Cash Flow Forecast and Analysis

The provided content is a financial forecast for a business over three years, including income statements, cash flow forecasts, and other relevant financial information. The forecast includes details such as revenue, costs of goods sold, gross profit, operating expenses, and net profit. Additionally, it provides a breakdown of the company's cash inflows and outflows, including capital injections, loan repayments, and interest payments.

BUSINESS PLAN

TABLE OF CONTENTS
BUSINESS GROWTH PLAN.............................................................................................................4
CUSTOMERS ...................................................................................................................................5
COMPETITORS ................................................................................................................................5
SKILLS ANALYSIS ..........................................................................................................................6
RESOURCES REQUIRED.................................................................................................................6
SUITABLE SOURCES OF FUNDING ............................................................................................7
PLAN FOR OBTAINING RESOURCES ..........................................................................................8
TYPE OF ORGANIZATION.............................................................................................................10
VISION FOR BUSINESS IDEA.......................................................................................................10
REFERENCES...................................................................................................................................11
APPENDIX .......................................................................................................................................12

ILLUSTRATION INDEX
Illustration 1: Gantt chart......................................................................................................................9
Illustration 2: Critical path....................................................................................................................9

BUSINESS GROWTH PLAN
The present business named Healthy world's is based on the concept of organic food whose
demand is enhancing in the present era. Further, majority of the people living in the society prefers
to consume organic products as they are fit for health and provides a unique feeling of satisfaction.
Organic food covers wide range of products and they are highly fit for consumption (Organic
market shows improved growth amidst tumbling food prices., 2015). In short the decision taken
regarding setting up of business is feasible and innovative too. Moreover, at present majority of
customers prefer to purchase products and other type of eatable items online due to which new
business will offer entire range of products online and also through mobile application. Customers
sitting at home can choose best organic products for them and can purchase the best one. Range of
organic products involve carrots, fairtrade banana, mushroom, cucumber, tomatoes, apple, garlic
etc. Many products are present in the range of organic products and almost every item will be
offered by Healthy world's to its target market (Fromartz, 2007). Therefore, it is beneficial and
advantageous for new business to sell organic commodities online as demand for products is rising
at faster pace.
Apart from this, business symbol of healthy world's will be protected by intellectual
property of trademark. This will be governed by provisions of Trademark Act 1994. Therefore, in
this way the symbol of new business along with name can be protected and it cannot be used by
other ventures in near future. Below shown are the range of items which will be offered to
customers by Healthy world's:
Items
Dairy products Milk, cream and yogurt
Eggs and butter
Cheese
Boxes Meat and vegetable boxes
Meat boxes
Salad boxes
Recipe boxes
Fruit and veg Veg boxes
Veg
Salad
Food
Farm shop Bread
Deli
Cooked and cured meat

Pasta
Sauces
Soups
Preserves
Breakfast cereals
CUSTOMERS
The target market of Healthy world's are adults, youngsters and other type of people who
prefer to consume organic food and are health conscious. Business will directly sell entire range of
products to end consumers. Further, online websites along with mobile applications will be
developed so that customers can gain information about the product range such as price, quality etc
and on the basis of this they can easily take decision whether to buy the products or not. Moreover,
it is well known fact that before purchasing any specific commodity prices of different food items
are compared by customers and in turn they prefer to purchase commodities having high quality and
moderate price. Further, customers are ready to pay high price for the organic food products as they
are fit for consumption and assist them in maintaining their health (Baourakis, 2004).
In short customers need of staying healthy and fit is met by the entire product range which
will be offered by Healthy world's. Generally organic food is considered to be little bit costly as
compared with other type of food items and due to this reason target market of new business will be
people having high income and are health concious. Further, lower income group people cannot
afford organic commodities on continuous basis and it is not possible for business to target them.
On the other hand, at present businesses operating in the market who are offering organic food have
good position in the market and this represents that idea of selling organic products online is
feasible and appropriate too.
COMPETITORS
Organic food market of UK is growing at faster pace where overall sales of commodities
have risen by 4%. Shoppers spent an extra £1.4m a week on organic products and this is highly
beneficial for the present businesses operating in the market. No doubt competition level is quite
high in the market and Healthy world's has to adopt effective strategies so that it is possible to deal
with challenges present in the market. Main competitors of company are real foods, planet organic
and riverford organic farms. All these three companies are operating in the market of UK on smaller
basis and they are offering wide range of organic products for satisfying need of target market. Real
food is an natural and organic retailer which offers large range of products (Real foods., 2015).
Apart from this business will keep prices lower as compared with other companies as through this it
is possible to retain large number of customers for longer period of time. Concept of riverford

