GROUP 1

We will explain material about :

• business plan,
• finance,
• cost calculation,
• sales, and revenue

Arowwai Industries
BUSINESS
PLAN

A business plan is a formal document that outlines the

goals, strategies, and methods for achieving success for a
business. It's like a roadmap that guides you from where
you are now to where you want to be in the future.
 Here are some key components of a business plan:
• Executive Summary :
This is a brief overview of the entire plan, highlighting the most important points. Think of it as an elevator pitch for your
business.

• Company Description:
This section introduces your business, its products or services, and its target market.

• Market Analysis:
This section assesses the competition and the overall market landscape for your business.

• Marketing and Sales Strategy:

This section outlines how you plan to reach your target market and sell your products or services.

• Management Team:
This section introduces the key people who will be running the business.

• Financial Projections:
This section forecasts your revenue, expenses, and profits for the next few years.
FINANC
E

The term finance comes from English which means finance. Meanwhile, in terms of terms, it is a science that studies how
to manage money so that it remains stable.
Almost every company or business needs a financial figure to organize, manage and supervise the inflow and outflow of
money in the company's operational processes.

Finance functions and tasks for the company

• Manage payments and bills
• Ensure the correctness of the data in the financial reports
• Carry out business analysis
• Do budgeting.
• Finance also has the task of managing and holding money directly, both in the form of currency and demand deposits.
which is also defined as finance is the art of managing money in everyday life, business or organizations.
 CALCULATION
COST
Calculation Cost is the process of determining all costs incurred to run a business. This includes direct costs related to the
production of goods or services, as well as indirect costs such as overhead and administration.

Objective:

• To find out the total costs incurred in business

• To determine the right selling price for products or services
• To control expenses and increase efficiency
• To make the right decisions related to business finances
• To measure profitability and business performance
Fixed Costs: Costs that do not change, regardless of the number of products or services produced. For example: building rent,
permanent employee salaries, insurance, taxes, etc.

Variable Costs: Costs that change according to the number of products or services produced. For example: raw materials, wages for
temporary employees, electricity costs, shipping costs, etc.

Total Costs: The total costs incurred to run a business, which are a combination of fixed costs and variable costs.

Direct Costs: Costs that can be directly linked to the products or services produced. For example: raw materials, direct labor wages,
etc.

Indirect Costs: Costs that cannot be directly linked to the products or services produced, but are still necessary to run the business.
For example: administrative staff salaries, office rental costs, etc.
Sales & Revenue

Sales

Sales may be defined as money paid by customers. Sales are a company's core revenue for a given period. Sales
are the proceeds a company generates from selling goods or services to its customers:

• In accounting terms, sales comprise one component of a company's revenue figure.

• On an income statement, sales are typically referred to as gross sales.

• A company may also report net sales, which is the result of subtracting any returned merchandise from gross
sales. Retail companies tend to report net sales as well as revenue.
 Revenue according to experts:

• Lam and Lau (2014:317) state that income is the gross inflow of economic benefits during the current
period that arises in the ordinary course of activities of an entity when the inflow is generated in addition to
capital, other than those related to equity holder contributions.
• The Indonesian Association of Accountants (2015:23.1) defines revenue as income that arises from carrying
out normal entity activities and is known by different names, such as sales, service income, interest,
dividends, royalties and rent.

in our opinion about revenue :

• Revenue is often referred to as the "top line" because it appears at the top of the company's income
statement.
• Revenue is the income a company generates before any expenses are subtracted from the calculation.
• Logically, revenue is the larger figure. However, total revenue for a period may occasionally be smaller than
total sales.

Take, for example, a business that sells only hats. If the store's revenue formula deducts all discounted sales,
returns, and damaged merchandise, the company's gross sales could be greater than its revenue.
Types of Revenue :

• Total Revenue
Total Revenue (TR) is the company's total receipt or income from sales. The value of total revenue can change
depending on the size of sales of goods achieved by the company

• Marginal Revenue
Marginal revenue is an increase or decrease in revenue caused by the addition or reduction of one unit of output.
Marginal revenue is used to measure changes in income (revenue) resulting from changes in the number of goods or
services sold.

• Average Income
Average revenue is the receipt per unit from sales of output. It could be said that average revenue is the price of the
product itself.
Revenue Formula

There are at least 3 types of formulas that can be used to determine company revenue, namely total revenue,
average revenue and marginal revenue.

Total Revenue Formula :

Total revenue is the most basic formula used and will be the basis for calculating other types of income. To
determine total revenue, you need to multiply the selling price per product unit by the total number of products
sold. The formula is:

TR = P x Q

TR = Total Revenue

P = Price or price

Q = Quantity or number of products sold

Revenue Formula

Average Revenue Formula

Average revenue is total revenue divided by the number of products sold. The calculation formula is:

AR = TR : Q

AR = Average Revenue

TR = Total Revenue

Q = Quantity or number of products

Revenue Formula

Marginal Revenue Formula

What is meant by marginal revenue is additional income resulting from each additional unit of goods sold. The
formula used to calculate marginal income is as follows:

MR = ∆ TR : ∆ Q

MR = Marginal Revenue

∆ TR = Additional Total Revenue

∆ Q = Additional Goods sold

 Overall Conclusion
Building a successful business requires a holistic approach that
encompasses a sound business plan, careful financial management,
accurate cost calculations, and a robust sales and revenue engine. By
understanding and diligently addressing each of these elements, you
can navigate challenges, capitalize on opportunities, and build a
thriving business venture.
Thank You