A Business Plan for Cyprus Financials Limited - Essay Example

A Business Plan for Cyprus Financials Limited December 26, 2007 I. FIRST-YEAR BUDGETARY PLAN AND CASH FLOW FORECAST Cyprus Financials Limited shall adhere to the following cash flow plan and Profit and Loss analysis: II. EXPLANATION OF BASIS FOR PLANNED BUDGET The budget assumptions were based on actual cost estimates on the products and services needed to start up a company in Cyprus. The following factors were considered in the budget preparation: 1. Size of the company Since there would initially be just three manpower that would need full support in terms of furniture, connectivity, office supplies and equipment, the owner budgeted for just thee units of personal computers and corresponding sets of furniture to start up the office operations. Additional budget was allocated in the succeeding months for the possibility of adding up the manpower in anticipation of an added number of clientele base and accounts. 2. Marketing Plan The company will rely heavily on non-traditional advertising, which is through word-of-mouth and the use of collateral materials such as brochures and flyers. These are powerful tools since these would contain a summary of the services that the office would render. With this plan, the owner budgeted for the design and production of the materials on a quarterly basis. An agency will be outsourced to fulfill this requirement. CFL would also be utilizing Search Engine Optimization, thus the budget to be allocated for the creation and hosting of its website. The creation of a web site would only be one-time and any change to the website would essentially be just minor ones and would not entail too much costs. Print ads would also be produced to support the above-mentioned marketing plans and also to reach the market who are heavy users of this medium. A monthly print advertisement shall be implemented in two major dailies in Cyprus. To have a wider reach, CFL shall sponsor various activities that cater to budding and existing entrepreneurs. The cost shall cover sponsorship costs and other needed advertising tools. 3. Targets The budgetary requirements have been spread all throughout the first year of operations to be able to determine the needed cash flow. Targets on the number of needed accounts to cover for all operational costs have also been determined. These targets must be adhered to by the account managers to ensure smooth operations of the company. III. PERSONAL SURVIVAL BUDGET The 50,000 pounds start-up capital shall not be used up 100% for the first month, but instead, only 25% of which shall be spent on the perceived operational requirements./The rest shall be treated as savings and would only be used as needed. The cash flow has been planned to ensure that the projected income shall cover for the projected costs. IV. BREAK EVEN ANALYSIS The targeted number of projects and clients has been identified for the rest of the operational year. This is to ensure that all operational costs shall be covered for and that there would be as little deficit as can be should the plans do not materialize. The budget requirements are definitely lower than the projected income. The company plans to adhere to this budget plan to ensure that the office, at the very least, breaks even. However, as such a business is bound to succeed in Cyprus, the projected amount of income is 25% greater than the projected cost of operations. This is a safe percentage in case there would be some limitations in terms of pulling through an account. V. PROFIT FORECASTS FOR YEARS 1 & 2 CFL is looking at a profit of at an average of 25% per month. This is a computation of the difference between the projected income in contrast to the projected cost of expenses. By the 2nd year, CFL is looking at increasing the average to 32% per month. The firm would have more clients – both new and returning – by then. VI. VALUE OF CURRENT RESOUECES/ CAPITAL AVAILABLE The owner, being the sole proprietor, invested a total of 50,000 pounds to cover for the start up expenses and the required value amount for a company to be able to open a corporate bank account, necessary for related transactions. VII. FURTHER FINANCE REQUIRED The company wishes to thrive on its own, and therefore, has planned carefully on the cash flow for the first year. Having identified the sources of income and items that it projects to spend for, CFL is confident that it can achieve its financial objectives at the end of the year. The basic source of its operational budget would be from the targeted sales to be garnered from the various projects it would implement starting second month of operations. VIII. POTENTIAL SOURCES OF FINANCE As a fall back, CFL is looking at getting the support of one local bank in case the need arises. However, due to its properly identified source of income, which is basically business-generated, CFL sees the least need for it to tap other resources in the next few months. As the financial plan has already been laid out, CFL shall adjust its operational costs accordingly in case there would be a budget deficit. IX. CHOSEN SOURCES OF FINANCE AND REASONS FOR CHOICE As mentioned, the business will thrive on its own, and there would only e two sources of financing, namely, the owner’s own investment and the income to be generated from the various projects that the firm would handle. The company will run basing on sole proprietorship and would only entail the help of a third-party agency in terms of financing as the need arises. X. FINANCIAL MONITORING PROCEDURES CFL would be hiring a third-party agency to handle its finance and book keeping requirements. This is an action in accordance to the law and to ensure that all financial activities are being properly monitored and handled by the designated team. The company shall adhere to its business plan marketing and financial-wise to ensure that the corporate goals are met. At the end of the first operational year, the owner shall review and analyze the actual cash flow to identify the strong and weak points as basis for improvement for the following year’s operations. Reference List Background Note: Cyprus. Retrieved November 27, 2007 from http://www.state.gov/r/pa/ei/bgn/5376.htm#econ Read More