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3.1 Using and Navigating Financials

top The Financials tab of the Business Plan Builder was created to alleviate the tedious calculations involved with creating financial reports. Along every step of the process is a "Tool Tip" (as pictured below) to help you with each decision. To use the tool tip function simply click on the ? mark icon and a dialog box appears with information explaining the specific field in greater detail to help you determine the best possible choice. The dialog box will remain open until the ? icon is clicked for a second time. The navigation tools at the bottom of each section help direct you through the process.

 

3.2 General Assumptions

top The first section under the financial business plan is the General Assumptions function which helps you start the basics of the financials by identifying:

• Business plan name: (What is the name of the business to be used as the title on this business plan)
• Business plan type: (Which industry category best describes the type of business being planned?)
• Rounding of dollar amounts: (Choose whether to round the financial statements to the nearest Whole Dollar or thousands or Millions of Dollars. For example, if your projected revenues are most likely to be in the Hundreds of Thousands, then choose Whole Dollar.)
• Periods to be presented: (New entities will only present –Future periods. Existing entities can choose to present either one year or two years of actual historical financial statements.)
• Fiscal year ends: (Choose the month that is the last month of the Fiscal Year for this entity.)
• Plan month one: (Specify the calendar month during which the first activity occurs in this plan. Plan activity occurs when the first expenditure occurs. Often earlier than the first revenue. If the business is already in existence, you should choose to use the first month of the current year as Plan Month One and enter assumptions that will generate results consistent with actual performance for the early months of the current fiscal year.)
• What is the initial cost of organizing your business entity: (How much will you spend for the initial formation of the business entity?)
• In what “Plan Month” will these costs be incurred: (Plan Month These Costs will be incurred during what month you will actually incur the costs of organization?)
• Plan Type: (Plan Type (New Entity or Existing Entity) Is this a New Entity just being formed, or is this a plan for a business that already has operations?)
• Below is an image of a finished General Assumption section.

3.3 Revenue Assumptions

top Revenues will be projected by revenue items. A revenue item may be a particular product or it may identify the Category for each line of revenue. Product sales can be projected based on unit sales or dollar volume sales. Service Revenues are projected based on gross dollars. Professional Services revenues are projected based on units of service delivered and a billing rate per unit of service. Commission revenues are based on commissionable sales and a percentage commission rate. Companies may have revenues in one or all of these categories.

3.3.1 Adding and Understanding a Revenue Type

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• To add a revenue assumption, simply click the drop down menu to select a revenue assumption of your choice.

• Once a revenue assumption is chosen click the “Add Revenue Items” button. After clicking, the image below will appear.

• Next, begin by filling out each item as necessary.
• Descriptive name for this Revenue item: (Create a name and give a description of the revenue assumption.)
• “Plan Month” when 1 st sale Occurs: (Select the Plan Month when the first sale of this item will occur. For existing businesses and already have revenues of this type, choose Month One.)
• Number of Months to Collect A/R: (Revenue is recognized when a sale occurs, but many businesses do not collect the amount in cash until the customer has been billed as makes payment in accordance with the terms of payment. Project the average number of months to collect revenues in this category. This assumption will be used to project cash flow.)
• Project and insert the number of Units or gross amount Sold in the first six months with Sales Activity:
• After the initial 6 months of revenue, project the remainder of the forecast period by providing a percentage % for each succeeding month. Enter the percentage increase as a whole number. Enter a separate assumption for months 7 - 12, months 13 - 24 and for the remainder of the forecast period. This percentage increase will be applied to this revenue item each month. For example, months 7-12 may see a larger percentage increase as opposed to months 13-24 when a product may mature. It is in steps 7. and 8. Where you may account for seasonality in for certain products or services. For example, you may sell more of a product during the last three months of your fiscal year as opposed to the first few.
• Variable Cost (materials and resources) as a % of Sales: (Labor and overhead will be determined later, but it is necessary to provide an estimate of the cost of Materials and other External Costs. This amount should be entered as a percentage of each sale, enter the percentage as a whole number.)
• Sales Commission % to Sales Force (if any): (If sales personnel are commissioned on this product, enter the average percentage of sales to be paid as a whole number. If no commissions are to be paid, leave this item blank.)
• Returns and Allowances as a % of Sales: (Estimate the percentage of sales that will be returned for credit by the customer. To not assume or predict that you may have dissatisfied customers who want their money back could affect you in the future if not prepared.
• Once all these items have been entered, click the save button and the revenue assumption will appear. To add more, just repeat the steps and add as many as necessary.

