Parkdale Meats
Financial Plan
Forecast
Key Assumptions
Our key assumptions are:
- Families appreciate nourishing meat
- People are willing to pay for premium meats
Revenue by Month
Expenses by Month
Net Profit (or Loss) by Year
Financing
Use of Funds
Our uses of funds are:
Legal ………………………………………………. $10,000
Stationery etc. ……………………………….. $1,000
Insurance ………………………………………. $2,000
Rent ……………………………………………….. $4,800
Pre-Launch Marketing …………………. $5,000
Website Development …………………… $10,000
TOTAL START-UP EXPENSES ………. $32,800
The following summary table shows the projected start-up costs over the three months prior to the store’s opening.
• Initial insurance premiums covering both general liability and product liability
• Business renters insurance
• Rent for one month’s security and two months to allow for build-out of the retail space
• Pre-launch marketing to cover flyers
• Direct mail campaign
• Advertisements in local papers
• Website development with E-commerce capabilities to take orders and sell meats directly
• Standard legal expenses for consultation and permits.
Inventory on-hand at any given time must be low to keep all meat extremely fresh. It will be ordered on a weekly basis or more often if necessary. Other current assets include office and store furniture, shelving, one computer, phone systems, and other tools. Long-term assets include the refrigerator unit for the shop, refrigerated display cases, window displays, store fixtures, a refrigerated delivery van, and additional investments in improvements to the retail location.
A significant amount of cash is required to fund the first year of operations until the business reaches its break-even point.
Sources of Funds
Our funds are from:
Robert Suidae $65,000
Eryka Auroch $65,000
Initial funds are from Robert Suidae and Eryka Auroch for $65,000 each.
Parkdale Meats will also get a credit line of $100,000 from the bank using the owner’s houses and land as collateral. If everything goes according to plan, all debt will be paid off by year three. In year four, the shop will start giving Robert and Eryka back their $65,000 in owner’s dividends.
Statements
Projected Profit & Loss
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Revenue | $866,200 | $1,127,000 | $1,411,000 |
| Direct Costs | $519,720 | $676,200 | $846,600 |
| Gross Margin | $346,480 | $450,800 | $564,400 |
| Gross Margin % | 40% | 40% | 40% |
| Operating Expenses | |||
| Salaries & Wages | $179,400 | $182,988 | $186,647 |
| Employee Related Expenses | $35,880 | $36,598 | $37,329 |
| Marketing | $8,640 | $8,640 | $8,640 |
| Promotions | $6,696 | $6,696 | $6,696 |
| Rent | $30,000 | $30,000 | $30,000 |
| Utilities | $4,200 | $4,200 | $4,200 |
| Insurance | $2,700 | $2,700 | $2,700 |
| Amortization of Other Current Assets | $0 | $0 | $0 |
| Total Operating Expenses | $267,516 | $271,822 | $276,212 |
| Operating Income | $78,964 | $178,978 | $288,188 |
| Interest Incurred | $3,984 | $2,839 | $984 |
| Depreciation and Amortization | $8,000 | $8,000 | $8,000 |
| Gain or Loss from Sale of Assets | |||
| Income Taxes | $10,047 | $25,221 | $41,881 |
| Total Expenses | $809,267 | $984,082 | $1,173,677 |
| Net Profit | $56,933 | $142,918 | $237,323 |
| Net Profit/Sales | 7% | 13% | 17% |
Projected Balance Sheet
| Starting Balances | 2020 | 2021 | 2022 | |
|---|---|---|---|---|
| Cash | $110,000 | $87,234 | $155,789 | $375,437 |
| Accounts Receivable | $15,457 | $12,209 | $15,286 | |
| Inventory | $2,000 | $112,700 | $141,100 | $141,100 |
| Other Current Assets | $20,000 | $20,000 | $20,000 | $20,000 |
| Total Current Assets | $132,000 | $235,391 | $329,099 | $551,822 |
| Long-Term Assets | $80,000 | $80,000 | $80,000 | $80,000 |
| Accumulated Depreciation | ($8,000) | ($16,000) | ($24,000) | |
| Total Long-Term Assets | $80,000 | $72,000 | $64,000 | $56,000 |
| Total Assets | $212,000 | $307,391 | $393,099 | $607,822 |
| Accounts Payable | $4,800 | $23,674 | $29,212 | $29,212 |
| Income Taxes Payable | $9,200 | $6,340 | $10,485 | |
| Sales Taxes Payable | $0 | $0 | $0 | |
| Short-Term Debt | $45,861 | $62,406 | $8,993 | ($10,944) |
| Prepaid Revenue | ||||
| Total Current Liabilities | $50,661 | $95,280 | $44,546 | $28,754 |
| Long-Term Debt | $34,139 | $27,978 | $21,502 | $14,694 |
| Long-Term Liabilities | $34,139 | $27,978 | $21,502 | $14,694 |
| Total Liabilities | $84,800 | $123,258 | $66,047 | $43,448 |
| Paid-In Capital | $160,000 | $160,000 | $160,000 | $160,000 |
| Retained Earnings | ($32,800) | ($32,800) | $24,133 | $167,051 |
| Earnings | $56,933 | $142,918 | $237,323 | |
| Total Owner’s Equity | $127,200 | $184,133 | $327,051 | $564,374 |
| Total Liabilities & Equity | $212,000 | $307,391 | $393,099 | $607,822 |
Projected Cash Flow Statement
| 2020 | 2021 | 2022 | |
|---|---|---|---|
| Net Cash Flow from Operations | |||
| Net Profit | $56,933 | $142,918 | $237,323 |
| Depreciation & Amortization | $8,000 | $8,000 | $8,000 |
| Change in Accounts Receivable | ($15,457) | $3,248 | ($3,077) |
| Change in Inventory | ($110,700) | ($28,400) | $1 |
| Change in Accounts Payable | $18,874 | $5,538 | $0 |
| Change in Income Tax Payable | $9,200 | ($2,860) | $4,145 |
| Change in Sales Tax Payable | $0 | $0 | $0 |
| Change in Prepaid Revenue | |||
| Net Cash Flow from Operations | ($33,150) | $128,444 | $246,392 |
| Investing & Financing | |||
| Assets Purchased or Sold | |||
| Net Cash from Investing | |||
| Investments Received | |||
| Dividends & Distributions | |||
| Change in Short-Term Debt | $16,545 | ($53,413) | ($19,937) |
| Change in Long-Term Debt | ($6,161) | ($6,476) | ($6,808) |
| Net Cash from Financing | $10,384 | ($59,889) | ($26,744) |
| Cash at Beginning of Period | $110,000 | $87,234 | $155,789 |
| Net Change in Cash | ($22,766) | $68,555 | $219,647 |
| Cash at End of Period | $87,234 | $155,789 | $375,437 |
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