Bra~vo Intimates

Start your own business plan »

Lingerie Retail Clothing Store Business Plan

Financial Plan

  • Being a retail store we will not be selling on credit, nor will we have lay-aways.
  • The first year we will keep the part-time help to a minimum.
  • Due to the soft economy we plan on a better interest rate than offered in the past five years.

7.1 Important Assumptions

Our sales paid for by credit card will be deposited in our business checking account within 48 hours. Since most of our personnel are part-time, the first year only the Owner/Manager Rebecca Autumn will receive benefits. Our business checking account will be with National City, in Royal Oak. They have reported the approximate current interest rates as those below.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 9.00% 9.00% 9.00%
Tax Rate 2.50% 0.00% 2.50%
Other 0 0 0

7.2 Key Financial Indicators

The following chart shows the Benchmark figures for Bra~vo.

7.3 Break-even Analysis

The following table and chart show our Break-even Analysis. Fixed costs are based on operating expenses in the first year.

Break-even Analysis
Monthly Revenue Break-even $32,367
Assumptions:
Average Percent Variable Cost 42%
Estimated Monthly Fixed Cost $18,727

7.4 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 $389,750 $535,200 $655,250
Direct Cost of Sales $164,250 $219,850 $257,625
Other $0 $0 $0
Total Cost of Sales $164,250 $219,850 $257,625
Gross Margin $225,500 $315,350 $397,625
Gross Margin % 57.86% 58.92% 60.68%
Expenses
Payroll $90,248 $129,300 $145,075
Sales and Marketing and Other Expenses $42,025 $48,354 $46,460
Depreciation $0 $0 $0
Principle Loan Payment $21,006 $5,937 $7,907
Utilities $5,475 $6,325 $7,085
Telephone $3,000 $3,850 $4,240
Insurance $8,400 $8,500 $8,600
Bankcard Machine $325 $200 $0
Bankcard Processing fees $9,094 $12,488 $15,289
Bank Account fees $108 $144 $150
Business Supplies $1,955 $800 $850
Rent $32,256 $30,000 $30,000
Payroll Taxes $10,830 $15,516 $17,409
Other $0 $0 $0
Total Operating Expenses $224,722 $261,414 $283,065
Profit Before Interest and Taxes $778 $53,936 $114,560
EBITDA $778 $53,936 $114,560
Interest Expense $14,147 $12,864 $10,178
Taxes Incurred $0 $0 $2,610
Net Profit ($13,369) $41,072 $101,773
Net Profit/Sales -3.43% 7.67% 15.53%

7.5 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 $389,750 $535,200 $655,250
Subtotal Cash from Operations $389,750 $535,200 $655,250
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 $389,750 $535,200 $655,250
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $90,248 $129,300 $145,075
Bill Payments $228,814 $349,774 $406,803
Subtotal Spent on Operations $319,062 $479,074 $551,878
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 $28,512 $31,187
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $319,062 $507,586 $583,065
Net Cash Flow $70,688 $27,614 $72,185
Cash Balance $75,688 $103,301 $175,486

7.6 Projected Balance Sheet

Deborah Summers will keep our financial reports current, Chris Hamill our accountant will make a quarterly visit to review the reports and offer suggestions on business development.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $75,688 $103,301 $175,486
Inventory $8,298 $11,106 $13,015
Other Current Assets $0 $0 $0
Total Current Assets $83,985 $114,408 $188,501
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $83,985 $114,408 $188,501
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $12,354 $30,217 $33,724
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $12,354 $30,217 $33,724
Long-term Liabilities $157,190 $128,678 $97,491
Total Liabilities $169,544 $158,895 $131,215
Paid-in Capital $39,000 $39,000 $39,000
Retained Earnings ($111,190) ($124,559) ($83,487)
Earnings ($13,369) $41,072 $101,773
Total Capital ($85,559) ($44,487) $57,286
Total Liabilities and Capital $83,985 $114,408 $188,501
Net Worth ($85,559) ($44,487) $57,286

7.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5632, Women's Accessory and Specialty Stores, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 37.32% 22.43% 8.20%
Percent of Total Assets
Inventory 9.88% 9.71% 6.90% 50.10%
Other Current Assets 0.00% 0.00% 0.00% 22.40%
Total Current Assets 100.00% 100.00% 100.00% 81.40%
Long-term Assets 0.00% 0.00% 0.00% 18.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.71% 26.41% 17.89% 42.60%
Long-term Liabilities 187.16% 112.47% 51.72% 14.90%
Total Liabilities 201.87% 138.88% 69.61% 57.50%
Net Worth -101.87% -38.88% 30.39% 42.50%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 57.86% 58.92% 60.68% 40.50%
Selling, General & Administrative Expenses 61.29% 51.25% 44.75% 22.20%
Advertising Expenses 4.71% 3.92% 3.51% 2.20%
Profit Before Interest and Taxes 0.20% 10.08% 17.48% 1.10%
Main Ratios
Current 6.80 3.79 5.59 2.23
Quick 6.13 3.42 5.20 0.57
Total Debt to Total Assets 201.87% 138.88% 69.61% 57.50%
Pre-tax Return on Net Worth 15.63% -92.32% 182.21% 2.80%
Pre-tax Return on Assets -15.92% 35.90% 55.37% 6.70%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -3.43% 7.67% 15.53% n.a
Return on Equity 0.00% 0.00% 177.66% n.a
Activity Ratios
Inventory Turnover 5.35 22.66 21.36 n.a
Accounts Payable Turnover 19.52 12.17 12.17 n.a
Payment Days 27 21 28 n.a
Total Asset Turnover 4.64 4.68 3.48 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 2.29 n.a
Current Liab. to Liab. 0.07 0.19 0.26 n.a
Liquidity Ratios
Net Working Capital $71,631 $84,191 $154,777 n.a
Interest Coverage 0.05 4.19 11.26 n.a
Additional Ratios
Assets to Sales 0.22 0.21 0.29 n.a
Current Debt/Total Assets 15% 26% 18% n.a
Acid Test 6.13 3.42 5.20 n.a
Sales/Net Worth 0.00 0.00 11.44 n.a
Dividend Payout 0.00 0.00 0.00 n.a