Thanks for downloading a sample plan

from Bplans.com
A sample plan is a great way to get started, but you cant just print
this plan out and turn it into the bank. Youre still going to have to put
in all your own information and do all of your own financial forecasts.
With LivePlan, you can easily use this sample as inspiration and create
your own plan, complete with financial tables and graphs. Youll also
be able to:

Save time with linked financial tables (the formulas are built in,
so you dont have to do the calculations!)
Benefit from tons of help, advice, and resources.
Present your plan with confidence, with automatic charts and
graphs corresponding to your financial data.
Work on your plan anywhere, on any computer.

For 20 dollars I ended up getting a quarter of a million dollars of

funding. Thats worth it!
Todd C. Tablegate
Click here to save 50% off the first month of LivePlan!

Cover Page

This sample business plan has been made available to users of Business Plan Pro, business
planning software published by Palo Alto Software, Inc. Names, locations and numbers may have
been changed, and substantial portions of the original plan text may have been omitted to preserve
confidentiality and proprietary information.
You are welcome to use this plan as a starting point to create your own, but you do not have
permission to resell, reproduce, publish, distribute or even copy this plan as it exists here.
Requests for reprints, academic use, and other dissemination of this sample plan should be emailed
to the marketing department of Palo Alto Software at marketing@paloalto.com. For product
information visit our website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2009 All rights reserved.

Legal Page
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by _______________ in this
business plan is confidential; therefore, reader agrees not to disclose it without the express written
permission of _______________.
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means
and that any disclosure or use of same by reader, may cause serious harm or damage to
_______________.
Upon request, this document is to be immediately returned to _______________.
___________________
Signature
___________________
Name (typed or printed)
___________________
Date

This is a business plan. It does not imply an offering of securities.

Table of Contents

1.0 Executive Summary...............................................................................................................................1

Chart: Highlights..................................................................................................................................1
1.1 Objectives..........................................................................................................................................1
1.2 Mission...............................................................................................................................................2
1.3 Keys to Success..................................................................................................................................2
2.0 Company Summary...............................................................................................................................2
2.1 Company Ownership.........................................................................................................................2
2.2 Start-up Summary..............................................................................................................................2
Table: Start-up Funding.......................................................................................................................3
Chart: Start-up......................................................................................................................................4
Table: Start-up.....................................................................................................................................4
......................................................................................................................................................................4
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................5
Table: Market Analysis........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................6
4.2 Service Business Analysis.................................................................................................................7
4.2.1 Competition and Buying Patterns...............................................................................................7
5.0 Strategy and Implementation Summary.................................................................................................7
5.1 Competitive Edge...............................................................................................................................8
5.2 Milestones..........................................................................................................................................8
Table: Milestones.................................................................................................................................8
5.3 Marketing Strategy.............................................................................................................................8
5.4 Sales Strategy.....................................................................................................................................8
5.4.1 Sales Forecast..............................................................................................................................9
Table: Sales Forecast.......................................................................................................................9
Chart: Sales Monthly.......................................................................................................................9
Chart: Sales by Year......................................................................................................................10
6.0 Management Summary........................................................................................................................10
6.1 Personnel Plan..................................................................................................................................11
Table: Personnel.................................................................................................................................11
7.0 Financial Plan.......................................................................................................................................11
7.1 Important Assumptions....................................................................................................................11
Table: General Assumptions..............................................................................................................11
................................................................................................................................................................11
7.2 Break-even Analysis........................................................................................................................12
Table: Break-even Analysis...............................................................................................................12
Chart: Break-even Analysis...............................................................................................................12
7.3 Projected Profit and Loss.................................................................................................................13
Chart: Profit Monthly.........................................................................................................................13
Chart: Profit Yearly............................................................................................................................13
Chart: Gross Margin Monthly............................................................................................................14
Chart: Gross Margin Yearly...............................................................................................................14
Page 1

Table of Contents

Table: Profit and Loss........................................................................................................................15

................................................................................................................................................................15
7.4 Projected Cash Flow........................................................................................................................16
Table: Cash Flow...............................................................................................................................16
Chart: Cash.........................................................................................................................................17
7.5 Projected Balance Sheet...................................................................................................................18
Table: Balance Sheet..........................................................................................................................18
7.6 Business Ratios................................................................................................................................18
Table: Ratios......................................................................................................................................19
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: General Assumptions........................................................................................................................3
......................................................................................................................................................................3
Table: Profit and Loss..................................................................................................................................4
......................................................................................................................................................................4
Table: Cash Flow.........................................................................................................................................5
......................................................................................................................................................................6
Table: Balance Sheet....................................................................................................................................7

