Running head: BUSINESS PLAN FOR TWO PATHS ALONG CONSISTENCY 1

Commented [Office1]:

Business Plan for Two Paths Along Consistency Assignment Five

Kellan D. Bowman

Writing Partner: Lauri Blair

Brandman University
Business Plan For Two Paths Along Consistency 2

Financial Plan

Establishing the financial plan for Two Paths Along Consistency is critical to any

sustainable operations the organization wishes to conduct. Accurately assessing the risk and

associated mitigations will be instrumental in planning for the company. The financial analysis

of documents including the cash flow, balance sheet and breakeven documents will help

understand the economic viability of the organization. Utilizing the six steps of economic Commented [Office2]: I’m not sure your utilization of
economic viability is utilized clearly; possibly will outline
the economic viability of the organization. “proves to be
decision making will help determine how the business reached the selected actions taken in this economically feasible”

plan.

Risk

The founders identified several potential risks associated with the establishment of this

organization. The first of these risks involve the projected growth of the company. If the

company is unable to obtain the new customers as required in order to support operations, then it

will be difficult to grow the business as listed in the other sections of this business plan (Swink, Commented [Office3]: I understand this is a reasonable
issue, but your speaking as if your target customer has not be
identified, or as if your are not confident that the target
Melnyk, Cooper & Hartley, 2014, p. 565). One way the company is mitigating this, is to keep customer exist. I would be careful with how this is written.

most of the costs for running the organization low. In doing so, Two Paths Along Consistency

will be able to quickly change strategies as required to accommodate the actual reality.

However, if individuals do not even desire the service as listed, it will be a challenge to continue.

If “customers have credible options, they are less dependent; they have the power to bargain

away the profits a company earns” (Marcus, 2011, p. 29).

In tandem with this risk, is an extra test for the company of being in a field where there a

so many options available to consumers. The options to deal with personal financial challenges Commented [Office4]: This is complex to read. Remove “of
being”
vary widely and all compete with the services offered by Two Paths Along Consistency. Some

of these options include those listed previously with GreenPath, but also money managing
Business Plan For Two Paths Along Consistency 3

programs like Quicken or Mint, banks and investment houses, and a variety of other profit and

nonprofit organizations that seek to assist individuals. The founders will seek to set this new

company apart from those options by creating a personalized service that directly engages with

individuals and families on a personal level. This increased business intelligence will continue Commented [Office5]: On a personal level, how? Birthday
cards, birth cards, learning customers, personal data
worksheet ??How will you build relationships and
to pay benefits for the long term growth of the organization. “Business intelligence is an personalize communication to each client?

umbrella term that combines architectures, tools, databases, applications, and methodologies”

(Turban, Leidner, McLean, & Wetherbe, 2008, p. 429). The ability to sympathize with and serve

the individual customer’s needs will create goodwill between the company and the community,

helping to strengthen the fundamentals from the mission and vision statements espoused in the

management and operations sections of the business plan.

There is also risk in how the organization will conduct a strictly cash operations to begin.

This is risky on several fronts including, turning away, inconveniencing or alienating a portion of

the customer base. This will be mitigated by ensuring open and honest dialogue with the

customer about the cash options is articulated upfront. Explaining to the customer the standard

that is in place will help alleviate some of the concerns. Operating on a strictly case basis also

presents a problem with the amount of cash the company has on its physical location. This risk

will be limited with nightly deposits and lowering the available cash on site as quickly as

possible. Additionally, as the organization grows there will be the potential to migrate to other

forms of payment in the future.

Another potential risk is associated with operations is related to the location and the

target market. Since there will be a focus on military members, if there are base relocations and

service members leave the area, the customer base for the company will dwindle. The business Commented [Office6]:
Commented [Office7]: Since there will be a focus on
will mitigate this situation by initially continuing to pursue other community members and grow military members, as service members relocate and transition
to different areas, the customer base for the company will
fluctuate.
Business Plan For Two Paths Along Consistency 4

this group if there is a change. Also ensuring the team members are actively trained and

supported to notice this risk and potential opportunities to expand the organization. If employees

feel like they are part of a family, instead of a business, then they will be more dedicated to the

mission driven company (Russo, 2010). This potential risk will also dramatically impact the rest

of the community and can present a daunting challenge to all, however there is also extreme

benefits to be had if Two Paths Along Consistency is able to assist in this potential transition

period.

