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Studio67

Executive Summary

This restaurant business plan is for Studio67, a new medium-sized restaurant located in a trendy neighborhood of Portland, Oregon. Studio67’s emphasis will be on organic and creative ethnic food. An emphasis on organic ingredients is based on Studio67’s dedication to sustainable development. Additionally, the restaurant procures local foods when possible, reducing their dependence on fossil fuels used for transportation.

Services
Studio67 offers Portlanders a trendy, fun place to have great food in a social environment. Chef Mario Langostino has a large repertoire of ethnic ingredients and recipes. Studio67 forecasts that the majority of purchases will be from the chef’s recommendations. Ethnic recipes will be used to provide the customers with a diverse, unusual menu. Chef Mario will also be emphasizing healthy dishes, recognizing the trend within the restaurant industry for the demand for healthy cuisine.

Customers
Studio67 believes that the market can be segmented into four distinct groups that it aims to target. The first group is the lonely rich which number 400,000 people. The second group that will be targeted is young happy customers which are growing at an annual rate of 8% with 150,000 potential customers. The third group is rich hippies who naturally desire organic foods as well as ethnic cuisine. The last group which is particularly interested in the menu’s healthy offerings is dieting women which number 350,000 in the Portland area.

Management
Studio67 has assembled a strong management team. Andrew Flounderson will be the general manager. Andrew has extensive management experience of organizations ranging from six to 45 people. Jane Flap will be responsible for all of the finance and accounting functions. Jane has seven years experience as an Arthur Andersen CPA. Jane’s financial control skills will be invaluable in keeping Studio67 on track and profitable. Lastly, Studio67 has chef Marion Langostino who will be responsible for the back-end production of the venture. Chef Mario has over 12 years of experience and is a published, visible fixture in the Portland community.

Most important to Studio67 is the financial success which will be achieved through strict financial controls. Additionally, success will be ensured by offering a high-quality service and extremely clean, non-greasy food with interesting twists. Studio67 does plan to raise menu rates as the restaurant gets more and more crowded, and to make sure that they are charging a premium for the feeling of being in the “in crowd.”

The market and financial analyses indicate that with a start-up expenditure of $141,000, Studio67 can generate over $365,000 in sales by year one, $565,000 in sales by the end of year two and produce net profits of over 7.5% on sales by the end of year three.  Profitability will be reached by year two.

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Objectives

  1. Sales of $350K the first year, more than half a million the second.
  2. Personnel costs less than $300K the first year, less than $400K the second year.
  3. Profitable in year two, better than 7.5% profits on sales by year three.

Mission

Studio67 is a great place to eat, combining an intriguing atmosphere with excellent, interesting food that is also very good for the people who eat there. We want fair profit for the owners, and a rewarding place to work for the employees.

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Company Summary

Studio67 is a single-unit, medium-sized restaurant. We focus on organic and creative food. The restaurant will be located in a prime neighborhood of Portland. Most important to us is our financial success, but we believe this will be achieved by offering high-quality service and extremely clean, non-greasy food with interesting twists.

Company Ownership

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

Start-up Summary

The founders of the company are Andrew Flounderson and his companion Jane Flap. Jane focuses on the financial issues and Andrew on the personnel issues. Jane earned her business major undergraduate degree from the University of Berkeley.

We have found the location and secured the lease for $2,000 per month. We will be able to set up shop in time to begin turning back a profit by the end of month eleven and be profitable in the second year. The place is already equipped as a restaurant so we plan to come up with a total of $40,000 in capital, plus a $100,000 SBA-guaranteed loan, to start up the company.

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Start-up Funding
Start-up Expenses to Fund $3,000
Start-up Assets to Fund $138,000
Total Funding Required $141,000
Assets
Non-cash Assets from Start-up $50,000
Cash Requirements from Start-up $88,000
Additional Cash Raised $0
Cash Balance on Starting Date $88,000
Total Assets $138,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $1,000
Other Current Liabilities (interest-free) $0
Total Liabilities $101,000
Capital
Planned Investment
Investor 1 $25,000
Investor 2 $15,000
Additional Investment Requirement $0
Total Planned Investment $40,000
Loss at Start-up (Start-up Expenses) ($3,000)
Total Capital $37,000
Total Capital and Liabilities $138,000
Total Funding $141,000
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $1,000
Other $1,000
Total Start-up Expenses $3,000
Start-up Assets
Cash Required $88,000
Other Current Assets $50,000
Long-term Assets $0
Total Assets $138,000
Total Requirements $141,000

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Services

The Menu
The menu is going to be extremely simple but changing every day. We will keep a small group of constants on the menu and then feature a chef’s recommendation that we plan to have 85% of meals ordering. This will help us to reduce waste and plan ingredients and purchasing.

