Dinner Theater Business Plan
Belle Epoque is a restaurant and Dinner Show in Bigsmalltown, Upstate, that celebrates the cultural refinement, social elegance, and prosperity of the late 19th and early 20th centuries. Our restaurant is modeled after the establishments in the Montmartre district of Paris, such as Moulin de la Galette. The decor will resemble the 1890s restaurant/dance hall/theaters and feature artwork by Impressionists like Pierre-Auguste Renoir, Henri de Toulouse-Lautrec, Mary Cassat, and Berthe Morisot. Our staff will dress in period costume.
Our dynamic restaurant combines the ambiance of a Montmartre dance hall with bon vivants, famous artists, and lively music. It offers a first-person experience where customers can interact with "look-alikes" of historical figures like Alfred Dreyfus or Madam La Goulue. Our menu is an international extravaganza with illustrations of regional cuisine, a world map, and indigenous ingredients. While the majority of the menu features French and American cuisine, we also offer specialties from Japan, Korea, Philippines, Italy, Germany, Mexico, Spain, Belgium, and the Middle East. We have a curated wine selection and a special cellar collection.
Belle Epoque is the first of a chain of themed restaurants inspired by successful concepts like "Captain Hook" and "Medieval Times." We aim to attract customers with our Impressionist/Moulin Rouge theme. Our executive chef, Joachim Oignons, is a retired military chef with extensive experience serving high-ranking officials and managing various restaurant and food service venues worldwide.
Mission
Belle Epoque offers an impressive revue of international food and drink, centered around the high culture and exuberant nightlife of 19th-century Paris. Our focus is always on the customer, and our employees are considered part of our team. We are deeply involved in the community and provide an excellent work environment.
Keys to Success
– High-quality menu and ingredient sourcing
– Well-trained workforce with clear daily action plans and managerial follow-up
– Fantastic show and performer training for an exceptional dining experience
– Profit sharing with the workforce
– Unique interior design and landscaping
– Actors and staff trained to entertain customers with anecdotes and humor
– Excellence in show and restaurant management
– Generating new business leads
– Diversifying revenue through bar, restaurant, catering, show, and events
According to the National Restaurant Association, the restaurant industry anticipates $440.1 billion in sales this year, making it the largest private-sector employer in the United States. Wine sales in restaurants also saw an 8.1% increase last year, according to Adams Beverage Group and Restaurants and Institutions magazine.
Objectives
1. Build and create a restaurant that celebrates the belle époque/gay 90s era, with a focus on profitability, excellent reviews, and keeping food costs below 35% of total operation.
2. Deliver an international menu that produces high customer satisfaction and achieves at least 200% return on investment.
3. Reflect the Belle Epoque era through our menu, with input and review from esteemed chefs and culinary experts.
4. Continuously analyze and fine-tune objectives through planning and strategy meetings.
5. Monitor profit and loss statements, learn from local restaurant owners, and seek guidance from consultants as needed.
Company Summary
Belle Epoque is a restaurant that offers lunch and dinner menus, as well as a theme show for dinner. It welcomes artists, historians, living history interpreters, and re-enactors for plein aire painting sessions, historical shows, and events. The restaurant showcases the culinary adventures and exquisite tastes of late 19th-century Paris, prepared by Executive Chef Joachim Oignons.
Chef Joachim retired as a Senior Chief Petty Officer and was the first American Culinary Federation Executive Chef in Camp David’s history. He excelled in the history of America at the Catoctin Mountain Retreat and at the White House. He later cooked for Admirals in Japan, at NATO, and for royalty, stars, and public personalities around the world. His food represents his direct experiences and features international culinary favorites learned firsthand.
2.1 Company Ownership
Belle Epoque is solely owned by Executive Chef Joachim Oignons and is chartered as an Upstate LLC corporation based in Border County. The company plans to drop the LLC status within three to five years and seek Sub-chapter S, followed by C status, pending changing tax laws, the economy, and review of profit and loss statements. Additional investors may provide operations assistance and staff.
2.2 Start-up Summary
Start-up expenses include legal costs, artwork, property lease or purchase, remodeling, logo design, computer software, stationery, and liquor license.
Start-up assets required include short-term assets such as office furniture, tableware and glassware, signage, small kitchen equipment and utensils, and kitchen and server uniforms and costumes. Initial cash is also needed to handle the first few months of operations, while sales and accounts receivable play through the cash flow. Inventory for the first two weeks of operations will be ordered and delivered in the week prior to opening.
