New World Deli
Financial Plan
Forecast
Key Assumptions
We assume a slightly higher gross margin than industry standards for eating places, because we don’t have the full slate of meals or servers. Also, kitchen and busboy employees are not included in cost of sales, for simplicity.
Because we’re new to this business, we’ve adjusted the profitability into normal range by adding a relatively large amount of additional unitemized expenses. That gives us a buffer for the additional unforeseen expenses that we expect will come up. If they don’t, then we’ll be more profitable than normal for the deli business
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Startup expenses (as listed in retained earnings Dec 16) are:
Legal $500
Stationery etc. $300
Rent $1,000
Expensed Equipment $3,000
Other $1,000
TOTAL START-UP EXPENSES $5,800
Sources of Funds
Jane Ericson will be investing $20,000 of savings and guaranteeing a loan for another $30,000 with personal assets. In addition, the business will receive an interest-free loan from a family member of $10,000, to be repaid within the first year.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $679,098 | $1,003,222 | $1,337,780 |
| Direct Costs | $332,758 | $491,579 | $655,512 |
| Gross Margin | $346,340 | $511,643 | $682,268 |
| Gross Margin % | 51% | 51% | 51% |
| Operating Expenses | |||
| Salaries & Wages | $201,600 | $315,008 | $339,708 |
| Employee Related Expenses | $40,320 | $63,002 | $67,941 |
| sales | $14,400 | $14,400 | $14,400 |
| marketing | $7,200 | $7,200 | $7,200 |
| Utilities | $6,000 | $6,000 | $6,000 |
| Rent | $24,000 | $24,000 | $24,000 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $293,520 | $429,610 | $459,249 |
| Operating Income | $52,820 | $82,034 | $223,018 |
| Interest Incurred | $1,150 | ||
| Depreciation and Amortization | $2,400 | $2,400 | $2,400 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $7,391 | $11,945 | $33,092 |
| Total Expenses | $637,219 | $935,533 | $1,150,254 |
| Net Profit | $41,879 | $67,689 | $187,526 |
| Net Profit/Sales | 6% | 7% | 14% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $28,200 | $62,819 | $139,503 | $244,960 |
| Accounts Receivable | $0 | $0 | $0 | |
| Inventory | ||||
| Other Current Assets | $2,000 | $2,000 | $2,000 | $2,000 |
| Total Current Assets | $30,200 | $64,819 | $141,503 | $246,960 |
| Long-Term Assets | $24,000 | $24,000 | $24,000 | $24,000 |
| Accumulated Depreciation | ($2,400) | ($4,800) | ($7,200) | |
| Total Long-Term Assets | $24,000 | $21,600 | $19,200 | $16,800 |
| Total Assets | $54,200 | $86,419 | $160,703 | $263,760 |
| Accounts Payable | $28,869 | $33,948 | $44,195 | |
| Income Taxes Payable | $1,470 | $2,987 | $8,271 | |
| Sales Taxes Payable | ||||
| Short-Term Debt | $40,000 | |||
| Prepaid Revenue | ||||
| Total Current Liabilities | $40,000 | $30,339 | $36,935 | $52,466 |
| Long-Term Debt | $0 | $0 | $0 | $0 |
| Long-Term Liabilities | $0 | $0 | $0 | $0 |
| Total Liabilities | $40,000 | $30,339 | $36,935 | $52,466 |
| Paid-In Capital | $20,000 | $20,000 | $20,000 | $20,000 |
| Retained Earnings | ($5,800) | ($5,800) | $36,079 | $3,768 |
| Earnings | $41,879 | $67,689 | $187,526 | |
| Total Owner’s Equity | $14,200 | $56,079 | $123,768 | $211,294 |
| Total Liabilities & Equity | $54,200 | $86,419 | $160,703 | $263,760 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $41,879 | $67,689 | $187,526 |
| Depreciation & Amortization | $2,400 | $2,400 | $2,400 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | |||
| Change in Accounts Payable | $28,869 | $5,079 | $10,246 |
| Change in Income Tax Payable | $1,470 | $1,517 | $5,284 |
| Change in Sales Tax Payable | |||
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $74,619 | $76,685 | $205,456 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | ($100,000) | ||
| Change in Short-Term Debt | ($40,000) | ||
| Change in Long-Term Debt | $0 | $0 | $0 |
| Net Cash from Financing | ($40,000) | $0 | ($100,000) |
| Cash at Beginning of Period | $28,200 | $62,819 | $139,503 |
| Net Change in Cash | $34,619 | $76,685 | $105,456 |
| Cash at End of Period | $62,819 | $139,503 | $244,960 |
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