This is a summarized article. You can read the original post in full length (20 min read, 20 screenshots, 3 tables) for free here.
As a founder, there comes a time when you need a business plan, complete with financial forecasts, income statements, and fancy graphs that will impress your investors.
Don’t build it from scratch — use an existing model.
A financial model allows you to draft financial projections easily, fast, and in a professional manner. A great template will also force you to think through all the aspects of your project and make sure you really get the financial logic behind your business.
It can be annoying but trust me, it’s worth your time.
This post compares the top 12 templates of financial models for SaaS startups. I have personally tested each model. I have ranked them on 40+ items along 5 categories. I’ve looked at both spreadsheets and SaaS apps, and both free and paid solutions.
If you are looking at building your SaaS financials, this article is for you.
Table of contents
- Methodology — What makes a great financial model for startups?
- Disclaimers: affiliation, impartiality, and non-finito
- #1 — “FISY Innovation Plan” by Remi Berthier
- #2 — “SaaS Financial Plan 2.0” by Christoph Janz
- #3 — “SaaS Financial Model” by Jaakko Piipponen
- #4 — “Standard SaaS Financial Plan for Startups and SMBs” by Ben Murray
- #5 — “SaaS Startup Kit” by Pro Forma
- #6 — “SaaS Financial Model” by Taylor Davidson
- #7 — “SaaS: SME & Users” by Alexander Jarvis
- #8 — “SaaS: Enterprise, SME & Users” by Alexander Jarvis
- #9 — “EY Finance navigator” by Alex and Wout
- #10 — “Liveplan” by Palo Alto Software
- #11 — “Summit” by Matt Wensing
- #12 — “Causal” by Taimur and Lukas
- Conclusion: this is the best financial model for SaaS startups
Methodology — What makes a great financial model for SaaS startups?
Here is the methodology I used to build this benchmark.
I compared 40 points across 5 categories: (a) financial statements, (b) analysis capabilities, (c) revenue modeling, (d) cost modeling, (e) extra features. A detailed analysis of each model is available below. In each case, I tested the software/spreadsheet myself.
Criteria 1: Financial statements
- Time scale: Are the statements over 1 year, 3 years or more? You usually want 3 years as a minimum when you speak with professional investors.
- Income statement: Does the template include an income statement? You usually want a monthly income statement, at least for year 1.
- Cash flow statement: Same as income statement
- Balance sheet: Same as income statement
- GAAP/IFRS: Are the statements compliant with GAAP and/or IFRS rules?
- Currency: How many currencies are available?
Criteria 2: Analysis capabilities
- Financial analysis: Number of typical financial metrics included e.g. breakeven point, quick ratio, average inventory, etc.
- SaaS analysis: Number of typical SaaS metrics included e.g. MRR growth, SaaS magic number, CAC/LTV, etc.
- Graphs: Number of built-in graphs
- Costs by P&L category: Does the template break down costs into P&L categories (CoGS, RD, G&A, etc.)
- Costs by departments: Does the model break down costs into departments (sales, marketing, CS, engineering, etc)
- VS Scenarios: Does the template allow you to compare multiple scenarios?
- VS Industry comparables: Does the template compare your financials against industry comparables?
- VS Actuals: Does the template allow you to run your model versus your actual numbers?
Criteria 3: Revenue modeling
- New client acquisition: How do you enter new clients into the model? Possibilities include: entering a number manually for each month or year (it sucks); autofill the model from a base number and a growth rate (sucks a bit less); autofill several streams — each stream represents a different type of client e.g SMB/enterprise (better); or even fully model each acquisition channel (the best, very rare)
- Offerings: How many offers can you define and how precisely can you model them? This includes the possibility to create one-off offers, recurring offers, or a combo, but also the possibility to create introduction times and end times for specific offers.
- Pricing model: How many pricing models can you define and how precisely: tiers (free, basic, premium), revenue models (per seat, per usage, etc), automatically increase or decrease the plans price over years.
- Existing clients: Can you model expansion, contraction, churn, reactivation?
- Commitment: Can you model monthly VS yearly VS multi-annual contracts?
- Service revenue: Can you model punctual service revenue on top of all the other pricing models and offerings?
- Enterprise specific: Does the template offer specific features to model complex enterprise sales, such as landing/expansion, custom product developments, various sales cycles, etc?
Criteria 4: Costs modeling
- Direct labor costs: The best templates allow you to correlate direct labor costs with relevant metrics. For example, your sales staff is calculated based on forecasted income and sales target per account executive. Same for customer success payroll with number of customers and workload target per CS staff.
- Direct non-labor costs: just like with labor costs, the best templates allow you to link some direct non-labor costs with relevant metrics. For instance, server costs can be a % of MRR.
- Indirect labor costs: same as above. Even for indirect costs, some templates find smart ways to tie them to some aspect of the business.
- Indirect non-labor costs: same as above
- Payment terms: Can you define the payment terms with your vendors and suppliers? May be useful if there is a hardware component to your offer.
- Hardware-friendly: This is a special mention for templates that model things like shipping costs, inventory delay, etc.
Criteria 5: Extra features
- Documentation: Is there proper documentation in the model and on the website? Are there good explainer videos? What kind of direct support (chat, email) comes with the template?
- Languages: In what language is the template available?
- Third-party integration: Third-party integrations can be useful to input or update data over time, or to display advanced graphs.
- Excel spreadsheet: Can you access your financials as a Microsoft Excel spreadsheet? This is a must if you need to share it with investors.
- Google Sheets: Does the model work in Google Sheets? Not all models that work in Microsoft Excel work in Google, so you may want to consider that point.
- Editable formulas: Some templates do not allow you to modify formulas — which is a massive bummer when it comes to customization.
Granted, it’s not a perfect methodology. One could argue forever about whether cap tables should be included in a startup financial model. But it’s the best I could come up with — without being a finance nerd myself :)
This is a summarized version. You can read the original post in full length (20 min read, 20 screenshots, 3 tables) for free here.
Conclusion: this is the best financial model for SaaS startups
Best free spreadsheet
See below a side-by-side comparison of the differences between both models.
Best paid spreadsheet
If you want the best financial model spreadsheet out there and are willing to pay for it, go for Taylor Davidson’s (model #6) or Alexander Jarvis’ (models #7/#8). They are by far the best stuff on the market today.
See below a side-by-side comparison of the differences.
See below a side-by-side comparison of the differences between both models.
Thanks for reading. Don’t hesitate to leave a question in the comments, I try to reply personally to each one of them.