CMBA - Connecticut Motorsports Business Association

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Nonprofit Trade Association Business Plan

Financial Plan

  • We want to finance growth solely through cash flow. We recognize that this means we will have to grow more slowly than we might like but that no assessment of members or borrowing is necessary.

  • The most important factor in our case is attention to details and to the plan. Therefore, we need to develop a permanent system of communication and accountability between the executive director and the board of directors and officers.

  • We are also assuming beginning cash reserves on June 30th of $12,000 according the the Treasurer.

7.1 Important Assumptions

Notes for Funding chart for 1999-2000 (FY2000):

Revenues:

  1. Dues revenue assumes 50 members (new and renewing) at $250 from Exec. Dir. visiting all potential members in state and calling potential associate members.
  2. Meeting revenue assumes 20 people per monthly meeting paying $25 each for dinner and meeting.
  3. Motorcycle Show revenue assumes 11,000 consumers @$10 and 20,000 sq ft @$1.
  4. SuperRide revenue comes from Registrations, Exhibitors, Advertisers, Sponsors, and Specials. Separate chart is attached for projected SuperRide forecast.
  5. Awards Banquet Revenue assumes 400 people paying $30 each plus $5,000 sponsorships.
  6. Conference Revenue assumes 200 people paying $125 each plus $5,000 sponsors and exhibitors.

Costs:

  1. Motorcycle Show costs include $10,000 for space, $9,000 advertising, $1,000 other costs.
  2. SuperRide costs include Promotion expense, cost of Event, and General expenses such as credit card charges, postage for confirmations, etc.
General Assumptions
FY 2000 FY 2001 FY 2002
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% 0.00% 0.00%
Other 0 0 0

7.2 Projected Surplus or Deficit

Our projected surplus and deficit is shown on the following table, with funding increasing from more than $195K the first year to more than $263K the third. Profits may be applied to legislative activities, marketing activities, or held for contingencies.

The detailed monthly projections are included in the appendix.

Surplus and Deficit
FY 2000 FY 2001 FY 2002
Funding $195,000 $225,200 $263,200
Direct Cost $128,550 $146,100 $170,100
Other Costs of Funding $0 $0 $0
Total Direct Cost $128,550 $146,100 $170,100
Gross Surplus $66,450 $79,100 $93,100
Gross Surplus % 34.08% 35.12% 35.37%
Expenses
Payroll $43,200 $49,000 $59,000
Marketing/Promotion $1,380 $6,400 $7,450
Depreciation $0 $0 $0
Rent $6,000 $6,500 $7,000
Telephone Service $1,200 $1,500 $1,800
Payroll Taxes $0 $0 $0
Other $0 $0 $0
Total Operating Expenses $51,780 $63,400 $75,250
Surplus Before Interest and Taxes $14,670 $15,700 $17,850
EBITDA $14,670 $15,700 $17,850
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $0
Net Surplus $14,670 $15,700 $17,850
Net Surplus/Funding 7.52% 6.97% 6.78%

7.3 Projected Cash Flow

Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.

Pro Forma Cash Flow
FY 2000 FY 2001 FY 2002
Cash Received
Cash from Operations
Cash Funding $195,000 $225,200 $263,200
Subtotal Cash from Operations $195,000 $225,200 $263,200
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 $195,000 $225,200 $263,200
Expenditures FY 2000 FY 2001 FY 2002
Expenditures from Operations
Cash Spending $43,200 $49,000 $59,000
Bill Payments $135,400 $149,039 $184,225
Subtotal Spent on Operations $178,600 $198,039 $243,225
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 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $178,600 $198,039 $243,225
Net Cash Flow $16,400 $27,161 $19,975
Cash Balance $28,400 $55,562 $75,536

7.4 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.

Pro Forma Balance Sheet
FY 2000 FY 2001 FY 2002
Assets
Current Assets
Cash $28,400 $55,562 $75,536
Other Current Assets $0 $0 $0
Total Current Assets $28,400 $55,562 $75,536
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $28,400 $55,562 $75,536
Liabilities and Capital FY 2000 FY 2001 FY 2002
Current Liabilities
Accounts Payable $1,730 $13,192 $15,316
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $1,730 $13,192 $15,316
Long-term Liabilities $0 $0 $0
Total Liabilities $1,730 $13,192 $15,316
Paid-in Capital $0 $0 $0
Accumulated Surplus/Deficit $12,000 $26,670 $42,370
Surplus/Deficit $14,670 $15,700 $17,850
Total Capital $26,670 $42,370 $60,220
Total Liabilities and Capital $28,400 $55,562 $75,536
Net Worth $26,670 $42,370 $60,220

7.5 Standard Ratios

The following table outlines some of the more important ratios from the Convention and Trade Show Organizers industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7389.

Ratio Analysis
FY 2000 FY 2001 FY 2002 Industry Profile
Funding Growth 838.40% 15.49% 16.87% 10.93%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 76.67%
Total Current Assets 100.00% 100.00% 100.00% 76.67%
Long-term Assets 0.00% 0.00% 0.00% 23.33%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.09% 23.74% 20.28% 40.41%
Long-term Liabilities 0.00% 0.00% 0.00% 17.31%
Total Liabilities 6.09% 23.74% 20.28% 57.72%
Net Worth 93.91% 76.26% 79.72% 42.28%
Percent of Funding
Funding 100.00% 100.00% 100.00% 100.00%
Gross Surplus 34.08% 35.12% 35.37% 100.00%
Selling, General & Administrative Expenses 26.55% 28.15% 28.59% 76.26%
Advertising Expenses 0.00% 0.00% 0.00% 2.58%
Surplus Before Interest and Taxes 7.52% 6.97% 6.78% 1.39%
Main Ratios
Current 16.41 4.21 4.93 1.42
Quick 16.41 4.21 4.93 1.14
Total Debt to Total Assets 6.09% 23.74% 20.28% 67.09%
Pre-tax Return on Net Worth 55.01% 37.05% 29.64% 3.47%
Pre-tax Return on Assets 51.65% 28.26% 23.63% 10.56%
Additional Ratios FY 2000 FY 2001 FY 2002
Net Surplus Margin 7.52% 6.97% 6.78% n.a
Return on Equity 55.01% 37.05% 29.64% n.a
Activity Ratios
Accounts Payable Turnover 79.25 12.17 12.17 n.a
Payment Days 27 17 28 n.a
Total Asset Turnover 6.87 4.05 3.48 n.a
Debt Ratios
Debt to Net Worth 0.06 0.31 0.25 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $26,670 $42,370 $60,220 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Funding 0.15 0.25 0.29 n.a
Current Debt/Total Assets 6% 24% 20% n.a
Acid Test 16.41 4.21 4.93 n.a
Funding/Net Worth 7.31 5.32 4.37 n.a
Dividend Payout 0.00 0.00 0.00 n.a