Miami Beach Film Society

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Art Film Theater Business Plan

Financial Plan

The basis for planning has been to look forward with conservative estimates for revenue and expenses. We are committed to the steady growth of revenues through tight control of all inventory, services, and managing sponsorship funds. Our financial plan focus will be to remain profitable while building adequate cash reserves for further stages of development.

We anticipate carrying one month worth of inventory, with the concession turning over more often, and the majority of items in the sales areas will be sold on cash basis, while the website sales will be mostly by credit card (unless customers request a hold at the box office for cash payment). The majority of items in the gallery will be sold on consignment and therefore do not affect inventory turnover. 

Our personnel burden will be relatively low at 15% based on assumption that the only benefits paid will be minimal vacation for full time positions, employment fees, and healthcare plan. 

The estimate of 8% funding on credit refers to the delay between commitment of funding and actual receipt of funds.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:

  • We assume a slow-growth economy, with slow recovery after a national catastrophe, and have therefore set income levels substantially lower than capacity allows.
  • We assume of that there will be no major changes in federal grant funding availability.
  • We assume that our summer months will be slower than others, but not as slow as some businesses depending completely on tourism to survive. Our local business will help in our low months.
  • We assume that a major weather catastrophe could affect business, and we hope it does not happen at all, especially in our first year.  
  • We assume a growing interest in the arts and alternative arts appreciation on South Beach.
  • We anticipate a very popular success!
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 6.00% 6.00% 6.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 0.00% 0.00% 0.00%
Other 0 0 0

8.2 Break-even Analysis

Based on our forecasted monthly fixed costs and aniticipated average monthly revenues our monthy break-even forecast is displayed in the table and chart below.

Break-even Analysis
Monthly Revenue Break-even $8,872
Assumptions:
Average Percent Variable Cost 30%
Estimated Monthly Fixed Cost $6,218

8.3 Projected Surplus or Deficit

Our projected annual surplus is shown in the table. March surplus is due to the annual Oscar Night fundraiser, and we anticipate adding another major fundraiser to our lowest income month (perhaps August), to help with surplus that may dip at that time. A "Summer Soiree" at the Cinematheque may help to make August a high surplus month instead of a low one. Assumption of a modest first year August fundraiser is included in the table results. 

Note that the surplus shown in the second and third years will not actually be a surplus. The profits will be utilized to help update facilities (after a modest phase one opening build-out to get open in the first year), expand personnel, and develop the Miami Beach International Film Festival. 

Surplus and Deficit
Year 1 Year 2 Year 3
Funding $149,310 $216,800 $258,900
Direct Cost $44,670 $55,750 $67,600
Other Ticket Sales > Accompaniment $8,250 $9,000 $10,000
Other Ticket Sales > Shipment $1,100 $1,500 $2,000
Other Ticket Sales > Ticket Printing $600 $800 $1,000
Other Production Expenses $1,200 $1,500 $2,000
Total Direct Cost $55,820 $68,550 $82,600
Gross Surplus $93,490 $148,250 $176,300
Gross Surplus % 62.61% 68.38% 68.10%
Expenses
Payroll $16,500 $30,000 $35,000
Sales and Marketing and Other Expenses $19,000 $29,700 $34,800
Depreciation $0 $120 $120
Operations Expenses 1 $1,800 $1,900 $2,000
Operations Expenses 2 $600 $1,000 $1,300
Operations Expenses 3 $1,575 $1,500 $1,700
Flood/Wind Insurance $100 $250 $250
Fire/Theft Alarm $1,200 $1,200 $1,200
Liability/Theft/Fire Insurance $1,200 $1,300 $1,400
Rent $30,160 $36,000 $36,500
Payroll Taxes $2,475 $4,500 $5,250
Other $0 $0 $0
Total Operating Expenses $74,610 $107,470 $119,520
Surplus Before Interest and Taxes $18,880 $40,780 $56,780
EBITDA $18,880 $40,900 $56,900
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $0
Net Surplus $18,880 $40,780 $56,780
Net Surplus/Funding 12.64% 18.81% 21.93%

8.4 Projected Cash Flow

Cash flow projections are critical to Cinematheque's success. The monthly cash flow is shown in the illustration, with one bar representing the Cash Flow per month, and the other the monthly Cash Balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.

Notice the levels of Cash Balance grows to allow development of future projects.

Notice that the Net Cash Flow, is of course, typically low of non-profit organizations in the first year of such an expansion.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Funding $137,365 $199,456 $238,188
Cash from Receivables $9,596 $16,282 $20,050
Subtotal Cash from Operations $146,961 $215,738 $258,238
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 $146,961 $215,738 $258,238
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $16,500 $30,000 $35,000
Bill Payments $108,502 $145,224 $166,531
Subtotal Spent on Operations $125,002 $175,224 $201,531
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 $125,002 $175,224 $201,531
Net Cash Flow $21,960 $40,514 $56,707
Cash Balance $38,652 $79,165 $135,872

8.5 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $38,652 $79,165 $135,872
Accounts Receivable $2,349 $3,410 $4,072
Inventory $4,796 $5,986 $7,258
Other Current Assets $0 $0 $0
Total Current Assets $45,796 $88,561 $147,202
Long-term Assets
Long-term Assets $10,000 $10,000 $10,000
Accumulated Depreciation $0 $120 $240
Total Long-term Assets $10,000 $9,880 $9,760
Total Assets $55,796 $98,441 $156,962
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $10,224 $12,090 $13,831
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $10,224 $12,090 $13,831
Long-term Liabilities $0 $0 $0
Total Liabilities $10,224 $12,090 $13,831
Paid-in Capital $44,000 $44,000 $44,000
Accumulated Surplus/Deficit ($17,308) $1,572 $42,352
Surplus/Deficit $18,880 $40,780 $56,780
Total Capital $45,572 $86,352 $143,132
Total Liabilities and Capital $55,796 $98,441 $156,962
Net Worth $45,572 $86,352 $143,132