Business Plan
| Company: |
AllSport |
| Address: |
123 Main Street |
| |
SomeCity, NY, 12345 |
| |
|
| Phone: |
585-555-5555 |
| Email: |
555any.domain.com |
| Date: |
1/1/2007 |
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by___________
_________________________________________ in this business plan is confidential.
It is acknowledged by reader that this business plan contains information not
found in the public domain and such information is in all respects is
confidential in nature and that any disclosure or use of the confidential
information will cause serious harm or damage to ______________________________
_______________. The reader agrees not to disclose the confidential information
without the express written permission of _____________________________________.
Upon request, this business plan is to be immediately returned to _____________
____________________________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date
This business plan does not imply an offering of securities.
Table of Contents
It is usually best to write the executive summary near the end of the plan-writing process. The executive summary will likely be the most important part of your business plan. It is the first section everyone will read, but you do not want it to be the only section that people read. If you do write it last, make sure you leave yourself enough time to write it well.
The executive summary is a synopsis of the key points of the entire business plan. Its purpose is to explain the fundamentals of the business in a way that both informs and excites the reader. Include everything that you would cover in a three to five minute presentation. If, after reading the executive summary, the reader understands what the business is about and he/she is eager to know more, the executive summary has done its job.
The executive summary must be written with the intended reader in mind. If the plan is being written for an investor, then important content about financial requirements must be included. Also, avoid terminology and concepts which may be unfamiliar to the reader. The best executive summary shows an understanding of what issues are important to the reader and addresses them in a straightforward and comprehensive manner.
Try to begin the executive summary with an interesting and compelling statement that will grab the reader's attention. This could be an interesting brief story about how the was company started, or why the company is being started, or perhaps a startling statistic about the company's target market or industry. Alternatively, the traditional way to begin the executive summary is with a statement of the firm's purpose, perhaps by integrating the firm's mission statement and a few sentences about the product or service the business will provide.
Then try to highlight a key point from each section of the plan--the primary target market from the market analysis section, the principal source of competitive advantage from the competitor analysis, the return on investment from the financial statements, and so on.
Conclude the executive summary with the purpose of the business plan and a specific statement of what you expect from the reader. For example, don't leave the banker to sort through the plan to page ten before he/she finds out the amount of the loan you require. Clearly state your capabilities and needs in the executive summary and you will have a greater chance that the reader will turn the page.
The executive summary should be at least one page of written text and less than two pages long. You can include a half page chart or graph (such as the Gross Sales and Net Income Chart below) if it relates to one of the paragraphs (make sure you refer to it in that paragraph). Due to space limitations some sections may get missed, but a well written summary will provide the reader with a succinct explanation of the entire plan.
In a few sentences describe your company and the products and/or service it will sell.
Who owns the company, when it was formed and what is the legal form of ownership (i.e. Sole proprietor, Partnership, Corporation, Limited Liability Corporation).
The mission statement is usually 30 words or fewer. It explains the company's guiding principles.
The following are some examples of mission statements:
- 3M - "To solve unsolved problems innovatively."
- Mary Kay Cosmetics - "To give unlimited opportunity to women."
- Merck - "To preserve and improve human life."
- Wal-Mart - "To give ordinary folk the chance to buy the same thing as rich people."
- Walt Disney - "To make people happy."
Make the mission statement clear and succinct, incorporating socially meaningful and measurable criteria. Consider including the following concepts:
- The moral/ethical position of the enterprise.
- The desired public image.
- The key strategic influence for the business.
- A description of the target market.
- A description of the products/services.
- The geographic domain.
- Expectations of growth and profitability.
Set goals and objectives the help you achieve the mission statement. The characteristics of effective goals are summarized by the following (SMART):
- Specific - the objective should state exactly what is to be achieved.
- Measurable - an objective should be capable of measurement, so that it is possible to determine whether (or how far) it has been achieved.
- Achievable - the objective should be realistic given the circumstances in which it is set and the resources available to the business.
- Relevant - objectives should be relevant to the people responsible for achieving them.
- Time Bound - objectives should be set with a time-frame in mind. These deadlines also need to be realistic.
An example of a bad goal is: "The Company would like to improve its market position". A well written goal would be as follows: "The Company will have a market share of 20% by January 2006"
Here are some additional rules in making goals effective.
- Avoid contradictory goals. For example the two goals: "The Company will discontinue sales items that have low profit margins. The Company will increase its profits by adding new sales items." Should be combined to the following goal: "The Company will replace sales items with low profit margins with new sales items that have higher margins."
