Laser Tag Gaming Center Business Plan

Laser Tag

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Financial Plan

The premier element in our financial plan is initiating, maintaining, and improving the factors that create, stabilize, and increase our cash flow:

  1. We must create visibility so as to create customer flow.
  2. We must ensure the theme creates a "WOW" effect to bolster attendance.
  3. We must maintain a dependable, cheerful employee force so as to minimize turnover.

9.1 Start-up Funding

Total start-up requirements come to $111,844. The start-up costs are to be financed partially by the direct owner investment of $27,000 and financing in the amount of $84,844. The details are included in the following table.

Start-up Funding
Start-up Expenses to Fund $50,097
Start-up Assets to Fund $61,747
Total Funding Required $111,844
Assets
Non-cash Assets from Start-up $51,747
Cash Requirements from Start-up $10,000
Additional Cash Raised $0
Cash Balance on Starting Date $10,000
Total Assets $61,747
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $84,844
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $84,844
Capital
Planned Investment
Owner $27,000
Investor $0
Additional Investment Requirement $0
Total Planned Investment $27,000
Loss at Start-up (Start-up Expenses) ($50,097)
Total Capital ($23,097)
Total Capital and Liabilities $61,747
Total Funding $111,844

9.2 Important Assumptions

The key underlying assumptions of our financial plan shown in the following general assumption table are:

  1. We assume access to equity capital and financing to support our financial plan.
  2. We assume our financial progress based on realistic sales to minimum sales against highest expenses.
  3. We assume there will not be an economic crash that would greatly hinder our target market's access to their personal luxury finds.
General Assumptions
Year 1 Year 2 Year 3 Year 4 Year 5
Plan Month 1 2 3 4 5
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 11.00% 11.00% 11.00% 11.00% 11.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0

9.3 Break-even Analysis

Our break-even analysis is shown below.

Break-even Analysis
Monthly Units Break-even 9,876
Monthly Revenue Break-even $22,551
Assumptions:
Average Per-Unit Revenue $2.28
Average Per-Unit Variable Cost $0.33
Estimated Monthly Fixed Cost $19,324

9.4 Projected Profit and Loss

The company will make a profit early on. There are two important assumptions with our Projected Profit and Loss statement:

  1. Our revenue is based on minimum estimated averages against highest expense expectations.
  2. Our major expense of rent and utilities is fixed for the next five years.

The yearly analysis is indicated in the table below; monthly analyses can be found in the appendix.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sales $427,422 $398,023 $383,829 $407,177 $432,517
Direct Cost of Sales $61,165 $61,172 $60,820 $64,281 $67,990
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $61,165 $61,172 $60,820 $64,281 $67,990
Gross Margin $366,256 $336,850 $323,008 $342,896 $364,527
Gross Margin % 85.69% 84.63% 84.15% 84.21% 84.28%
Expenses
Payroll $75,971 $77,969 $83,689 $91,648 $99,706
Marketing/Promotion $60,000 $62,000 $63,000 $65,000 $66,000
Depreciation $5,875 $5,875 $5,875 $5,875 $5,875
Rent $57,600 $57,600 $57,600 $57,600 $57,600
Utilities $7,340 $8,000 $8,200 $8,400 $8,600
Insurance $10,944 $10,944 $10,944 $10,944 $10,944
Professional Fees $2,400 $2,400 $2,400 $2,400 $2,400
Telephone $2,040 $2,100 $2,150 $2,200 $2,250
Supplies $4,800 $4,800 $4,800 $4,800 $4,800
Bank & Credit Card Fees $1,320 $1,320 $1,320 $1,320 $1,320
New Game Software $0 $10,000 $15,000 $10,000 $0
Miscellaneous $3,600 $3,600 $3,600 $3,600 $3,600
Total Operating Expenses $231,890 $246,608 $258,578 $263,787 $263,095
Profit Before Interest and Taxes $134,366 $90,242 $64,430 $79,108 $101,432
EBITDA $140,241 $96,117 $70,305 $84,983 $107,307
Interest Expense $8,611 $7,333 $6,000 $4,667 $3,333
Taxes Incurred $37,726 $24,873 $17,529 $22,333 $29,430
Net Profit $88,028 $58,037 $40,901 $52,109 $68,669
Net Profit/Sales 20.60% 14.58% 10.66% 12.80% 15.88%