Page 2

Sigmund's Gourmet Pasta

1.0 Executive Summary

Sigmund's Gourmet Pasta will be the leading gourmet pasta restaurant in Eugene, OR with a
rapidly developing consumer brand and growing customer base. The signature line of
innovative, premium, pasta dishes include pesto with smoked salmon, pancetta and peas
linguini in an alfredo sauce, and fresh mussels and clams in a marinara sauce. Sigmund's
Gourmet Pasta also serves distinctive salads, desserts, and beverages.
Sigmund's Gourmet Pasta will reinvent the pasta experience for individuals, families, and takeaway customers with discretionary income by selling high quality, innovative products at a
reasonable price, designing tasteful, convenient locations, and providing industry benchmark
customer service.
Sigmund's first restaurant will be financed through a combination of direct owner investment
and long-term loans, guaranteed by the owner's collateral.

Chart: Highlights

Highlights
$800,000
$700,000
$600,000
$500,000

Sales

$400,000

Gross Margin

$300,000

Net Profit

$200,000
$100,000
$0
Year 1

Year 2

Year 3

1.1 Objectives
Sigmund's objectives are to build brand awareness and customer service, while growing sales
by opening new stores. Sigmund's intends to utilize the following strategies to achieve these
objectives:

Offer high quality, innovative menu items, utilizing premium vegetables, meats and
cheeses.
Provide an excellent dining value. Sigmund's provides large portions of fresh, high-quality
food for an average guest check of $10 per person.
Build brand awareness through inexpensive, guerrilla marketing tactics.

Page 1

Sigmund's Gourmet Pasta

Pursue disciplined restaurant growth.

Provide superior customer service.
Leverage the experience, intelligence, and skills of our sophisticated advisory board.

1.2 Mission
Sigmund's Gourmet Pasta's mission is to provide the customer the finest pasta meal and dining
experience. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall into place. Our services will exceed the expectations of our customers.
1.3 Keys to Success
Location, Location, Location.
Sigmund's site selection criteria are critical to success. Arthur Johnson, former VP Real Estate,
Starbucks, helped us identify the following site selection criteria:

Daytime and evening populations.

Shopping patterns.
Car counts.
Household income levels.

2.0 Company Summary

Sigmund's Gourmet Pasta is a gourmet pasta restaurant started in Eugene, OR. Sigmund's
serves individuals, families, and take-away customers with fresh, creative, attractive pasta
dishes, salads and desserts. Sigmund's uses homemade pasta, fresh vegetables, and premium
meats and cheeses.
The Eugene store in the Valley River Shopping Center will be the concept store on which all
future stores will be based.
2.1 Company Ownership
Sigmund's is a privately held Oregon Corporation. The majority stock holder is Kevin Lewis.
2.2 Start-up Summary
Sigmund's will incur the following start-up costs:

Pasta machines.
Commercial stove.
Commercial refrigerators and freezers.
Commercial dishwasher.
Cabinets with cutting board surfaces.
Chairs and tables.
Beverage dispenser.
Dishware and flatware.
Assorted knives, mixing bowls, and other accessories needed in the production of food.
Point-of-Sale terminal.
Computer with Internet connection, CD-RW, and printer.

Page 2

Sigmund's Gourmet Pasta

Please note that the following items which are considered assets to be used for more than a
year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line
depreciation method.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$2,100
$162,900
$165,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$75,000
$87,900
$0
$87,900
$162,900

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$80,000
$0
$0
$80,000

Capital
Planned Investment
Kevin Lewis
Other
Additional Investment Requirement
Total Planned Investment

$85,000
$0
$0
$85,000

Loss at Start-up (Start-up Expenses)

Total Capital

($2,100)
$82,900

Total Capital and Liabilities

$162,900

Total Funding

$165,000

Page 3

Sigmund's Gourmet Pasta

Chart: Start-up

Start-up

$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses

Assets

Investment

Loans

Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Menus
Insurance
Rent
Research and Development
Expensed Equipment
Other
Total Start-up Expenses

$1,000
$100
$1,000
$0
$0
$0
$0
$0
$2,100

Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

$87,900
$0
$75,000
$162,900

Total Requirements

$165,000

Page 4

Sigmund's Gourmet Pasta

3.0 Services
Sigmund's has created gourmet pastas and salads that are differentiated and superior to
competitors. Customers can taste the quality and freshness of the product in every bite. The
following are some characteristics of the product:
1.
2.
3.
4.

