Working Capital Model

Essential issues impacting cash. Basic factors to help run your business without running out of money.

One of the common elements missed in building a financial model is the concept of working capital. This refers to balance sheet items like Accounts Receivable, Inventory, Fixed Assets, and Accounts Payable. Some very smart entrepreneurs may not even understand fully what those mean. Not to worry. They can hire people who can help them with those concepts. Still, they must understand them, build them into their financial models, and be prepared to discuss them if ever asked.

INSIGHT Business Systems developed a whimsical financial model to demonstrate these concepts with a business building a LemonADE stand, which is explained in both a 30-minute presentation and a model, available for download here:

High-Level Financial Model

Fundamental for fundraising. Essential tool to prove viability of a business, determine how much money to raise, and demonstrate how long it will last.

This licensed, Excel-based model solves the basic question of, "Is there a there there?" It is intended to help determine if a business model is viable. It's a five-year model, showing two years in quarters and three years in full years only. It has many simplifying assumptions, none of which impact cash. It helps determine how much cash is required to start a business, and how long that cash will last. The last three years have expenses determined by an operating stack, which applies a percentage of revenue to various expense categories. Such high-level assumptions allow this model to be completed fairly quickly. The resulting income statement, balance sheet and cash flow demonstrate the viability of the business over the five-year period. The model is available for download here:

Click here to Extend License Period and please attach your current model to the email. Thank you!

Detailed Financial Model

Detailed financial road-map. Plan to address key operational issues required to run a startup.

This licensed, Excel-based model is similar to the high-level model, but is more operational in nature. This model should be used by someone actually starting a business. The first two years are shown in months rather than quarters, and the last three years are annual. Additional detail includes depreciation for fixed assets, and hiring assumptions by person and by month. Like the high-level model, the final output includes an income statement, balance sheet and cash flow which demonstrate the financial viability of the business over the five-year period. The model is available for download here:

Click here to Extend License Period and please attach your current model to the email. Thank you!