Business Plan for Café Mountain Moose in Melbourne

This business plan outlines the details of Café Mountain Moose, a start-up establishment in Melbourne that aims to provide American-style breakfast and lunch at a reasonable price. The plan includes market research, financial objectives, organizational chart, products and services, legal considerations, and sustainability plan.

Running head: BUSINESS PLAN
Business Plan
Name of the Student
Name of the University
Authors Note
Course ID

1BUSINESS PLAN
Table of Contents
The Business Summary..............................................................................................................4
The Market:............................................................................................................................5
The future:..............................................................................................................................5
The finances:..........................................................................................................................5
The Business:.............................................................................................................................5
Business Details:....................................................................................................................6
Products and Services:...........................................................................................................6
Registrations Details:.............................................................................................................6
Business Premises:.................................................................................................................7
Organization Chart:................................................................................................................7
Management and Ownership:................................................................................................8
Key Personnel:.......................................................................................................................8
Products and Services:...........................................................................................................9
Innovation:...........................................................................................................................10
Insurance:.............................................................................................................................10
Risk management:................................................................................................................11
Legal Considerations:...........................................................................................................11
Operations:...........................................................................................................................11
Sustainability Plan:...............................................................................................................12
The Market:..............................................................................................................................12

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Market research:...................................................................................................................13
Market Targets:....................................................................................................................15
Environmental analysis:.......................................................................................................15
SWOT analysis:...................................................................................................................17
Competitors:.........................................................................................................................18
Advertising and Sales:..........................................................................................................18
The Future:...........................................................................................................................19
Vision Statement:.................................................................................................................19
Mission Statement:...............................................................................................................20
Goals/Objectives:.................................................................................................................20
Action Plan:..........................................................................................................................21
The Finance:.............................................................................................................................21
Key objectives and Financial Review:.................................................................................21
Key Assumptions:................................................................................................................21
Start-up Costs:......................................................................................................................21
Balance Sheet:......................................................................................................................23
Profit and Loss Forecast:......................................................................................................23
Expected Cash Flow:............................................................................................................24
Reference List:.........................................................................................................................27

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The Business Summary
Café Mountain Moose is the formal legal entity which is a start-up establishment that
would be located in the central Melbourne market. Café Mountain Moose anticipates to catch
the interest of the regular base of customer with the wide variety of coffee and pastry
products. The business plans to create a strong base of the customers to build the market
position in the town because of its business partners industry experience a medium
competitive climate in that area. Café Mountain Moose targets to provide its customers with
the products at the competitive price in order to meet the demand of the medium to higher
income group people that are residing in the market.
The primary business objectives of the Café Mountain Moose are become the premier
home style restaurant in the Carlton South district of Melbourne. Café Mountain Moose also
aims to provide meals to its customers at the reasonable price with the exemplary service.
The target of the business is to cover the ratios of 1.00X for each serving to its customers at
the price cost ratios of less than 65%. The business would commence from 1st August 2018
onwards and the business owners of the Café Mountain Moose are
1. Ryan Harris
2. John Moore
3. Cristina Deli
The Café Mountain Moose would be serving its American-style breakfast and lunch
placing emphasis on the healthy, tasty food. The business would be serving Low-fat recipes
would be served to the customers by not sacrificing the taste or the appeal of the food. Menu
items for the breakfast would range from $2.99 to $8.99. Lunch items would be ranging from
$4.99 to $12.99. Daily soups and specials would be offered by the Café Mountain Moose as

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well. The hours of operations would range from 6.30 am to 11.30 p.m. seven days a week.
The ABN number for the business is 897 798 568.
The Market:
The Café Mountain Moose industry comprise of around 6 million customers with
combined restaurant strength of $80,000 thousands with annual revenue of more than $400
billion (Armstrong and Taylor 2014). The major industry participants comprise of the KFC,
Pizza Hut, Taco Bell and Darden Restaurants.
The future:
The mission of the business is to offer unique and relaxing experience of dining to its
customers. Café Mountain Moose would strive to attain this goal by offering menu items
incorporating the quality ingredients at the reasonable prices (Baker and Saren 2016). The
Café Mountain Moose would be mindful of the wellbeing of its customers and staff by
treating each and every customer with the dignity and respect similar to the home experience.
The objective of the business is to keep the variable and overhead expenditure as low as
possible and creating the higher market visibility through the building and advertisement.
The finances:
The business in the span of three years intends to make profit for a minimum of 25
per cent for each of the three years of its operations. The business would be requiring the
working capital of around $200,000. The business would aim attract contributions from the
partners and the rest of the funds would be funded through the banks.
The Business:
Café Mountain Moose is the formal legal entity which is a start-up establishment that
would be located in the central Melbourne market. Café Mountain Moose anticipates to catch
the interest of the regular base of customer with the wide variety of coffee and pastry

