The Watertower Cafe
Financial Plan
Forecast
Key Assumptions
The most important indicators in our case are are daily seating "counts" and weekly sales numbers. We must also make sure that we are turning our inventory rapidly so as to avoid food spoilage.
We must target net profit/sales figures toward the 14% level with gross margins around 45%. Marketing costs should never exceed three percent of sales. We will use Social Media Facebook Twitter and Instagram to reach to the community and listen to our customers while keeping the costs down.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
We will use the funds to: move into a space that has enough room for a restaurant and coffee service. renovation, buy all the equipment we need to set up, and decorate as well as train our people to give really good service.
Sources of Funds
We plan on getting 180,000 dollars from two investors. We will also get a 30,000 dollar loan that will be paid off in 2 years.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $2,187,900 | $2,415,000 | $2,621,000 |
| Direct Costs | $1,137,708 | $1,255,800 | $1,362,920 |
| Gross Margin | $1,050,192 | $1,159,200 | $1,258,080 |
| Gross Margin % | 48% | 48% | 48% |
| Operating Expenses | |||
| Salaries & Wages | $463,584 | $471,752 | $480,084 |
| Employee Related Expenses | $92,717 | $94,350 | $96,017 |
| Lease – For both coffeehouse and Resturaunt | $180,000 | $180,000 | $180,000 |
| Sales and Marketing | $78,000 | $78,000 | $78,000 |
| Leased Equipment | $12,000 | $12,000 | $12,000 |
| Utilities | $24,000 | $24,000 | $24,000 |
| Insurance | $18,000 | $18,000 | $18,000 |
| Legal | $2,000 | ||
| Stationary | $500 | ||
| Brochures | $500 | ||
| Consultant | $1,500 | ||
| Debt Service | $5,000 | ||
| Licences Tax Deposits | $12,000 | ||
| Expensed Equipment | $36,000 | ||
| Soft Opening | $3,000 | ||
| Grand Opening | $4,000 | ||
| Total Operating Expenses | $932,801 | $878,102 | $888,101 |
| Operating Income | $117,391 | $281,098 | $369,979 |
| Interest Incurred | $1,099 | $483 | $6 |
| Depreciation and Amortization | $6,700 | $6,700 | $6,700 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $8,767 | $21,914 | $29,061 |
| Total Expenses | $2,087,074 | $2,163,000 | $2,286,788 |
| Net Profit | $100,826 | $252,000 | $334,212 |
| Net Profit/Sales | 5% | 10% | 13% |
Projected Balance Sheet
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Cash | $216,839 | $445,683 | $791,181 |
| Accounts Receivable | $0 | $0 | $0 |
| Inventory | $104,650 | $113,577 | $113,577 |
| Other Current Assets | |||
| Total Current Assets | $321,489 | $559,260 | $904,758 |
| Long-Term Assets | $67,000 | $67,000 | $67,000 |
| Accumulated Depreciation | ($6,700) | ($13,400) | ($20,100) |
| Total Long-Term Assets | $60,300 | $53,600 | $46,900 |
| Total Assets | $381,789 | $612,860 | $951,658 |
| Accounts Payable | $19,598 | $20,937 | $20,937 |
| Income Taxes Payable | $7,863 | $5,484 | $7,263 |
| Sales Taxes Payable | $52,880 | $48,300 | $52,420 |
| Short-Term Debt | $15,309 | $1,314 | |
| Prepaid Revenue | |||
| Total Current Liabilities | $95,649 | $76,035 | $80,620 |
| Long-Term Debt | $1,314 | $0 | $0 |
| Long-Term Liabilities | $1,314 | $0 | $0 |
| Total Liabilities | $96,963 | $76,035 | $80,620 |
| Paid-In Capital | $184,000 | $184,000 | $184,000 |
| Retained Earnings | $100,826 | $352,826 | |
| Earnings | $100,826 | $252,000 | $334,213 |
| Total Owner’s Equity | $284,826 | $536,826 | $871,038 |
| Total Liabilities & Equity | $381,789 | $612,860 | $951,658 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $100,826 | $252,000 | $334,212 |
| Depreciation & Amortization | $6,700 | $6,700 | $6,700 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($104,650) | ($8,927) | $0 |
| Change in Accounts Payable | $19,598 | $1,339 | $0 |
| Change in Income Tax Payable | $7,863 | ($2,379) | $1,779 |
| Change in Sales Tax Payable | $52,880 | ($4,580) | $4,120 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $83,216 | $244,153 | $346,812 |
| Investing & Financing | |||
| Assets Purchased or Sold | ($67,000) | ||
| Net Cash from Investing | ($67,000) | ||
| Investments Received | $184,000 | ||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $15,309 | ($13,994) | ($1,314) |
| Change in Long-Term Debt | $1,314 | ($1,314) | $0 |
| Net Cash from Financing | $200,623 | ($15,309) | ($1,314) |
| Cash at Beginning of Period | $0 | $216,839 | $445,683 |
| Net Change in Cash | $216,839 | $228,845 | $345,498 |
| Cash at End of Period | $216,839 | $445,683 | $791,181 |
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