Business Plan Template (Page 18 of 18) in pdf

Business Plan Template Page 18

you generate more sales, you may need added personnel to service those sales which would increase

your costs. Lowering the fixed costs your business must pay each month will have a greater impact on the

profit margin than changing variable costs.

Fixed costs: Rent, insurance, salaries, etc.

Variable costs: The cost at which you buy products, supplies, etc.

Contribution Margin: This is the selling price minus the variable costs. It measures the dollars available to

pay the fixed costs and make a profit.

Contribution Margin Ratio: This is the amount of total sales minus the variable costs, divided by the total

sales. It measures the percentage of each sales dollar to pay fixed costs and make a profit.

Break-even Point: This is the amount when the total sales equals the total expenses. It represents the

minimum sales dollar you need to reach before you make a profit.

Break-even Point in Units: For applicable businesses, this is the total of fixes costs divided by the unit selling

price minus the variable costs per unit. It tells you how many units you need to sell before you make a

profit.

Break-even Point in Dollars: This is the total amount of fixed costs divided by the contribution margin ratio.

It is a method of calculating the minimum sales dollar to reach before you make a profit.

Note: If the sales dollars are below the break-even point, your business is losing money.

Miscellaneous Documents

In order to back up the statements you may have made in your business plan, you may need to include

any or all of the following documents in your appendix:

Personal resumes

Personal financial statements

Credit reports, business and personal

Copies of leases

Letter of reference

Contracts

Legal documents

Personal and business tax returns

Miscellaneous relevant documents.

Photographs

[BUSINESS PLAN TITLE] - [SELECT DATE]

Business Plan Template Page 18