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Wedding Consultant Business Plan

TLC Wedding Consultants

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Financial Plan

The following subtopics represent the financial plan of TLC Wedding Consultants.

7.1 Break-even Analysis

The following table and chart summarize our break-even analysis.

Break-even Analysis
Monthly Revenue Break-even $4,804
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $4,804

7.2 Projected Profit and Loss

Our projected profit and loss is shown in the following table.

Pro Forma Profit and Loss
FY 2001 FY 2002 FY 2003
Sales $95,300 $114,360 $125,796
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $95,300 $114,360 $125,796
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $53,100 $76,200 $85,800
Sales and Marketing and Other Expenses $4,550 $1,000 $2,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $0 $0 $0
Insurance $0 $0 $0
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $57,650 $77,200 $87,800
Profit Before Interest and Taxes $37,650 $37,160 $37,996
EBITDA $37,650 $37,160 $37,996
Interest Expense $0 $0 $0
Taxes Incurred $9,443 $9,290 $9,657
Net Profit $28,208 $27,870 $28,339
Net Profit/Sales 29.60% 24.37% 22.53%

7.3 Projected Cash Flow

The following chart and table show our cash flow projections.

Pro Forma Cash Flow
FY 2001 FY 2002 FY 2003
Cash Received
Cash from Operations
Cash Sales $38,120 $45,744 $50,318
Cash from Receivables $45,494 $66,279 $74,075
Subtotal Cash from Operations $83,614 $112,023 $124,394
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 $83,614 $112,023 $124,394
Expenditures FY 2001 FY 2002 FY 2003
Expenditures from Operations
Cash Spending $53,100 $76,200 $85,800
Bill Payments $12,748 $10,689 $11,545
Subtotal Spent on Operations $65,848 $86,889 $97,345
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 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $65,848 $86,889 $97,345
Net Cash Flow $17,766 $25,134 $27,049
Cash Balance $22,766 $47,900 $74,949
General Assumptions
FY 2001 FY 2002 FY 2003
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.4 Projected Balance Sheet

Three years of annual totals are presented in the Projected Balance Sheet below. First year monthly figures are included in the appendix.

Pro Forma Balance Sheet
FY 2001 FY 2002 FY 2003
Assets
Current Assets
Cash $22,766 $47,900 $74,949
Accounts Receivable $11,686 $14,023 $15,426
Other Current Assets $0 $0 $0
Total Current Assets $34,452 $61,923 $90,374
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $34,452 $61,923 $90,374
Liabilities and Capital FY 2001 FY 2002 FY 2003
Current Liabilities
Accounts Payable $1,245 $846 $958
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,245 $846 $958
Long-term Liabilities $0 $0 $0
Total Liabilities $1,245 $846 $958
Paid-in Capital $8,000 $8,000 $8,000
Retained Earnings ($3,000) $25,208 $53,078
Earnings $28,208 $27,870 $28,339
Total Capital $33,208 $61,078 $89,416
Total Liabilities and Capital $34,452 $61,923 $90,374
Net Worth $33,207 $61,078 $89,416

7.5 Business Ratios

The following table outlines some of the more important ratios from the Personal Services industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7299.