- Write goals in the positive, not the negative. For example, the goal "The Company's total gross sales will rank in the top 25% for its industry by 2006" is better than "The Company's total gross sales will no longer rank in the bottom 75% for its industry by 2006".
The term "Startup Expenses" is a misnomer, but it is commonly used in business plans. Think of startup expense schedule as a typical profit and loss statement. The Startup Expense Schedule is a summary of expenses (and sometimes sales) over a period of time. Before you can build the schedule you must first set a cut off date. All the expenses (and sometimes sales) that are expected to occur before the cutoff date are summarized in the startup expense schedule. There is no hard and fast rule for when the cutoff date occurs. The cut off date should be a date when most of the startup expenses have occurred and normal day to day sales are expected. For some companies it might be normal for several years of research and development before the first sale is forecasted, in which case the cutoff date will occur well before the company's first sale. Other companies may have sales before the cutoff period, so they will actually have sales listed in their Startup Expense Schedule.
Do not confuse startup expenses with expenses that are capitalized and depreciated for tax purposes (see IRS Publication 535 Business Start-Up and Organizational Costs). Include all the expenses that have occurred and any expenses that you expect to occur before your cutoff date. You may want to list the expenses that are directly related to starting your company in the text portion of the business plan and include a startup expense schedule which can found in the next section.
All Sport Health ClubStart Up Income StatementFor the Month Ending Dec. 31, 2006
| Advertising | $7,500 |
| Bank Fees | 100 |
| Consultants | 2,000 |
| Expensed Equipment | 5,000 |
| Insurance | 100 |
| Interest | 0 |
| Legal | 2,500 |
| Minor Leasehold Improvements | 400 |
| Payroll: Benefits | 5,000 |
| Payroll: Employer Taxes | 12,000 |
| Payroll: Wages | 60,000 |
| Rent | 4,000 |
| Stationery | 3,500 |
| Supplies | 2,500 |
| Utilities | 3,000 |
| Total Expenses | $107,600 |
| |
| Net Income (Loss) | ($107,600) |
| |
All Sport Health ClubBeginning Balance SheetFor the Month Ending Dec. 31, 2006
| Assets |
| Short-Term Assets |
| Cash | $392,400 |
| Accounts Receivable | 0 |
| Merchandise Inventory | 0 |
| Other Short-Term Assets | 0 |
| Total Short-Term Assets | $392,400 |
| |
| Long-Term Assets |
| Fixed Assets | $0 |
| Less Accumulated Depreciation | 0 |
| Net Fixed Assets | $0 |
| Other Long-Term Assets | 0 |
| Total Long-Term Assets | $0 |
| |
| Total Assets | $392,400 |
| |
| Liabilities |
| Short-Term Liabilities |
| Accounts Payable | $0 |
| Other Short-Term Liabilities | 0 |
| Total Short-Term Liabilities | $0 |
| |
| Long-Term Liabilities |
| Loans Payable | $0 |
| Other Long-Term Liability | 0 |
| Total Long-Term Liabilities | $0 |
| |
| Total Liabilities | $0 |
| |
| Capital |
| Owners Equity | $500,000 |
| Retained Earnings | -107,600 |
| Total Capital | $392,400 |
| |
| Total Liabilities and Capital | $392,400 |
| |
Keep this sections detailed. In the marketing section of the business plan you will describe the product/service from the consumers' point of view. Save the details on how the consumer will benefit from product/service for the marketing section. This section should be technical and detailed. As a result it may appear a little dry or boring, so try to spruce it up by including pictures or blue prints of the products. For services include work flowcharts if you have them. Use a few charts and/or graphs (such as add the end of the Products and Services section) to help make a point. Make sure the charts relate to the text.
Before listing the Features summarize the products and services here.
List all of your major products or services.
For each product or service describe the most important or unique features.
What after-sale services will you give? Some examples are delivery, warranty, service contracts, support, follow-up, and refund policy.
If you have sales literature that describes your products/services without listing the prices you can include it here. Bulky items belong in Appendices but refer to them here.
If the product or service is technical in nature you may want to describe it here.
This section is comprised of factors your business can not directly control (your customers and your competition) and factors in which your business will be able to directly control (pricing, promotion, distribution, and the product/service). You need to demonstrate that you understand the uncontrollable factors and use the controllable factors to maximize your company's net revenues. A well written marketing plan will help make your sales forecast (the next section) seem attainable and realistic.
