SmallBusinessPoint.com, Inc.
Sample On-line Plans
This plan is copyrighted by SmallBusinessPoint.com, Inc. This plan was used by a new business start- up. Use of the business plan does not guarantee business success. Due to management decisions, government regulations, economic factors, location considerations, and all other internal and external factors beyond SmallBusinessPoint's control, SmallBusinessPoint does not guarantee business success by use of the plan. The plan is designed to be a guide from which to grow and a model from which to build a business plan.
Return Policy:
Due to the nature of electronic documents, any document automatically downloaded is not returnable. Since all Sample On-line Plans are electronic and not "returnable", SmallBusinessPoint.com does not issue refunds except in the case of an order incorrectly filled.
Tanning Salon, Inc. S-Corporation
A Tanning Salon Business Plan
Executive Summary _____________________________________________________ 4
Company Analysis ______________________________________________________ 5
Name _____________________________________________________________________ 5
Mission ____________________________________________________________________ 5
Company History ___________________________________________________________ 5
Current Situation ___________________________________________________________ 5
Company Location and facilities _______________________________________________ 5
Company Goals _____________________________________________________________ 6
Legal Form of Ownership ____________________________________________________ 6
Profile of the Management Team ______________________________________________ 6
Insurance __________________________________________________________________ 6
Market Analysis ________________________________________________________ 8
Services ___________________________________________________________________ 8
Price ______________________________________________________________________ 8
Distribution ________________________________________________________________ 9
Promotion _________________________________________________________________ 9
Advertising ________________________________________________________________ 9
Industry Trends/Influential Factors ____________________________________________ 9
Supply/Demand ____________________________________________________________ 10
Target Market and Customer Base____________________________________________ 10
Customer Identification _____________________________________________________ 10
Barriers to Entry___________________________________________________________ 10
Intellectual Property________________________________________________________ 10
Company Revenues ________________________________________________________ 10
Growth Opportunities ______________________________________________________ 10
Vendor/Supplier Relationships _______________________________________________ 11
Exit Strategy ______________________________________________________________ 11
Inventory _________________________________________________________________ 12
Start-up Cost Estimates _____________________________________________________ 12
Budgets___________________________________________________________________ 12
Income Statement __________________________________________________________ 12
Balance Sheet _____________________________________________________________ 12
2
Break-even analysis ________________________________________________________ 12
Financial Ratios ___________________________________________________________ 12
Intellectual Property Documents______________________________________________ 12
Company Documents _______________________________________________________ 12
Conservative & Aggressive Financials _________________________________________ 12
Intellectual Property________________________________________________________ 13
Legal Documents___________________________________________________________ 13
3
Executive Summary
Tanning Salon, Inc. is a start-up company seeking financing. Tanning Salon has an experienced management team, excellent location, and sound business strategy. This business plan will highlight tanning salon's strengths, weaknesses, opportunities and threats.
Tanning Salon is a start-up located just outside Metropolitan. This is a market area of over 160,000 individuals. The location is in a high traffic strip mall with national chains. The business' main service is offering tanning booths for individuals. Tanning Salon will offer eight stand-up booths and limited retail sales of lotions, swimwear, and sunglasses.
Current management has a combined over 40 years experience in tanning and hair salons. Edgar Pekin is the majority owner and a successful entrepreneur, currently owns a car wash. Gadda Mooga and Jeff Minor have extensive careers operating and managing hair salons. These owners have $50,000 to invest in the business.
Tanning Salon, Inc. is looking to finance $78,000 for the build out and start-up of their salon. The funds will be used to finance start-up costs, remodeling of the location, purchase equipment, and initial inventory. The funds will be repaid through earnings. Estimated first year revenues are $267,000, with an estimated after tax profit of $61,000.
Overall, Tanning Salon, Inc. is a sound business with limited risk to the bank. The principals are investing
$50,000 of the overall start-up costs of $128,000.
4
Company Analysis
Name
Tanning Salon, Inc. was chosen to be descriptive to existing and potential customers. Because most of Tanning Salon's customers will locate them through the phone book, the name describes exactly what services are offered.
Mission
Tanning Salon is in business to provide a safe, reliable tanning experience, with a sincere concern for customer's health and well being.
Company History
Tanning Salon is a start-up salon located just outside Metropolitan's city limits. The business was started after Jeff Minor contacted Edgar Pekin about investing in a tanning salon. Mr. Pekin, a successful entrepreneur was looking for a business investment, while Mr. Minor was looking to secure equity in a tanning salon. After searching for a location and business model, the two decided to start from zero and build their own tanning salon.
In the fall of 2000, a site was chosen and lease negotiations began.
Current Situation
Today, Tanning Salon is in need of additional financing to assist with the site build-out and purchase of equipment. Tanning Salon has a lease close date of January 1, 2001 with a grand opening slated for March
16, 2001.
Tanning Salon has a database of 300 potential clients, all of which were served by Mr. Minor in his prior employment.
Company Location and facilities
Tanning Salon is located in a suburban strip mall just outside Metropolitan's city limits. The L-shaped strip mall opens to the fourth busiest road (Lincoln) in the metropolitan area, and has three entrances, two facing Lincoln, and another facing 200th. Within the mall is an assortment of retail shops including a ladies dress shop, hair salon, insurance office, art gallery, coffee shop, golf store, Mexican restaurant, and anchored by
a large, regional, grocery store. The parking lot contains three National restaurants.
Retail strip malls surround tanning Salon's location on each corner. Directly south and across Lincoln Street is another strip mall anchored by a regional discount retailer. Within the strip mall are similar retail shops, restaurants, and a bank. Southwest of Tanning Salon on the opposite corner sites the second largest enclosed mall within the Metropolitan area. National stores such as; Sears, Dillards, JCPenneys, and Younkers anchor it. The frontage road contains other National retailers like Old Navy, Barnes & Noble, Kohls, and Toys R Us. Directly east of Tanning Salon is a two-story strip mall which contains a hair salon, restaurant, hardware store, and an adjacent auto repair shop. This is an excellent location not only for the retail exposure, but also because of the afternoon commuter traffic.
Demographics of the area and potential customers indicate Tanning Salon is a good fit for the area. More than 136,000 people live within five miles of the store; two-thirds of households within a mile have annual incomes of more than $50,000; and nearly two-thirds of the residents are younger than 40.
According to the city planner's office, there is no construction in the immediate area and none planned for the next three years.
5
The actual site will be 810 square feet including eight tanning booths. The space is divided as follows:
ﾷ
Office space: 170 square feetﾷ
Tanning/changing space: 240 square feetﾷ
Waiting/Retail space: 350 square feetﾷ
Restroom/storage: 50 square feetThe three-year lease contract includes rent of $1,500, which covers insurance, maintenance, and area marketing. Overall, the location is very attractive due to the car and foot traffic and low crime rate.
Company Goals
Tanning Salon has three specific goals they will achieve in the short-term, obtain financing, hire two employees, and achieve revenues in excess of $250M in the first year. The first goal of Tanning Salon is to obtain financing for all start-up costs and six months budget. Without financing, Tanning Salon is simply an idea and business plan.
The second goal is to hire two experienced employees who can assist Mr. Minor with daily operations. Tanning Salon is searching for individuals who are experienced in tanning salons and have the work ethic that will want them to stay a long time.
The third goal is to achieve revenues in excess of $250M in the first year. This level of revenue will pay all fixed costs for the first year and provide good foundation for Tanning Salon.
Legal Form of Ownership
The legal form of ownership will be an S-Corporation based in a Midwestern State. The ownership will be divided among the founders, Edgar Pekin (52%), Gadda Mooga (27%), and Jeff Minor (21%).
Profile of the Management Team
Responsibilities of Tanning Salon will be divided among the owners Mr. Pekin, Ms. Mooga, and Mr. Minor. Mr. Pekin will be President and responsible for overall strategy and marketing. Ms. Mooga will be Vice President/Treasurer and responsible for budgets and financial reporting. Mr. Minor will be Secretary and have daily responsibilities within the salon, including staffing, management, training, and inventory.
Mr. Pekin is a successful entrepreneur who has started and sold two hair salons, and currently owns a car wash. Ms. Mooga has a Bachelor Science in History from Western University and has worked in hair/tanning salons for over 15 years. Most recently she managed a hair salon with over $260,000 in annual revenues. Mr. Minor has over 22 years experience in hair/tanning salons. He holds an Associates Degree from the local community college and licensed as a hair stylist.
Insurance
Universal Insurance Facilities, LTD will provide insurance. Universal's Tanning Salon Insurance Package provides all of the essential coverage's needed to safeguard Tanning Salon in one basic, affordable package, including:
ﾷ
Property Coverage -- All Riskﾷ
Buildings Coverage and Contents Coverage -- Replacement Costﾷ
Loss of Income Coverageﾷ
Extra Expense Coverageﾷ
Valuable Papers Coverageﾷ
Accounts Receivable Coverageﾷ
Computer Equipment Coverageﾷ
Money and Securities Coverageﾷ
Glass Coverage6
ﾷ
Signs Coverage -- Attached to building or within 1,000 feet of buildingﾷ
Liability Coverageﾷ
Premises Liability Coverageﾷ
Product Liability Coverageﾷ
Personal Injury Liability Coverageﾷ
Fire Legal Liability Coverageﾷ
Medical Payments Coverage
A rating report from the A.M. Best Company represents an independent opinion from the leading provider of insurer rating of a company's financial strength and ability to meet its obligation to policyholders. Universal's tanning salon insurance program is underwritten by the American International Group (AIG), one of the world's largest commercial insurance and financial services organizations. Rated A++ (Superior) by A.M. Best Company.
7
Market Analysis
Services
Tanning Salon's primary service will be tanning. Additional products offered will include lotions, clothing, and sunglasses. Tanning Salon's tanning services will be provided through eight tanning booths. Tanning booths were chosen in order to combine the benefits of standing tan and shorter session times.
Tanning booths eliminate the 'white spot' effect, which commonly occurs in tanning beds. In a tanning bed, the pressure points, such as shoulder blades, reduce blood circulation therefore inhibiting the secretion of melanin. Tanning booths require no contact.
The average booth tanning session is eight- to 15 minutes, compared to the 20-30 minutes for most beds. More customers can be accommodated in the same period, or 3.5 sessions per hour.
