Bensai Halstadt and Kaethe Villanova are the principals of Regali Luxuri, a specialty gift boutique located in the warehouse district of Treschicburg. We offer high-quality merchandise, including customized business cards, greeting cards, apparel, and home accents. Our target market consists of middle-to-upper class and affluent clientele, who appreciate our "Modern & Urban Life Style" aesthetic. What sets us apart from other retail shops is our printing services, unique product line, and proprietary designs.
Prior to our Grand Opening, we will have a company website in place. Our goal for the first year is to break even, with a moderate profit projected for year two. Future plans for growth include expanding our physical space, diversifying our product line, hiring designers, implementing e-commerce, and creating a mail order catalog.
Regali Luxuri was incorporated as an "S" corporation. We have invested time, personal finances, and conducted extensive research to develop our home-based business into a retail location. While we may not be retail experts, Kaethe brings five years of retail and accounting experience, and we have both pursued entrepreneurial and managerial education through the local University SBDC. Our combined experience and continuous learning enable us to train employees and effectively manage daily operations.
1.1 Objectives
– Generate total sales revenue to establish a profit by the end of year one.
– Implement e-commerce capabilities to the company website in year three.
– Establish an annual growth rate of approximately 20% in year three.
– Maintain a direct cost of sales of 45% or less.
– Establish 50% of merchandise as proprietary products in year two.
– Establish the company as a premier "Brand Recognized" name in the community in year one.
1.2 Mission
Regali Luxuri is a specialty cards, gifts, and apparel boutique that specializes in unique merchandise not commonly found in larger retail markets. We are dedicated to providing exceptional customer service in a relaxing and engaging shopping environment. Our mission is to provide customers with high-quality, affordable merchandise.
1.3 Keys to Success
– Acquire and design a product line of unique, handcrafted products.
– Provide customized products and services tailored to each customer’s personal style.
– Establish a loyal customer following through seasonal promotions, direct mail postcards, affordable prices, and a welcoming shopping environment.
– Establish a "Brand Identity" that represents high-quality merchandise and outstanding customer service.
Regali Luxuri is a privately owned gift boutique located in Treschicburg. The owners, Bensai Halstadt and Kaethe Villanova, specialize in a variety of unique merchandise, from specialty cards to customized apparel.
What started as a hobby soon evolved into a promising business venture. After meeting through a mutual friend, we began designing greeting cards, custom T-shirts, and business cards. Family and friends showed interest in purchasing these items, leading to a growing clientele. Over the years, we conducted primary market research and received tremendous interest and responses.
Three years ago, we relocated to Treschicburg, where we identified our target market primarily consisting of women between the ages of 25 and 55, including business entrepreneurs and professionals. We envisioned having a store front and secured space in a newly developed Luxury Residential/Retail Community. Although both owners have diverse backgrounds, Bensai Halstadt, a design engineer, and Kaethe Villanova, a surgical technologist, are creative and ambitious.
Regali Luxuri is located at 1234 Greenfern Boulevard in the warehouse district of west midtown in Treschicburg. The gift shop is situated in a newly developed Residential/Retail Community called Wensleydale. The area is undergoing gentrification, with twelve live/work space units and two retail spaces available. The owners’ two-level unit has a total square footage of 1,800, including an 800 square feet store front. The total space is leased at $1,610 per month.
Of the twelve live/work store fronts, over half are occupied and fully operational. The surrounding area is expected to attract more visitors with the opening of an upscale restaurant in early fall.
Regali Luxuri is approximately 15 minutes from Treschicburg Airport and less than 10 minutes away from the intersection of two Interstate Highways. Local street access is convenient, with ample parking available. The shop is also within 5-10 miles of several universities.
2.1 Company Ownership
Regali Luxuri is owned and operated by Bensai Halstadt and Kaethe Villanova. In August of last year, the business became incorporated and is structured as a privately owned "S" Corporation.
2.2 Start-up Summary
These figures are based on monthly and start-up expenses needed to open and operate the gift store. The capital needed will come from the owners’ personal finances.
Start-up expenses include the purchase of an additional computer, POS system, high-quality printing equipment, and software. Long-term assets encompass a larger multi-function fabric press for customizing garments. Additionally, start-up inventory for stocking display shelves will be purchased. Other current assets consist of the owners’ computer, supplies, and inventory accumulated while pursuing the business as a hobby.
