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Food Manufacturing icon Pasta Manufacturer Business Plan

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The Pasta Tree

Executive Summary

The Pasta Tree is the only fresh pasta retail producer in the city of Springfield. For the past three years, the company has sold its fresh pasta products out of its own storefront and in the city’s five natural food stores. The company has built a loyal consumer base with customers that have increased sales by 15% each year for the past three years. This year, The Pasta Tree will gross more than $300,000 in sales. This was generated from an initial investment of  $80,000.

The Pasta Tree is planning to expand its operation to include distribution to the major supermarket chains within the entire city. There are fifteen major supermarkets that operate in Springfield and over thirty-five smaller grocery stores that serve the metro and expanding suburban communities. To meet the increased product demand, The Pasta Tree will have to double production. Owner funding and internally generated cash flow will enable only a portion of the expansion plan. The Pasta Tree will secure a $50,000 loan to fund the expansion of its production facility. Sales projections for the next three years are based on current sales success with the target customer base in Springfield. 

This plan will result in sales revenues growing to almost $420,000 by Year 3.

The Pasta Tree is located in a 3,000 square feet facility that operates as a storefront and a production facility. With the expansion, 3/4 of the area will be dedicated to production. The preparation of the new production space will cost $10,000. The new equipment will cost an additional $30,000. The company will also have to upgrade its packaging equipment to meet the new demand. This will cost $10,000.

The Pasta Tree will embark on a new marketing program in supermarkets and grocery stores that will be carrying its products. Eye catching in-store displays have been created to attract new customers. The displays will also hold discount coupons to promote sales to new customers.

In conjunction with the introduction of the products, The Pasta Tree will be a major sponsor of the Canal Run which raises funds for children’s cancer research.

Pasta manufacturer business plan, executive summary chart image

1.1 Objectives

The objectives of The Pasta Tree are the following:

  • Expand production facility without compromising product quality.
  • Establish strong sales in the city’s major supermarket chains.
  • Maintain tight control of cost and operation during expansion.

1.2 Mission

The Pasta Tree’s mission is as follows:

  • Quality: Our products are the highest quality and the freshest pasta available to the consumers.
  • Value: We offer greater value to the consumer with nutritious products that have tremendous flavor.
  • Integrity: Our customers depend on the quality of our pasta products. Our commitment to the highest standard is the foundation of our customers trust in The Pasta Tree. We promise our customer that they will never be disappointed with our products.
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Company Summary

The Pasta Tree has built a reputation on offering the most delicious, nutritious pasta products. The business will operate as a general partnership with Jill Forman and John Wingate both performing management responsibilities.

2.1 Company Ownership

The Pasta Tree is owned by Jill Forman and John Wingate.

2.2 Company History

The Pasta Tree’s first products were created in the kitchen of Jill Forman. It was in her kitchen that she first created fresh pasta that was used in a part-time catering business operated by John Wingate and herself.

Customers quickly began to request special orders of the pasta products. They proved to be so popular that Jill and John pooled their resources and began The Pasta Tree. They opened a storefront and began to sell directly to the public.

After one year of operation, John was successful in getting the city’s natural food stores to carry The Pasta Tree products. Over the last two years, The Pasta Tree’s products have become popular in upscale natural food stores in Springfield.

The Pasta Tree’s operations has expanded dramatically over the past three years. What was initially a two person operation has expanded to now include a staff of four in production, delivery, and sales.

The following table and chart illustrates the sales success of The Pasta Tree.

Pasta manufacturer business plan, company summary chart image

Past Performance
FY 2000 FY 2001 FY 2002
Sales $155,000 $178,250 $200,000
Gross Margin $60,000 $70,000 $80,000
Gross Margin % 38.71% 39.27% 40.00%
Operating Expenses $100,000 $105,000 $110,000
Collection Period (days) 35 35 39
Inventory Turnover 15.00 15.00 15.00
Balance Sheet
FY 2000 FY 2001 FY 2002
Current Assets
Cash $20,000 $30,000 $70,000
Accounts Receivable $10,000 $12,000 $14,000
Inventory $8,000 $8,000 $8,000
Other Current Assets $0 $0 $5,000
Total Current Assets $38,000 $50,000 $97,000
Long-term Assets
Long-term Assets $0 $0 $36,736
Accumulated Depreciation $0 $0 $5,248
Total Long-term Assets $0 $0 $31,488
Total Assets $38,000 $50,000 $128,488
Current Liabilities
Accounts Payable $3,000 $7,000 $10,000
Current Borrowing $2,000 $4,000 $3,000
Other Current Liabilities (interest free) $0 $0 $0
Total Current Liabilities $5,000 $11,000 $13,000
Long-term Liabilities $30,000 $20,000 $10,000
Total Liabilities $35,000 $31,000 $23,000
Paid-in Capital $20,000 $10,000 $0
Retained Earnings ($17,000) $9,000 $81,488
Earnings $0 $0 $24,000
Total Capital $3,000 $19,000 $105,488
Total Capital and Liabilities $38,000 $50,000 $128,488
Other Inputs
Payment Days 30 30 30
Sales on Credit $105,000 $114,000 $123,000
Receivables Turnover 10.50 9.50 8.79