You may want to use a top - down approach to help you find (or describe) your target market. At the top is the potential market and at the bottom is your target market. The potential market is the total number of people who could buy from your business. For example, if you are selling solely over the Internet and only accepting credit cards for payment, the potential market would be everyone in the world who owns a credit card and has access to the Internet. The addressable market is the group of individuals in the potential market who are likely to have an interest in what your business has to offer. For instance if the potential market is Internet users, then the addressable market is the individuals who do an Internet search for a product or service that you offer. The target market is the group(s) of individuals in the addressable market that are likely to buy from your Company. You may have two or three target markets.
Identify your target market by classifying prospective customers according to one or more of the following:
- Demographic characteristics: specific, objective factors such as age, gender, race/ethnicity, education, occupation, and income.
- Geographic characteristics: location-based factors such as country, state, city, mobile workers, and lifestyle setting (e.g., rural versus urban).
- Psychographic characteristics: personality traits such as attitudes, beliefs, life experiences, needs, and desires.
- Consumer characteristics: customer-based factors such as loyalty, shopping frequency, and willingness to purchase from the Internet.
For each market estimate the size and describe any growth trends and/or trends in consumer preferences.
What factors will give you competitive advantages or disadvantages? Examples include level of quality or unique or proprietary features. Describe your most important company strengths and core competencies. What factors will make the company succeed? What do you think your major competitive strengths will be? What background experience, skills, and strengths do you personally bring to this new venture?
Identify your competition
Every business has competitors, and you need to take the time to discern who your customers can approach to get a product or service that fills the same need as yours does. Even if your product or service is truly innovative, you need to look at what else your customers would purchase to accomplish this task. For example, you may be opening a Web site that offers online Bingo. Your competition would be other Bingo sites, other Web gaming sites, the Bingo hall down the street, and any other businesses that are competing for the same leisure-time dollars.
Begin by looking at your primary competitors. These are the market leaders, the companies who currently dominate your market. They are probably the ones you find yourself bumping up against in your search for new customers. If you are a florist, it would be other florists in your neighborhood. If you are a computer consultant, it would be other consultants with the same specialty.
Next, look for your secondary and indirect competitors. These are the businesses who may not go head-to-head with you, but who are targeting the same general market. Sticking with the florist example, it might be a small local roses only store, a national floral delivery service, or the flower/plant department of your local supermarket or discount store.
Finally, look at potential competitors. These are companies who might be moving into your market and who you need to prepare to compete against. For example, you might have an independent frozen yogurt stand; you will need to prepare to compete against national frozen yogurt franchises, even if they are not yet in your market.
Analyze strengths and weaknesses
After you have figured out who your competitors are, determine their strengths and find out what their vulnerabilities are. Why do customers buy from them? Is it price, value, service, convenience, and/or reputation? Focus as much on "perceived" strengths and weaknesses as you do on actual ones because customer perception may actually be more important than reality.
Look at opportunities and threats
Strengths and weaknesses are often factors that are under a company's control. But when you're looking at your competition, you also need to examine how well-prepared they are to deal with factors outside their control. These are called opportunities and threats.
Opportunities and threats fall into a wide range of categories. They might be technological developments, regulatory or legal action, economic factors, or even a possible new competitor. For example, a photo developing store needs to know how well its competitors are prepared to deal with the advent of digital photography. Or a company that sells over the Web should analyze how its competitors are prepared to deal with online security issues.
Again, an effective way to do this is to create a table listing your competitors and the outside factors that will impact your industry. You will then be able to tell how they can deal with opportunities and threats.
Determine your position
Once you figure out what your competitors' strengths and weaknesses are, you need to determine where to position your company vis-à-vis the competition. Some of this may be obvious from the results of your analysis, but it also pays to take a hard look at how your business operates.
One of the most effective ways to do this is to create a strengths/weaknesses opportunities/threats (or SWOT) analysis of your business. Rank your company in the same categories that you ranked your competitors. This will give you an even clearer picture of where your business fits in the competitive environment. It will also help you determine what areas you need to improve, and what characteristics of your business you should take advantage of to gain more customers.
The bottom line: look for ways to leverage your strengths and take advantage of your competitors' weaknesses.
Marketing decisions generally fall into the following four controllable categories: Product, Price, Place (distribution), and Promotion. You can use the "4 P's" to help you arrive at your company's forecasted market share. The forecasted market share is the individuals in the target market who can be expected to make a purchase from your business. Your market share is dependant on factors you can control product, price, promotion, and place (the "4 P's of Marketing" or "the Marketing Mix"). The goal is to make decisions that center the four P's on the customers in the target market in order to create perceived value and generate a positive, response thereby maximizing your company's market share.
