Luna’s is a new convenience store near Aspen Estates in Jenniville. Aspen Estates targets high-income individuals and young couples, making it a prime opportunity for the store. Household incomes in this area range from $85,000 to $100,000, and Luna’s is the only food store within a two-mile radius of the housing estate.
Owned by Thomas and Heidi Renner, Luna’s benefits from their perfect business partnership. With fifteen years of retail food industry experience, Heidi handles day-to-day operations, while Thomas, a certified public accountant, manages the financial side of the business.
Luna’s offers a variety of fresh, organic produce, staples, packaged foods, alcoholic and nonalcoholic drinks, prepackaged meals, pastries, newspapers, pet foods, medicines, and health and beauty items. Additionally, a small cafe rental within the store provides seating for approximately 20 people, serving breakfast, lunch, coffee, tea, cold drinks, and pastries.
Luna’s competitive edge lies in its location, customer service focus, and the expertise of its owners.
Luna’s Convenience Store aims to provide packaged and fresh foods, fast food, soft drinks, beer, cigarettes, groceries, and selected nonfood items to residents of Aspen Estates and surrounding neighborhoods. Our goal is to offer fair prices to customers while generating a healthy profit for the owners.
Our objectives are as follows:
1. Establish Luna’s as the preferred convenience store for the residents of Aspen Estates and neighboring areas.
2. Break even by the end of the first year.
3. Achieve a net profit of 5% within three years.
To achieve success, we must:
1. Convince Aspen Estates residents that Luna’s is their go-to convenience store.
2. Maintain an inventory turnover rate of 15 – 20 times per year.
3. Provide a wide variety of groceries, food, and household items.
Luna’s Convenience Store is a start-up venture occupying a leased property on Main Street in Jenniville, just 30 yards from the main entrance of Aspen Estates. The store is part of a newly constructed building with five other storefronts, including a coffee shop, gourmet chocolate shop, gift shop, and bookstore. Luna’s is owned by Thomas and Heidi Renner.
Start-up Summary:
Funding for the enterprise will come from a combination of owner investment and bank funding. The main start-up cost will be $100,000 for inventory. Additionally, $30,000 will be allocated for fixtures and fittings. As the building is new, no maintenance is required before move-in.
Start-up Requirements
Legal: $500
Stationery etc.: $100
Consultants: $500
Insurance: $1,000
Rent: $3,000
Expensed Equipment: $1,300
Other: $500
Total Start-up Expenses: $6,900
Start-up Assets
Cash Required: $58,100
Start-up Inventory: $100,000
Other Current Assets: $5,000
Long-term Assets: $30,000
Total Assets: $193,100
Total Requirements: $200,000
Start-up Funding
Start-up Expenses to Fund: $6,900
Start-up Assets to Fund: $193,100
Total Funding Required: $200,000
Assets
Non-cash Assets from Start-up: $135,000
Cash Requirements from Start-up: $58,100
Additional Cash Raised: $0
Cash Balance on Starting Date: $58,100
Total Assets: $193,100
Liabilities and Capital
Liabilities
Current Borrowing: $50,000
Long-term Liabilities: $0
Accounts Payable (Outstanding Bills): $0
Other Current Liabilities (interest-free): $0
Total Liabilities: $50,000
Capital
Planned Investment
Investor 1: $150,000
Other: $0
Additional Investment Requirement: $0
Total Planned Investment: $150,000
Loss at Start-up (Start-up Expenses): ($6,900)
Total Capital: $143,100
Total Capital and Liabilities: $193,100
Total Funding: $200,000
Company Ownership
The company is incorporated in Delaware and is owned by Thomas Renner and his wife Heidi. Funding for start-up will come from the Renner’s own savings, and a $50,000 bank loan.
Before starting the company, Heidi Renner worked as a manager of a local supermarket, and has over 15 years of experience in this industry at management levels. Thomas is a certified CPA and ran his own practice for ten years before launching the concept of Luna’s.
