Mexican Restaurant Business Plan

This business plan was created to secure investors. La Salsa Fresh Mexican Grill is a highly sought-after franchise in Oregon, with great potential for growth. Currently, La Salsa is expanding in all of the neighboring states of Oregon. The Santa Barbara Restaurant Group (SBRG) franchises the La Salsa chain.

La Salsa will succeed in Eugene for two main reasons: first, there is no direct competition, making it a unique option in town; second, there is a high demand for this type of product in Eugene. The current population of the greater Eugene/Springfield metro area is over 300,000 according to Census 2000, and it is expected to continue growing.

Creating a Limited Liability Corporation (LLC) will protect owners and investors from personal liability. Benjamin D. Strock plans to expand La Salsa in Oregon over the next three years, developing between 3 to 10 restaurants under the LLC. This business plan focuses on the first store, setting clear goals. Per store revenues for La Salsa range between $400,000 to $1,000,000, depending on location. Start-up costs from SBRG are estimated between $300,000 and $400,000, with an initial investment of around $600,000. A small business loan will cover half of this amount, and the remaining half will come from private investors. Net profits are expected to be high, yielding approximately $85,000 per store annually, possibly even higher.

The franchisor, SBRG, will have control over pricing, training, building, and advertising, in exchange for 8% to 10% of gross sales. Assuming that a location has been agreed upon by the franchisor, franchisee, and investors, the first La Salsa in Oregon is expected to be up and running within three months of initial financing.

Mission

La Salsa Fresh Mexican Grill aims to become the leading casual Mexican dining restaurant in Eugene while adhering to unwavering principles as it expands to more than three restaurants. The following six guiding principles will help evaluate the appropriateness of our decisions:

– Provide a positive work environment and treat our employees with respect.

– Embrace diversity as a fundamental aspect of our business.

– Maintain the highest standards of excellence in food production, preparation, and service for our customers.

– Foster lasting relationships with our guests.

– Make positive contributions to our communities and the environment.

– Recognize that profitability is crucial for our future success.

Mexican Restaurant Business Plan Example

1.2 Objectives:

– Set up an LLC to limit liability.

– Complete construction in less than three months.

– Achieve positive net profit in the first quarter.

– Become a market leader in Eugene.

– Generate monthly revenues of $60,000 or more.

– Increase annual sales by 3-7%.

1.3 Keys to Success:

– Location, location, location.

– Secure bank financing at reasonable interest rates and individual investors.

– Recruit and hire qualified, motivated employees.

– Allocate marketing budget effectively to boost sales.

– Offer extraordinary food with unmatched taste.

Company Summary:

The parent company asserts that La Salsa is a rapidly expanding Mexican chain across the nation. Its distinctive feature is the open-display kitchen where customers can witness the preparation of their food. The restaurant is also known for its unique salsa bar, which allows guests to customize their salsa according to their preferences. La Salsa prides itself on cooking without the use of microwaves, can openers, or lard. The flavorsome menu consists of gourmet burritos, handcrafted tacos, and vegetarian specialties. La Salsa has been a beloved West Coast favorite since 1979.

2.1 Company Ownership:

A Limited Liability Corporation (LLC) will be created to protect the owner and investors from personal liability. The initial focus of the LLC will be to franchise La Salsa. Benjamin D. Strock, the managing shareholder, intends to offer outside ownership in the LLC on an equity, debt, or combination basis to accelerate the growth of the La Salsa concept. Shareholders will receive a 12% priority return on their investment.

2.2 Start-up Summary:

The Santa Barbara Restaurant Group, owners of the La Salsa chain, estimates the overall start-up costs to be between $300,000 and $400,000. The figures in the start-up cost table aim to reflect these estimates. The allocation into each category may not be precise, but the estimated costs are slightly higher than those of the Santa Barbara Restaurant Group. Overestimated costs allow for contingencies and ensure smooth operations.

