"Nightclub" Business Plan:
1.0 Executive Summary
2.0 Company Summary
3.0 Products and Services
4.0 Market Analysis Summary
5.0 Strategy and Implementation Summary
6.0 Management Summary
7.0 Financial Plan
 7.1 Important Assumptions
7.2 Break-even Analysis
7.3 Projected Profit and Loss
7.4 Projected Cash Flow
7.5 Projected Balance Sheet
 7.6 Business Ratios
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This business plan was originally published
by Palo Alto Software, Inc. All rights reserved.
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7.0 Financial Plan
The financial projections for this plan are presented in the tables and charts
of the following subtopics.
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7.1 Important Assumptions
The financial plan depends on important assumptions, most of which are illustrated in the following table.
The key underlying assumptions are:
- We assume a slow-growth economy of five percent the first year, and three
percent thereafter, without major recession.
- We assume that we will grow as managers during the process, this growth will
manifest itself as flat line expense growth over the five-year period, leading
to increased annual cash flow.
- We assume access to equity capital and financing sufficient to maintain our
financial plan as shown in the tables.
- We assume continued popularity of nightclubs in America and the growing
demand for high-energy themed and casual dining venues.
|
| General Assumptions |
| |
2001 |
2002 |
2003 |
| Plan Month |
1 |
2 |
3 |
| Current Interest Rate |
10.00% |
10.00% |
10.00% |
| Long-term Interest Rate |
10.00% |
10.00% |
10.00% |
| Tax Rate |
25.42% |
25.00% |
25.42% |
| Sales on Credit |
10.00% |
10.00% |
10.00% |
| Other |
0 |
0 |
0 |
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7.2 Break-even Analysis
Average Nightly Break Even Revenues – approximately $ X,xxx
Minimum Nightly Required Spending Per Person - $8.75 + $9.75 = $18.50
Minimum Nightly Required Incoming Traffic – Xxx
Break-even Analysis
|
| Break-even Analysis: |
| Monthly Units Break-even |
139,924 |
| Monthly Revenue Break-even |
$139,924 |
| |
| Assumptions: |
| Average Per-Unit Revenue |
$1.00 |
| Average Per-Unit Variable Cost |
$0.16 |
| Estimated Monthly Fixed Cost |
$117,342 |
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7.3 Projected Profit and Loss
Projected profit and loss statement for the nightclub follows. Three years'
annual totals are shown below. Monthly breakdown for year one appears in the appendix.
|
| Pro Forma Profit and Loss |
| |
2001 |
2002 |
2003 |
| Sales |
$2,276,340 |
$2,503,974 |
$2,754,371 |
| Direct Cost of Goods |
$367,380 |
$404,119 |
$444,531 |
| Other |
$0 |
$0 |
$0 |
|
------------ |
------------ |
------------ |
| Total Cost of Sales |
$367,380 |
$404,119 |
$444,531 |
| Gross Margin |
$1,908,960 |
$2,099,855 |
$2,309,840 |
| Gross Margin % |
88.86% |
83.86% |
83.86% |
| Expenses: |
| Payroll |
$391,936 |
$411,528 |
$432,104 |
| Sales and Marketing and Other Expenses |
$411,576 |
$430,574 |
$451,284 |
| Depreciation |
$0 |
$0 |
$0 |
| Fees--Credit Card |
$10,764 |
$10,982 |
$11,202 |
| Fees--Credit Card |
$10,764 |
$10,982 |
$11,202 |
| Fees--Professional |
$7,500 |
$7,650 |
$7,803 |
| Taxes--Admission |
$0 |
$0 |
$0 |
| Taxes--Excise |
$391,536 |
$399,368 |
$407,355 |
| Taxes--Property |
$0 |
$0 |
$0 |
| Leased Equipment |
$2,496 |
$2,550 |
$2,601 |
| Utilities |
$36,000 |
$36,720 |
$37,454 |
| Insurance |
$22,500 |
$22,950 |
$23,409 |
| Rent |
$75,000 |
$75,000 |
$76,500 |
| Payroll Taxes |
$66,629 |
$69,960 |
$73,458 |
| Other |
$0 |
$0 |
$0 |
| |
------------ |
------------ |
------------ |
| Total Operating Expenses |
$1,415,937 |
$1,467,282 |
$1,523,170 |
| Profit Before Interest and Taxes |
$493,023 |
$632,573 |
$786,670 |
| Interest Expense |
$0 |
$0 |
$0 |
| Taxes Incurred |
$121,122 |
$158,143 |
$199,945 |
| Net Profit |
$371,901 |
$474,430 |
$586,725 |
| Net Profit/Sales |
16.34% |
18.95% |
21.30% |
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7.4 Projected Cash Flow
The following chart illustrates our monthly cash flow for year one. The table
shows three years of annual totals. First year monthly figures as presented in
the appendix. The months are weighted according to the amount of weeks in that month in a typical calendar year.
