MODEL OVERVIEW
 
A Software Development business specialises in designing, building, and maintaining custom software solutions tailored to meet the unique needs of clients across various industries. It offers services such as web and mobile app development, enterprise software systems, software integration, and ongoing technical support. Software business may also develop and market subscription-based software products (SaaS), providing scalable, cloud-based tools that generate recurring revenue and deliver continuous value through regular updates, support, and feature enhancements.
 
Our highly versatile and user-friendly Excel model allows for the preparation of a of 5-year rolling 3 statement (Income Statement, Balance Sheet and Cash flow Statement) financial projection with a monthly timeline for a startup or existing software development business offering ongoing and one-off services and/or subscription-based products.
The model allows the user to model up to 20 categories software services split into recurring and one-off services and 8 different subscription tiers/products each with their own mix of direct expense requirements. The model also includes staff costs, marketing costs, other operating costs, fixed assets, borrowings, sales tax, corporate tax and dividend distributions.
 
KEY OUTPUTS
 
Projected full financial statements (Income Statement, Balance Sheet and Cash flow Statement) presented on a monthly basis across 5 years and summarised on an annual basis.
Dashboard with:
Summarised projected Income Statement and Balance Sheet;
Compounded Annual Growth Rate (CAGR) for each summarised income statement and balance sheet line item;
List of key subscription metrics including Average Revenue Per Customer (ARPU), Monthly Recurring Revenue (MRR), Annual Recurring Revenue (ARR), Churn Rate, Customer Lifetime Value (LTV) and Customer Acquisition Cost (CAC);
Other key ratios including average revenue growth, average profit margins, average return on assets and equity and average debt to equity ratio;
Tables and Bar charts summarising revenue, direct expenses and gross profit by service and subscription-product;
Charts and graphs showing: cash balance by month, free cash flow generation, cash flow statement breakdown, profit margins, income statement breakdown, net cash vs net income, working capital, valuation and capital structure.
Discounted cash flow valuation using the projected cash flow output.
Breakeven analysis
 
KEY INPUTS
 
Setup Inputs:
Name of business;
Currency;
First projection year and month;
Naming for ongoing services, oneoff services, subscription tiers, direct expenses, staff costs, marketing costs, other operating costs, fixed assets and borrowings;
 
Actuals Inputs:
Opening balance sheet (for existing businesses);
Income Statement actuals (for trend analysis);
 
Projection Inputs:
Service revenue inputs including volume of services, rate per service, direct staff hours per service and assumptions on settlement of sales receipts;
Subscriptionbased product assumptions including new subscribers, churn rates, subscription rates and free trial to paid user conversion ratio;
Direct expenses calculated based on number of users/services or amount per annum;
Staff cost inputs including staff numbers, average salary per full time position, average employer’s social security percentage of salary, average annual bonus and bonus payment months.
Other costs inputs including marketing costs and other operating costs;
Sales and corporate tax inputs including rate and payment periods;
Dividend inputs including amount (percentage of retained earnings) and frequency;
Fixed assets including addition amounts and useful life;
Borrowings including addition amounts, interest rate and maturity date;
Share capital additions;
Discount rate inputs (for valuation calculation).
 
KEY FEATURES
 
The model contains a flexible timeline that allows for a mix of actual and forecast periods across a 5-year period. This allows projections to be easily rolled forward as forecast periods become actual period;
Timeline is split on a monthly basis and summarised on an annual basis; 
The model is not password protected and can be modified as required following download;
The model allows for the following number of underlying categories for each line item (these can be easily expanded if required):
Services – 20 categories split into recurring and one-off services;
Subscription tiers/products – 10 types;
Direct expenses – 15 categories (5 for each service type and subscription-product);
Staff costs – 10 categories;
Marketing costs – 5 categories;
Other expenses – 15 categories;
Fixed assets – 5 categories;
Borrowings – 3 facilities
The model computes direct staff utilisation and direct expenses by service type with gross profit by service type presented in the dashboard;
Apart from projecting revenue and costs the model includes the functionality to model accounts receivable, fixed assets, borrowings (amortising), dividends and corporate tax;
Business name, currency, starting projection period are fully customisable;
Revenue, cost and fixed asset descriptions are fully customisable;
The model included an integrated discounted cash flow valuation using the projected cash flow outputs;
The model includes instructions, line-item explanations, checks and input validations to help ensure input fields are populated accurately; 
The model includes a checks dashboard which summarises all the checks included in the various tabs making it easier to identify any errors. 
 
SUPPORT / MODIFICATIONS
 
If you require any be-spoke modifications or support, we are more than happy to assist. Please send us a message below or contact us on hello@useprojectify.com