Sigmund's dough is made with Italian semolina flour.

Cheeses are all imported.
Vegetables are organic and fresh with three shipments a week.
Meats are all top-shelf varieties, organic when possible.

At Sigmund's, food is not the only product. Sigmund's prides themselves on providing service
that is on par with fine dining. This is accomplished through an extensive training program and
only hiring experienced employees.
At A Glance--The Protype Sigmund's Store:

Location: an upscale mall, suburban neighborhood, or urban retail district.

Design: bright, hip, and clean.
Size: 1,200-1,700 square feet.
Employees: six to seven full time.
Seating: 35-45.
Types of transactions: 80% dine in, 20% take away.

4.0 Market Analysis Summary

The market can be divided into three target markets, individuals, families and take-away
business. Please see the next session for an intricate analysis of the different segments.
Sigmund's expansion strategy is to further penetrate the existing markets by opening an
additional store (or stores) in Eugene in 2004. This clustering approach enables Sigmund's
Gourmet Pasta to increase brand awareness and improve operating and marketing efficiencies.
For example:

Clustering allows Sigmund's to negotiate a fixed percentage contract with the food
wholesalers.

Marketing expenditures can be spread over multiple revenue centers. This strategy reduces
risks involved with opening new restaurants given that Sigmund's better understands the
competitive conditions, consumer tastes, and spending patterns in the market. When the
Eugene market is saturated with one or two additional stores, then Sigmund's intends to
look at new markets.

4.1 Market Segmentation

The market can be segmented into three target populations:

Individuals: people that dine in by themselves.

Families: a group of people, either friends or a group of non-nuclear relatives dining
together.
Take away: people that prefer to eat Sigmund's food at another location.

Page 5

Sigmund's Gourmet Pasta

Sigmund's customers are hungry individuals between the ages of 25 and 50, making up 53% of
Eugene (Eugene Chamber of Commerce). Age is not the most defined demographic of this
customer base; all age groups enjoy pasta. The most defined characteristic of the target
market is income. Gourmet pasta stores have been very successful in high rent, mixed-use
urban areas, such as Northwest 23rd in Portland. These areas have a large day and night
population consisting of business people and families who have household disposable incomes
over $40,000. Combining several key demographic factors, Sigmund's arrives at a profile of the
primary customer as follows:

Sophisticated families who live nearby.

Young professionals who work close to the location.
Shoppers who patronize the high rent stores.

Table: Market Analysis

Market Analysis
Potential Customers

Growth

Individuals
Families
Take away
Total

8%
9%
10%
9.27%

Year 1

Year 2

Year 3

Year 4

Year 5

12,457
8,974
24,574
46,005

13,454
9,782
27,031
50,267

14,530
10,662
29,734
54,926

15,692
11,622
32,707
60,021

16,947
12,668
35,978
65,593

CAGR
8.00%
9.00%
10.00%
9.27%

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Individuals
Families
Take away

Page 6

Sigmund's Gourmet Pasta

4.2 Service Business Analysis

In 1999, global pasta sales reached $8 billion. Pasta sales are estimated to grow by at least
10% for the next five years. The big four, Pastabilities, PastaFresh, Pasta Works, and Pasta
Perfect contribute $2 billion in combined 2000 revenues. The rest of the market is primarily
made up of independent restaurants. Though the barrier to entry into the pasta market is low,
due to insufficient capitalization, most entrants fail within their first six months.
4.2.1 Competition and Buying Patterns
National Competition

Pastabilities. This restaurant offers consumers their choice of noodles, sauces, and
ingredients, allowing the customer to assemble their dish as they wish. Food quality is
average.

PastaFresh. This company has a limited selection but the dishes are assembled with highquality ingredients. The price point is high, but the food is quite good.

Pasta Works. This company offers pasta that is reasonably fresh, reasonably innovative
and at a lower price point. The company was sold a few years ago, and consequently the
direction of management has been stagnant lately and has resulted in excessive employee
turnover.

