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Second Run Pizza

Executive Summary

The number of movie theaters is decreasing as the major chains create megaplexes that pile more people into smaller spaces.  This profit strategy has left once popular downtown theaters vacant.  Second Run Pizza is a theater/restaurant business that believes there is a significant number of theater-goers that are craving a more satisfying and enjoyable way to catch a movie and a bit to eat. Second Run Pizza is renovating the downtown Majestic Theater and creating a medium-size restaurant that will show second-run movies that have proven to still be popular to our target market.  We will offer a totally unique dining and movie experience at a affordable price that will fill the theater space with repeat customers.

The owners of Second Run Pizza, Robert Williamson and Judy Fillmore, stress two factors that they believe assures the success of the business:

  • Judy’s 15 years experience as a manager of four of the city’s most successful restaurants and Robert’s experience as manager of the Lighthouse Theater, a small art house theater which has recently returned to profitability under Robert’s stewardship.
  • Robert’s strong seven year working relationship with Premiere Film Distributors which will provide the second run films for Second Run Pizza.

Our market and financial analyses indicate that with a start-up expenditure of $300,000 we can generate $600,000 in sales by the end of year one, and produce high net profits by the end of year three.

Movie theater restaurant business plan, executive summary chart image

1.1 Objectives

  • Sales over $600K the first year, more than a million by the third.
  • Personnel costs less than $300K the first year.
  • Profitable in first year, with net profits increasing each year.

1.2 Mission

Second Run’s mission is to create a new theater experience for our customers that will be so enjoyable and satisfying that they will return often and recommend Second Run to their friends and family.  Our customers will be delighted with our level of service, the quality of the food, and a theater environment that is second to none.  When the film ends and the applause die out, we believe that our customers will prefer to watch a new movie at Second Run rather than to ever be squeezed into a Megaplex again.

1.3 Keys to Success

  • Selection of popular films that work best in the group viewing environment; i.e. comedies, scary or adventure films.
  • Provide exceptional service that leaves an impression.
  • Consistent entertainment atmosphere and product quality.
  • Managing our internal finances and cash flow to enable upward capital growth.
  • Strict control of all costs, at all times, without exception.
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Company Summary

Second Run Pizza is a single-unit, medium-sized restaurant. We focus on pizza and a few creative Italian dishes. The restaurant will be located downtown near the major shopping centers and evening entertainment establishments.

2.1 Start-up Summary

The founders of the company are Robert Williamson and Judy Fillmore. Judy focuses on the financial issues and Robert on the personnel issues. Judy earned her business major undergraduate degree from the University of Berkeley. A lease for the location has been secured for $2,000 per month. The theater will have to be equipped as a restaurant. It will be able to set up shop in time to begin turning a profit by the end of month eleven and be profitable in the second year. Both Robert and Judy are investing $150,000 each to start up the company.

Movie theater restaurant business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $140,800
Start-up Assets to Fund $159,200
Total Funding Required $300,000
Assets
Non-cash Assets from Start-up $10,000
Cash Requirements from Start-up $149,200
Additional Cash Raised $0
Cash Balance on Starting Date $149,200
Total Assets $159,200
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Capital
Planned Investment
Investor 1 $150,000
Investor 2 $150,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $300,000
Loss at Start-up (Start-up Expenses) ($140,800)
Total Capital $159,200
Total Capital and Liabilities $159,200
Total Funding $300,000
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $1,000
Insurance $1,800
Rent $2,000
Projection Equipment $40,000
Kitchen $40,000
Initial Marketing $15,000
Dining Products $5,000
Interior Refit $35,000
Total Start-up Expenses $140,800
Start-up Assets
Cash Required $149,200
Other Current Assets $10,000
Long-term Assets $0
Total Assets $159,200
Total Requirements $300,000

2.2 Company Ownership

The restaurant will start out as a simple sole proprietorship, owned by its founders.

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Services

The Menu:

The menu is extremely simple.  Pizza is the perfect finger food for watching a movie.  We will also include select Italian dishes that fit will in the viewing  environment.

