Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $900 |
Stationery etc. | $2,000 |
Brochures | $4,000 |
Insurance | $200 |
Rent | $3,000 |
Answering Service | $200 |
Utilities Start Up | $250 |
Office Furnishings | $4,000 |
Expensed Equipment | $3,000 |
Business Software | $2,000 |
Office Supplies | $1,000 |
Total Start-up Expenses | $20,550 |
Start-up Assets | |
Cash Required | $59,450 |
Other Current Assets | $20,000 |
Long-term Assets | $0 |
Total Assets | $79,450 |
Total Requirements | $100,000 |
Hamlin and Park Design will offers a wide range of interior design services to meet any client’s needs in southwest Claremont:
Due to the strengthening of the area’s economy, more southwest Claremont homeowners are exploring interior design to improve their homes’ beauty and charm. Last year, residential interior design companies generated $4 million in sales in the greater Claremont area. Approximately, 75% of the sales were located in southwest Claremont. Forecasts for next year predict that there will be an increase of 11% in sales. This demand for interior design services is a tremendous opportunity. Hamlin and Park Design is poised to take advantage of these changes, and expects to become a recognized name and profitable entity in the city’s interior design market.
The customers that Hamlin and Park Design will be serving can be divided into three groups:
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
New Home Construction | 6% | 1,500 | 1,590 | 1,685 | 1,786 | 1,893 | 5.99% |
Remodeling Projects | 10% | 3,000 | 3,300 | 3,630 | 3,993 | 4,392 | 10.00% |
Interior Design of Existing Home | 8% | 2,000 | 2,160 | 2,333 | 2,520 | 2,722 | 8.01% |
Total | 8.50% | 6,500 | 7,050 | 7,648 | 8,299 | 9,007 | 8.50% |
Hamlin and Park Design’s competitive edge is that both Courtney Hamlin and Katherine Park are highly successful interior designers with a loyal customer base. Courtney has been a Project Manager with Sullivan and Associates for five years. During that time she has established strong relationships with builders and vendors which will prove beneficial in the coming years. For the past six years, Katherine has worked as a Design Consultant for Jonathan Miller, the most successful interior designer in Claremont. Together, Courtney and Katherine have the skills, resources and experience to be build on the base of 1,000 satisfied customers.
Hamlin and Park will focus on the interior design needs in the southwest section of the city. Our target customers will be the affluent residents of southwest Claremont.
The following is the sales strategy Hamlin and Park Design will employ on the three target customer groups:
The following table and chart will forecast sales for the next three years.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Remodeling Projects | $87,672 | $96,685 | $108,200 |
New Home Construction | $41,000 | $45,280 | $47,300 |
Interior Design of Existing Home | $90,739 | $97,800 | $105,000 |
Total Sales | $219,411 | $239,765 | $260,500 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Remodeling Projects | $8,634 | $9,500 | $10,000 |
New Home Construction | $5,500 | $6,300 | $7,000 |
Interior Design of Existing Home | $9,091 | $10,000 | $10,000 |
Subtotal Direct Cost of Sales | $23,225 | $25,800 | $27,000 |
Hamlin and Park is a two member interior design firm. Both designers are equal partners in the firm.
The staff of Hamlin and Park Design will be its co-owners Courtney Hamlin and Katherine Park.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Courtney Hamlin | $48,000 | $54,000 | $60,000 |
Katherine Park | $48,000 | $54,000 | $60,000 |
Total People | 2 | 2 | 2 |
Total Payroll | $96,000 | $108,000 | $120,000 |
The following is the financial plan for Hamlin and Park Design.
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Some of the more important underlying assumptions are:
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 30.00% | 30.00% | 30.00% |
Other | 0 | 0 | 0 |
The following table and chart will summarize our break-even analysis. The monthly break-even point is approximately $14,800.