3.3.2 How to Delete a Revenue Type

Pictured below is the end result of a completed revenue type. In order to delete a revenue click on the blue “X” that is circled in the image. After clicking the “X”, a message will appear that asks, “Are you sure you want to delete this record?” Click “OK” to continue to delete the revenue type.

 

3.4 Human Resources

top The Human Resources section is intended to cover most of the expenses and costs associated with employees. This will help you identify certain costs that may have not yet been brought up or overlooked.

3.4.1 How to Navigate Human Resources

top -Pictured above is what will appear when you click on the Human Resources Section. To navigate this section successfully, you may:

• Click on the simple tabs circled at the top of the page.
• Use the navigation buttons located and circled at the bottom of the page.
• Or use the Human Resource drop down menu which is circled and located to the left hand side of the image.

3.4.2 Global Assumptions

topBeginning with Global Assumptions in the Human Resources section, you will be asked on another screen to supply headcount and salary information. Other payroll costs are determined using global assumptions. Assumptions are based on either a percentage of calculated gross pay or an amount per employee. To start, begin with Payroll Related Expenses as displayed in the image below. *Upon filling each box with the information necessary, there is an additional choice called Method of Estimation located to the right of the image above. This will allow you to select a method to calculate each line item. Personnel costs can be determined as a percentage of payrolls or as a set amount per employee per month. For example, if you choose Payroll Taxes to be 8% of your total payroll, you may have Other HR Costs that looks like the number pictured below in comparison to your Department Base Salary. (These are simply examples and do not reflect actual costs. These examples just display the how the costs are calculated.) However, if you choose Payroll Taxes to be 8% of (Amount per Person per Month) then you will end up with Other HR Costs to look like the circled number below.

Note:

These totals can be found in the summary tab of the HR section. Finish this section by entering the rest of the blank boxes for a specific field.

• Payroll Taxes: (Most companies will estimate payroll taxes as a percentage of payroll. To handle in this manner, select a (%) and enter the percentage as a whole number.)
• Workers Compensation Ins: (Workers compensations is generally paid as a percentage of payroll based on class of employee, however, it may be easier to project as an amount per employee.)
• Employee Health Ins: (Employee Health Insurance is amount of the company contribution, net of the portion withheld from the pay of employees. Most employers will project this expense as an amount per employee per month.)
• Employee Retirement: (Employers often provide a matching contribution, but many small employers cannot afford to contribute to employee retirement. Some small employers will provide a plan to which employees contribute and the employer pays for the administrative costs. The nature of the expenditure will influence the choice of method on this line.)
• Other: (Use this line for any payroll related expense that is not captured elsewhere.)

Next, we will explore Salary Increse Assumptions located at the bottom of the screen as the image below displays. Finish this section by entering the rest of the blank boxes for a specific field.

• Annual Percentage Increase: (Most employers will estimate salary increases at a rate approximating the published national averages. Enter your assumption as a whole number. Salaries will increase automatically by this percentage on the next increase date.)
• Annual Increase Date: (Choose the timing of salary increases: either increasing each employee on the anniversary date of their hire or increasing all employees at the same time in a month that you choose.)

• Month for Annual Increase if on Set Schedule: (Choose a particular month in which may already assign or predict annual salary increases.)

Once you have completed the necessary boxes, you may add comments to this particular section or click the “Next” button to proceed to that next tab, and your information will be saved.

3.4.3 Executive Personnel

top The next tab is the Executive section of Human Resources. This tab already has a list of basic Executive positions that may need to be filled for your particular business.