9.5 Projected Cash Flow

The company's estimated cash flow analysis is outlined in the following table. Laser Tag's popularity will instantly show profitability, which will ensure positive cash balance. The Cash Flow table also shows planned sales tax received and paid out, and the estimated repayment for the requested loan.

Pro Forma Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received
Cash from Operations
Cash Sales $320,566 $298,517 $287,871 $305,382 $324,388
Cash from Receivables $96,929 $100,188 $96,287 $101,252 $107,541
Subtotal Cash from Operations $417,495 $398,705 $384,158 $406,634 $431,929
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $417,495 $398,705 $384,158 $406,634 $431,929
Expenditures Year 1 Year 2 Year 3 Year 4 Year 5
Expenditures from Operations
Cash Spending $75,971 $77,969 $83,689 $91,648 $99,706
Bill Payments $237,732 $257,787 $253,576 $257,359 $258,396
Subtotal Spent on Operations $313,703 $335,756 $337,265 $349,007 $358,102
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $12,120 $12,120 $12,120 $12,120 $12,120
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $325,823 $347,876 $349,385 $361,127 $370,222
Net Cash Flow $91,672 $50,829 $34,773 $45,507 $61,707
Cash Balance $101,672 $152,501 $187,274 $232,781 $294,487

9.6 Projected Balance Sheet

The table below presents the balance sheet for Laser Tag. This table reflects a positive cash position throughout the period of this financial plan and dramatic growth in net worth.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $101,672 $152,501 $187,274 $232,781 $294,487
Accounts Receivable $9,926 $9,244 $8,914 $9,456 $10,045
Inventory $2,883 $2,883 $2,867 $3,041 $3,230
Other Current Assets $4,480 $4,480 $4,480 $4,480 $4,480
Total Current Assets $118,961 $169,108 $203,534 $249,758 $312,243
Long-term Assets
Long-term Assets $47,267 $47,267 $47,267 $47,267 $47,267
Accumulated Depreciation $5,875 $11,750 $17,625 $23,500 $29,375
Total Long-term Assets $41,392 $35,517 $29,642 $23,767 $17,892
Total Assets $160,353 $204,625 $233,176 $273,525 $330,134
Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5
Current Liabilities
Accounts Payable $22,698 $21,053 $20,823 $21,182 $21,243
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $22,698 $21,053 $20,823 $21,182 $21,243
Long-term Liabilities $72,724 $60,604 $48,484 $36,364 $24,244
Total Liabilities $95,422 $81,657 $69,307 $57,546 $45,487
Paid-in Capital $27,000 $27,000 $27,000 $27,000 $27,000
Retained Earnings ($50,097) $37,931 $95,968 $136,869 $188,978
Earnings $88,028 $58,037 $40,901 $52,109 $68,669
Total Capital $64,931 $122,968 $163,869 $215,978 $284,647
Total Liabilities and Capital $160,353 $204,625 $233,176 $273,525 $330,134
Net Worth $64,931 $122,968 $163,869 $215,978 $284,647

9.7 Business Ratios

The company's projected business ratios are provided in the table below. The final column, Industry Profile, shows significant ratios for the Amusement and Recreation industry for comparison, as determined by the Standard Industry Classification (SIC) code, 7999.

