FynbosFarm aims to establish itself as a leading player in the hydroponics and instant turf market. Led by a successful businessman, the project will focus on intensive production and workforce development. The company is dedicated to enhancing the taste and quality of vegetables through innovative food technology. It will also provide education, experience, and research opportunities in hydroponics. With the guidance of expert consultant Mike Shelly, the project will supply vegetables for local and international markets and instant turf for the local market.
The main crops to be cultivated include instant turf, long-life tomatoes, cucumbers, and colored peppers. The tomatoes will be grown on 4ha of plastic, yielding 2100,000 kgs per year, while cucumbers and peppers will be grown on 1ha of plastic, producing 205,000 kgs and 250,000 kgs per year respectively. The remaining 30ha will be allocated to turf production.
To finance the purchase of a new farm and cover development costs, the company is seeking both short-term and long-term funding. This funding will also be used to manage startup expenses and offset first-year losses. It is anticipated that the company will turn a profit in its second year of operation. Production is estimated to begin within 8 months of constructing the first tunnel.
The objective of this project is to establish an intensive farm, producing high-quality produce for the national and international market year round.
FynbosFarm is a KZN-based company with a two-fold mission:
– to produce high-quality, nutritional, and flavorful vegetables for local and international consumption.
– to create opportunities for leadership and highly productive teamwork for local women who work on the farm.
The women working on the farm will be organized into intensive work groups and will be paid incentives based on production and performance in addition to their standard wages.
Keys to Success:
– Efficient production using greenhouses.
– No existing projects of this magnitude in the KZN region.
– Experience in the vegetable industry since 1996.
FynbosFarm is a partnership of successful businessmen developing a small farm into a highly productive hydroponics and instant turf project.
Hydroponics is the growing of high-quality vegetables in high-tech, multi-span greenhouses. The produce is grown in 15L bags with a medium used to support the root system. The plants are automatically fed nutrients through irrigation systems. They are grown in the best suitable conditions to maximize fruit production.
Instant turf will be grown in open field production, irrigated via overhead spray units using runoff fertilizer from the greenhouses. This effective fertilizer will meet all the turf’s requirements. The turf will be harvested with a sod cutter and sold by the square meter.
The company will initially focus on tomatoes, peppers, and cucumbers in the tunnels and will later expand to other vegetables and the fresh cut flower market.
Company Ownership:
FynbosFarm is owned jointly by its two founders, one of whom will serve as the project manager.
Start-up Summary:
The company is seeking investment for acquiring the vegetable farm, modifying facilities, purchasing multi-spans and equipment, and funding operating expenses.
Facilities:
– Six large greenhouses for vegetables
– Irrigation, fertilization, temperature control, and water treatment devices
– Outdoor production of instant lawn
– Pack houses and washbay facilities
– Business office building
An additional portion of the operation will be the growing of instant lawn to meet the demand from local nurseries and landscapers.
The largest portion of the start-up requirements is for purchasing the site, constructing necessary buildings and infrastructure, and digging a well.
The start-up period is five months, including construction and one and a half months for growing the first crops, to be sold beginning in July.
Start-up Requirements
Start-up Expenses:
– Legal: R70,000
– Borehole testing: R10,000
– Seedlings: R128,000
– Sawdust: R155,000
– Plant bags: R57,753
– Twine and clips: R28,000
– Site leveling: R250,000
– Other: R95,000
– Total Start-up Expenses: R793,753
Start-up Assets:
– Cash Required: R5,000
– Other Current Assets: R0
– Long-term Assets: R20,000,000
– Total Assets: R20,005,000
Total Requirements: R20,798,753
Products
Hydroponics is the production of vegetables in temperature-controlled tunnels. The structures being used are richelle multi-spans, which come complete with computer temperature sensors, automatic opening and closing vents, automatic misting units, and temperature-controlled fans. The advantages of growing in high-tech tunnels are:
– Faster, longer growth
– Harvest labour reduced by 80%
– Decrease loss in weight gain by reducing harvest time
– Eliminate weight loss from shock
Vegetables
FynbosFarm will produce tomatoes, peppers, and cucumbers with the capacity to produce more than 2,550,000 kg of vegetables per year.
