$385,000 of funding is needed over the next year for renovations, furniture, kitchen equipment, liquor license, food & restaurant supplies, legal fees, working capital, marketing and personnel.
The financial plan depends on important assumptions, most of which are shown in the following table as annual figures. The key underlying assumptions are:
The most important assumption in the Projected Profit and Loss statement is the gross margin. Although it doesn't jump drastically in the first year, over time the restaurant will develop it's customer base and reputation and the growth will pick up more rapidly towards the fourth and fifth years of business.
Month-by-month assumptions for profit and loss are included in the appendix.
The cash flow depends on assumptions for inventory turnover, payment days, and accounts receivable management. Our projected same-day collection is critical, and is reasonable and customary in the restaurant industry. We do not expect to need significant additional support even when we reach the less profitable months, as they are expected.
Month-by-month assumptions for projected cash flow are included in the appendix.
No one attempts a business anticipating failure, however sometimes ventures do not fulfill their promise.
We at Gabri's are committed to our concept and its viability. In the event that our venture cannot achieve profitability and retire the encumbrances; we will first attempt to sell the operation and use the proceeds to clear all outstanding balances. If we are unable to sell the operation for sufficient proceeds we will forced to default whereby the SBA loan will be in senior standing. Any further outstanding balances will be borne by the investors on a weighted percentage basis of the total amounts due in bankruptcy proceedings.