The Most Successful SaaS Strategies

Successful Software as a Service (SaaS) companies often employ a variety of strategies to achieve their success. These strategies, combined with the inherent risks and necessary conditions for success, have shaped the landscape of SaaS businesses. Here are some key strategies, their long-term payoffs, major risks involved, and crucial factors for success:

Financial Model Templates with Inventory Accounting Modules

 When I start to build a financial model template, it is important to look at key modules that need to be included. For example, in a SaaS model it is not likely inventory needs accounted for, but in a business that sells goods to consumers, such as a bike shop, inventory is an important component to account for and requires specific accounting logic. This page will list every single projection model I've built that includes inventory logic.

Small Businesses, Debt Utilization, and Growth

 Using debt wisely can be a strategic move for small businesses during growth phases, but it's important to approach it with careful planning and best practices. Here are some key considerations:

Financial Model Templates for Subscription Businesses

Building financial models for subscription businesses has been one of my core offerings as a consultant. The work started mostly in software-as-a-service, but has expanded to a wide range of subscription businesses. 

Understanding Industry-Specific Asset-to-Liability Ratios: A Comprehensive Guide for Long-Term Financial Stability

The optimal ratio of assets to liabilities, often referred to as the asset-to-liability ratio, varies significantly across different industries due to the unique financial structures and operational requirements of each industry. Here are some key points to consider:

What Does Hawkish and Dovish Mean?

The terms "hawkish" and "dovish" are frequently used in finance, especially in the context of central bank policies and economic outlooks. They refer to the attitudes and approaches towards inflation and monetary policy.

Financial Model Templates for Recession Proof Businesses

Let's jump through all the financial models in the SmartHelping library that could be considered recession proof. Also, we'll see why they are being considered. Obviously no business is immune to macro trends completely, but these business models will have some key attributes to help when there are economic downturns.

Starting a Cloud Computing Business? Here is a General Guide

Earlier in the week I talked about financial model templates for the tech industry, and today we are going to talk strategy. Specifically, a strategy to start a successful cloud computing business.

Financial Model Templates for the Tech Industry

I've built lots of templates for financial modeling within the technology sector. Most of them are startups, but some have been ongoing operations as well. These types of companies usually involve developing, manufacturing, and/or distributing technology products and services.

Real Estate Model: $0 Investment Seller Financing Strategy for Buying Portfolios of Properties

 The "0 down seller financing" strategy in real estate investing is an approach where the buyer purchases multiple properties (a portfolio) from a seller who is offering their own financing terms. The buyer pays a down payment to the seller and agrees to the repayment terms for principal/interest over time, BUT the seller agrees to give one or multiple properties to the buyer free and clear. The buyer can then go and refinance those properties to try and get enough proceeds to pay for the down payment. This involves high risk with 100% leverage essentially. The real estate model below lets you plan out various scenarios.

Why Financial Feasibility Studies are Useful

 Companies conduct financial feasibility studies to assess the viability of a project or investment before committing resources to it. These studies are crucial in ensuring that a company makes sound financial decisions. Here’s why they are important and how they are used in valuation justification:

Components of a Startup Financial Model

 A startup financial model is a vital tool for entrepreneurs and investors to understand the financial dynamics of a new business. It helps in forecasting the financial future of a startup and is crucial for strategic planning and fundraising. The main components of a startup financial model typically include:

What is a Debt Covenant and Implications

 A debt covenant is a clause in a loan agreement that requires the borrower to fulfill certain conditions or forbids the borrower from undertaking certain actions. These covenants are used by lenders to protect their investments and ensure that the borrower remains financially stable enough to repay the debt. There are two main types of debt covenants:

Financial Model Templates for Logistics and Supply Chain Management

Logistics and supply chain management encompass the comprehensive coordination of processes and activities involved in producing and delivering goods and services. I've done a few Excel spreadsheet templates in this field, the most popular being inventory forecasting.

How to Calculate Running Interest Reserve in Real Estate Model

One issue I've come across in real estate development modeling is the calculation of interest reserve. It has only come up a few times but still I had no solution that was dynamic until now. The below video shows how to figure out the cash flow effects of having a running interest reserve.

LTV to CaC Ratio Suggested to Take Your SaaS Company Public

 This is not financial advice so use at your own risk. What you read below is just a rule of thumb and every situation has different circumstances that may effect decision making.

Methods to Conduct Sales Forecasting in Financial Models

 I've specialized in revenue forecasting for many clients. This skill takes a lot of experience to perfect as many different businesses have completely different ways in which revenue is generated. In order to have a usable forecast, here are some of the techniques to use:

Financial Models for Brick and Mortar Businesses

 As my entire financial model template library grows, I'm always looking at new ways to categorize product offerings in order to better communicate the value of this site. One category I've never really called out is brick and mortar businesses. In general, this just means businesses that have a physical location.

When a 1031 Exchange Makes Sense: Real Estate Investment Strategies

A 1031 exchange is an ideal strategy in several specific situations for real estate investors who are looking to defer capital gains taxes and leverage their investment in property. Here are some perfect scenarios for utilizing a 1031 exchange:

Sale-leaseback and 1031 Exchange Real Estate Investment Strategies

 A sale-leaseback is a financial arrangement in which a business sells a property or asset it owns to an external party (typically a real estate or financial company) and simultaneously enters into a long-term lease agreement to continue using the property or asset. In essence, the business becomes the tenant while the external party becomes the landlord.

Function as a Service (FaaS) Financial Model Template

Function-as-a-Service (FaaS) means saving money by eliminating over-provision of resources. This business model stands out in cloud computing for its efficiency, surpassing Infrastructure as a Service (IaaS) and Platform as a Service (PaaS). It offers scalable solutions ideal for growing customer needs. FaaS focuses on function execution, allowing developers to concentrate on coding without managing code execution / scaling problems. This template aligns with industry standards, offering a streamlined financial forecasting environment with clear business logic and unit economics. Prospective cloud service providers now have a way to test various pricing / capacity / capex strategies and see what is financially feasible.

