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Financial Projections in Business Plans
One of the most difficult sections to write in a business plan is the proforma and financial sections. After all it is most difficult to what exact costs you will incur or what level of sales volumes are actually achievable. So often businesses are faced with excess government controls at all levels which take thousands of dollars in fees, additionally legal fees, delays and lawsuits often ensue and slow the project. You cannot know in advance what roadblocks or brick walls city planners, country agencies or Federal Regulators will come up with, as they often change their minds and add new laws in the middle of your already delayed project. These are only a few of the problems facing entrepreneurs when writing financial projections. Other issues occur from an over enthusiastic entrepreneurial positive attitude and business plan writers should double the money needed and triple the time to complete the project to be on a reality based plain. Thus if you beat your projections everyone is happy. Including bankers, investors and yourself. If folks are not happy you may find yourself in court defending yourself and making excuses, many of which many not be your fault, but in the end you are hung out to dry as the buck stops with you. To assist you in writing your financial projections section of your business plan, I have prepared a sample. This sample is from a most simple business model; a mobile car wash, which is part of a franchise system. Please feel free to print this article out and make notes in the margins and then take a legal pad and sketch out your own financial projections and start-up capital needed. I sincerely hope this sample helps you. - - - - - - - - - - - - - - - - Financial Projections We will follow our business plan to keep us in a profitable situation at all times. We will try to keep our car wash truck busy at all times. We will stay on top of collections and make sure all invoices go out on time and are directed to the person who authorizes payment. We will treat cash flow as a primary objective in order to reach our financial projections. We will be sure to have the right mix of services. Gross Revenue Percentage Breakdown Personal Car Washing 60% Gross Revenue: Insert Graph or Pie Chart Here. * Note: Car washing of personal vehicles will be 60% of our business. Over 80% of these monies will be collected at the point of sale by either: · Cash Some will actually be paid in advance on credit cards thus keeping us on the proper course to achieve positive cash flow at all times. Very few customers will be allowed to be billed monthly. ** Note: Fleet washing and industrial (graffiti, concrete, etc.) will only account for 35% of gross receipts. Twenty-five percent of this will be collected at the time the work is done, leaving only 26.25% of gross receipts to be billed at month's end. Billing On fleet accounts, all invoices will be net due in fifteen days. After fifteen days they will be considered late and 2% will be charged. If, in the future, our mix of percentages of services performed changes, we may offer a 2% discount for payment in ten days and a 1% discount for payment between ten and fifteen days. We don't anticipate changing our mix. However, if our city awards us a graffiti contract for $75,000 a year we will definitely accept it. Anticipated Gross Sales From Services In the appendix there is a first year pro forma of projected sales. We believe these figures are attainable. For various reasons we will take a 70% scenario for budgeting purposes in case everything doesn't go as planned. Just to be on the safe side. We project a conservative gross sales dollar amount to be: $124,630 Projected Gross Revenue X .70 70% Of Projected Dollars = $ 87,241 A Conservative Safe Number To Project As First Year Gross Receipts Anticipated Business Expenses We project costs of $56,112 for our first year of expenses. Please see spreadsheet in the appendix. We will add in a 20% fudge factor just in case we have any unanticipated expenses in year one. We project a conservative business expense dollar amount to be: $56,112 Anticipated Expenses X .20 20% Fudge Factor = $11,222 Possible Additional And Unanticipated Expenses During Year One $56,111 Anticipated Expenses +11,111 Unanticipated Expenses = $67,334 Total Anticipated And Unanticipated Business Expenses For Year One. Profit Per Truck Please see the graph on the following page of the "Net Profit One Truck". This graph is based on the spreadsheets "Anticipated Gross Sales From Services" minus "Anticipated Business Expenses". We realize that if a conservative approach is taken, we must use the 70% scenario for Gross Sales and add 20% to Business Expenses. We project a conservative net profit for the first truck in year one to be: $ 87,241 Gross Receipts - 67,334 Expenses = $ 19,907 First Year Profit. $ 19,907 First Year Profit divided by 12 Number Of Months = $ 1,659 Per Month Profit, A Good Conservative Number. "Lance Winslow" - If you have innovative thoughts and unique perspectives, come think with Lance; www.WorldThinkTank.net/wttbbs
