Our biggest savings of the year
Market Plaza Showplace
Financial Plan
The base operation is a “cash cow” with no accounts receivable or the burdensome collection efforts that accompany A/R management. Future services will be added with positive financial impact to the base operation when opportunities arise.
We expect to add revenue-producing services and activities during the first year that have not been covered in this business plan. These services will be a natural compliment to our operation and significantly add to our base revenue from regular productions. They include audio and video recording services, possible syndication of productions, sponsored radio and/or TV programs, and advertising for local merchants. Financing for new services will be arranged through cash flow, sponsorship, or outside interests.
7.1 Important Assumptions
The financial plan assumes private investor funding, a 15-year facility mortgage and founder investment for consultants, travel, business plan, and other planning costs.
Once in operation, the business will be self-sustaining and require no further financial assistance for this plan. General assumptions follow:
7.2 Break-even Analysis
The following chart and table summarize our Break-even Analysis. We have decided to treat fixed costs for this start-up plan to include the normal running costs each month for a more practical analysis. The average price per unit assumes that standard ticket prices will be $13.00 adults, $12.00 seniors and $11.00 for children under 12 years of age. The variable cost per unit assumes artist and musician fees and sales taxes to average $4.20 per ticket sold. Considering the start-up costs and the conservative position of the plan, we don’t expect to reach break-even until several months into the business operation.
The break-even assumes variable costs as shown below. This assumption is probably too high, and therefore conservative, because it is based on the highest local pay scale for musicians and artists. We will employ high-quality musicians for less than the maximum pay scale.
Also, the effects of additional revenue opportunities are not considered in the Break-even Analysis. The executive team will actively pursue other revenue producing opportunities and expect substantial success in this effort.

Break-even Analysis | |
Monthly Revenue Break-even | $20,684 |
Assumptions: | |
Average Percent Variable Cost | 35% |
Estimated Monthly Fixed Cost | $13,504 |
7.3 Projected Profit and Loss
Our projected profit and loss is shown on the following table projecting a reasonable profit the first year. Revenues are conservative as they include only the base operation (two shows per week) and minimal special event hosting. The executive team believes that actual experience will include a minimum of three shows per week with the possibility of daily successful shows and or special events. Increases in the base operation in the second and third years consider sold out performances and additional special and private events.
Our cost of sales should be somewhat lower, and gross margin higher, than in this projection due to our commitment to careful management of entertainer and musician costs. However, we prefer to project conservative so that we maintain a positive cash flow and to allow for less than expected performance.
Dividends are not applicable in an S Corporation. Net earnings are distributed directly to shareholders. However the company will consider shareholder requests to defer income or provide pretax investment opportunities.
The detailed monthly projections are included in the appendix.




Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $484,400 | $912,000 | $954,000 |
Direct Cost of Sales | $168,140 | $314,400 | $324,900 |
Other | $0 | $0 | $0 |
Total Cost of Sales | $168,140 | $314,400 | $324,900 |
Gross Margin | $316,260 | $597,600 | $629,100 |
Gross Margin % | 65.29% | 65.53% | 65.94% |
Expenses | |||
Payroll | $80,500 | $150,000 | $162,000 |
Sales and Marketing and Other Expenses | $35,000 | $60,000 | $60,000 |
Depreciation | $0 | $0 | $0 |
Leased Equipment | $3,500 | $6,000 | $6,000 |
Utilities | $14,000 | $24,000 | $24,000 |
Insurance | $7,000 | $12,000 | $12,000 |
Rent | $5,950 | $10,200 | $10,200 |
Payroll Taxes | $16,100 | $30,000 | $32,400 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $162,050 | $292,200 | $306,600 |
Profit Before Interest and Taxes | $154,210 | $305,400 | $322,500 |
EBITDA | $154,210 | $305,400 | $322,500 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $7,711 | $15,270 | $22,844 |
Net Profit | $146,500 | $290,130 | $299,656 |
Net Profit/Sales | 30.24% | 31.81% | 31.41% |
7.4 Projected Cash Flow
The monthly cash flow for the first year is shown in the illustration. The cash flow does not reflect distribution of earnings in the three years depicted. Shareholders may elect full distribution, partial distribution or pretax investment options to be made available by the company. The table that follows includes annual amounts only.

Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $484,400 | $912,000 | $954,000 |
Subtotal Cash from Operations | $484,400 | $912,000 | $954,000 |
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 | $484,400 | $912,000 | $954,000 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $80,500 | $150,000 | $162,000 |
Bill Payments | $224,355 | $468,632 | $490,661 |
Subtotal Spent on Operations | $304,855 | $618,632 | $652,661 |
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 | $304,855 | $618,632 | $652,661 |
Net Cash Flow | $179,545 | $293,368 | $301,339 |
Cash Balance | $232,045 | $525,413 | $826,752 |
7.5 Projected Balance Sheet
The balance sheet in the following table shows an attractive growth of net worth, and a healthy financial position with the conservative plan. The executive team believes and has the commitment to exceed the position projected in this plan. The monthly estimates are included in the appendix.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $232,045 | $525,413 | $826,752 |
Other Current Assets | $6,000 | $6,000 | $6,000 |
Total Current Assets | $238,045 | $531,413 | $832,752 |
Long-term Assets | |||
Long-term Assets | $923,000 | $923,000 | $923,000 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $923,000 | $923,000 | $923,000 |
Total Assets | $1,161,045 | $1,454,413 | $1,755,752 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $35,546 | $38,784 | $40,467 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $35,546 | $38,784 | $40,467 |
Long-term Liabilities | $639,200 | $639,200 | $639,200 |
Total Liabilities | $674,746 | $677,984 | $679,667 |
Paid-in Capital | $423,000 | $423,000 | $423,000 |
Retained Earnings | ($83,200) | $63,300 | $353,430 |
Earnings | $146,500 | $290,130 | $299,656 |
Total Capital | $486,300 | $776,430 | $1,076,086 |
Total Liabilities and Capital | $1,161,045 | $1,454,413 | $1,755,752 |
Net Worth | $486,299 | $776,429 | $1,076,086 |
7.6 Business Ratios
The following are several important business ratios for the years of this plan. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7922, Theatrical Producers and Services, are shown for comparison. No analysis by management is offered at this writing.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 88.27% | 4.61% | 15.20% |
Percent of Total Assets | ||||
Other Current Assets | 0.52% | 0.41% | 0.34% | 32.50% |
Total Current Assets | 20.50% | 36.54% | 47.43% | 41.30% |
Long-term Assets | 79.50% | 63.46% | 52.57% | 58.70% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 3.06% | 2.67% | 2.30% | 34.70% |
Long-term Liabilities | 55.05% | 43.95% | 36.41% | 27.90% |
Total Liabilities | 58.12% | 46.62% | 38.71% | 62.60% |
Net Worth | 41.88% | 53.38% | 61.29% | 37.40% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 65.29% | 65.53% | 65.94% | 0.00% |
Selling, General & Administrative Expenses | 35.05% | 33.71% | 33.83% | 74.90% |
Advertising Expenses | 1.45% | 1.32% | 1.26% | 2.90% |
Profit Before Interest and Taxes | 31.84% | 33.49% | 33.81% | 2.00% |
Main Ratios | ||||
Current | 6.70 | 13.70 | 20.58 | 1.29 |
Quick | 6.70 | 13.70 | 20.58 | 0.85 |
Total Debt to Total Assets | 58.12% | 46.62% | 38.71% | 62.60% |
Pre-tax Return on Net Worth | 31.71% | 39.33% | 29.97% | 2.30% |
Pre-tax Return on Assets | 13.28% | 21.00% | 18.37% | 6.00% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | 30.24% | 31.81% | 31.41% | n.a |
Return on Equity | 30.13% | 37.37% | 27.85% | n.a |
Activity Ratios | ||||
Accounts Payable Turnover | 7.24 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 29 | 29 | n.a |
Total Asset Turnover | 0.42 | 0.63 | 0.54 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 1.39 | 0.87 | 0.63 | n.a |
Current Liab. to Liab. | 0.05 | 0.06 | 0.06 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $202,500 | $492,629 | $792,286 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 2.40 | 1.59 | 1.84 | n.a |
Current Debt/Total Assets | 3% | 3% | 2% | n.a |
Acid Test | 6.70 | 13.70 | 20.58 | n.a |
Sales/Net Worth | 1.00 | 1.17 | 0.89 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |