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How to Prepare a Financial Plan for Startup Business (w/ example)

Financial Statements Template

Ajay Jagtap

• December 7, 2023
• 13 Min Read

If someone were to ask you about your business financials, could you give them a detailed answer?

Let’s say they ask—how do you allocate your operating expenses? What is your cash flow situation like? What is your exit strategy? And a series of similar other questions.

Instead of mumbling what to answer or shooting in the dark, as a founder, you must prepare yourself to answer this line of questioning—and creating a financial plan for your startup is the best way to do it.

A business plan’s financial plan section is no easy task—we get that.

But, you know what—this in-depth guide and financial plan example can make forecasting as simple as counting on your fingertips.

Ready to get started? Let’s begin by discussing startup financial planning.

What is Startup Financial Planning?

Startup financial planning, in simple terms, is a process of planning the financial aspects of a new business. It’s an integral part of a business plan and comprises its three major components: balance sheet, income statement, and cash-flow statement.

Apart from these statements, your financial section may also include revenue and sales forecasts, assets & liabilities, break-even analysis , and more. Your first financial plan may not be very detailed, but you can tweak and update it as your company grows.

Key Takeaways

• Realistic assumptions, thorough research, and a clear understanding of the market are the key to reliable financial projections.
• Cash flow projection, balance sheet, and income statement are three major components of a financial plan.
• Preparing a financial plan is easier and faster when you use a financial planning tool.
• Exploring “what-if” scenarios is an ideal method to understand the potential risks and opportunities involved in the business operations.

Why is Financial Planning Important to Your Startup?

Poor financial planning is one of the biggest reasons why most startups fail. In fact, a recent CNBC study reported that running out of cash was the reason behind 44% of startup failures in 2022.

A well-prepared financial plan provides a clear financial direction for your business, helps you set realistic financial objectives, create accurate forecasts, and shows your business is committed to its financial objectives.

It’s a key element of your business plan for winning potential investors. In fact, YC considered recent financial statements and projections to be critical elements of their Series A due diligence checklist .

Your financial plan demonstrates how your business manages expenses and generates revenue and helps them understand where your business stands today and in 5 years.

Makes sense why financial planning is important to your startup or small business, doesn’t it? Let’s cut to the chase and discuss the key components of a startup’s financial plan.

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Key Components of a Startup Financial Plan

Whether creating a financial plan from scratch for a business venture or just modifying it for an existing one, here are the key components to consider including in your startup’s financial planning process.

Income Statement

An Income statement , also known as a profit-and-loss statement(P&L), shows your company’s income and expenditures. It also demonstrates how your business experienced any profit or loss over a given time.

Consider it as a snapshot of your business that shows the feasibility of your business idea. An income statement can be generated considering three scenarios: worst, expected, and best.

Your income or P&L statement must list the following:

• Cost of goods or cost of sale
• Gross margin
• Operating expenses
• Revenue streams
• EBITDA (Earnings before interest, tax, depreciation , & amortization )

Established businesses can prepare annual income statements, whereas new businesses and startups should consider preparing monthly statements.

Cash flow Statement

A cash flow statement is one of the most critical financial statements for startups that summarize your business’s cash in-and-out flows over a given time.

This section provides details on the cash position of your business and its ability to meet monetary commitments on a timely basis.

Your cash flow projection consists of the following three components:

✅ Cash revenue projection: Here, you must enter each month’s estimated or expected sales figures.

✅ Cash disbursements: List expenditures that you expect to pay in cash for each month over one year.

✅ Cash flow reconciliation: Cash flow reconciliation is a process used to ensure the accuracy of cash flow projections. The adjusted amount is the cash flow balance carried over to the next month.

Furthermore, a company’s cash flow projections can be crucial while assessing liquidity, its ability to generate positive cash flows and pay off debts, and invest in growth initiatives.

Balance Sheet

Your balance sheet is a financial statement that reports your company’s assets, liabilities, and shareholder equity at a given time.

Consider it as a snapshot of what your business owns and owes, as well as the amount invested by the shareholders.

This statement consists of three parts: assets , liabilities, and the balance calculated by the difference between the first two. The final numbers on this sheet reflect the business owner’s equity or value.

Balance sheets follow the following accounting equation with assets on one side and liabilities plus Owner’s equity on the other:

Here is what’s the core purpose of having a balance-sheet:

• Indicates the capital need of the business
• It helps to identify the allocation of resources
• It calculates the requirement of seed money you put up, and
• How much finance is required?

Since it helps investors understand the condition of your business on a given date, it’s a financial statement you can’t miss out on.

Break-even Analysis

Break-even analysis is a startup or small business accounting practice used to determine when a company, product, or service will become profitable.

For instance, a break-even analysis could help you understand how many candles you need to sell to cover your warehousing and manufacturing costs and start making profits.

Remember, anything you sell beyond the break-even point will result in profit.

You must be aware of your fixed and variable costs to accurately determine your startup’s break-even point.

• Fixed costs: fixed expenses that stay the same no matter what.
• Variable costs: expenses that fluctuate over time depending on production or sales.

A break-even point helps you smartly price your goods or services, cover fixed costs, catch missing expenses, and set sales targets while helping investors gain confidence in your business. No brainer—why it’s a key component of your startup’s financial plan.

Having covered all the key elements of a financial plan, let’s discuss how you can create a financial plan for your startup or small business.

How to Create a Financial Section of a Startup Business Plan?

1. determine your financial needs.

You can’t start financial planning without understanding your financial requirements, can you? Get your notepad or simply open a notion doc; it’s time for some critical thinking.

Start by assessing your current situation by—calculating your income, expenses , assets, and liabilities, what the startup costs are, how much you have against them, and how much financing you need.

Assessing your current financial situation and health will help determine how much capital you need for your small business and help plan fundraising activities and outreach.

Furthermore, determining financial needs helps prioritize operational activities and expenses, effectively allocate resources, and increase the viability and sustainability of a business in the long run.

Having learned to determine financial needs, let’s head straight to setting financial goals.

2. Define Your Financial Goals

Setting realistic financial goals is fundamental in preparing an effective financial plan for your business plan. So, it would help to outline your long-term strategies and goals at the beginning of your financial planning process.

Let’s understand it this way—if you are a SaaS startup pursuing VC financing rounds, you may ask investors about what matters to them the most and prepare your financial plan accordingly.

However, a coffee shop owner seeking a business loan may need to create a plan that appeals to banks, not investors. At the same time, an internal financial plan designed to offer financial direction and resource allocation may not be the same as previous examples, seeing its different use case.

Feeling overwhelmed? Just define your financial goals—you’ll be fine.

You can start by identifying your business KPIs (key performance indicators); it would be an ideal starting point.

3. Choose the Right Financial Planning Tool

Let’s face it—preparing a financial plan using Excel is no joke. One would only use this method if they had all the time in the world.

Having the right financial planning software will simplify and speed up the process and guide you through creating accurate financial forecasts.

Many financial planning software and tools claim to be the ideal solution, but it’s you who will identify and choose a tool that is best for your financial planning needs.

Create a Financial Plan with Upmetrics in no time

Enter your Financial Assumptions, and we’ll calculate your monthly/quarterly and yearly financial projections.

Start Forecasting

4. Make Assumptions Before Projecting Financials

Once you have a financial planning tool, you can move forward to the next step— making financial assumptions for your plan based on your company’s current performance and past financial records.

You’re just making predictions about your company’s financial future, so there’s no need to overthink or complicate the process.

You can gather your business’ historical financial data, market trends, and other relevant documents to help create a base for accurate financial projections.

After you have developed rough assumptions and a good understanding of your business finances, you can move forward to the next step—projecting financials.

5. Prepare Realistic Financial Projections

It’s a no-brainer—financial forecasting is the most critical yet challenging aspect of financial planning. However, it’s effortless if you’re using a financial planning software.

Upmetrics’ forecasting feature can help you project financials for up to 7 years. However, new startups usually consider planning for the next five years. Although it can be contradictory considering your financial goals and investor specifications.

Following are the two key aspects of your financial projections:

Revenue Projections

In simple terms, revenue projections help investors determine how much revenue your business plans to generate in years to come.

It generally involves conducting market research, determining pricing strategy , and cash flow analysis—which we’ve already discussed in the previous steps.

The following are the key components of an accurate revenue projection report:

• Market analysis
• Sales forecast
• Pricing strategy
• Growth assumptions
• Seasonal variations

This is a critical section for pre-revenue startups, so ensure your projections accurately align with your startup’s financial model and revenue goals.

Expense Projections

Both revenue and expense projections are correlated to each other. As revenue forecasts projected revenue assumptions, expense projections will estimate expenses associated with operating your business.

Accurately estimating your expenses will help in effective cash flow analysis and proper resource allocation.