Long-term assets include office computers, serving staff workstations, kitchen terminals, POS terminals, security and fire alarm systems, shelving, and food storage.
This plan assumes moving into a retrofit of a former restaurant with existing tables, chairs, kitchen stoves, and equipment. If that is not available, a scratch start will require an additional $500,000 to $600,000.
Belle Epoque offers a unique entertainment and dining concept with excellent food. The interaction with live actors from 1890s Paris is fascinating. It offers colorful actors by day and an entertaining Moulin de la Galette evening dinner show. Our table side service is fun and unique. The wine selection and daily wine card will be in addition to our selection of beer on tap and fully stocked bar. The catering will also entertain and thrill customers.
Our target market is vacationing families, friends, lovers, and fun-seekers. A smaller number of locals will also visit us. The local winter population is 250,000 people. The summer season has 4.5 million visitors, with 75.5% being families with children, 17.6% single, and 2.6% senior citizens. Most visitors are between the ages of 28 and 54 and earn more than $50,000 per year. The average stay is 4.6 days, with spending per day ranging from $78 to $300. Tourism in Bigsmalltown generates $3.64 billion.
In 2003, Bigsmalltown had a year-round population of 102,326 residents and a summer population of 614,261. Per capita income is $24,172, and the median household income is $41,591. The area has 91,000 housing units, with 46% being year-round residents. The area encompasses 256 square miles of land and is made up of 16 municipalities. It has 30 miles of white sandy beaches and islands, with thousands of acres on the mainland preserved for open space and natural conservation. Tourism is the leading industry, generating over $3 billion a year. The total labor force is 49,201 people, with the services sector employing 37% and the trades employing 36%.
Our market segmentation includes families on vacation, local residents, and long distance drivers. Within these segments, we have specific sub-groups such as the lunch crowd, casual wine drinkers, and the nightly "Admiral’s Table" crowd. These segments are slightly more sophisticated, with an average age range of 25 to 54-plus and upper middle household income. We believe these segments will frequent Belle Epoque.
In addition, we will target teenagers with specific marketing strategies. Teenagers sort themselves into groups such as "preppies, dudes, gothic, jocks, and skaters," which represent certain behavior patterns. We will market directly to these segments and provide offerings that cater to their preferences, such as bottled sodas. Marketing to specific segments generates sales across the board, especially when teenagers encourage their parents to visit Belle Epoque. We have other marketing strategies based on award-winning experience and expertise from noted experts.
| Market Analysis | |||||||
| 1 | 2 | 3 | 4 | 5 | |||
| Potential Customers | Growth | CAGR | |||||
| Weekly summer population | 5% | 225,000 | 235,000 | 245,000 | 255,000 | 265,000 | 4.18% |
| Weekly winter population | 5% | 4,808 | 5,008 | 5,208 | 5,408 | 5,608 | 3.92% |
| Long distance customers | 2% | 5,000 | 8,000 | 12,000 | 15,000 | 20,000 | 41.42% |
| Total | 5.47% | 234,808 | 248,008 | 262,208 | 275,408 | 290,608 | 5.47% |
4.2 Target Market Segment Strategy
We must focus on specific market segments whose needs match our offerings. Focusing on targeted segments is the key to our future. We will attract customers with live performances and distribution of brochures.
We need to focus our marketing message and product offerings. We need to develop our message, communicate it, and make good on it. The Marketing Strategy topic contains the details of our tactics and programs.
4.3 Service Business Analysis
The restaurant and entertainment show business is dynamic. It offers exciting food and dining experiences with high profit margins. Owners with extensive multi-decade experience will do well. Those with theater and acting experience, combined with 20 to 30 years of business success, will do extremely well in profit, employee, and customer satisfaction. This service business provides rewards via customer satisfaction surveys.
4.3.1 Competition and Buying Patterns
In the restaurant market, competition depends on reputation, advertising, and the dining experience. Word-of-mouth recommendations are important in retaining long-term satisfied customers. Combined with changing drama shows each year, and other side acts, this will ensure that diners return.
Customers will choose our business from the first time they see our actors handing out brochures or staging mini-shows. We have extensive experience with free publicity. Chef Joachim recently appeared on the Today show.
Appearances at events and public areas will attract the public. Customers will choose us due to our personal and face-to-face interaction in a dining experience. Staff will dress in period costumes and portray famous members of Parisian high society, including painters and writers.
