UK High Tech Consulting Business Plan

Acme Consulting is a marketing consulting company focused on high-tech product promotion in international markets. Our founders possess extensive experience in international marketing, consulting services, personal computers, and market research. They have come together to establish Acme Consulting and provide formalized consulting services.

UK High Tech Consulting Business Plan Example

1.1 Objectives:

– Achieve sales of £550,000 in Year 1 and £1 million by Year 3.

– Maintain a gross margin higher than 70%.

– Ensure that net income remains more than 5% of sales through Year 3.

1.2 Mission:

Acme Consulting offers high-tech manufacturers a reliable and high-quality alternative to in-house resources for business development, market development, and channel development on an international scale. Acme provides practical experience, know-how, contacts, and confidentiality. Clients perceive working with Acme as more professional and less risky than developing new areas in-house. Acme charges a high value for its services and delivers an even higher value to its clients. The initial focus is on developing the European and Latin American markets, or serving European clients in the United Kingdom market.

1.3 Keys to Success:

– Excel in fulfilling promises by offering completely confidential, reliable, trustworthy expertise, and information.

– Generate new business leads through increased visibility.

– Leverage expertise to create multiple revenue generation opportunities, including retainer consulting, project consulting, market research, and published reports.

Company Summary:

Acme Consulting is a new company specializing in international high-tech business development, channel development, distribution strategies, and marketing of high-tech products. Initially, it will cater to United Kingdom clients seeking development opportunities in the European and Latin American markets, as well as European and United Kingdom clients targeting the United States and Latin American markets. As the company grows, it will expand its focus to other markets such as the rest of Latin America, the Far East, and similar markets. Acme Consulting will also explore brokerage positions and representation positions to acquire percentage holdings in product results.

2.1 Company Ownership:

Acme Consulting will be established as a Limited Company based in London, England, owned by its principal investors and operators. At present, it is not registered with Companies House, and alternative legal formations are still under consideration.

2.2 Start-up Summary:

Total start-up expenses, including legal costs, logo design, stationery, and related expenses, amount to £18,350. The required start-up assets consist of £32,000 in current assets (office furniture, etc.) and £25,000 in initial cash to cover the first few months of consulting operations as sales and accounts receivable generate cash flow. Details are provided below.

UK High Tech Consulting Business Plan Example

Start-up Funding:

Start-up Expenses: £18,350

Start-up Assets: £32,000

Total Funding Required: £50,350

Assets:

Non-cash Assets from Start-up: £7,000

Cash Requirements from Start-up: £25,000

Additional Cash Raised: £0

Cash Balance on Starting Date: £25,000

Total Assets: £32,000

Liabilities and Capital:

Liabilities:

Current Borrowing: £0

Long-term Liabilities: £0

Accounts Payable (Outstanding Bills): £350

Other Current Liabilities (interest-free): £0

Total Liabilities: £350

Capital:

Planned Investment:

Investor 1: £20,000

Investor 2: £20,000

Other: £10,000

Additional Investment Requirement: £0

Total Planned Investment: £50,000

Loss at Start-up (Start-up Expenses): (£18,350)

Total Capital: £31,650

Total Capital and Liabilities: £32,000

Total Funding: £50,350

Start-up:

Requirements:

Start-up Expenses:

Legal: £1,000

Stationery etc.: £3,000

Brochures: £5,000

Consultants: £5,000

Insurance: £350

Expensed equipment: £3,000

Other: £1,000

Total Start-up Expenses: £18,350

Start-up Assets:

Cash Required: £25,000

Other Current Assets: £7,000

Long-term Assets: £0

Total Assets: £32,000

Total Requirements: £50,350

Company Locations and Facilities:

The initial office will be established in top quality office space in London’s Canary Wharf, as there are high quality office spaces with security and lobby areas. It is important for a high tech consulting company to spend money on high quality centrally located office space.

