Web Design Business Plan

Ibrio Incorporated

Create your own business plan

Financial Plan

Ibrio's financials summarize the following areas:

  • Important Assumptions.
  • Key Financial Indicators.
  • Break-even Analysis.
  • Projected Profit and Loss.
  • Projected Cash Flow.
  • Projected Balance Sheet.
  • Business Ratios.

7.1 Important Assumptions

Our financial assumptions are based on a steady economy and standard numbers for a business in our industry.

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 13.00% 13.00% 13.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

The following chart indicates our key financial indicators over the next three years.

7.3 Break-even Analysis

The following table and chart summarize our break-even analysis. With two developers and two salesmen we plan on developing eight sites in November and once the two new hires are fully trained doubling the number to 16 sites a month. (We don't plan on that happening until March 2001).

The average variable cost is an aggregate measure for all the types of services which will be offered.

Break-even Analysis
Monthly Revenue Break-even $4,649
Assumptions:
Average Percent Variable Cost 9%
Estimated Monthly Fixed Cost $4,210

7.4 Projected Profit and Loss

Our projected profit and loss is shown on the following table.  Some highlights are the Gross Margin at 67% for our first year and steadily increasing. Our Net Profit/Sales starting at 26% and increasing by approximately 10% the following two years to reach 45% by our third year.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $164,520 $514,900 $1,194,500
Direct Cost of Sales $15,550 $50,000 $127,600
Production Payroll $38,492 $90,000 $137,000
Other $0 $0 $0
Total Cost of Sales $54,042 $140,000 $264,600
Gross Margin $110,478 $374,900 $929,900
Gross Margin % 67.15% 72.81% 77.85%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $30,000 $69,000 $108,000
Advertising/Promotion $2,790 $3,500 $10,000
Travel $1,020 $3,000 $7,000
Miscellaneous $0 $1,000 $2,500
Total Sales and Marketing Expenses $33,810 $76,500 $127,500
Sales and Marketing % 20.55% 14.86% 10.67%
General and Administrative Expenses
General and Administrative Payroll $0 $0 $0
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $3,180 $5,000 $12,000
Rent $4,500 $12,000 $24,000
Depreciation $0 $2,000 $4,000
Leased Equipment $0 $0 $0
Utilities $805 $2,000 $5,000
Insurance $0 $2,500 $5,000
Payroll Taxes $8,219 $19,080 $29,400
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $16,704 $42,580 $79,400
General and Administrative % 10.15% 8.27% 6.65%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Contract/Consultants $0 $0 $0
Total Other Expenses $0 $0 $0
Other % 0.00% 0.00% 0.00%
Total Operating Expenses $50,514 $119,080 $206,900
Profit Before Interest and Taxes $59,964 $255,820 $723,000
EBITDA $63,144 $260,820 $735,000
Interest Expense $2,600 $2,302 $1,664
Taxes Incurred $14,330 $63,380 $183,340
Net Profit $43,034 $190,139 $537,996
Net Profit/Sales 26.16% 36.93% 45.04%

7.5 Projected Cash Flow

Cash flow projections for the first half of the year are slightly declining and in May they begin to raise sufficiently. We may need to borrow against our accounts receivables but are projecting that the initial capital raised should cover us until our cash becomes fluid.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $54,292 $169,917 $394,185
Cash from Receivables $70,969 $261,372 $638,141
Subtotal Cash from Operations $125,260 $431,289 $1,032,326
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 $10,700 $0 $0
Subtotal Cash Received $135,960 $431,289 $1,032,326
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $68,492 $159,000 $245,000
Bill Payments $40,764 $156,598 $379,881
Subtotal Spent on Operations $109,256 $315,598 $624,881
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 $4,589 $5,222
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $20,000 $20,000
Dividends $0 $0 $0
Subtotal Cash Spent $109,256 $340,187 $650,103
Net Cash Flow $26,704 $91,102 $382,224
Cash Balance $43,704 $134,806 $517,029

7.6 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 $43,704 $134,806 $517,029
Accounts Receivable $39,260 $122,871 $285,045
Other Current Assets $7,650 $7,650 $7,650
Total Current Assets $90,614 $265,327 $809,724
Long-term Assets
Long-term Assets $0 $20,000 $40,000
Accumulated Depreciation $3,180 $8,180 $20,180
Total Long-term Assets ($3,180) $11,820 $19,820
Total Assets $87,434 $277,147 $829,544
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9,050 $13,213 $32,836
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,050 $13,213 $32,836
Long-term Liabilities $20,000 $15,411 $10,189
Total Liabilities $29,050 $28,624 $43,025
Paid-in Capital $18,000 $18,000 $18,000
Retained Earnings ($2,650) $40,384 $230,523
Earnings $43,034 $190,139 $537,996
Total Capital $58,384 $248,523 $786,519
Total Liabilities and Capital $87,434 $277,147 $829,544
Net Worth $58,384 $248,523 $786,519