organic food is unique and commodities are offered to customers in boxes for their convenience
(Riverford organic farms., 2015). The key competitors of the enterprise are having low market share
as majority of the market share in organic food business has been grabbed by large companies such
as Tesco, Marks and Spencer etc. But in near future main objective of Healthy world's is to compete
with large sized organization and firm wants to enhance its market share by adopting different
strategies. Planet organic offers raw foods and other type of eatable items (Planet organic., 2010).
The main reason due to which customers may prefer to purchase organic food products from
Healthy world's rather than its key competitors is that business will produce organic food in its own
farm and they will be offered through online platform along with mobile applications. Apart from
this product range is also wide which other companies may not offer. This can surely support
business in attracting target market towards range of commodities and can act as development tool.
SKILLS ANALYSIS
For running any specific business in the market it is necessary to apply different skills so
that operations can be carried out in effective manner. Skills such as marketing, customer
relationship, leadership, communication and accounting are present in myself with the help of
which it is possible to conduct business affairs in appropriate manner. Further, the team developed
for running business operations is having skills such as time management, communication, decision
making etc and this can assist them in serving customers as per their need and requirement. The
skills present in myself and in my team can surely take this business idea forwards as more efforts
will be applied in making business successful and large number of customers will know about the
product range in specific period of time. Apart from this, main focus will be on marketing and
promotion as it is the backbone and without effective marketing strategies no business can survive
in the market for longer period of time. On the other hand, skills such as stress management and
decision making are required to be developed in myself as through this I can better handle business
operations and it is fruitful for the new business in every possible manner. Further, for addressing
skills gap I will take feedback from my colleagues who are working with me for carrying out
business operations. Therefore, in this way the new business idea can be implemented in
appropriate manner with the help of skills present in myself and it can act as development tool for
the entire firm.
RESOURCES REQUIRED
Different type of resources are required for implementing this business idea and it can surely
support in satisfying need of target market in efficient manner. Major resources are human,
financial, technological etc. For smooth functioning of business operations skilled workforce will be
hired and they will be assigned duty to serve customers. Financial resources are also required for
conducting operations, modern technology is required as commodities will be offered through

online websites and it is fruitful for new firm. Further, physical is also one of the most crucial
resource of the present business and it involves the inventory store, delivery van etc which will be
purchased by Healthy world for delivery products to the target market and it is beneficial for
customers as they can easily purchase products at home. These resources will provide base to the
business in delivering services to the target market and corrective actions are taken for management
for resources so that management may not face difficulties such as inadequacy of resources etc.
Assumptions
 It is assumed that business of the organization will be grow by 20% per annum.
 Business will give 10% of hike in employee’s salary.
 Expenses related to utility and maintenance and miscellaneous expenses will be increased by
5% yearly.
 Interest will be charged by 6% on loan amount taken from bank.
(https://www.fundingcircle.com/uk/businesses/?
&mkwid=s4zWdciid_dc&pcrid=71223221666&pkw=business%20loan%20rates
%20comparison&pmt=e&gclid=COXwspLE4sgCFVaXvQodOnUPYg
 Monthly £100 will be paid for maintenance and development of website and mobile
application. (http://www.swiftcreations.co.uk/website-design.php?
gclid=CLDCupbF4sgCFVcsvQod1uwKXA
 Yearly expenses on promotion and advertisement will be incurred by 2% of sales of the
business.
 Tax will be levied by 20% on profits of the business as per the rules and regulations of
government of UK. (https://www.gov.uk/government/publications/rates-and-allowances-
corporation-tax/rates-and-allowances-corporation-tax
 Depreciation on fixed assets will be charged by 10% and it will be applied on straight line
method of depreciation.
 Cost of goods sold includes all the expenses related to production and maintenance of
products offered for selling.
SUITABLE SOURCES OF FUNDING
Different funding sources are present which can be adopted by new business and the most
appropriate one is bank loan and owner's capital. Implementation of organic food business requires
high investment and due to this reason it is necessary to adopt effective source of finance so that
operations can be carried out easily. Many financial institutions are present in the market who
provides funds at cheaper rate of interest. Therefore, Healthy world's will obtain funds from the
selected financial institution and it can satisfy financial needs of the enterprise. Moreover, owner
capital will be another source of finance where business owner will invest funds in carrying out

