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FINANCIAL PROJECTIONS
Gemma Noble Find my Festival
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CONTENTS WHO WE ARE .......................................................................................................................................... 2
OUR MISSION ......................................................................................................................................... 2
FINANCE INTRODUCTION ....................................................................................................................... 2
CASH INCOME ......................................................................................................................................... 3
INITIAL START UP FUNDS .................................................................................................................... 3
GRANT ASSISTANCE—PRODUCT ......................................................................................................... 3
GRANT ASSISTANCE—STAFF ............................................................................................................... 3
APP SALES............................................................................................................................................ 3
FESTIVAL COMISSION .......................................................................................................................... 3
ADVERTISING ...................................................................................................................................... 3
CASH PAYMENTS .................................................................................................................................... 4
PREMISES RENT ................................................................................................................................... 4
START UP EQUIPMENT ........................................................................................................................ 4
INSURANCE ......................................................................................................................................... 4
DEVELOPMENT EXPENDATURE ........................................................................................................... 4
WAGES AND NATIONAL INSURANCE .................................................................................................. 4
ADVERTISING ...................................................................................................................................... 4
SUNDRIES ............................................................................................................................................ 4
CASH FLOW PROJECTION ....................................................................................................................... 5
PROFIT AND LOSS STATEMENT .............................................................................................................. 6
CASH FLOW SUMMARY .......................................................................................................................... 7
PROFIT AND LOSS SUMMARY ................................................................................................................ 7
REFERENCES ............................................................................................................................................ 7
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Find My Festival
WHO WE ARE Music festivals are a huge part of modern social life. Our
managing director, Gemma Noble, has always been
passionate about music and over the years has attended
many music festivals. When comparing prices and music
genres for her own festival selection Gemma noticed a gap
in the market for a festival comparison app which would
allow users to quickly and easily compare thousands of
festivals nationally and internationally.
FMF Ltd was established with the goal of creating an easy
to use app for international festival goers.
FMF Ltd is a private limited company therefore our shares
do not trade on the stock market.
OUR MISSION To make the festival decision process easy and simple for
our customers by allowing them to compare multiple
options nationally and internationally while promoting and
encouraging smaller festivals.
Music is Life.
FINANCE INTRODUCTION This report details FMF Ltd.’s first year Cash Flow Projection
and Profit and Loss Statement with a detailed breakdown of
the cash income and the cash expenditure.
A cash flow projection for the first year of business has
been completed to determine the closing balance after the
first year of business. A cash flow refers to money which
flows into and out of a company over a specific period of
time. The cash flow is a form of budget and will show
approximately when money is expected to flow into and
out of the company (Anderson, 2015).
A Profit and Loss Statement shows how well a company has
been trading over a year timescale, typically. The difference
between trading revenue and expenses is profit (Anderson,
2015).
#MUSICISLIFE
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CASH INCOME
INITIAL START UP FUNDS The initial start-up fund is an investment of £75,000 will come from the following sources:
£25,000 of personal savings from childhood bonds
£25,000 family investment
£25,000 co investment from Apps Central
A contract has been drawn up with each of the investor parties to ensure fair and equitable
treatment of them as creditors. It states that repayment of the investment will begin after year
three, subject to the company operating at a profit and will be made in monthly instalments.
Interest will be payable at Royal Bank of Scotland base rate.
GRANT ASSISTANCE—PRODUCT Grant Assistance for the product branding will come from Scottish Enterprise. This is in the form of
£5,000 in a one off non-refundable grant. This is provided to assist in the design of branding and
marketing materials. To receive the grant the organisation must give a detailed business and
promotional plan to Scottish Enterprise.
GRANT ASSISTANCE—STAFF There is Grant Assistance available for staff of FMF Ltd from Scot Grad. This is in the form of 30% of
salary cost for a graduate to a maximum value of £6,000 per annum for the first year of employment
only. The money is given stages, with payments being made every 2nd month. The main condition of
the grant is that the job is advertised on the Scot Grad website only.
APP SALES The app will be sold in the Apple and Android stores at £1 per download. It is anticipated there will
be a 20% increase in sales after the first quarter as advertising and awareness of the product
spreads. Thereafter a projected 12% sales increased is anticipated from quarter 3 onwards.
Additional promotional activity in year 2 would give an opportunity to project further increases.
