Startup Expenses
Before the practice can function as a business providing architectural services there is various equipment and facilities are needed. These need to be paid for before the practice is actually trading, therefor requiring investment or loan. Some of the start up costs will be as follows:
Office Essential: Desks, seats, shelving, pin board, lights, storage, computers, laptops, projector, scanner, printer, plotter, server, storage server, scanning server, desk lamps, bins, telephones, mobiles, camera, SD cards, USB pens, laser measure, tape measures, desk organizers, hard hats, high visibility vests.
None Essential: Kettle, microwave, teapot, coffee pot, cups, mugs, glasses, plates, bowls, cutlery, coffee tea sugar jars, TV, sofa.
Software: AutoCAD, Revit, Rhino, Adobe, Outlook, CS6, Sketchup ProText: Approved Documents, Building Regulations, Local Planning Guidelines, Metric Handbook, Contracts
Profit and Loss
Once the financial estimations and predictions have been made for the first five years of trading for TDC, it can be seen at what point the practice is likely to breakeven from making loss to turning profits. The profit the company is expected to make is going to be reinvested into the business.
Response to market boom and downturn
To avoid financial collapse in the first years of trading, the design collective plan to follow closely the stock market, in particular companies such as Balfour Beatty. Following housing and construction companies will give a good market indication of how the construction sector is responding in the economical climate. Having good profit margins that have been predicted using the sales forecast and cash flow prediction will allow the firm to invest these profits back into the company. This will safe guard the practice from market downturn as loss in projects secured can be balanced with this money as oppose to start to make cuts. This money can also be used for the direct opposite response in the market such as a boom. If the firm needs to expand quickly or make new investments in equipment and staff, there will be sufficient funds to allow for this change.
S.W.O.T Analysis
Financial Management
Duties
My duties as a financial director for The Design Collective are providing financial advice and management for the practice to support clients and colleagues so that the practice and clients can make sound business decisions. Clear budgetary planning is also an essential job responsibility. These duties will be carried out by managing cash flow and making sales forecasts using the capital and running costs for the practice. The end goal is to make profits for re-investment and keep the practice growing and expanding. Future planning and marketing strategies can be used to safe guard the practice again changing market circumstances and allow the company to react positively to economic upturns and downturns.
Loans and Investment
After sales forecast and cash flow estimations have been made for the first five years of trading, The Design Collective reviewed what options there are for starting a small business. To cover slow income from the early stages of trading and to cover the startup costs expected the practice would need capital to begin. After research what grants and loans are available for a small business start up we have decided to use a bank loan and pursue a small business grant. Through the sales forecasting process it has been predicted how much loan will be needed. Working out what loan amount is needed, the monthly payback amount can then be implemented into the financial business plan.
Sales forecasting
The sales forecasting for The Design Collective is an important part for devising a business plan to fore sees if a business plan is viable. In order to understand if the work TDC will undertake to make profits and be worthwhile cash flow and sales forecasts predictions have to be made. By researching the construction and design industry and gaining an understanding of what the company’s capital expenditure and running costs will equate to, it is then possible to determine what income the business will be required to generate to turn profit.
Breakeven Graph
