Storyboard Your Financial Model Properly Before You Prep. – Here's My Process.

A Financial Model Storyboard (With an Apple's Freeform Template)

Image Designed by Author

When clients ask me to work on a financial model, I know that I’ll get a deep dive into their business. Here’s rule number one – The thing about financial models is that almost every projected financial model in this world is inaccurate.

The truth is you try to make the best out of the situation. Since you’re operating in an ocean of inaccuracy, financial model prep, in this situation, is key. You want to get a model that gives you:

• A figure close to reality, as close as it gets (even if that’s a 0 away from reality.)

• The vision of how big your product could become.

• Understanding how much money you’ll need to burn in the future.

• Finally, it should give you “that” entrepreneurial motivation.

The one that makes entrepreneurs wake up in the middle of the night to tamper around with numbers and see the answer to their “what ifs?”

Let me tell you, then link you to a template, of how I work with financial models.

---

Proper Financial Model Prep.

Stage 1 – The Financial Storyboard

Before using Excel (or Google Sheets? actually… use Excel for this one), there has to be a story. You might not be pitching that story to a client or an investor. Regardless, there is always a story. When you look at your financial model and start to daydream when getting a “numbers coma”, you are living that story.

There are characters in that story, you see their number right in front of your eyes. You see how much you’ll be impacting their lives (or at least charging them.)

Finally, you’ll see how every single dime and effort you put into this reaches them and then reverts to you with, fingers crossed, a profit. Always start with the story.

The story of the model answers every possible question of how what connects with which and where. All sorts of questions related to the model should simply be in that storyboard (Similar to the image you see at the start of this article.)

Then you need to make sure you connect everything together and know for a fact what will change. There isn’t a single financial model that hasn’t been changed. It will change. Your job is to anticipate what will change and make it dynamic.

There are two things that will definitely change:

1. Things that you are unsure of or see potential in improving (that could be your business model, for instance.)

2. Things that the market controls, like pricing and market growth.

Trust me — Make them dynamic and editable. This will save you tons of time.

Stage 2 – Writing The Financial Model

Then head to Excel (it’s just more advanced in this sense.) and start drawing it all.

There is jargon in each financial model for new entrepreneurs. Sounding smart helps nobody. Put your expenses, and your profits, even if you want to call the sheets tomatoes and oranges.

A key element when writing this model is to remember that there is a very high chance others will need to understand this model. Either explain it while designing it or make it extremely simple following the common structures (not tomatoes and oranges.)

Financial Benchmark

Comparing your growth with other similar startups is key. Here’s a secret after 14 years of entrepreneurial consulting – your product will most probably be similar, or worse, than that $1b startup you are putting as competition (and yes, I know you have a better product.)

If you’re working on a payment provider, put Stripe’s early years of growth in your benchmark. But know that you probably won’t reach that. Look at startups that are more recent. Stripe is 14 years old, believe it or not.

Never forget rule number 1. You’re not trying to be accurate. You’re trying to use this model to actually build something useful for people out there.

Here’s an editable template for the financial model storyboard that is referenced as this article’s image. Note that it is in Apple’s Freeform. So it probably won’t work if you have anything else (I could’ve used Figma, I know. Next time… For this time, just buy a new Apple device and put it in your expenses column in your financial model.)