3.4.4 How to Add Executive Personnel

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• Begin by entering the name of the person you wish to fill a particular position. Please look at the image below for an example.

• Next, type the assigned salary to that particular position.

• Next, choose the month that you will begin to pay the employee.

• And finally, click insert to apply the person to the position.

This is what an employee record will look like when completed. You may fill the rest of the positions out, or leave them blank for your particular business. To proceed, click the next button located at the bottom of the screen.

 

3.4.5 How to Delete an Employee Record

top Pictured below is the end result of a completed employee record. In order to delete an employee record, click on the blue “X” that is circled in the image. After clicking the “X”, a message will appear that asks, “Are you sure you want to delete this record?” Click “OK” to continue to delete the employee record.

 

 

3.4.6 Adding an Employee Record and Position in, Finance/Admin, Sales, Production, Service, Professional, R&D, and Marketing

top The next seven tabs have the same employee record functions and are simple to use. This function allows you to add and delete various types of positions in the process that are necessary to your line of business. Additionally, not every tab may be necessary for your specific plan, it is ok to leave some blank.

• First, begin by entering a position in the Job Tile box. (Enter text to add a descriptive title for each position added in each month. The same Job Title may be added in more than one plan month as staff grows. For example, a Clerk may be added on month 2 and two more Clerks may be added in month 6, this would be indicated on two lines of entry in this form.)

• Next, click the drop down menu and choose a Job category. (Select the general Category for each Job Title as a new row is entered.)

• After choosing a category, insert the number of positions that you currently have or project to have in the # Positions box. For each plan month in which a particular Job Title has new staff additions, enter the number of persons added in that month.)

• Next, in the Salary box, enter the amount of Annual Compensation for each position being entered on this row.

• Click on the drop down menu labeled Start Month and select the month in which the positions are to be added. If a particular job has positions added in more than one month, the entry should be made on more than one row.

• And finally, click insert to apply the Personnel record.

 

 

3.4.7 HR Summary

top The Summary tab of the HR section displays a calculated report of the information you have in the previous tabs. The Summary also presents the data through to Fiscal year 5. Pictured below is an example of the Summary page.

3.5 Long-Term Assets

top Long-Term assets are very important to be identified. They include any property, plant, equipment and among many other assets that need to be used for more than one year.

3.5.1 How to add Facilities Assumptions

top Costs related to facilities will be projected for each facility based on the items of cost and the date each facility is put into service. If a physical location has separate components that can be put into use in different months, then consider each component as a separate facility. Identify the Category for each facility. Facilities may be either Owned or Leased. You will be prompted for assumptions dependent on whether a facility is owned or leased. Facilities may already be in service for businesses that are already in existence or facilities may be planed as future operations.

Own Facility-Already Operational

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• Own Facility- Already Operational-Begin by clicking on the drop down menu labeled “Select Facility Type”.

• After selecting Own Facility-Already Operational, click the “Add New Facility button”.

• The screen below will appear. Use this screen to provide data on facilities that are owned rather than leased and which have already been put into use by an entity in existence prior to plan month one.

• Continue to fill out the appropriate costs. The costs related to each facility must be allocated to either Cost of Revenues or G&A. If Cost of Revenues, the cost must be broken between Product, Service and Professional Service. It would not be uncommon for a single facility to house production, service and administrative functions. The costs related to the facility must be distributed to each of those categories. The total cost allocation must sum to 100%.

• Next fill out the cost of the land. The Building cost will be depreciated. Land is not depreciated, and therefore the cost of the Land must be entered separately from the Building.

• Fill out the cost of the building. The Building cost will be depreciated. Land is not depreciated, and therefore the cost of the Land must be entered separately from the Building.

• After filling out the cost of the building, fill out The useful life at the date the building was placed in service and Number of months the building was placed in service. Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. Because this facility is already operational, some depreciation will have already been operational; some depreciation will have already have been taken. The Number of Months already in Service will be used to determine prior depreciation.

• Next, fill out any costs associated with improvements to the facility. Certain improvements to the facility may have a useful life that is shorter than the core building. Report those improvements separately on these three input lines.