Perfect Pasta. This company had medium-priced pasta dishes that use average
ingredients, no creativity, and less than average store atmosphere. Sigmund's is not sure
how this company has been able to grow in size as their whole product is mediocre at best.

Local Competition

(name omitted)- This is an upscale Italian restaurant that has a limited selection of pasta
dishes. Although the selection is limited and pricey, the dishes are quite good.
(name omitted)- An Italian restaurant with a decent pasta selection, however quality is
inconsistent.
(name omitted)- An upscale restaurant with a large wine selection and good salads.
Everything else is mediocre at best and over-priced. Service can often be poor.

5.0 Strategy and Implementation Summary

Sigmund's will leverage their two competitive advantages, superior product and industry
benchmarked customer service to build a loyal customer base.

Page 7

Sigmund's Gourmet Pasta

5.1 Competitive Edge

Sigmund's competitive edge is quite simple - superior product and superior service.

Product: the product will have the freshest ingredients including homemade pasta,
imported cheeses, organic vegetables and top-shelf meats. The product will also be
developed to enhance presentation, everything will be aesthetically pleasing.
Service: customer service will be the priority. All employees will ensure that the customers
are having the most pleasant dining experience. All employees will go through an extensive
training program and only experienced people will be hired.

5.2 Milestones
Sigmund's will have several milestones:
1. Business plan completion. This will be done as a roadmap for the organization. This will be
an indispensable tool for the ongoing performance and improvement of the company. The
business plan will be also used for raising capital.
2. Set up of the restaurant.
3. Opening of the second store.
4. Profitability.
Table: Milestones
Milestones
Milestone
Business plan completion
Set up of the restaurant
Profitability
Opening of the second store
Totals

Start Date
1/1/2001
1/1/2001
11/1/2001
6/1/2004

End Date
2/1/2001
3/1/2001
11/31/2001
6/30/2004

Budget
$0
$162,900
$0
$100,000
$262,900

Manager
Kevin
All
Kevin
Kevin and Erika

Department
Marketing
Department
Department
Department

5.3 Marketing Strategy

Sigmund's Gourmet Pasta's advertising budget is very limited, so the advertising program is
simple. Sigmund's will do direct mail, banner ads, and inserts, with inserts in the RegisterGuard likely to be the most successful of the campaigns.
Lastly, Sigmund's will leverage personal relationships to get an article about the opening of
Sigmund's in the Register-Guard business section. Previously, friends who have had their
restaurant featured in the Register-Guard have seen a dramatic increase of sales immediately
after the article was published.
5.4 Sales Strategy
The sales strategy will be to allow people to try the superior product and service for
themselves. In essence, the product will speak for itself. The marketing campaign will attract
people into Sigmund's and the sales strategy will be to let people experience Sigmund's, this
will be sufficient to turn the person into a long-term customer.

Page 8

Sigmund's Gourmet Pasta

5.4.1 Sales Forecast

The first two months will be used to get the restaurant up and running. By month three things
will get a bit busier. Sales will gradually increase, and by the end of the first year we will be
running at 2/3 capacity. We will approach full capacity in year two (full capacity for a restaurant
being 90% full), and the introduction of new, higher price-point items in the third year accounts
for that year's increase.
Table: Sales Forecast
Sales Forecast
Year 1

Year 2

Year 3

Individuals
Families
Take away
Total Sales

$103,710
$150,304
$25,401
$279,415

$262,527
$380,474
$64,300
$707,301

$286,024
$414,528
$70,055
$770,608

Direct Cost of Sales

Individuals
Families
Take away
Subtotal Direct Cost of Sales

Year 1
$46,669
$67,637
$11,431
$125,737

Year 2
$118,137
$171,213
$28,935
$318,286

Year 3
$128,711
$186,538
$31,525
$346,773

Sales

Chart: Sales Monthly

Sales Monthly
$40,000
$36,000
$32,000
$28,000

Individuals

$24,000
$20,000

Families

$16,000

Take away

$12,000
$8,000
$4,000
$0
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Page 9

Sigmund's Gourmet Pasta

Chart: Sales by Year

Sales by Year
$800,000
$700,000
$600,000

Individuals
$500,000

Families
$400,000

Take away

$300,000
$200,000
$100,000
$0
Year 1

Year 2

Year 3

6.0 Management Summary

Kevin Lewis, President, CPA

Duties: strategic development, back-office administration, financial analysis, internal

control, server, and line cook.
Education: BS general science and BS accounting, University of Oregon.
Restaurant experience: two years as a server and busser.
Business experience: staff accountant (Arthur Andersen) and controller (Hollywood Video).

