The basis for our financial planning has been looking forward with conservative estimates for revenue and expenses. We are committed to consistent growth of our cash balances through prudent management of our expenses. Our focus will be on remaining profitable year to year, while also building adequate cash reserves.
Personnel burden is relatively low at 15% based on the assumption that the only benefits included will be minimal vacation time based on the number of hours worked. Personnel burden also includes taxes.
We anticipate carrying one month's worth of inventory in the Curiosity Shop. The majority of items in the shop are sold on a consignment basis, and therefore do not affect inventory turnover.
The estimate of 8% funding on credit refers to the delay between the commitment of funding and the actual receipt of funds. We anticipate the great majority of our revenues will be paid by cash or check.
The table and chart below show the level of funding, from all sources combined, we need on a monthly average, to cover our operating expenses.
Our projected annual surplus or deficit is shown on the following table. The detailed monthly projections are included in the appendix.
Management of cash flow is critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other bar the monthly balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix. Should our monthly cash flows fail to meet expectations, directors salaries will not be paid. If further action is required, we will utilize revolving credit facilities.
The following balance sheet shows our projected financial position during the next three years. The monthly estimates are included in the appendix.
Our projected business ratios for the three years of this plan are shown below, along with ratios for an industry profile, based on the Standard Industry Classification (SIC) Index, 8412, for Museums and Art Galleries.