Mexican Restaurant Business Plan Example

Start-up Requirements

Start-up Expenses

– Legal: $5,000

– Stationery etc.: $2,000

– Brochures: $1,000

– Franchise Fee: $20,000

– Insurance: $1,000

– Rent: $5,000

– Development Fee: $10,000

– Expensed Equipment: $17,000

– Other: $100,000

– Total Start-up Expenses: $161,000

Start-up Assets

– Cash Required: $102,000

– Start-up Inventory: $50,000

– Other Current Assets: $0

– Long-term Assets: $287,000

– Total Assets: $439,000

Total Requirements: $600,000

Start-up Funding

Start-up Expenses to Fund: $161,000

Start-up Assets to Fund: $439,000

Total Funding Required: $600,000

Assets

– Non-cash Assets from Start-up: $337,000

– Cash Requirements from Start-up: $102,000

– Additional Cash Raised: $0

– Cash Balance on Starting Date: $102,000

– Total Assets: $439,000

Liabilities and Capital

Liabilities

– Current Borrowing: $0

– Long-term Liabilities: $300,000

– Accounts Payable (Outstanding Bills): $0

– Other Current Liabilities (interest-free): $0

– Total Liabilities: $300,000

Capital

– Planned Investment

– Richard & Ginny Strock: $100,000

– Benjamin D. Strock: $20,000

– Investor 3: $80,000

– Investor 4: $100,000

– Additional Investment Requirement: $0

– Total Planned Investment: $300,000

– Loss at Start-up (Start-up Expenses): ($161,000)

– Total Capital: $139,000

Total Capital and Liabilities: $439,000

Total Funding: $600,000

Company Locations and Facilities

The first option for location is close to Sacred Heart Hospital on 13th Avenue in Eugene, Oregon. This location will be important because the University of Oregon campus is close, as is the hospital. Students and hospital employees will have a new lunch spot which is much needed. The best location currently available is next to the Napoli Restaurant & Bakery, but it is only 800 square feet. In order to make this location feasible a partial/full buyout of Napoli Bakery is desirable. The bakery is not overly successful and will hopefully be cooperative in this process.

If the first restaurant is not located on 13th Ave., there are a few high traffic strip mall locations available. Located on the corner of 18th Ave. and Willamette Street, next to a mini-mall, Blockbuster Video, Little Caesar’s Pizza, and Hong Kong Chinese restaurant. South Eugene High School (open campus) is also very close by. There are 1367 square feet available, plenty of parking, high traffic and high visibility. This location rents for $970 a month, and appears to have excellent profit potential. Traffic counts from 1997 were approximately 15,000 for each direction on 18th Ave., and 11,000 one way on Willamette St. Overall revenues would most likely stay consistent with 13th Ave. location, but it is conceivable that without the effect of demand decline during the summer months next to University of Oregon, overall revenues could be substantially higher in this location.

As the company gains community recognition, La Salsa will expand to one or both of the neighboring shopping malls (Valley River Center or Gateway). Once the Eugene/Springfield market is developed, expansion to other Oregon cities-on-the-rise such as Corvallis, Bend, Medford, or Ashland is anticipated. Portland is not a strong candidate considering competition is already fierce in that region.

Market Analysis Summary

Market segmentation is described in the next section.

Market Segmentation

The 2000 Census of Eugene/Springfield says there are currently over 300,000 people populating this metropolitan area. Using basic demographic characteristics of age, gender, income, location, food preferences, ethnicity, an estimate of 150,000 potential customers was used in developing this plan.

The University of Oregon was established in 1876 and currently has over 20,000 students. It is expected to gradually increase in size as it has over the previous years.

Across the street from the University is Sacred Heart Hospital, which currently employs over 3,500 people (according to a hospital information representative) though it is likely moving to North Eugene in the near future. If this happens, the current hospital will remain open only as an emergency room. This move and change will take time, hence the growth rate is listed as -50%.

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Both of the proposed initial locations are close to university student residential areas. At the 18th Ave. and Willamette St. location, high school students might be substituted for Sacred Heart Hospital employees as a source of mid-day customers. South Eugene High School has over 1,500 students.