Chef Darryl Darci, Executive Chef

Duties: manages the back of the house, product development, kitchen hiring, kitchen
training, and inventory management.
Education: Western Culinary Institute.
Restaurant Experience: fifteen years of restaurant experience at Harrah's & JQ Hammonds.
At JQ Hammonds ran an opening crew for new properties, also the executive sous chef
managing 20 and plated 800 meals a day.

Erika Lewis, General Manager

Duties: manages the front of the house, human resources, server hiring, server training,
and quality control.
Education: BS sociology, University of Oregon.
Business experience: office and facilities manager, nCube Inc., managed a staff of five,
managed system implementation and construction projects and negotiated satellite office
lease.

Page 10

Sigmund's Gourmet Pasta

Advisory Board

John Stevens, VP Food Starbucks Coffee Co., Inc.

Arthur Johnson, Former VP Real Estate Starbucks Coffee Co., Inc.
Donald Davis, franchise owner of Sheraton Hotel and Tony Roma's.
Jerry Slippery, CPA, Partner, Arthur Anderson.

6.1 Personnel Plan

Kevin, Darryl, and Erika will all be working full time. In addition to this management team,
there will be four other full-time employees brought on board during the end of the third month
for the first store. The second store will see the hiring of five additional employees.
Table: Personnel
Personnel Plan
Kevin
Erika
Darryl
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Total People
Total Payroll

Year 1

Year 2

Year 3

$30,000
$30,000
$62,000
$11,480
$11,480
$11,480
$10,472
$0
$0
$0
$0
$0
7

$37,800
$37,800
$75,600
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
12

$39,690
$39,690
$79,380
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
12

$166,912

$272,160

$279,720

7.0 Financial Plan

The following sections will outline important financial information.
7.1 Important Assumptions
The following table details important financial assumptions.
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
10.00%
10.00%
30.00%
0

2
10.00%
10.00%
30.00%
0

3
10.00%
10.00%
30.00%
0

Page 11

Sigmund's Gourmet Pasta

7.2 Break-even Analysis

The following topic and table shows our Break-even Analysis.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$31,017

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

45%
$17,059

Chart: Break-even Analysis

Break-even Analysis
$12,000
$9,000
$6,000
$3,000
$0
($3,000)
($6,000)
($9,000)
($12,000)
($15,000)
$0
$5,000

$10,000
$20,000
$30,000
$40,000
$50,000
$15,000
$25,000
$35,000
$45,000
$55,000

Page 12

Sigmund's Gourmet Pasta

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.
Chart: Profit Monthly

Profit Monthly
$4,000
$2,000
$0
($2,000)
($4,000)
($6,000)
($8,000)
($10,000)
($12,000)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Profit Yearly

Profit Yearly

$60,000
$40,000
$20,000
$0
($20,000)
($40,000)

Year 1

Year 2

Year 3

Page 13

Sigmund's Gourmet Pasta

Chart: Gross Margin Monthly

Gross Margin Monthly

$22,000
$20,000
$18,000
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Gross Margin Yearly

Gross Margin Yearly

$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Year 1

Year 2

Year 3

Page 14

Sigmund's Gourmet Pasta

Table: Profit and Loss

Pro Forma Profit and Loss
Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales

$279,415
$125,737
$0
$125,737

$707,301
$318,286
$0
$318,286

$770,608
$346,773
$0
$346,773

Gross Margin
Gross Margin %

$153,678
55.00%

$389,016
55.00%

$423,834
55.00%

Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$166,912
$2,400
$15,000
$0
$0
$2,400
$18,000
$0
$0

$272,160
$2,400
$15,000
$0
$0
$3,600
$36,000
$0
$0

$279,720
$2,400
$15,000
$0
$0
$3,600
$36,000
$0
$0

Total Operating Expenses

$204,712

$329,160

$336,720

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($51,034)
($36,034)
$8,000
$0

