Financial Forecast Model

Here’s a tactical breakdown (plus template guidance) for your founder-ready financial model.

1. Customer Acquisition
Where growth begins — but only if it’s measured. Model your channels, CAC, and conversion rates.
ChannelMonthly SpendLeadsConversion RateCAC
Paid Ads$5,00050010%$100
Outbound Sales$8,0008020%$400
Organic Search$020015%$0
2. Customer Retention
Where enterprise value is built. Track churn and retention by cohort to signal product-market fit.
  • **Churn Rate (Monthly):** The percentage of customers who cancel their subscriptions.
  • **Average Customer Lifespan:** The average time a customer stays with your service.
  • **Retention Curve by Cohort:** A graph showing the retention of customer groups over time. Showing this to investors signals strong PMF.
3. Revenue Modeling
Your strategy, in numbers. Start simple and show how revenue scales with low CAC and improving retention.

Start with a simple formula: `Revenue = ARPU × Active Users` or `Revenue = Unit Sales × Price × Frequency`

MonthActive CustomersARPUMonthly Recurring Revenue
Jan100$50$5,000
Feb150$50$7,500
4. Expense Modeling
A reality check on your burn rate. Break expenses into key buckets.
Expense CategoryMonthly CostNotes
Salaries$25,0005 employees
Hosting$2,000AWS, Cloudflare, etc.
Marketing$8,000Paid + Brand + Contractors
Tools & Software$1,200Slack, HubSpot, Figma

Hiring Plan

NameRoleTeamSalaryStart DateStart Month
FounderCEOExecutive$100,0001/1/2024Jan-24
Name if hiredEngineerEngineering$100,0001/1/2024Jan-24
Name if hiredEngineerEngineering$100,0002/29/2024Feb-24
Name if hiredEngineerEngineering$100,0002/29/2024Feb-24
Name if hiredDesignerDesign$100,0002/29/2024Feb-24
To be hiredCustomer SupportEngineering$100,0005/31/2024May-24
To be hiredSales Account ExecutiveSales$100,0006/30/2024Jun-24
To be hiredSales Account ExecutiveSales$100,0006/30/2024Jun-24
To be hiredMarketing LeadMarketing$100,0008/31/2024Aug-24
To be hiredDesignerDesign$100,0009/30/2024Sep-24
5. Cash Flow & Runway
Don’t die. Forecast your oxygen and plan for different scenarios.
  • **Opening Balance:** Starting cash.
  • **Inflows:** Revenue + funding.
  • **Outflows:** All expenses.
  • **Runway:** Cash ÷ Burn Rate.

Scenario Planning:

Build 3 cases to show you've thought through the possibilities:

  • **Best Case:** Revenue accelerates, churn drops.
  • **Base Case:** CAC holds, ARPU steady.
  • **Worst Case:** Growth slows, churn rises, fundraising delayed.