• When you are finished filling out the necessary information, click Save located at the bottom of the page as pictured below to save your information and proceed to the next step.

• After clicking Save, your information will be displayed as assumptions specifying the type, and the depreciation expense will be projected for years 1-5.
*You may Add and Delete as many Facilities Assumptions that are necessary to your plan.

Lease Facility-Already Operational

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• Begin by choosing Lease Facility- Already Operational from the drop down menu as pictured below. Then click Add New Facility.

• The screen below will then appear. Use this screen to provide data on facilities that are leased rather than owned and which have already been put into use by an entity in existence prior to plan month one.

• Write in the name and a description of the facility in this box to distinguish it from the others.

• Next, fill in the necessary costs. The costs related to each facility must be allocated to either Cost of Revenues or G&A. If Cost of Revenues, the cost must be broken between Product, Service and Professional Service. It would not be uncommon for a single facility to house production, service and administrative functions. The costs related to the facility must be distributed to each of those categories. The total cost allocation must sum to %100.

• Next, fill in the amount of your security deposit. Leases typically require a security deposit. The security deposit does not affect profit but does require cash. The amount will be reflected as a long-term asset on the balance sheet.

• Then, fill in the amount of the cost Leasehold improvements if any. Leasehold improvements will be depreciated over the number of years provided as the useful life, which may be the same as the lease term, but could be a different period of time over which value will be derived.

• Next, fill out the useful life at the date the leasehold improvements were placed in service?

• Then, insert the number of months the leased facility has been in service.

• Next, fill in the monthly lease cost. The primary cost of a leased facility is the monthly lease amount. Enter as a dollar amount per month.

• Then fill in the annual escalation factor during the lease term. Most lease agreements will provide for rent increases on an annual basis. Enter an annual escalation percentage as a whole number and then indicate the month during the year when the annual escalation occurs. *You may Add and Delete as many assumptions as necessary to your plan
• Then select the month the escalation factor begins, and click 'Save' to save the financial assumptions.
  

Plan to Purchase Facility

top 1.) Choose Plan to Purchase Facility on the drop down menu then click Add New Facility. 2.) The screen below will then appear. Use this screen to provide data on facilities that are owned rather than leased and which are planned for initial service after the start of plan month one. 3.) Then fill out the Allocation of Costs Related to this Facility. The costs related to each facility must be allocated to either Cost of Revenues or G&A. If Cost of Revenues, the cost must be broken between Product, Service and Professional Service. It would not be uncommon for a single facility to house production, service and administrative functions. The costs related to the facility must be distributed to each of those categories. The total cost allocation must sum to 100%. 4.) Next, fill in the cost or estimation of the land you plan on purchasing. The Building cost will be depreciated. Land is not depreciated, and therefore the cost of the Land must be entered separately from the Building. 5.) Then fill in the projected building cost of the facility. The Building cost will be depreciated. Land is not depreciated, and therefore the cost of the Land must be entered separately from the Building. 6.) Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. Because this facility is already operational, some depreciation will have already been taken. Depreciation will be calculated monthly beginning with the Plan Month specified on this screen. 7.) Then select which “Plan Month” the facility will be placed in service. Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. Because this facility is already operational, some depreciation will have already been taken. Depreciation will be calculated monthly beginning with the Plan Month specified on this screen. 8.) Next, include the projected cost of improvements to the facility if necessary. Certain improvements to the facility may have a useful life that is shorter than the core building. 9.) Next, insert the useful life at the date the improvements are placed in service. 10.) Then, include the Timing of Cash flow for the facilities. The cost of a Facility is generally expended over more than a single month. These input areas are used to spread the expenditures in the Cash Flow reports. Some cost may have been incurred prior to Plan Month One. The costs yet to be incurred are assumed to be incurred at the monthly rate specified until the total cost has been incurred. * Mortgage data will be entered separately under Debt Assumptions.
11.) Then click Save to add your assumption. You may Add or Delete as many assumptions as necessary to your plan.

