|
Cafe - Internet Cafe
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
Download PDF Version
View an Adobe PDF version of this sample plan.
|
| ||||
 | ||||
| 7.0 Financial Plan | [back to top] |
Sales: JavaNet is basing their projected coffee and espresso sales on the financial snapshot information provided to them by Allann Bros. Coffee Co. Internet sales were estimated by calculating the total number of hours each terminal will be active each day and then generating a conservative estimate as to how many hours will be purchased by consumers.
Cost of Goods Sold: The cost of goods sold for coffee-related products was determined by the "retail profit analysis" we obtained from Allann Bros. Coffee Co. The cost of bakery items is 20% of the selling price. The cost of Internet access is $660 per month, paid to Bellevue Computers for networking fees. The cost of e-mail accounts is 25% of the selling price.
Fixture Costs: Fixture costs associated with starting JavaNet are the following: 11 computers = $22,000, two printers = $1,000, one scanner = $500, one espresso machine = $10,700, one automatic espresso grinder = $795, two coffee/food preparation counters = $1,000, one information display counter = $1,000, one drinking/eating counter = $500, sixteen stools = $1,600, six computer desks w/chairs = $2,400, stationery goods = $500, two telephones = $200, decoration expense = $14,110 for a total fixture cost of $50,000.
Salaries Expense: The founder of JavaNet, Cale Bruckner, will receive a salary of $24,000 in year one, $26,400 in year two, and $29,040 in year three.
Payroll Expense: JavaNet intends to hire six part-time employees at $5.75/hour and a full-time technician at $10.00/hour. The total cost of employing seven people at these rates for the first year is $7,240/month.
Rent Expense: JavaNet is leasing a 1700 square foot facility at $.85/sq. foot. The lease agreement JavaNet signed specifies that we pay $2,000/month for a total of 36 months. At the end of the third year, the lease is open for negotiations and JavaNet may or may not re-sign the lease depending on the demands of the lessor.
Utilities Expense: As stated in the contract, the lessor is responsible for the payment of utilities including gas, garbage disposal, and real estate taxes. The only utilities expense that JavaNet must pay is the phone bill generated by fifteen phone lines; thirteen will be dedicated to modems and two for business purposes. The basic monthly service charge for each line provided by US West is $17.29. The 13 lines used to connect the modems will make local calls to the network provided by Bellevue resulting in a monthly charge of $224.77. The two additional lines used for business communication will cost $34.58/month plus long distance fees. JavaNet assumes that it will not make more than $40.00/month in long distance calls. Therefore, the total cost associated with the two business lines is estimated at $74.58/month and the total phone expense at $299.35/month. In addition, there will be an additional utility expense of $800 for estimated EWEB bills.
Marketing Expense: JavaNet will allocate $5,000 for promotional expenses at the time of start-up. These dollars will be used for advertising in local newspapers in order to build consumer awareness. For additional information, please refer to section 5.0 of the business plan.
Insurance Expense: JavaNet has allocated $1,440 for insurance for the first year. As revenue increases in the second and third year of business, JavaNet intends to invest more money for additional insurance coverage.
Legal and Consulting Fees: The cost of obtaining legal consultation in order to draw up the paper work necessary for an LLC is $1,000.
Depreciation: In depreciating our capital equipment, JavaNet used the Modified Accelerated Cost Recovery Method. We depreciated our computers over a five-year time period and our fixtures over seven years.
Taxes: JavaNet is an LLC and, as an entity, it is not taxed. However, there is a 15% payroll burden.
Accounts Payable: JavaNet acquired a $24,000 loan from a bank at a 10% interest rate. The loan will be paid back at $750/month over the next three years. The $9,290 short term loan will be paid back at a rate of 8%.
| 7.1 Start-up Funding | [back to top] |
This business plan is prepared to obtain financing in the amount of $24,000. The supplemental financing is required to begin work on site preparation and modifications, equipment purchases, and to cover expenses in the first year of operations. Additional financing has already been secured in the form of: (1) $24,000 from the Oregon Economic Development Fund (2) $19,000 of personal savings from owner Cale Bruckner (3) $36,000 from three investors (4) and $9,290 in the form of short-term loans.
