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Don’t assume sales will convert to cash right away.Enter them as cash only when you expect to get paid based on prior experience.Your projections will act as an early warning system, helping you to plan for cash flow dips, identify financing needs and pinpoint the best timing for projects.
Ultimately, the type of startup financial model you choose depends on what kind of firm you run.
But do make sure to have the financial model in place before you incorporate your business and build your first products.
All in all, startup financial models have the additional benefit of enabling access to leverage of an accurate baseline valuation.
For example, if a firm has a Saa S business model, then assumptions will differ between that of a Freemium business model.
Hence, the Saa S financial model will vary greatly to that of a Freemium financial model.