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Use this skill when the user says 'financial model', 'projections', 'revenue forecast', 'unit economics', 'break-even', 'cash flow', or mentions MRR, churn, CAC, LTV, or runway. Builds monthly projections with scenario modeling. Do NOT use for pricing strategy or invoice generation.
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# Financial Model — Building financial projections... *Builds monthly revenue projections, expense forecasts, unit economics (CAC, LTV, payback), break-even analysis, cash flow tracking, and scenario modeling (best/base/worst).* ## Activation When this skill activates, output: `Financial Model — Building financial projections...` Then execute the protocol below. ## Context Guard | Context | Status | |---------|--------| | User says "financial model", "projections", "revenue forecast" | ACTIVE | | User mentions MRR, churn, CAC, LTV, runway, or break-even | ACTIVE | | User wants to forecast revenue, expenses, or cash flow | ACTIVE | | User wants to set pricing tiers | DORMANT — use Pricing Strategy | | User wants to generate an invoice | DORMANT — use Invoice Generator | ## Common Mistakes | Mistake | Why It's Wrong | |---------|---------------| | "Hockey stick revenue" | Realistic projections beat optimistic fantasies. Start conservative, model scenarios. | | "Forget to model churn" | SaaS without churn modeling is fiction. Even 3% monthly churn compounds fast. | | "Revenue only, no expenses" | Revenue without expenses is a dream. Model all costs to see actual profitability. | | "One scenario only" | A single forecast is a guess. Model best/base/worst to understand the range. | | "Skip unit economics" | If CAC > LTV, growth loses money. Unit economics tell you if the business model works. | ## Protocol ### Step 1: Gather Business Data If the user hasn't provided details, ask: > 1. **Business model** — SaaS, e-commerce, service, marketplace, or other? > 2. **Revenue streams** — subscriptions, one-time sales, services, ads? > 3. **Current numbers** — existing revenue, customers, growth rate? > 4. **Pricing** — price points, tiers, average revenue per user? > 5. **Costs** — known fixed and variable costs? > 6. **Funding** — bootstrapped or funded? Current cash balance? ### Step 2: Revenue Model **SaaS / Subscription revenue:** ``` Month N Revenue = (Previous customers - Churned + New) × ARPU Where: - Previous customers: end of prior month - Churned: Previous × monthly churn rate - New: Acquired through marketing/sales - ARPU: Average Revenue Per User (monthly) ``` | Month | Starting | New | Churned | Ending | MRR | ARR | |-------|---------|-----|---------|--------|-----|-----| | 1 | 0 | [X] | 0 | [X] | $[X] | — | | 2 | [X] | [X] | [X] | [X] | $[X] | — | | 3 | [X] | [X] | [X] | [X] | $[X] | — | | ... | | | | | | | | 12 | [X] | [X] | [X] | [X] | $[X] | $[X] | **E-commerce / Transaction revenue:** ``` Monthly Revenue = Visitors × Conversion Rate × Average Order Value Where: - Visitors: Monthly unique visitors (organic + paid) - Conversion Rate: % of visitors who purchase (target: 1-3%) - AOV: Average Order Value ``` **Service revenue:** ``` Monthly Revenue = Active Clients × Average Monthly Retainer + Project Revenue (one-time) ``` ### Step 3: Unit Economics **Key SaaS metrics:** ``` CAC (Customer Acquisition Cost): = Total Sales & Marketing Spend ÷ New Customers Acquired Target: recover within 12 months