Barney’s Bullpen is a for-profit corporation in North Dakota. We will lease a 15,000 square/ft. facility to offer a central, indoor location for guests to practice baseball and softball skills. The facility will include batting cages, pitching areas, team skills areas, meeting area, equipment rental, & rest area. In addition, Barney’s Bullpen will offer group coaching clinics and one-on-one skills training, as well as facilitate youth league board meetings.
Youth baseball and softball programs have significantly increased in popularity in the past decade. Facilities offering similar amenities draw guests from up to 40 miles away, as long as they provide a safe, clean, state-of-the-art environment for honing skills. Within a 20 mile radius of the proposed facility, there are over 4,000 children in little league baseball, 2,000 in girls softball, 2,500 in adult softball, 300 in High school Baseball/Softball, and 4 colleges. All of these could be regular customers for Barney’s Bullpen.
Parents want to give their children an advantage in organized sports activities. Group coaching alone is not enough to develop the skills required to play at an above average level in baseball and softball. Private coaches and skill trainers are fully booked by eager parents seeking one-on-one training for their child. “Select” baseball and softball leagues are growing in popularity, and advanced skills training is a requirement for participation. This indoor facility will cater to the increasing need for individualized skills training year-round.
Barney’s Bullpen currently has little to no competition in the service area. There is one outdoor batting cage facility located in Cedar Hill, approximately 10 miles away. This facility is closed during inclement weather and has limited utilization during the summer. The next closest facility is in Euless, 20 miles from Duncanville and 40 miles from Waxahatchie. This business was opened two years ago by two youth league coaches who recognized a need for this type of facility. From our personal experience, we found that a two-hour wait was common on winter weekends without reservations. Weeknights did not require reservations for the batting cages, but one-hour waits were common. The team skills areas do require reservations. The indoor competition is open for 53 hours a week, while the outdoor facility has a potential of 50 plus hours a week, depending on weather.
Barney’s Bullpen will provide a quality indoor baseball training environment for committed athletes and amateurs alike. We project 20% facility usage for the first year, with a 25% growth rate in the second year. Barney’s Bullpen is positioned to thrive in the growing sports environment of the Best Southwest area of Dallas county.
1.1 Mission: Barney’s Bullpen will provide a quality indoor baseball training environment for both serious and recreation-minded individuals. The primary goal is to promote baseball fundamentals for all ages, generating a positive revenue stream for continued growth.
1.2 Objectives:
1. Barney’s Bullpen will begin operations in the spring.
2. In the first year, we expect 20% facility usage.
3. For the second year, we project a 25% growth rate.
4. In the third year, we anticipate matching the community growth rate of 15%.
1.3 Keys to Success:
1. Great location.
2. High quality customer service.
3. Contracts with skilled local baseball instructors.
4. Multiple options under one roof to keep customers engaged.
Barney’s Bullpen is a for-profit North Dakota corporation. We will lease a 15,000 square/ft. facility where guests can learn and practice baseball and softball skills. The facility will include batting cages, pitching areas, team skills areas, meeting area, equipment rental, and a rest area. In addition, Barney’s Bullpen will offer group coaching clinics, one-on-one skills training, and youth league board meetings.
Youth baseball and softball programs have become increasingly popular. Facilities with similar amenities draw guests up to 40 miles away if they provide a safe, clean, state-of-the-art facility for honing skills. Within a 20 mile radius, there are 4,000+ children in little league baseball, 2000+ in girls softball, 2500+ in adult softball, 300+ in high school baseball/softball, and 4 colleges. These are potential customers for Barney’s Bullpen.
Parents want to give their children an advantage in organized sports activities. Group coaching is not enough to develop above-average skills for baseball and softball. Private coaches and trainers are fully booked by parents seeking one-on-one training. "Select" baseball and softball leagues require advanced skills training. This indoor facility caters to the increasing need for individualized year-round training.
Barney’s Bullpen has little to no competition in the service area. The closest facility is in Cedar Hill, approximately 10 miles away. This facility is closed during inclement weather and has limited utilization in the summer. The next closest facility is in Euless, 20 miles from Duncanville and 40 miles from Waxahatchie. A two-hour wait is common on winter weekends without reservations. Weeknights require no reservations for the batting cages, but one-hour waits are common. Team skill areas require reservations. The indoor facility is open for 53 hours a week, while the outdoor facility is open potentially for over 50 hours a week, depending on weather.