5BUSINESS PLAN
products. The business plans to create a strong base of the customers to build the market
position in the town because of its business partners industry experience a medium
competitive climate in that area. Café Mountain Moose targets to provide its customers with
the products at the competitive price in order to meet the demand of the medium to higher
income group people that are residing in the market (Baker 2014). The ABN number for the
business is 897 798 568.
Business Details:
Products and Services:
The Café Mountain Moose would be serving its American-style breakfast and lunch
placing emphasis on the healthy, tasty food. The business would be serving Low-fat recipes
would be served to the customers by not sacrificing the taste or the appeal of the food
(Carland et al. 2017). Menu items for the breakfast would range from $2.99 to $8.99. Lunch
items would be ranging from $4.99 to $12.99. Daily soups and specials would be offered by
the Café Mountain Moose as well. The hours of operations would range from 6.30 am to
11.30 p.m. seven days a week.
Registrations Details:
The registration details represent that the business would be operating under the
partnership form. The business registered trading name is Café Mountain Moose and would
be located in the Carlton South in the Melbourne City (Drucker 2014). The structure of the
business would be as Partnership with the ABN number of 897 798 568. The ABN number of
business represents the permits that identifies the business to carry out its activities. To
promote transparency in business the personal details, business information’s, business
activity details with the declaration of the true information across the entire operations.

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Business Premises:
Location and specific operations: Carlton South, in Melbourne is the location that serves as
the concept of café restaurant. The position of the chosen location is exceptionally positive
and may be regarded as the advanced developed area (Erevelles, Fukawa and Swayne 2016).
Furthermore, there are numerous developers that are filling up commercially, residential and
retail development as well. Café Mountain Moose can generate large amount of benefit from
heavy investment and grant that is received from bank for renovating the property. The
market has been selected for examining the necessary demographics together with the
essentials for meeting the goals that is created attaining the profit (Hartline and Ferrell 2014).
The location is of Melbourne is commercially a busy place and has been selected for
prosperous the demographic market. Concerning the business premises, the owners of the
business would be leasing the premises to carry out the operations.
Organization Chart:
Café Mountain Moose organizational chart comprises of the administration staff
together with the managers under different sections dining, kitchens and staffs (Hitt and
Duane 2017). The administrations fundamentally report the business owners with staffs that
are accountable for handling the segments in the area of cook, waiter along with the cash.

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Figure 1: Figure depicting Organizational Chart
(Source: As Created by Author)
Management and Ownership:
The management and ownership of the Café Mountain Moose intends to commence
the business under the partnership agreement with each of the partners having limited liability
till the face value of the capital contributed by them. The owners and the management of the
Café Mountain Moose have the experience of around ten years particularly in the restaurant
and hotel, business management, marketing and finance (Kirzner 2015). The partnership
agreement provide that business under the regulations which offers its owners with the
authority of handling the overall business operations. The management structure offers the
management with the right of indulging in the regular business operations.
Key Personnel:
The managerial personnel of the Café Mountain Moose comprise of the following;
Managing
Director
Managers
(Dining Area)
Staff (Service) Staff (Waiter)
Managers
(Kitchen)
Staff (Cook)
Manager
(Finance)
Staff
(Cashier)