Cash
|
| Pro Forma Cash Flow |
| |
2001 |
2002 |
2003 |
| |
| Cash from Operations: |
| Cash Sales |
$2,048,706 |
$2,253,577 |
$2,478,934 |
| Cash from Receivables |
$212,383 |
$248,872 |
$273,760 |
| Subtotal Cash from Operations |
$2,261,089 |
$2,502,449 |
$2,752,693 |
| |
| Additional Cash Received |
| Sales Tax, VAT |
$0 |
$0 |
$0 |
| HMRC VAT Repayments |
$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 |
$2,261,089 |
$2,502,449 |
$2,752,693 |
| Expenditures |
2001 |
2002 |
2003 |
| Expenditures from Operations: |
| Cash Spending |
$144,573 |
$155,044 |
$166,133 |
| Payment of Accounts Payable |
$1,688,286 |
$1,869,949 |
$1,996,707 |
| Subtotal Spent on Operations |
$1,832,858 |
$2,024,993 |
$2,162,840 |
| |
| 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 |
$0 |
$0 |
$0 |
| Purchase Other Current Assets |
$0 |
$0 |
$0 |
| Purchase Long-term Assets |
$0 |
$0 |
$0 |
| Dividends |
$0 |
$0 |
$0 |
| Subtotal Cash Spent |
$1,832,858 |
$2,024,993 |
$2,162,840 |
| |
| Net Cash Flow |
$428,231 |
$477,456 |
$589,854 |
| Cash Balance |
$503,231 |
$980,687 |
$1,570,541 |
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7.5 Projected Balance Sheet
The following Balance Sheet indicates healthy growth of net worth and a strong financial position. The monthly estimates are included in the appendix.
|
| Pro Forma Balance Sheet |
| |
| Assets |
| Current Assets |
2001 |
2002 |
2003 |
| Cash |
$503,231 |
$980,687 |
$1,570,541 |
| Accounts Receivable |
$15,251 |
$16,776 |
$18,453 |
| Inventory |
$3,259 |
$3,585 |
$3,943 |
| Other Current Assets |
$0 |
$0 |
$0 |
| Total Current Assets |
$521,740 |
$1,001,048 |
$1,592,938 |
| Long-term Assets |
| Long-term Assets |
$0 |
$0 |
$0 |
| Accumulated Depreciation |
$0 |
$0 |
$0 |
| Total Long-term Assets |
$0 |
$0 |
$0 |
| Total Assets |
$521,740 |
$1,001,048 |
$1,592,938 |
| |
| Liabilities and Capital |
| Current Liabilities |
2001 |
2002 |
2003 |
| Accounts Payable |
$67,339 |
$72,217 |
$77,382 |
| Current Borrowing |
$0 |
$0 |
$0 |
| Other Current Liabilities |
$0 |
$0 |
$0 |
| Subtotal Current Liabilities |
$67,339 |
$72,217 |
$77,382 |
| |
Long-term Liabilities |
$0 |
$0 |
$0 |
| Total Liabilities |
$67,339 |
$72,217 |
$77,382 |
| |
| Paid-in Capital |
$567,750 |
$567,750 |
$567,750 |
| Retained Earnings |
($485,250) |
($113,349) |
$361,081 |
| Earnings |
$371,901 |
$474,430 |
$586,725 |
| Total Capital |
$454,401 |
$928,831 |
$1,515,556 |
| Total Liabilities and Capital |
$521,740 |
$1,001,048 |
$1,592,938 |
| Net Worth |
$454,401 |
$928,831 |
$1,515,556 |
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7.6 Business Ratios
The Ratios table below outlines important ratios for this Nightclub. The last
column, Industry Profile, is derived from the Standard Industrial Classification
(SIC) Index code 5813, for Drinking Places.