Barney’s Bullpen will provide a quality indoor baseball training environment for serious athletes and amateur enthusiasts. We project a conservative facility usage of 20% in the first year and a 25% growth rate for the second year. Barney’s Bullpen will flourish in the growing sports environment of the Best Southwest area of Dallas county.
1.1 Mission
Barney’s Bullpen will provide a quality indoor baseball training environment for both serious and recreation-minded individuals. The primary goal is to promote baseball fundamentals of offense and defense for all ages. By focusing on this goal, Barney’s Bullpen will provide a service to the local youth, generating a positive revenue stream for continued growth.
1.2 Objectives
– Barney’s Bullpen will commence operation in the spring.
– In the first year of operation, we expect a conservative 20% usage.
– For the second year, we project a growth rate of 25%.
– For the third year, we expect to match the community growth rate of 15%.
1.3 Keys to Success
– Our great location.
– High quality customer service.
– Contracts with skilled local baseball instructors.
– Multiple options under one roof to keep customers engaged.
Company Summary
Barney’s Bullpen is a for-profit Texas corporation. We will lease a 15,000 square/ft. facility to provide a climate-controlled, well-equipped central location for baseball enthusiasts to learn and practice their skills.
This indoor facility will include:
– Iron Mike hitting lanes.
– Individual lanes with portable mounds for pitching or “L” screens for live hitting practice.
– Utility lanes for various drills.
Additionally, Barney’s Bullpen offers these services:
– Local instructors for clinics.
– Private instructors for personalized hitting and pitching lessons.
– Video analysis for both hitting and pitching.
Due to the growth of youth sports and North Texas’ unpredictable weather, indoor facilities are necessary for our youth to compete with teams that have year-round training access.
2.1 Start-up Summary
We require less than $80,000 of start-up funding to cover opening costs. These costs will be financed through investments and an SBA loan. Details are shown in the following table and chart.
Start-up Requirements
Start-up Expenses
Legal: $0
Advertising: $2,500
Utilities/Deposits: $2,500
Insurance / 1 yr: $10,000
Special use permit: $1,100
Rent Deposit: $6,250
Contractor services: $3,500
Freight Charges: $2,000
Other: $0
Total Start-up Expenses: $27,850
Start-up Assets
Cash Required: $3,000
Other Current Assets: $11,150
Long-term Assets: $36,000
Total Assets: $50,150
Total Requirements: $78,000
Start-up Funding
Start-up Expenses to Fund: $27,850
Start-up Assets to Fund: $50,150
Total Funding Required: $78,000
Assets
Non-cash Assets from Start-up: $47,150
Cash Requirements from Start-up: $3,000
Additional Cash Raised: $0
Cash Balance on Starting Date: $3,000
Total Assets: $50,150
Liabilities and Capital
Liabilities
Current Borrowing: $0
Long-term Liabilities: $70,000
Accounts Payable (Outstanding Bills): $0
Other Current Liabilities (interest-free): $0
Total Liabilities: $70,000
Capital
Planned Investment
Barney Crouch: $2,000
Jen Crouch: $6,000
Additional Investment Requirement: $0
Total Planned Investment: $8,000
Loss at Start-up (Start-up Expenses): ($27,850)
Total Capital: ($19,850)
Total Capital and Liabilities: $50,150
Total Funding: $78,000
2.2 Company Ownership
Barney’s Bullpen is a Limited Liability Corporation based in North Dakota, owned by Barney and Jen Crouch. The legal name is Barney’s Bullpen, LLC.
Services
Barney’s Bullpen promotes and enhances baseball/softball skills for residents of all ages and genders. Our services include:
– Hitting lanes with Iron Mike pitching machines. These lanes can be rented for $25 per 1/2 hour or $40 per hour. They are also available as coin operated machines, with $1 for 20 pitches. There are 4 lanes for baseball and 2 lanes for softball.
– Utility lanes. These lanes are approximately 14′ x 70′ and can be rented for $25 per 1/2 hour or $40 per hour.
– Private instructions for teams or individuals. The price is based on the formula: 1 hr Lane Rental + Instructor fee. The instructor fees will be determined by the instructor, with 20% retained by Barney’s Bullpen.
– A winter Skills and Drills league for specific age groups. Teams pay a $300 registration fee to participate and compete for awards based on points earned.
– Video analysis of hitting and pitching (target date 2nd year). The estimated cost is $75 for 1/2 hour.