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The management team for Café Mountain Moose has around 10 years of experience
particularly in hotel and restaurant, business management, marketing and finance areas.
1. Ryan Harris: Operating as the managing director of the company
2. John Moore: Functioning as the General Manager along with the executive officer
3. Cristina Deli: Functioning as the Manager (Dining Area)
4. Peter Cross: Would be functioning as the Kitchen Manager
5. Katerina Dias: Would be discharging the responsibilities of Finance Manager
Products and Services:
Services: Café Mountain Moose would be featuring a negotiation from the supplier
agreement with numerous local food-service wholesalers and coffee wholesalers in the
Carlton South of Melbourne district having a reputation for reliability and quality;
a. Mean Beans Coffee Roasters
b. Overland Brewers
c. Healthy Harvest Bread
d. Herb Stuffed Chicken
e. Grilled Chicken with Shallot
f. Baked Mushroom and Capsicum
g. Quick Salted Caramel Pie
h. Grilled Chicken in Mustard Sauce
Concerning the market position of Café Mountain Moose, the products and services
offered are both competitive and budget products. With respect to its competitors the
products and services are priced similar to that of the prevailing competitors (Kiseleva 2017).
The proposed business of café can concentrate on the narrower and specialized menus that
targets in enhancing the overall level of quality and services. Sufficient labelling and

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techniques of rotation together with the sufficient storage would help in making sure that
higher quality products would be sufficiently available to satisfy the demands for the
customers during the peak hours.
Concerning the pricing Café Mountain Moose would be priced moderately that would
offer family style food service. The prices of Café Mountain Moose products would range
from $3.99 to $20 per entrée. The choices for food would be varied and the price would range
from $6.69 to $20. The average price is anticipated to range between $8 to $15 that appears
in line with the standards of industry of below $25.00. Café Mountain Moose would be
keeping its menu reasonable priced by providing menu items that would take the advantage
of seasonal produce for further lowering the price.
Innovation:
The business operators of Café Mountain Moose can place their concentrations on
decreasing the food wastage by initiating the food processing techniques and going green
(Kuratko 2016). Raising the awareness concerning the sustainability, particularly among the
millennial can force the owners of restaurants to enforce environment friendly and at the
same time keeping the sustainable practices.
Insurance:
The Café Mountain Moose would be covering different risks namely the one that is
mentioned below;
a. Product Liability: Presence of unnecessary objects in different foods
b. Workers Compensation: Burns, Strains
c. Public Liability: Injuries that are suffered by the patrons through slips and falls.

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Risk management:
Risk Likelihood Impact Strategy
Physical Risks Likely Medium Knowing the risk of
locations all the exits.
Installing the fire alarm and
smoke detectors.
A system of sprinkler would
be installed.
Hazardous Material Risk Highly Medium A plan would create to
handle the immediate
impact of risk. Local fire
department can be deployed
to acquire help.
Location Risk Highly Low Among the location hazards
there is a risk of fires,
damage from storm, floods
and earthquake. Keeping
sufficient amount of
vehicles to drive away from
the locations.
Strategic Risks Likely Medium A system is created to
implement control on the
financial hardships that
takes place when there is
risky failure in the
diversifications of the
present project.
Legal Considerations:
There are some applicable laws of the new café business. The legal license includes
Australian Business License and Information Service that necessarily includes the permits
and licenses (Lantos 2015). Furthermore, the business would be complying with the Privacy
Act and Fair Work Commission.
Operations:
The operations of the Café Mountain Moose would be located in the Carltons South
of Melbourne city. The café would be serving lunch and dinners following the afterhours for

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specifically in the weekends. Café Mountain Moose would be operating particularly during
the peak business hour for obtaining the advantage of the street traffic.
Lunch Hours: Monday to Sunday (12 pm to 3 pm)
Dinner Hours: Monday to Sunday (8 pm to 1 am)
Sustainability Plan:
The Café Mountain Moose aims to make their business sustainable by developing the
greener and profitable plan. Unpretentious improvement of handling equipment efficiently
and reducing the heating and cooling bills for further investment in energy efficiency
procedure (Scarborough 2016). The company aims to introduce the plan of decreasing the
total waste. Particularly, recycling and similarly composting the programs that can be used in
the common way of addressing heating and cooling plans for effective reduction in energy.
The Market:
Coffee business is one of the most lucrative business markets in the Australian
scenario. The country which celebrates its laid back style and which has moved far from the
bustling cafes culture of the European countries and the caffeine driven cities of Northern
America, Australian have become increasingly specific to their coffee (Schaper et al. 2014).
The coffee culture in Australia is very rich and the trend has continued. The Quality espresso,
which was brought in this island nation back in the 50s, has still continued to dominate and
still remains the face of the Australian coffee market. The major players are the home
players. The coffee shop industry in Australia is different than other countries (Solomon et
al. 2014). Here it is not dominated by the large global coffee shop chains, on the contrary is
highly fragmented, with a high percentage of single store independent coffee shops outlets,
although some of the major players such as McCafé, Starbucks, and Gloria Jeans are present
too. They consists of Duke Coffee Roasters, Industry Beans, Seven Seeds, Axil Coffee

