Practice Venture Worksheet FINANCIAL PLANNING AND FORECASTING TEMPLATE

Context

• Three students start a Mentor Connect company. It is an AI powered ecosystem connect app , and all interactions happen
online through its mobile app.
• The basic starting cost is the website design and development cost and the cost of office computers. We have considered a
fixed deposit of 6 months rentals as is the norm for office space. The cost of company registration is taken into account along
with professional consultation fees.
• The total startup investment is INR 10,00,000. Half of the amount is invested by founders and the other half is interest-free loan
from friends and family.
• The products being sold are ' One Hour of Mentoring 'for now. These are one on one sessions that are purchased in advance
and paid for by the Entrepreneur mentee , The standard size is a 10hr pack . Mentors pay a listing fee for being on the app ,
additional revenues by way of in-line app advertising and mentor connect event sponsorhips can be factored in at later stages .
For simplicity of understanding only revenues accruing from Mentoring pack sales is considered.

• COGS is INR 700. This includes the cost of INR 400 per hour being paid to the Mentor for the engagement.
• The selling price is at INR 1000. The major expenses are online marketing costs, digital support services , founder’s salary,
and early employees' salaries, and server costs.
•
• The founders work all by themselves till month 4, then they start adding employees. The total employee count at the end of the
year is 5. Not including the founders.

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Practice Venture Worksheet START-UP COSTS

Starting Costs

Startup Cost
₹0

Capital Work in Progress ( Fixed Asset )

₹0

Starting Operations ( Budgeted )

₹0

Start-up capital
₹0

Share Captial

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Practice Venture Worksheet COGS CALCULATOR

Variable Costs of Products

Raw material
Packaging
Labour cost

Cost of Goods Sold (COGS) Per Unit ₹0

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Sales Forecast
Jan Feb Mar Apr May Jun Jul
Product category
No of Units sold
Revenue 0 0 0 0 0 0 0
Price Per Unit
COGS 0 0 0 0 0 0 0
Cost Per Unit
Aug Sep Oct Nov Dec Total

0
0 0 0 0 0 0
#DIV/0!
0 0 0 0 0 0
#DIV/0!
Practice Venture Worksheet

Salaries

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Employee Salaries
Saylee - CEO

Suvendu - COO

Founder 3 - CMO

Emp 1

Emp 2

Emp 3

Emp 4

Emp 5
Total Salaries ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

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Practice Venture Worksheet PROFIT LOSS FORECAST

Profit & Loss Account ( Income Statement)

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Totals

Sales
Cash Sales ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

No. of Customers 0 0 0 0 0 0 0 0 0 0 0 0 0
Price Per Unit ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - #DIV/0!

Other Cash Receipts

Total Sales ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

COGS
Cost of Services ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

Cost Per Unit ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - #DIV/0!

Gross profit ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

Fixed Expenses
Salaries ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

Marketing and Promotion ₹ -

Digital Marketing ₹ -

Utilities (Electricity etc.) ₹ -

Customer Service ₹ -

Rent ₹ -
Total Expenses ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -

Result
Net Profit/Loss ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ - ₹ -
Gross Profit Margin
Net Profit Margin

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Practice Venture Worksheet CASH FLOW FORECAST

Cash flow forecast

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Starting Cash Position 0 0 0 0 0 0 0 0 0 0 0 0

Cash Inflows
Total Sales 0 0 0 0 0 0 0 0 0 0 0 0

Cash Outflows
Cost Of Goods Sold 0 0 0 0 0 0 0 0 0 0 0 0
Operating Expenses 0 0 0 0 0 0 0 0 0 0 0 0

New Fixed Assets Purchased

Loan Payments
Total 0 0 0 0 0 0 0 0 0 0 0 0

Result
Change during month 0 0 0 0 0 0 0 0 0 0 0 0
Closing cash position 0 0 0 0 0 0 0 0 0 0 0 0

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Practice Venture Worksheet BALANCE SHEET