Plan to Lease Facility

top 1.) Choose Plan to Lease Facility on the drop down menu then click Add New Facility. 2.) The screen below will then appear. Use this screen to provide data on facilities that are leased rather than owned and which are planned for initial service after the start of plan month one. 3.) Begin by adding a name and or a description of the facility. 4.) Then fill out the Allocation of Costs Related to this Facility. The costs related to each facility must be allocated to either Cost of Revenues or G&A. If Cost of Revenues, the cost must be broken between Product, Service and Professional Service. It would not be uncommon for a single facility to house production, service and administrative functions. The costs related to the facility must be distributed to each of those categories. The total cost allocation must sum to 100%. 5.) Next, fill in the projected or actual amount of your security deposit. Leases typically require a security deposit. The security deposit does not affect profit but does require cash. The amount will be reflected as a long-term asset on the balance sheet. 6.) Determine and project on reasonable assumptions on which “Plan Month” that the security deposit will be paid. 7.) If necessary, insert the expected cost of Leasehold Improvements. Leasehold Improvements will be depreciated over the number of years provided as the useful life, which may be the same as the lease term, but could be a different period of time over which value will be derived. 8.) Then, fill in the useful life of the leasehold improvements. Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. The monthly depreciation will begin in the Plan Month that the facility is placed in service. 9.) Next, determine or project using reasonable assumptions which “Plan Month” the facility will be placed in service. Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. The monthly depreciation will begin in the Plan Month that the facility is placed in service. 10.) Determine or project the monthly lease cost using reasonable assumptions. The primary cost of a leased facility is the monthly lease amount. Enter as a dollar amount per month. 11.) Then fill in the annual escalation factor during the lease term. Most lease agreements will provide for rent increases on an annual basis. Enter an annual escalation percentage as a whole number and then indicate the month during the year when the annual escalation occurs. 12.) And finally, choose the first escalation month from the drop down menu and click Save at the bottom of the screen to continue. *You may not be able to immediately fill each assumption. You may always come back and edit an assumption by simply clicking “Edit” as pictured below.

3.5.2 How to Add Equipment

top Equipment can be added either one piece at a time or using logical groupings. Logical groupings would include equipment that is in a common facility, charged to the same cost center and put into service in a single month.

• First begin by clicking on “Add Equipment” as pictured below.

• The screen below will then appear.

• Indicate whether this equipment is newly purchased or already owned. Newly purchased equipment will require the use of cash to purchase in the month of acquisition. Already owned equipment should be included in data entry for the opening balance sheet.

• Select one of the facilities that was set up in the Facilities screens to show the location of the equipment. For example, for one of the Facilities you created in the Facilities Assumptions, you may choose where this particular piece of equipment or logical groupings may go.

• Provide an Item Number for tracking, if you choose. This may be the serial number or other coding utilized by the company to track items of equipment. Once again, this is optional.

• Then include a description of the equipment in sufficient detail to allow a reader to understand its purpose.

• Next select a Cost Center for Depreciation. The costs related to each facility must be allocated to either Cost of Revenues or G&A. If Cost of Revenues, the cost must be broken between Product, Service and Professional Service.

• Enter in the cost of the item. The Equipment cost will require the use of Cash and the cost will be depreciated. Enter the amount of purchase cost for this item.

• Then determine or project what “Plan Month” this item is acquired. The date that Cash is required for the purchase and the beginning of monthly depreciation is based on the Plan Month selected here.

• Determine the useful life of the particular item (e.g. the life expectancy according the manufacturer of a certain piece of equipment). Depreciation is calculated using Straight Line depreciation based on the number of years entered as a Useful Life. If the equipment is already owned, and some depreciation will have already been taken, the number of months the equipment has been in use is required to determine prior depreciation.

• After finishing inserting the appropriate information, click Save to finish and save the item. You will then have a calculated depreciation expense for years 1-5 for that particular item.

*You may Add and Delete as many Items of Equipment that is necessary for your plan. To delete simply click on the blue “X” under delete. *You may also edit your item any time you like by clicking on “Edit” as pictured below.

