-release copies of the new stuff.  All part of the “grow with internally generated cash” path we’ve chosen to take.

Here’s the current plan:

• Changes to the Website should go live later this week
• We’ll put out the press release announcing to the general public next week
• The special pricing will stay in effect about 60 days
• We’re discontinuing free trials during this period (hopefully it’s cheap enough to buy to try, and we do have a 30 day money back guarantee)
• The increase to the full retail price of $895 will coincide with the release of version 2.01, including source code for the FM2007 model, and complete SDK documentation on how to modify and build your own models on the SurvivalWare platform
• We’ll probably re-introduce a 30 day trial verson then

SurvivalWare Version 2.0 Status – getting closer

The last post about the status of version 2.0 was 2 weeks ago.  The reference to “Hell Week” turned out to be prescient.   Instead of “Documentation Week” last week it turned out to be “Bug Fix Week.”  That’s what happens when you get it out to a wider circle of Beta testers.

You would think I would have learned by now:

Rule #1: If a feature has not been tested, you can assume it does NOT work.

Rule #2:  The one feature you take OUT of a new version of a software package will be the first thing the Beta testers look for.

I got a call from Danny 10 days ago in a slight panic because he was trying to use the new version for a client and nothing seemed to work.  I was on my bicycle when I first noticed he had called, and pulled over to call him back.  I got this knot in my stomach as he described what was going wrong and I realized how untested the Import routine for Non-QuickBooks data was.  I had been planning to shake down that part of the code with another customer for whom I was loading data before turning the system over to them – so I could work in a controlled environment.  Oops.

When I got back to the office, I was able to figure out what was happening, and started to scramble to make things right.  Danny followed up the next day with a 10 page list of notes full of questions, bugs, and suggestions.  The 5 items on my “homestretch to do” list ballooned to about 25, and hovered there over several days as I fixed things, deferred things, and monitored the field testing.  But there were some awesome nuggets in Danny’s list.  The bug fixes had obvious priority, but I found time to work on some of the other suggested improvements because they just made so much sense.  One is the use of “Thumbnails” for the list of Dashboards, and another was to reduce the size of the icons in each module.  Yet another was to given you notification that a file was being saved if you had the AutoSave set to on – just so you’d know what was going on.  Thank you Danny for taking the time to document the bugs and suggestions.

The weekend was a turning point as the number of items came back down to 5.  In addition, I had some dedicated time from my graphic artist during Spring Break, and he was able to crank out some terrific work.  I feel like we’ve just given the software a fresh coat of paint.  I completed another Beta Test version this morning, and will roll it out to key customers today and tomorrow (I have to create/update special “Install” files for certain customers).  We’ll get a new version of the Help File / Documentation from our technical writer by Wednesday, and get that into testing as well. 

I feel like we can still meet the March 17 release date for end users, but that the technical documentation that will allow developers to create their own SurvivalWare models will take longer.  Our plan is to offer a special introductory price for SurvivalWare starting on March 17^th for a fixed period of time, 30 to 45 days.  Don’t buy it until it goes on sale!

SurvivalWare Version 2.0 Status

We’re still on track for the March 17, 2008 release date.  The “home stretch” list is down to 5 items.  We’re sending more beta test versions out this week.  Several have already gone out this morning.  The documentation is still 60% done.  I’m hoping to get a new version of the help file from our technical writer this week.  Next week is Spring Break for Virginia Tech, and North Carolina State University.  This means that the Luhring SurvivalWare work force will experience a surge and we plan to stage a “Doc Week” (Hell week?) to complete the technical documentation users need to do their own customizations.

What’s New in SurvivalWare Version 2.0 for Franchise Customers

First, the look and feel is totally different.  If you want to ease into the new user interface, you can go into Rusty’s Toolbox which has the same functionality as before with a few extras thrown in.  Early testers have commented favorably on the new look and feel.  Felt it was much more friendly than before.

The new dashboard is a work in progress.  There are gauges available, and comparative data to populate them with numbers.  You can have more than one dashboard, and can customize your own if you want (or get me to do one for you).  Right now I have three hooked up – the original with 6 charts per screen showing trends of KPIs, a sample 3 gauge screen, and a report card style dashboard.  You can right mouse-click on the Dashboard Icon to select a different Dashboard from a list of those available.

You’ll spend most of your time in the Data Viewer, looking at trends, and many “aha” moments as you cruise through the Comparanator and see how you stack up to the others submitting data via SurvivalWare.  You’ll have to let corporate know how important it is for them to feed this comparative data back to the franchisees on a regular basis.

The reporting is kind of neat.  You see more clearly the difference between a report and a column set, and you can drag and drop to join them together in a preview.  You can also add them to a package of reports, and re-arrange the order of reports in that package.  You can create several report packages yourself, and share them with peer group members and friends.  The “Lauer” series of report packages comes with the new version, designed by someone who knows your business.

