Business Plan For A Start-Up

START-UP COSTS Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper	Cost
Registrations
Business name	£ 2,000.00 Save Time On Research and Writing Hire a Pro to Write You a 100% Plagiarism-Free Paper. Get My Paper
Licences	£ 7,500.00
Permits	£ 2,500.00
Domain names	£ 3,100.00
Trade-marks/designs/patents	£ 12,000.00
Membership fees	£ 12,000.00
Accountant fees	£ 15,000.00
Rental lease cost (Rent advance/deposit)	£ 12,000.00
Utility connections & bonds (Electricity, gas, water)	£ 9,000.00
Phone connection	£ 3,000.00
Internet connection	£ 7,500.00
Computer software	£ 30,000.00
Training	£ 5,000.00
Wages	£ 20,000.00
Insurance
Building & contents	£ 40,000.00
Product liability	£ 45,000.00
Workers compensation	£ 35,000.00
Printing	£ 15,000.00
Stationery & office supplies	£ 15,400.00
Marketing & advertising	£ 19,000.00
Total start-up costs	£ 3,10,000.00

As per the above forecasting the start-up cost requirement will be £ 310,000. Out of the total requirement £ 250,000 will be raised through borrowing and £ 60,000 will be contributed by 6 partners £ 10,000 each.

For the financial aspects of the business plan following assumptions have been made –

Debt will be raised from banks at the rate of 15% per annum for the entire borrowing of £ 250,000.
Sales for the 1^styear will be £ 13,00,000 and cost of goods sold will be 60% of the sales. Sales will be increased by 10% in 2019 as well as in 2020.
Rate of tax on taxable income will be at the rate of 30%
Payroll expenses for 1^styear will be £ 80,000 for 2 people and the cost for developer 1 will be £ 70,000 and developer 2 will be £ 10,000.
Rent and rates will be paid quarterly.
Insurance expenses for the 1^stsix months will be £ 2000 per month and thereafter will be increased by £ 166.67 for the rest of the months of the year.
Payroll expenses and superannuation expenses will be same for all the months for 1^st
Other expenses have been charged as and when incurred.

Income statement forecast
Particulars	2018	2019	2020
Sales	£13,00,000.00	£14,30,000.00	£ 15,73,000.00
Cost of goods sold	£ 7,80,000.00	£ 8,29,400.00	£ 8,65,150.00
Gross profit	£ 5,20,000.00	£ 6,00,600.00	£ 7,07,850.00
Gross profit %	40%	42%	45%
Other income	£ 2,30,000.00	£ 2,70,000.00	£ 3,10,000.00
Total income	£ 7,50,000.00	£ 8,70,600.00	£ 10,17,850.00
Expenses
Accountants fees	£ 54,000.00	£ 42,000.00	£ 48,000.00
Advertising and marketing	£ 92,000.00	£ 80,000.00	£ 65,000.00
Bank fees and charges	£ 56,000.00	£ 52,000.00	£ 46,000.00
Bank interest	£ 7,000.00	£ 12,000.00	£ 16,000.00
Credit card fees	£ 6,000.00	£ 7,000.00	£ 12,000.00
Utilities	£ 22,000.00	£ 24,000.00	£ 29,000.00
Telephone charges	£ 5,763.00	£ 2,200.00	£ 6,900.00
Loan payments	£ 70,000.00	£ 70,000.00	£ 70,000.00
Rent and rates	£ 4,200.00	£ 4,900.00	£ 5,400.00
Repairs and Maintenance	£ 2,810.00	£ 3,260.00	£ 4,130.00
Stationary and printing	£ 8,000.00	£ 14,000.00	£ 16,000.00
Payroll expenses	£ 80,000.00	£ 90,000.00	£ 80,000.00
Insurance	£ 25,000.00	£ 20,000.00	£ 25,000.00
Superannuation	£ 65,000.00	£ 65,000.00	£ 75,000.00
Total Expenses	£ 4,97,773.00	£ 4,86,360.00	£ 4,98,430.00
Profit before taxes	£ 2,52,227.00	£ 3,84,240.00	£ 5,19,420.00
Taxes paid @ 30%	£ 75,668.10	£1,15,272.00	£1,55,826.00
Net Profit after tax	£1,76,558.90	£2,68,968.00	£3,63,594.00
Profit/loss percentage	13.58%	18.81%	23.11%