3.5.3 Amortizable Intangibles

top Amortizable intangibles are assets that will provide value over time and should be expensed over the period which they provide value, but these assets are not physical assets. Examples are trademarks and patents.

• Begin by clicking the “Create Intangible” button to add a new asset.

• The screen below will then appear. You may create an Item No. to help organize the item.

• Next, provide a description that will, in combination with the numbering system, allow you to identify each asset.

• Insert the amount it cost to acquire the asset.

• Select which “Plan Month” these costs will be incurred.

• Then enter in the number of years to amortize the cost. This is how long it will take to write off the cost of the asset.

• Then click Save to finish and save the asset.

*You may Add and Delete as many assets as necessary for your individual plan. To delete simply click the blue “X” then “OK” in the message box. *You may also edit an existing asset at any time, by clicking the “Edit” option next to the asset.

3.5.4 Other Long-Term Assets

top If there are assets purchases other than those detailed as facilities, equipment, organization cost or amortizable intangibles, provide a Description, the Month the expenditure will occur and the Dollar Amount. You may observe the affect of this expense by examining the Analysis of General and Administrative costs found at the end of the Financials section.
1.) Begin by adding the name or description of the asset in the box as pictured below. 2.) Next, choose the “Plan Month” in which the asset is acquired. 3.) Then add the dollar amount of the asset. 4.) Finally, click “insert” to create the asset and continue. *You may Add, Delete, or Edit your asset at any point in the creation of the business plan.

 

3.6 Other Departmental Expenses Other Departmental Expenses include additional monthly expenses such as Executive, Finance/Admin, Sales, R&D and Marketing. This brings about expenses that may have been otherwise overlooked.

3.6.1 How to use Other Departmental Expenses

top 1.) Begin by entering the amount projected as an expense, line by line - for each of the first 12 Plan Months. If Plan Month One is not the first month of the fiscal year, then you will see a RED line separating the last month of Fiscal Year One from the first month of Fiscal Year Two. Go ahead and project for 12 months, even though it crosses two fiscal years. *You may Add an additional expense category at anytime by typing in the name of the expense and then by clicking the “Add Expense Item” as pictured below. 2.) Once you have entered in the projected or current dollar amounts for each month for your expenses, click “Calculate & Save Changes” located at the bottom of the screen. 3.) After Calculating & Saving Changes, there is a table that displays your expenses thus far. Departmental expenses for years two through five are projected as a % of revenue. The Departmental Expense for Months 10, 11 and 12 are presented here as a point of reference. Use this information to assist in your projection of a % for years two through five. 4.) Enter your projection for years 2-5 in the grid below. If fiscal year 2 includes months for which specific expense amounts are entered above, the calculation of expense using the projected % begins in month 13 of the plan. Then calculate to review the resulting Departmental Expense. 5.) After projecting for years 2-5 and clicking the “Calculate & Save Changes” button, you may click the next button to continue to the next section. 6.) To view the results of your Other Departmental Expenses you may go to the “Summary” section and observe them by specific sections and totals for the first 12 months of operations, and then years 2-5.

3.7 Fixed Costs of Sales

top Fixed Costs of Sales assists you in projecting the Production, Service, and Professional costs associated with sales.

3.7.1 How to use Production, Service, and Professional

top 1.) For each section, enter the amount projected as an expense line by line - for each of the first 12 Plan Months. If Plan Month One is not the first month of the fiscal year, then you will see a RED line separating the last month of Fiscal Year One from the first month of Fiscal Year Two. Go ahead and project for 12 months, even though it crosses two fiscal years. 2.) Review the increase in Product revenues from year to year and determine the extent to which these other fixed costs will require an increase. Some growth can usually be accommodated with a modest increase in fixed costs, but significant growth may require additional infrastructure. The percentage to be entered here is the percentage increase from one year to the next. 3.) After inserting the projected percentages. Click the “Calculate & Save Changes” located at the bottom of the screen to proceed. 4.) For the “Production” section, the Summary of Production Costs will appear on the left hand side of the screen after calculating and saving changes. The Summary of Production Costs is presented as a guide to gauge the reasonableness of the percentage increase that was projected. 5.) For the “Service” and “Professional “sections, the Fixed Cost Summary will appear on the left hand side of the screen after calculating and saving changes. The Summary of Production Costs is presented as a guide to gauge the reasonableness of the percentage increase that was projected. 6.) A graph for each section displays the Total Fixed Sales Costs.

