Willow Park Golf Course

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Golf Course Business Plan

Financial Plan

The following is the financial plan for the Willow Park Golf Course. We anticipate a first year of fluctuating sales and expenses as we become established physically, and in the minds of our target market. The first year we will have one time expenses in restoring the course and establishing our maintenance routines. As our existence and reputation become known we steady growth, and a more even membership sales as golfers from cold snowy climes travel to the Crest Canyon area, and Willow Park particularly to play golf during the winter months.

7.1 Break-even Analysis

Using averaged monthly total expenses and an estimated variable cost, the monthly break-even point in sales revenue is calculated and shown below.

Break-even Analysis
Monthly Revenue Break-even $113,085
Assumptions:
Average Percent Variable Cost 16%
Estimated Monthly Fixed Cost $94,730

7.2 Projected Profit and Loss

The following table and charts show the projected profit and loss for three years. Monthly figures for the first year are shown in the appendix.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $1,443,500 $1,620,000 $1,930,000
Direct Cost of Sales $234,300 $271,000 $323,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $234,300 $271,000 $323,000
Gross Margin $1,209,200 $1,349,000 $1,607,000
Gross Margin % 83.77% 83.27% 83.26%
Expenses
Payroll $588,000 $635,000 $680,000
Sales and Marketing and Other Expenses $60,000 $80,000 $100,000
Depreciation $28,560 $28,560 $28,560
Leased Equipment $72,000 $80,000 $80,000
Utilities $26,000 $26,000 $26,000
Insurance $24,000 $24,000 $24,000
Lease $250,000 $250,000 $250,000
Payroll Taxes $88,200 $95,250 $102,000
Other $0 $0 $0
Total Operating Expenses $1,136,760 $1,218,810 $1,290,560
Profit Before Interest and Taxes $72,440 $130,190 $316,440
EBITDA $101,000 $158,750 $345,000
Interest Expense $28,066 $24,643 $21,072
Taxes Incurred $13,312 $31,664 $88,610
Net Profit $31,062 $73,883 $206,758
Net Profit/Sales 2.15% 4.56% 10.71%

7.3 Projected Cash Flow

The following table and chart show the projected cash flow for three years. Monthly figures for the first year are shown in the appendix.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $1,443,500 $1,620,000 $1,930,000
Subtotal Cash from Operations $1,443,500 $1,620,000 $1,930,000
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 $1,443,500 $1,620,000 $1,930,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $588,000 $635,000 $680,000
Bill Payments $732,096 $861,100 $1,007,098
Subtotal Spent on Operations $1,320,096 $1,496,100 $1,687,098
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 $35,712 $35,712 $35,712
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $1,355,808 $1,531,812 $1,722,810
Net Cash Flow $87,692 $88,188 $207,190
Cash Balance $122,292 $210,480 $417,670

7.4 Projected Balance Sheet

The following table presents the projected balance sheet for three years. Monthly figures for the first year are shown in the appendix. 

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $122,292 $210,480 $417,670
Inventory $15,125 $17,494 $20,851
Other Current Assets $0 $0 $0
Total Current Assets $137,417 $227,975 $438,521
Long-term Assets
Long-term Assets $210,000 $210,000 $210,000
Accumulated Depreciation $28,560 $57,120 $85,680
Total Long-term Assets $181,440 $152,880 $124,320
Total Assets $318,857 $380,855 $562,841
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $48,907 $72,734 $83,674
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $48,907 $72,734 $83,674
Long-term Liabilities $264,288 $228,576 $192,864
Total Liabilities $313,195 $301,310 $276,538
Paid-in Capital $600,000 $600,000 $600,000
Retained Earnings ($625,400) ($594,338) ($520,455)
Earnings $31,062 $73,883 $206,758
Total Capital $5,662 $79,545 $286,302
Total Liabilities and Capital $318,857 $380,855 $562,841
Net Worth $5,662 $79,545 $286,302

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7997, Membership Sports and Recreation, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 12.23% 19.14% 15.20%
Percent of Total Assets
Inventory 4.74% 4.59% 3.70% 4.00%
Other Current Assets 0.00% 0.00% 0.00% 31.80%
Total Current Assets 43.10% 59.86% 77.91% 40.90%
Long-term Assets 56.90% 40.14% 22.09% 59.10%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 15.34% 19.10% 14.87% 31.60%
Long-term Liabilities 82.89% 60.02% 34.27% 28.00%
Total Liabilities 98.22% 79.11% 49.13% 59.60%
Net Worth 1.78% 20.89% 50.87% 40.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 83.77% 83.27% 83.26% 0.00%
Selling, General & Administrative Expenses 81.62% 78.71% 72.55% 72.30%
Advertising Expenses 4.16% 4.94% 5.18% 2.70%
Profit Before Interest and Taxes 5.02% 8.04% 16.40% 2.60%
Main Ratios
Current 2.81 3.13 5.24 1.23
Quick 2.50 2.89 4.99 0.83
Total Debt to Total Assets 98.22% 79.11% 49.13% 59.60%
Pre-tax Return on Net Worth 783.71% 132.69% 103.17% 2.80%
Pre-tax Return on Assets 13.92% 27.71% 52.48% 6.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 2.15% 4.56% 10.71% n.a
Return on Equity 548.60% 92.88% 72.22% n.a
Activity Ratios
Inventory Turnover 10.64 16.62 16.85 n.a
Accounts Payable Turnover 15.97 12.17 12.17 n.a
Payment Days 27 25 28 n.a
Total Asset Turnover 4.53 4.25 3.43 n.a
Debt Ratios
Debt to Net Worth 55.31 3.79 0.97 n.a
Current Liab. to Liab. 0.16 0.24 0.30 n.a
Liquidity Ratios
Net Working Capital $88,510 $155,241 $354,846 n.a
Interest Coverage 2.58 5.28 15.02 n.a
Additional Ratios
Assets to Sales 0.22 0.24 0.29 n.a
Current Debt/Total Assets 15% 19% 15% n.a
Acid Test 2.50 2.89 4.99 n.a
Sales/Net Worth 254.94 20.37 6.74 n.a
Dividend Payout 0.00 0.00 0.00 n.a