Insurance Agency Business Plan

Quaestor Services’ financial plan is based on obtaining a loan by January of 2005 of $15,000 to cover the start-up expenses. In July of 2005 an additional $10,000 in financing will be required to ensure business operations, marketing and stability during the first year of operation. For financial forecasting the loan is a seven year loan at an interest rate of 9.09%. Quaestor will achieve profitability in the second year.

The fiscal year is a calendar year, January through December.

7.1 Start-up Funding

Start-up costs come to $30,000 of which $15,000 is being financed by a direct owner investment. Before the first six months of operation, $15,000 financing is being sought for the start-up costs. In July of 2005 an additional $10,000 in financing will be required to ensure business operations, marketing and stability during the first year of operation.

7.2 Important Assumptions

The key underlying assumptions of Quaestor financial plan shown in the following general assumption table are:

1. We assume access to financing of $30,000 to support our financial plan.
2. We assume our financial progress is based on a very conservative sales forecast supported by data received and reviewed by Whelnoan Insurance.
3. We assume that all sales milestones have been achieved.

7.3 Break-even Analysis

The following table and chart show our Break-even Analysis. The first year due to start-up costs and expenses will not be included in the break-even analysis.

7.4 Projected Profit and Loss

Based on the realistic sales projections and efficient cost control measures in place, Quaestor will achieve profitability in the second year of operation. Monthly profitability is first achieved in November 2005, but due to developing a customer base, the first months of operations reflect a loss.

In the second year of operation, sales increased $68,810 or 174%, resulting in a net profit. Significant changes in the second year are the hiring of an agent in January 2006, resulting in additional costs to the direct cost of sales of $34,500 and the set-up of an office outside of the owner’s home and Whelnoan Insurance District 15 office, resulting in additional operating costs of $7,120.

In the third year of operation, sales increased $13,800 or 13%. This yields an increase on the bottom line. In the third year of operations, Whelnoan Insurance subsidies are no longer available, resulting in a decrease in Miscellaneous revenue of $36,800 over the prior year. There are no significant changes in the third year of operations.

7.5 Projected Cash Flow

Due the fact that Quaestor is a new start-up company, the cash flow for FY2005 is somewhat exaggerated by the instant influx of new capital. Subsequent years however show a healthy growth in cash flow, mainly due to the 84-month repayment of the start-up loan and increased sales.

7.6 Projected Balance Sheet

The table below presents the balance sheet for Quaestor Services. This table reflects a positive cash position throughout the period of this financial plan. The negative net worth is created in the first year due to the start-up costs showing as a negative retained earnings. As the balance sheet shows, Quaestor will not have any difficulty meeting their debt obligations as long as the conservative revenue projections are met.

7.7 Business Ratios

The table below presents common business ratios as a reference. Industry Profile comparisons are for Standard Industrial Classification code 6411.0000, Insurance Agents, Brokers and Service as the majority of our revenue comes from insurance sales. However, since the combined business of accounting/bookkeeping services and insurance sales does not fall underneath any predefined Industry dataset, the Industry ratios are not wholly accurate nor representative for Quaestor Services.