The building’s open layout allows for customization of options for different events. Fees for special events will depend on the number of participants and length of the event. Advertising space on the league websites can be negotiated in lieu of charging fees for league meetings.
Market Analysis Summary
The baseball market in our area is large and growing. From peewee leagues to adult softball to high school teams, North Dakota residents love baseball. Barney’s Bullpen will cater to the following market segments:
– Amateur baseball and softball leagues for children and high school students in 12 cities. There are over 6,000 kids playing baseball/softball in this area, with approximately 1/4 participating in competitive leagues.
– Adult softball leagues. The level of interest from this group is uncertain.
– Serious high school and collegiate athletes seeking off-season training.
Market Segmentation
High School Baseball/Softball Teams: These teams need indoor practice space during the winter months.
Youth Leagues: Our main focus will be on recreational baseball players, who start practicing in late April.
Adult Softball Leagues: We expect to draw mostly from the competitive divisions.
Other potential customers include youth groups at local churches and team building events for area businesses.
Market Analysis:
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Local High Schools 2% 300 306 312 318 324 1.94%
Area Little Leagues 5% 6,000 6,300 6,615 6,946 7,293 5.00%
Adult Softball leagues 2% 2,500 2,550 2,601 2,653 2,706 2.00%
Total 4.07% 8,800 9,156 9,528 9,917 10,323 4.07%
4.2 Target Market Segment Strategy:
We will initially focus on Classic or Select baseball and high school players. Expanding our focus to include all areas of baseball and softball can be accommodated by the facility. By catering to classic players, we can maximize the advantages of our indoor facility and cater to their desire to improve their skills all year. High school and collegiate teams will provide a stable repeat customer base.
4.2.1 Market Needs:
Parents seek advantages for their children in organized sports activities. Group coaching is insufficient for above-average performance in baseball and softball. Private coaches and skill trainers are in high demand. Skills training is crucial for participants in "Select" baseball and softball leagues. Our indoor facility will meet the increasing need for individualized skills training year-round.
4.3 Service Business Analysis:
Barney’s Bullpen is a service-oriented and entertainment business. Customers seek entertainment and stress relief, as well as serious training. Coaches require meeting places during the off-season, access to various facilities, and private lessons for children. Other potential areas to explore include theme events for church or business groups, dedicated time slots for local professional athletes, or sponsoring tournaments.
Variety of customers and market needs necessitate specific focus, appropriate advertising, hours of operation, and customer service. Separate nights or sections for different age groups or interests will prevent frustration for skilled players and ensure fun for casual players.
4.3.1 Competition and Buying Patterns:
Direct competition is limited, with only one outdoor-only facility in City F, offering six hitting lanes. The only competing indoor facility is 20-40 miles away. Our strategic advantage lies in our location, which is easily accessible to high schoolers and parents, and is near vacant land that may be developed into a baseball/softball complex. We also compete with after-school programs, athletic events, and other entertainment choices. Convincing potential customers that Barney’s Bullpen offers a healthier and more fun alternative will be our challenge.
Our success depends on establishing a loyal clientele who bring their families, friends, colleagues, and peers to Barney’s Bullpen. Local sponsorship and word-of-mouth will be crucial for our reputation in the community.
Strategy and Implementation Summary:
To be successful, we will send email notifications to youth league coaches and make personal contact with high school and college coaches. Quality service, availability, and competitive pricing are essential for meeting our sales forecast.
5.1 Competitive Edge:
Barney’s Bullpen has a major competitive edge as the only facility of its kind within a 20-mile radius. We have established relationships with youth leagues, high schools, and colleges. Our management team has a passion for the sport and enjoys teaching baseball skills.
5.2 Marketing Strategy:
Marketing efforts will vary based on demand throughout the year. In winter, when outdoor activity is restricted, and leagues are not playing, marketing efforts can be reduced. However, during late spring and early summer, maintaining visibility will be important.
– Email notification to local classic coaches.
– Flyers distributed to high school and college coaches.
– Advertisements at local sports businesses and facilities.
– Advertisements in local papers.
– Word-of-mouth.
– Barney’s Bullpen website.
Spring and Summer Marketing:
– Donations to area youth leagues, with discount coupons.
– Spring break and school holiday specials.
– Attending league coaches’ meetings.
– Summer programs, hitting leagues, and clinics.
Fall and Winter Marketing:
– Advertisements in local papers.
– Word-of-mouth.
– Barney’s Bullpen website.
