[Company Name]

Annual Operating Budget—Services

Model Inputs and General Information

Model key
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Italicized numbers in gray cells are calculations that generally should not be altered.
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General notes and assumptions

Document key financial planning assumptions here.

Key model inputs

Use this area to capture key general assumptions that carry throughout the model.

1. Fringe rate for labor 25%

2. Number of years for straight-line 5

depreciation

3. Tax rate 30%

4. Annual targeted revenue $270,000

per employee
[Company Name]
Annual Operating Budget—Services
[Date]

Business Unit Budgets—Service Operations, Sales and Marketing, and General and Administrative
A. Service operations
Service operations expenses Q1 Q2 Q3 Q4 Annual total Notes
Salaries $491,250 $543,750 $562,500 $592,500 $2,190,000 Total labor expense pulled from Row 35
Benefits (such as health care, training, 401(k)) 122,810 135,940 140,630 148,130 547,510 Rounded calculation based on input sheet rate
Net travel and entertainment 50,000 50,000 50,000 50,000 200,000
Supplies 25,000 25,000 25,000 25,000 100,000 Annual total should equal financial plan target
General and miscellaneous 25,000 25,000 25,000 25,000 100,000 Annual total should equal financial plan target
Total service operations expenses $714,060 $779,690 $803,130 $840,630 $3,137,510

Service operations headcount analysis by role Number of full-time employees (FTEs) Notes
Vice president 1.00 1.00 1.00 1.00 4.00
Director 2.00 3.00 3.00 4.00 12.00
Manager 5.00 6.00 6.00 6.00 23.00
Analyst 15.00 15.00 16.00 16.00 62.00
TBD 0.00 0.00 0.00 0.00 0.00
TBD 0.00 0.00 0.00 0.00 0.00
Total service operations headcount 23.00 25.00 26.00 27.00 101.00

Service operations labor expense breakdown by role Q1 Q2 Q3 Q4 Notes

Annual cost
Vice president $150,000 $37,500 $37,500 $37,500 $37,500 $150,000
Director 120,000 60,000 90,000 90,000 120,000 360,000
Manager 90,000 112,500 135,000 135,000 135,000 517,500
Analyst 75,000 281,250 281,250 300,000 300,000 1,162,500
TBD 0 0 0 0 0 0
TBD 0 0 0 0 0 0
Service total operations labor expense $491,250 $543,750 $562,500 $592,500 $2,190,000

B. Sales and marketing

Sales and marketing expenses Q1 Q2 Q3 Q4 Annual total Notes
Salaries $441,250 $441,250 $520,000 $550,000 $1,952,500
Benefits (such as health care, training, 401(k)) 110,310 110,310 130,000 137,500 488,120 Rounded calculation based on input sheet rate
Marketing programs 75,000 50,000 65,000 70,000 260,000
Public relations 15,000 15,000 15,000 15,000 60,000
Travel and entertainment 150,000 150,000 150,000 160,000 610,000
Supplies 25,000 25,000 25,000 25,000 100,000
General and miscellaneous 25,000 25,000 25,000 25,000 100,000
Total sales and marketing expenses $841,560 $816,560 $930,000 $982,500 $3,570,620

Sales and marketing headcount analysis by role Number of full-time employees (FTEs) Notes
Vice president 2.00 2.00 2.00 2.00 8.00
Director 2.00 2.00 2.00 3.00 9.00
Marketing managers 3.00 3.00 4.00 4.00 14.00
Marketing analysts 1.00 1.00 1.00 1.00 4.00
Business development managers 4.00 4.00 5.00 5.00 18.00
Customer service 4.00 4.00 5.00 5.00 18.00
TBD 0.00 0.00 0.00 0.00 0.00
Total sales and marketing headcount 16.00 16.00 19.00 20.00 71.00

Sales and marketing labor expense breakdown by role Q1 Q2 Q3 Q4 Notes

Annual cost
Vice president $150,000 $75,000 $75,000 $75,000 $75,000 $300,000
Director 120,000 60,000 60,000 60,000 90,000 270,000
Marketing managers 110,000 82,500 82,500 110,000 110,000 385,000
Marketing analysts 75,000 18,750 18,750 18,750 18,750 75,000
Business development managers 130,000 130,000 130,000 162,500 162,500 585,000
Customer service 75,000 75,000 75,000 93,750 93,750 337,500
TBD 0 0 0 0 0 0
Total sales and marketing labor expense $441,250 $441,250 $520,000 $550,000 $1,952,500

