Financial Plan

COSTS/EXPENSES FORECASTING/JUSTIFICATION:

MARKETING PLAN / MARKETING MIX TOOLS

• “Price” – revenue-generating tool

o *Can be calculated separately for each Product Item from the Product Portfolio
(Price 1 for Product 1, Price 2 for Product 2, etc.)

• “Product” – for example, new product development, design, brand management*

• “Promotion”– advertising budget, public relationships, or other Expenses

• “Place” costs – for example, such expenses as:

OPERATIONAL PLAN

• HRM — salaries,
- but also hiring process-related costs (how will you advertise your job positions?), training and development costs, bonuses, benefits (holidays, insurances, gym or working computer)
- Salary related TAX
• Suppliers — the purchase of raw materials
• Processes — Maintenance should be demonstrated as costs, for example, quality control, planned security controls of buildings, changing of the broken furniture, revenue of domain name and hosting for website
• Etc.

NOTES.

Costs should be grouped by fixed and variable to calculate BEP further
Costs should be grouped by the periods (monthly, quarterly, yearly) to place the incorrect column in the table – Financial Plan
All prices (for customers and for the company) should include VAT input (what the company gets with revenues) and VAT output (what the company pays, for example, with the purchase of raw materials)
the First year should be planned by month, further calculations can be grouped by years.
Check that all the numbers are related to the business plan document. A financial plan is a representation of your decisions done but with numbers.

ECONOMIC AND FINANCIAL VIABILITY

Checklist Financial Plan (see Appendix for an example of tables)

• Key assumptions –

o if you make any generalization of the numbers (we consider average check for the calculations of the restaurant’s revenue,
o we do not include demonstrate seasonality in the financial table and take occupancy rate as average per year)
o or if do not take into consideration some issues (for the calculation we consider optimistic sales forecast, we do not take into consideration inflation, we do not consider any changes of the taxes or the minimum salary ranges)
o etc.

• Investment plan – initial investments (furniture, initial hiring employees, website development, logo design, etc.)

• Financial Statements (12-month for Year 1, Year 2, Year 3)

o Income statement (Profit&Loss statement) (with Gross margin, or with Contribution margin)

§ NOTE! Do not forget to add the VAT payments to the government (VAT output-VAT input)

§ Income TAX

§ Salary TAX

o Balance sheet – Pro-forma balance sheet
o Cash flow statement – (you should demonstrate the first month when you willget a positive Income, and the year of the return of initial investments).

• Detailed BEP (break-even point) analysis

• BEP in dollars/euro

• BEP in number of sales

• Analysis of the economic viability of the project

o Ration analysis with the comparison to the industry standards (per Year1, Year 2, Year 3 and +industry standard column):
- § Profitability, % (net sales vs. net profit)
- § ROI, % (total investments vs. net profit)
- § Contribution margin, % (proportions on fixed vs. variable costs)
o Additional industry ration comparison:

• % of marketing spending

• Occupancy rate

• Turnover

Appendix – Examples of Tables