Valithea’s financial plan was specifically developed for high-risk or fast-growing businesses, from pre-revenue startups to growth-stage companies. They include all figures sought by investors, as well as a realistic financial plan to be used by business owners. Additionally, all assumptions used are checked for consistency and while developing the financial plan, we work on adjusting the strategy together. Our financial plans are preferred by those clients who value precision over simplicity (we have an alternative financial model for those who prefer a simpler model)
With years of experience and testing on different business models, this financial model was engineered to:
* realistically project market size and penetration with top down approach TAM/SAM/SOM
* test all types of revenue models and easily switch between different scenarios
* display a changeable set of assumptions that entrepreneurs can update independently (training provided)
* measure liquidity
* integrate different feasibility analyses and make strategic decision
* present all necessary figures to investors, with presentation-ready tables and graphs
* link the financials to advanced valuation techniques and risk assessment that are defensible in negotiations.
The financial plan for startups and fast-growing SMEs is usually planned on a monthly basis, as measuring liquidity is important to correctly measure the amount of funding to raise, as well as to observe the changes in strategy closely and how they affect financials, but can also be delivered on a yearly basis, as is preferred by the client and according to our recommendation. This is recommended for companies that aim to raise a large amount of funds and quickly grow to raise Series A and B.
The financial plan includes:
- An editable assumptions page with instructions (no need to change any formulas)
- Customers’ development, usage rates and acquisition costs for customers and suppliers to realistically project market size, churn and penetration with the top down approach using TAM/SAM/SOM (the bottom-up approach is also available)
- Detailed revenue model based on your unique revenue models (regular or one-off services/ products, SaaS, trading, subscription fees, licence fees, transaction fees for marketplaces, transaction fees on funding, rent, inventory fees, advertising, and more)
- Detailed direct and indirect costs (and inventory flow with value/volume and timing of payments) for all types of business models
- Personnel development based on growth and salary increase, including varying paying models across countries
- Operating costs timed with expansion phases and regular admin costs, as well as capital investments with detailed depreciation
- Integrated IFRS financials with P&L, balance sheet and monthly and yearly cash flows (and past financials analysis) to measure liquidity
- Estimate of funds to raise for the period of time of your choice, that is automatic and measures minimum and maximum funds to raise, divided into multiple rounds
- Snapshot, Breakeven analysis, KPIs
- Template structured for automatic updates with tables that are easy to copy into reports, with changeable brand colours
- Snapshot, Breakeven analysis, Budgeting, KPIs, Scenarios, Valuation, Investors’ Dashboard and various other add-ons including an advanced Valuation (optional)
Long-term support is also available through the hourly packages.
CLIENT EXAMPLE 1
The basic assumptions of the financial plan are determined on the cover page, as well as having instructions and quick links to the relevant pages.
The disclaimer cannot be deleted to ensure the fair use of the financial plan.
Most assumptions are determined on a single page for each scenario. This makes the financial plan fully flexible, as it can be updated anytime without changing any of the formulas contained in the projections. The image below has some hidden rows, but excel easily allows you to find the relevant assumptions, divided by market, revenue model, direct costs & inventory, opex (marketing, staff and administration costs), capex and funding/working capital assumptions. All pages can be expanded to show more details or minimised to show only basic information, for easier printing: additionally, the links take you straight to the relevant section you need to edit. The financial plan works with dates and there is a timeline where you can easily input all relevant dates.
We use here a top down approach, by analysing market entry, market size, identifying customers to target, competition, competitiveness, growth strategy and retention. This produces highly realistic market penetration and growth built-up, slowly in the first months, and faster in the following years, with a later slowdown in each market (but growth can be sustained by entering new markets or selling new products to the same market. For a small business, instead, the bottom up approach is preferred and we have included the option to use the bottom-up approach or a fusion of both approaches. We estimate a TAM, SAM and SOM by assessing competition, and establish a maximum penetration and growth rate to ensure realistic growth. Additionally, we include a realistic number of suppliers or usage rates related to your customer data.
The detailed revenue model allows to include a variety of products or services, subscriptions, licences, transaction fees or advertising revenues. Each revenue stream has a variety of assumptions that help determine realistically how much you can earn from the selected customer base. We also calculate detailed figures on which revenue figures are based: sales volumes on which transaction fees are based, website views on which advertising fees are based, etc.
Direct costs are measured for each revenue type, and the inventory flow as well as related costs can be calculated in detail, potentially also for different products if relevant for your liquidity planning. The financial plan provides many hints on costs that you may have forgotten.
The financial plan can be seen on a monthly and yearly basis by opening and closing hidden cells (in Microsoft Excel). Marketing and sales costs can be projected based on 4 main channels and conversion rates: this allows you to portray the funnel, measure and validate your Customer Acquisition Costs. It also helps many customers plan out marketing channels that they previously did not consider, and to have realistic marketing expenses expectations . For example, you can plan the number of sales people needed to achieve certain goals.
Operating costs are calculated based on detailed projections of staff according to the strategy and realistic revenue/employees KPIs, salary for each position, and a variety of operating and administration costs, growing according to chosen variables, which ensure that no important business expense is left out.
Capex is typically low for startups, but it can include hardware for employees and intangible investments. This is calculated together with depreciation and balance sheet figures.
Rows and columns can be collapsed or expanded to easily find all relevant sections. The financial plans includes a high level of detail as you can see below, which was tested many times for potential errors. The complex formulas allows you to freely change the assumptions without ever needing to edit formulas. If you want to insert hard values, you can also do that.
The financial statements include a standard income statement with all relevant figures, a balance sheet and a cash flow statement with the direct approach to easily measure the timing of cash flows (both direct and indirect cash flow method available. This gives us information on the run rate, gross and net burn rate, breakeven profit and breakeven investment time (when present), as well as how much funds to raise.
The financial statements are viewable monthly or yearly, and rows can be collapsed or expanded to fit the tables perfectly into business plans.
We can also measure the upcoming round of funding by determining how many months it should cover, including a safety buffer to avoid being short of cash too early, before the next round of funding can take place. The amount of funds to raise automatically updates and flows into the balance sheet according to the period selected. This helps us select a financing strategy with multiple rounds when necessary.
Metrics can be both general and sector-specific, and give you a last overview of all key data on customers, product prices, revenue per customer group, breakeven analysis for each main product, and lifetime value of customers, among others.
At last, these tables and graphs update automatically, and are ready to be used for business plans or pitch decks. May graphs were correctly sized to fit into our documents. You can also change the colours of the spreadsheet to your brand colours, or copy paste the graphs into your branded power point: the colours will automatically adapt to your brand colours.
Get in contact if you want to discuss your strategy before purchasing:
You can also receive the following analyses in excel:
- A Crowdcube Financials Snapshot
- A detailed Budget
- 2 in 1 Scenarios
- Financial KPIs
- SaaS Metrics monitoring
- An Investor Dashboard
- Valuation, fully integrated into the financial plan
- Cap Table
- & more…