Tanning Salon will also sell an assortment of skin lotions, lightweight clothing, and mid-tier sunglasses. No more than $1,000 of inventory will be on-hand at any given time. These additional products are meant to be income generators and not detract from the tanning salon's mission. The entrance/waiting room has enough floor room to accommodate three small displays of these items.
A strict tanning booth maintenance program will be followed consisting of the following: Daily:
ﾷ
Clean outside of unit for any dust, fingerprints, or oils.ﾷ
Check vents for clogs caused by dust or hairﾷ
Ensure all lamps are lit by turning tanning be on.ﾷ
Check for unusual noises or unusual smell while bed is running.ﾷ
Disinfect the machine after every use with an acrylic cleaner.Weekly
ﾷ
Clean and dust the acrylic shields, top and bottom.ﾷ
Clean the reflectors and lamps with a damp cloth.ﾷ
Disinfect entire machine.ﾷ
Vacuum around screens and inlets.ﾷ
Vacuum around entire machine including sockets.Monthly
ﾷ
Vacuum inspection plates.ﾷ
Vacuum around ballasts.ﾷ
Vacuum airflow inlets, fan mounts, and reflector channels.ﾷ
Clean lamps with a damp cloth.ﾷ
Clean reflectorsﾷ
Disinfect acrylic shields with acrylic cleaner.
Price
Tanning Salon will offer tanning sessions starting at $9 for an 11-minute session. They will also offer packages consisting of: monthly unlimited for $45 and five sessions for $35. Tanning Salon will start with these prices based upon the local market prices. They will be using market based pricing and are confident that these competitive prices will attract new customers.
Prices of other products are listed below: Lotions will retail from $5-$15.
Clothing will retail from $20-40
8
Sunglasses will retail from $15-30
Distribution
Tanning Salon services are available in the store through walk-in sales. Lotion and retail sales will be generated via Tanning Salon's web site at www.tanningsalon.com and over the phone.
Channel sales:
Walk-up 90% Phone 5% E-Commerce 5%
Repeat satisfied customers are the most important individuals to sustain the business.
Store hours are:
Monday to Saturday 10:00AM - 9:00PM and Sunday 12:00Noon - 6:00PM.
Peak sales are Monday to Friday 11:45AM - 1:00PM, 4:30pm - 7:00PM; Saturday 12:30PM - 7:00PM; and
Sunday 12:30PM - 5:00PM. Televised sporting events will effect the peak sales hours.
To initiate sales Tanning Salon uses attractive displays placed in strategic locations, point of purchase displays, holiday or special day promotions, up-selling (encouraging the customer to purchase a value-pak), consistent high quality product, and excellent customer relations.
Promotion
Promotion is going to be a big factor in Tanning Salon's success. The marketing plan currently includes a soft opening in January and February, with a Grand Opening slated for mid-March. This will take advantage of the spring season and individuals thinking of getting rid of the white pasties. As the weather becomes more tolerable, individuals will become more interested in tanning.
Tanning Salon will contract with a local radio station to broadcast live during the grand opening with free give-aways. The cost of the grand opening promotion is estimated at $5,000.
Advertising
Tanning coupons. Tanning Salon will have a standard coupon that will be given away at local sporting events, school fundraisers, and association meetings. The coupons will range from 10 percent to 25 percent off of each tanning session or purchase.
Yellow pages. Tanning Salon will have a yellow page advertisement at a cost of $40 per month. Newspaper. Tanning Salon will run a weekly ad in the suburban newspaper at a cost of $40 per week. This ad will be run during the slow periods, as other methods will be used during peak season.
Industry Trends/Influential Factors
1999 $4 billion
2000 $4.2 billion
The number of tanners increased 8% from 25 million in 1998 to 27 million in 1999.
The indoor tanning industry has doubled in the last 10 years, with over 60 percent attributed to current salon owners expanding or opening new locations.
Tanning salons have grown from an average of 6.7 tanning units and customer database of 1,673 in 1993, to an average 11 tanning units and customer database of 2,200, today. Today, there are over 15,000 strictly tanning salons, with another 14,000-15,000 health clubs, video stores and beauty salons that offer tanning as a secondary service.
9
Household discretionary income and change of seasons influence the tanning industry. Because tanning is a luxury to most individuals, as bills increase or the economy declines, it is one of the discretionary expenses to be eliminated. To counteract this, the tanning industry is doing a nice job of advertising the medicinal benefits of tanning. The tanning industry is also effected by the change of seasons, although this too is receiving the attention of the tanning industry. Many salons advertise the need for base tans during the spring and summer months, and safety of tanning beds versus the actual sun.
Supply/Demand
In a reviewing the yellow pages, there are 55 locations that are listed under Tanning Salons. Of these approximately 20% are within three miles of Tanning Salon. With the increase in demand and population density in this area, the number of booths is sufficient for each salon.
Target Market and Customer Base
Tanning Salon's target market will be individuals between the ages of 16 and 49. Tanning Salon expects over 70% of this group to be women, and over 50% will be women between the ages of 20-39. In an industry survey, the fastest growing tanning demographic are individuals over 55, which will account for
2% of the stores sales.
Customer Identification
Barriers to Entry
The only real barrier to entry is the capital required for start-up and on-going working capital. With some effort any individual can open a tanning salon, however, without the proper funding, the business will have little chance for success. This risk is mitigated by the fact Tanning Salon has an excellent location and experienced staff. Other salons may enter the market, however, these two main advantages of Tanning Salon will improve their chances of success.
Intellectual Property
Tanning Salon has applied for the domain name www.tanningsalon.com. Tanning Salon, Inc. has also applied for a trademark at the state level. This will protect their name from other ventures attempting to use it.
Company Revenues
Estimated Revenue Tanning Lotions Total Revenue
Booth 8
Tanning Sessions
per hour 0.9
Hours per day 10
Days per month 25
TTL Sessions/Mo 1,800
Cost per session $9
Revenue per month $16,200 $6,000
Revenue per year $194,400 $72,000 $266,400
Sales per month will average $16,200 in the first year. Overall, lotion and retail sales are expected to exceed 30% of overall sales.
Growth Opportunities
Tanning Salon has other growth opportunities in aromatherapy, nails, and nutritional supplements. Some competitive salons in the market are offering a small sample of these products. Tanning Salon will
10
research each offering and determine what product is the best overall fit with their customers. These opportunities are estimated to be added after the first year. Tanning Salon would like to concentrate on the core business and iron out all wrinkles before venturing too far.
Vendor/Supplier Relationships
Tanning Salon has entered into an agreement with ETS, Inc. to provide eight tanning booths. Each booth will be purchased new at an estimated cost of $5,000. ETS will provide financing over seven years at 7 percent interest, or $529 monthly.
Exit Strategy
Tanning Salon has three exit strategy options:
1. Sell to competitor within local market. Because tanning is gaining popularity within Metropolitan, after two or three years, Tanning Salon may sell its location and customer base to a larger competitor.
2. Sell to employee or outside interest. The second option is to sell Tanning Salon to either a current employee or outside party. This strategy would allow the principals to 'cashout' their interest and build another business. Jeff Minor has and interest in owning the entire business and is the leading candidate for this option.
3. The last option is to grow the business into a franchise by offering franchises throughout the Midwest. Much investigation needs to be learned about this strategy.
11
Financial Analysis
Inventory
Appendix A-1, Office Inventory
Appendix A-2, Equipment Inventory
Start-up Cost Estimates Appendix B-1Budgets
Appendix C
Income Statement
Appendix D-02, Year Ending January 31, 2002
Appendix D-03, Year Ending January 31, 2003
Appendix D-04, Year Ending January 31, 2004
Balance Sheet
Appendix E, Starting Balance Sheet
Appendix E-02, January 31, 2002
Appendix E-03, January 31, 2003
Appendix E-04, January 31, 2004
Break-even analysis
Appendix F
Financial Ratios Appendix GIntellectual Property Documents
Appendix H
Company Documents
Appendix I
Conservative & Aggressive Financials
Conservative Income Statement
Appendix J-02, Year Ending January 31, 2002
Appendix J-03, Year Ending January 31, 2003
Appendix J-04, Year Ending January 31, 2004
Conservative Balance Sheet
Appendix K-02, Year Ending January 31, 2002
Appendix K-03, Year Ending January 31, 2003
Appendix K-04, Year Ending January 31, 2004
Aggressive Income Statement
Appendix L-02, Year Ending January 31, 200
Appendix L-03, Year Ending January 31, 2003