Product Decisions
The term "product" refers to tangible, physical products as well as services. Here are some examples of the product decisions to be made:
- Brand name
- Functionality
- Styling
- Quality
- Safety
- Packaging
- Repairs and Support
- Warranty
- Accessories and services
Pricing Decisions
Setting the price of the product or service based on methods such as cost-plus pricing, demand pricing, and competitive pricing; and the use of innovative pricing strategies such as penetration pricing, flexible pricing, and market skimming. Each strategy is used in a different set of circumstances. When choosing the best pricing strategy for your company you must consider your direct costs and profit goals, competitors' activities, and how the customers perceive the value of your service or product.
Some examples of pricing decisions to be made include:
- Pricing strategy (skim, penetration, etc.)
- Suggested retail price
- Volume discounts and wholesale pricing
- Cash and early payment discounts
- Seasonal pricing
- Bundling
- Price flexibility
- Price discrimination
Promotion plan
In the context of the marketing mix, promotion represents the various aspects of marketing communication, that is, the communication of information about the product with the goal of generating a positive customer response. Marketing communication decisions include:
- Promotional strategy (push, pull, etc.)
- Advertising
- Personal selling & sales force
- Sales promotions
- Public relations & publicity
- Marketing communications budget
Distribution (Place) Decisions
Distribution is about getting the products to the customer. Some examples of distribution decisions include:
- Distribution channels
- Market coverage (inclusive, selective, or exclusive distribution)
- Specific channel members
- Inventory management
- Warehousing
- Distribution centers
- Order processing
- Transportation
- Reverse logistics
Estimates of product or service sales, based on the target market, competition and the effectiveness of your companies pricing, promotion, and distribution strategies.
AllSport Health ClubSales UnitsFiscal Years Ending: Dec-31
| |
2005 |
2006 |
2007 |
2008 |
| Exercise Classes |
1,560 |
4,252 |
4,252 |
4,890 |
| Family Plan |
1,332 |
1,620 |
1,620 |
1,944 |
| New Member Fee |
426 |
648 |
648 |
972 |
| Single Plan |
1,106 |
1,767 |
1,767 |
2,649 |
| Total |
4,424 |
8,287 |
8,287 |
10,455 |
Now that you have described your products/services, target market, competitors and marketing plans in detail, it's time to attach some numbers to your plan. Include a Sales Forecast. The sales forecast should be based on your historical sales (if any) and appear realistic after reading the marketing section.
Your company's sales forecast is a very important part of any business plan. You should set some goals or milestones. If your company has no sales then build a "to do" list of items that most be done before your first sale. The list should describe the items to be done in detail, with the expected start and completion dates and who is responsible for getting the item done. Also set some short term goals (Milestones) such as "The Company will obtain ten customers by December 31, 2006" or "The Company will sell five widgets and six gadgets by December 15, 2006". Include your sales forecast such as below:
AllSport Health ClubGross SalesFiscal Years Ending: Dec-31
| |
2005 |
2006 |
2007 |
2008 |
| Exercise Classes |
$18,720 |
$51,024 |
$51,024 |
$58,680 |
| Family Plan |
119,813 |
153,819 |
157,059 |
194,303 |
| New Member Fee |
42,600 |
64,800 |
64,800 |
97,200 |
| Single Plan |
55,245 |
88,262 |
97,097 |
148,212 |
| Total |
$236,378 |
$357,905 |
$369,980 |
$498,394 |
AllSport Health ClubCost of SalesFiscal Years Ending: Dec-31
| |
2005 |
2006 |
2007 |
2008 |
| Exercise Classes |
$3,120 |
$8,504 |
$8,504 |
$9,780 |
| Family Plan |
0 |
0 |
0 |
0 |
| New Member Fee |
10,650 |
16,200 |
16,200 |
24,300 |
| Single Plan |
0 |
0 |
0 |
0 |
| Total |
$13,770 |
$24,704 |
$24,704 |
$34,080 |
AllSport Health ClubNet SalesFiscal Years Ending: Dec-31
| |
2005 |
2006 |
2007 |
2008 |
| Exercise Classes |
$15,600 |
$42,520 |
$42,520 |
$48,900 |
| Family Plan |
119,813 |
153,819 |
157,059 |
194,303 |
| New Member Fee |
31,950 |
48,600 |
48,600 |
72,900 |
| Single Plan |
55,245 |
88,262 |
97,097 |
148,212 |
| Total |
$222,608 |
$333,201 |
$345,276 |
$464,314 |
Offer access to additional Sales Schedules by providing an internet address, such as www.fast4cast.com/fc1/budget-sample-reports.aspx (include the user name and password) and/or (only if you are emailing a file) provide hyperlinks such as:
This section is also known as Strategy and Implementation. In this section you will describe how and where your products (and/ or services) are produced (and/ or delivered). You will also explain the daily operation of the business, its location, equipment, processes, and surrounding environment. You should start off with a brief summary.