Ratio Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profile
Sales Growth 0.00% -6.88% -3.57% 6.08% 6.22% 2.76%
Percent of Total Assets
Accounts Receivable 6.19% 4.52% 3.82% 3.46% 3.04% 4.27%
Inventory 1.80% 1.41% 1.23% 1.11% 0.98% 4.31%
Other Current Assets 2.79% 2.19% 1.92% 1.64% 1.36% 31.38%
Total Current Assets 74.19% 82.64% 87.29% 91.31% 94.58% 39.96%
Long-term Assets 25.81% 17.36% 12.71% 8.69% 5.42% 60.04%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.15% 10.29% 8.93% 7.74% 6.43% 23.98%
Long-term Liabilities 45.35% 29.62% 20.79% 13.29% 7.34% 24.53%
Total Liabilities 59.51% 39.91% 29.72% 21.04% 13.78% 48.51%
Net Worth 40.49% 60.09% 70.28% 78.96% 86.22% 51.49%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.69% 84.63% 84.15% 84.21% 84.28% 100.00%
Selling, General & Administrative Expenses 65.09% 70.05% 73.50% 71.42% 68.40% 75.54%
Advertising Expenses 1.37% 0.00% 0.00% 0.00% 0.00% 3.11%
Profit Before Interest and Taxes 31.44% 22.67% 16.79% 19.43% 23.45% 1.52%
Main Ratios
Current 5.24 8.03 9.77 11.79 14.70 1.04
Quick 5.11 7.90 9.64 11.65 14.55 0.68
Total Debt to Total Assets 59.51% 39.91% 29.72% 21.04% 13.78% 64.79%
Pre-tax Return on Net Worth 193.67% 67.42% 35.66% 34.47% 34.46% 2.30%
Pre-tax Return on Assets 78.42% 40.52% 25.06% 27.22% 29.71% 6.54%
Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Net Profit Margin 20.60% 14.58% 10.66% 12.80% 15.88% n.a
Return on Equity 135.57% 47.20% 24.96% 24.13% 24.12% n.a
Activity Ratios
Accounts Receivable Turnover 10.76 10.76 10.76 10.76 10.76 n.a
Collection Days 29 35 35 33 33 n.a
Inventory Turnover 24.00 21.22 21.16 21.76 21.68 n.a
Accounts Payable Turnover 11.47 12.17 12.17 12.17 12.17 n.a
Payment Days 27 31 30 30 30 n.a
Total Asset Turnover 2.67 1.95 1.65 1.49 1.31 n.a
Debt Ratios
Debt to Net Worth 1.47 0.66 0.42 0.27 0.16 n.a
Current Liab. to Liab. 0.24 0.26 0.30 0.37 0.47 n.a
Liquidity Ratios
Net Working Capital $96,263 $148,055 $182,711 $228,576 $291,000 n.a
Interest Coverage 15.60 12.31 10.74 16.95 30.43 n.a
Additional Ratios
Assets to Sales 0.38 0.51 0.61 0.67 0.76 n.a
Current Debt/Total Assets 14% 10% 9% 8% 6% n.a
Acid Test 4.68 7.46 9.21 11.20 14.07 n.a
Sales/Net Worth 6.58 3.24 2.34 1.89 1.52 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a
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Start-up Funding
Start-up Expenses to Fund $50,097
Start-up Assets to Fund $61,747
Total Funding Required $111,844
Assets
Non-cash Assets from Start-up $51,747
Cash Requirements from Start-up $10,000
Additional Cash Raised $0
Cash Balance on Starting Date $10,000
Total Assets $61,747
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $84,844
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $84,844
Capital
Planned Investment
Owner $27,000
Investor $0
Additional Investment Requirement $0
Total Planned Investment $27,000
Loss at Start-up (Start-up Expenses) ($50,097)
Total Capital ($23,097)
Total Capital and Liabilities $61,747
Total Funding $111,844
General Assumptions
Year 1 Year 2 Year 3 Year 4 Year 5
Plan Month 1 2 3 4 5
