Having seen user comments on my SaaS Financial Plan, I decided to make an adapted SaaS Startup Financial Model in Excel that is purpose-built for founders and those with limited Excel experience. That way, everyone can get maximum value from my Best Practice.
In the early days, SaaS businesses do not usually have a finance expert at their disposal, so founders can end up having to sacrifice hours and hours in order to create financial forecasts themselves. So I have attempted to remove all the baggage and reduce the quantity of numbers that are in the forecast model.
All of the SaaS financial metrics have been taken away as the chances are that you won't yet have the sheer volume for those metrics. This Best Practice is more to do with cash flow and go-to-market strategies.
Here are the different tabs presents in the tool that will facilitate the creation of your first forecast:
This is the tabor you to insert the details of your headcount roster. Examples: title, wage, benefits, taxes, etc.
What's particularly useful about this feature is that you are able to indicate the beginning and end dates for every role and the headcount planning formulas will do the rest for you. With this tool you will soon have your perfect wage forecast!
RECURRING REVENUE MODEL
For a SaaS business, recurring revenue is the central pillar to your being (and valuation). The recurring revenue forecast tabs only needs a small number of crucial inputs, including: new customer count, churn, revenue expansion, and professional services assumptions (if any).
Following this, the tool will create a professional recurring revenue forecast, or "waterfall". It is laid out in such a way to deal with ARR or MRR subscription companies.
OPERATING EXPENSE MODEL
Having completed the previous steps, you are now able to set your sights on non-wage expenses such as commissions, travel, rent and professional services (CPAs, lawyers, consultants, etc.).
Those given examples are the common ones that I have come across in SaaS Startups in their early days. I have added the formula examples that do the leg-work themselves, which means there is no need to insert all the numbers each month on every row.
SAAS P&L TEMPLATE
That's it! You now are in possession of the financial output in an industry-accepted SaaS P&L template. This complete with the correct grouping of department expenses, meaning you have the correct SaaS gross margin and operating expenses. The output also contains your headcount forecast and high-level financial metrics.
This includes the proper grouping of department expenses, so that you see your correct SaaS gross margin and operating expenses. The output also includes your headcount forecast and high-level financial metrics.