"Beverage Machine Retail" Business Plan:
1.0 Executive Summary
2.0 Company Summary
3.0 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
Business Ideas applicable for this business plan:
Innovative drink product
What do I do with my new beverage idea?
Wine distributors needed for organic wine from Georgia
New development in the presentation of Spirit liquor
Participate in the next Coca Cola
Exclusive beverage distributorships for hangover market
Whisky import and distribution - Romania
Investors needed for beer distribution business in Singapore
Bier trading supplier needs partners
Investor for beverage distribution company in Singapore
This business plan was originally published
by Palo Alto Software, Inc. All rights reserved.
|
7.0 Financial Plan
We want to finance growth mainly through cash flow. We recognize
that this means we will have to grow slowly, adding machines one at a time, not
in bulk. The most important indicator in our case is that minimal inventory will
have to be stored for these rentals; this translates into very low
overhead.
There are some seasonal variations, with the months of March
through September being the hottest months in Texas. This will, as expected,
mean a high rate of rentals for events such as pool parties, Fourth of July
celebrations, and barbecues. However, we expect the winter months to be just as
lucrative due to the number of holiday parties, football gatherings, and
fundraising events. We expect a light seasonal variation, with sales increasing
slightly during the cooler months. For the most part, Margarita Momma will
experience a high rate of sales, regardless of weather variations.
 Back to Top
7.1 Important Assumptions
The financial assumptions for Margarita Momma are included in the
following table.
|
| 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% |
| Other |
0 |
0 |
0 |
Back to Top
7.2 Break-even Analysis
The following table and chart summarize our break-even analysis.
With estimated fixed costs of $200 per month, we need to have only two rentals
to cover our costs.
Break-even Analysis
|
| Break-even Analysis: |
| Monthly Units Break-even |
3 |
| Monthly Revenue Break-even |
$223 |
| |
| Assumptions: |
| Average Per-Unit Revenue |
$74.51 |
| Average Per-Unit Variable Cost |
$7.60 |
| Estimated Monthly Fixed Cost |
$200 |
Back to Top
7.3 Projected Profit and Loss
We expect a net profit of $32,000 in year one, which is over 50% of
net profit. We foresee an increase to $37,000, or 54% of net profit in 2002, and
a further increase to $44,000, or 55% of net profit for 2003.
|
| Pro Forma Profit and Loss |
| |
2001 |
2002 |
2003 |
| Sales |
$60,875 |
$69,500 |
$80,250 |
| Direct Cost of Goods |
$5,523 |
$6,380 |
$7,380 |
| Other |
$0 |
$0 |
$0 |
|
|
------------ |
------------ |
------------ |
| Cost of Goods Sold |
$5,523 |
$6,380 |
$7,380 |
| Gross Margin |
$55,352 |
$63,120 |
$72,870 |
| Gross Margin % |
90.93% |
90.82% |
90.80% |
| Expenses: |
| Payroll |
$0 |
$0 |
$0 |
| Sales and Marketing and Other Expenses |
$280 |
$300 |
$250 |
| Depreciation |
$150 |
$150 |
$150 |
| Leased Equipment |
$0 |
$0 |
$0 |
| Utilities |
$0 |
$0 |
$0 |
| Insurance |
$0 |
$0 |
$0 |
| Rent |
$0 |
$0 |
$0 |
| Payroll Taxes |
$0 |
$0 |
$0 |
| Other |
$0 |
$0 |
$0 |
| |
------------ |
------------ |
------------ |
| Total Operating Expenses |
$430 |
$450 |
$400 |
| Profit Before Interest and Taxes |
$54,922 |
$62,670 |
$72,470 |
| Interest Expense |
$1,031 |
$916 |
$796 |
| Taxes Incurred |
$13,610 |
$15,439 |
$18,217 |
| Net Profit |
$40,281 |
$46,316 |
$53,457 |
| Net Profit/Sales |
66.17% |
66.64% |
66.61% |
Back to Top
7.4 Projected Cash Flow
The following cash flow projections show the annual amounts only.
For a monthly breakdown, please see the appendices at the end of the business
plan.
Cash
|
| Pro Forma Cash Flow |
| |
2001 |
2002 |
2003 |
| |
| Cash from Operations: |
| Cash Sales |
$60,875 |
$69,500 |
$80,250 |
| Cash from Receivables |
$0 |
$0 |
$0 |
| Subtotal Cash from Operations |
$60,875 |
$69,500 |
$80,250 |
| |
| 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 |
$60,875 |
$69,500 |
$80,250 |
| Expenditures |
2001 |
2002 |
2003 |
| Expenditures from Operations: |
| Cash Spending |
$1,734 |
$2,016 |
$2,331 |
| Payment of Accounts Payable |
$17,151 |
$20,875 |
$24,156 |
| Subtotal Spent on Operations |
$18,886 |
$22,891 |
$26,487 |
| |
| 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 |
$21,000 |
| Long-term Liabilities Principal Repayment |
$1,200 |
$1,200 |
$1,200 |
| Purchase Other Current Assets |
$0 |
$0 |
$0 |
| Purchase Long-term Assets |
$0 |
$0 |
$0 |
| Dividends |
$0 |
$0 |
$0 |
| Subtotal Cash Spent |
$20,086 |
$24,091 |
$27,687 |
| |
| Net Cash Flow |
$40,789 |
$45,409 |
$52,563 |
| Cash Balance |
$41,628 |
$87,037 |
$139,600 |
Back to Top
7.5 Projected Balance Sheet
The following table represents our financial position at the end of
each of the three upcoming fiscal years.