Break-even Analysis | |
Monthly Revenue Break-even | $14,874 |
Assumptions: | |
Average Percent Variable Cost | 11% |
Estimated Monthly Fixed Cost | $13,300 |
Our projected profit and loss is shown on the following table and charts.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $219,411 | $239,765 | $260,500 |
Direct Cost of Sales | $23,225 | $25,800 | $27,000 |
Other Production Expenses | $0 | $0 | $0 |
Total Cost of Sales | $23,225 | $25,800 | $27,000 |
Gross Margin | $196,186 | $213,965 | $233,500 |
Gross Margin % | 89.41% | 89.24% | 89.64% |
Expenses | |||
Payroll | $96,000 | $108,000 | $120,000 |
Sales and Marketing and Other Expenses | $6,000 | $7,000 | $10,000 |
Depreciation | $0 | $0 | $0 |
Leased Equipment | $2,400 | $2,400 | $2,400 |
Utilities | $2,400 | $2,400 | $2,400 |
Insurance | $2,400 | $2,400 | $2,400 |
Rent | $36,000 | $36,000 | $36,000 |
Payroll Taxes | $14,400 | $16,200 | $18,000 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $159,600 | $174,400 | $191,200 |
Profit Before Interest and Taxes | $36,586 | $39,565 | $42,300 |
EBITDA | $36,586 | $39,565 | $42,300 |
Interest Expense | $2,643 | $2,010 | $1,350 |
Taxes Incurred | $10,183 | $11,267 | $12,285 |
Net Profit | $23,760 | $26,289 | $28,665 |
Net Profit/Sales | 10.83% | 10.96% | 11.00% |
Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $109,706 | $119,883 | $130,250 |
Cash from Receivables | $101,608 | $119,131 | $129,485 |
Subtotal Cash from Operations | $211,313 | $239,014 | $259,735 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $0 | $0 | $0 |
Subtotal Cash Received | $211,313 | $239,014 | $259,735 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $96,000 | $108,000 | $120,000 |
Bill Payments | $105,544 | $100,914 | $111,312 |
Subtotal Spent on Operations | $201,544 | $208,914 | $231,312 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $6,600 | $6,600 | $6,600 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $0 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $208,144 | $215,514 | $237,912 |
Net Cash Flow | $3,170 | $23,500 | $21,822 |
Cash Balance | $62,620 | $86,119 | $107,942 |
The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $62,620 | $86,119 | $107,942 |
Accounts Receivable | $8,098 | $8,849 | $9,614 |
Other Current Assets | $20,000 | $20,000 | $20,000 |
Total Current Assets | $90,717 | $114,968 | $137,556 |
Long-term Assets | |||
Long-term Assets | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 |
Total Assets | $90,717 | $114,968 | $137,556 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $4,107 | $8,669 | $9,192 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $4,107 | $8,669 | $9,192 |
Long-term Liabilities | $23,400 | $16,800 | $10,200 |
Total Liabilities | $27,507 | $25,469 | $19,392 |
Paid-in Capital | $60,000 | $60,000 | $60,000 |
Retained Earnings | ($20,550) | $3,210 | $29,499 |
Earnings | $23,760 | $26,289 | $28,665 |
Total Capital | $63,210 | $89,499 | $118,164 |
Total Liabilities and Capital | $90,717 | $114,968 | $137,556 |
Net Worth | $63,210 | $89,499 | $118,164 |
The following table provides important ratios for the real estate industry, as determined by the Standard Industry Classification (SIC) Index, 8999, Services.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 9.28% | 8.65% | 8.50% |
Percent of Total Assets | ||||
Accounts Receivable | 8.93% | 7.70% | 6.99% | 20.90% |
Other Current Assets | 22.05% | 17.40% | 14.54% | 55.70% |
Total Current Assets | 100.00% | 100.00% | 100.00% | 81.60% |
Long-term Assets | 0.00% | 0.00% | 0.00% | 18.40% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 4.53% | 7.54% | 6.68% | 48.20% |
Long-term Liabilities | 25.79% | 14.61% | 7.42% | 15.50% |
Total Liabilities | 30.32% | 22.15% | 14.10% | 63.70% |
Net Worth | 69.68% | 77.85% | 85.90% | 36.30% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 89.41% | 89.24% | 89.64% | 0.00% |
Selling, General & Administrative Expenses | 78.59% | 78.28% | 78.63% | 82.60% |
Advertising Expenses | 2.73% | 2.92% | 3.84% | 0.60% |
Profit Before Interest and Taxes | 16.67% | 16.50% | 16.24% | 1.50% |
Main Ratios | ||||