Regali Luxuri is a specialty shop that offers a range of specialty cards, gifts, and home accents to fit the client’s personal style. The shop also provides customized printing services and exclusive proprietary products. The product line includes printing products, customized apparel, home accessories, personal care accents, and pet products. Additionally, Regali Luxuri offers various customized services, including plastic gift cards, customization services, V.I.P. customer appreciation, and graphic design/photography services. The pricing structure is based on cost-plus and competitive pricing, with a 50% deposit required for all orders and a 15% discount for bulk orders.
In the future, Regali Luxuri plans to expand its product line by showcasing home accessories, offering gift wrapping services, and introducing men’s gifts. The company also seeks to hire individuals to design exclusively for its proprietary products and develop a mail order catalog.
In terms of market analysis, research shows that small businesses in the gift industry have an advantage despite the economic recession. The target markets for Regali Luxuri include the Baby Boom Generation, the Affluent demographic, Generation X, and Generation Y.
The retail boutique is located in a community with a population of 214,675 within a five-mile radius. The primary consumers of Regali Luxuri products are women, and the customer base is composed of Baby Boomers, Affluent individuals, and Generation X and Y. By race, the customer base is diverse, including White, African American, Hispanic, Asian, and Other ethnicities.
Regali Luxuri’s customer is primarily female, educated, a homeowner, middle-to-upper class, and aged 25-59. They enjoy splurging on traveling and redecorating, value word-of-mouth recommendations, and are influenced by brand reputation.
Market Analysis
Potential Customers Growth Year 1 Year 2 Year 3 Year 4 Year 5 CAGR
Baby Boomers 3% 70,842 73,180 75,595 78,090 80,667 3.30%
Affluent 3% 55,816 57,267 58,756 60,284 61,851 2.60%
Generation X 2% 51,522 52,759 54,025 55,322 56,650 2.40%
Generation Y 2% 36,495 37,115 37,746 38,388 39,041 1.70%
Total 2.63% 214,675 220,321 226,122 232,084 238,209 2.63%
4.2 Service Business Analysis
The “Gift Industry” primarily sells combined lines of gifts and novelty merchandise, souvenirs, greeting cards, holiday decorations, and miscellaneous small arts goods. These shops are characterized by small, single-unit specialty shops, each retailing a narrow line of full-priced, high-quality merchandise. The gift industry’s five product categories and their total sales and market share are as follows:
Total Sales (billions)
1. Home Decorative Accents
—Source: 2004 Market Share Reporter (Research Alert, Dec. 6, 2002, p.5 from Unity Marketing)
The market for gifts and decorations reached $54.6 billion in 2001, only a 1% drop from $55.2 billion in 2000. In the Home Decorative Accents segment, Candles had the largest sales at $2 billion, while Baby and Children gifts were the top sellers in the General Gifts category with $1.8 billion.
Snap Shots of the Industry
“While the traditional furniture industry is struggling with the new fashion focus in home, the gifts industry is benefiting greatly from this trend. In the past two years, consumers spent more money on home furnishings than on clothes.”
“With this new emphasis on home decorating, consumers are not just striving to make our homes more ‘beautiful,’ rather they are seeking decorative items that can positively impact the mood and emotional climate of our home.”
“Products with a personal, emotional link to the consumer, such as collectibles or gifts based on licensed properties or which appeal to multiple senses, including sight, sound, scent, are in demand as consumers seek to make our homes more comfortable and comforting.”
“The future of the gifts and home accents market is positive for the next several years. A significant consumer trend that will play out in the gifts and home decorative market, as well as many other consumer product categories, will be a reaction against our increasingly technology-driven culture.”
“As our lives become more ‘virtual’ and dependent on computers and technology, consumers will seek out gifts and decorative accents that will help ground them in the ‘real’ world.”
—Source: Unity Marketing, The Gifts and Decorative Accents Report 2002: The Market, The Competitors, The Trends
4.2.1 Competition and Buying Patterns
Main Competitors
Specialty gift retailers can distinguish themselves by the types of products and services they offer. Regali Luxuri has identified and analyzed three competitors located within a 5-mile radius. To analyze them effectively, one of the owners visited all three stores to observe pricing structures, company image, traffic flow, location, and range of service. The analysis proved valuable in identifying Regali Luxuri’s competitive edge, areas of uniqueness, and marketing niche.
