Financial Plan for Small Businesses

Financial Plan For small businesses Training & Templates Includes links with Excel tables and charts

Objectives of this document

“ Learn how to create a financial plan with a training and templates created by former Deloitte Management Consultants ”

“ Save your time by using our fully editable PowerPoint slides that you can reuse for your own presentation ”

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Overview - Guiding principles

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Table of content

How to create a Financial Plan?

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1

Set-up costs

2

Start-up capital

3

Financial statements

4

Financial ratios

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Set-up costs - Guiding principles

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Set-up costs - Template Insert your key message (e.g. Our total set-up costs will be $13,450)

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I.Setting up the business Accountant's fees Solicitor's fees Business registration Domain name registration Insurance Licences Workers compensation Total

$100 $100 $100 $50 $400 $400 $800 $1,950

II.Setting up the premises and equipement Lease deposit Advance rent Stationery and office supplies Equipment Vehicles Telecommunications Computers and software Total

$1,000 $1,000 $500 $100 $5,000 $400 $1,000 $9,000

III.Starting Operations Advertising and promotion Raw materials and supplies Working capital Total

$1,000 $1,000 $500 $2,500

Example of figures that you will have to replace by your own figures

IV.Total Set-up costs I.Setting up the business II.Setting up the premises and equipement III.Starting Operations Total (I+II+III)

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$1,950 $9,000 $2,500 $13,450

Table of content

How to create a Financial Plan?

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1

Set-up costs

2

Start-up capital

3

Financial statements

4

Financial ratios

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Start-up capital – Guiding principles

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Start-up capital - Template Insert your key message (e.g. Our start-up capital will be $19,000)

I.Equity Investment Owner #1 Owner #2 Investor #1 Total II.Borrowings Borrowing #1 Borrowing #2 Borrowing #3 Total

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$10,000 $2,000 $1,000 $13,000

$3,000 $2,000 $1,000 $6,000

III.Start-up Capital I.Equity Investment II.Borrowings Total (I+II)

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$13,000 $6,000 $19,000

Table of content

How to create a Financial Plan?

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1

Set-up costs

2

Start-up capital

3

Financial statements

4

Financial ratios

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Profit and Loss “P&L” forecast - Guiding principles

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Profit and Loss forecast - Template (1/2) Insert your key message 2014

2015

$100,000 $20,000 $80,000

$120,000 $20,000 $100,000

$140,000 $20,000 $120,000

$160,000 $20,000 $140,000

$200,000 $20,000 $180,000

II.Expenses Accounting fees Advertising Bank charges Bank intertest Depreciation Electricity and Gas Equipement hire/lease Insurance Legal fees Motor vehicle expenses Postage, telephone and fax Stationery Rent Repairs and maintenance Security Sundries Transport/courier costs Wages Total Expenses

$100 $1,000 $100 $100 $100 $100 $100 $1,000 $100 $100 $100 $100 $100 $100 $100 $1,000 $100 $30,000 $34,400

$100 $1,000 $100 $100 $100 $100 $100 $1,000 $100 $100 $100 $100 $100 $100 $100 $1,000 $100 $30,000 $34,400

$100 $1,000 $100 $100 $100 $100 $100 $1,000 $100 $100 $100 $100 $100 $100 $100 $1,000 $100 $30,000 $34,400

$100 $1,000 $100 $100 $100 $100 $100 $1,000 $100 $100 $100 $100 $100 $100 $100 $1,000 $100 $30,000 $34,400

$100 $1,000 $100 $100 $100 $100 $100 $1,000 $100 $100 $100 $100 $100 $100 $100 $1,000 $100 $30,000 $34,400

III.Results Gross Profit Total Expenses Net profit Gross profit margin Net profit margin

$80,000 $34,400 $45,600 80% 46%

$100,000 $34,400 $65,600 83% 55%

$120,000 $34,400 $85,600 86% 61%

$140,000 $34,400 $105,600 88% 66%

$180,000 $34,400 $145,600 90% 73%

I.Sales Sales invoiced Cost of goods sold Gross profit

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2016

2017

2018

Profit and Loss forecast - Template (2/2) Insert your key message

Revenue and Profit

4 3.5 3 2.5 2 1.5 1 0.5 0 2014

2015

2016 Revenue

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2017 Profit

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2018

Cash flow forecast - Guiding principles

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Cash flow forecast - Template Insert your key message 2014

2015

2016

$20,000

$100,000

$227,600

$365,200

$512,800

$80,000 $10,000 $20,000 $110,000

$100,000 $10,000 $20,000 $130,000

$110,000 $10,000 $20,000 $140,000

$120,000 $10,000 $20,000 $150,000

$160,000 $10,000 $20,000 $190,000

II.Outgoing Fixed Costs Administration Marketing Operations Total Outgoing Fixed Costs

$5,000 $5,000 $5,000 $15,000

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

III.Outgoing Variable Costs Administration Marketing Operations Total Outgoing Variable Costs

$5,000 $5,000 $5,000 $15,000

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

$100 $1,000 $100 $1,200

$110,000 $15,000 $15,000 $80,000 $100,000

$130,000 $1,200 $1,200 $127,600 $227,600

$140,000 $1,200 $1,200 $137,600 $365,200

$150,000 $1,200 $1,200 $147,600 $512,800

$190,000 $1,200 $1,200 $187,600 $700,400

Starting Cash Position I.Incoming Cash sales Collections from accounts receivable Other cash receipts Total Incoming

IV.Results Total Incoming Total Outgoing Fixed Costs Total Outgoing Variable Costs Change during year Closing cash position 15

2017

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2018

Balance sheet forecast - Guiding principles

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Balance sheet forecast - Templates Insert your key message As at December As at December As at December As at December As at December 2014 2015 2016 2017 2018

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I.Current Assets Cash Accounts receivable Stock Short-term investment Prepaid expenses Long-term investment Total Current Assets

$0

$0

$0

$0

$0

II.Fixed Assets Land Building Equipement Furniture Motor vehicles Total Fixed Assets

$0

$0

$0

$0

$0

III.Current Liabilities Accounts payable Interest payable Taxes payable Payroll Accrual Total Current Liabilities

$0

$0

$0

$0

$0

IV.Long term Liabilities Borrowing #1 Borrowing #2 Total Long term Liabilities

$0

$0

$0

$0

$0

V.Total Assets and Liabilities Total Assets Total Liabilities Net Assets

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $0

$0 $0 $45,600 $65,600 $45,600 $65,600 www.slidebooks.com

$0 $85,600 $85,600

$0 $105,600 $105,600

$0 $145,600 $145,600

VI.Owner's Equity Retained Earnings Current year earnings (=net profit) Total Equity (should equal Net Assets)

Break-even analysis – Guiding principles

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Break-even analysis – Templates

Insert your key message

Break-even analysis Average selling price per unit Average variable cost per unit Fixed cost Number of unit sales to break-even

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$50 $10 $34,400 860

Table of content

How to create a Financial Plan?

20

1

Set-up costs

2

Start-up capital

3

Financial statements

4

Financial ratios

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Guiding principles

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Definitions and Templates (1/2) Ratio

Formula

Definition

Margin of safety

Total sales – (number of units sales to break-even X average price per unit)

Shows how much actual or forecasted sales exceed the break-even point. Shows how much ‘breathing room’ you have (i.e. how much sales can drop before you start making a loss).

Insert your own text

Current ratio

Current assets ÷ Current liabilities

A measure of your business' liquidity (i.e. ability to repay short-term debts). A ratio below 1 shows liquidity problems

Insert your own text

Current trading level per month

Annual sales ÷ 12

Used to determine average monthly sales. Useful for analyzing and setting sales targets

Insert your own text

(Trade debtors x 365) ÷ Credit sales per year

This ratio approximates the average number of days debtors are outstanding

Insert your own text

(Trade creditors x 365) ÷ Credit purchases per year

This ratio approximates the average number of days creditors are outstanding

Insert your own text

Debtor days

Creditor days

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Result

Definitions and Templates (2/2)

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Ratio

Formula

Definition

Days stock

(Closing stock x 365) ÷ Material used or stock purchases

This ratio approximates the number of days stock is held without replenishment.

Insert your own text

Stock turnover

Cost of goods sold ÷ Average stock value

This ratio is used to approximate the number of times in a year the stock turns over. Greater stock turn reduces working capital

Insert your own text

Gearing ratio (%)

(Borrowed funds x 100) ÷ Total assets

This ratio is used to ascertain the extent to which the total assets of the business are used for borrowed funds

Insert your own text

Debt to equity ratio

Total liabilities ÷ Owner’s equity

This ratio shows the relative proportion of owner’s equity and debt used to finance your business’s assets

Insert your own text

Asset turnover per annum

Total sales ÷ Total assets

This ratio is used to show the extent to which total assets are used to produce sales.

Insert your own text

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Result

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