Week 8 Discussion – Plan Assumption and Financials
Before beginning work on this discussion post, review Chapter 16, “The Financials,” in your textbook. You have already read this chapter during the previous week. With your review this week, specifically examine:
- “Assumption Sheet,” pages 323–324 and “Sample Plan: Assumptions,” page 332.
- “Sources and Use of Funds,” page 317 and “Sample Plan: Sources and Use of Funds,” page 331.
- “Break-Even Analysis,” pages 320–321.
The financial plan must be based on decisions and facts. Investors want to know whether your business plan is realistic.
This Weeks Discussion Post
Provide a written overview of the plan assumptions and key financials based on the information contained in your business plan and your Business Plan Financials Excel Template.
Use headings (bold) to address each required topic.
Be sure to include:
| Key Financial | Specific Worksheet in the Business Plan Financials Excel Template where the information can be found |
| Projected Sales | Sales Projections worksheet |
| Personnel Overview | Setup and Staff Budgeting worksheets |
| Financing to Date and Funds you plan to raise from investors | Capital Investments worksheet |
| Use of Funds | Capital Expenditures worksheet |
| Break-Even Analysis | Break-Even worksheet |
| Projected Profits | Income Statement worksheet |
Important:
- Do not copy tables from the Excel document in your discussion response. This is an overview of the key financials.
- Start your response with a brief description of your business (no more than 3 sentences). Specify your company name, what business you are in, and the specific product or service you plan to sell.
- Post at least one substantive comment to another student’s post. A substantive comment is at least 4-6 substantive sentences in length, sharing examples, your perspective, resources, your experience, making connections, asking questions, etc.
Important Notes:
- You will use the information from this discussion post in the Week 10 assignment, Business Plan—Final.
- A bullet point under Part 1 asks you to incorporate financial information that will help to convince the investors.
Another Student’s Sample Post for reference purposes:
Good afternoon,
Company Description
My company name is Afghan Organic Dry Nut Inc, and we import organic nuts from Afghanistan and sell them in the USA. We have organic almonds, cashews, walnuts, peanuts, and pine nuts in different flavors such as sweet and salty, honey, curry spiced, BBQ, herb and garlic, and cinnamon glazed. We offer excellent quality organic nuts with exceptional customer service!
Projected Sales
Our company will sell organic in different flavors, a total of ten products. The products that we sell are pine nuts, walnuts, sweet and salty cashew, sweet and salty peanut, BBQ peanuts, BBQ almonds, herb and garlic almonds, honey almonds, cinnamon glazed almonds, and curry spiced almonds. Our company’s total projected gross sales for year one is $1,805427, and the projected second-year sales are $2,501907.
Personnel Overview
Afghan Organic Nuts Inc will have a manager, two full-time employees, and a part-time employee. During the first year, our company will have four employees. During the second year, we will increase our total employees to seven, two managers, three full-time employees, and two part-time employees.
Our manager has 10 years of experience in managing a snack company and our full-time associates have three years of experience. Our part time employee have a background in technology with 2 years of experience.
Our manager will oversee the store’s daily operation, ensuring it runs smoothly and effectively. Our manager’s duties include motivating associates, creating business strategies, developing promotional materials and training, and conducting industry research and inventory. Our two full-time store associates will be responsible for placing in-person and online orders, packaging, shipping online orders, quality control, and cleaning the store. Our part-time employee will handle the company website, hardware and software issues, answer phone calls, and helps with packaging. As we grow, we will add more positions to our business. Since we are a small company, we will not have an advisor and quality control position in the next two years. For now, quality control will be handled by our existing employees and managers.
Financing to Date and Funds Afghan Organic Nuts Inc plans to raise from investors.
Afghan Organic Nuts Inc will have the following equity capital investments: a $240,000 gift, $80,000 from family members, 220,000 from an angel investor for a 10% stake in the company, and a $150,000 loan from Apple Federal Credit Union for 48 months with 6.20% interest. Our total amount of investment and loans will be $690,000. We will use this money for purchasing equipment, marketing, hiring employees, and rent.
Use of funds
Afghan Organic Nuts Inc will use the funds to purchase four automatic packaging machines each for $3500, furniture which will cost us $2600, a delivery van for $22,000, four desktop computers for $1320 each, a printer for $3,200, two cash register machines each for $750, NetSuite for $5600, two Inventory Bar Code Scanners for $500 each, telecommunication equipment, marketing, and rent.
Break-Even Analysis
Our company’s break-even estimate for the first year will be a monthly average of $68,062, and the monthly average for the second year is $113,336.
Projected Profits
The projected profits for the first year will be $300,215; for the second year, it will be $348,168.