Products
The store will provide typical items found in any convenience store, but items will be “higher end” than many convenience stores. Luna’s will offer fresh, organic produce, staples, packaged foods, drinks (alcoholic and nonalcoholic), prepackaged fresh meals and pastries, newspapers, pet foods, medicines, health and beauty items, etc. In addition, Luna’s will rent a small section of the store to a cafe that will provide breakfast, lunch, coffee, tea, cold drinks, and pastries. There will be seating for approximately 20 people.
Market Analysis Summary
The Aspen Estates is a newly built apartment complex in the western suburbs of Jenniville. Construction is scheduled to continue for the next eight months, but 350 condominiums and townhouses are already complete and approximately another 175 are scheduled for completion in the next eight months.
All of the residences are for sale, so it is expected that the household income of the residents of Aspen Estates will be higher than the national average, estimated at $85,000 – $100,000. Many of the residents are workers at seven large technology companies located within a 20-mile radius of the Estates. These workers tend to be young, 25 – 45, and married or living with a partner.
Market Segmentation
The “Yuppies” are young upwardly mobile individuals aged between 23 and 33 with a household income between $55,000 and $80,000. They have very active lives, are health-conscious, and are single or living with a partner.
The “Young Parents” are couples with young families aged 27 – 37. They used to be Yuppies focused on entertainment and fun, but now their main focus is their one to two children. Convenience is important to them.
The “Healthy Middles” have the highest income, ranging from $90,000 to $120,000. They spend much of their time taking care of their children, but their children are old enough to spend the occasional evening alone if their parents want a night out.
The “Healthy Middles” is the smallest market in the Aspen Estates but potentially the most lucrative for Luna’s. This group has an expected growth rate of 5% per year. The Yuppies are the next most lucrative group, as they have smaller household incomes than the “Young Parent” group but have greater disposable income since they have no children.
The following Market Analysis table includes residents of the Aspen Estates and the surrounding neighborhoods.
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Potential Customers Growth
Yuppies 5% 750 788 827 868 911 4.98%
Young Parents 5% 880 924 970 1,019 1,070 5.01%
Healthy Middles 5% 500 525 551 579 608 5.01%
Total 5.00% 2,130 2,237 2,348 2,466 2,589 5.00%
– The convenience store industry is highly fragmented, with larger players such as 7-11 dominating due to their location and early growth.
– Gross profits are typically 20 – 22%, with net profits.
4.2.1 Competition and Buying Patterns
Convenience stores are small retail outlets, usually 2,000 to 3,000 square feet, selling staple groceries, beer, cigarettes, soft drinks, dairy products, gasoline, and some nonfood items. These stores provide convenience and are often open 24/7.
The typical customer is a blue-collar male aged 18-34. Beer and cigarettes represent about 1/3 of merchandise sales, but Luna’s is targeting yuppies as the professional market grows.
4.3 Target Market Segment Strategy
The key target market segments for Luna’s are those geographically close to the store, with specific income levels and lifestyles. Since the most attractive group has young children, the store will focus on providing products parents regularly need for babies and young children, such as diapers and baby food.
Strategy and Implementation Summary
Luna’s stands out with impressive customer service and a higher-end selection of food and goods compared to typical convenience stores. The store’s competitive edge comes from its prime location in a high-income neighborhood.
– Superior customer service attracts customers.
– Upselling leads to increased sales per customer.
– Marketing to high-end individuals results in higher average sales.
5.1 Competitive Edge
Luna’s competitive edge is its location and being the first to market. It is the closest store to every residence on Aspen Estates, with no other stores offering similar products within a 2-mile radius. New residents will naturally choose Luna’s as their preferred store for small grocery and household purchases.
SWOT analysis can help develop good business strategies.
Luna’s has access to market research information from the developers of Aspen Estates, providing knowledge of a large portion of its potential market. The high-income group presents a prime opportunity for Luna’s. With its convenient location, the store requires minimal above-the-line advertising.