The problem with today’s restaurants is they look great but lack the human element—the host or server who physically interacts with the customers. The dining experience should not be a simulation or game. What might someone say and what answer might come back?
Our customers will have repeat patterns of buying. Our pricing, taste, and product quality will exceed local expectations. We rely on the world tastes and travels of Chef Joachim and team.
Strategy and Implementation Summary
Belle Epoque will focus on attracting target customers who are fun-seekers, couples, and families. We will offer a menu of global cuisine, an extensive wine list, and a staged show and entertainment.
5.1 Competitive Edge
Our competitive edge will be our exciting actors. We will stand out with sustainable value, the transition from real life into fantasy escape. The competitive edge, that puts us ahead of most competitors, is the opportunity to live and interact in history or another world. Stepping into our world will reveal discussion with people of the time and physically doing things with them while enjoying a great meal and a show.
The ultimate edge is that we allow people to be in our show and to walk a few hours or days in history’s shoes. This is the opportunity for customers to gain instant fame on stage. But beyond that, we also offer the opportunity to live and work in our historic world for a reasonable price.
Our positioning is very hard to match, as long as we maintain this focus in our strategy, marketing, and business development. We are aware that diluting this expertise with premature expansion will dull the importance of our competitive edge. Also, excessive changing of our plan and rollout could break the creative side of the operation.
5.2 Marketing Strategy
Marketing will be our lifeblood of crowd draws and excitement. Our Marketing Strategy has been explained already. Our Sales Strategy is the easiest of our plans.
Our Marketing Strategy is born out of three governing functions:
- An indignant refusal to adopt typical high-cost advertising schemes. Throwing tens of thousands of dollars at billboards or magazines is a crutch for those less creative. The impact we can have with other creative means will be impressive.
- Word-of-mouth and first-person character advertising. Guaranteed to affect image, awareness, and propensity to buy.
- Ingenious strategic placement and appearance into the market at the right time and stunning venue. One of the easiest ones is strolling the promenade and handing out leaflets. Other events will include partnering with various wine and spirit distributors for special promotions.
5.3 Sales Strategy
Sales in our business are customer service. It is repeat business. One doesn’t just sell a glass or bottle of wine and boost the check price. One develops a proposal that works for the client. Direct-in house sales classes will be held to teach staff how to “get in with the smile,” “enjoy laughter with customers,” and then go for the boost in the check price. We can also make money with our selections of tea, coffee, cheese, and cigars.
Our innovative drama sales platforms will attract customers. Paying attention to people, listening and talking with them, admiring their face and clothes will make dynamic drama sales happen. Our goal is extraordinary attention to reveal extraordinary sales.
We must always be aware of the split between selling the restaurant and failure to fulfill the sale with entertainment and food, which leads to client dissatisfaction. The human sale should be developed, sold, and fulfilled by the same people. Our customers should never buy into a sale from one partner and have it delivered by anybody other than that same partner. The promise shall be fulfilled.
5.3.1 Sales Forecast
Lunch Hour Sales are figured starting in April of 2005 with 27 available days of weather and 190 seatings at an average check take of $14.00. In May, this rises to 220 covers. For June, July, and August, this escalates to full capacity with a cap of 385 out of 400 in four hours and 27 days of good weather.
Dinner Sales are figured starting in April of 2005 with 27 available days of weather and 110 seatings at an average check take of $24.00. In May, this rises to 140 covers. For June, July, and August, this escalates to full capacity with a cap of 385 out of 400 in four hours and 27 days of good weather.
Dinner Show Sales are figured starting in April of 2005 with 27 available days of weather and 101 seatings at a fixed ticket price of $55.00. In May, this rises to 201 covers. For June, July, and August, this escalates to full capacity with a cap of 320 out of 340 seats and 27 days of good weather.
Bar Sales are figured on 50 people per night at $20.00 for 15 nights in April, May, September, and October. In June, July, and August, the bar will book out at 200 people per night and be filled with excitement and games. Average take is expected to be $35.00 per person.
Be in the Show Sales are figured on 10 participants per night at $65.00 with 27 days of good weather.
Catering Sales are not desired to be a strong sales platform. But, we do expect to do at least two events in the summer. High Tea with a Lady Sales will be brisk at 30 people per afternoon for 27 days of good weather each month. Prix Fixe will be $18.00 per person from 2:00 PM to 4:00 PM each day.
