business plan
Tuleenhb
8-SamplePlan.pdf
1
Executive Summary Introduction
Jolly's Java and Bakery (JJB) is a start-up coffee and bakery retail establishment located
in southwest Washington. JJB expects to catch the interest of a regular loyal customer
base with its broad variety of coffee and pastry products. The company plans to build a
strong market position in the town, due to the partners' industry experience and mild
competitive climate in the area.
JJB aims to offer its products at a competitive price to meet the demand of the middle-to
higher-income local market area residents and tourists.
The Company
JJB is incorporated in the state of Washington. It is equally owned and managed by its
two partners.
Mr. Austin Patterson has extensive experience in sales, marketing, and management, and
was vice president of marketing with both Jansonne & Jansonne and Burper Foods. Mr.
David Fields brings experience in the area of finance and administration, including a stint
as chief financial officer with both Flaxfield Roasters and the national coffee store chain,
BuzzCups.
The company intends to hire two full-time pastry bakers and six part-time baristas to
handle customer service and day to day operations.
Products and Services
JJB offers a broad range of coffee and espresso products, all from high quality
Columbian grown imported coffee beans. JJB caters to all of its customers by providing
each customer coffee and espresso products made to suit the customer, down to the
smallest detail.
The bakery provides freshly prepared bakery and pastry products at all times during
business operations. Six to eight moderate batches of bakery and pastry products are
prepared during the day to assure fresh baked goods are always available.
2
The Market
The retail coffee industry in the U.S. has recently experienced rapid growth. The cool
marine climate in southwest Washington stimulates consumption of hot beverages
throughout the year.
JJB wants to establish a large regular customer base, and will therefore concentrate its
business and marketing on local residents, which will be the dominant target market. This
will establish a healthy, consistent revenue base to ensure stability of the business. In
addition, tourist traffic is expected to comprise approximately 35% of the revenues. High
visibility and competitive products and service are critical to capture this segment of the
market.
Financial Considerations
JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed by
the SBA as a ten-year loan. This provides the bulk of the current financing required.
JJB anticipates sales of about $491,000 in the first year, $567,000 in the second year, and
$655,000 in the third year of the plan. JJB should break even by the fourth month of its
operation as it steadily increases its sales. Profits for this time period are expected to be
approximately $13,000 in year 1, $36,000 by year 2, and $46,000 by year 3. The
company does not anticipate any cash flow problems.
3
1.1 Mission
JJB aims to offer high quality coffee, espresso, and pastry products at a competitive price
to meet the demand of the middle- to higher-income local market area residents and
tourists.
1.2 Keys to Success
Keys to success for JJB will include:
1. Providing the highest quality product with personal customer service.
2. Competitive pricing.
Company Summary JJB is a bakery and coffee shop managed by two partners. These partners represent
sales/management and finance/administration areas, respectively. The partners will
provide funding from their own savings, which will cover start-up expenses and provide a
financial cushion for the first months of operation. A ten-year Small Business
Administration (SBA) loan will cover the rest of the required financing. The company
plans to build a strong market position in the town, due to the partners' industry
experience and mild competitive climate in the area.
2.1 Company Ownership
JJB is incorporated in the state of Washington. It is equally owned by its two partners.
2.2 Start-up Summary
JJB is a start-up company. Financing will come from the partners' capital and a ten-year
SBA loan. The following chart and table illustrate the company's projected initial start-up
costs.
4
START-UP REQUIREMENTS
Start-up Expenses
Legal $3,000
Premise renovation $20,000
Expensed equipment $40,000
Other $1,000
TOTAL START-UP EXPENSES $64,000
Start-up Assets
Cash Required $70,000
Other Current Assets $12,000
Long-term Assets $65,000
TOTAL ASSETS $147,000
Total Requirements $211,000
START-UP FUNDING
Start-up Expenses to Fund $64,000
Start-up Assets to Fund $147,000
TOTAL FUNDING REQUIRED $211,000
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Assets
Non-cash Assets from Start-up $77,000
Cash Requirements from Start-up $70,000
Additional Cash Raised $0
Cash Balance on Starting Date $70,000
TOTAL ASSETS $147,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $1,000
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $101,000
Capital
Planned Investment
Patterson $55,000
Fields $55,000
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $110,000
6
Loss at Start-up (Start-up Expenses) ($64,000)
TOTAL CAPITAL $46,000
TOTAL CAPITAL AND LIABILITIES $147,000
Total Funding $211,000
Products JJB offers a broad range of coffee and espresso products, all from high quality Columbian grown imported coffee beans. JJB caters to all of its customers by providing each customer coffee and espresso products made to suit the customer, down to the smallest detail.