5.3 Sales Strategy
Luna’s aims to provide a typical convenience store selection along with impulse purchases to increase the average sale per customer. The sales staff will prioritize customer service and always ask if customers found everything they need.
5.3.1 Sales Forecast
The average customer ticket is expected to be $5.50 cents, higher than the industry average of $3.75. This is due to the demographics of the surrounding neighborhoods and the focus on branded goods and organic, healthy foods.
Sales Forecast:
Fresh Foods, Dairy and Drinks: $48,109 (Year 1), $60,136 (Year 2), $69,156 (Year 3)
Packaged Foods: $108,893 (Year 1), $143,739 (Year 2), $169,612 (Year 3)
Hard Goods: $43,378 (Year 1), $54,223 (Year 2), $65,067 (Year 3)
Beer, Wine and Cigarettes: $140,762 (Year 1), $185,806 (Year 2), $224,825 (Year 3)
Rental Income: $12,000 (Year 1), $12,600 (Year 2), $13,230 (Year 3)
Prepackaged Meals: $21,239 (Year 1), $26,336 (Year 2), $30,286 (Year 3)
Total Sales: $374,380 (Year 1), $482,839 (Year 2), $572,176 (Year 3)
Direct Cost of Sales:
Fresh Foods: $24,054 (Year 1), $30,068 (Year 2), $34,578 (Year 3)
Packaged Foods: $14,867 (Year 1), $18,435 (Year 2), $21,200 (Year 3)
Hard Goods: $187,190 (Year 1), $241,419 (Year 2), $286,088 (Year 3)
Drinks (inc. beer and wine): $0 (Year 1), $0 (Year 2), $0 (Year 3)
Prepackaged Meals: $7,216 (Year 1), $9,020 (Year 2), $10,373 (Year 3)
Subtotal Direct Cost of Sales: $233,328 (Year 1), $298,943 (Year 2), $352,240 (Year 3)
5.4 Milestones:
The table below lists program milestones, along with dates, managers, and budgets.
Milestones:
| Write Business Plan | 1/12/2002 | 12/31/2002 | $0 | Thomas/Heidi | Management |
| Form Corporation | 1/15/2003 | 1/15/2003 | $0 | Thomas | Management |
| Negotiate Lease on Property | 1/12/2002 | 12/31/2002 | $0 | Thomas | Management |
| Store construction | 1/15/2003 | 2/28/2003 | $0 | Contractors | – |
| Hire Employees | 1/2/2002 | 1/15/2003 | $0 | Heidi | Management |
| Create Collateral Materials | 1/1/2003 | 1/15/2003 | $500 | Outside Agency | Consultant |
| Grand Opening | 1/3/2003 | 1/3/2003 | $0 | Heidi/Thomas | Management |
| Totals | $500 |
Management Summary:
Thomas and Heidi Renner are the owners and managers of Luna’s Convenience Store. They are well qualified to manage the store. Heidi has worked in management at Safeway for fifteen years. She has extensive knowledge of the retail food industry and is passionate about the business. She understands inventory management and has experience dealing with employee issues. Additionally, her position at Safeway has allowed her to build relationships with food vendors.
Thomas, a certified CPA, brings financial expertise to the business. He has dealt with the financial aspects of many small businesses and understands why they fail or succeed.
