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Pizzeria del Causamali

Executive Summary

Pizzeria del Causamali is a new player in the restaurant industry.  The restaurant is in a comfortable, familiar, small town that has a strong need for additional dining options.  Bolstered by the need for more choices in family-oriented dining experiences, combined with the option for home-delivery, the restaurant is positioned to take advantage of the market need and serve the families in the Deauville area.

The Deauville’s population is rapidly growing with new subdivisions and young families moving to the rural suburb of the Hewgton area.  It is Pizzeria del Causamali’s strategy to exploit the first-mover opportunity and establish itself as the preferred pizza provider to the area.  We believe a locally-owned restaurant is the best option to serve the rapidly growing population with a fresh, unique menu as opposed to a national chain franchise.

This business plan calls for an exciting, profitable start-up year ahead with future forecasted growth as we meet the demands of the community.  In all, this plan describes a healthy company with good growth prospects, looking to manage its orderly growth in the near future.

Pizzeria business plan, executive summary chart image

1.1 Mission

Pizzeria del Causamali creates a friendly and pleasant atmosphere for customers in a well-designed, and productive environment in which people can work happily.  We are sensitive to the look and taste of good pizza as well as to high-quality ingredients.  We look to provide the best possible value to our customers who desire great tasting pizza and to provide customers with the satisfaction of receiving a great value, both tangibly and intangibly.  Additionally, we are the first home-deliverer of pizzas in our area. 

Our customers are our neighbors as we are residents of our market area.  We will also create and nurture a healthy, creative, respectful, and fun working environment, in which our employees are fairly compensated and encouraged to respect the customer and the quality of the product we produce.  We seek fair and responsible profit, enough to keep the company financially healthy for the long term and to fairly compensate owners and investors for their investment and risk.

1.2 Keys to Success

The keys to success in this business are:

  • Delivering the customer value proposition. 
  • Marketing: promoting a new company, product, and delivery channels to a rural community. 
  • Product quality and consistency. 
  • Pricing effectively with respect to the project quality and customer value proposition.
  • Family-oriented atmosphere with occasional nights of family entertainment.
  • Management: products delivered on time, costs controlled, marketing budgets managed.  There is a temptation to fixate on growth at the expense of profits.
  • Reporting and controls in place for inventory and financials.

1.3 Objectives

The objectives for Pizzeria del Causamali are:

  • To establish the market presence needed to support marketing and sales goals and to attract customers. 
  • To reach healthy monthly sales by the end of the year, and average monthly sales increasing modestly by steadily through Year 3. 
  • To achieve double digit profit margins. 
  • To develop top-rated relationships with 2-4 well-respected, all encompassing distributors.
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Company Summary

Pizzeria del Causamali is a privately-owned pizza restaurant offering a product menu that does not currently exist in the area and first to offer home delivery.  Our customers are many of the young families and students in the area.

2.1 Company Ownership

Pizzeria del Causamali will be established as a limited liability company (LLC) with Marion E. and Marianne K. Bruxellesprot as the sole owners.

2.2 Start-up Summary

Our start-up costs cover the renovation of the occupied store space, professional fees, and expenses associated with opening our first location.  The start-up costs are to be financed by direct owner investment, financial institutions, and private investors.  The assumptions are shown in the following table and illustration.

Pizzeria business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Professional Fees (Legal, Accounting, Consulting) $1,800
Placemats, Stationery, Business Cards $1,100
Renovation $8,300
Marketing $2,500
Rent $2,000
Expensed Equipment $5,000
Insurance $350
Website Development $1,000
Misc Expense $3,800
Total Start-up Expenses $25,850
Start-up Assets
Cash Required $23,100
Start-up Inventory $6,000
Other Current Assets $5,250
Long-term Assets $20,300
Total Assets $54,650
Total Requirements $80,500
Start-up Funding
Start-up Expenses to Fund $25,850
Start-up Assets to Fund $54,650
Total Funding Required $80,500
Assets
Non-cash Assets from Start-up $31,550
Cash Requirements from Start-up $23,100
Additional Cash Raised $0
Cash Balance on Starting Date $23,100
Total Assets $54,650
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $25,000
Accounts Payable (Outstanding Bills) $9,500
Other Current Liabilities (interest-free) $0
Total Liabilities $34,500
Capital
Planned Investment
Investor 1 $15,000
Owners $30,000
Additional Investment Requirement $1,000
Total Planned Investment $46,000
Loss at Start-up (Start-up Expenses) ($25,850)
Total Capital $20,150
Total Capital and Liabilities $54,650
Total Funding $80,500

