mic 2016 workshop financial plan

Xavier Corman | Martin van Wunnik 107/02/2012 Xavier Corman | Martin van Wunnik 117/04/2012

10th MIC boostcamp - Finance workshop

P&L “Carton de bière”, what’s next?

Key parts and logic behind your financial plan

Jean-Luc Surquin & Rodolphe d'Udekem d'Acoz

Business & Finance Advisors @ impulse.brussels

Martin van Wunnik

Project Manager @ van Wunnik partners

14 Nov '16

Xavier Corman | Martin van Wunnik 207/02/2012

Who are we ?

Martin van Wunnik

Trang Nguyen

Jean-Luc Surquin

Rodolphe d'Udekem d'Acoz

14 Nov '16


This presentation is available for free:

http://www.slideshare.net/FinanceCoach24

14 Nov '16


If you don't think about the future,you cannot have one.

John Golsworthy

where you want to go

how you are supposed to get there

(Why a) Financial Plan?

You

need to

know

You

need to

know

14 Nov '16


The Financial Plan is a forecast about the future : basically the financial translation of your project / business model which allows you to :

• Check the viability of your project

• Decrease / mitigate Risks

• Estimate the financial need of your startup

• Calculate the break-even point

• Identify the key metrics influencing your business

• Convince third parties

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Xavier Corman | Martin van Wunnik 607/02/2012 Xavier Corman | Martin van Wunnik 617/04/201214 Nov '16

Some key elements not to forget :

• Be tangible

• Look for info where available & validate

• Be coherent

• With your business model / business plan

• Costs versus Sales, costs versus HR

• Cash is key

• Working Capital Requirement

• For each financial need : specific financing sources



Content:

• Assumptions : hypothesis versus facts

• Profit & Loss

• Balance Sheet / Investment

• Treasury Plan : Cash needed Cash=king! CIMITYM

• Valuation of the project

• Profitability / return of the project

14 Nov '16



Revenues (Sales…)

COGS (Cost of Sales)

General Expenditures

Personnel Costs

Depreciation

Financial cost

Profit

Gro

ss m

arg

in

EB

ITD

A

Taxes EB

ITD

AE

BIT

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Accounting: Profit & Loss (P&L)


Non Current Assets

(Actifs Immobilisés/

Vast Activa)

Equity + Reserves

(Capital/Kapitaal)

LT Debts

ST Debts

Current Assets

(Actifs circulants/

Vlottend Activa)

ACTIVE (Assets) PASSIVE (Liabilities)

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Accounting: Balance Sheet


Valley of Death…

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Required Cash-Flow

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How to finance your startup ?

Founders

FFF

Business A

VC

Partners

Crowd

Public

Banks

Shareholders

Partners

Crowd

Clients

Suppliers

Banks

Shareholders

Peer to PeerEquity

LT Debts

ST Debts


David Skok

SaaS Metrics 2.0

A Guide to Measuring and

Improving what Matters

http://www.forentrepreneurs.com/saas-metrics-2

14 Nov '16


Sales & Costs

(find your specific drivers for both aspects)

14 Nov '16


Financial assumptions

How to estimate your Sales?


2.1. Chiffre d'affaires : Volume de vente (= nombre d'unités vendues, mois par mois, pour chaque produit-service)

1/2014 2/2014 3/2014 4/2014 5/2014

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

2.2. Chiffre d'affaires : Prix de vente (= prix unitaire, mois par mois, pour chaque produit-service, hors TVA)

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

(-) 21% - - - -

Taux de

TVA

Xavier Corman | Martin van Wunnik 1707/02/2012 •17

SALES

•Sales?

•What? •When?•How

Much?•Price? •How?

•Market potential = (Average Purchase * How Much * How Often)

•Market potential = (Average Purchase * How Much * How Often)


What ?

Focus on your Value Proposition

What do you offer : MVP or full

product/service, product alone or full

package,…

What is your Unique Selling Proposition?


Price?

� Pricing of alternative solutions

� How much is the customer ready/willing to pay?

� Price:

- Not too low

- Not too high

- Coherent

� Evolution of the selling prices?

� What is the average amount per purchase?

Test it!Test it!


How Much?

� 2 methods to evaluate How Much you will be able to sell

•Top Down

•approach starts with market and

industry data.

•Top Down

•approach starts with market and

industry data.

•Bottom Up

•approach starts with your

customers and your resources

•Bottom Up

•approach starts with your

customers and your resources


How Much? – Top Down

� A Top Down analysis is calculated by determining the total market, then estimating your share of that market.

� It works in 3 steps :

1. Total Available Market (TAM) : How large is the market if all customers buy your product ?

2. Serviceable Available Market (SAM) : Focus on your owntechnology/services

3. Serviceable Obtainable Market (SOM) : Which realistic marketshare can be obtained by myself, considering competition, countries, my sales/distribution channels and other marketinfluences?