Appendix L-04, Year Ending January 31, 2004
12
Aggressive Balance Sheet
Appendix M-02, Year Ending January 31, 2002
Appendix M-03, Year Ending January 31, 2003
Appendix M-04, Year Ending January 31, 2004
Appendix N, Financial Statement Comparison
Intellectual Property
Appendix O
Legal Documents
Appendix P
13
Appendix A-1 Tanning Salon Office Inventory January 7, 2001
QTY. DESCRIPTION
DATE PURCHASED
ORIGINAL
COST EACH Total Value
1 Sony laptop computer 2000 $
1 Dell desktop computer 2000 $
1 HP Deskjet 820 printer 2000 $
1 Brother fax machine 2000 $
3 Telephones 2000 $
2 Office tables 2000 $
2 Desk chair 2000 $
3 file cabinets 2000 $
1 software 2000 $
1 paper, printer ink, staples, etc 2000 $
8 Waiting chairs 2000 $
900 $
300 $
200 $
100 $
20 $
40 $
40 $
30 $
200 $
100 $
20 $
900
300
200
100
60
80
80
90
200
100
160
Total Office Inventory
$ 2,270
TanningFinancials.xls Office Inventory
Appendix A-2 Tanning Salon, Inc. Equipment Inventory January 7, 2001
Description Total Value
Short Term Retail Inventory (Lotions, sunglasses, swim wear)
$ 5,000
Total Short term
$ 5,000
Long Term Booths
$ 40,000
Total All Equipment & Store Inventory
$ 45,000
TanningFinancials.xls Equipment Inventory
Appendix B-1 Tanning Salon, Inc. Start-up Cost Estimates
Description Cost
Professional Fees
Attorney/Accounting fees
State Registration
Phase 1 Environmental
Business License
Business Services
Deposits
Grand opening
Building Remodel
$ 2,000
$ 1,500
$ 1,000
$ 1,000
$ 2,000
$ 2,000
$ 5,000
$ 15,000
Total Costs already paid
$ 29,500
TanningFinancials.xls Start-up
Appendix C Tanning Salon, Inc. Monthly Budget 2002
Description April May June July August September October November December January February March Annual
Rent 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 1500 $ Telephone 300 300 300 300 300 300 300 300 300 300 300 300 $ Electric/Gas/Water 600 600 600 600 600 600 600 600 600 600 600 600 $ Accounting/Bookkeeping 50 50 50 50 50 50 50 50 50 50 50 50 $ Health Insurance 50 50 50 50 50 50 50 50 50 50 50 50 $ Payroll 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 4000 $ Inventory replenishment 1000 1000 1500 1750 2000 2000 2000 2000 2000 2000 2000 2000 $ Advertising 400 400 400 400 400 400 400 400 400 400 400 400 $ Loan on Equipment 529 529 529 529 529 529 529 529 529 529 529 529 $ Business Insurance 70 70 70 70 70 70 70 70 70 70 70 70 $ Social Security 50 50 50 50 50 50 50 50 50 50 50 50 $ Travel, airfare, car rental, lodging 0 0 0 0 0 0 0 0 0 0 0 0 $ Bank service charge 25 25 25 25 25 25 25 25 25 25 25 25 $ Shipping and postage 0 0 0 0 0 0 0 0 0 0 0 0 $ Dues and subscriptions 20 20 20 20 20 20 20 20 20 20 20 20 $ Credit card processing 15 15 15 15 15 15 15 15 15 15 15 15 $ Office supplies 50 50 50 50 50 50 50 50 50 50 50 50 $ Maintenance, lights, rugs, etc 200 200 200 200 200 200 200 200 200 200 200 200 $ Office misc. expense 150 150 150 150 150 150 150 150 150 150 150 150 $
18,000
3,600
7,200
600
600
48,000
21,250
4,800
6,348
840
600
-
300
-
240
180
600
2,400
1,800
Total
$ 9,009 $
9,009 $
9,509 $
9,759
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 117,358
TanningFinancials.xls Budget
C-02 Tanning Salon, Inc. Cash Budget Statement January 31, 2002
February March April May June July August September October November December January
Beginning Cash Balance
Add receipts: Customer collections
Cash available before disbursements
$ 15,000
$ 7,125
$ 22,125
$ 13,116
$ 8,313
$ 21,429
$ 12,420
$ 10,450
$ 22,870
$ 13,361
$ 13,775
$ 27,136
$ 17,377 $
$ 16,150 $
$ 33,527 $
23,518
18,050
41,568
$ 31,559
$ 19,950
$ 51,509
$ 41,500 $
$ 20,900 $
$ 62,400 $
52,391 $
22,800 $
75,191 $
65,182
23,750
88,932
$ 78,923
$ 24,700
$ 103,623
$ 93,614
$ 25,650
$ 119,264
Less Disbursements
Rent
Telephone
Electric/Gas/Water
Accounting/Bookkeeping
Health Insurance
Payroll
Inventory replenishment
Advertising
Loan on Equipment
Business Insurance
Social Security
Bank service charge
Dues and subscriptions
Credit card processing
Office supplies
$ 1,500 $
$ 300 $
$ 600 $
$ 50 $
$ 50 $
$ 4,000 $
$ 1,000 $
$ 400 $
$ 529 $
$ 70 $
$ 50 $
$ 25 $
$ 20 $
$ 15 $
$ 50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
1,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
1,500 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
1,750 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500 $
300 $
600 $
50 $
50 $
4,000 $
2,000 $
400 $
529 $
70 $
50 $
25 $
20 $
15 $
50 $
1,500
300
600
50
50
4,000
2,000
400
529
70
50
25
20
15
50
Maintenance, lights, rugs, etc
Office misc. expense
Total Disbursements
$ 200 $
$ 150 $
$ 9,009 $
200 $
150 $
9,009 $
200 $
150 $
9,509 $
200
150
9,759
$ 200 $
$ 150 $
$ 10,009 $
200
150
10,009
$ 200
$ 150
$ 10,009
$ 200 $
$ 150 $
$ 10,009 $
200 $
150 $
10,009 $
200 $
150 $
10,009 $
200 $
150 $
10,009 $
200
150
10,009
Cash excess(deficiency)
before financing
Borrow to maintain $10,000 minimum balance (at beginning of period)
$ 13,116
$ -
$ 12,420
$ -
$ 13,361
$ -
$ 17,377
$ -
$ 23,518 $
$ - $
31,559
-
$ 41,500
$ -
$ 52,391 $
$ - $
65,182 $
- $
78,923 $
- $
93,614
-
$ 109,255
$ -
Repayment (at end of period) Interest at 8% per annum
Ending cash balance
$ 13,116
$ 12,420
$ 13,361
$ 17,377
$ 23,518 $
31,559
$ 41,500
$ 52,391 $
65,182 $
78,923 $
93,614
$ 109,255
TanningFinancials.xls CB2002
C-03 Tanning Salon, Inc. Cash Budget Statement January 31, 2003
February March April May June July August September October November December January
Beginning Cash Balance
Add receipts: Customer collections
Cash available before disbursements
$ 109,255
$ 26,933
$ 136,187
$ 126,728
$ 27,471
$ 154,199
$ 144,739
$ 28,021
$ 172,760
$ 162,775
$ 28,581
$ 191,356
$ 181,109
$ 29,153
$ 210,262
$ 199,753
$ 29,736
$ 229,488
$ 218,979
$ 30,330
$ 249,309
$ 238,800
$ 30,937
$ 269,737
$ 259,227
$ 31,556
$ 290,783
$ 280,273
$ 32,187
$ 312,460
$ 301,951
$ 32,831
$ 334,781
$ 324,272
$ 33,487
$ 357,759
Less Disbursements
Rent
Telephone
Electric/Gas/Water
Accounting/Bookkeeping
Health Insurance
Payroll
Inventory replenishment
Advertising
Loan on Equipment
Business Insurance
Social Security
Bank service charge
Dues and subscriptions
Credit card processing
Office supplies
$ 1,575 $
$ 315 $
$ 630 $
$ 53 $
$ 53 $
$ 4,200 $
$ 1,050 $
$ 420 $
$ 555 $
$ 74 $
$ 53 $
$ 26 $
$ 21 $
$ 16 $
$ 53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
1,050 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
1,575 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
1,838 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575 $
315 $
630 $
53 $
53 $
4,200 $
2,100 $
420 $
555 $
74 $
53 $
26 $
21 $
16 $
53 $
1,575
315
630
53
53
4,200
2,100
420
555
74
53
26
21
16
53
Maintenance, lights, rugs, etc $
Office misc. expense $
Total Disbursements
$
210 $
158 $
9,459 $
210 $
158 $
9,459 $
210 $
158 $
9,984 $
210 $
158 $
10,247 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210 $
158 $
10,509 $
210
158
10,509
Cash excess(deficiency)
before financing $
Borrow to maintain $10,000
minimum balance (at beginning
of period) $
126,728
-
$ 144,739
$ -
$ 162,775
$ -
$ 181,109
$ -
$ 199,753
$ -
$ 218,979
$ -
$ 238,800
$ -
$ 259,227
$ -
$ 280,273
$ -
$ 301,951
$ -
$ 324,272
$ -
$ 347,250
$ -
Repayment (at end of period) Interest at 8% per annum
Ending cash balance
$ 126,728
$ 144,739
$ 162,775
$ 181,109
$ 199,753
$ 218,979
$ 238,800
$ 259,227
$ 280,273
$ 301,951
$ 324,272
$ 347,250
TanningFinancials.xls CB2003
C-04 Tanning Salon, Inc. Cash Budget Statement January 31, 2004
February March April May June July August September October November December January
Beginning Cash Balance
Add receipts: Customer collections
Cash available before disbursements
$ 347,250
$ 34,157
$ 381,407
$ 371,474
$ 34,840
$ 406,314
$ 396,382
$ 35,537
$ 431,919
$ 421,435
$ 36,248
$ 457,683
$ 446,923
$ 36,973
$ 483,896
$ 472,861
$ 37,712
$ 510,573
$ 499,538
$ 38,466
$ 538,004
$ 526,969
$ 39,236
$ 566,205
$ 555,170
$ 40,020
$ 595,190
$ 584,155
$ 40,821
$ 624,976
$ 613,941
$ 41,637
$ 655,578
$ 644,543
$ 42,470
$ 687,013
Less Disbursements
Rent $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654 $ 1,654
Telephone $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331 $ 331
Electric/Gas/Water $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662 $ 662
Accounting/Bookkeeping $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55
Health Insurance $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55
Payroll $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410 $ 4,410
Inventory replenishment $ 1,103 $ 1,103 $ 1,654 $ 1,929 $ 2,205 $ 2,205 $ 2,205 $ 2,205 $ 2,205 $ 2,205 $ 2,205 $ 2,205
Advertising $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441 $ 441
Loan on Equipment $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583 $ 583
Business Insurance $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77 $ 77
Social Security $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55
Bank service charge $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28 $ 28
Dues and subscriptions $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22 $ 22
Credit card processing $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17 $ 17
Office supplies $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55 $ 55
Maintenance, lights, rugs,
etc $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221 $ 221
Office misc. expense $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165 $ 165
Total Disbursements
$ 9,932 $
9,932 $
