Mahogany Western Wear
Financial Plan
Forecast
Key Assumptions
The growth of Mahogany Western Wear will be moderate and the cash balance will always be positive. Being a retail environment we will not be selling on credit. We will accept cash, checks, and all major credit cards. TeleCheck Services will be used as the check guaranty system to help reduce the percentage of loss on bad checks. Marketing and advertising will remain at or below 5% of sales. We will continue to reinvest residual profits into company expansion, and personnel.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
We anticipate $8,000 of pre-launch startup expenses including…
- Pre-launch rent: $3K One month of prepaid rent
- Pre-launch fixup: $2K. We will do most of the work ourselves
- Legal: $1K
- Prelaunch marketing expense: $2K. Includes branding, logo, social media, pre-launch marketing. We plan to do most of this ourselves.
We also need $70K pre-launch assets:
- $18K cash on hand
- $30K inventory
- $2K other current assets
- $20K furniture, shelves, signage, etc.
Total starting costs are $78K.
Sources of Funds
We will start with $35,000 of founder investment. We will have a $20,000 dollar line of credit from our bank. We plan on getting a $27,000 Accion loan to help with our startup.
Statements
Projected Profit & Loss
| FY2019 | FY2020 | FY2021 | |
|---|---|---|---|
| Revenue | $632,845 | $727,000 | $924,375 |
| Direct Costs | $348,065 | $399,850 | $508,406 |
| Gross Margin | $284,780 | $327,150 | $415,969 |
| Gross Margin % | 45% | 45% | 45% |
| Operating Expenses | |||
| Salaries & Wages | $149,400 | $185,800 | $258,654 |
| Employee Related Expenses | $26,400 | $32,360 | $45,731 |
| Telephone / Cell Phone | $1,800 | $1,800 | $1,800 |
| utilities | $4,500 | $4,500 | $4,500 |
| Rent | $30,000 | $30,000 | $30,000 |
| Marketing | $5,400 | $5,400 | $5,400 |
| Sales | $4,800 | $4,800 | $4,800 |
| Other | $6,000 | $6,000 | $6,000 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $228,300 | $270,660 | $356,885 |
| Operating Income | $56,480 | $56,490 | $59,084 |
| Interest Incurred | $923 | $489 | $439 |
| Depreciation and Amortization | $1,500 | $1,500 | $1,500 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $5,406 | $5,450 | $5,714 |
| Total Expenses | $584,194 | $677,949 | $872,944 |
| Net Profit | $48,651 | $49,051 | $51,431 |
| Net Profit/Sales | 8% | 7% | 6% |
Projected Balance Sheet
| Starting Balances | FY2019 | FY2020 | FY2021 | |
|---|---|---|---|---|
| Cash | $18,000 | $29,908 | $58,642 | $111,312 |
| Accounts Receivable | $3,418 | $3,221 | $4,092 | |
| Inventory | $30,000 | $99,963 | $127,083 | $127,083 |
| Other Current Assets | $1,000 | $1,000 | $1,000 | $1,000 |
| Total Current Assets | $49,000 | $134,289 | $189,947 | $243,487 |
| Long-Term Assets | $15,000 | $15,000 | $15,000 | $15,000 |
| Accumulated Depreciation | $0 | ($1,500) | ($3,000) | ($4,500) |
| Total Long-Term Assets | $15,000 | $13,500 | $12,000 | $10,500 |
| Total Assets | $64,000 | $147,789 | $201,947 | $253,987 |
| Accounts Payable | $10,000 | $33,926 | $42,062 | $42,062 |
| Income Taxes Payable | $1,723 | $1,363 | $1,427 | |
| Sales Taxes Payable | $11,541 | $11,359 | $14,441 | |
| Short-Term Debt | $2,458 | $2,914 | $2,985 | $3,059 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $12,458 | $50,104 | $57,770 | $60,989 |
| Long-Term Debt | $24,542 | $22,033 | $19,475 | $16,864 |
| Long-Term Liabilities | $24,542 | $22,033 | $19,475 | $16,864 |
| Total Liabilities | $37,000 | $72,138 | $77,245 | $77,854 |
| Paid-In Capital | $35,000 | $35,000 | $35,000 | $35,000 |
| Retained Earnings | ($8,000) | ($8,000) | $40,651 | $89,702 |
| Earnings | $48,651 | $49,051 | $51,431 | |
| Total Owner’s Equity | $27,000 | $75,651 | $124,702 | $176,133 |
| Total Liabilities & Equity | $64,000 | $147,789 | $201,947 | $253,987 |
Projected Cash Flow Statement
| FY2019 | FY2020 | FY2021 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $48,651 | $49,051 | $51,431 |
| Depreciation & Amortization | $1,500 | $1,500 | $1,500 |
| Change in Accounts Receivable | ($3,418) | $196 | ($871) |
| Change in Inventory | ($69,963) | ($27,121) | $0 |
| Change in Accounts Payable | $23,926 | $8,136 | $0 |
| Change in Income Tax Payable | $1,723 | ($360) | $64 |
| Change in Sales Tax Payable | $11,541 | ($182) | $3,082 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $13,961 | $31,221 | $55,206 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $456 | $71 | $73 |
| Change in Long-Term Debt | ($2,508) | ($2,559) | ($2,610) |
| Net Cash from Financing | ($2,053) | ($2,487) | ($2,537) |
| Cash at Beginning of Period | $18,000 | $29,908 | $58,642 |
| Net Change in Cash | $11,908 | $28,734 | $52,669 |
| Cash at End of Period | $29,908 | $58,642 | $111,312 |
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