How Much? – Top Down : Example

� You want to sell internet access in Europe

� Each account will yield €250 per year.

� Expected revenue : € 1 billion (4 millions ×€250/customer)

TAM Total population of Europe 500 millions

SAM% of the population who want

internet access

80%

400 millions

SOM

Based on your market study, you

expect to achieve 1% of that potentiel

audience

1%

4 millions


How Much? – Bottom-Up

� This approach allow you to estimate the sales consideringthe client and your resources.

� The idea is to understand how much you will be able to sellconsidering the resources of your company :

- Time

- People

- Money


How Much? – Bottom Up: Example

� You want to sell internet access in Europe

� Each account will yield €250 per year.

� Expected revenue : € 150 000 (600×€250/customer)

We can bring on board five salespeople 5 salespeople

Each salesperson can make ten phone sales calls a day

that get through to a prospect.10 calls/day

There are 240 working days per year. 240 days

5% of the sales calls will convert within six months 5%

Estimated sales 600


How Much?

� Combine both approaches

- Use top-down analysis to estimate the market opportunity for your company—to decide whether you want to try it in the first place

- Use bottom-up analysis to get a realistic and testable estimate of what you can achieve within the first years of your startup

� Challenge both approaches and present a coherent global perspective of your estimated sales

� One-off/recurring/bundled sales?

� What are the supporting trends of your market ?

� How fast will the market grow?


When & How ?

� How and When are you going to sell your products ?

� Sales channels: Direct / Indirect – focus may shift over time


When & How ? - COCA

� Impact on the cost of customer acquisition (COCA)

Target

Calls

Meetings

First sale

€?


When & How ? - COCA

� Impact on the cost of customer acquisition (COCA) :

- It costs money to achieve each sales

- How much resources (time, €, HR) does it require (cf Bottom Up approach)?

- Includes unsuccessful prospects

- To be taken into account in your financial plan

- Choice of channels :

� Financially sustainable?


When & How ? - COCA & LTVOAC

� COCA & Life time value of an acquired customer

- Cost of Customer Acquisition (COCA)

- Life time value of an acquired customer (LTVOAC)

- Each acquired customer will provide you with revenues during his life time (as a client of your company)

- Put those revenues in perspective with the COCA

COCA = Sales & Marketing Costs / Customers

LTVOAC = revenue over life time x gross margin


When & How ? - COCA & LTVOAC

� Lifetime value of a gym member who spends €20 every month for 3 years?

- €20 X 12 months X 3 years = €720 in total revenue (or €240 per year)

� How much will it cost you to acquire this client? Allowable acquisition cost?

� How to optimize LTVOAC?

� Discount while managing CF


Don’t Forget …

� Probably one of the most important parameters … and

certainly the most difficult to estimate !!

� Consider different (sub)categories of products and/or

services

� Consider the volume of units (products/services) sold and the

respective selling prices

� Outputs

– Per product (category)

– Per client / market / segment

– Per channel

– Combine ?


Don’t Forget …

� Gross sales or Net sales (e.g. after commission, bad debts…)

� Consider the initial volumes and the growth rates for each line of products/services without forgetting the market’s dynamic (seasonality, evolution of the selling prices, growth…)

� Be aware of potential delays and lower (initial) volumes &growth rates than expected.

� Consider the sales without VAT (unless you do not recuperateit !)


Don’t Forget …

� The sales data should be based on tangible elements andhypothesis directly linked to the business plan

� In no circumstances should the volume of sales be based onthe costs … : “ spontaneous sales creation ” in order toachieve break even or benefit on paper does not help andcould possibly endanger your credibility in the eyes of thirdparties

� To keep in mind:

- User friendliness, avoid too much items

- Internal logic : price, discount, cost of sales, payment conditions… & cycle


Your answers to...

14 Nov '16


Financial assumptions

How to estimate your Costs?


Fixed costs

1. What is the structure to run the business: SPRL/BVBA or SA/NV?

How many (co)founders and employees (1, 5 or 50)? Employees or

outsourced workforce?

2. Back-office services required?

3. Required operational fixed costs?

4. Where: in Brussels, Wallonia, Flanders? Any outsourced activities

outside Belgium?