Achieving Financial Freedom: 10 Timeless Strategies for Lifelong Prosperity

 To achieve financial freedom, a person can make several key decisions that can have a significant impact on their financial health. Here are some of the most impactful choices I've tried to keep in mind myself and it has worked. I am not ultra rich, but very comfortable and happy with the work I do have to do and the free time achieved:

Difference Between EBITDA and Cash Flow

All of the startup financial models I've built here on the site have an line for EBITDA and cash flow. We are going to explore what they mean, how to analyze them, and some general considerations because they are both really important when putting together a pro forma.

Equipment Purchase ROI Analysis Template

Calculating the Return on Investment (ROI) for a piece of equipment involves considering several factors to accurately assess its financial impact. This template lets you enter assumptions about initial capital expenditure and future benefit in order to see a range of IRRs, ROIs, and NPVs over a 120 month period. I love new spreadsheets and this one will provide value to many industries.

Difference Between Horizontal and Vertical Scaling in Business (Technology, Logistics, E-commerce)

 Vertical scaling and horizontal scaling are two strategies used to increase the capacity and performance of a system, each with its own approach and use cases. They are widely applicable in various industries, such as technology, manufacturing, and services.

Data-as-a-Service (DaaS) Financial Model Template

 Data as a Service (DaaS) is a cloud-based model where data is provided and accessed by customers over the Internet. This model allows businesses to leverage data as an asset without the need for heavy infrastructure investment. DaaS is based on the principle that data quality can be maintained and provided as a service, and it's particularly useful in scenarios where data is dynamic and continually updated, such as in market trends, consumer behavior, or geographical information.

Product-as-a-Service Business Ideas

Creating a new product-as-a-service business can be both challenging and rewarding. Here are some potential ideas that you could consider:

Waterfall Structure Private Equity

 One of the financial modeling techniques I have chosen to be highly proficient in is building various types of waterfall structures that are used in private equity. This is one of my biggest types of customers and nearly every deal has its own structure, but all involve similar terms and motivations. It was one of the most challenging things for me to get a good grasp on and it is also difficult for many others, no matter what level they are. As a result, I've had huge demand for this knowledge and it is extremely useful.

Considerations When Raising Money for Your Startup

 The main thing I want to focus on here is a mental model for raising funds. Some guys have a certain percentage of equity they are willing to give up and whatever investor offers the most money wins (effectively maximizing the value the startup gets for how much of the company is being given away in equity). Someone who does the above is very confident in their operational acumen and will not care about any help that a given investor might be giving. This is not the only way, let's dive in.

Using a Financial Model Template to Manage Working Capital

 A founder, or any business owner in general, can use a financial model to manage working capital in several specific ways:

Artificial Intelligence (AI) and Startup Financial Modeling

 The integration of Artificial Intelligence (AI) and automation in financial modeling represents a significant evolution in the field of finance. I don't do this kind of programming, however the models I built here on the site would greatly help inform a programmer that is trying to do this. It is interesting that such work is becoming more mainstream. Here's a more detailed explanation of this topic:

Breaking Down the Components of a 3 Statement Model in Excel

 Building a fully integrated three-statement model in Excel, which includes the Income Statement, Balance Sheet, and Cash Flow Statement, requires a strong understanding of accounting principles and logic. Here are the key steps and logic required:

How to Value a Company Based on Revenue

 I've built all sorts of general business valuation templates. One of the main methodologies that is used to estimate the value of a business is by way of applying a multiple to trailing twelve month revenue or expected twelve month revenue.

Waterfall Distribution Excel Template

One of the most difficult forms of business logic I'm asked to model is waterfall distributions. Doing this kind of template in Excel is perfect, but the logic can be much harder than you think to make dynamic. You've got IRR hurdles, simple preferred returns, preferred equity, complex preferred returns, monthly basis or annual basis, compounding or non-compounding, accrued or non-accrued, reference to when the initial investment is paid back (for LPs) also known as return of capital vs profit distribution. 

Real Estate DCF Model

Real estate means steady cash flows. Buying properties comes with an initial purchase / capital expenditure and then steady rents for many years before a potential exit. That type of venture fits a Discounted Cash Flow (DCF) model perfectly and performing such an analysis is a crucial tool in real estate analysis for several reasons:

Simple Cash Flow Projection Template Excel

 I've done simple and complex cash flow projections, for real-time analysis and pro forma views based on bottom-up revenue, expense, capex, debt assumptions (monthly for 3,5,10,15,20 year projections). I've done this for SaaS, real estate, and a bunch of other industries.

Carried Interest Waterfall Model

 A "carried interest waterfall model" is a term often used in private equity and real estate investments to describe a method for distributing the profits earned on an investment. The name "waterfall" comes from the way profits flow down to different types of investors in a series of steps or tiers. Here's a basic breakdown of how it typically works:

Pro Forma Excel Template

As an expert in crafting pro forma structures in Excel, my career is anchored in the art and science of financial forecasting. A pro forma is essentially a financial projection, applicable to various scenarios such as evaluating new projects, assessing company acquisitions, or projecting the finances of a new venture. Its essence lies in presenting a potential financial performance, rather than historical data.

Hotel Underwriting Model

Hotel underwriting has some nuances to it that are mixed between hospitality and real estate. This is because you have quite extensive operating expenses for staffing, food, and things that don't normally hit the pro forma of something like self-storage or multi-family real estate.

Staffing Plan: Payroll Forecasting Template - Up to 20 Departments

Payroll forecasting is tough and can be exhaustive. This template was designed to make it easier with plenty of department types and slots for any business size. The spreadsheet has 20 departments, each with the capacity to handle 45 positions. Each position can be configured based on job title, start month, payroll taxes / benefits, base salary, and annual increase.

Property Development Spreadsheet

Property development analysis involves a detailed evaluation of the potential, viability, and profitability of a real estate development project. This process is critical for developers, investors, and other stakeholders to make informed decisions. I've done many different models that can be used for general analysis.

Early-Stage SaaS Financial Model Templates

 One of my specializations is SaaS financial models and early-stage modeling is the basis for how I built most templates for this industry. They all center around acquisition, retention, renewal, CLTV, and how to arrive at MRR based on cohort frameworks.

Excel Cash Flow Template

 A cash flow template in Excel can take many different forms depending on the context. You can get deeper into the view of an Accountant that is looking to produce financial statements or it could be something more informal that is used for real-time cash flow forecasting. Either way, the most requested service I am asked to do is driving down to the cash flow results of various scenarios and business situations.

