Develop key success factors, budget, and forecasted financials, including a break-even chart for Allete Inc.
Key success factors
These are key performances that are essential for an organization to meet its mission (Hitt, Ireland, & Hoskisson, 2015). The key success factors for the implementation of the strategic goals include securing adequate resources and budgets. Most organization budget and human resources are not always allocated; therefore, having these factors are critical in achieving the success of the implementation plan. Anticipating for a potential change in management issues is another factor that promotes the achievement of the strategic goal because there will be less or no resistance. Engaging and incentivizing employees and stakeholders will help stakeholders connect to the strategic goal, and this will help promote its implementation.
Budget and forecasted financials
The company is expected to set out 2 percent of its total income (2% × $62,285) = $1,245,700. The fund will be used for the implementation plan, including training staff, developing marketing strategies and programs, cater to the cost of hiring consultative personnel and allowance for executives.
The following is the financial performance expected.
Forecasted Financial Revenue | |||
| 2018 | 2020 | |
Customer Revenue | $892,345 | 5% | $936,962.25 |
Operating Expense | $781,324 | 88% | $820,390.20 |
Operating Income | $111,018 | 12% | $116,569 |
Other income expense | $23,540 | 21% | $24,717 |
Net income | $62,285 | 56% | $65,399.25 |
Break-Even Analysis Charts
Units of Aircrafts | Total Revenue | Total Variable Cost | Total Costs | Total Fixed Costs |
1.0 | $ 148,723.67 | $116,983.00 | $ 200,000.00 | $ 79,426.00 |
14.0 | $ 297,447.34 | $233,966.00 | $ 300,000.00 | $ 79,426.00 |
28.0 | $ 446,171.01 | $350,949.00 | $ 400,000.00 | $ 79,426.00 |
42.0 | $ 594,894.68 | $467,932.00 | $ 500,000.00 | $ 79,426.00 |
56.0 | $ 743,618.35 | $584,915.00 | $ 600,000.00 | $ 79,426.00 |
88.0 | $ 892,342.00 | $701,901.00 | $ 781,327.00 | $ 79,426.00 |
ATSG break-even point is where revenue in dollars is equal to total cost. At break-even point only 14 aircrafts are needed to generate revenue of $300,000. This point is where the total cost and revenue are equal. The cost above that is the profit margin for the organization while any point below the break-even point is loses recorded.