Updated: Oct 20, 2020
When building financial projections or anything at all really, it is important to keep in mind Voltaire’s simple but crucial norm: “the best is the enemy of the good.” In the start-up world, this has been flipped upside down in the most wonderful manner, with the concept of constant iteration. Start with something, anything, that you can get in front of your clients as quickly as possible. After you get their feedback improve on your original design, and repeat this process as many times as possible. Too many founders build great products with too many options that most customers don’t want.
At Finply we believe your financial projections should be constructed with this same philosophy. We are creating tools that reduce the time founders have to allocate to financial modeling. With our apps, start-ups will be able to create multiple scenarios and modify them easily when their business conditions change. This flexibility paired with the ability to retrace and connect previous models, enables our clients to create good, dare we say great, financials.
Our Revenue app allows users to create and modify their projection in hundreds of ways, but ideally, our users will spend less time doing financials rather than customizing them. The point is to start simple and build only what the customers for this information require from you. Don’t try to blow investors away with our cool graphs, instead focus on knowing your segments and business well enough to explain, in the most concise manner, how you’ll get to those monthly revenue numbers.
Voltaire’s norm also applies to precision. It doesn’t matter if your projections are within one cent or one dollar of your actual sales. They’re just a guide, not a written contract, as discussed in our previous article on model precision. Don’t stress over how good your model is, it will only come true if you spend most of your time on generating sales.
At Finply we exist to save you time. Financial models are not static, they should be living maps that change with the alterations in your economic reality. As such, you want to revise them quickly, easily, and repeatedly. This means you need to spend some weekly time on them, but we want this time to be productive, we want you to be able to gain insights or produce valuable information for your stakeholders. The models won’t be perfect, but they will be good and will enable you to iterate forward on your start-up journey.