Академический Документы
Профессиональный Документы
Культура Документы
Prepared for:
John Walker
(9X7) 98X 4026
john.walker@anyprovider.com
Prepared by:
Continental Business Plan Consulting, LLC.
2009 New York, NY
operations@continental-businessplan.com
www.continental-businessplan.com
Confidentiality Agreement
Table of Contents
1.0
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Mission and Vision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3
Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.4
Start-up costs and funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.5
Company Ownwership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.6
Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.7
Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.8
Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.9
Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.10 Financials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.11 Investor Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.12 Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
1
2
3
3
4
4
4
5
5
5
6
2.0
Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.1
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.2
Start-up Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.3
Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
7
10
11
3.0
4.0
5.0
6.0
Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
6.1
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.0
Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.1
Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
7.2
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
7.3
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
7.4
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.5
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
7.6
Long-term Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.7
Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.7.1 Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
7.7.2 Entry Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
16
16
17
17
17
18
18
18
19
22
23
24
25
25
Table of Contents
7.7.3
7.7.4
Investor Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Exit Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
1.1 Objectives
To attract a minimum of 100 regular customers per day for pizza take-out and
delivery, in the first year of operations;
To offer our customers excellent pizza services, at a reasonable price, and
provide outstanding customer experience, measured by minimum 5 percent
yearly sales growth, and customer complaints less than 1 percent.
To generate positive cash flow from operations, and at least 10 percent net
profits to sales.
Page 2
1.7 Market
The Local Bay area is a growing low-to-middle-class area, counting more than one
million residents. There are about five hundred businesses close to our location. Most
of these residents are families of three or more. The average income for the area is
$45,000.
With continued growth in the area, opportunities to serve the Local Bay residents will
increase. The company will sell to individuals, but it will also accept some occasional
catering jobs to individuals and companies in the area.
The main market segments are: a) individuals (retail customers) accounting for more
than 90 percent of our sales, and b) local businesses (corporate customers) which, in
terms of purchase orders, typically make larger orders for their employees and business
needs.
1.8 Strategy
Our strategy is based on delivering a strong customer value proposition in a niche
market. We are looking to offer the Local Bay city and its surrounding areas a new
choice in pizza options.
We are building our marketing infrastructure so that we can eventually reach more
customers with the same pizza offering. We focus on satisfying the needs of low-tomiddle class residents and companies located inside or outside the Loca Bay Industrial
Park.
Page 4
1.10 Financials
According to our conservative estimates, Take-Out Pizza, Inc. is expected to maintain a
healthy financial position over the next five years. Our company is expected to break
even in the third month of operations.
We also expect to be profitable in the first year of operations, with profits increasing
over the next four years, as we establish and increase our customer base.
Our main concern will be to have sufficient cash on hand to meet our payment
obligations and be prepared for unexpected needs of cash. Our conservative
projections indicate that our business is able to generate positive cash flows and
sufficient cash reserves.
The ratio analysis clearly shows that Take-Out Pizza, Inc.'s financial position is
expected to remain strong, as measured by its liquidity, long-term solvency, and cash
flow adequacy ratios.
The company's profitability, as measured by its profitability ratios, is excellent, and will
gradually increase over the next five years. This performance will probably be rewarded
by a higher market price when the company decides to go public.
1.12 Disclaimer
The current unfavorable economic conditions and prospects are carefully considered,
and the estimates included in the plan are conservative. However, investors are
advised to exercise caution when considering investment alternatives because actual
data almost always differ from projections.
This business plan is designed to help investors better understand the potential risks,
costs and benefits of this business project, but it is not intended, and is not to be
considered in itself or any part of it, as an investment offer or solicitation, as regulated
by law. It was developed for sample purposes, and any resemblance to real situations,
people, or data would be purely coincidental.
Page 6
Page 7
Page 8
$1,200
$6,000
$1,500
$20,000
$1,500
$2,000
$1,800
$5,000
$3,000
$1,500
$1,000
$3,000
$47,500
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
$10,000
$15,000
$9,000
$50,000
$84,000
Total Requirements
$131,500
Page 9
Page 10
$47,500
$84,000
$131,500
$74,000
$10,000
$0
$10,000
$84,000
$0
$30,000
$0
$0
$30,000
Capital
Planned Investment
Owner 1
Owner 2
Investor
Other
Additional Investment Requirement
Total Planned Investment
$36,000
$36,000
$29,500
$0
$0
$101,500
($47,500)
$54,000
$84,000
$131,500
Page 11
Pizza-For You
Stevenson's Foods
Other
Page 13
Page 14
Page 15
Page 16
5.1.2 Weaknesses
Strengths are valuable, but it is useful to realize the weaknesses. We have identified
some of our weaknesses:
a) cost factor associated with keeping state-of-the-art equipment and technology
b) we are new in town
c) start-up challenges
d) limited operating capacity during peak sales periods
5.1.3 Opportunities
Take-Out Pizza, Inc.'s strengths and the awareness of its weaknesses will help it
capitalize on emerging opportunities. These opportunities include, but are not limited to:
a) fast growing population in Local Bay area
b) no other specialized pizza take-out and delivery restaurant within a five-mile radius
from our chosen location
c) a large segment of low-to-middle class population, and more than five hundred
businesses in the area
d) no competitors offer New York-style pizza in the surrounding area
Page 17
5.1.4 Threats
Threats the Take-Out Pizza, Inc. should be aware of include:
a) slow recovery process of the economy from the current crisis
b) changes in the business environment that might reduce our sales
c) higher taxes in the future
d) the commercial property is leased, not owned by our company
e) tight credit times, higher interest rate, and higher inflation rate than predicted.