Mexican Restaurant Business Plan Example

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

Potential Customers Growth Eugene/Springfield 3% 150,000 154,500 159,135 163,909 168,826 3.00% University of Oregon 3% 20,000 20,600 21,218 21,855 22,511 3.00% Sacred Heart Hospital -50% 3,500 1,750 875 438 219 -49.99% South Eugene High School 2% 1,500 1,523 1,546 1,569 1,593 1.52% Total 2.50% 175,000 178,373 182,774 187,771 193,149 2.50%

Target Market Segment Strategy

The quick casual dining industry’s target market is broad and includes all demographics.

Market Trends

Eugene is expanding and working on various projects, including:

– Building a new public library.

– Renovating and reopening Broadway St. to traffic.

– Constructing a new Federal Courthouse.

– Funding low-income housing in downtown.

– Renovating highway off-ramps at an estimated $88 million.

– Making additions to the University of Oregon’s football stadium.

These projects indicate the city’s preparation for expansionary times.

Market Needs

In Eugene, there is a lack of high-quality, quick food Mexican restaurants. Most local Mexican restaurants use canned foods, lard, and shredded meats. We will offer 100% fresh food prepared in front of our customers, with a customizable salsa bar.

Main Competitors

Quick Service Mexican

Burrito Boy – Popular quick Mexican restaurant in town, but we offer higher food quality and service.

Santa Fe Burrito – Low-quality quick Mexican restaurant, located on Willamette St., that uses canned foods and lard products.

Burrito Amigos – Not near the university campus, offers a traditional style of Mexican food.

Ritta’s Burritos – Started as a mobile stand and continues catering business, uses shredded meats and canned foods.

Las Brasas – Located on Blair Street, not a competitive threat to La Salsa.

Other Quick Service Mexican

La Salsa is not a direct competitor with drive-thru fast-food Mexican restaurants like Taco Bell and Taco Time. We offer higher quality, fresh food at a fraction of sit-down dining prices.

Strategy and Implementation Summary

Marketing Strategy

Cost-effective marketing will be utilized, including local media, event marketing, and advertising on university campuses.

Pricing Strategy

All menu items are moderately priced, with an average customer spending $5-8 including food and drink. Student discounts may be offered.

Promotion Strategy

Advertising will be tailored to the location. Close to the university campus, promotional events and advertising will target students and hospital employees. High traffic locations will use traditional forms of restaurant promotion.

Sales Forecast

Sales forecasts start at a moderate level and build until the end of the school year. Sales may decline during the summer months but pick up again when students return to school. Proper location and parking availability can appeal to a larger market. Competitors have not arrived in town yet, so La Salsa has the opportunity for higher sales than predicted.

Mexican Restaurant Business Plan Example

Mexican Restaurant Business Plan Example

Sales Forecast:

Sales Year 1 Year 2 Year 3
Meal Deals $266,169 $284,801 $304,737
A La Carte $139,720 $149,500 $159,965
Burrito/ Taco $249,068 $266,503 $285,158
Other $37,151 $39,752 $42,534
Total Sales $692,108 $740,556 $792,394

Management Summary:

Benjamin D. Strock will run all business operations for La Salsa Fresh Mexican Grill, with an accounting professional reviewing the final accounting monthly. Other key personnel include the day-to-day manager and cooks. Qualified and available staff and management can be sourced from local labor pools.

5.1 Organizational Structure:

Benjamin D. Strock will oversee store operations. Each store will have a general manager responsible for day-to-day operations and rewarded through incremental profit sharing. Future organizational structure may include a director of store operations when store locations exceed three and/or expansion to other Oregon cities. A full-time accountant and a sales/marketing director may also be added at that juncture to support growth and execute the franchise expansion strategy.

5.2 Management Team:

BENJAMIN D. STROCK

[Personal and Confidential information removed.]

5.3 Personnel Plan:

Typical La Salsa locations have one cashier (usually the manager) and two or three cooks. Additional cooks may be needed based on sales volume. Initially, there will not be a marketing manager, with Benjamin D. Strock taking care of marketing. As the business grows, a marketing representative will be hired. Benjamin D. Strock will receive $3,000 per month for managing the first restaurants. Once profits increase, he may no longer be included on the payroll.

