Retail Discount Store Business Plan

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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: 

  1. Growth will be moderate; cash flows steady.
  2. Marketing costs will remain below 15% of sales.
  3. The company will invest residual profits into financial markets and not company expansion (unless absolutely necessary).
  4. Future cash investments will use NOV projections to achieve maximum return with limited risk.

Revenue by Month

Chart visualizing the data for Revenue by Month

Expenses by Month

Chart visualizing the data for Expenses by Month

Net Profit (or Loss) by Year

Chart visualizing the data for 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
Gross Margin $191,680 $248,000 $293,600
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
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

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
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
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

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
Investing & Financing
Assets Purchased or Sold
Investments Received
Dividends & Distributions
Change in Short-Term Debt
Change in Long-Term Debt
Cash at Beginning of Period $95,600 $31,275 $102,323
Net Change in Cash ($64,325) $71,048 $127,256
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