Costs

YEAR 1

Start up costs = £22,352.81
based on (rounded numbers):
-£10000 computers
-£8000 software
-£1500 furniture
-£500 research

Total overheads for Year 1
-£43372.86
If we take out a loan of £50,000 from the bank this will cover overheads for year 1, the overhead includes a 10% loan repayment

our total employment costs are £146,800 based on each earning £30,000 salary and a 5% pension plan and a 9% NI contribution (this will increase with the rise of salary)

we will work 210 days annually, 8 hrs a day.
which means our daily rate each is £214.48
which means our hourly rate each is £26.81


To break even in year one we will need to earn £180,000 approx to cover costs.
Our Year 1 annual turnover would be £199,991.81

If we raise our hourly rate to £29.76 then we can get a Gross Profit Margin of 11%
Which gives us a profit of £19,000 for year 1.


YEAR 2


Overheads drop dramitically due to no start up equipment.
Which means our hourly rate drops to £23.65 each
If we keep the rate the same as year one it means we have added a GPM of 26% for year 2
Which gives us a profit of £41,000


YEAR 3


Increase GPM to 35% by raising hourly rate by £3
- we will be well established by now so this will be ok
Profit for year 3 = £60,000