Dog Kennel Business Plan

The Creature Nannie

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Financial Plan

The following sections will outline important financial information.

8.1 Important Assumptions

The following table details important financial assumptions.

General Assumptions
Year 1 Year 2 Year 3
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 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis indicates that approximately $1,400 will be needed in monthly revenue to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $1,259
Assumptions:
Average Percent Variable Cost 2%
Estimated Monthly Fixed Cost $1,233

8.3 Projected Profit and Loss

The following table will indicate projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $12,880 $17,000 $18,000
Direct Cost of Sales $258 $340 $360
Other Production Expenses $0 $0 $0
Total Cost of Sales $258 $340 $360
Gross Margin $12,622 $16,660 $17,640
Gross Margin % 98.00% 98.00% 98.00%
Expenses
Payroll $12,000 $12,000 $12,000
Sales and Marketing and Other Expenses $1,000 $600 $600
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $600 $600 $600
Insurance/ license/ bonding $1,200 $1,200 $1,200
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $14,800 $14,400 $14,400
Profit Before Interest and Taxes ($2,178) $2,260 $3,240
EBITDA ($2,178) $2,260 $3,240
Interest Expense $0 $0 $0
Taxes Incurred $0 $678 $972
Net Profit ($2,178) $1,582 $2,268
Net Profit/Sales -16.91% 9.31% 12.60%

8.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $12,880 $17,000 $18,000
Subtotal Cash from Operations $12,880 $17,000 $18,000
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 $12,880 $17,000 $18,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $12,000 $12,000 $12,000
Bill Payments $2,833 $3,361 $3,706
Subtotal Spent on Operations $14,833 $15,361 $15,706
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 $14,833 $15,361 $15,706
Net Cash Flow ($1,953) $1,639 $2,294
Cash Balance $2,247 $3,885 $6,179

8.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $2,247 $3,885 $6,179
Other Current Assets $0 $0 $0
Total Current Assets $2,247 $3,885 $6,179
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $2,247 $3,885 $6,179
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $224 $281 $307
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $224 $281 $307
Long-term Liabilities $0 $0 $0
Total Liabilities $224 $281 $307
Paid-in Capital $5,000 $5,000 $5,000
Retained Earnings ($800) ($2,978) ($1,396)
Earnings ($2,178) $1,582 $2,268
Total Capital $2,022 $3,604 $5,872
Total Liabilities and Capital $2,247 $3,885 $6,179
Net Worth $2,022 $3,604 $5,872