$59,856
$74,856
$8,000
$15,557

$87,114
$102,114
$8,000
$23,734

Net Profit
Net Profit/Sales

($59,034)
-21.13%

$36,299
5.13%

$55,380
7.19%

Expenses

Page 15

Sigmund's Gourmet Pasta

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

$279,415
$279,415

$707,301
$707,301

$770,608
$770,608

$0
$0
$0
$0
$0
$0
$0
$279,415

$0
$0
$0
$0
$0
$0
$0
$707,301

$0
$0
$0
$0
$0
$0
$0
$770,608

Year 1

Year 2

Year 3

$166,912
$136,690
$303,602

$272,160
$372,140
$644,300

$279,720
$417,494
$697,214

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$0
$0
$0
$0
$303,602

$0
$0
$0
$0
$0
$0
$0
$644,300

$0
$0
$0
$0
$0
$0
$0
$697,214

Net Cash Flow

Cash Balance

($24,187)
$63,713

$63,001
$126,714

$73,394
$200,107

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Page 16

Sigmund's Gourmet Pasta

Chart: Cash

Cash
$80,000
$70,000
$60,000
$50,000
$40,000

Net Cash Flow

$30,000

Cash Balance

$20,000
$10,000
$0

Month 12

Month 11

Month 10

Month 9

Month 8

Month 7

Month 6

Month 5

Month 4

Month 3

Month 2

Month 1

($10,000)

Page 17

Sigmund's Gourmet Pasta

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1

Year 2

Year 3

$63,713
$0
$63,713

$126,714
$0
$126,714

$200,107
$0
$200,107

$75,000
$15,000
$60,000
$123,713

$75,000
$30,000
$45,000
$171,714

$75,000
$45,000
$30,000
$230,107

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$19,846
$0
$0
$19,846

$31,549
$0
$0
$31,549

$34,562
$0
$0
$34,562

Long-term Liabilities
Total Liabilities

$80,000
$99,846

$80,000
$111,549

$80,000
$114,562

$85,000
($2,100)
($59,034)
$23,866
$123,713

$85,000
($61,134)
$36,299
$60,165
$171,714

$85,000
($24,835)
$55,380
$115,545
$230,107

$23,866

$60,165

$115,545

Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

7.6 Business Ratios

The following table outlines some of the more important ratios from the restaurant industry.
The final column, Industry Profile, details specific ratios based on the industry as it is classified
by the Standard Industry Classification (SIC) code, 5812, Eating Places.

Page 18

Sigmund's Gourmet Pasta

Table: Ratios
Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

153.14%

8.95%

7.60%

Other Current Assets

Total Current Assets
Long-term Assets
Total Assets

0.00%
51.50%
48.50%
100.00%

0.00%
73.79%
26.21%
100.00%

0.00%
86.96%
13.04%
100.00%

35.60%
43.70%
56.30%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

16.04%
64.67%
80.71%
19.29%

18.37%
46.59%
64.96%
35.04%

15.02%
34.77%
49.79%
50.21%

32.70%
28.50%
61.20%
38.80%

100.00%
55.00%
91.28%
0.43%
-18.26%

100.00%
55.00%
55.14%
0.17%
8.46%

100.00%
55.00%
51.74%
0.16%
11.30%

100.00%
60.50%
39.80%
3.20%
0.70%

3.21
3.21
80.71%
-247.35%
-47.72%

4.02
4.02
64.96%
86.19%
30.20%

5.79
5.79
49.79%
68.47%
34.38%

0.98
0.65
61.20%
1.70%
4.30%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

-21.13%
-247.35%

5.13%
60.33%

7.19%
47.93%

n.a
n.a

7.89
27
2.26

12.17
24
4.12

12.17
29
3.35

n.a
n.a
n.a

4.18
0.20

1.85
0.28

0.99
0.30

n.a
n.a

$43,866
-6.38

$95,165
7.48

$165,545
10.89

n.a
n.a

0.44
16%
3.21
11.71
0.00

0.24
18%
4.02
11.76
0.00

0.30
15%
5.79
6.67
0.00

n.a
n.a
n.a
n.a
n.a

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 19

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$13,424
$19,455
$3,288
$36,167

