Plan Outline
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SIC 5813 Eating and Drinking Places - Drinking places
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Nightclub Business Plan
The Spot
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Financial Plan
The financial projections for this plan are presented in the tables and charts of the following subtopics.
7.1 Important Assumptions
The table below presents the assumptions used in the financial calculations of this business plan.
| 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 | 0.00% | 30.00% | 30.00% |
| Other | 0 | 0 | 0 |
7.2 Break-even Analysis
Our Break-even Analsysis is shown in the following table and chart.
| Break-even Analysis | |
| Monthly Units Break-even | 10,220 |
| Monthly Revenue Break-even | $56,482 |
| Assumptions: | |
| Average Per-Unit Revenue | $5.53 |
| Average Per-Unit Variable Cost | $1.27 |
| Estimated Monthly Fixed Cost | $43,527 |
7.3 Projected Profit and Loss
The following table and chart will show the projected profit and loss for The Spot.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $569,800 | $875,000 | $1,052,000 |
| Direct Cost of Sales | $130,700 | $192,868 | $257,717 |
| Other Production Expenses | $0 | $0 | $0 |
| Total Cost of Sales | $130,700 | $192,868 | $257,717 |
| Gross Margin | $439,100 | $682,133 | $794,283 |
| Gross Margin % | 77.06% | 77.96% | 75.50% |
| Expenses | |||
| Payroll | $348,000 | $388,000 | $412,000 |
| Sales and Marketing and Other Expenses | $22,900 | $25,000 | $27,300 |
| Depreciation | $2,618 | $2,856 | $2,856 |
| Leased Equipment | $33,000 | $40,000 | $40,000 |
| Utilities | $3,600 | $3,600 | $3,600 |
| Insurance | $12,000 | $12,000 | $12,000 |
| Rent | $48,000 | $40,000 | $40,000 |
| Payroll Taxes | $52,200 | $58,200 | $61,800 |
| Other | $0 | $0 | $0 |
| Total Operating Expenses | $522,318 | $569,656 | $599,556 |
| Profit Before Interest and Taxes | ($83,218) | $112,477 | $194,727 |
| EBITDA | ($80,600) | $115,333 | $197,583 |
| Interest Expense | $42 | $250 | $0 |
| Taxes Incurred | $0 | $33,668 | $58,418 |
| Net Profit | ($83,260) | $78,559 | $136,309 |
| Net Profit/Sales | -14.61% | 8.98% | 12.96% |
7.4 Projected Cash Flow
The following table and chart are the projected cash flow for three years.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $512,820 | $787,500 | $946,800 |
| Cash from Receivables | $45,082 | $81,127 | $101,504 |
| Subtotal Cash from Operations | $557,902 | $868,627 | $1,048,304 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $5,000 | $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 | $562,902 | $868,627 | $1,048,304 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $348,000 | $388,000 | $412,000 |
| Bill Payments | $289,115 | $407,976 | $500,717 |
| Subtotal Spent on Operations | $637,115 | $795,976 | $912,717 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $0 | $5,000 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $637,115 | $800,976 | $912,717 |
| Net Cash Flow | ($74,213) | $67,651 | $135,587 |
| Cash Balance | $3,287 | $70,938 | $206,525 |
7.5 Projected Balance Sheet
The following is the projected balance sheet for the three years.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $3,287 | $70,938 | $206,525 |
| Accounts Receivable | $11,898 | $18,271 | $21,967 |
| Inventory | $15,593 | $23,009 | $30,746 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $30,778 | $112,218 | $259,238 |
| Long-term Assets | |||
| Long-term Assets | $20,000 | $20,000 | $20,000 |
| Accumulated Depreciation | $2,618 | $5,474 | $8,330 |
| Total Long-term Assets | $17,382 | $14,526 | $11,670 |
| Total Assets | $48,160 | $126,744 | $270,908 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $28,919 | $33,945 | $41,800 |
| Current Borrowing | $5,000 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $33,919 | $33,945 | $41,800 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $33,919 | $33,945 | $41,800 |
| Paid-in Capital | $210,000 | $210,000 | $210,000 |
| Retained Earnings | ($112,500) | ($195,760) | ($117,201) |
| Earnings | ($83,260) | $78,559 | $136,309 |
| Total Capital | $14,240 | $92,799 | $229,108 |
| Total Liabilities and Capital | $48,160 | $126,744 | $270,908 |
| Net Worth | $14,240 | $92,799 | $229,108 |
7.6 Business Ratios
The Ratios table below outlines important ratios for this night club. The last column, Industry Profile, is derived from the Standard Industrial Classification (SIC) Index code 5813, for Drinking Places.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 53.56% | 20.23% | 1.90% |
| Percent of Total Assets | ||||
| Accounts Receivable | 24.71% | 14.42% | 8.11% | 4.60% |
| Inventory | 32.38% | 18.15% | 11.35% | 3.10% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 44.60% |
| Total Current Assets | 63.91% | 88.54% | 95.69% | 52.30% |
| Long-term Assets | 36.09% | 11.46% | 4.31% | 47.70% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 70.43% | 26.78% | 15.43% | 28.20% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 23.10% |
| Total Liabilities | 70.43% | 26.78% | 15.43% | 51.30% |
| Net Worth | 29.57% | 73.22% | 84.57% | 48.70% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 77.06% | 77.96% | 75.50% | 42.30% |
| Selling, General & Administrative Expenses | 91.67% | 68.98% | 62.55% | 23.40% |
| Advertising Expenses | 3.86% | 2.74% | 2.47% | 2.40% |
| Profit Before Interest and Taxes | -14.60% | 12.85% | 18.51% | 2.80% |
| Main Ratios | ||||
| Current | 0.91 | 3.31 | 6.20 | 1.14 |
| Quick | 0.45 | 2.63 | 5.47 | 0.74 |
| Total Debt to Total Assets | 70.43% | 26.78% | 15.43% | 51.30% |
| Pre-tax Return on Net Worth | -584.67% | 120.94% | 84.99% | 5.20% |
| Pre-tax Return on Assets | -172.88% | 88.55% | 71.88% | 10.60% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | -14.61% | 8.98% | 12.96% | n.a |
| Return on Equity | -584.67% | 84.65% | 59.50% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 4.79 | 4.79 | 4.79 | n.a |
| Collection Days | 57 | 63 | 70 | n.a |
| Inventory Turnover | 10.91 | 9.99 | 9.59 | n.a |
| Accounts Payable Turnover | 11.00 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 28 | 27 | n.a |
| Total Asset Turnover | 11.83 | 6.90 | 3.88 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 2.38 | 0.37 | 0.18 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | ($3,142) | $78,273 | $217,438 | n.a |
| Interest Coverage | -1,997.23 | 449.91 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.08 | 0.14 | 0.26 | n.a |
| Current Debt/Total Assets | 70% | 27% | 15% | n.a |
| Acid Test | 0.10 | 2.09 | 4.94 | n.a |
| Sales/Net Worth | 40.01 | 9.43 | 4.59 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