Services:

Acme offers the expertise a high-technology company needs to develop new product distribution and new market segments in new markets. This can be taken as high-level retainer consulting, market research reports, or project-based consulting.

Service Description:

1. Retainer consulting: We represent a client company as an extension of its business development and market development functions. This begins with complete understanding of the client company’s situation, objectives, and constraints. We then represent the client company quietly and confidentially, sifting through new market developments and new opportunities as is appropriate to the client, representing the client in initial talks with possible allies, vendors, and channels.

Competitive Comparison:

The competition comes in several forms:

1. The most significant competition is no consulting at all, companies choosing to do business development, channel development and market research in-house. Their own managers do this on their own, as part of their regular business functions. Our key advantage in competition with in-house development is that managers are already overloaded with responsibilities, they don’t have time for additional responsibilities in new market development or new channel development. Also, Acme can approach alliances, vendors, and channels on a confidential basis, gathering information and making initial contacts in ways that the corporate managers can’t.

2. The high-level prestige management consulting: McKinsey, Bain, Accenture, etc. These are essentially generalists who take their name-brand management consulting into specialty areas. Most of these are US firms that have expanded to the UK and have offices in London and all over continental Europe. Their other very important weakness is the management structure that has the partners selling new jobs, and inexperienced associates delivering the work. We compete against them as experts in our specific fields, and with the guarantee that our clients will have the top-level people doing the actual work.

3. The third general kind of competitor is the international market research company: International Data Corporation (IDC), Dataquest, etc. These companies are formidable competitors for published market research and market forums, but cannot provide the kind of high-level consulting that Acme will provide.

4. The fourth kind of competition is the market-specific smaller house. For example: Gloucestershire Research in the United Kingdom, Select S.A. de C.V. in Mexico (now affiliated with IDC).

Sales representation, brokering, and deal catalysts are an ad-hoc business form that will be defined in detail by the specific nature of each individual case.

Sales Literature:

The business will begin with a general corporate brochure establishing the positioning. This brochure will be developed as part of the start-up expenses. Literature and mailings for the initial market forums will be very important.

Fulfillment:

The key fulfillment and delivery will be provided by the principals of the business. The real core value is professional expertise, provided by a combination of experience, hard work, and education (in that order).

Technology:

Acme Consulting will maintain the latest Windows and Macintosh capabilities, including complete e-mail facilities on the Internet, CompuServe, Applelink, and others for working with clients directly through e-mail delivery of drafts and information.

Future Services:

In the future, Acme will broaden the coverage by expanding into coverage of additional markets (e.g., all of Latin America, Far East) and additional product areas (e.g., telecommunications and technology integration). We are also studying the possibility of newsletter or electronic newsletter services, or perhaps special on-topic reports.

Market Analysis Summary:

Acme will be focusing on high-technology manufacturers of computer hardware and software, services, and networking, who want to sell into markets in the United Kingdom, Europe, and Latin America. These are mostly larger companies, and occasionally medium-sized companies.

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Our most important group of potential customers are executives in larger corporations. These are marketing managers, general managers, sales managers, sometimes charged with international focus and sometimes charged with market or even specific channel focus. They do not want to waste their time or risk their money looking for bargain information or questionable expertise. As they go into markets looking at new opportunities, they are very sensitive to risking their company’s name and reputation.

Market Segmentation:

Large manufacturer corporations: Our most important market segment is the large manufacturer of high-technology products, such as Apple, Hewlett-Packard, IBM, Microsoft, Siemens, or Olivetti. These companies will be calling on Acme for development functions that are better spun off than managed in-house, for market research, and for market forums.

Medium-sized growth companies: Particularly in software, multimedia, and some related high-growth fields, Acme will offer an attractive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments.