Organic Ingredients
The organic ingredient element will allow us to price to the extremely wealthy Internet entrepreneurs who are looking to spend an exorbitant amount of money to have peace of mind that their money is still coming back to themselves. We will be extremely ecologically conscious as well, and spread this across our literature. Eating at Studio67 will feel like having contributed to the Sierra Club and drinking fresh squeezed orange juice.

Ethnic Ingredients and Recipes
Our chef will have great latitude in designing and producing menu offerings from many different world cultures. We will endeavor to procure all the traditional, authentic ingredients necessary to hold true to these varied and interesting cultural recipes.

Interior Accoutrements
People need to keep life interesting, and our artwork will reflect the world influences that are core to the attitude of the Studio67 chef.

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Market Analysis Summary

Because of the founders’ connections within the very trendy area of Portland, we have an excellent feel for the area and its core group of customers. They will all share something alike, which is a feeling of being in the “in crowd” and having “gotten it” in life. Although the crew will be different and not connect with each other in each segment, each segment is complementary to the others. We do plan to raise menu rates as the restaurant gets more and more crowded, and to make sure we are charging a premium for the feeling of being in the “in crowd.”

Market Segmentation

The Lonely Rich
Most of the lonely rich are tech workers these days, and most of those tech workers are Internet workers. Their life has become their website servers and code they write, and the people who help them to make the decisions in that world. They hang out with each other, but desperately want to get away from it and use the money they are racking up. Because this wealth has come fairly easily for them, it is particularly easy to separate them from their money again – they spend the most on drinks, appetizers and tips.

Young Happy Couples
The restaurant will have an atmosphere that encourages people to bring dates and to have couples arrive. It won’t be awkward for others, and Studio67 does want to be a social place where people meet each other and develop a network. These young couples are generally very successful but balanced and won’t be spending as much on drinks.

The Rich Hippies
The rich hippies in Portland are a massive group with tremendous influence over the city’s government and private enterprise. They wear tie-die but drive BMWs and crave the feeling of being in a social circle that is changing the world – even if in different ways than in their glory days. We will cater to their ecological ideology and contribute to charities to help them part with more of their money.

Dieting Women
The organic food menu will always have a line of extremely delicious very low-fat meals. Studio67 will have tables of women meeting like they do in shows like Sex and the City, to discuss all types of matters while feeling good about the food they eat.

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Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Lonely Rich 10% 400,000 440,000 484,000 532,400 585,640 10.00%
Young Happy Couples 8% 150,000 162,000 174,960 188,957 204,074 8.00%
Rich Hippies 6% 250,000 265,000 280,900 297,754 315,619 6.00%
Dieting Women 7% 350,000 374,500 400,715 428,765 458,779 7.00%
Other 5% 50,000 52,500 55,125 57,881 60,775 5.00%
Total 7.87% 1,200,000 1,294,000 1,395,700 1,505,757 1,624,887 7.87%

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Strategy and Implementation Summary

Our strategy is simple, we intend to succeed by giving people a combination of great,healthy, interesting food, and an environment that attracts “trendy” people like a magnet.  Implementation isn’t simple, but that’s in the doing of it, not in the plan.

Competitive Edge

Our competitive edge is the menu, the chef, the environment, and the tie-in to what’s trendy.

Sales Strategy

As the table shows, we intend to deliver sales of about $350K in the first year, and to double that by the third year of the plan.

Organic restaurant business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Meals 22,822 35,000 45,000
Drinks 11,415 17,500 22,500
Other 240 500 1,000
Total Unit Sales 34,477 53,000 68,500
Unit Prices Year 1 Year 2 Year 3
Meals $15.00 $15.00 $15.00
Drinks $2.00 $2.00 $2.00
Other $10.00 $10.00 $10.00
Sales
Meals $342,330 $525,000 $675,000
Drinks $22,830 $35,000 $45,000
Other $2,400 $5,000 $10,000
Total Sales $367,560 $565,000 $730,000
Direct Unit Costs Year 1 Year 2 Year 3
Meals $2.00 $2.00 $2.00
Drinks $0.50 $0.50 $0.50
Other $1.00 $1.00 $1.00
Direct Cost of Sales
Meals $45,644 $70,000 $90,000
Drinks $5,708 $8,750 $11,250
Other $240 $500 $1,000
Subtotal Direct Cost of Sales $51,592 $79,250 $102,250

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Management Summary

Andrew has great experience managing personnel and we are quite confident of his ability to find the best staff possible. Our chef, Mario Langostino, is already on board and has a published cookbook that will add prestige to the restaurant immediately. We will be looking to find a young, ultra-hip staff to make sure we add the edge that makes Studio67 so trendy.