Movies:

The films will be chosen with two target audiences in mind.  The first is the families that will come to Second Run Pizza to watch movies like Shrek and Spy Kids.  These movies will be shown three times during the afternoon. The second group is young adults who will come to the evening shows to watch movies like Jeepers Peepers, the Fast and the Furious, and Rush Hour 2. There will be three evening showings of these films.  In addition, there will be midnight movies for the college crowd on Friday and Saturday.

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Market Analysis Summary

We believe that our unique dining environment will attract our target customers.  The central location of Second Run Pizza to the downtown shopping and entertainment center makes the restaurant easily accessible. Once inside, the customer will find watching a movie at comfortable table seating, while enjoying great food, is a experience to repeat again and again with friends.

4.1 Market Segmentation

Families:

We are focusing on parents with children who want to catch a movie with a pizza in the afternoon or early evening, before or after shopping at the downtown mall.

Young Adults:

The second group we are going to focus on is young adults ages 18 – 26 for the evening shows.  We believe that this target group will enjoy this unique way to watch a film and Second Run Pizza will become a common place for friends to have an affordable evening’s entertainment together.

Movie theater restaurant business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Families 15% 400,000 460,000 529,000 608,350 699,603 15.00%
Young Adults 10% 200,000 220,000 242,000 266,200 292,820 10.00%
Other 0% 0 0 0 0 0 0.00%
Total 13.41% 600,000 680,000 771,000 874,550 992,423 13.41%

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Strategy and Implementation Summary

Our strategy is simple, we intend to succeed by giving our target customers a combination of great food and a relaxed enjoyable environment that creates a memorable experience.

5.1 Competitive Edge

Our competitive edge is two fold:

  • The experience of Robert and Judy in managing Second Run Pizza.
  • The agreement with Premiere Film Distributors which have agreed to supply Second Run Pizza with second run movies.

Co-owner Judy Fillmore has been a fixture of the city’s restaurant scene for the past 15 years.  She managed four successful restaurants and has received industry accolades for her operational excellence. She is now a highly sought consultant on improving  restaurant operating efficiency and work flow. Her client list include the city’s best restaurants.

Robert Williamson has 20 years of experience in the movie theater industry. Robert was the manager of the city’s largest multiplex for seven years before taking a position with Premiere Film Distributors where he served as a regional distribution coordinator for six years. When Robert took over the challenge of managing the Lighthouse Theater, the business was failing and losing significant market share to the larger chain theaters.  Under his management,  the theater regained its vitality as an Indie film center.  Usage levels increase by 200% over a two-year period and the theater soon became a key feature in the city’s cultural community.  The combination of Judy and Robert’s experience will ensure that Second Run will be a unique competitive force in both the theater and restaurant industries.

The owners have negotiated an agreement with Premiere Film Distributors that will assure that the Second Run will have best available second run films. Premiere Film Distributors will provide the films and will receive 75% of the admission revenue.  This is a better return for the distributor who normally receive only 50% of admission revenue for second run films. In exchange, Second Run will get the films most popular with their target customers.

5.2 Sales Strategy

Our initial sales strategy is to flood our target consumers with free movie coupons for the first three months of operation.  The $1.50 charge for the film will be waived with the coupon. These coupons will be in the city’s daily paper as well as the student papers of Claremont University and Jefferson College.

The film charge is really incidental.  Second Run’s profits will come from food sales. Menu pricing will reflect this focus. Our prices will be higher than a traditional Pizza restaurant but we believe the unique dining environment will justify those prices with our customers.

On the traditional slow days (Monday and Tuesday) we will offer cheaper fare (spaghetti) and market these days to college students as spaghetti movie night. In addition, we will have two for one date nights, where couples will only be charged for one admission.

Sales projections for this plan are presented in the following topics.

5.2.1 Sales Forecast

This chart represents our forecast for income on a monthly basis. The table presents yearly expected sales. Complete monthly forecast figures for the first year are presented in the appendix.