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 11.00% 11.00% 11.00% 11.00% 11.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0
Break-even Analysis
Monthly Units Break-even 9,876
Monthly Revenue Break-even $22,551
Assumptions:
Average Per-Unit Revenue $2.28
Average Per-Unit Variable Cost $0.33
Estimated Monthly Fixed Cost $19,324
Pro Forma Profit and Loss
Year 1 Year 2 Year 3 Year 4 Year 5
Sales $427,422 $398,023 $383,829 $407,177 $432,517
Direct Cost of Sales $61,165 $61,172 $60,820 $64,281 $67,990
Other Costs of Sales $0 $0 $0 $0 $0
Total Cost of Sales $61,165 $61,172 $60,820 $64,281 $67,990
Gross Margin $366,256 $336,850 $323,008 $342,896 $364,527
Gross Margin % 85.69% 84.63% 84.15% 84.21% 84.28%
Expenses
Payroll $75,971 $77,969 $83,689 $91,648 $99,706
Marketing/Promotion $60,000 $62,000 $63,000 $65,000 $66,000
Depreciation $5,875 $5,875 $5,875 $5,875 $5,875
Rent $57,600 $57,600 $57,600 $57,600 $57,600
Utilities $7,340 $8,000 $8,200 $8,400 $8,600
Insurance $10,944 $10,944 $10,944 $10,944 $10,944
Professional Fees $2,400 $2,400 $2,400 $2,400 $2,400
Telephone $2,040 $2,100 $2,150 $2,200 $2,250
Supplies $4,800 $4,800 $4,800 $4,800 $4,800
Bank & Credit Card Fees $1,320 $1,320 $1,320 $1,320 $1,320
New Game Software $0 $10,000 $15,000 $10,000 $0
Miscellaneous $3,600 $3,600 $3,600 $3,600 $3,600
Total Operating Expenses $231,890 $246,608 $258,578 $263,787 $263,095
Profit Before Interest and Taxes $134,366 $90,242 $64,430 $79,108 $101,432
EBITDA $140,241 $96,117 $70,305 $84,983 $107,307
Interest Expense $8,611 $7,333 $6,000 $4,667 $3,333
Taxes Incurred $37,726 $24,873 $17,529 $22,333 $29,430
Net Profit $88,028 $58,037 $40,901 $52,109 $68,669
Net Profit/Sales 20.60% 14.58% 10.66% 12.80% 15.88%
Pro Forma Cash Flow
Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received
Cash from Operations
Cash Sales $320,566 $298,517 $287,871 $305,382 $324,388
Cash from Receivables $96,929 $100,188 $96,287 $101,252 $107,541
Subtotal Cash from Operations $417,495 $398,705 $384,158 $406,634 $431,929
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $417,495 $398,705 $384,158 $406,634 $431,929
Expenditures Year 1 Year 2 Year 3 Year 4 Year 5
Expenditures from Operations
Cash Spending $75,971 $77,969 $83,689 $91,648 $99,706
Bill Payments $237,732 $257,787 $253,576 $257,359 $258,396
Subtotal Spent on Operations $313,703 $335,756 $337,265 $349,007 $358,102
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $12,120 $12,120 $12,120 $12,120 $12,120
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0
Subtotal Cash Spent $325,823 $347,876 $349,385 $361,127 $370,222
Net Cash Flow $91,672 $50,829 $34,773 $45,507 $61,707
Cash Balance $101,672 $152,501 $187,274 $232,781 $294,487
Pro Forma Balance Sheet
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $101,672 $152,501 $187,274 $232,781 $294,487
Accounts Receivable $9,926 $9,244 $8,914 $9,456 $10,045
Inventory $2,883 $2,883 $2,867 $3,041 $3,230
Other Current Assets $4,480 $4,480 $4,480 $4,480 $4,480
Total Current Assets $118,961 $169,108 $203,534 $249,758 $312,243
Long-term Assets
Long-term Assets $47,267 $47,267 $47,267 $47,267 $47,267
Accumulated Depreciation $5,875 $11,750 $17,625 $23,500 $29,375
