Summary

Chapter 8: Management Team - Page 8.6

Headcount Personnel Plan

An alternative plan estimates total people per department, and the average salary per department. This can be a useful way to project growth of personnel in a high-growth mode requiring rapid addition of people. The next illustration shows an example of this personnel projection method.

Headcount-based Personnel Plan Table

This personnel plan shows personnel expenditures by people per department and spending per person.

For any of these three personnel tables, you also want to calculate a payroll burden as a percentage of the total, and make sure to include the personnel burden amount among the operating expenses, usually as a separate line in Profit and Loss.

The payroll assumptions in this model will also be used for the other financial projections. The Profit and Loss (also called income statement) will use personnel plan numbers.

Summary

Your personnel plan is actually just an educated guess. It is hard to make this kind of guess if you aren't used to forecasting, but you can do it by breaking the assumptions down into rows and thinking it through. If you're having trouble with it, remember that a real business plan is frequently revised to accommodate changes in sales, marketing, and finances.

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