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Business Plan for starting your engineering consulting firm
Thousands of engineering students are out there with high dreams and aspirations to start and excel in a successful business out there. Having different minds with different plans for a company, but business plans for engineering consulting services are nowadays one of the most exciting and familiar ideas among youngsters. It is wise enough to say that to think and execute any purpose takes efforts in the right direction. Some of them with great views also fail and finally surrender all because of the wrong execution.
So, how to start an engineering consulting business is the central question one should have in mind. Being a businessperson is not that easy because when it comes to marketing, he always looks for more and more profit, but there are ups and downs. For a young mind that has just started his business and is new to the market, it often becomes frustrating with such fluctuations. You need to invest in the right direction and wait patiently for the results.
Always remember, “Rome was not built in a day.” Your mission should be to provide the best and most efficient service to the people, with all types of planning, concept building, and completion. Your team should be highly professional and skilled, which you might be the critical factor, too, using experience and ideas making your customers satisfied. The development of a working strategy and working on its implementation is all it takes. Indeed starting an engineering consulting firm has several challenges that need to get sorted out though we cannot deny the fact that it is a very profitable business.
Further in the article, we will be dealing with these:-
Executive summary
The firm here is to provide all the possible support and successfully solve the problems of the people out there with high, excellent, and efficient consulting services. The firms have a team of competent and well-trained professionals, which would try to help people with consulting to all possible extents. Bit of direct investments in money and time can help you in the long run. The starting of the business is not easy, but it is the most significant step.
Start to invest little, don’t let any even the customers with very less profit go down and start gaining a name in the market. Implementation of quality control work as well as assurance program is beneficial and provides more scope and focus for production work. One needs to be more strategic and schedule oriented to get a good hold over several prospects in the engineering consulting business.
How will the engineering consulting business be started?
The business initially would be all about a small investment and hard works. The company will be started based on providing the best service possible for delivering professional quality services with excellent and efficient budgets and doing so on time. The business plan companies was started to implement and maintain the best policy control and develop a strategy for doing so and maintaining a smooth relation with the customers.
| Start-up Expenses | ||
| Legal | $72,500 | |
| Consultants | $0 | |
| Insurance | $32,750 | |
| Rent | $222,500 | |
| Research and Development | $32,750 | |
| Expensed Equipment | $62,750 | |
| Signs | $12,250 | |
| TOTAL START-UP EXPENSES | $435,500 | |
| Start-up Assets | $22,000 | |
| Cash Required | $485,000 | |
| Start-up Inventory | $0 | |
| Other Current Assets | $322,500 | |
| Long-term Assets | $52,625 | |
| TOTAL ASSETS | $882,125 | |
| Total Requirements | $1,317,625 | |
| START-UP FUNDING | $1,317,625 | |
| Start-up Expenses to Fund | $435,500 | |
| Start-up Assets to Fund | $882,125 | |
| TOTAL FUNDING REQUIRED | $1,317,625 | |
| Assets | $121,875 | |
| Non-cash Assets from Start-up | $195,000 | |
| Cash Requirements from Start-up | $0 | |
| Additional Cash Raised | $203,125 | |
| Cash Balance on Starting Date | $118,750 | |
| TOTAL ASSETS | $638,750 | |
| Liabilities and Capital | $118,750 | |
| Liabilities | $121,875 | |
| Current Borrowing | $0 | |
| Long-term Liabilities | $0 | |
| Accounts Payable (Outstanding Bills) | $0 | |
| Other Current Liabilities (interest-free) | $0 | |
| TOTAL LIABILITIES | $240,625 | |
| Capital | $0 | |
| Planned Investment | $1,317,625 | |
| Investor 1 | $0 | |
| Investor 2 | $0 | |
| Other | $0 | |
| Additional Investment Requirement | $0 | |
| TOTAL PLANNED INVESTMENT | $1,317,625 | |
| Loss at Start-up (Start-up Expenses) | ($919,500) | |
| TOTAL CAPITAL | ($919,500) | |
| TOTAL CAPITAL AND LIABILITIES | $638,750 |
Engineering business
The private limited company is competent enough to deal with any kind of such business. The founder himself, being a professional engineer, is having profound knowledge in the engineering business. The team working alongside is also well to do with such a company and is highly efficient in providing the best service possible. The cost that might involve in such a business may depend on the size of the market. In our opinion, start slow, and then with the growth and expansion, the investments too would become more.
