Business Consulting Business Plan

Growth Management and Strategies

Financial Plan

The Financial Plan is based on a pending SBA loan, and a corresponding cash flow amount held in a highly liquid account.

7.1 Important Assumptions

The General Assumptions table explains various tax rates, personnel burden, and other financial inputs.

General Assumptions
	Year 1	Year 2	Year 3
Plan Month	1	2	3
Current Interest Rate	7.00%	7.00%	7.00%
Long-term Interest Rate	5.50%	5.50%	5.50%
Tax Rate	31.83%	32.00%	31.83%
Other	0	0	0

7.2 Break-even Analysis

The Break-even Analysis table is based on the assumption that each hour worked can be billed at approximately $70 per unit, and the employees will start at approximately $25/hour. This doesn’t include the cost of the payroll burden, however the assumptions are fairly accurate. Fixed costs are related to the lease and other monthly costs.

Business consulting business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$10,203

Assumptions:
Average Percent Variable Cost	1%
Estimated Monthly Fixed Cost	$10,075

7.3 Projected Cash Flow

The following table and chart show the Projected Cash Flow figures for Growth Management and Strategies.

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$806,829	$1,177,624	$1,762,655
Subtotal Cash from Operations	$806,829	$1,177,624	$1,762,655

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	$806,829	$1,177,624	$1,762,655

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$54,000	$62,000	$68,000
Bill Payments	$191,326	$481,392	$581,431
Subtotal Spent on Operations	$245,326	$543,392	$649,431

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	$245,326	$543,392	$649,431

Net Cash Flow	$561,503	$634,232	$1,113,224
Cash Balance	$607,303	$1,241,536	$2,354,759

7.4 Projected Profit and Loss

The following table and charts are the Projected Profit and Loss and Gross Margin figures for Growth Management and Strategies.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$806,829	$1,177,624	$1,762,655
Direct Cost of Sales	$10,151	$11,673	$13,424
Other Costs of Sales	$0	$0	$0
Total Cost of Sales	$10,151	$11,673	$13,424

Gross Margin	$796,679	$1,165,951	$1,749,231
Gross Margin %	98.74%	99.01%	99.24%


Expenses
Payroll	$54,000	$62,000	$68,000
Sales and Marketing and Other Expenses	$6,000	$6,000	$6,000
Depreciation	$0	$0	$0
Rent	$42,000	$42,000	$42,000
Utilities	$7,800	$7,800	$7,800
Insurance	$3,000	$3,000	$3,000
Payroll Taxes	$8,100	$9,300	$10,200
Other	$0	$0	$0

Total Operating Expenses	$120,900	$130,100	$137,000

Profit Before Interest and Taxes	$675,779	$1,035,851	$1,612,231
EBITDA	$675,779	$1,035,851	$1,612,231
Interest Expense	$1,375	$1,375	$1,375
Taxes Incurred	$215,990	$331,032	$512,789

Net Profit	$458,414	$703,444	$1,098,067
Net Profit/Sales	56.82%	59.73%	62.30%

7.5 Projected Balance Sheet

The following table is the Projected Balance Sheet for Growth Management and Strategies.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$607,303	$1,241,536	$2,354,759
Other Current Assets	$0	$0	$0
Total Current Assets	$607,303	$1,241,536	$2,354,759

Long-term Assets
Long-term Assets	$0	$0	$0
Accumulated Depreciation	$0	$0	$0
Total Long-term Assets	$0	$0	$0
Total Assets	$607,303	$1,241,536	$2,354,759

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$103,090	$33,878	$49,035
Current Borrowing	$0	$0	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$103,090	$33,878	$49,035

Long-term Liabilities	$25,000	$25,000	$25,000
Total Liabilities	$128,090	$58,878	$74,035

Paid-in Capital	$35,000	$35,000	$35,000
Retained Earnings	($14,200)	$444,214	$1,147,658
Earnings	$458,414	$703,444	$1,098,067
Total Capital	$479,214	$1,182,658	$2,280,725
Total Liabilities and Capital	$607,303	$1,241,536	$2,354,759

Net Worth	$479,214	$1,182,658	$2,280,725

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8742, Business Management Consultants, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	45.96%	49.68%	6.98%

Percent of Total Assets
Other Current Assets	0.00%	0.00%	0.00%	43.95%
Total Current Assets	100.00%	100.00%	100.00%	75.76%
Long-term Assets	0.00%	0.00%	0.00%	24.24%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	16.97%	2.73%	2.08%	31.78%
Long-term Liabilities	4.12%	2.01%	1.06%	17.26%
Total Liabilities	21.09%	4.74%	3.14%	49.04%
Net Worth	78.91%	95.26%	96.86%	50.96%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	98.74%	99.01%	99.24%	100.00%
Selling, General & Administrative Expenses	41.90%	39.27%	37.09%	85.31%
Advertising Expenses	0.00%	0.00%	0.00%	1.02%
Profit Before Interest and Taxes	83.76%	87.96%	91.47%	1.90%

Main Ratios
Current	5.89	36.65	48.02	1.88
Quick	5.89	36.65	48.02	1.48
Total Debt to Total Assets	21.09%	4.74%	3.14%	55.78%
Pre-tax Return on Net Worth	140.73%	87.47%	70.63%	3.41%
Pre-tax Return on Assets	111.05%	83.32%	68.41%	7.72%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	56.82%	59.73%	62.30%	n.a
Return on Equity	95.66%	59.48%	48.15%	n.a

Activity Ratios
Accounts Payable Turnover	2.86	12.17	12.17	n.a
Payment Days	27	61	25	n.a
Total Asset Turnover	1.33	0.95	0.75	n.a

Debt Ratios
Debt to Net Worth	0.27	0.05	0.03	n.a
Current Liab. to Liab.	0.80	0.58	0.66	n.a

Liquidity Ratios
Net Working Capital	$504,214	$1,207,658	$2,305,725	n.a
Interest Coverage	491.48	753.35	1,172.53	n.a

Additional Ratios
Assets to Sales	0.75	1.05	1.34	n.a
Current Debt/Total Assets	17%	3%	2%	n.a
Acid Test	5.89	36.65	48.02	n.a
Sales/Net Worth	1.68	1.00	0.77	n.a
Dividend Payout	0.00	0.00	0.00	n.a