UK High Tech Consulting Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

U.K. High Tech 10% 5,000 5,500 6,050 6,655 7,321 10.00%

European High Tech 15% 1,000 1,150 1,323 1,521 1,749 15.00%

Latin America 35% 250 338 456 616 832 35.07%

Other 2% 10,000 10,200 10,404 10,612 10,824 2.00%

Total 6.27% 16,250 17,188 18,233 19,404 20,726 6.27%

4.2 Target Market Segment Strategy

As shown by the previous table and Illustration, we must focus on a few thousand potential customers in Europe and Latin America, while also offering services to UK and US firms expanding into European markets. These high-tech manufacturing companies are the key customers for Acme.

4.3 Service Business Analysis

The consulting industry is pulverised and disorganised, with numerous smaller consulting organizations and individual consultants for every well-known company.

Consulting participants range from major international name-brand consultants to tens of thousands of individuals. Acme’s challenge will be establishing itself as a real consulting company, positioned as a relatively risk-free corporate purchase.

4.3.1 Distributing a Service

Consulting is primarily sold and purchased through word-of-mouth, with relationships and previous experience being the most important factor.

The major name-brand houses have locations in major cities and markets, and executive-level managers or partners develop new business through industry associations, chambers of commerce, and social associations.

The medium-level houses are generally area or function specific and cannot easily leverage their business through distribution.

4.3.2 Competition and Buying Patterns

The key element in purchase decisions made by Acme’s clients is trust in the professional reputation and reliability of the consulting firm.

4.3.3 Main Competitors

1. The high-level prestige management consulting firms:

Strengths: International locations, presentation and understanding of general business.

Weaknesses: Lack of specific market, channel, and distribution expertise, high fees, work done by junior-level consultants.

2. The international market research company:

Strengths: International offices, specific market knowledge, good relationships with potential clients.

Weaknesses: Cannot offer the same level of business understanding at a high level.

3. Market or function-specific experts:

Strengths: Expertise in specific areas.

Weaknesses: Unable to provide management expertise beyond their focus.

4. Companies do in-house research and development:

Strengths: No incremental cost, work done by responsible people.

Weaknesses: Overburdened managers, additional risk in market and channel development.

4.3.4 Business Participants

At the highest level are the few well-established major names in management consulting. Some evolved from accounting companies and some from management consulting. These companies charge high rates and maintain relatively high overhead and fulfillment structures.

At the intermediate level are function-specific or market-specific consultants, such as market research and channel development firms.

Some types of consulting are little more than contract expertise provided by individuals offering consulting services.

Strategy and Implementation Summary

Acme will focus on three geographical markets: Europe, Latin America, and the United Kingdom, and limited product segments. The target customer is usually a manager in a larger corporation, occasionally an owner or president of a medium-sized corporation.

5.1 Value Proposition

Acme Consulting will be priced competitively with name-brand consultants, providing high-level expertise.

Consulting prices: £3,000 per day for project consulting, £1,500 per day for market research, and £7,000 per month for retainer consulting. Market research reports will be priced at £3,000 per report, requiring careful planning and focus.

5.2 Sales Strategy

The sales forecast monthly summary is included in the appendix. The annual sales projections are included below.

UK High Tech Consulting Business Plan Example

UK High Tech Consulting Business Plan Example

Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Retainer Consulting £140,000 £350,000 £425,000
Project Consulting £270,000 £325,000 £350,000
Market Research £122,000 £150,000 £200,000
Strategic Reports £0 £50,000 £125,000
Other £0 £0 £0
Total Sales £532,000 £875,000 £1,100,000

5.3 Strategic Alliances

At this writing, strategic alliances with Smith and Jones are possibilities, given the content of existing discussions. We might also be talking to European companies including Siemens, Olivetti, and others, and to United States companies related to Apple Computer. In Latin America, we would be looking at key local high-technology vendors, starting with Printaform.

5.4 Milestones

Our detailed milestones are shown in the following table and chart. The related budgets are included in the projected Profit and Loss statement, which is in the financial analysis in Chapter 7 of this plan.