7.7 Business Ratios

The following table shows the projected businesses ratios. We expect to maintain healthy ratios for profitability, risk, and return. The Industry Profile ratios, shown for comparison, are based on Standard Industrial Classification (SIC) code 7375, Information Retrieval Services.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 212.97% 131.99% 9.70%
Percent of Total Assets
Accounts Receivable 44.90% 44.33% 34.36% 25.00%
Other Current Assets 8.75% 2.76% 0.92% 46.30%
Total Current Assets 103.64% 95.74% 97.61% 76.60%
Long-term Assets -3.64% 4.26% 2.39% 23.40%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.35% 4.77% 3.96% 49.40%
Long-term Liabilities 22.87% 5.56% 1.23% 21.20%
Total Liabilities 33.23% 10.33% 5.19% 70.60%
Net Worth 66.77% 89.67% 94.81% 29.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 67.15% 72.81% 77.85% 0.00%
Selling, General & Administrative Expenses 41.00% 35.88% 32.56% 78.10%
Advertising Expenses 1.70% 0.68% 0.84% 0.90%
Profit Before Interest and Taxes 36.45% 49.68% 60.53% 1.90%
Main Ratios
Current 10.01 20.08 24.66 1.57
Quick 10.01 20.08 24.66 1.19
Total Debt to Total Assets 33.23% 10.33% 5.19% 70.60%
Pre-tax Return on Net Worth 98.25% 102.01% 91.71% 4.10%
Pre-tax Return on Assets 65.61% 91.47% 86.96% 13.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 26.16% 36.93% 45.04% n.a
Return on Equity 73.71% 76.51% 68.40% n.a
Activity Ratios
Accounts Receivable Turnover 2.81 2.81 2.81 n.a
Collection Days 54 86 93 n.a
Accounts Payable Turnover 5.50 12.17 12.17 n.a
Payment Days 27 25 21 n.a
Total Asset Turnover 1.88 1.86 1.44 n.a
Debt Ratios
Debt to Net Worth 0.50 0.12 0.05 n.a
Current Liab. to Liab. 0.31 0.46 0.76 n.a
Liquidity Ratios
Net Working Capital $81,564 $252,114 $776,888 n.a
Interest Coverage 23.06 111.14 434.50 n.a
Additional Ratios
Assets to Sales 0.53 0.54 0.69 n.a
Current Debt/Total Assets 10% 5% 4% n.a
Acid Test 5.67 10.78 15.98 n.a
Sales/Net Worth 2.82 2.07 1.52 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page
« Previous Page Next Page »

Your business plan can look as polished and professional as this sample plan. It's fast and easy, with LivePlan.

Click here to get started.