What Factor Rate Means: Cash Advance Business

A factor rate in the context of a cash advance business refers to a decimal figure that is used to calculate the total repayment amount of a cash advance. Unlike a traditional loan with an annual percentage rate (APR), which can fluctuate with the market or the borrower's payment schedule, a factor rate is a simple, fixed multiplier.

Matching Principle in Accounting

I was having a discussion on social media with someone about this. It shows why the matching principle exists for financial reporting. The basic premise was someone said they had signed $x money on new contracts for the month and expenses were $y. They failed to mention the $x was going to be earned over time as the jobs are completed and the relates expenses would also come in more over time.

How Do You Value a Startup with No Revenue?

I've seen this in my financial model consulting career quite a bit. A new startup is looking to raise money and they need a valuation. The question is, how do you come up with a reasonable or fair value of this entity? We have a lot of different ways to do this and no single way is best. It depends on the situation.

Business Case Template Excel

A business case template in Excel is a pre-formatted spreadsheet designed to help you organize, calculate, and present the quantitative aspects of your business case. It facilitates the analysis and presentation of the financial and numerical data that support your case. 

Business Valuation Excel Template

If you know a few of the basics, an Excel template can easily be used to perform business valuation tasks. Just like learning how startups are valued (more speculative), there are some rules of thumb for how any business valuation can be done. Excel is very good at quantitative methodologies and implementations as long as the user understand some general Accounting terms and can work with financial statements to some degree.

Real Estate Investment Template

 The first job I did on Upwork back in 2015 was for a real estate investment template. That is actually how I started my career in financial modeling and ended up branching into all kinds of industries. I still specialize in real estate templates and it is my favorite type of thing to build out. There are a lot of considerations when doing such work.

How Startups are Valued

 Valuing a startup can be a complex process due to the unique nature of these businesses and the high level of uncertainty involved. Here are some of the key methods and factors that are considered:

Business Value Template

 A good business value template can serve multiple purposes in various aspects of business management and decision-making. Here's what a well-designed business value template can do and who can benefit from it:

Construction Business Financial Modeling Considerations (periods of negative cash flow)

 Modeling a construction business with periods where more bills are paid than cash is collected from the customer is an aspect of financial management that focuses on cash flow. This situation is referred to as a "negative cash flow" period. This is common in construction projects because contractors often have to pay for materials, labor, and other expenses before receiving payment from their clients. It is why I built the financial model for construction businesses based on the timing of cash flows for each job type.

Update to Financial Cohort Analysis Template for Historical Customer Data

 After a few weeks of this template being live, I realized there were a few more really important data points that I could add to the template. This ended up increasing the usefulness quite a bit for any recurring revenue business that wants to take a hard look at historical customer spending patterns and retention.

Financial Modeling Templates

I've built my entire career on learning about and building financial modeling templates. It's a fine art and really brings a lot of things to light about how a business makes money and scales. If you have a new business idea, or want to get into an existing business, being able to create a financial projection will force you to deeply understand its' unit economics, potential risks, and general valuation.

Starting an Ad Agency Business

 Starting an ad agency is a multifaceted endeavor that requires careful planning, knowledge of the advertising industry, and a clear understanding of your target market. Here are some foundational steps, insights, and strategies to consider:

Real-Time Template Cash Flow Excel

Excel is versatile for creating cash flow templates, from daily to annual tracking. Whether it's monitoring daily actuals, projecting weekly or monthly paces, computing after-tax cash flow, or automating bill payments and invoice collections, there's a style for everyone.

Cash Flow Forecasting Templates

The one thing a business needs to understand and can't get wrong is their cash flow forecasting. If you run out of cash, it could mean you are out of business (or require more debt / fundraising). Either way it isn't great. Using Excel to model your expected cash flow and possible requirements will help.

Pricing Strategy for Online Travel Agency Business

 Developing a pricing strategy for an online travel agency (OTA) is crucial for its success and profitability. Here's a step-by-step guide to help you develop an effective pricing strategy:

Foundations of Real Estate Financial Modeling

Understanding the fundamental principles of real estate development and acquisition is paramount. All real estate models encompass general concepts, but certain underwriting models also have unique elements. For instance, the approach to residential real estate differs from self-storage, and mixed-use acquisition / development and rent varies from build and sell condo development at a granular level. However, they all share certain common features. Once you grasp these foundational pillars, a myriad of creative strategies can be devised, scrutinized, and assessed. An effective model aims to be versatile, minimizing the need for tailored logic with each transaction.

Financial Template Excel

Microsoft Excel is widely regarded as a pivotal tool in the world of finance for a multitude of reasons:

3 Statement Model Excel Template

When I originally started building financial model templates, the main request I received was to put together monthly and annual profit / loss summaries as well as a final line that showed cash flow. These were to update as the desired assumptions changed. However, this was quite a bit different from building a 3-statement model in Excel. The 3 statements included in that are the Income Statement, Balance Sheet, and Cash Flow Statement. There are all kinds of considerations to keep in mind when modeling this structure.

Self Storage Underwriting Model

I've built two different self storage underwriting models. One of them is based on doing up to 6 deals over 15 years and looking at the deal from the perspective of an LP or a GP. It is complete with cash flow waterfalls and dynamic acquisition, debt, operating, and exit assumptions for each deal. The second was built for the acquisition or development of a self storage facility that may or may not be added onto in the future.

Excel Finance Spreadsheet Template

Upon graduating college in 2012, I was immediately introduced to a robust spreadsheet system at a public accounting firm. This system, built on Microsoft Excel, was elegantly simple yet profoundly effective in generating income statements and balance sheets. Fast forward to 2023, and Excel's dominance in finance and accounting remains unshaken. Throughout my career, I've curated a collection of over 170 templates focused on finance, financial projections, and valuation within this versatile software. Truly, Excel has been the linchpin of my professional journey.

Rent Spreadsheet Template Excel

 Over the years I've done many consulting projects for real estate guys (both large and small). They all involve creating a spreadsheet to understand current rent rolls and future rent based on adjustments to occupancy and inflation.

