Cosmetics Manufacturing Business Plan

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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

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

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.

  1. 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).
  2. Start-up costs expressed in year one cash flow: FF&E for first Bluespa retail store.
  3. 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

  1.  

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
Gross Margin $596,626 $848,160 $1,011,840
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
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

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
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
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

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
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt ($100,000)
Change in Long-Term Debt $0 $0 $0
Cash at Beginning of Period $140,000 $323,287 $517,127
Net Change in Cash $183,287 $193,840 $139,432
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