2.3 Company Locations and Facilities

The Pasta Tree is located on 1234 Main St. The storefront is 3,000 square feet with 2/3 of the area dedicated to production. The location is perfect for foot traffic and there is quick access to the city’s freeway system.

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Products

The Pasta Tree offers the following products:

  • Fettuccine;
  • Linguini;
  • Spaghettini;
  • Spinach linguini;
  • Tomato fettuccine;
  • Tricolor fusilli;
  • New mexico chile linguini;
  • Black linguini;
  • Basil spaghettini;
  • Cayenne tagliolini;
  • Black and white spaghettini.
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Market Analysis Summary

The population in Springfield has grown by 5% over the past five years. The current population stands at over 250,000. It is projected that the population will continue its growth pattern for the next three years and will eventually reach over 280,000.

There are fifteen major supermarkets that operate in Springfield and over thirty-five smaller grocery stores that serve the metro and expanding suburban communities. Approximately 60% of these stores serve communities that are made up predominantly of urban professionals. The Pasta Tree has identified the upscale shopper as the target customer for the fresh pasta products.

4.1 Market Segmentation

The Pasta Tree has identified two store types where the products will reach the target customers:

  • Supermarkets: The volume of activity in these stores creates tremendous opportunity for The Pasta Tree. The supermarkets have been losing market share steadily to smaller stores that offer the customers products that the larger stores don’t carry. Though the price of the products ($3.00 for a serving for two) is higher than dry pasta products, it is still affordable to most shoppers.
  • Smaller Grocery Stores: These stores serve customers in specific communities. These also include speciality stores like wine shops and fish markets where the product line would fit in nicely.
Pasta manufacturer business plan, market analysis summary chart image

Market Analysis
2002 2003 2004 2005 2006
Potential Customers Growth CAGR
Supermarkets 5% 15 16 17 18 19 6.09%
Smaller Stores 5% 35 37 39 41 43 5.28%
Total 5.53% 50 53 56 59 62 5.53%

4.2 Target Market Segment Strategy

The Pasta Tree’s marketing will focus on the urban professional segment, which has little time to prepare dinner and will be attracted to quality and freshness of The Pasta Tree products. The pasta products are ready to eat in half the time of dry pasta (one to three minutes) and are fresher than the competition. This gives The Pasta Tree products a decidedly better taste and consistency.

4.3 Service Business Analysis

Pasta is a staple in a supermarket with a number of products and brands to pick from. Most of the competition is in dry pasta. Fresh pasta has a much shorter shelf life (about 30 days) so there is less competition  in products. Currently, several large food companies offer a limited line of fresh pasta products. Though fresh, these products are only slightly better than dry pasta and really only offer reduced preparation time. As a local product, The Pasta Tree can offer better quality and better packaging of fresh pasta.

4.3.1 Competition and Buying Patterns

The Pasta Tree products will be displayed in the deli case of the supermarkets. The only competition in this section are two other product lines whose packaging is boxy and unattractive. To improve the ability to transport the product, these pasta products have been folded into a small container. The Pasta Tree products are not folded and are wrapped in an air-tight colorful plastic package. Their presentation is similar to the dry pasta packaging which is important to consumers. No one wants their fettuccine folded.

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Strategy and Implementation Summary

The strategy of The Pasta Tree will be to initially push our three most popular sellers; fettuccine, linguini, and spaghettini. Our plan is to introduce the rest of The Pasta Tree’s product line as sales increase and we can negotiate more cooler space for products.

5.1 Marketing Strategy

The Pasta Tree will advertise its products with a 20% off regular price coupon during the first month of the product being introduced into the supermarkets. The Pasta Tree will use in-store displays that will hold the coupons and attract customer attention.

