Don't bother with copy and paste.

Get this complete sample business plan as a free text document.

Download for free

Medical Support & Laboratories icon Dental Laboratories Business Plan

Start your plan

Wright's Dental Lab

Financial Plan

The following is the financial plan for Wright’s Dental Laboratory.

Start-up Funding

Each of the two Wright’s, David and Charles, will invest in the venture. An additional long-term loan will be secured from the SBA, or local lenders, with an interest rate not more that 10%.

Start-up Funding
Start-up Expenses to Fund $76,300
Start-up Assets to Fund $173,700
Total Funding Required $250,000
Assets
Non-cash Assets from Start-up $102,000
Cash Requirements from Start-up $71,700
Additional Cash Raised $0
Cash Balance on Starting Date $71,700
Total Assets $173,700
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000
Capital
Planned Investment
Charles $75,000
David $75,000
Additional Investment Requirement $0
Total Planned Investment $150,000
Loss at Start-up (Start-up Expenses) ($76,300)
Total Capital $73,700
Total Capital and Liabilities $173,700
Total Funding $250,000

Break-even Analysis

The following table and chart display the monthly break-even point.

Dental laboratories business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $49,013
Assumptions:
Average Percent Variable Cost 36%
Estimated Monthly Fixed Cost $31,400

Projected Profit and Loss

The following table and charts will highlight projected profit and loss for the next three years.

Dental laboratories business plan, financial plan chart image

Dental laboratories business plan, financial plan chart image

Dental laboratories business plan, financial plan chart image

Dental laboratories business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $615,000 $750,000 $880,000
Direct Cost of Sales $221,000 $269,250 $315,920
Other Production Expenses $0 $0 $0
Total Cost of Sales $221,000 $269,250 $315,920
Gross Margin $394,000 $480,750 $564,080
Gross Margin % 64.07% 64.10% 64.10%
Expenses
Payroll $264,000 $290,000 $324,000
Sales and Marketing and Other Expenses $24,000 $30,000 $35,000
Depreciation $12,000 $12,000 $12,000
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $7,200 $7,200 $7,200
Rent $24,000 $24,000 $24,000
Payroll Taxes $39,600 $43,500 $48,600
Other $0 $0 $0
Total Operating Expenses $376,800 $412,700 $456,800
Profit Before Interest and Taxes $17,200 $68,050 $107,280
EBITDA $29,200 $80,050 $119,280
Interest Expense $12,463 $12,520 $11,777
Taxes Incurred $1,421 $16,659 $28,651
Net Profit $3,316 $38,871 $66,852
Net Profit/Sales 0.54% 5.18% 7.60%

Projected Cash Flow

The following table and chart highlight the projected cash flow for three years. It will be necessary for each Wright brother to loan the company additional funds mid-year.

Dental laboratories business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $153,750 $187,500 $220,000
Cash from Receivables $343,250 $536,598 $635,057
Subtotal Cash from Operations $497,000 $724,098 $855,057
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $40,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $537,000 $724,098 $855,057
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $264,000 $290,000 $324,000
Bill Payments $314,168 $418,284 $475,335
Subtotal Spent on Operations $578,168 $708,284 $799,335
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $9,864 $9,864 $5,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $588,032 $718,148 $804,335
Net Cash Flow ($51,032) $5,950 $50,722
Cash Balance $20,668 $26,618 $77,340

Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $20,668 $26,618 $77,340
Accounts Receivable $118,000 $143,902 $168,846
Inventory $30,800 $31,307 $35,377
Other Current Assets $12,000 $12,000 $12,000
Total Current Assets $181,468 $213,827 $293,562
Long-term Assets
Long-term Assets $80,000 $80,000 $80,000
Accumulated Depreciation $12,000 $24,000 $36,000
Total Long-term Assets $68,000 $56,000 $44,000
Total Assets $249,468 $269,827 $337,562
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $42,317 $33,669 $39,552
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $42,317 $33,669 $39,552
Long-term Liabilities $130,136 $120,272 $115,272
Total Liabilities $172,453 $153,941 $154,824
Paid-in Capital $150,000 $150,000 $150,000
Retained Earnings ($76,300) ($72,984) ($34,114)
Earnings $3,316 $38,871 $66,852
Total Capital $77,016 $115,886 $182,738
Total Liabilities and Capital $249,468 $269,827 $337,562
Net Worth $77,016 $115,886 $182,738

Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 8072, Dental Laboratories, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 21.95% 17.33% 6.60%
Percent of Total Assets
Accounts Receivable 47.30% 53.33% 50.02% 15.10%
Inventory 12.35% 11.60% 10.48% 4.50%
Other Current Assets 4.81% 4.45% 3.55% 56.00%
Total Current Assets 72.74% 79.25% 86.97% 75.60%
Long-term Assets 27.26% 20.75% 13.03% 24.40%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 16.96% 12.48% 11.72% 34.20%
Long-term Liabilities 52.17% 44.57% 34.15% 18.20%
Total Liabilities 69.13% 57.05% 45.87% 52.40%
Net Worth 30.87% 42.95% 54.13% 47.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 64.07% 64.10% 64.10% 0.00%
Selling, General & Administrative Expenses 63.37% 58.73% 56.34% 70.40%
Advertising Expenses 3.90% 4.00% 3.98% 0.20%
Profit Before Interest and Taxes 2.80% 9.07% 12.19% 10.10%
Main Ratios
Current 4.29 6.35 7.42 1.81
Quick 3.56 5.42 6.53 1.25
Total Debt to Total Assets 69.13% 57.05% 45.87% 52.40%
Pre-tax Return on Net Worth 6.15% 47.92% 52.26% 18.10%
Pre-tax Return on Assets 1.90% 20.58% 28.29% 38.00%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 0.54% 5.18% 7.60% n.a
Return on Equity 4.31% 33.54% 36.58% n.a
Activity Ratios
Accounts Receivable Turnover 3.91 3.91 3.91 n.a
Collection Days 56 85 86 n.a
Inventory Turnover 10.48 8.67 9.48 n.a
Accounts Payable Turnover 8.42 12.17 12.17 n.a
Payment Days 28 34 28 n.a
Total Asset Turnover 2.47 2.78 2.61 n.a
Debt Ratios
Debt to Net Worth 2.24 1.33 0.85 n.a
Current Liab. to Liab. 0.25 0.22 0.26 n.a
Liquidity Ratios
Net Working Capital $139,152 $180,158 $254,010 n.a
Interest Coverage 1.38 5.44 9.11 n.a
Additional Ratios
Assets to Sales 0.41 0.36 0.38 n.a
Current Debt/Total Assets 17% 12% 12% n.a
Acid Test 0.77 1.15 2.26 n.a
Sales/Net Worth 7.99 6.47 4.82 n.a
Dividend Payout 0.00 0.00 0.00 n.a