How and where are your products or services produced?
Explain your methods of:
- Production techniques and costs
- Quality control
- Customer service
- Inventory control
- Product development
Describe the building that your Company will operate out of. What qualities do you need in a location? Describe the type of location you will have.
Physical requirements:
- Amount of space
- Type of building
- Zoning
- Power and other utilities
Describe the following:
- Licensing and bonding requirements
- Permits
- Health, workplace, or environmental regulations
- Special regulations covering your industry or profession
- Zoning or building code requirements
- Insurance coverage
- Trademarks, copyrights, or patents (pending, existing, or purchased)
What kind of inventory will you keep: raw materials, supplies, finished goods?
Average value in stock (i.e., what is your inventory investment)?
Rate of turnover and how this compares to the industry averages?
Seasonal buildups?
Lead-time for ordering?
Identify key suppliers:
- Names and addresses
- Type and amount of inventory furnished
- Credit and delivery policies
If you expect shortages or short-term delivery problems, describe your contingency plan and/ or list alternative suppliers.
Describe any strategic alliances or unique relationships with your suppliers. If your company has any supplier contracts with it's key suppliers briefly describe them and include them in the appendices.
Are supply costs steady or fluctuating? If fluctuating, how would you deal with changing costs?
If the supplier(s) have (has) a great deal of bargaining power, you'll need to address this issue. You may need a long-term contract (at least three to five years) from the supplier. The bargaining power of suppliers will be high when:
- There are many buyers and few dominant suppliers.
- There are undifferentiated, highly valued products.
- Suppliers threaten to integrate forward into the industry (e.g. brand manufacturers threatening to set up their own retail outlets).
- Buyers do not threaten to integrate backwards into supply.
- The industry is not a key customer group to the suppliers.
A company must be able to manage its short term cash flow. Before starting a business you must consider the following:
- When you will get paid for the goods that you sell.
- When you must pay for goods that you sell.
- How much money you will lose if you don't get paid.
Managing cash flow for all new businesses is essential. How much time you will need to spend on this section of your business plan depends on how vulnerable your company is to liquidity problems. You can determine how vulnerable your company is by looking at:
- The number of days between the date your company pays for goods sold and the date your company is paid for the goods sold.
- Your company's selling margin, or how much your company pays for the goods sold and how much your company receives for the goods sold. If your company has a low margin, then a high percentage of what should be collected from the customer will be paid to your suppliers whether your company gets paid or not.
- Your company's sales volume; the higher the volume the more spread out the risk will be. A company with a low sales volume will be severely impacted by not getting paid.
Managing Cash Inflows (Receivables)
If you plan on selling goods or services on credit, you must address the following:
- List the policies you will have about who gets credit and how much?
- Describe how you will check the creditworthiness of new applicants?
- List the terms you will offer your customers; that is, how much credit and when payment is due?
- The procedures for insuring payment. Are signed purchase orders required? Will your company mail monthly statements?
- The procedures for dealing with slow paying customers. Who in your Company will call slow paying customers? How may days past due must the customer be before a phone call is made? How past due before a collection letter is sent? How past due before you get your attorney involved?
Managing Cash Outflows (Payables)
Will your suppliers offer you credit and if so how much and what are the terms?
AllSport Health ClubAssumptions: Days Outstanding
Balance Sheet
Account |
Income Statement
Account |
Days |
Percentage
Cash |
| Accounts Receivable |
Gross Sales |
30 |
10.00 % |
| Prepaid Expenses |
Rent |
30 |
0.00 % |
| Accounts Payable |
Advertising |
30 |
0.00 % |
| Accounts Payable |
Legal and Accounting |
45 |
0.00 % |
Who will manage the business on a day-to-day basis? What experience does that person bring to the business? What special or distinctive competencies? Is there a plan for continuation of the business if this person is lost or incapacitated?
Include position descriptions for key employees. If you are seeking loans or investors, include resumes of owners and key employees.
For key positions you should include an abbreviated resume in paragraph form (and if is not clear a brief job description for the person).
If you are using a new version of Microsoft Office (i.e. 2002 or newer) you can include an organizational chart such as below. To build an organizational chart with MS Office use word and go to the insert tab, select diagrams and choose the organizational chart. The more employees in the company the more helpful the organizational chart will be.
AllSport Health Club
Organizational Chart
December, 2005
In this section you may want to include the following:
- Details about contract workers (or outsourcing for seasonal demand or certain functions).
- Type of labor (skilled, unskilled, and professional) that will be required for certain positions. For skilled positions that you have not yet hired you should describe where you will find these people and why they will work for your company.
- Training methods and requirements.
- Any schedules and written procedures.
If you are using an incentive based pay structure, you should describe it and include any schedules here.
AllSport Health ClubAssumptions: Payroll Commissions
| Employee Name |
Sales Item |
Sales Type |
| Doe Jr., John: Sales Manager |
Exercise Classes |
Sales |
| Doe Jr., John: Sales Manager |
Single Plan |
Quantity |
You should include a pay schedule for either the first 12 months or yearly for the first few years. You do not need to include the names of each employee and you may want to just use a payroll by department schedule such as the schedule below.
AllSport Health ClubPayroll by DepartmentFiscal Years Ending: Dec-31
| |
2005 |
2006 |
2007 |
2008 |
| Administration |
$30,600 |
$36,660 |
$38,720 |
$40,720 |
| Sales |
143,277 |
168,597 |
192,187 |
218,628 |
| Total |
$173,877 |
$205,257 |
$230,907 |
$259,348 |
List the following:
- Board of directors
- Management advisory board
- Attorney
- Accountant
- Insurance agent
- Banker
- Consultant or consultants
- Mentors and key advisors
In this section you should describe how you should summarize your Company's financial outlook.
AllSport Health ClubAssumptions: Percentage an Account
Dependant
Account |
Parent
Account |
Link
Percentage |
| Bad Debts |
Gross Sales |
0.50 % |
| Bank Fees |
Gross Sales |
0.80 % |
| Repairs |
Depreciation |
10.00 % |
| Payroll Employer Taxes |
Payroll: Wages |
20.00 % |
| Payroll Employer Taxes |
Payroll: Bonus |
20.00 % |
| Payroll Employer Taxes |
Payroll: Commissions |
20.00 % |
| Payroll Employer Taxes |
Payroll: Benefits |
20.00 % |
AllSport Health ClubAssumptions: Expenses from Number of Employees
| Account |
Department |
Amount Per
Employee |
| Telephone |
Sales |
$65.00 |
| Telephone |
Administration |
$40.00 |
A break-even analysis predicts the sales volume at a given price required to recover total costs. The breakeven is the point where the Net Margin equals the Total Fixed Costs. The breakeven point is the number of units sold. To calculate the breakeven you must pick a time period (either a typical year or month), separate fixed costs (i.e. rent, insurance, wages and salaries that are not based on sales, interest expense, etc.) from the variable costs (cost of goods sold, commissions, etc.) and total the units sold. Then calculate the Net Margin by subtracting the variable expenses from the Gross Sales. Calculate the Net Margin per Unit Sold by dividing the Units Sold into the Net Margin. You calculate the breakeven by dividing the Total Fixed costs by the Net Margin per Unit.
AllSport Health Club Break Even AnalysisYear Ending Dec. 31, 2007
| |
|
|
| Gross Sales |
|
$369,980 |
| Variable Expenses: |
|
|
| Cost of Goods Sold |
$24,704 |
|
| Commissions |
$13,937 |
|
| Less Total Variable Expenses |
|
$38,641 |
| Net Margin |
|
$331,339 |
| |
|
|
| Units Sold |
|
8,287 |
| Net Margin Per Unit Sold |
|
$39.98 |
| |
|
|
| Total Fixed Expenses |
|
$459,772 |
| |
|
|
| Breakeven |
|
11,500 |
All Sport Health ClubIncome StatementFor the Fiscal Years Ending Dec. 31, 2007 - Dec. 31, 2011
| 2007 | 2008 | 2009 | 2010 | 2011 |