Current | 22.09 | 13.26 | 14.96 | 1.57 |
Quick | 22.09 | 13.26 | 14.96 | 1.13 |
Total Debt to Total Assets | 30.32% | 22.15% | 14.10% | 63.70% |
Pre-tax Return on Net Worth | 53.70% | 41.96% | 34.66% | 1.90% |
Pre-tax Return on Assets | 37.42% | 32.67% | 29.77% | 5.20% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 10.83% | 10.96% | 11.00% | n.a |
Return on Equity | 37.59% | 29.37% | 24.26% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 13.55 | 13.55 | 13.55 | n.a |
Collection Days | 59 | 26 | 26 | n.a |
Accounts Payable Turnover | 24.26 | 12.17 | 12.17 | n.a |
Payment Days | 30 | 22 | 29 | n.a |
Total Asset Turnover | 2.42 | 2.09 | 1.89 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.44 | 0.28 | 0.16 | n.a |
Current Liab. to Liab. | 0.15 | 0.34 | 0.47 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $86,610 | $106,299 | $128,364 | n.a |
Interest Coverage | 13.85 | 19.68 | 31.33 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.41 | 0.48 | 0.53 | n.a |
Current Debt/Total Assets | 5% | 8% | 7% | n.a |
Acid Test | 20.12 | 12.24 | 13.92 | n.a |
Sales/Net Worth | 3.47 | 2.68 | 2.20 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Remodeling Projects | 0% | $2,100 | $2,200 | $3,020 | $6,000 | $8,500 | $12,000 | $14,000 | $18,000 | $10,022 | $5,210 | $3,820 | $2,800 |
New Home Construction | 0% | $0 | $0 | $2,000 | $3,000 | $4,000 | $5,000 | $7,000 | $8,000 | $5,000 | $3,000 | $2,000 | $2,000 |
Interior Design of Existing Home | 0% | $3,000 | $3,000 | $4,240 | $6,300 | $9,000 | $11,000 | $14,000 | $17,000 | $13,000 | $4,322 | $3,222 | $2,655 |
Total Sales | $5,100 | $5,200 | $9,260 | $15,300 | $21,500 | $28,000 | $35,000 | $43,000 | $28,022 | $12,532 | $9,042 | $7,455 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Remodeling Projects | $0 | $230 | $433 | $630 | $950 | $1,201 | $1,550 | $1,700 | $850 | $530 | $300 | $260 | |
New Home Construction | $0 | $0 | $300 | $400 | $500 | $600 | $700 | $900 | $800 | $600 | $400 | $300 | |
Interior Design of Existing Home | $0 | $320 | $590 | $800 | $1,002 | $1,202 | $1,409 | $1,650 | $1,200 | $390 | $280 | $248 | |
Subtotal Direct Cost of Sales | $0 | $550 | $1,323 | $1,830 | $2,452 | $3,003 | $3,659 | $4,250 | $2,850 | $1,520 | $980 | $808 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Courtney Hamlin | 0% | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 |
Katherine Park | 0% | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 | $4,000 |
Total People | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |
Total Payroll | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Tax Rate | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | 30.00% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $5,100 | $5,200 | $9,260 | $15,300 | $21,500 | $28,000 | $35,000 | $43,000 | $28,022 | $12,532 | $9,042 | $7,455 | |
Direct Cost of Sales | $0 | $550 | $1,323 | $1,830 | $2,452 | $3,003 | $3,659 | $4,250 | $2,850 | $1,520 | $980 | $808 | |
Other Production Expenses | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Cost of Sales | $0 | $550 | $1,323 | $1,830 | $2,452 | $3,003 | $3,659 | $4,250 | $2,850 | $1,520 | $980 | $808 | |
Gross Margin | $5,100 | $4,650 | $7,937 | $13,470 | $19,048 | $24,997 | $31,341 | $38,750 | $25,172 | $11,012 | $8,062 | $6,647 | |
Gross Margin % | 100.00% | 89.42% | 85.71% | 88.04% | 88.60% | 89.28% | 89.55% | 90.12% | 89.83% | 87.87% | 89.16% | 89.16% | |
Expenses | |||||||||||||
Payroll | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
Sales and Marketing and Other Expenses | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Leased Equipment | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Utilities | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Insurance | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Rent | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
Payroll Taxes | 15% | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 | $1,200 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | $13,300 | |
Profit Before Interest and Taxes | ($8,200) | ($8,650) | ($5,363) | $170 | $5,748 | $11,697 | $18,041 | $25,450 | $11,872 | ($2,288) | ($5,238) | ($6,653) | |
