Bluespa
Financial Plan
Forecast
Key Assumptions
Our assumptions are detailed in the proceeding tables. We have planned for relatively slow but stable general economic growth and an interest rate on borrowing of 9.5%. Because our business is a combination of retail and wholesale our collection days may look somewhat optimistic. That is caused by our assumption that approximately 70% of our retail sales will be done on credit cards and debit cards. There is a three-day payment lag on these sales. We assumed that wholesale customers would pay on an average of 50 days and that in year one 60% of our business would be on terms. As we develop our customer base (at wholesale) this number is ramped up to 80% by year five. (Our terms will be C.O.D. on all opening orders.) Our payments to vendors are assumed at 45 days.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Start-up costs are shown in three areas. The first is in the start-up table, the second is within the cash flow assumptions and the third is in the P&L.
- Start-up expenses: legal (incorporation and trademark registration), stationery (business cards and office supplies), etc., brochures, consultants (graphic design for logo and packaging), research and development (architecture fees for store and trade fixture design).
- Start-up costs expressed in year one cash flow: FF&E for first Bluespa retail store.
- Start-up costs included within year one P&L: brand marketing, management staff, travel costs to coordinate product development.
Start-up Expenses referenced in retained earnings:
Legal $2,500
Stationery etc. $3,000
Brochures $10,000
Consultants $15,000
Research and Development $30,000
Expensed Equipment $60,000
Other $50,000
TOTAL START-UP EXPENSES $170,500
Sources of Funds
The start up expense for this company is $420,000. There is $100,000 in current borrowing, $256,000 from founder Ray and $64,000 from founder Barbara.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $962,300 | $1,368,000 | $1,632,000 |
| Direct Costs | $365,674 | $519,840 | $620,160 |
| Gross Margin | $596,626 | $848,160 | $1,011,840 |
| Gross Margin % | 62% | 62% | 62% |
| Operating Expenses | |||
| Salaries & Wages | $237,150 | $510,968 | $699,257 |
| Employee Related Expenses | $47,430 | $102,194 | $139,851 |
| Leased Equipment | $21,600 | $21,600 | $21,600 |
| Utilities | $2,400 | $2,400 | $2,400 |
| Insurance | $1,800 | $1,800 | $1,800 |
| Legal Fees | $2,640 | $2,640 | $2,640 |
| Licenses | $1,380 | $1,380 | $1,380 |
| Office Supplies | $1,560 | $1,560 | $1,560 |
| Telephone | $1,920 | $1,920 | $1,920 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $317,880 | $646,462 | $872,408 |
| Operating Income | $278,746 | $201,698 | $139,432 |
| Interest Incurred | $2,180 | ||
| Depreciation and Amortization | $6,500 | $6,500 | $6,500 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $0 | $0 | $0 |
| Total Expenses | $692,234 | $1,172,801 | $1,499,069 |
| Net Profit | $270,066 | $195,199 | $132,931 |
| Net Profit/Sales | 28% | 14% | 8% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $140,000 | $323,287 | $517,127 | $656,558 |
| Accounts Receivable | $0 | $0 | $0 | $0 |
| Inventory | $44,500 | $86,640 | $103,360 | $103,360 |
| Other Current Assets | $0 | $0 | $0 | $0 |
| Total Current Assets | $184,500 | $409,927 | $620,487 | $759,918 |
| Long-Term Assets | $65,000 | $65,000 | $65,000 | $65,000 |
| Accumulated Depreciation | $0 | ($6,500) | ($13,000) | ($19,500) |
| Total Long-Term Assets | $65,000 | $58,500 | $52,000 | $45,500 |
| Total Assets | $249,500 | $468,427 | $672,487 | $805,418 |
| Accounts Payable | $48,861 | $57,722 | $57,722 | |
| Income Taxes Payable | $0 | $0 | $0 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | $100,000 | |||
| Prepaid Revenue | ||||
| Total Current Liabilities | $100,000 | $48,861 | $57,722 | $57,722 |
| Long-Term Debt | $0 | $0 | $0 | $0 |
| Long-Term Liabilities | $0 | $0 | $0 | $0 |
| Total Liabilities | $100,000 | $48,861 | $57,722 | $57,722 |
| Paid-In Capital | $320,000 | $320,000 | $320,000 | $320,000 |
| Retained Earnings | ($170,500) | ($170,500) | $99,566 | $294,765 |
| Earnings | $270,066 | $195,198 | $132,932 | |
| Total Owner’s Equity | $149,500 | $419,566 | $614,765 | $747,696 |
| Total Liabilities & Equity | $249,500 | $468,427 | $672,487 | $805,418 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $270,066 | $195,199 | $132,931 |
| Depreciation & Amortization | $6,500 | $6,500 | $6,500 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($42,140) | ($16,720) | $0 |
| Change in Accounts Payable | $48,861 | $8,861 | $0 |
| Change in Income Tax Payable | $0 | $0 | $0 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $283,287 | $193,840 | $139,432 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | ($100,000) | ||
| Change in Long-Term Debt | $0 | $0 | $0 |
| Net Cash from Financing | ($100,000) | $0 | $0 |
| Cash at Beginning of Period | $140,000 | $323,287 | $517,127 |
| Net Change in Cash | $183,287 | $193,840 | $139,432 |
| Cash at End of Period | $323,287 | $517,127 | $656,558 |
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