$14,804
$21,455
$3,626
$39,885

$14,817
$21,474
$3,629
$39,920

Month 10

Month 11

Month 12

Sales
Individuals
Families
Take away
Total Sales
Direct Cost of Sales

0%
0%
0%

$0
$0
$0
$0
Month 1

$0
$0
$0
$0
Month 2

$3,895
$5,645
$954
$10,494

$6,813
$9,874
$1,669
$18,356

$7,906
$11,458
$1,936
$21,300

$9,286
$13,458
$2,274
$25,018

$10,057
$14,575
$2,463
$27,095

$10,664
$15,455
$2,612
$28,731

$12,044
$17,455
$2,950
$32,449

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Individuals

$0

$0

$1,753

$3,066

$3,558

$4,179

$4,526

$4,799

$5,420

$6,041

$6,662

$6,668

Families

$0

$0

$2,540

$4,443

$5,156

$6,056

$6,559

$6,955

$7,855

$8,755

$9,655

$9,663

Take away

$0

$0

$429

$751

$871

$1,023

$1,108

$1,175

$1,327

$1,480

$1,632

$1,633

Subtotal Direct Cost of Sales

$0

$0

$4,722

$8,260

$9,585

$11,258

$12,193

$12,929

$14,602

$16,275

$17,948

$17,964

Page 1

Appendix
Table: Personnel

Personnel Plan

Kevin
Erika
Darryl
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Total People
Total Payroll

0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

$2,500
$2,500
$3,500
$0
$0
$0
$0
$0
$0
$0
$0
$0
3

$2,500
$2,500
$3,500
$280
$280
$280
$280
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$112
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7

$8,500

$9,620

$13,972

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

Month
10
$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7
$14,980

Month
11
$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7
$14,980

Month
12
$2,500
$2,500
$5,500
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
7
$14,980

Page 2

Appendix
Table: General Assumptions

General Assumptions
Plan Month

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

Month 12
12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest
Rate
Tax Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Other

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and
Loss
Month 10

Month 11

Month 12

Sales

Month 1
$0

$0

$10,494

$18,356

$21,300

$25,018

$27,095

$28,731

$32,449

$36,167

$39,885

$39,920

Direct Cost of Sales

$0

$0

$4,722

$8,260

$9,585

$11,258

$12,193

$12,929

$14,602

$16,275

$17,948

$17,964

Other Production
Expenses
Total Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,722

$8,260

$9,585

$11,258

$12,193

$12,929

$14,602

$16,275

$17,948

$17,964

Gross Margin
Gross Margin %

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

$0

$0

$5,772

$10,096

$11,715

$13,760

$14,902

$15,802

$17,847

$19,892

$21,937

$21,956

0.00%

0.00%

55.00%

55.00%

55.00%

55.00%

55.00%

55.00%

55.00%

55.00%

55.00%

55.00%

$8,500

$9,620

$13,972

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

Expenses
Payroll
Sales and Marketing and
Other Expenses
Depreciation

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

Leased Equipment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Utilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$11,650

$12,770

$17,122

$18,130

$18,130

$18,130

$18,130

$18,130

$18,130

$18,130

$18,130

$18,130

($11,650)

($12,770)

($11,350)

($8,034)

($6,415)

($4,370)

($3,228)

($2,328)

($283)

$1,762

$3,807

$3,826

($10,400)

($11,520)

($10,100)

($6,784)

($5,165)

($3,120)

($1,978)

($1,078)

Insurance
Rent
Payroll Taxes
Other
Total Operating
Expenses
Profit Before Interest and
Taxes
EBITDA
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

15%

$967

$3,012

$5,057

$5,076

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

$667

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,095

$3,140

$3,159

3.03%

7.87%

7.91%

($12,317)
0.00%

($13,437)
0.00%

($12,017)

($8,701)

($7,081)

($5,037)

($3,894)

($2,995)

-114.51%

-47.40%

-33.25%

-20.13%

-14.37%

-10.42%

($950)
-2.93%

Page 4

Appendix
Table: Cash Flow
Pro Forma Cash Flow
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Cash Received

Month
10

Month
11

Month
12

Cash from Operations

Cash Sales

$0

$0

$10,494

$18,356

$21,300

$25,018

$27,095

$28,731

$32,449

$36,167

$39,885

$39,920

Subtotal Cash from Operations

$0

$0

$10,494

$18,356

$21,300

$25,018

$27,095

$28,731

$32,449

$36,167

$39,885

$39,920

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Other Liabilities (interestfree)

