Office Equipment Rental Business Plan

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Financial Plan

The following section will outline important financial information.

8.1 Important Assumptions

The following table details important Financial Assumptions.

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 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

The Break-even Analysis indicates what monthly revenue will be needed to reach the break-even point.

Break-even Analysis
Monthly Revenue Break-even $10,246
Assumptions:
Average Percent Variable Cost 0%
Estimated Monthly Fixed Cost $10,246

8.3 Projected Profit and Loss

This projected table and these charts show the Projected Profit and Loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $52,271 $181,178 $222,948
Direct Cost of Sales $0 $0 $0
Other Costs of Sales $0 $0 $0
Total Cost of Sales $0 $0 $0
Gross Margin $52,271 $181,178 $222,948
Gross Margin % 100.00% 100.00% 100.00%
Expenses
Payroll $85,700 $109,200 $119,000
Sales and Marketing and Other Expenses $2,400 $12,846 $17,440
Depreciation $9,996 $9,996 $9,996
Rent $7,800 $8,200 $8,500
Utilities $2,400 $3,000 $3,500
Insurance $1,800 $2,000 $22,000
Payroll Taxes $12,855 $16,380 $17,850
Other $0 $0 $0
Total Operating Expenses $122,951 $161,622 $198,286
Profit Before Interest and Taxes ($70,681) $19,556 $24,662
EBITDA ($60,684) $29,552 $34,658
Interest Expense $0 $0 $0
Taxes Incurred $0 $5,867 $7,399
Net Profit ($70,681) $13,689 $17,263
Net Profit/Sales -135.22% 7.56% 7.74%

8.4 Projected Cash Flow

The following chart and table present the Projected Cash Flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $52,271 $181,178 $222,948
Subtotal Cash from Operations $52,271 $181,178 $222,948
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 $52,271 $181,178 $222,948
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $85,700 $109,200 $119,000
Bill Payments $24,877 $46,702 $74,355
Subtotal Spent on Operations $110,577 $155,902 $193,355
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 $110,577 $155,902 $193,355
Net Cash Flow ($58,306) $25,276 $29,593
Cash Balance $9,794 $35,070 $64,663

8.5 Projected Balance Sheet

The following table displays the Projected Balance Sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $9,794 $35,070 $64,663
Other Current Assets $0 $0 $0
Total Current Assets $9,794 $35,070 $64,663
Long-term Assets
Long-term Assets $50,000 $50,000 $50,000
Accumulated Depreciation $9,996 $19,992 $29,988
Total Long-term Assets $40,004 $30,008 $20,012
Total Assets $49,797 $65,078 $84,675
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $2,378 $3,969 $6,303
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $2,378 $3,969 $6,303
Long-term Liabilities $0 $0 $0
Total Liabilities $2,378 $3,969 $6,303
Paid-in Capital $125,000 $125,000 $125,000
Retained Earnings ($6,900) ($77,581) ($63,891)
Earnings ($70,681) $13,689 $17,263
Total Capital $47,419 $61,109 $78,372
Total Liabilities and Capital $49,797 $65,078 $84,675
Net Worth $47,419 $61,109 $78,372

8.6 Business Ratios

Business Ratios for HOP. SIC class/code: Office machine rental, except computers - 7359.0505

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 246.61% 23.05% 7.07%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 44.65%
Total Current Assets 19.67% 53.89% 76.37% 76.22%
Long-term Assets 80.33% 46.11% 23.63% 23.78%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.78% 6.10% 7.44% 33.47%
Long-term Liabilities 0.00% 0.00% 0.00% 16.23%
Total Liabilities 4.78% 6.10% 7.44% 49.70%
Net Worth 95.22% 93.90% 92.56% 50.30%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 100.00%
Selling, General & Administrative Expenses 235.22% 92.44% 92.26% 84.88%
Advertising Expenses 0.00% 0.00% 0.00% 1.01%
Profit Before Interest and Taxes -135.22% 10.79% 11.06% 1.94%
Main Ratios
Current 4.12 8.84 10.26 1.73
Quick 4.12 8.84 10.26 1.33
Total Debt to Total Assets 4.78% 6.10% 7.44% 3.77%
Pre-tax Return on Net Worth -149.05% 32.00% 31.47% 57.72%
Pre-tax Return on Assets -141.94% 30.05% 29.13% 8.92%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -135.22% 7.56% 7.74% n.a
Return on Equity -149.05% 22.40% 22.03% n.a
Activity Ratios
Accounts Payable Turnover 11.46 12.17 12.17 n.a
Payment Days 27 24 24 n.a
Total Asset Turnover 1.05 2.78 2.63 n.a
Debt Ratios
Debt to Net Worth 0.05 0.06 0.08 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $7,416 $31,101 $58,360 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.95 0.36 0.38 n.a
Current Debt/Total Assets 5% 6% 7% n.a
Acid Test 4.12 8.84 10.26 n.a
Sales/Net Worth 1.10 2.96 2.84 n.a
Dividend Payout 0.00 0.00 0.00 n.a