In my work with startups, I’ve noticed a recurring theme

In my work with startups, I’ve noticed a recurring theme: when tasked with the challenge of building a financial model, teams really struggle with knowing where to begin or what questions to ask. In my work as a financial consultant, the same thing happened with families that were looking to build a financial plan.

In today’s world of simplification, canvases, and design boards, I’m wondering whether financial modeling/planning would be made easier if teams/families were given a straightforward framework to follow before building their numerical financial story.

Attached are components of a financial model for startup founders

Financial Goals: It’s not the same to bootstrap as to raise a $1M round – don’t get caught playing somebody else’s game.

Financial Assumptions: Gaining market share in your region before moving your business to the USA is always a logical choice – make good decisions.

Scenario Planning: COVID put thousands of companies out of business – making adjustments is easier if you’ve planned for them.

Revenue Streams: Nobody will buy unless you truly know what you are selling - develop your product/pricing offer over time.

Cash Flows: This one is simple – cash is king.

Cost Structure: Costs of running a SaaS business are vastly different from running a restaurant – what can you do to minimize them?

Financial Ratios: These are like the indicators in your car that tell you to change your oil – be honest with yourself and listen to them.

Capital Structure: Running out of money is one of the main reasons startups fail – but what if you planned well for those deadlines?

Company Valuation: Whether you value your company at $1 or $1 Billion, execution is the most important factor.

Would you find this financial model canvas useful? Leave comments below to let me know if you’ve had trouble with financial modeling/planning and whether the attached could help you get the process started. I have a more detailed version to help founders.