Financial Plan

Key Revenue & Costs

The revenue drivers for TY’s Bookstore will be the books it will sell on location. Another revenue driver will be the subscription fees it will generate from the Book Club memberships.

The cost drivers will be the cost of the book and other items’ inventory. Other cost drivers will be the rent, payroll, and overhead costs.

Funding Requirements and Use of Funds

Thomas Young is seeking $100,000 in debt financing to open a bookstore in Portland, Oregon. The funding will be dedicated for product inventory, leasehold improvements, working capital, and three months of payroll. The breakout of the funding is below:

• Bookstore design/build: $50,000
• Opening inventory: $30,000
• Working capital: $5,000
• Three months of payroll: $15,000

 

Key Assumptions

The following outlines the key assumptions required in order to achieve the revenue and cost numbers in the financials and in order to pay off the startup business loan.

• Initial Number of Customers Per Month: 500
• Annual Lease: $20,000

 

Financial Projections

Income Statement

		FY 1	FY 2	FY 3	FY 4	FY 5
Revenues
	Total Revenues	$360,000	$793,728	$875,006	$964,606	$1,063,382
Expenses & Costs
	Cost of goods sold	$64,800	$142,871	$157,501	$173,629	$191,409
	Lease	$50,000	$51,250	$52,531	$53,845	$55,191
	Marketing	$10,000	$8,000	$8,000	$8,000	$8,000
	Salaries	$157,015	$214,030	$235,968	$247,766	$260,155
	Initial expenditure	$10,000	$0	$0	$0	$0
	Total Expenses & Costs	$291,815	$416,151	$454,000	$483,240	$514,754
EBITDA		$68,185	$377,577	$421,005	$481,366	$548,628
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
EBIT		$41,025	$350,417	$393,845	$454,206	$521,468
	Interest	$23,462	$20,529	$17,596	$14,664	$11,731
PRETAX INCOME		$17,563	$329,888	$376,249	$439,543	$509,737
	Net Operating Loss	$0	$0	$0	$0	$0
	Use of Net Operating Loss	$0	$0	$0	$0	$0
	Taxable Income	$17,563	$329,888	$376,249	$439,543	$509,737
	Income Tax Expense	$6,147	$115,461	$131,687	$153,840	$178,408
NET INCOME		$11,416	$214,427	$244,562	$285,703	$331,329

 

Balance Sheet

		FY 1	FY 2	FY 3	FY 4	FY 5
ASSETS
	Cash	$154,257	$348,760	$573,195	$838,550	$1,149,286
	Accounts receivable	$0	$0	$0	$0	$0
	Inventory	$30,000	$33,072	$36,459	$40,192	$44,308
	Total Current Assets	$184,257	$381,832	$609,654	$878,742	$1,193,594
	Fixed assets	$180,950	$180,950	$180,950	$180,950	$180,950
	Depreciation	$27,160	$54,320	$81,480	$108,640	$135,800
	Net fixed assets	$153,790	$126,630	$99,470	$72,310	$45,150
TOTAL ASSETS		$338,047	$508,462	$709,124	$951,052	$1,238,744
LIABILITIES & EQUITY
	Debt	$315,831	$270,713	$225,594	$180,475	$135,356
	Accounts payable	$10,800	$11,906	$13,125	$14,469	$15,951
	Total Liability	$326,631	$282,618	$238,719	$194,944	$151,307
	Share Capital	$0	$0	$0	$0	$0
	Retained earnings	$11,416	$225,843	$470,405	$756,108	$1,087,437
	Total Equity	$11,416	$225,843	$470,405	$756,108	$1,087,437
TOTAL LIABILITIES & EQUITY		$338,047	$508,462	$709,124	$951,052	$1,238,744

 

Cash Flow Statement

		FY 1	FY 2	FY 3	FY 4	FY 5
CASH FLOW FROM OPERATIONS
	Net Income (Loss)	$11,416	$214,427	$244,562	$285,703	$331,329
	Change in working capital	($19,200)	($1,966)	($2,167)	($2,389)	($2,634)
	Depreciation	$27,160	$27,160	$27,160	$27,160	$27,160
	Net Cash Flow from Operations	$19,376	$239,621	$269,554	$310,473	$355,855
CASH FLOW FROM INVESTMENTS
	Investment	($180,950)	$0	$0	$0	$0
	Net Cash Flow from Investments	($180,950)	$0	$0	$0	$0
CASH FLOW FROM FINANCING
	Cash from equity	$0	$0	$0	$0	$0
	Cash from debt	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow from Financing	$315,831	($45,119)	($45,119)	($45,119)	($45,119)
	Net Cash Flow	$154,257	$194,502	$224,436	$265,355	$310,736
	Cash at Beginning of Period	$0	$154,257	$348,760	$573,195	$838,550
	Cash at End of Period	$154,257	$348,760	$573,195	$838,550	$1,149,286