Financial Plan

Several of the initial documents, startup expenses and profit and loss projection for Commented [Office8]: I like this section !!!

twelve months, regarding the financial plan were already developed in the startup section of this

business plan. Amplification on this portion is crucial to understanding the long term viability of

the organization. As such, the development of the cash flow projection and projected balance

sheet provide these snap shots to show the capabilities of Two Paths Along Consistency to

project positive growth and an excellent business model.

The cash flow projection in Figure 9-1 identifies the organization will be profitable in the

first year. If this projection holds true the founder will remove the initial investment of fifty

thousand dollars of owner’s capital at the end of the first year. The forward thinking analysis

and planning by the founder will allow for evaluation of how competitors adapt and also create a

financial cushion to set the stage for future change (Marcus, 2011, p. 195). Even with this

withdrawal the organization should still maintain nearly forty thousand dollars in operating cash

at the end of the first year of operations.

Business Plan For Two Paths Along Consistency 5

Figure 9-1. Cash Flow Projection Spreadsheet

Cash Flow (12 months) Two Paths Along Consistency Fiscal Year Begins: Oct-19
Pre-Startup Total Item
Oct-19 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20
EST EST
Cash on Hand (beginning of
50,000 41,522 40,144 38,766 37,387 40,149 42,911 45,673 52,655 59,637 66,619 73,601 80,582 41,522
month)

CASH RECEIPTS
Cash Sales 6,800 6,800 6,800 10,960 10,960 10,960 15,200 15,200 15,200 15,200 15,200 15,200 144,480

Collections fm CR accounts

Loan/ other cash inj.

TOTAL CASH RECEIPTS 0 6,800 6,800 6,800 10,960 10,960 10,960 15,200 15,200 15,200 15,200 15,200 15,200 144,480
Total Cash Available (before
50,000 48,322 46,944 45,566 48,347 51,109 53,871 60,873 67,855 74,837 81,819 88,801 95,782 186,002
cash out)

CASH PAID OUT

Salary expenses 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 6,250 75,000

Payroll expenses 478 478 478 478 478 478 478 478 478 478 478 478 478 5,738

401K/SEP Options 313 313 313 313 313 313 313 313 313 313 313 313 313 3,756

Outside services 0

Supplies (office and operating) 50 50 50 50 50 50 50 50 50 50 50 50 50 600

Repairs and maintenance 0

Advertising 0

Car, delivery and travel 50 50 50 50 70 70 70 90 90 90 90 90 90 900

Accounting and legal 500 500 500 500 500 500 500 500 500 500 500 500 500 6,000

Rent 0

Telephone 10 10 10 10 10 10 10 10 10 10 10 10 10 120

Internet 50 50 50 50 50 50 50 50 50 50 50 50 50 600

Website 10 10 10 10 10 10 10 10 10 10 10 10 10 120

Utilities 100 100 100 100 100 100 100 100 100 100 100 100 100 1,200

Insurance 167 167 167 167 167 167 167 167 167 167 167 167 167 2,004

Taxes (real estate, etc.) 0

Interest 0

Licenses/Certifications/Training 100 100 100 100 100 100 100 100 100 100 100 100 100 1,200

Miscellaneous 0

SUBTOTAL 8,078 8,078 8,078 8,078 8,098 8,098 8,098 8,118 8,118 8,118 8,118 8,118 8,118 97,238

Reserve and/or Escrow 400 100 100 100 100 100 100 100 100 100 100 100 100 1,200

Ow ners' Withdraw al 50,000 50,000

TOTAL CASH PAID OUT 8,478 8,178 8,178 8,178 8,198 8,198 8,198 8,218 8,218 8,218 8,218 8,218 58,218 148,438

Cash Position (end of month) 41,522 40,144 38,766 37,387 40,149 42,911 45,673 52,655 59,637 66,619 73,601 80,582 37,564 37,564

ESSENTIAL OPERATING DATA (non cash flow information)

Sales Volume (dollars) 6,800 6,800 6,800 10,960 10,960 10,960 15,200 15,200 15,200 15,200 15,200 15,200 144,480

Accounts Receivable

Bad Debt (end of month)

Inventory on hand (eom)

Accounts Payable (eom)

Depreciation

For the projected balance sheet for the company will be able to accumulate nearly forty

thousand dollars in cash. The company will also build up goodwill with its customer base and

establish a value of one month’s worth of sales as a baseline for goodwill estimates. The
Business Plan For Two Paths Along Consistency 6

goodwill of the company is higher than the current assets because of the development of the

business (Berk & DeMarzo, 2014, p. 25). This estimate is based on the future value of the

organization and ability to establish a solid customer base that will return for business and also

advertise to other potential consumers. The beginning of this balance sheet includes the capital

the founder used to finance operations, however this will be returned at the end of the first year

because of the projected sales revenue.

