Attorney Employment Agency Business Plan

Legal Associates Temp Agency

Financial Plan

The following sections will outline financial assumption/projections.

7.1 Important Assumptions

The following table highlights some of the important financial assumptions for LATA.

General Assumptions
	Year 1	Year 2	Year 3
Plan Month	1	2	3
Current Interest Rate	10.00%	10.00%	10.00%
Long-term Interest Rate	10.00%	10.00%	10.00%
Tax Rate	25.42%	25.00%	25.42%
Other	0	0	0

7.2 Break-even Analysis

The Break-even Analysis table and chart below show the monthly break-even sales figure.

Attorney employment agency business plan, financial plan chart image

Break-even Analysis


Monthly Revenue Break-even	$13,525

Assumptions:
Average Percent Variable Cost	0%
Estimated Monthly Fixed Cost	$13,525

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss
	Year 1	Year 2	Year 3
Sales	$106,223	$219,461	$235,955
Direct Cost of Sales	$0	$0	$0
Other	$0	$0	$0
Total Cost of Sales	$0	$0	$0

Gross Margin	$106,223	$219,461	$235,955
Gross Margin %	100.00%	100.00%	100.00%


Expenses
Payroll	$115,680	$130,906	$141,500
Sales and Marketing and Other Expenses	$3,000	$16,600	$16,600
Depreciation	$1,668	$1,666	$1,666
Utilities	$600	$600	$600
Insurance	$6,000	$6,100	$6,200
Rent	$18,000	$19,000	$19,500
Payroll Taxes	$17,352	$19,636	$21,225
Other	$0	$0	$0

Total Operating Expenses	$162,300	$194,508	$207,291

Profit Before Interest and Taxes	($56,077)	$24,953	$28,664
EBITDA	($54,409)	$26,619	$30,330
Interest Expense	$650	$975	$325
Taxes Incurred	$0	$5,995	$7,203

Net Profit	($56,727)	$17,984	$21,136
Net Profit/Sales	-53.40%	8.19%	8.96%

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
	Year 1	Year 2	Year 3
Cash Received

Cash from Operations
Cash Sales	$0	$0	$0
Cash from Receivables	$69,063	$179,847	$230,185
Subtotal Cash from Operations	$69,063	$179,847	$230,185

Additional Cash Received
Sales Tax, VAT, HST/GST Received	$0	$0	$0
New Current Borrowing	$13,000	$0	$0
New Other Liabilities (interest-free)	$0	$0	$0
New Long-term Liabilities	$0	$0	$0
Sales of Other Current Assets	$0	$0	$0
Sales of Long-term Assets	$0	$0	$0
New Investment Received	$46,000	$0	$0
Subtotal Cash Received	$128,063	$179,847	$230,185

Expenditures	Year 1	Year 2	Year 3

Expenditures from Operations
Cash Spending	$115,680	$130,906	$141,500
Bill Payments	$41,696	$67,148	$71,427
Subtotal Spent on Operations	$157,376	$198,054	$212,927

Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out	$0	$0	$0
Principal Repayment of Current Borrowing	$0	$6,500	$6,500
Other Liabilities Principal Repayment	$0	$0	$0
Long-term Liabilities Principal Repayment	$0	$0	$0
Purchase Other Current Assets	$0	$0	$0
Purchase Long-term Assets	$0	$0	$0
Dividends	$0	$0	$0
Subtotal Cash Spent	$157,376	$204,554	$219,427

Net Cash Flow	($29,313)	($24,707)	$10,758
Cash Balance	$29,487	$4,780	$15,538

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
	Year 1	Year 2	Year 3
Assets

Current Assets
Cash	$29,487	$4,780	$15,538
Accounts Receivable	$37,160	$76,774	$82,544
Other Current Assets	$0	$0	$0
Total Current Assets	$66,647	$81,554	$98,082

Long-term Assets
Long-term Assets	$5,000	$5,000	$5,000
Accumulated Depreciation	$1,668	$3,334	$5,000
Total Long-term Assets	$3,332	$1,666	$0
Total Assets	$69,979	$83,220	$98,082

Liabilities and Capital	Year 1	Year 2	Year 3

Current Liabilities
Accounts Payable	$3,906	$5,663	$5,889
Current Borrowing	$13,000	$6,500	$0
Other Current Liabilities	$0	$0	$0
Subtotal Current Liabilities	$16,906	$12,163	$5,889

Long-term Liabilities	$0	$0	$0
Total Liabilities	$16,906	$12,163	$5,889

Paid-in Capital	$111,000	$111,000	$111,000
Retained Earnings	($1,200)	($57,927)	($39,943)
Earnings	($56,727)	$17,984	$21,136
Total Capital	$53,073	$71,057	$92,193
Total Liabilities and Capital	$69,979	$83,220	$98,082

Net Worth	$53,073	$71,057	$92,193

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the NAICS code 561310, Employment Placement Agencies, are shown for comparison.

Ratio Analysis
	Year 1	Year 2	Year 3	Industry Profile
Sales Growth	0.00%	106.60%	7.52%	11.37%

Percent of Total Assets
Accounts Receivable	53.10%	92.25%	84.16%	10.25%
Other Current Assets	0.00%	0.00%	0.00%	50.16%
Total Current Assets	95.24%	98.00%	100.00%	64.49%
Long-term Assets	4.76%	2.00%	0.00%	35.51%
Total Assets	100.00%	100.00%	100.00%	100.00%

Current Liabilities	24.16%	14.62%	6.00%	27.96%
Long-term Liabilities	0.00%	0.00%	0.00%	26.35%
Total Liabilities	24.16%	14.62%	6.00%	54.31%
Net Worth	75.84%	85.38%	94.00%	45.69%

Percent of Sales
Sales	100.00%	100.00%	100.00%	100.00%
Gross Margin	100.00%	100.00%	100.00%	100.00%
Selling, General & Administrative Expenses	153.40%	91.81%	90.99%	67.20%
Advertising Expenses	1.69%	0.18%	0.17%	1.87%
Profit Before Interest and Taxes	-52.79%	11.37%	12.15%	3.25%

Main Ratios
Current	3.94	6.70	16.65	1.57
Quick	3.94	6.70	16.65	1.10
Total Debt to Total Assets	24.16%	14.62%	6.00%	63.70%
Pre-tax Return on Net Worth	-106.88%	33.75%	30.74%	6.19%
Pre-tax Return on Assets	-81.06%	28.81%	28.89%	17.06%

Additional Ratios	Year 1	Year 2	Year 3
Net Profit Margin	-53.40%	8.19%	8.96%	n.a
Return on Equity	-106.88%	25.31%	22.93%	n.a

Activity Ratios
Accounts Receivable Turnover	2.86	2.86	2.86	n.a
Collection Days	54	95	123	n.a
Accounts Payable Turnover	11.68	12.17	12.17	n.a
Payment Days	27	25	29	n.a
Total Asset Turnover	1.52	2.64	2.41	n.a

Debt Ratios
Debt to Net Worth	0.32	0.17	0.06	n.a
Current Liab. to Liab.	1.00	1.00	1.00	n.a

Liquidity Ratios
Net Working Capital	$49,741	$69,391	$92,193	n.a
Interest Coverage	-86.27	25.59	88.20	n.a

Additional Ratios
Assets to Sales	0.66	0.38	0.42	n.a
Current Debt/Total Assets	24%	15%	6%	n.a
Acid Test	1.74	0.39	2.64	n.a
Sales/Net Worth	2.00	3.09	2.56	n.a
Dividend Payout	0.00	0.00	0.00	n.a