Excel financial model to share - no strings attached

I'm not a machinist, but rather a consulting dork who really digs machine shops and one day aspires to open his own.

I recently helped put together a financial model for a machine shop owner & friend as a part of his business plan to get a loan. He found the model super useful so I'm keen on passing it along.

We all know that the only thing that's for sure about a financial model is it's wrong, but tinkering with the assumptions and scenarios helped him nail down capital constraints and where best to allocate limited resources. Not to mention the lenders were impressed that he had demonstrated a thought-out plan, even if it was simply a plan to deviate from.

I'm happy to email the fully-functional .xlsx version of the model. Free and no strings attached. My only ask is feedback on how I can make the next version even more useful for the machine shop industry. Y'all don't nearly get the credit you deserve.

Post a link.

No need for us all to email you

Steven-Canada said:

Post a link.

No need for us all to email you

Click to expand...

That's a much better suggestion, thank you.

Below is a shareable Google Drive link. Anyone with the link should be able to download the model. Please let me know if there are issues.

XYZ Manufacturing financial model - Google Drive

Hope this helps. Any and all feedback welcome.

Thanks for the share, That's a well thought out spreadsheet clean cells without a lot of cosmetics....

I think you've done a good job of it. As you point out it really is a matter what the assumptions are. Its amazing the human condition though, do enough excel acrobatics and people believe in the model.....perhaps its a bit 1) bothering to make the darn thing in first place is indicative of how hard one is willing to work and 2) it shows the entrepreneur has thought through variables and assumptions and 3) has some financial sophistication.

When when I was doing raises for people I built on over the years what became an enormously complex model letting you plug dozens of different types of financing, and many different revenue streams. It also allowed inputting of previous years financials and extrapolated for missing months (i.e. between last statement and closing). I did everything, and you could use for M&A, valuation, financing or just business planning. Its was too gangly an octopus to ever finish (seems every file needed some customizing), but all and all it was an awesome tool. Often the value was as much for salesmanship as anything else....make it really complex and think good god, if this process is that difficult I better have someone like that in my corner. Which in a way is BS, but it also the currently.....the capital wants you to demonstrate a bit of financial sophistication...and when you raising money you selling...selling the capital on you and your business. Its like making up a slick brochure lol

One big thing though, is it would better to have monthly and annual statements. I always did it all monthly and then calculated annuals. The reason is many will ask for it, and it looks a more professional if in the package you've included a monthly proforma for the first year. The saying is true - wanna make god laugh, tell him your plans....but hopefully you have some visibility a year out and can present the granularity of monthly statements. Its easily make a profit during a time period but still go broke within the time frame because of cash flow variances

One small thing I saw.... the next 12 months LTD payments should be a current liability. Don't know that anyone will care, but you always want to the model as bullet proof against critics as possible

good job and thanks sharing

Mcgyver said:

One small thing I saw.... the next 12 months LTD payments should be a current liability. Don't know that anyone will care, but you always want to the model as bullet proof against critics as possible

good job and thanks sharing

Click to expand...

Good catch, will update for the next version. My goal is to make it more "operational" instead of a dog-and-pony show for lenders. My buddy has been using it for a few months, so I'm hoping to incorporate some of his use-case feedback into the next version, which I'll happily share as well.

I agree with you that sometimes the model is mostly for show. That's one of the reasons I wanted to provide it to the PM community - saves them building a model from the ground up if they (only) needed something to show.

Thank you for all the feedback!

As a garage warrior with zero business experience, this is appreciated.

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For those who are looking for more options: here's a link to a great resource with over 120 financial models to download for free. Don't even need to enter in personal info to download, which is a pet peeve of mine.

Over 100 Free Excel Spreadsheets - Excellence in Financial Management

Some are basic, some are more nuanced. The options can be a bit overwhelming, but there's a lot of good stuff on there. The few I dug into were good foundational pieces to experiment with and customize.

In my country, every quarter is considered a hot overhead. "Overhead costs are additional costs that are not directly related to the main production, which are not included in the remuneration of the main personnel and in the cost of raw materials."
They include all costs not directly related to the cost of production. For example - lighting, water, heating, land taxes, garden maintenance, travel to exhibitions, consultations, costs for sales managers, engineers, designers and so on.
Next, we determine how much money was spent on salaries for the main workers - a CNC operator, a bending machine operator, a welder, a slinger, and so on. We divide the overhead costs by the wage bill and multiply by 100, so we get the overhead costs as a percentage and can monitor our efficiency.
For example, here are the indicators of the ineffective economy of the former USSR - overhead factories of the workshop that produced wheelsets for diesel locomotives - 600% (about that). Tool shop overhead - 1000%.
In Ukraine and Russia, those companies with overhead costs in the region of 400% are effective.
I did not find such a column as "overhead" in your file. It seems to me that this is a very important indicator when planning production, the investor will see at what volume of production his overhead costs will be at a competitive level.
I may be wrong and you have a different name for this parameter

ArtemLoco said:

I did not find such a column as "overhead" in your file. It seems to me that this is a very important indicator when planning production, the investor will see at what volume of production his overhead costs will be at a competitive level.
I may be wrong and you have a different name for this parameter

Click to expand...

Overhead isn't explicitly summarize in the model, but is accounted for in different parts depending on the type of expense. I tried to generally adhere to GAAP financing standards, especially for general presentation of the three financial statements (income statement, balance sheet, cash flow). There's some significant overlap with IFRS as well.

For example, you'll see a "Manufacturing Overhead" (Line 31) in the COGS tab that estimates manufacturing overhead as a percentage of revenue. The logic being the more you manufacture (and sell), the higher your manufacturing overhead.

Additional overhead costs like rent, legal, accounting, advertising, and other general expenses are accounted for in the SG&A tab. Many overhead costs are also estimated as percentages of revenue since they go up the more you manufacture and sell.

These are just planning measures to make sure everything is included in the financial statements, but users can modify the model to include fine-grained overhead costs. It may be more time-efficient to estimate the percentage of revenue for your different overhead costs and use those in the model for planning purposes.

Hope this helps!