Please Go Through The Business Plan Document And Add The Det

Please Go Through The Business Plan Document And Add the Below Topics

Please go through the Business plan document and add the following topics:

Financials: Start-up requirements – Furniture, equipment, legal fees, opening cash, total requirements.

Capital Structure – Personal savings, bank loans.

Sales Forecast – Number of units, price per unit, total sales revenue.

Growth rate – 2019, 2020, 2021 sales.

Balance Sheet – Assets, cash, furniture, equipment, total assets, liabilities, loans, owner equity.

Income Statement for Year 2019 – Sales revenue, cost of goods, salaries, rent, utilities, interest expenses, earnings before tax, total net income.

Statement of Cash Flows for Year 2019 – Net income 2019.

Paper For Above instruction

Introduction

The preparation of a comprehensive business plan is essential for entrepreneurs seeking to establish or expand a business. A well-structured business plan encompasses various financial components that provide a clear picture of the company’s potential viability and sustainability. This paper integrates the specified topics into a detailed analysis, offering insights necessary for potential investors, lenders, and internal strategic planning. The focus spans startup financial requirements, capital structure, sales projections, growth rates, balance sheet fundamentals, income statements, and cash flow statements for the fiscal year 2019.

Start-up Requirements

To initiate the business, an estimated budget of $150,000 is required, allocated towards furniture ($30,000), equipment ($50,000), legal fees ($10,000), and opening cash reserves ($60,000). Furniture expenses include office and showroom fittings, while equipment covers production machinery and technology infrastructure. Legal fees encompass registration, licensing, and intellectual property costs. These initial investments lay a foundation for operational readiness and compliance, ensuring smooth commencement of business activities.

Capital Structure

The funding mix for the startup predominantly comprises personal savings valued at $70,000, supplemented by bank loans amounting to $80,000. This blended approach reduces reliance on external equity sources and maintains ownership control. The bank loans are structured with a 5-year term at an interest rate of 7%, providing a manageable debt repayment schedule aligned with projected revenue growth.

Sales Forecast

Projected sales for the upcoming year anticipate the sale of 10,000 units at a price of $25 per unit, resulting in total sales revenue of $250,000. This forecast is based on market research indicating a growing demand within the target demographic. As the business gains market share, steady growth is expected, with sales increasing by 10% annually over the next three years. These projections help determine inventory needs, marketing strategies, and staffing requirements.

Growth Rate Analysis

Analyzing sales data from 2019 through 2021 reveals significant growth: 2019 sales at $180,000, with a subsequent increase to $210,000 in 2020, and an estimated $250,000 in 2021. The compound annual growth rate (CAGR) over this period approximates 15%, reflecting positive market reception and effective sales strategies. This growth rate informs financial planning, capital investments, and operational scaling efforts.

Balance Sheet Overview

The year-end balance sheet as of December 31, 2019, indicates total assets valued at $200,000. Assets include cash reserves of $20,000, furniture worth $30,000, and equipment valued at $50,000. Total liabilities stand at $70,000, comprising bank loans of the same amount, with the owner’s equity calculated at $130,000. This financial positioning demonstrates a healthy asset-to-liability ratio, providing a basis for potential credit extension and investment opportunities.

Income Statement for 2019

The income statement for 2019 reports sales revenue of $180,000. The cost of goods sold (COGS) is estimated at $90,000, leaving gross profit of $90,000. Operating expenses include salaries ($40,000), rent ($12,000), utilities ($3,000), and interest expenses ($4,000). Total operating expenses sum to $59,000, resulting in earnings before tax of $31,000. After accounting for taxes ($6,200 at 20%), the net income totals approximately $24,800, reflecting operational profitability.

Statement of Cash Flows for 2019

The cash flow statement indicates a net income of $24,800 for 2019. Adjustments for non-cash items, such as depreciation, amount to $5,000. Changes in working capital, including increases in receivables and inventory, resulted in a net cash inflow of $15,000. Cash flows from investing activities show capital expenditures of $20,000 for equipment, while financing activities include $70,000 received from bank loans. The net effect results in a closing cash balance of approximately $20,000, demonstrating effective cash management during the year.

Conclusion

Integrating these financial components provides a comprehensive overview of the business’s initial financial health, growth potential, and operational sustainability. Accurate projections and detailed financial statements are crucial for securing funding, guiding strategic decisions, and measuring performance over time. Continuous monitoring and adjustments based on actual performance against forecasts will be essential for long-term success.

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