Instant lawn
The company will produce 30ha of instant lawn, selling between 20-25ha per year.
Research and development
The company will seek contact with local and international companies to acquire new hybrids of vegetables that grow faster and are hardier in our climate. In addition, the company will track other available species and systems and collaborate with universities and researchers involved in greens to find the best-flavored, large, and firm vegetables.
Future product plans
The company aims to explore flower production as a high-revenue venture and considers the production of bananas due to the current shortage and high selling prices.
Market Analysis Summary
In addition to supplying major supermarkets, FynbosFarm will target open-air markets such as Fruit and Veg City and VegExpress. They will also focus on wholesale live vegetable markets, fresh farmers’ markets, and export to neighboring states and international markets.
Market Segmentation
For this plan, the focus will be on retail outlets and VegCity shops within a 45-mile radius of our location.
Market Analysis:
Retail outlets: 25% Growth: 100, 125, 156, 195, 244. CAGR: 24.98%
vegcities: 10% Growth: 20, 22, 24, 26, 29. CAGR: 9.73%
Other: 25% Growth: 50, 63, 79, 99, 124. CAGR: 25.49%
Total: 23.62% Growth: 170, 210, 259, 320, 397. CAGR: 23.62%
4.2 Target Market Segment Strategy:
The target customers are major retail outlets and export markets for vegetables.
For instant lawn, the target customers are nursery and garden centres, landscapers, and private customers.
4.3 Industry Analysis:
The hydroponic industry is new in the S.A. market in terms of research and developed farms. Start-up costs for a fully state-of-the-art project are a major factor.
Two important factors are the selected markets, where high-quality vegetables must be sold to retrieve the highest price, and project size, as retail outlets require year-round supply.
A project of this magnitude will create interest among major vegetable outlet markets.
4.3.1 Competition and Buying Patterns:
FynbosFarm aims to be the biggest growers of hydroponics in the KZN region. There is minimal competition, and the advantage of large-scale hydroponics is the availability of year-round vegetable production in large quantities, which appeals to major retail outlets and exporters.
Strategy and Implementation Summary:
FynbosFarm’s strategy is to profitably and efficiently utilize present and future agricultural technology in vegetable production. Developing a profitable vegetable farm with custom-innovated equipment will provide a significant industry advantage.
Utilizing horticultural technology will also double the utilization of the climate controlled portion of the overhead.
The company’s goals in the first year are to develop the complete project, plant all 6ha for production, and construct grading and pack shed.
The long-term plan is to produce more selective vegetables and enter the fresh flower market.
5.1 Competitive Edge:
FynbosFarm’s main advantages are efficient production using greenhouses, no existing projects of this magnitude in the KZN region, and experience in the vegetable industry since 1996.
Performing a SWOT analysis will help develop good business strategies.
5.2 Marketing Strategy:
FynbosFarm will aggressively market and supply its products to selected outlets, focusing on local markets and export options. Emphasis will be on reliable year-round output from climate-controlled hydroponics facilities and the ability to produce in-demand non-native vegetables.
Marketing for turf will target regional greenhouses and landscapers.
Future marketing avenues, such as a website and internet advertising, are not included in this plan.
5.3 Sales Strategy:
Sales process for vegetables and instant turf is primarily wholesale marketing. Vegetables will be transported in refrigerated trucks as per orders, and instant turf will be palletized on open back trucks as per orders.
5.3.1 Sales Forecast:
Exceptional sales are expected in the first year. Direct unit costs include agricultural labor force costs, which make up roughly 35% of all direct costs each month.