3.8 Sources of Funds

top Funding your new business or future projects requires you to estimate how much you may need to borrow if there is not enough cash on hand. For example, you may have negative cash flows for the first few months of operations. To be able to cover bills and fixed costs, you may have to use additional funds such as a line of credit or fixed period loans to stay in business until you are generating positive cash flow.

3.8.1 Equity Funding

top 1.) Begin by determining the plan month and the dollar amount of the first series of investment in the business. 2.) Then choose the amount projected. *The same steps may be applied for Stages Two and Three. 3.) Then click the “Next” button as circled in the image to continue to the next section.

3.8.2 Fixed Period Loans

top Fixed Period Loans are loans that are received in a fixed amount at the inception of the loan and require repayment over a set number of payments. The payments in this tool must be entered as monthly amounts.

• Begin by clicking the “Add Loan” button.

• The screen below will appear. Type in the name of the loan that you wish to call it as pictured in the image below.

• Select either Short Term or one of the categories of Long Term notes. This selection determines the balance sheet line for placement of this debt.

• Select whether the loan is Existing or a new loan.

• Then select which “Plan Month” the loan will fall into.

• Next, select whether the loan is Amortizing or Non-amortizing.
- An Amortizing payment is one that is made in a constant amount for the term of the loan with each payment being part interest and part principal. The interest portion decreases as the debt decreases and the principal portion increases by the difference. - A Non-Amortizing payment plan has the company repay a set principal amount in each payment plus the interest that is calculated on the outstanding balance. The total payment amount will therefore decrease as the balance of the note decreases.
• Insert the annual interest rate that is on the loan.

• Then insert the original loan amount.

• And finally put in the loan term. (E.g. 3 yrs, 5 yrs, or 6 yrs.)

• After filling in the necessary information on your loan, click the “Save” button to apply the loan to the business plan.

• After clicking the “Save” button, the screen below will appear. You may, Edit, Add, or Delete a loan at anytime. To continue click the “Next” button located just below the existing loan.

a

3.8.3 Lines of Credit

top If you have an existing line of credit or project to use one in the future it may be best to use this tool to preview your financials with a line of credit.

• First, begin by clicking the “Add Credit” button.

• Next, add a descriptive name for this particular line of credit.

• Then, select from the available choices. If you select Accounts Receivable Line, you will be asked to provide a maximum draw as a percentage of outstanding receivables. If you select Inventory Line, you will be asked to provide a maximum draw as a percentage on Inventory on hand.

• Insert the Max Loan Amount. This is the maximum amount available on the line without respect to the percentage limitation as a percentage of either A/R or Inventory.

• Then fill in the annual interest rate for the line of credit.

• Next, be sure to insert the loan balance at the beginning of the plan. Then click the “Next” button pictured below to apply the Line of Credit to the business plan.

• After clicking “Save”, the screen below will appear. You may, Add, Delete, or Edit a line of credit at any point in the process of creating your business plan. To continue click the “Next” button located at the bottom of the screen displayed below.

*If you have more than one line of credit, you may rearrange the order of them using the two green arrows located on the left hand side of the screen displayed below.