Latest News:Site: Yahoo! News Search Results for news Myanmar's Suu Kyi to get family letters, news mags (Reuters via Yahoo! News) Detained Myanmar opposition leader Aung San Suu Kyi has managed to wring small concessions from the ruling generals in the form of letters from her family and some international news magazines, her lawyer said on Friday. SEC Looks Into UAL Stock Scare; Implications For Online News? (CBS News) A ton of digits have been devoted to this in other spots but the SEC's decision to investigate takes it to another level. The backstory: a six-year-old news story about UAL declaring bankruptcy made it into the Tribune-owned Sun-Sentinel 's current news flow, was picked up by a Google (NSDQ: GOOG) News bot and, via a reporter for a newsletter, made it onto Bloomberg News. After a lot of buck ... JCDecaux in talks for News Outdoor Group in Russia (AP via Yahoo! News) French outdoor advertising firm JCDecaux SA said Thursday it is negotiating to buy Russian rival News Outdoor Group from global media company News Corp. News Corp tightens grip on Premiere with new CEO (Reuters via Yahoo! News) Rupert Murdoch tightened his grip on German pay-TV broadcaster Premiere by appointing News Corp executive Mark Williams as CEO in a move to get the company back on track. Phila. mayor to announce grim budget news (The Philadelphia Inquirer) The Nutter administration is expected to announce grim budget news today, which is all but certain to lead to significant spending cuts - perhaps as high as 10 percent - in some city departments, according to three sources familiar with the budget. JCDecaux and News Corp. in talks to combine outdoor ad groups (International Herald Tribune) The News Corp. chief executive, Rupert Murdoch, has recently expressed nervousness about investments in Russia, where News Outdoor generated the bulk of its revenue last year. Help News pick Stadium's greatest moment (New York Daily News) The News is marking the countdown to the final game at The House That Ruth Built by reflecting on Yankee Stadium's greatest moments - and we're asking you - the reader - to help us pick out the best of the best. SEC Looks Into UAL Stock Scare; Implications For Online News? (paidContent.org via Yahoo! Finance) A ton of digits have been devoted to this in other spots but the SEC's decision to investigate takes it to another level. The backstory: a six-year-old news story about UAL declaring bankruptcy made it into the Tribune-owned Sun-Sentinel's current news flow, was picked up by a Google News bot and, via a reporter for a newsletter, made it onto Bloomberg News. JCDecaux in talks to buy News Corp. billboard unit (AP via Yahoo! Finance) In a deal that would create the world's largest outdoor advertising company, French conglomerate JCDecaux SA said Thursday that it is in talks to buy Russian rival News Outdoor Group from global media company News Corp. News Corp says Mark Williams interim Premiere CEO (Reuters via Yahoo! News) News Corp. executive Mark Williams has taken over as chief executive of German pay-TV broadcaster Premiere in an interim capacity, News Corp. said after the move led to renewed takeover speculation. Site: news - Google News New Voices in Congress Will Change the Tone of the Democratic Majority - New York Times
MORE RESOURCES: Site: Yahoo! News Search Results for ethics Charges against Queens assemblyman amplifies calls for ethics reform (Rochester Democrat and Chronicle) In the wake of charges by a federal prosecutor that a Queens assemblyman solicited $500,000 in bribes from people trying to influence state government, reform groups Thursday renewed their calls for tougher state ethics laws. Ethics panel clears Gibbons (Reno Gazette-Journal) A Nevada Ethics Commission panel concluded Thursday that there's no evidence to support a claim by a state Democratic Party official that Republican Gov. Jim Gibbons pressured a county assessor to get an unwarranted property tax break. Charges against assemblyman spur call for tighter ethics laws (The Journal News) Following charges by a federal prosecutor that an assemblyman from Queens solicited $500,000 in bribes from people trying to influence state government, reform groups yesterday renewed their calls for tougher state ethics laws. Ethics complaint filed against Loux over salary hikes (Las Vegas Review-Journal) Assembly Minority Leader Heidi Gansert, R-Reno, filed an ethics complaint today against Nevada Nuclear Projects Agency chief Bob Loux. The complaint alleges that Loux improperly used his position to ?grant unwarranted privileges? to himself in violation of state ethics laws. House overrides ethics veto, 110-3 (Herald & Review) SPRINGFIELD - The Illinois House on Wednesday voted overwhelmingly to override Gov. Rod Blagojevich's veto of a major campaign ethics bill. The question of whether to outlaw so-called pay-to-play politics now rests with the state Senate. Ethics complaint filed in pay raise flap (The Fresno Bee) The head of Nevada's anti-nuclear dump agency was hit Thursday with an ethics complaint filed by a legislative leader irate that the official gave himself and other staffers pay increases far above authorized amounts. Read comments Judge tells ethics luncheon 'Ethics is hard work' (Midland Reporter-Telegram) By Mella McEwen Oil Editor Ethics was the topic of Thursday's luncheon during the West Texas Geological Society's annual Fall Symposium. Ethics committee meets in secret (The Auburn Citizen) ALBANY - The New York Assembly's ethics committee met behind closed doors in an unannounced session Thursday involving a disciplinary case. Members wouldn't say if it concerned a colleague now facing federal charges of taking $500,000 in illegal payments, another accused of an extramarital affair with a legislative employee or a third accused of sexually harassing a woman. Ligon cleared of state ethics complaint (The Woodlands Villager) Attorney Brett Ligon, who defeated incumbent District Attorney Michael McDougal for the Republican nomination in the April runoff election, has been cleared of any wrongdoing regarding a complaint filed against him with the Texas Ethics Commission shortly before the runoff. Pelosi taps Va. Rep. Bobby Scott for ethics panel (Richmond Times-Dispatch) NEWPORT NEWS -- Virginia Representative Bobby Scott has been appointed to the House Ethics Committee. The Newport News Democrat said yesterday he was appointed by House Speaker Nancy Pelosi to the committee, formally known as the House Committee on Standards of Official Conduct. He will succeed Representative Stephanie Tubbs Jones, the Ohio Democrat who died Aug. 20. Site: ethics - Google News Ethics Overhaul Sought in Massachusetts - New York Times
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