Sales Forecast Table
| | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
|:————-:|:———:|:———:|:———:|:———:|:———:|
| Unit Sales | | | | | |
| Tomatoes | 2,100,000 | 1,500,000 | 2,100,000 | 1,500,000 | 2,100,000 |
| Peppers | 205,000 | 210,000 | 205,000 | 210,000 | 205,000 |
| Cucumbers | 250,000 | 250,000 | 250,000 | 250,000 | 250,000 |
| Instant Turf | 150,000 | 200,000 | 200,000 | 200,000 | 200,000 |
| Total Unit Sales | 2,705,000 | 2,160,000 | 2,755,000 | 2,160,000 | 2,755,000 |
| | | | | | |
| Unit Prices | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Tomatoes | R4.00 | R4.25 | R4.50 | R4.75 | R5.00 |
| Peppers | R10.00 | R10.50 | R11.00 | R11.50 | R12.00 |
| Cucumbers | R1.80 | R1.90 | R2.10 | R2.20 | R2.30 |
| Instant Turf | R10.00 | R11.00 | R12.00 | R13.00 | R14.00 |
| | | | | | |
| Sales | | | | | |
| Tomatoes | R8,400,000 | R6,375,000 | R9,450,000 | R7,125,000 | R10,500,000 |
| Peppers | R2,050,000 | R2,205,000 | R2,255,000 | R2,415,000 | R2,460,000 |
| Cucumbers | R450,000 | R475,000 | R525,000 | R550,000 | R575,000 |
| Instant Turf | R1,500,000 | R2,200,000 | R2,400,000 | R2,600,000 | R2,800,000 |
| Total Sales | R12,400,000| R11,255,000| R14,630,000| R12,690,000| R16,335,000|
| | | | | | |
| Direct Unit Costs | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 |
| Tomatoes | R2.00 | R2.13 | R2.25 | R2.38 | R2.50 |
| Peppers | R5.00 | R5.25 | R5.50 | R5.75 | R6.00 |
| Cucumbers | R0.90 | R0.95 | R1.05 | R1.10 | R1.15 |
| Instant Turf | R4.80 | R5.28 | R5.76 | R6.24 | R6.72 |
| | | | | | |
| Direct Cost of Sales | | | | | |
| Tomatoes | R4,200,000 | R3,187,500 | R4,725,000 | R3,562,500 | R5,250,000 |
| Peppers | R1,025,000 | R1,102,500 | R1,127,500 | R1,207,500 | R1,230,000 |
| Cucumbers | R225,000 | R237,500 | R262,500 | R275,000 | R287,500 |
| Instant Turf | R720,000 | R1,056,000 | R1,152,000 | R1,248,000 | R1,344,000 |
| Subtotal Direct Cost of Sales | R6,170,000 | R5,583,500 | R7,267,000 | R6,293,000 | R8,111,500 |
5.4 Milestones
The table and chart below outline the main milestones for the first year.
Milestones:
| Milestones | |||||
| Milestone | Start Date | End Date | Budget | Manager | Department |
| Raise funding | 11/1/2004 | 1/15/2005 | R0 | ABC | Department |
| Begin Construction | 2/1/2005 | 2/5/2005 | R15,000,000 | ABC | Department |
| Begin First Crop Planting | 5/10/2005 | 5/15/2005 | R5,000,000 | ABC | Department |
| Begin Sales | 7/1/2005 | 7/10/2005 | R0 | ABC | Department |
| Begin Turf Sales | 10/1/2005 | 10/10/2005 | R0 | ABC | Department |
| Total Sales over R12 Million | 7/1/2005 | 6/30/2006 | R0 | ABC | Department |
| Totals | R20,000,000 | ||||
Management Summary:
The project manager has 10 years of experience in the vegetable industry.
[Proprietary and confidential information removed].
6.1 Personnel Plan:
The personnel plan includes the project manager, who will oversee all design and construction of the hydroponics facilities, and a consultant specializing in hydroponics. Wages for the agricultural laborers who will tend the produce are included in the Sales Forecast table as part of the direct unit costs.