Management of engineering consulting business
The founder does the control of the market; he makes the initial and capital investments made for the company. He is the one who manages the investments made for the company following development and future growth. The management and success of the business, at last, are the results of cooperation and hard work by the team of workers in the venture.
Customers of engineering consulting firms
The customer of such a business, mainly the one who needs help and expert assistance in the specific project, may be private or public. These firms can provide expertise in the sections such as design, model, execution, and many many more aspects relating to civil, electrical, mechanical, and sometimes software engineering. Effective and efficacious communication is very helpful when it comes to engineering consulting. It is a way, which is more efficient, and most number of people can easily get through their problems/issues regarding their engineering projects/career easily. The customers of such firms are the people who need a tinge of experienced advice and guidance over their projects.
Business targets
Start with a little, and do not ever panic to make decisions for your investment for your business plan. The goal mainly should deal with providing the customer what they need, and going on with slow and steady growth to increase the business, I a year or two of your business years the target should be to get market value and minimum. Increase in the gross margin (which would significantly help your firm to grow), and the profit line should be one of your targets.
Company summary
Company owner
The owner of the company is an experienced and skilled engineer. His mind-set is mainly involved in the welfare of the customers. The owner is the one responsible or every type of investments and inputs to the company, he not only is a role model for the company and the team but also is the main thought behind the concept of setting such a business. He was always into such an idea since starting of his carrier, and with hard works and efforts here, he is today making the dream come true
Why is the engineering consulting business being started?
The owner, as specified above, had the idea of doing so. The company is being stated to deal with the problems of the people, help them in all possible ways when it comes to consultations about design, model, and structure of the project or sometimes thoroughly supervising the project. The company aims to provide every possible expertise in the plans. They always will be getting befits from the best ideas and lots of experience.
Establish a web presence
A web presence is essential for any type of business to grow in the era of technology, and especially one that is dealing with engineering and technology needs to have a web presence. It not only makes your company grab opportunities from any part of the world but also makes your presence in the market stable. Our business mainly deals with consulting services, which needs a web presence. More good reviews and a significant presence out there allow you to grab more and more.
Services for the customers
- The leading function is for consultation and investigation which further also involves studies regarding it
- It includes detailed and comprehensive research and analysis of different conditions
- Comparison between different service ideas and opinion for the project
- Many various factors, such as risk management, capital and project cost, management analysis, and different environmental facts.
- When it comes to civil consultancy, it includes many urban and land development plans along with generating different and the best possible facilities
- Public involvement is also one of the services provided, the owner of the project need new concepts and ideas for explaining and involving the public with him
- When dealt with mechanical, the services can include selection and testing of materials, specialized equipment selection and employing people with supervising them for the project
- Evaluation and examination of the existing materials and rating them accordingly is one of the services
- They have some professional services like designing, bidding, and construction
- Further, they analyze the report based on the study and explain aspects such as financial requirements to the project
Market analysis of the engineering consulting business
If business was a sport, then the market is the playing ground where it is performed. Any type of business needs a demand to complete, and for a growing activity, it needs to expand and grow.
Market trends
Potentially we as an engineering consulting firm have a lot of different markets to target. According to the direction, we are there for planning and designing services. We not help the designs of the project with our innovative ideas but also give a proper plan to execute it. The trend shows that most of the inputs in the market come from architectural designing, then comes the structural design, and lastly, the mechanical and electrical designing.
Note
The most important market for our firm would be the structural and the architectural designing companies as they need the inputs and detailed analysis of their projects.
Market segmentation
- For engineering, architectural, and structural firms- most of the customers for our firms are from these companies. The market in these firms have a great need for consulting services; the inputs with ideas, planning, design, and structural development are well-known works out there. Even financial management is one of the aspects
- Some government departments need the help of consultations firms with projects such as construction, forensic engineering, or structural management. We would like to present ourselves as a firm standing out there with consultation services for projects such as management and restoration.
