Whether you want to build a sustainable business, explore different funding options, or just avoid going bankrupt; creating a financial model is nearly indispensable. As a founder, you already have a variety of responsibilities, but building a financial model helps eliminate risk by quantifying and validating your vision and assumptions. Think of it this way, if you want to get a bird’s eye view on the viability of your own company, you need to start financial planning.
Most financial models are built in Excel where it’s easy to run into circular dependencies, syntax errors, and long, avoidable formulas. Check out…
Financial modeling has proven itself to be an indispensable tool for startups and founders. An entrepreneur might create a financial model for garnering investor interest or strategic planning, such as calculating runway and deciding budgets. However, financial modeling typically involves an Excel spreadsheet where complexity and confusion can increase without the proper precautions. Before diving into a spreadsheet without a concrete plan, check out the following common financial modeling mistakes for startups. Keep reading if you’re interested in how Sturppy can solve these problems for you.
1. Hardcoding projections and assumptions
As one of the more common and easy mistakes to make, hardcoding values in…
While it’s easy to use immediate sales and short-term metrics as success indicators, SaaS startups must consider other factors to prevent bottlenecks when scaling. Given the nature of monthly subscriptions, metrics such as churn and user retention are exceedingly important. However, it’s easy to go down a rabbit hole of different metrics that ultimately might distract a founder from what’s important.
To make matters simple, here are five important metrics founders should always consider as they grow their SaaS company.
Recurring Revenue
Recurring revenue is the amount of revenue that…
For some reasons you would like to know how much your startup is worth, maybe you are searching for investors and you want to know what offers you should expect, or maybe you are searching for a co-founder and want to give him some equity or you are planning on selling you startup. Basically if you are asking yourself: “how do I value my startup?”, then you are in the right place, let’s start.
There isn’t a single method
You should have seen it coming, of course, there isn’t a single method with which startups are valued, this is because of the intrinsic uncertain nature…
Creating different scenarios for your financial model is the process of examining and evaluating possible events or scenarios that would impact your assumptions and, in turn, change the result of your projections.
Why is scenario analysis useful
Scenario analysis is often used to get an idea of the most extreme directions that a financial model could take. It is useful for founders and investors to get an idea of what would happen if everything goes “bad” or if everything goes “right”.
Let’s see how to create scenarios for your financial model.
Different scenarios breakdown
A scenario could be used to indicate a specific evolution of the sector where your business operates, a different approach to your assumptions or a shift in the economy. For startup founders it is especially useful since it allows them to predict how their startup will…
Financial modeling is a very interesting discipline, because even if you are an expert or you have the perfect template, you still need to do some guessing. Isn’t there a better alternative?
Honestly I think that the disciplines where there isn’t a “correct” answer or where the “correct” answer isn’t known until you try it (basically in the future) are the most fascinating and hardest ones. Jobs like these are researchers, entrepreneurs or financial modelers.
Where is the guessing?
A financial model is basically comprised of two parts: assumptions and projections. Assumptions are all the data that your enter (basically the inputs) while the projections are all the data that the financial model computes on its own and shows to you (the outputs).
The assumptions are where the guessing occurs. …
There are a lot of resources for startups and programmers on how to create a mobile app, but there are very few resources to learn which infrastructure or tech stack to use, especially if you want to keep things cheap or free.
I’m serious, this is not clickbait, you can build a mobile app complete of frontend, backend and database for absolutely zero upfront and monthly cost. And what’s even better is that you will be able to serve a lot of users with this infrastructure for free and scaling is 100% automatic.
Why?
This all started when I wanted to make an app. I was working as a software developer for an IT company, but I wanted to build an app that I had in mind since the one that I was using sucked and being a very frugal person I didn’t…
Filippo
Founder of Sturppy.com
