What is a financial model?
A financial model is a forecast of a company’s future financial performance based on assumptions (of revenue drivers, operating expenses, etc.) and past performance.
Importance of financial models for small businesses
One of the top reasons small businesses fail is from cash flow issues. Whether it be from not having a large enough cushion to survive poor economic times, not understanding the total startup costs, not planning inventory, not prepared for irregular income streams, etc. The list is seemingly never-ending but the solution is generally one thing: a financial model.
Quick overview of the benefits of a financial model:
- Understand your key profit drivers
- Monitor your progress over time
- Manage costs and find efficiencies
- Play out scenarios of future performance
- Required when seeking external funding
A free resource to learn 90% of financial modeling.
I have personally taken this course and a few others by this company. This video alone will run you several hundred dollars if you take the course in person.
If you want this product but don’t have the time.
Send me a message below. I have free templates I can offer and can always build you a model for a fee based on the complexity of your business.