Milestones

Milestones
Milestone Start Date End Date Budget Manager Department
Business plan 10/1/2005 11/19/2005 £3,500 HM Devpt
Logo design 1/1/2006 2/1/2006 £1,500 TAJ Marketing
Retainer contracts 2/1/2006 12/31/2006 £7,000 HM Sales
Stationery 3/1/2006 4/15/2006 £300 JD G&A
Brochures 3/1/2006 4/15/2006 £1,700 TAJ Marketing
Financial backing presentations 4/1/2006 9/15/2006 £7,000 HM Devpt
Initial mailing 6/1/2006 7/1/2006 £3,000 HM Sales
Office location 1/15/2006 2/9/2006 £3,000 JD G&A
Office equipment 1/15/2006 2/19/2006 £8,000 JD G&A
Other 1/1/2006 12/31/2006 £7,000 ABC Department
Totals £42,000

Management Summary

The initial management team relies on the founders themselves with little backup. As we grow, we will bring in additional consulting help, as well as graphic/editorial, sales, and marketing personnel.

6.1 Organizational Structure

Acme should be managed by working partners in a structure based on Smith Partners. Initially, we assume 3-5 partners:

– Ralph Sampson

– At least one, possibly two, partners from Smith and Jones

– One strong United States partner based in San Francisco

– The organization should have a flat structure in the beginning, with each founder responsible for their own work and management

– One other strong partner

6.2 Management Team

The Acme business requires a high level of international experience and expertise, which means it will not follow the traditional consulting company model where partners run the business and make sales while associates handle fulfillment. Partners will be involved in fulfilling the core business proposition and providing expertise to clients. The initial personnel plan is tentative and includes 3-5 partners, 1-3 consultants, an editorial/graphic person with good staff support, a marketing person, an office manager, and a secretary. More partners, consultants, and sales staff will be added later. Founders’ resumes are attached to this plan.

6.3 Personnel Plan

The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are as follows:

Personnel Plan

Personnel Plan
Year 1 Year 2 Year 3
Partners £96,000 £175,000 £200,000
Consultants £0 £50,000 £63,000
Editorial/graphic £12,000 £14,000 £17,000
VP Marketing £14,000 £50,000 £55,000
Sales people £0 £30,000 £33,000
Office Manager £5,250 £30,000 £33,000
Secretarial £5,250 £20,000 £22,000
Other £0 £0 £0
Other £0 £0 £0
Total People 7 14 20
Total Payroll £132,500 £369,000 £423,000
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Financial Plan

Our financial plan is based on conservative estimates and assumptions. We will need initial investment to make the financials work.

7.1 Important Assumptions

The General Assumptions table summarizes key financial assumptions, including sales on invoice basis, payroll burden, and present-day interest and tax rates. We also assume 45-day average collection days, expenses on net 30 basis, and 35 days on average for payment of invoices.

General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

The following benchmark chart shows our key financial indicators for the first three years. We anticipate significant growth in sales and operating expenses, as well as an increase in collection days during expansion.

UK High Tech Consulting Business Plan Example

The table and chart below summarize the break-even analysis, including monthly units and sales break-even points.

UK High Tech Consulting Business Plan Example

Break-even Analysis

Monthly Revenue Break-even: £30,098

Assumptions:

– Average Percent Variable Cost: 20%

– Estimated Monthly Fixed Cost: £23,988

Projected Profit and Loss

The detailed monthly pro-forma income statement for the first year is included in the appendix. The annual estimates are included here.