Personnel Plan:
The table below shows the projected personnel for the next three years. Luna’s aims to reduce turnover by paying higher wages and employing older individuals. The company also strives to keep employees happy.
| Personnel | Year 1 | Year 2 | Year 3 |
| Heidi Renner | $30,000 | $34,000 | $38,000 |
| Thomas Renner | $18,000 | $22,000 | $24,000 |
| Cashiers | $43,200 | $45,000 | $48,000 |
| Other | $0 | $0 | $0 |
| Total People | 0 | 0 | 0 |
| Total Payroll | $91,200 | $101,000 | $110,000 |
1. Growth will be moderate, with steady cash flows.
2. Minimal marketing will be done, as Luna’s will rely on its convenient location and will not purchase advertising.
3. The company will use tight inventory controls to manage costs.
4. Luna’s expects to achieve higher gross margins than industry averages by targeting women and professionals.
Important Assumptions:
Luna’s does not sell anything on credit. The personnel burden is low because the company employs part-time staff in addition to the owners. Part-time employees do not receive benefits.
| General Assumptions | Year 1 | Year 2 | Year 3 |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 10.00% | 10.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 30.00% | 30.00% | 30.00% |
| Other | 0 | 0 | 0 |
Break-even Analysis:
The table and chart below illustrate the Break-even Analysis for Luna’s.
Break-even Analysis:
Monthly Revenue Break-even: $33,735.
Assumptions:
Average Percent Variable Cost: 62%.
Estimated Monthly Fixed Cost: $12,710.
7.3 Projected Profit and Loss:
The table and charts below display the Projected Profit and Loss and Gross Margin for Luna’s.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $374,380 $482,839 $572,176
Direct Cost of Sales $233,328 $298,943 $352,240
Other Costs of Goods $0 $0 $0
Total Cost of Sales $233,328 $298,943 $352,240
Gross Margin $141,052 $183,896 $219,936
Gross Margin % 37.68% 38.09% 38.44%
Expenses
Payroll $91,200 $101,000 $110,000
Sales and Marketing and Other Expenses $2,400 $2,400 $2,400
Depreciation $6,000 $6,000 $6,000
Rent $36,000 $36,000 $36,000
Utilities $6,000 $7,000 $8,000
Insurance $1,800 $1,900 $2,000
Payroll Taxes $9,120 $10,100 $11,000
Other $0 $0 $0
Total Operating Expenses $152,520 $164,400 $175,400
Profit Before Interest and Taxes ($11,468) $19,496 $44,536
EBITDA ($5,468) $25,496 $50,536
Interest Expense $4,805 $4,460 $4,100
Taxes Incurred $0 $4,511 $12,131
Net Profit ($16,273) $10,525 $28,305
Net Profit/Sales -4.35% 2.18% 4.95%
Projected Cash Flow
The following table shows the cash flow totals for three years. The cash flow remains healthy.
Pro Forma Cash Flow:
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $374,380 | $482,839 | $572,176 |
| Subtotal Cash from Operations | $374,380 | $482,839 | $572,176 |
| 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 | $374,380 | $482,839 | $572,176 |
| Expenditures | |||
| Year 1 | Year 2 | Year 3 | |
| Expenditures from Operations | |||
| Cash Spending | $91,200 | $101,000 | $110,000 |
| Bill Payments | $191,178 | $365,820 | $427,957 |
| Subtotal Spent on Operations | $282,378 | $466,820 | $537,957 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $3,600 | $3,600 | $3,600 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $30,000 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $315,978 | $470,420 | $541,557 |
| Net Cash Flow | $58,402 | $12,419 | $30,619 |
| Cash Balance | $116,502 | $128,921 | $159,540 |
Projected Balance Sheet:
7.5 Projected Balance Sheet
The following table is the Projected Balance Sheet.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | $116,502 | $128,921 | $159,540 |
| Inventory | $22,460 | $28,777 | $33,907 |
| Other Current Assets | $5,000 | $5,000 | $5,000 |
| Total Current Assets | $143,962 | $162,698 | $198,447 |
| Long-term Assets | |||
| Long-term Assets | $60,000 | $60,000 | $60,000 |
| Accumulated Depreciation | $6,000 | $12,000 | $18,000 |
| Total Long-term Assets | $54,000 | $48,000 | $42,000 |
| Total Assets | $197,962 | $210,698 | $240,447 |
| Liabilities and Capital | |||
| Year 1 | Year 2 | Year 3 | |
| Current Liabilities | |||
| Accounts Payable | $24,735 | $30,545 | $35,589 |
| Current Borrowing | $46,400 | $42,800 | $39,200 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $71,135 | $73,345 | $74,789 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $71,135 | $73,345 | $74,789 |
| Paid-in Capital | $150,000 | $150,000 | $150,000 |
