Joe has taken his plan to the bank hoping to get a loan and overdraft to finance his new business. The bank has asked Joe to consider a best and worse case scenario and in particular, what the ‘breakeven’ is for the new business.
|Profit Projections:||Month 1||Month 2||Month 3||Month 4||Month 5||Month 6||Total|
|Wages & NI||£2,200||£2,200||£2,200||£2,200||£2,200||£2,200||£13,200|
Joe has based his sales on a price of £100 per unit; he buys them in for £40 so makes £60 ‘profit’ on every additional unit he sells.
But to sell more he will probably need an extra person on sales, and if he sells a lot more, then an extra person on packing and delivery, maybe an extra van, or even a bigger premises.