File Drop Limited

File Drop Limited

Introduction

The report will cover financial plan for a company name “File Drop Limited”. The core business of the company is to provide services like cloud computing services. According to the operational plan, the company would be requiring two locations where one place will consider as primary location and second place will consider as secondary location. Both places will be rendered on lease. According to calculations, the cost of 24,528 square feet of space will be $138,338 per annum for the primary location. On the other hand, the cost of 10,000 square feet of space will be $10,800 per annum for the primary location. In order to prepare an effective financial plan for this project, there is a need to estimate start up cost, profit and loss statement and balance sheet. The report will explain the startup cost, profit and loss statement and balance sheet. The report will also include assumptions that have been made during the calculation of the startup cost, profit and loss statement and balance sheet (Kleiner & Abrams, 2003).

Significance of Financial Plan

There are different aspects of a business project such as marketing plan, operational plan, communication plan and financial plan. Each of above mentioned plan type is important for business but the importance of financial plan is very high as compared to other plans because every action depends upon the funds available for project. The financial plan actually guides the marketing and operation staff in design their task because every action needs financial support. The finance plan is the foremost thing to prepare because it clearly and truly demonstrates the constraint for marketing and operational activities. For example, the marketing team or staff needs to know the amount of funds available to them for carrying out their activities. The marketing activities like brand activation of products and advertisements needs huge sum of money so the marketing staff must know in advance that how much amount do they have for financing marketing plans. The marketing plans eventually lead to higher sales and bring revenue. The operational plan means the production of goods or services, methods or process for production of goods or services and designing of jobs. Therefore, the operational plan is crucial for the business because it actually produces the product but again it depends on available funds. The arrangement of funds is very important for the operational department. There is big need to make it clear that how much funds are available for operational activities otherwise ambiguity in the availability of funds will lead to disorganized operational plans (Kuratko & Hodgetts 1998).

The financial plans cover many aspects such as amount required for starting up business, sources of funds like equity and debt, allocation of funds for operations, working capital and revenue sources and amount of revenue. The cost of starting up a business includes cost of purchasing land or lease amount required to obtain building, equipment that will be used in operations of business and cost of office ...