FINANCIAL PLAN

We have been able to analyze our sales and revenue, and we plan to have P45,700 in our own wallet
within the first year. Our goal is to sell an established chain of environmentally friendly seed-filled paper or to
open a plant nursery franchise within the next four years. Considering this, we must constantly reinvest in the
development of seed-filled paper.
To accomplish our objectives, we have also refined our sales and marketing tactics, which we think will
enable us to be who we want, when we want. We have plans in place, and we are confident in our abilities and
business operations, so we think we will meet these targets.

Crucial Presumptions

The following table lists most of the key assumptions that underpin the financial plan. The following are the main
presumptions:

• We anticipate a modestly growing economy free from significant recessions.

• Naturally, we assume that there won't be any unanticipated technological advancements that would render things
instantly outdated.

• As indicated in the tables, we assume that we will have access to enough funding and equity resources to sustain our
financial plan.

Our start-up costs come to P45,000 which is mostly production cost, store furnishings and construction, and
starting inventory expenses associated with opening our first stall. The start-up costs are to be financed by our owned
investment.

Start-up is for 1month of operations.

Start-up Requirements
Start-up Expenses
Legal Registration P11,000
Production Costs (Maximum) P10,000
Advertising P 2,000
Transportation P700
Expensed Equipment P6000
Total Start-up Expenses PP30,700
Start-up Assets
Cash Required P15000
Total Assets P15000
Total Requirements P45,700
Projected Profit and Loss
An important assumption when calculating our P&L is the increase in sales from year to year. We are basing our
assumptions on the financial success to the number of target customer in one year. Our capital is more helpful. We
computed the number may we sell in a day-to-day basis. In first year, 2 months our capital was cut into two, one for the
expenses and the other half is for the productions. According to what we know, our business will increase 30% every 2
months and in our 1 year in business, our estimated profit will increase by 50%.

Profit and Loss

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Sales 306,180 612,360 918,540 1,224,720 1,530,900

Direct Cost of Sales P10,000 20,000 30,000 40,000 50,000

Total Cost of Sales 10,000 20,000 30,000 40,000 50,000

Gross Margin 296,180 592,360 888,540 1,184,720 1,480,900

Gross Margin % 96.73% 96.73% 96.73% 96.73% 96.73%

Expenses
Legal Registration and 11,000 11,000 11,000 11,000 11,000
Licenses
Equipment 72,000 144,000 216,000 288,000 360,000
Advertising 2,000 4,000 6,000 8,000 10,000
Transportation 8400 16,800 25,200 33,600 42,000
Business Taxes Incurred 11,400 22,800 34,200 45,600 57,000
104,800 349,800 519,200 688,600 858,000
Total Operating Expenses
Net Profit 191,380 242,560 369,340 496,120 622,900
Net Profit/Income % 64.62% 40.95% 41.575 41.885 42.06%

Legends:
Direct Cost of Sales or Production Costs
Gross Margin-Sales-Total Costs of Sales
Gross Margin%=Gross Margin/Sales
Equipment (Planting pot)
Business Taxes is 3.8% of total Sales
Net Profit %-Net Profit/Gross Margin
 CASH FLOW
Year 1 Year 2 Year 3 Year 4 Year 5
Cash received by operations
Cash sales 306,180 612,360 918,540 1,224,720 1,530,900

Expenditure from
Operations
Bill payment 21,800 43,600 65,400 87,200 109,000
Subtotal Spent on 21,800 43,600 65,400 87,200 109,000
Operations

Purchase of long-term 72,000 144,000 216,000 288,000 360,000

assets
Subtotal cash spent 72,000 144,000 216,000 288,000 360,000

Net cash flow 234,180 468,360 702,540 936,720 1,170,900

Cash balance 249,180 717,540 1,420,080 2,356,800 3,527,700

LEGENDS:
CASH SALES = The money that the stalls receive.
BILL PAYMENT = It includes the taxes, transportation, and advertising.
LONG TERM ASSETS =Equipment's / Materials
NET CASH FLOW = Cash sales (CS) - Subtotal cash spent (SCS)
CASH BALANCE = in first year, cash balance in first month of operation (15,000) plus the net cash flow. In
second year, cash balance in the first year plus the net cash flow in second year, and the same process in the
next 3 years.
Balance Sheet
 Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash 249,180 717,540 1,420,080 2,356,800 3,527,700
Inventory - - - - -
Other Current - - - - -
Asset
Long Term 21,800 43,600 65,400 87,200 109,000
Assets
Total Assets P270,980 P761,140 P2,246,620 P2,444,000 P3,636,700

Liabilities and - - - - -
Capital
Current - - - - -
Liabilities
Account - - - - -
Payable
Borrowing - - - - -
Total Liabilities - - - - -

Capital
Paid In Capital 45, 700 91,400 137,100 182,800 228,500

Earnings 224,180 448,360 672, 540 896,720 1, 120, 900

Total Capital 269,880 539,760 809,640 1,079,520 1,349,400

Total Liabilities 269,880 539,760 809,640 1,079,520 1,349,400

and Capital

LEGEND:

EARNINGS =Net cash flow – Total cost of sales

Required Capital and Its Uses

Total Required Capital

• P45,700 (Philippine Pesos)

This amount represents the total start-up capital needed to launch your business and cover the first month of operations.

Breakdown of Capital Uses

Category Description Estimation Amount

Production Cost Cost of materials and Major portion
manufacturing for seed-filled
paper products
Store Furnishings & Expenses for setting up the Included
Construction stall, including fixtures and
initial setup
Starting Inventor Initial stock of products for Included
sale
Equipment Purchase of planting pots Included
and other necessary
tools/materials
Business Taxes Estimated at 3.8% of total Ongoing
sales
Marketing & Advertising Initial promotional Included
activities to attract
customers
Transportation Costs for delivering goods Included
and materials
Note: The capital is split into two main uses during the first two months:

• 50% for expenses (such as marketing, taxes, transportation, and store setup)

• 50% for production (manufacturing and inventory)

Return on Investment (ROI)

Initial Investment

• Total Required Capital: P45,700

This amount covers all start-up costs including production, inventory, store setup, equipment, marketing, and initial
operations.

Projected Financial Performance

• Sales Growth: Projected to increase by 30% every two months.

• Profit Growth: Expected to increase by approximately 50% by the end of the first year.

• Business Tax: 3.8% of total sales deducted from gross revenue.

Formula:

ROI = (Net Profit ÷ Initial Investment) × 100%

Net Profit (Year 1): ₱191,380

Initial Investment: ₱45,700

Year 1 ROI

ROI = (₱191,380 / ₱45,700) × 100% = 418.64%

Yearly ROI Summary (Cumulative):

Year Net Profit (₱) Cumulative Profit (₱) ROI (Annual %)

Year 1 191,380 191,380 418.64%
Year 2 242,560 433,940 948.97%
Year 3 369,340 1,757.21%
Year 4 496,120 2,842.24%
Year 5 622,900 4,204.16%

Insights:

 The ROI increases substantially year-over-year, indicating high profitability and effective reinvestment.
 Most of the capital is front-loaded (Year 1) with minimal external liabilities.
 By Year 2, the business becomes self-sustaining, with net profits surpassing capital investment by over 9x.