N services (fixed per quarter) Training (based on employees) Travel and transportation expense (based on employees) Utilities (based on employees) Practical Design and Economic Parameters Table 10-4 cont. Support Costs 1st year 2nd year 3rd year 4th year 5th year Facility and SGA Employee Vehicle expense- Expenses facility and so on (based on employees) Vehicle expense- sales (based on employees) Vehicle expense- other (based on employees) Vehicle lease expense (based on cities) Small tools (based on employees) Outsourced NOC $2,500,000 $250,000 $250,000 expense (fixed amount) Table 10-5 1st-year 2nd-year 3rd-year 4th-year 5th-year Productivity payroll payroll payroll payroll payroll Measures Revenue/employee $70,000 $140,000 $280,000 $290,000 $290,000 Revenue/month/sales $8,000 $8,000 $9,000 $9,000 $10,000 account executive Dividing the total carrier revenue by this goal yields the total number of employees in the company. Next, you need to establish a monthly quota for salespeople against the company revenue using the Rule of 78. The Rule of 78 yields the number of sales account representatives needed. Subtracting the salespeople from the total number of staffers just computed gives the number of employees that can be supported in each company division. (See Appendix A for a calculation of the normalized revenue per employee and Appendix B for a calculation of the number of salespeople required for revenue.) Table 10-6 identifies the capital infusion, and timing thereof, that may be needed from financiers. Chapter 10 Table 10-6 Financing Activities Financing Financing Monetary Share Measures Occurs Shares Amount Value Year 1 1st qtr. $200,000,000 2nd qtr. 3rd qtr. 4th qtr. Year 2 1st qtr. $430,000,000 2nd qtr. 3rd qtr. 4th qtr. There are other relevant parameters to consider, such as the installation revenue, sales channels revenue percentages, and SO on, which will affect SGA and salespeople counts. Some assumptions, but certainly not all, are captured in Table 10-7: Table 10-7 1st year 2nd year 3rd year Opera