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Services

Pizzeria del Causamali offers high quality pizza to a growing community that currently has limited availability of restaurants and no availability to delivery.  At start up we will be open for dinner 4 p.m. to 10 p.m. Sunday – Thursday and 3 p.m. to 11 p.m. Friday and Saturday.  We will consider opening earlier and serving lunch if there is a demand, and if forecast and financial analysis can justify the increased costs.

Our menu will include 4 sizes of pizzas with various combinations of toppings.  Predefined, high-margin pizzas will be highlighted on the menu.  Additionally, breadsticks, beer, and soda will be included in the initial menu offerings.

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Market Analysis Summary

Our primary target market is people who desire a comfortable, family-oriented environment for dine-in pizza.  Our secondary target market also desires a delivery service for pizza, or a take-out approach.  There is overlap of these segments.

Deauville and its surrounding communities are a growing middle-class area with nearly 14,000 residents.  A majority of these residents are families of four or more.  The boom in the area is primarily in response to an exodus of families moving out of the over-populated areas and into a more rural setting. 

According to a Growth Plan Deauville conducted in 2001, population within Deauville is expected to increase.  However, the number of persons per household is expected to decline, meaning the need for additional housing in Deauville will continue to grow.  From the same plan, population is listed as being evenly distributed by age groupings, with approximately 33% of the population being minors.  Another 40% are less than 54 years of age, indicating a major concentration of the Deauville population being families.  The report forecasts there being nearly 1,900 households in the Deauville by 2005.  This is driving the need for more quality, family-oriented restaurants.

Additionally, Deauville residents frequently visit the building in which Pizzeria del Causamali is located. Tanning and video rental businesses are adjacent to the restaurant, so we are providing a new convenience for families to select a movie and pick up a pizza.

With the expected continued growth in the area, estimated at 7% annually, opportunities to serve Deauville and its surrounding communities will increase.  The company will sell predominantly to individuals, but it will also accept some catering jobs to individual parties, schools, and company functions in the Deauville area.

4.1 Market Segmentation

Those residents of neighboring communities of Deauville, including Doughbuoy, d’Ohtown, and Doe Valley are included in the Market Segmentation.  Only those residents of Deauville are included in the delivery, as delivery radius is limited to a 5-mile radius in the city of Deauville.  An estimated 53% of Deauville residents live within the Sanitary District, or within this 5-mile radius.

Pizzeria business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Dine-In or Take-Out 7% 13,860 14,830 15,868 16,979 18,168 7.00%
Delivery 7% 5,000 5,350 5,725 6,126 6,555 7.00%
Total 7.00% 18,860 20,180 21,593 23,105 24,723 7.00%

4.2 Target Market Segment Strategy

Including Deauville and its surrounding areas, no pizza establishments exist.  In Deauville one to two restaurants serve pizza, but not as a primary menu item.  These pizza outlets are in taverns which are not conducive to family-type atmosphere.  No eating establishments in the Deauville area provide home-delivery service.

4.3 Service Business Analysis

Other family-oriented restaurants in the area include:  Subway(R), What’s Cookin’ diner, and Colonial House supper club.  Subway serves sandwiches, wraps, and salads, none of which are direct competition to the pizza establishment.  The diner is open until 2 p.m. each day and focuses on the breakfast crowd, with a limited sandwich availability for lunch.  The supper club has a Chicken and Pizza buffet once a week for approximately $6; the pizza served as part of the buffet are frozen pizzas.

Other restaurants in Deauville are taverns and are not conducive to family activities.  One of the bars in Deauville serves a homemade pizza.