FY 2011
FY 2012
FY 2013
FY 2014
Unit Sales
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
Total Unit Sales
19,230
8,936
4,504
3,050
1,480
37,200
21,153
9,830
4,954
3,355
1,628
40,920
23,268
10,813
5,450
3,691
1,791
45,012
25,130
11,678
5,886
3,986
1,934
48,613
25,884
12,028
6,062
4,105
1,992
50,071
Unit Prices
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
FY 2010
$16.00
$18.00
$19.00
$21.00
$25.00
FY 2011
$16.80
$18.90
$19.95
$22.05
$26.25
FY 2012
$17.64
$19.85
$20.95
$23.15
$27.56
FY 2013
$18.52
$20.84
$21.99
$24.31
$28.94
FY 2014
$19.45
$21.88
$23.09
$25.53
$30.39
Sales
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
Total Sales
$307,680
$160,848
$85,576
$64,050
$37,000
$655,154
$355,370
$185,779
$98,840
$73,978
$42,735
$756,703
$410,453
$214,575
$114,161
$85,444
$49,359
$873,992
FY 2010
$8.32
$9.36
$9.88
$10.92
$13.00
FY 2011
$8.57
$9.64
$10.17
$11.25
$13.39
FY 2012
$8.82
$10.12
$10.68
$11.81
$14.06
FY 2013
$9.08
$10.42
$11.00
$12.16
$14.47
FY 2014
$9.34
$10.72
$11.32
$12.51
$14.89
$159,994
$83,641
$44,500
$33,306
$19,240
$340,680
$181,239
$94,748
$50,409
$37,729
$21,795
$385,918
$205,226
$109,433
$58,222
$43,577
$25,173
$441,631
$228,072
$121,664
$64,729
$48,447
$27,987
$490,899
$241,626
$128,948
$68,604
$51,347
$29,662
$520,188
$465,453
$503,388
$243,328
$263,160
$129,458
$140,009
$96,894
$104,791
$55,973
$60,535
$991,107 $1,071,882
Page 20
Page 21
5/25/2009
8/15/2009
$2,000
Lisa Walker
Purchase Equipment
Purchase Inventory &
Materials
Loan, Purchase Equipment
Promotion & Business Sign
8/15/2009
8/25/2009
$20,000
John Walker
Department
Manager
Manager
Manager
Manager
Assist.
Manager
Assist.
Manager
8/15/2009
8/31/2009
$28,500
Lisa Walker
Manger Assist
8/15/2009
8/31/2009
$50,000
John Walker
8/1/2009
8/31/2009
$4,800
Lisa Walker
7/15/2009
8/31/2009
$22,025
$131,500
John Walker
Manager
Manager
Assist.
Manager
Start Date
4/1/2009
5/5/2009
5/25/2009
End Date
5/5/2009
5/25/2009
8/1/2009
Budget
$800
$675
$1,200
Manager
John Walker
John Walker
John Walker
5/25/2009
8/31/2009
$1,500
Lisa Walker
Page 22
Direct mail
Grand opening
Industry specific trade shows and other local business events
Internet marketing
Word of mouth
All marketing decisions with regard to specific media choices, frequency, size and costs
will be conducted on an ongoing basis with careful consideration of results (generated
returns).
Page 24
Page 26
Manager
Cook
One kitchen staff member
Two servers
In our experience, a team of five multi-skilled employees works best for our kind of
business.Working as a team is critical to our success. We recognize that human
resources are Take-Out Pizza, Inc.'s most valuable asset. Our personnel strategy
focuses on selecting, training, rewarding, and stimulating all employees in order to build
employee loyalty, and increase performance.
It will be easy to find and select the best new members of our team. The traditional local
food-service industry, well represented in the area, along with local colleges and
schools, have contributed to the formation and growth of many skilled employees. In the
selection process, the background check is a must in this line of business.