- Law-related works are also one of our market targets. We would like to provide our expertise in fields such as mediation, arbitration and many more which would be assisted by forensic engineering
- Private individuals and realtors- we would like to provide services regarding home inspection for those people who are renovating or fixing their hose up with modern equipment
- Bodies such as Municipal Corporation also might be one of our markets. Since we are not only interested in business but also promoting it and expanding our market. Bodies such as, municipal cooperation have a vast access to people, if we can collaborate with such organizations and try to help them out. Technically, they can be one of our advertising bodies and not only this much since they work for the government and if they approve you to be a legitimate body, we can attract young students, who are interested in engineering as carrier and teach them for their benefit, which ultimately makes more and more name in the market.
| Market Analysis | |||||||
| Established Architectural and Engineering firms | Growth | YEAR 1 | YEAR 2 | YEAR 3 | YEAR 4 | YEAR 5 | CAGR |
| Territorial and Federal Governmental Departments | 10% | 22,334 | 32,344 | 43,665 | 52,544 | 66,432 | 10.00% |
| Law Firm | 15% | 11,433 | 13,344 | 16,553 | 18,745 | 20,545 | 13.43% |
| Contractors | 10% | 8,322 | 9,455 | 10,655 | 12,867 | 14,433 | 13.00% |
| Municipal Governments | 10% | 4,333 | 5,655 | 6,877 | 7,877 | 9,543 | 10.57% |
| Private Individuals | 14% | 3,256 | 5,655 | 6,877 | 7,877 | 9,543 | 11.00% |
| Realtors | 15% | 3,925 | 5,655 | 6,877 | 7,877 | 9,543 | 10.00% |
| Total | 74% | 53,603 | 72,108 | 91,504 | 107,787 | 130,039 | 100% |
Business targets
Our main business targets are all the companies and firms, whether government, private, or individual ventures, who are looking for some expertise in their projects. The main objectives generally would be the substantial architectural and structural firms looking for support with their plans for ideas, designs, and financial planning. Other destinations can be electrical and mechanical firms, bodies like municipal cooperation, government structures, and law firms.
Pricing
To price and bill for a project, which you will be working on is a difficult task. Often the customers can be confusing depending upon their expectation for the price, and one can find it too high and unaffordable while for the other it might be well within the reach
Clients can compare two of the providers but usually goes on what they hear from the market, which makes an essential point of standing in the market with the right name. When reasonable concessions are given with satisfactory work, customers will return to you for the next job, and also the recommendation of your work will create chances in the market.
Strategy
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The primary components of strategy of our business will keep growing and expanding the company in the market. The primary market strategy for the company would include the promotion and spread of the business. Good strategies, along with management for understanding the budgets, can solve your problems easily.
Sales strategy
When it comes to internet and web promotion, we will try to maximize the flow of users to our website with efficient advertisements and campaigns like email campaigns. One of the best ways to connect with customers is to meet them directly. We will try advertising in a limited budget by giving technical supports to NGOs and campaigning in local communities and schools.
Competitive analysis
It is something that is the best way to rate and know where your business is lacking. Comparing another such firm who has similar services to offer allows you to understand how to overcome things which make you lag. Since you are competing and analyzing yourself, it makes you grow with double speed as it would be the combined inputs of both you and the one which you are getting from your competitor. When you analyze on this basis, it makes your market growth, which ultimately makes your business grow.
Sales monthly
Sales monthly and annual are the analysis of the growth of your company in months and years. Regularly the gross margin is expected to be the same all over and will remain constant; with time passing by, it might increase, but it is going to be persistent.
Sales yearly
For yearly sales, the first year n is expected to be moreover a constant one, the second year might show fluctuations, and in the third, we expect a growth in gross margin. During this time, the business might need some extra cost input, which disrupts the graph sometimes, but in most cases, it same.