3.8.4 Balance Sheet Assumptions

top The Balance Sheet Assumptions guide you in highlighting your Assets, Liabilities, and Owners Equity.
1.) Begin by estimating the amount of inventory required to deliver product to customers on a timely basis. If sales are $30,000 for the month and cost of sales is 30% of the sales amount, then cost of sales is $9,000 for the month or $300 per day. If $6,000 of inventory is required to support sales at that level, then the Number of Days Inventory on Hand is 20 ($6,000 / $300). 2.) Determine and project the average number of days before supplier invoices are paid. Number of Days Accrued Payroll at M/E (Month End) if payroll is monthly or semi-monthly and is paid on the last day of each month, the payroll accrual at month end may be zero. If payroll is weekly, the average number of days accrued will be 3.5. If there is a delay between the end of the period and the date that payment is made to employees, then the number of days will increase by the lag time. 3.) Insert the amount of cash maintained in the operating accounts before funds are moved into interest bearing investments. 4.) When excess funds are moved temporarily into interest bearing investments, determine and project the average interest rate earned. 5.) When excess funds are moved temporarily into interest bearing investments, determine and project the average interest rate earned. 6.) Determine and project the effective tax rate after utilization of any tax loss carry forward amounts. 7.) Next, determine and project what the amount of prior losses will be available to offset future taxable earnings. 8.) Many companies will project no dividends during the initial growth periods. If you expect to pay dividends, project the dividends as a % of profits. 9.) After completing the Balance Sheet Assumptions, click the “Next” button to continue and save the information.

3.8.5 Historicals

top * No historical information required for a new business entity
* For existing entities, you may include previous financial statement information from balance sheets, and income statements.
1.) Beginning with previous Balance sheet information, you have three columns that may be filled in as pictured below. 2.) The first column includes the Most Recent Fiscal Year. If you want to show actual amounts for fiscal years prior to the Five Year Projections, this is the Balance Sheet for the Fiscal Year most recently ended. The numbers will be reported in the financial statements but will not affect the Projections. 3.) The next column allows you to fill in the Most Recent Fiscal year. The reports allow for presentation of 2 Prior Years. The column is for entry of the older of the 2 years. 4.) If the business is already in existence, you will need to provide the Dollar Amounts for the Opening Balance Sheet. These amounts will serve as the starting point for Projected Financial Statements. 5.) Next, scroll down the page and you will see the Income Statement information with two columns. 6.) If you want to show actual amounts for fiscal years prior to the Five Year Projections, this is the Income Statement for the Fiscal Year most recently ended. The numbers will be reported in the financial statements but will not affect the Projections. 7.) Then fill in the Most Recent Fiscal year, the reports allow for presentation of 2 Prior Years. The column is for entry of the older of the 2 years. 8.) Once you have completed entering the appropriate information, you may click the “Next” button to continue to the next section as pictured in the screen below.

3.9 Gross Profit Analysis

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3.9.1 Product Analysis

top The Analysis of Product Revenue and Cost breaks down your sales and cost by month for the first fiscal year, then by year up to year 5.

3.9.2 Service Analysis

top The Analysis of Service Revenue and Cost breaks down the expenses and revenues associated with a particular service revenue that you have created by month for the first year, then by year up to year 5.

3.9.3 Professional Analysis

top The Analysis of Professional Revenue and Cost breaks down the expenses and revenues associated with a particular professional revenue that you have created by month for the first year, then by year up to year 5.

3.10 Expense Analysis

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3.10.1 General Analysis

top The Analysis of General and Administrative Costs displayed below breaks down the expenses by month for the first year. Then the expenses are displayed yearly up to year 5.

3.10.2 Sales Analysis

top The Analysis of Sales and marketing Costs displayed below breaks down the expenses by month for the first year. Then the expenses are displayed yearly up to year 5.

3.11 Completion

top Congratulations, you have completed the Financials section. You may choose one of the three options displayed in the image below to move forward with the business plan. top The Reports section is a summary of the Financials section that displays every financial statement required for a business plan and more. 1.) To view the financial reports, simply click on any of the sections to view the financial report. For example, if you click on “Balance Sheet (Yearly)” the Balance sheet for your current or projected business will appear on the right hand side of the screen as pictured below. top If you finish at any point, Business Plan Builder conveniently has a Finished Icon that allows you to create your final documents. These Icons can be found at the bottom of the screen in every section of the Business Plan Builder. 1.) To begin, simply click the font “Finished? Click Here to Export Your Documents.” 2.) The screen below will then be displayed. Choose one of the options displayed below, and then click the “Create Final Documents” button to continue. Then you will be able to view your business plan in the Document form that you have chosen.