Do you have a Financial Model?
Hi guys,
How many of you have a financial model to better understand your business model?
It's common when you want to fundraise but I don't see indie hackers talking about that.
Do you think it can be useful for a Bootstrapped company? I feel that it can be really useful to understand the business and viability.
Just started to make mine and it eases my decisions.
What about you guys?
#ask-ih #accounting #budgeting #fundraising
I find spreadsheets are the best for early-stage startups because it forces founders to truly understand every single input that is being accounted for within the model. If you use a tool that perhaps automates some of the process or includes some assumptions in your model to make it easier, it helps in the short run, but then the founder has some uncertainty about what the model is truly saying, and how it arrived at those calculations.
Advice for building a model:
Strongly agree with this comment. The process always starts with understanding your key drivers, which will really help you understand your business.
The best financial model templates for various business models I've come across: https://foresight.is/
I'd love to see some examples of financial models, do you have anything you could share?
In the past I've just used a spreadsheet to explore ways at how my ideas would/could work.
A financial model is useful for any & all companies, because it is a decision making tool. When you understand your business from the perspective of what actually drives revenue, cost, and profitability, you can save time & simplify/make better decisions. I am working on a youtube channel to tackle this exact problem: how entrepreneurs can utilize financial models to build better businesses (not just use it to raise money); so let me know if you have anything you'd like me to cover.
Please share template