EBITDA | ($8,200) | ($8,650) | ($5,363) | $170 | $5,748 | $11,697 | $18,041 | $25,450 | $11,872 | ($2,288) | ($5,238) | ($6,653) | |
Interest Expense | $245 | $241 | $236 | $232 | $227 | $223 | $218 | $213 | $209 | $204 | $200 | $195 | |
Taxes Incurred | ($2,534) | ($2,667) | ($1,680) | ($18) | $1,656 | $3,442 | $5,347 | $7,571 | $3,499 | ($748) | ($1,631) | ($2,054) | |
Net Profit | ($5,912) | ($6,224) | ($3,919) | ($43) | $3,865 | $8,032 | $12,476 | $17,666 | $8,164 | ($1,745) | ($3,806) | ($4,794) | |
Net Profit/Sales | -115.92% | -119.68% | -42.33% | -0.28% | 17.98% | 28.69% | 35.65% | 41.08% | 29.14% | -13.92% | -42.10% | -64.30% |
Pro Forma Cash Flow | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Cash Received | |||||||||||||
Cash from Operations | |||||||||||||
Cash Sales | $2,550 | $2,600 | $4,630 | $7,650 | $10,750 | $14,000 | $17,500 | $21,500 | $14,011 | $6,266 | $4,521 | $3,728 | |
Cash from Receivables | $0 | $85 | $2,552 | $2,668 | $4,731 | $7,753 | $10,858 | $14,117 | $17,633 | $21,250 | $13,753 | $6,208 | |
Subtotal Cash from Operations | $2,550 | $2,685 | $7,182 | $10,318 | $15,481 | $21,753 | $28,358 | $35,617 | $31,644 | $27,516 | $18,274 | $9,935 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $2,550 | $2,685 | $7,182 | $10,318 | $15,481 | $21,753 | $28,358 | $35,617 | $31,644 | $27,516 | $18,274 | $9,935 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | $8,000 | |
Bill Payments | $10,100 | $3,026 | $3,482 | $5,252 | $7,420 | $9,713 | $12,053 | $14,618 | $17,152 | $11,672 | $6,229 | $4,828 | |
Subtotal Spent on Operations | $18,100 | $11,026 | $11,482 | $13,252 | $15,420 | $17,713 | $20,053 | $22,618 | $25,152 | $19,672 | $14,229 | $12,828 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $550 | $550 | $550 | $550 | $550 | $550 | $550 | $550 | $550 | $550 | $550 | $550 | |
Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Purchase Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $18,650 | $11,576 | $12,032 | $13,802 | $15,970 | $18,263 | $20,603 | $23,168 | $25,702 | $20,222 | $14,779 | $13,378 | |
Net Cash Flow | ($16,100) | ($8,891) | ($4,850) | ($3,484) | ($489) | $3,490 | $7,755 | $12,449 | $5,943 | $7,295 | $3,495 | ($3,443) | |
Cash Balance | $43,350 | $34,459 | $29,609 | $26,125 | $25,636 | $29,126 | $36,881 | $49,330 | $55,273 | $62,568 | $66,063 | $62,620 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $59,450 | $43,350 | $34,459 | $29,609 | $26,125 | $25,636 | $29,126 | $36,881 | $49,330 | $55,273 | $62,568 | $66,063 | $62,620 |
Accounts Receivable | $0 | $2,550 | $5,065 | $7,143 | $12,126 | $18,145 | $24,392 | $31,033 | $38,417 | $34,794 | $19,810 | $10,578 | $8,098 |
Other Current Assets | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 |
Total Current Assets | $79,450 | $65,900 | $59,524 | $56,752 | $58,250 | $63,781 | $73,518 | $87,915 | $107,747 | $110,067 | $102,378 | $96,641 | $90,717 |
Long-term Assets | |||||||||||||
Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Assets | $79,450 | $65,900 | $59,524 | $56,752 | $58,250 | $63,781 | $73,518 | $87,915 | $107,747 | $110,067 | $102,378 | $96,641 | $90,717 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $10,000 | $2,911 | $3,309 | $5,007 | $7,098 | $9,314 | $11,569 | $14,040 | $16,757 | $11,462 | $6,067 | $4,687 | $4,107 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $10,000 | $2,911 | $3,309 | $5,007 | $7,098 | $9,314 | $11,569 | $14,040 | $16,757 | $11,462 | $6,067 | $4,687 | $4,107 |
Long-term Liabilities | $30,000 | $29,450 | $28,900 | $28,350 | $27,800 | $27,250 | $26,700 | $26,150 | $25,600 | $25,050 | $24,500 | $23,950 | $23,400 |
Total Liabilities | $40,000 | $32,361 | $32,209 | $33,357 | $34,898 | $36,564 | $38,269 | $40,190 | $42,357 | $36,512 | $30,567 | $28,637 | $27,507 |
Paid-in Capital | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 | $60,000 |
Retained Earnings | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) | ($20,550) |
Earnings | $0 | ($5,912) | ($12,135) | ($16,055) | ($16,098) | ($12,233) | ($4,201) | $8,275 | $25,941 | $34,105 | $32,360 | $28,554 | $23,760 |