In conversations with an independent pizza operator in Lakeshore Haven, an hour’s drive away, he indicated pizza sales in his community are thriving despite competition from 4 other pizza establishments, including Pizza Hut(R).  While exact figures were not shared, he indicated a high level of penetration into the pizza market in his area with profitable margins.  He also provided suggestions and tips to minimize costs, and components of his restaurant he would do differently, including payroll handling, vendors, and layout. 

4.3.1 Competition and Buying Patterns

There is minimal competition for pizza in the Deauville area, besides the bar establishments previously mentioned.  The closest locales for pizza to the Deauville area are Bolingbrooke, Avro, and de Havilland.  None of these competing pizza locations deliver to the Deauville area.  Additionally, Pizzeria del Causamali would be the only family-oriented, non-smoking restaurant in Deauville.

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Strategy and Implementation Summary

Our strategy is based on delivering a strong customer value proposition in a niche market.  The world is full of small, family-oriented towns that do not have endless opportunities for dining out.  We are looking to offer the Deauville and its surrounding areas a new choice in food options. 

Also:

  • What begins as a need to satisfy a need in the community, can eventually turn into a mainstay in the small town community. 
  • We are building our marketing infrastructure so that we can eventually reach additional towns with the same offering. 
  • We focus on satisfying the needs of small towns. 

5.1 Competitive Edge

Our competitive edge is to be first-to-the-market with pizza in a friendly, non-smoking, family-oriented dine-in experience, and first-to-the-area with food delivery.

Additionally, the location of Pizzeria del Causamali is crucial as a convenience model to customers.  Deauville residents frequent the video rental store adjacent to the restaurant.  This location is directly in the center of activity in this rural community–it is within walking distance of the middle and high schools, the local church, and within 2 miles of the existing large subdivisions and apartment complexes in the area.

5.2 Marketing Strategy

To drive customers to Pizzeria del Causamali, we will employ several techniques outlined below.

Advertising in Bolingbrooke Postde Havilland Buyer’s GuideDeauville Register, and Deauville Shopping News will be used to promote the Grand Opening of Pizzeria del Causamali.  As part of the advertising, a coupon will be available to customers.  Intermittent newspaper advertisements will continue throughout the year to promote upcoming events.  Most initiatives will focus on the local Deauville papers as the target of these papers is specifically the Deauville residents.  Additional marketing efforts will come in the form of on-box coupons for future purchases.

Additionally, family-oriented events will be hosted by Pizzeria del Causamali to attract customers such as trivia nights, birthday parties, and prize giveaways.  Frequent buyer cards will be employed to entice repeat customers.  Pizzeria del Causamali will also sponsor a local Little League baseball team, and a bowling team to publicize the restaurant within the community events.

Future plans of working in coordination with the adjacent video store to offer “bundle savings” if both pizza and video rentals are purchased will be pursued within the second year of operation.

5.3 Sales Strategy

The Deauville area has expressed its need for additional restaurants, specifically a desire for pizza.  Because of this, there is pent-up demand for pizza in this area.  We will expect a high rate of sales growth within the first 3 months as this customer desire is met.

For the next year, we continue to focus on a growing presence in the community and advertising heavily throughout the community.  As a major convention center and water park open in nearby Fairchild, we will focus our attention on becoming the recognized provider of pizza to that establishment.

5.3.1 Sales Forecast

Our sales forecast assumes a modest change in annual costs to accommodate new entry into the market. 

We are expecting to increase sales modestly but steadily over the next year, which is a respectable growth rate.  The growth forecast is assumed given this is a new product for the area using new channels of availability.  We are not projecting significant change in the product line, or in the proportion between different lines. 