These are the most common costs to consider while projecting expenses:

• Fixed costs
• Variable costs
• Employee costs or payroll expenses
• Operational expenses
• Marketing and advertising expenses
• Emergency fund

Remember, realistic assumptions, thorough research, and a clear understanding of your market are the key to reliable financial projections.

6. Consider “What if” Scenarios

After you project your financials, it’s time to test your assumptions with what-if analysis, also known as sensitivity analysis.

Using what-if analysis with different scenarios while projecting your financials will increase transparency and help investors better understand your startup’s future with its best, expected, and worst-case scenarios.

Exploring “what-if” scenarios is the best way to better understand the potential risks and opportunities involved in business operations. This proactive exercise will help you make strategic decisions and necessary adjustments to your financial plan.

7. Build a Visual Report

If you’ve closely followed the steps leading to this, you know how to research for financial projections, create a financial plan, and test assumptions using “what-if” scenarios.

Now, we’ll prepare visual reports to present your numbers in a visually appealing and easily digestible format.

Don’t worry—it’s no extra effort. You’ve already made a visual report while creating your financial plan and forecasting financials.

Check the dashboard to see the visual presentation of your projections and reports, and use the necessary financial data, diagrams, and graphs in the final draft of your financial plan.

Here’s what Upmetrics’ dashboard looks like:

8. Monitor and Adjust Your Financial Plan

Even though it’s not a primary step in creating a good financial plan for your small business, it’s quite essential to regularly monitor and adjust your financial plan to ensure the assumptions you made are still relevant, and you are heading in the right direction.

There are multiple ways to monitor your financial plan.

For instance, you can compare your assumptions with actual results to ensure accurate projections based on metrics like new customers acquired and acquisition costs, net profit, and gross margin.

Consider making necessary adjustments if your assumptions are not resonating with actual numbers.

Also, keep an eye on whether the changes you’ve identified are having the desired effect by monitoring their implementation.

And that was the last step in our financial planning guide. However, it’s not the end. Have a look at this financial plan example.

Startup Financial Plan Example

Having learned about financial planning, let’s quickly discuss a coffee shop startup financial plan example prepared using Upmetrics.

Important Assumptions

• The sales forecast is conservative and assumes a 5% increase in Year 2 and a 10% in Year 3.
• The analysis accounts for economic seasonality – wherein some months revenues peak (such as holidays ) and wanes in slower months.
• The analysis assumes the owner will not withdraw any salary till the 3rd year; at any time it is assumed that the owner’s withdrawal is available at his discretion.
• Sales are cash basis – nonaccrual accounting
• Moderate ramp- up in staff over the 5 years forecast
• Barista salary in the forecast is $36,000 in 2023.
• In general, most cafes have an 85% gross profit margin
• In general, most cafes have a 3% net profit margin

Projected Balance Sheet

Projected Cash-Flow Statement

Projected Profit & Loss Statement

Break Even Analysis

Start Preparing Your Financial Plan

We covered everything about financial planning in this guide, didn’t we? Although it doesn’t fulfill our objective to the fullest—we want you to finish your financial plan.

Sounds like a tough job? We have an easy way out for you—Upmetrics’ financial forecasting feature. Simply enter your financial assumptions, and let it do the rest.

So what are you waiting for? Try Upmetrics and create your financial plan in a snap.

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Frequently Asked Questions

How often should i update my financial projections.

Well, there is no particular rule about it. However, reviewing and updating your financial plan once a year is considered an ideal practice as it ensures that the financial aspirations you started and the projections you made are still relevant.

How do I estimate startup costs accurately?

You can estimate your startup costs by identifying and factoring various one-time, recurring, and hidden expenses. However, using a financial forecasting tool like Upmetrics will ensure accurate costs while speeding up the process.

What financial ratios should startups pay attention to?

Here’s a list of financial ratios every startup owner should keep an eye on:

• Net profit margin
• Current ratio
• Quick ratio
• Working capital
• Return on equity
• Debt-to-equity ratio
• Return on assets
• Debt-to-asset ratio

What are the 3 different scenarios in scenario analysis?

As discussed earlier, Scenario analysis is the process of ascertaining and analyzing possible events that can occur in the future. Startups or small businesses often consider analyzing these three scenarios:

• base-case (expected) scenario
• Worst-case scenario
• best case scenario.

About the Author

Ajay is the Head of Content at Upmetrics. Before joining our team, he was a personal finance blogger and SaaS writer, covering topics such as startups, budgeting, and credit cards. If not writing, he’s probably having a power nap. Read more

Reach Your Goals with Accurate Planning

11 min read

How to Build a Startup Financial Model in 9 Steps

Stepping into the startup world feels like diving headfirst into a sea of uncertainties. But, crafting a solid startup financial model is your lifeboat, guiding you through rough waters to clear skies and steady growth. This article unpacks the nuts and bolts of financial modeling, shedding light on its pivotal role in navigating your business toward success.

In this section, we dive into how the trio of income statements, balance sheets, and cash flow statements serve as the critical pillars supporting a sturdy financial strategy. We break down complex concepts like bottom-up versus top-down forecasting and reveal tools that simplify building these models. Plus, get insider tips on managing cash flow effectively—a make-or-break factor for startups aiming high.

For those looking to dive deeper and ensure their financial modeling is as accurate and effective as possible, working with a financial analyst can provide the expertise needed to navigate these waters successfully.

After diving into this guide, you'll possess a blueprint for crafting a fiscal strategy that not only secures investment but also refines your tactical planning, laying the groundwork for your business's success ahead.

Key Takeaways:

• Success Roadmap : Financial models forecast performance and attract investment.
• Core Statements : Income, balance sheets, and cash flows are foundational for analysis.
• Informed Forecasting : Use detailed data for realistic financial projections.
• Essential Tools : Excel and Google Sheets are crucial for model building.
• Cash Flow Strategy : Effective management ensures growth and stability.

The Fundamentals of Financial Modeling for Startups

Building your startup financial model in 9 steps, tools and resources for building financial models, effective cash flow management strategies, preparing investor presentations with your financial model, forecastr: expert financial modeling for startups.

Creating a robust financial model is akin to crafting a blueprint for your startup's success. It’s the groundwork that helps you forecast future financial performance, manage cash flow effectively, and woo potential investors with solid data.

Understanding the Three-Statement Model

A three-statement model serves as the backbone of any comprehensive financial analysis, intertwining the income statement, balance sheet, and cash flow statement. This trio offers a panoramic view of your startup's financial health by showing where money comes from, how it’s spent, and where it ends up over time.

The income statement , or profit and loss account, lays out revenues minus expenses to reveal net income. The balance sheet provides a snapshot at any given moment in time—assets on one side balanced against liabilities plus equity on the other.

Lastly but equally crucial is the cash flow statement . In a lively dance of numbers, it tracks the real movement of cash in and out, stemming from daily operations, weaving through the abstract realm of accounting.

This interconnectedness can't be overstated; each part feeds into or draws from others making them indispensable tools in forecasting profitability scenarios or assessing liquidity needs—a vital step underscored by our 5-step guide to mastering your startup finances.

Deciding Between Bottom-Up vs. Top-Down Forecasting

Gathering data is your first step towards enlightenment—or at least towards understanding how much money your startup could make or need. There are two main paths you can take: bottom-up forecasting and top-down forecasting.

Bottom-up starts with the nitty-gritty, focusing on internal data such as operational efficiency and sales data from similar products or services within your target market. This approach prioritizes your grasp and command over the situation.

Top-down forecasting , however, looks at the bigger picture first—like industry trends and overall market demand—before zooming in on where your business fits into that landscape. It's like standing at the top of a mountain looking down; it offers comprehensive forecasts but might miss some ground-level details.

A blend of both approaches often works best because it allows startups to dream big while keeping their feet firmly planted in reality. Here’s why combining these methods matters.

Understanding Key Components of Revenue Projections

To accurately project revenue—which let me tell you, is crucial if you don’t want to run out of cash before making any—you’ll need an intimate understanding of several components that influence potential earnings directly:

• Your product's pricing strategy against its cost structure will determine margins.
• The size (and accessibility) of your target audience affects volume potentials.
• Sales channels used (direct sales team? online only?) impact go-to-market strategies significantly.

Digging deep into these areas not only helps in projecting realistic numbers but also highlights possible challenges early enough for them to be addressed proactively rather than reactively—a key aspect in ensuring long-term success. Don't forget, the smooth operation of your business is crucial as it influences both expenses and how effectively you can deliver services.

Leveraging Excel and Google Sheets

In today’s world, there are tools galore available for those brave souls embarking on building their own financial models—and thankfully many do not require being a wizard (of either finance or spreadsheets).

Microsoft Excel has been the stalwart tool due largely to its versatility while Google Sheets offers fantastic collaboration features critical when multiple team members need access simultaneously. Dive into these awesome templates for a head start.