Balance sheet forecast

The numbers reflected on this Balance Sheet are computed as of: As of Dec 31st

Assets ₹ 100,000
Current assets ₹ -
Cash in hand ₹ -
Petty cash ( cash lying in office )
Accounts Receivable ( Debtors )
Stock on hand (Inventory)
Other Assets
Fixed assets ₹ 100,000
Equipment for Quality Control ₹ -
Furniture ₹ 100,000
Capital Investment ( Startup Capital ) ₹ -

Liabilities ₹ -
Current liabilities ₹ -
Accounts payable ( Creditors )
Interest payable
Any Other Amounts Owed
Long-term liabilities ₹ -
Loans from Bank ₹ -
Loans from Friends and Family

Networth of the Promoters ₹ -

Reserves & Surplus ( Retained Earnings) ₹ -
Equity Share Capital ₹ -

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Practice Venture Worksheet BREAKEVEN ANALYSIS

Break-even analysis
Average sales price per unit
Average cost of each unit
Gross Profit Margin
Fixed costs for the year
Sales required to break even
Number of unit sales to break even
Gross Margin % of Sales
Gross Profit for the year
₹ - Breakeven Sales Level
₹ - The breakeven sales level is the number of units that must be sold in order to
break even. This means that revenues are equal to expenses. Any units sold
₹ - beyond this quantity will allow the company to generate profit.
One of the best uses of breakeven analysis is to play with various scenarios.
For instance, if you can reduce the cost of producing an item, what will be
the impact on how many units you need to sell. You can use many such
"what if" scenarios to arrive at the sales that your team can achieve.
₹ - Formula:

Total Sales for the year ₹ - Breakeven Point = Total Fixed Costs/(Gross Margin/Total Sales)
Contribution Margin #DIV/0!
Gross Margin/Total Sales 0%
Total Fixed Expenses
Operating Expenses ₹ -
Breakeven Sales (Annual)
Gross Margin % of Sales 0%

Total Fixed Expenses ₹ -

Yearly Breakeven Amount ₹ -
Monthly Breakeven Amount ₹ -

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 Year 1 Year 2 Year 3 Year 4
Number of sales 0 6 7 13
Value of each sale (Contribution) #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Price per unit #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Average Cost per unit #DIV/0! #DIV/0! #DIV/0! #DIV/0!
Total revenue ₹ - #DIV/0! #DIV/0! #DIV/0!
Gross Profit #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Capital costs
Land and building N.A. N.A. N.A. N.A.
Equipment
Product development costs
Others
Total

Expenses (Annual)
Salaries ₹ - ₹ - ₹ - ₹ -
Marketing and Promotion ₹ - ₹ - ₹ - ₹ -
Digital Marketing & Customer Services ₹ - ₹ - ₹ - ₹ -
Utilities (electricity etc.) ₹ - ₹ - ₹ - ₹ -
Office Supplies ₹ - ₹ - ₹ - ₹ -
Rent ₹ - ₹ - ₹ - ₹ -
Total ₹ - ₹ - ₹ - ₹ -

Earnings (EBITDA) #DIV/0! #DIV/0! #DIV/0! #DIV/0!

Year 5
-25
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!
#DIV/0!

N.A.

₹ -
₹ -
₹ -
₹ -
₹ -
₹ -
₹ -

#DIV/0!
 Year 2022 Unit
P & L/ unit Economics Year 2022 Step 1

Revenue
#DIV/0! CAC #DIV/0! Step 2
COGS #DIV/0! CLV #DIV/0!
Step 3
Gross Profit #DIV/0! ARPU ₹ - Step 4
Gross Profit Margin #DIV/0!
Operating Costs #DIV/0!
Operating Profit #DIV/0!