The bakery provides freshly prepared bakery and pastry products at all times during business operations. Six to eight moderate batches of bakery and pastry products are prepared during the day to assure fresh baked goods are always available.
Market Analysis Summary JJB's focus is on meeting the demand of a regular local resident customer base, as well as
a significant level of tourist traffic from nearby highways.
4.1 Market Segmentation
JJB focuses on the middle- and upper-income markets. These market segments consume the majority of coffee and espresso products.
Local Residents
JJB wants to establish a large regular customer base. This will establish a healthy, consistent revenue base to ensure stability of the business.
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Tourists
Tourist traffic comprises approximately 35% of the revenues. High visibility and competitive products and service are critical to capture this segment of the market.
4.1.1 Market Analysis
The chart and table below outline the total market potential of the above described
customer segments.
4.2 Target Market Segment Strategy
The dominant target market for JJB is a regular stream of local residents. Personal and
expedient customer service at a competitive price is key to maintaining the local market
share of this target market.
4.2.1 Market Needs
Because Washington has a cool climate for eight months out of the year, hot coffee
products are very much in demand. During the remaining warmer four months of the
year, iced coffee products are in significantly high demand, along with a slower but
consistent demand for hot coffee products. Much of the day's activity occurs in the
morning hours before ten a.m., with a relatively steady flow for the remainder of the day.
4.3 Service Business Analysis
The retail coffee industry in the U.S. has recently experienced rapid growth. The cool
marine climate in southwest Washington stimulates consumption of hot beverages
throughout the year. Coffee drinkers in the Pacific Northwest are finicky about the
quality of beverages offered at the numerous coffee bars across the region. Despite low
competition in the immediate area, JJB will position itself as a place where customers can
enjoy a cup of delicious coffee with a fresh pastry in a relaxing environment.
4.3.1 Competition and Buying Patterns
Competition in the local area is somewhat sparse and does not provide nearly the level of
product quality and customer service as JJB. Local customers are looking for a high
quality product in a relaxing atmosphere. They desire a unique, classy experience.
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Leading competitors purchase and roast high quality, whole-bean coffees and, along with
Italian-style espresso beverages, cold-blended beverages, a variety of pastries and
confections, coffee-related accessories and equipment, and a line of premium teas, sell
these items primarily through company-operated retail stores. In addition to sales through
company-operated retail stores, leading competitors sell coffee and tea products through
other channels of distribution (specialty operations).
Larger chains vary their product mix depending upon the size of each store and its
location. Larger stores carry a broad selection of whole bean coffees in various sizes and
types of packaging, as well as an assortment of coffee- and espresso-making equipment
and accessories such as coffee grinders, coffee makers, espresso machines, coffee filters,
storage containers, travel tumblers and mugs. Smaller stores and kiosks typically sell a
full line of coffee beverages, a more limited selection of whole-bean coffees, and a few
accessories such as travel tumblers and logo mugs. During fiscal year 2000,
industry retail sales mix by product type was approximately 73% beverages, 14% food
items, eight percent whole-bean coffees, and five percent coffee-making equipment and
accessories.
Technologically savvy competitors make fresh coffee and coffee-related products
conveniently available via mail order and online. Additionally, mail order
catalogs offering coffees, certain food items, and select coffee-making equipment and
accessories, have been made available by a few larger competitors. Websites offering
online stores that allow customers to browse for and purchase coffee, gifts, and other
items via the Internet have become more commonplace as well.
Strategy and Implementation Summary JJB will succeed by offering consumers high quality coffee, espresso, and bakery
products with personal service at a competitive price.
