It should be built properly.
The main question shouldn’t be “should I build one from scratch or can I use a template?”, but “does this financial model reflect the true dynamics of my business?”. In simple words, it should tell a reader how inputs go through a bespoke process and come out as an output, and how this process evolves over time. If you opt to have an external, experienced, party building your model (this is not a faux pas), you need to make sure you know how to use it and how to present it once it is built.
A financially sound model should comprise the three financial statements: Profit & Loss (P&L), Cash Flow Statement, and Balance Sheet. If your business is at very early stages you might get away with not including a Balance Sheet (although, most likely, investors will later ask to see it as part of their due diligence process).
It should forecast 3 – 5 years into the future, and forecast the operations of the business by month (by week is too detailed, by year is too high-level). It should also include historical financial data (if any), which is clearly labeled as “historical”, whilst the forecast is also labeled accordingly.
The model should be self-contained and only run in one excel spreadsheet. If you are linking multiple workbooks together, you are likely overcomplicating your forecast. There will be detailed and data rich components of your business (e.g. product engagement), but as a rule of thumb: if it doesn’t impact your costs or revenue, don’t include it in your financial model.
You’ll note that we do not recommend any financial modelling software. This is because this is quite literally the purpose of excel. There’s no substitute and nothing does the job better!
Finally, just as with any other document produced, it should have an “executive summary”. A good summary will include the main lines of the financial statements (primarily the P&L and your cash flow) as well as the main KPIs that drive performance. It is also very useful to include graphs/charts showing the evolution of these main KPIs and financial lines. The human mind is trained to recognise patterns so using graphics will feel more natural, even for those with a sound finance background.