| Start-up Funding | |
| Start-up Expenses to Fund | $62,290 |
| Start-up Assets to Fund | $26,000 |
| Total Funding Required | $88,290 |
| Assets | |
| Non-cash Assets from Start-up | $2,000 |
| Cash Requirements from Start-up | $24,000 |
| Additional Cash Raised | $0 |
| Cash Balance on Starting Date | $24,000 |
| Total Assets | $26,000 |
| Liabilities and Capital | |
| Liabilities | |
| Current Borrowing | $9,290 |
| Long-term Liabilities | $24,000 |
| Accounts Payable (Outstanding Bills) | $0 |
| Other Current Liabilities (interest-free) | $0 |
| Total Liabilities | $33,290 |
| Capital | |
| Planned Investment | |
| Cale Bruckner | $19,000 |
| Luke Walsh | $12,000 |
| Doug Wilson | $12,000 |
| John Underwood | $12,000 |
| Additional Investment Requirement | $0 |
| Total Planned Investment | $55,000 |
| Loss at Start-up (Start-up Expenses) | ($62,290) |
| Total Capital | ($7,290) |
| Total Capital and Liabilities | $26,000 |
| Total Funding | $88,290 |
| 7.2 Important Assumptions | [back to top] |
Basic assumptions are presented in the table below.
| General Assumptions | |||
| 1999 | 2000 | 2001 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 8.00% | 8.00% | 8.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
| 7.3 Key Financial Indicators | [back to top] |
Profit growth data is presented in the chart below.
Profit Monthly
Click to Enlarge
| 7.4 Break-even Analysis | [back to top] |
Break-even data is presented in the chart and table below.
Break-even Analysis
Click to Enlarge
| Break-even Analysis | |
| Monthly Units Break-even | 7,904 |
| Monthly Revenue Break-even | $20,008 |
| Assumptions: | |
| Average Per-Unit Revenue | $2.53 |
| Average Per-Unit Variable Cost | $0.63 |
| Estimated Monthly Fixed Cost | $15,013 |
| 7.5 Projected Profit and Loss | [back to top] |
P & L data is presented in the table below.
| Pro Forma Profit and Loss | |||
| 1999 | 2000 | 2001 | |
| Sales | $248,878 | $303,548 | $333,903 |
| Direct Cost of Sales | $62,138 | $75,782 | $83,360 |
| Other | $0 | $0 | $0 |
| ------------ | ------------ | ------------ | |
| Total Cost of Sales | $62,138 | $75,782 | $83,360 |
| Gross Margin | $186,740 | $227,767 | $250,543 |
| Gross Margin % | 75.03% | 75.03% | 75.03% |
| Expenses | |||
| Payroll | $93,291 | $121,824 | $129,254 |
| Sales and Marketing and Other Expenses | $33,750 | $40,000 | $43,000 |
| Depreciation | $0 | $0 | $0 |
| Utilities | $9,120 | $9,120 | $9,120 |
| Insurance | $6,000 | $6,000 | $6,000 |
| Rent | $24,000 | $24,000 | $24,000 |
| Payroll Taxes | $13,994 | $18,274 | $19,388 |
| Other | $0 | $0 | $0 |
| ------------ | ------------ | ------------ | |
| Total Operating Expenses | $180,154 | $219,217 | $230,762 |
| Profit Before Interest and Taxes | $6,586 | $8,549 | $19,781 |
| EBITDA | $6,586 | $8,549 | $19,781 |
| Interest Expense | $2,325 | $1,470 | $1,100 |
| Taxes Incurred | $584 | $1,770 | $4,748 |
| Net Profit | $3,677 | $5,309 | $13,933 |
| Net Profit/Sales | 1.48% | 1.75% | 4.17% |
| 7.6 Projected Cash Flow | [back to top] |
Cash flow data is presented in the chart and table below.
| Pro Forma Cash Flow | |||
| 1999 | 2000 | 2001 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $248,878 | $303,548 | $333,903 |
| Subtotal Cash from Operations | $248,878 | $303,548 | $333,903 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
| New Current Borrowing | $2,000 | $5,000 | $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 | $250,878 | $308,548 | $333,903 |
| Expenditures | 1999 | 2000 | 2001 |
| Expenditures from Operations | |||
| Cash Spending | $93,291 | $121,824 | $129,254 |
| Bill Payments | $142,648 | $178,392 | $190,537 |
| Subtotal Spent on Operations | $235,939 | $300,215 | $319,792 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
| Principal Repayment of Current Borrowing | $9,290 | $2,000 | $0 |
| Other Liabilities Principal Repayment | $0 | $0 | $0 |
| Long-term Liabilities Principal Repayment | $9,600 | $5,000 | $4,800 |
| Purchase Other Current Assets | $0 | $0 | $0 |
| Purchase Long-term Assets | $0 | $0 | $0 |
| Dividends | $0 | $0 | $0 |
| Subtotal Cash Spent | $254,829 | $307,215 | $324,592 |
| Net Cash Flow | ($3,951) | $1,333 | $9,311 |
| Cash Balance | $20,049 | $21,382 | $30,693 |
Cash
Click to Enlarge
| 7.7 Projected Balance Sheet | [back to top] |
Our projected balance sheet is presented in the table below.