Based on industry averages and the absence of competition for pizza in the Deauville area, we are predicting an average of 25 pizzas sold each week night (Sunday – Wednesday).  On the weekends (Thursday – Saturday), we are estimating 40 pizzas are sold each day.  Of those pizzas ordered, we are expecting approximately 1/3 to be dine-in customers.  Those customers dining in will most likely order drinks and/or beer (on average 4 for each family).  Additionally, we are estimating that approximately one-third of the pizza orders will be accompanied by an order for breadsticks.  Our estimated average prices for each item are as follows:

  • Pizza:  $12
  • Breadsticks:  $2.50
  • Beer:  $2.50/pint
  • Drinks:  $1.70 refillable
Pizzeria business plan, strategy and implementation summary chart image

Pizzeria business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Pizza $133,900 $143,808 $153,875
Breadsticks $18,667 $19,973 $21,371
Beer $37,333 $39,947 $42,743
Drinks $50,773 $54,327 $58,130
Total Sales $240,673 $258,055 $276,120
Direct Cost of Sales Year 1 Year 2 Year 3
Pizza $42,848 $44,990 $47,240
Breadsticks $3,733 $3,920 $4,116
Beer $7,467 $7,840 $8,232
Drinks $2,539 $2,666 $2,799
Subtotal Direct Cost of Sales $56,587 $59,416 $62,387

5.4 Milestones

The following table lists important program milestones, with dates and managers in charge, and budgets for each.  The milestone schedule indicates our emphasis on planning for implementation. 

Pizzeria business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 1/8/2004 1/31/2004 $0 Marianne Bruxellesprot Management
Secure Start-up Funding 2/1/2004 3/1/2004 $0 Marianne Bruxellesprot Management
Site Selection 1/8/2004 2/1/2004 $0 Marion Bruxellesprot Operations
Architect Designs/Redesign 2/15/2004 3/1/2004 $500 Marion Bruxellesprot Operations
Technology Design 3/15/2004 4/1/2004 $5,000 Marianne Bruxellesprot Technical
Personnel Plan 3/1/2004 3/15/2004 $0 Marianne Bruxellesprot Management
Accounting Plan 3/1/2004 3/31/2004 $400 Marianne Bruxellesprot Management
Renovation 4/1/2004 5/15/2004 $7,800 Marion Bruxellesprot Operations
Equipment Installation 5/1/2004 5/15/2004 $2,000 Marion Bruxellesprot Operations
Marketing Plans 3/4/2004 4/30/2004 $2,500 Marianne Bruxellesprot Marketing
Grand Opening 5/1/2004 5/15/2004 $2,500 Marianne Bruxellesprot Marketing
Totals $20,700

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Web Plan Summary

The Pizzeria del Causamali website will be the virtual business card and portfolio for the company, as well as its online “home.”  It will showcase the history, product information, and offers for Pizzeria del Causamali.  Special online-only offers will be made available on the website, along with customer’s opportunity to sign-up for email news and offers. 

The Pizzeria del Causamali website needs to be a simple yet classy and well designed website that, at the same time, is in keeping with the latest trends in user interface design.  Customers will be coming to the site for product information, history, and offers. 

Future elements of the site can contain online ordering, if customers express an interest in this functionality.

6.1 Website Marketing Strategy

Our Internet marketing activities will be focused on product information and offers.  Future opportunities exist in offering online ordering.

6.2 Development Requirements

The Pizzeria del Causamali website will be initially developed with few technical resources.  A simple hosting provider, Yahoo! Web services, will host the site and provide the technical back end.  The owner’s expertise in professional Web development will lead this effort. 

The user interface designer will work with a graphic artist to come up with the website logo, and the website graphics. 

The maintenance of the site will be done by the owners.  If the website rolls out future development such as newsletters and online ordering, the internal staff at Pizzeria del Causamali will design, implement, and execute the technology.

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Management Summary

We are a small company owned and operated by Marion and Marianne Bruxellesprot, husband and wife, as a partnership.  Management style reflects the participation of the owners.  The company respects its community of co-workers and treats all workers well. 

Marianne Bruxellesprot is a 1998 graduate of University School of Business with High Honors and Distinction in Business.  Her experience with general business, technology, and operations is a great asset to this venture. 

Additionally, Otho Colderobby is an advisor to the owners.  Otho is a 1991 graduate of State College with a degree in Economics.  Furthermore, Otho graduated in 1995 with a Masters in Business Administration from University School of Business with emphases in Marketing and Finance.  Otho held a senior finance management position with Frito Lay for 5 years.  Otho is currently a managing consultant with a marketing strategy firm.  He also spent 5 years in a strategic services consulting practice.