As our restaurant will be open Monday through Saturday from 11:00 AM to 8:00 PM,
the team of five can operate effectively only by using alternative work schedules that
take into account the busiest periods of the day, the time needed to prepare the food
before opening, and a forty hours week. Here is an example of alternative work
schedule for our cook in week 1:
Day
Friday
Saturday
Sunday
Monday
Tuesday
Wednesday
Thursday
Totals
Begin Time
(AM)
10:00
10:00
OFF
10:00
10:00
10:00
10:00
End Time
(PM)
4:00
5:00
OFF
4:00
5:00
5:00
5:00
Hours Worked
6 hours
7 hours
none
6 hours
7 hours
7 hours
7 hours
40 hours
In addition to salaries, important bonuses and incentives are included in the personnel
table, that will be used to reward employee performance, on a pay-for-performance
basis. The cornerstone of our personnel plan is to maximize productivity and minimize
labor burden of the company's operating expenses, while maintaining strong employee
commitment to the success of operations.
Trying to appropriate compensation incentives to our company's performance targets,
increases the likelihood that these goals will be achieved. Our performance-based pay
strategy takes into consideration the linking of employee compensation to the
achievement of measurable business targets. Employees that perform well are eligible
Page 27
Table: Personnel
Personnel Plan
Manager
Cook
Kitchen Staff Member
Servers (2)
Bonuses and Incentives
Other
Total People
Total Payroll
FY 2010
$22,800
$20,400
$19,200
$38,400
$7,800
$0
5
FY 2011
$23,940
$21,420
$20,160
$40,320
$8,190
$0
5
FY 2012
$25,137
$22,491
$21,168
$42,336
$8,600
$0
5
FY 2013
$26,394
$23,616
$22,226
$44,453
$9,029
$0
5
FY 2014
$27,714
$24,796
$23,338
$46,675
$9,481
$0
5
$108,600
$114,030
$119,732
$125,718
$132,004
Page 28
Page 29
1,996
$35,155
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost
$17.61
$9.16
$16,874
Page 30
FY 2011
$655,154
$756,703
$873,992 $991,107
$340,680
$17,034
-----------$357,714
$385,918
$19,296
-----------$405,214
$441,631 $490,899
$22,082
$24,545
------------ -----------$463,713 $515,444
Gross Margin
Gross Margin %
$297,440
45.40%
$351,488
46.45%
$108,600
$114,030
$8,000
$8,500
$9,996
$1,200
$6,600
$9,000
$24,000
$31,494
$3,600
-----------$202,490
$9,996
$1,250
$6,900
$9,450
$24,720
$33,069
$4,000
-----------$211,915
$9,996
$9,996
$10,016
$1,300
$1,350
$1,400
$7,226
$7,640
$8,022
$9,922
$10,418
$10,939
$25,461
$26,225
$27,012
$34,722
$36,458
$38,281
$4,500
$4,800
$5,200
------------ ------------ -----------$221,559 $231,505 $241,874
$94,950
$104,946
$6,810
$26,442
$139,574
$149,570
$6,120
$40,036
$61,698
9.42%
$93,418
12.35%
Sales
Direct Costs of Goods
Other Production Expenses
Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Office Supplies
Utilities
Insurance
Rent
Payroll Taxes and Benefits
Other
Net Profit
Net Profit/Sales
FY 2012
$8,700
FY 2013
$8,900
FY 2014
$1,071,8
82
$520,188
$26,009
-----------$546,198
$9,000
Page 31
Page 32
Page 33
Page 34
FY 2011
FY 2012
FY 2013
FY 2014
$556,881
$88,540
$643,197
$111,997
$742,893
$129,356
$842,441
$146,926
$645,421
$755,194
$872,249
$989,367
$911,100
$159,582
$1,070,68
2
$55,688
$0
$0
$30,000
$0
$0
$0
$64,320
$0
$0
$0
$0
$0
$0
$74,289
$0
$0
$0
$0
$0
$0
$84,244
$0
$0
$0
$0
$0
$0
$731,109
$819,514
$946,539
$1,073,611
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
$108,600
$461,968
$570,568
$114,030
$510,618
$624,648
$119,732
$612,191
$731,922
$125,718
$684,597
$810,315
$132,004
$732,139
$864,143
$55,688
$0
$0
$6,000
$0
$30,000
$17,892
$64,320
$0
$0
$6,000
$0
$0
