Financial modeling is a practice that help a business make more intelligent decisions and improve its health over time. It’s also something that every entrepreneur and business owner should understand and have at their disposal, the size or nature of the company they run because it allows them to anticipate problems before they become unmanageable. If you have started a new business or are thinking of giving a shot to your startup, this article is for you. Today we will cover how Numberly helps Startup Founders achieve their dream.
According to Forbes 90% of startups and only ten percent succeed. To put it in another term Nine out of ten don’t succeed. The reason behind sharing these statistics is not to burst your bubble or discourage you in any way. But it’s to show you that you need all the help you can get to have a successful startup.
When you are starting from scratch you have a lot on your plate because you have the pressure to launch. Management of assets, employees, and revenue is a tedious task but vital. The good news is that you don’t have to do it all alone.
Today’s article is about how this financial modeling tool can help startups achieve their dreams. This article will help entrepreneurs who feel out of their dept and need expert advice. Whenever you start something new or want to learn about something you go to an expert to get the ins and outs. This is where we come in, we provide you with expert consultation to help answer any question.
You might be wondering if spending money on financial modeling is a smart idea. It might even seem like It isn’t important or necessary for your startup. But let me tell you if you don’t start at the right foundation you will be losing a lot more money than you might have saved.
Let’s get into the ways Numberly has helped Startups become part of the 10% Startup. Check it out if you want to be part of them.
1) Securing Funds
When it comes to funds every business depends on it whether it is a startup or an established business. To help the business succeed you will need the right investors that share your dream. There are various kinds of Investors; Angel Investors, Debt Financing, and Venture Captial.
According to Investopedia, “Angel Investors are any high-net-worth investors who invest in startups. In Exchange for the investment, they will have equity in the company.” (Ganti, 2022)
Debt Financing Debt Financing is when you borrow money and pay it back with interest on a set date. To secure the investment you need to put up a personal asset as a guarantee in case you are unable to pay the money back. (Investopedia, 2022)
Venture Capitals look to invest in startups with high potential. Startups that have significant success, in the start, are at higher risk of failing. Venture Capitalists invest in these startups to help them succeed. In return for the investment, the Investors own a share of the company.
There are a couple more options as well such as crowdfunding and Personal funding. There are a couple more options as well such as crowdfunding and Personal funding. Deciding which option is best suited for you is essential. Numberly will help you explore that and will provide you with the tools required.
There are approximately 4.38 million new business applications that are your competition. If you want to secure one of these Investors you will need a fool-proof Financial model and plan.
Pitching your idea:
You will have to pitch your idea to the investors and more importantly show them the numbers. To do so you need the right financial model for your business. Numberly is an effective way to get professional’s help with years of experience in financial analysis and modeling. Thus you will be in the right hands without having to pay a fortune. It might seem unreal but try it before it’s too late.
To show your investors the financial analysis. Numberly will help you with your financial model and some other aspects such as:
– Profit and loss statement.
– Balance Sheet
– Cash flow statement.
With the help of the forecast and the financial model, you will be able to give the investors a detailed picture of your business. Which will help in securing the investment you want.
2) Fundamental Analysis:
To look at the big picture for your startup you will need a forecasting method, market analysis, and goals. It can be a bit overwhelming for someone who is starting and doesn’t have enough time to get to know everything. This is where Numberly comes in, you will be able to Forecast your startup and narrow down the strategy. It will help you achieve your goals and stay motivated for achieving success.
Forecasting is the key to running a successful business. With the help of forecasting, you can get an insight into your company’s future.
You can get free templates for financial models anywhere but they won’t be of any use. You need a customized financial model for your business that suits your needs. The methods of forecasting in financial models are top-down and bottom-up forecasting.
Let’s look into these methods so you can familiarize yourself with the concepts. It will help you get a kickstart and will give you an overview of what you can expect at Numberly.
Top-down forecasting
As it is a bit evident from the name top-bottom forecasting is looking from a macro perspective to a micro one. In Accordance with your company, an industry-wide prognosis will be taken into account in this forecast. This forecast will help you see where you stand according to the industry standards. It will also give you the estimate of what is it you want to achieve under a time frame. Which will help you tally your business’s progress so you can keep track of your business plan.
The model you will get with Numberly which is for top-down forecasting is known as TAM SAM SOM which will help you define the market size you are competing against.
Following are the three different levels of the market size you will be getting:
- TAM- Total Available Market.
- SAM- Serviceable Available Market.
- SOM- Serviceable Obtainable Market.
Bottom-up forecasting:
When it comes to bottom-up forecasting in the financial model, you will get a forecast for your business that is less dependent on the market. It is more about the internal statistics of your company. It is the opposite of Top-down forecasting starting from micro view to macro view. In this forecast, the data of the business is analyzed and measured. It helps conclude where the business stands and where its potential growth is.
3) Data Check:
To help gain some perspective for your business you should get a sanity check. This means having a professional look at your financial model and checking the data. It will help you get an insight into your business and help you improve.
With the help of Sanity Check here, you will be able to ensure that your data, assumption, and performance are on track and correct. You might think it isn’t important to cross-check your data or model but you can’t be more wrong. If any one of the formulas or data in your financial model isn’t correct the results can be disastrous. There is a reason why 90% of the business don’t succeed it is because they get over-confident. They refuse to take any help which costs them way more than they might have thought.
Numberly will help you organize your financial model and cross-check the numbers for investors or yourself. Imagine going forward with your business without Updating your Financial Model. This will only end with your company going bankrupt in a year or two.
Some of the most important parts of running a business depend on your income, expenses, and revenue. If you don’t have a competent financial team because you don’t have the resources for it. Then I’m here to tell you that you don’t need to spend buckets of money on financial management. You need to be smarter about it. To know when something is a necessary expense and where you can get the right tools to keep your business on track.
With features provided by Numberly, you will be able to cover all aspects of your financial plan. If you are pitching your business to a potential investor you will need a perfect financial model. To do so you should get a consultant’s help and their guidance available at here at our platform. For that, you can always set up a free consultancy call with our experts and seek their advice.
Finally, we would like to leave you with a very important message from a successful entrepreneur and influencer on Startups Evan Carmichael:
“Again, without the mentor or model, I failed. With them, I succeeded.”
