Studio / agency business plan template (financial model)

Hello, Habr!

As part of our special project with NetCat for web studios and agencies, we prepared a lot of material on the financial model of the studio with a bunch of KPIs, developed a real model - and we suggest discussing it. This is an exclusive material. Earlier, I did not publish this template anywhere and did not speak on this topic.

I do not pretend that the approach described below is the only true one and is a “silver bullet”. Of course, there are many other options for organizing the model, but most companies keep their format in the strictest confidence. I personally use a similar general organization of a business plan for all my projects in combat conditions - of course, with other KPIs and formulas, details, etc.

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Introductory


This business plan, despite the fact that it looks rather complicated, in fact, is a very simplified model. We made a number of assumptions and simplifications to show in a simple way how the basic meanings depend on each other. “Fighting” financial models of real agencies, of course, are even more complex.

I hope that you will try to “play around” with the values ​​- by changing the constants and indicators that are input “by hands” - and see how the dynamics of the company’s development are changing.

Our model considers a small studio of 6 people, which is engaged only in the development of sites and their support. For the year reflected in the plan, our company grows to 15 employees and increases its turnover by more than 3 times. One of the goals of our plan was to show that this is entirely possible - without monstrous investments in marketing, and without raising the price tag of the studio by an order of magnitude.

The assumptions I spoke about above:


  • Our studio makes projects lasting 1 month. It is clear that in reality projects last a different time, and the structure of the studio’s services is much more complicated.

  • Revenues from support (subscription) do not require additional production resources. It is clear that in reality this almost never happens, but again, we simplify the situation a bit.

  • We allow fractional values ​​of the number of projects.

  • Our studio has no box office gaps. Everyone pays on time.

  • Our studio sells 100% of its resources. So we built our model. We gave “in manual mode” production volume and marketing budget. As a result, the cost of a typical project and the average labor costs for a project became dependent parameters. We just wanted to show that with 100% workload and high growth rates inherent, nothing catastrophic will happen with these key indicators.

  • You could have done the opposite - to fix the cost and labor costs of an average project - and run the formula in the reverse mode, considering what marketing costs we would need to sell 100% of our resources. We recommend doing this experiment yourself.

  • Our studio is not risky.

So, we will analyze our model in detail.


Download the sample (xls) >>
We have different blocks vertically - total, expenses, revenues, indicators. The lines give the studio development plan for 1 year by month. All monetary values ​​are indicated in thousands of rubles.

The first block shows the general values ​​- expense, income and profit. Expense and income are obtained by a simple sum of indicators in the corresponding blocks. Everything is clear here, we will not dwell in detail.

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Cost block


We will analyze in more detail the main items of studio expenses:



  • PHOT - non-producing resources . These are the director and managers - those employees whose time we do not sell to the client. At the beginning of the calendar year there are two of them - the director and the project manager, then another project manager and a person for the account / sales role are added to relieve the director.

    The cells indicate the salaries of employees "on hand". Quite modest amounts indicate that our model is more suitable for a regional studio.

  • PHOT - producing resources . Employees whose time we sell to the customer. We start with the designer, developer, technologist and content manager. During the year, their salaries are growing. Also during the year, two more designers, a developer, a layout designer, and another content manager are added to them.

  • Total payroll - the sum of the salaries of producing and non-producing employees - two previous indicators. Detailing on the photo can be minimized so as not to interfere (plus sign over the block).

  • UPR + taxes . Some consolidated value, where we lay taxes, office rent, accounting services and other conditionally fixed expenses. To simplify the model, we put a direct dependence of this indicator on the general payroll of employees (they, however, are closely related). We start with a rather low coefficient - 40% of the payroll, and by the end of the year our costs increase - and we pay 60% of the pay on this item.

  • Organizational and unaccounted expenses . We put down the values ​​by hand, based on the general adequacy of what is happening.

  • Marketing . In this model, we give the values ​​of the marketing budget by hand. As a result, given the need to sell 100% of the resources, the cost of the site and the labor costs of the site are changing. You can enter the turnover — fix typical costs — and see what marketing budget is needed to achieve revenue goals. As can be seen in our model, the marketing budget is not growing very fast: from 30 thousand rubles a month to 100.

Thus, from the sum of these indicators the total amount of expenses and the volume of production available to us are obtained. It is these indicators that we present as the goal - we want to grow to such values ​​within the plan, while maintaining the company's profitability and having a rigidly fixed marketing budget.

Revenue block


We turn to the revenue block. It is directly related to the next block - the main indicators. All of our studio's revenue items are divided into three types:

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  • New projects (from new customers who came to us through our marketing activities). The amount is equal to the number of new customers, multiplied by the average cost of the site.

  • Reorders from current customers . These are the projects that we sold with the help of our glue client service already for current customers who are on our support. The value is equal to the number of backorders multiplied by the average cost of the site.