BELLA AZUL
Bella Azul is an ultra chic, cutting-edge, funky fashion and lifestyle boutique that opened in February 2003. They primarily sell designer fashion and have a distinctive line of home accessories, candles, bath/body accents, and jewelry. They offer a personal shopping staff for repeat customers and target primarily affluent women. Prices range from $20 to $1600. While they face slow traffic flow due to the developing area, they occasionally host special events like Wine Tasting and Fashion Shows. Their first-year estimated annual sales were approximately $200,000.
SWOOZIES
Swoozies is an established gift shop with four retail locations in the metro Treschicburg area. They target affluent women with a wide range of products and services, from dinnerware and picture frames to doll collections and custom printing. Their store environment is engaging and celebratory, with creative displays that distinguish gifts for different genders. They are looking to expand nationally to southeast cities. Their estimated annual sales for 2003 were $8 million.
BROOKSTONE, INC.
Brookstone, Inc., is a nationwide specialty retailer known for developing unique, proprietary branded products. They offer their merchandise through retail stores, catalogs, and the Internet. Their closest retail store is located in a popular mall. Customers can try out products for true, hands-on shopping. They offer a wide range of products, with a "brand identity" established for exceptional quality and high value. They also have a corporate gifts program and offer personalized services like silk-screening, engraving, stitching, or embossing. Brookstone’s products range from $5 to $3,000, and their estimated annual sales were over $325 million. They target women making purchases for their partners.
Strategy and Implementation Summary
Regali Luxuri will develop effective marketing and sales strategies by focusing on the following key areas:
– Prices
– Promotions
– Distribution channels
– Customer relations
– Products
These key areas will reflect our existing and potential target market segments.
5.1 Competitive Edge
KEY COMPETITIVE STRENGTHS
– Customized Services: Offering personalized connections to purchased products, a service not commonly found in today’s retail marketplace.
– Printing Services: Providing printing products like greeting cards, calendars, and business cards using personal photographs and mementos, creating one-of-a-kind merchandise.
– Handmade/Handcrafted Products: Showcasing crafts by owners Bensai and Kaethe, as well as outside entrepreneurs, on consignment to broaden our product line.
– Brand Identity: Distinguishing our proprietary products with brand labels, representing high quality and dedicated customer service.
KEY COMPETITIVE WEAKNESSES
– Range of Product Line: Despite unique and high-end merchandise, our product range is considered small compared to more established businesses.
– Location of the Gift Shop: The current developing stage of the area results in relatively slow business traffic, although as the residential and commercial development progresses, traffic flow is expected to improve.
PRICING STRATEGY
Regali Luxuri’s pricing structure remains affordable and in line with other specialty gift retailers, despite offering high-end and stylish products. The pricing structure is based on the value customers place on these products.
PROMOTION STRATEGY
Regali Luxuri will host seasonal open houses with special discounts to showcase new products and liquidate slow-moving merchandise. The promotional strategy includes the following:
– Spring: 15-20% discounts
– Fall: 15-20% discounts
– Summer: 15-20% discounts
– Annual Anniversary: 25% discounts
Existing and potential customers will be informed about new merchandise and savings through various marketing communication channels, including:
– Direct-Mail Postcards: Mailed to local ZIP codes and existing out-of-state clientele.
– Word-of-Mouth: Networking through friends, family, and business associates.
– Advertising Literature: Distributed to local community businesses and establishments such as restaurants, coffee shops, book stores, and universities.
5.3 Sales Strategy
CUSTOMERS
Establishing a rapport and connection with customers directly affects sales. The following methods will establish such a connection:
– Training and Customer Needs: Emphasizing the importance of customer needs to sales associates and encouraging helpful and personable behavior.
– Suggestion/Comment Box: Providing a suggestion/comment box for customers near the boutique’s entrance to gather direct feedback for improvement or enhancements.
PRODUCTS AND MERCHANDISING
Staying up-to-date with product and market trends is essential for increased sales. Regali Luxuri will utilize the following methods:
– Gift Industry Trade Shows: Attending local and national trade shows to stay informed about the latest gifting products and buying trends.
– Subscribing to Trade Publications: Subscribing to publications that keep us updated on current products and customer needs.