Sales forecast
The sales forecast is a summary of the sales and layout of the business in months and years. The sales in months and years are expressed in such estimates. This forecast shows a constant deal typically for three years in a successfully running business with a slow start for the first year. When we talk of the third year, the gross margin likely will increase, but don’t lose your patience and be there to support the business.
| Sales Forecast | |||
| Unit Sales | Year 1 | Year 2 | Year 3 |
| Established Architectural and Engineering firms | 539 | 770 | 1,002 |
| Territorial and Federal Governmental Departments | 265 | 322 | 393 |
| Law Firm | 1035 | 1250 | 1762 |
| Contractors | 550 | 750 | 1,100 |
| TOTAL UNIT SALES | 2,389 | 3,092 | 4,257 |
| Unit Prices | Year 1 | Year 2 | Year 3 |
| Dairy support services | $870.00 | $910.00 | $1,200.00 |
| Livestock health services | $650.00 | $750.00 | $850.00 |
| Farrier services | $1,050.00 | $1,200.00 | $1,000.00 |
| Sale and export | $1,700.00 | $2,100.00 | $3,100.00 |
| Sales | |||
| Established Architectural and Engineering firms | $468,930 | $700,700 | $1,202,400 |
| Territorial and Federal Governmental Departments | $172,250 | $241,500 | $334,050 |
| Law Firm | $1,086,750 | $1,500,000 | $1,762,000 |
| Contractors | $935,000 | $1,575,000 | $3,410,000 |
| TOTAL SALES | $2,662,930 | $4,017,200 | $6,708,450 |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 |
| Established Architectural and Engineering firms | $560.00 | $620.00 | $800.00 |
| Territorial and Federal Governmental Departments | $105.00 | $170.00 | $190.00 |
| Law Firm | $750.00 | $790.00 | $940.00 |
| Contractors | $1,000.00 | $1,350.00 | $2,000.00 |
| Direct Cost of Sales | |||
| Established Architectural and Engineering firms | $301,840 | $477,400 | $801,600 |
| Territorial and Federal Governmental Departments | $27,825 | $54,740 | $74,670 |
| Law Firm | $776,250 | $987,500 | $1,656,280 |
| Contractors | $550,000 | $1,012,500 | $2,200,000 |
| Subtotal Direct Cost of Sales | $1,655,915 | $2,532,140 | $4,732,550 |
Personnel plan
Company staffs
A company is a roof that is supported by the strong pillars of the employees working out there. The company staff, which gives you support and confidence to be there out at the market, is one of the main reasons why a venture becomes successful. If the team does this much for you, makes the backbone of your company secure, then they deserve appreciation, which may be in ways of good and justified salary.
The average salary of employees
The average salary of the employees should be adequate to justify their works when an employee gets what he deserves; he gives his best for the company. It creates a healthy environment and a happy workplace for the people out there. The average salary should justify what one does for a company, and most importantly, the employees should have the respect they deserve.
| Personnel Plan | |||
| Year 1 | Year 2 | Year 3 | |
| Owner | $75,000 | $85,000 | $95,000 |
| Campus Cleaners | $ 7,000 | $ 9,000 | $ 11,000 |
| Digital team | $ 16,000 | $ 18,000 | $ 20,000 |
| Consulting Staff | $ 14,000 | $ 18,000 | $ 21,000 |
| Other staff | $ 17,000 | $ 19,000 | $ 23,000 |
| Manager | $ 25,000 | $ 27,000 | $ 29,000 |
| Security guard | $ 9,000 | $ 11,000 | $ 13,000 |
| Total Salaries | $163,000 | $187,000 | $212,000 |
Financial plans
Important assumptions
We have assumed the economy be healthy and without a recession. We believe the creation of the company will not change the delivery of engineering services. Different taxes and interest rates are taken as conservative assumptions.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 11.00% | 12.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 26.42% | 27.76% | 28.12% |
| Other | 0 | 0 | 0 |
Break-even analysis
A break-even analysis helps you compare total variable and fixed costs with sales revenues to determine the level of sales volume. Charts and graphs can show it, and it is the number of sales, which we need to cover the cost, and we don’t think that before a few months such things would happen.
