Unite For Youth

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Nonprofit Youth Services Business Plan

Financial Plan

Unite for Youth will build funding support from businesses and private donors in the community at an aggressive rate of growth.  Yet it will take five years before funding from these sources becomes strong enough to expand the program. The primary expenditures for the program are for the training and managing of mentors and the program activities for youth and mentors.  Therefore it is essential that due diligence is applied to fund allocation for these critical program responsibilities.  An effective communication system will be established to report fiscal data to the Board of Directors so adjustment can be made quickly to assure the health of the program.

We are also assuming beginning cash reserves on October 1st of $71,500 according to the treasurer.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:

  • We assume a slow-growth economy, without major recession.
  • We assume that there are no unforeseen changes in federal grant funding availability.
  • We assume a continued need for services by at-risk youths.
  • We assume broad community support for mentoring.
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 0.00% 0.00% 0.00%
Other 0 0 0

7.2 Projected Surplus or Deficit

Unite for Youth's projected surplus or deficit is shown on the following table, with revenue increasing from more than $267,396 the first year to more than $350,000 the third. Surplus may be applied to program activities, marketing activities, or held for contingencies. The detailed monthly projections are included in the appendix.

Surplus and Deficit
Year 1 Year 2 Year 3
Funding $267,396 $305,926 $359,018
Direct Cost $0 $0 $0
Other Costs of Funding $0 $0 $0
Total Direct Cost $0 $0 $0
Gross Surplus $267,396 $305,926 $359,018
Gross Surplus % 100.00% 100.00% 100.00%
Expenses
Payroll $122,400 $122,400 $122,400
Sales and Marketing and Other Expenses $12,000 $15,000 $18,000
Depreciation $0 $0 $0
Rent $3,600 $3,600 $4,000
Utilities $1,200 $1,200 $1,500
Insurance $0 $0 $0
Activities $60,000 $70,000 $90,000
Payroll Taxes $0 $0 $0
Training $36,000 $40,000 $50,000
Total Operating Expenses $235,200 $252,200 $285,900
Surplus Before Interest and Taxes $32,196 $53,726 $73,118
EBITDA $32,196 $53,726 $73,118
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $0
Net Surplus $32,196 $53,726 $73,118
Net Surplus/Funding 12.04% 17.56% 20.37%

7.3 Projected Cash Flow

The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly cash balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Funding $267,396 $305,926 $359,018
Subtotal Cash from Operations $267,396 $305,926 $359,018
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 $0 $0 $0
Subtotal Cash Received $267,396 $305,926 $359,018
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $122,400 $122,400 $122,400
Bill Payments $103,713 $128,218 $160,730
Subtotal Spent on Operations $226,113 $250,618 $283,130
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 $226,113 $250,618 $283,130
Net Cash Flow $41,283 $55,308 $75,888
Cash Balance $112,783 $168,091 $243,979

7.4 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $112,783 $168,091 $243,979
Other Current Assets $0 $0 $0
Total Current Assets $112,783 $168,091 $243,979
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $112,783 $168,091 $243,979
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9,087 $10,668 $13,438
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,087 $10,668 $13,438
Long-term Liabilities $0 $0 $0
Total Liabilities $9,087 $10,668 $13,438
Paid-in Capital $80,000 $80,000 $80,000
Accumulated Surplus/Deficit ($8,500) $23,696 $77,422
Surplus/Deficit $32,196 $53,726 $73,118
Total Capital $103,696 $157,422 $230,540
Total Liabilities and Capital $112,783 $168,091 $243,979
Net Worth $103,696 $157,422 $230,540

7.5 Standard Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8322 or NAICS 624110, Child and Youth Services, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Funding Growth 0.00% 14.41% 17.35% 7.72%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 32.31%
Total Current Assets 100.00% 100.00% 100.00% 56.30%
Long-term Assets 0.00% 0.00% 0.00% 43.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.06% 6.35% 5.51% 23.57%
Long-term Liabilities 0.00% 0.00% 0.00% 28.65%
Total Liabilities 8.06% 6.35% 5.51% 52.22%
Net Worth 91.94% 93.65% 94.49% 47.78%
Percent of Funding
Funding 100.00% 100.00% 100.00% 100.00%
Gross Surplus 100.00% 100.00% 100.00% 100.00%
Selling, General & Administrative Expenses 94.83% 88.44% 84.75% 78.74%
Advertising Expenses 0.00% 0.00% 0.00% 0.97%
Surplus Before Interest and Taxes 12.04% 17.56% 20.37% 1.90%
Main Ratios
Current 12.41 15.76 18.16 2.18
Quick 12.41 15.76 18.16 1.77
Total Debt to Total Assets 8.06% 6.35% 5.51% 58.63%
Pre-tax Return on Net Worth 31.05% 34.13% 31.72% 3.01%
Pre-tax Return on Assets 28.55% 31.96% 29.97% 7.27%
Additional Ratios Year 1 Year 2 Year 3
Net Surplus Margin 12.04% 17.56% 20.37% n.a
Return on Equity 31.05% 34.13% 31.72% n.a
Activity Ratios
Accounts Payable Turnover 12.41 12.17 12.17 n.a
Payment Days 27 28 27 n.a
Total Asset Turnover 2.37 1.82 1.47 n.a
Debt Ratios
Debt to Net Worth 0.09 0.07 0.06 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $103,696 $157,422 $230,540 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Funding 0.42 0.55 0.68 n.a
Current Debt/Total Assets 8% 6% 6% n.a
Acid Test 12.41 15.76 18.16 n.a
Funding/Net Worth 2.58 1.94 1.56 n.a
Dividend Payout 0.00 0.00 0.00 n.a