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 13.00% 13.00% 13.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0
Break-even Analysis
Monthly Revenue Break-even $4,649
Assumptions:
Average Percent Variable Cost 9%
Estimated Monthly Fixed Cost $4,210
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $164,520 $514,900 $1,194,500
Direct Cost of Sales $15,550 $50,000 $127,600
Production Payroll $38,492 $90,000 $137,000
Other $0 $0 $0
Total Cost of Sales $54,042 $140,000 $264,600
Gross Margin $110,478 $374,900 $929,900
Gross Margin % 67.15% 72.81% 77.85%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $30,000 $69,000 $108,000
Advertising/Promotion $2,790 $3,500 $10,000
Travel $1,020 $3,000 $7,000
Miscellaneous $0 $1,000 $2,500
Total Sales and Marketing Expenses $33,810 $76,500 $127,500
Sales and Marketing % 20.55% 14.86% 10.67%
General and Administrative Expenses
General and Administrative Payroll $0 $0 $0
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $3,180 $5,000 $12,000
Rent $4,500 $12,000 $24,000
Depreciation $0 $2,000 $4,000
Leased Equipment $0 $0 $0
Utilities $805 $2,000 $5,000
Insurance $0 $2,500 $5,000
Payroll Taxes $8,219 $19,080 $29,400
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $16,704 $42,580 $79,400
General and Administrative % 10.15% 8.27% 6.65%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Contract/Consultants $0 $0 $0
Total Other Expenses $0 $0 $0
Other % 0.00% 0.00% 0.00%
Total Operating Expenses $50,514 $119,080 $206,900
Profit Before Interest and Taxes $59,964 $255,820 $723,000
EBITDA $63,144 $260,820 $735,000
Interest Expense $2,600 $2,302 $1,664
Taxes Incurred $14,330 $63,380 $183,340
Net Profit $43,034 $190,139 $537,996
Net Profit/Sales 26.16% 36.93% 45.04%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $54,292 $169,917 $394,185
Cash from Receivables $70,969 $261,372 $638,141
Subtotal Cash from Operations $125,260 $431,289 $1,032,326
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 $10,700 $0 $0
Subtotal Cash Received $135,960 $431,289 $1,032,326
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $68,492 $159,000 $245,000
Bill Payments $40,764 $156,598 $379,881
Subtotal Spent on Operations $109,256 $315,598 $624,881
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 $4,589 $5,222
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $20,000 $20,000
Dividends $0 $0 $0
Subtotal Cash Spent $109,256 $340,187 $650,103
Net Cash Flow $26,704 $91,102 $382,224
Cash Balance $43,704 $134,806 $517,029
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $43,704 $134,806 $517,029
Accounts Receivable $39,260 $122,871 $285,045
Other Current Assets $7,650 $7,650 $7,650
Total Current Assets $90,614 $265,327 $809,724
Long-term Assets
Long-term Assets $0 $20,000 $40,000
Accumulated Depreciation $3,180 $8,180 $20,180
Total Long-term Assets ($3,180) $11,820 $19,820
Total Assets $87,434 $277,147 $829,544
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9,050 $13,213 $32,836
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,050 $13,213 $32,836
Long-term Liabilities $20,000 $15,411 $10,189
Total Liabilities $29,050 $28,624 $43,025
Paid-in Capital $18,000 $18,000 $18,000
Retained Earnings ($2,650) $40,384 $230,523
Earnings $43,034 $190,139 $537,996
Total Capital $58,384 $248,523 $786,519
Total Liabilities and Capital $87,434 $277,147 $829,544
Net Worth $58,384 $248,523 $786,519
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 212.97% 131.99% 9.70%
Percent of Total Assets
Accounts Receivable 44.90% 44.33% 34.36% 25.00%
Other Current Assets 8.75% 2.76% 0.92% 46.30%
Total Current Assets 103.64% 95.74% 97.61% 76.60%
Long-term Assets -3.64% 4.26% 2.39% 23.40%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 10.35% 4.77% 3.96% 49.40%
Long-term Liabilities 22.87% 5.56% 1.23% 21.20%
Total Liabilities 33.23% 10.33% 5.19% 70.60%
Net Worth 66.77% 89.67% 94.81% 29.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 67.15% 72.81% 77.85% 0.00%
Selling, General & Administrative Expenses 41.00% 35.88% 32.56% 78.10%
Advertising Expenses 1.70% 0.68% 0.84% 0.90%
Profit Before Interest and Taxes 36.45% 49.68% 60.53% 1.90%
Main Ratios
Current 10.01 20.08 24.66 1.57
Quick 10.01 20.08 24.66 1.19
Total Debt to Total Assets 33.23% 10.33% 5.19% 70.60%
Pre-tax Return on Net Worth 98.25% 102.01% 91.71% 4.10%
Pre-tax Return on Assets 65.61% 91.47% 86.96% 13.80%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 26.16% 36.93% 45.04% n.a
Return on Equity 73.71% 76.51% 68.40% n.a
Activity Ratios
Accounts Receivable Turnover 2.81 2.81 2.81 n.a
Collection Days 54 86 93 n.a
Accounts Payable Turnover 5.50 12.17 12.17 n.a
Payment Days 27 25 21 n.a
Total Asset Turnover 1.88 1.86 1.44 n.a
Debt Ratios
Debt to Net Worth 0.50 0.12 0.05 n.a
Current Liab. to Liab. 0.31 0.46 0.76 n.a
Liquidity Ratios
Net Working Capital $81,564 $252,114 $776,888 n.a
Interest Coverage 23.06 111.14 434.50 n.a
Additional Ratios
Assets to Sales 0.53 0.54 0.69 n.a
Current Debt/Total Assets 10% 5% 4% n.a
Acid Test 5.67 10.78 15.98 n.a
Sales/Net Worth 2.82 2.07 1.52 n.a
Dividend Payout 0.00 0.00 0.00 n.a