7.1 Personnel Plan

The personnel table assumes a level need of employees, and 5% per annum pay raises.  Staffing for a 7-day a week restaurant necessitates two shifts.  In addition to the hours open for serving we anticipate an additional hour before opening for prep and as much as an hour after closing for cleanup.  This is approximately 8 hours of staffing necessary Sunday – Thursday and 10 hours on both Friday and Saturday.

The two kitchen lead positions are part-time, earning $9/hr.  The kitchen leads will serve as the shift leaders of the kitchen/wait staff.  Kitchen staff will serve as the wait staff.  There will be one dedicated dishwashing position per shift.  Wages for kitchen/wait staff, dishwashers, and delivery drivers, who are all part-time, are $6/hr, with opportunities for all to share the combined earn tips.  It is imperative the people serving as the kitchen lead are over 21 and can legally serve alcohol.

Hourly part-time positions as kitchen/wait, dishwashing, and delivery staff average out to be approximately 30 hours per week each.  Delivery staff will work 5 hour shifts each night, with an extra delivery staff member added on Thursdays, Fridays, and Saturdays.  During the week if this person is not delivering, they will work in the kitchen as needed, directed by the kitchen lead.

Personnel Plan
Year 1 Year 2 Year 3
Kitchen Leads $28,080 $29,484 $30,958
Kitchen/Wait $37,440 $39,312 $41,278
Dishwasher $15,600 $16,380 $17,199
Owner $9,000 $9,450 $9,923
Delivery $15,600 $16,380 $17,199
Total People 12 12 12
Total Payroll $105,720 $111,006 $116,556

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Financial Plan

The financial picture is quite encouraging.  We will be slow to take on debt and heavily investing our own assets, but with our increase in sales we do expect to apply for a credit line with the bank, to a limit of $50,000.  The credit line is supported by assets.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table.  The key underlying assumptions are:

  • We assume a fairly high-growth economy for pizza in the Deauville area, given the lack of competition and interest in having a pizza restaurant available in the area and pent-up demand. 
  • We assume, of course, that there are no unforeseen changes in technology to make our products immediately obsolete. 
  • We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 6.00% 6.00% 6.00%
Long-term Interest Rate 5.00% 5.00% 5.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

Our break-even analysis is based on running costs, the “burn-rate” costs we incur to keep the business running, not on theoretical fixed costs that would be relevant only if we were closing. The essential insight here is that our sales level seems to be running comfortably above break-even. 

Pizzeria business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $16,283
Assumptions:
Average Percent Variable Cost 24%
Estimated Monthly Fixed Cost $12,454

8.3 Projected Profit and Loss

We expect to be profitable in the first year, with profits increasing over the next two years, as we establish a loyal customer base.

Pizzeria business plan, financial plan chart image

Pizzeria business plan, financial plan chart image

Pizzeria business plan, financial plan chart image

Pizzeria business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $240,673 $258,055 $276,120
Direct Cost of Sales $56,587 $59,416 $62,387
Other Costs of Goods $0 $0 $0
Total Cost of Sales $56,587 $59,416 $62,387
Gross Margin $184,087 $198,639 $213,733
Gross Margin % 76.49% 76.98% 77.41%
Expenses
Payroll $105,720 $111,006 $116,556
Sales and Marketing and Other Expenses $7,250 $7,250 $7,500
Depreciation $2,040 $1,836 $1,652
Rent $14,400 $14,400 $14,400
Utilities $7,200 $7,200 $7,200
Insurance $4,200 $4,500 $4,800
Payroll Taxes $8,042 $8,444 $8,866
Website Hosting and Maintenance $600 $50 $50
Other $0 $0 $0
Total Operating Expenses $149,452 $154,686 $161,024
Profit Before Interest and Taxes $34,635 $43,954 $52,709
EBITDA $36,675 $45,790 $54,361
Interest Expense $1,088 $700 $225
Taxes Incurred $10,064 $12,976 $15,745
Net Profit $23,483 $30,278 $36,739
Net Profit/Sales 9.76% 11.73% 13.31%

