Your T-Shirt!
Financial Plan
Forecast
Key Assumptions
Our key assumptions are:
- There are people with disposable income that will be interested in buying custom t-shirts
- People like wearing shirts that say something as a fashion and personal statement.
- Our customers will find us on our website
- Our customers will appreciate the convenience of getting t-shirts shipped to their house and will be willing to pay for it.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Your T-Shirt! will incur the following expenses for start up:
- Two Apple Macintosh computers — These will be high end models and utilize the following software: Microsoft Office, Adobe Photoshop and Illustrator, Macromedia FreeHand, and QuickBooks Pro.
- HP XX Laser Printer — This is a prototype printer not available to the public.
- In-store computer kiosk — This allows customers to view options for shirts and existing imagery.
- Website — This will be used for information disbursement as well as ordering.
- Shelving display unit — To display assorted graphic images on paper for easier viewing.
- Broadband Internet connection.
- Two desk/chair/office supplies sets.
- Small shirt inventory — Inventory will be kept small to lower overhead. This will be accomplished by using a shirt vendor who is one shipping day away, effectively using a just-in-time (JIT) system for managing inventory.
- Heat application unit — To make the sublimation transfer.
Start-up Expenses
Legal $1,200
Stationery etc. $200
Computer equipment $6,200
Office furniture $1,000
Sublimation heat transfer unit $2,000
Wesite development $6,500
TOTAL START-UP EXPENSES $17,100
Sources of Funds
We will need a total of $84,500. David will give 19,500 of his own money. He secured a loan for $65,000 for the startup expenses. Since we are able to break even by the second year, and make profit on the third year. He will start hiring more staff to up the sales by year 5 after he pays off the loan.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $168,500 | $295,000 | $432,000 |
| Direct Costs | $84,250 | $147,500 | $216,000 |
| Gross Margin | $84,250 | $147,500 | $216,000 |
| Gross Margin % | 50% | 50% | 50% |
| Operating Expenses | |||
| Salaries & Wages | $64,800 | $97,296 | $133,517 |
| Employee Related Expenses | $12,960 | $19,459 | $26,704 |
| Marketing | $3,000 | $3,000 | $3,000 |
| Rent | $12,000 | $12,000 | $12,000 |
| Utilities | $3,300 | $3,600 | $3,600 |
| Insurance | $3,000 | $3,600 | $3,600 |
| Website Server | $1,800 | $1,800 | $1,800 |
| VoIP + Interent | $2,400 | $2,400 | $2,400 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $103,260 | $143,155 | $186,621 |
| Operating Income | ($19,010) | $4,345 | $29,379 |
| Interest Incurred | $2,422 | $2,023 | $1,609 |
| Depreciation and Amortization | $996 | $996 | $996 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $0 | $0 | $0 |
| Total Expenses | $190,928 | $293,675 | $405,225 |
| Net Profit | ($22,428) | $1,325 | $26,775 |
| Net Profit/Sales | (13%) | 0% | 6% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $56,400 | $18,971 | $11,689 | $24,982 |
| Accounts Receivable | $27,324 | $26,550 | $38,880 | |
| Inventory | ||||
| Other Current Assets | $1,500 | $1,500 | $1,500 | $1,500 |
| Total Current Assets | $57,900 | $47,795 | $39,739 | $65,362 |
| Long-Term Assets | $9,960 | $9,960 | $9,960 | $9,960 |
| Accumulated Depreciation | ($996) | ($1,992) | ($2,988) | |
| Total Long-Term Assets | $9,960 | $8,964 | $7,968 | $6,972 |
| Total Assets | $67,860 | $56,759 | $47,707 | $72,334 |
| Accounts Payable | $536 | $21,645 | $21,448 | $29,896 |
| Income Taxes Payable | $0 | $0 | $0 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | $9,782 | $10,181 | $10,595 | $11,027 |
| Prepaid Revenue | ||||
| Total Current Liabilities | $10,318 | $31,826 | $32,043 | $40,923 |
| Long-Term Debt | $55,218 | $45,037 | $34,442 | $23,415 |
| Long-Term Liabilities | $55,218 | $45,037 | $34,442 | $23,415 |
| Total Liabilities | $65,536 | $76,863 | $66,485 | $64,338 |
| Paid-In Capital | $19,424 | $19,424 | $19,424 | $19,424 |
| Retained Earnings | ($17,100) | ($17,100) | ($39,528) | ($38,203) |
| Earnings | ($22,428) | $1,325 | $26,775 | |
| Total Owner’s Equity | $2,324 | ($20,104) | ($18,779) | $7,996 |
| Total Liabilities & Equity | $67,860 | $56,759 | $47,707 | $72,334 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | ($22,428) | $1,325 | $26,775 |
| Depreciation & Amortization | $996 | $996 | $996 |
| Change in Accounts Receivable | ($27,324) | $774 | ($12,330) |
| Change in Inventory | |||
| Change in Accounts Payable | $21,109 | ($197) | $8,448 |
| 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 | ($27,647) | $2,898 | $23,889 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $399 | $415 | $432 |
| Change in Long-Term Debt | ($10,181) | ($10,595) | ($11,027) |
| Net Cash from Financing | ($9,782) | ($10,181) | ($10,595) |
| Cash at Beginning of Period | $56,400 | $18,971 | $11,689 |
| Net Change in Cash | ($37,429) | ($7,282) | $13,294 |
| Cash at End of Period | $18,971 | $11,689 | $24,982 |
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