Personnel Plan
Year 1 Year 2 Year 3
Production Personnel
Manager $36,417 $37,508 $38,633
Cooks (3) $58,264 $60,013 $61,813
Other $34,417 $35,448 $36,512
Subtotal $129,098 $132,969 $136,958
Sales and Marketing Personnel
Marketing $12,168 $12,531 $12,907
Other $0 $0 $0
Subtotal $12,168 $12,531 $12,907
General and Administrative Personnel
Benjamin Strock $36,501 $37,594 $38,722
Accountant $12,140 $12,503 $12,878
Other $0 $0 $0
Subtotal $48,641 $50,097 $51,600
Other Personnel
Name or Title $0 $0 $0
Other $0 $0 $0
Subtotal $0 $0 $0
Total People 0 0 0
Total Payroll $189,907 $195,597 $201,465

Financial Plan:

The financial plan for La Salsa Fresh Mexican Grill is presented in the following sections. Year-end totals for the first three years are provided, while the appendix includes first-year monthly figures.

6.1 Important Assumptions:

The financial plan is based on several key assumptions, including the assumption that the economy will recover from the current recession. Access to equity capital and financing is assumed to be sufficient to support the financial plan as shown in the tables.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-Term Interest Rate 7.00% 7.00% 7.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

6.2 Break-even Analysis:

The break-even analysis is based on estimated fixed costs.

Mexican Restaurant Business Plan Example

Break-even Analysis
Monthly Revenue Break-even $20,895
Assumptions:
Average Percent Variable Cost 26%
Estimated Monthly Fixed Cost $15,398

6.3 Projected Profit and Loss

To avoid underestimating costs, the costs listed are higher than what will likely be experienced. This may make the profits and margins less attractive, but there are many ways to cut costs.

The Santa Barbara Restaurant Group requires a 4% royalty on gross sales to cover national and local advertising costs. This is included in the Profit/Loss table as Corporate Marketing Fee. The Franchise Fee is 6% of gross sales and is labeled Franchise Fee on the Profit/Loss table.

Mexican Restaurant Business Plan Example

Mexican Restaurant Business Plan Example

Mexican Restaurant Business Plan Example

Mexican Restaurant Business Plan Example

The table below shows the Pro Forma Profit and Loss for three years:

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $692,108 $740,556 $792,394
Direct Cost of Sales $182,072 $194,817 $208,454
Production Payroll $129,098 $132,969 $136,958
SBRG Franchise Fee $41,526 $44,433 $47,544
Other Production Expenses $12,000 $12,000 $12,000
Total Cost of Sales $364,696 $384,219 $404,956
Gross Margin $327,412 $356,336 $387,439
Gross Margin % 47.31% 48.12% 48.89%
Operating Expenses
Sales and Marketing Expenses
Sales and Marketing Payroll $12,168 $12,531 $12,907
Advertising/ Promotion $12,000 $12,000 $12,000
SBRG Corporate Marketing Fee $27,684 $29,622 $31,696
Travel $1,800 $1,800 $1,800
Miscellaneous $1,200 $1,200 $1,200
Total Sales and Marketing Expenses $54,852 $57,153 $59,603
Sales and Marketing % 7.93% 7.72% 7.52%
General and Administrative Expenses
General and Administrative Payroll $48,641 $50,097 $51,600
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $12,000 $12,000 $12,000
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $2,400 $2,400 $2,400
Rent $36,000 $36,000 $36,000
Payroll Taxes $28,486 $29,340 $30,220
Other General and Administrative Expenses $0 $0 $0
Total General and Administrative Expenses $129,927 $132,237 $134,620
General and Administrative % 18.77% 17.86% 16.99%
Other Expenses:
Other Payroll $0 $0 $0
Consultants $0 $0 $0
Contract/Consultants $0 $0 $0
Total Other Expenses $0 $0 $0
Other % 0.00% 0.00% 0.00%
Total Operating Expenses $184,779 $189,390 $194,223
Profit Before Interest and Taxes $142,632 $166,947 $193,216
EBITDA $154,632 $178,947 $205,216
Interest Expense $20,194 $18,690 $17,020
Taxes Incurred $36,731 $44,477 $52,859
Net Profit $85,707 $103,779 $123,337
Net Profit/Sales 12.38% 14.01% 15.57%
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6.4 Projected Cash Flow

The chart and table below highlight the importance of maintaining cash on hand to ensure the business can continue running smoothly, especially in the event of any unforeseen problems.