– Proprietary Products: Continuously developing creative and stylish products to strengthen our brand positioning and company image.
5.3.1 Sales Forecast
For the first year, we have averaged the cost of goods across all product lines at 42%. As we track our real costs, future forecasts for cost of goods sold (COGS) will be adjusted. Sales forecasts demonstrate the cyclical trends of seasonal and holiday spending, with declining sales in the summer months. However, as the neighborhood continues to develop economically and residentially, there is the potential for increased sales from visitors, vacationers, and residents.
Sales Forecast:
| Sales Forecast | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | |||
| Personal Care Accents | $10,875 | $13,594 | $16,313 |
| Candle Products | $7,800 | $9,750 | $11,700 |
| Bamboo Garden Vase Collection | $12,390 | $15,488 | $18,585 |
| Home Accessories | $11,190 | $13,988 | $16,785 |
| Pet Products | $7,770 | $9,713 | $11,655 |
| Printing Products | $8,960 | $11,200 | $13,440 |
| Customized Apparel | $6,370 | $7,963 | $9,555 |
| Total Sales | $65,355 | $81,694 | $98,033 |
| Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
| Personal Care Accents | $4,567 | $4,567 | $4,795 |
| Candle Products | $3,278 | $3,278 | $3,442 |
| Bamboo Garden Vase Collection | $5,203 | $5,203 | $5,463 |
| Home Accessories | $4,700 | $4,700 | $4,935 |
| Pet Products | $3,264 | $3,264 | $3,427 |
| Printing Products | $3,763 | $3,763 | $3,951 |
| Customized Apparel | $2,674 | $2,674 | $2,808 |
| Subtotal Direct Cost of Sales | $27,449 | $27,449 | $28,821 |
5.4 Milestones
The following lists important milestones for Regali Luxuri along with dates and person(s) responsible for each task.
Milestones:
Store Location Confirmed – 1/1/2003 to 1/15/2003 – $0 – Bensai – Department
Lease Agreement Negotiated/Signed – 1/15/2003 to 3/1/2003 – $0 – Bensai/Kaethe – Department
Utilities, Internet Service Confirmed – 3/1/2003 to 3/6/2003 – $0 – Selma – Department
Vendor List Selection – 5/1/2003 to 2/1/2004 – $0 – Bensai/Kaethe – Department
Product Selection Confirmed – 5/1/2003 to 2/1/2004 – $0 – Bensai/Kaethe – Department
Business Acccount Opened – 7/1/2003 – $0 – Bensai/Kaethe – Department
Licensing/Business Entity – 7/18/2003 to 8/18/2003 – $0 – Bensai/Kudana – Department
Business Plan Completed – 10/1/2003 to 2/20/2004 – $0 – Bensai/Shantu – Department
Grand Opening Advertisement – 12/1/2003 to 1/1/2004 – $0 – Bensai – Department
Business Cards & Stationery Printed – 1/1/2004 to 2/1/2004 – $0 – Kaethe – Department
Totals – $0 –
Management Summary:
Owners, Bensai Halstadt and Kaethe Villanova will manage the boutique. Kaethe Villanova has five-years of retail and accounting experience applied to the business. Both owners have taken entrepreneurial classes through the local University SBDC (small business development center). Our experience and continuous education has aided our efforts in training sales associates and managing daily operations.
Due to the area being in its beginning stages of gentrification resulting in slow business traffic, the owners have decided to initially open its doors Thursday-Saturday, 10a.m. – 7p.m. and Sunday, 10a.m. – 6p.m. They have also decided to take a minimal salary for the first year, increasing their salary each of the next two years, commenserate with their expanded operating hours. Both will continue to work to finance our business venture. Our work schedule allows us the flexibility to manage the store on the days previously mentioned. We will eventually expand our days of operation according to increased population of residential and retail establishments and increased business traffic.
The following is a breakdown of responsibility and decision-making:
– Bensai Halstadt: Printing Services, Promotions/Advertising, Shipping/Delivery, Web Maintenance, Proprietary Product Development, General Product Selection
– Kaethe Villanova: Purchasing/Inventory Tracking, Merchandising/Store Planning, Operations/Accounting, Training, Sales/Marketing, Hiring/Employee Policies, Customer Service, Customization Services
In addition, Regali Luxuri has a professional and advisory support team, including:
– Board of Directors: Bensai Halstadt & Kaethe Villanova
– Attorney: Greming Starke Roffman P.C.