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 $60,000 $65,000 $70,000
Hostess $42,000 $45,000 $50,000
Chef $54,000 $60,000 $65,000
Cleaning $30,000 $35,000 $40,000
Waiters $72,000 $100,000 $130,000
Other $24,000 $52,000 $55,000
Total People 8 10 12
Total Payroll $282,000 $357,000 $410,000

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Financial Plan

We expect to raise $40,000 of our own capital, and to borrow $100,000 guaranteed by the SBA as a 10-year loan. This provides the bulk of the start-up financing required.

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 really the same as fixed cost, but these conservative assumptions make for a better estimate of real risk.

Organic restaurant business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 3,205
Monthly Revenue Break-even $34,171
Assumptions:
Average Per-Unit Revenue $10.66
Average Per-Unit Variable Cost $1.50
Estimated Monthly Fixed Cost $29,375

Projected Profit and Loss

As the profit and loss table shows, we expect to become barely profitable in the second year of business, and to make an acceptable profit in the third year.

Organic restaurant business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $367,560 $565,000 $730,000
Direct Cost of Sales $51,592 $79,250 $102,250
Other $0 $0 $0
Total Cost of Sales $51,592 $79,250 $102,250
Gross Margin $315,969 $485,750 $627,750
Gross Margin % 85.96% 85.97% 85.99%
Expenses
Payroll $282,000 $357,000 $410,000
Sales and Marketing and Other Expenses $27,000 $35,830 $72,122
Depreciation $0 $0 $0
Utilities $1,200 $1,260 $1,323
Payroll Taxes $42,300 $53,550 $61,500
Other $0 $0 $0
Total Operating Expenses $352,500 $447,640 $544,945
Profit Before Interest and Taxes ($36,532) $38,110 $82,806
EBITDA ($36,532) $38,110 $82,806
Interest Expense $9,673 $8,887 $7,637
Taxes Incurred $0 $7,306 $19,105
Net Profit ($46,204) $21,917 $56,063
Net Profit/Sales -12.57% 3.88% 7.68%

Projected Cash Flow

The cash flow projection shows that starting cost and provisions for ongoing expenses are adequate to meet our needs until the business itself generates its own cash flow sufficient to support operations.

Organic restaurant business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $367,560 $565,000 $730,000
Subtotal Cash from Operations $367,560 $565,000 $730,000
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 $367,560 $565,000 $730,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $282,000 $357,000 $410,000
Bill Payments $117,968 $185,584 $257,538
Subtotal Spent on Operations $399,968 $542,584 $667,538
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 $6,133 $10,000 $15,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $406,101 $552,584 $682,538
Net Cash Flow ($38,541) $12,416 $47,462
Cash Balance $49,459 $61,875 $109,337

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 $49,459 $61,875 $109,337
Other Current Assets $50,000 $50,000 $50,000
Total Current Assets $99,459 $111,875 $159,337
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $99,459 $111,875 $159,337
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $14,796 $15,294 $21,693
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $14,796 $15,294 $21,693
Long-term Liabilities $93,867 $83,867 $68,867
Total Liabilities $108,663 $99,161 $90,560
Paid-in Capital $40,000 $40,000 $40,000
Retained Earnings ($3,000) ($49,204) ($27,287)
Earnings ($46,204) $21,917 $56,063
Total Capital ($9,204) $12,713 $68,776
Total Liabilities and Capital $99,459 $111,875 $159,337
Net Worth ($9,204) $12,713 $68,776