10,484 $
10,759 $
11,035 $
11,035 $
11,035 $
11,035 $
11,035 $
11,035 $
11,035 $
11,035
Cash excess(deficiency)
before financing
Borrow to maintain $10,000 minimum balance (at beginning of period)
$ 371,474
$ -
$ 396,382
$ -
$ 421,435
$ -
$ 446,923
$ -
$ 472,861
$ -
$ 499,538
$ -
$ 526,969
$ -
$ 555,170
$ -
$ 584,155
$ -
$ 613,941
$ -
$ 644,543
$ -
$ 675,978
$ -
Repayment (at end of period) Interest at 8% per annum
Ending cash balance
$ 371,474
$ 396,382
$ 421,435
$ 446,923
$ 472,861
$ 499,538
$ 526,969
$ 555,170
$ 584,155
$ 613,941
$ 644,543
$ 675,978
TanningFinancials.xls CB2004
Appendix D-02 Tanning Salon, Inc. ProForma Income Statement January 31, 2002
Sales Revenue
February March April May June July August September October November December January Total
Tanning sessions 750 875 1,100 1,450 1,700 1,900 2,100 2,200 2,400 2,500 2,600 2,700 22,275
Tanning
Lotions
Total Revenue
$ 9.00 $
$ 3.00 $
$
6,750
2,250
9,000
$ 7,875
$ 2,625
$ 10,500
$ 9,900
$ 3,300
$ 13,200
$ 13,050
$ 4,350
$ 17,400
$ 15,300 $
$ 5,100 $
$ 20,400 $
17,100
5,700
22,800
$ 18,900
$ 6,300
$ 25,200
$ 19,800
$ 6,600
$ 26,400
$ 21,600
$ 7,200
$ 28,800
$ 22,500
$ 7,500
$ 30,000
$ 23,400
$ 7,800
$ 31,200
$ 24,300
$ 8,100
$ 32,400
$ 200,475
$ 66,825
$ -
$ 267,300
Expenses
Cost of Tanning
Cost of Lotions
Cost of Sales
$ 1.00 $
$ 1.50 $
$
750 $
1,125 $
1,875 $
875 $
1,313 $
2,188 $
1,100 $
1,650 $
2,750 $
1,450 $
2,175 $
3,625 $
1,700 $
2,550 $
4,250 $
1,900 $
2,850 $
4,750 $
2,100 $
3,150 $
5,250 $
2,200 $
3,300 $
5,500 $
2,400 $
3,600 $
6,000 $
2,500 $
3,750 $
6,250 $
2,600 $
3,900 $
6,500 $
2,700 $
4,050 $
6,750 $
22,275
33,413
55,688
Gross Profit
$ 7,125 $
8,313
$ 10,450
$ 13,775
$ 16,150 $
18,050
$ 19,950
$ 20,900
$ 22,800
$ 23,750
$ 24,700
$ 25,650
$ 211,613
Operating expenses
$ 9,009 $
9,009 $
9,009 $
9,509 $
9,759
$ 10,009 $
10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 10,009
$ 117,358
All other expenses 0.00% $
$- - $
$- - $ - $
$- - $ - $
$- - $
-$- - $
EBIT
$ (1,884) $
(697) $
941 $
4,016 $
6,141 $
8,041 $
9,941
$ 10,891
$ 12,791
$ 13,741
$ 14,691
$ 15,641 $
94,255
Interest 10%
$ - $
Taxes 34% $ - $
$- - $
$- 320 $
- $
1,365 $
- $
2,088 $
- $
2,734 $
- $
3,380 $
- $
3,703 $
- $
4,349 $
- $
4,672 $
- $
4,995 $
- $
5,318 $
-
32,924
After tax profit
$ (1,884) $
(697) $
621 $
2,651 $
4,053 $
5,307 $
6,561 $
7,188 $
8,442 $
9,069 $
9,696
$ 10,323 $
61,331
TanningFinancials.xls IS2002
Appendix D-03 Tanning Salon, Inc. ProForma Income Statement January 31, 2003
February March April May June July August September October November December January Total
Sales Revenue
Sessions 2,835 2,892 2,950 3,009 3,069 3,130 3,193 3,257 3,322 3,388 3,456 3,525 38,023
Tanning $ 9.00
Lotions $ 3.00
$ 25,515
$ 8,505
$ 26,025
$ 8,675
$ 26,546
$ 8,849
$ 27,077
$ 9,026
$ 27,618 $
$ 9,206 $
28,171
9,390
$ 28,734
$ 9,578
$ 29,309
$ 9,770
$ 29,895
$ 9,965
$ 30,493
$ 10,164
$ 31,103
$ 10,368
$ 31,725
$ 10,575
$ 342,209
$ 114,070
Total Revenue
$ 34,020
$ 34,700
$ 35,394
$ 36,102
$ 36,824 $
37,561
$ 38,312
$ 39,078
$ 39,860
$ 40,657
$ 41,470
$ 42,300
$ 456,279
Expenses
Cost of Tanning $ 1.00 $
Cost of Lotions $ 1.50 $
Cost of Sales $
2,835 $
4,253 $
7,088 $
2,892 $
4,338 $
7,229 $
2,950 $
4,424 $
7,374 $
3,009 $
4,513 $
7,521 $
3,069 $
4,603 $
7,672 $
3,130 $
4,695 $
7,825 $
3,193 $
4,789 $
7,982 $
3,257 $
4,885 $
8,141 $
3,322 $
4,982 $
8,304 $
3,388 $
5,082 $
8,470 $
3,456 $
5,184 $
8,640 $
3,525 $
5,287 $
8,812 $
38,023
57,035
95,058
Gross Profit
$ 26,933
$ 27,471
$ 28,021
$ 28,581
$ 29,153 $
29,736
$ 30,330
$ 30,937
$ 31,556
$ 32,187
$ 32,831
$ 33,487
$ 361,221
Operating expenses
$ 9,459 $
9,459 $
9,984
$ 10,247
$ 10,509 $
10,509
$ 10,509
$ 10,509
$ 10,509
$ 10,509
$ 10,509
$ 10,509
$ 123,226
All other expenses 0.00% $
$- - $
$- - $ - $
$- - $ - $
$- - $
-$- - $
EBIT
$ 17,473
$ 18,012
$ 18,036
$ 18,334
$ 18,643 $
19,226
$ 19,821
$ 20,428
$ 21,046
$ 21,677
$ 22,321
$ 22,978
$ 237,995
Interest 10%
$
Taxes 34% $
- $
5,941 $
- $
6,124 $
- $
6,132 $
- $
6,234 $
- $
6,339 $
- $
6,537 $
- $
6,739 $
- $
6,945 $
- $
7,156 $
- $
7,370 $
- $
7,589 $
- $
7,812 $
-
80,918
After tax profit
$ 11,532
$ 11,888
$ 11,904
$ 12,100
$ 12,304 $
12,689
$ 13,082
$ 13,482
$ 13,891
$ 14,307
$ 14,732
$ 15,165
$ 157,077
TanningFinancials.xls IS2003
Appendix D-04 Tanning Salon, Inc. ProForma Income Statement January 31, 2004
February March April May June July August September October November December January Total
Sales Revenue
Tanning sessions 3,595 3,667 3,741 3,816 3,892 3,970 4,049 4,130 4,213 4,297 4,383 4,471 48,223
Tanning $ 9.00 $
Lotions $ 3.00 $
32,359
10,786
$ 33,006
$ 11,002
$ 33,667
$ 11,222
$ 34,340
$ 11,447
$ 35,027 $
$ 11,676 $
35,727
11,909
$ 36,442
$ 12,147
$ 37,171
$ 12,390
$ 37,914
$ 12,638
$ 38,672
$ 12,891
$ 39,446
$ 13,149
$ 40,235
$ 13,412
$ 434,004
$ 144,668
Total Revenue
$ 43,146
$ 44,008
$ 44,889
$ 45,786
$ 46,702 $
47,636
$ 48,589
$ 49,561
$ 50,552
$ 51,563
$ 52,594
$ 53,646
$ 578,672
Expenses
Cost of Tanning
Cost of Lotions
Cost of Sales
$ 1.00 $
$ 1.50 $
$
3,595 $
5,393 $
8,989 $
3,667 $
5,501 $
9,168 $
3,741 $
5,611 $
9,352 $
3,816 $
5,723 $
9,539 $
3,892 $
5,838 $
9,730 $
3,970
5,955
9,924
$ 4,049
$ 6,074
$ 10,123
$ 4,130
$ 6,195
$ 10,325
$ 4,213
$ 6,319
$ 10,532
$ 4,297
$ 6,445
$ 10,742
$ 4,383
$ 6,574
$ 10,957
$ 4,471
$ 6,706
$ 11,176
$ 48,223
$ 72,334
$ 120,557
Gross Profit
$ 34,157
$ 34,840
$ 35,537
$ 36,248
$ 36,973 $
37,712
$ 38,466
$ 39,236
$ 40,020
$ 40,821
$ 41,637
$ 42,470
$ 458,116
Operating expenses
$ 9,932 $
9,932
$ 10,484
$ 10,759
$ 11,035 $
11,035
$ 11,035
$ 11,035
$ 11,035
$ 11,035
$ 11,035
$ 11,035
$ 129,387
All other expenses 0.00% $
$- - $ - $ - $ - $
$- - $ - $
$- - $
-$- - $
EBIT
$ 24,224
$ 24,908
$ 25,053
$ 25,488
$ 25,938 $
26,677
$ 27,431
$ 28,201
$ 28,985
$ 29,786
$ 30,602
$ 31,435
$ 328,729
Interest 10%
$
Taxes 34% $
- $
8,236 $
- $
8,469 $
- $
8,518 $
- $
8,666 $
- $
8,819 $
- $
9,070 $
- $
9,327 $
- $
9,588 $
-
9,855
$ -
$ 10,127
$ -
$ 10,405
$ -
$ 10,688
$ -
$ 111,768
After tax profit
$ 15,988
$ 16,439
$ 16,535
$ 16,822
$ 17,119 $
17,607
$ 18,105
$ 18,612
$ 19,130
$ 19,659
$ 20,197
$ 20,747
$ 216,961
TanningFinancials.xls IS2004
Appendix E Tanning Salon, Inc. ProForma Balance Sheet January 7, 2001
Cash 7.8% 15,000 Notes Payable 6.8% 5,000
Accounts Receivable 16.2% Accounts Payable 18.0% Inventory/Office 27.9% 7,270 Income Taxes Payable 0.2%
Current Maturity of Long-
Inventory 6.5%
term debt 2.9% All other current liabilities 16.2%
Total Current Assets 22,270 Total Current Liabilities 5,000
Net Fixed Assets 33.2% 40,000 Long-term Debt 18.8% 40,000
All other Non-Current &
Intangibles 8.4% All other Non-Current 10.5%
Total Long-term Assets 40,000 Total Liabilities 45,000
Net worth 26.6% 17,270
Total Assets 100.00% $
62,270
Total Liabilities & Net Worth 100.00%
$ 62,270
TanningFinancials.xls BSStart
Appendix E-02 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2002
Cash & Equivalents 72.2% 109,255 Notes Payable 3.0% 4,500
Accounts Receivable 1.8% 2,673 Accounts Payable 3.3% 5,000
Inventory/Office 4.9% 7,488 Income Taxes Payable 3.5% 5,318
Current Maturity of Long-
Other 0.0% -
term debt 2.0% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 78.9% 119,416 Total Current Liabilities 11.8% 17,818
Net Fixed Assets 21.1% 32,000 Long-term Debt 24.4% 37,000
Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% All other Non-Current 0.0% -
Total Long-term Assets 21.1% 32,000 Total Long-term Liabilities 24.4% 37,000
Net worth 63.8% 96,598
Total Assets 100.0%
$ 151,416
Total Liabilities & Net Worth 100%
$ 151,416
TanningFinancials.xls BS2002
Appendix E-03 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2003
Cash 90.5% 347,250 Notes Payable 1.6% 6,000
Accounts Receivable 1.2% 4,563 Accounts Payable 1.6% 6,000
Inventory/Office 2.0% 7,713 Income Taxes Payable 2.0% 7,812
Current Maturity of Long-
Other 0.0% -
term debt 0.8% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 93.7% 359,525 Total Current Liabilities 5.9% 22,812
Net Fixed Assets 6.3% 24,000 Long-term Debt 8.9% 34,000
Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 6.3% 24,000 Total Long-term Liabilities 8.9% 34,000
Net worth 85.2% 326,713
Total Assets 100.0%
$ 383,525
Total Liabilities & Net Worth 100.0%
$ 383,525
TanningFinancials.xls BS2003
Appendix E-04 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2004
Cash 95.8% 675,978 Notes Payable 1.1% 8,000
Accounts Receivable 0.8% 5,787 Accounts Payable 1.1% 8,000
Inventory/Office 1.1% 7,944 Income Taxes Payable 1.5% 10,688
Current Maturity of Long-
Other 0.0% -
term debt 0.4% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 97.7% 689,709 Total Current Liabilities 4.2% 29,688
Net Fixed Assets 2.3% 16,000 Long-term Debt 4.4% 31,000
- Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 2.3% 16,000 Total Long-term Liabilities 4.4% 31,000
Net worth 91.4% 645,021
Total Assets 100.0%
$ 705,709
Total Liabilities & Net Worth 100.0%
$ 705,709
TanningFinancials.xls BS2004
Appendix F Tanning Salon, Inc. Break-even Analysis
Monthly Break-even Analysis
Monthly Fixed Costs
$ 9,780
Price
Tanning
Lotions
$ 9.00
$ 3.00
$1 9
$1 3
Average Wholesale Price
$ 12
Variable Costs
Tanning
Lotions
$ 1.00
$ 1.50
$1 1
$1 2
3$Average Variable Costs
Contribution Margin
$ 10
Break-even Point
Fixed Costs
Contribution Margin
$ 9,780
$ 10
divided by
equals
Break-even point
1,029.5Tanning Salon must sell 1,029.5 services per month in order to break-even.
