The financial plan is based on the consideration of the key partners, key activities, value proposition strategies, customer relations and customer segments. Some of the other considerations have been taken with the key resources and the channels. The key partners of Medcycle have been seen with the partnerships with the doctors, pharmacy, hospitals and major developers of the app such as Google Play store. The Indian government and bank and the insurance companies has formed a considerable share of the revenues for Medcycle. Some of the main form of the key activities of the company has been further identified in terms of the considering the total cost of the mobile app. The other consideration has been seen with staff cost, technical infrastructure cost, developmental cost, marketing cost and the store charges of IOS and Google play. The most expensive cost consideration has been inferred with IT professional to design and make the app with 24 hours helpline desk. Apart from the key partners of the company, some of the key partners of the company the revenue stream have been identified with the Direct Customers and the advertisement sources of the company. The budget has considered some of the intangible assets in form of the licenses and copyrights. These costs have been taken into considered in the first year itself.
|
Start-up Requirements |
|
|
|
Start-up Expenses |
||
|
Fixed Costs |
Particulars |
Amount (USD) |
|
Technical Infrastructure |
28,000 |
|
|
Staff Remuneration |
75,000 |
|
|
Marketing Fees |
1,400 |
|
|
IOS & Google Play Store Charges |
4,500 |
|
|
App Development Expenses |
6,500 |
|
|
Interest on loan 10% |
2,500 |
|
|
Telephone |
1,650 |
|
|
Brouchers |
1,250 |
|
|
Logo Designs |
2,250 |
|
|
Market survey |
1,650 |
|
|
Lease payments |
8,000 |
|
|
Market survey |
1,975 |
|
|
Preliminary Expenses |
1,200 |
|
|
Total Fixed Costs |
$ 135,875.00 |
|
|
Average Monthly Costs |
||
|
Infrastructure |
$ 2,333.33 |
|
|
Lease payments |
$ 666.67 |
|
|
Interest on loan 3% |
$ 208.33 |
|
|
Telephone |
$ 137.50 |
|
|
Repairs and Maintenance |
$ 541.67 |
|
|
Staff Remuneration |
$ 6,250.00 |
|
|
Total Average Monthly Costs |
$ 10,137.50 |
|
|
x Number of Months: |
$ 12.00 |
|
|
Total Monthly Costs |
$ 121,650.00 |
|
|
Total Startup Expenses |
|
$ 257,525.00 |
|
Start-up Assets |
||
|
Owner Funding |
||
|
Owners Fund |
$ 250,000.00 |
|
|
Total Owner Funding |
$ 250,000.00 |
|
|
Loans |
||
|
Bank Loan |
$ 25,000.00 |
|
|
Other |
||
|
Total Loans |
$ 25,000.00 |
|
|
Total Start up Funds |
$ 275,000.00 |
|
|
Assets |
||
|
Networking Equipments |
$ 25,000.00 |
|
|
Computers |
$ 45,000.00 |
|
|
Total Fixed Assets |
$ 70,000.00 |
|
|
Total Start-up Assets |
|
$ 345,000.00 |
The main component for the start up expenses has been considered with the Technical Infrastructure amounting to USD 28000 as fixed cost. Some of the other considerations have been seen with Staff Remuneration, Marketing Fees, IOS & Google Play Store Charges. The highest start up cost has been further seen to be seen with Staff Remuneration USD 75000. The various considerations of the fixed costs has been observed with Marketing Fees, IOS & Google Play Store Charges, App Development Expenses, Interest on loan 10%, Telephone, Brouchers and designs of the logo. The fixed cost has been estimated to be Market survey, Lease payments, Market survey and Preliminary Expenses. The total of the fixed cost has been seen to be $ USD 135875. The various types of the average monthly cost has been further seen to be discerned to with monthly Infrastructure expenses, Lease payments, Interest on loan 3%, Telephone/ cellular charges, Repairs and Maintenance and salaries. The monthly average expenses have been identified as USD 121,650.00. The final amount for the start up expenses has been computed as USD 257,525.00.
