Photography Studio Business Plan

Phoebe's Photo Studio

Financial Plan

Forecast

Key Assumptions

We assume a stable economy with reasonable growth and a steady rise in interest rates. We also assume that our competitors won’t adopt our strategy within the first two years. After that, our approach is likely to make a change in what our competitors charge for digital files, because they’ll see it’s effective in bringing in repeat business as well as new business.

The expenses show the impact of close to $30K startup expenses, which we put into the first month. Those expenses are listed below in the Use of Funds chapter.

Revenue by Month

Expenses by Month

Net Profit (or Loss) by Year

Financing

Use of Funds

Start-up Expenses

Rent $480
Insurance $300
Filing Fees $50
Utilities and Deposits $500
Paper $200
Website Development $2,000
Marketing Consultant: Ad design, etc. $20,000
Personnel Costs for December $3,500
Software $1,500
Office Expense $200

TOTAL START-UP EXPENSES $28,730

Start-up Assets: $13,000 in computer and photographic equipment

Sources of Funds

We will be using the $10,000 cash from my savings, plus a $50,000 interest-free loan from family, and a $20,000 5-year loan co-signed by family. The plan calls for funds to service the bank loan and repay most of the family loan by the end of the third year.

Statements

Projected Profit & Loss

	2020	2021	2022
Revenue	$146,825	$169,500	$192,650

Direct Costs	$27,336	$31,680	$36,336

Gross Margin	$119,489	$137,820	$156,314
Gross Margin %	81%	81%	81%
Operating Expenses
Salaries & Wages	$79,200	$86,720	$97,454
Employee Related Expenses	$15,840	$17,344	$19,491
Utilities	$1,200	$1,200	$1,200
Insurance	$300	$300	$300
Rent	$9,600	$9,600	$9,600
Sales and Marketing	$7,800	$8,000	$8,000
Startup Expense listed in Use of Funds	$28,730
Maintenance of Cameras	$600	$600	$600
Offsite File Backup	$720	$720	$720
Total Operating Expenses	$143,990	$124,484	$137,365

Operating Income	($24,501)	$13,336	$18,949

Interest Incurred	$678	$596	$440
Depreciation and Amortization	$2,600	$2,817	$3,216
Gain or Loss from Sale of Assets
Income Taxes	$0	$0	$0
Total Expenses	$174,604	$159,576	$177,357
Net Profit	($27,779)	$9,924	$15,293
Net Profit/Sales	(19%)	6%	8%

Projected Balance Sheet

	2020	2021	2022
Cash	$24,428	$17,306	$14,196
Accounts Receivable	$6,563	$5,284	$6,119
Inventory
Other Current Assets
Total Current Assets	$30,991	$22,590	$20,315

Long-Term Assets	$13,000	$15,000	$17,000
Accumulated Depreciation	($2,600)	($5,417)	($8,633)
Total Long-Term Assets	$10,400	$9,583	$8,367

Total Assets	$41,391	$32,173	$28,682

Accounts Payable	$2,540	$2,219	$2,411
Income Taxes Payable	$0	$0	$0
Sales Taxes Payable	$0	$0	$0
Short-Term Debt	$43,820	$28,976	$14,138
Prepaid Revenue
Total Current Liabilities	$46,360	$31,195	$16,549
Long-Term Debt	$12,809	$8,833	$4,695
Long-Term Liabilities	$12,809	$8,833	$4,695

Total Liabilities	$59,169	$40,028	$21,244

Paid-In Capital	$10,000	$10,000	$10,000
Retained Earnings		($27,779)	($17,855)
Earnings	($27,779)	$9,924	$15,293
Total Owner’s Equity	($17,779)	($7,855)	$7,438

Total Liabilities & Equity	$41,391	$32,173	$28,682

Projected Cash Flow Statement

	2020	2021	2022
Net Cash Flow from Operations
Net Profit	($27,779)	$9,924	$15,293
Depreciation & Amortization	$2,600	$2,817	$3,217
Change in Accounts Receivable	($6,563)	$1,278	($834)
Change in Inventory
Change in Accounts Payable	$2,540	($321)	$192
Change in Income Tax Payable	$0	$0	$0
Change in Sales Tax Payable	$0	$0	$0
Change in Prepaid Revenue
Net Cash Flow from Operations	($29,202)	$13,698	$17,867
Investing & Financing
Assets Purchased or Sold	($13,000)	($2,000)	($2,000)
Net Cash from Investing	($13,000)	($2,000)	($2,000)
Investments Received	$10,000
Dividends & Distributions
Change in Short-Term Debt	$43,820	($14,844)	($14,838)
Change in Long-Term Debt	$12,809	($3,976)	($4,138)
Net Cash from Financing	$66,630	($18,820)	($18,976)
Cash at Beginning of Period	$0	$24,428	$17,306
Net Change in Cash	$24,428	($7,122)	($3,109)
Cash at End of Period	$24,428	$17,306	$14,196