You’ve got your financial model done. You’re satisfied with the results.

But wait there might be one more step.

Have you done sensitivity analysis? For example:

1. What would be the impact if revenues change? How would you be affected by lower pricing? What about if fewer new customers came onboard? Suppose it took you longer to launch certain new products or services.

2. What about changes in key cost of providing your product or service?

3. What about the cost or timing of development cost for new products or new services?

4. How about marketing cost, such as advertising, promotion or commission?

5. How about changes in interest rates?

These are just a few of the things that could affect your financial model. So what can sensitivity analysis then tell you?

1. Do you have enough financing lined up to cover any potential shortfalls?

2. If raising equity, how long will your particular equity round last and how soon will you have to go back to the market? How much will you have to raise with your next round?

3. How will your shareholder returns vary, in particular dividends to shareholders or distributions to yourself as the owner?

You may have this very well covered as the sensitivity analysis backs up. If so, by having that sensitivity analysis in you’ve given either your bank or potential investor some great comfort. You’ve helped your cause and your negotiation to set some terms. You may have lowered the perceived risk a bit, which can translate to better rates or terms or valuation.

So be sensitive about having sensitivity analysis in your financial model. It can pay some nice dividends and help you become better prepared for the future.