In addition, The Pasta Tree will be a major sponsor of the city’s Canal Run that raises money for children’s cancer research. The run will occur the first weekend the products have been introduced into supermarkets. The Pasta Tree will distribute discount coupons at the event.

5.2 Sales Strategy

The sales strategy is to present our products as an affordable upscale dinner item that is quick to make and tastier than our dry competition.

5.2.1 Sales Forecast

The following table and charts show the rapid ramp-up of sales during the next twelve months of operation.

Pasta manufacturer business plan, strategy and implementation summary chart image

Pasta manufacturer business plan, strategy and implementation summary chart image

Sales Forecast
FY 2003 FY 2004 FY 2005
Sales
Supermarkets $128,000 $143,000 $173,000
Grocery Stores $185,000 $203,000 $246,000
Total Sales $313,000 $346,000 $419,000
Direct Cost of Sales FY 2003 FY 2004 FY 2005
Supermarkets $12,800 $15,000 $16,400
Grocery Stores $18,500 $20,300 $23,900
Subtotal Direct Cost of Sales $31,300 $35,300 $40,300

5.3 Milestones

The accompanying table and chart shows specific milestones, with responsibilities assigned, dates, and budgets. We are focusing on a few key milestones that should be accomplished.

Pasta manufacturer business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Production Facility Expansion 1/1/2002 3/15/2002 $10,000 Jill Forman Production
Production Equipment 3/1/2002 3/20/2002 $40,000 Jill Forman Production
In-Store Displays 2/10/2002 3/28/2002 $5,000 John Wingate Sales
Canal Run 1/1/2001 4/12/2002 $1,000 John Wingate Sales
Totals $56,000

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Management Summary

Co-owners, Jill Forman and John Wingate, currently manage the daily operation of The Pasta Tree. Jill is responsible for production and distribution, while John works as the sales manager.

Jill and John have fifteen years of experience working in food production and sales.

Jill Forman was one of the owners of the Mason Peak Deli, 4th and Tyler. Jill managed the deli for five years, eventually starting a catering business with John Wingate in 1997.

John Wingate was a salesperson for Sunburst Natural Foods for ten years. At the time he started the catering business with Jill, John annual sales had reached $1 million dollars.

6.1 Personnel Plan

The personnel plan for The Pasta Tree is as follows:

  • Production manager;
  • Sales manager;
  • Production staff (4 total, 2 new hires);
  • Store staff (1 new hire);
  • Delivery staff/sales (1 new hire).
Personnel Plan
FY 2003 FY 2004 FY 2005
Production Manager $36,000 $38,880 $44,712
Sales Manager $36,000 $38,880 $44,712
Production Staff $81,600 $88,128 $101,347
Delivery $24,000 $25,920 $29,808
Store Staff $21,600 $23,328 $26,827
Total People 8 8 8
Total Payroll $199,200 $215,136 $247,406

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Financial Plan

The following is financial plan for The Pasta Tree.

7.1 Break-even Analysis

The monthly break-even point is $24,989.

.

Pasta manufacturer business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $24,989
Assumptions:
Average Percent Variable Cost 10%
Estimated Monthly Fixed Cost $22,490

7.2 Projected Profit and Loss

The following table and charts are the projected profit and loss for three years.

Pasta manufacturer business plan, financial plan chart image

Pasta manufacturer business plan, financial plan chart image

Pro Forma Profit and Loss
FY 2003 FY 2004 FY 2005
Sales $313,000 $346,000 $419,000
Direct Cost of Sales $31,300 $35,300 $40,300
Other Production Expenses $0 $0 $0
Total Cost of Sales $31,300 $35,300 $40,300
Gross Margin $281,700 $310,700 $378,700
Gross Margin % 90.00% 89.80% 90.38%
Expenses
Payroll $199,200 $215,136 $247,406
Sales and Marketing and Other Expenses $6,000 $8,000 $10,000
Depreciation $9,600 $9,600 $9,600
Leased Equipment $0 $0 $0
Utilities $3,600 $12,000 $12,000
Insurance $9,600 $9,600 $9,600
Rent $12,000 $12,000 $12,000
Payroll Taxes $29,880 $32,270 $37,111
Other $0 $0 $0
Total Operating Expenses $269,880 $298,606 $337,717
Profit Before Interest and Taxes $11,820 $12,094 $40,983
EBITDA $21,420 $21,694 $50,583
Interest Expense $4,760 $3,405 $1,715
Taxes Incurred $2,118 $2,607 $11,780
Net Profit $4,942 $6,082 $27,488
Net Profit/Sales 1.58% 1.76% 6.56%

7.3 Projected Cash Flow

The following table and chart are the projected cash flow for three years.