These resources streamline organizing vast amounts of business data—including everything from basic income statements through complex SaaS financial models—making it easier for teams to collaborate and make informed decisions quickly.

Knowing Your Data

Moving beyond understanding these components involves diving deep into building your very own startup-specific model—an endeavor that demands both precision and creativity.

Gather Data : Beyond basic bookkeeping lies gathering nuanced operational efficiency indicators such as customer acquisition costs (CAC) versus lifetime value (LTV), sales cycle lengths per segment—or even churn rates among various cohorts if you’re running a SaaS business. These are not mere numbers but narratives telling tales about what drives revenue growth or necessitates cost adjustments.

With this info banked, you can start piecing together projections rooted in real-world operations rather than wishful thinking, a practice further bolstered when combining bottom-up forecasting techniques with top-down market analyses providing holistic forecasts encompassing internal capabilities alongside external factors influencing future market trends .

By recognizing that no single method has all answers, rather blending approaches yield richer insights—you position yourself better before embarking on raising funds since investors understand nuances distinguishing well-thought-out plans from overly optimistic guesses masquerading as strategies.

To facilitate this process, Forecastr advocates leveraging Excel spreadsheets efficiently which allow users freedom yet discipline needed when constructing detailed models. Even Google Sheets becomes invaluable due to its collaborative features, enabling teams dispersed geographically to work synchronously towards refining their company’s economic outlook.

The shift towards these advanced tools is critical for businesses that want to maintain their lead in the rapidly changing marketplace, as it promotes more agile and impactful strategy development.

Building a financial model for your startup might sound like you're trying to predict the future with a crystal ball. But, it’s more about laying down a solid plan based on data and informed assumptions. Let’s jump right into how you can create this roadmap to success.

Step 1. Define Your Objectives

Start by understanding the purpose of your financial model. Are you sizing the market, raising capital, or managing cash flow? Your goal will dictate the level of detail required. Keep it simple for initial estimates, add moderate detail for investor discussions, and use comprehensive analysis for operational cash flow models.

Step 2. Identify Key Performance Indicators (KPIs)

Determine the critical metrics that will drive your business forward. KPIs are the backbone of your model, helping you track performance and make informed decisions. Use industry-standard KPIs as a benchmark and tailor them to your business needs. Remember, a model is only as useful as the accuracy of the data you can track against these KPIs.

Step 3. Leverage Financial Model Templates

Don’t reinvent the wheel. Utilize existing financial model templates to save time and effort. Templates provide a structured foundation, allowing you to focus on customizing the model to fit your startup’s unique circumstances.

Step 4. Incorporate Actual Financial Results

If your business is already operational, integrate your actual financial results into the model. This provides a realistic baseline and helps identify any discrepancies between past performance and future projections. Smooth transitions between historical data and forecasts are crucial for credibility.

Step 5. Forecast Revenue

Begin with revenue projections. Break down your revenue streams and understand the drivers behind them. Consider factors like customer acquisition, sales strategies, and market demand. Ensure your cost of goods sold (COGS) is aligned with revenue projections, especially for hardware or biotech startups where product development milestones are critical.

Step 6. Estimate Headcount Requirements

Headcount is often a major expense for startups. Project your staffing needs based on your growth objectives. Factor in salaries, benefits, and recruiting costs. Accurate headcount planning helps manage expenses and ensures you have the necessary talent to achieve your goals.

Step 7. Account for Other Expenses

Analyze expenses beyond headcount. Use benchmarks from similar companies to gauge how your expenses might scale. Include costs for marketing, operations, and any other significant expenditures. Ensure your expense projections are realistic to maintain healthy profit margins.

Step 8. Model Working Capital

Understand your working capital requirements by analyzing cash flow timing. Determine when you’ll receive payments from customers and when you’ll need to pay suppliers. Effective working capital management is crucial for maintaining a positive cash position.

Step 9. Review and Refine Your Projections

Conduct a thorough review of your financial model. Ensure it aligns with your business strategy and goals. Perform a sanity check to verify that the projections make sense and tell a coherent story. Regularly updating and refining your model keeps it relevant and accurate. By following these steps, you’ll create a financial model that not only guides your startup’s financial planning but also supports strategic decision-making and investor relations. At Forecastr, we’re here to help you navigate the complexities of financial modeling with confidence and clarity.

The Old Standbys

When it comes to building financial models, Microsoft Excel and Google Sheets are like the Swiss Army knives of spreadsheet software. These tools are brimming with functionalities, enabling the meticulous organization of data, a fundamental aspect when devising your startup's financial architecture.

The beauty of using these tools lies in their flexibility. Whether you're piecing together a financial model template, tracking sales data, or projecting future market trends, both platforms offer robust functionalities tailored for complex calculations and detailed analysis. And guess what? You don't need to be a spreadsheet wizard to make the most out of them.

If you've ever felt bogged down by endless rows and columns, remember this: Excel and Google Sheets support formulas that can automate much of the heavy lifting. This means less time crunching numbers manually and more time refining your strategy based on valuable insights derived from accurate financial projections.

Unlocking Advanced Features for In-Depth Analysis

Diving deeper into the capabilities of these tools reveals functions such as pivot tables in Excel or QUERY in Google Sheets. These allow startups to dissect business data meticulously – think breaking down revenue growth by target market segments or evaluating performance indicators against external factors.

Sure, mastering these advanced features takes some effort but consider this investment one into your company's future success. The ability to slice through layers of financial data gives founders unparalleled clarity about their business’s health - an essential factor when raising funds or making strategic decisions. If you're not up for becoming a spreadsheet expert, consider using a dedicated financial modeling software .

Finding the Right Model Template

Navigating through creating a SaaS financial model or any other type doesn’t have to feel like decoding hieroglyphics without the Rosetta Stone at hand; templates are here to save the day.

Using a pre-designed startup financial model template can dramatically simplify this process by providing structured placeholders where only specific inputs related directly back towards understanding overall cash flow management strategies better within the context surrounding investor presentations must go — thereby turning what was once a daunting task into a manageable one step-by-step guide approach helps ensure no key aspect gets overlooked along the way either.

This pragmatic use not only streamlines how quickly models get built but also enhances accuracy since templates typically follow industry standards regarding balance sheet statements alongside income statements integration amongst others—all vital components ensuring a comprehensive look under the hood so speak enabling smarter faster decision-making based on solid evidence rather than gut feelings alone.

This ultimately aids in securing necessary funding further down the line due well thought out presentation backed up hard facts figures showing potential growth trajectory convincingly enough investors take notice invest accordingly.

Cash flow is the lifeblood of your startup. Managing it effectively isn't just about keeping your business afloat; it's about setting the stage for growth and sustainability. With insights from your financial model, you can navigate through potential liquidity issues before they become real problems.

The Role of Cash Flow Statements

A cash flow statement gives you a snapshot of where your money comes from and where it goes over a specific period. It’s crucial because even profitable businesses can face difficulties if their cash outflows exceed their inflows at any given time. Regular monitoring helps you stay ahead, ensuring that operations run smoothly without hiccups.

But how do we make this practical? First off, integrating cash flow management into daily operations allows startups to anticipate future shortfalls or surpluses. By taking a forward-thinking stance , businesses can sharpen their strategies regarding spending, asset allocation, and capital requirements. Moreover, understanding the nuances between operational cash flows (day-to-day business activities), investing cash flows (purchase or sale of assets), and financing cash flows (debts and equity) can highlight areas needing attention.

By employing resources such as Excel or Google Sheets, one can streamline the monitoring of these financial streams by enabling automatic computations and amalgamating information with ease. Utilizing these applications, one can craft comprehensive forecasts that mirror present conditions and future ambitions with precision.

Leveraging Insights for Growth

Your financial model isn’t just a tool for managing today's dollars; it’s also about planning for tomorrow's opportunities. By analyzing past performance indicators, startups can identify trends in sales data or recurring revenue streams that suggest new strategies to boost income statements further or manage balance sheets more effectively—critical factors investors scrutinize closely.

Beyond internal benefits, clear visibility into your company’s financial health aids in raising funds by demonstrating sound management practices to potential backers. Tools designed specifically for building robust models, such as SaaS-specific templates, make tailoring forecasts easier than ever while accounting for unique challenges like subscription-based revenue models.

Diving deep into the specifics enhances precision and fosters trust among those who prioritize openness, an essential strategy in the cutthroat realm of business. Last but certainly not least, let external factors guide adjustments within your model. Market fluctuations, evolving societal norms, and updates in regulations all trigger cascading impacts on how consumers act, directly influencing the financial health of emerging businesses. So stay agile, adapting plans as necessary to maintain steady progress toward long-term goals. Adaptability ensures resilience amidst uncertainty.

