# P&L Forecast template



## MikeHag

A business plan can be extremely daunting, especially if you haven't completed one before. How do you get started? Everyone is different. Some prefer to start with the design, or style, or concept. Some prefer the marketing plan. Personally, coming from a financial background, I like to make sure it will work financially before I do much else. Linked below is an excel document (extracted from an even bigger document!) that might be useful to those starting a coffeeshop.

http://www.box.com/s/8bedyxxob5ftr5xleek2

Just a caveat. This is something that has evolved over months of planning for my own business. I certainly would not recommend trying to use it for your own business 'off the shelf'. The main takeaways should include the following:

SALES:

- Forecast your number of customers. Do this from the bottom up. That means (you guessed it) thinking about every hour of every day of every month. During that hour, how busy will you be? (also think Who will your customers be? What will they want to buy etc.) You can split this into sit in and takeaway.

- Forecast your average spend per customer. Don't know what this might be? Aah... add something to your task list... create a draft menu! Based upon that, calculate an average spend. £2? £3? £6? £7?

- The above two forecasts, multipled together, give you your sales forecast in £. (BUT don't forget... you need to consider VAT!)

COSTS:

- Based upon how many customers you will have each hour, how many staff will you need to handle that demand? Not sure? Go and sit in cafes and see how many staff they have versus customers. Everywhere is different, so try to pick places similar to what you have in mind for your own place.

- How much will you pay staff.

- Multiply the above two to get your staff costs. Add 20% for extra costs like National Insurance, Sick pay etc.

- Cost of Goods... This is a tricky one to calculate at first. Initially you might just want to calculate it as 25% of your sales... less for coffee. Bear this in mind later when you are sourcing your ingredients. Whatever they cost, you must be able to sell them for four times as much. (Over-simplification, but it gives you an idea.)

Your Sales minus the above costs gives you your Gross Profit. Try to make this at least 60%, and target getting up to the 80% mark... even higher if you are only selling drinks rather than also selling food.

OPERATING COSTS/OVERHEADS

- These are listed at the bottom right of the sheet. Rent should be 10% of sales (good) to 20% (not so good). Rates should be around 40% of rent.

Your Gross Profit minus your Overheads is your Net Profit. This is the figure that you will then pay tax on, leaving you the remaining profits to spend/re-invest/pay off debts!

There is an awful lot of research to do to be able to full in these figures and believe in them. It will take many MANY iterations. But at the end of it you will have either overcome any doubts as to whether you could make a living from it, or established that it wouldn't work and walked away before losing your shirt. AND you will probably have made a start on other parts of your business plan.

This is just one way. There are many others







Good luck!


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## wastedhours

That is epic, thank you. It's always good to take a step back and think about these sorts of things quantitatively and decide whether they really stack up as viable and not pipe-dreams. Great resource!


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## brickwicks

Thankyou, great resource to focus my mind just now.


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## remdex

Holy coffee bean Batman!! That's an amazing thing to do and give. Thanks very much.


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## MikeHag

You're welcome







Coincidentally I had a meeting today with a bank manager to finally open my business account. People do get turned down for an account even if they aren't looking for funding. Important to give the bank confidence in you. So it was good to be able to show a P&L forecast and explain that behind it are workings going down to every hour of every day. Account was opened there and then!


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## brickwicks

Congratulations! Let's hope it's catching... To the coffeemobile!


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## Obsy

Glad to hear the Banks are supporting businesses still. As an accountant, I love the excel doc and you've explained very well what to consider! Excellent resource Mike!


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