Sales projections and what if scenarios – remember sales drive everything. When projecting sales, you may want to consider doing high, low, and medium sales projections. This will al
Please fix and add:
For this part, I expect to see the following financial information:
1. Sales projections and what if scenarios – remember sales drive everything. When projecting sales, you may want to consider doing high, low, and medium sales projections. This will allow you to make plans for your expenses and revenues based on various scenarios. What if salaries increased by 10 percent? What if rent could be reduced by 2 percent? What if workers’ compensation and other insurance increased by 3 percent? What if the cost of goods sold increased by 5 percent due to increased freight charges? You get the idea.
2. Income Statement and Cash-flow projections – income statement shows when you are going to make profit and cash-flow projections show whether you can pay all your bills on time and when you'd need more cash to keep going. The key to remember here is Cash is King and if you run out of cash you run out of business, hence the importance of providing cash-flow projections.
3. Balance Sheet – this document shows how much you own and how much you owe. In other words, listing all the assets that have money value minus liabilities (money you owe to banks or creditors) equals your net worth value, or as we call it equity.
Highly recommended but not required
1. Break-even analysis – this will show you for how long you will stay in the red, and after that point, when you will be in the green or start making money. Very useful tool for start-ups.
2. Financial Ratio – this tool will show you how your business is doing compared to other businesses in the same industry. If you are going to ask the bank or investors for a loan to start your business, then they will ask you for financial ratios to calculate the risk for lending you money.
One very good resource to help you with these financial documents is BizStats.com
Business Plan
Business Plan
Francisco Leon
Grantham University
BUS499 Business Policy and Strategy
Instructor: Elhan Durguti
Due Date:05/30/2023
NexGen Inc. Financial Plan
NextGen Inc is a multinational enterprise specializing in Artificial Intelligence-driven solutions, encompassing predictive analytics and workflow automation, delivered through its hardware, software, and consultancy offerings. The AI solutions market is undergoing substantial expansion, primarily due to the escalating need for sophisticated data analytics and automation technologies in diverse sectors due to its extensive proficiency in artificial intelligence, robust industry connections, and customized customer-centric strategy. Therefore, NextGen Inc is favorably positioned to leverage this opportunity (NexGen, 2022). This paper aims to establish the enterprise's feasibility and provide a rationale for securing financial resources to facilitate its development and enlargement objectives.
Financial plan
To establish the feasibility of the enterprise and substantiate the requirement for financial backing, I have formulated a financial plan that encompasses financial projections and justification. The financial plan is a crucial tool for decision-making and will help ensure the entity's financial sustainability. Furthermore, it is a comprehensive strategy that outlines the projected financial performance of an entity over a specified period. It typically includes revenue and expense projections, cash flow analysis, and balance sheet forecasts.
Form of Business
The primary objective of NextGen, a company operating under the legal structure of a limited liability company, is to offer services in technology, software, and consulting, with a particular emphasis on solutions that incorporate artificial intelligence (AI). NextGen will function as a limited liability company (LLC) as its chosen business structure. This organizational framework affords the advantages of restricted liability to proprietors while providing maneuverability regarding administration and tax implications (NexGen, 2022).
Projections for Income, Expenses, and Sources of Funds.
The projections have been formulated considering industry research, past trends, and pragmatic assumptions. The potential expansion of the AI market, the rising need for predictive analytics and workflow automation, and the distinctive capability to deliver customized solutions have been duly considered.
Income projections
|
Year |
Projected Income |
|
1st Year |
$2,500,000. |
|
2nd Year |
$4,000,000 |
|
3rd Year |
$6,000,000 |
Expenses Projections
|
Year |
Projected Expenses |
|
1st Year |
$1,800,000. |
|
2nd Year |
$3,200,000 |
|
3rd Year |
$4,800,000 |
The funding requirements of NextGen are expected to vary as the organization expands and progresses through various developmental phases. These funding sources will be subject to change accordingly. At the outset, we aim to secure $2,000,000 as initial capital to lay the foundation of our infrastructure, recruit essential personnel, and formulate our actual products and services.
Our strategy involves targeting venture capitalists and angel investors focusing on financing nascent technology startups. We intend to pursue funding from diverse sources to secure the necessary capital for our startup expenses and initial undertakings. Furthermore, we will investigate the feasibility of crowdfunding and pursuing loans from banking and other financial establishments.
As the organization experiences growth and expansion, it is expected that there will be a requirement for supplementary financial resources. The company intends to pursue equity and debt financing to augment its capital and evaluate prospects for strategic partnerships with other industry entities. Based on our growth and expansion plans, an additional $3 million in funding will be necessary over the next three years.
The process of assigning and distributing expenses incurred during the initial stages of a business venture is commonly referred to as the allocation of startup costs. The allocation for infrastructure and equipment amounts to $500,000. The allocated budget for research and development amounts to $800,000. Furthermore, the aggregate income derived from promotional and commercial endeavors is $300,000. The aggregate cost associated with legal and administrative functions is $200,000. The contingency amount specified is $200,000. Currently, NextGen has obtained $500,000 in capital via private investments. We are engaged in advanced negotiations with prospective venture capital firms and angel investors who have demonstrated a keen interest in providing financial backing for our cutting-edge AI-driven solutions.