Movie theater restaurant business plan, strategy and implementation summary chart image

Movie theater restaurant business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Movie Admissions 78,400 90,000 100,000
Meals 25,725 33,000 40,000
Other 12,000 13,000 14,000
Total Unit Sales 116,125 136,000 154,000
Unit Prices Year 1 Year 2 Year 3
Movie Admissions $1.50 $1.50 $2.00
Meals $20.00 $20.00 $22.00
Other $5.00 $5.00 $5.00
Sales
Movie Admissions $117,600 $135,000 $200,000
Meals $514,500 $660,000 $880,000
Other $60,000 $65,000 $70,000
Total Sales $692,100 $860,000 $1,150,000
Direct Unit Costs Year 1 Year 2 Year 3
Movie Admissions $1.20 $1.20 $1.60
Meals $3.00 $3.00 $3.00
Other $0.50 $0.50 $0.50
Direct Cost of Sales
Movie Admissions $94,080 $108,000 $160,000
Meals $77,175 $99,000 $120,000
Other $6,000 $6,500 $7,000
Subtotal Direct Cost of Sales $177,255 $213,500 $287,000

5.3 Milestones

The following table lists important program milestones, with dates and budgets for each. The milestones schedule indicates our emphasis on planning for implementation.

Milestones
Milestone Start Date End Date Budget Manager Department
Tables and Chairs 11/4/2001 11/13/2001 $3,000 ABC Marketing
Decorations 11/4/2001 11/18/2001 $2,000 ABC Marketing
Painting/reconstuction of Resturant 11/1/2001 12/22/2001 $25,000 ABC Web
Food for Opening 12/28/2001 12/29/2001 $1,000 ABC Web
Production of Menus 11/13/2001 12/16/2001 $400 ABC Department
Buying Supplies for Kitchen 11/16/2001 12/20/2001 $5,000 ABC Department
Set Up Projection Equipment 12/20/2001 12/28/2001 $40,000 ABC Department
Establish Film Schedule 11/1/2001 12/28/2001 $1,000 ABC Department
Staff Hiring 12/4/2001 12/22/2001 $0 ABC Department
Staff Schedules 12/25/2001 12/28/2001 $0 ABC Department
Distribution of Advertising 12/5/2001 1/1/2001 $0 ABC Department
Totals $77,400

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Management Summary

Judy will be responsible for hiring, training and supervision of all restaurant staff. As we stated previously, Judy is the best in her field and will have no trouble in assembling a team that will be eager to participate in the success of Second Run.

Robert’s management focus will be marketing and responsibilities related to the presentation of the film. It is widely acknowledged that Robert’s marketing of the Lighthouse Theater pulled it out of the red and into its current profitability.

6.1 Personnel Plan

As the personnel plan shows, we expect to invest in a good team, fairly compensated. We think the planned staff is in good proportion to the size of the restaurant and projected revenues.

Personnel Plan
Year 1 Year 2 Year 3
Manager $48,000 $53,000 $58,000
Hostess $36,000 $40,000 $44,000
Kitchen Staff $60,000 $64,000 $68,000
Cleaning $36,000 $38,000 $40,000
Servers $72,000 $72,000 $72,000
Projectionist $36,000 $40,000 $44,000
Total People 12 15 18
Total Payroll $288,000 $307,000 $326,000

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Financial Plan

We will invest $300,000 of our own capital. This will provide the start-up financing required.

7.1 Break-even Analysis

Our break-even analysis is based on the average of the first-year numbers for total sales by meal served, total cost of sales, and all operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. We realize that this is not the same as fixed cost, but these conservative assumptions make for a better estimate of real risk.

Movie theater restaurant business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 7,778
Monthly Revenue Break-even $46,356
Assumptions:
Average Per-Unit Revenue $5.96
Average Per-Unit Variable Cost $1.53
Estimated Monthly Fixed Cost $34,483

7.2 Projected Profit and Loss

The following table and chart shows projected profit and loss.

