A financial model is a set of linked assumptions that shows how your business could perform over time. It is not a prediction. Its value lies in making your assumptions explicit so you can test them, discuss them and update them as you learn.
Decisions a Model Supports
- How many people can we hire this year, and when?
- How much runway do we have if sales are slower than planned?
- How much should we raise, and what will it get us?
- Which pricing or channel change has the biggest effect?
Why Build It Yourself
Outsourced models often look impressive but are hard to update and harder to explain. When an investor asks why revenue triples in year two, you need to be able to point to the driver and the assumption behind it. Building the model yourself, even a simple one, gives you that fluency.
Accuracy Versus Usefulness
Early-stage forecasts will be wrong. A useful model is one where you can see exactly why it is wrong once real data arrives, and adjust. That means fewer, clearer assumptions rather than hundreds of rows of detail.
What You Will Build
Across this course you will build a monthly model covering 24 to 36 months, with a revenue build, cost and headcount plan, cash flow and runway, and scenario switches. You can use any spreadsheet tool. Keep a blank workbook open as you work through each lesson.