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$0

$10,494

$18,356

$21,300

$25,018

$27,095

$28,731

$32,449

$36,167

$39,885

$39,920

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

Expenditures

0.00%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month
10

Month
11

Month
12

$8,500

$9,620

$13,972

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$14,980

$86

$2,567

$2,724

$7,407

$10,871

$12,208

$13,856

$14,784

$15,551

$17,224

$18,898

$20,515

$8,586

$12,187

$16,696

$22,387

$25,851

$27,188

$28,836

$29,764

$30,531

$32,204

$33,878

$35,495

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current

Borrowing
Other Liabilities Principal
Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$8,586

$12,187

$16,696

$22,387

$25,851

$27,188

$28,836

$29,764

$30,531

$32,204

$33,878

$35,495

($8,586)

($12,187)

($6,202)

($4,031)

($4,551)

($2,169)

($1,741)

($1,033)

$1,918

$3,962

$6,007

$4,425

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Subtotal Cash Spent

Net Cash Flow

Page 5

Appendix
Cash Balance

$79,314

$67,128

$60,926

$56,895

$52,344

$50,175

$48,434

$47,401

$49,318

$53,281

$59,288

$63,713

Page 6

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Month 1
Assets

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Starting
Balances

Month
10

Month
11

Month
12

Current Assets
Cash
Other Current Assets
Total Current Assets

$87,900
$0
$87,900

$79,314
$0
$79,314

$67,128
$0
$67,128

$60,926
$0
$60,926

$56,895
$0
$56,895

$52,344
$0
$52,344

$50,175
$0
$50,175

$48,434
$0
$48,434

$47,401
$0
$47,401

$49,318
$0
$49,318

$53,281
$0
$53,281

$59,288
$0
$59,288

$63,713
$0
$63,713

$75,000
$1,250
$73,750
$153,064

$75,000
$2,500
$72,500
$139,628

$75,000
$3,750
$71,250
$132,176

$75,000
$5,000
$70,000
$126,895

$75,000
$6,250
$68,750
$121,094

$75,000
$7,500
$67,500
$117,675

$75,000
$8,750
$66,250
$114,684

$75,000
$10,000
$65,000
$112,401

$75,000
$11,250
$63,750
$113,068

$75,000
$12,500
$62,500
$115,781

$75,000
$13,750
$61,250
$120,538

$75,000
$15,000
$60,000
$123,713

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month
10

Month
11

Month
12

$0
$0
$0
$0

$2,481
$0
$0
$2,481

$2,481
$0
$0
$2,481

$7,046
$0
$0
$7,046

$10,466
$0
$0
$10,466

$11,747
$0
$0
$11,747

$13,364
$0
$0
$13,364

$14,267
$0
$0
$14,267

$14,979
$0
$0
$14,979

$16,596
$0
$0
$16,596

$18,214
$0
$0
$18,214

$19,831
$0
$0
$19,831

$19,846
$0
$0
$19,846

$80,000
$80,000

$80,000
$82,481

$80,000
$82,481

$80,000
$87,046

$80,000
$90,466

$80,000
$91,747

$80,000
$93,364

$80,000
$94,267

$80,000
$94,979

$80,000
$96,596

$80,000
$98,214

$80,000
$99,831

$80,000
$99,846

$85,000
($2,100)
$0
$82,900
$162,900

$85,000
($2,100)
($12,317)
$70,583
$153,064

$85,000
($2,100)
($25,753)
$57,147
$139,628

$85,000
($2,100)
($37,770)
$45,130
$132,176

$85,000
($2,100)
($46,471)
$36,429
$126,895

$85,000
($2,100)
($53,553)
$29,347
$121,094

$85,000
($2,100)
($58,589)
$24,311
$117,675

$85,000
($2,100)
($62,484)
$20,416
$114,684

$85,000
($2,100)
($65,478)
$17,422
$112,401

$85,000
($2,100)
($66,428)
$16,472
$113,068

$85,000
($2,100)
($65,333)
$17,567
$115,781

$85,000
($2,100)
($62,193)
$20,707
$120,538

$85,000
($2,100)
($59,034)
$23,866
$123,713

$82,900

$70,583

$57,147

$45,130

$36,429

$29,347

$24,311

$20,416

$17,422

$16,472

$17,567

$20,707

$23,866

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

$75,000
$0
$75,000
$162,900

Liabilities and Capital

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 7