| Retained Earnings | ($6,900) | ($23,173) | ($12,647) |
| Earnings | ($16,273) | $10,525 | $28,305 |
| Total Capital | $126,827 | $137,353 | $165,658 |
| Total Liabilities and Capital | $197,962 | $210,698 | $240,447 |
| Net Worth | $126,827 | $137,353 | $165,658 |
Business Ratios:
7.6 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5411, [Convenience Stores, Independent], are shown for comparison.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | 0.00% | 28.97% | 18.50% | 2.27% |
| Percent of Total Assets | ||||
| Inventory | 11.35% | 13.66% | 14.10% | 22.18% |
| Other Current Assets | 2.53% | 2.37% | 2.08% | 26.81% |
| Total Current Assets | 72.72% | 77.22% | 82.53% | 56.12% |
| Long-term Assets | 27.28% | 22.78% | 17.47% | 43.88% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | ||||
| Accounts Payable | 35.93% | 34.81% | 31.10% | 26.39% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 24.87% |
| Total Liabilities | 35.93% | 34.81% | 31.10% | 51.26% |
| Net Worth | 64.07% | 65.19% | 68.90% | 48.74% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 37.68% | 38.09% | 38.44% | 23.55% |
| Selling, General & Administrative Expenses | 42.02% | 35.91% | 33.49% | 16.21% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.85% |
| Profit Before Interest and Taxes | -3.06% | 4.04% | 7.78% | 1.02% |
| Main Ratios | ||||
| Current | 2.02 | 2.22 | 2.65 | 1.68 |
| Quick | 1.71 | 1.83 | 2.20 | 0.71 |
| Total Debt to Total Assets | 35.93% | 34.81% | 31.10% | 57.28% |
| Pre-tax Return on Net Worth | -12.83% | 10.95% | 24.41% | 4.63% |
| Personnel Plan | |||||||||||||
| Heidi Renner | 0% | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 | $2,500 |
| Thomas Renner | 0% | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 |
| Cashiers | 0% | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 | $3,600 |
| Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Total People | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | |
| Total Payroll | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | |
| General Assumptions | |||||||||||||
| Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
| Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
| 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 | $21,931 | $25,940 | $27,731 | $33,786 | $36,742 | $36,066 | $32,406 | $31,432 | $31,906 | $31,112 | $32,664 | $32,665 | |
| Direct Cost of Sales | $13,412 | $16,010 | $17,283 | $20,902 | $23,035 | $22,959 | $20,502 | $19,600 | $19,724 | $19,221 | $20,261 | $20,419 | |
| Other Costs of Goods | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $13,412 | $16,010 | $17,283 | $20,902 | $23,035 | $22,959 | $20,502 | $19,600 | $19,724 | $19,221 | $20,261 | $20,419 | |
| Gross Margin | $8,519 | $9,930 | $10,448 | $12,885 | $13,707 | $13,106 | $11,904 | $11,832 | $12,182 | $11,891 | $12,402 | $12,247 | |
| Gross Margin % | 38.84% | 38.28% | 37.68% | 38.14% | 37.31% | 36.34% | 36.73% | 37.64% | 38.18% | 38.22% | 37.97% | 37.49% | |
| Expenses | |||||||||||||
| Payroll | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | |
| Sales and Marketing and Other Expenses | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
| Depreciation | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
| Rent | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | $3,000 | |
| Utilities | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | $500 | |
| Insurance | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | $150 | |
| Payroll Taxes | 10% | $760 | $760 | $760 | $760 | $760 | $760 | $760 | $760 | $760 | $760 | $760 | $760 |
| Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Operating Expenses | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | $12,710 | |
| Profit Before Interest and Taxes | ($4,191) | ($2,780) | ($2,262) | $175 | $997 | $396 | ($806) | ($878) | ($528) | ($819) | ($308) | ($464) | |
| EBITDA | ($3,691) | ($2,280) | ($1,762) | $675 | $1,497 | $896 | ($306) | ($378) | ($28) | ($319) | $192 | $37 | |
| Interest Expense | $414 | $412 | $409 | $407 | $404 | $402 | $399 | $397 | $394 | $392 | $389 | $387 | |
| Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Net Profit | ($4,606) | ($3,192) | ($2,671) | ($232) | $593 | ($5) | ($1,205) | ($1,275) | ($922) | ($1,211) | ($697) | ($850) | |
| Net Profit/Sales | -21.00% | -12.31% | -9.63% | -0.69% | 1.61% | -0.01% | -3.72% | -4.06% | -2.89% | -3.89% | -2.
