Bowl Weevil's financial plan is conservative. With sufficient start-up funding, we will be able to not only complete renovations on time for opening, but hire enough staff to provide a full-service, fun, safe, and clean environment for our bowlers. Although we are asking for a very large loan, we should be easily able to repay it within seven years, even after hiring an additional manager in year two.
The first two years will be the slimmest, as we establish our reputation among our target groups and build market share. However, our sales forecasts are based on sound research, and are conservative. We will focus on aggressive marketing and limiting expenses during these early years to achieve our long-term goals.
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. Bowling league participation rates are based on conservative assumptions.
Two of the more important underlying assumptions are:
The following chart and table summarize our break-even analysis.
The following table indicates the projected profit and loss. We plan to take a hit in net profit in the second year in order to hire an assistant manager, and to increase personnel payments for our employees. This additional hiring and the raises are subject to cash flow meeting projections.
Our business is a retail-oriented business with clients who will pay primarily with cash and credit cards. Our cash flow is shown below, including repayment of the requested loan. Hiring a second manager will make an impact on cash flow in the second year, but we anticipate greater sales and efficiency to make up this difference by year three.
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.
The following table shows the projected businesses ratios, and standard comparison ratios for our industry, Bowling Centers (SIC Code 7933). We expect to maintain healthy ratios for profitability, risk, and return.