The charting as a special module has not yet been done – but rather deferred for version 2.1.  This was one of the tough decisions, but I had to get the other stuff working first, and I had customers and prospects clamoring for the new version.  Hopefully we’re looking at a test version of Charting available in the Spring.

You’ll notice that there are separate Budgeting and Projections modules.  The Budgeting module takes you to a DataViewer type screen with just the two budgets tabs available (current year budget and next year budget).  You have the Budget menu items from Version 1.0 available if you want to use the customized Salary Expense or Capital Expenditure modules.

You can do a two click load of a budget from the new Excel template that Kirk prepared for this year – by clicking on the Automator button while in the Budget view, and then selecting the Excel file containing your budget.

Then there is the “Company Stats” module.  In this module, you define a population of locations (e.g. all those in a specific region, or all those submitting data), and crunch the numbers to create a Comparison Group.  These groups can then be used in conjunction with the Gauges in the dashboard, and the Comparanator in the DataViewer.   The end user is able to look at a gauge on the dashboard, and see that his sales are at the 70^th percentile, for example.

Tech Note – Setting up a new company in SurvivalWare

One thing nice about being a small software company is that you can make design decisions quickly without having to get approval or communicate with other departments.

This is especially nice during the “home stretch” phase just before release of a product when you are trying to develop the help files and documentation to explain how to use the software, while at the same time getting feedback from alpha and beta testers who use it in real life.  Having to explain how or why to do something can expose clumsiness in the user interface.

We had one of those moments this weekend.  We are putting a whole lot of effort into making it simple to set up a new company in SurvivalWare and do the initial mapping and loading of financial data exported from their accounting software.  I have found that if you can get someone to look at their own data in SurvivalWare, there is about a 90% chance they will buy the software.  The fewer barriers to getting to this point, the better.

Thinking like a programmer, I had put in a “Company Setup” icon on the main screen – not to set up a new company, but to let you edit the “Setup info” for an existing company.  Setup info consists of a company ID and a long company name, a company logo, and details about where the financial data is coming from.  Anne, my technical writer, was given the task to explain to a new user how to set up a new company file in SurvivalWare, and load financial data.  She kept going to the “Company Setup” to accomplish this task, and really got tripped up when I took out the “<Add New>” feature of the Company Selector.

The solution was to make the whole “File / New, Open, Save, Save As” menu structure available in “Company Setup.”  As I write this, I realize that it really makes sense to take the next logical step and make the “Load Data” icon available on the company setup screen.  Instead of telling the user to “Go back one level, and then click Load Data” after setting up a new company, it’s just “Next, click the Load Data icon.”

Tech Note: Company Selector

Warning: I have my programmer’s hat on.  Language may not be suitable for non-techies.

8 a.m. Saturday morning.  I’ve spent the last hour and a half trying to track down a bug in the “Add New” option of the Company Selector.  This is on top of the last hour and a half of the workday yesterday.  To refresh your memory, the Company Selector is available in the Data Viewer and a few other places.  It lets you select a company from a pull down list.  It builds the list by looking at all MTX files in the current DATA directory.  (There is also a way  to control what appears in the list via a setting in FinMod.SMD, the model control file for a given model).

Right now, I insert the text “<Add New>” as the first item in the list.  If you select that, and click OK, you are prompted for a Company ID, which SurvivalWare uses as the file name by adding “.MTX” to the end.  It seems to correctly set up the new file – because I can come back open one that I’ve created.

But for some reason, right after it sets up the new file, and on its way back to the DataViewer, it bombs.  Unfortunately, it is one of those catastrophic errors that practically bring down the entire PC, and leaves you clueless where to look.

And then after I click “Don’t Send”:

Here’s a portion of the “Error Report”.    I wonder if someone actually reviews this if I click the “Send Error Report” button.  I always figured it was like the “Close Door” button on elevators – something to make you FEEL like you have some control, or that you’re doing something about the problem.

I finally decided to wave the white flag.  You no longer will see “<Add New>” as an option in the Company Selector.  That feature will be kicked onto the Version 2.1 list, to be analyzed and prioritized at a later date.

I thought it was going to be an easy fix – just find where I put the item <Add New> in the list (it turned out to be in 4 places) and comment out that line.  I’m being optimistic that I’ll be able to come back and fix it later.  I just tried running it, and now have to search for the 4 or 5 debug messages that now appear since it no longer bombs.

You can set up a new file easy enough: just select File / New from the main screen, and you are done.  File / New is also available in Rusty’s Toolbox.

Background on the Automator – Part 4 – Overview

Overview – the Automator

It’s all about productivity.  At the top level view, few would argue that good financial management is a desirable thing.  A company that is well managed financially has a better chance of paying off its debts, providing a comfortable living for the owner, and avoiding cash flow catastrophes.

It takes time and effort to do it well.  That’s where SurvivalWare comes in.  From the very beginning – loading data from Quickbooks (or other accounting systems), to printing packages of reports, to scanning 70 trend graphs during a 2 minute drill – there has been an undeclared emphasis on getting it done with the least amount of effort.

