Here are the essential financial models every founder in Kenya needs to prepare before seeking funding:

1. Revenue Model

Purpose: To project how your business will generate income over time.

Key Components:

• Revenue streams (e.g. product sales, Mpesa-based subscriptions, consultancy services)
• Pricing strategy and value proposition
• Sales forecasts by market or region
• Customer acquisition and retention projections

Why it matters:
Investors want to know how your business will make money and how much it can potentially earn. A strong revenue model helps validate your business’s scalability, especially in a diverse and competitive market like Kenya.

2. Profit and Loss (P&L) Statement

Purpose: To show your startup’s profitability over a specific period.

Key Components:

• Revenue
• Cost of Goods Sold (COGS)
• Gross profit
• Operating expenses (e.g. salaries, rent, internet, marketing)
• Net profit or loss

Why it matters:
Your P&L reveals your operational efficiency. Kenyan investors, including accelerators and private equity firms, often scrutinize this to gauge how well you manage costs and how soon you’ll break even.

3. Cash Flow Statement

Purpose: To track how cash enters and leaves your business.

Key Components:

• Operating cash flow
• Investing cash flow (asset purchases, R&D)
• Financing cash flow (loans, equity funding)
• Net cash flow

Why it matters:
Even if you’re profitable on paper, poor cash flow can shut down your business. This model reassures investors that you can cover your bills and pay suppliers—critical in markets with unpredictable payment cycles.

4. Balance Sheet

Purpose: To provide a snapshot of your financial health at a given time.

Key Components:

• Assets (cash, inventory, equipment)
• Liabilities (short-term debts, supplier payments, loans)
• Equity (owner’s capital, retained earnings)

Why it matters:
A healthy balance sheet shows stability. In Kenya, where many startups bootstrap in their early years, a strong balance sheet can differentiate you when approaching banks or development finance institutions.

5. Break-Even Analysis

Purpose: To calculate when your business will start turning a profit.

Key Components:

• Fixed costs (rent, salaries, licenses)
• Variable costs (raw materials, distribution)
• Revenue per unit or per customer

Why it matters:
This is a favourite of banks and grant committees. It helps funders understand how long it will take before your operations become self-sustaining.

6. Burn Rate Analysis

Purpose: To measure how quickly you’re using up your cash reserves.

Key Components:

• Monthly operating expenses
• Monthly revenues
• Net cash burn

Why it matters:
Burn rate shows how long your runway is—essential information for investors planning exit strategies or future rounds. If your burn rate is high, you need a plan to either raise more funds or cut costs.

7. Scenario Planning and Sensitivity Analysis

Purpose: To prepare for uncertainty and test the flexibility of your financial model.

Key Components:

• Base-case, best-case, and worst-case scenarios
• Key variable changes: revenue dips, cost spikes, currency fluctuations
• Contingency plans

Why it matters:
Markets can change quickly—especially in emerging economies like Kenya’s. This model demonstrates strategic thinking and gives investors confidence in your risk management approach.