$27,091
$74,289
$0
$0
$6,000
$0
$0
$37,213
$84,244
$0
$0
$6,000
$0
$0
$48,613
$680,148
$722,059
$849,425
$949,172
$91,110
$0
$0
$6,000
$0
$0
$56,809
$1,018,06
2
$50,961
$60,961
$97,455
$158,416
$97,114
$255,530
$124,439
$379,969
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
$91,110
$0
$0
$0
$0
$0
$0
$1,161,79
2
$143,730
$523,699
Page 35
FY 2011
FY 2012
FY 2013
FY 2014
$60,961
$9,733
$15,857
$9,000
$95,551
$158,416
$11,241
$17,963
$9,000
$196,620
$255,530
$12,984
$20,556
$9,000
$298,070
$379,969
$14,724
$23,311
$9,000
$427,004
$523,699
$15,924
$25,211
$9,000
$573,833
$80,000
$9,996
$70,004
$165,555
$80,000
$19,992
$60,008
$256,628
$80,000
$29,988
$50,012
$348,082
$80,000
$39,984
$40,016
$467,020
$80,000
$50,000
$30,000
$603,833
FY 2010
FY 2011
FY 2012
FY 2013
FY 2014
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$13,749
$0
$0
$13,749
$44,496
$0
$0
$44,496
$50,838
$0
$0
$50,838
$56,754
$0
$0
$56,754
$60,482
$0
$0
$60,482
Long-term Liabilities
Total Liabilities
$54,000
$67,749
$48,000
$92,496
$42,000
$92,838
$36,000
$92,754
$30,000
$90,482
$101,500
($65,392)
$61,698
$97,806
$165,555
$101,500
($30,785)
$93,418
$164,133
$256,628
$101,500
$25,420
$128,324
$255,244
$348,082
$101,500
$105,131
$167,634
$374,265
$467,020
$101,500
$215,956
$195,895
$513,351
$603,833
$97,806
$164,133
$255,244
$374,265
$513,351
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
Page 37
FY 2010
0.00%
FY 2011
15.50%
FY 2012
15.50%
FY 2013
13.40%
FY 2014
8.15%
Industry Profile
6.61%
5.88%
9.58%
5.44%
57.72%
42.28%
100.00%
4.38%
7.00%
3.51%
76.62%
23.38%
100.00%
3.73%
5.91%
2.59%
85.63%
14.37%
100.00%
3.15%
4.99%
1.93%
91.43%
8.57%
100.00%
2.64%
4.18%
1.49%
95.03%
4.97%
100.00%
4.45%
3.81%
36.47%
44.73%
55.27%
100.00%
8.30%
32.62%
40.92%
59.08%
17.34%
18.70%
36.04%
63.96%
14.61%
12.07%
26.67%
73.33%
12.15%
7.71%
19.86%
80.14%
10.02%
4.97%
14.98%
85.02%
17.78%
24.21%
41.99%
58.01%
100.00%
45.40%
100.00%
46.45%
100.00%
46.94%
100.00%
47.99%
100.00%
49.04%
100.00%
54.17%
77.59%
74.42%
72.16%
0.00%
0.00%
25.21%
4.53%
14.49%
4.08%
18.44%
3.65%
21.59%
0.00%
24.63%
0.00%
26.48%
3.37%
1.66%
6.95
5.80
40.92%
90.12%
53.24%
4.42
4.02
36.04%
81.31%
52.00%
5.86
5.46
26.67%
71.82%
52.67%
7.52
7.11
19.86%
63.99%
51.28%
9.49
9.07
14.98%
54.51%
46.35%
1.31
0.87
52.21%
4.68%
9.79%
FY 2010
9.42%
63.08%
FY 2011
12.35%
56.92%
FY 2012
14.68%
50.28%
FY 2013
16.91%
44.79%
FY 2014
18.28%
38.16%
n.a
n.a
10.10
39
16.00
34.60
27
3.96
10.10
34
22.82
12.17
20
2.95
10.10
34
22.93
12.17
28
2.51
10.10
34
22.38
12.17
28
2.12
10.10
35
21.44
12.17
29
1.78
n.a
n.a
n.a
n.a
n.a
n.a
0.69
0.20
0.56
0.48
0.36
0.55
0.25
0.61
0.18
0.67
n.a
n.a
$81,802
$152,125
$247,232
13.94
22.81
34.95
$370,24
9
52.17
$513,35
1
71.67
0.25
8%
5.09
6.70
0.29
0.34
17%
3.76
4.61
0.29
0.40
15%
5.20
3.42
0.29
0.47
12%
6.85
2.65
0.29
0.56
10%
8.81
2.09
0.29
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Net Profit Margin
Return on Equity
Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
n.a
n.a
n.a
n.a
n.a
n.a
n.a
Page 38
FY 2010
1
9.00%
12.00%
30.00%
30
15.00%
40
21
5.00%
400
0
FY 2011
2
9.00%
12.00%
30.00%
30
15.00%
40
21
5.00%
400
0
FY 2012
3
9.00%
12.00%
30.00%
30
15.00%
40
21
5.00%
400
0
FY 2013
4
9.00%
12.00%
30.00%
30
15.00%
40
21
5.00%
400
0
FY 2014
5
9.00%
12.00%
30.00%
30
15.00%
40
21
5.00%
400
0
7.7.1 Risks
Company management is responsible for constantly evaluating risks and taking
corrective actions to provide adequate prevention, control and risk reserves. We have
identified several risks that are associated with our business project.