5.3 Sales Strategy:
Sales efforts will target coaches, parents, and players through email and direct contact. Initial sales strategies include incentives such as two-for-one batting tokens, shirts for the first 100 customers, and discount coupons. Continuous sales efforts will vary depending on the time of year.
Sales Strategy:
– Discount membership packages.
– Yearly league donations.
– Spring break and school holiday discounts.
– Trophies for hitting champions.
– Tournament specials with discount coupons.
5.3.1 Sales Forecast:
Sales are expected to peak from October to March, with potential for higher sales due to weather conditions. Sales growth of 10-20% is projected for 2005 and 2006. Credit sales will account for 10% of total sales.
Direct Cost of Sales includes fees for instructors and league prizes. The facility retains 20% of instructor fees and uses 50% of registration fees for league prizes.
Operating costs for maintenance, repair, and equipment replacement are reflected in the Profit and Loss table.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Iron Mikes $98,226 $117,871 $141,445
Pitching Lanes $52,479 $60,351 $69,403
Hitting league $27,000 $24,000 $24,000
Instructor fees collected $5,900 $6,200 $6,500
Skills & Drills League registration fees $1,800 $1,500 $2,100
Utility Lanes $52,479 $60,351 $69,403
Total Sales $237,884 $270,273 $312,852
Direct Cost of Sales
Year 1 Year 2 Year 3
Skills & Drills League prizes $900 $750 $1,050
Instructor fees paid $4,720 $4,960 $5,200
Row 3 $0 $0 $0
Subtotal Direct Cost of Sales $5,620 $5,710 $6,250
5.4 Milestones
The following milestones are to be used as a roadmap to the success of Barney’s Bullpen. The marketing milestones will be ongoing. While the Internet site will be a useful tool in marketing, it is not critical that it be launched on opening day. The dates given for the Web milestones are optimistic. All other milestones will need to be followed as closely as possible.
Milestones
Milestone Start Date End Date Budget Manager Department
TBD 1/1/2004 1/1/2004 $0 TBD Department
Web link to Leagues 1/15/2004 2/28/2004 $0 Willis Web
Acquire Financing 1/15/2004 2/28/2004 $0 Willis Management
Secure location 1/1/2004 2/28/2004 $0 Willis Management
Order Iron Mikes 2/15/2004 3/1/2004 $0 Willis All
Open for Business 3/1/2004 4/1/2004 $0 Willis All
E-mail Database 3/1/2004 5/1/2004 $0 Willis plus Web Admin Marketing
Contact Leagues & Schools 3/1/2004 5/15/2004 $0 Willis Marketing
Launch Website 4/1/2004 8/1/2004 $0 Web Admin Web
All services operational 9/1/2004 1/1/2005 $0 TBD All
1 year anniversary 3/1/2005 4/1/2005 $0 Willis All
Totals
Personnel Plan
Personnel Plan Year 1 Year 2 Year 3
Owner $30,000 $32,000 $34,000
Bookkeeper $12,000 $14,000 $14,000
Part time #1 $7,600 $7,700 $7,800
Part time #2 $6,400 $7,700 $7,800
Total People 4 4 4
Total Payroll $56,000 $61,400 $63,600
The following section outlines the financial plan for Barney’s Bullpen:
– Start-up funding of $78,000 is required. $36,000 is for the purchase of the Iron Mike Pitching equipment and associated netting, control panel, and other required equipment. Rent, utilities, and advertising are the only monthly expenses listed in the start-up requirements. Insurance will be an annual expense.
– The start-up capital will be obtained through a combination of investor contributions ($8,000) and an SBA long-term loan ($70,000).
Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendices. We recognize that repeat business, weather, economic conditions, and growth of youth sports will determine our success. These reasons are why we have chosen a conservative revenue stream.
Two of the more important underlying assumptions are:
– We assume a strong economy, without major recession.
– We assume that there are no unforeseen changes in the growth of classic baseball participation to make our services immediately obsolete.
General Assumptions Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 8.00% 8.00% 8.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
Break-even Analysis
The following chart and table summarize our break-even analysis. This projection is based on very conservative estimates of revenue.
Break-even Analysis
Monthly Revenue Break-even: $14,659
Assumptions:
– Average Percent Variable Cost: 2%
– Estimated Monthly FixedCost: $14,313
Projected Profit and Loss:
Our projected profit and loss is shown in the following table. Sales increase from over $200K in the first year to over $300K in the third year. We forecast a profit in the first year with a relatively low sales forecast.
