Pizza Delivery Business Plan

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Financial Plan

The following is the financial plan for Tsunami Pizza.

7.1 Break-even Analysis

The following table and chart show the Break-even Analysis.

Break-even Analysis
Monthly Revenue Break-even $12,803
Assumptions:
Average Percent Variable Cost 15%
Estimated Monthly Fixed Cost $10,925

7.2 Projected Profit and Loss

The following table and charts show the projected profit and loss for three years.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $176,500 $196,000 $219,000
Direct Cost of Sales $25,900 $31,800 $38,400
Other Production Expenses $0 $0 $0
Total Cost of Sales $25,900 $31,800 $38,400
Gross Margin $150,600 $164,200 $180,600
Gross Margin % 85.33% 83.78% 82.47%
Expenses
Payroll $90,000 $96,000 $105,000
Sales and Marketing and Other Expenses $8,000 $8,000 $8,000
Depreciation $1,596 $1,600 $1,600
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $0 $0 $0
Rent $12,000 $12,000 $12,000
Payroll Taxes $13,500 $14,400 $15,750
Other $0 $0 $0
Total Operating Expenses $131,096 $138,000 $148,350
Profit Before Interest and Taxes $19,504 $26,200 $32,250
EBITDA $21,100 $27,800 $33,850
Interest Expense $0 $0 $0
Taxes Incurred $5,851 $7,860 $9,675
Net Profit $13,653 $18,340 $22,575
Net Profit/Sales 7.74% 9.36% 10.31%

7.3 Projected Cash Flow

The following table and chart is the projected cash flow for three years.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $176,500 $196,000 $219,000
Subtotal Cash from Operations $176,500 $196,000 $219,000
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 $176,500 $196,000 $219,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $90,000 $96,000 $105,000
Bill Payments $63,520 $81,211 $89,022
Subtotal Spent on Operations $153,520 $177,211 $194,022
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 $153,520 $177,211 $194,022
Net Cash Flow $22,980 $18,789 $24,978
Cash Balance $27,980 $46,769 $71,747

7.4 Projected Balance Sheet

The following table is the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $27,980 $46,769 $71,747
Other Current Assets $0 $0 $0
Total Current Assets $27,980 $46,769 $71,747
Long-term Assets
Long-term Assets $8,000 $8,000 $8,000
Accumulated Depreciation $1,596 $3,196 $4,796
Total Long-term Assets $6,404 $4,804 $3,204
Total Assets $34,384 $51,573 $74,951
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $7,731 $6,580 $7,383
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $7,731 $6,580 $7,383
Long-term Liabilities $0 $0 $0
Total Liabilities $7,731 $6,580 $7,383
Paid-in Capital $50,000 $50,000 $50,000
Retained Earnings ($37,000) ($23,347) ($5,007)
Earnings $13,653 $18,340 $22,575
Total Capital $26,653 $44,993 $67,568
Total Liabilities and Capital $34,384 $51,573 $74,951
Net Worth $26,653 $44,993 $67,568

7.5 Business Ratios

Business ratios for the years of this plan are shown below.  Industry profile ratios based on the Standard Industrial Classification (SIC) code 5812, Eating Places, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 11.05% 11.73% 7.60%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 81.37% 90.69% 95.73% 43.70%
Long-term Assets 18.63% 9.31% 4.27% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.48% 12.76% 9.85% 32.70%
Long-term Liabilities 0.00% 0.00% 0.00% 28.50%
Total Liabilities 22.48% 12.76% 9.85% 61.20%
Net Worth 77.52% 87.24% 90.15% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.33% 83.78% 82.47% 60.50%
Selling, General & Administrative Expenses 77.59% 74.42% 72.16% 39.80%
Advertising Expenses 4.53% 4.08% 3.65% 3.20%
Profit Before Interest and Taxes 11.05% 13.37% 14.73% 0.70%
Main Ratios
Current 3.62 7.11 9.72 0.98
Quick 3.62 7.11 9.72 0.65
Total Debt to Total Assets 22.48% 12.76% 9.85% 61.20%
Pre-tax Return on Net Worth 73.18% 58.23% 47.73% 1.70%
Pre-tax Return on Assets 56.72% 50.80% 43.03% 4.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 7.74% 9.36% 10.31% n.a
Return on Equity 51.22% 40.76% 33.41% n.a
Activity Ratios
Accounts Payable Turnover 9.22 12.17 12.17 n.a
Payment Days 27 33 28 n.a
Total Asset Turnover 5.13 3.80 2.92 n.a
Debt Ratios
Debt to Net Worth 0.29 0.15 0.11 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $20,249 $40,189 $64,364 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.19 0.26 0.34 n.a
Current Debt/Total Assets 22% 13% 10% n.a
Acid Test 3.62 7.11 9.72 n.a
Sales/Net Worth 6.62 4.36 3.24 n.a
Dividend Payout 0.00 0.00 0.00 n.a