Securing funding is a crucial step for startups, and your financial model can be the key to unlocking those funds. But how do you turn rows of numbers into a compelling story? The answer is through solid financial modeling preparation .

Transforming those digits into a narrative is where the art of designing an enthralling presentation plays its part. It’s not just about showcasing your business performance; it’s about painting a picture of market demand, outsmarting competitor analysis, and making strategic decisions that appeal to investors.

Crafting an Engaging Pitch Deck

To captivate investor interest, incorporate key aspects of your financial model into a pitch deck. This isn't just throwing in some charts and graphs; it's about storytelling—connecting dots between what the data says and what this means for future growth potential. Highlight how past sales data reflects understanding of the target market or demonstrate operational efficiency improvements over time as evidence of sound management.

An effective strategy involves breaking down complex financial statements into digestible insights. For instance, turn cash flow forecasts into stories about expanding the business or venturing into fresh territories. Don’t forget to include visuals from Excel or Google Sheets models that clearly illustrate these points without overwhelming viewers with too much detail at once.

Remember: Investors see countless presentations. Make yours stand out by addressing external factors affecting revenue growth like emerging trends or regulatory changes—and then pivot back to how your startup plans to navigate these challenges successfully.

How To Capture Investor Interest

Your startup's unique value proposition should shine through every slide but align this closely with quantitative evidence from your financial model build process—a balance sheet statement here, an income statement there—to lend credibility while keeping them engaged throughout the presentation.

Showcasing scenarios such as best-case/worst-case analyses based on different levels of funding can also help investors understand the flexibility and resilience within your planning processes—it demonstrates foresight in considering various future market conditions that could impact profitability directly related to their investment decision-making process significantly.

And don’t overlook integrating performance indicators that track both historical achievements against goals set forth initially during early stages—they serve as powerful testimonials towards the company’s capability to execute its vision effectively amidst uncertainties that abound within dynamic startup landscapes today.

Tapping into valuable insights gained from building detailed SaaS business models—or any type tailored specifically towards meeting niche industry needs—equips founders not only to articulate their current financial standings but more importantly, to project long-term visions.

These dreams catch the attention of potential investors, eager to put their money into projects that show a solid road to lasting triumph. This is crucial despite the temporary setbacks that might arise along the way due to unforeseen circumstances beyond anyone's control.

It ultimately reassures confidence among the investing community overall concerning the robustness and viability of a given enterprise moving forward. Thus, it increases the chances of raising the necessary capital needed to propel them into the next phase of development substantially further than ever before imagined.

Embarking on this journey, you've immersed yourself in the intricate dance of financial forecasting for emerging businesses. You've seen how income statements, balance sheets, and cash flow statements are the backbone of any sound business plan.

You now understand that forecasting can shape your startup's future. Bottom-up or top-down? That question doesn't puzzle you anymore.

Tools like Excel and Google Sheets aren’t just names; they're allies in building robust financial models. Handling cash flow has evolved from a mere task to a strategic maneuver, ensuring your startup's prosperity.

Raising funds feels less daunting when armed with a compelling financial model. Remember, it’s not just about numbers; it’s about telling your story convincingly.

In essence: Build diligently. Forecast wisely. Manage strategically. Pitch passionately. Success in crafting an effective financial model for startups is yours to claim.

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How to Write a Financial Plan for a Business Plan

Noah Parsons

4 min. read

Updated July 11, 2024

Creating a financial plan for a business plan is often the most intimidating part for small business owners.

It’s also one of the most vital. Businesses with well-structured and accurate financial statements are more prepared to pitch to investors, receive funding, and achieve long-term success.

Thankfully, you don’t need an accounting degree to successfully create your budget and forecasts.

Here is everything you need to include in your business plan’s financial plan, along with optional performance metrics, funding specifics, mistakes to avoid , and free templates.

• Key components of a financial plan in business plans

A sound financial plan for a business plan is made up of six key components that help you easily track and forecast your business financials. They include your:

Sales forecast

What do you expect to sell in a given period? Segment and organize your sales projections with a personalized sales forecast based on your business type.

Subscription sales forecast

While not too different from traditional sales forecasts—there are a few specific terms and calculations you’ll need to know when forecasting sales for a subscription-based business.

Expense budget

Create, review, and revise your expense budget to keep your business on track and more easily predict future expenses.

How to forecast personnel costs

How much do your current, and future, employees’ pay, taxes, and benefits cost your business? Find out by forecasting your personnel costs.

Profit and loss forecast

Track how you make money and how much you spend by listing all of your revenue streams and expenses in your profit and loss statement.

Cash flow forecast

Manage and create projections for the inflow and outflow of cash by building a cash flow statement and forecast.

Balance sheet

Need a snapshot of your business’s financial position? Keep an eye on your assets, liabilities, and equity within the balance sheet.

What to include if you plan to pursue funding

Do you plan to pursue any form of funding or financing? If the answer is yes, you’ll need to include a few additional pieces of information as part of your business plan’s financial plan example.

Highlight any risks and assumptions

Every entrepreneur takes risks with the biggest being assumptions and guesses about the future. Just be sure to track and address these unknowns in your plan early on.

Plan your exit strategy

Investors will want to know your long-term plans as a business owner. While you don’t need to have all the details, it’s worth taking the time to think through how you eventually plan to leave your business.

• Financial ratios and metrics

With your financial statements and forecasts in place, you have all the numbers needed to calculate insightful financial ratios.

While including these metrics in your financial plan for a business plan is entirely optional, having them easily accessible can be valuable for tracking your performance and overall financial situation.

Key financial terms you should know

It’s not hard. Anybody who can run a business can understand these key financial terms. And every business owner and entrepreneur should know them.

Common business ratios

Unsure of which business ratios you should be using? Check out this list of key financial ratios that bankers, financial analysts, and investors will want to see.

Break-even analysis

Do you want to know when you’ll become profitable? Find out how much you need to sell to offset your production costs by conducting a break-even analysis.

How to calculate ROI

How much could a business decision be worth? Evaluate the efficiency or profitability by calculating the potential return on investment (ROI).

• How to improve your financial plan

Your financial statements are the core part of your business plan’s financial plan that you’ll revisit most often. Instead of worrying about getting it perfect the first time, check out the following resources to learn how to improve your projections over time.

Common mistakes with business forecasts

I was glad to be asked about common mistakes with startup financial projections. I read about 100 business plans per year, and I have this list of mistakes.

How to improve your financial projections

Learn how to improve your business financial projections by following these five basic guidelines.

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• Financial plan templates and tools

Download and use these free financial templates and calculators to easily create your own financial plan.

Sales forecast template

Download a free detailed sales forecast spreadsheet, with built-in formulas, to easily estimate your first full year of monthly sales.

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Noah is the COO at Palo Alto Software, makers of the online business plan app LivePlan. He started his career at Yahoo! and then helped start the user review site Epinions.com. From there he started a software distribution business in the UK before coming to Palo Alto Software to run the marketing and product teams.

Table of Contents

• What to include for funding

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The quickest way to turn a business idea into a business plan

Fill-in-the-blanks and automatic financials make it easy.

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Discover the world’s #1 plan building software

Startup financial models - 12 templates compared

Posted by Stéphane Nasser | April 20, 2020

As a founder, there comes a time when you need a business plan, complete with financial forecasts, income statements, and fancy graphs that will impress your investors.

Don't build it from scratch - use an existing model.

A financial model allows you to draft financial projections easily, fast, and in a professional manner. A great template will also force you to think through all the aspects of your project and make sure you really get the financial logic behind your business.

It can be annoying but trust me, it's worth your time.

This post compares the top 12 templates of financial models for SaaS startups. I have personally tested each model. I have ranked them on 40+ items along 5 categories. I've looked at both spreadsheets and SaaS apps, and both free and paid solutions.

If you are looking at building your SaaS financials, this article is for you.

Table of Contents

Methodology - what makes a great financial model for saas startups.

Here is the methodology I used to build this benchmark.

I compared 40 points across 5 categories: (a) financial statements, (b) analysis capabilities, (c) revenue modeling, (d) cost modeling, (e) extra features. A detailed analysis of each model is available below. In each case, I tested the software/spreadsheet myself.

Criteria 1: Financial statements

• Time scale : Are the statements over 1 year, 3 years or more? You usually want 3 years as a minimum when you speak with professional investors.
• Income statement : Does the template include an income statement? You usually want a monthly income statement, at least for year 1.
• Cash flow statement : Same as income statement
• Balance sheet : Same as income statement
• GAAP/IFRS : Are the statements compliant with GAAP and/or IFRS rules?
• Currency : How many currencies are available?

