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We have three templates you can use to do your business plan kindly offered by SCORE and Bank of Scotland.There are two for preparing the narrative of your plan (One for a startup business and the other for an existing business) and a cash flow template.In addition, this section includes your financial statement forecasts, and the assumptions made when creating your financial projections.
But do make sure to have the financial model in place before you incorporate your business and build your first products.
All in all, startup financial models have the additional benefit of enabling access to leverage of an accurate baseline valuation.
In addition, these statements help investors determine the plan's feasibility and its potential profitability.
It is for these reasons that many refer the financial section as the "heart of a business plan". (Please note, the financial statements and analysis for two of the examples below; namely "" provide forecasted financial statements for a two year period.
Financial models are created to portray some of or all the aspects of a business. A startup financial model enables entrepreneurs to understand their cash and to determine their burn-rate.
This is crucial for a firm, as it makes one conscious of how long money will last and what milestones can be achieved with the given expenditures.For example, if a firm has a Saa S business model, then assumptions will differ between that of a Freemium business model.Hence, the Saa S financial model will vary greatly to that of a Freemium financial model.The Financial Section, in many cases, is the most scrutinized section of your business plan.In short, it provides details on how potentially profitable the business will be, how much debt and equity capital is required for the business venture, and when debts are scheduled to be repaid to investors.It pushes you to go back to your business model and revise it, in order to further develop it into a more successful instrument.A bottoms up startup financial model: It is one with an existing 5-15 core assumptions about the business, that is most useful for firms considering specific product direction, distribution strategy, or partnership that can potentially be a big impulse for the company.Although the projections do not need to be correct all times, the assumptions, however, are key.The assumptions tell whether the entrepreneur has given some thought to the startup’s potential market share, its competitors, adoption rates, etc. Given the overall picture, the startup financial model enables you to depict the strengths and weaknesses of your assumptions.For example, you may add volume growth rates and number of salesmen to integrate a “What If” analyses into your model.Also, aim to have projections in your early-stage startup financial model so that it can go up to 3 to 5 years from the present time.