TanningFinancials.xls Break-even
Appendix G Tanning Salon, Inc. Financial Ratios
Tanning Salon, Inc.
Troy's
Almanac* RMA**
Current Ratio The higher the ratio the greater cushion.
Quick Ratio Conservative measure of liquidity, higher is better.
Low number indicates inefficient use of working capital(current assets-current liabilities) Will improve with
Net Sales to Working Capital
Total Asset Turnover
Total Liabilities to Net Worth
Return on Assets (ROA)
increased sales.
Measure of sales to total assets. Increase the amount of sales with same assets will improve number.
Higher number, higher the risk. Lower number, greater flexibility to borrow in future.
Success of business in using assets to generate earnings independent of financing the assets.
Return on Equity (ROE) Measure of profitability of interest to shareholders equity.
ratios using FY2002 financial statements
DeepCreekFinancials.xls Financial Ratios
Appendix H Tanning Salon, Inc. intellectual Property Documents
Insert documents
Intellectual Property
Appendix I Tanning Salon, Inc. Company Documentes
Insert documents
Company Documents
Appendix J-02 Tanning Salon, Inc. ProForma Income Statement January 31, 2002
Revenue
75%
February March April May June July August September October November December January Total-
Revenue
$ 5,063 $
$ 5,063 $
5,906 $
5,906 $
7,425 $
7,425 $
9,788
9,788
$ 11,475
$ 11,475
$ 12,825
$ 12,825
$ 14,175
$ 14,175
$ 14,850
$ 14,850
$ 16,200
$ 16,200
$ 16,875
$ 16,875
$ 17,550
$ 17,550
$ 18,225
$ 18,225
$ 150,356
$ 150,356
Total Revenue
$ 5,063 $
5,906 $
7,425 $
9,788
$ 11,475 $
12,825
$ 14,175
$ 14,850
$ 16,200
$ 16,875
$ 17,550
$ 18,225
$ 150,356
Expenses
Cost of Sales
$ 563 $
656 $
825 $
1,088 $
1,275 $
1,425 $
1,575 $
1,650 $
1,800
$ 1,875
$ 1,950
$ 2,025 $
16,706
Cost of Sales
$ 563 $
656 $
825 $
1,088 $
1,275 $
1,425 $
1,575 $
1,650 $
1,800
$ 1,875
$ 1,950
$ 2,025 $
16,706
Gross Profit
$ 4,500 $
5,250 $
6,600 $
8,700
$ 10,200 $
11,400
$ 12,600
$ 13,200
$ 14,400
$ 15,000
$ 15,600
$ 16,200
$ 133,650
Operating expenses
$ 9,009
$ 9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009
$ 9,009
$ 9,009
$ 9,009
$ 108,108
All other expenses 0.00% $ - $
$- - $
$- - $
$- - $
$- -
-$ $ -
--$ $
EBIT
$ (4,509) $
(3,759) $
(2,409) $
(309) $
1,191 $
2,391 $
3,591 $
4,191 $
5,391
$ 5,991
$ 6,591
$ 7,191 $
25,542
Interest 10%
$ - $
Taxes 25% $ - $
$- - $
$- - $
$- - $
$- 298 $
- $
598 $
- $
898 $
- $
1,048 $
-
1,348
$ -
$ 1,498
$ -
$ 1,648
$ - $
$ 1,798 $
-
9,132
After tax profit
$ (4,509) $
(3,759) $
(2,409) $
(309) $
893 $
1,793 $
2,693 $
3,143 $
4,043
$ 4,493
$ 4,943
$ 5,393 $
16,410
TanningFinancials.xls IS2002 Conservative
Appendix J-03 Tanning Salon, Inc. ProForma Income Statement January 31, 2003
Revenue
75%
February March April May June July August September October November December January Total-
Revenue
$ 19,136
$ 19,136
$ 19,519
$ 19,519
$ 19,909
$ 19,909
$ 20,308
$ 20,308
$ 20,714
$ 20,714
$ 21,128
$ 21,128
$ 21,551
$ 21,551
$ 21,982
$ 21,982
$ 22,421
$ 22,421
$ 22,870
$ 22,870
$ 23,327
$ 23,327
$ 23,794
$ 23,794
$ 256,657
$ 256,657
Total Revenue
$ 19,136
$ 19,519
$ 19,909
$ 20,308
$ 20,714 $
21,128
$ 21,551
$ 21,982
$ 22,421
$ 22,870
$ 23,327
$ 23,794
$ 256,657
Expenses
Cost of Sales
$ 2,126 $
2,169 $
2,212 $
2,256 $
2,302 $
2,348 $
2,395 $
2,442 $
2,491 $
2,541 $
2,592 $
2,644 $
28,517
Cost of Sales
$ 2,126 $
2,169 $
2,212 $
2,256 $
2,302 $
2,348 $
2,395 $
2,442 $
2,491 $
2,541 $
2,592 $
2,644 $
28,517
Gross Profit
$ 17,010
$ 17,350
$ 17,697
$ 18,051
$ 18,412 $
18,780
$ 19,156
$ 19,539
$ 19,930
$ 20,329
$ 20,735
$ 21,150
$ 228,140
Operating expenses
$ 7,095 $
7,095 $
7,095 $
7,488 $
7,685 $
7,882 $
7,882 $
7,882 $
7,882 $
7,882 $
7,882 $
7,882 $
7,882 $
92,419
All other expenses 0.00% $ - $
$- - $ - $ - $
$- - $
$- - $
-$- - $ - $
EBIT
$ 9,915
$ 10,256
$ 10,209
$ 10,366
$ 10,530 $
10,898
$ 11,274
$ 11,657
$ 12,048
$ 12,446
$ 12,853
$ 13,268
$ 135,720
Interest 10%
$
Taxes 25% $
- $
2,479 $
- $
2,564 $
- $
2,552 $
- $
2,591 $
- $
2,633 $
- $
2,725 $
- $
2,818 $
- $
2,914 $
- $
3,012 $
- $
3,112 $
- $
3,213 $
- $
3,317 $
-
33,930
After tax profit
$ 7,437 $
7,692 $
7,657 $
7,774 $
7,898 $
8,174 $
8,455 $
8,743 $
9,036 $
9,335 $
9,640 $
9,951
$ 101,790
TanningFinancials.xls IS2003 Conservative
Appendix J-04 Tanning Salon, Inc. ProForma Income Statement January 31, 2004
Revenue
75%
February March April May June July August September October November December January Total
Revenue
$ 24,269
$ 24,269
$ 24,755
$ 24,755
$ 25,250
$ 25,250
$ 25,755
$ 25,755
$ 26,270
$ 26,270
$ 26,795
$ 26,795
$ 27,331
$ 27,331
$ 27,878
$ 27,878
$ 28,435
$ 28,435
$ 29,004
$ 29,004
$ 29,584
$ 29,584
$ 30,176
$ 30,176
$ 325,503
$ 325,503
Total Revenue
$ 24,269
$ 24,755
$ 25,250
$ 25,755
$ 26,270 $
26,795
$ 27,331
$ 27,878
$ 28,435
$ 29,004
$ 29,584
$ 30,176
$ 325,503
Expenses
Cost of Sales
$ 2,697 $
2,751 $
2,806 $
2,862 $
2,919 $
2,977 $
3,037 $
3,098 $
3,159 $
3,223 $
3,287 $
3,353 $
36,167
Cost of Sales
$ 2,697 $
2,751 $
2,806 $
2,862 $
2,919 $
2,977 $
3,037 $
3,098 $
3,159 $
3,223 $
3,287 $
3,353 $
36,167
Gross Profit
$ 21,573
$ 22,004
$ 22,444
$ 22,893
$ 23,351 $
23,818
$ 24,294
$ 24,780
$ 25,276
$ 25,781
$ 26,297
$ 26,823
$ 289,336
Operating expenses
$ 9,932 $
7,449 $
7,449 $
7,863 $
8,069 $
8,276 $
8,276 $
8,276 $
8,276 $
8,276 $
8,276 $
8,276 $
8,276 $
97,040
All other expenses 0.00% $ - $
$- - $ - $ - $
$- - $
$- - $
-$- - $ - $
EBIT
$ 14,123
$ 14,555
$ 14,582
$ 14,824
$ 15,075 $
15,542
$ 16,018
$ 16,504
$ 17,000
$ 17,505
$ 18,021
$ 18,547
$ 192,296
Interest 10%
$
Taxes 25% $
- $
3,531 $
- $
3,639 $
- $
3,645 $
- $
3,706 $
- $
3,769 $
- $
3,885 $
- $
4,005 $
- $
4,126 $
- $
4,250 $
- $
4,376 $
- $
4,505 $
- $
4,637 $
-
48,074
After tax profit
$ 10,593
$ 10,916
$ 10,936
$ 11,118
$ 11,306 $
11,656
$ 12,014
$ 12,378
$ 12,750
$ 13,129
$ 13,516
$ 13,910
$ 144,222
TanningFinancials.xls IS2004 Conservative
Appendix K-02 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2002
Cash & Equivalents 43.4% 31,410 Notes Payable 6.8% 3,375
Accounts Receivable 2.1% 1,504 Accounts Payable 18.0% 3,750
Inventory 10.3% 7,488 Income Taxes Payable 0.2% 1,798
Current Maturity of Long-
Inventory 0.0% -
term debt 2.9% 3,000
All other Current Liabilities 16.2% -
Total Current Assets 55.8% 40,402 Total Current Liabilities 11,923
Net Fixed Assets 44.2% 32,000 Long-term Debt 18.8% 37,000
Deferred Taxes -
All other Non-Current &
Intangibles 0.0% - All other Non-Current -
Total Long-term Assets 44.2% 32,000 Total Long-term Liabilities 10.5% 37,000
Net worth 26.6% 23,479
Total Assets 100.0% $
72,402
Total Liabilities & Net Worth
$ 72,402
TanningFinancials.xls BS2002 Conservative
Appendix K-03 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2003
Cash 70.7% 101,790 Notes Payable 16.4% 4,500
Accounts Receivable 1.8% 2,567 Accounts Payable 16.9% 4,500
Inventory 5.4% 7,713 Income Taxes Payable 1.9% 3,317
Current Maturity of Long-
Inventory 0.0% -
term debt 2.8% 3,000
All other Current Liabilities 15.7% -
Total Current Assets 77.8% 112,069 Total Current Liabilities 15,317
Net Fixed Assets 22.2% 32,000 Long-term Debt 13.9% 34,000
Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 10.9% -
Total Long-term Assets 22.2% 32,000 Total Long-term Liabilities 34,000
Net worth 21.6% 94,753
Total Assets 100.0%
$ 144,069
Total Liabilities & Net Worth
$ 144,069
TanningFinancials.xls BS2003 Conservative
Appendix K-04 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2004
Cash 77.0% 144,222 Notes Payable 1.6% 6,000
Accounts Receivable 1.7% 3,255 Accounts Payable 1.6% 6,000
Inventory 4.2% 7,944 Income Taxes Payable 2.0% 4,637
Current Maturity of Long-
Inventory 0.0% -
term debt 0.8% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 82.9% 155,421 Total Current Liabilities 19,637
Net Fixed Assets 17.1% 32,000 Long-term Debt 8.9% 31,000
Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 17.1% 32,000 Total Long-term Liabilities 31,000
Net worth 85.2% 136,784
Total Assets 100.0%
$ 187,421
Total Liabilities & Net Worth
$ 187,421
TanningFinancials.xls BS2004 Conservative
Appendix L-02 Tanning Salon, Inc. ProForma Income Statement January 31, 2002
175.00%
February March April May June July August September October November December January TotalRevenue
Revenue
$ 11,813
$ 11,813
$ 13,781
$ 13,781
$ 17,325
$ 17,325
$ 22,838
$ 22,838
$ 26,775
$ 26,775
$ 29,925
$ 29,925
$ 33,075
$ 33,075
$ 34,650
$ 34,650
$ 37,800
$ 37,800
$ 39,375
$ 39,375
$ 40,950
$ 40,950
$ 42,525
$ 42,525
$ 350,831
$ 350,831
Total Revenue
$ 11,813
$ 13,781
$ 17,325
$ 22,838
$ 26,775 $
29,925
$ 33,075
$ 34,650
$ 37,800
$ 39,375
$ 40,950
$ 42,525
$ 350,831
Expenses
Cost of Sales
$ 1,313 $
1,531 $
1,925 $
2,538 $
2,975 $
3,325 $
3,675 $
3,850 $
4,200 $
4,375 $
4,550 $
4,725 $
38,981
Cost of Sales
$ 1,313 $
1,531 $
1,925 $
2,538 $
2,975 $
3,325 $
3,675 $
3,850 $
4,200 $
4,375 $
4,550 $
4,725 $
38,981
Gross Profit
$ 10,500
$ 12,250
$ 15,400
$ 20,300
$ 23,800 $
26,600
$ 29,400
$ 30,800
$ 33,600
$ 35,000
$ 36,400
$ 37,800
$ 311,850
Operating expenses
$ 9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
9,009 $
$- - $
$- 81,081
All other expenses 0.00% $ - $
$- - $ - $ - $
$- - $
$- - $
-$- - $ - $
EBIT
$ 1,491 $
3,241 $
6,391
$ 11,291
$ 14,791 $
17,591
$ 20,391
$ 21,791
$ 24,591
$ 35,000
$ 36,400
$ 37,800
$ 230,769
Interest 10%
$
Taxes 25% $
- $
373 $
- $
810 $
- $
1,598 $
- $
2,823 $
- $
3,698 $
- $
4,398 $
- $
5,098 $
- $
5,448 $
- $
6,148 $
- $
8,750 $
- $
9,100 $
- $
9,450 $
-
57,692
After tax profit
$ 1,118 $
2,431 $
4,793 $
8,468
$ 11,093 $
13,193
$ 15,293
$ 16,343
$ 18,443
$ 26,250
$ 27,300
$ 28,350
$ 173,077
TanningFinancials.xls IS2002 Aggressive
Appendix L-03 Tanning Salon, Inc. ProForma Income Statement January 31, 2003
Revenue
175%
February March April May June July August September October November December January Total-
Revenue
$ 44,651
$ 44,651
$ 45,544
$ 45,544
$ 46,455
$ 46,455
$ 47,384
$ 47,384
$ 48,332
$ 48,332
$ 49,299
$ 49,299
$ 50,285
$ 50,285
$ 51,290
$ 51,290
$ 52,316
$ 52,316
$ 53,362
$ 53,362
$ 54,430
$ 54,430
$ 55,518
$ 55,518
$ 598,867
$ 598,867
Total Revenue
$ 44,651
$ 45,544
$ 46,455
$ 47,384
$ 48,332 $
49,299
$ 50,285
$ 51,290
$ 52,316
$ 53,362
$ 54,430
$ 55,518
$ 598,867
Expenses
Cost of Sales
$ 4,961 $
5,060 $
5,162 $
5,265 $
5,370 $
5,478 $
5,587 $
5,699 $
5,813 $
5,929 $
6,048 $
6,169 $
66,541
Cost of Sales
$ 4,961 $
5,060 $
5,162 $
5,265 $
