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Ingenious Africa Media Sample Business
                        Plan
 

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INGENIOUS AFRICA MEDIA
ADVERTISING AND MARKETING BUSINESS PLAN 




Sample business plan
Current page: 26
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14.    Financial Plan
Management believes that the initial funding of R535,000 will be adequate to carry the entity through its initial profitability.  The entity anticipates being able to sustain a gross margin in the 60% range which exceeds the industry average. Beginning in its second year, Ingenious Africa Media will have a bottom line net income of approximately 5% to 6% of sales. Management has taken what it believes to be a reasonable approach in formulating its pro forma financials – no additional financing is shown 5 year financial projections and lease financing is not proposed as an option.

14.1    Assumptions underlying the financial projections

Item

Assumption

Business days per week

5 days

Working days per month

20 days

Depreciation

Depreciation is calculated on all fixed and capital assets assuming five-year lives and straight line computation

Receivables

Receivables are 30 days in duration

Payables

Payables are 45 days in duration

Interest earned

Interest is earned at 6% per annum

Interest paid

Interest is paid at 16% per annum

Total funding required

R535,000

Capital expenditure (CAPEX)

R385,000

Working capital requirements

R150,000

Bank overdraft

R50,000

Owner contribution

Founders will contribute R100,000 cash to Ingenious Africa Media in month one

Bank loan

R385,000

Proposed security

Assets of the business will be used as collateral

Loan period

5 Years

Bank overdraft facility period

12 months

Tax rate

28%




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