Financial Achievements

One of the nice things about Kent is his ability to ask the obvious question that we always seem to overlook. Having worked out that we need to start in the end in mind and also have a map our next task was to work out our financial starting position:

Having a weekly profit & loss report was helpful but did not give us all of the answers -
in particular, where have we been and how well did we do?


1. What was the total sales revenue for the last year (invoices/banked)?

2 What was the cost of the goods and services that we provided (Variable costs)?

3. What were our Fixed costs - expenses & overheads?

4. From this we can work out our gross profit - 1-(2+3)

5. As a small limited Company our Corporation tax rate (2011/12) will be 21%; setting aside 21% of (4) give us our net profit for the year - simple.

6. Now take the net profit figure (5) & divide by the total sales revenue (1) to work out a net profit figure - which is the maximum available to us as dividends.

Having worked out our figures for the last 12 months we then worked out a monthly plan - something that our book keeper can now keep up to date for us :o) - reflecting where we want to be in 12/24 months.

But what if our business was cyclical / seasonal rather than a straight line ? - simply adjust each month to reflect the expected turnover / costs.

Using an excel spreadsheet we are now able to monitor our progress and plan accordingly.

For our projections we started with our desired net profit (6)

We then did the tax guestimates (21%) to that figure

We then added in our anticipated expenses and overheads

This gave us our gross profit

We then worked out our Cost of supply / goods

Added together this gave us our target Sales Revenue turnover.


Now all that we have to do is use the map to take us from A to B