| Brake-Even Analysis | |
| Monthly Units Break-even | 5530 |
| Monthly Revenue Break-even | $159,740 |
| Assumptions: | |
| Average Per-Unit Revenue | $260.87 |
| Average Per-Unit Variable Cost | $0.89 |
| Estimated Monthly Fixed Cost | $196,410 |
Projected profit and loss
The projected profit and loss for the first financial year are considered much less, and the gross margin was taken high. As the years pass by and the business is in the second, and the third year the growth can be seen, and gross margin should readily increase
| Pro Forma Profit And Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $2,662,930 | $4,017,200 | $6,708,450 |
| Direct Cost of Sales | $1,655,915 | $2,532,140 | $4,732,550 |
| Other | $0 | $0 | $0 |
| TOTAL COST OF SALES | $1,655,915 | $2,532,140 | $4,732,550 |
| Gross Profit | $1,007,015 | $1,485,060 | $1,975,900 |
| Gross Margin % | 37.82% | 36.97% | 29.45% |
| Expenses | |||
| Payroll | $75,000 | $85,000 | $95,000 |
| Sales and Marketing and Other Expenses | $1,850 | $2,000 | $2,150 |
| Depreciation | $2,070 | $2,070 | $2,070 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $4,000 | $4,250 | $4,500 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Rent | $6,500 | $7,000 | $7,500 |
| Payroll Taxes | $34,510 | $40,726 | $46,942 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $125,730 | $142,846 | $159,962 |
| Profit Before Interest and Taxes | $881,285 | $1,342,214 | $1,815,938 |
| EBITDA | $881,285 | $1,342,214 | $1,815,938 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $176,257 | $268,443 | $363,188 |
| Net Profit | $705,028 | $1,073,771 | $1,452,750 |
| Net Profit/Sales | 26.48% | 26.73% | 21.66% |
Profit monthly
Profit monthly with our business is moreover seen constant. The profit margins seen every month are next to the same in the initial financial years.
Profit yearly
It is the profit of the business in a financial year. In the first year the profit is not expected to be high, the second year remains to fluctuate, and good profits can be appreciated until the third financial year.
Gross margin monthly
Gross margin monthly is the gross profit the company will make in a month. The gross margin monthly is not estimated to be high in our business in the initial months.
Gross margin yearly
This is the gross profit made by our company annually. In other words, the sales from the business minus the gross cost. In our business, the first year is not expected to give a great gross margin. However, a steep increase can be expected during the third year.
Projected cash flow
The projected cash flow is an essential aspect of the project. With the starting of the business, one should have ready cash inflow, and sometimes an increase in capital investment to boost up the industry is needed. The first periods are often critical, and at this time, a company needs support.
| Pro Forma Cash Flow | |||
| Cash Received | Year 1 | Year 2 | Year 3 |
| Cash from Operations | |||
| Cash Sales | $40,124 | $45,046 | $50,068 |
| Cash from Receivables | $7,023 | $8,610 | $9,297 |
| SUBTOTAL CASH FROM OPERATIONS | $47,147 | $53,656 | $59,365 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $0 | $0 | $0 |
| New Other Liabilities (interest-free) | $0 | $0 | $0 |
| New Long-term Liabilities | $0 | $0 | $0 |
| Sales of Other Current Assets | $0 | $0 | $0 |
| Sales of Long-term Assets | $0 | $0 | $0 |
| New Investment Received | $0 | $0 | $0 |
| SUBTOTAL CASH RECEIVED | $47,143 | $53,651 | $55,359 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $21,647 | $24,204 | $26,951 |
| Bill Payments | $13,539 | $15,385 | $170,631 |
| SUBTOTAL SPENT ON OPERATIONS | $35,186 | $39,589 | $197,582 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $0 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| SUBTOTAL CASH SPENT | $35,296 | $35,489 | $43,882 |
| Net Cash Flow | $11,551 | $13,167 | $15,683 |
| Cash Balance | $21,823 | $22,381 | $28,239 |
Projected balance sheet
The balance sheet in our business shows healthy financial growth and an increase in the net worth. It shows growth in gross income and increasing business.
