All About People

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Employment Agency Business Plan

Financial Plan

The following sections contain the financial information for All About People. Tables show annual projections for three years. Charts show first year monthly figures.  First year monthly tables are included in the appendix.

8.1 Important Assumptions

The financials of this plan are predicated on the following table of assumptions.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 7.00% 7.00% 7.00%
Tax Rate 0.00% 30.00% 30.00%
Other 0 0 0

8.2 Projected Profit and Loss

Profit and Loss figures are projected in this table.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $94,248 $175,000 $300,000
Direct Cost of Sales $0 $0 $0
Placed Employees Payroll $51,836 $99,750 $171,000
Other $0 $0 $0
Total Cost of Sales $51,836 $99,750 $171,000
Gross Margin $42,412 $75,250 $129,000
Gross Margin % 45.00% 43.00% 43.00%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $0 $0 $0
Advertising/Promotion $1,165 $1,200 $2,500
Bank Service Charges $1,019 $1,000 $1,500
Contributions $255 $300 $300
Dues & Subscriptions $887 $250 $500
Total Sales and Marketing Expenses $3,325 $2,750 $4,800
Sales and Marketing % 3.53% 1.57% 1.60%
General and Administrative Expenses
General and Administrative Payroll $10,929 $25,000 $30,000
Marketing/Promotion $6,516 $6,500 $12,800
Depreciation $0 $0 $0
Telephone & Pager $4,168 $4,800 $5,000
Recruitment $1,573 $1,575 $2,000
Referral Fees $170 $250 $500
Rent $6,102 $9,600 $10,000
Office Supplies $2,114 $2,000 $3,000
Postage $1,062 $1,250 $1,500
Printing $3,362 $4,000 $5,000
Professional Fees $6,941 $5,000 $7,500
Payroll Taxes $0 $0 $0
Maintenance and Repairs $311 $750 $2,000
Total General and Administrative Expenses $43,248 $60,725 $79,300
General and Administrative % 45.89% 34.70% 26.43%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Misc. $1,050 $500 $1,000
Total Other Expenses $1,050 $500 $1,000
Other % 1.11% 0.29% 0.33%
Total Operating Expenses $47,623 $63,975 $85,100
Profit Before Interest and Taxes ($5,212) $11,275 $43,900
EBITDA ($5,212) $11,275 $43,900
Interest Expense $3,046 $2,678 $2,363
Taxes Incurred $0 $2,579 $12,461
Net Profit ($8,257) $6,018 $29,076
Net Profit/Sales -8.76% 3.44% 9.69%

8.3 Projected Cash Flow

Our cash flow estimates are shown in the chart and table below. The owner expects to invest further amounts in the business over the next two years to finance continued growth.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $23,562 $43,750 $75,000
Cash from Receivables $58,112 $120,477 $208,324
Subtotal Cash from Operations $81,674 $164,227 $283,324
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $10,000 $20,000 $0
Subtotal Cash Received $91,674 $184,227 $283,324
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $62,765 $124,750 $201,000
Bill Payments $37,123 $43,357 $67,812
Subtotal Spent on Operations $99,888 $168,107 $268,812
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $2,720 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $4,500 $4,500 $4,500
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $107,108 $172,607 $273,312
Net Cash Flow ($15,434) $11,620 $10,012
Cash Balance $30,566 $42,186 $52,199

8.4 Projected Balance Sheet

Three year annual balance sheets estimates appear below.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $30,566 $42,186 $52,199
Accounts Receivable $12,573 $23,346 $40,022
Other Current Assets $0 $0 $0
Total Current Assets $43,139 $65,533 $92,221
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $43,139 $65,533 $92,221
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $2,761 $3,635 $5,747
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $2,761 $3,635 $5,747
Long-term Liabilities $40,500 $36,000 $31,500
Total Liabilities $43,261 $39,635 $37,247
Paid-in Capital $17,600 $37,600 $37,600
Retained Earnings ($9,464) ($17,721) ($11,703)
Earnings ($8,257) $6,018 $29,076
Total Capital ($121) $25,897 $54,973
Total Liabilities and Capital $43,139 $65,533 $92,221
Net Worth ($121) $25,897 $54,973

8.5 Business Ratios

The table below presents important business ratios from the help supply services industry, as determined by the Standard Industry Classification (SIC) Index code 7363, Help Supply Services.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 85.68% 71.43% 9.00%
Percent of Total Assets
Accounts Receivable 29.15% 35.63% 43.40% 28.80%
Other Current Assets 0.00% 0.00% 0.00% 44.00%
Total Current Assets 100.00% 100.00% 100.00% 76.30%
Long-term Assets 0.00% 0.00% 0.00% 23.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.40% 5.55% 6.23% 44.00%
Long-term Liabilities 93.88% 54.93% 34.16% 17.50%
Total Liabilities 100.28% 60.48% 40.39% 61.50%
Net Worth -0.28% 39.52% 59.61% 38.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 45.00% 43.00% 43.00% 0.00%
Selling, General & Administrative Expenses #NAME? 39.56% 33.31% 82.20%
Advertising Expenses 1.24% 0.69% 0.83% 1.50%
Profit Before Interest and Taxes -5.53% 6.44% 14.63% 2.40%
Main Ratios
Current 15.63 18.03 16.05 1.64
Quick 15.63 18.03 16.05 1.31
Total Debt to Total Assets 100.28% 60.48% 40.39% 61.50%
Pre-tax Return on Net Worth 6817.49% 33.20% 75.56% 4.40%
Pre-tax Return on Assets -19.14% 13.12% 45.04% 11.50%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -8.76% 3.44% 9.69% n.a
Return on Equity 0.00% 23.24% 52.89% n.a
Activity Ratios
Accounts Receivable Turnover 5.62 5.62 5.62 n.a
Collection Days 57 50 51 n.a
Accounts Payable Turnover 14.40 12.17 12.17 n.a
Payment Days 27 26 24 n.a
Total Asset Turnover 2.18 2.67 3.25 n.a
Debt Ratios
Debt to Net Worth 0.00 1.53 0.68 n.a
Current Liab. to Liab. 0.06 0.09 0.15 n.a
Liquidity Ratios
Net Working Capital $40,379 $61,897 $86,473 n.a
Interest Coverage -1.71 4.21 18.58 n.a
Additional Ratios
Assets to Sales 0.46 0.37 0.31 n.a
Current Debt/Total Assets 6% 6% 6% n.a
Acid Test 11.07 11.60 9.08 n.a
Sales/Net Worth 0.00 6.76 5.46 n.a
Dividend Payout 0.00 0.00 0.00 n.a