Planning on a timeline – how to use time to your advantage in business planning
One of the elements of Brixx that we’re most proud of is the Timeline. Every component in a Brixx plan sits in a particular place in the plan’s Timeline, with a clearly displayed start-point and end-point. This means that any financial activity in a Brixx plan, be it a source of income, the purchase of an asset, the sale of shares, can be changed to take place at a different time. You can also adjust the Timeline for groups of components – the applications of which are almost endless.
Consider a group including a new product line:
Currently, this group, and everything in it starts 1 month after the start of the plan. By dragging the group’s grey timeline bar all components in the group can be moved at once, ensuring that all products in the product line and their associated cost of sale are moved together. We might do this to represent the product line being delayed or brought forward.
The group of components described above is pretty simple, but sets of grouped financial activities can be more complex.
For example, what about a property purchase, with its associated mortgage, change in mortgage rates, repair and maintenance costs for the property and the rent gained from renting the property out after some initial refurbishment costs. In Brixx this whole set of related financial activities is easy to assemble into a group of components. They can be easily manipulated on the timeline, moved forward or backwards in time depending on the situation being modelled. Perhaps the property purchase is delayed, or renovation takes longer than expected.
The timeline also makes some key changes inherently visual. Consider the following example:
In many cases where you are selling a product, once you have reached a certain level of strength in your sales you will be able to re-negotiate with your suppliers for a better deal on the goods or services they provide. In Brixx, I would model this using two Cost of Sales components, one for the initial cost, and another for the re-negotiated cost. On the timeline it’s easy to set the second cost to start taking effect at the moment the first cost stops being applied. And with the Group Cost of Sales component I could apply this change to a large number of grouped Income components (products) simultaneously.
Another use of the timeline deals specifically with the end dates of components. Several Brixx components can be set to perform special calculations on the end dates. These broadly fall into two camps – the end point of loan payments and the selling of an asset.
Loans, along with Assets, Inventory, Investments and Equity components can be set to have started before the beginning of the Brixx plan. In the case of loans, this means that the current value of the loan forms part of the plan’s opening balance, and the remaining interest and capital repayments are calculated over the remaining duration of the loan, shown in the Timeline.
In this example there are two loans, ‘Old Loan’ which started before the start of the plan, with its repayments ending 4 months from the start of the plan, and ‘New Loan’ which is taken out 4 months from the start of the plan and continues to be repaid after the end of the 1 year plan timeline.
For a final example, we turn to the Asset component.
In this case, assets are bought at the start of their timeline bar, and each remains on the balance sheet for 4 months while a buyer is found. Proceeds from the sale of each asset are used to fund the purchase of the next. We could also use a similar setup over a longer period of time to show the depreciation and replacement of other assets in the business, such as IT equipment or trade vehicles.