5,370 $
5,478 $
5,587 $
5,699 $
5,813 $
5,929 $
6,048 $
6,169 $
66,541
Gross Profit
$ 39,690
$ 40,484
$ 41,293
$ 42,119
$ 42,962 $
43,821
$ 44,697
$ 45,591
$ 46,503
$ 47,433
$ 48,382
$ 49,350
$ 532,326
Operating expenses
-$ $
16,554
$ 16,554
$ 17,473
$ 17,932
$ 18,392 $
18,392
$ 18,392
$ 18,392
$ 18,392
$ 18,392
$ 18,392
$ 18,392
$ 215,645
All other expenses 0.00% $ - $
$- - $ - $ - $
$- - $
$- - $
-$- - $ - $
EBIT
$ 23,136
$ 23,930
$ 23,821
$ 24,187
$ 24,570 $
25,429
$ 26,306
$ 27,200
$ 28,112
$ 29,042
$ 29,990
$ 30,958
$ 316,681
Interest 10%
$
Taxes 25% $
- $
5,784 $
- $
5,982 $
- $
5,955 $
- $
6,047 $
- $
6,143 $
- $
6,357 $
- $
6,576 $
- $
6,800 $
- $
7,028 $
- $
7,260 $
- $
7,498 $
- $
7,739 $
-
79,170
After tax profit
$ 17,352
$ 17,947
$ 17,866
$ 18,140
$ 18,428 $
19,072
$ 19,729
$ 20,400
$ 21,084
$ 21,781
$ 22,493
$ 23,218
$ 237,510
TanningFinancials.xls IS2003 Aggressive
Appendix L-04 Tanning Salon, Inc. ProForma Income Statement January 31, 2004
175%
February March April May June July August September October November December January TotalRevenue
Revenue
$ 56,629
$ 56,629
$ 57,761 $
$ 57,761 $
58,916
58,916
$ 60,095
$ 60,095
$ 61,297
$ 61,297
$ 62,523
$ 62,523
$ 63,773
$ 63,773
$ 65,048 $
$ 65,048 $
66,349 $
66,349 $
67,676
67,676
$ 69,030
$ 69,030
$ 70,411 $
$ 70,411 $
759,508
759,508
Total Revenue
$ 56,629
$ 57,761 $
58,916
$ 60,095
$ 61,297
$ 62,523
$ 63,773 $
65,048 $
66,349 $
67,676
$ 69,030
$ 70,411 $
759,508
Expenses
Cost of Sales
$ 6,292 $
6,418 $
6,546 $
6,677 $
6,811 $
6,947 $
7,086 $
7,228 $
7,372 $
7,520 $
7,670 $
7,823 $
84,390
Cost of Sales
$ 6,292 $
6,418 $
6,546 $
6,677 $
6,811 $
6,947 $
7,086 $
7,228 $
7,372 $
7,520 $
7,670 $
7,823 $
84,390
Gross Profit
$ 50,337
$ 51,343 $
52,370
$ 53,418
$ 54,486
$ 55,576
$ 56,687 $
57,821 $
58,977 $
60,157
$ 61,360
$ 62,587 $
675,118
Operating expenses
All other
-$ $
17,382
$ 17,382 $
18,346
$ 18,829
$ 19,311
$ 19,311
$ 19,311 $
19,311 $
19,311 $
19,311
$ 19,311
$ 19,311 $
226,428
expenses 0.00% $
$- - $
$- - $ - $ - $ - $ - $ - $
-$- - $ - $
EBIT
$ 32,955
$ 33,962 $
34,024
$ 34,589
$ 35,175
$ 36,264
$ 37,376 $
38,510 $
39,666 $
40,846
$ 42,049
$ 43,276 $
448,690
Interest 10%
$
Taxes 25% $
- $
8,239 $
- $
8,490 $
- $
8,506 $
- $
8,647 $
- $
8,794 $
- $
9,066 $
- $
9,344 $
- $
9,627 $
- $
9,917 $
-
10,211
$ -
$ 10,512
$ - $
$ 10,819 $
-
112,173
After tax profit
$ 24,716
$ 25,471 $
25,518
$ 25,942
$ 26,381
$ 27,198
$ 28,032 $
28,882 $
29,750 $
30,634
$ 31,537
$ 32,457 $
336,518
TanningFinancials.xls IS2004 Aggressive
Appendix M-02 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2002
Cash & Equivalents 81.4% 188,077 Notes Payable 3.4% 7,875
Accounts Receivable 1.5% 3,508 Accounts Payable 3.8% 8,750
Inventory/Office 3.2% 7,488 Income Taxes Payable 4.1% 9,450
Current Maturity of Long-
Other 0.0% -
term debt 1.3% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 86.2% 199,073 Total Current Liabilities 12.6% 29,075
Net Fixed Assets 13.8% 32,000 Long-term Debt 16.0% 37,000
- Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 13.8% 32,000 Total Long-term Liabilities 16.0% 37,000
Net worth 71.4% 164,998
Total Assets 100.0%
$ 231,073
Total Liabilities & Net Worth 100.0%
$ 231,073
TanningFinancials.xls BS2002 Aggressive
Appendix M-03 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2003
Cash 86.3% 237,510 Notes Payable 3.8% 10,500
Accounts Receivable 2.2% 5,989 Accounts Payable 3.8% 10,500
Inventory/Office 2.8% 7,713 Income Taxes Payable 2.8% 7,739
Current Maturity of Long-
Other 0.0% -
term debt 1.1% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 91.3% 251,212 Total Current Liabilities 11.5% 31,739
Net Fixed Assets 8.7% 24,000 Long-term Debt 12.4% 34,000
- Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 8.7% 24,000 Total Long-term Liabilities 12.4% 34,000
Net worth 76.1% 209,472
Total Assets 100.0%
$ 275,212
Total Liabilities & Net Worth 100.0%
$ 275,212
TanningFinancials.xls BS2003 Aggressive
Appendix M-04 Tanning Salon, Inc. ProForma Balance Sheet January 31, 2004
Cash 91.4% 336,518 Notes Payable 3.8% 14,000
Accounts Receivable 2.1% 7,595 Accounts Payable 3.8% 14,000
Inventory/Office 2.2% 7,944 Income Taxes Payable 2.9% 10,819
Current Maturity of Long-
Other 0.0% -
term debt 0.8% 3,000
All other Current Liabilities 0.0% -
Total Current Assets 95.7% 352,057 Total Current Liabilities 11.4% 41,819
Net Fixed Assets 4.3% 16,000 Long-term Debt 8.4% 31,000
- Deferred Taxes 0.0% -
All other Non-Current &
Intangibles 0.0% - All other Non-Current 0.0% -
Total Long-term Assets 4.3% 16,000 Total Long-term Liabilities 8.4% 31,000
Net worth 80.2% 295,238
Total Assets 100.0%
$ 368,057
Total Liabilities & Net Worth 100.0%
$ 368,057
TanningFinancials.xls BS2004 Aggressive
Appendix N Tanning Salon, Inc. Statement Review
Conservative Ideal Aggressive
Income Statement 75% 175%
2002
Total Revenue
EBIT
$ 150,356 $
$ 25,542 $
267,300 $
94,255 $
350,831
230,769
2003
Total Revenue
EBIT
$ 256,657 $
$ 135,720 $
456,279 $
237,995 $
598,867
316,681
2004
Total Revenue
EBIT
$ 325,503 $
$ 192,296 $
578,672 $
328,729 $
759,508
448,690
Balance Sheet
2002
Total Assets $
Net Worth $
72,402 $
23,479 $
151,416 $
96,598 $
231,073
164,998
2003
Total Assets
Net Worth
$ 144,069 $
$ 94,753 $
383,525 $
326,713 $
275,212
209,472
2004
Total Assets
Net Worth
$ 187,421 $
$ 136,784 $
705,709 $
645,021 $
368,057
295,238
TanningFinancials.xls Financial Statement Compare
Tanning Salon, Inc. Financial Needs
Budget
Start-up
Equipment
$ 9,009
$6 54,054
$ 29,500
$ 45,000
Financial needs
$ 128,554
Principal sources
$ 50,000
Total Finance Needed from bank
$ 78,554
TanningFinancials.xls Financial Needs
The Business Plan Generator
The Business Plan Writing Success System
SmallBusinessPoint.com
Omaha, Nebraska
The Business Plan Generator
SMALLBUSINESSPOINT.COM The Business Plan Generator
SmallBusinessPoint.com was created as a result of introspective realization of skills, experiences, and dreams. These three collective entities, combined with a heavy dose of entrepreneurship, are the motivation behind ‘The Business Plan Generator’. Many people dream of owning their own business or doing what they want to do. However, few people follow their dreams to success. Whatever the reason, adequate direction should not be one. The purpose of
‘The Business Plan Generator’ is to give you the direction needed to identify your skills, exercises to generate ideas, resources to evaluate the venture, questions to ask in the business plan, and key indicators to measure implementation.
The SmallBusinessPoint.com concept was not born in a day, but over time. Today, the concept continues to evolve as we incorporate more of our skills and bring in new ideas daily.
We at SmallBusinessPoint.com, currently combine the experiences, knowledge and education of: engineering, marketing, finance, banking, supply chain management, venture capital, MBA, business ownership, professor of entrepreneurship, logistics, writer, and publisher (just to name a few), and a healthy dose of enthusiasm. This enthusiasm is the product of setting our dreams in motion and helping others find the road to their dreams.
SmallBusinessPoint.com appreciates the opportunity to help you, and wishes you the best of success.
We believe in your dreams!
Copyright 2000 SmallBusinessPoint.com, Inc. 1
The Business Plan Generator
Table Of Contents
INTRODUCTION..................................................................................................................................................................5
SECTION ONE.......................................................................................................................................................................6
FORETHOUGHT.....................................................................................................................................................................6
WHERE ARE YOU NOW?.................................................................................................................................................6
JOB EXPERIENCE...............................................................................................................................................................6
EDUCATION AND TRAINING........................................................................................................................................8
COMMON KNOWLEDGE.............................................................................................................................................. 11
PERSONAL MOTIVATION ........................................................................................................................................... 13
REWARDS ............................................................................................................................................................................ 14
PERSONAL GOALS .......................................................................................................................................................... 14
SELF ASSESSMENT ......................................................................................................................................................... 15
SECTION TWO................................................................................................................................................................... 21
IDEA .........................................................................................................................................................................................21
BRAINSTORMING FOR YOUR IDEA ....................................................................................................................... 23
CONCLUSION..................................................................................................................................................................... 26
BUSINESS PLAN COMPARED TO A VACATION ............................................................................................... 26
SECTION THREE.............................................................................................................................................................. 29
BUSINESS PLAN..................................................................................................................................................................29