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 from Operations | |||||||||||||
| Cash Sales | $21,931 | $25,940 | $27,731 | $33,786 | $36,742 | $36,066 | $32,406 | $31,432 | $31,906 | $31,112 | $32,664 | $32,665 | |
| Subtotal Cash from Operations | $21,931 | $25,940 | $27,731 | $33,786 | $36,742 | $36,066 | $32,406 | $31,432 | $31,906 | $31,112 | $32,664 | $32,665 | |
| 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 | $0 |
| New Other Liabilities (interest-free) | $0 | $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 | $0 |
| Sales of Other Current Assets | $0 | $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 | $0 |
| New Investment Received | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Subtotal Cash Received | $21,931 | $25,940 | $27,731 | $33,786 | $36,742 | $36,066 | $32,406 | $31,432 | $31,906 | $31,112 | $32,664 | $32,665 | |
| Expenditures | |||||||||||||
| Expenditures from Operations | |||||||||||||
| Cash Spending | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 | $7,600 |
| Bill Payments | $167 | $5,024 | $5,022 | $5,019 | $5,549 | $21,223 | $27,719 | $22,835 | $23,656 | $24,825 | $23,761 | $26,378 | |
| Subtotal Spent on Operations | $7,767 | $12,624 | $12,622 | $12,619 | $13,149 | $28,823 | $35,319 | $30,435 | $31,256 | $32,425 | $31,361 | $33,978 | |
| Additional Cash Spent | |||||||||||||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 | $300 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Purchase Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
| Purchase Long-term Assets | $30,000 | $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 | $0 |
| Subtotal Cash Spent | $38,067 | $12,924 | $12,922 | $12,919 | $13,449 | $29,123 | $35,619 | $30,735 | $31,556 | $32,725 | $31,661 | $34,278 | |
| Net Cash Flow | ($16,137) | $13,016 | $14,810 | $20,867 | $23,293 | $6,943 | ($3,213) | $697 | $349 | ($1,613) | $1,003 | ($1,613) | |
| Cash Balance | $41,963 | $54,979 | $69,788 | $90,656 | $113,949 | $120,891 | $117,678 | $118,375 | $118,724 | $117,112 | $118,115 | $116,502 | |
Pro Forma Balance Sheet
| 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 | ||
| Starting Balances | |||||||||||||
| Current Assets | |||||||||||||
| Cash | $58,100 | $41,963 | $54,979 | $69,788 | $90,656 | $113,949 | $120,891 | $117,678 | $118,375 | $118,724 | $117,112 | $118,115 | $116,502 |
| Inventory | $100,000 | $86,588 | $70,578 | $53,295 | $32,393 | $25,338 | $25,255 | $22,552 | $21,560 | $21,696 | $21,143 | $22,288 | $22,460 |
| Other Current Assets | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |
| Total Current Assets | $163,100 | $133,551 | $130,557 | ||||||||||
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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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