  • Support . Income from support subscriptions. It is equal to the product of the number of customers in support for the cost of the subscription.

Constants and Metrics


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Probably one of the most important blocks of the plan. Let's take a close look at what and how. All these values ​​affect the revenue block in one way or another.

  • The volume of production (in hours) is an average indicator, the number of current producing employees multiplied by 160 hours in a month.

  • K is the overhead coefficient . One of the most important KPI studios. It shows by what factor we must multiply employee salaries in order to remain in profit. Those. if we pay the designer 1 ruble per hour, and K = 3, then we must sell the client an hour for this designer for 3 rubles.

    It is considered K in this way: We take the total amount of expenses of the company, divide it by the share of payroll of producing resources and multiply by 1.25 - the desired rate of return for our company. The coefficient arrived is protected by a formula and does not change during the year.

    It is clearly seen that even with such a rapid growth, K is within acceptable limits for the market - in the range from K = 3.3 to K = 3.6.

  • Client production cost per month . The amount by which we must close the work in order to sell 100% of our resources. It is considered the multiplication of the payroll of the producing resources by the coefficient K.

  • Production load level . In our model - 100%, the value is not particularly used anywhere.

  • Cost Per Lead . The block of marketing indicators begins. Lead cost - the average value of the cost of attracting a high-quality client application for our services (with which you can continue presale). The value is served by hands and grows throughout the year. A range from 2 to 5 thousand rubles for a high-quality lead is an indicator that is quite achievable in the market (given the low price segment in which our studio operates).

  • Leads . The number of these same client requests. It is considered a division of the marketing budget by the cost of lead.

  • Conversion sales of new customers . The probability with which we will sell the project. Values ​​are given by hands and grow throughout the year (our competence is growing). A conversion range of 20% -30% is achievable, given that we only record high-quality client requests in leads.

  • New projects . The number of new projects / clients per month. It is considered a multiplication of the number of leads by the conversion of sales of new customers. Over the year, the value doubles - from 3 to 6.

  • Conversion to support. The probability with which the client after creating the first project will become our current one will pay a subscription and with some probability order new projects. The value is served by hand. 20% is quite an average indicator for a segment.

  • Churn Rate - an indicator of outflow. What percentage of our current customers will leave us within a month. This is inevitable, and 10% is an acceptable value for the market.

  • Customers in support . The number of our current customers. The values ​​of the first month are set by hands - we start with 5 current customers. Further, the quantity is considered as follows: We take into account the outflow from the base according to the value of the next month (-10% every month) and add the number of new customers. This is one of the most important indicators. We see that according to our plan, it is growing from 5 to 9 regular customers.

  • Conversion to backorders . The likelihood that our current client will order us a new project this month. It is served by hands. 20% is a good indicator for the market (a little optimistic).

  • Re-orders of projects . The number of projects from current customers. The product of the number of customers in support for conversion to backorders.

  • Total projects per month. How much our studio makes projects per month. The most important indicator is equal to the sum of new and additional orders. It grows during the year from 4 to 8 projects. It is an achievable indicator. Given that we make small sites. Recall, in our assumptions, we believe that the production of the project takes only a month.

  • The average cost of the project . We calculate this indicator dynamically, given that we sell 100% of our resources and have a fixed marketing budget. The cost is equal to the total customer cost of production per month divided by the number of projects. We see that the range varies from 100 to almost 200 thousand per project. For a small site in the regions - quite ok.

  • Average project volume in hours . How well do we work on the project? The value is equal to the total volume of production in hours divided by the number of projects. The range of 160 - 230 hours is quite acceptable (given the overlap of the stages), and we see that labor costs are growing (this, in particular, will allow us to sell more expensive, as required by the plan).

  • Subscription in support . The minimum amount of funds that current customers pay for services in our company. It is served by hands. и растет с 10 до 15 тыс.

Application


This model is suitable for simple calculation of the plan of a small studio. It is very important to understand which values ​​we are submitting “to the input” and which we are counting with the help of average indicators and a sales funnel.

Now we have applied for expenses (staff growth) and marketing - as a result, we calculated the average cost of the project and the amount of labor. Could do the opposite - and count marketing. They could apply marketing and average cost to the entrance - and see what production resources we need.

Work on the studio’s combat plan is largely a meditative exercise. You put coefficients, change them, see what comes out, calculate different options.

Of course, the presented sample is only a blank. The real plan will be more complicated. Something you remove, add something. Take away the assumptions we made in our model.

It is equally important to generate reports on the fact - in many ways, after analyzing them, you will be able to adjust the model, clarify the indicators given by "hands" - and create a suitable combat option that will allow you to effectively develop your digital business.

Conclusion


We also shot a video lecture on the topic of a business plan, it complements this material well. To watch this video (as well as other lectures of the cycle) - register at http://promo.netcat.ru . It's free.

I hope that the discussion in the comments will be even more interesting than the material itself. Write =)
Regards, Andrey Terekhov