"Sports Bar and Grill" Business Plan:
1.0 Executive Summary
2.0 Company Summary
3.0 Market Analysis Summary
4.0 Strategy and Implementation Summary
5.0 Management Summary
6.0 Financial Plan
 6.1 Important Assumptions
6.2 Key Financial Indicators
6.3 Break-even Analysis
6.4 Projected Profit and Loss
6.5 Projected Cash Flow
6.6 Projected Balance Sheet
 6.7 Business Ratios
Business Ideas applicable for this business plan:
Mobile Catering Trailer
New Fresh Seafood grill Restaurant Chain Concept
This business plan was originally published
by Palo Alto Software, Inc. All rights reserved.
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6.0 Financial Plan
The over-all financial plan for growth allows for use of the
significant cash flow generated by operations.
Equity/debt infusion of $1.5 to $2 million allows for more rapid
expansion of store starts than could be accomplished from cash flow alone.
Outside investment capital also allows a buffer of excess cash so that the
expansion plan can be revised on short notice. Every opportunity will be seized
to accelerate expansion past the critical dates in this plan if cash flow from
new stores exceeds projections.
It is management's intent to build equity in the brand name and
in its franchise. Other models exists in the recent past of successful IPO's on
similar concepts.
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6.1 Important Assumptions
The financial plan depends on important assumptions, most of which
are shown in the following table. The key underlying assumptions are:
- We assume a slow-growth economy, without major recession.
- We assume access to equity capital and financing sufficient to
maintain our financial plan as shown in the tables.
- We assume the continued popularity of sports in America and the
growing demand for sports theme venues.
|
| General Assumptions |
| |
1996 |
1997 |
1998 |
| Plan Month |
1 |
2 |
3 |
| Current Interest Rate |
8.50% |
8.50% |
8.50% |
| Long-term Interest Rate |
0.00% |
0.00% |
0.00% |
| Tax Rate |
32.75% |
33.00% |
32.75% |
| Sales on Credit |
10.00% |
10.00% |
10.00% |
| Other |
0 |
0 |
0 |
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6.2 Key Financial Indicators
The most important indicator in our case is inventory turnover. In
the restaurant business turnover exceeds 50, with product being purchased and sold often within the week.
Food costs must be kept below 32%.
Beverage costs must be kept below 21%.
Above all, controls must be instituted and maintained over multiple store locations.
Take Five now uses state-of-the-art restaurant management
control and inventory systems. All systems are computer based that allow for
accurate off-premises control of all aspects of food and beverage service
business. The systems used are point-of-sale from HSI and inventory and recipe
management from VIP. Both systems are PC based and have become industry standards.
Management's background in corporate finance indicates understanding of the importance of these control systems.
Beanchmarks
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6.3 Break-even Analysis
The break even analysis is based upon fixed costs at the Medlock
Bridge location. This location exceeded required volume to break even in only its second month of operation.
At $15 per average ticket the break even volume at Medlock Bridge is attained less than one full seating per day. The industry average is
between 3 and 4 turns of seating capacity.
Break-even Analysis
|
| Break-even Analysis: |
| Monthly Units Break-even |
91,892 |
| Monthly Revenue Break-even |
$91,892 |
| |
| Assumptions: |
| Average Per-Unit Revenue |
$1.00 |
| Average Per-Unit Variable Cost |
$0.26 |
| Estimated Monthly Fixed Cost |
$68,000 |
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6.4 Projected Profit and Loss
As the profit and loss table shows, we expect to become barely profitable in the second year of business, and to make an acceptable profit in the third year.