UK High Tech Consulting Business Plan Example

UK High Tech Consulting Business Plan Example

UK High Tech Consulting Business Plan Example

UK High Tech Consulting Business Plan Example

Pro Forma Profit and Loss

Sales: £532,000 | £875,000 | £1,100,000

Direct Cost of Sales: £108,000 | £219,000 | £289,000

Other: £0 | £0 | £0

Total Cost of Sales: £108,000 | £219,000 | £289,000

Gross Margin: £424,000 | £656,000 | £811,000

Gross Margin %: 79.70% | 74.97% | 73.73%

Expenses:

Payroll: £132,500 | £369,000 | £423,000

Sales and Marketing and Other Expenses: £108,600 | £137,000 | £195,000

Depreciation: £0 | £0 | £0

Leased Equipment: £3,600 | £7,000 | £7,000

Utilities: £9,000 | £12,000 | £12,000

Insurance: £3,600 | £2,000 | £2,000

Rent: £12,000 | £0 | £0

Other: £0 | £0 | £0

Payroll Taxes (National Insurance, etc): £18,550 | £51,660 | £59,220

Other: £0 | £0 | £0

Total Operating Expenses: £287,850 | £578,660 | £698,220

Profit Before Interest and Taxes: £136,150 | £77,340 | £112,780

EBITDA: £136,150 | £77,340 | £112,780

Interest Expense: £6,800 | £11,400 | £15,400

Taxes Incurred: £31,516 | £16,485 | £24,751

Net Profit: £97,834 | £49,455 | £72,629

Net Profit/Sales: 18.39% | 5.65% | 6.60%

7.5 Projected Cash Flow

Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other representing the monthly balance. The annual cash flow figures are included below. Detailed monthly numbers are included in the appendix.

UK High Tech Consulting Business Plan Example

Pro Forma Cash Flow

Cash Received

Cash from Operations

– Cash Sales: £399,000, £656,250, £825,000

– Cash from Receivables: £100,450, £197,764, £261,234

– Subtotal Cash from Operations: £499,450, £854,014, £1,086,234

Additional Cash Received

– Sales Tax, VAT, HST/GST Received: £0, £0, £0

– New Current Borrowing: £30,000, £100,000, £0

– New Other Liabilities (interest-free): £0, £0, £0

– New Long-term Liabilities: £50,000, £0, £0

– Sales of Other Current Assets: £0, £0, £0

– Sales of Long-term Assets: £0, £0, £0

– New Investment Received: £0, £0, £0

– Subtotal Cash Received: £579,450, £954,014, £1,086,234

Expenditures

Expenditures from Operations

Cash Spending: £132,500, £369,000, £423,000

Bill Payments: £274,773, £446,264, £592,221

Subtotal Spent on Operations: £407,273, £815,264, £1,015,221

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out: £0, £0, £0

Principal Repayment of Current Borrowing: £0, £0, £0

Other Liabilities Principal Repayment: £0, £0, £0

Long-term Liabilities Principal Repayment: £0, £0, £0

Purchase Other Current Assets: £0, £0, £0

Purchase Long-term Assets: £0, £0, £0

Dividends: £0, £0, £0

Subtotal Cash Spent: £407,273, £815,264, £1,015,221

Net Cash Flow: £172,177, £138,750, £71,013

Cash Balance: £197,177, £335,927, £406,940

Projected Balance Sheet

The balance sheet shows healthy growth of net worth and a strong financial position. Monthly estimates are included in the appendix.

Pro Forma Balance Sheet

Assets

Current Assets

– Cash: £197,177, £335,927, £406,940

– Accounts Receivable: £32,550, £53,536, £67,303

– Other Current Assets: £7,000, £7,000, £7,000

– Total Current Assets: £236,727, £396,464, £481,243

Long-term Assets

– Long-term Assets: £0, £0, £0

– Accumulated Depreciation: £0, £0, £0

– Total Long-term Assets: £0, £0, £0

Total Assets: £236,727, £396,464, £481,243

Liabilities and Capital

Current Liabilities

– Accounts Payable: £27,243, £37,524, £49,674

– Current Borrowing: £30,000, £130,000, £130,000

– Other Current Liabilities: £0, £0, £0

– Subtotal Current Liabilities: £57,243, £167,524, £179,674

Long-term Liabilities

– Long-term Liabilities: £50,000, £50,000, £50,000

Total Liabilities: £107,243, £217,524, £229,674

Paid-in Capital: £50,000, £50,000, £50,000

Retained Earnings: (£18,350), £79,484, £128,939

Earnings: £97,834, £49,455, £72,629

Total Capital: £129,484, £178,939, £251,569

Total Liabilities and Capital: £236,727, £396,464, £481,243

Net Worth: £129,484, £178,939, £251,569

Business Ratios

The following table shows the projected business ratios. We expect to maintain healthy ratios for profitability, risk, and return. Industry profile comparisons are for the Management Consulting Services.