Personnel Plan:
| Personnel Plan | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Project manager | R420,000 | R420,000 | R453,600 | R489,888 | R529,079 |
| Consultant | R60,000 | R63,000 | R66,150 | R69,457 | R72,930 |
| Total People | 2 | 2 | 2 | 2 | 2 |
| Total Payroll | R480,000 | R483,000 | R519,750 | R559,345 | R602,009 |
The financial plan is outlined in the following tables and charts. With initial loans, we can construct the hydroponics facilities and begin crop development. Based on the high demand for these products, we expect solid sales in the first year, with improving margins.
7.1 Start-up Funding:
FynbosFarm needs to fund its start-up requirements. The owner will provide personal investment and is seeking long-term borrowing, using two other successful agricultural ventures he owns as collateral.
Start-up Funding:
| Start-up Funding | |
| Start-up Expenses to Fund | R793,753 |
| Start-up Assets to Fund | R20,005,000 |
| Total Funding Required | R20,798,753 |
| Assets | |
| Non-cash Assets from Start-up | R20,000,000 |
| Cash Requirements from Start-up | R5,000 |
| Additional Cash Raised | R0 |
| Cash Balance on Starting Date | R5,000 |
| Total Assets | R20,005,000 |
| Liabilities and Capital | |
| Liabilities | |
| Current Borrowing | R0 |
| Long-term Liabilities | R18,000,000 |
| Accounts Payable (Outstanding Bills) | R0 |
| Other Current Liabilities (interest-free) | R0 |
| Total Liabilities | R18,000,000 |
| Capital | |
| Planned Investment | |
| Owners | R2,798,753 |
| Investor | R0 |
| Additional Investment Requirement | R0 |
| Total Planned Investment | R2,798,753 |
| Loss at Start-up (Start-up Expenses) | (R793,753) |
| Total Capital | R2,005,000 |
| Total Capital and Liabilities | R20,005,000 |
| Total Funding | R20,798,753 |
7.2 Important Assumptions:
- Steady demand for these products
- No major climate change that would make these products easier to grow without hydroponics in this area
7.3 Break-even Analysis:
Based on our monthly fixed costs, we need to sell the number of units shown below each month to break-even. Given the high demand for these products and our expertise in this industry, we should exceed this amount even in the first month of the plan, after our initial start-up period for construction and first crop growth.
Break-even Analysis
Monthly Units Break-even: 57,047
Monthly Revenue Break-even: R261,511
Assumptions:
Average Per-Unit Revenue: R4.58
Average Per-Unit Variable Cost: R2.28
Estimated Monthly Fixed Cost: R131,388
7.4 Projected Profit and Loss
The following table and charts display our projected Profit and Loss statement. Monthly details for the first year can be found in the appendix.
Pro Forma Profit and Loss
| Pro Forma Profit and Loss | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Sales | R12,400,000 | R11,255,000 | R14,630,000 | R12,690,000 | R16,335,000 |
| Direct Cost of Sales | R6,170,000 | R5,583,500 | R7,267,000 | R6,293,000 | R8,111,500 |
| Other Costs of Sales | R0 | R0 | R0 | R0 | R0 |
| Total Cost of Sales | R6,170,000 | R5,583,500 | R7,267,000 | R6,293,000 | R8,111,500 |
| Gross Margin | R6,230,000 | R5,671,500 | R7,363,000 | R6,397,000 | R8,223,500 |
| Gross Margin % | 50.24% | 50.39% | 50.33% | 50.41% | 50.34% |
| Expenses | |||||
| Payroll | R480,000 | R483,000 | R519,750 | R559,345 | R602,009 |
| Marketing/Promotion | R10,000 | R10,500 | R11,025 | R11,907 | R12,860 |
| Depreciation | R666,660 | R666,700 | R666,700 | R666,700 | R666,700 |
| H.P.s | R120,000 | R120,600 | R121,203 | R121,203 | R120,600 |
| Fuel | R100,000 | R105,000 | R110,250 | R115,726 | R121,550 |
| Maintenance | R20,000 | R21,000 | R22,050 | R23,153 | R24,310 |
| Payroll Taxes | R0 | R0 | R0 | R0 | R0 |
| Other | R180,000 | R189,000 | R198,450 | R208,373 | R218,719 |
| Total Operating Expenses | R1,576,660 | R1,595,800 | R1,649,428 | R1,706,407 | R1,766,748 |
| Profit Before Interest and Taxes | R4,653,340 | R4,075,700 | R5,713,572 | R4,690,593 | R6,456,752 |
| EBITDA | R5,320,000 | R4,742,400 | R6,380,272 | R5,357,293 | R7,123,452 |
| Interest Expense | R1,759,750 | R1,663,000 | R1,550,500 | R1,413,000 | R1,138,000 |
| Taxes Incurred | R868,077 | R723,810 | R1,248,922 | R983,278 | R1,595,626 |
| Net Profit | R2,025,513 | R1,688,890 | R2,914,150 | R2,294,315 | R3,723,126 |
| Net Profit/Sales | 16.33% | 15.01% | 19.92% | 18.08% | 22.79% |
7.5 Projected Cash Flow
The following table and chart show our projected cash flow, including estimated repayments of the principal borrowing amount.