| Sales |
| Gross Sales | $296,324 | $414,854 | $539,310 | $647,172 | $744,248 |
| Less Cost of Sales | 11,853 | 16,002 | 20,002 | 24,002 | 27,603 |
| Net Sales | $284,471 | $398,852 | $519,308 | $623,170 | $716,645 |
| |
| Expenses |
| Advertising | $37,774 | $41,551 | $43,629 | $45,810 | $48,101 |
| Auto | 1,200 | 1,260 | 1,323 | 1,389 | 1,459 |
| Depreciation | 26,125 | 45,125 | 59,375 | 73,625 | 87,875 |
| Dues & Subscriptions | 300 | 315 | 331 | 347 | 365 |
| Interest | 15,448 | 35,212 | 32,416 | 29,404 | 26,157 |
| Janitorial / Cleaning | 1,200 | 1,260 | 1,323 | 1,389 | 1,459 |
| Licenses & Permits | 300 | 315 | 331 | 347 | 365 |
| Payroll: Benefits | 24,000 | 25,200 | 26,460 | 27,783 | 29,172 |
| Payroll: Employer Taxes | 38,400 | 40,320 | 42,336 | 44,453 | 46,675 |
| Payroll: Salaries | 120,000 | 126,000 | 132,300 | 138,915 | 145,861 |
| Payroll: Wages | 72,000 | 75,600 | 79,380 | 83,349 | 87,516 |
| Printing & Reproduction | 1,200 | 1,260 | 1,323 | 1,389 | 1,459 |
| Professional Fees | 1,800 | 1,890 | 1,985 | 2,084 | 2,188 |
| Rent | 48,000 | 50,400 | 52,920 | 55,566 | 58,344 |
| Repairs & Maintenance | 1,200 | 1,260 | 1,323 | 1,389 | 1,459 |
| Travel & Entertainment | 3,000 | 3,150 | 3,308 | 3,473 | 3,647 |
| Utilities: Gas & Electric | 6,000 | 6,300 | 6,615 | 6,946 | 7,293 |
| Utilities: Telephone | 3,600 | 3,780 | 3,969 | 4,167 | 4,376 |
| Total Expenses | $401,547 | $460,198 | $490,646 | $521,826 | $553,770 |
| |
| Net Income (Loss) | ($117,076) | ($61,346) | $28,662 | $101,344 | $162,875 |
| |
All Sport Health ClubBalance SheetFor the Fiscal Years Ending Dec. 31, 2007 - Dec. 31, 2011
| 2007 | 2008 | 2009 | 2010 | 2011 |
| Assets |
| Short-Term Assets |
| Cash | $544,226 | $293,247 | $193,496 | $177,725 | $234,586 |
| Accounts Receivable | 0 | 0 | 0 | 0 | 0 |
| Merchandise Inventory | 1,200 | 1,333 | 1,667 | 2,000 | 2,300 |
| Other Short-Term Assets | 0 | 0 | 0 | 0 | 0 |
| Total Short-Term Assets | $545,426 | $294,581 | $195,163 | $179,725 | $236,887 |
| |
| Long-Term Assets |
| Fixed Assets | $275,000 | $475,000 | $625,000 | $775,000 | $925,000 |
| Less Accumulated Depreciation | 26,125 | 71,250 | 130,625 | 204,250 | 292,125 |
| Net Fixed Assets | $248,875 | $403,750 | $494,375 | $570,750 | $632,875 |
| Other Long-Term Assets | 0 | 0 | 0 | 0 | 0 |
| Total Long-Term Assets | $248,875 | $403,750 | $494,375 | $570,750 | $632,875 |
| |
| Total Assets | $794,301 | $698,331 | $689,538 | $750,475 | $869,762 |
| |
| Liabilities |
| Short-Term Liabilities |
| Accounts Payable | $33,204 | $34,589 | $35,939 | $37,350 | $38,825 |
| Other Short-Term Liabilities | 0 | 0 | 0 | 0 | 0 |
| Total Short-Term Liabilities | $33,204 | $34,589 | $35,939 | $37,350 | $38,825 |
| |
| Long-Term Liabilities |
| Loans Payable | $485,773 | $449,764 | $410,959 | $369,142 | $324,078 |
| Other Long-Term Liabilities | 0 | 0 | 0 | 0 | 0 |
| Total Long-Term Liabilities | $485,773 | $449,764 | $410,959 | $369,142 | $324,078 |
| |
| Total Liabilities | $518,977 | $484,353 | $446,898 | $406,492 | $362,903 |
| |
| Capital |
| Owners Equity | $500,000 | $500,000 | $500,000 | $500,000 | $500,000 |
| Retained Earnings | -224,676 | -286,022 | -257,360 | -156,016 | 6,859 |
| Total Capital | $275,324 | $213,978 | $242,640 | $343,984 | $506,859 |
| |
| Total Liabilities and Capital | $794,301 | $698,331 | $689,538 | $750,475 | $869,762 |
| |
All Sport Health ClubCash Flow StatementFor the Fiscal Years Ending Dec. 31, 2007 - Dec. 31, 2011
| 2007 | 2008 | 2009 | 2010 | 2011 |
| Net Income | ($117,076) | ($61,346) | $28,662 | $101,344 | $162,875 |