LTV (Customer Lifetime Value): = ARPU × Gross Margin% × (1 ÷ Monthly Churn Rate) Example: $50 × 80% × (1 ÷ 0.05) = $800 LTV:CAC Ratio: = LTV ÷ CAC Target: > 3:1 (every $1 spent acquires $3+ in lifetime value) Payback Period: = CAC ÷ (ARPU × Gross Margin%) Example: $200 ÷ ($50 × 80%) = 5 months Target: < 12 months ``` **Unit economics table:** | Metric | Value | Target | Status | |--------|-------|--------|--------| | ARPU (monthly) | $[X] | — | — | | Monthly churn rate | [X]% | <5% | [OK / At Risk] | | CAC | $[X] | — | — | | LTV | $[X] | >3× CAC | [OK / At Risk] | | LTV:CAC ratio | [X]:1 | >3:1 | [OK / At Risk] | | Payback period | [X] months | <12 months | [OK / At Risk] | | Gross margin | [X]% | >70% (SaaS) | [OK / At Risk] | ### Step 4: Expense Forecast **Fixed costs (monthly):** | Category | Monthly Cost | Annual Cost | Notes | |----------|-------------|-------------|-------| | Salaries & wages | $[X] | $[X] | [Headcount × avg salary ÷ 12] | | Office / co-working | $[X] | $[X] | | | Software & tools | $[X] | $[X] | [List: hosting, SaaS tools, etc.] | | Insurance | $[X] | $[X] | | | Legal & accounting | $[X] | $[X] | | | **Total fixed** | **$[X]** | **$[X]** | | **Variable costs (scales with revenue):** | Category | Cost Basis | Monthly Estimate | Notes | |----------|-----------|-----------------|-------| | Hosting / infrastructure | [X]% of revenue | $[X] | Scales with users | | Payment processing | 2.9% + $0.30/txn | $[X] | Stripe standard rate | | Customer support | $[X] per 100 customers | $[X] | | | Sales commissions | [X]% of new revenue | $[X] | | | Marketing spend | $[X] fixed + [X]% of revenue | $[X] | | | **Total variable** | | **$[X]** | | **Total monthly burn:** ``` Burn Rate = Fixed Costs + Variable Costs - Revenue Runway = Cash Balance ÷ Monthly Burn Rate ``` ### Step 5: Break-Even Analysis ``` Break-Even Point (customers): = Fixed Costs ÷ (ARPU - Variable Cost per Customer) Break-Even Point (revenue): = Fixed Costs ÷ Gross Margin% Example: Fixed costs: $10,000/month ARPU: $50/month Variable cost per customer: $10/month Break-even: $10,000 ÷ ($50 - $10) = 250 customers ``` **Monthly P&L projection:** | | Mo 1 | Mo 3 | Mo 6 | Mo 12 | |---|---|---|---|---| | **Revenue** | $[X] | $[X] | $[X] | $[X] | | COGS / variable costs | ($[X]) | ($[X]) | ($[X]) | ($[X]) | | **Gross profit** | $[X] | $[X] | $[X] | $[X] | | Gross margin % | [X]% | [X]% | [X]% | [X]% | | Operating expenses | ($[X]) | ($[X]) | ($[X]) | ($[X]) | | **Net income** | ($[X]) | ($[X]) | $[X] | $[X] | | Cumulative cash | $[X] | $[X] | $[X] | $[X] | ### Step 6: Scenario Modeling **Three scenarios:** | Assumption | Worst Case | Base Case | Best Case | |-----------|-----------|----------|----------| | Monthly new customers | [X] | [X] | [X] | | Monthly churn rate | [X]% | [X]% | [X]% | | ARPU | $[X] | $[X] | $[X] | | Marketing spend | $[X] | $[X] | $[X] | | Hiring timeline | Delayed | On time | Accelerated | **12-month outcome by scenario:** | Metric | Worst | Base | Best | |--------|-------|------|------| | Customers (Mo 12) | [X] | [X] | [X] | | MRR (Mo 12) | $[X] | $[X] | $[X] | | ARR (Mo 12) | $[X] | $[X] | $[X] | | Monthly burn (avg) | $[X] | $[X] | $[X] | | Break-even month | Mo [X] | Mo [X] | Mo [X] | | Runway remaining | [X] months | [X] months | [X] months | | Cash needed | $[X] | $[X] | $0 | ### Step 7: Cash Flow Summary **Monthly cash flow:** | Month | Revenue | Expenses | Net | Cumulative | |-------|---------|----------|-----|------------| | 1 | $[X] | $[X] | ($[X]) | $[X] | | 2 | $[X] | $[X] | ($[X]) | $[X] | | 3 | $[X] | $[X] | ($[X]) | $[X] | | ... | | | | | | 12 | $[X] | $[X] | $[X] | $[X] | **Key dates:** - **Cash-flow positive:** Month [X] (when monthly net turns positive) - **Break-even (cumulative):** Month [X] (when cumulative losses are recovered) - **Runway exhausted:** Month [X] at current burn (worst case) ## Output Format ```markdown # Financial Model — [Business Name] ## Revenue Model [From Step 2 — monthly revenue projections] ## Unit Economics [From Step 3 — CAC, LTV, payback, margins] ## Expense Forecast [From Step 4 — fixed + variable costs] ## Break-Even Analysis [From Step 5 — break-even point + P&L] ## Scenario Analysis [From Step 6 — worst/base/best] ## Cash Flow [From Step 7 — monthly cash flow + key dates] ## Key Assumptions [List every assumption with the value used] ``` ## Completion ``` Financial Model — Complete! Business model: [Type] 12-month ARR (base case): $[X] Break-even: Month [X] LTV:CAC ratio: [X]:1 Runway: [X] months Scenarios modeled: 3 (worst/base/best) Next steps: 1. Validate assumptions with real data (update monthly) 2. Track actual vs projected monthly 3. If LTV:CAC < 3:1, reduce CAC or increase ARPU before scaling 4. If runway < 6 months, raise capital or cut burn 5. Update the model quarterly with actuals ``` ## Level History - **Lv.1** — Base: Revenue models (SaaS, e-commerce, service), unit economics (CAC, LTV, payback, LTV:CAC, gross margin), expense forecast (fixed + variable), break-even analysis with P&L projection, 3-scenario modeling (worst/base/best), cash flow timeline with key dates (cash-positive, break-even, runway). (Origin: MemStack Pro v3.2, Mar 2026)
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Use this skill when the user says 'financial model', 'projections', 'revenue forecast', 'unit economics', 'break-even', 'cash flow', or mentions MRR, churn, CAC, LTV, or runway. Builds monthly projections with scenario modeling. Do NOT use for pricing strategy or invoice generation.
# Financial Model — Building financial projections... *Builds monthly revenue projections, expense forecasts, unit economics (CAC, LTV, payback), break-even analysis, cash flow tracking, and scenario modeling (best/base/worst).* ## Activation When this skill activates, output: `Financial Model — Building financial projections...` Then execute the protocol below. ## Context Guard | Context | Status | |---------|--------| | User says "financial model", "projections", "revenue forecast" | ACTIVE | | User mentions MRR, churn, CAC, LTV, runway, or break-even | ACTIVE | | User wants to forecast revenue, expenses, or cash flow | ACTIVE | | User wants to set pricing tiers | DORMANT — use Pricing Strategy | | User wants to generate an invoice | DORMANT — use Invoice Generator | ## Common Mistakes | Mistake | Why It's Wrong | |---------|---------------| | "Hockey stick revenue" | Realistic projections beat optimistic fantasies. Start conservative, model scenarios. | | "Forget to model churn" | SaaS without churn modeling is fiction. Even 3% monthly churn compounds fast. | | "Revenue only, no expenses" | Revenue without expenses is a dream. Model all costs to see actual profitability. | | "One scenario only" | A single forecast is a guess. Model best/base/worst to understand the range. | | "Skip unit economics" | If CAC > LTV, growth loses money. Unit