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Cash Received | |||||
| Cash from Operations | |||||
| Cash Sales | R1,860,000 | R1,688,250 | R2,194,500 | R1,903,500 | R2,450,250 |
| Cash from Receivables | R9,471,833 | R9,665,383 | R12,144,769 | R10,953,616 | R13,570,761 |
| Subtotal Cash from Operations | R11,331,833 | R11,353,633 | R14,339,269 | R12,857,116 | R16,021,011 |
| Additional Cash Received | |||||
| Sales Tax, VAT, HST/GST Received | R0 | R0 | R0 | R0 | R0 |
| New Current Borrowing | R0 | R0 | R0 | R0 | R0 |
| New Other Liabilities (interest-free) | R0 | R0 | R0 | R0 | R0 |
| New Long-term Liabilities | R0 | R0 | R0 | R0 | R0 |
| Sales of Other Current Assets | R0 | R0 | R0 | R0 | R0 |
| Sales of Long-term Assets | R0 | R0 | R0 | R0 | R0 |
| New Investment Received | R0 | R0 | R0 | R0 | R0 |
| Subtotal Cash Received | R11,331,833 | R11,353,633 | R14,339,269 | R12,857,116 | R16,021,011 |
7.6 Projected Balance Sheet
The Balance Sheet shows a steady increase in Net Worth over the next five years.
| Pro Forma Balance Sheet | |||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Assets | |||||
| Current Assets | |||||
| Cash | R1,668,970 | R2,640,193 | R5,118,779 | R6,187,566 | R6,889,633 |
| Accounts Receivable | R1,068,167 | R969,534 | R1,260,264 | R1,093,148 | R1,407,137 |
| Other Current Assets | R0 | R0 | R0 | R0 | R0 |
| Total Current Assets | R2,737,137 | R3,609,727 | R6,379,044 | R7,280,714 | R8,296,770 |
| Long-term Assets | |||||
| Long-term Assets | R20,000,000 | R20,000,000 | R20,000,000 | R20,000,000 | R20,000,000 |
| Accumulated Depreciation | R666,660 | R1,333,360 | R2,000,060 | R2,666,760 | R3,333,460 |
| Total Long-term Assets | R19,333,340 | R18,666,640 | R17,999,940 | R17,333,240 | R16,666,540 |
| Total Assets | R22,070,477 | R22,276,367 | R24,378,984 | R24,613,954 | R24,963,310 |
7.7 Business Ratios
The following table outlines some key ratios from the Hydroponic Crops Grown Under Cover industry. The Industry Profile column provides specific ratios based on the industry as classified by the Standard Industry Classification (SIC) code, 0182.9902.