Total Capital | $39,450 | $33,538 | $27,315 | $23,395 | $23,352 | $27,217 | $35,249 | $47,725 | $65,391 | $73,555 | $71,810 | $68,004 | $63,210 |
Total Liabilities and Capital | $79,450 | $65,900 | $59,524 | $56,752 | $58,250 | $63,781 | $73,518 | $87,915 | $107,747 | $110,067 | $102,378 | $96,641 | $90,717 |
Net Worth | $39,450 | $33,538 | $27,315 | $23,395 | $23,352 | $27,217 | $35,249 | $47,725 | $65,391 | $73,555 | $71,810 | $68,004 | $63,210 |
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Starting an interior design business can be a daunting task, but with the right preparation and guidance, you can hit the ground running and create a successful business. The #1 Interior Design Business Plan Template & Guidebook provides all of the essential elements that help business owners create a professional, detailed and effective plan. This article will discuss the key components of this template, how to use it to your advantage and how it can help you create a winning business plan.
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1. describe the purpose of your interior design business..
The first step to writing your business plan is to describe the purpose of your interior design business. This includes describing why you are starting this type of business, and what problems it will solve for customers. This is a quick way to get your mind thinking about the customers’ problems. It also helps you identify what makes your business different from others in its industry.
It also helps to include a vision statement so that readers can understand what type of company you want to build.
Here is an example of a purpose mission statement for a interior design business:
Our mission at Interior Design is to provide a wide range of services to help clients create and maintain a personalized, beautiful, and functional home environment that fits their individual needs and lifestyle. We will take the time to get to know our clients, understand their needs, and help them develop a plan that meets those needs. We strive to be the go-to resource for customers seeking quality design solutions for their living spaces.
The next step is to outline your products and services for your interior design business.
When you think about the products and services that you offer, it's helpful to ask yourself the following questions:
You may want to do a comparison of your business plan against those of other competitors in the area, or even with online reviews. This way, you can find out what people like about them and what they don’t like, so that you can either improve upon their offerings or avoid doing so altogether.
If you don't have a marketing plan for your interior design business, it's time to write one. Your marketing plan should be part of your business plan and be a roadmap to your goals.
A good marketing plan for your interior design business includes the following elements:
Next, you'll need to build your operational plan. This section describes the type of business you'll be running, and includes the steps involved in your operations.
In it, you should list:
To run a Interior Design business, you will need the following equipment, supplies, and permits:
The second part of your interior design business plan is to develop a management and organization section.
This section will cover all of the following:
This section should be broken down by month and year. If you are still in the planning stage of your business, it may be helpful to estimate how much money will be needed each month until you reach profitability.
Typically, expenses for your business can be broken into a few basic categories:
Startup Costs
Startup costs are typically the first expenses you will incur when beginning an enterprise. These include legal fees, accounting expenses, and other costs associated with getting your business off the ground. The amount of money needed to start a interior design business varies based on many different variables, but below are a few different types of startup costs for a interior design business.