There are many possible classifications of risks, but for the purposes of this plan, we
have chosen to group them as follows:
a) External Risks (These risks come from outside the company and are more difficult
to prevent and control.)
Economic depression. Current trends indicate that the economic downturn is
Page 39
reaching the bottom, and chances are that the recovery process will begin soon.
However, it is likely to be a slow process, and it will probably take several years
until complete recovery and full growth are achieved. We assess the risk of a
major depression to be low.
Competition and buying patterns changes. There is a high risk that new
competitors will arrive in the relevant marketplace. Our continuous improvement
management strategy and cost control techniques will help us to stay on top of
customer preference. The pizza customer buying patterns are not likely to
significantly change over the next five years. In addition, the population growth
predicted in the area will increase the chances to maintain and boost sales.
Suppliers. Our company's purchases do not depend on a single or a limited
group of suppliers. There is a large supply of materials and ingredients for pizza
preparation, and other specific products in the Local Bay area. The risk to face
supply constrictions is low.
Technology. New and more efficient food preparation equipment is expected to
become available. However, by deciding to purchase only state-of-the-art,
energy-efficient equipment, we believe to have reduced this risk over the next
five years.
Location. The chosen location will be leased for minimum five years, with the
possibility to extend the lease over another similar period. There are no other
construction developments foreseen in this highly dense population area of Local
Bay that might affect our business location in the near future.
Inflation. According to expert estimates, the inflation rate is likely to remain
under control over the next five years. We have accounted for a 5 percent
annual inflation rate.
Currency. All our operations are in U.S. dollars, and both equipment and
materials are manufactured in the United States. No currency risk has been
accounted for.
U.S. taxation and economic policy changes. These changes are likely to
occur, and it is not clear how they might influence our financial performance.
That is another reason why our estimates are conservative. This risk is high.
b) Internal Risks (These risks come from inside the company and can be better
prevented or controlled.)
Personnel. There are many skilled food-service employees in the Local Bay
area. We will be able to select the best new staff members from a large number
of valuable applicants. Our personnel strategy includes modern management
techniques that will be applied to select, hire, motivate, and reward the
employees.
This strategy is expected to build and maintain employee loyalty, and increase
productivity. However, before hiring new employees, their background check will
be reviewed, to avoid possible employee theft, which is a frequent risk in the
restaurant industry.
Cash flow deficiency. Our main concern will be to have sufficient cash on
hand to meet our payment obligations, and be prepared for unexpected needs of
cash. Our conservative projections indicate that our business is able to generate
positive cash flows and sufficient cash reserves to reduce the risk of cash flow
Page 40
Business continuity over the next five years. In the event something happens
to one of the company's managers and co-owners (husband and wife), the other
will have the skills and experience required to take over and continue operations.
In addition, the company's incorporation legal documents include special
provisions for protection in such cases.
$17,892
27,091
37,213
48,613
56,809
$187,618
The other co-owners, John and Lisa Walker, will not take dividends over the next five
years. The reasons for this decision are: a) they will receive employment compensation
and benefits, and b) the undistributed dividends will increase the amount of retained
earnings, as a strategy to strengthen the company's financial position for sustainable
future growth, to increase the company's net worth, and subsequently the market value
Page 41
$29,500
17,892
11,608
$0
Weighted average cost of capital (the lowest acceptable rate of return) is estimated
at 16 percent.
Net present value (NPV), which evaluates the capital investment by discounting at 16
percent its future cash flows to their present values, and substracting the initial
investment of $29,500 from their sum of $187,618 is $83,778, computed as follows:
Year1
Year2
Year3
Year4
Year5
NPV
Values
$15,422
20,128
23,853
26,834
27,041
$113,278
$29,500
$83,778
Because the net present value is positive, the investment would achieve at least the
minimum rate of return of 16 percent, and is expected to yield significant additional
returns to the investor.
Internal rate of return (IRR) of 87 percent is computed as follows:
Year 1
Initial
($29,500)
Investment
Returns
$17,892
Year 2
Year 3
Year 4
Year 5
$27,091
$37,213
$48,613
$56,809
Page 42
Common Stock
Dividends / Common
Dividends per share
Shares Outstanding
$61,698 / 10,150 shares $6.08
$93,418 / 10,150 shares
9.20
$128,324 / 10,150 shares 12.64
$167,634 / 10,150 shares 16.52
$195,895 / 10,150 shares 19.30
Basic earnings per share has the same values as dividends per share because the
company has only common stock, and the same number of shares outstanding
throughout the year.
Diluted earnings per share has the same values as basic earnings per share because
at the time of this analysis no potential dilutive securities are accounted for.
More information regarding the financial performance measures is included in the
business ratios section of this plan.