We are projecting very conservatively. Detailed monthly projections are included in the appendices.
Pro Forma Profit and Loss
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | $237,884 | $270,273 | $312,852 |
| Direct Cost of Sales | $5,620 | $5,710 | $6,250 |
| Other Costs of Sales | $0 | $0 | $0 |
| Total Cost of Sales | $5,620 | $5,710 | $6,250 |
| Gross Margin | $232,264 | $264,563 | $306,602 |
| Gross Margin % | 97.64% | 97.89% | 98.00% |
| Expenses | |||
| Payroll | $56,000 | $61,400 | $63,600 |
| Marketing/Promotion | $4,600 | $5,500 | $6,000 |
| Depreciation | $5,143 | $5,143 | $5,143 |
| Rent | $86,004 | $88,000 | $92,000 |
| Utilities | $6,000 | $6,000 | $6,000 |
| Insurance | $0 | $10,000 | $10,000 |
| Payroll Taxes | $0 | $0 | $0 |
| Equipment Repair and Maintenance | $3,034 | $4,225 | $4,858 |
| Ball and bat replacement | $1,050 | $1,811 | $2,082 |
| Other (incl. property taxes) | $9,925 | $10,000 | $10,000 |
| Total Operating Expenses | $171,755 | $192,078 | $199,683 |
| Profit Before Interest and Taxes | $60,509 | $72,485 | $106,919 |
| EBITDA | $65,652 | $77,628 | $112,062 |
| Interest Expense | $5,250 | $4,200 | $3,080 |
| Taxes Incurred | $16,578 | $20,485 | $31,152 |
| Net Profit | $38,681 | $47,799 | $72,687 |
| Net Profit/Sales | 16.26% | 17.69% | 23.23% |
8.4 Projected Cash Flow
The following section shows the cash flow projections for Barney’s Bullpen for the first three years. These include repayment of the principal on a 5-year $70,000 SBA loan in equal monthly payments of $1,167, which we start repaying after the first three months of operations.
Cash flow projections are critical to our success. Our cash balance will reach its minimum in mid-2004, during a low season in the first year of operations. We believe that if we manage our cash wisely during this critical period, the following months’ cash flows should be sufficient to cover all our expenses.
The annual cash flow figures are included here, and the more important detailed monthly numbers are included in the appendices.
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $214,096 | $243,246 | $281,567 |
| Cash from Receivables | $18,150 | $26,260 | $30,276 |
| Subtotal Cash from Operations | $232,245 | $269,505 | $311,843 |
| 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 | $232,245 | $269,505 | $311,843 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | $56,000 | $61,400 | $63,600 |
| Bill Payments | $124,245 | $156,929 | $170,149 |
| Subtotal Spent on Operations | $180,245 | $218,329 | $233,749 |
| 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 | $10,500 | $14,000 | $14,000 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $4,600 | $7,200 |
| Subtotal Cash Spent | $190,745 | $236,929 | $254,949 |
| Net Cash Flow | $41,500 | $32,576 | $56,894 |
| Cash Balance | $44,500 | $77,076 | $133,970 |
Projected Balance Sheet
The balance sheet in the following table shows conservative growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendices.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Cash | $44,500 | $77,076 | $133,970 |
| Accounts Receivable | $5,639 | $6,406 | $7,416 |
| Other Current Assets | $11,150 | $11,150 | $11,150 |
| Total Current Assets | $61,289 | $94,633 | $152,536 |
| Long-term Assets | |||
| Long-term Assets | $36,000 | $36,000 | $36,000 |
| Accumulated Depreciation | $5,143 | $10,286 | $15,429 |
| Total Long-term Assets | $30,857 | $25,714 | $20,571 |
| Total Assets | $92,146 | $120,347 | $173,108 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | $13,815 | $12,816 | $14,089 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $13,815 | $12,816 | $14,089 |
| Long-term Liabilities | $59,500 | $45,500 | $31,500 |
| Total Liabilities | $73,315 | $58,316 | $45,589 |
| Paid-in Capital | $8,000 | $8,000 | $8,000 |
| Retained Earnings | ($27,850) | $6,231 | $46,831 |
| Earnings | $38,681 | $47,799 | $72,687 |
| Total Capital | $18,831 | $62,031 | $127,518 |
| Total Liabilities and Capital | $92,146 | $120,347 | $173,108 |
| Net Worth | $18,831 | $62,031 | $127,518 |
The following table shows the projected businesses ratios along with comparisons for our industry, baseball batting cages (SIC Code 7999.9903). We expect to maintain healthy ratios for profitability, risk, and return.