Running & Operating Costs
Running costs refer to ongoing expenses related directly with operating your business over time like electricity bills or salaries paid out each month. These types of expenses will vary greatly depending on multiple variables such as location, team size, utility costs, etc.
Marketing & Sales Expenses
You should include any costs associated with marketing and sales, such as advertising and promotions, website design or maintenance. Also, consider any additional expenses that may be incurred if you decide to launch a new product or service line. For example, if your interior design business has an existing website that needs an upgrade in order to sell more products or services, then this should be listed here.
A financial plan is an important part of any business plan, as it outlines how the business will generate revenue and profit, and how it will use that profit to grow and sustain itself. To devise a financial plan for your interior design business, you will need to consider a number of factors, including your start-up costs, operating costs, projected revenue, and expenses.
Here are some steps you can follow to devise a financial plan for your interior design business plan:
Why do you need a business plan for a interior design business.
A business plan for an interior design business is necessary to clearly outline the goals and objectives of the business, create a detailed operational plan, and provide potential investors or lenders with a comprehensive understanding of the scope and structure of the business. It should include an executive summary, market analysis, financial projections, and an action plan. A business plan will help guide the long-term growth of the business and ensure that it remains on track to reach its desired outcomes.
You should ask a professional business consultant or an experienced interior designer for help with your interior design business plan. Additionally, there are resources online, such as online templates and step-by-step guidelines or video tutorials, that can provide useful information for your plan.
Yes, it is possible to create an interior design business plan yourself. While there is no one-size-fits-all template for creating a business plan, there are a few essential components that should be included in any effective plan. These essential components include: an executive summary, a market analysis, a company overview, a financial plan, and a marketing strategy. Additionally, make sure to research local regulations and industry standards to ensure that you’re in compliance with all requirements of your local area.
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Do you enjoy modifying spaces and have a good sense of aesthetics? Starting your own interior design company in India could be a profitable endeavour. The thriving real estate and construction industries, together with an increasing awareness of the value of well-designed places, offer numerous options. Here is a step-by-step guide to getting your interior design business off to a good start.
Table of Contents
1. market research and niche identification.
Conduct thorough market research to understand your target area’s demand for interior design services. Identify your niche. It can be residential, commercial, hospitality, or a specific style like contemporary, traditional, or sustainable design.
Clearly define the range of services you will offer, covering initial consultations to full-service design. It is advisable initially to consider specializing in a specific type of design or catering to a niche market to stand out.
Choose a name that reflects your style and values. Ensure the name is unique, easy to remember, and not already in use by another business.
Read: How to Name a Business
The next step is to write a detailed business plan for your interior design business. Outline your business goals, target market, and unique selling propositions. Develop a detailed financial plan, including startup costs, operating expenses, and projected income.
Register your business with the appropriate authorities. Choose a business structure (sole proprietorship, partnership, LLP, or private limited company). Obtain any required licenses or permits for operating an interior design business in your locality.
Develop a strong portfolio showcasing your previous work, including renderings, floor plans, and before-and-after images. If you’re just starting, consider offering your services to friends or family at a discounted rate in exchange for permission to use the projects in your portfolio.
Create a professional website with a portfolio, services offered, and contact information. Leverage social media platforms like Instagram and Pinterest to showcase your work and engage with potential clients.
Establish a blog on your website to showcase your expertise and thought leadership. Share design tips, trends, and case studies to engage and attract your target audience.
Attend industry events, trade shows, and networking sessions to connect with potential clients and collaborators. Collaborate with suppliers, contractors, and other professionals in the industry to expand your network.
Read: Top Interior Design Companies in India
If feasible, establish a physical studio space that reflects your design style and provides a welcoming environment for client meetings. Ensure you have the necessary design software, hardware, and other tools to execute your projects efficiently.
Determine how you’ll charge for your services – hourly rates, flat fees, or a combination. Consider including a detailed breakdown of costs, ensuring transparency with clients. Research industry standards and local market rates to remain competitive.
You need to identify and invest in industry-standard design software such as AutoCAD, SketchUp, or Adobe Creative Suite. Explore project management tools like Trello or Asana to streamline workflow and collaboration. Also, consider 3D rendering software to present designs effectively to clients. In addition, invest in reliable accounting software to manage finances efficiently.
