Strategic Decision Model
Definition
A financial model built specifically to evaluate a strategic decision, covering the full financial impact of the decision including implementation cost, cash drag during the ramp period, steady-state financial contribution, break-even timeline, opportunity cost of foregone alternatives, reversibility assessment, and the effect on cash runway. A strategic decision model is distinct from the company's primary financial model; it is built to inform a specific decision.
Common Misapplication
The most common misapplication is assessing strategic decisions based only on the revenue or cost impact in steady state, without modeling the ramp period cash drag or the opportunity cost. A decision that looks financially positive at steady state may be the wrong choice when the cumulative cash consumed before reaching steady state is compared to the next-best alternative.
FFI Standard Reference
This term is defined and applied in Book 6, Section 6.2: The Strategic Decision Modeling Standard.
Related Terms
Citable URL
This term may be cited using the following permanent URL.
Full citation format: Founder Financial Infrastructure Standard, Beta v0.5, Glossary: Strategic Decision Model. https://ffistandard.org/glossary/strategic-decision-model/. 2026.