Cash flow forecast
Particulars	Jan	Feb	Mar	Apr	May	June	July	August	Sept	Oct	Nov	Dec
OPENING BALANCE	£ 60,000.00	£ 83,744.83	£ 1,20,313.50	£ 1,20,627.00	£ 1,91,722.33	£ 2,45,375.67	£ 2,94,559.00	£ 3,52,737.67	£ 4,32,250.43	£ 5,16,766.30	£ 5,93,556.97	£ 6,75,983.73
Cash incoming
Sales	£ 72,000.00	£ 84,000.00	£ 95,000.00	£ 1,20,000.00	£ 1,05,000.00	£ 98,000.00	£ 1,10,000.00	£ 1,20,000.00	£ 1,27,000.00	£ 1,15,000.00	£ 1,22,000.00	£ 1,32,000.00
Other income	£ –	£ 2,000.00	£ 3,000.00	£ –	£ –	£ 1,000.00	£ –	£ –	£ 2,000.00	£ –	£ –	£ –
Total incoming	£ 72,000.00	£ 86,000.00	£ 98,000.00	£ 1,20,000.00	£ 1,05,000.00	£ 99,000.00	£ 1,10,000.00	£ 1,20,000.00	£ 1,29,000.00	£ 1,15,000.00	£ 1,22,000.00	£ 1,32,000.00
Cash outgoing
Accountants fees	£ 4,000.00	£ 4,000.00	£ 4,000.00	£ 4,000.00	£ 4,000.00	£ 4,000.00	£ 5,000.00	£ 5,000.00	£ 5,000.00	£ 5,000.00	£ 5,000.00	£ 5,000.00
Advertising and marketing	£ 10,000.00	£ 10,000.00	£ 9,000.00	£ 9,000.00	£ 9,000.00	£ 7,500.00	£ 7,500.00	£ 7,500.00	£ 7,500.00	£ 5,000.00	£ 5,000.00	£ 5,000.00
Bank fees and charges	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67	£ 4,666.67
Bank interest	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33	£ 583.33
Credit card fees	£ 584.00	£ 433.00	£ 512.00	£ 433.00	£ 390.00	£ 510.00	£ 560.00	£ 413.00	£ 417.00	£ 583.00	£ 570.00	£ 595.00
Utilities	£ 1,600.00	£ 1,800.00	£ 2,100.00	£ 1,700.00	£ 1,800.00	£ 1,900.00	£ 1,700.00	£ 1,400.00	£ 2,200.00	£ 1,900.00	£ 1,700.00	£ 2,200.00
Telephone charges	£ 563.00	£ 590.00	£ 520.00	£ 490.00	£ 440.00	£ 420.00	£ 470.00	£ 430.00	£ 420.00	£ 480.00	£ 430.00	£ 510.00
Loan payments	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33	£ 5,833.33
Rent and rates	£ –	£ –	£ 1,050.00	£ –	£ –	£ 1,050.00	£ –	£ –	£ 1,050.00	£ –	£ –	£ 1,050.00
Repairs and Maintenance	£ –	£ 350.00	£ –	£ –	£ 750.00	£ –	£ 600.00	£ –	£ –	£ 510.00	£ –	£ 600.00
Stationary and printing	£ 883.00	£ 791.67	£ 583.33	£ 615.00	£ 460.00	£ 970.00	£ 345.00	£ 677.00	£ 600.00	£ 750.00	£ 600.00	£ 725.00
Payroll expenses	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67	£ 6,666.67
Insurance	£ 2,000.00	£ 2,000.00	£ 2,000.00	£ 2,000.00	£ 2,000.00	£ 2,000.00	£ 2,166.67	£ 2,166.67	£ 2,166.67	£ 2,166.67	£ 2,166.67	£ 2,166.67
Superannuation	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67	£ 5,416.67
Income tax	£ 5,458.50	£ 6,300.00	£ 7,200.00	£ 7,500.00	£ 9,340.00	£ 8,300.00	£ 10,313.00	-£ 266.10	£ 1,963.80	-£ 1,347.00	£ 939.90	£ 3,165.90
Total outgoing	£ 48,255.17	£ 49,431.33	£ 97,686.50	£ 48,904.67	£ 51,346.67	£ 49,816.67	£ 51,821.33	£ 40,487.23	£ 44,484.13	£ 38,209.33	£ 39,573.23	£ 44,179.23
Monthly cash balance	£ 23,744.83	£ 36,568.67	£ 313.50	£ 71,095.33	£ 53,653.33	£ 49,183.33	£ 58,178.67	£ 79,512.77	£ 84,515.87	£ 76,790.67	£ 82,426.77	£ 87,820.77
CLOSING BALANCE	£ 83,744.83	£ 1,20,313.50	£ 1,20,627.00	£ 1,91,722.33	£ 2,45,375.67	£ 2,94,559.00	£ 3,52,737.67	£ 4,32,250.43	£ 5,16,766.30	£ 5,93,556.97	£ 6,75,983.73	£ 7,63,804.50