8.4 Projected Cash Flow

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

Pizzeria business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $240,673 $258,055 $276,120
Subtotal Cash from Operations $240,673 $258,055 $276,120
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 $240,673 $258,055 $276,120
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $105,720 $111,006 $116,556
Bill Payments $105,383 $114,835 $120,750
Subtotal Spent on Operations $211,103 $225,841 $237,306
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 $6,000 $10,000 $9,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $217,103 $235,841 $246,306
Net Cash Flow $23,570 $22,214 $29,813
Cash Balance $46,670 $68,884 $98,698

8.5 Projected Balance Sheet

As shown in the balance sheet in the following table, we expect a healthy growth in net worth.  The monthly projections are in the appendices. 

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $46,670 $68,884 $98,698
Inventory $1,720 $1,806 $1,896
Other Current Assets $5,250 $5,250 $5,250
Total Current Assets $53,640 $75,940 $105,844
Long-term Assets
Long-term Assets $20,300 $20,300 $20,300
Accumulated Depreciation $2,040 $3,876 $5,528
Total Long-term Assets $18,260 $16,424 $14,772
Total Assets $71,900 $92,364 $120,616
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $9,267 $9,454 $9,967
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,267 $9,454 $9,967
Long-term Liabilities $19,000 $9,000 $0
Total Liabilities $28,267 $18,454 $9,967
Paid-in Capital $46,000 $46,000 $46,000
Retained Earnings ($25,850) ($2,367) $27,911
Earnings $23,483 $30,278 $36,739
Total Capital $43,633 $73,911 $110,649
Total Liabilities and Capital $71,900 $92,364 $120,616
Net Worth $43,633 $73,911 $110,649

8.6 Business Ratios

Standard business ratios are included in the following table.  Industry profile ratios are shown for comparison, and are based on Standard Industrial Classification (SIC) code 5812.0600, Pizza Restaurants.  The ratios show a plan for balanced, healthy growth.  Our return on sales and return on assets remain strong in percentage terms. 

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 7.22% 7.00% 5.24%
Percent of Total Assets
Inventory 2.39% 1.96% 1.57% 3.54%
Other Current Assets 7.30% 5.68% 4.35% 34.82%
Total Current Assets 74.60% 82.22% 87.75% 43.85%
Long-term Assets 25.40% 17.78% 12.25% 56.15%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 12.89% 10.24% 8.26% 20.80%
Long-term Liabilities 26.43% 9.74% 0.00% 28.42%
Total Liabilities 39.31% 19.98% 8.26% 49.22%
Net Worth 60.69% 80.02% 91.74% 50.78%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 76.49% 76.98% 77.41% 61.18%
Selling, General & Administrative Expenses 39.83% 39.27% 38.77% 38.56%
Advertising Expenses 0.00% 0.00% 0.00% 2.28%
Profit Before Interest and Taxes 14.39% 17.03% 19.09% 1.44%
Main Ratios
Current 5.79 8.03 10.62 0.99
Quick 5.60 7.84 10.43 0.67
Total Debt to Total Assets 39.31% 19.98% 8.26% 52.80%
Pre-tax Return on Net Worth 76.88% 58.52% 47.43% 2.77%
Pre-tax Return on Assets 46.66% 46.83% 43.51% 5.88%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 9.76% 11.73% 13.31% n.a
Return on Equity 53.82% 40.97% 33.20% n.a
Activity Ratios
Inventory Turnover 31.29 33.70 33.70 n.a
Accounts Payable Turnover 11.35 12.17 12.17 n.a
Payment Days 30 30 29 n.a
Total Asset Turnover 3.35 2.79 2.29 n.a
Debt Ratios
Debt to Net Worth 0.65 0.25 0.09 n.a
Current Liab. to Liab. 0.33 0.51 1.00 n.a
Liquidity Ratios
Net Working Capital $44,373 $66,487 $95,877 n.a
Interest Coverage 31.85 62.79 234.26 n.a
Additional Ratios
Assets to Sales 0.30 0.36 0.44 n.a
Current Debt/Total Assets 13% 10% 8% n.a
Acid Test 5.60 7.84 10.43 n.a
Sales/Net Worth 5.52 3.49 2.50 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
Sales
Pizza 0% $7,200 $12,600 $11,160 $12,000 $11,460 $11,340 $11,820 $11,160 $11,320 $11,640 $10,560 $11,640
Breadsticks 0% $1,000 $1,750 $1,550 $1,667 $1,592 $1,575 $1,642 $1,550 $1,642 $1,617 $1,467 $1,617
Beer 0% $2,000 $3,500 $3,100 $3,333 $3,183 $3,150 $3,283 $3,100 $3,283 $3,233 $2,933 $3,233
Drinks 0% $2,720 $4,760 $4,216 $4,533 $4,329 $4,284 $4,465 $4,216 $4,465 $4,397 $3,989 $4,397
Total Sales $12,920 $22,610 $20,026 $21,533 $20,564 $20,349 $21,210 $20,026 $20,710 $20,887 $18,949 $20,887
Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Pizza 32% $2,304 $4,032 $3,571 $3,840 $3,667 $3,629 $3,782 $3,571 $3,622 $3,725 $3,379 $3,725
Breadsticks 20% $200 $350 $310 $333 $318 $315 $328 $310 $328 $323 $293 $323
Beer 20% $400 $700 $620 $667 $637 $630 $657 $620 $657 $647 $587 $647
Drinks 5% $136 $238 $211 $227 $216 $214 $223 $211 $223 $220 $199 $220
Subtotal Direct Cost of Sales $3,040 $5,320 $4,712 $5,067 $4,839 $4,788 $4,991 $4,712 $4,831 $4,915 $4,459 $4,915
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
Kitchen Leads 0% $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340 $2,340
Kitchen/Wait 0% $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120 $3,120
Dishwasher 0% $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300
Owner 0% $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Delivery 0% $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300
Total People 12 12 12 12 12 12 12 12 12 12 12 12
Total Payroll $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810

