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Plan Outline
ASP B2B Technology Business Plan
Discover Productions
This sample business plan can be edited directly in Business Plan Pro software.
Financial Plan
The company is seeking first round funding in the amount of £914,900 for staffing purposes, purchasing software and hardware computing equipment, office costs, and other Internet related costs. The company is also seeking second round funding in the amount of £3 million for developing B2B Web-based applications, and their educational application software.
The following sections outline the financial plan for Discover Productions.
| General Assumptions | |||
| FY 2001 | FY 2002 | FY 2003 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 10.00% | 10.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
7.1 Projected Profit and Loss
Discover Productions' estimated income statements for FY2000-2002 are outlined below.
| Pro Forma Profit and Loss | |||
| FY 2001 | FY 2002 | FY 2003 | |
| Sales | £1,075,000 | £16,125,000 | £45,125,000 |
| Direct Cost of Sales | £100,000 | £1,500,000 | £3,000,000 |
| Other | £38,000 | £570,000 | £600,000 |
| Total Cost of Sales | £138,000 | £2,070,000 | £3,600,000 |
| Gross Margin | £937,000 | £14,055,000 | £41,525,000 |
| Gross Margin % | 87.16% | 87.16% | 92.02% |
| Expenses | |||
| Payroll | £434,783 | £2,200,000 | £3,600,000 |
| Sales and Marketing and Other Expenses | £483,600 | £3,780,000 | £5,765,000 |
| Depreciation | £36,000 | £100,000 | £150,000 |
| Utilities | £3,600 | £5,000 | £6,000 |
| Insurance | £14,400 | £40,000 | £60,000 |
| Rent | £18,000 | £40,000 | £70,000 |
| Utilities | £24,000 | £25,000 | £25,000 |
| Continuing Education | £36,000 | £518,000 | £575,000 |
| Payroll Taxes | £65,217 | £330,000 | £540,000 |
| Other | £0 | £0 | £0 |
| Total Operating Expenses | £1,115,600 | £7,038,000 | £10,791,000 |
| Profit Before Interest and Taxes | (£178,600) | £7,017,000 | £30,734,000 |
| EBITDA | (£142,600) | £7,117,000 | £30,884,000 |
| Interest Expense | £5,452 | £4,856 | £3,782 |
| Taxes Incurred | £0 | £1,753,036 | £7,810,597 |
| Net Profit | (£184,052) | £5,259,108 | £22,919,621 |
| Net Profit/Sales | -17.12% | 32.61% | 50.79% |
7.2 Projected Cash Flow
The table below provides the company's projected cash flow for FY2000-2002.
| Pro Forma Cash Flow | |||
| FY 2001 | FY 2002 | FY 2003 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | £268,750 | £4,031,250 | £11,281,250 |
| Cash from Receivables | £698,750 | £10,028,750 | £29,864,680 |
| Subtotal Cash from Operations | £967,500 | £14,060,000 | £41,145,930 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | £0 | £0 | £0 |
| New Current Borrowing | £0 | £0 | £0 |
| New Other Liabilities (interest-free) | £0 | £0 | £0 |
| New Long-term Liabilities | £0 | £0 | £0 |
| Sales of Other Current Assets | £0 | £0 | £0 |
| Sales of Long-term Assets | £0 | £0 | £0 |
| New Investment Received | £3,914,900 | £0 | £0 |
| Subtotal Cash Received | £4,882,400 | £14,060,000 | £41,145,930 |
| Expenditures | FY 2001 | FY 2002 | FY 2003 |
| Expenditures from Operations | |||
| Cash Spending | £434,783 | £2,200,000 | £3,600,000 |
| Bill Payments | £753,996 | £7,926,120 | £17,642,544 |
| Subtotal Spent on Operations | £1,188,779 | £10,126,120 | £21,242,544 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | £0 | £0 | £0 |
| Principal Repayment of Current Borrowing | £0 | £2,624 | £0 |
| Other Liabilities Principal Repayment | £0 | £0 | £0 |
| Long-term Liabilities Principal Repayment | £646 | £8,963 | £9,902 |
| Purchase Other Current Assets | £0 | £0 | £0 |
| Purchase Long-term Assets | £1,052,000 | £1,500,000 | £1,500,000 |
| Dividends | £0 | £0 | £0 |
| Subtotal Cash Spent | £2,241,425 | £11,637,707 | £22,752,446 |
| Net Cash Flow | £2,640,975 | £2,422,293 | £18,393,484 |
| Cash Balance | £2,670,975 | £5,093,269 | £23,486,753 |
7.3 Balance Sheet
The projected Balance Sheet is shown below.
