The Financial Plan demystified

financial plan for startups, startup investment, know how
financial plan for startups


Florian Übelacker (CCO)


"The only thing we know 100% about the budget, plan and the figures is that they are wrong. The earlier the startup, the less accurate the numbers, but the financial plan helps us understand how a startup thinks about the future."

 What to pay attention to in the financial plan

  1. Clear growth strategy based on the financial plan 

  2. Assumptions under which the figures were planned (usually a discussion)

  3. Monthly Burn Rate / Costs and the planned growth - Why financing is needed and where to go with it (should last 12-18 months) 

  4. Does the financial plan match the termsheet, the business plan? 

  5. Do we believe the business model provides the planned turnover and how plausible is the business case in general? 

  6. Do we agree with the assumption used in the calculations?

  7. Is it too realistic or the moonshot we would expect?

  8. Does the valuation go in accordance with the financial projections? 

Furthermore, the financial plan is not a static document - founders need to adopt & adapt where necessary. The assumption is that it is possible to find out a priori most of the "unknowns" and what you have to work on and when to grow as planned. To us financial planning can be used in many ways: as reporting to investors, for internal performance measurement, for the financing strategy, profitability, human resources and marketing planning.

Everything comes together in the financial plan: Marketing, product, personnel, strategy. 

A good financial plan needs a clear structure

Icon Summary page and KPIs

The first page in the finance plan should give a good overview of the business model and its profitability. It should contain the main results of the P&L and liquidity statement.

Icon Traceable and clear assumptions from markets or historical experiences

Assumptions get challenged. Here it is important to give a good overview of the most important assumptions and to show the logic behind them. Mostly assumptions are variables, which can be easily changed.

Icon Profitability plan - Profitability forecast

Determine whether sufficient income is expected to be generated to live on in the long term. Therefore, profitability is usually determined for the next three to five years. The profitability plan consists of two separate items: turnover and costs. The turnover should consist of the past years, the current year and the future plan. You should determine all revenue sources, broken down by volume or by number/quantity. This provides a transparent and structured derivation of revenue and assumptions are directly identifiable. It should also be clear how much turnover is recurring and how much is not (monthly and annually). In order to see the collaboration with the milestones, they should be included here as well (Break Even, Investment, ...). The costs should include personnel (including sales), Sales commissions, marketing, rent, and other.

Icon Liquidity statement

This part of the financial plan shows that the company will be liquid and the risk of insolvency is therefore very low. Profitability plan as a basis and check when the planned turnover will be received on the account and when the costs will be incurred. Especially with young companies, problems with liquidity are often a problem and often the reason why self-employment fails - how long will your money last?

Icon Milestones

Be specific – it is very important to make them as concrete or detailed as possible. It should also be very clear when a milestone is met or who decides on this if a decision is required. calculate – work through the worst-case scenario to see what happens if the milestone is not met. Samples: Profitability, Customer Level and retention, Expansion, Team, Sales, etc… What’s your business and how do you grow it? It’s sounds intuitive but actually use your milestone as references to make decision and steer towards them - Don’t let them become tombstones.

Icon Graphics and graphical summary

Visualizing numbers is a method of giving them context and meaning. And this should be possible at a glance.

A good financial plan is not static, but interactive. That means you can calculate different scenarios (Best/Worst/Realistic) and change the assumptions. It is also recommended to create a summarized version in the form of a financial pitchdeck (PDF), including historical figures.


Never forget to send an Excel version of the financial plan so that we can play with the numbers.