– Accountant: Cleona Giraude
– Insurance Agent: State Farm Agency
– Banker: Riane Schmidt, Wachovia Bank
– Consultant(s): Kudana Elderberry
– Mentors & Key Advisors: Kudana Ederberry and Shantu Mobuko
Personnel Plan:
Owners Bensai and Kaethe have decided to take a minimal salary for the first year, increasing their salary each of the next two years, commenserate with their expanded operating hours. Both will continue to work to finance our business venture. If the extended hours and volume of business warrants, we may hire part-time employees for the year two holiday season, or maybe not until year three.
Year 1 – Owners: $18,000 – Total People: 0
Year 2 – Owners: $30,000 – Total People: 0
Year 3 – Owners: $36,000 – Total People: 0
Total Payroll: $18,000, $30,000, $36,000
The following topics present the financials for Regali Luxuri.
Start-up Funding:
Kaethe Villanova and Bensai Halstadt will each invest in Regali Luxuri. Additional start-up funding includes existing computer and printing equipment, some short-term debt in the form of credit card purchases, and a small amount of accounts payables owed to suppliers for inventory purchased while this operation was a hobby.
Start-up Expenses to Fund: $17,080
Start-up Assets to Fund: $9,800
Total Funding Required: $26,880
Assets: Non-cash Assets from Start-up – $9,000, Cash Requirements from Start-up – $800, Additional Cash Raised – $0, Cash Balance on Starting Date – $800, Total Assets – $9,800
Liabilities: Current Borrowing – $2,160, Long-term Liabilities – $0, Accounts Payable (Outstanding Bills) – $720, Other Current Liabilities (interest-free) – $0, Total Liabilities – $2,880
Capital: Planned Investment: Bensai Halstadt – $12,000, Kaethe Villanova – $12,000, Other – $0, Additional Investment Requirement – $0, Total Planned Investment – $24,000, Loss at Start-up (Start-up Expenses) – ($17,080), Total Capital – $6,920
Total Capital and Liabilities: $9,800
Total Funding: $26,880
Break-even Analysis:
Current projections of average monthly expenses, and an admittedly high estimated cost of goods, Regali Luxuri will need to sell merchandise and services each month, as shown below, to break even.
Break-even Analysis:
Monthly Revenue Break-even: $5,048.
Assumptions:
– Average Percent Variable Cost: 42%
– Estimated Monthly Fixed Cost: $2,928.
Projected Profit and Loss:
The profit and loss figures indicate that Regali Luxuri is teetering on the edge of profitability. The owners acknowledge the possibility of forgoing salaries in certain months to ensure profitability and maintain a positive cash balance.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales: $65,355 $81,694 $98,033
Direct Cost of Sales: $27,449 $27,449 $28,821
Other Costs of Goods: $0 $0 $0
Total Cost of Sales: $27,449 $27,449 $28,821
Gross Margin: $37,906 $54,245 $69,211
Gross Margin %: 58.00% 66.40% 70.60%
Expenses:
Payroll: $18,000 $30,000 $36,000
Marketing/Promotion: $1,200 $1,600 $2,000
Depreciation: $396 $400 $400
Delivery & Shipping Cost: $1,200 $1,200 $1,200
Legal Expenses: $720 $720 $720
Payroll Taxes: $0 $0 $0
Rent: $9,600 $9,600 $9,600
Utilities & Internet: $1,500 $1,500 $1,500
Business Insurance: $1,020 $1,020 $1,020
Telephones-Landline/Cell: $1,500 $1,500 $1,500
Total Operating Expenses: $35,136 $47,540 $53,940
Profit Before Interest and Taxes: $2,770 $6,705 $15,271
EBITDA: $3,166 $7,105 $15,671
Interest Expense: $40 $0 $0
Taxes Incurred: $819 $2,011 $4,581
Net Profit: $1,911 $4,693 $10,690
Net Profit/Sales: 2.92% 5.75% 10.90%
7.4 Projected Cash Flow
The following includes Regali Luxuri Projected Cash Flow through 2007.