Predictions on Industry and Historical Trends
According to a recent report by Statista (2021), the worldwide software industry is projected to experience a 12% growth rate between 2021 and 2026. In 2020, the worldwide software market was valued at $640 billion and is projected to reach $1.3 trillion by 2026. According to Statista's projections for 2021, the anticipated figure for software sales is estimated to be approximately US$659 billion. The innovative software solutions NexGen Inc Technologies offers enable them to benefit from this expansion strategically.
The justification for the projections is grounded in a comprehensive market analysis and a deep comprehension of the demands of the customer base. Our research has encompassed a comprehensive analysis of the artificial intelligence (AI) sector, comprising its expansion rate, market magnitude, and nascent developments. The financial performance of analogous firms has been analyzed to obtain valuable insights into their revenue streams and cost structures. By utilizing specialized knowledge and synchronizing products and services with the market's needs, our estimations are both practical and attainable.
Rationale for Projections
The projections are based on thorough market analysis and an understanding of customer needs. Our research endeavors have encompassed a comprehensive analysis of the artificial intelligence sector, comprising its expansion rate, the market's magnitude, and nascent developments. The financial performance of analogous firms has been analyzed to obtain insights into their revenue streams and cost structures. We are confident that our projections are both attainable and pragmatic, as we have utilized our specialized knowledge and synchronized our services with current market needs.
The initial expenses necessary for the establishment of NextGen have been approximated as startup costs. The expenses above include establishing office space, technological infrastructure, software creation, preliminary marketing efforts, legal and administrative charges, and remuneration for personnel. The calculations utilized in this study are founded upon established industry benchmarks and quotations procured from various suppliers and service providers.
The allocation of startup funds will be executed strategically to facilitate the progression of our proposed business. Much of our resources will be allocated to research and development to improve our AI solutions and create novel products. Furthermore, a budget segment will be designated for marketing and sales initiatives to raise awareness, generate leads, and acquire customers (NexGen, 2022). Fund funds for operational expenses, including employee recruitment, training, and administrative expenditures, will also be allocated.
Current Capital and Funding Sources
NextGen has secured initial capital through the contributions of the company's founders and early-stage investors. NextGen Venture Partners just raised a $22 million fund from 83 investors (Loizos, 2017). The injection of capital is allocated towards covering the preliminary expenses associated with commencing operations and furnishing the necessary funds for sustaining the initial phases of its business activities. We are currently investigating potential avenues for securing supplementary funding, including but not limited to venture capital firms, strategic partnerships, and government grants.
The financial projections, startup costs, and funding estimates have been thoroughly documented and calculated. We have generated exhaustive financial reports encompassing income statements, balance sheets, and cash flow statements. The previous assertions are buttressed by accurate computations and presumptions, guaranteeing lucidity and precision in our fiscal strategy.
Continuous Improvement System
The Continuous Improvement System is a structured approach aimed at improving and refining organizational processes and procedures gradually and continuously. NextGen recognizes the importance of continuous improvement in quality management. The organization has adopted a comprehensive approach incorporating various methodologies, including Six Sigma and Total Quality Management (TQM), to ensure its products and services' highest possible quality standard. Furthermore, the continuous improvement system is centered on a set of fundamental principles, on the integration of Six Sigma principles aims to reduce defects, enhance efficiency, and improve customer satisfaction (Burlingame, 2022). The methodology entails a meticulous examination of data, optimization of processes, and utilization of statistical methods to facilitate enhancements in quality throughout our operations.
Total Quality Management (TQM) is the fundamental basis of our quality management system. The notion encompasses a thorough approach to satisfying customer demands, continuous improvement, and the active involvement of staff (Burlingame, 2022). By fostering a culture that prioritizes quality throughout the organization, we ensure that all aspects of our enterprise are aligned with delivering exceptional solutions.
Implementing continuous process monitoring is facilitated by utilizing resilient monitoring systems that track essential performance metrics, commonly called key performance indicators (KPIs). This approach enables the identification of areas that necessitate improvement. Conducting periodic evaluations and appraisals allows for the timely identification and correction of any deviations from the established standards of quality.
NextGen has pledged to exceed customer expectations by employing continuous improvement methodologies to provide products and services of exceptional quality. The organization maintains a culture prioritizing ongoing learning and adaptability while consistently striving to attain outstanding performance across all business operations.
In conclusion, NextGen is a technology and software consulting company specializing in AI-enabled solutions. Our revenue is anticipated to experience consistent growth in the upcoming three years as we prioritize establishing enduring partnerships with clients spanning diverse sectors. We have also outlined our startup costs and funding needs, including plans to raise additional capital as we grow and expand our operations.
References
Loizos, C. (2017, March 6). NextGen Venture Partners just raised a $22 million fund from 83 investors. TechCrunch. https://techcrunch.com/2017/03/03/nextgen-venture-partners-just-raised-a-22-million-fund-from-83-investors/
NexGen. (2022). NexGen About Us. NexGen Technologies, Inc. Retrieved April 21, 2023, from https://www.nexgeninc.com/about-us
Statista. (2021). Software – worldwide: Statista market forecast. Statista. Retrieved April 18, 2023, from https://www.statista.com/outlook/tmo/software/worldwide
Burlingame, E. (2022, October 25). Six Sigma vs. total Quality management: Compare differences. Project. https://project-management.com/six-sigma-vs-total-quality-management/
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