Guide
What a driver-based financial model isAssumptions in, every statement out.
A driver-based model stores the rules of the business (customers, price, people, costs) and recomputes the P&L, cash flow and balance sheet whenever those rules change. It is how you run what-ifs without rewriting twelve months of cells.
Definition
Drivers, not a typed P&L
A driver-based financial model starts from operating assumptions and derives the statements. You set how many customers you add, what they pay, who you hire and when, what tools cost, and how long customers take to pay. The engine turns that into revenue, costs, cash and a balance sheet that balances.
That is the opposite of typing January revenue, February revenue, and hoping March still matches the story. Drivers are the story; the months are the output.
Why it matters
Drivers vs typing the P&L by hand
Hand-typed monthly grids feel fast on day one. They fail when the plan moves: a delayed hire, a price change, a round that closes two months later. You find some cells, miss others, and the cash line stops agreeing with the balance sheet.
- One source of truth. Drivers live in one place; statements are computed, not copied.
- What-if without forking. “What if we hire in March?” is a start-date change, not a new workbook.
- Consistency. A three-statement model only stays honest if the links are formula-driven, not pasted.
Minimum set
The drivers most companies need
You can grow the set later. This is enough to get a usable twelve-month view.
- Opening cash from the bank accounts you would spend from.
- Revenue build that matches how you sell: subscribers and ARPU, covers and ticket, projects and retainers, or marketplace take rate.
- Cost of revenue or a COGS percentage, so gross margin is not a guess.
- Payroll roles with counts, fully loaded cost and start dates.
- Recurring opex: rent, tools, contractors, marketing that you can name.
- Working capital terms once you invoice or take prepaid annual plans: days to collect, days payable, deferred revenue.
- Financing you actually plan: rounds, loans, repayments on the months they land.
That set feeds the cash flow forecast, the burn and runway figures, and later the valuation methods that read from the projection.
Flow
How drivers become three statements
Revenue and cost drivers build the income statement. Collection terms, payroll timing, capex and financing turn profit into cash. Ending cash, receivables, payables, deferred revenue, debt and equity land on the balance sheet. The check is simple: assets must equal liabilities plus equity in every month.
Replafin keeps that math in pure functions under lib/. The workspace UI only shows the result. If a change would break the balance, it does not ship. That is what makes a driver-based model safe for an assistant to edit: the guardrail is in the engine.
Inheritance
Burn, runway and valuation follow the drivers
Net burn and runway are not separate models. They are summaries of the cash line the drivers produce. Change a hire's start month and runway moves. Raise a round on the raise plan and ending cash, dilution and ownership update from the same company file.
Valuation methods that need a forecast (forward multiples, DCF, the VC method) read the projected statements. Pre-revenue methods still sit beside the stage and sector settings on the company profile. One driver set, many views.
What-if
Scenarios without rewriting the sheet
A useful what-if answers a decision: delay a hire, raise price, cut a tool, close a round in month three. In a driver-based model you change that input and read the new burn, runway and statements. In Replafin you can also ask the assistant in plain language; it edits approved drivers and shows the recomputed result.
Keep scenarios comparable. Change one lever at a time when you are deciding, then combine once you know which moves matter.
Start
Begin from a template, not a blank grid
Pick a business model template that matches how you sell. The SaaS template sets subscribers, churn, ARPU and collection terms. Café, retail, agency and marketplace templates set their own driver language so founders are not translating everything into enterprise FP&A labels.
Connect a bank, Stripe or your books when you are ready so actuals refresh the opening balance and real figures can beat the plan where you have them. See integrations and features for what ships today. Pricing is Starter at $200 a month and Pro at $500; details on the pricing page.
Questions
Driver-based models, answered
What is a driver-based financial model?
A model built from a small set of operating assumptions (customers, price, churn, headcount, costs, collection terms) that compute the income statement, cash flow and balance sheet together. Change a driver and every linked figure recomputes. You do not type monthly P&L lines by hand.
How is that different from a spreadsheet P&L?
A typed P&L is a list of monthly numbers. A driver-based model stores the rules that produce those numbers. Hiring two engineers updates payroll, burn, runway, cash and the balance sheet from the same change. In a static sheet you hunt for every cell that should move.
What drivers does a startup need first?
Opening cash, how revenue is built (customers × price, or covers × ticket, or projects), cost of revenue or COGS rate, payroll roles with start dates, recurring opex, and any planned financing. Collection terms and churn matter as soon as you invoice or sell subscriptions.
Do burn, runway and valuation use the same drivers?
In Replafin, yes. The twelve-month model is the source of truth; projections, valuation, raise sizing and the cap table read from it. That is why a hire or a price change shows up in cash and in valuation without rebuilding three workbooks.
Can I start from a template?
Yes. Replafin ships templates for SaaS, café, retail, agency and marketplace businesses. Each sets a sensible driver set and statement structure so you edit assumptions instead of inventing the sheet from scratch.
One set of drivers.Every statement moves with them.
Open the workspace, pick a template, and change an assumption. The P&L, cash flow and balance sheet recompute together. Plans from $200 a month.