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Roasters, Aucuba Coffee Roasters and the famous Melbourne based St Ali Coffee Roasters.
These independent coffee providing service companies and outlets have taken over the
Australian market and are ruling the same.
Market research:
Extensive use of the quantitative data has been used in the compilation of the relevant
information about the market of the coffee industry. Some valuable amount of information
has been received, which provide an in-depth information about the insights of the coffee
market of Australia (Storey 2016). The revenue in the Australian coffee segment amounts to
$1440m and it is expected to grow by 2.8% annually. The market’s largest coffee segment is
the ‘Instant Coffee’, which had clocked the volumes of $1223m. Moreover, the average per
capita consumption stood at 1.9kg in the year 2018.
As per the latest reports, the Coffee segment is expected to have a revenue growth of
4.8% in 2019. This is a positive sign for the coffee industry in general. It is a welcoming
prospect, for the Australian coffee market, considering the fact that the major players in the
market are independent players (Wensley 2016). Given the nature of the coffee industry’s
products and services, discretionary income categories have an important impact on the
demand of the product. It is because of this, that the major markets are based on income
distribution (Chambers and Humble 2017). The market is divided into mainly four kinds of
income quintiles, which are the low income quintile, middle income, second income quintile
and the fourth income quintile. The statistical information regarding the revenue growth and
the different kinds of income quintiles have been provided below:

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Figure 2: Figure representing Revenue Growth
(Source: acta.org, 2018)
The income quintiles have been provided below:
Figure 3: Figure representing Income in quantiles
(Source: ibpsworld.com.au, 2015)

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Market Targets:
The target market for any kind of business is one of the most important aspects of the
business. The business exists for catering to the needs and requirements of its target business
audience. It is no exception for the market of coffee too in the case of Australia. The coffee
target audience are classified into mainly four kinds, which are the drip coffee lovers, whole
bean buyers, Speciality coffee drinkers and the coffee shop lovers (Ghezzi et al. 2015). The
age of the target audience plays a crucial role in taking specific business decisions, relating to
the different aspects of the coffee business. Around 40% of the people aged between 18-24
years, drink coffee on a daily basis, which forms an important piece of data for not only the
independent coffee business, but also for the different international players , who are
operating in the Australian market. Additionally, around 54% of the people, aged between
25-38, consume daily cups of coffee (McKeever 2016). This assists the businesses in taking
important business decisions.
The young adult café consumers are much more influenced by the advertising, sales
promotion activities of the companies, which is why, they are heavily targeted (Schaper et al.
2014). The quality driven consumers, who have higher income target market consumers, are
more influenced by the existing brand name of the companies and are more driven towards
the superior’s quality offerings, provided by both the existing independent businesses as well
as the international chains, in Australia. Lastly, the middle income consumers, are targeted,
keeping in mind the economical reward, which is expected by them, while ensuring the
quality of the coffee.
Environmental analysis:
The café and coffee shops industry has grown strongly over the last couple of years,
owing much of its success and growth because of the love of the Australia’s towards quality
and vibrant coffee culture (Simón-Moya and Revuelto-Taboada 2016). In fact, this love for

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coffee culture has remained consistent and has helped spurred the domestic demand, in spite
of global economic downturn in the recent years. The industry has grown successfully. Here,
the coffee quality is crucial, with coffee brand, texture, temperature, milk and even the cream
has been important factors for the influence of the espresso lovers (Ross and Byrd 2015).
This industry is directly affected by the changes in the real discretionary incomes, any
increase or decrease in the household incomes, exerts a significant amount of impact on the
industry revenue. A pictorial description has been given below:
Figure 4: Figure representing household income
(Source: ibpsworld.com.au, 2015)
Larger workloads and an increase in the family and work commitments exerts a
significant amount of pressure on the products of the industry over the last five years (Barton
2016). Industry profitability has become feeble in a slight manner over the previous five
years, as competition has restricted the profit margins. However, consistent and increased
demand and the decreasing trend of coffee prices have helped in raising the consistency of
the profit margins.

