The growth-stage financial plan is suitable for all businesses that have past financials to analyse, and a more predictable growth than seed stage startups. The yearly projections are calculated through an integrated financial plan. The financial plan works with a set of assumptions on the side of the financial plan, meaning that the spreadsheet can be updated anytime without changing any of the formulas in the projections.
The cover page allows to easily change some basic assumptions used in the financial model
The revenue projections are adapted to the specific revenue model of the company, based on the available market size and potential penetration, increasing prices and changing revenue model. Using a growth rate for revenue is not suitable for fast growing companies as it not justifiable. The same applies to COGS, that grow together with revenue and changing trends in supplier agreements. The inventory flow can also be calculated here.
Changing operating costs can be calculated as a portion of revenue for very stable companies, but for fast-growing companies, a more detailed analysis is necessary. The planned build-up of the workforce, the salary for each position, marketing costs and administration & operating costs can be calculated according to how they realistically change. For example, some marketing costs would grow together with the number of new customers acquired, while some operating costs would grow in line with number of employees, while the revenue per employee determines the structure of the company.
Investments and depreciation need detailed planning for SMEs, since they determine tax payments for profitable businesses. Recurring or one-off investments, as well as detailed depreciation, will be calculated according to the strategy and business model of the company.
The Profit & Loss Account (or Income Statement) would be adapted to the company’s features, with the IFRS model being the preferred option for a clear overview of all costs. The financial result can be linked to the balance sheet structure and debt analysis. The table was graphically planned so that rows can be hidden to automatically fit the financials into presentations and business plans.
Different balance sheet positions draw in some of the calculations that took place before, such as inventory and fixed assets. Other positions are planned according to the most likely cash cycle of the company, which can also change over time. Debt, new equity investments and other positions are planned in detail and update automatically when changing the assumptions. The resulting working capital flows directly into the cash flow statement.
KPIs are very important for growth-stage companies and SMEs that are raising growth capital or debt. These are specifically financial KPIs that determine the financial health of the company. The detailed calculation of debt helps make decisions on future financing and determine the sustainable capital structure.
The Cash Flow Statement is calculated with the indirect method for SMEs and growth-stage company (unless measuring liquidity is priority, and in that case we would use the direct method and monthly cash flows). The Cash Flow levels are used for valuation purposes and for planning the amount of funds to raise.
Graphs are generated automatically on different elements of the financial plan and they can be used directly for presentations and business plans.