The Automator helps you (or a consultant working for you) automate many of the tasks involved in monitoring your company’s finances and operations.  Larger companies spend big bucks on Business Intelligence (BI) software and systems.  With the Automator / Command Language, SurvivalWare makes affordable and practical “BI for the Little Guy.”

Background on Command Language

Command Language has been around for ages in one form or another.  The most well known in the early days of PC’s was the MSDOS Batch language.  Any command you could type at a C:> prompt, you could put into a batch file, and have it executed in sequence.  You had access to variables, and I think you could do some conditional stuff.  And of course you could add comments with the REM (remarks) command. You could do some powerful stuff.

In my first startup, Ferox, I developed a command language called Exec to go along with the DOS version of ENCORE!, our financial modeling language.  It evolved quite a bit over the course of a decade, and people were developing complete systems with it to handle consolidation, financial reporting, and the buzzword at the time, EIS (Executive Information Systems).  There were a number of financial / accounting types who got totally hooked on ENCORE! and Exec, because they could automate some tedious work, and spend more time thinking rather than keying numbers.  It also provided a vehicle for some entrepreneurs to offer modeling services and custom report writing.

Now 15 or 20 years later, here is a command language updated for the times we live in.  And every bit as empowering as Exec back in the day.  You (or a consultant) can build menus, automate the loading and transfer of data, and create entire reporting systems if you want.  You can periodically pass control to a SurvivalWare module (e.g. the Projections Viewer) to let the user interact and play.  Then automatically create reports and charts based on the work just done.

Theory of Operation

The Automator allows you to access the functionality of SurvivalWare in small and large chunks alike.   You assemble these chunks into programs to automate in large part the loading of data, and creation of reports, and guiding a novice user through the analysis and projection tools.

There is a menuing system that allows you to take control of the user, and periodically give control to a major SurvivalWare module, such as the DataViewer.  You can set things up so that when an end user fires up SurvivalWare and clicks on the Automator Icon, your application takes over from there.

The Automator is a great way to automate the printing of a bunch of reports and graphs together with a cover sheet in one attractive package.  There is a PrintDashBoard command that allows you to include the Dashboard graphs as part of the package.  The AskPrinter command prompts you at the beginning of a print job to select a printer (or PDF file if you have Acrobat Writer or some other PDF creater installed).  How cool is that – click an icon, confirm name of PDF file – and voila, a 50 page report.

This can be especially useful for franchisors, multi-unit owners, and companies with light consolidation needs.

The built in FTP commands (and Zip and Unzip) make it possible to include single click file and data synchronization with Headquarters or a central facility run by a group sponsor.

It is nice to be able to launch the major modules from your own customized menuing system.  For example, you might want to put them into the DataViewer after loading some data, or the Mix and Match Report tool when they ask for something different.

Keep in mind that the center of the universe for SurvivalWare is a financial model that provides “buckets” to analyze history; and projection logic to calculate a full Income Statement, Balance Sheet, and Cash Flow Statement months and years into the future.

There are rows for non-financial data (such as FTE’s, Web Visitors) and Key Performance Indicators (KPI’s) derived from the combination of financial and non-financial inputs.

The model may be generic (FM2007 – for most small companies) or customized (e.g. “Franchise Customer A”).  Up until now, all the customization has been done by Luhring SurvivalWare.  With the release of version 2.0 and the development tools and documentation created for the Automator, it is now possible for a non-programmer (but technically proficient PC user) to customize models and systems.

Examples of Systems built with Command Language

Here are just a few examples of applications that have been built using Rusty’s Command Language in the Automator:

Franchise data collection and analysis system

One example of a Command Language application would be a system built to handle the movement of data between a franchisor and hundreds of franchisees in a franchise system.  The franchisee imports financial data from QuickBooks locally and views the latest month’s results.  He clicks on an icon to send his financial data to Corporate, and retrieve operational data from the system-wide POS system.  Behind the scenes, an RCL file exports a subset of his SurvivalWare data file to a CSV file, sends it to a specific FTP site, and checks another FTP site to see if there is new data available from corporate.  If so it is downloaded and put into the proper buckets in the SurvivalWare model.  The user clicks another icon to see a Dashboard with the latest Key Performance Indicators (KPI’s) calculated using a combination of Financial Data imported from QuickBooks (e.g. Total Sales and Expenses), and operational data from other systems (e.g. Number of Transactions, Paid Work Hours, Leads, etc.)

Special Purpose data translation and loading

Another example is the automation of the loading of Website visitor statistics from Google Analytics into a financial model so that resources and results can be analyzed together.  We are doing this ourselves so that we can track traffic from four major sources over time, and compare the cost of attracting a visitor from each source.

Simple Applet to print reports

Yet another example is a small applet that prompts for a Title, and then prints a Dashboard and a set of Financial Reports using that title.