To find the best financial model tool for your startup you have first to understand what are the key features this financial tool should provide you!
Indeed, the financial model is key to your startup success, so you have to start to tackle this financial issue with the best financial tool ever. Though, it can sound pretty hard to find it among all the financial model tools available (financial softwares, bookkeeping tools, homemade excel template made from scratch, financial excel templates to fill, …). Moreover, some are free and other can cost some bucks … What a maze!
You didn’t expected to have to deal with this kind of issues when dreaming to be a kick-ass entrepreneur ?
Let’s find what are the 6 key features you should check before choosing the best financial tool to buid your financial plan for your startup!
Reliable : A tool made by financial startup expert
Well, it could sound quite obvious that you should choose a reliable financial tool … but it’s harder to find one! 😉
In fact, what is really a reliable financial model tool ?
A reliable financial tool for startup is a tool that will give a solid and relevant structure to help any entrepreneur to build his own financial plan. It gives a generic but yet effective framework. It also integrates natively at least basic accounting and financial best practices.
“Homemade excel templates from scratch” are usually the worst reliable tools ever (except when they are made by financial experts…), because they are mostly full of errors and hard to understand (very complicated and confusing for others …).
This is also important that a financial tool has to be built by startup expert that understand what really matters in a financial plan for a startup. Indeed most financial model templates are usually made by accounting experts or financial genius, which result on super complex tools where most entrepreneurs can hardly understand and analyse anything. The best financial tool you are looking for should help you focus on short-term cash management and long-term business model potential.
And of course a reliable financial tool is a tool that do most calculation automatically with data filled-in by the entrepreneur.
Easy : Any entrepreneur should be able to build a financial plan
Indeed a financial template should be really simple to use because it’s a key requirement to help entrepreneurs work on fundamental financial issues. A financial model has to guide the entrepreneur towards modeling his startup project. Hence, the best financial template should ask the entrepreneur to fill-in data as little as possible to focus on key business metrics.
A generic financial tool should concentrate on this following data to fill-in :
- Revenues building (revenues and costs per unit sold, volume sold over years)
- Human ressources costs (annual salary per post, number of employees per post over years)
- Main expenses with a simple way to estimate costs over years
- Financial ressources
This tool should then give a simple but yet effective dashboard to analyse the main financial issues : cash/treasury management, funding plan, business model profitability.
An entrepreneur should be able with this template to complete a full financial plan modeling in less than 5 minutes!
Customizable : A financial model should be an open Excel stylehseet template to be adaptable to any startup
A financial model needs to give a solid framework to guide and help the entrepreneur building his financial forecast. But to be the best, a financial model tool has to be fully open and customizable. Indeed, any startup is unique. An entrepreneur can often have specific needs to build his business model. It’s really important to be able to customize the financial tool.
The best way to get an easy and customizable financial tool is to choose one based on an open Excel stylehseet template. It’s then pretty easy to customize the tool to your needs while making the most of the given generic framework designed by financial and startup experts!
Free : A best financial model is a free one !
You may probably think that anything free has no value and it may be a good investment to buy the top financial tool whatever it costs. You may be right. It’s usually pretty hard to find good stuff for free. And there are some really good financial tools around here that may cost you some bucks (too much?).
But there are also really good financial model available for free on the web. Free doesn’t always mean bad. You can always test it for free to get a better idea of what it worths before looking deeper into it!
Confidentiality : Keep control of your confidential data
Managing confidentiality on critical data is part of building a startup. Managing confidentiality of financial and strategic data is moreover crucial! An entrepreneur choosing a financial tool should consider to select a confidential one.
How can you identify if a tool is safe or not?
It can be obviously very hard. A good oldschool excel stylesheet template may however remains the best solution to keep control of your data confidentiality. Cloud softwares may be secure, but still you don’t have full control of confidentiality policies.
Compatibility : Easily use and share your financial model
SaaS software are usually available everywhere … with a web connection, but it may lacks the easiness to share results to others (advisors, associates, VC, …).
Excel stylesheet template are usually easy to share but they usually lack a large compatibility : software compatibility oroblem (Microsoft, Apple, Open Office, …), macro calculation not working, …
The best financial tool may be a simple excel stylsheet without any macro and only simple calculation rules to be compatible with most stylesheet softwares. It can be used anywhere and shared to anyone. Results can then be easily copy-pasted in a Business Plan.
Any recommendation to find this best financial model tool ? Business Model Forecast, off course! 😉
Indeed, we have designed our Business Model Forecast financial tool exactly to respond to all these key features we are looking for in what we think should be the best financial model! Our experience in entrepreneurship helped us understand what is really important in financial modeling for startups. And we finally came up with Business Model Forecast, a 100% free and super easy but yet reliable excel financial model tool totally customizable!
Good luck in your startup project!