| |
| Ratio Analysis |
| |
2001 |
2002 |
2003 |
Industry Profile |
| Sales Growth |
0.00% |
10.00% |
10.00% |
1.90% |
| |
| Percent of Total Assets |
| Accounts Receivable |
2.92% |
1.68% |
1.16% |
4.60% |
| Inventory |
0.62% |
0.36% |
0.25% |
3.10% |
| Other Current Assets |
0.00% |
0.00% |
0.00% |
44.60% |
| Total Current Assets |
100.00% |
100.00% |
100.00% |
52.30% |
| Long-term Assets |
0.00% |
0.00% |
0.00% |
47.70% |
| Total Assets |
100.00% |
100.00% |
100.00% |
100.00% |
| |
| Current Liabilities |
12.91 |
7.21% |
4.86% |
28.20% |
| Long-term Liabilities |
0.00% |
0.00% |
0.00% |
23.10% |
| Total Liabilities |
12.91% |
7.21% |
4.86% |
51.30% |
| Net Worth |
87.09% |
92.79% |
95.14% |
48.70% |
| |
| Percent of Sales |
| Sales |
100.00% |
100.00% |
100.00% |
100.00% |
| Gross Margin |
83.86% |
83.86% |
83.86% |
42.30% |
| Selling, General & Administrative Expenses |
67.36% |
64.67% |
62.20% |
23.40% |
| Advertising Expenses |
8.79% |
8.39% |
8.01% |
2.40% |
| Profit Before Interest and Taxes |
21.66% |
25.26% |
28.56% |
2.80% |
| |
| Main Ratios |
| Current |
7.75 |
13.86 |
20.59 |
1.14 |
| Quick |
7.70 |
13.81 |
20.53 |
0.74 |
| Total Debt to Total Assets |
12.91% |
7.21% |
4.86% |
51.30% |
| Pre-tax Return on Net Worth |
108.50% |
68.10% |
51.91% |
5.20% |
| Pre-tax Return on Assets |
94.50% |
63.19% |
49.38% |
10.60% |
| |
| Additional Ratios |
2001 |
2002 |
2003 |
|
| Net Profit Margin |
16.34% |
18.95% |
21.30% |
n.a |
| Return on Equity |
81.84% |
51.08% |
38.71% |
n.a |
| |
| Activity Ratios |
| Accounts Receivable Turnover |
14.93 |
14.93 |
14.93 |
n.a |
| Collection Days |
44 |
23 |
23 |
n.a |
| Inventory Turnover |
40.00 |
118.10 |
118.10 |
n.a |
| Accounts Payable Turnover |
26.07 |
25.96 |
25.87 |
n.a |
| Payment Days |
20 |
14 |
14 |
n.a |
| Total Asset Turnover |
4.36 |
2.50 |
1.73 |
n.a |
| |
| Debt Ratios |
| Debt to Net Worth |
0.15 |
0.08 |
0.05 |
n.a |
| Current Liab. to Liab. |
1.00 |
1.00 |
1.00 |
n.a |
| |
| Liquidity Ratios |
| Net Working Capital |
$454,401 |
$928,831 |
$1,515,556 |
n.a |
| Interest Coverage |
0.00 |
0.00 |
0.00 |
n.a |
| |
| Additional Ratios |
| Assets to Sales |
0.23 |
0.40 |
0.58 |
n.a |
| Current Debt/Total Assets |
13% |
7% |
5% |
n.a |
| Acid Test |
7.47 |
13.58 |
20.30 |
n.a |
| Sales/Net Worth |
5.01 |
2.70 |
1.82 |
n.a |
| Dividend Payout |
0.00 |
0.00 |
0.00 |
n.a |
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