Ratio Analysis

Sales Growth: 0.00%, 64.47%, 25.71%, Industry Profile: 8.52%

Percent of Total Assets

– Accounts Receivable: 13.75%, 13.50%, 13.99%, Industry Profile: 21.99%

– Other Current Assets: 2.96%, 1.77%, 1.45%, Industry Profile: 50.95%

– Total Current Assets: 100.00%, 100.00%, 100.00%, Industry Profile: 75.87%

– Long-term Assets: 0.00%, 0.00%, 0.00%, Industry Profile: 24.13%

– Total Assets: 100.00%, 100.00%, 100.00%, Industry Profile: 100.00%

Current Liabilities

– Accounts Payable: 24.18%, 42.25%, 37.34%, Industry Profile: 34.32%

– Long-term Liabilities: 21.12%, 12.61%, 10.39%, Industry Profile: 17.09%

– Total Liabilities: 45.30%, 54.87%, 47.73%, Industry Profile: 51.41%

– Net Worth: 54.70%, 45.13%, 52.27%, Industry Profile: 48.59%

Percent of Sales

– Sales: 100.00%, 100.00%, 100.00%, Industry Profile: 100.00%

– Gross Margin: 79.70%, 74.97%, 73.73%, Industry Profile: 100.00%

– Selling, General & Administrative Expenses: 61.46%, 69.32%, 67.09%, Industry Profile: 80.54%

– Advertising Expenses: 4.51%, 4.57%, 4.00%, Industry Profile: 1.54%

– Profit Before Interest and Taxes: 25.59%, 8.84%, 10.25%, Industry Profile: 2.69%

Main Ratios

Current: 4.14, 2.37, 2.68, Industry Profile: 1.63

Quick: 4.14, 2.37, 2.68, Industry Profile: 1.31

Total Debt to Total Assets: 45.30%, 54.87%, 47.73%, Industry Profile: 60.47%

Pre-tax Return on Net Worth: 99.90%, 36.85%, 38.71%, Industry Profile: 4.80%

Pre-tax Return on Assets: 54.64%, 16.63%, 20.24%, Industry Profile: 12.14%

Additional Ratios

Net Profit Margin: 18.39%, 5.65%, 6.60%, Industry Profile: n.a

Return on Equity: 75.56%, 27.64%, 28.87%, Industry Profile: n.a

Activity Ratios

Accounts Receivable Turnover: 4.09, 4.09, 4.09, Industry Profile: n.a

Collection Days: 57, 72, 80, Industry Profile: n.a

Accounts Payable Turnover: 11.07, 12.17, 12.17, Industry Profile: n.a

Payment Days: 27, 26, 26, Industry Profile: n.a

Total Asset Turnover: 2.25, 2.21, 2.29, Industry Profile: n.a

Debt Ratios

Debt to Net Worth: 0.83, 1.22, 0.91, Industry Profile: n.a

Current Liabilities to Liabilities: 0.53, 0.77, 0.78, Industry Profile: n.a

Liquidity Ratios

Net Working Capital: £179,484, £228,939, £301,569, Industry Profile: n.a

Interest Coverage: 20.02, 6.78, 7.32, Industry Profile: n.a

Additional Ratios

Assets to Sales: 0.44, 0.45, 0.44, Industry Profile: n.a

Current Debt/Total Assets: 24%, 42%, 37%, Industry Profile: n.a

Acid Test: 3.57, 2.05, 2.30, Industry Profile: n.a

Sales/Net Worth: 4.11, 4.89, 4.37, Industry Profile: n.a

Dividend Payout: 0.00, 0.00, 0.00, Industry Profile: n.a

Appendix

Sales Forecast

Month 1, Month 2, Month 3, Month 4, Month 5, Month 6, Month 7, Month 8, Month 9, Month 10, Month 11, Month 12

