Paintball Products Retail Business Plan

Harquebus Paintball’s start-up funding will include an investment made in the company by the owners, and a long-term SBA or commercial bank loan. HPI will achieve profitability in its first year of operations, and will sustain a slow, steady profit margin and a rapidly growing cash account with solid growth from the end of the first year’s operations to the end of the third year’s operations.  HPI will continue this amazing growth via sales, promotions, product selection, the launching of new stores, distributor discounting, company franchising, etc.

The financials are projected out three years, but are based on the original store only. If actual results for each year play out at equal to or greater than projections, the available cash on hand will be used as seed capital for HPI’s expansion.

8.1 Important Assumptions

Harquebus Paintball has taken assumptions about the following:

• The sport of paintball will undertake a slow and steady economic growth throughout the next several years.
• A “worse case” scenario, HPI assumes a modest average profit margin on all products.
• All avid Bombarde County paintball players will purchase new gear/equipment at least once a year.
• Our target market only includes current Bombarde County paintballers, not all males ages 12-24 who may have an interest in paintball.

All estimates and assumptions will be adjusted once HPI has been finalized and established.

8.2 Start-up Funding

Padraich Petard, Geoffrey Gunnar and Petra Pistolero will each invest in Harquebus Paintball, Inc.  Dolores Derringer and Claude Carabinerie will also each invest, but a lesser amount.

Harquebus Paintball will welcome additional investment form outside parties.

HPI will seek a long-term SBA loan through local Bigbucks Bank, which specializes in serving Bombarde County commerce.

8.3 Break-even Analysis

As shown in the table below, Harquebus Paintball estimates the number of units of $1 which must be sold (under the forecasted profit margin attributed to each item), to generate sufficient revenue monthly to break-even with its estimated monthly fixed costs (utilities, payroll, depreciation, etc.).

8.4 Projected Profit and Loss

Shown in the following table and charts are projected profits and gross margins for the first year of operations.

Profits and losses are summed up below:

• Rent: Rent in Enfilade Plaza has three property leasing charges: base rent charge ($12 s/f per annum), NNN charges ($4.45 s/f per annum); 4% s/f management fee based on the base rent charge. The property at Enfilade is 1,800 s/f. After all the math, the monthly costs are: $1,800.00(base fee) + 667.50(NNN fee) + $72.00(management fee) = $2,539.50 + 7% sales tax = $2,717.27 Total Monthly Rent.
• Utilities: Utilities for HPI will consist of electric ($150), water ($25), telephone ($90), Internet ($90), fax ($30), etc., for a total monthly cost of approx. $400.
• Insurance: A $50,000 125% inventory insurance policy will cost $94/month.
• Payroll Taxes: Payroll taxes will average about 20% of total dollars earned.

8.5 Projected Cash Flow

Harquebus Paintball demonstrates its projected cash flow in the table and chart shown on the following pages.

• Cash Flow: HPI estimates mass inventory purchases every other month, therefore creating a “wave” effect in HPI’s cash flow from positive flow to negative flow during inventory months, yet sustaining an overall positive cash balance. As HPI will continue to grow throughout the years, negative cash flow will slowly decrease as positive cash flow slowly increases. As shown in the table on the following page, Net Cash Flow is derived by the “Cash Spent (inventory; payroll, rent, etc.)” and subtracted from the “Operations Cash (cash gained from sales),” therefore showing how much money is flowing into or out of HPI’s checking accounts. By the end of first year’s operations, HPI will have sustained an overall positive cash flow.
• Cash Balance: As shown in the chart on the following page, HPI’s “Cash Balance (cash in checking account)” will remain positive, and sustain a continuous positive growth rate. Cash balance is derived by taking the current month’s “Net Cash Flow” and adding it to the previous month’s “Cash Balance.” Cash “on hand” by the end of first year’s operations is estimated to increase nearly 10-fold over the beginning cash balance.

8.6 Projected Balance Sheet

The balance sheet below represents Harquebus Paintball’s overall cash position through the years 2006-2008, only including the original store, as well as Internet sales. As shown in the table below, HPI’s “Net Worth” is projected to increase approximately exponentially from month one to the end of 2008. Harquebus Paintball does not project any trouble meeting its debt obligations as long as the specific goals and objectives mentioned earlier in this plan are achieved.

8.7 Business Ratios

Harquebus Paintball’s projected business ratios are provided in the table below. HPI chose the Standard Industry Classification (SIC) code: Sporting goods and bicycle shops – 5941 as the closest match to its industry.