| Pro Forma Balance Sheet | |||
| 1999 | 2000 | 2001 | |
| Assets | |||
| Current Assets | |||
| Cash | $20,049 | $21,382 | $30,693 |
| Inventory | $7,669 | $9,353 | $10,288 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $27,718 | $30,735 | $40,982 |
| Long-term Assets | |||
| Long-term Assets | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $27,718 | $30,735 | $40,982 |
| Liabilities and Capital | 1999 | 2000 | 2001 |
| Current Liabilities | |||
| Accounts Payable | $14,931 | $14,638 | $15,752 |
| Current Borrowing | $2,000 | $5,000 | $5,000 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $16,931 | $19,638 | $20,752 |
| Long-term Liabilities | $14,400 | $9,400 | $4,600 |
| Total Liabilities | $31,331 | $29,038 | $25,352 |
| Paid-in Capital | $55,000 | $55,000 | $55,000 |
| Retained Earnings | ($62,290) | ($58,613) | ($53,303) |
| Earnings | $3,677 | $5,309 | $13,933 |
| Total Capital | ($3,613) | $1,697 | $15,630 |
| Total Liabilities and Capital | $27,718 | $30,735 | $40,982 |
| Net Worth | ($3,613) | $1,697 | $15,630 |
| 7.8 Business Ratios | [back to top] |
The Standard Industrial Classification (SIC) Code for the Internet Service Provider industry is "Remote data base information retrieval" 7375.9903. We used the report for "Information retrieval services" 7375 to generate the industry profile.
As we are also a food cafe we could have used the ratios based on SIC classification 5812, "Eating places". The combined nature of JavaNet Cafe makes our ratios a blend of the two industries.
| Ratio Analysis | ||||
| 1999 | 2000 | 2001 | Industry Profile | |
| Sales Growth | 0.00% | 21.97% | 10.00% | 0.90% |
| Percent of Total Assets | ||||
| Inventory | 27.67% | 30.43% | 25.10% | 2.17% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 59.34% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 86.95% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 13.05% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 61.08% | 63.90% | 50.64% | 28.33% |
| Long-term Liabilities | 51.95% | 30.58% | 11.22% | 16.21% |
| Total Liabilities | 113.03% | 94.48% | 61.86% | 44.54% |
| Net Worth | -13.03% | 5.52% | 38.14% | 55.46% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 75.03% | 75.03% | 75.03% | 100.00% |
| Selling, General & Administrative Expenses | 73.78% | 73.30% | 70.86% | 79.00% |
| Advertising Expenses | 6.03% | 8.24% | 8.39% | 1.01% |
| Profit Before Interest and Taxes | 2.65% | 2.82% | 5.92% | 1.62% |
| Main Ratios | ||||
| Current | 1.64 | 1.57 | 1.97 | 1.90 |
| Quick | 1.18 | 1.09 | 1.48 | 1.52 |
| Total Debt to Total Assets | 113.03% | 94.48% | 61.86% | 52.45% |
| Pre-tax Return on Net Worth | -117.95% | 417.22% | 119.52% | 3.74% |
| Pre-tax Return on Assets | 15.37% | 23.03% | 45.58% | 7.86% |
| Additional Ratios | 1999 | 2000 | 2001 | |
| Net Profit Margin | 1.48% | 1.75% | 4.17% | n.a |
| Return on Equity | 0.00% | 312.92% | 89.14% | n.a |
| Activity Ratios | ||||
| Inventory Turnover | 10.91 | 8.90 | 8.49 | n.a |
| Accounts Payable Turnover | 10.55 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 30 | 29 | n.a |
| Total Asset Turnover | 8.98 | 9.88 | 8.15 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.00 | 17.11 | 1.62 | n.a |
| Current Liab. to Liab. | 0.54 | 0.68 | 0.82 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | $10,787 | $11,097 | $20,230 | n.a |
| Interest Coverage | 2.83 | 5.82 | 17.98 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.11 | 0.10 | 0.12 | n.a |
| Current Debt/Total Assets | 61% | 64% | 51% | n.a |
| Acid Test | 1.18 | 1.09 | 1.48 | n.a |
| Sales/Net Worth | 0.00 | 178.90 | 21.36 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
|
Copyright ©2010 Palo Alto Software Inc. All rights reserved.
Go to Bplans.com