Educational Courses: 10-Year Financial Model Template - Large or Small Operations

The financial intricacies of providing educational classes are profound. Among the numerous financial modeling projects I've undertaken, constructing a scalable model for businesses offering classes or courses stands out as one of the most challenging. This complexity is accentuated when aiming to introduce classes progressively and gauge capacity attainment throughout a course's lifespan. However, I have successfully navigated these challenges with my model.

Pros and Cons of Starting an In-person Educational Courses Business

 Starting a business that offers in-person educational classes comes with its own set of advantages and challenges.

How to Analyze a Loan Portfolio in Excel

 Analyzing a loan portfolio involves assessing the quality, performance, and risk profile of a group of loans held by a financial institution or individual. The primary goal is to understand the overall health of the portfolio, ensure compliance with lending standards, and make informed decisions for future lending. Here's a step-by-step approach to analyzing a loan portfolio:

SaaS COGS Guide

 For a Software as a Service (SaaS) business, the Cost of Goods Sold (COGS) is somewhat different from traditional manufacturing businesses. SaaS companies typically have minimal physical production costs. Instead, their COGS primarily consists of the direct costs related to delivering the software service to their customers.

The Most Helpful Spreadsheets for Accountants

 Accountants utilize a variety of spreadsheets to facilitate their tasks, perform calculations, and organize financial information. There are quite of bit of backend calculations and tracking that go into being able to generate proper financial statements. Here are some of the most helpful spreadsheets for accountants:

Startups and the Path to Stabilization: Guide

 Startups typically pass through various stages, from ideation to scaling. Stabilization is a crucial phase in the lifecycle of a startup as it denotes steady growth, consistent revenues, and reduced volatility. Here are some of the key dynamics involved in reaching stabilization:

Cohort Modeling for a Loan Tape

 When you're evaluating the performance of loan tapes (data sets containing detailed information on a pool of loans) over time, you can use cohort analysis to group loans by certain shared characteristics (like the month or year of origination) and then measure their performance over time. Here's a breakdown of how to approach this analysis and what metrics/data points you might consider:

Can a Financial Model Be the Difference Between Profitability and Break-even?

A financial model can significantly help in understanding the difference between profitability and only breaking even. Having a usable template can be super valuable if you know how to use it. Let's break down how:

Cohort Modeling Template and Visualizations - Up to 5 Years of Historicals

I've implemented this SaaS cohort modeling approach with numerous clients. Now, with this introductory template, you too can analyze up to 60 months of historical data. Key outputs feature visuals of total monthly customer spending by cohort in a 'layer cake' format and average customer retention, complete with a best-fit curve to predict customer retention rates.

Royalty Licensing Analysis Template

 Royalty licensing is a contractual arrangement where one party (the licensor) grants another party (the licensee) the right to use a certain intellectual property (IP) – such as a patent, trademark, copyrighted material, or trade secret – in exchange for compensation. This compensation is often structured as a royalty, which is typically a percentage of the revenue generated from using the IP or a fixed amount per unit sold. The specific details of royalty payments, such as the rate and payment terms, are usually outlined in the licensing agreement.

How to Patent Your New Idea or Product and Costs

Here's a more detailed explanation on how to patent something, including costs, benefits, and important considerations:

Real Estate Market Review: Worst and Best Case Scenarios - 20 Year Outlook

 The real estate market, like any investment market, is influenced by a wide range of factors, which can result in both risks and opportunities. Let's take a long term view and see what might happen in the next 20 years, best, worse case scenarios. Keep in mind that the real estate market is complex and influenced by local, national, and global factors, so the exact scenarios may vary by region.

5 Basic Terms You Should Understand When Analyzing Real Estate Deals

 When it comes to real estate investing, the lexicon shifts a bit to focus more on financial and strategic aspects. Here are five of the most crucial terms for real estate investors:

Capital Structure Theories in Corporate Finance (funny explanations)

 Alright, let's dive into the world of corporate finance with a lighter touch. Imagine capital structure as the recipe for a finance cake. Here's how our pastry chefs (financial theorists) think it should be baked:

Starting a Locksmith Business: Some Considerations

The next financial model template I am building is going to be for a Locksmith business. The start of my research is what you see below. After a lot of research, it turns out this plumbing business financial model has all the logic required for the locksmith business, so that can be used just the same.

REITs with Traditionally Lower Leverage Exposure (who is safe from interest rate hikes?)

 The higher for longer narrative has taken a strong hold on the market. As of October 3, 2023, this is hammering the value of public REITs. Normally I don't do much content on things that are timely, but this is a pretty good illustration of leverage and risk so we'll try to get some long-term lesson out of it.

Online Travel Agency Financial Model Template

While traditional travel agencies may have waned, numerous thriving online travel agencies and specialized boutique travel firms exist in various niches. If you're aiming to forecast startup costs, anticipate operational financial outcomes, or evaluate different scenarios and feasibilities, this template offers an excellent starting point.

How to Change the Discount Rate When Projecting at Various Time Intervals (monthly, quarterly, semi-annual)

 This is one of the most common calculations you will ever do in the finance industry as an analyst or just someone who is trying to figure out the present value of future cash flows for a business. The DCF Analysis method is very common to use for valuation, but what happens if you are using non-annual periods, but want to apply an annualized discount rate to the future cash flows correctly?

Financial Modeling for an Online Travel Agency

 Travel agencies facilitate travel and other related services for their customers. They have various revenue streams and cost structures. Here's a detailed breakdown:

Financial Projections for a Startup

 Financial projections for a startup are critical for several reasons: they can help you understand the feasibility of your business model, secure funding, and plan for the future. When crafting these projections, there are several key considerations you should keep in mind:

Example of Using a Financial Model Template to Validate the Economics of a Business

In this video, I wanted to dive down into how a user would use one of the startup financial models here on the site to try and figure out what was financially feasible for the target business. In this case, it was for a plumbing service business, but the general structure you see and methodology behind the flow of assumptions to cash flow forecasting is similar in all the models on this site.

Accounting for Leasehold Improvements on the Gym Financial Model Template

 I had a client that was wondering how to properly account for leasehold improvements in the gym / fitness center financial model. The gist of it was they were acquiring the facility and operating the business, leasing the facility, and contributing a fair amount of leasehold improvements.