| |
| Operating Adjustments |
| Depreciation | $26,125 | $45,125 | $59,375 | $73,625 | $87,875 |
| (Increase) Decr. A/R | 0 | 0 | 0 | 0 | 0 |
| (Increase) Decr. Inventory | -1,200 | -133 | -333 | -333 | -300 |
| (Increase) Decr. Oth. S-T Assets | 0 | 0 | 0 | 0 | 0 |
| (Decrease) Incr. A/P | 33,204 | 1,385 | 1,350 | 1,411 | 1,474 |
| (Decrease) Incr. Oth. S-T Liabilities | 0 | 0 | 0 | 0 | 0 |
| Total Operating Adjustments | $58,129 | $46,377 | $60,391 | $74,702 | $89,049 |
| |
| Net Cash from Operating Activities | ($58,947) | ($14,969) | $89,054 | $176,046 | $251,925 |
| |
| Investing / Financing Activities |
| (Purchase) Sale. Fixed Assets | ($275,000) | ($200,000) | ($150,000) | ($150,000) | ($150,000) |
| (Increase) Decr. Other L-T Assets | 0 | 0 | 0 | 0 | 0 |
| (Payment) Issuance Loans | 485,773 | -36,009 | -38,805 | -41,817 | -45,064 |
| (Decrease) Incr. Other L-T Liabilities | 0 | 0 | 0 | 0 | 0 |
| Increase (Decr.) Owners Equity | 0 | 0 | 0 | 0 | 0 |
| Total Inv. / Fin. Activities | $210,773 | ($236,009) | ($188,805) | ($191,817) | ($195,064) |
| | | | | | |
| Net Change in Cash | $151,826 | ($250,978) | ($99,751) | ($15,771) | $56,861 |
| | | | | | |
| Beginning Cash | $392,400 | $544,226 | $293,247 | $193,496 | $177,725 |
| Ending Cash | $544,226 | $293,247 | $193,496 | $177,725 | $234,586 |
All Sport Health ClubRatiosFor the Fiscal Years Ending Dec. 31, 2007 - Dec. 31, 2011
| 2007 | 2008 | 2009 | 2010 | 2011 |
| Sales Growth | n.a. | 29% | 23% | 17% | 13% |
| | | | | |
| Percent of Sales | | | | | |
| Net Sales | 96% | 96% | 96% | 96% | 96% |
| Net Income | (40%) | (15%) | 5% | 16% | 22% |
| | | | | |
| Percent of Total Assets | | | | | |
| Short-term Assets | 69% | 42% | 28% | 24% | 27% |
| Long-term Assets | 31% | 58% | 72% | 76% | 73% |
| Short-term Liabilities | 4% | 5% | 5% | 5% | 4% |
| Long-term Liabilities | 61% | 64% | 60% | 49% | 37% |
| Owners Equity | 63% | 72% | 73% | 67% | 57% |
| | | | | |
| Liquidity, Debt & Profitability | | | | | |
| Current Ratio | 16.4 | 8.5 | 5.4 | 4.8 | 6.1 |
| Quick Ratio | 16.4 | 8.5 | 5.4 | 4.8 | 6.0 |
| Debt to Equity Ratio | 1.8 | 2.1 | 1.7 | 1.1 | 0.6 |
| Return on Assets (ROA) | (15%) | (9%) | 4% | 14% | 19% |
| | | | | |
| Efficiency | | | | | |
| Average Collection Period | n.a. | n.a. | n.a. | n.a. | n.a. |
| Days in Inventory | 30 | 30 | 30 | 30 | 30 |
At the following internet address: www.fast4cast.com/fc1/budget-sample-reports.aspx
you will be able to generate the following reports:
- Loan Amortization Schedules by Loan
- Depreciation Schedule by Asset
- Income Statement
- Balance Sheet
- Cash Flow Statement
- Start-Up Expenses / Starting Balance Sheet
- Sales Schedule
- Payroll Schedule
- Payroll by Department
- Assumptions: Amounts derived from a Percentage an Account
- Assumptions: Amounts derived from the number of Employees
- Assumptions: Amounts derived from Days Outstanding
- Assumptions: Payroll Commissions
- Ratios
Or to view some of the more common reports simply click on any of the hyperlinks below:
Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well.
Include details and studies used in your business plan. For example:
- Brochures and advertising materials
- Industry studies
- Blueprints and plans
- Maps and photos of location
- Magazine or other articles
- Detailed lists of equipment owned or to be purchased
- Copies of leases and contracts
- Letters of support from future customers
- Any other materials needed to support the assumptions in this plan
- Market research studies
- List of assets available as collateral for a loan