Mexican Restaurant Business Plan Example

Pro Forma Cash Flow:

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $692,108 $740,556 $792,394
Subtotal Cash from Operations $692,108 $740,556 $792,394
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $692,108 $740,556 $792,394
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $189,907 $195,597 $201,465
Bill Payments $336,482 $432,352 $454,852
Subtotal Spent on Operations $526,389 $627,949 $656,317
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $21,479 $23,032 $24,697
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $36,000 $36,000
Subtotal Cash Spent $547,868 $686,981 $717,014
Net Cash Flow $144,240 $53,574 $75,381
Cash Balance $246,240 $299,814 $375,195

Projected Balance Sheet:

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $246,240 $299,814 $375,195
Inventory $19,201 $20,545 $21,984
Other Current Assets $0 $0 $0
Total Current Assets $265,441 $320,360 $397,179
Long-term Assets
Long-term Assets $287,000 $287,000 $287,000
Accumulated Depreciation $12,000 $24,000 $36,000
Total Long-term Assets $275,000 $263,000 $251,000
Total Assets $540,441 $583,360 $648,179
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $37,214 $35,385 $37,564
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $37,214 $35,385 $37,564
Long-term Liabilities $278,521 $255,488 $230,791
Total Liabilities $315,735 $290,874 $268,355
Paid-in Capital $300,000 $300,000 $300,000
Retained Earnings ($161,000) ($111,293) ($43,514)
Earnings $85,707 $103,779 $123,337
Total Capital $224,707 $292,486 $379,823
Total Liabilities and Capital $540,441 $583,360 $648,179
Net Worth $224,707 $292,486 $379,823

Business Ratios:

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Personnel Plan

Production Personnel

Manager: $3,000, $3,000, $3,008, $3,015, $3,023, $3,030, $3,038, $3,045, $3,053, $3,061, $3,068, $3,076

Cooks (3): $4,800, $4,800, $4,812, $4,824, $4,836, $4,848, $4,860, $4,872, $4,885, $4,897, $4,909, $4,921

Other: $2,000, $2,000, $3,008, $3,015, $3,023, $3,030, $3,038, $3,045, $3,053, $3,061, $3,068, $3,076

Sales and Marketing Personnel

Marketing: $1,000, $1,003, $1,005, $1,008, $1,010, $1,013, $1,015, $1,018, $1,020, $1,023, $1,025, $1,028

General and Administrative Personnel

Benjamin Strock: $3,000, $3,008, $3,015, $3,023, $3,030, $3,038, $3,045, $3,053, $3,061, $3,068, $3,076, $3,084

Accountant: $1,000, $1,000, $1,003, $1,005, $1,008, $1,010, $1,013, $1,015, $1,018, $1,020, $1,023, $1,025

Other Personnel

Name or Title: $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: $14,800, $14,811, $15,851, $15,890, $15,930, $15,969, $16,009, $16,048, $16,090, $16,130, $16,169, $16,210

General Assumptions

Plan Month: 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12

Current Interest Rate: 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%, 10.00%

Long-term Interest Rate: 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%, 7.00%

Tax Rate: 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%, 30.00%

Other: 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0, 0

Pro Forma Profit and Loss

Sales:

Month 1: $29,392

Month 2: $45,506

Month 3: $59,482

Month 4: $67,244

Month 5: $71,621

Month 6: $74,492

Month 7: $62,494

Month 8: $51,112

Month 9: $44,138

Month 10: $56,926

Month 11: $64,144

Month 12: $65,557

Direct Cost of Sales:

Month 1: $7,631

Month 2: $11,887

Month 3: $15,597

Month 4: $17,630

Month 5: $18,791

Month 6: $19,574

Month 7: $16,428

Month 8: $13,449

Month 9: $11,647

Month 10: $14,977

Month 11: $17,005

Month 12: $17,456

Production Payroll:

Month 1: $9,800

Month 2: $9,800

Month 3: $10,828

Month 4: $10,854

Month 5: $10,882

Month 6: $10,908

Month 7: $10,936

Month 8: $10,962

Month 9: $10,991

Month 10: $11,019

Month 11: $11,045

Month 12: $11,073

SBRG Franchise Fee:

6%:

Month 1: $1,764

Month 2: $2,730

Month 3: $3,569

Month 4: $4,035

Month 5: $4,297

Month 6: $4,470

Month 7: $3,750

Month 8: $3,067

Month 9: $2,648

Month 10: $3,416

Month 11: $3,849

Month 12: $3,933

Other Production Expenses:

Month 1: $1,000

Month 2: $1,000

Month 3: $1,000

Month 4: $1,000

Month 5: $1,000

Month 6: $1,000

Month 7: $1,000

Month 8: $1,000

Month 9: $1,000

Month 10: $1,000

Month 11: $1,000

Month 12: $1,000

Total Cost of Sales:

Month 1: $20,195

Month 2: $25,418

Month 3: $30,993

Month 4: $33,519

Month 5: $34,971

Month 6: $35,951

Month 7: $32,114

Month 8: $28,478

Month 9: $26,286

Month 10: $30,412

Month 11: $32,899

Month 12: $33,462

Gross Margin:

Month 1: $9,197

Month 2: $20,088

Month 3: $28,489

Month 4: $33,725

Month 5: $36,650

Month 6: $38,541

Month 7: $30,380

Month 8: $22,634

Month 9: $17,852

Month 10: $26,514

Month 11: $31,245

Month 12: $32,095

Gross Margin %:

Month 1: 31.29%

Month 2: 44.14%

Month 3: 47.89%

Month 4: 50.15%

Month 5: 51.17%

Month 6: 51.74%

Month 7: 48.61%

Month 8: 44.28%

Month 9: 40.45%

Month 10: 46.58%

Month 11: 48.71%

Month 12: 48.96%

Operating Expenses:

Sales and Marketing Expenses

Sales and Marketing Payroll:

Month 1: $1,000

Month 2: $1,003

Month 3: $1,005

Month 4: $1,008

Month 5: $1,010

Month 6: $1,013

Month 7: $1,015

Month 8: $1,018

Month 9: $1,020

Month 10: $1,023

Month 11: $1,025

Month 12: $1,028

Advertising/Promotion:

Month 1: $1,000

Month 2: $1,000

Month 3: $1,000

Month 4: $1,000

Month 5: $1,000

Month 6: $1,000

Month 7: $1,000

Month 8: $1,000

Month 9: $1,000

Month 10: $1,000

Month 11: $1,000

Month 12: $1,000

SBRG Corporate Marketing Fee:

4%:

Month 1: $1,176

Month 2: $1,820

Month 3: $2,379

Month 4: $2,690

Month 5: $2,865

Month 6: $2,980

Month 7: $2,500

Month 8: $2,044

Month 9: $1,766

Month 10: $2,277

Month 11: $2,566

Month 12: $2,622

Travel:

Month 1: $600

Month 2: $600

Month 3: $600

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Miscellaneous:

Month 1: $100

Month 2: $100

Month 3: $100

Month 4: $100

Month 5: $100

Month 6: $100

Month 7: $100

Month 8: $100

Month 9: $100

Month 10: $100

Month 11: $100

Month 12: $100

Total Sales and Marketing Expenses:

Month 1: $3,876

Month 2: $4,523

Month 3: $5,084

Month 4: $4,798

Month 5: $4,975

Month 6: $5,093

Month 7: $4,615

Month 8: $4,162

Month 9: $3,886

Month 10: $4,400

Month 11: $4,691

Month 12: $4,750

Sales and Marketing %:

Month 1: 13.19%

Month 2: 9.94%

Month 3: 8.55%

Month 4: 7.13%

Month 5: 6.95%

Month 6: 6.84%

Month 7: 7.38%

Month 8: 8.14%

Month 9: 8.80%

Month 10: 7.73%

Month 11: 7.31%

Month 12: 7.25%

General and Administrative Expenses:

General and Administrative Payroll:

Month 1: $4,000

Month 2: $4,008

Month 3: $4,018

Month 4: $4,028

Month 5: $4,038

Month 6: $4,048

Month 7: $4,058

Month 8: $4,068

Month 9: $4,079

Month 10: $4,088

Month 11: $4,099

Month 12: $4,109

Sales and Marketing and Other Expenses:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Depreciation:

Month 1: $1,000

Month 2: $1,000

Month 3: $1,000

Month 4: $1,000

Month 5: $1,000

Month 6: $1,000

Month 7: $1,000

Month 8: $1,000

Month 9: $1,000

Month 10: $1,000

Month 11: $1,000

Month 12: $1,000

Leased Equipment:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Utilities:

Month 1: $200

Month 2: $200

Month 3: $200

Month 4: $200

Month 5: $200

Month 6: $200

Month 7: $200

Month 8: $200

Month 9: $200

Month 10: $200

Month 11: $200

Month 12: $200

Insurance:

Month 1: $200

Month 2: $200

Month 3: $200

Month 4: $200

Month 5: $200

Month 6: $200

Month 7: $200

Month 8: $200

Month 9: $200

Month 10: $200

Month 11: $200

Month 12: $200

Rent:

Month 1: $3,000

Month 2: $3,000

Month 3: $3,000

Month 4: $3,000

Month 5: $3,000

Month 6: $3,000

Month 7: $3,000

Month 8: $3,000

Month 9: $3,000

Month 10: $3,000

Month 11: $3,000

Month 12: $3,000

Payroll Taxes:

15%:

Month 1: $2,220

Month 2: $2,222

Month 3: $2,378

Month 4: $2,384

Month 5: $2,390

Month 6: $2,395

Month 7: $2,401

Month 8: $2,407

Month 9: $2,414

Month 10: $2,420

Month 11: $2,425

Month 12: $2,432

Other General and Administrative Expenses:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Total General and Administrative Expenses:

Month 1: $10,620

Month 2: $10,630

Month 3: $10,796

Month 4: $10,812

Month 5: $10,828

Month 6: $10,843

Month 7: $10,859

Month 8: $10,875

Month 9: $10,893

Month 10: $10,908

Month 11: $10,924

Month 12: $10,941

General and Administrative %:

Month 1: 36.13%

Month 2: 23.36%

Month 3: 18.15%

Month 4: 16.08%

Month 5: 15.12%

Month 6: 14.56%

Month 7: 17.38%

Month 8: 21.28%

Month 9: 24.68%

Month 10: 19.16%

Month 11: 17.03%

Month 12: 16.69%

Other Expenses:

Other Payroll:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Consultants:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Contract/Consultants:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Total Other Expenses:

Month 1: $0

Month 2: $0

Month 3: $0

Month 4: $0

Month 5: $0

Month 6: $0

Month 7: $0

Month 8: $0

Month 9: $0

Month 10: $0

Month 11: $0

Month 12: $0

Other %:

Month 1: 0.00%

Month 2: 0.00%

Month 3: 0.00%

Month 4: 0.00%

Month 5: 0.00%

Month 6: 0.00%

Month 7: 0.00%

Month 8: 0.00%

Month 9: 0.00%

Month 10: 0.00%

Month 11: 0.00%

Month 12: 0.00%

Total Operating Expenses:

Month 1: $14,496

Month 2: $15,153

Month 3: $15,880

Month 4: $15,609

Month 5: $15,802

Month 6: $15,936

Month 7: $15,474

Month 8: $15,038

Month 9: $14,778

Month 10: $15,308

Month 11: $15,615

Month 12: $15,691

Profit Before Interest and Taxes:

Month 1: ($5,298)

Month 2: $4,936

Month 3: $12,609

Month 4: $18,116

Month 5: $20,848

Month 6: $22,605

Month 7: $14,906

Month 8: $7,597

Month 9: $3,074

Month 10: $11,207

Month 11: $15,630

Month 12: $16,404

EBITDA:

Month 1: ($4,298)

Month 2: $5,936

Pro Forma Cash Flow:

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 7.00% 7.00% 7.60%
Percent of Total Assets
Inventory 3.55% 3.52% 3.39% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 49.12% 54.92% 61.28% 43.70%
Long-term Assets 50.88% 45.08% 38.72% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities
Accounts Payable 6.89% 6.07% 5.80% 32.70%
Long-term Liabilities 51.54% 43.80% 35.61% 28.50%
Total Liabilities 58.42% 49.86% 41.40% 61.20%
Net Worth 41.58% 50.14% 58.60% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 47.31% 48.12% 48.89% 60.50%
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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 Sales $29,392 $45,506 $59,482 $67,244 $71,621 $74,492 $62,494 $51,112 $44,138 $56,926 $64,144 $65,557
Subtotal Cash from Operations $29,392 $45,506 $59,482 $67,244 $71,621 $74,492 $62,494 $51,112 $44,138 $56,926 $64,144 $65,557
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $29,392 $45,506 $59,482 $67,244 $71,621 $74,492 $62,494 $51,112 $44,138 $56,926 $64,144 $65,557
Cash Spending $14,800 $14,811 $15,851 $15,890 $15,930 $15,969 $16,009 $16,048 $16,090 $16,130 $16,169 $16,210
Bill Payments $363 $11,044 $15,768 $22,330 $41,154 $42,603 $43,377 $32,561 $26,551 $24,497 $36,855 $39,379
Subtotal Spent on Operations $15,163 $25,855 $31,619 $38,220 $57,084 $58,572 $59,386 $48,609 $42,641 $40,627 $53,024 $55,589
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,733 $1,743 $1,754 $1,764 $1,774 $1,784 $1,795 $1,805 $1,816 $1,826 $1,837 $1,848
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $16,896 $27,598 $33,372 $39,984 $58,859 $60,357 $61,180 $50,415 $44,456 $42,453 $54,861 $57,437
Net Cash Flow $12,496 $17,908 $26,110 $27,260 $12,762 $14,135 $1,314 $697 ($318) $14,473 $9,283 $8,120
Cash Balance $114,496 $132,404 $158,514 $185,773 $198,536 $212,671 $213,985 $214,682 $214,364 $228,837 $238,119 $246,240

Pro Forma Balance Sheet:

Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Cash $102,000 $114,496 $132,404 $158,514 $185,773 $198,536 $212,671 $213,985 $214,682 $214,364 $228,837 $238,119 $246,240
Inventory $50,000 $42,369 $30,482 $17,156 $19,393 $20,670 $21,531 $18,071 $14,794 $12,811 $16,475 $18,706 $19,201
Total Current Assets $152,000 $156,865 $162,886 $175,670 $205,166 $219,206 $234,202 $232,056 $229,476 $227,175 $245,312 $256,825 $265,441
Long-term Assets $287,000 $286,000 $285,000 $284,000 $283,000 $282,000 $281,000 $280,000 $279,000 $278,000 $277,000 $276,000 $275,000
Total Assets $439,000 $442,865 $447,886 $459,670 $488,166 $501,206 $515,202 $512,056 $508,476 $505,175 $522,312 $532,825 $540,441
Current Liabilities $0 $10,525 $15,045 $20,960 $39,736 $41,145 $42,284 $31,673 $25,748 $23,271 $35,542 $38,096 $37,214
Long-term Liabilities $300,000 $298,267 $296,523 $294,770 $293,006 $291,232 $289,448 $287,653 $285,848 $284,032 $282,205 $280,368 $278,521
Total Liabilities $300,000 $308,791 $311,568 $315,730 $332,742 $332,377 $331,732 $319,326 $311,

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