Balance sheet forecast
Particulars	2018	2019	2020
Current assets
Cash	£ 7,63,804.50	£ 6,61,018.00	£ 6,83,644.00
Accounts receivables	£ 25,000.00	£ 32,000.00	£ 29,000.00
Inventory	£ 20,000.00	£ 1,90,000.00	£ 1,50,000.00
Total current assets	£ 8,08,804.50	£ 8,83,018.00	£ 8,62,644.00
Non-current assets
Plant, property & equipment	£ 50,000.00	£ 50,000.00	£ 45,000.00
Land and building	£ 40,000.00	£ 40,000.00	£ 45,000.00
Furniture & fittings	£ 5,000.00	£ 5,000.00	£ 15,000.00
Computer equipment	£ 10,000.00	£ 10,000.00	£ 15,000.00
Total non-current assets	£ 1,05,000.00	£ 1,05,000.00	£ 1,20,000.00
Total assets	£17,22,609.00	£ 9,88,018.00	£ 9,82,644.00
Current/short-term liabilities
Accounts payable	£ 7,20,000.00	£ 2,80,000.00	£ 3,10,000.00
Bank charges payable	£ 1,20,000.00	£ 35,000.00	£ 46,000.00
Interest payable	£ 40,000.00	£ 14,000.00	£ 16,000.00
Accrued wages	£ 85,000.00	£ 52,000.00	£ 51,000.00
Income tax	£ 95,000.00	£ 52,000.00	£ 35,000.00
Total current liabilities	£ 10,60,000.00	£ 4,33,000.00	£ 4,58,000.00
Long-term liabilities
Borrowings	£ 2,50,000.00	£ 50,000.00	£ 25,000.00
Total liabilities	£13,10,000.00	£ 4,83,000.00	£ 4,83,000.00
Owner’s equity
Issued capital	£ 1,76,050.00	£ 1,76,050.00	£ 76,050.00
Shareholder’s equity	£ 60,000.00	£ 60,000.00	£ 60,000.00
Retained earnings	£ 1,76,559.00	£ 2,68,968.00	£ 3,63,594.00
Total equity	£ 4,12,609.00	£ 5,05,018.00	£ 4,99,644.00
Toal liabilities and equity	£17,22,609.00	£ 9,88,018.00	£ 9,82,644.00

Break -even analysis
Timeframe (e.g. monthly/yearly)
Average price of each product/service sold	£ 1,800.00
Average cost of each product/service to make/deliver	£ 1,100.00
Fixed costs for the month/year	£ 2,10,000.00
Profit percentage	38.89%
Total sales needed to break-even	£ 5,40,000.00
Number of units sold needed to break-even	300

The contingency planning will be prepared for helping the management to overcome or face the possible future circumstances or events (Authority 2016). The contingency plan will include the system programming, internal auditors, applications programming, legal department, safety, security and fire plan, insurance, responsibility, communications. Further, the app can be developed or modified as per requirement. The plan will include the following –

Problem	Response
App not responding	The client can report the issue online and the solution will be provided in 24 hrs of time after checking all the details of the user.
Non-availability of signal in client’s end	In such circumstances the client must notify the issue through the 24 hrs customer care services and shall follow the instructions as will provided by the customer care executive
Mobile Phone of the client lost or stolen	The client can suspend the service through calling the service centre number immediately and then again start the service on new handset through login password.

Ratio	2018	2019	2020	Analysis
Current ratio	0.76	2.04	1.88	The current ratio of the company for the year 2018 will be lower than the average that is 1, however, it is expected to improve from next year
Debt equity ratio	3.17	0.96	0.97	The debt ratio of the company for the year 2018 is quite high that is funding through borrowing is high. However, it is expected to improve from next year (Vogel 2014)
Return on equity	0.43	0.53	0.73	Both ROA and ROE of the company are expected to improve from the 2nd year that is from 2018 as the net profit of the company is expected to improve
Return on assets	0.10	0.27	0.37
Net profit margin	13.58%	18.81%	23.11%	Net margin is expected to increase each year as the sales will increase at 10% each year (Brigham and Ehrhardt 2013)