Movie theater restaurant business plan, financial plan chart image

Movie theater restaurant business plan, financial plan chart image

Movie theater restaurant business plan, financial plan chart image

Movie theater restaurant business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $692,100 $860,000 $1,150,000
Direct Cost of Sales $177,255 $213,500 $287,000
Movie Screening Expenses $77,861 $96,750 $129,375
Total Cost of Sales $255,116 $310,250 $416,375
Gross Margin $436,984 $549,750 $733,625
Gross Margin % 63.14% 63.92% 63.79%
Expenses
Payroll $288,000 $307,000 $326,000
Sales and Marketing and Other Expenses $22,600 $8,000 $8,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $14,400 $14,400 $14,400
Insurance $21,600 $21,600 $21,600
Rent $24,000 $24,000 $24,000
Payroll Taxes $43,200 $46,050 $48,900
Other $0 $0 $0
Total Operating Expenses $413,800 $421,050 $442,900
Profit Before Interest and Taxes $23,184 $128,700 $290,725
EBITDA $23,184 $128,700 $290,725
Interest Expense $0 $0 $0
Taxes Incurred $6,955 $38,610 $87,218
Net Profit $16,229 $90,090 $203,508
Net Profit/Sales 2.34% 10.48% 17.70%

7.3 Projected Cash Flow

The table and chart shows projected cash flow for the year.

Movie theater restaurant business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $692,100 $860,000 $1,150,000
Subtotal Cash from Operations $692,100 $860,000 $1,150,000
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 $0 $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 $692,100 $860,000 $1,150,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $288,000 $307,000 $326,000
Bill Payments $337,234 $475,500 $607,541
Subtotal Spent on Operations $625,234 $782,500 $933,541
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 $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $625,234 $782,500 $933,541
Net Cash Flow $66,866 $77,500 $216,459
Cash Balance $216,066 $293,566 $510,026

7.4 Projected Balance Sheet

The table shows projected balance sheet for three years.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $216,066 $293,566 $510,026
Other Current Assets $10,000 $10,000 $10,000
Total Current Assets $226,066 $303,566 $520,026
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $226,066 $303,566 $520,026
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $50,638 $38,047 $50,999
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $50,638 $38,047 $50,999
Long-term Liabilities $0 $0 $0
Total Liabilities $50,638 $38,047 $50,999
Paid-in Capital $300,000 $300,000 $300,000
Retained Earnings ($140,800) ($124,571) ($34,481)
Earnings $16,229 $90,090 $203,508
Total Capital $175,429 $265,519 $469,026
Total Liabilities and Capital $226,066 $303,566 $520,026
Net Worth $175,429 $265,519 $469,026

