Birmon: Business Plan, Financials, and Cash Flow Analysis

This report presents a comprehensive business plan for Birmon, a newly established property firm in London. It advocates for a sole proprietorship structure for its initial stages, emphasizing the ease of setup and the owner's complete control. The plan highlights the need for a business loan of £500,000 to facilitate rapid operational commencement and profitability. A detailed budgeted cash flow statement is provided, projecting revenue, operating expenses, and net cash flow over a year, demonstrating the firm's ability to manage finances and maintain liquidity. The report also addresses the management of budgets, financial resources, and human resources, including strategies for effective budgeting, financial planning, and employee satisfaction through competitive compensation and effective record-keeping. The conclusion reiterates the business's viability and its capacity to secure and repay a loan, reinforcing the financial stability of Birmon.

COURSEWORK

EXECUTIVE SUMMARY
The below explores the business plan for a newly set up property firm in London, named
as Birmon. From the evaluations, it has been found out as for Birmon sole proprietorship is the
appropriate structure in order to take the business further in its initial stages. Along with it, it has
been found out that in order to start the business properly, it is important for the firm to make use
of loan. Loan will allow the business to start its activities step by step and to repay the bank from
the profits which are being generated. It has been also found out that the budgets will be
managed by setting up the team and discussing each and every thing with them in order to
clearly ensure required growth of the business.
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Table of Contents
EXECUTIVE SUMMARY.............................................................................................................1
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Business Plan..............................................................................................................................3
Preparing budgeted cash flow statement as to provide sufficient funding sought......................4
Describing management of budgets, financial resources and human resources.........................6
CONCLUSION................................................................................................................................7
REFERENCES................................................................................................................................7
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INTRODUCTION
Today, property and real estate industry is one of the largest growing industries in the
world. The below report is focused on preparing a business plan for the firm named Birmon.
Birmon is a recently set up property business, headquartered in London. The organisation is
having 10 employees and one senior manager. The report is going to describe the legal status for
the company and explaining the righteousness of the structure. It prepares required financial
information to raise a sufficient funding (Jordà, Schularick and Taylor, 2017). The report is also
going to produce a cash flow. The budgets of the organisation will be managed and explored.
MAIN BODY
Business Plan
The chosen legal status and structure for the real estate business of Birmon is sole
proprietorship. The reason behind choosing this structure is the sole proprietorship is one of the
most common structures of business. It is formed to perform the business operations in order to
earn profits. The business is carried out by a single person and does not involve any other person.
The advantages of sole proprietorship is that it is easy to set up and there are none of the legal
formalities are there required while setting up.
The business owner have the full control over the business and he is the only one
responsible to take decisions. Along with it, he is the only one who enjoys the profits earned by
the business (Johnson, 2018). The reason behind choosing sole proprietor only is that other
structures such as partnership often involves partners in the agreement which have liable and are
jointly ore individually responsible for the debts of the firm. Also, the partners often disagree on
certain matters which tends to lead towards conflicts.
The reason for not choosing limited liability company is that it is heavily regulated form
of a business and the business have to keep record of each and every activity of the business. It is
going to make it difficult for the organisation to start the business effectively and achieve set
growth.
In order to start the business successfully, the business is going to take loan from the
bank. The loan will allow the business to start is operations rapidly and earn required profits in
its initial stages. It is important for the business to take loan because the other available options
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such as overdraft facility is going to be proved very expensive and time consuming for the
business. The business is going to take the loan of £500.000 from the bank to start its operations.
Preparing budgeted cash flow statement as to provide sufficient funding sought
Budgeted cash flow statement
Particulars
Initial
invest
ment
Jan
uar
y
Feb
ruar
y
Mar
ch
Apr
il May June July
Augu
st
Septe
mber
Octob
er
Nove
mbe
r
Dece
mbe
r
Number of
customers
200
0
224
0
250
9
281
0
314
7 3525 3948 4421 4952 5546 6212 6957
Average
selling price
100
0
100
0
100
0
100
0
100
0 1000 1000 1000 1000 1000 1000 1000
Total
revenue
200
000
0
224
000
0
250
880
0
280
985
6
314
703
9
3524
683
3947
645
4421
363
49519
26
55461
58
6211
696
6957
100
Total
revenue
(cash inflow)
200
000
0
224
000
0
250
880
0
280
985
6
314
703
9
3524
683
3947
645
4421
363
49519
26
55461
58
6211
696
6957
100
Operating
expenses
Advertisemen
t
150
0
150
0
150
0
150
0
150
0 1500 1500 1500 1500 1500 1500 1500
Raw material
200
0
210
0
220
5
231
5
243
1 2553 2680 2814 2955 3103 3258 3421
Labour
expenses
180
0
184
5
189
1
193
8
198
7 2037 2087 2140 2193 2248 2304 2362
Salaries
400
0
400
0
400
0
400
0
400
0 4000 4000 4000 4000 4000 4000 4000
4