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Retainer Consulting: £7,000, £7,000, £7,000, £7,000, £14,000, £14,000, £14,000, £14,000, £14,000, £14,000, £14,000, £14,000, £14,000

Project Consulting: £0, £0, £10,000, £20,000, £30,000, £40,000, £20,000, £10,000, £30,000, £45,000, £50,000, £15,000

Market Research: £0, £0, £0, £4,000, £8,000, £15,000, £10,000, £5,000, £20,000, £20,000, £20,000, £20,000

Strategic Reports: £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0

Other: £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0

Total Sales: £7,000, £7,000, £17,000, £31,000, £52,000, £69,000, £44,000, £29,000, £64,000, £79,000, £84,000, £49,000

Direct Cost of Sales

Retainer Consulting: £2,500, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700, £1,700

Project Consulting: £0, £0, £700, £2,700, £3,000, £4,250, £2,250, £700, £3,000, £5,000, £6,250, £1,700

Market Research: £0, £0, £0, £1,500, £4,000, £7,000, £4,000, £2,750, £9,500, £9,500, £9,500, £9,500

Strategic Reports: £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0

Other: £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0, £0

Subtotal Direct Cost of Sales: £2,500, £1,700, £2,400, £5,900, £8,700, £12,950, £7,950, £5,150, £14,200, £16,200, £17,450, £12,900

Personnel Plan:

Partners: 140% – £8,000 for months 1-12.

Consultants: 125% – £0 for months 1-12.

Editorial/graphic: 120% – £0 for months 1-6, £4,000 for months 10-12.

VP Marketing: 110% – £0 for months 1-6, £3,500 for months 9-12.

Sales people: 110% – £0 for months 1-12.

Office Manager: 110% – £0 for months 1-6, £1,750 for months 10-12.

Secretarial: 110% – £0 for months 1-6, £1,750 for months 10-12.

Other: 110% – £0 for months 1-12.

Total People: 3 for months 1-3, 5 for months 9-12.

Total Payroll: £8,000 for months 1-12.

General Assumptions:

Plan Month: 1 for months 1-12.

Current Interest Rate: 8.00% for months 1-12.

Long-term Interest Rate: 10.00% for months 1-12.

Tax Rate: 30.00% for month 1, 25.00% for months 2-12.

Other: 0 for months 1-12.

Pro Forma Profit and Loss:

Sales: £7,000 for months 1-2, £17,000 for month 3, £31,000 for month 4, £52,000 for month 5, £69,000 for month 6, £44,000 for month 7, £29,000 for month 8, £64,000 for month 9, £79,000 for month 10, £84,000 for month 11, £49,000 for month 12.

Direct Cost of Sales: £2,500 for months 1-2, £2,400 for month 3, £5,900 for month 4, £8,700 for month 5, £12,950 for month 6, £7,950 for month 7, £5,150 for month 8, £14,200 for month 9, £16,200 for month 10, £17,450 for month 11, £12,900 for month 12.

Other: £0 for months 1-12.

Total Cost of Sales: £2,500 for months 1-2, £2,400 for month 3, £5,900 for month 4, £8,700 for month 5, £12,950 for month 6, £7,950 for month 7, £5,150 for month 8, £14,200 for month 9, £16,200 for month 10, £17,450 for month 11, £12,900 for month 12.