|
Common Financial Ratios |
FY-1 |
FY-2 |
FY-3 |
|
30% |
32% |
32% |
|
|
Debt Ratio (Total Liabilities / Total Assets) |
0.87 |
0.90 |
0.90 |
|
Current Ratio (Current Assets / Current Liabilities) |
1.57 |
1.74 |
1.78 |
|
Assets-to-Equity Ratio (Total Assets / Owner’s Equity) |
1.20 |
1.10 |
1.06 |
|
Debt-to-Equity Ratio (Total Liabilities / Owner’s Equity) |
1.04 |
0.99 |
0.96 |
The main projection of the profitability has been discerned in terms of calculation of the common ratios such as Net Profit Ratio, Debt Ratio, Current Ratio, Assets-to-Equity Ratio and debt to equity ratio. The net profit of the company has been calculated based on the net profit divided by the sales of the company. The net profit of the company for the first year has been seen to be USD 121,388, in the second year the net profit has been discerned to be USD 135,524 and the third year net profit of the company has been seen to be USD 143,371. The sales of the company for the first year has been further discerned to be USD 405,000, in the second year the projected sales has been forecasted as USD 425,250 and USD 446,513 for the third year. The linear progression of the net profit ratio has been further identified to be evident with 30% in the first year and 32% consecutively for the second and third year. The various types of the various types of the other financial improvement have been depicted with decreasing debt equity ratio of 1.04 in the first year, 0.99 in the second and third year. The break even assessment of the company has been discerned as 405000 units as the contribution margin. The break even value has been further observed as USD 119261.325.
|
X-Axis Label |
Sales |
Gross Margin |
Net Profit |
|
Year 1 |
$ 405,000.00 |
$ 283,612.50 |
$ 121,387.50 |
|
Year 2 |
$ 425,250.00 |
$ 289,725.53 |
$ 135,524.48 |
|
Year 3 |
$ 446,512.50 |
$ 303,141.10 |
$ 143,371.40 |
The break even analysis along with the profitability assessment has been discerned as
|
Breakeven Analysis |
|
|
|
|
Breakeven Sales Value = |
average fixed cost/% contribution |
||
|
Average fixed cost |
83238.675 |
||
|
Contribution % |
50% |
||
|
Revenue |
Contribution |
Fixed Cost |
Profit |
|
405000 |
202500 |
83238.675 |
119261.325 |
|
425250 |
212625 |
83238.675 |
129386.325 |
|
208096.6875 |
104048.34 |
83238.675 |
20809.66875 |
|
249716.025 |
124858.01 |
83238.675 |
41619.3375 |
The cash reserves for the first financial year have been discerned to be USD 106,050. In the second year the cash reserves of the company has been discerned to be USD 137,050. In the third year the cash reserves of the company has been further seen to be USD 124650. Hence the company needs to consider the factors for the decreasing cash reserves in the third year.
The projected income has discerned that in the first year sales has amounted to USD 480000, COGS of USD 330000 and gross profit of USD 150000. The projected income has discerned that in the second year sales has amounted to USD 520000, COGS of USD 375000 and gross profit of USD 145000. The projected income for the third year sales has amounted to USD 625000, COGS of USD 460000 and gross profit of USD 165000.
The projected cash flows have been taken into consideration as per the cash from Sales, director’s loans and the capital employed. The cash from the sales has discerned a linear growth with USD 405,000 in the first year, USD 425,250 in the second year and USD 446,513. The total amount of the director’s loans has been further seen to be USD 25000. The cash inflow has shown an increasing trend of USD 125000 in the first year, USD 680000 in the second year, USD 712,750 and USD 747138.
The assistance from the venture capitalist can be taken to provide the investment to startup ventures or support the capital funding. The capitalists have been further seen to be willing to earn a huge amount of investment for the success of the organization. The venture capitalist will be able to help the business to provide a strong management team and explore large potential in the market.
Reference List
Brinckmann, J., & Kim, S. M. (2015). Why we plan: the impact of nascent entrepreneurs’ cognitive characteristics and human capital on business planning. Strategic Entrepreneurship Journal, 9(2), 153-166.
Brinckmann, J., Read, S., Mayer-Haug, K., Dew, N., & Grichnik, D. (2015, January). Of those who plan: A meta-analysis of the relationship between human capital and business planning. In Academy of Management Proceedings (Vol. 2015, No. 1, p. 16198). Academy of Management.
Fulker, D., Timur, A., Dew, K., & Butler, J. (2016). A Case Study of the Grey Oaks Community and Club: Creation of a High-Performance Culture Through the Innovative Use of a Data-Driven Business Plan. International Journal of Hospitality & Tourism Administration, 17(1), 72-99.
McKeever, M. (2016). How to write a business plan. Nolo.
Rutz, E., Tappel, J., & Zirger, B. J. (2014). A MOOC with a business plan. In ASEE Annual Conference and Exposition. American Society for Engineering Education.
Schaper, M. T., Volery, T., Weber, P. C., & Gibson, B. (2014). Entrepreneurship and small business.
Watson, K., McGowan, P., & Cooper, S. (2016). Reimagining the extracurricular business plan competition through the incorporation of effectuation.
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