Financial Plan: A Guide on Staffing and Expense Models

The success of your business hinges on the people you hire. It is crucial to prepare and bring in the right talent at the right time to ensure a successful launch and ongoing growth. By having a clear understanding of when and whom to hire, you can accurately forecast staffing expenses, establish effective management structures, and minimize turnover. Additionally, developing a reliable model to predict each staff member's contribution to income generation helps create realistic revenue forecasts.

In this course, we will not only explore how staffing plans integrate with financial reporting but also provide guidelines on whether to build staff or hire contractors, setting pay rates, predicting benefit costs, and calculating the ROI of different positions within the organization. Using the accompanying spreadsheet tool, you will be able to develop a staffing plan that aligns your talent needs with the right personnel at the appropriate time.

Unlike the common refrain of "Where did all the money go?" when managing household bills, expenses should never be a mystery when launching a business. It is essential to have a comprehensive understanding of the costs associated with running a business, ranging from rent to marketing collateral for trade shows. This knowledge is crucial for monitoring income, cash flow, and tracking actual expenses against projections as your business progresses beyond the launch phase. It also enables you to determine baseline expenses that allow for appropriate pricing of your offerings and eventual profitability.

Furthermore, this course provides detailed insights into potential expenses, their classifications, tax implications, and offers a comprehensive worksheet for tracking all the costs involved in running your business. Equipped with this information, you will not only develop solid financials for your business plan but also establish a safeguard against overspending.

To gain a deeper understanding of creating a strong financial plan, you can explore and expand your knowledge by watching the other courses within this comprehensive series:

• Financial Plan: The Fundamentals for Your Business
• Financial Plan: A Detailed Guide to Revenue Models
• Financial Plan: A Guide on Financial Statements

Your Staffing Model

What is your intended budget for your employees and/or contractors, and how do you determine that amount? This section offers a comprehensive view of the factors to consider when it comes to staffing, including expenses, salaries, timing, and business objectives.

We will also delve into the distinctions between contractors and employees, weighing the advantages and disadvantages of each. Additionally, we will guide you on how to forecast for both categories since our model accommodates both.

Properly categorizing your employees and contractors by expense group is essential for generating your income statement and ensuring the effectiveness of your model.

Staffing Model Walk-Through

In this guide, we will delve into the Financial Model, with a specific focus on the Staffing Worksheet. The objective is to provide a step-by-step explanation of how to calculate employee and contractor costs for the upcoming years. I will guide you through each field in the spreadsheet, ensuring that you gain the necessary knowledge to confidently estimate your business financials independently.

By following this walkthrough, you will be able to accurately estimate contractor expenses and consider all the overhead costs related to your employees. The model simplifies this process by automatically performing the calculations for you, making it incredibly convenient.

Your Expense Model

In order to ensure precise financial statements and comply with tax regulations, it is essential to classify all expenses correctly. Your expense model encompasses all non-staffing related costs. This section offers a comprehensive overview of the four classification groups, namely G&A, COGS, product development, and sales & marketing. It also guides you on selecting the appropriate classification groups for your specific business needs.

You will be guided through the Financial Models Worksheet with a focus on the Expense tab.

I will explain the process of filling out all the fields in the spreadsheet, enabling you to accurately estimate your business's financials with confidence.

Financial Model: Worksheets

This course provides a comprehensive financial model that can be utilized to generate a staffing and expense forecast, as well as a financial plan, for your business. Additionally, a set of completed sample worksheets, which are mentioned in the course, have been included.

It is important to remember that the password to unprotect the spreadsheets, allowing you to modify formulas and add rows, is "Success".

1. Anyone who is running a small business.
2. Anyone who wants to start a business.

1. I'm not graduate from economic bachelor and English is not my mother tongue. But this course and how Mr. Ken explained the content is really easy to understand for beginner like me. Thanks to Mr. Ken for answered all of my question with a fast and easy understandable answer! ~ Diantini S
2. Perfect timing and the insights till now are those that I was exactly looking for.... Excited to learn more ~ Yogen P
3. Such an amazing course. You'll be able to understand and create your own business plan and you'll get a lot of valuable advices ~ A Cerimagic
4. Lot’s of info in this course. Ken really takes you from A to Z . Just what I needed for my business to take off. Thanks ~ Hugo M
5. I'm new to the business world and have been looking for courses with practical guidance. This course definitely provides that and so much more ~ S Slawinski
6. So far so good! A lot of challenges I'm facing in my work place Ken has highlighted the root course, which I was not expecting. He is clear, very engaging and breaks down the jargon. He is straight talking, right down to business attitude. I've just completed the first chapter and he's restoring a little faith in me so quite excited to keep learning (I know, I sound like a nerd) ~ Harrie T
7. This course is the right match for me as I know some about business but believe in always improving. I also want to make sure I have a solid foundation for my business so I'm positioned right for the new year, and growth ~ E Jollymore

1. How do I know when to hire for which positions?
2. What business milestone affect hiring?
3. How long will it take to recruit the right talent?
4. When should I make a staff hire, and when should I use contractors?
5. What factors affect pay rates and salary standards?
6. How much do benefits cost?
7. What kinds of costs should I capture in the expense model?
8. Why should I bother to classify expenses?
9. How can I handle overhead expenses?
10. What’s the difference between a COGs expense and an R&D expense?
11. What marketing and sales expenses should I track?

1. Basic knowledge of Excel or Google Sheets. We provide the complete financial model so all you need to do is input your data.
2. A basic understanding of business accounting.