8.6 Business Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 31.99% 5.88% -2.90%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 31.90%
Total Current Assets 100.00% 100.00% 100.00% 55.90%
Long-term Assets 0.00% 0.00% 0.00% 44.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 9.98% 7.23% 4.96% 32.70%
Long-term Liabilities 0.00% 0.00% 0.00% 19.90%
Total Liabilities 9.98% 7.23% 4.96% 52.60%
Net Worth 90.02% 92.77% 95.04% 47.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 98.00% 98.00% 98.00% 42.50%
Selling, General & Administrative Expenses 119.19% 90.97% 87.55% 26.40%
Advertising Expenses 3.11% 0.00% 0.00% 0.50%
Profit Before Interest and Taxes -16.91% 13.29% 18.00% 2.40%
Main Ratios
Current 10.02 13.83 20.14 2.19
Quick 10.02 13.83 20.14 1.48
Total Debt to Total Assets 9.98% 7.23% 4.96% 52.60%
Pre-tax Return on Net Worth -107.67% 62.70% 55.17% 4.50%
Pre-tax Return on Assets -96.93% 58.17% 52.43% 9.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -16.91% 9.31% 12.60% n.a
Return on Equity -107.67% 43.89% 38.62% n.a
Activity Ratios
Accounts Payable Turnover 13.63 12.17 12.17 n.a
Payment Days 27 27 29 n.a
Total Asset Turnover 5.73 4.38 2.91 n.a
Debt Ratios
Debt to Net Worth 0.11 0.08 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $2,022 $3,604 $5,872 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.17 0.23 0.34 n.a
Current Debt/Total Assets 10% 7% 5% n.a
Acid Test 10.02 13.83 20.14 n.a
Sales/Net Worth 6.37 4.72 3.07 n.a
Dividend Payout 0.00 0.00 0.00 n.a
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General Assumptions
Year 1 Year 2 Year 3
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 30.00% 30.00% 30.00%
Other 0 0 0
Break-even Analysis
Monthly Revenue Break-even $1,259
Assumptions:
Average Percent Variable Cost 2%
Estimated Monthly Fixed Cost $1,233
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $12,880 $17,000 $18,000
Direct Cost of Sales $258 $340 $360
Other Production Expenses $0 $0 $0
Total Cost of Sales $258 $340 $360
Gross Margin $12,622 $16,660 $17,640
Gross Margin % 98.00% 98.00% 98.00%
Expenses
Payroll $12,000 $12,000 $12,000
Sales and Marketing and Other Expenses $1,000 $600 $600
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $600 $600 $600
Insurance/ license/ bonding $1,200 $1,200 $1,200
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $14,800 $14,400 $14,400
Profit Before Interest and Taxes ($2,178) $2,260 $3,240
EBITDA ($2,178) $2,260 $3,240
Interest Expense $0 $0 $0
Taxes Incurred $0 $678 $972
Net Profit ($2,178) $1,582 $2,268
Net Profit/Sales -16.91% 9.31% 12.60%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $12,880 $17,000 $18,000
Subtotal Cash from Operations $12,880 $17,000 $18,000
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 $12,880 $17,000 $18,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $12,000 $12,000 $12,000
Bill Payments $2,833 $3,361 $3,706
Subtotal Spent on Operations $14,833 $15,361 $15,706
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 $14,833 $15,361 $15,706
Net Cash Flow ($1,953) $1,639 $2,294
Cash Balance $2,247 $3,885 $6,179
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $2,247 $3,885 $6,179
Other Current Assets $0 $0 $0
Total Current Assets $2,247 $3,885 $6,179
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $2,247 $3,885 $6,179
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $224 $281 $307
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $224 $281 $307
Long-term Liabilities $0 $0 $0
Total Liabilities $224 $281 $307
Paid-in Capital $5,000 $5,000 $5,000
Retained Earnings ($800) ($2,978) ($1,396)
Earnings ($2,178) $1,582 $2,268
Total Capital $2,022 $3,604 $5,872
Total Liabilities and Capital $2,247 $3,885 $6,179
Net Worth $2,022 $3,604 $5,872
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 31.99% 5.88% -2.90%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 31.90%
Total Current Assets 100.00% 100.00% 100.00% 55.90%
Long-term Assets 0.00% 0.00% 0.00% 44.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 9.98% 7.23% 4.96% 32.70%
Long-term Liabilities 0.00% 0.00% 0.00% 19.90%
Total Liabilities 9.98% 7.23% 4.96% 52.60%
Net Worth 90.02% 92.77% 95.04% 47.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 98.00% 98.00% 98.00% 42.50%
Selling, General & Administrative Expenses 119.19% 90.97% 87.55% 26.40%
Advertising Expenses 3.11% 0.00% 0.00% 0.50%
Profit Before Interest and Taxes -16.91% 13.29% 18.00% 2.40%
Main Ratios
Current 10.02 13.83 20.14 2.19
Quick 10.02 13.83 20.14 1.48
Total Debt to Total Assets 9.98% 7.23% 4.96% 52.60%
Pre-tax Return on Net Worth -107.67% 62.70% 55.17% 4.50%
Pre-tax Return on Assets -96.93% 58.17% 52.43% 9.40%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -16.91% 9.31% 12.60% n.a
Return on Equity -107.67% 43.89% 38.62% n.a
Activity Ratios
Accounts Payable Turnover 13.63 12.17 12.17 n.a
Payment Days 27 27 29 n.a
Total Asset Turnover 5.73 4.38 2.91 n.a
Debt Ratios
Debt to Net Worth 0.11 0.08 0.05 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $2,022 $3,604 $5,872 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.17 0.23 0.34 n.a
Current Debt/Total Assets 10% 7% 5% n.a
Acid Test 10.02 13.83 20.14 n.a
Sales/Net Worth 6.37 4.72 3.07 n.a
Dividend Payout 0.00 0.00 0.00 n.a