economics tell you if the business model works. | ## Protocol ### Step 1: Gather Business Data If the user hasn't provided details, ask: > 1. **Business model** — SaaS, e-commerce, service, marketplace, or other? > 2. **Revenue streams** — subscriptions, one-time sales, services, ads? > 3. **Current numbers** — existing revenue, customers, growth rate? > 4. **Pricing** — price points, tiers, average revenue per user? > 5. **Costs** — known fixed and variable costs? > 6. **Funding** — bootstrapped or funded? Current cash balance? ### Step 2: Revenue Model **SaaS / Subscription revenue:** ``` Month N Revenue = (Previous customers - Churned + New) × ARPU Where: - Previous customers: end of prior month - Churned: Previous × monthly churn rate - New: Acquired through marketing/sales - ARPU: Average Revenue Per User (monthly) ``` | Month | Starting | New | Churned | Ending | MRR | ARR | |-------|---------|-----|---------|--------|-----|-----| | 1 | 0 | [X] | 0 | [X] | $[X] | — | | 2 | [X] | [X] | [X] | [X] | $[X] | — | | 3 | [X] | [X] | [X] | [X] | $[X] | — | | ... | | | | | | | | 12 | [X] | [X] | [X] | [X] | $[X] | $[X] | **E-commerce / Transaction revenue:** ``` Monthly Revenue = Visitors × Conversion Rate × Average Order Value Where: - Visitors: Monthly unique visitors (organic + paid) - Conversion Rate: % of visitors who purchase (target: 1-3%) - AOV: Average Order Value ``` **Service revenue:** ``` Monthly Revenue = Active Clients × Average Monthly Retainer + Project Revenue (one-time) ``` ### Step 3: Unit Economics **Key SaaS metrics:** ``` CAC (Customer Acquisition Cost): = Total Sales & Marketing Spend ÷ New Customers Acquired Target: recover within 12 months LTV (Customer Lifetime Value): = ARPU × Gross Margin% × (1 ÷ Monthly Churn Rate) Example: $50 × 80% × (1 ÷ 0.05) = $800 LTV:CAC Ratio: = LTV ÷ CAC Target: > 3:1 (every $1 spent acquires $3+ in lifetime value) Payback Period: = CAC ÷ (ARPU × Gross Margin%) Example: $200 ÷ ($50 × 80%) = 5 months Target: < 12 months ``` **Unit economics table:** | Metric | Value | Target | Status | |--------|-------|--------|--------| | ARPU (monthly) | $[X] | — | — | | Monthly churn rate | [X]% | <5% | [OK / At Risk] | | CAC | $[X] | — | — | | LTV | $[X] | >3× CAC | [OK / At Risk] | | LTV:CAC ratio | [X]:1 | >3:1 | [OK / At Risk] | | Payback period | [X] months | <12 months | [OK / At Risk] | | Gross margin | [X]% | >70% (SaaS) | [OK / At Risk] | ### Step 4: Expense Forecast **Fixed costs (monthly):** | Category | Monthly Cost | Annual Cost | Notes | |----------|-------------|-------------|-------| | Salaries & wages | $[X] | $[X] | [Headcount × avg salary ÷ 12] | | Office / co-working | $[X] | $[X] | | | Software & tools | $[X] | $[X] | [List: hosting, SaaS tools, etc.] | | Insurance | $[X] | $[X] | | | Legal & accounting | $[X] | $[X] | | | **Total fixed** | **$[X]** | **$[X]** | | **Variable costs (scales with revenue):** | Category | Cost Basis | Monthly Estimate | Notes | |----------|-----------|-----------------|-------| | Hosting / infrastructure | [X]% of revenue | $[X] | Scales with users | | Payment processing | 2.9% + $0.30/txn | $[X] | Stripe standard rate | | Customer support | $[X] per 100 customers | $[X] | | | Sales commissions | [X]% of new revenue | $[X] | | | Marketing spend | $[X] fixed + [X]% of revenue | $[X] | | | **Total variable** | | **$[X]** | | **Total monthly burn:** ``` Burn Rate = Fixed Costs + Variable Costs - Revenue Runway = Cash Balance ÷ Monthly Burn Rate ``` ### Step 5: Break-Even Analysis ``` Break-Even Point (customers): = Fixed Costs ÷ (ARPU - Variable Cost per Customer) Break-Even Point (revenue): = Fixed Costs ÷ Gross Margin% Example: Fixed costs: $10,000/month ARPU: $50/month Variable cost per customer: $10/month Break-even: $10,000 ÷ ($50 - $10) = 250 customers ``` **Monthly P&L projection:** | | Mo 1 | Mo 3 | Mo 6 | Mo 12 | |---|---|---|---|---| | **Revenue** | $[X] | $[X] | $[X] | $[X] | | COGS / variable costs | ($[X]) | ($[X]) | ($[X]) | ($[X]) | | **Gross profit** | $[X] | $[X] | $[X] | $[X] | | Gross margin % | [X]% | [X]% | [X]% | [X]% | | Operating expenses | ($[X]) | ($[X]) | ($[X]) | ($[X]) | | **Net income** | ($[X]) | ($[X]) | $[X] | $[X] | | Cumulative cash | $[X] | $[X] | $[X] | $[X] | ### Step 6: Scenario Modeling **Three scenarios:** | Assumption | Worst Case | Base Case | Best Case | |-----------|-----------|----------|----------| | Monthly new customers | [X] | [X] | [X] | | Monthly churn rate | [X]% | [X]% | [X]% | | ARPU | $[X] | $[X] | $[X] | | Marketing spend | $[X] | $[X] | $[X] | | Hiring timeline | Delayed | On time | Accelerated | **12-month outcome by scenario:** | Metric | Worst | Base | Best | |--------|-------|------|------| | Customers (Mo 12) | [X] | [X] | [X] | | MRR (Mo 12) | $[X] | $[X] | $[X] | | ARR (Mo 12) | $[X] | $[X] | $[X] | | Monthly burn (avg) | $[X] | $[X] | $[X] | | Break-even month | Mo [X] | Mo [X] | Mo [X] | | Runway remaining | [X] months | [X] months | [X] months | | Cash needed | $[X] | $[X] | $0 | ### Step 7: Cash Flow Summary **Monthly cash flow:** | Month | Revenue | Expenses | Net | Cumulative | |-------|---------|----------|-----|------------| | 1 | $[X] | $[X] | ($[X]) | $[X] | | 2 | $[X] | $[X] | ($[X]) | $[X] | | 3 | $[X] | $[X] | ($[X]) | $[X] | | ... | | | | | | 12 | $[X] | $[X] | $[X] | $[X] | **Key dates:** - **Cash-flow positive:** Month [X] (when monthly net turns positive) - **Break-even (cumulative):** Month [X] (when cumulative losses are recovered) - **Runway exhausted:** Month [X] at current burn (worst case) ## Output Format ```markdown # Financial Model — [Business Name] ## Revenue Model [From Step 2 — monthly revenue projections] ## Unit Economics [From Step 3 — CAC, LTV, payback, margins] ## Expense Forecast [From Step 4 — fixed + variable costs] ## Break-Even Analysis [From Step 5 — break-even point + P&L] ## Scenario Analysis [From Step 6 — worst/base/best] ## Cash Flow [From Step 7 — monthly cash flow + key dates] ## Key Assumptions [List every assumption with the value used] ``` ## Completion ``` Financial Model — Complete! Business model: [Type] 12-month ARR (base case): $[X] Break-even: Month [X] LTV:CAC ratio: [X]:1 Runway: [X] months Scenarios modeled: 3 (worst/base/best) Next steps: 1. Validate assumptions with real data (update monthly) 2. Track actual vs projected monthly 3. If LTV:CAC < 3:1, reduce CAC or increase ARPU before scaling 4. If runway < 6 months, raise capital or cut burn 5. Update the model quarterly with actuals ``` ## Level History - **Lv.1** — Base: Revenue models (SaaS, e-commerce, service), unit economics (CAC, LTV, payback, LTV:CAC, gross margin), expense forecast (fixed + variable), break-even analysis with P&L projection, 3-scenario modeling (worst/base/best), cash flow timeline with key dates (cash-positive, break-even, runway). (Origin: MemStack Pro v3.2, Mar 2026)