STARTUP FINANCIAL MODEL
Creating a startup financial model is crucial for planning, securing funding, and making informed decisions. Here's a simplified outline of the key components you should include in your startup financial model:
Income Statement (Profit and Loss Statement):
Revenue: Projected sales and income from your products or services.
Cost of Goods Sold (COGS): Direct costs associated with producing your products or services.
Gross Profit: Revenue minus COGS.
Operating Expenses: Costs such as rent, utilities, salaries, marketing, and other overhead.
Earnings Before Interest and Taxes (EBIT): Gross profit minus operating expenses.
Interest and Taxes: Interest on loans and taxes payable.
Net Profit: EBIT minus interest and taxes.
Cash Flow Statement:
Operating Cash Flow: Money generated or used by day-to-day operations.
Investing Cash Flow: Money spent or earned from investments (e.g., buying or selling assets).
Financing Cash Flow: Money from or used for financing (e.g., loans, investments, equity).
Net Cash Flow: Total change in cash during a specific period.
Balance Sheet:
Assets: Current (e.g., cash, inventory) and non-current (e.g., equipment, intellectual property) assets.
Liabilities: Current (e.g., accounts payable) and long-term (e.g., loans) debts.
Equity: Owner's investment and retained earnings.
Revenue Model:
Explain how you calculate revenue. It could be based on unit sales, subscription fees, advertising, etc.
Expense Assumptions:
Detail your assumptions for operating expenses, such as rent, salaries, marketing, and other overhead costs.