Templates

How do you choose which Foresight template to use?

Here's my perspective on how to choose the right one for you. I build the templates 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 forecast tools are all free tools that are built to handle specific kinds of forecasting, 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, 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 Budgeting Tool vs. Standard Financial Model

I built the Runway Budgeting Tool to be a free resource for entrepreneurs just getting started. It is built to focus on expenses, cash, and runway, with basic consolidated financial statements, 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 Standard Financial Model is built to be the best base financial 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 comes with a prebuilt revenue structure, and it is easy to build in your own revenue and growth forecast.

The choice between the Standard and the Runway Budgeting Tool basically comes down to whether you want to use the prebuilt revenue forecast in the Standard Model, which allows you to forecast revenues using a range of assumptions around paid and 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 models is simple and easy to use, making it easy to build custom revenue forecasts to fit your needs.

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.