WHAT IS A BUSINESS PLAN? ..................................................................................................................................... 29
KEY REQUIREMENTS OF THE PLAN .................................................................................................................... 30
WHY BUSINESS PLANS FAIL...................................................................................................................................... 30
WHO READS A BUSINESS PLAN? ............................................................................................................................. 31
WHY YOU NEED A BUSINESS PLAN ....................................................................................................................... 32
I. EXECUTIVE SUMMARY ............................................................................................................................................ 33
II. COMPANY ANALYSIS ................................................................................................................................... 34
NAME OF COMPANY...................................................................................................................................................... 34
PRODUCTS OR SERVICES OFFERED ..................................................................................................................... 34
COMPANY HISTORY...................................................................................................................................................... 35
CURRENT SITUATION................................................................................................................................................... 35
Copyright 2000 SmallBusinessPoint.com, Inc. 2
The Business Plan Generator
COMPANY LOCATION AND FACILITIES ............................................................................................................. 36
FUTURE GOALS OF ORGANIZATION ................................................................................................................... 36
LEGAL FORM OF THE ORGANIZATION AND OWNERSHIP ...................................................................... 37
PROFILE OF THE MANAGEMENT TEAM AND ORGANIZATION CHART........................................... 37
RESOURCES AND TECHNOLOGY............................................................................................................................ 39
INSURANCE......................................................................................................................................................................... 42
III. MARKET ANALYSIS .......................................................................................................................................... 43
MARKETING MIX ............................................................................................................................................................ 43
MARKETING GOALS ..................................................................................................................................................... 48
MARKET RESEARCH..................................................................................................................................................... 48
INDUSTRY ANALYSIS .................................................................................................................................................... 49
INDUSTRY LIFE CYCLE................................................................................................................................................ 50
INDUSTRY HISTORY...................................................................................................................................................... 50
INDUSTRY TRENDS ........................................................................................................................................................ 50
INDUSTRY INFLUENTIAL FACTORS ..................................................................................................................... 51
PROJECTED INDUSTRY SALES ................................................................................................................................ 51
DEMAND............................................................................................................................................................................... 52
INDUSTRY PARTICIPANTS ......................................................................................................................................... 52
TARGET MARKET AND CUSTOMER BASE......................................................................................................... 53
CUSTOMER IDENTIFICATION.................................................................................................................................. 54
MARKETING SYSTEM ................................................................................................................................................... 55
BARRIERS TO ENTRY.................................................................................................................................................... 56
INTELLECTUAL PROPERTY...................................................................................................................................... 57
COMPANY REVENUES .................................................................................................................................................. 57
MARKET SHARE............................................................................................................................................................... 59
GROWTH OPPORTUNITIES ........................................................................................................................................ 59
IV. FINANCIAL ANALYSIS ............................................................................................................................................ 60
INITIAL INVENTORY..................................................................................................................................................... 60
Copyright 2000 SmallBusinessPoint.com, Inc. 3
The Business Plan Generator
START-UP COST ESTIMATES .................................................................................................................................... 60
BUDGETS ............................................................................................................................................................................. 61
MATERIAL ASSUMPTIONS ......................................................................................................................................... 62
FINANCIAL INDICATORS ............................................................................................................................................ 62
PROFORMA INCOME STATEMENT........................................................................................................................ 63
PROFORMA BALANCE SHEET .................................................................................................................................. 65
PROFORMA CASH FLOW STATEMENT ............................................................................................................... 67
BREAK-EVEN ANALYSIS ............................................................................................................................................. 68
FINANCIAL RATIOS ....................................................................................................................................................... 70
CONTINGENCY PLANNING........................................................................................................................................ 71
SECTION FOUR ................................................................................................................................................................. 72
IMPLEMENTATION ............................................................................................................................................................72
SECTION FIVE................................................................................................................................................................... 73
EVALUATION.......................................................................................................................................................................73
INTERNET............................................................................................................................................................................ 75
HOME BASED BUSINESS .............................................................................................................................................. 78
EPILOGUE............................................................................................................................................................................ 79
Copyright 2000 SmallBusinessPoint.com, Inc. 4
The Business Plan Generator
Introduction
SMALLBUSINESSPOINT.COM
SmallBusinessPoint.com successfully assists entrepreneurs in starting new businesses. We firmly believe in business plans and have developed a comprehensive Business Plan Generator or ‘The Business Plan Generator’ for the execution of a business plan. The ‘The Business Plan Generator’ is divided into five sections that you will use as you progress throughout this ‘The Business Plan Generator’. The steps are:
1. Forethought
2. Idea
3. Business Plan
4. Implementation
5. Evaluation
The first section of the ‘The Business Plan Generator’ is what we call "Forethought." This includes identification of your skills, abilities, and goals. Forming the foundation for success through "Forethought" is important and will separate success from failure. The initial phase of the ‘The Business Plan Generator’ focuses on you as an individual, intimately identifying each characteristic needed to be a successful entrepreneur.
