Dollar Store
Financial Plan
Forecast
Key Assumptions
The personnel burden is very low because benefits are not paid to part-timers. And the short-term interest rate is extraordinarily low because of Mr. Brinkman’s long-standing relationship with High Desert Credit Union.
Other assumptions:
- Growth will be moderate; cash flows steady.
- Marketing costs will remain below 15% of sales.
- The company will invest residual profits into financial markets and not company expansion (unless absolutely necessary).
- Future cash investments will use NOV projections to achieve maximum return with limited risk.
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Start-up costs will be financed through a combination of owner investment and short-term borrowing. They include starting expenses of $13K and starting assets of
The building will be leased with a down payment of $3,000 on a four year lease. That amount shows up on the balance sheet, at launch, as part of other current assets.
Startup expenses
Our other expenses to get the office open are:
- Legal $300
- Stationery, etc. $200
- Brochures $500
- Marketing consultants $1,000
- Insurance $200
- Rent $3,000
- Building renovations $5,000
- Expensed equipment $1,500
- Other $1,300
Other miscellaneous expenses include:
- Marketing/advertising consultancy fees for assistance in designing our grand-opening ads and brochures.
- Legal fees for corporate organization filings.
- Retail merchandising/designing fees for store layout and minor renovations
TOTAL START-UP EXPENSES $13,000
This amount shows up as -$13,000 in negative retained earnings at launch.
Startup assets:
Startup assets include
- $3K in other current assets for the rent deposit,
- $11.5K in fixtures, shelving, etc.
- $5.5K starting inventory
- $95.6K cash in the bank as reserve.
These show up in the balance sheet at launch.
Sources of Funds
Our sources of funds are:
Ted Brinkman $60,000
Jim Spencer $40,000
Other $20,000
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $479,200 | $620,000 | $734,000 |
| Direct Costs | $287,520 | $372,000 | $440,400 |
| Gross Margin | $191,680 | $248,000 | $293,600 |
| Gross Margin % | 40% | 40% | 40% |
| Operating Expenses | |||
| Salaries & Wages | $72,000 | $73,440 | $74,908 |
| Employee Related Expenses | $14,400 | $14,688 | $14,982 |
| Sales | $4,800 | $4,800 | $4,800 |
| Marketing | $6,456 | $6,456 | $6,456 |
| Rent | $36,000 | $36,000 | $36,000 |
| Utilities | $4,200 | $4,200 | $4,200 |
| Insurance | $3,000 | $3,000 | $3,000 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $140,856 | $142,584 | $144,346 |
| Operating Income | $50,824 | $105,416 | $149,254 |
| Interest Incurred | |||
| Depreciation and Amortization | $1,140 | $1,140 | $1,140 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $7,453 | $15,641 | $22,217 |
| Total Expenses | $436,969 | $531,365 | $608,103 |
| Net Profit | $42,231 | $88,635 | $125,897 |
| Net Profit/Sales | 9% | 14% | 17% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $95,600 | $31,275 | $102,323 | $229,579 |
| Accounts Receivable | $8,325 | $7,750 | $9,175 | |
| Inventory | $5,500 | $124,000 | $146,800 | $146,801 |
| Other Current Assets | $3,000 | $3,000 | $3,000 | $3,000 |
| Total Current Assets | $104,100 | $166,600 | $259,873 | $388,555 |
| Long-Term Assets | $11,400 | $11,400 | $11,400 | $11,400 |
| Accumulated Depreciation | ($1,140) | ($2,280) | ($3,420) | |
| Total Long-Term Assets | $11,400 | $10,260 | $9,120 | $7,980 |
| Total Assets | $115,500 | $176,860 | $268,993 | $396,535 |
| Accounts Payable | $8,500 | $23,455 | $27,217 | $27,217 |
| Income Taxes Payable | $4,174 | $3,910 | $5,554 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | ||||
| Prepaid Revenue | ||||
| Total Current Liabilities | $8,500 | $27,629 | $31,127 | $32,771 |
| Long-Term Debt | ||||
| Long-Term Liabilities | ||||
| Total Liabilities | $8,500 | $27,629 | $31,127 | $32,771 |
| Paid-In Capital | $120,000 | $120,000 | $120,000 | $120,000 |
| Retained Earnings | ($13,000) | ($13,000) | $29,231 | $117,866 |
| Earnings | $42,231 | $88,635 | $125,897 | |
| Total Owner’s Equity | $107,000 | $149,231 | $237,866 | $363,763 |
| Total Liabilities & Equity | $115,500 | $176,860 | $268,993 | $396,535 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $42,231 | $88,635 | $125,897 |
| Depreciation & Amortization | $1,140 | $1,140 | $1,140 |
| Change in Accounts Receivable | ($8,325) | $575 | ($1,425) |
| Change in Inventory | ($118,500) | ($22,801) | ($1) |
| Change in Accounts Payable | $14,955 | $3,762 | $0 |
| Change in Income Tax Payable | $4,174 | ($264) | $1,644 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | ($64,325) | $71,048 | $127,256 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | |||
| Change in Long-Term Debt | |||
| Net Cash from Financing | |||
| Cash at Beginning of Period | $95,600 | $31,275 | $102,323 |
| Net Change in Cash | ($64,325) | $71,048 | $127,256 |
| Cash at End of Period | $31,275 | $102,323 | $229,579 |
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