Unit Sales
Lunch: 78,975 | 86,873 | 95,560
High Tea: 9,720 | 10,692 | 11,761
Dinner: 66,335 | 72,969 | 80,265
Dinner Show: 68,074 | 74,881 | 82,370
Bar: 28,350 | 31,185 | 34,304
Be In the Show: 3,240 | 3,564 | 3,920
Catering: 4 | 4 | 5
Total Unit Sales: 254,698 | 280,168 | 308,185
Unit Prices
Lunch: $14.00 | $14.98 | $16.03
High Tea: $18.00 | $19.26 | $20.61
Dinner: $24.00 | $25.68 | $27.48
Dinner Show: $55.00 | $58.85 | $62.97
Bar: $28.57 | $30.57 | $32.71
Be In the Show: $65.00 | $69.55 | $74.42
Catering: $7,250.00 | $7,757.50 | $8,300.53
Sales
Lunch: $1,105,650 | $1,301,350 | $1,531,689
High Tea: $174,960 | $205,928 | $242,377
Dinner: $1,592,040 | $1,873,831 | $2,205,499
Dinner Show: $3,744,070 | $4,406,770 | $5,186,769
Bar: $810,000 | $953,370 | $1,122,116
Be In the Show: $210,600 | $247,876 | $291,750
Catering: $29,000 | $34,133 | $40,175
Total Sales: $7,666,320 | $9,023,259 | $10,620,375
Direct Unit Costs
Lunch: $5.32 | $5.53 | $5.81
High Tea: $6.84 | $7.11 | $7.47
Dinner: $8.64 | $8.99 | $9.43
Dinner Show: $13.75 | $14.30 | $15.02
Bar: $10.29 | $10.70 | $11.23
Be In the Show: $16.25 | $16.90 | $17.75
Catering: $3,987.50 | $4,147.00 | $4,354.35
Direct Cost of Sales
Lunch: $420,147 | $480,648 | $555,149
High Tea: $66,485 | $76,059 | $87,848
Dinner: $573,134 | $655,666 | $757,294
Dinner Show: $936,018 | $1,070,804 | $1,236,779
Bar: $291,600 | $333,590 | $385,297
Be In the Show: $52,650 | $60,232 | $69,567
Catering: $15,950 | $18,247 | $21,075
Subtotal Direct Cost of Sales: $2,355,984 | $2,695,245 | $3,113,008
5.4 Milestones
The table below lists program milestones, managers, and budgets. The milestone schedule emphasizes implementation planning.
Please note that our business plan includes provisions for plan-vs.-actual analysis. We will hold monthly follow-up meetings to discuss variance and course corrections.
The “Belle Epoque” website will be the virtual business card and portfolio for the company, as well as its online “home.” It will showcase the 1890s Paris high-society decor of the restaurant, and the exuberant, social elegance of the Moulin de la Galette show and costumes of our staff. The website needs to be a simple yet classy and well-designed website that is in keeping with the latest trends in user interface design. A site that is too flashy or tries to use too much of the latest Shockwave or Flash technology can be overdone and cause potential customers to look elsewhere for online excitement as well as a meal or show. A particular section will offer a stunning and robust Flash MX presentation of the gay 90s Paris Impressionist arts scene. To further show off its expertise, the website may create a resources area, offering articles, research, re-enacting tips, and sales to interested parties. We will accept reservations online as well as partner with Amazon, PayPal, and book sellers to sell products while holding no inventory. Of course, all of the items will be totally Impressionist/Moulin Rouge/Age of Elegance in nature. We will accept all credit cards via our merchant accounts. The key to the website strategy will be combining a very well-designed front end with a back end capable of recording leads and proposal requests, as well as running our own online marketing program. We will sell targeted advertising to specific market groups, as well as partnering with online retailers to sell relevant products to the users. Marketing for us will center primarily around distribution of our URL, initially via paper means. That will plug and pull unique hits on our real-time database reporting and stats. Our restaurant concept will not rely on achieving first hit status for keywords to draw customers into the premises. Rather, a visit to the website will most always be an after-the-fact event. For instance, after visiting the restaurant or after reading our brochure or after hearing our commercial on the radio. We will garner some specific unique entry hits via usage of our time-proven keyword and HTML skills. These will result in number one placement across certain keywords and dozens of engines, worldwide. Such is our proven success of using numerous URLs, keyword generation, and testing with the number one rated international “Web Position Gold 2” program. In addition to that, whole, separate websites are built specifically for precise search engines. The most intelligent designers are able to achieve #1 ranking via weekly updating across 1,200+ engines. Our primary goal model is the Google engine. We will be linked to from hundreds of websites, including the Greater Bigmalltown Chamber of Commerce and US Chamber of Commerce. The website will be initially developed with few technical resources. A simple hosting provider, Ludditeorgweb.com services, will host the site and provide the technical back end out of Sunscorch City, USA. We will work with a contracted user interface designer to develop the simple, classy, yet Internet-focused site. The user interface