Excel for Startups: Simple Financial Models and Dashboards
Ready-to-use Excel templates of different financial models for startups
Before joining the Statsbot team, I founded two startups, and the most important thing I learned is that one needs to measure expenses and income from day one.
When you start building a business you might not be able to afford expensive tools for calculations, or haven’t yet found one that fits your needs and budget. However, you still have to do all the calculations, especially if fundraising is not far off.
In my experience, Excel and Google Spreadsheets are two of the best tools startuppers could start with for analytics.
They are rather simple to use if you’re not going too deep with numbers. You actually don’t need to go deep at the start of a business if you don’t want to get in a muddle with complex metrics.
Many Excel templates for startups that I meet online are great and contain lots of useful stuff, but if I found them earlier, without a business background, I would have had no idea what all these complex metrics mean.
That’s why I’ve created my own Google Spreadsheet template, which has all metrics that startups need to track their analytics while staying really easy to understand without specific experience.
Push File →Make a copy to edit this spreadsheet.
Note: It’s always easier to customize a simple solution for your specific needs, then learn how to use a difficult one. I’ve added recommendations to make this process easier for you.
I wish I had this template ten years ago, but I didn’t. Now, I am sharing it for absolutely free because I want everybody to have the possibility to measure their data as effectively as possible. You can quickly adjust your own numbers instead of mine, and get financial models and dashboards in Excel for your startup.
In this post, I’ll not only provide templates you could download and quickly adjust to your needs, but I’ll also explain basic metrics for startups, their nature, and their importance.
Expenses
To keep things simple, our costs model will be pretty generic, but quite useful at the early stage of your startup.
The model looks the following way:
- 1 year or 4 quarters
- Let’s assume we have 5 people in our startup. CEO and CTO at the beginning and two engineers plus a designer joining the team later on
- We will include salaries for this team plus fringe benefits (9%)
- Office rent
- Legal costs related to company registration
- Costs related to AWS
- Other tools that are crucial to sustain the business
- We assume that the startup has some cash in the form of founders’ savings or a pre-seed round raised ($300,000)
- We include the average monthly burn rate and how many months you have before all cash will be burned. This is probably the most important part of each startup
Recommendations
- Thoroughly think about all other expenses you might have and adjust the numbers in the spreadsheet.
- Add expenses in the special rows left blank if you have some more.
- Adjust starting capital or pre-seed investments if applicable (note that in order to found a startup, significant capital is not the hard requirement. 😉 You could always start by investing time together with your co-founders and some tiny compulsory expenses to launch).
Earnings
Things are getting more interesting here, and I would strongly suggest you to think about earnings at the earliest. Since I totally agree that “startup = growth … and the best thing to measure the growth rate is revenue”, you’d better address this question.
Startups could have different business models in terms of revenue, and we will focus on the main two in this post — SaaS, and e-commerce. We have adjusted the burn rate for both models and placed it in the Costs sheet because we assume there is some income being generated.
SaaS (software as a service)
The SaaS business model is based on the idea that a user could use software by purchasing a subscription usually on a monthly or annual basis. A lot of SaaS companies provide their solution in the cloud, making time to deploy significantly lower in this case: users just sign up and can start using the tool.
On the other hand, the value that this tool provides is not always clear from the beginning and the aims of users could be widely different, so there’s usually a trial period given. Users can test the product and decide whether it makes sense to purchase a subscription or not by the end of the trial.
Examples of SaaS include Slack, Intercom, Salesforce, Dropbox, and Shopify.
Let’s add some assumptions to our calculations. We will assume that monthly growth in subscriptions is 20%, the average revenue per client is $50, and the monthly churn rate starts from 10% and decreases by 0.5% each month. Lastly, in our first month, we acquire 20 first-time users.
At the early stage of building Statsbot, we came up with a solution to the question of how to automate failed charges in 2 hours.
I have included the following metrics in a separate sheet of our Excel file:
- New customers, Lost customers (churn), Total number of active customers
- New trials and trial-to-paid conversion rate
- Churn rate, i.e. how many users unsubscribe each month
- Monthly Recurring Revenue, or MRR, i.e. the total amount of cash being generated with subscriptions
- Lifetime revenue per client and Average lifetime of a customer in months
Recommendations
- Calculate your own average revenue per client. You might have several plans, so calculate the average between them for the beginning.
- Ideally, you should know the % of how much MRR each plan generates.
- Keep your eye on all the rows highlighted in blue.
- If you know the CPA for each client, compare it with Lifetime revenue per client and check if the latter is higher.
- If some users upgrade or downgrade between plans, add Expansion and Contraction MRR metrics yourself. It is actually the amount you earned or lost after a user has changed plans and it affects your MRR too.
E-Commerce
The e-commerce business model is based on the idea that you could sell something online. It’s usually pretty straightforward — there is no trial since goods being sold on the web or in mobile apps have a clear value. You purchase a product and get it delivered to your door or by email (e-books for example). However, in most cases, you could make a return.
Examples of e-commerce include Warby Parker, Zappos, and Jet.com.
For an e-commerce model, our assumptions would be the following: we sell 5 products and all of them need to be delivered to clients’ doors. Pricing for each is different, however, sales are evenly distributed. Cost to produce one product is 60% of the price and the other 40% is the margin.
TIP: If you plan to found an e-commerce startup, you need a really healthy margin that will bring velocity to your business. I would suggest you carefully study whether you can sell product with at least a 40% margin before starting.
In the spreadsheet, I include such metrics:
- Number of Sales and Sales growth MoM, %
- Revenue
- Total Cost to produce
- Shipping costs
- Transaction fee, 3% (it really depends, but let’s take this number as it seems like the average in the market)
- Total costs
- Net Margin and Net Income
- Total revenue cumulative and Total Net income cumulative
Recommendations
- Same as before, quickly adjust your numbers, and Excel will take care of the rest.
- Thoroughly think about other expenses such as packaging, and returns, and add costs for your warehouse if applicable.
- Keep your eye on all the rows highlighted in blue.
- If you know your CPA, add it to the Costs model and compare it with Net income to see if you’re actually making money.
- Analyze which product gives you the most sales and adjust your marketing accordingly.
We’ve also added revenue being generated in SaaS and e-commerce models to the Costs spreadsheet, so you can see the Burn rate for these models. The burn rate has changed since you now have some cash flow.
Mixed model
Recently, we saw a big number of success stories with so-called mixed subscription and e-commerce models. You could start a subscription and get physical goods delivered to your door with a certain frequency of your choice — monthly, quarterly, etc.
There’s no trial, but quite often the price for the first order and delivery is either extremely low or just free. It removes a barrier, allowing users to easily give it a try.
Some well-known examples: Dollar Shave Club and Adore Me.
Recommendations
- If you plan to pursue this business model, my Excel template can also help you.
- Think about products as plans and calculate MRR as a key metric.
- Costs and Income should now be considered even more thoroughly since you have to work on two fronts: software and physical goods.
Go ahead and download my template. Don’t forget to take a look at all the recommendations one more time. You could also use this spreadsheet for understanding what your cash flow might look like to grow and plan accordingly from there. I would suggest checking my assumptions in detail and making sure you use numbers inherent to your market.
Good luck and feel free to reach out. Our team at Statsbot is always ready to help with numbers.