C. General and administrative

General and administrative expenses Q1 Q2 Q3 Q4 Annual total Notes
Salaries $581,250 $581,250 $581,250 $598,750 $2,342,500
Benefits (such as health care, training, 401(k)) 145,310 145,310 145,310 149,690 585,620 Rounded calculation based on input sheet rate
Depreciation 32,600 33,050 33,650 34,250 133,550
Rent 0 0 0 0 0
Insurance 12,000 12,000 12,000 12,000 48,000
Professional services (not including subcontractors) 10,000 20,000 10,000 10,000 50,000
Dues and subscriptions 5,000 5,000 5,000 5,000 20,000
Bank charges 2,000 2,000 2,000 2,000 8,000
Telephone 25,000 25,000 25,000 25,000 100,000
Recruiting 20,000 20,000 20,000 20,000 80,000
Postage 10,000 10,000 10,000 10,000 40,000
Interest expense 10,000 10,000 10,000 10,000 40,000
Nonbillable travel and entertainment 15,000 15,000 15,000 15,000 60,000
Other supplies 25,000 25,000 25,000 25,000 100,000
Miscellaneous 2,000 3,000 4,000 5,000 14,000
Total general and administrative expenses $895,160 $906,610 $898,210 $921,690 $3,621,670

General and administrative headcount analysis by role Number of full-time employees (FTEs) Notes
Chief executive officer 1.00 1.00 1.00 1.00 4.00
Rev: 2/12/2008
Chief financial officer 1.00 1.00 1.00 1.00 4.00
Chief information officer 1.00 1.00 1.00 1.00 4.00
 Vice president of human resources 1.00 1.00 1.00 1.00 4.00
Administrative staff 6.00 6.00 6.00 6.00 24.00
Human resources director 1.00 1.00 1.00 1.00 4.00
Human resources staff 3.00 3.00 3.00 3.00 12.00
Information technology director 1.00 1.00 1.00 1.00 4.00
Information technology manager 2.00 2.00 2.00 2.00 8.00
Information technology analyst 3.00 3.00 3.00 4.00 13.00
Finance director or controller 2.00 2.00 2.00 2.00 8.00
Finance and accounting 2.00 2.00 2.00 2.00 8.00
TBD 0.00 0.00 0.00 0.00 0.00
Total general and administrative headcount 24.00 24.00 24.00 25.00 97.00

General and administrative labor expense breakdown by role Q1 Q2 Q3 Q4 Notes

Annual cost
Chief executive officer $300,000 $75,000 $75,000 $75,000 $75,000 $300,000
Chief financial officer 225,000 56,250 56,250 56,250 56,250 225,000
Chief information officer 200,000 50,000 50,000 50,000 50,000 200,000
Vice president of human resources 160,000 40,000 40,000 40,000 40,000 160,000
Administrative staff 50,000 75,000 75,000 75,000 75,000 300,000
Human resources director 90,000 22,500 22,500 22,500 22,500 90,000
Human resources staff 60,000 45,000 45,000 45,000 45,000 180,000
Information technology director 100,000 25,000 25,000 25,000 25,000 100,000
Information technology manager 90,000 45,000 45,000 45,000 45,000 180,000
Information technology analyst 70,000 52,500 52,500 52,500 70,000 227,500
Finance director or controller 120,000 60,000 60,000 60,000 60,000 240,000
Finance and accounting 70,000 35,000 35,000 35,000 35,000 140,000
TBD 0 0 0 0 0 0
Total general and administrative labor expense $581,250 $581,250 $581,250 $598,750 $2,342,500

Depreciable assets Q1 Q2 Q3 Q4 Annual total Notes

Beginning balance Additional purchases
Buildings $600,000 $0 $0 $0 $0 $600,000
Equipment 20,000 2,000 0 4,000 4,000 30,000
IT infrastructure 25,000 5,000 4,000 3,000 8,000 45,000
Other 0 0 5,000 0 0 5,000
Other 0 0 0 5,000 0 5,000
Total depreciable assets $645,000 $7,000 $9,000 $12,000 $12,000 $685,000

Depreciation base $645,000 $652,000 $661,000 $673,000 $685,000 $685,000

Rev: 2/12/2008
[Company Name]
Annual Operating Budget—Services
[Date]

Pro Forma Financial Statements—Income Statement, Balance Sheet, and Cash Flow Summary
Pro forma annual income statement
Headcount summary Q1 Q2 Q3 Q4
Service operations 23.00 25.00 26.00 27.00 27.00
Sales and marketing 16.00 16.00 19.00 20.00 20.00
General and administrative 24.00 24.00 24.00 25.00 25.00
Total headcount 63.00 65.00 69.00 72.00 72.00

Revenues $4,500,000 $5,000,000 $5,200,000 $5,500,000 $20,200,000

Cost of sales 1,000,000 1,100,000 1,200,000 1,300,000 4,600,000
Gross margin $3,500,000 $3,900,000 $4,000,000 $4,200,000 $15,600,000
Margin contribution % 78% 78% 77% 76% 77%

Checkpoint: Revenue per employee from this budget $280,556

Financial
Targeted
Plan Revenue
revenue per employee
Employee $270,000

Expenses Q1 Q2 Q3 Q4
Service operations $714,060 $779,690 $803,130 $840,630 $3,137,510
Sales and marketing 841,560 816,560 930,000 982,500 3,570,620
General and administrative 895,160 906,610 898,210 921,690 3,621,670
Total expenses $2,450,780 $2,502,860 $2,631,340 $2,744,820 $10,329,800