designer will work with a graphic artist to come up with the website logo and the website graphics. A number of articles, photos, and features will be provided based on our recreation of the 1890s Paris Boulevardier lifestyle. The maintenance of the site will be done by the owner. As the website rolls out future development such as newsletters and downloadable games, a technical resource may need to be contracted to build the high-end items. The initial management team depends on the founder, Joachim Oignons, and his recruitment of managers. As we grow, we may take on additional consulting help, plus graphic/editorial, sales, and marketing. By opening, Belle Epoque’s management team will be composed of: Executive Chef Joachim will manage the kitchen staff and oversee the financials, Serving Staff Manager – T.O. Matto, Sommelier/Bar Manager – A. Bisynthe, Performance Manager – C. Wensleydale. The following table summarizes our personnel expenditures for the first three years, with compensation increasing from less than $634K the first year to about $700K in the third. Employees include hosts, kitchen staff, serving staff, performance staff, bartending staff, and dishwashing/cleanup staff, sufficient to cover the hours of operation, prep-time, and cleanup. Restaurant serving hours begin at 10:30 AM, and the bar closes at 2:00 AM. A Bookkeeper/Office Assistant will also be hired. We believe this plan is a fair compromise between fairness and expedience and meets the commitment of our mission statement. The detailed monthly personnel plan for the first year is included in the appendices. We are assuming a low start-up funding figure of approximately $500,000. The business will grow exponentially by a net worth of about two million dollars per year, and this growth is based off sheer cash profits and managerial excellence. Growth will be self-financed. No additional funding will be needed. 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. From the beginning, we recognize that our direct marketing will be critical to advertising, a factor we can influence easily. Weather and catastrophe cannot be so easily planned on and would delay the project by a year (hurricane, tornado, etc…). At least we are planning on the potential problem and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions. Two of the more important underlying assumptions are: We assume a strong economy, without a major recession. We assume funding will be maintained and strongly backed. One item of particular note is that we have set our cost of goods for food sales at high percentage factors of 30% to 36%. The majority of seasoned managers would raise an eyebrow at those percentages. We intend to beat these percentages and therefore bring in a windfall on our P&L. One important assumption is our capability to decrease food waste and costs. The following table shows the projected business ratios. We expect to maintain healthy ratios for profitability, risk, and return. The Standard Industrial Classification (SIC) Code for the industry we chose is French Restaurant (5812.0104), though there is no SIC that accurately describes our offering platform of dinner theatre. We used the Industry Ratios report for Eating Places (5812) to generate the industry profile shown in the following table. The following chart and table summarize our break-even analysis. We expect to reach break-even a few months into the business operation. With a favorable response from PR exposure and teaser advertising, in the first month we open, April of 2005, we may achieve the goal and break even.
The break-even assumes variable costs of 38% of revenue. This assumption is probably conservative, as it is likely too high. With initial monthly expenses exceeding $86,600, our average monthly revenues need to be approximately $140,000 to break-even.
BREAK-EVEN ANALYSIS
Monthly Units Break-even: 127,018
Monthly Revenue Break-even: $127,018
Assumptions:
– Average Per-Unit Revenue: $1.00
– Average Per-Unit Variable Cost: $0.38
– Estimated Monthly Fixed Cost: $78,751
8.5 Projected Profit and Loss
Our advertising budget pulls data from several tables. Spending less than the industry average is due to our great reviews in consumer and press-related magazines and newspapers. We also have unique marketing stunts that don’t rely on traditional advertising schemes.
We are profitable in the first year, making just over $3 million. We project conservatively regarding cost of sales and gross margin, expecting lower costs and higher margins. We prefer to be conservative to ensure we have enough cash.
Based on 30+ years of restaurant experience, we have budgeted for computer and equipment purchases. If we open in a previously equipped restaurant space, we will need replacements. If we open with brand new equipment, we won’t have replacement expenses right away. Monthly budgeting accounts for wear and tear and breakage of plates, glasses, tableware, etc.
