The plan for Visions' financial future is steady growth. With a foundation of start-up investment from angel investors, VS has a solid cash base from which to establish itself and build name recognition. The eventual goal is to go public with a product line and locations around the country. The company will break-even shortly after the second year, making the location self supporting.
Leasing the location with the option to purchase the property is ideal for the company. The equipment, including exercise equipment, was purchased with start-up funds, leaving VS with little monthly costs beyond rent, utilities, and payroll. VS has a small staff of service providers whose payroll is subsidized by tips from clients. The managers are paid modestly,with their pay tied to the success of the company.
The main assumptions are the continued market need and the ability to deliver. We have included financial assumptions below.
Key to the financial success of VS is continued annual growth. While there are times of the year, especially holidays, where sales are expected to rise substantially, annual growth is imperative. The direct costs of providing our services is small, so increasing the number of clients receiving services will aid the bottom line. The inventory turnover increase shown in the chart is the result of rounding, our inventory remains steady at approximately two months in stock.
The Break-even Analysis in this plan makes many assumptions to achieve an estimate. Almost all cost in the operations will remained fixed. Salary for employees, lease, and utility costs are all considered as fixed costs.
We expect to return increasing profits over the next three years.
The following chart and table show the cash flow for Visions.
The following table shows the projected Balance sheet.
Industry profile ratios based on the Standard Industrial Classification (SIC) code 7991, Physical Fitness Facilities, are shown for comparison.