Pamperzhou Day Spa
Financial Plan
Forecast
Key Assumptions
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. We assume cash payments for all services, except for the 1% of sales projected as insurance reimbursements, with collection days at 90. The collection days are for insurance billings only. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
Two of the more important underlying assumptions are:
- We assume a strong economy, without major recession.
- We assume, of course, that there are no changes to the Medical/insurance Industry, such as the nationalization of health care.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
The bulk of the start-up costs will be invested by the owner and the remainder will be funded through short-term financing. Details are provided in the tables below.
Start-up Expenses
Legal $2,500
Printing, stationery, bags, grand opening coupons $3,500
Brochures $500
Construction/Design $45,000
Insurance$2,000
Rent $17,000
Advertising $5,000
Accountant $950
Linens $4,000
The total startup cost is $80,450 which includes: Massage table equipment, Aesthetician Equipment – $2,800 (2 room setup), Decor and Furnishings – $13,000, Envision Software & Equipment – $4,000, Signage – $3,500, Backbar Supplies – $5,000
Sources of Funds
Owner investment of $135,000
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $613,770 | $745,000 | $935,000 |
| Direct Costs | $165,718 | $201,150 | $252,450 |
| Gross Margin | $448,052 | $543,850 | $682,550 |
| Gross Margin % | 73% | 73% | 73% |
| Operating Expenses | |||
| Salaries & Wages | $152,000 | $283,968 | $404,504 |
| Employee Related Expenses | $30,400 | $56,794 | $80,900 |
| Marketing | $5,500 | $6,000 | $6,000 |
| Rent | $66,000 | $66,000 | $66,000 |
| Utilities | $3,000 | $3,000 | $3,000 |
| Advertising | $3,000 | $3,000 | $3,000 |
| Insurance | $1,500 | $1,500 | $1,500 |
| Other | $1,200 | $1,200 | $1,200 |
| Phone | $1,500 | $1,500 | $1,500 |
| Marketing Expense | $2,000 | ||
| Startup Expense listed in Use of funds | $80,450 | ||
| Total Operating Expenses | $346,550 | $422,962 | $567,604 |
| Operating Income | $101,502 | $120,889 | $114,945 |
| Interest Incurred | $354 | ($1) | $0 |
| Depreciation and Amortization | $4,000 | $4,000 | $4,000 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $14,572 | $17,534 | $16,641 |
| Total Expenses | $531,193 | $645,646 | $840,696 |
| Net Profit | $82,577 | $99,354 | $94,304 |
| Net Profit/Sales | 13% | 13% | 10% |
Projected Balance Sheet
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Cash | $70,039 | $56,076 | $58,429 |
| Accounts Receivable | $0 | $0 | $0 |
| Inventory | |||
| Other Current Assets | |||
| Total Current Assets | $70,039 | $56,076 | $58,429 |
| Long-Term Assets | $40,000 | $40,000 | $40,000 |
| Accumulated Depreciation | ($4,000) | ($8,000) | ($12,000) |
| Total Long-Term Assets | $36,000 | $32,000 | $28,000 |
| Total Assets | $106,039 | $88,076 | $86,429 |
| Accounts Payable | $0 | $0 | $0 |
| Income Taxes Payable | $14,572 | $4,384 | $4,157 |
| Sales Taxes Payable | $23,891 | $16,762 | $21,037 |
| Short-Term Debt | $0 | ($1) | ($1) |
| Prepaid Revenue | |||
| Total Current Liabilities | $38,463 | $21,145 | $25,193 |
| Long-Term Debt | |||
| Long-Term Liabilities | |||
| Total Liabilities | $38,463 | $21,145 | $25,193 |
| Paid-In Capital | $135,000 | $135,000 | $135,000 |
| Retained Earnings | ($150,000) | ($167,423) | ($168,069) |
| Earnings | $82,577 | $99,354 | $94,304 |
| Total Owner’s Equity | $67,577 | $66,931 | $61,235 |
| Total Liabilities & Equity | $106,039 | $88,076 | $86,429 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $82,577 | $99,354 | $94,304 |
| Depreciation & Amortization | $4,000 | $4,000 | $4,000 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | |||
| Change in Accounts Payable | $0 | $0 | $0 |
| Change in Income Tax Payable | $14,572 | ($10,188) | ($227) |
| Change in Sales Tax Payable | $23,891 | ($7,129) | $4,275 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $125,040 | $86,037 | $102,352 |
| Investing & Financing | |||
| Assets Purchased or Sold | ($40,000) | ||
| Net Cash from Investing | ($40,000) | ||
| Investments Received | $135,000 | ||
| Dividends & Distributions | ($150,000) | ($100,000) | ($100,000) |
| Change in Short-Term Debt | $0 | $0 | $0 |
| Change in Long-Term Debt | |||
| Net Cash from Financing | ($15,000) | ($100,000) | ($100,000) |
| Cash at Beginning of Period | $0 | $70,039 | $56,076 |
| Net Change in Cash | $70,039 | ($13,963) | $2,352 |
| Cash at End of Period | $70,039 | $56,076 | $58,429 |
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