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SWOT analysis:
Strengths- One of the most important aspects of the strengths of the new coffee business is
the consistent high quality of coffee provided by Mountain Moose. The beautiful décor, busy
location in the Melbourne city, atmosphere and ambience is one of the most important
strengths, which are being offered by Moose Mountain (Ekanem 2017). Providing internet
services is one of the other aspects, which are being offered by us, is also used to target the
younger audiences.
Weaknesses- One of the important weaknesses, which is much more explicit in its nature is
the high maintenance costs of the workers and the staffs (Authority 2016). As it is a working
start up, providing various kinds of bonuses and incentives to the new staffs is a challenge,
which needs to be addressed at the earliest.
Opportunities- Discovering new market segments like young adults group, who have a busy
schedule and work load is one of the most important target market, which needs to be
targeted. They are one of the lucrative targets as most of them are earning and have a
consistent credit worthiness (Ashkenas et al. 2015). The demand for coffee is specifically
high in various suburbs of Melbourne, which needs to be taken care of at the earliest. This
would ensure a steady flow of higher income in the years to come.
Threats- External factors like industry recessions, global economic slowdown, and decrease
in demand are some of the factors which exert a significant influence on the growth of
Moose. The competition provided by the different independent coffee businesses such as St
Ali, Aucuba, Seven Seeds, Industry Beans and Dukes, exercise significant amount of impact
upon the growth and survival of Moose. Moreover, the threat of international players like
Starbucks, looms large.

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Competitors:
Competit
or
Establis
hed
date
Size Marke
t share
(%)
Value to
customers
Strengths Weaknesses
Kraft
Heinz
2015 $272,00
0
17% Known for
providing
high
quality
services
and
products.
Strong financial
muscle.
Facing tough
competition
from local
players.
Starbucks 2016 $160,00
0
10% Providing
premium
products.
Worldwide
reputation as a
coffee
producers.
Failed to
understand the
needs of
Australian
consumers.
Coffee
Beanery
2000 $160,00
0
10% Reasonabl
e prices.
[What are your
competitor's
main
strengths?]
Failure to
improvise on
its products.
Nestle 1908 $608,60
00
38% Efficient
brand
loyalty
One of the
biggest brands
worldwide
Brand
imitation and
increased
competition.
Luigi
lavazza
1980 $400,00
00
25% Reputed
since its
inception.
Largest supply
chain
Stiff
competition
from
independent
businesses.
Advertising and Sales:
Advertising and sales is one of the most important sections of any business’s overall
success (O'Neill et al. 2016). It is important not only for the established companies but also
for start-ups like Mountain Moose’s. Some of the advertising types and their role have been
discussed below.

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Planned promotion
/advertising type
Expected business improvement Cost
($)
Target
date
Print media advertising It would attract the young adults. $12000 June,201
9
Social Media Young consumers $8000 April,
2019
Sample distribution It would bring in new set of consumers
of the adult category.
$5000 August,
2019.
Channel type Products/
services
Percentage
of sales
(%)
Advantages Disadvantages
Internet Coffee
espresso
machines
20% Wide reach Lack of originality.
Direct mail Coffee
flavours
20% Delivery of Quality
products
Compromise of
quality.
Shopfront Different
coffee
products
40% Maximum delivery
and ensuring overall
quality.
Limited distribution
and sales, because
of space issues.
Export of
products and
services in
other
countries.
Coffee beans,
products,
coffee
machines,
other
readymade
coffee flavours
and items.
20% Higher prices of the
products and
services, machines,
coffee flavours. It
would also help in
increasing and
improving the
reputation of
Mountain Moose’s.
Local competition
is one of the major
factors, higher
prices could offset
the consumers and
increase in the taxes
and tariffs,
increases the prices.
The Future:
Vision Statement:
The vision statement of Café Mountain Moose includes presenting an image of the
wholesome, healthy food under the attractive and clean atmosphere. The business has three
influential key to success factors and would attract the accomplishment of the Café Mountain
Moose goals (Withey and Gellatly 2015). The vision of the business is to select the

