Financial Projections

Create a comprehensive 3-5 year financial model with revenue projections, cost structure, headcount planning, cash flow analysis, and three-scenario modeling (conservative, base, optimistic) for startup financial planning and fundraising.

Use this skill when

• Working on financial projections tasks or workflows
• Needing guidance, best practices, or checklists for financial projections

Do not use this skill when

• The task is unrelated to financial projections
• You need a different domain or tool outside this scope

Instructions

• Clarify goals, constraints, and required inputs.
• Apply relevant best practices and validate outcomes.
• Provide actionable steps and verification.
• If detailed examples are required, open resources/implementation-playbook.md.

What This Command Does

This command builds a complete financial model including:

1. Cohort-based revenue projections
2. Detailed cost structure (COGS, S&M, R&D, G&A)
3. Headcount planning by role
4. Monthly cash flow analysis
5. Key metrics (CAC, LTV, burn rate, runway)
6. Three-scenario analysis

Instructions for Claude

When this command is invoked, follow these steps:

Step 1: Gather Model Inputs

Ask the user for essential information:

Business Model:

• Revenue model (SaaS, marketplace, transaction, etc.)
• Pricing structure (tiers, average price)
• Target customer segments

Starting Point:

• Current MRR/ARR (if any)
• Current customer count
• Current team size
• Current cash balance

Growth Assumptions:

• Expected monthly customer acquisition
• Customer retention/churn rate
• Average contract value (ACV)
• Sales cycle length

Cost Assumptions:

• Gross margin or COGS %
• S&M budget or CAC target
• Current burn rate (if applicable)

Funding:

• Planned fundraising (amount, timing)
• Pre/post-money valuation

Step 2: Activate startup-financial-modeling Skill

The startup-financial-modeling skill provides frameworks. Reference it for:

• Revenue modeling approaches
• Cost structure templates
• Headcount planning guidance
• Scenario analysis methods

Step 3: Build Revenue Model

Use Cohort-Based Approach:

For each month, track:

1. New customers acquired
2. Existing customers retained (apply churn)
3. Revenue per cohort (customers × ARPU)
4. Expansion revenue (upsells)

Formula:

MRR (Month N) = Σ across all cohorts:
  (Cohort Size × Retention Rate × ARPU) + Expansion

Project:

• Monthly detail for Year 1-2
• Quarterly detail for Year 3
• Annual for Years 4-5

Step 4: Model Cost Structure

Break down operating expenses:

1. Cost of Goods Sold (COGS)

• Hosting/infrastructure (% of revenue or fixed)
• Payment processing (% of revenue)
• Variable customer support
• Third-party services

Target gross margin:

• SaaS: 75-85%
• Marketplace: 60-70%
• E-commerce: 40-60%

2. Sales & Marketing (S&M)

• Sales team compensation
• Marketing programs
• Tools and software
• Target: 40-60% of revenue (early stage)

3. Research & Development (R&D)

• Engineering team
• Product management
• Design
• Target: 30-40% of revenue

4. General & Administrative (G&A)

• Executive team
• Finance, legal, HR
• Office and facilities
• Target: 15-25% of revenue

Step 5: Plan Headcount

Create role-by-role hiring plan:

Reference team-composition-analysis skill for:

• Roles by stage
• Compensation benchmarks
• Hiring velocity assumptions

For each role:

• Title and department
• Start date (month/quarter)
• Base salary
• Fully-loaded cost (salary × 1.3-1.4)
• Equity grant

Track departmental ratios:

• Engineering: 40-50% of team
• Sales & Marketing: 25-35%
• G&A: 10-15%
• Product/CS: 10-15%

Step 6: Calculate Cash Flow

Monthly cash flow projection:

Beginning Cash Balance
+ Cash Collected (revenue, consider payment terms)
- Operating Expenses
- CapEx
= Ending Cash Balance

Monthly Burn = Revenue - Expenses (if negative)
Runway = Cash Balance / Monthly Burn Rate

Include Funding Events:

• Timing of raises
• Amount raised
• Use of proceeds
• Impact on cash balance

Step 7: Compute Key Metrics

Calculate monthly/quarterly:

Unit Economics:

• CAC (S&M spend / new customers)
• LTV (ARPU × margin% / churn rate)
• LTV:CAC ratio (target > 3.0)
• CAC payback period (target < 18 months)

Efficiency Metrics:

• Burn multiple (net burn / net new ARR) - target < 2.0
• Magic number (net new ARR / S&M spend) - target > 0.5
• Rule of 40 (growth% + margin%) - target > 40%

Cash Metrics:

• Monthly burn rate
• Runway in months
• Cash efficiency

Step 8: Create Three Scenarios

Build conservative, base, and optimistic projections:

Conservative (P10):

• New customers: -30% vs. base
• Churn: +20% vs. base
• Pricing: -15% vs. base
• CAC: +25% vs. base

Base (P50):

• Most likely assumptions
• Primary planning scenario

Optimistic (P90):

• New customers: +30% vs. base
• Churn: -20% vs. base
• Pricing: +15% vs. base
• CAC: -25% vs. bas