How Do You Create a Financial Model?
This chapter provides an introduction to business financial modelling and helps you create a sound financial plan and forecasts for your business. After describing the fundamentals of a business model, we work through an example business to create a full 5-year business plan. Every aspect of building the plan is covered including how to forecast sales, how to set prices, planning your employment needs and costs, capital expenditure, even office consumables. Cash flow and Profit & Loss sheets are also explained and developed.
An important part of the process is the use of the model as a planning tool to help you design your business and develop strategies for its operation.
The plan uses an Excel spreadsheet that can be downloaded from the author’s website so you can experiment with different approaches and strategies, or can be used to start your own business model from scratch.