Creating a Startup Financial Plan by Using Startup Financial Model Template in Excel

Ensuring to have a healthy business is to have a working financial plan that will help with managing the business to make the right strategic financial decisions. Especially for startup businesses, creating a financial plan is a critical factor for the business’ survival against countless competitors and other risks that one might encounter especially for startups that’s new to the industry. Hence, it is very important to create a financial plan for startups. Usually, when creating a financial plan, it is better to build it in Excel spreadsheets since it is more convenient and easier to understand by any user.

There are certain components that completes a startup financial model in Excel which is done accordingly in a sequence to avoid going back and forth through the sheets.

1. Sales forecast – create a sales projection over the course period (whether for short-term or long-term planning). 

2. Expenses Budget – create an expense budget plan as you need to have a better understanding to the cost you will expend to make the sales forecast plausible and feasible.

3. Cash Flow Statement – develop a cash flow statement to track the flow of cash in and cash out of your business operations, partly basing it off your sales forecasts, balance sheet, and other assumptions.

4. Income Projections – or the so-called revenue forecast for the upcoming years by using the sales forecast, expense forecast, and the cash flow projection.

5. Balance Sheet Projection – deal with assets and liabilities that weren’t included in your income projection to project the net worth of your business at the end of fiscal year, especially for startups.

6. Breakeven Analysis – conduct a breakeven analysis after mapping out the whole projections, this is to assess if the business’s expenses match the sales or service volume. The analysis is conducted as to measure when the business will reach the break-even point which is an important key for potential investors to refer to if the business is financially feasible and a good investment.

Altogether, it completes a basic startup financial plan in Excel. The process may look simple and easy, but of course, the process is more than it seems. A lot of time is needed to be set aside just to build a financial model for your business or for an investment. Not to mention that you at least need to have an acceptable amount of industry know-how to make the financial model reliable and work as it should be. If you want to build a financial plan for your startup business, try to use a startup financial model template in Excel first to help you familiarize on how to create financial models for startup businesses. You can acquire a copy from here: Startup Financial Model Templates in Excel to use as a base to start with as you create a financial model for your startup business. You can also use other industry-specific financial model templates at eFinancialModels if you need financial model templates with different use cases.