Labor costs may be lower than projected because our attention might be diverted as we grow. We plan for worst-case scenarios and anticipate adjusting labor costs as we learn more. If our dinner and show concept is well received, we may need to increase staff to meet customer demand.
The Gross Margin Percentage remains steady year-to-year, as we hold menu and show prices with minimal increases to cover rising food costs and operating expenses. Customer response surveys and economic analysis will help determine whether we should raise prices after the first year. At worst, we forecast profits between $3-$4 million per year.
Pro Forma Profit and Loss
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| $7,666,320 | $9,023,259 | $10,620,375 | |
| $2,355,984 | $2,695,245 | $3,113,008 | |
| $0 | $0 | $0 | |
| $2,355,984 | $2,695,245 | $3,113,008 | |
| $5,310,336 | $6,328,013 | $7,507,367 | |
| 69.27% | 70.13% | 70.69% | |
| $945,011 | $974,038 | $1,018,075 | |
| $4,365,325 | $5,353,975 | $6,489,292 | |
| $4,377,325 | $5,365,975 | $6,501,292 | |
| $3,223 | $2,388 | $1,691 | |
| $1,090,525 | $1,337,897 | $1,621,900 | |
| $3,271,576 | $4,013,690 | $4,865,701 | |
| 42.67% | 44.48% | 45.81% | |
8.6 Projected Cash Flow
The plan projects a $11,340,000 net worth by 2007 (three years of operation in a high activity vacation environment). The plan anticipates full staffing, a small management team, and maximum acceptance by the dining public. The highest sales will be in the prime summer vacation months, but we believe our unique offering will draw customers to Belle Epoque all year long.
If our sales and profit forecasts prove accurate Chef Joachim will expand his management team and accelerate the long-term plan of opening a second and third Belle Epoque restaurants in other demographic markets. The opening of the second venue will be financed by the profits from this restaurant, and the third site will be financed by the profits from the first two ventures. This will result in substantial changes in the cash flow and profit figures in year two and year three.
Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly cash balance. The annual cash flow figures are included here and the more detailed monthly numbers are included in the appendices.
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $7,666,320 $9,023,259 $10,620,375
Subtotal Cash from Operations $7,666,320 $9,023,259 $10,620,375
Additional Cash Received
Sales Tax, VAT, HST/GST Received $536,642 $631,628 $743,426
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 $8,202,962 $9,654,887 $11,363,802
Expenditures
Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $634,040 $665,742 $699,029
Bill Payments $3,530,306 $4,194,008 $4,996,678
Subtotal Spent on Operations $4,164,346 $4,859,750 $5,695,707
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $536,642 $631,628 $743,426
Principal Repayment of Current Borrowing $5,400 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $6,900 $8,000 $9,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $100,000 $250,000 $500,000
Subtotal Cash Spent $4,813,288 $5,749,378 $6,948,133
Net Cash Flow $3,389,674 $3,905,508 $4,415,668
Cash Balance $3,440,094 $7,345,603 $11,761,271
8.7 Projected Balance Sheet
The balance sheet in the table shows managed yet sufficient growth of net worth and a healthy financial position. The monthly estimates are included in the appendices.