Criteria 2: Analysis capabilities

• Financial analysis : Number of typical financial metrics included e.g. breakeven point, quick ratio, average inventory, etc.
• SaaS analysis : Number of typical SaaS metrics included e.g. MRR growth, SaaS magic number, CAC/LTV, etc.
• Graphs : Number of built-in graphs
• Costs by P&L category : Does the template break down costs into P&L categories (CoGS, RD, G&A, etc.)
• Costs by departments : Does the model break down costs into departments (sales, marketing, CS, engineering, etc)
• VS Scenarios : Does the template allow you to compare multiple scenarios?
• VS Industry comparables : Does the template compare your financials against industry comparables?
• VS Actuals : Does the template allow you to run your model versus your actual numbers?

Criteria 3: Revenue modeling

• New client acquisition : How do you enter new clients into the model? Possibilities include: entering a number manually for each month or year (it sucks); autofill the model from a base number and a growth rate (sucks a bit less); autofill several streams - each stream represents a different type of client e.g SMB/enterprise (better); or even fully model each acquisition channel (the best, very rare)
• Offerings : How many offers can you define and how precisely can you model them? This includes the possibility to create one-off offers, recurring offers, or a combo, but also the possibility to create introduction times and end times for specific offers.
• Pricing model : How many pricing models can you define and how precisely: tiers (free, basic, premium), revenue models (per seat, per usage, etc), automatically increase or decrease the plans price over years.
• Existing clients : Can you model expansion, contraction, churn, reactivation?
• Commitment : Can you model monthly VS yearly VS multi-annual contracts?
• Service revenue : Can you model punctual service revenue on top of all the other pricing models and offerings?
• Enterprise specific : Does the template offer specific features to model complex enterprise sales, such as landing/expansion, custom product developments, various sales cycles, etc?

Criteria 4: Costs modeling

• Direct labor costs : The best templates allow you to correlate direct labor costs with relevant metrics. For example, your sales staff is calculated based on forecasted income and sales target per account executive. Same for customer success payroll with number of customers and workload target per CS staff.
• Direct non-labor costs : just like with labor costs, the best templates allow you to link some direct non-labor costs with relevant metrics. For instance, server costs can be a % of MRR.
• Indirect labor costs : same as above. Even for indirect costs, some templates find smart ways to tie them to some aspect of the business.
• Indirect non-labor costs : same as above
• Payment terms : Can you define the payments terms with your vendors and suppliers? May be useful if there is a hardware component to your offer.
• Hardware-friendly : This is a special mention for templates that model things like shipping costs, inventory delay, etc.

Criteria 5: Extra features

• Documentation : Is there proper documentation in the model and on the website? Are there good explainer videos? What kind of direct support (chat, email) comes with the template?
• Languages : In what language is the template available?
• Third-party integration : Third-party integrations can be useful to input or update data over time, or to display advanced graphs.
• Excel spreadsheet : Can you access your financials as a Microsoft Excel spreadsheet? This is a must if you need to share it with investors.
• Google Sheets : Does the model work in Google Sheets? Not all models that work in Microsoft Excel work in Google, so you may want to consider that point.
• Editable formulas : Some templates do not allow you to modify formulas - which is a massive bummer when it comes to customization.

Granted, it's not a perfect methodology. One could argue forever about whether cap tables should be included in a startup financial model. But it's the best I could come up with - without being a finance nerd myself :)

Disclaimers: affiliation, impartiality, and non-finito

Before jumping to the heart of the matter, please allow me three disclaimers:

• Affiliation: Some links in the article are affiliated - which means that if you end up buying a template through one of those links, OpenVC will get a few $$$. It doesn't cost you anything, and it allows us to keep writing useful articles for you.
• Impartiality: Regardless of whether there is a referral in place or not, I am committed to providing you with an honest opinion. We take great pride in being an independent, honest, and trusted source of information for entrepreneurs.
• Non finito: This is a non-finite work. We are happy to update the article if you bring new, relevant information to our knowledge. We are also happy to fix any mistake or clarify any confusion that you may find in the article.

1. "FISY Innovation Plan" by Remi Berthier

Fisy Innovation Plan, by Rémi Berthier

For years, this template has been the go-to financial model for French entrepreneurs. However, it didn't age that well.

Analysis capabilities are limited: only a handful of financial metrics, zero SaaS metrics, a couple of graphs, and it's impossible to categorize costs. Modeling, be it for revenue or costs, is all too basic and requires a lot of manual input. Also, it's entirely in French.

Having said that, it remains a free-of-charge, easy-to-use, easy-to-customize template that covers all the basics while including specificities to the French ecosystem such as CIR, JEI, etc. It also offers a detailed page of instructions on the website.

This model makes a lot of sense for French entrepreneurs looking for a simple solution. For the others, keep on reading.

Edit 2023: I've re-downloaded the template in 2023 and didn't notice any significant change versus the 2017 version I had initially reviewed, so I kept my review untouched.

2. "SaaS Financial Plan 2.0" by Christoph Janz

SaaS Financial Plan 2.0, by Christoph Janz

This template was built by SaaS apostle Christoph Janz, and you can tell. It packs a punch of SaaS knowledge in a sleek, clear spreadsheet. You'll find lots of good stuff: basic/pro/enterprise plans, churn/upgrade/downgrade, an elegant client acquisition model and a wealth of graphs and charts.

It's not all rosy, though. You want a 5 years forecast? No, you only need 2. You want to sell annual pro plans? Too bad, pro plans are monthly and that's that. Also, no balance sheet.

This template works great if you are a typical SaaS startup and fits the vision that Christoph put into his financial plan. If not, you may be better off considering templates with broader horizons.

Edit 2023: Based on the Dropbox information, the template has not been modified since my first review in 2017, so I kept it untouched.

3. "SaaS Financial Model 3.0" by Baremetrics

SaaS Financial Model 3.0, by Baremetrics

I reviewed this model for the first time in 2017, when Jaakko Piiponen was its sole author. Since then, the Baremetrics team has substantially updated it. This new 2023 review should finally do it justice.

This SaaS Financial Model 3.0 is geared towards people who want to pilot their SaaS business, as opposed to just raising funds. Its underlying philosophy is that you need to match actual numbers with your forecasts for maximum piloting accuracy. To reach that objective, this model wants you to frequently pull data from your accounting software (e.g. Quickbooks, Xero…) and will project many assumptions based on your last 3 months - what they call "Autopilot". It's a healthy approach, and if you're ok with the extra work, it may be the right one for you.

When it comes to financial statements, this model nails it: you get a monthly view of your P&L, cash flow, and balance sheet over 5 years. However, because this model is not designed for fundraising, it doesn't include a cap table, which may be a dealbreaker to some. The whole model is in USD - you can manually change to any other currency, but you'll have to click a lot….

The Baremetrics team has also beefed up the analysis capabilities. This new version packs up all the must-have financial and SaaS metrics (Churn, ARPC, LTV, Paid CAC, Blended CAC, CAC:Payback time, CAC:LTV, MRR Breakdown), plus 11 built-in charts. A very nice attention is the Chartbuilding tab, which groups all the numbers in a clean format so you can build additional custom charts effortlessly. Like Janz's and Murray's models, you can break down expenses by category (engineering, marketing, etc.). The icing on the cake: this SaaS financial Model 3.0 is the only free model of this benchmark that lets you build a "worst case scenario" on top of your base case - and of course, compare both scenarios to your Actuals. Kudos to that!

Revenue modeling and cost modeling follow the "Autopilot" philosophy described above, with a few notable twists. For instance, the Acquisition model can be augmented with a separate "Marketing funnel" sheet (also provided by Baremetrics, also free) that models a proper 7 step funnel (visitor, signups, MQL, SQL, opportunities, trial, customer) and distinguishes between paid and organic leads. Your CMO will love it. Similarly, each expense line can be tied to specific variables to reflect dependencies.

All in all, this model by Baremetrics is a very strong contender. The only weakness I found relates to modeling complex offers, such as a Basic, a Premium and a Pro plan. It's just not possible. Even modeling annual plans seems to take a bit of work using the "Deferred revenue" tab. On the upside, this SaaS Financial Model 3.0 models expansion, contraction, churn, and even reactivation, so it's a tit for tat.

If you're looking for a free model that cares about accuracy to pilot your SaaS business the year round, and you don't mind getting your hands dirty a bit, then this is the one. Support is limited to a well-written, opinionated page of instructions, and you can contact the creators on Twitter. The model is available on Excel and Google Sheets, and all the formulas are editable.

4. "Standard SaaS Financial Plan for Startups and SMBs" by Ben Murray

SaaS Financial Plan for Startups and SMBs, by Ben Murray

This template published by Ben Murray, AKA the SaaS CFO, has a lot in common with Chris Janz's model: it's free, it's SaaS-centric and it's really good overall.