Pasta manufacturer business plan, financial plan chart image

Pro Forma Cash Flow
FY 2003 FY 2004 FY 2005
Cash Received
Cash from Operations
Cash Sales $78,250 $86,500 $104,750
Cash from Receivables $203,750 $254,756 $303,755
Subtotal Cash from Operations $282,000 $341,256 $408,505
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 $50,000 $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 $332,000 $341,256 $408,505
Expenditures FY 2003 FY 2004 FY 2005
Expenditures from Operations
Cash Spending $199,200 $215,136 $247,406
Bill Payments $94,829 $115,954 $133,454
Subtotal Spent on Operations $294,029 $331,090 $380,860
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $1,200 $1,200 $600
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $18,000 $18,300 $13,700
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $313,229 $350,590 $395,160
Net Cash Flow $18,771 ($9,335) $13,345
Cash Balance $88,771 $79,437 $92,781

7.4 Projected Balance Sheet

The following table shows the projected balance sheet for three years.

Pro Forma Balance Sheet
FY 2003 FY 2004 FY 2005
Assets
Current Assets
Cash $88,771 $79,437 $92,781
Accounts Receivable $45,000 $49,744 $60,240
Inventory $3,410 $3,846 $4,391
Other Current Assets $5,000 $5,000 $5,000
Total Current Assets $142,181 $138,027 $162,412
Long-term Assets
Long-term Assets $36,736 $36,736 $36,736
Accumulated Depreciation $14,848 $24,448 $34,048
Total Long-term Assets $21,888 $12,288 $2,688
Total Assets $164,069 $150,315 $165,100
Liabilities and Capital FY 2003 FY 2004 FY 2005
Current Liabilities
Accounts Payable $9,839 $9,503 $11,100
Current Borrowing $1,800 $600 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $11,639 $10,103 $11,100
Long-term Liabilities $42,000 $23,700 $10,000
Total Liabilities $53,639 $33,803 $21,100
Paid-in Capital $0 $0 $0
Retained Earnings $105,488 $110,430 $116,512
Earnings $4,942 $6,082 $27,488
Total Capital $110,430 $116,512 $144,000
Total Liabilities and Capital $164,069 $150,315 $165,100
Net Worth $110,430 $116,512 $144,000

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 5149, Groceries and related products, are shown for comparison.