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry Profile ratios based on the Standard Industrial Classification (SIC) code 5813, Eating Places, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 24.26% 33.72% 1.90%
Percent of Total Assets
Other Current Assets 4.42% 3.29% 1.92% 44.60%
Total Current Assets 100.00% 100.00% 100.00% 52.30%
Long-term Assets 0.00% 0.00% 0.00% 47.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 22.40% 12.53% 9.81% 28.20%
Long-term Liabilities 0.00% 0.00% 0.00% 23.10%
Total Liabilities 22.40% 12.53% 9.81% 51.30%
Net Worth 77.60% 87.47% 90.19% 48.70%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 63.14% 63.92% 63.79% 42.30%
Selling, General & Administrative Expenses 60.79% 53.45% 46.10% 23.40%
Advertising Expenses 3.27% 0.93% 0.70% 2.40%
Profit Before Interest and Taxes 3.35% 14.97% 25.28% 2.80%
Main Ratios
Current 4.46 7.98 10.20 1.14
Quick 4.46 7.98 10.20 0.74
Total Debt to Total Assets 22.40% 12.53% 9.81% 51.30%
Pre-tax Return on Net Worth 13.22% 48.47% 61.98% 5.20%
Pre-tax Return on Assets 10.26% 42.40% 55.91% 10.60%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 2.34% 10.48% 17.70% n.a
Return on Equity 9.25% 33.93% 43.39% n.a
Activity Ratios
Accounts Payable Turnover 7.66 12.17 12.17 n.a
Payment Days 27 35 26 n.a
Total Asset Turnover 3.06 2.83 2.21 n.a
Debt Ratios
Debt to Net Worth 0.29 0.14 0.11 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $175,429 $265,519 $469,026 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.33 0.35 0.45 n.a
Current Debt/Total Assets 22% 13% 10% n.a
Acid Test 4.46 7.98 10.20 n.a
Sales/Net Worth 3.95 3.24 2.45 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Unit Sales
Movie Admissions 0% 0 0 0 6,000 6,000 7,200 8,200 9,000 9,400 9,600 11,000 12,000
Meals 0% 1,000 1,290 1,545 1,600 1,690 1,900 2,200 2,500 2,700 2,800 3,000 3,500
Other 0% 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000
Total Unit Sales 2,000 2,290 2,545 8,600 8,690 10,100 11,400 12,500 13,100 13,400 15,000 16,500
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Movie Admissions $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50
Meals $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00
Other $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
Sales
Movie Admissions $0 $0 $0 $9,000 $9,000 $10,800 $12,300 $13,500 $14,100 $14,400 $16,500 $18,000
Meals $20,000 $25,800 $30,900 $32,000 $33,800 $38,000 $44,000 $50,000 $54,000 $56,000 $60,000 $70,000
Other $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Total Sales $25,000 $30,800 $35,900 $46,000 $47,800 $53,800 $61,300 $68,500 $73,100 $75,400 $81,500 $93,000
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Movie Admissions 0.00% $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20
Meals 0.00% $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
Other 0.00% $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50 $0.50
Direct Cost of Sales
Movie Admissions $0 $0 $0 $7,200 $7,200 $8,640 $9,840 $10,800 $11,280 $11,520 $13,200 $14,400
Meals $3,000 $3,870 $4,635 $4,800 $5,070 $5,700 $6,600 $7,500 $8,100 $8,400 $9,000 $10,500
Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Subtotal Direct Cost of Sales $3,500 $4,370 $5,135 $12,500 $12,770 $14,840 $16,940 $18,800 $19,880 $20,420 $22,700 $25,400
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Manager 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Hostess 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Kitchen Staff 0% $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Cleaning 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Servers 0% $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Projectionist 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Total People 12 12 12 12 12 12 12 12 12 12 12 12
Total Payroll $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $25,000 $30,800 $35,900 $46,000 $47,800 $53,800 $61,300 $68,500 $73,100 $75,400 $81,500 $93,000
Direct Cost of Sales $3,500 $4,370 $5,135 $12,500 $12,770 $14,840 $16,940 $18,800 $19,880 $20,420 $22,700 $25,400
Movie Screening Expenses $2,813 $3,465 $4,039 $5,175 $5,378 $6,053 $6,896 $7,706 $8,224 $8,483 $9,169 $10,463
Total Cost of Sales $6,313 $7,835 $9,174 $17,675 $18,148 $20,893 $23,836 $26,506 $28,104 $28,903 $31,869 $35,863
Gross Margin $18,688 $22,965 $26,726 $28,325 $29,653 $32,908 $37,464 $41,994 $44,996 $46,498 $49,631 $57,138
Gross Margin % 74.75% 74.56% 74.45% 61.58% 62.03% 61.17% 61.12% 61.30% 61.55% 61.67% 60.90% 61.44%
Expenses
Payroll $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Sales and Marketing and Other Expenses $5,000 $5,000 $5,000 $1,000 $1,000 $800 $800 $800 $800 $800 $800 $800
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Insurance $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll Taxes 15% $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $37,600 $37,600 $37,600 $33,600 $33,600 $33,400 $33,400 $33,400 $33,400 $33,400 $33,400 $33,400
Profit Before Interest and Taxes ($18,913) ($14,635) ($10,874) ($5,275) ($3,948) ($493) $4,064 $8,594 $11,596 $13,098 $16,231 $23,738
EBITDA ($18,913) ($14,635) ($10,874) ($5,275) ($3,948) ($493) $4,064 $8,594 $11,596 $13,098 $16,231 $23,738
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($5,674) ($4,391) ($3,262) ($1,583) ($1,184) ($148) $1,219 $2,578 $3,479 $3,929 $4,869 $7,121
Net Profit ($13,239) ($10,245) ($7,612) ($3,693) ($2,763) ($345) $2,845 $6,016 $8,117 $9,168 $11,362 $16,616
Net Profit/Sales -52.96% -33.26% -21.20% -8.03% -5.78% -0.64% 4.64% 8.78% 11.10% 12.16% 13.94% 17.87%