The second section of the ‘The Business Plan Generator’ is the "Idea." Using what we uncover in the "Forethought" phase, we will be able to identify a short list of business opportunities from which to choose. Each idea will be given equal evaluation until the idea that appears most appealing will be chosen. The choice is decided by you based upon criteria you determine.
The third section of the ‘The Business Plan Generator’ is the "Business Plan." This is the longest and most detailed section of the ‘The Business Plan Generator’. This takes off where the Idea section ended. Once the idea has been chosen, we will walk you through exercises and modules to identify all the areas for investigation. This is where we go from idea to sound business structure.
The fourth section of the ‘The Business Plan Generator’ is "Implementation." This is where a timeline for execution of the well thought out business plan is discussed. We will determine when the best time to begin your business is based upon your industry cycle periods, seasons, etc..
The last section of the ‘The Business Plan Generator’ is "Evaluation." This is the section that needs to be completed periodically in which to determine where the business is going. Is the plan progressing according to the original plan? Evaluation of the idea, business plan, and implementation must be completed. If the business is going in a different direction than the original plan, then investigation must be timely and swift.
Copyright 2000 SmallBusinessPoint.com, Inc. 5
The Business Plan Generator
SECTION ONE
FORETHOUGHT
WHERE ARE YOU NOW?
As was mentioned previously, the first section of the ‘The Business Plan Generator’ is
"Forethought." This is the process of thinking through your personal history, experience, motivations, and goals. As we go through each section we will be answering three questions:
Where are you now? Where are you going?
How are you going to get there?
We are going to progress through this ‘The Business Plan Generator’ by intimately answering these three questions. At the conclusion of this The Business Plan Generator, you will have a business that is well thought out, and one that you will thoroughly enjoy.
We take pride in the process, you will pride yourself with the income generating business. Through your dedication, knowledge, and preparation, you will gain confidence knowing you have done everything toward solidifying your success. Let’s begin.
Job Experience
In the next four segments we will take you through the process of determining your job experiences, education and training, common knowledge, and motivations. These four segments will allow us to determine your knowledge set, strengths, weaknesses, and personal and professional goals. Each of these is equally important in the preparation for a business venture.
To determine where you are today, we must first ask ‘where have you been?’ Specifically, where have you been with your work experiences? Think about that for several minutes. Think back to your first job in high school or junior high. Every person is different, but this may be a newspaper route, a restaurant dishwasher, a grocery bagperson, or anything you did where you earned compensation. What did you learn in that job that you apply today? What did you like? What did you dislike? Do you see a way to improve that job/responsibility in today’s environment? We have all learned from every job we have ever had, whether the lesson was ‘I don’t want to do that job again’ or ‘I learned how efficient I can be by designing my paper route, completing the route 15 minutes earlier’.
After successfully completing the thinking exercise, using the form on the next page, spend the next several minutes writing down each of the successes or points you enjoyed most. These points must be specific. We will use this information later in the program. Do the same for your second job, third, fourth, etc. Please mention any job or successful position of responsibility.
Copyright 2000 SmallBusinessPoint.com, Inc. 6
The Business Plan Generator
JOB RESPONSIBILITY LIST
Job 1
Successes/Enjoyable points Improvement areas
Job 2
Job 3
Job 4
Job 5
Job 6
Job 7
Job 8
Job 9
Job 10
Job 11
Copyright 2000 SmallBusinessPoint.com, Inc. 7
The Business Plan Generator
Now that you know what you have enjoyed about all the jobs engaged in, write down the ways those jobs could be improved in today’s environment. Write these improvements down in list form. If you do not write them down you will not remember these excellent ideas. Again, these ideas must be specific with no generalizations.
The list you just created is the responsibilities and successes you experienced while employed for someone else or with someone else. This list should include every job where you earned compensation. This list is the "Job Responsibility List." We will be able to refer to this list later when we develop ideas for today’s business venture.
Education and Training
Let’s move onto education and training.
For the first time, probably, in your life, you are going to think about education and formal training. Remember back to the classes when you asked yourself, ‘Am I going to need this someday?’, now is that someday.
On the following page is a table where you will write down all the high school, college, non-credit classes, computer training, vocational training classes you have ever attended. Include everything, Algebra, Composition, Introduction to Computers, Woods, Photography, Cooking etc.
Once you have completed the list of education and training courses and classes, write down in the column labeled ‘Likes’, what you enjoyed about each class. What did you like about class ‘A’ that made it enjoyable? Was it challenging? Was it easy? What did you learn in this class that's memorable? What was the purpose of the class?
In the column labeled ‘Dislikes,’ list the reasons you disliked the class or what was the most difficult to comprehend. If it was the instructor, list what that individual did that was unpleasant and the way you would do it differently.
Copyright 2000 SmallBusinessPoint.com, Inc. 8
The Business Plan Generator
EDUCATION and TRAINING LIST
Class Likes Dislikes
Copyright 2000 SmallBusinessPoint.com, Inc. 9
The Business Plan Generator
EDUCATION and TRAINING LIST
Class Likes Dislikes
Copyright 2000 SmallBusinessPoint.com, Inc. 10
The Business Plan Generator
So far we have developed a foundation in which you will use to grow. We have identified two skill sets: practical job experience and educational training. These two skill sets will be the foundation in which we will grow your business idea and ‘The Business Plan Generator’. The objective of the ‘The Business Plan Generator’ is to evaluate the entire person to a point where they identify key strengths, and exploit those strengths in a business that will be both enjoyable and financially successful. This will not be easy, but with dedication and time, you will reap the benefits of these exercises.
Common Knowledge
The next area we would like to identify is the area of common knowledge. On the form provided, write down those tasks, hobbies, etc. that you thoroughly enjoy. What do you like to do in your spare time? What knowledge have you gained about these tasks, hobbies, etc.? You may enjoy woodworking, plumbing, writing, building airplanes, etc. This is where you identify all the areas others call on you for advice. Do friends call you up for advice on insurance, investments, sports, or home furnishings? What skills do other individuals say you excel? What types of technical skills have you learned either at work or in your spare time? This list will include any little task you like to do, however often that task or hobby undertaken.
Copyright 2000 SmallBusinessPoint.com, Inc. 11
The Business Plan Generator
COMMON KNOWLEDGE
Hobbies, spare time activities, areas of interest, areas of knowledge, etc.
This common knowledge exercise has identified all the areas where you excel. Others ask you for advice because you have knowledge they can use. "Common Knowledge" combined with the "Job Responsibility List" and "Education and Training List" are the three prongs of our stool.
By combining these three skill sets we can identify several areas where you will succeed. However, in order to properly determine a career path, we must first identify your personal motivations, rewards and goals. In the next segment, we will go through several exercises to determine your motivations, rewards, and goals.
Right now you may be asking yourself, ‘what are the differences between motivations, rewards, and goals?' It's semantics. Depending on whom you ask, these three concepts are very similar. However, by completing each of the exercises under different headings you will identify additional rewards that were not addressed under motivations. The same can be said for goals and rewards. You will think of many goals that can also be rewards upon completing.
After much debate between differences in motivations, rewards and goals we have decided to include each one as an individual exercise. In several nonscientific trials, the participants recognized many rewards and motivations very different from their goals, etc.. Have fun.
Copyright 2000 SmallBusinessPoint.com, Inc. 12
The Business Plan Generator
Personal Motivation
Before you can decide the appropriate business for yourself, you must determine what your skill set is, what motivations you have and what rewards you expect.
This section will focus on your personal motivations. Think for a moment why you want to start a new business? Are you motivated by money, prestige, independence, etc.? Are you looking to be your own boss? Do you want to fully utilize the skills and knowledge you possess? Are you looking for financial independence? Are you fulfilling personal interests? Are you looking for a stable income to provide for your family while staying home? Where do you want to be a year from now? In three years? In ten years? How will you know if you have made enough money? What will you do when you reach the money goal, retire or expand the business? How much money do you want to earn? Is there a target in three years? In five years? In ten years? Does the prospect of being a single-person business appeal to you or will you need the comfort of others?
With the previous questions in mind, list all your personal motivations below.
PERSONAL MOTIVATIONS
Copyright 2000 SmallBusinessPoint.com, Inc. 13
The Business Plan Generator