| Pro Forma Balance Sheet | |||
| Assets | Year 1 | Year 2 | Year 3 |
| Current Assets | |||
| Cash | $184,666 | $218,525 | $252,384 |
| Accounts Receivable | $12,613 | $14,493 | $16,373 |
| Inventory | $2,980 | $3,450 | $3,920 |
| Other Current Assets | $1,000 | $1,000 | $1,000 |
| TOTAL CURRENT ASSETS | $201,259 | $237,468 | $273,677 |
| Long-term Assets | |||
| Long-term Assets | $10,000 | $10,000 | $10,000 |
| Accumulated Depreciation | $12,420 | $14,490 | $16,560 |
| TOTAL LONG-TERM ASSETS | $980 | $610 | $240 |
| TOTAL ASSETS | $198,839 | $232,978 | $267,117 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $9,482 | $10,792 | $12,102 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| SUBTOTAL CURRENT LIABILITIES | $9,482 | $10,792 | $12,102 |
| Long-term Liabilities | $0 | $0 | $0 |
| TOTAL LIABILITIES | $9,482 | $10,792 | $12,102 |
| Paid-in Capital | $30,000 | $30,000 | $30,000 |
| Retained Earnings | $48,651 | $72,636 | $96,621 |
| Earnings | $100,709 | $119,555 | $138,401 |
| TOTAL CAPITAL | $189,360 | $222,190 | $255,020 |
| TOTAL LIABILITIES AND CAPITAL | $198,839 | $232,978 | $267,117 |
| Net Worth | $182,060 | $226,240 | $270,420 |
Business ratio
It is the ratio indicating if our business is growing or indirectly if we have many to pay our credit holders or not. Our company shows a good ratio, which means we are running out of adequate cash flow.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | INDUSTRY PROFILE | |
| Sales Growth | 4.35% | 30.82% | 63.29% | 4.00% |
| Percent of Total Assets | ||||
| Accounts Receivable | 5.61% | 4.71% | 3.81% | 9.70% |
| Inventory | 1.85% | 1.82% | 1.79% | 9.80% |
| Other Current Assets | 1.75% | 2.02% | 2.29% | 27.40% |
| Total Current Assets | 138.53% | 150.99% | 163.45% | 54.60% |
| Long-term Assets | -9.47% | -21.01% | -32.55% | 58.40% |
| TOTAL ASSETS | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 4.68% | 3.04% | 2.76% | 27.30% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 25.80% |
| Total Liabilities | 4.68% | 3.04% | 2.76% | 54.10% |
| NET WORTH | 99.32% | 101.04% | 102.76% | 44.90% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 94.18% | 93.85% | 93.52% | 0.00% |
| Selling, General & Administrative Expenses | 74.29% | 71.83% | 69.37% | 65.20% |
| Advertising Expenses | 2.06% | 1.11% | 0.28% | 1.40% |
| Profit Before Interest and Taxes | 26.47% | 29.30% | 32.13% | 2.86% |
| Main Ratios | ||||
| Current | 25.86 | 29.39 | 32.92 | 1.63 |
| Quick | 25.4 | 28.88 | 32.36 | 0.84 |
| Total Debt to Total Assets | 2.68% | 1.04% | 0.76% | 67.10% |
| Pre-tax Return on Net Worth | 66.83% | 71.26% | 75.69% | 4.40% |
| Pre-tax Return on Assets | 64.88% | 69.75% | 74.62% | 9.00% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 19.20% | 21.16% | 23.12% | N.A. |
| Return on Equity | 47.79% | 50.53% | 53.27% | N.A. |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.56 | 4.56 | 4.56 | N.A. |
| Collection Days | 92 | 99 | 106 | N.A. |
| Inventory Turnover | 19.7 | 22.55 | 25.4 | N.A. |
| Accounts Payable Turnover | 14.17 | 14.67 | 15.17 | N.A. |
| Payment Days | 27 | 27 | 27 | N.A. |
| Total Asset Turnover | 1.84 | 1.55 | 1.26 | N.A. |
| Debt Ratios | ||||
| Debt to Net Worth | 0 | -0.02 | -0.04 | N.A. |
| Current Liab. to Liab. | 1 | 1 | 1 | N.A. |
| Liquidity Ratios | ||||
| Net Working Capital | $120,943 | $140,664 | $160,385 | N.A. |
| Interest Coverage | 0 | 0 | 0 | N.A. |
| Additional Ratios | ||||
| Assets to Sales | 0.45 | 0.48 | 0.51 | N.A. |
| Current Debt/Total Assets | 4% | 3% | 2% | N.A. |
| Acid Test | 23.66 | 27.01 | 30.36 | N.A. |
| Sales/Net Worth | 1.68 | 1.29 | 0.9 | N.A. |
| Dividend Payout | 0 | 0 | 0 | N.A. |
I hope you got some ideas on how to start with a business in engineering consulting services. Collect your idea and accurately put them for the best result. Thanks for reading!
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