FESTIVAL COMISSION FMF Ltd receive between 8% and 10% commission for every ticket sold through the app. It is
anticipated there will be some degree of seasonality profile to the sales in line with the build up to
events. Commission earnings are projected to have a 20% growth profile per quarter after the first
quarter’s sales.
ADVERTISING Within the App a small amount of space will be allocated in the design to support advertising from
festivals organisers and associated relevant organisations. In addition advertising space will be made
in newsletters that will be issued to those who subscribe to the app. The Advertising will be sold on a
cost per impression (CPM) and cost per click (CPC) basis. Anticipated rates are £5 CPM and £20 CPC.
A conservative assumption been made regarding first year revenue based on assumed circulation
lists and newsletter issue frequency.
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CASH PAYMENTS
PREMISES RENT As the organisation is small and will only have two members of staff, there will be no business
premises. The business will be run from a home office in the Lothians. This cuts expenditure down.
START UP EQUIPMENT Initially the company has purchased the following equipment and software for £3,000:
Two Apple MacBook Pros one for the Managing Director and one for the Operations
Manager
An Apple iPad to test the app and analyses app usage
A printer for marketing materials
Internet services
Two Apple iPhone 6’s under a business contract with EE for each FMF employee
One low spec pay as you go android device for testing purposes
Full Microsoft Office for Business
Adobe products such as Photoshop and Illustrator to produce marketing materials
Cloud based payroll service, accountancy using Xero
INSURANCE The company has had to take out insurance policies from Simply Business for the following areas of
business:
Office equipment insurance
Employer Liability insurance
The cost of insurance is £50.
DEVELOPMENT EXPENDATURE App Central require a payment of £9,900 for the development of the product within the second
quarter of trading. Monthly payments of £334 for the maintenance of the app are required.
WAGES AND NATIONAL INSURANCE Initial salary payments of £12,000 per person will be made. As assumption of 5% employer NI has
been made, payable the month after the salary payments.
ADVERTISING Based on the current economic climate £334 per month has been designated to cover both
advertising and marketing for the first 6 months in the build up to launch. A reduced amount of £168
has then been allocated for post launch.
SUNDRIES A small allowance of £25 per month has been allocated for unplanned incidentals and out of pocket
expenses.
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CASH FLOW PROJECTION
JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTALCASH RECIPETS
Invesement £75,000.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £75,000.00
App Sales £0.00 £0.00 £0.00 £167.00 £167.00 £167.00 £200.00 £200.00 £200.00 £234.00 £234.00 £234.00 £1,803.00
Festival Comission £0.00 £0.00 £0.00 £1,000.00 £1,000.00 £1,000.00 £1,200.00 £1,200.00 £1,200.00 £1,440.00 £1,440.00 £140.00 £9,620.00
Advertising £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £167.00 £167.00 £167.00 £200.00 £200.00 £200.00 £1,101.00
Grant Assistance - Product £0.00 £0.00 £0.00 £5,000.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £5,000.00
Grant Assistance - Staff £0.00 £666.00 £0.00 £666.00 £0.00 £666.00 £0.00 £666.00 £0.00 £666.00 £0.00 £666.00 £3,996.00
TOTAL INFLOWS £75,000.00 £666.00 £0.00 £6,833.00 £1,167.00 £1,833.00 £1,567.00 £2,233.00 £1,567.00 £2,540.00 £1,874.00 £1,240.00 £96,520.00
CASH PAYMENTS
Sales and Promotion
Advertising £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £84.00 £84.00 £84.00 £84.00 £84.00 £84.00 £1,506.00
Marketing £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £84.00 £84.00 £84.00 £84.00 £84.00 £84.00 £1,506.00
Operations
Salary £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £24,000.00
Employer NI £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £1,100.00
Office Insurances £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £600.00
