tFS Simple SAAS Projection Model

Hey there, entrepreneurs! I'm excited to share insights from a recent presentation I delivered about a critical (yet often overlooked) aspect of running a successful startup: financial projections and cash-flow management.

Through years of experience as an entrepreneur and fractional CFO, I've learned that how you structure your financials dramatically affects your ability to make informed decisions and secure investment. Three concepts stood out in this session:

1. Functionally Broken-Down Financials

Rather than a basic profit-and-loss statement, organizing financials by specific functions—such as Revenue, Cost of Goods Sold (COGS), General & Administrative (G&A), Research & Development (R&D), and Customer Acquisition Cost (CAC)—provides clear visibility into exactly where your money is going. This structure helps you identify growth drivers, manage expenses more strategically, and articulate your financial story compellingly to investors.

2. Importance of Financial Projections

Projections aren't about predicting the future perfectly—they're about mapping potential outcomes and understanding your business deeply enough to adapt quickly. A good projection model helps you:

• Anticipate when you'll run out of cash

• Determine how much capital you need to raise

• Align your strategic goals with financial reality

3. Unit Economics

Understanding unit economics—the fundamental measure of profitability per transaction or customer—can be the difference between success and failure. It helps you determine:

• How much it costs to acquire a customer

• The lifetime value of that customer

• Whether your business model is economically sustainable in the long run

Here's how you can effectively use this financial modeling template:

Step 1: Input Data Clearly

• Begin by listing all your expected revenue sources and costs.

• Use the provided categories to classify expenses accurately (Revenue, COGS, G&A, R&D, CAC).

Step 2: Model Projections Top-Down

• Start with projected revenues.

• Map out direct costs and then expenses by category, enabling clarity in cash-flow management.

Step 3: Track Weekly Cash Flow

• Utilize the weekly cash-flow view to see exactly when and where you might face cash shortages or surpluses.

Step 4: Scenario Analysis

• Adjust key variables such as customer acquisition costs, average order values, or growth rates in your scenario tab to explore different business outcomes.

At the end of the presentation, I walked through a real-world example demonstrating how this model can be adapted to various business contexts. This section encourages you to truly "make it your own."

Feel empowered to:

• Add or modify categories relevant to your business

• Adjust projection timelines to fit your operational cycles

• Experiment with different scenarios and assumptions to reflect real-world uncertainty

The beauty of this model is its flexibility—adapt it to your unique business and refine as your understanding evolves.

Remember, this template isn't just about filling out numbers. It's designed to help you deeply understand your business, make informed strategic decisions, and clearly communicate your financial story.

Dive in, experiment, and build financial clarity into your entrepreneurial journey!