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 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00% 6.00%
Long-term Interest Rate 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00% 5.00%
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
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 $12,920 $22,610 $20,026 $21,533 $20,564 $20,349 $21,210 $20,026 $20,710 $20,887 $18,949 $20,887
Direct Cost of Sales $3,040 $5,320 $4,712 $5,067 $4,839 $4,788 $4,991 $4,712 $4,831 $4,915 $4,459 $4,915
Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $3,040 $5,320 $4,712 $5,067 $4,839 $4,788 $4,991 $4,712 $4,831 $4,915 $4,459 $4,915
Gross Margin $9,880 $17,290 $15,314 $16,467 $15,726 $15,561 $16,220 $15,314 $15,880 $15,973 $14,491 $15,973
Gross Margin % 76.47% 76.47% 76.47% 76.47% 76.47% 76.47% 76.47% 76.47% 76.68% 76.47% 76.47% 76.47%
Expenses
Payroll $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810
Sales and Marketing and Other Expenses $500 $750 $750 $750 $750 $750 $750 $750 $250 $250 $500 $500
Depreciation $170 $170 $170 $170 $170 $170 $170 $170 $170 $170 $170 $170
Rent $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Utilities $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Insurance $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
Payroll Taxes 15% $670 $670 $670 $670 $670 $670 $670 $670 $670 $670 $670 $670
Website Hosting and Maintenance 15% $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $12,350 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,100 $12,100 $12,350 $12,350
Profit Before Interest and Taxes ($2,470) $4,690 $2,714 $3,866 $3,125 $2,961 $3,619 $2,714 $3,779 $3,872 $2,140 $3,622
EBITDA ($2,300) $4,860 $2,884 $4,036 $3,295 $3,131 $3,789 $2,884 $3,949 $4,042 $2,310 $3,792
Interest Expense $102 $100 $98 $96 $94 $92 $90 $88 $85 $83 $81 $79
Taxes Incurred ($772) $1,377 $785 $1,131 $910 $861 $1,059 $788 $1,108 $1,137 $618 $1,063
Net Profit ($1,801) $3,213 $1,831 $2,639 $2,122 $2,008 $2,471 $1,838 $2,586 $2,652 $1,441 $2,480
Net Profit/Sales -13.94% 14.21% 9.14% 12.26% 10.32% 9.87% 11.65% 9.18% 12.49% 12.70% 7.61% 11.87%

