1.8 Projections
Explanation
Describe your expectations for profit (or loss) over the five year planning period. Be sure to explain when you will start operating at a profit, when you expect to reach a break even point and what the profit margins will be following the break even point. If you are proposing a capital investment, explain your financial needs and how the investor can expect to achieve a return on their investment.
Sample from CitiLoc, Inc.
There will be no revenue generated in the first year which will be dedicated to developing the web site and creating the data base. We expect to achieve break even cash flow by the middle of year two with a positive cash flow and a profit by the end of that year. Year three will see a major increase in revenue, a complete recovery of our investment and positive retained earnings at year end.
Years four and five will result in revenues of $5,485,000 and $7,885,000 respectively with after tax profits of $2,793,000 and $4,368,000. Revenues per employee will approach $225,000 by year five.
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