Catholic School Development Foundation

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School Fundraising Business Plan

Financial Plan

Our financial plan is based on conservative estimates and assumptions. We will need to plan on initial investment to make the financials work.

7.1 Important Assumptions

The following table summarizes key financial assumptions.  Retainer fees in this industry are generally billed in advance of service.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 2.50% 0.00% 2.50%
Other 0 0 0

7.2 Key Financial Indicators

The following benchmark chart indicates our key financial indicators for the first three years.

7.3 Break-even Analysis

The following chart and table summarizes the break-even analysis, assuming two full-time consultants in the second year of operations.

Break-even Analysis
Monthly Revenue Break-even $8,593
Assumptions:
Average Percent Variable Cost 4%
Estimated Monthly Fixed Cost $8,225

7.4 Projected Surplus or Deficit

An annual pro-forma income statement is included here.

Surplus and Deficit
Year 1 Year 2 Year 3
Funding $140,000 $420,000 $660,000
Direct Cost $6,000 $14,000 $16,000
Other $0 $0 $0
Total Direct Cost $6,000 $14,000 $16,000
Gross Surplus $134,000 $406,000 $644,000
Gross Surplus % 95.71% 96.67% 97.58%
Expenses
Payroll $65,000 $260,000 $492,000
Sales and Marketing and Other Expenses $21,000 $28,000 $33,000
Depreciation $0 $0 $0
Insurance $3,600 $7,200 $14,400
Rent $0 $0 $10,000
Other $0 $0 $0
Insurance $0 $0 $0
Payroll Taxes $9,100 $36,400 $68,880
Other $0 $0 $0
Total Operating Expenses $98,700 $331,600 $618,280
Surplus Before Interest and Taxes $35,300 $74,400 $25,720
EBITDA $35,300 $74,400 $25,720
Interest Expense $0 $0 $0
Taxes Incurred ($2,145) $0 $643
Net Surplus $37,445 $74,400 $25,077
Net Surplus/Funding 26.75% 17.71% 3.80%

7.5 Projected Cash Flow

Cash flow projections are 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 representing the monthly balance. The annual cash flow figures are included in the following table. Consulting is always a feast or famine venture.  It is extremely difficult to consistently match demand and supply, especially in firms of five or less consultants.  (Beyond this, it evens out.)  Therefore, note that a large cash balance in essential to operate through the dry months.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Funding $105,000 $315,000 $495,000
Cash from Receivables $25,167 $85,333 $148,143
Subtotal Cash from Operations $130,167 $400,333 $643,143
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 $130,167 $400,333 $643,143
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $65,000 $260,000 $492,000
Bill Payments $34,462 $81,658 $138,212
Subtotal Spent on Operations $99,462 $341,658 $630,212
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 $99,462 $341,658 $630,212
Net Cash Flow $30,705 $58,676 $12,931
Cash Balance $67,105 $125,781 $138,712

7.6 Projected Balance Sheet

The following table shows the project balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $67,105 $125,781 $138,712
Accounts Receivable $9,833 $29,500 $46,357
Other Current Assets $3,000 $3,000 $3,000
Total Current Assets $79,938 $158,281 $188,069
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $79,938 $158,281 $188,069
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,093 $7,036 $11,747
Current Borrowing $0 $0 $0
Other Current Liabilities $11,400 $11,400 $11,400
Subtotal Current Liabilities $14,493 $18,436 $23,147
Long-term Liabilities $0 $0 $0
Total Liabilities $14,493 $18,436 $23,147
Paid-in Capital $61,400 $61,400 $61,400
Accumulated Surplus/Deficit ($33,400) $4,045 $78,445
Surplus/Deficit $37,445 $74,400 $25,077
Total Capital $65,445 $139,845 $164,922
Total Liabilities and Capital $79,938 $158,281 $188,069
Net Worth $65,445 $139,845 $164,922

7.7 Standard Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8299, Schools & Educational Services, NEC, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Funding Growth 0.00% 200.00% 57.14% 9.50%
Percent of Total Assets
Accounts Receivable 12.30% 18.64% 24.65% 15.50%
Other Current Assets 3.75% 1.90% 1.60% 45.60%
Total Current Assets 100.00% 100.00% 100.00% 62.40%
Long-term Assets 0.00% 0.00% 0.00% 37.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 18.13% 11.65% 12.31% 43.30%
Long-term Liabilities 0.00% 0.00% 0.00% 17.30%
Total Liabilities 18.13% 11.65% 12.31% 60.60%
Net Worth 81.87% 88.35% 87.69% 39.40%
Percent of Funding
Funding 100.00% 100.00% 100.00% 100.00%
Gross Surplus 95.71% 96.67% 97.58% 0.00%
Selling, General & Administrative Expenses 73.50% 81.81% 95.95% 73.80%
Advertising Expenses 3.57% 2.38% 1.82% 5.00%
Surplus Before Interest and Taxes 25.21% 17.71% 3.90% 3.20%
Main Ratios
Current 5.52 8.59 8.12 1.33
Quick 5.52 8.59 8.12 1.11
Total Debt to Total Assets 18.13% 11.65% 12.31% 60.60%
Pre-tax Return on Net Worth 53.94% 53.20% 15.60% 5.50%
Pre-tax Return on Assets 44.16% 47.01% 13.68% 14.00%
Additional Ratios Year 1 Year 2 Year 3
Net Surplus Margin 26.75% 17.71% 3.80% n.a
Return on Equity 57.22% 53.20% 15.21% n.a
Activity Ratios
Accounts Receivable Turnover 3.56 3.56 3.56 n.a
Collection Days 56 68 84 n.a
Accounts Payable Turnover 12.14 12.17 12.17 n.a
Payment Days 27 22 24 n.a
Total Asset Turnover 1.75 2.65 3.51 n.a
Debt Ratios
Debt to Net Worth 0.22 0.13 0.14 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $65,445 $139,845 $164,922 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Funding 0.57 0.38 0.28 n.a
Current Debt/Total Assets 18% 12% 12% n.a
Acid Test 4.84 6.99 6.12 n.a
Funding/Net Worth 2.14 3.00 4.00 n.a
Dividend Payout 0.00 0.00 0.00 n.a