Numbers for business. Formulas for growth.
Summary Business Plan : This collates the data in a summarised format, providing an annual overview while collecting the monthly information available within the financial model and presenting the figures as a quick reference overview. All categories in this section provide an overview of the detailed worksheets that follow and are explained in the following sections.
In some cases there will be the requirement for different levels of summaries within the same business model, this can be where a group of companies are being established and different levels of income streams and business activity will take place in different business entities. However there will always be a consolidated summary business plan.
Assumptions : All assumptions are applied concurrently and monthly in the model being adaptable to projected changes in future months. In the majority of cases the assumptions remain constant throughout.
Assumptions include business, investment and direct cost assumptions.
Revenue Model:The results highlighted in this section outline the main business development categories focusing on the sales and marketing strategy while utilising online, advertising and target marketing methods and channels. The Target Market Model is designed to provide the basis for the targeted market, this model quantifies the population across the three categories (online/advertising/target marketing). An important aspect concerns the relationship between this analysis and the Business Development Model worksheets, the business development model calculates the advertising cost budget linking the targeted population, sales and marketing strategy as well as calculating the projected Cost Per Acquisition “CPA” for each customer.
Financial Analysis: The break-even analysis is based upon the average pricing across all income streams while calculating the average memberships, units or transactions that are required to break even. This is a linear average calculated across all income streams while identifying the variable (move with generating income) and fixed costs (don’t move with generating income – rent, salaries etc.) elements of the business model.
DCF: The Discounted Cash Flow calculation provides an analysis over the projected time period of the value of the future projected cash flows based upon the valuation of the business model. In taking three different “discounting factors” the business is valued based on different levels of risk, the private nature of the business model, the amount of investment required and the pre and post money (investment) assumptions. This calculation discounts future cash flows to assess how much the cash flow is worth to the business and the potential investor today and comparing this to the investment to calculate the amount of shareholding that should be offered based upon this. In most cases the shareholding required by the investor for any start-up investment would be higher (normally 20%-30%).
The financial plan is a business plan in it's own right which is why some companies who aren't looking for investment, or who have already written the majority of their plan only need a financial plan.
The financial plan details the sales and expenses that we expect your business to have. It takes into consideration historical data if available or is built from industry-experience based assumptions.
In short, the financial analysis comprises a P&L, balance sheet and cash flow forecast for 3-5 years depending on your requirements.
The financial analysis plan will not just look at what you intend to spend and make but also take into consideration extra expenses such as employer's NI, VAT, corporation tax and financials that are specific to you such as payment processing fees.
The most important part of the financial analysis is the timing and staging of incomes and expenses. This is where your cashflow document becomes vital to ensure that you remain in a positive cashflow balance.
In order for us to be able to accurately predict your financials, we'll need access to your past bank statements if available, to understand your business model in its entirety through email and consultations as well as using our own experience.
Where industry specific statistics are required we have access to a number of market research papers that help us build the business model assumptions.
Their analysis shows that you know how they work and who they are with a chapter dedicated to outlining their business.
When it comes to writing a business plan for a brand new venture then it is impossible to stress how important the figures section is going to be. This is something that is actually quite difficult to do especially if you have never constructed a business plan before and indeed if you look at example [...]
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