If you have ever worked on big plans to launch any kind of startup, you know you need one. You know you need one and you know you need it fast. Time is scarce but you simply can’t get any financial support without a financial plan. I have raised VC money and been in many pitch meetings. There are a number of other reasons why you need it:
- Helps you assess financial feasibility of business model
- Sharpen focus on key planning areas
- Can’t raise money without one?
- Understand the key variables of your business’s profitability
- Understand the cash requirements
I had been looking for a great model for a startup I have been working on for a number of weeks when I stumbled on the model created by Frank Moyes and Stephen Lawrence at the University of Colorado. This is the best model I have seen and it’s applicable to many kinds of startups. Before I send you off to play with the Excel sheet, let me stress that this model is a good framework but you need to still know your market and have some clear assumptions on how you are going to deliver your product or service, how you will ramp up market growth and your company’s growing share of tht market. Reasonable assumptions on startup costs and personal costs are necessary. Once that’s under your belt, you can seriously benefit from the model’s ability to frame your financial feasibility analysis and use it as a check for everything you haven’t thought about (tax, employee benefits, etc.) Or what you don’t want to create yourself from scratch (po forma financial statements, etc.). Enjoy this great startup financial model for planned projections.
Another useful tool to use as a primer for your thinking before or after you work with the model above is the presentation on startup financial plans from Stanford professor Mark Leslie. It’s succinct, self-explanatory, and to the point.
I wouldn’t advise to waste too much time on an elaborate business plan without first crunching some of the numbers above. They will teach more than all the disconnected great ideas that pop in your head as you dream up the details of a business plan. This said, you may need to put you initial ideas down on paper or ppt (PowerPoint). Nothing better then a good pitch presentation slide deck for that. It will force you to synthesize and get the the point without repeating yourself. Here is a great format Investor Presentation Template proposed by Deloitte. This is a good format.
If you are interested in getting more information on this topic or related services from the OrigoTerra consulting team, contact us.