Assumptions
customers
at the
beginning -
customers
Churn rate #DIV/0!
at the end/
customers
at the
beginning

Customers at the
Beginning of month
Customers at the
End of month
APV = Average Purchase Value =
Total revenue/Total number of
purchases #DIV/0!
APF = Average Purchase Frequency =
Number of purchases/ Number of
unique customers 0.00
Average Customer Lifespan =
1/Churnrate #DIV/0!
CLV =APV*APF*ACL*GM #DIV/0!
Activity
Update the Financial Planning and Forecasting Template
Accounts payable (AP) is an accounting entry that represents a company's obligation to pay off a short-term debt to its creditors or suppliers. For
Accounts Payable
example, when you purchase raw materials from your suppliers but pay after a month on receiving the invoice.

When customers buy your products or services on credit and pay after a certain amount of time, after receiving the invoice, it is called accounts
receivable. For example, think of your Internet or mobile bills. You use the services, mostly for a month, and then pay the money after you receive the
invoice.
Accounts
Receivable
Accounts receivable refers to the outstanding invoices a company has or the money clients owe the company. The phrase refers to accounts a business
has a right to receive because it has delivered a product or service. Accounts receivable or receivables represent a line of credit extended by a company
and normally have terms that require payments due within a relatively short time period, ranging from a few days to a fiscal or calendar year.

A company's balance sheet statement consists of its assets, liabilities, and shareholders' equity. Assets are what your venture owns, including cash,
equipment, and money receivable from customers (accounts receivables). For a cash-based business (a coffee shop, food delivery service), there won’t
be receivables because you collect money before or as soon as the product or service is delivered.

But for businesses that involve invoicing a customer (for example, you build websites and the customer will pay after you deliver the website and they are
happy with it). When you have sent out invoices and you are waiting for customers to pay you, then they are called receivables.
Assets
Assets are divided into current assets (those which can be converted to cash in one year or less) and long-term assets, which will take you longer than
one year to convert into cash.

A fixed asset is bought by a business for production or supply of goods or services. Examples of fixed assets can be equipment or a delivery truck that a
business has bought for itself. The term "fixed" means that these assets will not be used up or sold within the accounting year. A fixed asset typically has
a physical form and is reported on the balance sheet as property, plant, and equipment (PP&E).

A balance sheet reports your venture’s assets, liabilities, and shareholders' equity at a specific point in time. It is a financial statement that provides a
snapshot of what your venture owns and owes as well as the amount invested by your shareholders.
Balance Sheet
It is a snapshot, representing the state of your venture's finances at a moment in time. The balance sheet is based on the fundamental equation: Assets
= Liabilities + Equity

When entrepreneurs start their businesses, even before they start selling any of their products or services, they will have certain expenses. These are
fixed costs (like rent, electricity, salaries, etc.). Their first focus will be to at least sell enough to cover such expenses. Then, thay can focus on how to sell
more to make profits.

A break-even analysis is a useful tool to find out at what point your venture, or a new product or service you are thinking of introducing, will be profitable.
Break-Even It’s a financial calculation used to calculate the number of units you need to sell to at least cover your costs. When you break even, you are neither losing
Analysis money nor making money but all your costs have been covered.

You can use the break-even analysis to also assess the viability of a new business idea. Performing such a break-even calculation can give your team a
general sense of whether the idea is worth pursuing. If your analysis suggests that you would have to sell 8,000 t-shirts before you can make a profit and
it will require an investment of $10,000 to get going, you can make a more informed decision regarding whether that is possible (can you sell that many t-
shirts or can you raise $10,000 from investors etc.). It helps evaluate different business ideas and pick the one that you are comfortable with.

During the day-to-day operations of your venture, cash comes in (when customers pay you) and goes out (when you pay others such as vendors or
suppliers). Cash flow is the amount of cash that your venture receives or pays out by the way of payment(s) to creditors. Successful entrepreneurs
always keep an eye on their cash flows. Looking at how much money is coming in or going out, also called the cash flow analysis, is a good tool to
analyze the liquidity position of your venture. It gives a snapshot of the amount of cash coming into the business, from where, and the amount flowing
Cash Flow out.

Cash Flow Statement is a financial statement that summarizes the amount of cash and cash equivalents entering and leaving a company. It measures
how well a company manages its cash position, meaning how well the company generates cash to pay its debt obligations and fund its operating
expenses and the growth of the company.

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