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $3,440,094 $7,345,603 $11,761,271
Inventory $66,090 $75,607 $87,326
Other Current Assets $17,000 $17,000 $17,000
Total Current Assets $3,523,184 $7,438,209 $11,865,597
Long-term Assets
Long-term Assets $175,000 $175,000 $175,000
Accumulated Depreciation $12,000 $24,000 $36,000
Total Long-term Assets $163,000 $151,000 $139,000
Total Assets $3,686,184 $7,589,209 $12,004,597
Liabilities and Capital
Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $209,488 $356,823 $415,509
Current Borrowing $20 $20 $20
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $209,508 $356,843 $415,529
Long-term Liabilities $33,100 $25,100 $16,100
Total Liabilities $242,608 $381,943 $431,629
Paid-in Capital $450,420 $450,420 $450,420
Retained Earnings ($278,420) $2,743,156 $6,256,847
Earnings $3,271,576 $4,013,690 $4,865,701
Total Capital $3,443,576 $7,207,267 $11,572,967
Total Liabilities and Capital $3,686,184 $7,589,209 $12,004,597
Net Worth $3,443,576 $7,207,267 $11,572,967
Appendix
Sales Forecast
Unit Sales
Lunch Sales: 0%, 5,130, 5,940, 10,395, 10,395, 10,395, 5,940, 5,130, 5,130, 5,130, 5,130, 5,130, 5,130, 5,130
High Tea Sales: 0%, 810, 810, 810, 810, 810, 810, 810, 810, 810, 810, 810, 810, 810
Dinner Sales: 0%, 2,970, 3,780, 10,395, 10,395, 10,395, 5,000, 5,000, 4,000, 3,700, 3,500, 3,700, 3,500
Dinner Show Sales: 0%, 2,727, 5,427, 8,640, 8,640, 8,640, 7,000, 6,000, 5,000, 5,000, 4,000, 3,000, 4,000
Bar Sales: 0%, 1,350, 1,350, 5,400, 5,400, 5,400, 1,350, 1,350, 1,350, 1,350, 1,350, 1,350, 1,350
Be In the Show Sales: 0%, 270, 270, 270, 270, 270, 270, 270, 270, 270, 270, 270, 270, 270
Catering Sales: 0%, 0, 0, 0, 1, 1, 0, 0, 0, 2, 0, 0, 0
Total Unit Sales: 13,257, 17,577, 35,910, 35,911, 35,911, 20,370, 18,560, 16,560, 16,262, 15,060, 14,260, 15,060
Unit Prices
Lunch Sales: $14.00
High Tea Sales: $18.00
Dinner Sales: $24.00
Dinner Show Sales: $55.00
Bar Sales: $20.00
Be In the Show Sales: $65.00
Catering Sales: $0.00
Sales
Lunch Sales: $71,820, $83,160, $145,530, $145,530, $145,530, $83,160, $71,820, $71,820, $71,820, $71,820, $71,820, $71,820, $71,820
High Tea Sales: $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580, $14,580
Dinner Sales: $71,280, $90,720, $249,480, $249,480, $249,480, $120,000, $120,000, $96,000, $88,800, $84,000, $88,800, $84,000
Dinner Show Sales: $149,985, $298,485, $475,200, $475,200, $475,200, $385,000, $330,000, $275,000, $275,000, $220,000, $165,000, $220,000
Bar Sales: $27,000, $27,000, $189,000, $189,000, $189,000, $27,000, $27,000, $27,000, $27,000, $27,000, $27,000, $27,000
Be In the Show Sales: $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550, $17,550
Catering Sales: $0, $0, $0, $9,000, $10,000, $0, $0, $0, $5,000, $0, $0, $0
Direct Unit Costs
Lunch Sales: 38.00%, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32, $5.32
High Tea Sales: 38.00%, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84, $6.84
Dinner Sales: 36.00%, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64, $8.64
Dinner Show Sales: 25.00%, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75, $13.75
Bar Sales: 36.00%, $7.20, $7.20, $12.60, $12.60, $12.60, $7.20, $7.20, $7.20, $7.20, $7.20, $7.20, $7.20, $7.20
Be In the Show Sales: 25.00%, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25, $16.25
Catering Sales: 55.00%, $0.00, $0.00, $0.00, $4,950.00, $5,500.00, $0.00, $0.00, $0.00, $2,750.00, $0.00, $0.00, $0.00
Direct Cost of Sales
Lunch Sales: $27,292, $31,601, $55,301, $55,301, $55,301, $31,601, $27,292, $27,292, $27,292, $27,292, $27,292, $27,292, $27,292
High Tea Sales: $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540, $5,540
Dinner Sales: $25,661, $32,659, $89,813, $89,813, $89,813, $43,200, $43,200, $34,560, $31,968, $30,240, $31,968, $30,240
Dinner Show Sales: $37,496, $74,621, $118,800, $118,800, $118,800, $96,250, $82,500, $68,750, $68,750, $55,000, $41,250, $55,000
Bar Sales: $9,720, $9,720, $68,040, $68,040, $68,040, $9,720, $9,720, $9,720, $9,720, $9,720, $9,720, $9,720, $9,720
Be In the Show Sales: $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388, $4,388
Catering Sales: $0, $0, $0, $4,950, $5,500, $0, $0, $0, $5,500, $0, $0, $0, $0
Total Sales: $352,215, $531,495, $1,091,340, $1,100,340, $1,101,340, $647,290, $580,950, $501,950, $504,750, $434,950, $384,750, $434,950