Real estate
Membership
fee
350
0
350
0
350
0
350
0
350
0 3500 3500 3500 3500 3500 3500 3500
Licensing fee 20000 0 0 0
200
0 0 3000 0 4000 0 5000 0 4000
Marketing
cost 15000
200
0 0
100
00 0
500
0 0 6000 0 4000 0 3000 0
Commission
to brokers
140
0
142
1
144
2
146
4
148
6 1508 1531 1554 1577 1601 1625 1649
Rent
160
0
165
6
171
4
177
4
183
6 1900 1967 2036 2107 2181 2257 2336
Real estate
examination
220
0
231
0
242
6
254
7
267
4 2808 2948 3096 3250 3413 3584 3763
Total
operating
expenses
(cash
outflows) 35000
200
00
183
32
286
78
210
38
244
14
2280
5
2621
3
2463
9 25082 26545
2502
7
2653
0
Net cash flow -35000
198
000
0
222
166
8
248
012
2
278
881
8
312
262
5
3501
878
3921
432
4396
724
49268
44
55196
13
6186
669
6930
570
Capital
invested
30000
0
Bank loan
50000
0
Opening cash
balance
80000
0
765
000
274
500
0
496
666
8
744
679
0
102
356
08
1335
8233
1686
0111
2078
1542
25178
266
30105
110
3562
4723
4181
1392
Closing cash
balance
76500
0
274
500
0
496
666
8
744
679
0
102
356
08
133
582
33
1686
0111
2078
1542
2517
8266
30105
110
35624
723
4181
1392
4874
1962
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Interpretation
From the analysis of the above cash flow statement of Birmon has been prepared on
monthly basis as to have a better forecast of revenues and expenses of the business. As per the
budgeted cash flow statement, its number of that its number of customers will grow rapidly on
monthly basis. It will lead in increasing the sales revenue and profitability of the firm. Further,
its cost will remain same except of some expenses like broker's commission, rental expenses, real
estate examination cost, etc. Although, impact of these costs would be reduced with increase in
its selling capacity.
Further, with the present budgeted cash flow statement also states that some expenses like
Licensing fee, marketing cost, etc. are those that need not to be incurred by them on monthly
basis. It would result in maintaining and enhancing the liquidity of Birmon.
Therefore, it can be interpret that the Birmon is a profitable sole proprietorship and would
maintain a sufficient amount of liquidity in the firm. Therefore, bank can provide it loan as it
have a capacity to repay the loan and its interest amount even after incurring various operating
costs and other business expenses. Describing management of budgets, financial resources and
human resources.
Describing management of budgets, financial resources and human resources.
Budgets, financial resources and human resources are some essential part of a business
organisation. Therefore, it is required by Birmon to have effective management of all these
elements as to maintain the effectiveness of a business organisation. These can be managed as
under:
Management of budgets:
Being a construction company, Birmon needs to prepare various budgets like financial
budgets, budgeted cash flow statements, operating budgets, inventory budgets, etc. these can be
managed by enhancing the ability of the whole company to enhance efficiency of business to
prepare its various budgets (Zhang, 2017). For this purpose of the proprietor of Birmon need to
have a complete analysis of the whole business activities, its goals and set objectives. It would
result in more effective forecasting budgets and management of them as well.
Management of financial resources
Financial resources are those from which the Birmon can gain the funds for its business
operation. These can be managed by the business by developing effective strategies and plans to
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enhance the control and management of business. In this regard, the sole proprietor should
prepare budgets to forecast the need of financial resources. It would lead in determining the areas
where funds can be gained and areas where funds are needed to be invested (Oloyede, Ayedun
and Ajibola, 2016). It would help the firm in having better management of the financial
resources by maintaining sufficiency of resources with the proprietorship.
Management of human resources
Human resources are the essentials factors of each business organisation that helps in
achiveing the business goals and objectives. Management of these resources is important for the
purpose of enhancing the efficiency of its workers so that each activity of the business could be
performed in the most effective way. Being a real estate business, it needs to employ some
workers like manager, broker, agents, etc. the business would need to provide effective job
satisfaction to them so that they can perform their task with full efficiency.
Providing appropriate amount of salaries and commission can is the most important for
providing a sort of job satisfaction. Further, for the purpose of managing their activities, a sole
proprietor can maintain a separate register with the help of which it could maintain the records of
each activity of the human resources of the business. (Bentil and Yeomans, 2016.) Moreover, the
register should also contain a detailed information about the amount that has been paid to the
workers and amount due to be paid to them as well.
In this regard, the Birmon can maintain a proper management of each resources including
financial and human resources of the business and preparation of budgets as well.
CONCLUSION
The above report explains the new business plan of Birmon. It showcases nature of the
business in which the property business is going to be operated. Along with it, the report explains
and makes use of new development prospects in which the business is going to be operated and
the funding will be raised. Furthermore, it puts light on the basic requirement of the business for
which it is going to take loan. Along with it, the report discuss the advantages and disadvantage
of choosing the sole proprietorship for the business of Birmon.
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REFERENCES
Books and Journals
Bentil, J. and Yeomans, J., 2016. Technical and financial analysis for the implementation of a
sustainable poultry farm in Takoradi, Ghana (No. PG 59 2016).
Johnson, P., 2018. New firms: An economic perspective. Routledge.
Jordà, Ò., Schularick, M. and Taylor, A.M., 2017. Macrofinancial history and the new business
cycle facts. NBER macroeconomics annual. 31(1). pp.213-263.
Oloyede, O., Ayedun, C. and Ajibola, M., 2016. Leadership succession planning: An
examination of sole proprietor estate surveying and valuation firms in Lagos Metropolis,
Nigeria. Covenant Journal of Research in the Built Environment. 4(1).
Segal, S. P. and Choi, J. S., 2016. Ownership form and quality of care in sheltered care facilities:
Chain-affiliated business vs. sole proprietorship.
Zhang, X., 2017. What Does China’s Sole Proprietorship Law Mean to Foreign Business
People?. Business Law Review. 38(2). pp.61-63.
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