5.1 Competitive Edge
JJB's competitive edge is the relatively low level of competition in the local area in this
particular niche.
5.2 Sales Strategy
As the chart and table show, JJB anticipates sales of about $491,000 in the first year,
$567,000 in the second year, and $655,000 in the third year of the plan.
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10
SALES FORECAST
YEAR 1 YEAR 2 YEAR 3
Unit Sales
Espresso Drinks 135,000 148,500 163,350
Pastry Items 86,000 94,600 104,060
Other 0 0 0
TOTAL UNIT SALES 221,000 243,100 267,410
Unit Prices Year 1 Year 2 Year 3
Espresso Drinks $3.00 $3.15 $3.31
Pastry Items $1.00 $1.05 $1.10
Other $0.00 $0.00 $0.00
Sales
Espresso Drinks $405,000 $467,775 $540,280
Pastry Items $86,000 $99,330 $114,726
Other $0 $0 $0
TOTAL SALES $491,000 $567,105 $655,006
Direct Unit Costs Year 1 Year 2 Year 3
Espresso Drinks $0.25 $0.26 $0.28
Pastry Items $0.50 $0.53 $0.55
Other $0.00 $0.00 $0.00
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Direct Cost of Sales
Espresso Drinks $33,750 $38,981 $45,023
Pastry Items $43,000 $49,665 $57,363
Other $0 $0 $0
Subtotal Direct Cost of Sales $76,750 $88,646 $102,386
Management Summary Austin Patterson has extensive experience in sales, marketing, and management, and was
vice president of marketing with both Jansonne & Jansonne and Burper
Foods. David Fields brings experience in the area of finance and administration,
including a stint as chief financial officer with both Flaxfield Roasters and the national
coffee store chain, BuzzCups.
6.1 Personnel Plan
As the personnel plan shows, JJB expects to make significant investments in sales, sales
support, and product development personnel.
PERSONNEL PLAN
YEAR 1 YEAR 2 YEAR 3
Managers $100,000 $105,000 $110,250
Pastry Bakers $40,800 $42,840 $44,982
Baristas $120,000 $126,000 $132,300
Other $0 $0 $0
TOTAL PEOPLE 10 10 10
Total Payroll $260,800 $273,840 $287,532
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Financial Plan JJB expects to raise $110,000 of its own capital, and to borrow $100,000 guaranteed
by the SBA as a ten-year loan. This provides the bulk of the current financing required.
7.1 Break-even Analysis
JJB's Break-even Analysis is based on the average of the first-year figures for total sales
by units, and by operating expenses. These are presented as per-unit revenue, per-unit
cost, and fixed costs. These conservative assumptions make for a more accurate estimate
of real risk. JJB should break even by the fourth month of its operation as it
steadily increases its sales.
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BREAK-EVEN ANALYSIS
Monthly Units Break-even 17,255
Monthly Revenue Break-even $38,336
Assumptions:
Average Per-Unit Revenue $2.22
Average Per-Unit Variable Cost $0.35
Estimated Monthly Fixed Cost $32,343
7.2 Projected Profit and Loss
As the Profit and Loss table shows, JJB expects to continue its steady growth
in profitability over the next three years of operations.
PRO FORMA PROFIT AND LOSS
YEAR 1 YEAR 2 YEAR 3
Sales $491,000 $567,105 $655,006
Direct Cost of Sales $76,750 $88,646 $102,386
Other $0 $0 $0
TOTAL COST OF SALES $76,750 $88,646 $102,386
Gross Margin $414,250 $478,459 $552,620
Gross Margin % 84.37% 84.37% 84.37%
Expenses
Payroll $260,800 $273,840 $287,532
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Sales and Marketing and Other
Expenses
$27,000 $35,200 $71,460
Depreciation $60,000 $69,000 $79,350
Utilities $1,200 $1,260 $1,323
Payroll Taxes $39,120 $41,076 $43,130
Other $0 $0 $0
Total Operating Expenses $388,120 $420,376 $482,795
Profit Before Interest and Taxes $26,130 $58,083 $69,825
EBITDA $86,130 $127,083 $149,175
Interest Expense $10,000 $9,500 $8,250
Taxes Incurred $3,111 $12,146 $15,650
Net Profit $13,019 $36,437 $45,925
Net Profit/Sales 2.65% 6.43% 7.01%
7.3 Projected Cash Flow
The cash flow projection shows that provisions for ongoing expenses are adequate to
meet JJB's needs as the business generates cash flow sufficient to support operations.