R&D

1. Budget and estimated period? Type of R&D? Recurrent?

2. How many people for R&D?

Investments

1. Planned investments? Computers, software licence, machines, etc…

2. Budget and schedule of the investments. Subsidies ?

14 Nov '16


• Costs of goods/services sold

• (Other) Operating Costs


3. Coûts des ventes

1/2014 2/2014 3/2014 4/2014

3.1. Achats de marchandises : Coûts d'achat des marchandises liées aux produits-services vendus, mois par mois, pour chaque produit

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

3.2. Autres coûts de vente liés au produit-service vendu, mois par mois, pour chaque produit-service, exprimés en pourcentage du ch

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

(-) 21% 0.00% 0.00% 0.00% 0.00%

Taux de

TVA


= Cost of Sales

Variable costs directly linked to the goods / services soldand highly or totally proportional to the sales

Can be close to zero for some kind of activities

Much easier to predict than the volume of sales itself(should logically be based on tangible elements)

COGS : Cost of Goods / Services sold


Two main categories:

a) goods purchased and/or manufactured

� means a potential inventory and an additionalfinancial need

b) other costs, linked to sales, with no impact on inventory

eg. Transport, payment or packaging costs



Deducted from the sales, it will give the grossmargin or gross revenues

Often an important parameter, notably to monitor the evolution of profitability & to make comparison

with company in similar business

In some cases, there is a grey zone whether somecosts « should » be integrated in the COGS or the general expenses, with some freedom to choose



5. Stocks et délais de paiement

0 0.0

0 0.0

0 0.0

0 0.0

0 0.0

0 0.0

Délai moyen de paiement des clients (de 0 à 6 mois) 1.0

Délai moyen de paiement aux fournisseurs (de 0 à 6 mois) 1.0

5.1 Stocks

5.2. Délais moyen de paiement des clients

(-)

(-)

(-)

(-)

(-)

(-)

Stock Minimum (en valeur achat)

(euro htva)

Rotation moyenne du stock tous les

mois(euro htva)

mois

mois

(euro htva)

mois

mois

5.3. Délais moyen de paiement aux fournisseurs

mois

mois

(euro htva)

(euro htva)

(euro htva) mois


• Costs of goods/services sold

• (Other) Operating Costs


6. Frais généraux (mois par mois, hors TVA)

1/2014 2/2014 3/2014 4/2014

610 - Loyers et charges locatives 21% - - - -

6120 - Fournitures - Eau, gaz, électricité, vapeur 21% - - - -

6121 - Fournitures - Téléphone, GSM, Internet 21% - - - -

6124 - Fournitures - Autres 21% - - - -

6131 - Assurances hors RH (incendie, vol, autos, crédit) 21% - - - -

61321 - Honoraires d'experts - Comptables & fiscalistes 21% - - - -

61321 - Honoraires d'experts - Secrétariats sociaux 21% - - - -

61321 - Honoraires d'experts - Avocats 21% - - - -

61321 - Honoraires d'experts - Autres 21% - - - -

61330 - Frais Transport - Personnel 21% - - - -

61331 - Frais Transport - Voyages d'affaires 21% - - - -

61332 - Frais Transport - Autres 21% - - - -

6140 - Frais Commerciaux - Annonces et insertions 21% - - - -

6143 - Frais Commerciaux - Foires et expositions 21% - - - -

6144 - Frais Commerciaux - Autres 21% - - - -

615 - Autres Sous-traitances 21% - - - -

6230 - Frais HR - Assurances du personnel 21% - - - -

6400 - Taxes et impôts - Véhicules et autres 21% - - - -

6402 - Taxes et impôts - Région, Provinces, Communes 21% - - - -

66 - Imprévus 21% - - - -

- - - -

Taux de

TVA

TOTAL (hors TVA)


General Expenses or « Fixed » costs

Costs Depends on

Rent & Maintenance expenses # ETP

Utilities, Telephone, Internet & Licences, etc # ETP

Insurance & Bank fees % CA

Third parties / subcontracters, notably : Accountants, Lawyer

fees, External sales, etc

% CA

# ETP

Marketing & Communication expenses % CA

Travel & representation expenses % CA

Geographic

# ETP

HR costs other than salary and related costs # ETP

Other Taxes than on profit

Unexpected expenses


7. Frais des ressources humaines : Employé - Ouvrier / Administrateur - Gérant

Brut mensuel

de départ

Date

d'entrée

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

0 1/01/14

Ouvriers

Personne ou fonction à remplir

Ouvrier 1

Ouvrier 2

Ouvrier 3

Ouvrier 9

Ouvrier 7

7.1. Rémunération mensuelle brute des employés et ouvriers

Employé 5

Ouvrier 4

Ouvrier 5

Employés

Employé 7

Ouvrier 6Employé 6

Employé 8

Employé 9

Ouvrier 8

Personne ou fonction à remplir

Employé 1

Employé 2

Employé 3

Employé 4

7.2. Rémunération mensuelle brute des administrateurs-gérants, mois par mois

1/2014 2/2014 3/2014 4/2014 5/2014

- - - - -

- - - - -

Administrateur-Gérant 1

Administrateur-Gérant 2


Employees versus Workers

Director (self-employed) versus staff under contract

NB: social costs linked to the shareholder of a companyworking for it under a self-employed status is not to beincluded in the FP of the company, unless specifically

foreseen

The differences in the fiscal status and in the costs for the company are quite significant

(eg multiplication effect x 1.34 x 13.92 !)