Build a library of material samples to showcase to clients. Establish relationships with suppliers and manufacturers to access a variety of high-quality materials. Ensure your samples reflect diverse styles and cater to different budgets.
As your business grows, consider building a team of talented individuals with diverse skills. Recruit professionals such as architects, draftsmen, and project managers to complement your design expertise. Clearly define roles and responsibilities within your team to ensure smooth project execution.
Develop a strong brand identity, including a memorable logo and consistent branding across all platforms. Implement digital marketing strategies such as search engine optimization (SEO), content marketing, and online advertising to increase your online visibility.
Draft clear and comprehensive contracts for your clients, outlining the scope of work, payment terms, and project timelines. Communicate your design process and any additional charges for revisions or scope changes.
Keep meticulous records of your income and expenses. Set aside funds for taxes and invest in professional accounting services if needed.
Interior design trends evolve, so stay informed about the latest materials, styles, and technologies. Consider joining professional organizations such as the Institute of Indian Interior Designers (IIID). Attend trade shows and exhibitions to discover new products and technologies.
Invest time in continuous learning through workshops, courses, and industry publications to enhance your skills. Participate in design competitions to challenge yourself and showcase your creativity. Seek mentorship or collaboration with seasoned designers to gain insights and refine your design approach.
Read: Best Online Interior Design Courses
Build strong relationships with your clients by understanding their needs and preferences. Encourage client feedback to improve your services and ask for referrals to expand your client base.
Do i need a formal education to start an interior design business.
While a formal education in interior design is beneficial, it’s not mandatory. Practical experience, a strong portfolio, and continuous learning are equally valuable.
Consider factors such as your experience, the complexity of projects, and local market rates. Hourly rates, flat fees, or a combination can be used, and transparency in pricing is crucial for client trust.
Register your business, choose a suitable business structure, and obtain any necessary licenses or permits. Consult with a legal professional to ensure compliance with local regulations.
Establish a strong online presence with a professional website and active social media profiles. Utilize digital marketing strategies, collaborate with other professionals, and attend industry events to network.
Define a unique selling proposition (USP), specialize in a niche, build a strong portfolio, and focus on exceptional customer service. Emphasize your distinct design style and approach.
Invest in industry-standard design software (e.g., AutoCAD, SketchUp) and project management tools (e.g., Trello, Asana). Maintain a well-equipped workspace and regularly update your material library.
Draft clear and comprehensive contracts outlining the scope of work, payment terms, and project timelines. Communicate your design process and any additional charges for revisions.
Networking is crucial for building relationships with potential clients, collaborators, and suppliers. Attend industry events, join professional organizations, and actively engage with your community.
Subscribe to design publications, attend trade shows and exhibitions, and participate in workshops. Actively follow design influencers and continuously seek inspiration from various sources.
Keep meticulous records of income and expenses, set aside funds for taxes, and consider professional accounting services. Regularly review and adjust your financial plan as your business grows.
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1. Pick a specialty. Narrow down your niche to stand out in the market. There's a reason why people say "there are riches in niches.". Focusing on a specific niche for your interior design business will help you zero in on your customer and stand out amongst a smaller field of competitors.
Your interior design business plan will help you: Identify goals and potential problems: Set out goals and how you'll achieve them, and identify any risks and how to overcome them. Plan your business operations: From sales and marketing to onboarding staff. Get your finances in order: Estimate your revenue, business expenses, and any ...
Here are the essential steps to help you create a comprehensive and actionable plan for your design firm: 1. Define your vision and goals. Start by digging deep and articulating your long-term vision for your interior design business. Establish specific, measurable goals that align with your vision, including financial objectives, timelines ...
Program #1A - Press release in the local paper announcing the business is open. Program #1B - Offer seminars through organizations to promote the concept of using an interior designer and using Barton Interiors. STRATEGY #2 - Product Sales. Tactic #2A - Promotion of products available through Barton Interiors.
Download Template. Create a Business Plan. From decor ideas to make homes look personalized to making effective use of space to designing attention-grabbing furniture, good interior designers can do it all and more. After all, your home talks before you do. Hence, people want the best for their homes. Be it for form or function.