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 n.a. 53.72% 29.20% 7.60%
Percent of Total Assets
Other Current Assets 50.27% 44.69% 31.38% 35.60%
Total Current Assets 100.00% 100.00% 100.00% 43.70%
Long-term Assets 0.00% 0.00% 0.00% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 14.88% 13.67% 13.61% 32.70%
Long-term Liabilities 94.38% 74.97% 43.22% 28.50%
Total Liabilities 109.25% 88.64% 56.84% 61.20%
Net Worth -9.25% 11.36% 43.16% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 85.96% 85.97% 85.99% 60.50%
Selling, General & Administrative Expenses 98.90% 82.32% 78.45% 39.80%
Advertising Expenses 0.65% 1.77% 6.16% 3.20%
Profit Before Interest and Taxes -9.94% 6.75% 11.34% 0.70%
Main Ratios
Current 6.72 7.31 7.34 0.98
Quick 6.72 7.31 7.34 0.65
Total Debt to Total Assets 109.25% 88.64% 56.84% 61.20%
Pre-tax Return on Net Worth 501.98% 229.87% 109.29% 1.70%
Pre-tax Return on Assets -46.46% 26.12% 47.18% 4.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -12.57% 3.88% 7.68% n.a
Return on Equity 0.00% 172.40% 81.52% n.a
Activity Ratios
Accounts Payable Turnover 8.91 12.17 12.17 n.a
Payment Days 27 30 26 n.a
Total Asset Turnover 3.70 5.05 4.58 n.a
Debt Ratios
Debt to Net Worth 0.00 7.80 1.32 n.a
Current Liab. to Liab. 0.14 0.15 0.24 n.a
Liquidity Ratios
Net Working Capital $84,663 $96,580 $137,643 n.a
Interest Coverage -3.78 4.29 10.84 n.a
Additional Ratios
Assets to Sales 0.27 0.20 0.22 n.a
Current Debt/Total Assets 15% 14% 14% n.a
Acid Test 6.72 7.31 7.34 n.a
Sales/Net Worth 0.00 44.44 10.61 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
Meals 0% 779 1,053 1,505 1,553 1,652 1,633 1,173 1,520 2,066 2,602 3,451 3,835
Drinks 50% 390 527 753 777 826 817 587 760 1,033 1,301 1,726 1,918
Other 0% 20 20 20 20 20 20 20 20 20 20 20 20
Total Unit Sales 1,189 1,600 2,278 2,350 2,498 2,470 1,780 2,300 3,119 3,923 5,197 5,773
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
Meals $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00 $15.00
Drinks $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
Other $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Sales
Meals $11,685 $15,795 $22,575 $23,295 $24,780 $24,495 $17,595 $22,800 $30,990 $39,030 $51,765 $57,525
Drinks $780 $1,054 $1,506 $1,554 $1,652 $1,634 $1,174 $1,520 $2,066 $2,602 $3,452 $3,836
Other $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Total Sales $12,665 $17,049 $24,281 $25,049 $26,632 $26,329 $18,969 $24,520 $33,256 $41,832 $55,417 $61,561
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
Meals 0.00% $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
Drinks 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
Other 0.00% $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Direct Cost of Sales
Meals $1,558 $2,106 $3,010 $3,106 $3,304 $3,266 $2,346 $3,040 $4,132 $5,204 $6,902 $7,670
Drinks $195 $264 $377 $389 $413 $409 $294 $380 $517 $651 $863 $959
Other $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20 $20
Subtotal Direct Cost of Sales $1,773 $2,390 $3,407 $3,515 $3,737 $3,695 $2,660 $3,440 $4,669 $5,875 $7,785 $8,649
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% $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Hostess 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Chef 0% $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Cleaning 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Waiters 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
Other 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Total People 8 8 8 8 8 8 8 8 8 8 8 8
Total Payroll $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500

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% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
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 $12,665 $17,049 $24,281 $25,049 $26,632 $26,329 $18,969 $24,520 $33,256 $41,832 $55,417 $61,561
Direct Cost of Sales $1,773 $2,390 $3,407 $3,515 $3,737 $3,695 $2,660 $3,440 $4,669 $5,875 $7,785 $8,649
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $1,773 $2,390 $3,407 $3,515 $3,737 $3,695 $2,660 $3,440 $4,669 $5,875 $7,785 $8,649
Gross Margin $10,892 $14,660 $20,875 $21,535 $22,895 $22,635 $16,310 $21,080 $28,588 $35,958 $47,632 $52,912
Gross Margin % 86.00% 85.98% 85.97% 85.97% 85.97% 85.97% 85.98% 85.97% 85.96% 85.96% 85.95% 85.95%
Expenses
Payroll $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500
Sales and Marketing and Other Expenses $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250
Depreciation 5% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities 5% $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Payroll Taxes 15% $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525 $3,525
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375 $29,375
Profit Before Interest and Taxes ($18,483) ($14,716) ($8,501) ($7,841) ($6,480) ($6,741) ($13,066) ($8,295) ($788) $6,583 $18,257 $23,537
EBITDA ($18,483) ($14,716) ($8,501) ($7,841) ($6,480) ($6,741) ($13,066) ($8,295) ($788) $6,583 $18,257 $23,537
Interest Expense $829 $825 $821 $817 $813 $808 $804 $800 $795 $791 $787 $782
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($19,312) ($15,541) ($9,322) ($8,657) ($7,293) ($7,549) ($13,870) ($9,095) ($1,583) $5,791 $17,470 $22,755
Net Profit/Sales -152.49% -91.15% -38.39% -34.56% -27.38% -28.67% -73.12% -37.09% -4.76% 13.84% 31.53% 36.96%