| Pro Forma Balance Sheet | |||
| FY 2001 | FY 2002 | FY 2003 | |
| Assets | |||
| Current Assets | |||
| Cash | £2,670,975 | £5,093,269 | £23,486,753 |
| Accounts Receivable | £147,500 | £2,212,500 | £6,191,570 |
| Other Current Assets | £5,000 | £5,000 | £5,000 |
| Total Current Assets | £2,823,475 | £7,310,769 | £29,683,323 |
| Long-term Assets | |||
| Long-term Assets | £1,152,000 | £2,652,000 | £4,152,000 |
| Accumulated Depreciation | £56,000 | £156,000 | £306,000 |
| Total Long-term Assets | £1,096,000 | £2,496,000 | £3,846,000 |
| Total Assets | £3,919,475 | £9,806,769 | £33,529,323 |
| Liabilities and Capital | FY 2001 | FY 2002 | FY 2003 |
| Current Liabilities | |||
| Accounts Payable | £64,273 | £704,046 | £1,516,880 |
| Current Borrowing | £5,000 | £2,376 | £2,376 |
| Other Current Liabilities | £0 | £0 | £0 |
| Subtotal Current Liabilities | £69,273 | £706,422 | £1,519,256 |
| Long-term Liabilities | £49,354 | £40,391 | £30,489 |
| Total Liabilities | £118,627 | £746,813 | £1,549,745 |
| Paid-in Capital | £3,939,900 | £3,939,900 | £3,939,900 |
| Retained Earnings | £45,000 | (£139,052) | £5,120,056 |
| Earnings | (£184,052) | £5,259,108 | £22,919,621 |
| Total Capital | £3,800,848 | £9,059,956 | £31,979,577 |
| Total Liabilities and Capital | £3,919,475 | £9,806,769 | £33,529,323 |
| Net Worth | £3,800,848 | £9,059,956 | £31,979,577 |
7.4 Business Ratios
The following table contains important business ratios for the consulting industry, as determined by the Standard Industry Classification (SIC) Index code 8748.
| Ratio Analysis | ||||
| FY 2001 | FY 2002 | FY 2003 | Industry Profile | |
| Sales Growth | 115.00% | 1400.00% | 179.84% | 12.40% |
| Percent of Total Assets | ||||
| Accounts Receivable | 3.76% | 22.56% | 18.47% | 26.10% |
| Other Current Assets | 0.13% | 0.05% | 0.01% | 44.70% |
| Total Current Assets | 72.04% | 74.55% | 88.53% | 74.50% |
| Long-term Assets | 27.96% | 25.45% | 11.47% | 25.50% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 1.77% | 7.20% | 4.53% | 44.30% |
| Long-term Liabilities | 1.26% | 0.41% | 0.09% | 16.00% |
| Total Liabilities | 3.03% | 7.62% | 4.62% | 60.30% |
| Net Worth | 96.97% | 92.38% | 95.38% | 39.70% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 87.16% | 87.16% | 92.02% | 0.00% |
| Selling, General & Administrative Expenses | 104.28% | 54.55% | 40.95% | 80.80% |
| Advertising Expenses | 11.16% | 6.05% | 2.77% | 1.30% |
| Profit Before Interest and Taxes | -16.61% | 43.52% | 68.11% | 2.20% |
| Main Ratios | ||||
| Current | 40.76 | 10.35 | 19.54 | 1.75 |
| Quick | 40.76 | 10.35 | 19.54 | 1.38 |
| Total Debt to Total Assets | 3.03% | 7.62% | 4.62% | 60.30% |
| Pre-tax Return on Net Worth | -4.84% | 77.40% | 96.09% | 3.80% |
| Pre-tax Return on Assets | -4.70% | 71.50% | 91.65% | 9.70% |
| Additional Ratios | FY 2001 | FY 2002 | FY 2003 | |
| Net Profit Margin | -17.12% | 32.61% | 50.79% | n.a |
| Return on Equity | -4.84% | 58.05% | 71.67% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 5.47 | 5.47 | 5.47 | n.a |
| Collection Days | 58 | 36 | 45 | n.a |
| Accounts Payable Turnover | 12.26 | 12.17 | 12.17 | n.a |
| Payment Days | 28 | 16 | 22 | n.a |
| Total Asset Turnover | 0.27 | 1.64 | 1.35 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.03 | 0.08 | 0.05 | n.a |
| Current Liab. to Liab. | 0.58 | 0.95 | 0.98 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | £2,754,202 | £6,604,347 | £28,164,066 | n.a |
| Interest Coverage | -32.76 | 1,445.00 | 8,127.25 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 3.65 | 0.61 | 0.74 | n.a |
| Current Debt/Total Assets | 2% | 7% | 5% | n.a |
| Acid Test | 38.63 | 7.22 | 15.46 | n.a |
| Sales/Net Worth | 0.28 | 1.78 | 1.41 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |