The financial plan for rapid, but controlled growth for Southeast Health Plans, Inc. is presented in detail in the following sections.
Initial capitalization (after $300 thousand founder's seed funding) is pegged at $1 million (with cash streaming in from April through September).
The company will be debt free at that point (barring any interim management decisions to accelerate growth further). The company will also have significant IPO potential in the future and/or be an acquisition candidate in an industry that traditionally undergoes consolidation.
The financial assumptions upon which this plan is based are outlined in the following table:
Key financial indicators are increasing sales volume coupled with maintenance and improvement of margins. On-going cost control is paramount to success.
Monthly break-even, based upon fixed initial market overheads, will be attained prior to the end of year two.
Cost control and market maturation will then accelerate profitability which increases disproportionately as market development costs are offset with a critical mass of baseline business in each new market.
Southeast Health Plans, Inc. projects over-all profitability in year three.
Cash flow is the most critical indicator of business success.
At no point does our business model run out of cash. Significant margin for error is included. Initial and second round investment is procured prior to need and allowing for potential time lag to close.
All future growth is based upon a debt-free internally funded model. Attainment of targeted sales revenues will ensure the accumulation of required cash to execute expansion plans as presented.
Plans can always be curtailed or postponed in the event of future sales shortfalls.
Projected Balance Sheet follows.
These business ratios are only partially relevant as long as the business is able to remain debt free. Industry profile ratios based on the Standard Industrial Classification (SIC) code 6411, Insurance Agencies and Brokerages, are shown for comparison.