Gross Margin: £4,500 for months 1-2, £5,300 for month 3, £14,600 for month 4, £25,100 for month 5, £43,300 for month 6, £56,050 for month 7, £36,050 for month 8, £23,850 for month 9, £49,800 for month 10, £62,800 for month 11, £66,550 for month 12, £36,100 for month 13.

Gross Margin %: 64.29% for months 1-2, 85.88% for month 3, 80.97% for month 4, 83.27% for month 5, 81.23% for month 6, 81.93% for month 7, 82.24% for month 8, 77.81% for month 9, 79.49% for month 10, 79.23% for month 11, 73.67% for month 12.

Expenses:

Payroll: £8,000 for months 1-12.

Sales and Marketing and Other Expenses: £9,050 for months 1-12.

Depreciation: £0 for months 1-12.

Leased Equipment: £300 for months 1-12.

Utilities: £750 for months 1-12.

Insurance: £300 for months 1-12.

Rent: £1,000 for months 1-12.

Other: £0 for months 1-12.

Payroll Taxes (National Insurance, etc): 15% – £1,120 for months 1-12.

Other: £0 for months 1-12.

Total Operating Expenses: £20,520 for months 1-12.

Profit Before Interest and Taxes: (£16,020) for month 1, (£15,220) for month 2, (£5,920) for month 3, £4,580 for month 4, £22,780 for month 5, £35,530 for month 6, £15,530 for month 7, £3,330 for month 8, £25,290 for month 9, £29,740 for month 10, £33,490 for month 11, £3,040 for month 12.

EBITDA: (£16,020) for month 1, (£15,220) for month 2, (£5,920) for month 3, £4,580 for month 4, £22,780 for month 5, £35,530 for month 6, £15,530 for month 7, £3,330 for month 8, £25,290 for month 9, £29,740 for month 10, £33,490 for month 11, £3,040 for month 12.

Interest Expense: £417 for months 1-12.

Taxes Incurred: (£4,931) for month 1, (£3,909) for month 2, (£1,618) for month 3, £1,008 for month 4, £5,558 for month 5, £8,728 for month 6, £3,728 for month 7, £678 for month 8, £6,168 for month 9, £7,281 for month 10, £8,218 for month 11, £606 for month 12.

Net Profit: (£11,506) for month 1, (£11,728) for month 2, (£4,853) for month 3, £3,023 for month 4, £16,673 for month 5, £26,185 for month 6, £11,185 for month 7, £2,035 for month 8, £18,505 for month 9, £21,843 for month 10, £24,655 for month 11, £1,818 for month 12.

Net Profit/Sales: -164.37% for month 1, -167.54% for month 2, -28.54% for month 3, 9.75% for month 4, 32.06% for month 5, 37.95% for month 6, 25.42% for month 7, 7.02% for month 8, 28.91% for month 9, 27.65% for month 10, 29.35% for month 11, 3.71% for month 12.

Pro Forma Cash Flow

Pro Forma Cash Flow is a table that shows the cash flow for each month. It includes cash received and expenditures.

Cash Received:

– Cash from Operations

– Cash Sales

– Cash from Receivables

– Subtotal Cash from Operations

– Additional Cash Received

– Sales Tax, VAT, HST/GST Received

– New Current Borrowing

– New Other Liabilities (interest-free)

– New Long-term Liabilities

– Sales of Other Current Assets

– Sales of Long-term Assets

– New Investment Received

– Subtotal Cash Received

Expenditures:

– Expenditures from Operations

– Cash Spending

– Bill Payments

– Subtotal Spent on Operations

– Additional Cash Spent

– Sales Tax, VAT, HST/GST Paid Out

– Principal Repayment of Current Borrowing

– Other Liabilities Principal Repayment

– Long-term Liabilities Principal Repayment

– Purchase Other Current Assets

– Purchase Long-term Assets

– Dividends

– Subtotal Cash Spent

Net Cash Flow

Cash Balance

The table provides a detailed breakdown of cash inflows and outflows for each month, allowing for better financial planning and analysis.

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