Pro Forma Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash Received
Cash from Operations
Cash Sales $25,000 $30,800 $35,900 $46,000 $47,800 $53,800 $61,300 $68,500 $73,100 $75,400 $81,500 $93,000
Subtotal Cash from Operations $25,000 $30,800 $35,900 $46,000 $47,800 $53,800 $61,300 $68,500 $73,100 $75,400 $81,500 $93,000
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $25,000 $30,800 $35,900 $46,000 $47,800 $53,800 $61,300 $68,500 $73,100 $75,400 $81,500 $93,000
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Bill Payments $475 $14,332 $17,127 $19,718 $25,722 $26,683 $30,288 $34,590 $38,568 $41,024 $42,362 $46,346
Subtotal Spent on Operations $24,475 $38,332 $41,127 $43,718 $49,722 $50,683 $54,288 $58,590 $62,568 $65,024 $66,362 $70,346
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $24,475 $38,332 $41,127 $43,718 $49,722 $50,683 $54,288 $58,590 $62,568 $65,024 $66,362 $70,346
Net Cash Flow $525 ($7,532) ($5,227) $2,282 ($1,922) $3,117 $7,012 $9,910 $10,532 $10,376 $15,138 $22,654
Cash Balance $149,725 $142,193 $136,966 $139,249 $137,327 $140,445 $147,456 $157,366 $167,899 $178,275 $193,413 $216,066
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $149,200 $149,725 $142,193 $136,966 $139,249 $137,327 $140,445 $147,456 $157,366 $167,899 $178,275 $193,413 $216,066
Other Current Assets $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Total Current Assets $159,200 $159,725 $152,193 $146,966 $149,249 $147,327 $150,445 $157,456 $167,366 $177,899 $188,275 $203,413 $226,066
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $159,200 $159,725 $152,193 $146,966 $149,249 $147,327 $150,445 $157,456 $167,366 $177,899 $188,275 $203,413 $226,066
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $13,764 $16,476 $18,861 $24,836 $25,678 $29,140 $33,307 $37,202 $39,617 $40,824 $44,600 $50,638
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $13,764 $16,476 $18,861 $24,836 $25,678 $29,140 $33,307 $37,202 $39,617 $40,824 $44,600 $50,638
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $13,764 $16,476 $18,861 $24,836 $25,678 $29,140 $33,307 $37,202 $39,617 $40,824 $44,600 $50,638
Paid-in Capital $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000 $300,000
Retained Earnings ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800) ($140,800)
Earnings $0 ($13,239) ($23,483) ($31,095) ($34,787) ($37,551) ($37,895) ($35,051) ($29,035) ($20,918) ($11,750) ($388) $16,229
Total Capital $159,200 $145,961 $135,717 $128,105 $124,413 $121,649 $121,305 $124,149 $130,165 $138,282 $147,451 $158,812 $175,429
Total Liabilities and Capital $159,200 $159,725 $152,193 $146,966 $149,249 $147,327 $150,445 $157,456 $167,366 $177,899 $188,275 $203,413 $226,066
Net Worth $159,200 $145,961 $135,717 $128,105 $124,413 $121,649 $121,305 $124,149 $130,165 $138,282 $147,451 $158,812 $175,429

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