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 $12,920 $22,610 $20,026 $21,533 $20,564 $20,349 $21,210 $20,026 $20,710 $20,887 $18,949 $20,887
Subtotal Cash from Operations $12,920 $22,610 $20,026 $21,533 $20,564 $20,349 $21,210 $20,026 $20,710 $20,887 $18,949 $20,887
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 $12,920 $22,610 $20,026 $21,533 $20,564 $20,349 $21,210 $20,026 $20,710 $20,887 $18,949 $20,887
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 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810 $8,810
Bill Payments $9,590 $2,921 $9,309 $9,037 $10,016 $9,381 $9,359 $9,806 $9,113 $9,189 $9,254 $8,409
Subtotal Spent on Operations $18,400 $11,731 $18,119 $17,847 $18,826 $18,191 $18,169 $18,616 $17,923 $17,999 $18,064 $17,219
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 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $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 $18,900 $12,231 $18,619 $18,347 $19,326 $18,691 $18,669 $19,116 $18,423 $18,499 $18,564 $17,719
Net Cash Flow ($5,980) $10,379 $1,407 $3,187 $1,238 $1,658 $2,541 $910 $2,288 $2,388 $386 $3,168
Cash Balance $17,120 $27,499 $28,906 $32,093 $33,331 $34,989 $37,530 $38,440 $40,728 $43,116 $43,501 $46,670
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 $23,100 $17,120 $27,499 $28,906 $32,093 $33,331 $34,989 $37,530 $38,440 $40,728 $43,116 $43,501 $46,670
Inventory $6,000 $2,960 $1,862 $1,649 $1,773 $1,694 $1,676 $1,747 $1,649 $1,691 $1,720 $1,561 $1,720
Other Current Assets $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250 $5,250
Total Current Assets $34,350 $25,330 $34,611 $35,805 $39,116 $40,275 $41,915 $44,527 $45,339 $47,669 $50,086 $50,312 $53,640
Long-term Assets
Long-term Assets $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300 $20,300
Accumulated Depreciation $0 $170 $340 $510 $680 $850 $1,020 $1,190 $1,360 $1,530 $1,700 $1,870 $2,040
Total Long-term Assets $20,300 $20,130 $19,960 $19,790 $19,620 $19,450 $19,280 $19,110 $18,940 $18,770 $18,600 $18,430 $18,260
Total Assets $54,650 $45,460 $54,571 $55,595 $58,736 $59,725 $61,195 $63,637 $64,279 $66,439 $68,686 $68,742 $71,900
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 $9,500 $2,611 $9,008 $8,702 $9,703 $9,070 $9,031 $9,503 $8,806 $8,880 $8,975 $8,089 $9,267
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 $9,500 $2,611 $9,008 $8,702 $9,703 $9,070 $9,031 $9,503 $8,806 $8,880 $8,975 $8,089 $9,267
Long-term Liabilities $25,000 $24,500 $24,000 $23,500 $23,000 $22,500 $22,000 $21,500 $21,000 $20,500 $20,000 $19,500 $19,000
Total Liabilities $34,500 $27,111 $33,008 $32,202 $32,703 $31,570 $31,031 $31,003 $29,806 $29,380 $28,975 $27,589 $28,267
Paid-in Capital $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000 $46,000
Retained Earnings ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850) ($25,850)
Earnings $0 ($1,801) $1,412 $3,243 $5,883 $8,005 $10,014 $12,484 $14,323 $16,909 $19,561 $21,003 $23,483
Total Capital $20,150 $18,349 $21,562 $23,393 $26,033 $28,155 $30,164 $32,634 $34,473 $37,059 $39,711 $41,153 $43,633
Total Liabilities and Capital $54,650 $45,460 $54,571 $55,595 $58,736 $59,725 $61,195 $63,637 $64,279 $66,439 $68,686 $68,742 $71,900
Net Worth $20,150 $18,349 $21,562 $23,393 $26,033 $28,155 $30,164 $32,634 $34,473 $37,059 $39,711 $41,153 $43,633

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