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $65,355 $81,694 $98,033
Subtotal Cash from Operations $65,355 $81,694 $98,033
Additional Cash Received
Sales Tax, VAT, HST/GST Received $4,575 $5,159 $5,828
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 $69,930 $86,853 $103,861
Expenditures
Expenditures from Operations
Cash Spending $18,000 $30,000 $36,000
Bill Payments $42,017 $44,813 $50,691
Subtotal Spent on Operations $60,017 $74,813 $86,691
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $4,575 $5,159 $5,828
Principal Repayment of Current Borrowing $2,160 $0 $0
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 $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $66,752 $79,972 $92,519
Net Cash Flow $3,178 $6,881 $11,341
Cash Balance $3,978 $10,859 $22,201
7.5 Projected Balance Sheet
The balance sheet for Regali Luxuri is typical of a shoe-string startup company. The company relies on the passion and dedication of its founders, and it displays steady growth based on conservative forecasting. Earnings and net worth improve each year of the plan.
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $3,978 $10,859 $22,201
Inventory $2,291 $2,291 $2,406
Other Current Assets $3,000 $3,000 $3,000
Total Current Assets $9,270 $16,150 $27,607
Long-term Assets
Long-term Assets $2,000 $2,000 $2,000
Accumulated Depreciation $396 $796 $1,196
Total Long-term Assets $1,604 $1,204 $804
Total Assets $10,874 $17,354 $28,411
Liabilities and Capital
Current Liabilities
Accounts Payable $2,043 $3,830 $4,196
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $2,043 $3,830 $4,196
Long-term Liabilities $0 $0 $0
Total Liabilities $2,043 $3,830 $4,196
Paid-in Capital $24,000 $24,000 $24,000
Retained Earnings ($17,080) ($15,169) ($10,476)
Earnings $1,911 $4,693 $10,690
Total Capital $8,831 $13,524 $24,214
Total Liabilities and Capital $10,874 $17,354 $28,411
Net Worth $8,831 $13,524 $24,214
7.6 Business Ratios
The Standard Industrial Classification (SIC) Code for our industry is Gift Shops (5947.0104). We used the report for the broader category Gift, Novelty, and Souvenir shop (5947) to generate the industry profile ratios shown in the following table.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 25.00% 20.00% 0.44%
Percent of Total Assets
Inventory 21.07% 13.20% 8.47% 34.88%
Other Current Assets 27.59% 17.29% 10.56% 23.80%
Total Current Assets 85.25% 93.06% 97.17% 76.55%
Long-term Assets 14.75% 6.94% 2.83% 23.45%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 18.79% 22.07% 14.77% 34.24%
Long-term Liabilities 0.00% 0.00% 0.00% 15.29%
Total Liabilities 18.79% 22.07% 14.77% 49.53%
Net Worth 81.21% 77.93% 85.23% 50.47%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 58.00% 66.40% 70.60% 39.04%
Selling, General & Administrative Expenses 134.30% 118.94% 105.29% 24.17%
Advertising Expenses 0.00% 0.00% 0.00% 1.96%
Profit Before Interest and Taxes 4.24% 8.21% 15.58% 1.36%
Main Ratios
Current 4.54 4.22 6.58 1.99
Quick 3.42 3.62 6.01 0.81
Total Debt to Total Assets 18.79% 22.07% 14.77% 51.50%
Pre-tax Return on Net Worth 30.91% 49.58% 63.07% 2.37%
Pre-tax Return on Assets 25.11% 38.63% 53.75% 4.90%
Additional Ratios
Net Profit Margin 2.92% 5.75% 10.90% n.a
Return on Equity 21.64% 34.70% 44.15% n.a
Activity Ratios
Inventory Turnover 10.09 11.98 12.27 n.a
Accounts Payable Turnover 21.22 12.17 12.17 n.a
Payment Days 28 23 29 n.a
Total Asset Turnover 6.01 4.71 3.45 n.a
Debt Ratios
Debt to Net Worth 0.23 0.28 0.17 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $7,227 $12,320 $23,410 n.a
Interest Coverage 69.25 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.17 0.21 0.29 n.a
Current Debt/Total Assets 19% 22% 15% n.a
Acid Test 3.42 3.62 6.01 n.a
Sales/Net Worth 7.40 6.04 4.05 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Appendix
Sales Forecast
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