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PRO FORMA CASH FLOW
YEAR 1 YEAR 2 YEAR 3
Cash Received
Cash from Operations
Cash Sales $491,000 $567,105 $655,006
SUBTOTAL CASH FROM OPERATIONS $491,000 $567,105 $655,006
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $491,000 $567,105 $655,006
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $260,800 $273,840 $287,532
Bill Payments $143,607 $186,964 $237,731
SUBTOTAL SPENT ON OPERATIONS $404,407 $460,804 $525,263
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Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $10,000 $15,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $20,000 $20,000
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $404,407 $490,804 $560,263
Net Cash Flow $86,593 $76,301 $94,744
Cash Balance $156,593 $232,894 $327,637
7.4 Balance Sheet
The following is a projected Balance Sheet for JJB.
PRO FORMA BALANCE SHEET
YEAR 1 YEAR 2 YEAR 3
Assets
Current Assets
Cash $156,593 $232,894 $327,637
Other Current Assets $12,000 $12,000 $12,000
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TOTAL CURRENT ASSETS $168,593 $244,894 $339,637
Long-term Assets
Long-term Assets $65,000 $85,000 $105,000
Accumulated Depreciation $60,000 $129,000 $208,350
TOTAL LONG-TERM ASSETS $5,000 ($44,000) ($103,350)
TOTAL ASSETS $173,593 $200,894 $236,287
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $14,574 $15,438 $19,907
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $14,574 $15,438 $19,907
Long-term Liabilities $100,000 $90,000 $75,000
TOTAL LIABILITIES $114,574 $105,438 $94,907
Paid-in Capital $110,000 $110,000 $110,000
Retained Earnings ($64,000) ($50,981) ($14,544)
Earnings $13,019 $36,437 $45,925
TOTAL CAPITAL $59,019 $95,456 $141,381
TOTAL LIABILITIES AND CAPITAL $173,593 $200,894 $236,287
Net Worth $59,019 $95,456 $141,381
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7.5 Business Ratios
The following table represents key ratios for the retail bakery and coffee shop industry.
These ratios are determined by the Standard Industry Classification (SIC) Index code
5812, Eating Places.
RATIO ANALYSIS
YEAR 1 YEAR 2 YEAR 3 INDUSTRY
PROFILE
Sales Growth 0.00% 15.50% 15.50% 7.60%
Percent of Total Assets
Other Current Assets 6.91% 5.97% 5.08% 35.60%
Total Current Assets 97.12% 121.90% 143.74% 43.70%
Long-term Assets 2.88% -21.90% -43.74% 56.30%
TOTAL ASSETS 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.40% 7.68% 8.42% 32.70%
Long-term Liabilities 57.61% 44.80% 31.74% 28.50%
Total Liabilities 66.00% 52.48% 40.17% 61.20%
NET WORTH 34.00% 47.52% 59.83% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 84.37% 84.37% 84.37% 60.50%
Selling, General & Administrative Expenses
74.74% 71.43% 71.39% 39.80%
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Advertising Expenses 0.49% 1.76% 6.87% 3.20%
Profit Before Interest and Taxes 5.32% 10.24% 10.66% 0.70%
Main Ratios
Current 11.57 15.86 17.06 0.98
Quick 11.57 15.86 17.06 0.65
Total Debt to Total Assets 66.00% 52.48% 40.17% 61.20%
Pre-tax Return on Net Worth 27.33% 50.90% 43.55% 1.70%
Pre-tax Return on Assets 9.29% 24.18% 26.06% 4.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 2.65% 6.43% 7.01% n.a
Return on Equity 22.06% 38.17% 32.48% n.a
Activity Ratios
Accounts Payable Turnover 10.79 12.17 12.17 n.a
Payment Days 27 29 27 n.a
Total Asset Turnover 2.83 2.82 2.77 n.a
Debt Ratios
Debt to Net Worth 1.94 1.10 0.67 n.a
Current Liab. to Liab. 0.13 0.15 0.21 n.a
Liquidity Ratios
Net Working Capital $154,019 $229,456 $319,731 n.a
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Interest Coverage 2.61 6.11 8.46 n.a
Additional Ratios
Assets to Sales 0.35 0.35 0.36 n.a
Current Debt/Total Assets 8% 8% 8% n.a
Acid Test 11.57 15.86 17.06 n.a
Sales/Net Worth 8.32 5.94 4.63 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Appendix
SALES FORECAST
MONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
Unit Sales
Espresso
Drinks 0% 5,000 7,500 10,000 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500 12,500
