Create a Robust Financial Plan: Staffing and Expense Models

Last updated 5/2022 English

The success of your business depends on the people you employ, and preparing to bring the right talent on board just when you need it will be crucial to a successful launch and ongoing growth. The more you know in advance about when you’ll need to hire, for which positions, and at what rate, the better you’ll be able to forecast staffing expenses and put management structures in place to prevent turnover. And developing an accurate model for predicting how much each member of the staff will contribute to income generation helps you create realistic revenue forecasts.

We’ll not only cover how staffing plans interact with the rest of your financial reporting, but we’ll establish guidelines for whether to build staff or hire contractors, how to set pay rates and predict costs of benefits, and calculate the ROI of positions across the organization. Using the accompanying spreadsheet tool, you’ll develop a staffing plan that matches your talent needs with the right personnel at the right time.

“Where did all the money go?” may be a common refrain when paying the monthly household bills, but expenses should never be a mystery when you’re launching a business. A thorough understanding of the costs of doing business – from rent to trade show marketing collateral – is essential to keep track of income and cash flow; you can track actual expenses against the projections as you move past launch and adjust activities accordingly. You also need to know baseline expenses so that you can price your offering appropriately and eventually realize a profit.

This course also details potential expenses and their classifications, along with their potential tax implications, and offers a detailed worksheet for breaking out and tracking all the costs involved in running your business. Armed with this information, you’ll not only build solid financials for your business plan you’ll also build a buffer against overspending.

This course is part of a larger series on creating a robust financial plan. To learn more, you can watch the following courses in this series:

  1. Create a Robust Financial Plan: The Fundamentals
  2. Create a Robust Financial Plan: Revenue Models
  3. Create a Robust Financial Plan: Financial Statements

Your Staffing Model

How much do you plan to spend on your employees and/or contractors — and how do you make that decision? This video provides an overview of your staffing considerations, such as costs, salaries, timing, and business goals.

Let's take a look at the differences between contractors and employees. We explore the pros and cons of each. Since our model supports both, we will also walk you through how to forecast for each.

Your model will not work unless you classify your employees and contractors by expense category. This is required to create your income statement.

Staffing Model Walk-Through

This walk-through takes you right into the Financial Model — spotlighting the Staffing Worksheet. This covers calculating your employee and contractor costs over the next few years. Ken explains how to complete all fields in the spreadsheet so that you can confidently estimate business financials on your own.

Let's walk through the model and estimate our contractor expenses and all the overhead costs associated with employees, and how to account for them. The good thing is the model makes it easy (and calculates it for you).

Your Expense Model

Your expense model captures all of your non staffing-related expenses. To create accurate financial statements, and for tax compliance, you must classify all of your expenses properly. This video provides an overview of the four classification groups: G&A, COGS, product development, and sales & marketing — along with which ones to use for your business.

Expense Model Walk-Through

This walk-through takes you right into the Financial Models Worksheet — spotlighting the Expense tab. This covers the four classification groups: G&A, COGS, product development, and sales & marketing. Ken explains how to complete all fields in the spreadsheet so that you can confidently estimate business financials on your own.

Financial Model: Worksheets

This course included a full blown financial model you can use to create a staffing and expense forecast (and financial plan) for your business. In addition, we have included a collection of completed sample worksheets that are referenced in this course.

Please note: The password to unprotect the spreadsheets allowing you to change formulas and insert rows is: Success.

  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
What you'll learn
  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?