Equine Acres

Start your own business plan »

Horse Boarding Real Estate Business Plan

Financial Plan

A note of critical importance to any potential lender or investor reviewing this business plan:

  • Upon securing funding for this project, EquineAcres will utilize almost 100% of the funding to purchase undeveloped land, and then develop that land. The development of the land will be done in such a way as to vastly improve the value of the land to a point at which the entire loan/investment amount is entirely recoverable, perhaps even profitable, through resale of the improved land, buildings, and equipment (worse case scenario). This funding request should therefore be considered as "secured."

The financial plan for EquineAcres is presented herein for your review. From a high level it reflects several key factors:

  • Profitability.
  • Solid cash flow.
  • Sufficient profit and cash flow to cushion against unforseen challenges.
  • Solid growth expectations based on conservative estimates:
    • NOTE 1: Contrary to common business plan creation, this business plan has been created with conservative growth and sales expectations. Given the professional sales expertise and industry knowledge of the owner, sales and profitability are expected to surpass that which has been presented herein.
    • NOTE 2: The EquineAcres concept has every potential to quickly expand into multiple facilities serving multiple markets, however these opportunities are not reflected in this business plan. Once the initial EquineAcres (*1) is open, operating, and confirmed, additional facilities will be considered in direct cooperation with the initial lender/investor. Creation of these additional facilities (EqineAcres*2, EquineAcres*3, etc.) create the opportunity for exponential growth, profitability, and investor return. It is even within the realm of reason to envision a "franchise" approach spanning the United States.

The financial plan for EquineAcres has been assembled from a variety of sources which include:

  • Extensive professional business experience in sales, sales management, marketing, forecasting, and operational management.
  • Extensive experience in, knowledge of, and business contacts within, the equine marketplace.
  • Reliance upon the software program used to create this business plan for general assumption calculations.
    • See section on Management Gaps. The writer of this business plan, and future owner of EquineAcres, has identified a knowledge gap in basic accounting principles (to be resolved through external consultants and self education). Any apparent errors in the following tables and charts should be attributed to this knowledge gap. Professional assistance in reformatting this table to accurately reflect actual calculations is welcomed.

7.1 Important Assumptions

Important notes about the General Assumptions table: All calculations contained in the attached table are those recommended by the software program (Business Plan Pro) used to create this business plan. Future reformatting of this table based on actual values will be welcome and completed with the assistance of potential lenders/investors.

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 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

Important notes about Benchmarks:

  • The attached Benchmarks chart is assembled from data contained throughout this business plan. Refer to all other sections for detailed information validating the Benchmark result.
  • This is a self-calculating chart; future modifications in cooperation with lender/investors will automatically update this chart to reflect changes made elsewhere in this business plan.

7.3 Break-even Analysis

Break-even Analysis explanations:

  • Average Per Unit Revenue--Taken as gross average from Detailed Forecast.
  • Average Per Unit Variable Cost--Taken as gross average from Detailed Forecast.
  • Estimated Monthly Fixed Cost--Calculated by Owner Salary + Loan Payment + Average Utilities.
Break-even Analysis
Monthly Units Break-even 22
Monthly Revenue Break-even $1,155
Assumptions:
Average Per-Unit Revenue $53.38
Average Per-Unit Variable Cost $14.11
Estimated Monthly Fixed Cost $850

7.4 Projected Profit and Loss

Important notes about Profit and Loss:

  • The attached Profit and Loss Statement is assembled from data contained throughout this business plan. Refer to all other sections for detailed information validating the Profit and Loss result.
  • This is primarily a self-calculating table; future modifications in cooperation with lender/investors will automatically update this table to reflect changes made elsewhere in this business plan.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $164,155 $277,470 $473,220
Direct Cost of Sales $43,383 $77,500 $147,500
Other $0 $0 $0
Total Cost of Sales $43,383 $77,500 $147,500
Gross Margin $120,773 $199,970 $325,720
Gross Margin % 73.57% 72.07% 68.83%
Expenses
Payroll $0 $0 $0
Sales and Marketing and Other Expenses $2,400 $3,600 $4,800
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $3,000 $3,000 $3,000
Insurance $4,800 $4,800 $4,800
Rent $0 $0 $0
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $10,200 $11,400 $12,600
Profit Before Interest and Taxes $110,573 $188,570 $313,120
EBITDA $110,573 $188,570 $313,120
Interest Expense $14,025 $12,300 $10,500
Taxes Incurred $24,318 $44,068 $76,916
Net Profit $72,229 $132,203 $225,704
Net Profit/Sales 44.00% 47.65% 47.70%

7.5 Projected Cash Flow

Important notes about Cash Flow:

  • See line item: Long Term Borrowing Repayment in the Pro-forma Cash Flow Table:
    • This figure is a gross estimate based on conventional repayment of a long-term business loan. Should funding come from a private investor, this line item will be dramatically altered.
  • The attached Cash Flow table is assembled from data contained throughout this business plan. Refer to all other sections for detailed information validating the cash flow results.
  • These are self-calculating tables and charts; future modifications in cooperation with lender/investors will automatically update this data to reflect changes made elsewhere in this business plan.
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $164,155 $277,470 $473,220
Subtotal Cash from Operations $164,155 $277,470 $473,220
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 $164,155 $277,470 $473,220
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $0 $0 $0
Bill Payments $84,937 $140,885 $244,110
Subtotal Spent on Operations $84,937 $140,885 $244,110
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 $18,000 $18,000 $18,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $102,937 $158,885 $262,110
Net Cash Flow $61,218 $118,585 $211,110
Cash Balance $88,218 $206,803 $417,913

7.6 Projected Balance Sheet

Important notes about the Balance Sheet:

  • The attached Balance Sheet is assembled from data contained throughout this business plan. Refer to all other sections for detailed information validating the Balance Sheet result.
  • This is a self-calculating table; future modifications in cooperation with lender/investors will automatically update this chart to reflect changes made elsewhere in this business plan.
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $88,218 $206,803 $417,913
Inventory $3,234 $5,777 $10,996
Other Current Assets $0 $0 $0
Total Current Assets $91,452 $212,581 $428,909
Long-term Assets
Long-term Assets $60,000 $60,000 $60,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $60,000 $60,000 $60,000
Total Assets $151,452 $272,581 $488,909
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $5,223 $12,149 $20,773
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $5,223 $12,149 $20,773
Long-term Liabilities $132,000 $114,000 $96,000
Total Liabilities $137,223 $126,149 $116,773
Paid-in Capital $0 $0 $0
Retained Earnings ($58,000) $14,229 $146,432
Earnings $72,229 $132,203 $225,704
Total Capital $14,229 $146,432 $372,136
Total Liabilities and Capital $151,452 $272,581 $488,909
Net Worth $14,229 $146,432 $372,136

7.7 Business Ratios

Important notes about the Business Ratios:

  • The attached Business Ratios table is assembled from data contained throughout this business plan. Refer to all other sections for detailed information validating the Business Ratios result.
  • This is a self-calculating table; future modifications in cooperation with lender/investors will automatically update this chart to reflect changes made elsewhere in this business plan.
  • Standard ratios from Industry Profile SIC code 7032, Sporting and Recreational Camps is provided in the table.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 69.03% 70.55% 7.50%
Percent of Total Assets
Inventory 2.14% 2.12% 2.25% 1.10%
Other Current Assets 0.00% 0.00% 0.00% 26.90%
Total Current Assets 60.38% 77.99% 87.73% 33.40%
Long-term Assets 39.62% 22.01% 12.27% 66.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 3.45% 4.46% 4.25% 16.30%
Long-term Liabilities 87.16% 41.82% 19.64% 38.40%
Total Liabilities 90.60% 46.28% 23.88% 54.70%
Net Worth 9.40% 53.72% 76.12% 45.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 73.57% 72.07% 68.83% 0.00%
Selling, General & Administrative Expenses 45.91% 38.48% 29.11% 70.30%
Advertising Expenses 0.73% 0.86% 0.76% 5.10%
Profit Before Interest and Taxes 67.36% 67.96% 66.17% 4.20%
Main Ratios
Current 17.51 17.50 20.65 1.75
Quick 16.89 17.02 20.12 1.24
Total Debt to Total Assets 90.60% 46.28% 23.88% 54.70%
Pre-tax Return on Net Worth 678.51% 120.38% 81.32% 2.70%
Pre-tax Return on Assets 63.75% 64.67% 61.90% 5.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 44.00% 47.65% 47.70% n.a
Return on Equity 507.61% 90.28% 60.65% n.a
Activity Ratios
Inventory Turnover 9.99 17.20 17.59 n.a
Accounts Payable Turnover 17.26 12.17 12.17 n.a
Payment Days 27 21 24 n.a
Total Asset Turnover 1.08 1.02 0.97 n.a
Debt Ratios
Debt to Net Worth 9.64 0.86 0.31 n.a
Current Liab. to Liab. 0.04 0.10 0.18 n.a
Liquidity Ratios
Net Working Capital $86,229 $200,432 $408,136 n.a
Interest Coverage 7.88 15.33 29.82 n.a
Additional Ratios
Assets to Sales 0.92 0.98 1.03 n.a
Current Debt/Total Assets 3% 4% 4% n.a
Acid Test 16.89 17.02 20.12 n.a
Sales/Net Worth 11.54 1.89 1.27 n.a
Dividend Payout 0.00 0.00 0.00 n.a