How to rock at financial modeling

Prepared by our partners Finance PM Team


At some point every entrepreneur has to develop a financial model for their business be it a start of new venture, point of growth or time to raise funding. It is important to remember that financial model is a pure reflection of how your business operates or will operate: how you [will] sell your product/service, hire people, use resources. To build a working financial model you need to get all your plans and ideas straight. So we have some tips for you and the rest is just a beautiful work of art.


How to get started:

Gather key data

Build a template

Start filling in


Here is a suggested structure for your financial model file:

  • Summary: all the assumptions and guidelines for using the model as well as description of what is presented at each page.

  • Fin Model: this is the model itself, consolidated data which is linked to all relevant source pages.

  • Income-Sales Plan: one of the source pages for Fin Model page, showing your products/services and revenue streams.

  • Expenses: one of the source pages for Fin Model page, there are three main categories of expenses — R&D (research and development), S&M (sales and marketing), G&A (general and administrative).

  • Staffing Plan: one of the source pages for Expenses page, showing your headcount plan and salaries, bonuses, etc.

  • Marketing & Sales Expenses: one of the source pages for Expenses page, introducing your Go-2-Market strategy

  • Unit economy: one of the source pages for Income-Sales Plan page, providing your vision of key project metrics, such as ARPU, CAC, LTV, etc.

  • Use of Funds: an important page in case you are going to investors as they want to see how you will be spending their money

  • Valuation: an important page in case you are going to investors as it helps to develop an offer — % of equity you are ready to give away and their price.


There are some principles that will help you while working on your financial model:

  • Any good financial model lives and dies by assumption, don’t forget to keep record of yours and add them to your summary page for everyone reading the model to follow your logic.

  • Financial model as any financial document shall be transparent so don’t forget to use formulas, automatic updates and keep it simple.

  • Everything affects everything, if your costs grow your earnings grow proportionally.

  • Always use relevant currency, the one your clients or investors use.

  • Be reasonable, CEO can get less than a developer as CEO has his equity shares but they can’t get less than an analyst, this is just a matter of motivation.

  • Don’t plan too far ahead, the industry is changing so fast that 5 year plans look too abstract

  • Ask questions, don’t forget to involve key team members as CTO knows better which specialist he will need in 6 month and how much he will be spending on servers.

  • Look for industry standards, there are tons of information out there you can’t build your model in vacuum.

  • Use available templates: there is no need to reinvent a bicycle just find a template that you like the most and improve it.

And some useful links to dive deeper into financial modelling:

How to Create a Basic Financial Model: An Entrepreneur’s Guide

The ultimate guide to financial modeling for startups

Financial Modeling for Startups


Should you have any questions or require any assistance with your financial model don’t hesitate to book a free 30-minute call with us


Truly yours,

Finance PM Team



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