Ratio Analysis
FY 2003 FY 2004 FY 2005 Industry Profile
Sales Growth 56.50% 10.54% 21.10% 4.60%
Percent of Total Assets
Accounts Receivable 27.43% 33.09% 36.49% 33.30%
Inventory 2.08% 2.56% 2.66% 26.00%
Other Current Assets 3.05% 3.33% 3.03% 20.90%
Total Current Assets 86.66% 91.83% 98.37% 80.20%
Long-term Assets 13.34% 8.17% 1.63% 19.80%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.09% 6.72% 6.72% 45.20%
Long-term Liabilities 25.60% 15.77% 6.06% 10.00%
Total Liabilities 32.69% 22.49% 12.78% 55.20%
Net Worth 67.31% 77.51% 87.22% 44.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 90.00% 89.80% 90.38% 44.10%
Selling, General & Administrative Expenses 88.44% 88.08% 83.95% 26.70%
Advertising Expenses 1.92% 2.31% 2.39% 0.70%
Profit Before Interest and Taxes 3.78% 3.50% 9.78% 0.80%
Main Ratios
Current 12.22 13.66 14.63 1.69
Quick 11.92 13.28 14.24 1.01
Total Debt to Total Assets 32.69% 22.49% 12.78% 55.20%
Pre-tax Return on Net Worth 6.39% 7.46% 27.27% 3.60%
Pre-tax Return on Assets 4.30% 5.78% 23.78% 8.00%
Additional Ratios FY 2003 FY 2004 FY 2005
Net Profit Margin 1.58% 1.76% 6.56% n.a
Return on Equity 4.48% 5.22% 19.09% n.a
Activity Ratios
Accounts Receivable Turnover 5.22 5.22 5.22 n.a
Collection Days 58 67 64 n.a
Inventory Turnover 9.76 9.73 9.79 n.a
Accounts Payable Turnover 9.62 12.17 12.17 n.a
Payment Days 30 31 28 n.a
Total Asset Turnover 1.91 2.30 2.54 n.a
Debt Ratios
Debt to Net Worth 0.49 0.29 0.15 n.a
Current Liab. to Liab. 0.22 0.30 0.53 n.a
Liquidity Ratios
Net Working Capital $130,542 $127,924 $151,312 n.a
Interest Coverage 2.48 3.55 23.90 n.a
Additional Ratios
Assets to Sales 0.52 0.43 0.39 n.a
Current Debt/Total Assets 7% 7% 7% n.a
Acid Test 8.06 8.36 8.81 n.a
Sales/Net Worth 2.83 2.97 2.91 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Sales
Supermarkets 0% $9,000 $9,000 $10,000 $9,000 $10,000 $10,000 $10,000 $11,000 $12,000 $12,000 $13,000 $13,000
Grocery Stores 0% $14,000 $14,000 $14,000 $15,000 $15,000 $15,000 $15,000 $16,000 $16,000 $16,000 $17,000 $18,000
Total Sales $23,000 $23,000 $24,000 $24,000 $25,000 $25,000 $25,000 $27,000 $28,000 $28,000 $30,000 $31,000
Direct Cost of Sales Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Supermarkets $900 $900 $1,000 $900 $1,000 $1,000 $1,000 $1,100 $1,200 $1,200 $1,300 $1,300
Grocery Stores $1,400 $1,400 $1,400 $1,500 $1,500 $1,500 $1,500 $1,600 $1,600 $1,600 $1,700 $1,800
Subtotal Direct Cost of Sales $2,300 $2,300 $2,400 $2,400 $2,500 $2,500 $2,500 $2,700 $2,800 $2,800 $3,000 $3,100
Personnel Plan
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Production Manager 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
Sales Manager 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
Production Staff 0% $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800 $6,800
Delivery 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
Store Staff 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Total People 8 8 8 8 8 8 8 8 8 8 8 8
Total Payroll $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600

General Assumptions
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
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
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Sales $23,000 $23,000 $24,000 $24,000 $25,000 $25,000 $25,000 $27,000 $28,000 $28,000 $30,000 $31,000
Direct Cost of Sales $2,300 $2,300 $2,400 $2,400 $2,500 $2,500 $2,500 $2,700 $2,800 $2,800 $3,000 $3,100
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $2,300 $2,300 $2,400 $2,400 $2,500 $2,500 $2,500 $2,700 $2,800 $2,800 $3,000 $3,100
Gross Margin $20,700 $20,700 $21,600 $21,600 $22,500 $22,500 $22,500 $24,300 $25,200 $25,200 $27,000 $27,900
Gross Margin % 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00% 90.00%
Expenses
Payroll $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600
Sales and Marketing and Other Expenses $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Depreciation $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Insurance $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Rent $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 15% $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490 $2,490
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490 $22,490
Profit Before Interest and Taxes ($1,790) ($1,790) ($890) ($890) $10 $10 $10 $1,810 $2,710 $2,710 $4,510 $5,410
EBITDA ($990) ($990) ($90) ($90) $810 $810 $810 $2,610 $3,510 $3,510 $5,310 $6,210
Interest Expense $345 $332 $402 $388 $458 $445 $432 $418 $405 $392 $378 $365
Taxes Incurred ($641) ($636) ($388) ($383) ($135) ($131) ($127) $418 $692 $696 $1,240 $1,514
Net Profit ($1,495) ($1,485) ($904) ($895) ($314) ($305) ($295) $974 $1,614 $1,623 $2,892 $3,532
Net Profit/Sales -6.50% -6.46% -3.77% -3.73% -1.26% -1.22% -1.18% 3.61% 5.76% 5.80% 9.64% 11.39%

