Cranium Filament Reductions
Financial Plan
Forecast
Key Assumptions
Our Key Assumptions:
– Men would like to have great haircuts and do not mind paying for them
– Men and women need hair products
– Our cost for men’s haircuts will be industry standard of 43% and our cost for women’s haircuts, children’s haircuts and products are 27%
– Our friends and family see the merit of our business and would be happy to give us the cash to run the business.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Cranium Filament Reductions will incur the following start-up costs:
- Computer with point of sale terminal.
- Computer with printer for back office.
- Five cutting stations, each station requires a barber chair, cabinet, large mirror, blow dryer, curling iron, electric razor, several pairs of scissors, spray bottle, two sided mirror, and assorted combs and brushes.
- Desk for reception area.
- Three couches for the reception area.
- Display shelf for sale of retail products.
- Assorted plants.
- Assorted toys for the children.
- Legal fees for business formation and generation/review of contracts.
Please note that the following items that are assets to be used for more than a year will be considered a long-term assets and will be depreciated using the straight-line method accepted by G.A.A.P.
Sources of Funds
Susan will be contributing $60,000. The additional $45,000 will come from a business loan.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $394,697 | $532,000 | $732,000 |
| Direct Costs | $106,568 | $143,640 | $197,640 |
| Gross Margin | $288,129 | $388,360 | $534,360 |
| Gross Margin % | 73% | 73% | 73% |
| Operating Expenses | |||
| Salaries & Wages | $208,800 | $248,976 | $345,124 |
| Employee Related Expenses | $41,760 | $49,795 | $69,025 |
| Utilities | $1,200 | $1,200 | $1,200 |
| Rent | $24,000 | $24,000 | $24,000 |
| Insurance | $1,500 | $1,500 | $1,500 |
| Total Operating Expenses | $277,260 | $325,471 | $440,849 |
| Operating Income | $10,869 | $62,889 | $93,511 |
| Interest Incurred | $1,547 | $1,425 | $1,138 |
| Depreciation and Amortization | $1,465 | $1,465 | $1,465 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $1,178 | $9,000 | $13,637 |
| Total Expenses | $388,019 | $481,000 | $654,729 |
| Net Profit | $6,678 | $51,000 | $77,271 |
| Net Profit/Sales | 2% | 10% | 11% |
Projected Balance Sheet
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Cash | $84,344 | $87,260 | $99,844 |
| Accounts Receivable | $0 | $0 | $0 |
| Inventory | $11,970 | $16,470 | $16,470 |
| Other Current Assets | |||
| Total Current Assets | $96,314 | $103,731 | $116,314 |
| Long-Term Assets | $14,650 | $14,650 | $14,650 |
| Accumulated Depreciation | ($1,465) | ($2,930) | ($4,395) |
| Total Long-Term Assets | $13,185 | $11,720 | $10,255 |
| Total Assets | $109,499 | $115,451 | $126,569 |
| Accounts Payable | $2,839 | $3,739 | $3,739 |
| Income Taxes Payable | $1,178 | $2,254 | $3,411 |
| Sales Taxes Payable | $0 | $0 | $0 |
| Short-Term Debt | $7,024 | $7,310 | $7,608 |
| Prepaid Revenue | |||
| Total Current Liabilities | $11,041 | $13,303 | $14,758 |
| Long-Term Debt | $31,780 | $24,470 | $16,862 |
| Long-Term Liabilities | $31,780 | $24,470 | $16,862 |
| Total Liabilities | $42,820 | $37,773 | $31,620 |
| Paid-In Capital | $60,000 | $60,000 | $60,000 |
| Retained Earnings | ($33,322) | ($42,322) | |
| Earnings | $6,678 | $51,000 | $77,271 |
| Total Owner’s Equity | $66,678 | $77,678 | $94,949 |
| Total Liabilities & Equity | $109,499 | $115,451 | $126,569 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $6,678 | $51,000 | $77,271 |
| Depreciation & Amortization | $1,465 | $1,465 | $1,465 |
| Change in Accounts Receivable | $0 | $0 | $0 |
| Change in Inventory | ($11,970) | ($4,500) | $0 |
| Change in Accounts Payable | $2,839 | $900 | $0 |
| Change in Income Tax Payable | $1,178 | $1,076 | $1,157 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | $190 | $49,940 | $79,893 |
| Investing & Financing | |||
| Assets Purchased or Sold | ($14,650) | ||
| Net Cash from Investing | ($14,650) | ||
| Investments Received | $60,000 | ||
| Dividends & Distributions | ($40,000) | ($60,000) | |
| Change in Short-Term Debt | $7,024 | $286 | $298 |
| Change in Long-Term Debt | $31,780 | ($7,310) | ($7,608) |
| Net Cash from Financing | $98,803 | ($47,024) | ($67,310) |
| Cash at Beginning of Period | $0 | $84,344 | $87,260 |
| Net Change in Cash | $84,344 | $2,917 | $12,583 |
| Cash at End of Period | $84,344 | $87,260 | $99,844 |
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