Equipment £3,000.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £3,000.00
Sundries £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £300.00
Development Expendature
Software £0.00 £0.00 £0.00 £3,300.00 £3,300.00 £3,300.00 £334.00 £334.00 £334.00 £1,160.00 £1,160.00 £1,160.00 £14,382.00
TOTAL OUTFLOWS £5,409.00 £2,509.00 £2,509.00 £5,809.00 £5,809.00 £5,809.00 £2,677.00 £2,677.00 £2,677.00 £3,503.00 £3,503.00 £3,503.00 £46,394.00
NET CASH INFLOWS/OUTFLOWS £69,591.00 -£1,843.00 -£2,509.00 £1,024.00 -£4,642.00 -£3,976.00 -£1,110.00 -£444.00 -£1,110.00 -£963.00 -£1,629.00 -£2,263.00
OPENING BALANCE £69,591.00 £67,748.00 £65,239.00 £66,263.00 £61,621.00 £57,645.00 £56,535.00 £56,091.00 £54,981.00 £54,018.00 £52,389.00
CLOSING BALANCE £69,591.00 £67,748.00 £65,239.00 £66,263.00 £61,621.00 £57,645.00 £56,535.00 £56,091.00 £54,981.00 £54,018.00 £52,389.00 £50,126.00 £50,126.00
Find my FestivalCash Flow Forecast
First Year Projection Ending December 2016
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PROFIT AND LOSS STATEMENT
JAN FEB MAR APRIL MAY JUNE JULY AUG SEPT OCT NOV DEC TOTALApp Sales £0.00 £0.00 £0.00 £167.00 £167.00 £167.00 £200.00 £200.00 £200.00 £234.00 £234.00 £234.00 £1,803.00
Festival Comission £0.00 £0.00 £0.00 £1,000.00 £1,000.00 £1,000.00 £1,200.00 £1,200.00 £1,200.00 £1,200.00 £1,200.00 £1,200.00 £10,200.00
Advertising £0.00 £0.00 £0.00 £0.00 £0.00 £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £1,169.00
REVENUE £0.00 £0.00 £0.00 £1,167.00 £1,167.00 £1,334.00 £1,567.00 £1,567.00 £1,567.00 £1,601.00 £1,601.00 £1,601.00 £13,172.00
COGS £0.00 £0.00 £0.00 £3,300.00 £3,300.00 £3,300.00 £334.00 £334.00 £334.00 £1,160.00 £1,160.00 £1,160.00 £14,382.00
GROSS PROFIT £0.00 £0.00 £0.00 -£2,133.00 -£2,133.00 -£1,966.00 £1,233.00 £1,233.00 £1,233.00 £441.00 £441.00 £441.00 -£1,210.00
Gross Profit £0.00 £0.00 £0.00 -£1.83 -£1.83 -£1.47 £0.79 £0.79 £0.79 £0.28 £0.28 £0.28 -£0.09
Gross Margin Percentage 0.00% 0.00% 0.00% -182.78% -182.78% -147.38% 78.69% 78.69% 78.69% 27.55% 27.55% 27.55% -9.19%
EXPENSESSales and Promotion
Advertising £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £84.00 £84.00 £84.00 £84.00 £84.00 £84.00 £1,506.00
Marketing £167.00 £167.00 £167.00 £167.00 £167.00 £167.00 £84.00 £84.00 £84.00 £84.00 £84.00 £84.00 £1,506.00
Operations
Salary £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £2,000.00 £24,000.00
Employer NI £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £100.00 £1,200.00
Office Insurances £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £50.00 £600.00
Equipment £3,000.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £0.00 £3,000.00
Sundries £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £25.00 £300.00
TOTAL EXPENSES £5,509.00 £2,509.00 £2,509.00 £2,509.00 £2,509.00 £2,509.00 £2,343.00 £2,343.00 £2,343.00 £2,343.00 £2,343.00 £2,343.00 £32,112.00
OPERATING PROFIT -£5,509.00 -£2,509.00 -£2,509.00 -£4,642.00 -£4,642.00 -£4,475.00 -£1,110.00 -£1,110.00 -£1,110.00 -£1,902.00 -£1,902.00 -£1,902.00 -£33,322.00
Interest
PROFIT BEFORE TAX -£5,509.00 -£2,509.00 -£2,509.00 -£4,642.00 -£4,642.00 -£4,475.00 -£1,110.00 -£1,110.00 -£1,110.00 -£1,902.00 -£1,902.00 -£1,902.00 -£33,322.00
Find my Festival
Profit and Loss Forecast
First Year Projection ending in December 2016
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CASH FLOW SUMMARY The initial injection of £75,000 provides the working capital to start the business and sufficient funds
to cover the operating costs of the business for the first year of trading. The income generated from
sales of £21,520 is sufficient to minimise the first year’s net negative cash flow to leave a closing
balance of £50,126.
PROFIT AND LOSS SUMMARY In its first year, while the company is in start-up and developing its product and market position the
company will trade at a loss. The monthly operating cost projections are not being met by the
projected sales revenues.
The founders and trade creditors are aware of this position and will continue to financially support
the company during its start-up and development.
REFERENCES Anderson, S. (2015). Financial Accounts
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