Ratio Analysis
FY 2001 FY 2002 FY 2003 Industry Profile
Sales Growth 0.00% 20.00% 10.00% 17.90%
Percent of Total Assets
Accounts Receivable 33.92% 22.65% 17.07% 11.10%
Other Current Assets 0.00% 0.00% 0.00% 37.10%
Total Current Assets 100.00% 100.00% 100.00% 52.80%
Long-term Assets 0.00% 0.00% 0.00% 47.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 3.61% 1.37% 1.06% 33.90%
Long-term Liabilities 0.00% 0.00% 0.00% 28.00%
Total Liabilities 3.61% 1.37% 1.06% 61.90%
Net Worth 96.39% 98.63% 98.94% 38.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 70.37% 75.63% 77.35% 72.70%
Advertising Expenses 3.52% 0.87% 1.59% 2.20%
Profit Before Interest and Taxes 39.51% 32.49% 30.20% 4.00%
Main Ratios
Current 27.68 73.22 94.32 1.81
Quick 27.68 73.22 94.32 1.33
Total Debt to Total Assets 3.61% 1.37% 1.06% 61.90%
Pre-tax Return on Net Worth 113.38% 60.84% 42.49% 6.30%
Pre-tax Return on Assets 109.28% 60.01% 42.04% 16.60%
Additional Ratios FY 2001 FY 2002 FY 2003
Net Profit Margin 29.60% 24.37% 22.53% n.a
Return on Equity 84.94% 45.63% 31.69% n.a
Activity Ratios
Accounts Receivable Turnover 4.89 4.89 4.89 n.a
Collection Days 57 68 71 n.a
Accounts Payable Turnover 11.24 12.17 12.17 n.a
Payment Days 27 37 28 n.a
Total Asset Turnover 2.77 1.85 1.39 n.a
Debt Ratios
Debt to Net Worth 0.04 0.01 0.01 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $33,207 $61,078 $89,416 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.36 0.54 0.72 n.a
Current Debt/Total Assets 4% 1% 1% n.a
Acid Test 18.29 56.64 78.22 n.a
Sales/Net Worth 2.87 1.87 1.41 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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Edit This Plan
Break-even Analysis
Monthly Revenue Break-even $4,804
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $4,804
Pro Forma Profit and Loss
FY 2001 FY 2002 FY 2003
Sales $95,300 $114,360 $125,796
Direct Cost of Sales $0 $0 $0
Other $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $95,300 $114,360 $125,796
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $53,100 $76,200 $85,800
Sales and Marketing and Other Expenses $4,550 $1,000 $2,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $0 $0 $0
Insurance $0 $0 $0
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $57,650 $77,200 $87,800
Profit Before Interest and Taxes $37,650 $37,160 $37,996
EBITDA $37,650 $37,160 $37,996
Interest Expense $0 $0 $0
Taxes Incurred $9,443 $9,290 $9,657
Net Profit $28,208 $27,870 $28,339
Net Profit/Sales 29.60% 24.37% 22.53%
Pro Forma Cash Flow
FY 2001 FY 2002 FY 2003
Cash Received
Cash from Operations
Cash Sales $38,120 $45,744 $50,318
Cash from Receivables $45,494 $66,279 $74,075
Subtotal Cash from Operations $83,614 $112,023 $124,394
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 $83,614 $112,023 $124,394
Expenditures FY 2001 FY 2002 FY 2003
Expenditures from Operations
Cash Spending $53,100 $76,200 $85,800
Bill Payments $12,748 $10,689 $11,545
Subtotal Spent on Operations $65,848 $86,889 $97,345
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 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $65,848 $86,889 $97,345
Net Cash Flow $17,766 $25,134 $27,049
Cash Balance $22,766 $47,900 $74,949
General Assumptions
FY 2001 FY 2002 FY 2003
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0
Pro Forma Balance Sheet
FY 2001 FY 2002 FY 2003
Assets
Current Assets
Cash $22,766 $47,900 $74,949
Accounts Receivable $11,686 $14,023 $15,426
Other Current Assets $0 $0 $0
Total Current Assets $34,452 $61,923 $90,374
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $34,452 $61,923 $90,374
Liabilities and Capital FY 2001 FY 2002 FY 2003
Current Liabilities
Accounts Payable $1,245 $846 $958
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,245 $846 $958
Long-term Liabilities $0 $0 $0
Total Liabilities $1,245 $846 $958
Paid-in Capital $8,000 $8,000 $8,000
Retained Earnings ($3,000) $25,208 $53,078
Earnings $28,208 $27,870 $28,339
Total Capital $33,208 $61,078 $89,416
Total Liabilities and Capital $34,452 $61,923 $90,374
Net Worth $33,207 $61,078 $89,416
Ratio Analysis
FY 2001 FY 2002 FY 2003 Industry Profile
Sales Growth 0.00% 20.00% 10.00% 17.90%
Percent of Total Assets
Accounts Receivable 33.92% 22.65% 17.07% 11.10%
Other Current Assets 0.00% 0.00% 0.00% 37.10%
Total Current Assets 100.00% 100.00% 100.00% 52.80%
Long-term Assets 0.00% 0.00% 0.00% 47.20%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 3.61% 1.37% 1.06% 33.90%
Long-term Liabilities 0.00% 0.00% 0.00% 28.00%
Total Liabilities 3.61% 1.37% 1.06% 61.90%
Net Worth 96.39% 98.63% 98.94% 38.10%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 70.37% 75.63% 77.35% 72.70%
Advertising Expenses 3.52% 0.87% 1.59% 2.20%
Profit Before Interest and Taxes 39.51% 32.49% 30.20% 4.00%
Main Ratios
Current 27.68 73.22 94.32 1.81
Quick 27.68 73.22 94.32 1.33
Total Debt to Total Assets 3.61% 1.37% 1.06% 61.90%
Pre-tax Return on Net Worth 113.38% 60.84% 42.49% 6.30%
Pre-tax Return on Assets 109.28% 60.01% 42.04% 16.60%
Additional Ratios FY 2001 FY 2002 FY 2003
Net Profit Margin 29.60% 24.37% 22.53% n.a
Return on Equity 84.94% 45.63% 31.69% n.a
Activity Ratios
Accounts Receivable Turnover 4.89 4.89 4.89 n.a
Collection Days 57 68 71 n.a
Accounts Payable Turnover 11.24 12.17 12.17 n.a
Payment Days 27 37 28 n.a
Total Asset Turnover 2.77 1.85 1.39 n.a
Debt Ratios
Debt to Net Worth 0.04 0.01 0.01 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $33,207 $61,078 $89,416 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.36 0.54 0.72 n.a
Current Debt/Total Assets 4% 1% 1% n.a
Acid Test 18.29 56.64 78.22 n.a
Sales/Net Worth 2.87 1.87 1.41 n.a
Dividend Payout 0.00 0.00 0.00 n.a