But that's where similarities stop. Let's look at what differentiates them:

• Cost modeling: Janz does a much better job as many costs are tied to activity metrics. With Murray, you have to fill it all manually. Janz 1 - 0 Murray
• Commitment: Murray allows you to define which plans are annual and which are monthly. Janz does not. Janz 1 - 1 Murray
• Client acquisition: Murray wants you to manually input new clients each month, where Janz includes 3 acquisition channels. Janz 2 - 1 Murray
• Murray also allows you to add service revenue and offers up to 5 years of forecasts. Janz 2 - 2 Murray
• Since its latest update, Murray's model also allows you to input your actual number and compare them with your forecasts. Janz 2 - 3 Murray

At the end of the day, Murray's SaaS template is great - maybe the best amongst the free templates. It is a bit disappointing when it comes to modeling new client acquisition and costs, though.

To explore more powerful (and paid) templates, read on!

5. "SaaS Startup" by Pro Forma

SaaS Startup Kit, by Pro Forma

The SaaS startup kit is the first paying template we're looking at: one-time $99.

Because you're paying, you obviously get a lot more in return: balance sheet, cap table, GAAP/IFRS compliance, 161 currencies to choose from, a ton of financial metrics and graphs, and advanced capabilities to model your costs and your revenue, including for hardware startups.

Now, because we are paying, we are a lot pickier. And I see 3 problems with this SaaS Startup Kit. First, you cannot account for upgrades and downgrades (you can model churn, though). Second, you cannot break down costs by P&L categories or departments. Third, the formulas are "locked ' so you cannot edit them. That's a big problem if, like me, you like looking under the hood. But maybe you don't care?

All in all, I cannot tell you not to look at the SaaS startup kit. It has a lot going for it, and at $99, it's priced right. But if you can stretch your budget a little more, look at the next model - it may be the right one for you.

6. "SaaS Financial Model" by Taylor Davidson

"SaaS Financial Model" by Taylor Davidson

Let me start right off the bat: this "SaaS Financial Model" by Taylor Davidson is one of the best templates out there.

For $149, you get all the financial statements you may wish for, laid out over 5 years, and GAAP-compliant. Additional tabs are built-in for fundraising (assess needs and uses), valuation (ownership, DCF, waterfall exit, ROI), variants (simplified scenarios), and impact (for purpose-driven startups). Bonus point: the model works in Microsoft Excel and Google Sheets, supports all currencies, and is fully editable.

In terms of analysis capabilities, the template generates boatloads of financial and SaaS metrics, as well as 20+ beautiful graphs. Costs can be broken down by departments and P&L categories so you can make sense of all that good stuff. SaaS experts will especially appreciate the granularity provided by monthly cohort analysis - a rarity!

Modeling revenue and costs is extremely versatile. Instead of pre-modeling everything for you, the template provides you with very unique features (Pricing, Pipeline, Drivers) that allow you to customize it to your needs. Here are a few examples of what you can do:

• You can build as many subscription plans as you want.
• Contract length is not limited to monthly or annual but can be anything you want.
• Billings are separate from contract cycles, so can do an annual contract with quarterly billings, or 3-year contract with annual billings, or annual contract with monthly billings
• All costs, direct and indirect, labor and non-labor, can be tied to relevant activity metrics (revenue, headcount, etc.) which is what you would expect from this kind of template.
• All costs can also be tied that are *not* tied to an activity metric, say periodic costs that occur quarterly or annually, or costs that increase a % over time, or costs that are a % of salaries, or a % of revenues, for example. This is all built-in within the Drivers sheet and an absolute delight to use.
• For Enterprise sales, you can model a good old Pipeline in the Pipeline sheet and attribute different numbers of seats and "likelihood to close" to each deal.

True, it takes a bit of time to wrap your head around the internal logic of that model. But once you master it, there is virtually no limit to what you can do.

Thankfully, this financial model is well-documented. The website includes a long, detailed "Getting Started" page as well as specific articles and videos for technical points. The highlight is definitely the email support - I've consistently received detailed replies within 24 hours - at zero extra cost. Kudos to that.

Long story short - if you are willing to shell out $149 for a SaaS financial model, Taylor Davidon's template is arguably one of the absolute best you can get your hands on. The other one is the model built by Alexander Jarvis - read on to learn about it.

7. "SaaS: SME & Users" by Alexander Jarvis

8. "saas: enterprise, sme & users" by alexander jarvis.

"SaaS: SME & Users" by Alexander Jarvis

"SaaS: Enterprise, SME & Users" by Alexander Jarvis

It's hard to write a serious review about this template - everything about it is absolutely ridiculous. It is ridiculously rich, ridiculously detailed, ridiculously powerful. It's the kind of template that you use when you want to make a statement, like impress your investors or make your CFO feel irrelevant. It's heavy, bold, and over-the-top, in the best way possible. Brace yourselves, let's dive in.

This template by Alexander Jarvis comes in 2 versions. The "SaaS: SME & Users" is perfectly fine for most SaaS businesses. It sells at $319. The "SaaS: Enterprise, SME & Users" retails at $1,299 and includes extra logic to model enterprise sales. Because of their complexity, both models only work in Microsoft Excel (no Google Sheets).

In return for your money, you get the most advanced modeling capabilities - period.

• Each acquisition channel is modeled in great details: paid, organic, blog, social, emailing, and channel partners. Each channel can be assigned its own conversion rate from visitor to user. You can also differentiate between the customers that self-onboard and those who require sales intervention.
• You can design composite offerings based on usage fee, monthly fee and/or a one-time service fee. The templates allow 3 paid plans - typically basic, premium, pro - as well as a free trial plan, and each of these plans can exist with a monthly or annual commitment.
• Customers can upgrade, downgrade or churn, and you can even schedule module releases at different points in time, so you create new revenue streams over the years.
• All costs, direct and indirect, labor and non-labor, are modeled in a clever way i.e. they are tied to relevant activity metrics

I cannot stress enough how detailed this model is. Here is an example: the "email marketing" tab (yes, there is such a thing) takes into account 12+ inputs including stuff like the % of recipients who will share the newsletter with their friends. I love this kind of detail because it gives actionable points when thinking about execution. It also makes it easier to defend your numbers in front of investors because you can explain the underlying assumptions. If it's too much for you, you can always deactivate the advanced fields with the switch and focus on the core input.

If you buy the $1,299 version, you get an extra slew of tabs specifically dedicated to enterprise sales in all its complexity: enterprise-specific products and offerings, geographies, sales cycles, "land and expand", custom development, etc. If you are building the next Oracle or Palantir, that stuff alone is invaluable.

Documentation is ok. Instructions and comments are included inside the template, but not much in terms of FAQ/articles on the website. Having said that, I particularly appreciated the tutorial videos: one 28-min overview and 20 shorter videos that each cover a specific tab.

You want more? Time to talk about analysis capabilities. Alexander Jarvis' model is most lavish when it comes to that point. 50+ graphs are readily available - and that's without counting the sparklines that are peppered throughout the sheet. Because modeling is so detailed, the template can provide advanced SaaS metrics such as marketing leverage or expansion % of new MRR. Of course, costs can be allocated to P&L categories and departments so you really understand what's going on in your model.

When it comes to financial statements, the $319 version gives you only 3 years of forecasts, with no balance sheet and no cap table. The $1,299 version does a bit better with 5-year forecasts, but still no sign of balance sheet nor cap table. Some would argue that an early-stage startup doesn't need formal financial statements... However, this template does include a tab to compare your forecasts to your actuals, and another tab listing down industry metrics - both are very welcome additions.

If you want the best spreadsheet ever, it boils down to comparing Taylor Davidson's and Alexander Jarvis' templates, and picking the one that fits you the most. See the final section "Conclusion" for a side-by-side of both models.

However, some prefer using a specialized SaaS app to build their startup financial model. If that's your case, check out the last 4 models.

9. "EY Finance Navigator" by Alex and Wout

EY Finance Navigator, by Alex and Wout

The Finance Navigator was developed by Alexander Matthiessen and Wout Bobbink from EY's Dutch office. It's a SaaS app: you pay a monthly subscription to access an online tool. It's a fundamentally different approach from the spreadsheet-based models we've explored so far.

The Finance Navigator costs $30 per month without commitment or $380 over an 18 month period. For that price, you get very exhaustive financial statements: income statements, cash flow statements, and balance sheets over 10 years - no cap table though. All currencies are available and you can export the statements to a clean, well-designed spreadsheet format (only numbers, no formulas).

Documentation is good, with in-app guidance, website posts, a Q&A, and a 37 min walkthrough video. The tool was clearly thought to be user-friendly and the onboarding is best-in-class. You will have zero difficulties using EY's Finance Navigator whatsoever.