General Expenses : HR costs


8. Investissements à réaliser

Taux de TVA

21%

21%

Taux de TVA

21%

21%

21%

Taux de TVA

21%

21%

21%

21%

21%

21%

21%

21%

8.1. Investissements de l'année 2014

Total des investissements de l'année

Total

Date prévue

-

-

-

-

-

Montant

Total -

(-)

Montant

-

1/01/14

1/01/14

Montant

1/01/14

Date prévue

Date prévue

1/01/14

1/01/14

1/01/14

-

-

1/01/14

-

-

-

-

1/01/14

Total

(-)

(-)

1/01/14

1/01/14

b) Immobilisations incorporelles

a) Frais de constitution

-

1/01/14

(-) -

1/01/14 -

(-)

c) Immobilisations corporelles

(-)

(-)

(-)

(-)

(-)

(-)

(-)

(-) 1/01/14

-


Amortization, Depreciation & Provisions :(= costs not implying a direct cash out)

Amortization is automatically calculated in the template based on the investments (and the amortization tenor)

Depreciation & Provisions are not included at this stage (not relevant for a starter)

Costs with no impact on treasury


Tips for assumptions

• Office: 10-25 m²/person

• EUR 100/m²/year + 15 % for maintenance

[ or COWORKING !]

• Insurances: 1 -3 % of revenues

• Marketing: define a % of revenues + starting

investment

• Don’t forget lawyers, accountant, social

secretary, office supplies…

14 Nov '16


• Car leasing : 300 – 800 EUR per month

• Salary : Gross monthly x 19,2 = Yearly cost

• Revenues: worst-case & best-case

– First 3 to 6 months: 0 EUR

– Maximum ‘billable’ hours per day

(one-off events, holidays, prospecting, etc...)

• Own salary : “0 EUR” / Realistic �

different ‘hats’

14 Nov '16

Tips for assumptions


What’s next?

How to use this financial plan?


Does the big picture make sense?

2014 2015 2016BILANS

Prévisions financières - Résumé

2014 2015 2016

Chiffre d'affaires 48,000 150,000 270,000

Marge brute d'exploitation 24,000 75,000 135,000

Charges d'exploitation 33,600 80,802 117,058

Frais généraux 25,600 26,880 28,224

Ressources humaines 8,000 53,922 88,834

EBITDA -9,600 -5,802 17,942

Résultat avant impôts -10,900 -7,102 16,642

Résultat après impôts -10,900 -7,102 16,642

RESULTATS


Look at the cashflows

1/2014 2/2014 3/2014 4/2014 5/2014 6/2014 7/2014

1. Cash-flow opérationnel

2. Cash-flow financier

3. Investissements

Variation de trésorerie 12,135 -3,388 -2,420 -3,057 -758 -758 -3,104

Trésorerie 12,135 8,747 6,327 3,270 2,512 1,754 -1,350

Prélèvement sur crédit de caisse - - - - - - -

Valeurs disponibles sur compte 12,135 8,747 6,327 3,270 2,512 1,754 -1,350

Cash-flow statement

Année 1 - 2014


Make it yours and understand the key metrics

2014 2015 2016BILANS

Prévisions financières - Résumé

2014 2015 2016

1. Cash-flow opérationnel -18,346 -24,765 -1,018

Résultat hors amortissements -9,600 -5,802 17,942

Variation du BFR -8,746 -18,962 -18,960

2. Cash-flow financier 20,000 0 0

Sources de financement 20,000 0 0

Remboursement des dettes 0 0 0

3. Investissements -6,500 0 0

Variation de trésorerie -4,846 -24,765 -1,018

Total cash 4,846 - 29,611 - 30,629 -

# quantity sold 48 150 270

# ETP

# Sales & Marketing Expenses

…

CASH-FLOW


http://www.slideshare.net/FinanceCoach24/


Martin van Wunnik

0475 / 96.95.91

14 Nov '16


IMPULSE

Too many things to list them all here! We inform you, we guide you and we accompany you in a whole range of areas such as creating an

enterprise, financing, innovation, town planning, environmental permits, partnerships … by means of newsletters, websites, seminars or tailored

coaching.

Briefly, we create a complete ecosystem

in which you can grow as an entrepreneur!

Jean-Luc Surquin [email protected]

Rodolphe d'Udekem d'Acoz [email protected]

More info on our websites : www.impulse.irisnet.be - www.entreprendreabruxelles.bewww.ecosubsibru.be – http://monbusinessplan.be – www.brutrade.be

[email protected] - [email protected]