106 | How to Write a business Plan
Annual Average Cost of Sales Chart: Consulting Firm Forecast Sales Revenue
Item
Publications, phone, travel $ 100,000 Contract services (Typing, etc.) 50,000 Studies, Consultations 527,000 TOTAL
Cost per Sale
Total Cost of Sales
20%
$ 20,000
75%
37,500
0%
0
is provided on the CD-ROM at the back of this book in Microsoft Excel format under the filename P&L_Fore.xls. 1. Sales Revenue. You have completed this
e stimate already. Simply enter the total sales revenue dollars for each month for two years from the Sales Revenue Forecast you completed in Chapter 3. Here’s another chance to revise the
$ 677,000
$ 57,500
Total Average Cost of Sales = 8.5% ($57,500 divided by $677,000)
sales revenue numbers in case you think they need work. However, be sure you really believe that you can generate all the revenues you forecast. Make sure you don’t do it backwards by writing down enough sales revenue to show the profits you want. Otherwise, you’ll have to explain to your
Include piece-rate and commission
backers each month why things aren’t as good
costs. Note that some businesses pay
as you said they would be.
workers on a piece-rate or commission basis. All your costs that vary with each sale should
2. Cost of Sales. Enter your monthly dollar
be in cost of sales instead of fixed expenses.
cost of sales. To get these figures, multiply your monthly sales revenue forecast by the average cost of sales percentage. Returning to our dress shop example, Antoinette would multiply her monthly sales figure estimate by 60% (or 0.6). For example, if March sales are forecast at $30,000, the cost of sales for March would be $18,000 (0.6 x 30,000 = 18,000).
When you’ve completed your cost of sales calculations, you are ready to prepare your Profit and Loss Forecast.
Complete Your Profit and Loss Forecast Follow the line-by-line instructions below to complete your form.
If you are using the Profit & Loss Forecast form on the CD-ROM, you
Note for computer users: A formatted
can enter the Cost of Sales percentage in
copy of the Profit and Loss Forecast
Column B in the spreadsheet (where it is