| Ratio Analysis | |||||||||||||
| Year 1 | Year 2 | Year 3 | Industry Profile | ||||||||||
| Sales Growth | n.a. | 13.62% | 15.75% | 5.73% | |||||||||
| Percent of Total Assets | |||||||||||||
| Accounts Receivable | 6.12% | 5.32% | 4.28% | 7.08% | |||||||||
| Other Current Assets | 12.10% | 9.26% | 6.44% | 33.26% | |||||||||
| Total Current Assets | 66.51% | 78.63% | 88.12% | 43.21% | |||||||||
| Long-term Assets | |||||||||||||
| Long-term Assets | 33.49% | 21.37% | 11.88% | 56.79% | |||||||||
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||
| Current Liabilities | |||||||||||||
| Accounts Payable | 14.99% | 10.65% | 8.14% | 21.91% | |||||||||
| Long-term Liabilities | 64.57% | 37.81% | 18.20% | 28.81% | |||||||||
| Total Liabilities | 79.56% | 48.46% | 26.34% | 50.72% | |||||||||
| Net Worth | 20.44% | 51.54% | 73.66% | 49.28% | |||||||||
| Percent of Sales | |||||||||||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% | |||||||||
| Gross Margin | 97.64% | 97.89% | 98.00% | 100.00% | |||||||||
| Selling, General & Administrative Expenses | 63.80% | 76.90% | 76.28% | 76.43% | |||||||||
| Advertising Expenses | 2.16% | 1.90% | 1.64% | 2.77% | |||||||||
| Personnel Plan | |||||||||||||
| Owner | 0% | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | |
| Bookkeeper | 0% | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | $1,000 | |
| Part time #1 | 0% | $600 | $600 | $700 | $400 | $400 | $400 | $600 | $700 | $800 | $800 | $800 | $800 |
| Part time #2 | 0% | $600 | $600 | $700 | $0 | $0 | $0 | $600 | $700 | $800 | $800 | $800 | $800 |
| Total People | 4 | 4 | 4 | 3 | 3 | 3 | 4 | 4 | 4 | 4 | 4 | 4 | |
| Total Payroll | $4,700 | $4,700 | $4,900 | $3,900 | $3,900 | $3,900 | $4,700 | $4,900 | $5,100 | $5,100 | $5,100 | $5,100 | |
| General Assumptions | ||||||||||||
| Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| Current Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
| Long-term Interest Rate | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% | 8.00% |
| 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 | |||||||||||||
| Sales | $24,680 | $18,048 | $11,416 | $5,908 | $11,908 | $8,908 | $17,416 | $24,980 | $31,080 | $26,080 | $32,180 | $25,280 | |
| Direct Cost of Sales | $160 | $240 | $320 | $320 | $320 | $320 | $320 | $400 | $480 | $1,010 | $1,090 | $640 | |
| Other Costs of Sales | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $160 | $240 | $320 | $320 | $320 | $320 | $320 | $400 | $480 | $1,010 | $1,090 | $640 | |
| Gross Margin | $24,520 | $17,808 | $11,096 | $5,588 | $11,588 | $8,588 | $17,096 | $24,580 | $30,600 | $25,070 | $31,090 | $24,640 | |
| Gross Margin % | 99.35% | 98.67% | 97.20% | 94.58% | 97.31% | 96.41% | 98.16% | 98.40% | 98.46% | 96.13% | 96.61% | 97.47% | |
| Expenses | |||||||||||||
| Payroll | $4,700 | $4,700 | $4,900 | $3,900 | $3,900 | $3,900 | $4,700 | $4,900 | $5,100 | $5,100 | $5,100 | $5,100 | |
| Marketing/Promotion | $1,200 | $500 | $500 | $100 | $750 | $100 | $100 | $100 | $250 | $250 | $250 | $500 | |
| Depreciation | $429 | $429 | $429 | $429 | $429 | $429 | $429 | $429 | $429 | $429 | $429 | $429 | |
| Rent | $5,734 | $5,734 | $5,734 | $5,734 | $5,734 | $5,734 | $8,600 | $8,600 | $8,600 | $8,600 | $8,600 | $8,600 | |
| Utilities | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