Page 44
Appendix
Table: Sales Forecast
Sales Forecast
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
780
340
180
120
80
1,500
960
410
216
140
90
1,816
1,300
556
288
160
90
2,394
1,540
700
360
200
100
2,900
1,670
730
375
220
110
3,105
1,720
730
375
250
120
3,195
1,800
820
420
270
140
3,450
1,850
850
430
330
150
3,610
2,010
1,060
435
350
160
4,015
2,150
1,090
555
380
170
4,345
2,300
1,100
570
420
180
4,570
1,150
550
300
210
90
2,300
Unit Prices
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
Sep-09
$16.00
$18.00
$19.00
$21.00
$25.00
Oct-09
$16.00
$18.00
$19.00
$21.00
$25.00
Nov-09
$16.00
$18.00
$19.00
$21.00
$25.00
Dec-09
$16.00
$18.00
$19.00
$21.00
$25.00
Jan-10
$16.00
$18.00
$19.00
$21.00
$25.00
Feb-10
$16.00
$18.00
$19.00
$21.00
$25.00
Mar-10
$16.00
$18.00
$19.00
$21.00
$25.00
Apr-10
$16.00
$18.00
$19.00
$21.00
$25.00
May-10
$16.00
$18.00
$19.00
$21.00
$25.00
Jun-10
$16.00
$18.00
$19.00
$21.00
$25.00
Jul-10
$16.00
$18.00
$19.00
$21.00
$25.00
Aug-10
$16.00
$18.00
$19.00
$21.00
$25.00
Sales
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
Total Sales
$12,480
$6,120
$3,420
$2,520
$2,000
$26,540
$15,360
$7,380
$4,104
$2,940
$2,250
$32,034
$20,800
$10,008
$5,472
$3,360
$2,250
$41,890
$24,640
$12,600
$6,840
$4,200
$2,500
$50,780
$26,720
$13,140
$7,125
$4,620
$2,750
$54,355
$27,520
$13,140
$7,125
$5,250
$3,000
$56,035
$28,800
$14,760
$7,980
$5,670
$3,500
$60,710
$29,600
$15,300
$8,170
$6,930
$3,750
$63,750
$32,160
$19,080
$8,265
$7,350
$4,000
$70,855
$34,400
$19,620
$10,545
$7,980
$4,250
$76,795
$36,800
$19,800
$10,830
$8,820
$4,500
$80,750
$18,400
$9,900
$5,700
$4,410
$2,250
$40,660
Sep-09
$8.32
$9.36
$9.88
$10.92
$13.00
Oct-09
$8.32
$9.36
$9.88
$10.92
$13.00
Nov-09
$8.32
$9.36
$9.88
$10.92
$13.00
Dec-09
$8.32
$9.36
$9.88
$10.92
$13.00
Jan-10
$8.32
$9.36
$9.88
$10.92
$13.00
Feb-10
$8.32
$9.36
$9.88
$10.92
$13.00
Mar-10
$8.32
$9.36
$9.88
$10.92
$13.00
Apr-10
$8.32
$9.36
$9.88
$10.92
$13.00
May-10
$8.32
$9.36
$9.88
$10.92
$13.00
Jun-10
$8.32
$9.36
$9.88
$10.92
$13.00
Jul-10
$8.32
$9.36
$9.88
$10.92
$13.00
Aug-10
$8.32
$9.36
$9.88
$10.92
$13.00
$6,490
$3,182
$1,778
$1,310
$1,040
$13,801
$7,987
$3,838
$2,134
$1,529
$1,170
$16,658
$10,816
$5,204
$2,845
$1,747
$1,170
$21,783
$12,813
$6,552
$3,557
$2,184
$1,300
$26,406
$13,894
$6,833
$3,705
$2,402
$1,430
$28,265
$14,310
$6,833
$3,705
$2,730
$1,560
$29,138
$14,976
$7,675
$4,150
$2,948
$1,820
$31,569
$15,392
$7,956
$4,248
$3,604
$1,950
$33,150
$16,723
$9,922
$4,298
$3,822
$2,080
$36,845
$17,888
$10,202
$5,483
$4,150
$2,210
$39,933
$19,136
$10,296
$5,632
$4,586
$2,340
$41,990
$9,568
$5,148
$2,964
$2,293
$1,170
$21,143
Unit Sales
NYS Pizza for All
NYS Pizza Healthy Style
NYS Pizza Vegetarian
NYS Pizza Special
Other
Total Unit Sales
0%
0%
0%
0%
0%
0.00%
0.00%
0.00%
0.00%
0.00%
Page 45
Appendix
Table: Personnel
Personnel Plan
Manager
Cook
Kitchen Staff Member
Servers (2)
Bonuses and Incentives
Other
Total People
Total Payroll
0%
0%
0%
0%
0%
0%
Sep-09
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Oct-09
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Nov-09
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Dec-09
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Jan-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Feb-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Mar-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Apr-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
May-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Jun-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Jul-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
Aug-10
$1,900
$1,700
$1,600
$3,200
$650
$0
5
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