Writing an Effective Interior Design Business Plan. The following are the key components of a successful interior design business plan:. Executive Summary. The executive summary of an interior design business plan is a one to two page overview of your entire business plan. It should summarize the main points, which will be presented in full in the rest of your business plan.
01. Define your business goals. Determine your vision for your interior design business and create a business plan. Clarify your target market, design style and the types of projects you want to undertake. Establishing a clear direction will help you focus your efforts and attract the right clients.
These steps will help you turn dreaming into doing and help you avoid waking up to a world of issues. 1. Get an Education. Many states require certification for becoming an interior designer; the most sought-after is obtained by passing the National Council for Interior Design Qualification, or NCIDQ, exam.
Starting a business, especially in the interior design space, can be an exciting and rewarding venture.Whether you have a passion for interior design or simply want to capitalize on the growing demand for aesthetically pleasing spaces, creating a comprehensive interior design business plan is a crucial first step.
Interior Design Business Plan Template. If you want to start an interior design business or expand your current one, you need a business plan. Over the past 20+ years, we have helped over 7,000 entrepreneurs and business owners create business plans to start and grow their interior design businesses.
Here is a free business plan sample for an interior design services. January 29, 2024. If you have a passion for transforming spaces and a flair for design, embarking on a career as an interior designer might be your calling. In the following paragraphs, we will present to you a comprehensive business plan tailored for aspiring interior designers.
2. Make a business plan. Although you might be tempted to start an interior design business to express your creativity, consider how you will actually implement it. A business plan highlights what you'll do to launch a successful interior design firm. It also helps you evaluate your business idea's viability, get funding, manage cash, set ...
Step 1: Determine Your Niche. You have the opportunity to create the interior design business of your dreams. While the project possibilities are endless, it's important to define your niche. Defining your niche will set you apart from your competition by making you a specialist in a specific design style, a certain type of space, a ...
Step 3: Register your interior design business and get an EIN. The next step in starting your interior design business will be to use the name you secured in Step 1 and register your business. The ...
8.4 Sales Funnel Optimization: Chart the captivating journey from discovery to delight for your customers, optimizing every twist and turn of the sales funnel to deliver maximum efficiency and satisfaction in the interior design experience. Download this business plan. 9. Operational Plan.
An interior design business plan serves as a roadmap outlining the objectives, strategies, and operational procedures for your venture. It encapsulates your vision, mission, target market ...
An Interior Design Business Plan is a strategic document that outlines the goals, vision, and operational details of an interior design venture. It covers essential elements such as market ...
A well-crafted business plan serves as a roadmap for your interior design business, outlining your goals, strategies, and financial projections. Start by defining your mission statement, target market, and competitive analysis. Identify your pricing structure, revenue streams, and expenses, including overhead costs, marketing expenses, and ...
6. Launching and Promoting Your Interior Design Company. You're planning to be a business owner in 2024, so an online presence is non-negotiable. Luckily, you don't have to be a web design expert to create a website that shows off your work and reflects your sensitivities.
Last year, residential interior design companies generated $4 million in sales in the greater Claremont area. Approximately, 75% of the sales were located in southwest Claremont. Forecasts for next year predict that there will be an increase of 11% in sales. This demand for interior design services is a tremendous opportunity.
The #1 Interior Design Business Plan Template & Guidebook provides all of the essential elements that help business owners create a professional, detailed and effective plan. This article will discuss the key components of this template, how to use it to your advantage and how it can help you create a winning business plan. Written by: Newfoundr.
Investing the time and effort into creating your business plan is essential, as it will help you define your strategy, identify your ideal clients, and map out the future of your interior design business. Your business plan should include: Executive Summary: This provides a snapshot of your interior design business.
20 Steps to Start an Interior Design Business. 1. Market Research and Niche Identification. Conduct thorough market research to understand your target area's demand for interior design services. Identify your niche. It can be residential, commercial, hospitality, or a specific style like contemporary, traditional, or sustainable design. 2.
Lahore: August 6, 2024: Federal Minister for Interior Mohsin Naqvi met with a delegation of the Chinese business community led by Chinese Consul General Zhao Shiren. During the meeting, measures for the protection of Chinese citizens working on various projects were discussed in detail. Chinese businessmen presented suggestions regarding the security plan. Interior Minister noted