 Welcome to a new Precious Plastic video. In this video, we're going to be talking about the Workspace Calculator, which is a financial forecasting tool for you to understand the financial feasibility of starting a workspace. Using this tool, you should be able to learn how much money you're going to need to start, how many products and services you need to sell each month in order to be profitable, and how long it's going to take you to pay back your initial investment. Now, this tool isn't really an exact science, it just tells you what the ballpark area is that you need to be in. Today, we're going to be using our Google Sheets version. You can also download this file as an Excel sheet or as an open documents format that you can use in any of your favorite programs. We're going to be making a lot of assumptions I know can sometimes feel uncomfortable, maybe you don't know what numbers exactly to put in there. It's totally fine, just make a guess and then you can always go back and adjust these numbers as you learn more information. You don't have to worry too much about the currencies. The file does not use any specific currency, so you can just think about the numbers in terms of whatever you use in your home country. It also doesn't include taxes because there's different tax structures all around the world, so just keep this in mind when you are analyzing your results that you still need to think about taxes. This tool is really applicable to every type of precious plastic business, whether you're a machine builder, you're working on production, doing workshops, it's really a widely applicable tool. Basically, the idea of the tool is that you are going to list your sources of income, subtract the costs, and then look at the summary results for how much profit you're making per month. This video might be a little bit dry, sorry about that, but really there's no other way to show how to use it other than just jump in there and start using the tool, so let's get into it. Okay, so we start on the Read Me page. That's where you can find some information about what you will learn using this tool. But there's three things at the bottom that we should note. The first one is that the cells that have an outline in blue are where you should be entering numbers. The cells with a gray background are where we've calculated numbers for you. And then there's these cells with a little black arrow in the right-hand corner, and that's where if you click on that, then a little box comes up with more information if you get lost. So the sales page, we need to, first of all, add the products and services that we plan on producing and offering as part of our workspace. Then we will add our material costs for each product, and then the number of working hours that are spent to produce each product or service. So maybe in my workspace I'm going to make some bowls, some tiles, as well as workshops. And then putting in the material costs for each product, so I'm going to need to buy some shredded plastic from my local precious plastic shredder workspace. It's going to cost me about 50 cents per bowl, and then about 25 cents per tile. And for my workshops, I have some extra documentation and resources that I bring along to pass out, so that's going to cost me about 150 per workshop. Now we have to think about our working hours to produce each product and service. Looking at my bowls, it takes me about 15 minutes, which is about 0.33 of an hour, so I put that in that cell. To make my tiles, it takes me about 15 minutes, so I put a 0.25. And then my workshops are about four hours to do, so I will put a four in this cell. That's it for our sales. Now we need to move on to the costs. Okay, our costs will come in three different forms. First is working hours, then investment costs, and then finally our fixed costs. So the working hours section is all the things that we're going to be doing on a weekly basis that are not producing our products or services. So these are things like marketing, social media, also just general administration, machine, and workspace maintenance, as well as sales. And then we need to plug in how many hours that we plan on spending on each one of these activities per week. So I think about eight hours on marketing and social media, eight on administration, I think 10 on machine and workspace maintenance, and 12 on sales. Okay, next up is our investment costs. And the investment costs are all of those one-time costs that you need to get up and running. So these are like buying the machines, buying the materials that you're going to build the machines yourself, any tools that you're going to need, maybe a renovation of your workspace. So this is where we need to plug those numbers in, as well as assign a cost for each one. So I need an injection machine for my workspace that's going to cost me about $1,000 and then a business permit, $200, a van to deliver my products, $3,000, a computer, $500, office supply, workspace renovation. And trying to be as exhaustive as you can, it's better to think about all the things you really will need instead of underestimating what sort of first-time costs that you're going to need to get. The last section is our fixed costs or the costs that do not vary with the amount of products and services that we are producing. So these are things like rent, electricity, water, maybe you have some website costs. And then we need to assign a number for each one. So I talked to some people in my local area, I think I can get a space for about $300, electricity, maybe $100, water, $50, and then website $20. Of course, your number is going to look different based on the costs of your local area. Also, you might have some other monthly costs that we're not putting you in right now. This is just a guide to get you started. Okay, that's it for our costs. Next, we move on to the dashboard page, which is where everything kind of comes together. And