Reasons why you should create a financial model for your startup or small business. A good financial model can help you:
Building a financial model isn't just a vanity exercise. When done right, it could help you better understand your business, whether it's a startup or an existing business you're growing.
But it's not easy and there is a right way and a wrong way to go about it.
Even if you have little to no finance background, if you're going to be starting or running a business, this is a skill you need to have.
But financial modeling requires the right tools and the right approach.
We're going to show you how to do that with a wide variety of examples and exercises. But we'll also be teaching general best practices that will help you, no matter what you'll be building your financial models for in the future.
Why learn from us?
By signing up with us, you will be learning from two highly rated instructors that have a combined student count of over 120,000 students and 8,000 review!
Check out our profiles and see that we take care of your students and deliver the goods.
Evan has extensive startup experience and previously worked as a venture capitalist, where he evaluated 100's of startups that trying to convince him to invest in them.
Symon also has startup experience in both tech and brick & mortar businesses. Previously he built tons of models while working in mergers and acquisitions as well as in private equity. And he's helped dozens of startups build financial models across a dozen different business models and industries.
Together, we pull directly from our experience and put it in this course--in fact, two of the case studies use the ACTUAL financial models used to raise funding. The other case studies are inspired by well known startups you're sure to recognize.
How is this different from Symon's Intro to Financial Modeling Course?
The Intro to Financial Modeling course taught by Symon He and Brandon Young is an introductory course on financial modeling that presents a general overview covering the topic and is more relevant to those who wish to explore finance as a career option or those who want to understand financial modeling in a corporate context.
This course is all about financial modeling for startup businesses so it's more geared towards entrepreneurs or small business owners who want to better understand the key drivers of a new or growing business.
There is almost zero overlap. Even though both courses introduce a lemonade stand as an example, those examples and models are quite different as they serve very different purposes.
What if I don't have any finance or Excel background?
No worries! This course isn't an Excel or Finance course, although you will learn a bit of both. We focus more on the rationale and the logic of modeling specifically for startups or growing businesses, so you can take what you learn to other spreadsheet tools.
But it will take practice. You won't get better just watching the videos. That's why have lots of practice exercises and sample models for you to learn from.
What will I be able to do after I take your course?
After taking our course, you will be:
Why lemonade stand example?
Because learning how to model on its own is tough enough but learning it while also having to learn a new business model makes it even harder.
But, even with a simple business model such as a lemonade stand, you'll be surprised by how complex and sophisticated the analysis could become.
And since this is all about modeling for startups and new businesses, this example is different from the one in the Intro to Financial Modeling course.
Tell me again why I should take your course?
You have absolutely ZERO risk.
Udemy gives you a solid as an oak tree 30-day money back guarantee.
So if you've read this far, we welcome you to join us inside.
Before we dive into the example, we want to just briefly explain why we chose to do a lemonade stand and what you'll be able to learn from it.
Every cup of lemonade you make costs you money to make. We'll break it down into it's separate components here before we look at the larger business. Part 1 of 2
Every cup of lemonade you make costs you money to make. We'll break it down into it's separate components here before we look at the larger business. Part 2 of 2
When we model, we don't just start modeling aimlessly. We model to solve a question. In this example, we'll look at how we could easily determine a proper selling price as well as our labor costs.
You did well and now your customers are asking you for a strawberry lemonade. You think you could make even more money by adding that option so let's see how we could adjust our model to account for a premium add-on.
Whew! Bet you didn't think you could learn so much just from a lemonade stand business did you?
Among the most important things to do BEFORE you start building your model is to first decide what question(s) you're trying to answer.
A few more thoughts before we get into the best practices for building financial models. Always create a road map for yourself.
Always have a goal in mind of what you'd like your financial model to be able to do for you BEFORE you start building it. Have an end in mind.
Why taking more steps in building out your model to make things clear is better than being clever with your financial models.
As they say, "garbage in garbage out". It's the same when it comes to building financial models. To make sure you don't look silly in front of investors or business partners, make sure to do sanity checks on your models.
Building financial models is a lot like building with legos--you do it one piece at a time. Trying to do too much too early or at the same time will not only make it much harder to build your financial model, but it'll introduce more errors.
Quiz to review the best practices we covered.
