Guildford Dry Cleaning Service is a sole trader, start-up enterprise, to be established in Guildford, Surrey. The company will provide dry cleaning, laundry, and garment alterations, offered with regular home pick-up and delivery services.
The company will have a production facility, but will not need a retail shop front because of our pick-up and delivery service. However, we will need delivery vans, and customer service trained drivers.
Initially, the production facility will be rented. Cleaning equipment will be leased with accompanying maintenance contracts.
Start-up financing will be through owner investment and bank loans, with a line of credit established for operations eventualities.
The proposed legal form of business is sole trader. This is a small business and need not publicly disclose its finances. The business can immediately start without the complicated procedures associated with partnerships, limited liability companies, or co-operatives. The owner/founder will be the director and will initially handle the bookkeeping responsibilities.
Capital resource plan
Loan: Lending plan has to be completed and submitted to the bank six months before starting the business. Loan will be needed two months in advance.
Leasing equipment: Buying new machines costs approximately £30,000 as opposed to leasing which costs £10,000 per year including maintenance. Evaluating the leasing solution shows NPV higher than that of buying machines. Moreover, the business is new and has less experience in maintenance and repair of machine breakdown, therefore the optimal solution is leasing machines. The following machines will be leased:
Capital plan: The owner will invest £32,000 in the business. Additional capital for the business will be borrowed from a bank.
Annual interest of 6.48% has to be paid on the long-term loans secured with fixed assets.