|
| Pro Forma Profit and Loss |
| |
1996 |
1997 |
1998 |
| Sales |
$2,042,644 |
$9,198,000 |
$16,084,000 |
| Direct Cost of Goods |
$577,638 |
$2,531,380 |
$4,435,640 |
| Other |
$0 |
$0 |
$0 |
|
------------ |
------------ |
------------ |
| Total Cost of Sales |
$577,638 |
$2,531,380 |
$4,435,640 |
| Gross Margin |
$1,465,006 |
$6,666,620 |
$11,648,360 |
| Gross Margin % |
71.72% |
72.48% |
72.42% |
| Expenses: |
| Payroll |
$484,800 |
$2,800,000 |
$4,850,000 |
| Sales and Marketing and Other Expenses |
$69,500 |
$512,000 |
$860,000 |
| Depreciation |
$69,996 |
$280,000 |
$320,000 |
| Leased Equipment |
$0 |
$0 |
$0 |
| Utilities |
$28,800 |
$150,000 |
$180,000 |
| Insurance |
$36,000 |
$96,000 |
$125,000 |
| Rent |
$52,800 |
$197,000 |
$460,000 |
| Payroll Taxes |
$58,176 |
$336,000 |
$582,500 |
| Other |
$0 |
$0 |
$0 |
| |
------------ |
------------ |
------------ |
| Total Operating Expenses |
$800,072 |
$4,371,000 |
$7,377,000 |
| Profit Before Interest and Taxes |
$664,934 |
$2,295,620 |
$4,271,360 |
| Interest Expense |
$10,000 |
$9,500 |
$8,250 |
| Taxes Incurred |
$220,106 |
$757,555 |
$1,398,870 |
| Net Profit |
$444,828 |
$1,538,065 |
$2,872,490 |
| Net Profit/Sales |
21.78% |
16.72% |
17.86% |
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6.5 Projected Cash Flow
We expect to manage cash flow with an additional investment
totaling $1.5 to $2 million. All additional requirements can be met from
internally generated funds. With investment coming in during late 1996 and mid
1997 there is no point at which future cash flow appears to be in danger.
Cash
|
| Pro Forma Cash Flow |
| |
1996 |
1997 |
1998 |
| |
| Cash from Operations: |
| Cash Sales |
$2,042,644 |
$9,198,000 |
$16,084,000 |
| Cash from Receivables |
$0 |
$0 |
$0 |
| Subtotal Cash from Operations |
$2,042,644 |
$9,198,000 |
$16,084,000 |
| |
| 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 |
$625,000 |
$960,000 |
$1,250,000 |
| Subtotal Cash Received |
$2,667,644 |
$10,158,000 |
$17,334,000 |
| Expenditures |
1996 |
1997 |
1998 |
| Expenditures from Operations: |
| Cash Spending |
$1,269,034 |
$4,002,023 |
$7,381,839 |
| Payment of Accounts Payable |
$275,628 |
$3,425,038 |
$5,552,600 |
| Subtotal Spent on Operations |
$1,544,662 |
$7,427,061 |
$12,934,439 |
| |
| 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 |
$600,000 |
$700,000 |
$1,700,000 |
| Dividends |
$0 |
$0 |
$0 |
| Subtotal Cash Spent |
$2,144,662 |
$8,127,061 |
$14,634,439 |
| |
| Net Cash Flow |
$522,982 |
$2,030,939 |
$2,699,561 |
| Cash Balance |
$590,118 |
$2,621,057 |
$5,320,618 |
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6.6 Projected Balance Sheet
As shown in the balance sheet in the table, we expect a healthy
growth in net worth, from approximately $1 million at present to more than $8
million by the end of the third year of operations.
|
| Pro Forma Balance Sheet |
| |
| Assets |
| Current Assets |
1996 |
1997 |
1998 |
| Cash |
$590,118 |
$2,621,057 |
$5,320,618 |
| Inventor |
$17,324 |
$17,324 |
$17,324 |
| Other Current Assets |
$17,310 |
$17,310 |
$17,310 |
| Total Current Assets |
$624,752 |
$2,714,285 |
$5,470,956 |
| Long-term Assets |
| Long-term Assets |
$1,075,495 |
$1,775,495 |
$3,475,495 |
| Accumulated Depreciation |
$99,709 |
$379,709 |
$699,709 |
| Total Long-term Assets |
$975,786 |
$1,395,786 |
$2,775,786 |
| Total Assets |
$1,600,538 |
$4,110,071 |
$8,246,742 |
| |
| Liabilities and Capital |
| Current Liabilities |
1996 |
1997 |
1998 |
| Accounts Payable |
$5,325 |
$16,793 |
$30,975 |
| Current Borrowing |
$0 |
$0 |
$0 |
| Other Current Liabilities |
$40,826 |
$40,826 |
$40,826 |
| Subtotal Current Liabilities |
$46,151 |
$57,619 |
$71,801 |
| |
Long-term Liabilities |
$0 |
$0 |
$0 |
| Total Liabilities |
$46,151 |
$57,619 |
$71,801 |
| |
| Paid-in Capital |
$1,250,000 |
$2,210,000 |
$3,460,000 |
| Retained Earnings |
($140,441) |
$304,387 |
$1,842,452 |
| Earnings |
$444,828 |
$1,538,065 |
$2,872,490 |
| Total Capital |
$1,554,387 |
$4,052,452 |
$8,174,942 |
| Total Liabilities and Capital |
$1,600,538 |
$4,110,071 |
$8,246,742 |
| Net Worth |
$1,554,387 |
$4,052,452 |
$8,174,942 |
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6.7 Business Ratios
These business ratios are future estimates based upon current
assumptions. Industry Ratios are based on Standard Industry Classification code, 5813.
