Creating a Startup Financial Plan
To make sure that you have a healthy business, the need to have a working financial plan is adamant. Just by having a financial plan for a business, it will help with managing the business and also make the right strategic financial decisions. Creating a financial plan is a critical factor for the business’ survival against countless competitors and other risks that one might encounter especially for startups that are new to the industry. Hence, it is very important to create a financial plan for startups.
Usually, when creating a financial plan, it is better to build it in Excel spreadsheets since it is more convenient and easier to understand by any user. To have the financial plan in a structured report, the model will be easier to read and understand, as well as better perceived by potential investors.
Startup Financial Plans & Model Templates in Excel
Every Startup needs to find a model on how to operate and how to do business. Sometimes, selecting a business model requires time, trial and error. Choosing a Startup Model seems easy at the beginning but many Startups will have to Pivot during their lifespan in order to fine-tune and adjust themselves to what the market really needs. We would like to give you some insights on how to best select your Startup Model. For this, you can work with one of the Startup Financial Model Templates from eFinancialModels.
Components included in a Startup Financial Plan in Excel
There are certain components that complete a startup financial plan in Excel which is done accordingly in a sequence to avoid going back and forth through the spreadsheets.
- Sales forecast – In this component, you create a sales projection over the course period (whether for short-term or long-term planning).
- Expenses Budget – The next thing to create is an expense budget plan as you need to have a better understanding of the cost you will be spending to make the sales forecast plausible and feasible.
- Cash Flow Statement – Next would be to develop a cash flow statement to track the flow of cash in and cash out of your business operations, partly basing it off on your sales forecasts, balance sheet, and other expected projections.
- Income Projections – Also known as the so-called revenue forecast for the upcoming years by using the sales forecast, expense forecast, and the cash flow projection.
- Balance Sheet Projection – In here, you will deal with the assets and liabilities that weren’t included in your income projection to project the net worth of your business at the end of fiscal year, especially for startups.
- Breakeven Analysis – Then you will conduct a breakeven analysis after mapping out the whole projections. This is to assess if the business’ expenses match the sales or service volume. The analysis is then conducted as to measure when the business will reach the break-even point which is an important key for potential investors to refer to if the business is financially feasible and if the startup business is a good investment opportunity.
Altogether, it completes a basic startup financial plan in Excel. The process may look simple and easy, but of course, the process is more than it seems. A lot of time is needed to be set aside just to build a financial model for your business or for an investment. Not to mention that you at least need to have an acceptable amount of industry know-how to make the financial model reliable and work as it should be. If you want to build a financial plan for your startup business, try to use a startup financial model template in Excel first to help you familiarize on how to create financial models for startup businesses.
Startup Financial Model Templates in Excel
Startup financial models normally are prepared to obtain visibility over the next month’s and year’s cash flow needs and to raise funding from investors. A startup financial plan excel file typically seeks to answer the following questions:
- How much funding is required?
- What is the monthly burn rate?
- When do we expect to achieve break-even?
- What kind of return does our project have?
- How much equity stake can we afford to offer to investors?
- What will be the targeted valuation at the time of an investor’s exit?
- What return can investors expect?
- How much is the company worth today?
- What is our yearly budget and what is our 5-year financial plan?
So, a financial model for a Startup company will have to address most or all of these questions.
Example Startup Financial Plans in Excel
We would like to review some of the best example startup financial plan excel files available, by discussing their business model and to tackle the most important questions.
Software as a Service (SaaS) Startup
Software as a Service has become a popular topic among Startups since instead of selling software one time, software is sold as a service and secures monthly income for the Startup. The beauty of this Startup business model is that once customers are on board, they will get used to the service and normally, will not leave that easily. Therefore, the key upfront cost lies in the development of the software, the marketing, and the carrying of the operating costs until the number of subscribers can be stabilized and cover the operating costs.
One check to perform to know if the Startup Model works is to focus on the customer lifetime value (CLV). To calculate the customer lifetime value, one needs to estimate what the average subscription will be, which a typical customer will pay, and for how long. The CLV can be adjusted by also taking into account the operating costs required to deliver the service so that we are talking about a Customer Lifetime Gross Profit (CLGP). The CLGP can then be compared to the customer acquisition costs, e.g. the costs for a Google ad campaign. If the CLGP is higher than the acquisition costs, the Startup should be able to make profits in the long-term.
You can check out the SaaS Startup Financial Model below to use as a reference:
A simple and straight forward way to project out growth and churn within a SaaS environment.
The SaaS Financial Model provides a simple way to derive the financial forecast for a Software as a Service (SaaS) internet company. The Financial Model calculates the DCF Value, IRR, Breakeven, ARPU, Customer Lifetime Value…
Mobile App Startup Financial Plan
Starting a mobile app has become also a way to launch a business. The beauty of this Startup model is that it is a popular service which can be potentially used by millions of people worldwide just with their smartphones. This is a Startup Business Model which potentially is very scalable.
A startup financial model template excel file for a mobile app company should allow to include a variety of revenue streams. Revenues such as from paid app downloads, in-app purchases, advertisement or subscription revenues. User Lifetime Value now can origin from diverse sources of revenues and not only from subscriptions. Using the following Mobile App Startup Financial Model template can provide the framework for the required analysis.
This Financial Model for Mobile Apps provides an easy way to forecast the financial performance for an App sold in the App Stores and deriving revenues from paid downloads, advertisement and subscriptions.
eCommerce Startup Financial Model
Startup financial models for eCommerce stores will have to focus on setting a goal for customers to come back purchasing again from the company. Successful eCommerce Stores manage this very well and keep selling their products to a loyal customer base. So, your startup financial plan Excel file for an eCommerce store should set such a goal for a repurchase rate. When having such a goal, it will become easier to validate and find ways to increase the customer repurchase rate.
You can check out the eCommerce Startup Financial Model below to use as a reference:
This financial model was made to allow the user to specifically plan out the cash flows that commonly relate to the eCommerce space. You can enter all assumptions and it rolls through to all 3…
Additional Startup financial model template Excel files are provided below.
The Gas Station Financial Feasibility Model Template provides you with a framework to determine the financial feasibility of your next gas station project and come up with an appropriate financing structure. The model calculates the…
The Mini Storage Business Plan Templates provides a financial plan to start a mini storage business. Enter your expected rent roll and cost structure and calculate Project IRR, Investor IRR and required funding.
This is a financial model template for a new private school startup business. The Excel model allows forecasting the cash flows over the next 10 years for a School Startup offering Kindergarten, Middle School, and…
Plan out the financial plan your hair or beauty salon. The beauty & hair salon business plan goes up to 10 years and has plenty of granularity.
Key logic designed to forecast cash flow up to 10 years for a fitness center that has recurring monthly fees.
Build a 5-year financial projection for a used car lot / dealership.
A versatile template to forecast out a manufacturing or retail sales business that is built around customer re-purchases.
Certain franchisors are building fully functional robotic kiosks to server frozen yogurt. This model gives you the ability to build out financial forecasts of such an endeavor with fully dynamic assumptions about revenue/expenses and initial…