Getting Started with Financial Modeling

Horizon supports nine business types: SaaS, E-Commerce, Marketplace, Professional Services, Contractor/Construction, Land Development, Real Estate, Homestead Development, and Custom. Your choice determines which revenue drivers, KPIs, and benchmark ranges apply to your model.

Pick the type that most closely matches how your business earns money — not what industry you're in. A software consulting firm that charges retainers is a Professional Services model, not SaaS. A property management company that earns rental income is a Real Estate model. If your business spans multiple revenue streams, start with your primary one and use the Custom type to layer in secondary sources.

Horizon models your finances over a rolling period — typically 12, 24, or 36 months. Your start date anchors everything: revenue projections, hiring plans, funding events, and expense ramp-ups all calculate forward from it.

For early-stage companies, 24 months is the most useful window. It's long enough to show investors a path to profitability but short enough that your assumptions stay grounded. Anything beyond 36 months in a pre-revenue model is speculation, not forecasting.

If you're already operating, set your start date to the beginning of the current fiscal year and enter your actuals for completed months. Horizon will blend your historical data with forward projections automatically.

Revenue drivers are the inputs that generate your top-line numbers. Every business type has a different set. For SaaS, that's monthly new customers, average contract value, and churn rate. For a contractor, it's active projects, average job value, and project duration. For a marketplace, it's gross merchandise volume and take rate.

Start with conservative estimates. It's easier to explain upside to an investor than to defend an aggressive base case that doesn't materialize. Use the scenario planning feature to model your optimistic case separately — that way your base case stays credible.

Horizon calculates MRR, ARR, revenue run rate, and all downstream metrics automatically once your drivers are set. You don't need to build formulas.

Expenses in Horizon fall into two categories: fixed costs (rent, software subscriptions, salaries) and variable costs (commissions, cost of goods sold, payment processing fees). Variable costs scale with revenue; fixed costs don't.

For each hire, enter the salary and Horizon calculates the fully loaded cost — including payroll taxes, benefits, and overhead — automatically. The default burden rate is 25–30% above base salary, which is accurate for most US-based companies. You can adjust it if your benefits package is significantly above or below average.

Don't try to model every expense on day one. Start with the three or four largest cost categories (usually people, infrastructure, and marketing) and add detail as your model matures.

If you've raised money or plan to, enter it as a funding event with a date and amount. Horizon adds it to your cash position on that date and factors it into your runway calculation. You can model multiple rounds — pre-seed, seed, Series A — and see how each one extends your runway and changes your burn multiple.

For loans and lines of credit, enter the principal, interest rate, and repayment schedule. Horizon generates an amortization table and flows the interest expense into your income statement automatically.

If you're bootstrapped, skip this section. Your runway is determined entirely by your operating cash flow, and Horizon will show you that clearly in the Cash Position chart.

Once your inputs are set, Horizon generates three financial statements: the Income Statement (P&L), the Balance Sheet, and the Cash Flow Statement. These are the same documents investors, accountants, and lenders use to evaluate a business.

The Income Statement shows revenue minus expenses equals net income (or net loss). The Cash Flow Statement shows when cash actually moves — which is different from when revenue is recognized. The Balance Sheet shows what you own, what you owe, and what's left over.

For most early-stage companies, the Cash Flow Statement is the most important document. It tells you exactly when you run out of money, which is the number that drives every other decision.

Horizon's scenario planning feature lets you create multiple versions of your model — typically a base case, an optimistic case, and a pessimistic case — and compare them side by side.

For each scenario, adjust the assumptions that have the biggest impact on your outcome: customer acquisition rate, churn, average contract value, and time to hire. Don't change everything at once. The goal is to understand which variables your business is most sensitive to, not to model every possible combination.

A well-built pessimistic scenario should show a path that's uncomfortable but survivable. If your worst case shows the business failing in month 6, that's a signal to either raise more capital, cut costs, or revisit your go-to-market assumptions before you run out of time to act.