Financial Planning

In order to assess these financing requests quickly, we not only review the submitted pitch decks ( Pitch Deck Template), but also take an in-depth look at the historical and projected financial figures.
In this blog, Andreas van Bon, Managing Partner at bmp, therefore shares some tips for solid financial planning to help you avoid unnecessary mistakes and reach your investment faster.

Use a suitable framework

Microsoft Excel is still the tool of choice for the vast majority of startups in their early stages. You can find countless frameworks online. What matters is:

1. You feel comfortable with the structure of the model.

2. The document remains clear and not overly complex.

3. The framework can be flexibly adapted to the specifics of your business model.

Avoid unnecessary mistakes

• Net vs. gross: Time and again, founders enter their revenues and expenses as gross instead of net amounts. Please note that the profit and loss statement should generally be prepared excluding VAT. In contrast, cash flow planning must be based on gross amounts, and the corresponding offsetting of input and output VAT – and any resulting VAT refunds – must also be taken into account. For larger items, also consider the time lag between the month of invoicing and the month of refund or VAT payment, taking into account any permanent filing extension.
• Some companies forget to include the employer’s share of social security contributions in their personnel planning. Typically, a surcharge of around 22% is applied to the employee’s gross salary to arrive at the employer’s total cost. Pro-Tipp:
  a) For high salaries, consider the social security contribution ceiling.

  b) Founders who were previously not subject to social security contributions usually lose this status once a VC joins.

• A profit and loss forecast is not the same as a cash flow forecast. Payment terms, depreciable investments, and VAT, among other factors, lead to timing differences between the two plans, sometimes with significant impact. They should therefore be prepared separately. Hardware startups in particular must carefully plan inventory build-up and the resulting capital requirements.
• Purchasing goods is not the same as consuming goods. This is especially important for hardware startups. Purchases affect cash flow, while consumption of goods (cost of materials) is part of the income statement. This line is often labeled COGS (Cost of Goods Sold), but in many cases incorrectly. COGS are the direct costs incurred to produce or acquire the sold products (materials, direct labor), excluding indirect costs such as marketing or administration. This is quite complex, and in practice this position often only includes material costs.
• It is also advisable to use a framework aligned with Section 275 (2) of the German Commercial Code (HGB), as tax advisors usually provide monthly reports in this format, making it easier to compare plan versus actuals.
• Have you considered the following costs: notary fees for capital increases, costs for preparing the annual financial statements, and – beyond a certain size – audit fees?

Document your assumptions

Use Excel’s comment function to explain key positions and assumptions for external readers. For example, why does marketing spend, which has consistently been EUR 1,000 per month, suddenly jump to EUR 30,000 in a particular month? Is this due to a trade fair or a marketing campaign? This helps us better understand your planning logic and avoids unnecessary mistrust.

Bonus tip

As a venture capital investor, our first review of your financial plan focuses primarily on whether it is structurally realistic. We check whether certain ratios shift dramatically, which may indicate planning errors. For example, does revenue per employee explode, or do office rent costs remain unchanged even though the team size increases tenfold? Such assumptions are often unrealistic and quickly questioned. Therefore, check the consistency of your plan using metrics such as revenue per employee, marketing spend per new customer, sales per sales representative, etc.
We have developed a template that you can use to plan your finances. In principle, you should only fill in the grey fields; the blue fields are calculated automatically through formulas. First, check whether the P&L structure fits your business model and adjust it if necessary, applying the same changes and links in the cash flow plan. Then start with revenues in the financial model and work through all positions top-down.