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.
Subscribe to:
Posts (Atom)