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INDEX
INTRODUCTION
STRUCTURE
FINANCIAL PLAN
FEEDBACK
PHOTO
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Financial Plan
l
Growth
will be moderate, cash balance always positive.
l
Marketing will remain at or below 15% of sales.
l
The
company will invest residual profits into company expansion and
personnel.
Break-even Analysis
For our
Break-even analysis, we have chosen $500,000 to represent our average
revenue per month. We want to engage in a practical analysis of
precisely what it will take to turn the company profitable by using the
P&L statement. The Break-even analysis is a gauge by which we can
measure our monthly revenue streams to predict long-term profitability.
According
to the analysis, we will break-even at approximately $400,000 in monthly
sales.
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Break-even Analysis:
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Monthly Revenue Break-even |
$400,000 |
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Assumptions: |
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Average Per-Day Revenue |
$17,000 |
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Average Per-Day Variable Cost |
$1000 |
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Estimated Monthly Fixed Cost |
$100,000 |
Break-even Analysis
Projected Profit and Loss
We
predict advertising costs and consulting costs will go up in the next
three months. This will give
In
Season
a profit-to-sales ratio of nearly 31% by the year 2004. Normally, a
start-up concern will operate with negative profits through the first
two periods. We will avoid that kind of operating loss by knowing our
competitors, our target markets, industry direction, and the products we
sell.
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Profit and Loss |
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Period 1 |
Period 2 |
Period 3 |
Period 4 |
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Sales |
1,500,000 |
1,500,000 |
1,500,000 |
1,500,000 |
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Expenses: |
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Cost of Goods
Sold |
20,000 |
21,000 |
21,000 |
21,000 |
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Salary |
147,000 |
147,000 |
147,000 |
147,000 |
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Depreciation-machinery |
0 |
0 |
0 |
0 |
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Promotion |
10,000 |
9,000 |
9,000 |
9,000 |
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Energy Sources |
10,000 |
10,000 |
10,000 |
10,000 |
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Insurance |
8,000 |
8,000 |
8,000 |
8,000 |
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Rent |
100,000 |
100,000 |
100,000 |
100,000 |
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Tax |
3,000 |
3,000 |
3,000 |
3,000 |
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Other |
2,000 |
2,000 |
2,000 |
2,000 |
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Net Profit |
1,200,000 |
1,200,000 |
1,200,000 |
1,200,000 |
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