| Insurance | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Payroll Taxes | 15% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Equipment Repair and Maintenance | $306 | $306 | $138 | $69 | $295 | $69 | $138 | $306 | $306 | $367 | $367 | $367 | |
| Ball and bat replacement | 15% | $122 | $122 | $55 | $28 | $28 | $28 | $55 | $122 | $122 | $122 | $122 | $122 |
| Other (incl. property taxes) | $850 | $825 | $825 | $825 | $825 | $825 | $825 | $825 | $825 | $825 | $825 | $825 | |
| Total Operating Expenses | $13,841 | $13,116 | $13,080 | $11,584 | $12,460 | $11,584 | $15,346 | $15,782 | $16,132 | $16,193 | $16,193 | $16,443 | |
| Profit Before Interest and Taxes | $10,679 | $4,692 | ($1,984) | ($5,996) | ($872) | ($2,996) | $1,750 | $8,798 | $14,468 | $8,877 | $14,897 | $8,197 | |
| EBITDA | $11,108 | $5,121 | ($1,556) | ($5,567) | ($444) | ($2,567) | $2,178 | $9,227 | $14,897 | $9,305 | $15,325 | $8,625 | |
| Interest Expense | $467 | $467 | $467 | $459 | $451 | $443 | $436 | $428 | $420 | $412 | $404 | $397 | |
| Taxes Incurred | $3,064 | $1,268 | ($735) | ($1,936) | ($397) | ($1,032) | $394 | $2,511 | $4,214 | $2,539 | $4,348 | $2,340 | |
| Net Profit | $7,149 | $2,958 | ($1,716) | ($4,518) | ($926) | ($2,408) | $920 | $5,859 | $9,834 | $5,925 | $10,145 | $5,460 | |
| Net Profit/Sales | 28.97% | 16.39% | -15.03% | -76.48% | -7.78% | -27.03% | 5.28% | 23.46% | 31.64% | 22.72% | 31.52% | 21.60% |
Pro Forma Cash Flow
| 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 Sales | $22,212 | $16,243 | $10,274 | $5,317 | $10,717 | $8,017 | $15,674 | $22,482 | $27,972 | $23,472 | $28,962 | $22,752 | |
| Cash from Receivables | $0 | $82 | $2,446 | $1,783 | $1,123 | $611 | $1,181 | $919 | $1,767 | $2,518 | $3,091 | $2,628 | |
| Subtotal Cash from Operations | $22,212 | $16,325 | $12,720 | $7,100 | $11,840 | $8,628 | $16,855 | $23,401 | $29,739 | $25,990 | $32,053 | $25,380 | |
| 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 | $22,212 | $16,325 | $12,720 | $7,100 | $11,840 | $8,628 | $16,855 | $23,401 | $29,739 | $25,990 | $32,053 | $25,380 | |
| Expenditures | |||||||||||||
| Expenditures from Operations | |||||||||||||
| Cash Spending | $4,700 | $4,700 | $4,900 | $3,900 | $3,900 | $3,900 | $4,700 | $4,900 | $5,100 | $5,100 | $5,100 | $5,100 | |
| Bill Payments | $413 | $12,321 | $9,890 | $7,746 | $6,178 | $8,455 | $7,133 | $11,448 | $13,856 | $15,681 | $14,689 | $16,433 | |
| Subtotal Spent on Operations | $5,113 | $17,021 | $14,790 | $11,646 | $10,078 | $12,355 | $11,833 | $16,348 | $18,956 | $20,781 | $19,789 | $21,533 | |
| 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 | $0 | $0 | $0 | $1,167 | $1,167 | $1,167 | $1,167 | $1,167 | $1,167 | $1,167 | $1,167 | $1,167 | |
| 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 | $5,113 | $17,021 | $14,790 | $12,813 | $11,245 | $13,522 | $13,000 | $17,515 | $20,123 | $21,948 | $20,956 | $22,700 | |
| Net Cash Flow | $17,099 | ($696) | ($2,069) | ($5,713) | $596 | ($4,894) | $3,856 | $5,886 | $9,616 | $4,042 | $11,098 | $2,681 | |
| Cash Balance | $20,099 | $19,403 | $17,333 | $11,620 | $12,216 | $7,322 | $11,178 | $17,064 | $26,679 | $30,722 | $41,820 | $44,500 | |
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I’m Andrew Brooks, a seasoned finance consultant from the USA and the mind behind phonenumber247.com.
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