Page 46
Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Payment Delays
Sales on Credtit
Collection Period (days)
Inventory on Hand (days)
Inflation Rate
Max Op. Capacity
(pizzas/day)
Other
Sep-09
1
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Oct-09
2
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Nov-09
3
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Dec-09
4
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Jan-10
5
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Feb-10
6
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Mar-10
7
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Apr-10
8
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
May-10
9
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Jun-10
10
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Jul-10
11
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
Aug-10
12
9.00%
12.00%
30.00%
30
15.00%
40
21
0.41%
400
400
400
400
400
400
400
400
400
400
400
400
Page 47
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Sep-09
$26,540
$13,801
$690
-----------$14,491
Oct-09
$32,034
$16,658
$833
-----------$17,491
Nov-09
$41,890
$21,783
$1,089
-----------$22,872
Dec-09
$50,780
$26,406
$1,320
-----------$27,726
Jan-10
$54,355
$28,265
$1,413
-----------$29,678
Feb-10
$56,035
$29,138
$1,457
-----------$30,595
Mar-10
$60,710
$31,569
$1,578
-----------$33,148
Apr-10
$63,750
$33,150
$1,658
-----------$34,808
May-10
$70,855
$36,845
$1,842
-----------$38,687
Jun-10
$76,795
$39,933
$1,997
-----------$41,930
Jul-10
$80,750
$41,990
$2,100
-----------$44,090
Aug-10
$40,660
$21,143
$1,057
-----------$22,200
$12,049
45.40%
$14,543
45.40%
$19,018
45.40%
$23,054
45.40%
$24,677
45.40%
$25,440
45.40%
$27,562
45.40%
$28,943
45.40%
$32,168
45.40%
$34,865
45.40%
$36,661
45.40%
$18,460
45.40%
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$9,050
$1,500
$1,200
$1,200
$500
$500
$500
$500
$500
$400
$400
$400
$400
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$17,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$17,408
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$17,408
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,708
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,608
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,608
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,608
$833
$100
$550
$750
$2,000
$2,625
$300
-----------$16,608
($5,658)
($4,825)
$595
($1,876)
($2,864)
($2,031)
$590
($1,036)
$1,611
$2,444
$585
$308
$6,347
$7,180
$580
$1,730
$7,970
$8,803
$575
$2,218
$8,732
$9,565
$570
$2,449
$10,855
$11,688
$565
$3,087
$12,235
$13,068
$560
$3,503
$15,561
$16,394
$555
$4,502
$18,257
$19,090
$550
$5,312
$20,053
$20,886
$545
$5,852
$1,852
$2,685
$540
$394
Net Profit
Net Profit/Sales
($4,377)
-16.49%
($2,418)
-7.55%
$718
1.71%
$4,037
7.95%
$5,176
9.52%
$5,714
10.20%
$7,203
11.86%
$8,173
12.82%
$10,504
14.82%
$12,395
16.14%
$13,656
16.91%
$918
2.26%
Sales
Direct Costs of Goods
Other Production Expenses
Cost of Goods Sold
Gross Margin
Gross Margin %
Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Office Supplies
Utilities
Insurance
Rent
Payroll Taxes and Benefits
Other
Total Operating Expenses
29%
Page 48
Appendix
Table: Cash Flow
Pro Forma Cash Flow
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
$22,559
$0
$22,559
$27,229
$2,787
$30,016
$35,607
$4,558
$40,164
$43,163
$5,840
$49,003
$46,202
$7,217
$53,419
$47,630
$7,992
$55,622
$51,604
$8,330
$59,933
$54,188
$8,896
$63,084
$60,227
$9,426
$69,652
$65,276
$10,309
$75,584
$68,638
$11,252
$79,889
$34,561
$11,935
$46,496
$2,256
$0
$0
$30,000
$0
$0
$0
$54,815
$2,723
$0
$0
$0
$0
$0
$0
$32,738
$3,561
$0
$0
$0
$0
$0
