HAND-MADE TOP HATS (EXAMPLE)

SECTION I: FINANCIALS

This section provides you with all the essential financial information adapted and optimized for your entrepreneurship. This information can be used to set up your business; including but not limited to: spending the right amount of money on the correct items, hiring the necessary personnel, keep the essential amount of cash in your business bank account, and more. You will also know in advance how your business could perform within the first five years of operations. This information is essential for you, your partners, your providers, and investors (if any). These financials will also show you how fast your business is expected to grow, how you could finance that growth, how rate at which you are growing and producing profits, and how you will pay your business’ debts.

Estimated Budget & Startup Requirements

The following tables will provide you with the estimated amount of money and/or assets you will need to have available before opening your business and starting operations. Most items should be available long before you start operating. The cash required can be available just before opening your business, but the rest of the items are usually needed earlier on. If your business is successful, you will eventually receive or return this initial investment back.

Table: Estimated Budget & Startup Expenses
These are the business expenses you will have to incur before you start operations. There are many expenses that are specific to your type of business; others are generic expenses present in most businesses.

EXPENSES	AMOUNT
Legal Services	$12,500.00
Insurance Down payment	$3,700.00
Warehouse Rent Down payment	$20,400.00
Hardware and Software	$7,350.00
Marketing and Promotions	$23,000.00
Professional Services	$11,490.00
License and Permit	$2,320.00
Remodeling	$23,200.00
Other	$12,800.00
TOTAL STARTUP EXPENSES	$116,760.00

Table: Estimated Budget & Startup Assets
These are the assets that you would need to allocate or buy before your business is open and operating. The cash required, which is stated below, should be used as a backup or to cover expenses during the time the business cannot cover them with its own income (while the business is not self-sustainable). This graphic shows how the investment is distributed and/or allocated within the budget of your entrepreneurship.

ASSETS	AMOUNT
Cash Required	$137,124.00
Startup Inventory	$63,216.00
Other Current Assets	$35,500.00
Long-term Assets	$148,500.00
TOTAL STARTUP ASSETS	$384,340.00

Table: Estimated Budget & Startup Requirements

REQUIREMENTS	AMOUNT
Expenses	$116,760.00
Assets	$384,340.00
TOTAL AMOUNT NEEDED	$501,100.00

Graphic: Estimated Budget & Startup Requirements

Startup Requirements Summary
The projected total funds you will need to have at hand readily available before starting your venture is $501,100.00. This amount includes expenses and assets.

Projected Cash Required (Working & Expenses Capital)

When opening a new small business, you need money or any other Liquid Asset (an asset that can easily be converted into cash in a short amount of time) to cover operational expenses while the business is not self-sustainable. This is usually used in the beginning stages of operations when the business does not make enough income to cover its expenses. This table shows the projected cash (or any other liquid asset) that would have to be made available in order to cover the business’ operation expenses for a specific period of time.

Table: Projected Cash Required

PROJECTED CASH REQUIRED
Estimated Fixed Monthly Expenses	$45,708.00
Months Covered	3
Cash Required	$137,124.00

The projected amount in cash needed to cover operational and working expenses is $137,124.00. This amount represents months of expenses, which means that for 3 months after starting your business operations, these expenses will be covered. During this time, you should be focusing on making your business grow. Depending on the growth rate of your business you might need less time to get to the monthly breakeven point.

Graphic: Sales vs Costs vs Margin

Estimated Sales Summary
For the first year of operation, a total income of $887,784.00 is expected. $1,016,918.00 is expected for year 2, $1,132,236.00 for year 3, $1,234,383.00 for year 4 and $1,344,475.00 for year 5.

Estimated Startup Funding

Table: Estimated Startup Funding
The following table shows how to inject money into your new business. All the items shown in the Startup Requirements table must be funded before the business is opened.

There are two categories from which you can inject money to your business: debt and equity. Debt financing is when the funds are borrowed. These funds must be paid back usually with an interest. Equity financing is when someone (including yourself) invests in your business in return for an ownership share. You can also combine both categories.

PROJECTED STARTUP FUNDING
Startup Expenses to Fund	$116,760.00
Startup Assets to Fund	$384,340.00
Total Funding Required	$501,100.00
Assets
Non-cash Assets from Startup	$247,216.00
Cash Requirements from Startup	$137,124.00
Additional Cash Raised	$0.00
Total Assets	$384,340.00
Liabilities and Capital
Liabilities
Current Borrowing	$0.00
Long-term Liabilities	$0.00
Accounts Payable (Outstanding Bills)	$0.00
Other Current Liabilities (interest-free)	$0.00
Total Liabilities	$0.00
Capital
Planned Investment
Owner	$501,100.00
Investor	$0.00
Additional Investment Requirement	$0.00
Total Planned Investment	$501,100.00
Loss at Startup (Startup Expenses)	$-116,760.00
Total Capital	$384,340.00
Total Capital and Liabilities	$384,340.00
TOTAL FUNDING	$501,100.00

Estimated Startup Funding Summary
The estimated amount of money you will have to inject into your business before you start operations is $501,100.00.

Graphic: Projected Annual Expenses

Projected Annual Expenses Summary
Based on 5-year projections, the estimated average annual expenses for your business is $583,324.60.

Projected Monthly Break-even

Table: Estimated Monthly Break-even
It is the revenue the business will have to produce in order to cover all of a company's monthly expenses. The following table shows the point at which this match happens in terms of income or sales, in relationship with the costs and expenses. When the sales cannot cover costs and expenses, then we have to add money (cash required) into the operations to keep the business running.

PROJECTED MONTHLY BREAK-EVEN
Monthly Revenue Break-even	$57,859.00
Assumptions:
Average Percent Cost of Goods	21%
ESTIMATED MONTHLY BUSINESS EXPENSES	$45,708.00

Graphic: Projected Monthly Break-even

In terms of Monthly Gross Sales, the estimated Monthly Breakeven Point is $57,859.00; therefore, that is the Estimated Gross Sales your company has to make in order to cover all Direct Costs and Monthly Business Expenses. This calculation was made using an average Estimated Monthly Business Expenses of $45,708.00.

Graphic: Projected Profit and Loss

Projected Profit and Loss Summary
The estimated Net Profit of the business is expected to go from $225,708.00 in year 1 to $485,608.00 by year 5 of operations. Percentage-wise, from the sales made by the company, 20.08 percent is considered profit by year 1, and 28.52 percent by year 5.

Graphic: Projected Cash Flow

Projected Cash Flow
In year 1, your business is estimated to move $53,864.00, remaining $190,987.00 in possession of the business. By year 5 of operations, the cash flow of your business is estimated to be $70,786.00, remaining $190,987.00 of cash (or equivalent) in the business.

Graphic: Projected Balance Sheet

Projected Balance Sheet Summary
At the end of year 1 of operations, the Net Worth of your business is estimated to be $370,048.00. By year 5, the Net Worth is expected to be $649,144.00.