Total Long-term Assets $41,392 $35,517 $29,642 $23,767 $17,892
Total Assets $160,353 $204,625 $233,176 $273,525 $330,134
Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5
Current Liabilities
Accounts Payable $22,698 $21,053 $20,823 $21,182 $21,243
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $22,698 $21,053 $20,823 $21,182 $21,243
Long-term Liabilities $72,724 $60,604 $48,484 $36,364 $24,244
Total Liabilities $95,422 $81,657 $69,307 $57,546 $45,487
Paid-in Capital $27,000 $27,000 $27,000 $27,000 $27,000
Retained Earnings ($50,097) $37,931 $95,968 $136,869 $188,978
Earnings $88,028 $58,037 $40,901 $52,109 $68,669
Total Capital $64,931 $122,968 $163,869 $215,978 $284,647
Total Liabilities and Capital $160,353 $204,625 $233,176 $273,525 $330,134
Net Worth $64,931 $122,968 $163,869 $215,978 $284,647
Ratio Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profile
Sales Growth 0.00% -6.88% -3.57% 6.08% 6.22% 2.76%
Percent of Total Assets
Accounts Receivable 6.19% 4.52% 3.82% 3.46% 3.04% 4.27%
Inventory 1.80% 1.41% 1.23% 1.11% 0.98% 4.31%
Other Current Assets 2.79% 2.19% 1.92% 1.64% 1.36% 31.38%
Total Current Assets 74.19% 82.64% 87.29% 91.31% 94.58% 39.96%
Long-term Assets 25.81% 17.36% 12.71% 8.69% 5.42% 60.04%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.15% 10.29% 8.93% 7.74% 6.43% 23.98%
Long-term Liabilities 45.35% 29.62% 20.79% 13.29% 7.34% 24.53%
Total Liabilities 59.51% 39.91% 29.72% 21.04% 13.78% 48.51%
Net Worth 40.49% 60.09% 70.28% 78.96% 86.22% 51.49%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.69% 84.63% 84.15% 84.21% 84.28% 100.00%
Selling, General & Administrative Expenses 65.09% 70.05% 73.50% 71.42% 68.40% 75.54%
Advertising Expenses 1.37% 0.00% 0.00% 0.00% 0.00% 3.11%
Profit Before Interest and Taxes 31.44% 22.67% 16.79% 19.43% 23.45% 1.52%
Main Ratios
Current 5.24 8.03 9.77 11.79 14.70 1.04
Quick 5.11 7.90 9.64 11.65 14.55 0.68
Total Debt to Total Assets 59.51% 39.91% 29.72% 21.04% 13.78% 64.79%
Pre-tax Return on Net Worth 193.67% 67.42% 35.66% 34.47% 34.46% 2.30%
Pre-tax Return on Assets 78.42% 40.52% 25.06% 27.22% 29.71% 6.54%
Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Net Profit Margin 20.60% 14.58% 10.66% 12.80% 15.88% n.a
Return on Equity 135.57% 47.20% 24.96% 24.13% 24.12% n.a
Activity Ratios
Accounts Receivable Turnover 10.76 10.76 10.76 10.76 10.76 n.a
Collection Days 29 35 35 33 33 n.a
Inventory Turnover 24.00 21.22 21.16 21.76 21.68 n.a
Accounts Payable Turnover 11.47 12.17 12.17 12.17 12.17 n.a
Payment Days 27 31 30 30 30 n.a
Total Asset Turnover 2.67 1.95 1.65 1.49 1.31 n.a
Debt Ratios
Debt to Net Worth 1.47 0.66 0.42 0.27 0.16 n.a
Current Liab. to Liab. 0.24 0.26 0.30 0.37 0.47 n.a
Liquidity Ratios
Net Working Capital $96,263 $148,055 $182,711 $228,576 $291,000 n.a
Interest Coverage 15.60 12.31 10.74 16.95 30.43 n.a
Additional Ratios
Assets to Sales 0.38 0.51 0.61 0.67 0.76 n.a
Current Debt/Total Assets 14% 10% 9% 8% 6% n.a
Acid Test 4.68 7.46 9.21 11.20 14.07 n.a
Sales/Net Worth 6.58 3.24 2.34 1.89 1.52 n.a
Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a