Figure 9-2. Balance Sheet Projected Spreadsheet

Balance Sheet (Projected)

Two Paths Along Consistency

Beginning Projected
as of 10/01/2019 as of 09/30/2020
Assets

Current Assets
Cash in bank $ 37,564
Accounts receivable - -
Inventory - -
Prepaid expenses - -
Other current assets - -
Total Current Assets $ - $ 37,564

Fixed Assets
Machinery & equipment $ - $ -
(LESS accumulated
depreciation on all fixed assets) - -
Total Fixed Assets (net of
depreciation) $ - $ -

Other Assets
Goodwill - 15,200
Other - -
Total Other Assets $ - $ 15,200

TOTAL Assets $ - $ 52,764

Liabilities and Equity

Current Liabilities
Accounts payable $ - $ -
Interest payable - -
Business Plan For Two Paths Along Consistency 7

Taxes payable - -
Other current liabilities - -
Total Current Liabilities $ - $ -

Long-term Debt
Bank loans payable $ - $ -
Notes payable to stockholders - -
Total Long-term Debt $ - $ -

Total Liabilities $ - $ -

Owners' Equity
Invested capital $ 50,000
Retained earnings - beginning - -
Retained earnings - current - -
Total Owners' Equity $ 50,000 $ -

Total Liabilities & Equity $ 50,000 $ -

Breakeven Analysis

Two Paths Along Consistency’s breakeven analysis dictates the company will be able to

provide services to customers and become profitable at slightly under one hundred thousand

dollars in sales. This figure is important because the company can provide a significant portion

of the capital required to operate from the founder’s initial investment and quickly turn it around

to provide a solid revenue stream. Another way to calculate similar information is to use the

company’s payback period, which equals the investment required divided by net annual cash

inflow (Brewer, Garrison & Noreen, 2008, p. 509). For the company this equals less than five

months. Both of these figures dictate the investment appears to be sound for the founder. As

noted in the operations and startup sections of the business plan, initially the company will have

low variable costs, under one percent of expenses, associated with the services provided. This

will increase at a later date when the company will have to higher more financial managers to

deal with the influx of customers as growth occurs.

Business Plan For Two Paths Along Consistency 8

Figure 9-2. Break-Even Analysis Spreadsheet

Break-Even Analysis
Two Paths Along Consistency

Cost Description Fixed Costs ($) Variable Expenses (%)

Salaries (includes payroll taxes) 84,494 0.0
Supplies 600 0.0
Advertising - 0.0
Car, delivery and travel - 0.70
Legal 6,000 0.0
Rent - 0.0
Telephone 120 0.0
Utilities 1,200 0.0
Insurance 2,004 0.0
Taxes (Real estate, etc.) - 0.0
Licenses 1,200 0.0
Internet 600 0.0
Website 120 0.0
Other expenses - 0.0
Miscellaneous expenses - 0.0

Total Fixed Expenses $ 96,338

Total Variable Expenses 0.7%
Breakeven Sales level = $ 97,017
Commented [Office9]: I noticed you didn’t add a
advertising nor miscellaneous cost, was there a reason?

Steps of Decision Making

In identifying with Samuelson and Marks’ (2012) six steps of managerial decision

making process, Two Paths Along Consistency decision making process can be applied to how

the organization made economic choices. These directly impact each stage of development for

the company and also include options for how to field the growth and direction of the

organization. “The world simply can’t be made sense of, facts can’t be organized, unless you

have a mental model to begin with. That theory does not have to be the right one” (Hampen-

Turner as cited by Bolman & Deal, 2008, p. 10). The choices available are applicable to the
Business Plan For Two Paths Along Consistency 9

understanding of how to synthesize the change process that occurs prior to the organization’s

conception, development and maturation.