Personal Care Accents $600 $1,050 $975 $825 $675 $600 $1,125 $1,200 $1,500 $900 $900 $525
Candle Products $450 $600 $600 $525 $450 $525 $675 $900 $1,050 $675 $900 $450
Bamboo Garden Vase Collection $630 $1,260 $1,050 $735 $525 $630 $1,365 $1,680 $1,890 $945 $1,155 $525
Home Accessories $450 $900 $750 $750 $450 $750 $1,200 $1,500 $2,100 $1,200 $750 $390
Pet Products $375 $750 $675 $450 $450 $420 $750 $1,050 $1,050 $600 $750 $450
Printing Products $400 $800 $700 $600 $400 $560 $800 $1,200 $1,200 $800 $900 $600
Customized Apparel $350 $700 $350 $700 $350 $700 $560 $700 $490 $420 $560 $490
Total Sales $3,255 $6,060 $5,100 $4,585 $3,300 $4,185 $6,475 $8,230 $9,280 $5,540 $5,915 $3,430
Direct Cost of Sales
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Direct Cost of Sales
Personal Care Accents $252 $441 $409 $346 $283 $252 $473 $504 $630 $378 $378 $221
Candle Products $189 $252 $252 $221 $189 $221 $284 $378 $441 $284 $378 $189
Bamboo Garden Vase Collection $264 $529 $441 $308 $221 $264 $573 $706 $794 $397 $485 $221
Home Accessories $189 $378 $315 $315 $189 $315 $504 $630 $882 $504 $315 $164
Pet Products $158 $315 $284 $189 $189 $176 $315 $441 $441 $252 $315 $189
Printing Products $168 $336 $294 $252 $168 $235 $336 $504 $504 $336 $378 $252
Customized Apparel $147 $294 $147 $294 $147 $294 $235 $294 $206 $176 $235 $205
Subtotal Direct Cost of Sales $1,367 $2,545 $2,142 $1,925 $1,386 $1,757 $2,720 $3,457 $3,898 $2,327 $2,484 $1,441
| Personnel Plan | |||||||||||||
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Owners | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
| Name or Title or Group | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Name or Title or Group | $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 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
| 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 | $3,255 | $6,060 | $5,100 | $4,585 | $3,300 | $4,185 | $6,475 | $8,230 | $9,280 | $5,540 | $5,915 | $3,430 | |
| Direct Cost of Sales | $1,367 | $2,545 | $2,142 | $1,925 | $1,386 | $1,757 | $2,720 | $3,457 | $3,898 | $2,327 | $2,484 | $1,441 | |
| Other Costs of Goods | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Total Cost of Sales | $1,367 | $2,545 | $2,142 | $1,925 | $1,386 | $1,757 | $2,720 | $3,457 | $3,898 | $2,327 | $2,484 | $1,441 | |
| Gross Margin | $1,888 | $3,515 | $2,958 | $2,660 | $1,914 | $2,428 | $3,755 | $4,773 | $5,382 | $3,213 | $3,431 | $1,989 | |
| Gross Margin % | 58.00% | 58.00% | 58.00% | 58.02% | 58.00% | 58.02% | 57.99% | 58.00% | 58.00% | 58.00% | 58.01% | 57.99% | |
| Expenses | |||||||||||||
| Payroll | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | $1,500 | |
| Marketing/Promotion | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
| Depreciation | $33 | $33 | $33 | $33 | $33 | $33 | $33 | $33 | $33 | $33 | $33 | $33 | |
| Delivery & Shipping Cost | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | $100 | |
| Legal Expenses | $60 | $60 | $60 | $60 | $60 | $60 | $60 | $60 | $60 | $60 | $60 | $60 | |
| Payroll Taxes | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
| Rent | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | $800 | |
| Utilities & Internet | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | |
| Business Insurance | $85 | $85 | $85 | $85 | $85 | $85 | $85 | $85 | $85 | $85 | $85 | $85 | |
| Telephones-Landline/Cell | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | $125 | |
| Total Operating Expenses | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | $2,928 | |
| Profit Before Interest and Taxes | ($1,040) | $587 | $30 | ($268) | ($1,014) | ($500) | $827 | $1,845 | $2,454 | $285 | $503 | ($939) | |
| EBITDA | ($1,007) | $620 | $63 | ($235) | ($981) | ($467) | $860 | $1,878 | $2,487 | ||||
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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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