A financial model captures the vision of the business in numbers, it captures how the business creates its services and products, how customers find and use the services and products and how those services and products create revenue and costs. The end result is a set of operational metrics and financial statements that tell a credible story about what the business could become, it helps better strategic decision making explaining how much money the business needs and when, and it enables the business owners to experiment with different scenarios. A financial model also enables the business to tell a credible story to potential investors, a story about the opportunity, capital requirements, resource requirements, development and manufacturing costs, customer acquisition costs, how long it will take to acquire customers, growth and profits. What a financial model is not is a top down estimate of where the business will be, no one believes a model that is built to capturing “5% of the target market”.
Building a financial model is typically not a strength for a professional accountancy firm that can audit and document historic financial statements, rather what the business needs is someone who has both the experience of growing and running a similar company, corporate finance experience and the analytical mindset to be able to help build the assumptions and model the business activities. Through its strategy service Orsatech has built hundreds of bespoke built five or ten year Excel® financial models using IFRS for SME or US GAAP accounting standards with standard investor colour coding and best practise to help traceability. Our models frequently illustrate the performance of marketing channels and customer acquisition costs as well as cash requirements, revenues and profits for the business and how that scales and grows over time. They frequently incorporate sensitivity analysis and financial analysis of return on investment and can also model production and inventory as required. We have helped hundreds of businesses guiding them through the indecisiveness of setting assumptions and projections and enabling them to give confidence to investors.
Errors in financial models, or lack of key information can cause uncertainty and risks in transactions. Orsatech provides services to audit existing financial models, to check for consistency and errors in formulae.
Orsatech has deep experience in understanding social problems and delivering both profit and social impact. Our award winning team has successfully deployed REDF and NEF Social Return on Investment (SROI) models to qualify and quantify social impact drivers and metrics to better understand the business, improve social impact and through better understanding of the business drivers grow profits. We have helped businesses achieve 5* GIIRS company impact ratings.