we can start to see the whole financial picture of our workspace. So when we arrive on the dashboard page, we see some of the products and services that we already inputted on the sales page. But now we need to enter in the selling price per unit. I know it can be difficult to come up with exact price, but maybe look around on the precious plastic bazaar to see what other people are charging to understand a range of where you could also be. So for my bowls, I want to charge 15 tiles, I think 10 and workshops 400. And then we need to enter the number of expected sales per month, and try to be realistic here. If you can, I know we can always go back and adjust these over time. So I'm going to put in 150 and two. Next, we move on to the wages section, which is where we will put in a average hourly wage for people working at your workspace. If you have trouble coming up with one, try looking up the living wage for your country and use that as a reference point. So I'm going to leave this at 10 in here. So we've now entered enough information to get some results in our summary table. But going just down to the bottom here, I see in my total total profit earned per month that the number is in the red, meaning that we are not earning any profit per month. And this is a good place to start to see, okay, how can I go back and change some numbers to get a better financial picture? So there are a few key variables that we can look back at and change to try to get a better financial picture. One of those key areas to look at is our profit margin per product. So we can see here there's two products that have a negative profit margin. And you can tell that very easily because they're in red. And what that means, we need to either increase our selling price per unit or increase the number of expected sales per month. So I'm going to go back and change the selling price per unit of my bowls to 20 and my tiles to 15. That puts our profit margin in the green, meaning that we are covering the costs of production and we're making money on each one of our products. So selling price is just one of the variables that we could change to get a better financial picture of our workspace. We could also look at the hourly wage, maybe lower that a little bit by one. That's going to increase our profit margins. We can also go back to our sales page and look over the material costs for each product, make sure that that was accurate, make any adjustments if necessary. Also the number of working hours to produce each product, make sure that that is in line with what you really think it's going to take to produce those items. Okay, now we can interpret the summary page. The first number here is the money needed to start. So this is basically a sum of the investment costs plus one month of operating costs to get you going in the first month. It also tells us the months to pay back our initial investments. So here it says 13. That means it's going to take 13 months to pay back our initial investment. The number of full-time employees needed is 1.3. So it's about one and a half people needed to run this workspace. Our revenue earned per month is this number here in green. That is the amount of money that we are bringing in from the sale of all of our products and our workshops. Then we will subtract these fixed costs per month, the material costs per month, and the total wages paid per month to finally come up with our total profit earned per month, which is this last number here. It's important to remember these total wages paid per month. This is probably going to include you. So this is including all of the production time for each one of our products in our workshops. And it also includes the weekly activities that we put into the cost page. Next thing we can do is scroll down to the charts below. And we can see a payback analysis, which shows graphically how long it's going to take to pay back our initial investment. We can see our per product revenue versus cost, our total monthly profit by product, to see what's bringing in the most profit, as well as the total revenue versus costs. The last page is the extras page, which is where we have generated some financial statements for you, as well as provided some of the tables that we use to calculate the numbers on the dashboard page. First up is our cash flow statement, which is showing that you have enough money to cover your costs throughout the first year of operations. And this sort of statement is something that maybe a grant application or a bank would ask when you are applying for a grant or a bank loan. The next table is your profit and loss statement, which is a very important financial statement for showing the overall financial health of your business. So this financial statement is forecasting your net income over a three-year period, but it's highly dependent on this yearly growth rate, which you can select how high you would like this growth rate to be. And you can do either none, low, medium, or high. If we change this from high to medium, we can see the growth forecast for year two and three is a little bit lower. So we can also change our business tax rate, but do some research for your country to see what the range should be. And we can change this and that will change a little bit the amount of business taxes that we're taking out before seeing our net income. The last two tables are our monthly sales figures, where you can see all the costs and revenues for each product and service. And the payback table, which is the information that's used to generate the payback analysis on the dashboard page. That's it for the workspace calculator. I know it was a wild ride. Next up is a business plan template. See you in the next precious plastic video. Oh, and before you go, we just wanted to let you know that precious plastic runs on funding and support of people just like you. 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