MIC 2015-workshop financial plan

Xavier Corman | Martin van Wunnik 107/02/2012 Xavier Corman | Martin van Wunnik 117/04/2012
MIC boostcamp - Finance workshop
P&L “Carton de bière”, what’s next?
Key parts and logic behind your financial plan
Catherine Blondiau
Rodolphe d'Udekem d'Acoz
Martin van Wunnik
18 May '15

Xavier Corman | Martin van Wunnik 207/02/2012
Who are we ?
Martin van Wunnik
Catherine Blondiau
Rodolphe d'Udekem d'Acoz
18 May '15

This presentation is available for free:
http://www.slideshare.net/FinanceCoach24
18 May '15

Why a Financial Plan ?
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
You need to know
18 May '15

Financial Plan
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
• Estimate the financial need of your startup
• Calculate the break-even point
• Understand the key metrics that influence
your business
18 May '15

Financial Plan
18 May '15
Some key elements not to forget :
• Be coherent
• With your business model / business plan
• Costs versus Sales
• Cash is key
• Working Capital Requirement
• Each financial need has an appropriate source of
financing
• A financial plan is also a legal obligation to launch
a company

Financial Plan
Content
– Assumptions
– Profit & Loss
– Balance Sheet / Investment
– Cash-Flow -> Cash needed Cash=king! CIMITYM
– Valuation of the project
– Profitability / return of the project
18 May '15
P&L “Carton de bière”

18 May '15

Accounting: Profit & Loss (P&L)
Revenues (Sales…)
COGS (Cost of Sales)
General Expenditures
Personnel Costs
Depreciation
Financial cost
Profit
Grossmargin
EBITDA
Taxes
EBITDAEBIT
18 May '15

Accounting: Balance Sheet
Non Current Assets
(Actifs Immobilisés/
Vast Activa)
Equity + Reserves
(Capital/Kapitaal)
LT Debts
ST Debts
Current Assets
(Actifs circulants/
Vlottend Activa)
ACTIVE PASSIVE
18 May '15

Required Cash-Flow
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How to finance your startup ?
Equity
LT Debts
ST Debts
FFF
B A
V C
Crowd
Public
Banks
Shareholders
Clients
Suppliers
Banks
Shareholders
18 May '15

David Skok
SaaS Metrics 2.0
A Guide to Measuring and
Improving what Matters
http://www.forentrepreneurs.com/saas-metrics-2
18 May '15

Impulse template
Don’t hesitate to use different
colors to better identify
hypothesis vs facts
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Sales & Costs
(find your specific drivers for both aspects)
18 May '15

Financial assumptions
How to estimate your Sales?

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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 1807/02/2012 •18
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 own
technology/services
3. Serviceable Obtainable Market (SOM) : Which realistic market
share can be obtained by myself, considering competition,
countries, my sales/distribution channels and other market
influences?

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 considering
the client and your resources.
The idea is to understand how much you will be able to sell
considering 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 recuperate
it !)

Don’t Forget …
The sales data should be based on tangible elements and
hypothesis directly linked to the business plan
In no circumstances should the volume of sales be based on
the costs … : “ spontaneous sales creation ” in order to
achieve break even or benefit on paper does not help and
could possibly endanger your credibility in the eyes of third
parties
To keep in mind:
- User friendliness, avoid too much items
- Internal logic : price, discount, cost of sales, payment
conditions… & cycle

Your answers to...
18 May '15

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 ?
18 May '15

• Costs of goods/services sold
• (Other) Operating Costs

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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 sold
and 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 additional
financial 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 gross
margin 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 some
costs « should » be integrated in the COGS or the
general expenses, with some freedom to choose

18 May '15
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

18 May '15
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

18 May '15
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 company
working for it under a self-employed status is not to be
included 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

18 May '15
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…
18 May '15

• 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’
18 May '15

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

18 May '15
http://www.slideshare.net/FinanceCoach24/

Martin van Wunnik
0475 / 96.95.91
Martin@FinanceCoach24.com
18 May '15

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!
Catherine Blondiau cbl@impulse.irisnet.be
Rodolphe d'Udekem d'Acoz rud@impulse.irisnet.be
More info on our websites : www.impulse.irisnet.be - www.entreprendreabruxelles.be
www.ecosubsibru.be – www.monstarterkit.be – www.brutrade.be
info@1819.be - info@impulse.irisnet.be

MIC 2015-workshop financial plan

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