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 $352,215 $531,495 $1,091,340 $1,100,340 $1,101,340 $647,290 $580,950 $501,950 $504,750 $434,950 $384,750 $434,950
Direct Cost of Sales $110,097 $158,529 $341,882 $346,832 $347,382 $190,699 $172,640 $150,250 $153,158 $132,180 $120,158 $132,180
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $110,097 $158,529 $341,882 $346,832 $347,382 $190,699 $172,640 $150,250 $153,158 $132,180 $120,158 $132,180
Gross Margin $242,118 $372,966 $749,458 $753,508 $753,958 $456,591 $408,311 $351,701 $351,593 $302,771 $264,593 $302,771
Gross Margin % 68.74% 70.17% 68.67% 68.48% 68.46% 70.54% 70.28% 70.07% 69.66% 69.61% 68.77% 69.61%
Expenses
Payroll $51,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920
Sales and Marketing and Other Expenses $2,846 $3,671 $3,671 $3,671 $3,671 $3,671 $12,671 $13,671 $13,671 $14,251 $13,671 $3,671
Depreciation $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
MICROS system, phones, security, fire, computer upgrades $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000 $0
Exterminating $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25
Ceramic/Glass/Silver Upkeep $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Maintenance/Repairs $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Linen and Dry Cleaning $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175
Dish and Cleaning Supplies $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Office Products Upkeep $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Paper Products Upkeep $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Utilities $1,430 $1,430 $1,430 $1,430 $1,430 $1,430 $2,430 $3,430 $3,430 $3,430 $3,430 $3,430
Insurance $717 $717 $717 $717 $717 $717 $717 $717 $717 $717 $717 $717
Rent $1,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
Employee Healthcare $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Comps/Donations/Handouts 15% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pro Forma Cash Flow
Cash Received:
– Cash from Operations:
– Cash Sales: $352,215, $531,495, $1,091,340, $1,100,340, $1,101,340, $647,290, $580,950, $501,950, $504,750, $434,950, $384,750, $434,950
– Subtotal Cash from Operations: $352,215, $531,495, $1,091,340, $1,100,340, $1,101,340, $647,290, $580,950, $501,950, $504,750, $434,950, $384,750, $434,950
Additional Cash Received:
– Sales Tax, VAT, HST/GST Received: 7.00%, $24,655, $37,205, $76,394, $77,024, $77,094, $45,310, $40,667, $35,137, $35,333, $30,447, $26,933, $30,447
– New Current Borrowing: $0
– New Other Liabilities (interest-free): $0
– New Long-term Liabilities: $0
– Sales of Other Current Assets: $0
– Sales of Long-term Assets: $0
– New Investment Received: $0
– Subtotal Cash Received: $376,870, $568,700, $1,167,734, $1,177,364, $1,178,434, $692,600, $621,617, $537,087, $540,083, $465,397, $411,683, $465,397
Expenditures:
– Expenditures from Operations:
– Cash Spending: $51,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920, $52,920
– Bill Payments: $4,932, $152,261, $288,870, $619,528, $539,007, $527,194, $229,424, $273,304, $237,848, $251,615, $214,824, $191,498
– Subtotal Spent on Operations: $56,852, $205,181, $341,790, $672,448, $591,927, $580,114, $282,344, $326,224, $290,768, $304,535, $267,744, $244,418
Additional Cash Spent:
– Sales Tax, VAT, HST/GST Paid Out: $24,655, $37,205, $76,394, $77,024, $77,094, $45,310, $40,667, $35,137, $35,333, $30,447, $26,933, $30,447
– Principal Repayment of Current Borrowing: $450, $450, $450, $450, $450, $450, $450, $450, $450, $450, $450, $450, $450
– Other Liabilities Principal Repayment: $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0
– Long-term Liabilities Principal Repayment: $575, $575, $575, $575, $575, $575, $575, $575, $575, $575, $575, $575, $575
– Purchase Other Current Assets: $0, $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, $0
– Dividends: $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $0, $100,000
– Subtotal Cash Spent: $82,532, $243,411, $419,209, $750,497, $670,046, $626,449, $324,035, $362,386, $327,126, $336,007, $295,701, $375,890
Net Cash Flow: $294,338, $325,289, $748,525, $426,867, $508,388, $66,151, $297,581, $174,701, $212,957, $129,390, $115,981, $89,507
Cash Balance: $344,758, $670,047, $1,418,571, $1,845,438, $2,353,826, $2,419,978, $2,717,559, $2,892,260, $3,105,216, $3,234,606, $3,350,587, $3,440,094
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