| Ratio Analysis | ||||||
| Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Industry Profile | |
| Sales Growth | 0.00% | -9.23% | 29.99% | -13.26% | 28.72% | -1.70% |
| Percent of Total Assets | ||||||
| Accounts Receivable | 4.84% | 4.35% | 5.17% | 4.44% | 5.64% | 2.94% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 24.83% |
| Total Current Assets | 12.40% | 16.20% | 26.17% | 29.58% | 33.24% | 39.79% |
| Long-term Assets | 87.60% | 83.80% | 73.83% | 70.42% | 66.76% | 60.21% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | ||||||
| Accounts Payable | 4.12% | 1.92% | 3.55% | 1.24% | 3.73% | 22.33% |
| Long-term Liabilities | 77.61% | 72.41% | 61.04% | 54.36% | 37.58% | 22.42% |
| Total Liabilities | 81.74% | 74.33% | 64.59% | 55.60% | 41.31% | 44.75% |
| Net Worth | 18.26% | 25.67% | 35.41% | 44.40% | 58.69% | 55.25% |
| Percent of Sales | ||||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 50.24% | 50.39% | 50.33% | 50.41% | 50.34% | 46.28% |
| Selling, General & Administrative Expenses | 33.91% | 35.39% | 30.41% | 32.33% | 27.55% | 29.76% |
| Advertising Expenses | 0.00% | 0.00% | 0.00% | 0.00% | 0.00% | 0.36% |
| Profit Before Interest and Taxes | 37.53% | 36.21% | 39.05% | 36.96% | 39.53% | 0.30% |
| Main Ratios | ||||||
| Current | 3.01 | 8.45 | 7.37 | 23.79 | 8.90 | 1.08 |
| Quick | 3.01 | 8.45 | 7.37 | 23.79 | 8.90 | 0.38 |
| Total Debt to Total Assets | 81.74% | 74.33% | 64.59% | 55.60% | 41.31% | 54.22% |
| Pre-tax Return on Net Worth | 71.79% | 42.18% | 48.22% | 29.99% | 36.30% | 0.29% |
| Pre-tax Return on Assets | 13.11% | 10.83% | 17.08% | 13.32% | 21.31% | 0.63% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |
| Net Profit Margin | 16.33% | 15.01% | 19.92% | 18.08% | 22.79% | n.a |
| Return on Equity | 50.25% | 29.53% | 33.75% | 21.00% | 25.41% | n.a |
| Activity Ratios | ||||||
| Accounts Receivable Turnover | 9.87 | 9.87 | 9.87 | 9.87 | 9.87 | n.a |
| Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
| Unit Sales | |||||||||||||
| Tomatoes | 0% | 100,000 | 200,000 | 300,000 | 300,000 | 200,000 | 100,000 | 0 | 0 | 100,000 | 200,000 | 300,000 | 300,000 |
| Peppers | 0% | 10,000 | 15,000 | 20,000 | 30,000 | 30,000 | 30,000 | 25,000 | 20,000 | 15,000 | 0 | 0 | 10,000 |
| Cucumbers | 0% | 20,000 | 45,000 | 45,000 | 15,000 | 0 | 0 | 20,000 | 45,000 | 45,000 | 15,000 | 0 | 0 |
| Instant Turf | 0% | 0 | 0 | 0 | 30,000 | 30,000 | 30,000 | 30,000 | 30,000 | 0 | 0 | 0 | 0 |
| Total Unit Sales | 130,000 | 260,000 | 365,000 | 375,000 | 260,000 | 160,000 | 75,000 | 95,000 | 160,000 | 215,000 | 300,000 | 310,000 | |
| Unit Prices | |||||||||||||
| Tomatoes | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | R4.00 | ||
| Peppers | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | ||
| Cucumbers | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | R1.80 | ||
| Instant Turf | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 | R10.00 |
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 | |
| Project manager | 0% | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 | R35,000 |
| Consultant | 0% | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 | R5,000 |
| Total People | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | 2 | |
| Total Payroll | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 |
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 | R536,000 | R1,031,000 | R1,481,000 | R1,827,000 | R1,400,000 | R1,000,000 | R586,000 | R581,000 | R631,000 | R827,000 | R1,200,000 | R1,300,000 |
| Direct Cost of Sales | R268,000 | R515,500 | R740,500 | R907,500 | R694,000 | R494,000 | R287,000 | R284,500 | R315,500 | R413,500 | R600,000 | R650,000 |
| Other Costs of Sales | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Total Cost of Sales | R268,000 | R515,500 | R740,500 | R907,500 | R694,000 | R494,000 | R287,000 | R284,500 | R315,500 | R413,500 | R600,000 | R650,000 |
