Fri, 4 February 2022
Benefits of a Financial Model
Hello, this is Hall T. Martin with the Startup Funding Espresso -- your daily shot of startup funding and investing.
Many startups build a financial model to show the investors and then leave it alone ‘til it’s out of date and no longer useful.
The benefit of an up-to-date financial model is that it can actually help you make management decisions.
Here are several ways to use a financial model to manage your business:
Determine what positions to hire and when.
Measure the performance of the team and highlight problem areas.
Shows areas that are out of their target cost or performance zone, such as having too much of a given resource.
Determine your valuation range for a fundraise or exit event.
Find ways to reduce the risks in the business.
Create consistent results by managing both cost and revenue drivers.
Provide ongoing monitoring of the business.
Consider setting up the financial model for daily and monthly operational use as well as for fundraising.
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