|
| Pro Forma Balance Sheet |
| |
| Assets |
| Current Assets |
2001 |
2002 |
2003 |
| Cash |
$41,628 |
$87,037 |
$139,600 |
| Accounts Receivable |
$2,552 |
$3,611 |
$5,398 |
| Inventory |
$500/TD>
| $578 |
$668 |
| Other Current Assets |
$1,260 |
$1,260 |
$1,260 |
| Total Current Assets |
$43,388 |
$88,875 |
$141,528 |
| Long-term Assets |
| Long-term Assets |
$9,000 |
$9,000 |
$9,000 |
| Accumulated Depreciation |
$150 |
$300 |
$450 |
| Total Long-term Assets |
$8,851 |
$8,701 |
$8,551 |
| Total Assets |
$52,239 |
$97,575 |
$150,079 |
| |
| Liabilities and Capital |
| Current Liabilities |
2001 |
2002 |
2003 |
| Accounts Payable |
$1,359 |
$1,580 |
$1,826 |
| Current Borrowing |
$0 |
$0 |
$0 |
| Other Current Liabilities |
$0 |
$0 |
$0 |
| Subtotal Current Liabilities |
$1,359 |
$1,580 |
$1,826 |
| |
Long-term Liabilities |
$9,760 |
$8,560 |
$7,360 |
| Total Liabilities |
$11,119 |
$10,140 |
$9,186 |
| |
| Paid-in Capital |
$1,000 |
$1,000 |
$1,000 |
| Retained Earnings |
($161) |
$40,120 |
$86,435 |
| Earnings |
$40,281 |
$46,316 |
$53,457 |
| Total Capital |
$41,120 |
$87,435 |
$140,892 |
| Total Liabilities and Capital |
$52,239 |
$97,575 |
$150,079 |
| Net Worth |
$41,120 |
$87,435 |
$140,892 |
Back to Top
7.6 Business Ratios
The following table shows standard ratios and industry comparison
for SIC code 7359, rental businesses.
| |
| Ratio Analysis |
| |
2001 |
2002 |
2003 |
Industry Profile |
| Sales Growth |
0.00% |
14.17% |
15.47% |
7.90% |
| |
| Percent of Total Assets |
| Accounts Receivable |
0.00% |
0.00% |
0.00% |
25.80% |
| Inventory |
0.96% |
0.59% |
0.45% |
3.40% |
| Other Current Assets |
2.41% |
1.29% |
0.84% |
45.10% |
| Total Current Assets |
83.06% |
91.08% |
94.30% |
74.30% |
| Long-term Assets |
16.94% |
8.92% |
5.70% |
25.70% |
| Total Assets |
100.00% |
100.00% |
100.00% |
100.00% |
| |
| Current Liabilities |
2.60% |
1.62% |
1.22% |
42.00% |
| Long-term Liabilities |
18.68% |
8.77% |
4.90% |
15.70% |
| Total Liabilities |
21.28% |
10.39% |
6.12% |
57.70% |
| Net Worth |
78.71% |
89.61% |
93.88% |
42.30% |
| |
| Percent of Sales |
| Sales |
100.00% |
100.00% |
100.00% |
100.00% |
| Gross Margin |
90.93% |
90.82% |
90.80% |
0.00% |
| Selling, General & Administrative Expenses |
38.15% |
36.91% |
35.50% |
82.90% |
| Advertising Expenses |
0.46% |
0.43% |
0.32% |
1.00% |
| Profit Before Interest and Taxes |
90.22% |
90.17% |
90.13% |
2.60% |
| |
| Main Ratios |
| Current |
31.93 |
56.26 |
77.49 |
1.69 |
| Quick |
31.56 |
55.90 |
77.13 |
1.33 |
| Total Debt to Total Assets |
21.28% |
10.39% |
6.12% |
57.70% |
| Pre-tax Return on Net Worth |
131.06% |
70.63% |
50.87% |
4.80% |
| Pre-tax Return on Assets |
103.16% |
63.29% |
47.76% |
11.40% |
| |
| Additional Ratios |
2001 |
2002 |
2003 |
|
| Net Profit Margin |
66.17% |
66.64% |
66.61% |
n.a |
| Return on Equity |
97.96% |
52.97% |
37.94% |
n.a |
| |
| Activity Ratios |
| Accounts Receivable Turnover |
0.00 |
0.00 |
0.00 |
n.a |
| Collection Days |
0 |
0 |
0 |
n.a |
| Inventory Turnover |
11.69 |
11.84 |
11.85 |
n.a |
| Accounts Payable Turnover |
13.62 |
13.35 |
13.36 |
n.a |
| Payment Days |
23 |
25 |
25 |
n.a |
| Total Asset Turnover |
1.17 |
0.17 |
0.53 |
n.a |
| |
| Debt Ratios |
| Debt to Net Worth |
0.27 |
0.12 |
0.07 |
n.a |
| Current Liab. to Liab. |
0.12 |
0.16 |
0.20 |
n.a |
| |
| Liquidity Ratios |
| Net Working Capital |
$42,029 |
$87,295 |
$139,702 |
n.a |
| Interest Coverage |
53.27 |
68.42 |
91.04 |
n.a |
| |
| Additional Ratios |
| Assets to Sales |
0.86 |
1.40 |
1.87 |
n.a |
| Current Debt/Total Assets |
3% |
2% |
1% |
n.a |
| Acid Test |
31.56 |
55.90 |
77.13 |
n.a |
| Sales/Net Worth |
1.48 |
0.79 |
0.57 |
n.a |
| Dividend Payout |
0.00 |
0.00 |
0.00 |
n.a |
Back to Top | <-- Previous Page | Next Page -->
|