My Business is Failing, How Can Financial Modeling Help?

 If your business is facing challenges, financial modeling can be an invaluable tool to help diagnose, strategize, and implement corrective measures. Here's how financial modeling can assist:

What Does it Mean to Streamline Efficiency?

 To "streamline efficiency" means to improve a process, system, or workflow in order to make it more effective, efficient, and smoother. The term "streamline" often connotes a reduction of unnecessary steps, redundancies, or obstructions, much like how streamlining a physical object (like a car or a plane) reduces air or water resistance, allowing it to move more smoothly.

How Much Should You Spend on Ads for a Mobile App?

 The amount you should spend on ads for your mobile app depends on several factors, and there isn't a one-size-fits-all answer. However, there are some guidelines to help you determine an appropriate budget and the analyses that can support your decision.

CECL Accounting Standard and Its Implications (Current Expected Credit Loss)

 CECL, which stands for "Current Expected Credit Losses," is an accounting standard that addresses how financial institutions recognize and measure credit losses for financial instruments. It was introduced by the Financial Accounting Standards Board (FASB) in the U.S.

Cash Flow Management for Small Businesses

 Managing cash flow is crucial for the survival and growth of small businesses. Proper cash flow management ensures that a business has the necessary cash to meet its short-term obligations and invest in its future. Here are some strategies to help small businesses manage cash flow:

Side Gig P&L Tracker - 12 Month Template

 The gig economy has been growing for a long time now. Along with that comes financial responsibility. You now have taxes to account for, businesses expenses to log, and cash flow to manage. This template makes it easy to track revenue from multiple streams, expenses, and cash flow per month and year-to-date.

Due Diligence Process for Real Estate Acquisitions

 Due diligence in real estate acquisition refers to a comprehensive process of evaluating a property before purchasing it. This ensures that the buyer is fully aware of the property's current condition, any potential risks, and other pertinent information. Proper due diligence minimizes potential surprises and helps the buyer make an informed decision.

The Importance of Debt When Evaluating Real Estate Investments

Debt plays a critical role in real estate investment decisions for several reasons. Properly understanding and managing debt can amplify returns, provide leverage, and offer tax advantages. Here's why debt is crucial when evaluating real estate investment decisions:

Startup Articles

Venture into the vault of visionary ventures! This directory of startup articles is your compass to the bustling universe of innovation, entrepreneurship, and game-changing ideas. Dive in, and let each piece enlighten your entrepreneurial journey. Most all of the pro forma templates here are compatible for startups.


Best Approach for Startup Fundraising Strategy

 Fundraising for a startup is a critical and challenging process. Here's a strategy to approach it step by step:

List of Equipment Costs Required to Start a New Auto Repair Shop

 If you are starting your own auto repair show or chain of shops, one of the larger capital expenditures will include tools and equipment. This list is designed to give prospective owners an idea of the costs of each. Note these are just estimates and costs / items required can vary by specific circumstance and location.

Updating Used Car Dealership Financial Model: Added Payment Terms to Inventory Purchases

 I had a couple clients request to have payment terms apply to the vehicle purchases. As a result, I have updated the base template to include this new logic. The user can still opt to pay for 100% of the inventory purchase requirements up front, or adjust for payment terms (for example, 1/3 up front, 1/3 in 30 days or 60 days, and 1/3 at sale) or any combination of month and percentage amounts you need based on your situation.

Starting a Cloud Computing Business - Bull Case

 The cloud computing industry has witnessed exponential growth in the past decade and is projected to continue its upward trajectory. Here's the bull case for starting a cloud computing business:

Startup Financial Modeling Techniques to Determine Equity Requirements and Working Capital

Let's talk about a general modeling technique I use in all the financial model templates here on the site. I'm going to provide insights into how I structure financial models for startups. The emphasis is on the importance of understanding working capital requirements upon a business's initial launch. This understanding has been honed over time through building models for numerous clients.

Estimated Startup Costs for a Manufacturing Business

 Starting a manufacturing business can be capital-intensive, and the startup costs can vary widely depending on the type and scale of the manufacturing operation. Here's a general overview of potential startup costs involved in a manufacturing business:

Subscription Box Business Explained and Example

 A subscription box business is a type of business model where customers pay a recurring fee to receive a box of products on a regular basis, usually monthly or quarterly. These boxes typically contain a curated selection of items around a particular theme or category. The contents might be a surprise, based on general preferences the subscriber sets, or they may be known in advance.

MOIC Calculation Example: Financial Return Metric

MOIC, or Multiple on Invested Capital, is a financial metric used primarily in the private equity and venture capital industries to evaluate the return on an investment. It measures the multiple of money returned relative to the money invested. It's a way to express the return on a particular investment without taking into account the holding period.

Financial Model for Subscription Box Businesses

 This financial model template was built specifically for the nuances and unit economics that are involved in a subscription box business. The general business model is based on subscribers that pay a regular monthly fee in return for one or multiple monthly deliveries of something in a box. The 'box' is often curated collections of products, often tailored to specific interests or themes. 

Financial Models That Regulators and Policymakers Use

 Regulators and policymakers use financial models to make informed decisions, predict economic outcomes, set policies, and ensure stability within the economy or specific sectors. These models help them understand the implications of different policy choices and anticipate potential economic and financial consequences. Here are some ways regulators and policymakers utilize financial models and what those models typically contain:

How Individual Investors Use Financial Models

 Financial models are tools that investors can use to understand, predict, or value a business or investment opportunity. They can range from simple calculations to complex spreadsheets that consider multiple scenarios and variables. Here's how individual investors utilize these models and how they can be beneficial:

What is FCFF and How to Calculate it in a Financial Model

 Free Cash Flow to the Firm (FCFF) is a measure of the amount of cash generated by a business that's available to its capital providers, namely equity holders and debt holders. It represents the cash flow available to all investors after all operating expenses and capital expenditures are covered.