business operations. Main reason behind selecting these two sources is that it can save major
expenses of enterprise and can support business to deal with the condition of inadequacy of funds.
Moreover, expansion becomes quite easy when new business adopts this type of source and it is
fruitful for organization in every possible manner.
PLAN FOR OBTAINING RESOURCES
Task Task Name Duration Start Finish Predecessors
1 Conducting market research 10 wks Tue 27-10-15 Mon 04-01-
16
2 Development of business plan 8 wks Tue 05-01-16 Mon 29-02-
16 1
3 Sourcing of Finance 4 wks Tue 01-03-16 Mon 28-03-
16 2
4 Registration and other formalities 2 wks Tue 01-03-16 Mon 14-03-
16 2
5 Purchase of fixed Assets 6 wks Tue 29-03-16 Mon 09-05-
16 2,3
6 Infrastructure development 8 wks Tue 10-05-16 Mon 04-07-
16 5
7 Hiring of employees 4 wks Tue 01-03-16 Mon 28-03-
16 2
8 Purchasing technological tools 3 wks Tue 05-07-16 Mon 25-07-
16 3,6
9 Designing website 4 wks Tue 26-07-16 Mon 22-08-
16 8
10 Designing mobile applications 3 wks Tue 23-08-16 Mon 12-09-
16 9
11 Marketing and Promotion 4 wks Tue 13-09-16 Mon 10-10-
16 9,10
12 Targeting Customers 4 wks Tue 11-10-16 Mon 07-11-16 11
13 Testing & Modification 2 wks Tue 13-09-16 Mon 26-09-
16 9,10
14 Final Execution 1 wk Tue 08-11-16 Mon 14-11-16 11,12,13

Illustration 1: Gantt chart
Illustration 2: Critical path
Critical path: 1,2,3,5,6,8,9,10,11,12,14
= 10+8+4+6+8+3+4+3+4+4+1 = 55 weeks.
The above chart shows that all the activities in the project can be completed in time period
of 55 weeks. All the crucial activities of the project have been shown in the table and separate time
has been allotted to each activity in which it has to be completed.

TYPE OF ORGANIZATION
Healthy world's is a private organization where owner of the business holds responsibility to
take major decisions and prepares effective plans to conduct overall operations. Further, company
will deliver entire range of services online which is convenient for target market as they can
purchase commodities at home only. Moreover, customers are having options to purchase products
through online website and mobile applications. Apart from this effective management information
system has been developed by organization with the help of which crucial information of the
enterprise can be managed easily. Further, in future it will support management to deal with
challenges and major problems can be resolved easily.
Through computerized system relevant information will be stored which is linked with
customers as through this new business will be able to know about taste and preference of the target
market. By using important information it is possible for healthy world's to offer best organic food
to its target market as per their requirement. Key performance indicators for Healthy world's will be
market share, overall sales and product quality as through management can know whether
organization is operating efficiently or not. Further, CSF for business will be quality as company
has to keep quality of organic products high and through this it is possible to succeed in the market
and opportunities can be grabbed easily. Through this it is possible for management to control major
operations of the business and in turn can save major costs associated with the organization.
VISION FOR BUSINESS IDEA
The main vision of Healthy world's is “To be sustainable business that promotes health of
humans and keeps them fit”. This statement highlights that management believes in rendering high
quality products to target market and this has supported in enhancing organizational performance.
Further, it is expected that business will have bright future as by offering organic food products it is
possible for business to become leader in the market in near future. Apart from this, organic items
will be produced on its own and they will not be purchased from suppliers. So, there is surety that
business can well satisfy need and requirement of customers and best items can be offered to them
which is fit for their health.