$0
$43,725
$4,316
$0
$0
$0
$0
$0
$0
$53,319
$4,620
$0
$0
$0
$0
$0
$0
$58,039
$4,763
$0
$0
$0
$0
$0
$0
$60,385
$5,160
$0
$0
$0
$0
$0
$0
$65,094
$5,419
$0
$0
$0
$0
$0
$0
$68,502
$6,023
$0
$0
$0
$0
$0
$0
$75,675
$6,528
$0
$0
$0
$0
$0
$0
$82,112
$6,864
$0
$0
$0
$0
$0
$0
$86,753
$3,456
$0
$0
$0
$0
$0
$0
$49,952
Expenditures
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
$9,050
$546
$9,596
$9,050
$16,729
$25,779
$9,050
$26,992
$36,042
$9,050
$35,306
$44,356
$9,050
$40,340
$49,390
$9,050
$40,703
$49,753
$9,050
$41,239
$50,289
$9,050
$45,495
$54,545
$9,050
$47,092
$56,142
$9,050
$53,359
$62,409
$9,050
$56,897
$65,947
$9,050
$57,270
$66,320
$2,256
$0
$0
$500
$0
$30,000
$0
$42,352
$2,723
$0
$0
$500
$0
$0
$0
$29,002
$3,561
$0
$0
$500
$0
$0
$0
$40,103
$4,316
$0
$0
$500
$0
$0
$0
$49,172
$4,620
$0
$0
$500
$0
$0
$0
$54,510
$4,763
$0
$0
$500
$0
$0
$0
$55,016
$5,160
$0
$0
$500
$0
$0
$0
$55,949
$5,419
$0
$0
$500
$0
$0
$0
$60,464
$6,023
$0
$0
$500
$0
$0
$0
$62,665
$6,528
$0
$0
$500
$0
$0
$0
$69,436
$6,864
$0
$0
$500
$0
$0
$0
$73,311
$3,456
$0
$0
$500
$0
$0
$17,892
$88,168
$12,463
$22,463
$3,736
$26,199
$3,622
$29,821
$4,147
$33,968
$3,529
$37,497
$5,369
$42,866
$9,144
$52,011
$8,039
$60,049
$13,010
$73,060
$12,675
$85,735
$13,442
$99,177
($38,216)
$60,961
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
8.50%
Page 49
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
Starting Balances
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
$10,000
$0
$15,000
$9,000
$34,000
$22,463
$3,981
$10,351
$9,000
$45,794
$26,199
$5,999
$12,493
$9,000
$53,692
$29,821
$7,725
$16,337
$9,000
$62,884
$33,968
$9,502
$19,804
$9,000
$72,275
$37,497
$10,438
$21,198
$9,000
$78,134
$42,866
$10,851
$21,854
$9,000
$84,571
$52,011
$11,628
$23,677
$9,000
$96,316
$60,049
$12,294
$24,863
$9,000
$106,206
$73,060
$13,497
$27,633
$9,000
$123,190
$85,735
$14,708
$29,950
$9,000
$139,393
$99,177
$15,568
$31,493
$9,000
$155,238
$60,961
$9,733
$15,857
$9,000
$95,551
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$50,000
$0
$50,000
$84,000
$80,000
$833
$79,167
$124,961
$80,000
$1,666
$78,334
$132,026
$80,000
$2,499
$77,501
$140,385
$80,000
$3,332
$76,668
$148,943
$80,000
$4,165
$75,835
$153,969
$80,000
$4,998
$75,002
$159,573
$80,000
$5,831
$74,169
$170,485
$80,000
$6,664
$73,336
$179,542
$80,000
$7,497
$72,503
$195,693
$80,000
$8,330
$71,670
$211,063
$80,000
$9,163
$70,837
$226,075
$80,000
$9,996
$70,004
$165,555
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
May-10
Jun-10
Jul-10
Aug-10
$0
$0
$0
$0
$15,839
$0
$0
$15,839
$25,821
$0
$0
$25,821
$33,962
$0
$0
$33,962
$38,983
$0
$0
$38,983
$39,334
$0
$0
$39,334
$39,724
$0
$0
$39,724
$43,932
$0
$0
$43,932
$45,317
$0
$0
$45,317
$51,464
$0
$0
$51,464
$54,939
$0
$0
$54,939
$56,795
$0
$0
$56,795
$13,749
$0
$0
$13,749
$30,000
$30,000
$59,500
$75,339
$59,000
$84,821
$58,500
$92,462
$58,000
$96,983
$57,500
$96,834
$57,000
$96,724
$56,500
$100,432
$56,000
$101,317
$55,500
$106,964
$55,000
$109,939
$54,500
$111,295
$54,000
$67,749
$101,500
($47,500)
$0
$54,000
$84,000
$101,500
($47,500)
($4,377)
$49,623
$124,961
$101,500
($47,500)
($6,795)
$47,205
$132,026
$101,500
($47,500)
($6,077)
$47,923
$140,385
$101,500
($47,500)
($2,041)
$51,959
$148,943
$101,500
($47,500)
$3,136
$57,136
$153,969
$101,500
($47,500)
$8,849
$62,849
$159,573
$101,500
($47,500)
$16,052
$70,052
$170,485
$101,500
($47,500)
$24,225
$78,225
$179,542
$101,500
($47,500)
$34,729
$88,729
$195,693
$101,500
($47,500)
$47,124
$101,124
$211,063
$101,500
($47,500)
$60,779
$114,779
$226,075
$101,500
($65,392)
$61,698
$97,806
$165,555
$54,000
$49,623
$47,205
$47,923
$51,959
$57,136
$62,849
$70,052
$78,225
$88,729
$101,124
$114,779
$97,806
Page 50