19BUSINESS PLAN
appropriate locations by keeping the variable and overhead expenditure as low as possible
and creating a higher visible market through the brands building and advertisement. In
relation to the commercial transaction, Café Mountain Moose would be deliberately choosing
to remain distinctive and unique in its customer experience.
Mission Statement:
Café Mountain Moose mission is to provide quality coffee, espresso and pastry
products at the competitive price in order to meet the demand for the middle to higher income
locals in the local market area residents and tourists (Shafritz et al. 2015). The mission
statement of Café Mountain Moose is to offer the quality product with personal customer’s
service at the competitive pricing. The aim of the café is to be simple. It would be providing
an entirely sophisticated, sensual yet casual dining and coffeehouse experience for several
citizens of Melbourne and visitors that offer frequent casual dining spots. It would be the
affordable venture for the patrons and would be encouraging them to return on several
occasions.
Goals/Objectives:
The objective of the business are as follows;
a. Quality products: Food, coffee-based beverages with higher quality and value
products.
b. Service: The goal of business is to serve its patrons since they are paying to have the
good time (Bustinza et al. 2015). The goal of Café Mountain Moose is to commit
each member of its staff to be courteous, efficient and attentive.
c. Marketing: The objective of Café Mountain Moose is to target its audience early and
regularly.

20BUSINESS PLAN
d. Management: The goal of the business is to have the grasp of the food, beverage and
cost of labour. The objective of the business is to deliver encouraging entertainment,
coffeehouse experience that would not only result in repeat business but would also
promote a word to mouth endorsements to other customers.
Action Plan:
Milestone Date of
expected
completion
Person
responsible
Securing occupancy Overland Park Locations 18-7-2018 Business Owners
Assembling and hiring of barista team 20-7-2018 Business Owners
Advertisement on the local station and mail fliers 25-7-2018 Business Owners
Opening of business 1-8-2018 Business Owners
The Finance:
Key objectives and Financial Review:
The key objectives of the Café Mountain Moose is to move sustainably in the
direction of attaining a positive cash flow on each month beginning from the operations of
the business. The business aims to reach the positive cash flow when the profits from the
operations are able to lend support to both the operations and the training program.
Key Assumptions:
a. The price of the meal would range from $8 to $15.
b. The average lunch price would be ranging from $13.99
c. The business aims to target a revenue of $250,000 to $350,000
d. Yearly increase in revenue by 10 per cent.
Start-up Costs:
Start-up Requirements

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Start-up Expenses
Fixed Costs Particulars Amount ($)
Premises (RENT & RATES) $12,500
Salaries $22,000
Interest on loan 10% $10,000
Accountant Fees $15,000
Payroll Tax $2,750
Retainer contracts $14,500
Sales and Marketing $16,500
Postage & Telephone $1,750
Broachers $2,300
Logo Designs $2,550
Market survey $1,950
Preliminary expenses $2,400
Capital Improvements Expense $16,500
Total Fixed Costs $1,20,700
Average Monthly Costs
Rent $1,042
Capital Improvements Expense $1,375
Interest on loan 10% $833
Postage & Telephone $146
Repairs and Maintenance $192
Salaries / Wages $1,833
Total Average Monthly Costs $5,421
x Number of Months: 12
Total Monthly Costs $65,050
Total Startup Expenses $1,85,750
Start-up Assets
Owner Funding
Owners Fund $1,25,000
Total Owner Funding $1,25,000
Loans
Bank Loan $1,00,000
Other
Total Loans $1,00,000
Total Start-up Funds $2,25,000
Assets
Equipment’s $35,000
Computers $55,000
Total Fixed Assets $90,000
Total Start-up Assets $3,15,000

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Balance Sheet:
Balance Sheet
Assets FY-1 FY-2 FY-3
Current Assets
Cash $5,000 $11,060 $14,951
Accounts receivable $2,75,000 $3,02,500 $3,32,750
Total current assets $2,80,000 $3,13,560 $3,47,701
Fixed (Long-Term) Assets
Equipments $35,000 $38,500 $42,350
Computers $55,000 $60,500 $66,550
Utensils $15,000 $16,500 $18,150
Furnitures $22,000 $24,200 $26,620
(Less accumulated depreciation) $20,400 $18,200 $17,030
Total fixed assets $69,600 $80,800 $91,870
Total Assets $3,49,600 $3,94,360 $4,39,571
Liabilities and Owner's Equity
Current Liabilities
Bank Charges Payable $10,000 $10,000 $10,000
Short-term loans $15,000 $20,000 $50,000
Income taxes payable $11,640 $16,524 $16,193
Accrued salaries and wages $22,000 $24,200 $26,620
Total current liabilities $58,640 $70,724 $1,02,813
Long-Term Liabilities
Long-term debt $1,00,000 $90,000 $80,000
Less: Loan Repayment $10,000 $10,000
Total long-term liabilities $1,00,000 $80,000 $70,000
Owner's Equity
Owner's investment $1,25,000 $1,50,000 $1,75,000
Net Profits $27,160 $38,556 $37,783
Reserve and Surplus $38,800 $55,080 $53,976
Total owner's equity $1,90,960 $2,43,636 $2,66,758
Total Liabilities and Owner's Equity $3,49,600 $3,94,360 $4,39,571
Profit and Loss Forecast:
PROFIT AND LOSS FORECAST
Preop
Year 0 1 2 3
Revenue 0 2,75,000 3,02,500 3,32,750