How Students and Academics Use Financial Models

 Academics and students use financial models in various capacities, ranging from educational purposes to advanced research. The application and importance of financial models in academia can be understood from the following points:

How Entrepreneurs and Startups Use Financial Models

 Financial models are essential tools for startups and entrepreneurs for several reasons. They serve as a representation of a company's financial situation, projections, and business environment. Here are the main uses that startups and entrepreneurs derive from financial models:

What Kinds of Financial Models Do Treasurers and Risk Managers Use?

 Treasurers and risk managers utilize a wide variety of financial models to support their roles in managing a company's financial resources and mitigating risks. The specific models used depend on the industry, company size, regulatory environment, and specific challenges faced by the organization. Here are some of the most commonly used financial models by treasurers and risk managers:

Project Finance: What Kinds of Things Do These Financial Models Include

 Financial models constructed by professionals for the analysis of large projects are intricate and detail-oriented. They aim to capture all potential variables and scenarios to make informed decisions. 

Hydroponics Farming: 10 Year Financial Model Template

If you're involved in hydroponic or aeroponic farming, this financial model is designed to enhance your cash flow planning and evaluate potential business acquisitions. This template offers forecasts for up to a decade and comprehensively covers various startup costs, operational scenarios, and potential exit strategies.

How Do Lenders and Credit Analysts Utilize Financial Models?

 Credit analysts and lenders use financial models to evaluate the creditworthiness of individuals or businesses, project future financial performance, and make informed lending decisions. These models help analysts and lenders ensure that the borrower will be able to service their debt obligations. 

How Do Management Consultants Use Financial Models?

 Management consultants use financial models for various purposes, depending on the specific project's nature, the client's industry, and the business problem they are trying to solve. Here are some ways they utilize financial models:

How I Think About Revenue Forecasting for Hydroponics Business

There are lots of challenges in revenue forecasting and understanding variable costs for hydroponics. Here is what I'm trying to flesh out in regards to the economics of this industry.

How Real Estate Professionals Use Financial Models

 Building real estate models was the first thing I did as a financial modeler. I love the clients in this space and it has been worth every penny to become an expert in the field as far as building logic for the development and/or acquisition of commercial / residential properties. I liked these types of models because the primary focus was on cash flow.

Venture Capital and Financial Modeling

 Venture capitalists (VCs) utilize financial models as an essential tool in their investment decision-making process. Here's how and why they use them:

How to Calculate EBITDA (Earnings Before Interest, Taxes, Depreciation, and Amortization) and Pros/Cons

 The calculation is sort of built into the name. EBITDA is a common metric used to describe the profitability and earnings potential of a business as well as used as one source for performing a business valuation that is based on a multiple of the annual EBITDA.

Leveraged Buyout Model: Robust Template for LBO Acquisitions

I am really excited about this financial model. It is built for acquiring a target company by using a combination of debt and equity, inputting assumptions for expected operational activity, and defining a potential exit value. The common term used to describe such activity is LBO or leveraged buyout. In order to fit that user perspective, I've built some awesome assumptions.

What is a Feasibility Study?

 A feasibility study is an analysis and evaluation of a proposed project to determine if it is technically viable, economically justified, and will be successful in the intended market. In essence, it helps decision-makers understand the potential benefits and challenges of pursuing a specific initiative, whether it's a new business venture, product launch, infrastructure project, or any other significant undertaking.

Private Equity Professionals and How They Use Financial Models

 Private equity (PE) professionals utilize financial models as essential tools in their decision-making process, due diligence, and post-acquisition management. Here's a perspective on how PE professionals use these models:

Seller's Discretionary Income Isn't Ideal for Manufacturing Business Valuation Studies

 The SDE (Seller's Discretionary Earnings) method isn't inherently "bad" for manufacturing business valuations, but there are complexities and nuances associated with manufacturing businesses that can make SDE less ideal in certain scenarios. Here are some reasons why SDE might be less preferred or require careful adjustments when valuing a manufacturing business:

How to Calculate Seller's Discretionary Earnings (SDE) and Pros/Cons

 SDE, or Seller's Discretionary Earnings, is a metric commonly used in the valuation of small businesses. It represents the earnings of a business before certain non-operational expenses. SDE aims to capture the true underlying earnings that a new owner could expect, especially when the current owner might be taking benefits that wouldn't necessarily transfer to the new owner.

How Corporate Finance Professionals Use Financial Models

 Corporate finance professionals utilize financial models extensively to support various aspects of their roles. 

Types of Financial Models Asset Managers and Mutual Fund Managers Use

 Asset managers and mutual fund managers utilize a range of financial models to make investment decisions, assess risks, and project future returns. The choice of model depends largely on the investment strategy, the asset class being managed, the investment horizon, and the specific financial instruments being utilized. Here are some of the most commonly used financial models:

How Equity Researchers Use Financial Models

Equity Research and Financial Models

Equity research analysts seek to provide a clear understanding and valuation of publicly-traded companies, and one of their primary tools is financial modeling. A financial model is essentially a representation or simulation of a company's financial performance. It is built in a structured way that allows for inputs (like historical financial data or assumptions) to generate outputs (like future financial projections). By using these models, equity researchers can estimate a company's intrinsic value and determine whether the stock is overvalued or undervalued.

How Investment Bankers Use Financial Models

 Investment bankers use financial models as a crucial tool in their job, especially when it comes to making decisions related to transactions, valuations, and advising clients. Here's a detailed look at how investment bankers utilize financial models:

Who Actually Uses Financial Models?

I build all kinds of financial models for customers and one thing I don't often get to be a part of is the actually use of these templates. Here we are going to take a look at the various groups of people that are actually plugging in real data and/or studying a template that is already made. There are a few different perspectives here.

Most Profitable Equipment to Rent Out

 The profitability of renting out equipment depends on various factors like location, demand, maintenance cost, initial investment, and market dynamics. However, some equipment tends to be consistently profitable in specific contexts. Here are some commonly profitable equipment rental categories, keeping in mind that profitability can vary significantly based on the aforementioned factors:

Lease and Tenant Management System with Printable Monthly Reports

 Easily track and create monthly reports for all your units/tenants with this tenant management template. It was built in Excel and has an auto-generating report dashboard that is formatted to be printable on landscape 9.5 x 11.