Define the problem. “A key part of problem definition involves identifying the context”

(Samuelson & Marks, 2012, p. 7). The problem and first step for the company is to come up

with a way to improve the financial knowledge of individuals and families in a community. At

the same time the organization has to be profitable in order to sustain operations. The context of

the choice revolves around economic impact a families purchasing and investing practices, and

how this influences their lives. The decision maker for Two Paths Along Consistency will be the

founder and as the organization grows the advisory board will influence choices as well.

Determine the objective. The founders goal is to create opportunities to improve

communities from within by improving this financial knowledge for families and individuals.

The company will be created to encourage sustainability of communities over the profits of the

company as research shows companies that value improving brand image through sustainability,

improve their revenue (Farver, 2013, p. 36). An outcome that fails to improve the financial

viability of households, but reaps profits for the organization will be considered an unsuccessful

venture.

Explore the alternatives. This step involved considering different ways the organization

could create improved options for the customers, company, and the founder. For customers there

are alternatives to receive the financial services from, as well as different pricing schemes and

services provided by Two Paths Along Consistency. For the company, the alternatives lay along

the services and pricing provided, but also with how the organization approaches customers and

employees. “Most managerial decisions involve more than a once-and-for-all choice from

among a set of options” (Samuelson & Marks, 2012, p. 9), which impacts the company as well as
Business Plan For Two Paths Along Consistency 10

the founder. The founder has a variety of options to fund the company, align with other

organizations, or create a different bedrock of circumstances to attack the problem of personal

financial struggles for community members.

Predict the consequences. The consequences associated with all of these options vary

wildly for the company. By conducting accurate market research, analyzing financial

documentation, and creating options to adapt, the company will be able to predict and partake on

the selected path. Including the developed models and documentation in the feedback process in

the future can ensure the company can relook at options available to improve the business or take

it in a different direction. Ensuring this data and projections are not wildly optimistic or skewed

positively can help balance out options that are more probable. “If a distribution is

nonsymmetrical, or skewed, the relationship among the” (Lind, Marchal & Wathen, 2008, p. 67)

variables changes disproportionally.

Make a choice. The preferred course of action was to begin the process of helping

people in incremental steps. This would slowly develop the services available and also the

customer base for support. The invested capital by the founder will create options for this

process to be rolled out slowly and with flexibility. Limiting the customer growth to ensure the

company can accurate achieve the desired status of putting the customers and community

members first will ensure a stable level of interactions between both parties.

Perform sensitivity analysis. “The competition never lets up, and internal lethargy

stands in the way of change” (Marcus, 2011, p. 185). By ensuring the organization continues to

evaluate challenges of the competition and options available in the market, Two Paths Along

Consistency will be able to accurately evaluate opportunities as they arise. Focusing on differing
Business Plan For Two Paths Along Consistency 11

potential conditions that may change the location, market, or company can increase the financial

viability of the company and the members they serve.

Business Plan For Two Paths Along Consistency 12

References

Berk, J., & DeMarzo, P. (2014). Corporate finance: The core (3rd ed.). Boston, MA: Pearson

Education.

Bolman, L. & Deal, T. (2008). Reframing organizations: Artisy, choice, and leadership (4th ed.).

San Francisco, CA: Jossey-Bass.

Brewer, P., Garrison, R., & Noreen, E. (2008). Introduction to managerial accounting (4th ed.).

New York, NY: McGraw-Hill.

Farver, S. (2013). Mainstreaming corporate sustainability. Using proven tools to promote

business success. Cotati, CA: GreenFix, LLC.

Lind, D., Marchal, W., Wathen, S. (2008). Elementary statistics for business (13th ed.). New

York, NY: McGraw-Hill.

Marcus, A. (2011). Management Strategy: Achieving sustained competitive advantage. New

York: McGraw-Hill Irwin Publishing.

Russo, M. (2010). Companies on a mission: Entrepreneurial strategies for growing, sustainably,

responsibly, and profitably. Stanford, CA: Stanford University Press.

Samuelson, W. & Marks, S. (2012). Managerial economics (7th ed.). Hoboken, NJ: John Wiley

& Sons, Inc.

http://library.wub.edu.bd/assets/images/repository/Managerial_Economics.pdf

Swink, M., Melnyk, S., Cooper, M., & Hartley, J. (2014). Managing operations: Across the

supply chain (2nd ed.). New York, NY: McGraw-Hill.

Turban, E., Leidner, D., McLean, E., & Wetherbe, J. (2008). Information technology for

management: Transforming organizations in the digital economy (6th ed.). Danvers, MA:

John Wiley & Sons, Inc.