Unfortunately, simplicity is a double-edged sword. Revenue and cost modeling is super basic. For example, revenue is defined as a base number for month 1, then a monthly growth rate. No channels, no conversion rate, no pricing plans. The same goes for costs: you cannot tie costs to specific activity metrics, so you have to input them manually. Because it's a SaaS application, you cannot customize the model by adding fields or modifying formulas. And because it's so basic, there is only the bare minimum in terms of analysis capabilities.

At the end of the day, EY's Finance Navigator holds a lot of promises. UX is great and they have a couple of nice features like comparables and scenarios. The product has evolved over the years, adding up features and getting more usable. In my estimation, it's not quite enough to be used by advanced SaaS entrepreneurs. The product is geared towards traditional businesses - think bakery, restaurant, consulting, who just want clean and easy financials. Not the right pick for SaaS people - yet. I'd love to revisit the tool in a year and see what progress has been made.

10. "Liveplan" by Palo Alto Software

Liveplan, by Palo Alto Software

Liveplan sells its financial modeling SaaS app at $20 per month ($360 over 18 months), which makes it a close competitor to EY Finance Navigator.

Starting with the strong points, Liveplan offers exhaustive statements over 5 years: income statements, cash flow statements, and balance sheets. Compared with EY's model, you have a bit more control over revenue modeling: offerings can be defined as recurring fees, billable hours, and a one-time upfront fee can also be added. Pricing can be increased automatically over time, churn can be factored in, and you can model monthly or annual plans.

When looking at cost modeling, you can adjust payment terms for clients and suppliers. There are also specific variables for hardware products. Documentation is just fine, with a tutorial video per section embedded directly in the app, as well as plenty of instructions. Liveplan exists in 5 languages, and integrates with Quickbooks, which allows importing your actual numbers and comparing them with your forecasts. You can also export your financials into a (numbers-only) spreadsheet to share with your investors.

Now, although Liveplan's software has more powerful modeling capacities than EY's, it remains insufficient in my estimation. Here are just a few examples.

• Direct labor costs can be set as a % of revenue, but do not update the number of employees accordingly.
• Indirect costs can only be set as a constant, a % of overall revenue, or a % of a specific revenue.
• New client acquisition is just manual input - as in you manually input "2" clients in March and "4" clients in April. There is no channel modeling whatsoever.
• Costs cannot be broken down by P&L categories nor departments.

When modeling is too superficial, it translates into poor analysis capabilities. In Liveplan's case, you do have a dozen financial metrics available (net cash flow, account payable, cash on hand…) and another dozen graphs. But SaaS metrics are absent, which is a bummer for SaaS entrepreneurs.

At the end of the day, LivePlan was built for non-tech entrepreneurs. Perfect for a bike shop owner, but not quite there for SaaS people.

Don't take my word for it: there is a 60-day trial, so give it a spin for free and make up your own mind.

11. "Summit" by Matt Wensing

Summit, by Matt Wensing

Summit is a young startup (founded 2019) that brings a fresh take on the whole financial modeling thing with a SaaS solution.

Let's make it clear - Summit is not meant for fundraising. Forecasts on Summit are made for an 18-month period only. Costs cannot be allocated to P&L categories and departments, nor can you differentiate between labor/non-labor or direct/indirect costs. Therefore, you won't be able to generate any financial statements that your investors may require . Hell, you can't even export a spreadsheet!

So why talk about Summit? Because Summit is pretty awesome when it comes to piloting your SaaS startup with a financial model. Here is how it works. First you connect your live metrics (Stripe, Baremetrics, etc.) to your Summit account. This allows Summit to derive your future growth from the current trends. The next step consists in optimizing that future growth. To do that, you define a baseline scenario around 20+ metrics from sales, product, finance, then you play around with those variables to maximize your MRR or any other metric you like. What if we increase our close rate? What if we raise funds and funnel that money into paid ads? You instantly get clear answers. What's more, the clean dashboards and convenient built-in comments feature makes it easy and even pleasant to run those analyses and share with your team. It's a really fresh experience - no comparison possible with fuddy-duddy spreadsheets.

Summit is still a young product and there is room for improvement: currencies, tax rates, expansion and contraction of existing clients, one-off revenue. In particular, client acquisition would greatly benefit from more granularity and native integrations with social media accounts for instance.

At the end of the day, Summit is not meant to build financial statements, but to make decisions in a data-driven way. It's such a refreshing approach in the space that I highly recommend trying it out. Bonus point: it's 100% free for now, so it's a no-brainer.

12. "Causal" by Taimur and Lukas

Causal, by Taimur and Lukas

At first glance, Causal seemed very similar to Summit. It's also a SaaS solution, also founded in 2019, also bringing a new approach to modeling. But that's where the comparison stops because the philosophy behind Causal is quite unique.

Causal is not just a financial modeling tool for SaaS startups. It's a modeling tool that aims at replacing Excel for every modeling need you may have. This means that (a) Causal is super versatile and goes much deeper than Summit, and (b) Causal is much more complex with a steeper learning curve than Summit.

Looking at revenue and cost modeling, you can model anything you want on Causal with an interface that's 10x more modern and user-friendly than a spreadsheet. The same thing goes for analysis capabilities: you can generate dashboards, tables, and graphs for absolutely anything - including any financial statement your investors may want. You can also connect live data sources (Stripe and Google Sheets for now, more to come) to automatically update your models with real-time metrics.

As a SaaS entrepreneur, you don't have time to build a model from scratch. Lucky you, Causal has built-in templates - including two SaaS models built by Taylor Davidson himself (see template #6). You are then able to augment or fine-tune those models to suit your specific needs.

In terms of documentation, there are a few videos, a live chat as well as a walkthrough when you start a new model. That's not much, but Causal assumes that you are a modeling "nerd" and that your usual work environment is massive spreadsheets. If that's the case, you'll be just fine. Assuming you have the time and desire to put in the hours to learn a new tool, Causal may very well be the ultimate platform for financial modeling.

New models - reviews coming soon

"financial model template for startups" by basetemplates.

Financial Model Template, by BaseTemplates

Conclusion: this is the best financial model for SaaS startups

Best free spreadsheet

If you want a "good enough" model but are not willing to pay for it, go for Ben Murray's (model #4) or Chris Janz's (model #2) . Customize them a bit to offset their weaknesses.

See below a side-by-side comparison of the differences between both models.

Best paid spreadsheet

If you want the best financial model spreadsheet out there and are willing to pay for it, go for Taylor Davidson's (model #6) or Alexander Jarvis' (models #7/#8) . They are by far the best stuff on the market today.

See below a side-by-side comparison of the differences.

Best software

If you want to experience the future of financial modeling, go for Summit (model #11) or Causal (model #12) - while keeping in mind that both are very different.

Thanks for reading. Don't hesitate to leave a question in the comments, I try to reply personally to each one of them.

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Free Financial Templates for a Business Plan

By Andy Marker | July 29, 2020

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In this article, we’ve rounded up expert-tested financial templates for your business plan, all of which are free to download in Excel, Google Sheets, and PDF formats.

Included on this page, you’ll find the essential financial statement templates, including income statement templates , cash flow statement templates , and balance sheet templates . Plus, we cover the key elements of the financial section of a business plan .

Financial Plan Templates

Download and prepare these financial plan templates to include in your business plan. Use historical data and future projections to produce an overview of the financial health of your organization to support your business plan and gain buy-in from stakeholders

Business Financial Plan Template

Use this financial plan template to organize and prepare the financial section of your business plan. This customizable template has room to provide a financial overview, any important assumptions, key financial indicators and ratios, a break-even analysis, and pro forma financial statements to share key financial data with potential investors.

Download Financial Plan Template

Word | PDF | Smartsheet

Financial Plan Projections Template for Startups

This financial plan projections template comes as a set of pro forma templates designed to help startups. The template set includes a 12-month profit and loss statement, a balance sheet, and a cash flow statement for you to detail the current and projected financial position of a business.

‌ Download Startup Financial Projections Template

Excel | Smartsheet

Income Statement Templates for Business Plan

Also called profit and loss statements , these income statement templates will empower you to make critical business decisions by providing insight into your company, as well as illustrating the projected profitability associated with business activities. The numbers prepared in your income statement directly influence the cash flow and balance sheet forecasts.

Pro Forma Income Statement/Profit and Loss Sample

Use this pro forma income statement template to project income and expenses over a three-year time period. Pro forma income statements consider historical or market analysis data to calculate the estimated sales, cost of sales, profits, and more.

‌ Download Pro Forma Income Statement Sample - Excel

Small Business Profit and Loss Statement

Small businesses can use this simple profit and loss statement template to project income and expenses for a specific time period. Enter expected income, cost of goods sold, and business expenses, and the built-in formulas will automatically calculate the net income.

‌ Download Small Business Profit and Loss Template - Excel

3-Year Income Statement Template

Use this income statement template to calculate and assess the profit and loss generated by your business over three years. This template provides room to enter revenue and expenses associated with operating your business and allows you to track performance over time.

