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Choosing the right Foresight template

How do you choose which Foresight template to use? The product comparison grids outline the differences in the features, and below is my perspective on how to choose the right one for you.

I build the templates here at Foresight to be able to be used by people with a minimal amount of knowledge of spreadsheets and accounting, with enough flexibility to handle a wide range of situations already built into the templates, but with enough power to be used (and modified) by people with a deep experience in financial modeling.

Base Financial Models vs. Forecasting Tools

The base financial models are built to help an entrepreneur create financial projections for their business. The models provide an increasing amount of prebuilt detail and structure, from the Cash Budget Tool - the simplest - to the SaaS/Ecommerce/Services Models - the most complex - to help you find the right level of detail and structure you need in your forecasts.

The forecast tools are all free tools that are built to handle specific kinds of forecasting, from wholesale sales and cash flow, or per-channel digital marketing and sales forecasts, to sales and inventories for ecommerce companies. They are not intended to be full financial models, but used appropriately can help you make important financial decisions about your business.

Choosing the right template usually comes down to finding the best model for how the company grows and how the revenues are earned. For the base financial models, the financial core of the models - financial statements, operating costs, key reports and summary - are largely the same for all the paid models, so the question usually comes to whether the Standard is a good fit, or whether you need more or less structure.

The Standard is the best option for most businesses. The financial core contains all the details and reports necessary to build and present your financial model to executives and investors and make significant business decisions. The growth and revenue forecasts are prebuilt using the One Size Fits All conversion funnel and revenue forecasts, but the model also offers the Bring Your Own Model functionality to let use build or use your own revenue model with the financial core in the Standard.

Runway & Cash Budget vs. Starter

I built the Runway & Cash Budget Tool to be a free resource for entrepreneurs just getting started. It’s built to focus on expenses, cash, and runway, built with the same formatting and reports of the more advanced models, but without the prebuilt logic behind the revenue forecasts. It’s also free.

The Starter Model is built to be the simplest, “Minimum Viable Model” for an entrepreneur to use to raise capital. The focus is still on expenses, cash, and runway, but also includes consolidated financial statements - income statement, balance sheet, and statement of cash flows - along with more detailed approach to the operating costs, equity and debt financing, inventory (if applicable), and accounting treatment of the expense forecast. The model is easy to use to build in your own revenue and growth forecast, but that structure does not come prebuilt. For a seed-stage entrepeneur, the focus is on costs, and I’d argue that a detailed revenue forecast is not necessary, thus the structural choice I made with the Starter model to focus on costs and not revenues.

Starter vs. Standard

The choice between the Starter and the Standard comes down to the level of detail you need, and whether you need to build detailed revenue forecasts. The Standard offers the same components of the Starter, but also adds in an integrated cap table, valuation (discounted cash flow and multiples of EBITDA and revenues), actuals reporting, and a number of features that automate the cash flow and funding needs forecasting. The Standard also includes a prebuilt revenue model structure, the “One Size Fits All” conversion funnel and revenue forecast, which allows you to forecast revenues using a range of assumptions around paid advertising, organic growth, sales efforts, conversion rates, churn, repeat purchase rates, prices, cost of goods sold, and much more.

While the prebuilt revenue structure works for a wide variety of businesses, if it happens to not be the best fit for you, you can use the Bring Your Own Model functionality to build or use your own revenue model. The integration process for your revenue model with the financial core of the Standard Model is simple and easy to use, making it easy to build custom revenue forecasts to fit your needs.

Standard vs. SaaS/Ecommerce/Services

The SaaS/Ecommerce/Services modules are built to extend on the Standard Financial Model by adding in additional detail for each of those business models, and they are built so that they are easy to add-on at any point in time.

What’s a module? Read this ›

The choice between the Standard or SaaS / Ecommerce modules is usually pretty simple: the Standard Model handles subscription and transactional revenue models, but models 1 “average” order, product, or subscription plan, whereas the SaaS and Ecommerce modules can detail out multiple plans, orders, and products. If you’re looking for a simpler approach to modeling your SaaS or Ecommerce business, the base Standard is the right call: if you have to forecast out the adoption, churn, renewals, etc. of each specific subscription plan, then adding on the SaaS module is the right call; if you need to forecast out orders and break them into multiple SKUs with different prices, COGS, and inventory purchasing arrangements, then adding on the Ecommerce module is the right call. The SaaS module is prebuilt to handle up to eight different subscription plans/channels/regions, but can be extended for many more, the Ecommerce module is prebuilt to handle up to 25 different SKUs/products, but can be extended to handle hundreds if desired.

The choice between the Standard and Services modules is similarly simple: the Services modules is built to handle companies that have irregular, nonrecurring projects of varying lengths, prices, and margins, and you can forecast projects by inputting them directly (valuable if you have a small - typically less than 50 - amount of projects) or up to five different types of projects.

Feature comparison between the Standard MOdel and SaaS/Ecommerce/Services modules ›

My advice: Start with the simplest model possible

My general rule is to start with the model that has the least detail necessary to accomplish what you need and then either build in what you need or upgrade to a more advanced model with more features prebuilt. It’s usually the easier and cheaper approach for you.

Questions, just contact me.

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