The financial plan depends on initial investment of $25K from the founder plus a five-year loan of $30K. Much as we'd like to bootstrap this business without initial investment, it just isn't worth it. The rest of the plan is reasonably conservative, but there does have to be money at risk.
The bank loan will be secured with real estate owned by the founder.
Important general assumptions are shown in the following table.
The benchmarks chart shows changes in sales, operating expenses, gross margin, and collection days. We think the chart speaks for itself, and what it says is that the numbers and assumptions are reasonable.
Unfortunately, the break-even analysis shows that it takes more than $20,000 per month in sales to break even. That's not an easy figure to make, especially not in the beginning before the marketing efforts begin to take effect.
As shown in the following table, the business doesn't make money in the first year, but turns very profitable in the third.
With the financing plan as projected, the business remains cash positive throughout the first three years. That does depend of course on investment capital and loans.
The balance sheet shows that the negative net worth is gradually solved with profits later on. Debts are repaid ahead of schedule.
The following table outlines several important ratios. Standard industry ratios for business seminars are not readily available, but the final column, Industry Profile, details specific ratios based on the Business Start-up Consultancy Services industry as it is classified by the Standard Industry Classification (SIC) code, 8472. The annual ratios for Seminars show steadily improving financial results.