Financial plan of Found in the Ozone

Financial Plan of Found in the Ozone

Introduction

Businesses come into existence and fall, but only those remain on path that have proper planning and forecasting of the future goals and plans of action . The firm that we are running is a consultant firm (Ardalan, 2000). This firm provides consultancy to other companies and business concern who want to know about their future existence. Our firm uses computing technology and data mining software to help people predict the future of their ventures. Since our consultancy, business is in expanding phase so we are doing financial planning for our firm (Bowlin et.al, 1980) .This will help our company to make design of the future course of action and plan accordingly in the best manner.

Discussion

Assumptions

Revenue

(Year 1-2)

Year 3-5

Monthly Revenue per customer

$ 6,000 $ 6,000

Total Months

12

12

Customer Per Partner

2

4

Number of Partners

4

4

 

 

Annual Revenue

$ 576,000 $ 1,152,000

The consultation firm revenue per customer is average out around 6000 dollars. This will remain sustainable for the next five years since there is no effect of inflation and tax. In the initial 2 years, there were around two customers per partner but the company forecast says that its customer base would increase to four customers per partners. Thus, in other words there were eight customers in first 2 years, which ultimately will rise to 16 customers. The number of partner will remain same as the company does not expect to issue equities to other and at the same time, the present owners are not planning to leave in the next five years. If anyone leaves than his space will be filled by other owners (Elliott, 2008). Thus, the consultant firm revenue in the first 2 years would remain stable at $ 576,000 that will rise to $ 1,152,000 in the last three years.

Total Trip

(Year 1)

Year 2-5

Trip per partner

30

60

Number of Partners

4

4

Cost Per Trip

$ 2,000 $ 2,000

 

 

Annual Total Cost $ 240,000 $ 480,000

In this section, we assume that the trip per year in the initial first year would remain at 30, but in the next 4 years, it will rise to 60 visits per partner. This is because the consultant firm is planning to raise its customer base to four customers per year from the year 3. Therefore, preparation will start in the 2 years and will continue for the next 4 years. The number of partner as discussed before will remain constant. The cost per trip will remain the same, as there is no inflation effect. Therefore, in the year one the total cost would be $ 240,000 that will rise to $ 480,000 in the year 2. This cost will remain sustainable for the next 4 years.

Cost of Computer and Software

(Year 1-2)

Year 3-5

 

 

Purchase per partner

1

1.5

Number of Partners

4

4

Cost Per Purchase

$ 5,000 $ 5,000

 

 

Annual Total Cost $ 20,000 $ 30,000

The purchasing of computer and software per year the first 2 years is one per partner. However, as the rise in customer ...