Pro Forma Cash Flow
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Cash Received
Cash from Operations
Cash Sales $5,750 $5,750 $6,000 $6,000 $6,250 $6,250 $6,250 $6,750 $7,000 $7,000 $7,500 $7,750
Cash from Receivables $7,000 $7,575 $17,250 $17,275 $18,000 $18,025 $18,750 $18,750 $18,800 $20,275 $21,000 $21,050
Subtotal Cash from Operations $12,750 $13,325 $23,250 $23,275 $24,250 $24,275 $25,000 $25,500 $25,800 $27,275 $28,500 $28,800
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 $30,000 $0 $10,000 $0 $10,000 $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 $42,750 $13,325 $33,250 $23,275 $34,250 $24,275 $25,000 $25,500 $25,800 $27,275 $28,500 $28,800
Expenditures Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Expenditures from Operations
Cash Spending $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600 $16,600
Bill Payments $10,160 $4,794 $4,850 $6,769 $7,512 $8,020 $7,904 $7,927 $8,854 $9,093 $9,009 $9,936
Subtotal Spent on Operations $26,760 $21,394 $21,450 $23,369 $24,112 $24,620 $24,504 $24,527 $25,454 $25,693 $25,609 $26,536
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 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
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 $28,360 $22,994 $23,050 $24,969 $25,712 $26,220 $26,104 $26,127 $27,054 $27,293 $27,209 $28,136
Net Cash Flow $14,390 ($9,669) $10,200 ($1,694) $8,538 ($1,945) ($1,104) ($627) ($1,254) ($18) $1,291 $664
Cash Balance $84,390 $74,721 $84,921 $83,226 $91,764 $89,819 $88,715 $88,088 $86,834 $86,816 $88,107 $88,771
Pro Forma Balance Sheet
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Assets Starting Balances
Current Assets
Cash $70,000 $84,390 $74,721 $84,921 $83,226 $91,764 $89,819 $88,715 $88,088 $86,834 $86,816 $88,107 $88,771
Accounts Receivable $14,000 $24,250 $33,925 $34,675 $35,400 $36,150 $36,875 $36,875 $38,375 $40,575 $41,300 $42,800 $45,000
Inventory $8,000 $5,700 $3,400 $2,640 $2,640 $2,750 $2,750 $2,750 $2,970 $3,080 $3,080 $3,300 $3,410
Other Current Assets $5,000 $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 Current Assets $97,000 $119,340 $117,046 $127,236 $126,266 $135,664 $134,444 $133,340 $134,433 $135,489 $136,196 $139,207 $142,181
Long-term Assets
Long-term Assets $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736 $36,736
Accumulated Depreciation $5,248 $6,048 $6,848 $7,648 $8,448 $9,248 $10,048 $10,848 $11,648 $12,448 $13,248 $14,048 $14,848
Total Long-term Assets $31,488 $30,688 $29,888 $29,088 $28,288 $27,488 $26,688 $25,888 $25,088 $24,288 $23,488 $22,688 $21,888
Total Assets $128,488 $150,028 $146,934 $156,324 $154,554 $163,152 $161,132 $159,228 $159,521 $159,777 $159,684 $161,895 $164,069
Liabilities and Capital Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
Current Liabilities
Accounts Payable $10,000 $4,635 $4,626 $6,519 $7,245 $7,756 $7,641 $7,632 $8,551 $8,793 $8,678 $9,597 $9,839
Current Borrowing $3,000 $2,900 $2,800 $2,700 $2,600 $2,500 $2,400 $2,300 $2,200 $2,100 $2,000 $1,900 $1,800
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $13,000 $7,535 $7,426 $9,219 $9,845 $10,256 $10,041 $9,932 $10,751 $10,893 $10,678 $11,497 $11,639
Long-term Liabilities $10,000 $38,500 $37,000 $45,500 $44,000 $52,500 $51,000 $49,500 $48,000 $46,500 $45,000 $43,500 $42,000
Total Liabilities $23,000 $46,035 $44,426 $54,719 $53,845 $62,756 $61,041 $59,432 $58,751 $57,393 $55,678 $54,997 $53,639
Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings $81,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488 $105,488
Earnings $24,000 ($1,495) ($2,980) ($3,884) ($4,779) ($5,092) ($5,397) ($5,692) ($4,718) ($3,104) ($1,482) $1,411 $4,942
Total Capital $105,488 $103,994 $102,508 $101,604 $100,709 $100,396 $100,091 $99,796 $100,770 $102,384 $104,006 $106,899 $110,430
Total Liabilities and Capital $128,488 $150,028 $146,934 $156,324 $154,554 $163,152 $161,132 $159,228 $159,521 $159,777 $159,684 $161,895 $164,069
Net Worth $105,488 $103,994 $102,508 $101,604 $100,709 $100,396 $100,091 $99,796 $100,770 $102,384 $104,006 $106,899 $110,430

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