A Financial Model is a spreadsheet which provides a forecast of your venture’s future cash flow (i.e. incoming revenues and outgoing expenses during a year) and summarises key financial and social impact results for [social] investors. You can use the Financial Model to answer questions that investors ask, relating notably to the financial return, break-even, capital structuring, business valuation, impact, etc.
The Financial Model is an indispensable tool in your own business planning. You can also use it to refine your pricing, for example, or to work out which products are the most profitable or impactful, and plan accordingly.
The model can also be used to help both you and your investors agree future budgets, and measure financial and social impact performance against those plans.
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