Prototype to Profit Financial Business Plan Resource.xlsx

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2		Prototype to Profit Financial Business Plan Resource: To show investors that your business will make money, you need to develop a financial business plan. A financial business plan describes your company's expenses (how much you will spend to make and sell your product or service) and revenue (how much you will make from selling your product or service). This spreadsheet will help you calculate your expected expenses and revenue, which you can then use to figure out when your company will start to make a profit (make more money than you spend).
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10			Example: Khalil is starting a business to build and sell bat houses. The company has already received orders to build 5 bat houses, which each cost $75. Complete the steps below to calculate Khalil's expenses, revenue, and profit. Then, use what you learned to make a financial business plan for your own business in the next tab.
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15	1. Calculating Profit (Updates automatically, DO NOT EDIT)
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17	As you complete the steps below, this profit table will automatically update. You do not need to enter anything in this table.				Expenses ($)	Revenue ($)	Profit ($)
18					380	0	-380
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20	2. Expenses Worksheet
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22	Expenses: Khalil will need to consider one-time expenses (money that only needs to be spent once) and ongoing expenses (money that will need to be spent for each new bat house). To build one bat house, Khalil needs to buy the tools (one-time expense) and materials (ongoing expense) listed below. Complete the table to determine Khalil's total expenses for the 5 house order.
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24				Item	Cost ($)	Number of Houses	Total Cost ($)
25				Material - Ply Wood	22		0
26				Material - Pine Board	7		0
27				Material - Screws	1		0
28				Material - Stain	20		0
29				Material - Caulk	3		0
30				Tools - Table Saw	190	One Time Expense	190
31	Materials and Tools to Make 1 Bat House:			Tools - Caulk Gun	10	One Time Expense	10
32	Ply Wood	$22		Tools - Drill	160	One Time Expense	160
33	Pine Board	$7		Tools - Paint Brush	20	One Time Expense	20
34	Screws	$1		Total Expenses			380
35	Stain	$20
36	Caulk	$3		Build your own spreadsheet to analyze your business expenses. As you work, think about other expense that are not included here. For example, will you have employees? If so, how much will you pay them? Will you need to rent a place to work? How will you advertise?
37	Table Saw	$190
38	Caulk Gun	$10
39	Drill	$160
40	Paint Brush	$20
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43	3. Revenue Worksheet
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45	Revenue: To figure out if the company will make money, Khalil also needs to consider revenue. Revenue is the amount of money the company earns for each bat house they sell. Khalil is planning to sell each bat house for $75.00. Complete the table to calculate the company's revenue for the 5 bat house order. Note: only enter the price and number of houses. The total revenue will automatically appear. Do you think Khalil set a reasonable price for a bat house? Try changing the price to see how revenue and profit (top of the sheet) change.
46				Item	Price	Number of Houses	Total Revenue
47				Bat House			0
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49				Now analyze possible revenue for your business. As you work, think about how much you want to charge (price) for your product or service and how many units you might sell. This might take some experimenting to find the right price.
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55	4. Profit Over Time
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57	Breaking Even Try changing the number of bat houses Khalil's company sells or the price of a bat house to see how their profit changes. Use the table on the right to record the results of your experiment. The number of houses Khalil's company needs to sell for their profit to become positive is called the break even point.			Number of Houses	Expenses	Revenue	Profit
58				5			0
59				10			0
60				15			0
61				20			0
62				25			0
63				30			0
64				35			0
65				40			0
66	Now try finding the break even point for your business. You might need to experiment with the price or your expenses. You can also do this using Desmos. Visit the Prepare page to view a tutorial.			45			0
67				50			0
68				55			0
69				60			0
70							0
71							0
72							0
73							0
74							0
75							0
76							0
77							0
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80	5. Expanding the Business
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82		This is an example of a one-person business. If Khalil wanted to build more bat houses, they might add employees. This would likely mean that they would need to buy more tools and pay for a bigger place to work. They would likely also have to pay their employees. On the bright side, they might be able to buy the materials cheaper if there are places to store the materials and stores that offer discounts for buying in bulk. As you plan your business, be sure to think about these types of issues and include any assumptions in your plan.
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