| |
| Ratio Analysis |
| |
1996 |
1997 |
1998 |
Industry Profile |
| Sales Growth |
221.73% |
350.30% |
74.86% |
6.32% |
| |
| Percent of Total Assets |
| Accounts Receivable |
0.00% |
0.00% |
0.00% |
6.29% |
| Inventory |
0.00% |
0.00% |
0.00% |
3.60% |
| Other Current Assets |
1.08% |
0.42% |
0.21% |
25.18% |
| Total Current Assets |
39.03% |
66.04% |
66.34% |
35.31% |
| Long-term Assets |
60.97% |
33.96% |
33.66% |
64.69% |
| Total Assets |
100.00% |
100.00% |
100.00% |
100.00% |
| |
| Current Liabilities |
2.88 |
1.40% |
0.87% |
15.88% |
| Long-term Liabilities |
0.00% |
0.00% |
0.00% |
29.33% |
| Total Liabilities |
2.88% |
1.40% |
0.87% |
45.21% |
| Net Worth |
97.12% |
98.60% |
99.13% |
54.79% |
| |
| Percent of Sales |
| Sales |
100.00% |
100.00% |
100.00% |
100.00% |
| Gross Margin |
71.72% |
72.48% |
72.42% |
44.48% |
| Selling, General & Administrative Expenses |
49.91% |
55.76% |
54.63% |
24.68% |
| Advertising Expenses |
1.64% |
4.98% |
4.97% |
2.47% |
| Profit Before Interest and Taxes |
32.55% |
24.96% |
26.56% |
3.61% |
| |
| Main Ratios |
| Current |
13.54 |
47.11 |
76.20 |
1.54 |
| Quick |
13.16 |
45.79 |
74.34 |
1.05 |
| Total Debt to Total Assets |
2.88% |
1.40% |
0.87% |
5.83% |
| Pre-tax Return on Net Worth |
42.78% |
56.65% |
52.25% |
50.20% |
| Pre-tax Return on Assets |
41.54% |
55.85% |
51.79% |
11.70% |
| |
| Additional Ratios |
1996 |
1997 |
1998 |
|
| Net Profit Margin |
21.78% |
16.72% |
17.86% |
n.a |
| Return on Equity |
28.62% |
37.95% |
35.14% |
n.a |
| |
| Activity Ratios |
| Accounts Receivable Turnover |
0.00 |
0.00 |
0.00 |
n.a |
| Collection Days |
0 |
0 |
0 |
n.a |
| Inventory Turnover |
52.00 |
54.30 |
42.46 |
n.a |
| Accounts Payable Turnover |
49.00 |
204.64 |
179.72 |
n.a |
| Payment Days |
9 |
1 |
2 |
n.a |
| Total Asset Turnover |
1.28 |
2.24 |
1.95 |
n.a |
| |
| Debt Ratios |
| Debt to Net Worth |
0.03 |
0.01 |
0.01 |
n.a |
| Current Liab. to Liab. |
1.00 |
1.00 |
1.00 |
n.a |
| |
| Liquidity Ratios |
| Net Working Capital |
$578,601 |
$2,656,666 |
$5,399,156 |
n.a |
| Interest Coverage |
0.00 |
0.00 |
0.00 |
n.a |
| |
| Additional Ratios |
| Assets to Sales |
0.78 |
0.45 |
0.51 |
n.a |
| Current Debt/Total Assets |
3% |
1% |
1% |
n.a |
| Acid Test |
13.16 |
45.79 |
74.34 |
n.a |
| Sales/Net Worth |
1.31 |
2.27 |
1.97 |
n.a |
| Dividend Payout |
0.00 |
0.00 |
0.00 |
n.a |
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