Fresin Fries
Financial Plan
Forecast
Key Assumptions
- Status quo regarding regulation
- No major change in macro-economic or political situation.
- We assume our product, product quality, and social media marketing will generate healthy growth in buzz and steady increase in sales
- We assume efficient management of multiple sites
- We will make the first site work before moving to the second.
- We will not add sites while any site is not working well
- We expect expansion will cause a loss in our second year, but that it will be an acceptable loss and we will have working capital to finance it.
Revenue
Revenue
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Our startup funding of $100,000 will cover both startup expenses and initial assets. specifically:
Startup expenses of $54,500 incurred before launch:
These pre-launch, pre-revenue expenses show up in our financials as negative retained earnings in the Balance Sheet at launch.
- Legal: $3,000
- Furniture and interior: 17,000 (We discussed calling these assets, but we think we can legitimately expense them instead; that’s better for tax treatment)
- Rent: $15,000. We need five weeks in the location for fixup and such before we launch.
- Branding: $3,500. Includes imagery, website, logo, social media accounts, etc.
- Location fixup: $10,000
- Other: $2,000
- Total: $50,500
Current assets required:
- Cash: $50,000 to cover early deficits, working capital, etc.
- Inventory: $10,000
- Plates, napkins, etc. $4,000 (other current assets in starting balance)
Long-term Assets
- Kitchen and fixtures: $22,000
Total Startup Costs:
- $54,500 in expenses incurred before launch
- $86,000 in assets required at launch, including $50K cash reserve.
- Total: $140,500 startup cost
Sources of Funds
Investment will be in equal parts from all four founders. We expect to invest $100,000 to start and an additional $100,000 at the beginning of the second year. We plan to avoid commercial borrowing.
Statements
Projected Profit & Loss
| FY2019 | FY2020 | FY2021 | |
|---|---|---|---|
| Revenue | $543,909 | $1,018,600 | $1,917,500 |
| Direct Costs | $212,125 | $397,254 | $747,825 |
| Gross Margin | $331,784 | $621,346 | $1,169,675 |
| Gross Margin % | 61% | 61% | 61% |
| Operating Expenses | |||
| Salaries & Wages | $88,200 | $306,960 | $484,968 |
| Employee Related Expenses | $17,640 | $61,392 | $96,994 |
| Rent | $174,000 | $248,000 | $298,000 |
| Utilities | $9,000 | $15,000 | $24,000 |
| Marketing expenses | $21,756 | $40,744 | $76,700 |
| Amortization of Other Current Assets | $11,000 | $31,000 | $50,250 |
| Total Operating Expenses | $321,596 | $703,096 | $1,030,912 |
| Operating Income | $10,188 | ($81,750) | $138,764 |
| Interest Incurred | |||
| Depreciation and Amortization | $3,143 | $4,045 | $5,713 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $1,761 | ($1,761) | $13,575 |
| Total Expenses | $538,625 | $1,102,634 | $1,798,024 |
| Net Profit | $5,284 | ($84,034) | $119,476 |
| Net Profit/Sales | 1% | (8%) | 6% |
Projected Balance Sheet
| Starting Balances | FY2019 | FY2020 | FY2021 | |
|---|---|---|---|---|
| Cash | $50,000 | $26,029 | $26,361 | $159,099 |
| Accounts Receivable | $0 | $0 | $0 | $0 |
| Inventory | $10,000 | $33,104 | $62,319 | $62,319 |
| Other Current Assets | $4,000 | $6,500 | $11,500 | $15,250 |
| Total Current Assets | $64,000 | $65,634 | $100,180 | $236,669 |
| Long-Term Assets | $22,000 | $22,000 | $27,000 | $32,000 |
| Accumulated Depreciation | $0 | ($3,143) | ($7,188) | ($12,901) |
| Total Long-Term Assets | $22,000 | $18,857 | $19,812 | $19,099 |
| Total Assets | $86,000 | $84,491 | $119,991 | $255,768 |
| Accounts Payable | $32,500 | $26,647 | $43,816 | $47,772 |
| Income Taxes Payable | ($3,107) | ($1,761) | $8,033 | |
| Sales Taxes Payable | $2,167 | $3,187 | $5,737 | |
| Short-Term Debt | ||||
| Prepaid Revenue | ||||
| Total Current Liabilities | $32,500 | $25,707 | $45,242 | $61,542 |
| Long-Term Debt | ||||
| Long-Term Liabilities | ||||
| Total Liabilities | $32,500 | $25,707 | $45,242 | $61,542 |
| Paid-In Capital | $100,000 | $100,000 | $200,000 | $200,000 |
| Retained Earnings | ($46,500) | ($46,500) | ($41,216) | ($125,250) |
| Earnings | $5,284 | ($84,035) | $119,476 | |
| Total Owner’s Equity | $53,500 | $58,784 | $74,750 | $194,226 |
| Total Liabilities & Equity | $86,000 | $84,491 | $119,991 | $255,768 |
Projected Cash Flow Statement
| FY2019 | FY2020 | FY2021 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $5,284 | ($84,034) | $119,476 |
| Depreciation & Amortization | $14,143 | $35,046 | $55,962 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($23,104) | ($29,215) | $0 |
| Change in Accounts Payable | ($5,853) | $17,169 | $3,956 |
| Change in Income Tax Payable | ($3,107) | $1,346 | $9,794 |
| Change in Sales Tax Payable | $2,167 | $1,020 | $2,550 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | ($10,471) | ($58,669) | $191,739 |
| Investing & Financing | |||
| Assets Purchased or Sold | ($13,500) | ($41,000) | ($59,000) |
| Net Cash from Investing | ($13,500) | ($41,000) | ($59,000) |
| Investments Received | $100,000 | ||
| Dividends & Distributions | |||
| Change in Short-Term Debt | |||
| Change in Long-Term Debt | |||
| Net Cash from Financing | $100,000 | ||
| Cash at Beginning of Period | $50,000 | $26,029 | $26,361 |
| Net Change in Cash | ($23,971) | $331 | $132,739 |
| Cash at End of Period | $26,029 | $26,361 | $159,099 |
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