Pastry Items 0% 2,000 3,000 6,000 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333 8,333
Other 0% 0 0 0 0 0 0 0 0 0 0 0 0
TOTAL
UNIT
SALES
7,000 10,500 16,000 20,833 20,833 20,833 20,833 20,833 20,833 20,833 20,833 20,833
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Espresso
Drinks
$3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
Pastry Items $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Other $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Sales
Espresso
Drinks
$15,000 $22,500 $30,000 $37,500 $37,500 $37,500 $37,500 $37,500 $37,500 $37,500 $37,500 $37,500
Pastry Items $2,000 $3,000 $6,000 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL
SALES $17,000 $25,500 $36,000 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833
Direct Unit
Costs
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
22
Espresso
Drinks
0.00% $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25
Pastry Items 0.00% $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50
Other 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost
of Sales
Espresso
Drinks $1,250 $1,875 $2,500 $3,125 $3,125 $3,125 $3,125 $3,125 $3,125 $3,125 $3,125 $3,125
Pastry Items $1,000 $1,500 $3,000 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167 $4,167
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal
Direct Cost
of Sales
$2,250 $3,375 $5,500 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292
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PERSONNEL PLAN
MONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
Managers 0% $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333 $8,333
Pastry Bakers 0% $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400
Baristas 0% $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL
PEOPLE
10 10 10 10 10 10 10 10 10 10 10 10
Total Payroll $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733
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GENERAL ASSUMPTIONS
MONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current
Interest Rate
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term
Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
PRO FORMA PROFIT AND LOSS
MONTH 1 MONTH 2 MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
Sales $17,000 $25,500 $36,000 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833
Direct Cost of Sales $2,250 $3,375 $5,500 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
TOTAL COST OF
SALES
$2,250 $3,375 $5,500 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292 $7,292
Gross Margin $14,750 $22,125 $30,500 $38,542 $38,542 $38,542 $38,542 $38,542 $38,542 $38,542 $38,542 $38,542
Gross Margin % 86.76% 86.76% 84.72% 84.09% 84.09% 84.09% 84.09% 84.09% 84.09% 84.09% 84.09% 84.09%
Expenses
Payroll $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733
Sales and Marketing
and Other Expenses
$2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250
Depreciation 15% $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
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Utilities 5% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Payroll Taxes 15% $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260 $3,260
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating
Expenses $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343 $32,343
Profit Before Interest
and Taxes
($17,593) ($10,218) ($1,843) $6,198 $6,198 $6,198 $6,198 $6,198 $6,198 $6,198 $6,198 $6,198
EBITDA ($12,593) ($5,218) $3,157 $11,198 $11,198 $11,198 $11,198 $11,198 $11,198 $11,198 $11,198 $11,198
Interest Expense $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833 $833
Taxes Incurred ($5,528) ($2,763) ($669) $1,341 $1,341 $1,341 $1,341 $1,341 $1,341 $1,341 $1,341 $1,341
Net Profit ($12,899) ($8,289) ($2,007) $4,024 $4,024 $4,024 $4,024 $4,024 $4,024 $4,024 $4,024 $4,024
Net Profit/Sales -75.87% -32.50% -5.58% 8.78% 8.78% 8.78% 8.78% 8.78% 8.78% 8.78% 8.78% 8.78%
PRO FORMA CASH FLOW