Enough with all the talk, let's get back to building financial models. In this lecture, we'll do a sanity check for a co-working business called "YouWorks".
Alright, now that we have a good idea of what we want to build out, let's see how we can build out the revenue model for our YouWorks business.
But there are many ways to segment users or customers. We revisit our YouWorks example and explore several possibilities for segmenting our users.
For some business models that either has pricing that depends on their customer's usage or has costs associated to their customer's usage, it is important to be able to segment the customers based on their usage profiles. We look at an example and a demonstration of how to do that here.
If you're having trouble conceptualizing how your revenue model would work in your financial model, one way that helps is to visualize a funnel that users of customers have to go through through in order go from initial contact all the way to sales.
Some more thoughts on funnels.
There's a common way and a better way to model growth. We'll explore both in this lecture.
As much as you fantasize about it, your business won't retain 100% of its customers. It will lose some customers due to attrition (or churn in the SaaS world). In this lecture, we look at various ways to model this out.
Quiz to review the main take ways when it comes to modeling user growth
In this lecture, we'll explore the Affiliate Business Model and build out a model that you can use to build on top off if you're exploring a similar business model.
In this lecture, we'll explore the Freemium Business Model and build out a model that you can use to build on top off if you're exploring a similar business model.
We've looked at enough revenue examples, now let's dive into the other side. Not being able to accurately access your startup costs and expenses is a lot more costly than if you're off on the revenue side. Running out of cash is the number 1 way for a business to fail. So let's dive in on how we can better understand startup costs and expenses.
Regardless of what your business does, you probably need people to do things. In this lecture, we'll go over an example and show you some techniques for modeling out both headcount and labor related expenses.
Chances are you'll have other overhead expenses for your business like rent and other office related expenses. Some might depend on your headcount and others might just have it's own schedule for growth. We look at how to handle both in your financial model here.
In this lecture, we'll look at expenses that tend to vary depending on the number of customers or users you have and how you can factor that into your financial model.
No matter how much you plan, there will always be some unexpected bumps along the way. That is why you should always build in some contingency (or margin for error) in your financial models. Let's see how we can easily do that.
Hi, I'm Evan Kimbrell. Thanks for checking out my course.
Currently, I'm the Founder and Director of Sprintkick, a full-service, referral-based digital agency based out of San Francisco. Over the past four years I've overseen the development and launch of over 100 web and mobile apps. Clients range from two-man bootstrapping startups to multibillion dollar Fortune 100s like Wal-Mart, Dick's Sporting Goods, and GNC.
Prior to Sprintkick I worked as a VC for a new firm called Juvo Capital, based out of L.A. I spearheaded the firm's expansion into Silicon Valley and into the Consumer Web tech category.
In the long long ago, I was a co-founder for an educational software startup called ScholarPRO that raised a ton of money and then spectacularly blew up (in the bad way). Before it exploded like the Death Star, I went through five tech incubators (yes, five): Tech Stars, Excelerate Labs, MassChallenge, Babson Venture Program, and Sparkseed.
I'm an avid Airbnb host for the Fisherman's Wharf district of San Francisco. My space has the #1 search ranking for my area, has hosted over 200+ people, and is currently booking out 18 months in advance. I've helped multiple hosts get their properties listed and their prices per night maximized. Results range from an extra +50% in price for established hosts and +400% for brand new hosts.
Hope you enjoy my courses!
Hey, thanks for checking out my courses.
I am a real estate consultant and startup advisor based out of Los Angeles CA.
I currently help startup founders and small business entrepreneurs build financial models and projections for their businesses and private real estate investors with their acquisitions analysis and deal structuring. Please message me directly for consulting inquiries.
Previously, I was Head of Marketing Analytics at the Panda Restaurant Group after first serving as a senior financial analyst leading real estate and new store underwriting efforts.
Prior to that, I worked on over $400M in commercial real estate investments at a private equity real estate fund. Before that, I worked as a manager in the global M&A unit for a Fortune 80 company.
I am also a cofounder of LearnAirbnb, a consultancy and research group specializing in the home-sharing economy.
I graduated Magna Cum Laude in Computer Engineering and Economics from UC Irvine and hold an MBA from Stanford University.