Develop Projected Profit and Loss Statement for eBusiness

2.1 Develop Projected Profit and Loss Statement for your made up eBusiness

You will need to prepare a two-year projected profit and loss statement (P&L) for your eBusiness. including forecasting the traffic, conversion rate, and expected average sale per visit.

You need conduct research to construct a logical and reasonable business case that maximizes profits. The P&L you develop should be thorough, accurate and well supported, with clear explanations of your assumptions and reasoning. By the time you're done, the P&L should be easy for another person to read, and it should be easy for them to understand why you built it the way you did.

Set up the eBusiness Projected Profit and Loss Statement (P&L) workbook.	You will need to enter the spreadsheets to reflect your data.
Estimate eBusiness revenue.
To estimate revenue, you will need to consider the expected visitors to the site, how many of those visitors will make a purchase, and the size of an average purchase. Use your estimates to calculate quarterly revenue for the next two years. Keep in mind that, before you calculate revenue for Year Two, you will need to estimate Year Two traffic based on the growth pattern anticipates.
Estimate eBusiness costs.
Add a supplemental worksheet in your P&L workbook, track your assumptions and calculations for all costs related to the eBusiness. Once you have finalized your assumptions and calculations, update each related line item in the Profit and Loss tab of the workbook.
a. Estimate Cost of Goods Sold (COG). "Cost of Goods Sold" is the cost that a company pays the supplier for the goods they sell. Given that your eBusiness is assuming the same markup on goods as for their bricks & mortar business, it can be calculated as a percentage of revenue from the Projected Profit and Loss Statement for your existing business.
b. Estimate wages. Start with developing an organizational structure by listing the roles your eBusiness will need to launch and run the eBusiness. Next, determine how many full-time employees will be required to fill the roles you have identified. Review the Technical Considerations for your eBusiness for salaries related to SEO and web development; research the average salaries of any additional roles you have identified. Calculate total wages and include your supporting assumptions in the supplemental data tab. Keep in mind that you will want to maximize profits, while still ensuring that staffing levels can meet the demands of the business.
c. Estimate technical infrastructure cost. To calculate the infrastructure costs for the planned outsourced model, you will need to estimate how much total bandwidth will be required for each quarter, based on the estimated visitors to the site and the expected bandwidth required for each visit. Consider the information in the Technical Considerations for your eBusiness as you calculate these costs.
d. Enter the projected marketing costs based on the planned marketing budget.
e. Identify and estimate any additional costs. Review the Profit and Loss Statement for your existing business and the activities you identified in Task One; ensure that you have accounted for all costs related to launching and running the eBusiness over the next two years and you excluded any costs that are only related to running your brick and mortar business.
When calculating the cost of human resources, don't forget to consider all the costs to the company associated with employing that resource.