Executive Search and Rescue Firm

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Exec Employment Agency Business Plan

Financial Plan

The following sections will outline important financial information.

7.1 Important Assumptions

The following table details some of the important financial 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 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis indicates what is needed in monthly revenue to break even. The sales forecasts are based on the company receiving the commission spread out over the entire year as opposed to a lump sum.

Break-even Analysis
Monthly Revenue Break-even $10,052
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $10,052

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $119,660 $182,132 $212,801
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $119,660 $182,132 $212,801
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $83,300 $101,000 $107,600
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $828 $828 $828
Leased Equipment $0 $0 $0
Utilities $2,100 $2,100 $2,100
Insurance $1,500 $1,500 $1,500
Rent $18,000 $18,000 $18,000
Payroll Taxes $12,495 $15,150 $16,140
Other $0 $0 $0
Total Operating Expenses $120,623 $140,978 $148,568
Profit Before Interest and Taxes ($963) $41,154 $64,233
EBITDA ($135) $41,982 $65,061
Interest Expense $0 $0 $0
Taxes Incurred $0 $10,289 $16,326
Net Profit ($963) $30,866 $47,907
Net Profit/Sales -0.80% 16.95% 22.51%

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $17,949 $27,320 $31,920
Cash from Receivables $77,790 $142,324 $174,750
Subtotal Cash from Operations $95,739 $169,644 $206,670
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 $6,000 $0 $0
Subtotal Cash Received $101,739 $169,644 $206,670
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $83,300 $101,000 $107,600
Bill Payments $33,402 $48,468 $55,888
Subtotal Spent on Operations $116,702 $149,468 $163,488
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $116,702 $149,468 $163,488
Net Cash Flow ($14,962) $20,175 $43,182
Cash Balance $5,788 $25,963 $69,145

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $5,788 $25,963 $69,145
Accounts Receivable $23,921 $36,409 $42,540
Other Current Assets $0 $0 $0
Total Current Assets $29,708 $62,372 $111,685
Long-term Assets
Long-term Assets $2,500 $2,500 $2,500
Accumulated Depreciation $828 $1,656 $2,484
Total Long-term Assets $1,672 $844 $16
Total Assets $31,380 $63,216 $111,701
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,093 $4,063 $4,641
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,093 $4,063 $4,641
Long-term Liabilities $0 $0 $0
Total Liabilities $3,093 $4,063 $4,641
Paid-in Capital $31,000 $31,000 $31,000
Retained Earnings ($1,750) ($2,713) $28,153
Earnings ($963) $30,866 $47,907
Total Capital $28,287 $59,153 $107,060
Total Liabilities and Capital $31,380 $63,216 $111,701
Net Worth $28,287 $59,153 $107,060

7.6 Business Ratios

The following table outlines some of the more important ratios from the Human Resources and Executive Search Consulting industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the NAICS code, 541612.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 52.21% 16.84% 9.59%
Percent of Total Assets
Accounts Receivable 76.23% 57.59% 38.08% 25.69%
Other Current Assets 0.00% 0.00% 0.00% 48.94%
Total Current Assets 94.67% 98.66% 99.99% 78.12%
Long-term Assets 5.33% 1.34% 0.01% 21.88%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 9.86% 6.43% 4.15% 36.06%
Long-term Liabilities 0.00% 0.00% 0.00% 24.25%
Total Liabilities 9.86% 6.43% 4.15% 60.31%
Net Worth 90.14% 93.57% 95.85% 39.69%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 100.00%
Selling, General & Administrative Expenses 100.80% 83.05% 77.36% 77.89%
Advertising Expenses 2.01% 1.32% 1.13% 1.74%
Profit Before Interest and Taxes -0.80% 22.60% 30.18% 1.43%
Main Ratios
Current 9.60 15.35 24.06 1.53
Quick 9.60 15.35 24.06 1.19
Total Debt to Total Assets 9.86% 6.43% 4.15% 65.48%
Pre-tax Return on Net Worth -3.40% 69.57% 60.00% 4.35%
Pre-tax Return on Assets -3.07% 65.10% 57.50% 12.60%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -0.80% 16.95% 22.51% n.a
Return on Equity -3.40% 52.18% 44.75% n.a
Activity Ratios
Accounts Receivable Turnover 4.25 4.25 4.25 n.a
Collection Days 56 71 80 n.a
Accounts Payable Turnover 11.80 12.17 12.17 n.a
Payment Days 27 26 28 n.a
Total Asset Turnover 3.81 2.88 1.91 n.a
Debt Ratios
Debt to Net Worth 0.11 0.07 0.04 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $26,615 $58,309 $107,044 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.26 0.35 0.52 n.a
Current Debt/Total Assets 10% 6% 4% n.a
Acid Test 1.87 6.39 14.90 n.a
Sales/Net Worth 4.23 3.08 1.99 n.a
Dividend Payout 0.00 0.00 0.00 n.a