MONTH
1
MONTH
2
MONTH
3
MONTH
4
MONTH
5
MONTH
6
MONTH
7
MONTH
8
MONTH
9
MONTH
10
MONTH
11
MONTH
12
Cash Received
Cash from Operations
Cash Sales $17,000 $25,500 $36,000 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833
SUBTOTAL CASH FROM
OPERATIONS $17,000 $25,500 $36,000 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833
Additional Cash Received
Sales Tax, VAT, HST/GST
Received
0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities
(interest-free)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
25
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current
Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOTAL CASH
RECEIVED
$17,000 $25,500 $36,000 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833 $45,833
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from
Operations
Cash Spending $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733 $21,733
Bill Payments $1,106 $3,295 $7,196 $11,401 $15,076 $15,076 $15,076 $15,076 $15,076 $15,076 $15,076 $15,076
SUBTOTAL SPENT ON
OPERATIONS
$22,839 $25,028 $28,929 $33,134 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810
Additional Cash Spent
Sales Tax, VAT, HST/GST
Paid Out
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal
Repayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities
Principal Repayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current
Assets
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
SUBTOTAL CASH SPENT $22,839 $25,028 $28,929 $33,134 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810 $36,810
Net Cash Flow ($5,839) $472 $7,071 $12,699 $9,024 $9,024 $9,024 $9,024 $9,024 $9,024 $9,024 $9,024
26
Cash Balance $64,161 $64,633 $71,703 $84,403 $93,426 $102,450 $111,474 $120,498 $129,521 $138,545 $147,569 $156,593
PRO FORMA BALANCE SHEET
MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 MONTH 7 MONTH 8 MONTH 9 MONTH
10
MONTH
11
MONTH
12
Assets Starting
Balances
Current
Assets
Cash $70,000 $64,161 $64,633 $71,703 $84,403 $93,426 $102,450 $111,474 $120,498 $129,521 $138,545 $147,569 $156,593
Other Current
Assets
$12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
TOTAL
CURRENT
ASSETS
$82,000 $76,161 $76,633 $83,703 $96,403 $105,426 $114,450 $123,474 $132,498 $141,521 $150,545 $159,569 $168,593
Long-term
Assets
Long-term
Assets $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000 $65,000
Accumulated
Depreciation
$0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000
TOTAL
LONG-TERM
ASSETS
$65,000 $60,000 $55,000 $50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000
TOTAL
ASSETS $147,000 $136,161 $131,633 $133,703 $141,403 $145,426 $149,450 $153,474 $157,498 $161,521 $165,545 $169,569 $173,593
Liabilities and
Capital
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current
Liabilities
Accounts
Payable
$1,000 $3,060 $6,820 $10,898 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574
Current
Borrowing
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
27
Liabilities
SUBTOTAL CURRENT
LIABILITIES
$1,000 $3,060 $6,820 $10,898 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574 $14,574
Long-term
Liabilities
$100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
TOTAL
LIABILITIES
$101,000 $103,060 $106,820 $110,898 $114,574 $114,574 $114,574 $114,574 $114,574 $114,574 $114,574 $114,574 $114,574
Paid-in
Capital $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000 $110,000
Retained
Earnings
($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000) ($64,000)
Earnings $0 ($12,899) ($21,187) ($23,195) ($19,171) ($15,147) ($11,124) ($7,100) ($3,076) $948 $4,971 $8,995 $13,019
TOTAL
CAPITAL
$46,000 $33,101 $24,813 $22,805 $26,829 $30,853 $34,876 $38,900 $42,924 $46,948 $50,971 $54,995 $59,019
TOTAL
LIABILITIES
AND
CAPITAL
$147,000 $136,161 $131,633 $133,703 $141,403 $145,426 $149,450 $153,474 $157,498 $161,521 $165,545 $169,569 $173,593
Net Worth $46,000 $33,101 $24,813 $22,805 $26,829 $30,853 $34,876 $38,900 $42,924 $46,948 $50,971 $54,995 $59,019
