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Restaurant - Dessert Bar and Bakery
Business Plan
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1.0 Executive Summary
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2.0 Company Summary
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3.0 Products and Services
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4.0 Market Analysis Summary
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5.0 Competitive Edge
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6.0 Management Summary
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7.0 Financial Plan
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| 7.0 Financial Plan | [back to top] |
It is key to our financial success to grow Rutabaga Sweets not just as a dessert bar, but as a company. We are looking for an investment of $300,000 seed money with the hopes of eventually selling an established chain of dessert bars or establishing our company as a gourmet franchise. This means we must always be reinvesting in the future of Rutabaga Sweets.
| 7.1 Important Assumptions | [back to top] |
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 of course that there are no unforeseen changes in technology to make products immediately obsolete.
- We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
| General Assumptions | |||
| FY 2003 | FY 2004 | FY 2005 | |
| 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 | 30.00% | 30.00% | 30.00% |
| Other | 0 | 0 | 0 |
| 7.2 Break-even Analysis | [back to top] |
For our break-even analysis, we assume running costs including our full payroll, rent, and utilities, and an estimation of other running costs. Payroll alone, at our present run rate, is only about $4,000.
Margins are harder to assume that far in the future.
| Break-even Analysis | |
| Monthly Revenue Break-even | $13,251 |
| Assumptions: | |
| Average Percent Variable Cost | 19% |
| Estimated Monthly Fixed Cost | $10,689 |
Break-even Analysis
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| 7.3 Projected Profit and Loss | [back to top] |
An important assumption when calculating our P&L is the increase in sales from year to year. We are basing our assumptions on the financial success of Finale Dessertery in Boston, Massachusetts. They reported a 50% increase in sales the second year of business followed by a 30% increase the next year. We feel Rutabaga Sweets can match, if not beat those sales, considering the National Restaurant Association's analysis of the Bureau of Labor Statistics Consumer Expenditure Survey states that Washington DC households spend the most at restaurants per year.
It is also vital that we hold our food cost at 20% and 15% respectively for dine-in desserts and POP, carry-out and weekly lessons. That will assure our gross margin remains high.
| Pro Forma Profit and Loss | |||
| FY 2003 | FY 2004 | FY 2005 | |
| Sales | $166,150 | $241,525 | $312,751 |
| Direct Costs of Goods | $32,123 | $47,232 | $60,499 |
| Other Production Expenses | $0 | $0 | $0 |
| ------------ | ------------ | ------------ | |
| Cost of Goods Sold | $32,123 | $47,232 | $60,499 |
| Gross Margin | $134,028 | $194,293 | $252,252 |
| Gross Margin % | 80.67% | 80.44% | 80.66% |
| Expenses | |||
| Payroll | $50,063 | $54,019 | $60,387 |
| Sales and Marketing and Other Expenses | $2,300 | $2,500 | $2,500 |
| Depreciation | $0 | $0 | $0 |
| Leased Equipment | $0 | $0 | $0 |
| Utilities | $6,000 | $6,000 | $6,000 |
| Insurance | $2,400 | $2,400 | $2,400 |
| Rent | $60,000 | $60,000 | $60,000 |
| Payroll Taxes | $7,509 | $8,103 | $9,058 |
| Other | $0 | $0 | $0 |
| ------------ | ------------ | ------------ | |
| Total Operating Expenses | $128,272 | $133,022 | $140,345 |
| Profit Before Interest and Taxes | $5,755 | $61,271 | $111,907 |
| EBITDA | $5,755 | $61,271 | $111,907 |
| Interest Expense | $0 | $0 | $0 |
| Taxes Incurred | $1,727 | $18,381 | $33,572 |
| Net Profit | $4,029 | $42,890 | $78,335 |
| Net Profit/Sales | 2.42% | 17.76% | 25.05% |
Profit Monthly
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Profit Yearly
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Gross Margin Monthly
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Gross Margin Yearly
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| 7.4 Projected Cash Flow | [back to top] |
Being a quick-service oriented business, our cash flow depends on sales assumptions. It is critical to keep our food cost low. We also need to be careful to balance slow (non-holiday) months with busy months with big holidays such as Christmas, Valentine's Day and Mother's Day.
| Pro Forma Cash Flow | |||
| FY 2003 | FY 2004 | FY 2005 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | $166,150 | $241,525 | $312,751 |
| Subtotal Cash from Operations | $166,150 | $241,525 | $312,751 |
| 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 | $166,150 | $241,525 | $312,751 |
| Expenditures | FY 2003 | FY 2004 | FY 2005 |
| Expenditures from Operations | |||
| Cash Spending | $50,063 | $54,019 | $60,387 |
| Bill Payments | $104,118 | $146,159 | $173,213 |
| Subtotal Spent on Operations | $154,181 | $200,178 | $233,600 |
| 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 | $154,181 | $200,178 | $233,600 |
| Net Cash Flow | $11,969 | $41,347 | $79,151 |
| Cash Balance | $30,969 | $72,316 | $151,467 |
Cash
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| 7.5 Projected Balance Sheet | [back to top] |
The balance sheet is quite solid. We do not project any real trouble meeting our debt obligations - as long as we can achieve our specific objectives. We realize we've projected aggressively, but are confident the location we've chosen for Rutabaga Sweets, as well as the dessert bar concept itself , will be very successful.
At this point we haven't included any assets or depreciation in our calculations. Whether we purchase new or used kitchen equipment will determine those numbers at a later date.
| Pro Forma Balance Sheet | |||
| FY 2003 | FY 2004 | FY 2005 | |
| Assets | |||
| Current Assets | |||
| Cash | $30,969 | $72,316 | $151,467 |
| Inventory | $3,834 | $5,637 | $7,220 |
| Other Current Assets | $0 | $0 | $0 |
| Total Current Assets | $34,802 | $77,953 | $158,687 |
| Long-term Assets | |||
| Long-term Assets | $0 | $0 | $0 |
| Accumulated Depreciation | $0 | $0 | $0 |
| Total Long-term Assets | $0 | $0 | $0 |
| Total Assets | $34,802 | $77,953 | $158,687 |
| Liabilities and Capital | FY 2003 | FY 2004 | FY 2005 |
| Current Liabilities | |||
| Accounts Payable | $11,774 | $12,034 | $14,434 |
| Current Borrowing | $0 | $0 | $0 |
| Other Current Liabilities | $0 | $0 | $0 |
| Subtotal Current Liabilities | $11,774 | $12,034 | $14,434 |
| Long-term Liabilities | $0 | $0 | $0 |
| Total Liabilities | $11,774 | $12,034 | $14,434 |
| Paid-in Capital | $300,000 | $300,000 | $300,000 |
| Retained Earnings | ($281,000) | ($276,971) | ($234,082) |
| Earnings | $4,029 | $42,890 | $78,335 |
| Total Capital | $23,029 | $65,918 | $144,253 |
| Total Liabilities and Capital | $34,802 | $77,953 | $158,687 |
| Net Worth | $23,029 | $65,918 | $144,253 |
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