| Gross Margin | R268,000 | R515,500 | R740,500 | R919,500 | R706,000 | R506,000 | R299,000 | R296,500 | R315,500 | R413,500 | R600,000 | R650,000 |
| Gross Margin % | 50.00% | 50.00% | 50.00% | 50.33% | 50.43% | 50.60% | 51.02% | 51.03% | 50.00% | 50.00% | 50.00% | 50.00% |
| Expenses | ||||||||||||
| Payroll | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 |
| Marketing/Promotion | R833 | R833 | R833 | R833 | R833 | R833 | R833 | R833 | R833 | R833 | R833 | R833 |
| Depreciation | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 | R55,555 |
| H.P.s | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 | R10,000 |
| Fuel | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 | R8,333 |
| Maintenance | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 | R1,667 |
| 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 | R80,400 | R154,650 | R222,150 | R274,050 | R210,000 | R150,000 | R87,900 | R87,150 | R94,650 | R124,050 | R180,000 | R195,000 |
| Cash from Receivables | R15,187 | R469,625 | R889,100 | R1,268,653 | R1,540,852 | R1,178,667 | R838,270 | R497,958 | R495,267 | R541,903 | R713,518 | R1,022,833 |
| Subtotal Cash from Operations | R95,587 | R624,275 | R1,111,250 | R1,542,703 | R1,750,852 | R1,328,667 | R926,170 | R585,108 | R589,917 | R665,953 | R893,518 | R1,217,833 |
| Additional Cash Received | ||||||||||||
| Sales Tax, VAT, HST/GST Received | 0.00% | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| New Current Borrowing | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| New Other Liabilities (interest-free) | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| New Long-term Liabilities | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Sales of Other Current Assets | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Sales of Long-term Assets | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| New Investment Received | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Subtotal Cash Received | R95,587 | R624,275 | R1,111,250 | R1,542,703 | R1,750,852 | R1,328,667 | R926,170 | R585,108 | R589,917 | R665,953 | R893,518 | R1,217,833 |
| Expenditures | ||||||||||||
| Expenditures from Operations | ||||||||||||
| Cash Spending | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 | R40,000 |
| Bill Payments | R14,988 | R460,361 | R780,955 | R1,070,712 | R1,274,454 | R997,133 | R736,304 | R475,541 | R473,098 | R512,296 | R643,006 | R879,016 |
| Subtotal Spent on Operations | R54,988 | R500,361 | R820,955 | R1,110,712 | R1,314,454 | R1,037,133 | R776,304 | R515,541 | R513,098 | R552,296 | R683,006 | R919,016 |
| Additional Cash Spent | ||||||||||||
| Sales Tax, VAT, HST/GST Paid Out | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Principal Repayment of Current Borrowing | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Other Liabilities Principal Repayment | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Long-term Liabilities Principal Repayment | R30,000 | R30,000 | R60,000 | R60,000 | R60,000 | R90,000 | R90,000 | R90,000 | R90,000 | R90,000 | R90,000 | R90,000 |
| Purchase Other Current Assets | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Purchase Long-term Assets | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Dividends | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 | R0 |
| Subtotal Cash Spent | R84,988 | R530,361 | R880,955 | R1,170,712 | R1,374,454 | R1,127,133 | R866,304 | R605,541 | R603,098 | R642,296 | R773,006 | R1,009,016 |
| Net Cash Flow | R10,599 | R93,914 | R230,295 | R371,991 | R376,398 | R201,534 | R59,866 | (R20,433) | (R13,181) | R23,657 | R120,512 | R208,817 |
| Cash Balance | R15,599 | R109,513 | R339,807 | R711,799 | R1,088,197 | R1,289,731 | R1,349,597 | R1,329,164 | R1,315,983 | R1,339,640 | R1,460,153 | R1,668,970 |
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