/financial-model

name: memstack-business-financial-model
description: "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."
version: 1.0.0
license: "Proprietary, MemStack™ Pro by CW Affiliate Investments LLC. See LICENSE.txt"

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] | none | | 2 | [X] | [X] | [X] | [X] | $[X] | none | | 3 | [X] | [X] | [X] | [X] | $[X] | none | | ... | | | | | | | | 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] | none | none | | Monthly churn rate | [X]% | <5% | [OK / At Risk] | | CAC | $[X] | none | none | | 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]% |