Here’s a secret: most founders who build great companies didn’t start with finance expertise. They learned what they needed, when they needed it.
If spreadsheets make your eyes glaze over and terms like “accrual accounting” feel like a foreign language, you’re not alone. And you’re not at a disadvantage—you just need a different approach.
Why Finance Feels Hard
Traditional financial modeling was built by finance people, for finance people. It assumes you think in debits and credits, that you dream in Excel formulas, that you find GAAP riveting.
But you became a founder to solve a problem, build a product, or serve customers—not to become an accountant.
The good news: you don’t need to become an accountant. You need to understand your business well enough to plan its future.
Think Business First, Finance Second
Here’s the reframe: financial forecasting isn’t about finance. It’s about your business.
Ask yourself:
- How do we make money? (Revenue streams)
- What does it cost to deliver our product/service? (Cost of goods sold)
- What do we spend to run the company? (Operating expenses)
- How are we going to grow? (Growth drivers)
You already know these answers. You think about them every day. A forecast is just writing them down in a structured way.
The Building Block Approach
Instead of starting with a blank spreadsheet, start with building blocks:
Revenue Blocks
- Subscription revenue: Customers × Price × Retention
- Transaction revenue: Volume × Take rate
- Service revenue: Projects × Average value
Cost Blocks
- People: Headcount × Average salary × Benefits
- Infrastructure: Users × Cost per user
- Marketing: Budget as % of revenue or fixed spend
Growth Assumptions
- New customer acquisition rate
- Churn rate
- Price changes
- Hiring plan
Each block is something you understand intuitively. Stack them together, and you have a forecast.
What “Good Enough” Looks Like
Your forecast doesn’t need to be precise. It needs to be useful.
A useful forecast:
- Helps you make decisions (Should we hire? Can we afford this?)
- Gives you a baseline to measure against
- Tells a coherent story to investors or your board
- Updates easily when assumptions change
An overly precise forecast creates false confidence. Better to be roughly right than precisely wrong.
Common Mistakes to Avoid
1. Hockey Stick Syndrome
Yes, you’re optimistic about growth. But “we’ll 10x next year” isn’t a forecast—it’s a wish. Ground your growth in realistic drivers.
2. Forgetting About Cash
Profit ≠ Cash. You can be “profitable” and still run out of money if customers pay late or you have to buy inventory upfront.
3. Set It and Forget It
A forecast is a living document. Compare actuals to plan monthly. Update assumptions quarterly. The goal is to get better at predicting, not to be right the first time.
4. Over-Engineering
You don’t need 47 tabs and 10,000 formulas. Start simple. Add complexity only when it adds insight.
Getting Help
If you’re still stuck, you have options:
- Fractional CFO: Part-time finance leadership, often $2-5K/month
- Financial modeling consultants: One-time model builds, $5-15K
- Tools like Profitual: Software that guides you through the process
The right choice depends on your stage, budget, and how much you want to learn vs. delegate.
You’ve Got This
The founders who succeed at financial planning aren’t the ones with MBAs. They’re the ones who take the time to understand their business drivers and aren’t afraid to put numbers to their assumptions.
Start simple. Update often. Get better over time.
Profitual was built for founders who think in business terms, not finance terms. Build your forecast using building blocks you already understand. Start free.