Common Issues Multifamily Landlords Face and Solutions

 Multifamily landlords often face a unique set of challenges due to the close proximity in which tenants live. Here are some common tenant issues and suggested solutions or management techniques:

Short-term Rental Real Estate Business Investing Strategy

 Starting a successful short-term rental real estate business requires a combination of market research, savvy investments, operational excellence, and good guest relations. Here’s a potential strategy to get you started:

Big Update to Inventory Forecasting Template

 Alrighty, I spent a solid 10 hours rebuilding the inventory forecasting template to meet more customers needs. Overall, the user experience has improved dramatically and I've already had feedback saying "this is awesome" so we are on the right track here.

Step-by-step Guide for Starting a Car Wash Business Empire (multiple locations)

 Owning and operating a single car wash in a local market is much different than trying to become an owner / operator of 100s or 1,000s of car washes across the nation. Many factors exist that will separate successful and failing operations.

Rental Property Real Estate Model: Up to 100 Properties

Unlock the power of strategic property investment with this sophisticated rental property acquisition spreadsheet. Designed for both ambitious individuals and funds, this model simplifies the complexities of acquiring up to 100 properties over time. Delve into customizable scenarios, from debt structuring to appreciation and rent growth predictions, ensuring you have a comprehensive understanding of cash flows and minimum equity requirements. Whether you're a fund manager or a solo investor, this model provides the clarity and foresight needed for successful property scaling.

Made to Order Manufacturing: Financial Modeling Tips

 Building a financial model for a made-to-order (MTO) manufacturing system requires attention to a unique set of challenges and dynamics inherent to this type of production. Here are some important considerations:

20 Tips for Using a Financial Projection Template

 Creating an accurate financial projection template is essential for planning and decision-making in business. While no projection can guarantee 100% accuracy, due to inherent uncertainties and external variables, you can certainly reduce the margin of error. Here are some ways to avoid errors in a financial projection template:

Financial Modeling Approaches to Product-as-a-Service Business Model

Product-as-a-Service (PaaS) is a business model that offers products on a subscription basis or through a pay-per-use arrangement rather than a one-time purchase. PaaS can be an attractive proposition to customers as it often comes with regular updates, maintenance, and support. Financial modeling for this business model will typically involve several unique considerations. Here are some common financial modeling approaches:

Update to Preferred Return Template: Adding a Second Profit Share Distribution Tier

I had a few clients request a second profit share hurdle that is triggered by the LPs equity being fully repaid. The update is added as an upgrade version that you have the option to purchase separately.

Update to Self-storage Financial Model Template

 I originally built this real estate financial model to be an equity ramping non-debt option feasibility study tool. However, I've been trying to find the time over the last year to upgrade the template so it works exactly the same except there would be an option to finance some percentage of the total cost of each deal. Up to 6 deals can be modeled over a continuous 15-year timeframe, including options for joint venture waterfalls with IRR hurdles.

The Basics of Accounts Receivable

Accounts Receivable (AR) is a fundamental concept in accounting and finance. Here's an explanation of what it is, how it works, and its importance in cash flow management:

How to Compare Loans: 10 Factors to Consider

 Comparing different loan options and terms can be a complex process, but it's crucial to find the best fit for your financial situation. Here's a step-by-step guide to help you make an informed decision:

Cost Segregation Study Template

 Money's worth today is typically greater than its worth in the future. This core financial principle is the underlying reason why real estate owners engage in cost segregation studies (CSS).

Considerations When Making a Financial Projection for a Laundromat

 Relevant Template:

Creating a financial projection for a laundromat involves several key elements, and while some are universally relevant, others may depend on regional factors. Here are key things to consider:
  • Initial Investment and Startup Costs: The first thing you should consider is the capital needed to set up your laundromat. This will include costs like purchasing or leasing your business location, buying laundry equipment, setup costs, getting necessary licenses and permits, etc. Here are some detailed cost estimations:
    • Lease/Real Estate: This will vary greatly depending on the location and size of the property. For example, in a city, leasing a 1,500 square foot space might cost $3,000 to $5,000 per month
    • Renovation/Construction: Depending on the condition of the space, renovation could cost between $200,000 and $500,000, including installation of equipment, plumbing, electrical work, flooring, painting, etc.
    • Laundry Equipment: You'll need commercial-grade washers and dryers. The number of machines will depend on the size of your laundromat, but a small laundromat might start with around 15 washers and 15 dryers.
      • Commercial Washers: Commercial washing machines can range from $1,000 to $6,000 each. So, for 15 machines, you're looking at a cost between $15,000 and $90,000.
      • Commercial Dryers: Commercial dryers can range from $500 to $3,000 each. For 15 dryers, the cost would be between $7,500 and $45,000.
    • Ancillary Equipment:
      • Change Machines: You'll likely need at least one change machine, which can range from $1,000 to $2,500 each.
      • Laundry Carts: Depending on the size of your laundromat, you may need anywhere from 5 to 10 carts. Each cart can cost between $50 to $200.
      • Seating: Costs for seating will vary based on the style and quantity of chairs, benches, or sofas you choose.
      • Vending Machines: If you plan to sell laundry supplies or snacks, you'll need vending machines. These can cost between $1,000 and $3,000 each.
    • Initial Inventory: This includes laundry detergents, fabric softeners, dryer sheets, and other supplies if you plan to sell them. This cost might range from $500 to $1,000.
    • Permits and Licenses: Costs for business licenses, permits, and any regulatory compliance can vary, but you might budget $500 to $1,000.
    • Business Insurance: Depending on the coverage, business insurance might cost between $1,000 and $3,000 per year.
    • Marketing and Advertising: A budget for marketing and advertising to promote your new business could be between $2,000 and $5,000.
    • Working Capital: It's crucial to have enough money on hand to cover operating expenses for a few months while you're building your customer base. This might be around $10,000 to $20,000.
  • Operational Expenses: These include costs related to utilities (water, gas, electricity, sewer), supplies (detergent, cleaning supplies), equipment maintenance, employee wages (if any), insurance, property taxes, and rent (if leasing). Note, the more washers and dryers you have, the higher the utilities so that cost should be related to usage per machine over time.
  • Revenue Projections: Consider the number of machines, pricing per load, anticipated usage rates, ancillary services (like folding, dry cleaning, pick up and delivery), vending machine income, etc.
  • Market Analysis: Consider the size and demographics of your target market. Is there a demand for a laundromat in your chosen location? Consider factors like apartment density, income levels, and presence of college students or other groups likely to use a laundromat.
  • Competitor Analysis: Identify how many other laundromats are in the area, their pricing, services offered, and overall quality of service. This will help you determine your own pricing and services.
  • Marketing Costs: Budget for marketing and advertising to attract customers to your new business. This might include online advertising, print media, or local events.
  • Return on Investment: Once you've projected your costs and revenues, calculate your ROI to see how long it will take to recoup your initial investment and start making a profit.
Regional factors to consider:
  • Utilities Cost: The cost of utilities like water and electricity can vary significantly by region, and these are major operational expenses for a laundromat.
  • Labor Costs: If you plan to hire staff, wages can also vary depending on local labor laws and standards of living.
  • Market Saturation: Some regions may have more laundromats per capita than others, so competition could be stiffer in these areas.
  • Demand for Services: The need for laundromats can also vary by region. In urban areas with many apartments, demand might be high. However, in suburban areas where most people own homes with washers and dryers, demand might be lower.
  • Local Regulations and Taxation: Local laws and regulations can impact both the startup and operational costs of a laundromat. Some areas may have more stringent environmental regulations, for example, or higher business taxes.
  • Pricing Variance: Prices for laundry services can vary by region based on the average income levels, cost of living, and what the local market will bear.
  • Cultural Factors: In some regions, laundromats might also serve as community gathering spots, and offering features like free Wi-Fi, a comfortable seating area, or a coffee bar could attract more customers.
Remember, a good financial projection is based on realistic and well-researched assumptions. The more accurate and detailed your data, the more useful your financial projection will be for guiding your business decisions.

