3 September 2020 | Financial Modeling

Finally a Financial Modeling Approach that Works for Every Entrepreneur

When it comes to creating a financial model as a startup, having confidence that you won’t run out of money is pretty important! The last thing you want as an entrepreneur and founder is to wake up one day and realize you are out of money.  The key to preventing this from happening is being proactive in creating your financial model. Currently, most companies have three options when deciding on their financial model, all of which are insufficient.  

The first option is to outsource your company’s financial model to a third party or fractional CFO. It may seem like a good idea to let an experienced financial professional create and follow your financial model, but an outsourced CFO knows nothing about your business. Your business is changing rapidly every day. An outsourced professional would not be able to make sound business decisions if they are unaware of your ever-changing business. Besides the fact that an outsourced professional can not keep up with the changes in the business, the cost of outsourcing will hurt your startup’s funding. You will be wasting valuable money on an insufficient service.

Instead of outsourcing your financial model, some startups choose to download a template from somewhere on the internet. The problem with downloading a template is that it was specifically made to be generic, and if it wasn’t made to be generic, it was made for a company that’s not your own. There’s not a template for every company and every company is different. What works for one company will most likely not work for another.  

Lastly, and probably worst of all, some startups choose to ignore their financial model altogether. In some founders’ minds, their finances magically take care of themselves. If only we could dwindle down our to-do list by just thinking about our tasks, we would have a lot more time on our hands! Unfortunately, that is just not a reality.

Finmark brings a fourth option to the table. One thing you may have noticed that’s a common denominator among the three insufficient options is the lack of customization. As I’ve said before, every company is unique and therefore needs to be treated differently.  Finmark provides a customized financial planning model suitable for your business. With our guided help, you won’t have to fear running out of money.  You don’t have to worry about extra calculations. Finmark provides a more proactive approach to dealing with your financials and makes them more visible to you as you run your company. By clearly seeing your financials, you will be able to make sound business decisions that will put your company ahead of your competitors. So, don’t just settle for a template or a third party professional because you and your company deserve the best and most accurate planning.

Finmark

This content is presented “as is,” and is not intended to provide tax, legal or financial advice. Please consult your advisor with any questions.

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Historically financial modeling has been hard, complicated, and inaccurate. But financials are the lifeblood of any company. They’re too important to be ignored or outsourced. They should be a core part of every founder’s job. This doesn’t have to be scary. And you don’t have to do it alone. The Finmark Blog is here to educate founders on key financial metrics, startup best practices, and everything else to give you the confidence to drive your business forward.

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