Operating profit $1,049,220 $1,397,140 $1,368,660 $1,455,180 $5,270,200

Other gains (losses) 0 21,000 20,000 35,000 76,000

Other income 5,000 5,000 5,000 5,000 20,000

Total income 1,054,220 1,423,140 1,393,660 1,495,180 5,366,200

Taxes 30.0% 316,270 426,940 418,100 448,550 1,609,860

Net income 737,950 996,200 975,560 1,046,630 3,756,340

Pro forma annual balance sheet

Assets Q1 Q2 Q3 Q4 Annual total
Beginning balance
Cash 50,000 808,550 1,823,800 2,816,010 3,879,890 3,879,890
Accounts receivable 40,000 40,000 40,000 40,000 40,000 40,000
Other current assets 20,000 20,000 20,000 20,000 20,000 20,000
Total current assets 110,000 868,550 1,883,800 2,876,010 3,939,890 3,939,890

Depreciable assets 645,000 652,000 661,000 673,000 685,000 685,000

Accumulated depreciation 0 32,600 65,650 99,300 133,550 133,550
Land 640,000 640,000 640,000 640,000 640,000 640,000
Net property, plant, and equipment 1,285,000 1,259,400 1,235,350 1,213,700 1,191,450 1,191,450

Other assets 100,000 100,000 100,000 100,000 100,000 100,000

Total assets $1,495,000 $2,227,950 $3,219,150 $4,189,710 $5,231,340 $5,231,340

Liabilities and equity

Accounts payable $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Accrued liabilities 10,000 10,000 10,000 10,000 10,000 10,000
Other current liabilities 10,000 10,000 10,000 10,000 10,000 10,000
Total current liabilities $40,000 $40,000 $40,000 $40,000 $40,000 $40,000

Long-term debt $150,000 $145,000 $140,000 $135,000 $130,000 $130,000

Notes payable 0 0 0 0 0 0
Other long-term liabilities 5,000 5,000 5,000 5,000 5,000 5,000
Total long-term liabilities $155,000 $150,000 $145,000 $140,000 $135,000 $135,000

Total liabilities $195,000 $190,000 $185,000 $180,000 $175,000 $175,000

Common stock $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000 $1,000,000

Retained earnings 300,000 300,000 300,000 300,000 300,000 300,000
Cumulative net income 0 737,950 1,734,150 2,709,710 3,756,340 3,756,340
Net equity $1,300,000 $2,037,950 $3,034,150 $4,009,710 $5,056,340 $5,056,340

Total liabilities and equity $1,495,000 $2,227,950 $3,219,150 $4,189,710 $5,231,340 $5,231,340
Pro forma annual cash flow summary
Sources of funds Q1 Q2 Q3 Q4
From operations $732,950 $970,200 $950,560 $1,006,630
Add depreciation 32,600 33,050 33,650 34,250

Net changes in balance sheet accounts

Current assets 0 0 0 0
Current liabilities 0 0 0 0

Other sources of funds

Other gains (losses) 0 21,000 20,000 35,000
Other 5,000 5,000 5,000 5,000
Total sources $770,550 $1,029,250 $1,009,210 $1,080,880

Uses of funds
Repurchase of stock 0 0 0 0
Debt retirement -5,000 -5,000 -5,000 -5,000
Purchase of equipment and assets -7,000 -9,000 -12,000 -12,000
Other uses 0 0 0 0
Total uses -$12,000 -$14,000 -$17,000 -$17,000

Net change in cash 758,550 1,015,250 992,210 1,063,880

Cumulative cash 758,550 1,773,800 2,766,010 3,829,890

Beginning balance $50,000 $808,550 $1,823,800 $2,816,010

Ending balance $808,550 $1,823,800 $2,816,010 $3,879,890

Summary trend data for chart Q1 Q2 Q3 Q4

Quarterly revenue 4,500,000 5,000,000 5,200,000 5,500,000
Quarterly margin 3,500,000 3,900,000 4,000,000 4,200,000
Quarterly net income (loss) 737,950 996,200 975,560 1,046,630
Quarterly cash flow 758,550 1,015,250 992,210 1,063,880
Quarterly total assets 2,227,950 3,219,150 4,189,710 5,231,340
 Notes

Taken from 3-year financial plan

Taken from 3-year financial plan

Compare to financial plan

From Input sheet

Notes
Taken from operations section
Taken from sales and marketing section
Taken from general and administrative section

Rounded calculation based on input sheet rate

Notes

Notes
 Quarterly Trend for Key Financial Metrics

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000

0
Q1 Q2 Q3 Q4

Quarterly revenue Quarterly margin Quarterly net income (loss) Quarterly cash flow Quarterly total assets