Types of Lenders and Business Models

 When you think about the lending industry, you may not know that there are a wide variety of businesses out there that want to originate loans. It is a huge economy in and of itself, with loans getting bought, sold, and originated with many different terms / risk profiles.

Best Practices When Merging Financial Model Templates Together

 Now and then this comes up for me. I'll have a client with one set of logic and they want to take it out of one financial model and put it into another financial model template. When doing this, there are some things to consider.

Major Risks of Running an Auto Repair Shop

 Running an auto repair shop comes with its fair share of risks. Being aware of these risks can help you take preventive measures and protect your business. Some major risks to watch out for include:

How to Grow a Successful Real Estate Brokerage Business

 Starting and growing a successful real estate brokerage involves various steps, each requiring a different set of skills and expertise. Here's a general guide to help you understand the process:

Car Wash Startup Costs

 Starting a car wash can require a significant amount of upfront investment. The startup costs can vary based on the scale and type of car wash (automated, self-service, full-service, mobile, etc.) that you want to set up. Also, it will make a big difference depending on if you are acquiring a car wash or constructing a new car wash. However, here's a general list of possible expenses:

Latest Condo Development Innovations and Impact on Developers

 Innovations in condo development are driven by factors such as consumer demand, technological advancements, changing lifestyles, sustainability concerns, and even pandemic-induced trends.

Manufacturing Demand Planning and Financial Modeling

 Manufacturing demand planning is a crucial part of the supply chain process, primarily involving forecasting demand for a product, then planning how to meet this demand. This process ensures that goods are produced at the right time, in the right quantities, to meet customer needs, while also balancing cost-efficiency. An efficient demand planning system can reduce waste, lower costs, increase sales, and enhance customer satisfaction.

What is ARR in SaaS and How to Calculate

 ARR stands for Annual Recurring Revenue. It is a key metric used by SaaS (Software as a Service) businesses. ARR measures the value that a business would earn from a customer over the period of a year, assuming that the customer continues to use and pay for the service.

BRRRR Real Estate Investing Strategy

 BRRRR strategy in real estate means Buy, Rehab, Rent, Refinance, Repeat): This strategy involves buying a property, fixing it up, renting it out, and then refinancing it to withdraw your capital out (or at least some of it). This allows you to reinvest that money into another property, effectively growing your portfolio without needing to invest additional capital. However, this strategy requires a good understanding of renovation costs and the ability to manage renovation projects, as well as favorable lending conditions.

Keep in mind this is not investment or financial advice, use at your own risk, and consult with a professional if need be. (I just build the templates)

Some Ways to Get Into Real Estate Investing if You are Just Starting Out

 This is not financial advice so use at your own peril and do you own research.

Getting started with real estate investing can be a powerful way to generate wealth, but it's important to understand the potential risks and rewards. Here are some strategies to get started:

Real Estate Investing: Better to Build or Acquire a Mobile Home Park?

 Whether it's better to buy or build a mobile home park depends on several factors such as your investment objectives, experience, financial resources, risk tolerance, and the specific circumstances of the local real estate market. Here are some considerations:

Lending Articles

 The lending industry has been around for a long time. Some say it originated when merchants would give loans to grain farmers in 2,000 BC when they carried goods from city to city. Formal banks started coming up around the 1400s and there is still one that has continually existed since then. The point is money lending has been around society forever. Here are some insights about the industry and you can get money lending startup business models here.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.

Valuation Articles

 Evaluating businesses of your own or ones you are looking to acquire involves valuation. That means figuring out what something is worth based on various assumptions. Check out some general valuation models here.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.

HR (Human Resources) Articles

 HR management is tough and the more organized you are, the better your job and HR department will function. Check out HR spreadsheets here.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.

SaaS Articles

 Topics here will include Software-as-a-Service, general subscription businesses, membership businesses, and anything that has a focus on recurring revenue contracts. Check out SaaS financial models here.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.

Joint Venture Articles

 GPs and LPs are always engaging in deals together. These structures can vary greatly and understanding joint venture terminology and concepts can help both investors and operators navigate operating agreements much easier. Check out all CF waterfall models here.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.

General Industry Articles

 Enjoy a vast array of insights across many industries. Tips and tricks to help all sorts of small business operations. Check out bottom-up financial models for 50+ industries here.

Learn more about what a feasibility study is (including financial feasibility) as that is what most of the work done here at SmartHelping involves.

If you want a jumpstart in your financial modeling, check out The Super Smart Bundle.