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Cost of sales 0 1,15,000 1,32,250 1,52,088
Gross profit 0 1,60,000 1,70,250 1,80,663
Gross Margin 2,47,840 2,63,944 2,94,967
Expenses/overheads
Business Insurance 12,500 13,750 15,125
Wages and salaries 22,000 24,200 26,620
General expenses 15,000 16,500 18,150
Accountant Fees 15,000 16,500 18,150
Payroll Tax 2,750 3,025 3,328
Utilities 14,500 15,950 17,545
Sales and Marketing 16,500 18,150 19,965
Postage & Telephone 1,750 1,925 2,118
Repairs and Maintenance 2,300 2,530 2,783
Preliminary expenses 2,400 2,640 2,904
Capital Improvement Cost 16,500 18,150 19,965
Total expenses/overheads 1,21,200 1,15,170 1,26,687
Profit before tax 38,800 55,080 53,976
Tax @ 30% 11,640 16,524 16,193
Before tax net margin 14% 18% 16%
Profit after tax 27,160 38,556 37,783
Transfer to reserves 38,800 55,080 53,976
ROC 27% 31% 25%
Expected Cash Flow:
(2) CASHFLOW FORECAST
Preop
Year 0 1 2 3
CASH INFLOWS
Cash from Sales 2,75,000 3,02,500 3,32,750
Directors loans 1,00,000 1,00,000 1,00,000 1,00,000
Capital Employed 1,00,000 1,25,000 1,50,000 1,75,000
Other cash inflows
TOTAL CASH INFLOW 2,00,000 5,00,000 5,52,500 6,07,750
CASH OUTFLOWS

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Payments for materials 1,15,000 1,32,250 1,52,088
operating expenses ( ) 0
Business Insurance 0 12,500 13,750 15,125
Salaries 0 22,000 24,200 26,620
Accountant Fees 0 15,000 16,500 18,150
Payroll Tax 0 2,750 3,025 3,328
Supplier contracts 0 14,500 15,950 17,545
Sales and Marketing 16,500 18,150 19,965
Postage & Telephone 1,750 1,925 2,118
Broachers 2,300 2,530 2,783
Logo Designs 2,550 2,805 3,086
Interest on loan 10% 10,000 10,000 10,000
General and Admin Expenses 1,950 2,145 2,360
Preliminary expenses 2,400 2,640 2,904
Capital Improvement Cost 16,500 18,150 19,965
Corporation Tax 11,640 16,524 16,193
Loan repayments 10,000 10,000
TOTAL CASH OUTFLOWS 0 2,47,340 2,90,544 3,22,227
Cash flow summary
NET CASHFLOW FOR PERIOD 2,00,000 2,52,660 2,61,956 2,85,523
OPENING CASH BALANCE 0 2,00,000 4,52,660 7,14,616
CLOSING CASH BALANCE 2,00,000 4,52,660 7,14,616 10,00,139
Break Even Analysis:
Revenue Contribution Fixed Cost Profit
275000 137500 72611.4 64888.6
302500 151250 72611.4 78638.6
181528.5 90764.25 72611.4 18152.85
217834.2 108917.1 72611.4 36305.7
Breakeven Analysis
Breakeven Sales Value =
average fixed cost/%
contribution

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150000 200000 250000 300000 350000
0
20000
40000
60000
80000
100000
120000
140000
160000
64888.6
78638.6
18152.85
36305.7
72611.472611.472611.4 72611.4
137500
151250
90764.25
108917.1
Contribution
Fixed Cost
Profit
Figure 5: Figure representing Break-Even Analysis
(Source: As Created by Author)

26BUSINESS PLAN
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