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Cell Phones Retailer Business Plan

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Garbles Cellular Phones

Financial Plan

Forecast

Important advisory

[This sample business plan is based on one from several years ago, valid then, and still useful as an illustration of what a business plan contains and what issues it covers. It is not valid for information purposes today.]

Key Assumptions

It is assumed that the owner’s private resources will be sufficient to finance any monthly cash-flow shortage. However, it would be advisable to establish a bank relationship as soon as possible. Sales could very well increase at a much sharper rate than assumed in these conservative projections. Sharper sales will result in a greater need for funds in support of inventory and receivables. An over-draft line of credit with the bank will be an excellent cushion to fall back on.

This is considered a very good time to start a new business. The economy is beginning its trek up, and consumer spending is up. The Commerce Department reported, "Consumers had increased their spending, the largest advance in nine months."

A shorter learning curve will be brought to the business by the owner due to his extensive background and in-depth market knowledge. He has a clear understanding of the need to manage costs and forecast future needs so that the business is not "broadsided" by the unexpected.

One other component on which the financial plan is based is wise purchases. Finding the right product, at the right price will enable the business to meet planned margins and maintain inventory at an attractive level with a high turn rate.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for Net Profit (or Loss) by Year

Financing

Use of Funds

Our Start-up expenses are:

Legal $5,000

Insurance $1,000

Rent $2,000

Equipment $2,000

Other $1,000

TOTAL START-UP EXPENSES$11,000

 

In addition we will have the following Start-up Assets:

Cash Required $2,000

Start-up Inventory $30,000

TOTAL ASSETS$32,000

 

This brings our total required to $43,000

Sources of Funds

Mr. Seramed Garbles will invest $43,000 in Garbles Cellular Phones, Inc. to cover start-up costs. He will also invest an additional $50,000 when operation takes off for a total of $93,000

Statements

Projected Profit & Loss

2020 2021 2022
Gross Margin $224,865 $346,560 $493,050
Operating Expenses
Salaries & Wages $207,600 $211,752 $215,986
Employee Related Expenses $41,520 $42,350 $43,198
Rent $24,000 $24,000 $24,000
Insurance $12,000 $12,000 $12,000
Utilities $3,600 $3,600 $3,600
Marketing / Promo $7,200 $7,200 $7,200
Interest Incurred
Depreciation and Amortization
Gain or Loss from Sale of Assets
Income Taxes $0 $0 $0
Total Expenses $465,555 $562,342 $677,934
Net Profit ($71,055) $45,658 $187,066

Projected Balance Sheet

Starting Balances 2020 2021 2022
Cash $2,000 $101 $49,195 $242,961
Accounts Receivable $4,100 $5,067 $7,208
Inventory $30,000 $30,000 $30,000 $30,000
Other Current Assets
Total Current Assets $32,000 $34,201 $84,262 $280,169
Long-Term Assets
Accumulated Depreciation
Total Long-Term Assets
Accounts Payable $20,256 $24,659 $33,500
Income Taxes Payable $0 $0 $0
Sales Taxes Payable $0 $0 $0
Short-Term Debt
Prepaid Revenue
Total Current Liabilities $20,256 $24,659 $33,500
Long-Term Debt
Long-Term Liabilities
Paid-In Capital $43,000 $96,000 $96,000 $96,000
Retained Earnings ($11,000) ($11,000) ($82,055) ($36,397)
Earnings ($71,055) $45,658 $187,067

Projected Cash Flow Statement

2020 2021 2022
Net Cash Flow from Operations
Net Profit ($71,055) $45,658 $187,066
Depreciation & Amortization
Change in Accounts Receivable ($4,100) ($967) ($2,142)
Change in Inventory $0 $0 $0
Change in Accounts Payable $20,256 $4,403 $8,841
Change in Income Tax Payable $0 $0 $0
Change in Sales Tax Payable $0 $0 $0
Change in Prepaid Revenue
Investing & Financing
Assets Purchased or Sold
Investments Received $53,000
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $2,000 $101 $49,195
Net Change in Cash ($1,899) $49,094 $193,766

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