Download 3-Year Income Statement Template

For additional resources, including how to use profit and loss statements, visit “ Download Free Profit and Loss Templates .”

Cash Flow Statement Templates for Business Plan

Use these free cash flow statement templates to convey how efficiently your company manages the inflow and outflow of money. Use a cash flow statement to analyze the availability of liquid assets and your company’s ability to grow and sustain itself long term.

Simple Cash Flow Template

Use this basic cash flow template to compare your business cash flows against different time periods. Enter the beginning balance of cash on hand, and then detail itemized cash receipts, payments, costs of goods sold, and expenses. Once you enter those values, the built-in formulas will calculate total cash payments, net cash change, and the month ending cash position.

Download Simple Cash Flow Template

12-Month Cash Flow Forecast Template

Use this cash flow forecast template, also called a pro forma cash flow template, to track and compare expected and actual cash flow outcomes on a monthly and yearly basis. Enter the cash on hand at the beginning of each month, and then add the cash receipts (from customers, issuance of stock, and other operations). Finally, add the cash paid out (purchases made, wage expenses, and other cash outflow). Once you enter those values, the built-in formulas will calculate your cash position for each month with.

‌ Download 12-Month Cash Flow Forecast

3-Year Cash Flow Statement Template Set

Use this cash flow statement template set to analyze the amount of cash your company has compared to its expenses and liabilities. This template set contains a tab to create a monthly cash flow statement, a yearly cash flow statement, and a three-year cash flow statement to track cash flow for the operating, investing, and financing activities of your business.

Download 3-Year Cash Flow Statement Template

For additional information on managing your cash flow, including how to create a cash flow forecast, visit “ Free Cash Flow Statement Templates .”

Balance Sheet Templates for a Business Plan

Use these free balance sheet templates to convey the financial position of your business during a specific time period to potential investors and stakeholders.

Small Business Pro Forma Balance Sheet

Small businesses can use this pro forma balance sheet template to project account balances for assets, liabilities, and equity for a designated period. Established businesses can use this template (and its built-in formulas) to calculate key financial ratios, including working capital.

Download Pro Forma Balance Sheet Template

Monthly and Quarterly Balance Sheet Template

Use this balance sheet template to evaluate your company’s financial health on a monthly, quarterly, and annual basis. You can also use this template to project your financial position for a specified time in the future. Once you complete the balance sheet, you can compare and analyze your assets, liabilities, and equity on a quarter-over-quarter or year-over-year basis.

Download Monthly/Quarterly Balance Sheet Template - Excel

Yearly Balance Sheet Template

Use this balance sheet template to compare your company’s short and long-term assets, liabilities, and equity year-over-year. This template also provides calculations for common financial ratios with built-in formulas, so you can use it to evaluate account balances annually.

Download Yearly Balance Sheet Template - Excel

For more downloadable resources for a wide range of organizations, visit “ Free Balance Sheet Templates .”

Sales Forecast Templates for Business Plan

Sales projections are a fundamental part of a business plan, and should support all other components of your plan, including your market analysis, product offerings, and marketing plan . Use these sales forecast templates to estimate future sales, and ensure the numbers align with the sales numbers provided in your income statement.

Basic Sales Forecast Sample Template

Use this basic forecast template to project the sales of a specific product. Gather historical and industry sales data to generate monthly and yearly estimates of the number of units sold and the price per unit. Then, the pre-built formulas will calculate percentages automatically. You’ll also find details about which months provide the highest sales percentage, and the percentage change in sales month-over-month. 

Download Basic Sales Forecast Sample Template

12-Month Sales Forecast Template for Multiple Products

Use this sales forecast template to project the future sales of a business across multiple products or services over the course of a year. Enter your estimated monthly sales, and the built-in formulas will calculate annual totals. There is also space to record and track year-over-year sales, so you can pinpoint sales trends.

Download 12-Month Sales Forecasting Template for Multiple Products

3-Year Sales Forecast Template for Multiple Products

Use this sales forecast template to estimate the monthly and yearly sales for multiple products over a three-year period. Enter the monthly units sold, unit costs, and unit price. Once you enter those values, built-in formulas will automatically calculate revenue, margin per unit, and gross profit. This template also provides bar charts and line graphs to visually display sales and gross profit year over year.

Download 3-Year Sales Forecast Template - Excel

For a wider selection of resources to project your sales, visit “ Free Sales Forecasting Templates .”

Break-Even Analysis Template for Business Plan

A break-even analysis will help you ascertain the point at which a business, product, or service will become profitable. This analysis uses a calculation to pinpoint the number of service or unit sales you need to make to cover costs and make a profit.

Break-Even Analysis Template

Use this break-even analysis template to calculate the number of sales needed to become profitable. Enter the product's selling price at the top of the template, and then add the fixed and variable costs. Once you enter those values, the built-in formulas will calculate the total variable cost, the contribution margin, and break-even units and sales values.

Download Break-Even Analysis Template

For additional resources, visit, “ Free Financial Planning Templates .”

Business Budget Templates for Business Plan

These business budget templates will help you track costs (e.g., fixed and variable) and expenses (e.g., one-time and recurring) associated with starting and running a business. Having a detailed budget enables you to make sound strategic decisions, and should align with the expense values listed on your income statement.

Startup Budget Template

Use this startup budget template to track estimated and actual costs and expenses for various business categories, including administrative, marketing, labor, and other office costs. There is also room to provide funding estimates from investors, banks, and other sources to get a detailed view of the resources you need to start and operate your business.

Download Startup Budget Template

Small Business Budget Template

This business budget template is ideal for small businesses that want to record estimated revenue and expenditures on a monthly and yearly basis. This customizable template comes with a tab to list income, expenses, and a cash flow recording to track cash transactions and balances.

Download Small Business Budget Template

Professional Business Budget Template

Established organizations will appreciate this customizable business budget template, which  contains a separate tab to track projected business expenses, actual business expenses, variances, and an expense analysis. Once you enter projected and actual expenses, the built-in formulas will automatically calculate expense variances and populate the included visual charts. 

‌ Download Professional Business Budget Template

For additional resources to plan and track your business costs and expenses, visit “ Free Business Budget Templates for Any Company .”

Other Financial Templates for Business Plan

In this section, you’ll find additional financial templates that you may want to include as part of your larger business plan.

Startup Funding Requirements Template

This simple startup funding requirements template is useful for startups and small businesses that require funding to get business off the ground. The numbers generated in this template should align with those in your financial projections, and should detail the allocation of acquired capital to various startup expenses.

Download Startup Funding Requirements Template - Excel

Personnel Plan Template

Use this customizable personnel plan template to map out the current and future staff needed to get — and keep — the business running. This information belongs in the personnel section of a business plan, and details the job title, amount of pay, and hiring timeline for each position. This template calculates the monthly and yearly expenses associated with each role using built-in formulas. Additionally, you can add an organizational chart to provide a visual overview of the company’s structure. 

Download Personnel Plan Template - Excel

Elements of the Financial Section of a Business Plan

Whether your organization is a startup, a small business, or an enterprise, the financial plan is the cornerstone of any business plan. The financial section should demonstrate the feasibility and profitability of your idea and should support all other aspects of the business plan. 

Below, you’ll find a quick overview of the components of a solid financial plan.

• Financial Overview: This section provides a brief summary of the financial section, and includes key takeaways of the financial statements. If you prefer, you can also add a brief description of each statement in the respective statement’s section.
• Key Assumptions: This component details the basis for your financial projections, including tax and interest rates, economic climate, and other critical, underlying factors.
• Break-Even Analysis: This calculation helps establish the selling price of a product or service, and determines when a product or service should become profitable.
• Pro Forma Income Statement: Also known as a profit and loss statement, this section details the sales, cost of sales, profitability, and other vital financial information to stakeholders.
• Pro Forma Cash Flow Statement: This area outlines the projected cash inflows and outflows the business expects to generate from operating, financing, and investing activities during a specific timeframe.
• Pro Forma Balance Sheet: This document conveys how your business plans to manage assets, including receivables and inventory.
• Key Financial Indicators and Ratios: In this section, highlight key financial indicators and ratios extracted from financial statements that bankers, analysts, and investors can use to evaluate the financial health and position of your business.

Need help putting together the rest of your business plan? Check out our free simple business plan templates to get started. You can learn how to write a successful simple business plan  here . 

Visit this  free non-profit business plan template roundup  or download a  fill-in-the-blank business plan template  to make things easy. If you are looking for a business plan template by file type, visit our pages dedicated specifically to  Microsoft Excel ,  Microsoft Word , and  Adobe PDF  business plan templates. Read our articles offering  startup business plan templates  or  free 30-60-90-day business plan templates  to find more tailored options.

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