How Do I Build a Financial Model That Supports My Startup’s Growth?

Key Takeaways:

• Use industry KPIs and historical company trends to ground your growth forecast.
• Focus on realistic revenue targets, not just investor-pleasing numbers.
• A dynamic model makes scenario planning easy and actionable.
• Align headcount plans with productivity expectations and growth triggers.
• Benchmark your path to scalability using cost and margin targets.

In Part 1 of this series, I covered how to build a strong financial model from the ground up. In this article, I’m focusing on growth—how to forecast revenue, headcount, and performance in a way that supports day-to-day operations and earns investor confidence. These are the questions I help founders answer every day.

How do I build a revenue forecast that’s realistic but still compelling?

Start with data, not guesses.

Begin with the fundamentals: historical performance and industry benchmarks. If I’m building a model for a client today, I’ll start with their data from the beginning of the previous year. This helps identify trends, seasonality, and baseline growth patterns.

From there, I layer in relevant benchmarks—things like CAC, churn, retention, and average growth rates for similar companies. That might mean looking at what a healthy SaaS company should be doing in year one or two, or how similar startups have scaled in this market.

The best forecasts blend real data with realistic targets. Founders should be able to say, “Here’s what we’ve done, here’s where the industry is, and here’s a grounded plan to grow.”

What mistakes do early-stage founders make in revenue modeling?

Overestimating growth and ignoring constraints.

A common misstep founders make when modeling revenue is starting with industry benchmarks and backing into the model from there. For example, you might read that a SaaS startup should grow 200% year-over-year and plug that into your model—even if it doesn’t reflect your team, your resources, or your current pipeline.

It’s better to model growth based on what’s realistic for your company, and then use benchmarks as a comparison point. That way, you can build a story you believe in. If you raise money on a promise of $12M in revenue and only reach $4M, the damage to investor trust is hard to repair.

Start with your constraints. What would need to be true to hit the numbers you’re forecasting? That mindset leads to stronger models and better outcomes.

What if I don’t have much historical data for my model?

Lean on expert pattern recognition.

If you’re still early and don’t have meaningful data, working with a team like Burkland adds real value. We’ve worked with hundreds of startups in the same situation, and we can draw on that experience to build a credible model.

We help clients define assumptions that match their business model, stage, and strategy, and use those assumptions to build a roadmap grounded in real-world outcomes.

What is a dynamic financial model?

It’s a tool for active scenario planning.

A dynamic model lets you change key inputs and instantly see how they affect your revenue, burn, margins, and runway. For example:

• “If I close 10 customers, what does the year look like?”
• “What if I close 20?”
• “What if I don’t close that one big deal in my base case?”

At Burkland, we build dynamic models with clear summary pages that highlight key assumptions and outputs. Founders, board members, and investors can use these to stress-test the business in real time. The flexibility to say “here’s what we’re assuming, and here’s what happens if we miss or exceed that” is incredibly valuable.

How do I balance optimism and realism in my scenario planning?

Anchor to a base case, then model upside and downside.

Your base case should reflect what you have 85–90% confidence in delivering. From there, identify the levers that could swing outcomes higher or lower and build best- and worst-case scenarios around those.

The goal isn’t to impress—it’s to demonstrate good stewardship. Investors appreciate founders who know their limits and plan responsibly. If you’re not confident in a number, don’t put it in the model. This is your story. Own it, and keep it honest.

How can I show that our business is scalable?

Use cost structure benchmarks to map the path.

Scalability shows up in your margins and your cost structure over time. I help founders layer in industry data to show how things like gross margin, sales and marketing spend, and G&A cost can be expected to shift as revenue grows.

For example, industry benchmarks might suggest that a SaaS company moving from $1M to $10M ARR should improve gross margin by 10 percentage points and see operating leverage in sales and marketing.

I also make sure to factor in special situations. Maybe a founder is close to closing a large customer that would dramatically change the growth curve. That gets layered in as a separate growth scenario so it doesn’t distort the base case.

What’s the best way to model headcount and hiring?

Use productivity ratios, not just job titles.

Start by understanding what each role is expected to deliver. For example, you may use a rule of thumb like $1M in ARR per sales rep. That makes it easy to say, “When we hit $1M in ARR, we need to hire another salesperson.” That kind of logic keeps your team size aligned with growth.

For non-revenue roles like engineers, define units of output—features shipped, sprints supported, infrastructure maintained—and assign realistic expectations to those roles. From there it often makes sense to layer in efficiency improvements over time. For example, an engineer might become 5% more efficient each year as the codebase and tooling improves.

This kind of modeling not only supports smarter hiring decisions, it helps founders set clear expectations and accountability for each function.

💡 Tip: For back office roles like finance, HR, and accounting, many startups don’t need full-time hires early on. Burkland provides all of these on a fractional basis—right-sized for your stage and budget.

What’s next in this series?

In Part 3: Modeling for Fundraising, I’ll cover how to shape your projections for investors, tie your financial model to your funding strategy, and build a plan that inspires confidence in your ability to execute.

If you need help building a dynamic, growth-ready model, let’s connect. Burkland’s team creates financial models that drive better decisions today and support long-term success.