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 $12,665 $17,049 $24,281 $25,049 $26,632 $26,329 $18,969 $24,520 $33,256 $41,832 $55,417 $61,561
Subtotal Cash from Operations $12,665 $17,049 $24,281 $25,049 $26,632 $26,329 $18,969 $24,520 $33,256 $41,832 $55,417 $61,561
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 $12,665 $17,049 $24,281 $25,049 $26,632 $26,329 $18,969 $24,520 $33,256 $41,832 $55,417 $61,561
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 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500 $23,500
Bill Payments $1,283 $8,498 $9,123 $10,106 $10,214 $10,423 $10,343 $9,365 $10,156 $11,379 $12,604 $14,475
Subtotal Spent on Operations $24,783 $31,998 $32,623 $33,606 $33,714 $33,923 $33,843 $32,865 $33,656 $34,879 $36,104 $37,975
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 $488 $492 $496 $500 $505 $509 $513 $517 $522 $526 $530 $535
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 $25,271 $32,490 $33,119 $34,106 $34,219 $34,432 $34,356 $33,382 $34,178 $35,405 $36,634 $38,510
Net Cash Flow ($12,606) ($15,441) ($8,838) ($9,057) ($7,587) ($8,103) ($15,387) ($8,862) ($922) $6,427 $18,783 $23,051
Cash Balance $75,394 $59,954 $51,115 $42,058 $34,472 $26,369 $10,981 $2,120 $1,198 $7,625 $26,408 $49,459
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 $88,000 $75,394 $59,954 $51,115 $42,058 $34,472 $26,369 $10,981 $2,120 $1,198 $7,625 $26,408 $49,459
Other Current Assets $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Total Current Assets $138,000 $125,394 $109,954 $101,115 $92,058 $84,472 $76,369 $60,981 $52,120 $51,198 $57,625 $76,408 $99,459
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 $138,000 $125,394 $109,954 $101,115 $92,058 $84,472 $76,369 $60,981 $52,120 $51,198 $57,625 $76,408 $99,459
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 $1,000 $8,195 $8,787 $9,766 $9,866 $10,077 $10,032 $9,027 $9,778 $10,961 $12,123 $13,965 $14,796
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 $1,000 $8,195 $8,787 $9,766 $9,866 $10,077 $10,032 $9,027 $9,778 $10,961 $12,123 $13,965 $14,796
Long-term Liabilities $100,000 $99,512 $99,020 $98,524 $98,024 $97,519 $97,010 $96,497 $95,980 $95,458 $94,932 $94,402 $93,867
Total Liabilities $101,000 $107,707 $107,807 $108,290 $107,890 $107,596 $107,042 $105,524 $105,758 $106,419 $107,055 $108,367 $108,663
Paid-in Capital $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000 $40,000
Retained Earnings ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000)
Earnings $0 ($19,312) ($34,853) ($44,174) ($52,832) ($60,124) ($67,673) ($81,543) ($90,638) ($92,221) ($86,429) ($68,959) ($46,204)
Total Capital $37,000 $17,688 $2,147 ($7,174) ($15,832) ($23,124) ($30,673) ($44,543) ($53,638) ($55,221) ($49,429) ($31,959) ($9,204)
Total Liabilities and Capital $138,000 $125,394 $109,954 $101,115 $92,058 $84,472 $76,369 $60,981 $52,120 $51,198 $57,625 $76,408 $99,459
Net Worth $37,000 $17,688 $2,147 ($7,174) ($15,832) ($23,124) ($30,673) ($44,543) ($53,638) ($55,221) ($49,429) ($31,959) ($9,204)

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