Our financial plan is based on conservative estimates and assumptions. Owner investment and a short-term business loan provide start-up financing.
8.1 Important Assumptions
We examined the local market for Recreation Services (SIC 7999.9912) but because of low numbers (12 companies in Washbourne and 17 companies in Gourmandeville/Cuisineburg) we evaluated a wider surrounding region (290 companies). From this analysis the following table provides annual sales during the first three years of operation.
|Year 1 Average Sales||$157,500||$130,061||$100,000|
|Year 2 Average Sales||$168,354||$123,570||$112,500|
|Year 3 Average Sales||$185,882||$145,885||$100,000|
Gastronome Gander's Gatherings is classified in the 'Small Business' category for purposes of this table.
Data obtained from Bizminer (local marketing research profile for our region, Gourmandeville area, and Washbourne area) 2004.
8.2 Break-even Analysis
The Break-even Analysis table and chart indicate what will be needed in monthly revenue to achieve the Break-even point.
8.3 Projected Profit and Loss
The profit and loss numbers are estimates for this year, due in part to being a start-up company. We anticipate generation of revenue starting in April 2004. Some expenses are known and include utilities, phone, and Internet hosting/DSL. Other numbers are based in part on estimates from other similar membership event companies.
8.4 Projected Cash Flow
The cash flow projection shows that provisions for ongoing expenses are adequate to meet the needs of the company as the business generates sufficient cash flow to support operations.
8.5 Projected Balance Sheet
The balance sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the appendix.
8.6 Business Ratios
Our sales growth, as a percentage, is exceptionally high due to the figures being the first two years of operation. Therefore, by virtue of comparison to low first-year numbers our percent increase will seem extraordinary. Our assets are lower than industry averages due to the initial investment being small, most of the equipment being expensed, and that the size of Gastronome Gander's Gatherings is small in relation to other companies within this sector: Recreation Services, SIC Code 7999.9912. Our total liabilities are higher than other companies, but improve rapidly. If additional investment is acquired instead of secured loans, this will help us meet our goal of keeping liabilities to a minimum.