After building 500+ financial models across SaaS, mining, fintech, manufacturing, and food tech, we have learned one thing: every business model reduces to the same formula. Revenue = Price x Volume. Below revenue, there are only four cost buckets.
Understanding this principle changes how founders think about their numbers. Instead of building complexity, break your revenue into its atomic components. A SaaS company sells subscriptions (price) to users (volume). A marketplace charges fees (price) on transactions (volume). A mining company sells tonnes (volume) at a commodity price (price).
The Four Buckets Below Revenue
Once you have revenue, every cost falls into one of four categories:
- Business Development - Getting customers. Marketing, sales, commissions, partnerships.
- Product Development - Building the thing. Engineering, R&D, content creation.
- Overheads - Running the business. Rent, admin, insurance, accounting.
- Capital Expenditure - Buying things. Equipment, IP, infrastructure.
This framework works for a pre-revenue SaaS startup and a $30M mining operation. The complexity is in the details, not the structure. When an investor opens your model, they should see this logic immediately. If they cannot, the model needs restructuring.
What This Means for Your Model
Start your model by answering: what is my price, and what is my volume? Break volume into its drivers (users, transactions, seats, tonnes). Break price into its components (subscription, fee, margin). Everything else is a formula connecting these atoms to your P&L.
The founders who raise fastest are the ones who can explain their unit economics in two sentences. The model should make that easy, not harder.