📌 Stage 3 · Costs, CapEx, and the Loan · Operating Expenses · fixed, variable, typed · 35–45 min

One formula row, five typed rows, one total

Learning goals

  • Separate variable delivery cost from fixed studio cost
  • Write the contractor-cost formula as a ratio of project billings
  • Read the typed monthly rows and their seasonal spikes
  • Explain the vendor-invoices memo used by the cash timing math

Concepts

Variable first, fixed second

Operating expenses split in two. The variable line — contractor and freelance delivery — moves with project volume, so it is a formula: 25% of project billings under Base (22% Best, 28% Worst), driven from Assumptions F18. The fixed lines — rent, software, marketing, insurance, travel — are typed month by month because they are decisions, not arithmetic.

The sheet keeps the split visible: formulas on row 6, typed inputs on rows 8 to 12, and totals that never mix the two.

The contractor formula

Freelance designers carry the overflow work, so their cost tracks project billings:

=Assumptions!$F$18*'Revenue Plan'!C9

Operating Expenses C6 (January): 25% × January project billings of $32,300.00 = $8,075.00. The FY total in O6 is $114,000.00. Because it reads the Revenue Plan live, a slower project month automatically trims delivery cost.

💡 Tips:

  • A ratio-of-revenue cost line is the simplest sensitivity in the workbook: flip the scenario and this row moves before anything else.

The typed rows and their spikes

Five rows are typed because each is a decision: rent $3,900.00 every month; software $1,400.00 stepping to $1,750.00 in July when the new hire needs a seat; marketing $2,000.00 with $3,200.00 in March and $3,500.00 in November and December for the new-business push; insurance $900.00 with the $4,500.00 liability renewal in March; travel $700.00 with $3,800.00 in March (SXSW) and $2,400.00 in September (conference).

Typed rows are where a real budget lives: the spikes are the story, and the FY total only makes sense when you can name why each spike is there.

Totals and the vendor memo

Row 13 totals every non-payroll cost line:

=C6+SUM(C8:C12)

Operating Expenses C13 (January total): the $8,075.00 contractor line plus the five fixed rows ($3,900.00 rent + $1,400.00 software + $2,000.00 marketing + $900.00 insurance + $700.00 travel = $8,900.00) = $16,975.00. The FY total in O13 is $235,500.00.

=C6+C10+C11+C12

Operating Expenses C15 (vendor invoices incurred, memo): contractor + marketing + insurance + travel = $11,675.00 in January. Rent and software are excluded because they are paid separately, not on vendor invoices — this memo feeds the vendor payment lag in Lesson 13. The FY memo total is $169,800.00.

Practice

Fixed case: Harbor Creative Studio LLC, a four-person design studio in Austin, Texas, planning calendar year 2026. Cached numbers are the Base scenario. Pale-green cells are formulas; white cells are typed inputs. The exercise opens on the sheet this lesson teaches. Cell C6 (January contractor cost) is blank: retype the variable-cost formula.

  1. Open Operating Expenses — The exercise opens on Operating Expenses. Row 6 is the variable contractor line; rows 8 to 12 are the typed fixed rows; row 13 is the total; row 15 is the vendor memo.
  2. Retype the contractor formula in C6 — Cell C6 is empty. Type =Assumptions!$F$18*'Revenue Plan'!C9 and confirm: it should return $8,075.00 = 25% × January project billings of $32,300.00.
  3. Find the spikes — Scan the typed rows: March (column E) shows insurance $4,500.00 and travel $3,800.00; July (column I) steps software to $1,750.00; November and December show marketing $3,500.00; September shows travel $2,400.00.
  4. Check the totals — O13 (FY non-payroll costs) should read $235,500.00 and O15 (FY vendor invoices incurred) should read $169,800.00. January's C13 reads $16,975.00 and C15 reads $11,675.00.
  5. See it move with the scenario — Open Assumptions, switch C5 to Worst, and return here: C6 should rise to $9,044.00 (28% × $32,300.00) because the Worst scenario assumes more freelance help per project. Switch back to Base to restore $8,075.00.

Online exercise

The spreadsheet below is editable — follow the practice steps right on this page. Steps that need ribbon menus should be done in your own Excel with the downloadable practice file.

表格加载中…

Checklist

Work through each item; when every box passes, this lesson is done:

  • ☐ Retyped the contractor formula in C6 and it returned $8,075.00
  • ☐ O13 reads $235,500.00 for FY non-payroll costs and O15 reads $169,800.00 for the vendor memo
  • ☐ Can explain the March insurance and travel spikes and the July software step
  • ☐ Verified the contractor line tracks the scenario switch (Base $8,075.00 vs Worst $9,044.00)