REFERENCES
Books
Baourakis, G., 2004. Marketing Trends for Organic Food in the 21st Century. World Scientific.
Fromartz, S., 2007. Organic, Inc.: Natural Foods and How They Grew. Houghton Mifflin Harcourt.
Online
Organic market shows improved growth amidst tumbling food prices., 2015. Accessed through
<http://www.soilassociation.org/news/newsstory/articleid/7805/organic-market-shows-
improved-growth-amidst-tumbling-food-prices>. [Accessed on 27th Oct 2015].
Planet organic., 2010. Accessed through <http://www.planetorganic.com/>. [Accessed on 27th Oct
2015].
Real foods., 2015. Accessed through <http://www.realfoods.co.uk/about>. [Accessed on 27th Oct
2015].
Riverford organic farms., 2015. Accessed through <http://www.riverford.co.uk/shop/veg-fruit-meat-
boxes?tldr=tldr/>. [Accessed on 27th Oct 2015].

APPENDIX
Forecasted Profit & Loss account for the period of three years
Forecasted Profit & Loss Account
Year 1 (£) Year 2 (£) Year 3 (£)
Revenue 630000.00 756000.00 907200.00
Less: Cost of goods sold 252000.00 302400.00 362880.00
Gross profit 378000.00 453600.00 544320.00
Website Design & Mobile App 1200.00 1320.00 1452.00
Utilities and maintenance 18000.00 18900.00 19845.00
Salaries 240000.00 264000.00 290400.00
Insurance 500.00 500.00 500.00
Promotion and advertisements 12600.00 15120.00 18144.00
Depreciation 30000.00 30000.00 30000.00
Miscellaneous expenses 3000.00 3150.00 3307.50
Total operating expenses 305300.00 332990.00 363648.50
PBIT 72700.00 120610.00 180671.50
Interest payment 12000 9600 7200
PBT 60700.00 111010.00 173471.50
Tax payment 12140 22202 34694.3
Net profit 48560.00 88808.00 138777.20
Cash flow forecast for the period of three years
Cash flow forecast Pre-operating year Year 1 (£) Year 2 (£) Year 3 (£)
Cash Inflow
Owner's capital 300000 0 0 0
Bank Loan 200000 0 0 0
Revenue 0 630000 756000 907200
Total Cash Inflow 500000 630000 756000 907200
Cash Outflow
Purchase of Fixed Assets 300000 0 0 0
Legal & Registration fee 1000 0 0 0
Infrastructure & Designing 100000 0 0 0
Purchase of inventory 0 252000 302400 362880
Website Design & Mobile App 500 1200 1320 1452

Utilities & maintenance 0 18000 18900 19845
Salaries 0 240000 264000 290400
Insurance 0 500 500 500
Promotions and advertisements 20000 12600 15120 18144
Miscellaneous expenses 30000 3000 3150 3307.5
Interest 0 12000 9600 7200
Tax payment 0 12140 22202 34694.3
Loan Repayment 0 40000 40000 40000
Total Cash Outflow 451500 591440 677192 778422.8
Net cash flow 48500 38560 78808 128777.2
Opening balance 0 48500 87060 165868
Net cash flow 48500 38560 78808 128777.2
Closing balance 48500 87060 165868 294645.2