1. Financial plan

2. The finance plan brings together all your research from the previous section. You have studied all these financial documents before and should therefore be familiar with them and know how to work them out. You must draw up each of the following financial documents on a spreadsheet, with formulae to calculate key totals, as you are going to alter some of these figures in your evaluation. It is essential you use formulae on your spreadsheet, as this will make your evaluation much quicker.

3. Start up Budget Devise a start up budget showing the financial requirements of your business. This should include: Premises/ Rent or mortgage Equipment Fixtures and fittings Working capital – raw materials/stock. There may be some costs you haven’t worked out in the operations plan such as advertising and cost of recruiting staff.

4. Advertising Costs Look at the promotion section of your marketing plan. Make a list of the advertising media you are going to use. Research the costs of the advertising media your are going to use. Print off the research and put it altogether in an appendix. In the plan write insert an advertising budget which tells us the type of advertising; the number of weeks and adverts and the total cost.

5. Advertising Costs Advertising media Cost per advertNumber of weeksTotal Cost Harrogate Advertiser £160 for a 10 cm4£640 etc

6. Staff Costs How much do you think each of the following is paid per year? A receptionist £11,548 Van Driver £17.069 Retail manager £22,778 Use the following link to find out how the average pay in the jobs you require http://www.thisismoney.co.uk/money/article-2067258/Best-paid-jobs- 2011-Tables-official-figures-UK-salaries.html http://www.thisismoney.co.uk/money/article-2067258/Best-paid-jobs- 2011-Tables-official-figures-UK-salaries.html If you are unable to find it either use a similar job or conduct some original research of your own? Now add up and include in your budget your staff costs. Show how you worked them out.

7. Finance requirements From your start up budget you should be able to calculate how much finance you require and have already decided which method of finance you are going to use. Explain the size; length and rate of interest on your finance. Which method(s) of finance will you use? How much will you require? How long will you need them for? Research on the internet and find out where you could get this from and what rate of interest it will cost you. Look at a variety of different banks. http://www.barclays.co.uk/Businesslending/Businessloancalculator/P12426491 79882 http://www.barclays.co.uk/Businesslending/Businessloancalculator/P12426491 79882 http://www.business.natwest.com/afb/public/nwb/AFBRoot/mainhome/start ups http://www.business.natwest.com/afb/public/nwb/AFBRoot/mainhome/start ups https://www.moneyadviceservice.org.uk/en/tools/loan-calculator Explain the reasons for your choice – remember to explain your reasons, stating the effects of your advantages. You do not need to discuss the advantages. NB You may already have done this in the Operation Plan.

8. How Physical Resources are Purchased Explain how your have purchased your physical resources. Use page 422 of A2: Applied Business textbook or any other source to help. https://www.gov.uk/renting-buying-business-premises You can choose from: Own finance Share capital Lease Rent Trade Credit Hire Purchase or any other method you think is appropriate. Loan You should explain the advantages of your chosen method. You must: Point – state the advantage/disadvantage Explain it Effect - explain the effect it will have on the business. You could use the same method for several of the resources but do not need to explain the disadvantages

9. Break Even Starter Exercise http://www.businessstudiesonline.co.uk/GcseBusiness/Activitie s/Module5/BreakEven/BreakEvenTermsDragDrop/frame.htm http://www.businessstudiesonline.co.uk/GcseBusiness/Activitie s/Module5/BreakEven/BreakEvenTermsDragDrop/frame.htm Create a table which shows the fixed costs; variable costs; total costs and revenues.(initially per month, unless you have very large costs and low sales!) Plot your figures into a break even chart, which should be accurately labelled. K:\StaffOnly\Business Studies\GCSE Business Finance\Break Even\Breakeven_Exercise_complete.xls K:\StaffOnly\Business Studies\GCSE Business Finance\Break Even\Breakeven_Exercise_complete.xls Show on your chart the margin of safety. To accompany your chart, calculate and explain break even using the formula Use Page 428/429 of your textbook to help.

13. BREAK EVEN ANALYSIS Why use Break Even? Break even is used within the financial plan as it’s a quick way of showing potential funders the Business’s Profit Targets Step One: Sum up FIXED and VARIABLE costs (from operations plan) to find TOTAL COSTS Step Two: PLOT TOTAL COSTS WITH TOTAL SALES REEVNUE ON A GRAPH- the point at which these two intersect is BREAK EVEN- anything below is a loss anything ABOVE is PROFIT CHECK WHETHER A GRAPH IS REQUIRED

14. MARGIN OF SAFETY This is the Difference between the Break Even Point and the predicted Sales BREAK EVEN FORMULA: TOTAL FIXED COSTS Selling Price-Variable cost per Unit NB: put your figures into a spread sheet as these can then be altered in the evaluation

15. Cash Flow Forecast Produce a cash flow business for the 1 st 12 months of your business. You can find an exemplar cash flow on the St John Fisher Intranet, with the formulae already written in. (Thank you Mrs Stephenson!) Analyse the key findings – highlight any major strengths and weaknesses; any points where and why cash in and out is good or bad. Use page 428 of your textbook to help.

16. Profit & Loss Starter Try any of the following exercises: http://www.businessstudiesonline.co.uk/GcseBusiness/Act ivities/Module5/Accounts/AccountingKeyTermsres/frame. htm http://www.businessstudiesonline.co.uk/GcseBusiness/Act ivities/Module5/Accounts/AccountingKeyTermsres/frame. htm http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23 http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23 http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23 http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23 http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23 http://www.businessstudiesonline.co.uk/live/index.php?o ption=com_content&view=article&id=35&Itemid=23

21. Projected Profit and Loss Produce a projected profit and loss account for the 1 st year of your business. Use a spreadsheet and include formulae for the main calculations. Highlight the Use pages 308 – 310 to help Or http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=49&Itemid= 48 http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=49&Itemid= 48

22. Balance Sheet Starter Exercise Try to complete the following exercise: http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=35&Itemid=2 3 http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=35&Itemid=2 3

24. Balance Sheet Produce a balance sheet for the 1 st 12 months of your business. Use page 310 – 313 in your textbook to help or http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=50&Itemid= 49 http://www.businessstudiesonline.co.uk/live/index.ph p?option=com_content&view=article&id=50&Itemid= 49