Financial Plan Final - Financial Plan Community State Farm...

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Financial Plan Community State Farm Insurance is an insurance brokerage company that sells State Farm Insurance Policies. Community State Farm Insurance was started with owner investments of $100,000 and a $100,000 small business loan from Bank of America. The company will employ 3 persons and the owner/agent. The owner-agent’s salary will rely greatly on their sales and the sales of the 2 other salespeople in the office. The sales forecast was based on an 89% cost for the insurance policies. This figure was derived from a guarantee of 8% in sales plus a 3% bonus. The owner-agent is also eligible for other bonuses; however these have not been factored into the sales forecasts. The sales forecast is largely based on the trends of the insurance industry, as well as the increased advertising campaigns that will support Community State Farm Insurance in its sales efforts. State Farm Insurance, which is the primary resale item of Community State Farm Insurance, has created a substantial television campaign to increase agent’s sales and to promote return customers. Based on our estimates of startup costs, expenses, and sales forecasts, Community State Farm should be profitable, even during year one. It is expected that Community State Farm Insurance should be able to increase sales at an aggressive rate of up to 7% for some of its ten product lines. By year 5, the return on assets should be 59%, far surpassing any investor’s expectations. Setup and Assumptions Setup and Assumptions COMPANY INFORMATION What is your company's name? Community State Farm Insurance What month will you officially start your company? March What year will you officially start your company? 2011 SALES ASSUMPTIONS The Worksheets can accommodate sales projections for up to 10 major product/service lines. How many major product/service lines do you plan to have for your business? Ten
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Most businesses sell at least some of their products/services on credit (e.g., "net 30" as opposed to cash). What percentage of your sales will be made on credit? 50.00% For sales you make on credit, what terms will you extend? In other words, how many days will pass from the date of sale to when you expect to be paid? 30 PERSONNEL ASSUMPTIONS Approximately how much do you expect to spend per year on benefits for each employee (medical insurance, etc.)? $7,920.00 With health insurance and other benefits costing more each year, your plan should account for annual increases. How much do you estimate your benefit costs will increase each year? 5.00% If you plan to increase salaries on an annual basis, how much to you plan to increase them by? 3.50% Approximately what percentage of each employee's salary or wages do you plan to set aside for payroll taxes? 15.00%
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Financial Plan Final - Financial Plan Community State Farm...

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