Business Plan: Coffee Shop
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AI Summary
The business of specialty coffee is growing at an increasing pace within Australia. The success achieved by the global coffee chain such as Starbucks, the Coffee Bean, Café Coffee Day and others is the motivation behind undertaking this venture business idea. In this context, this business plan is developed for establishing the venture idea of providing delicious coffee drinks in combination with snacks to the customers. The café is aimed to be established in Sydney within one of the prime shopping mall for attracting large customer base.
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Business Plan: Coffee Shop
Business Plan: Coffee Shop
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2
Executive Summary
The business of specialty coffee is growing at an increasing pace within Australia. The
success achieved by the global coffee chain such as Starbucks, the Coffee Bean, Café Coffee
Day and others is the motivation behind undertaking this venture business idea. In this context,
this business plan is developed for establishing the venture idea of providing delicious coffee
drinks in combination with snacks to the customers. The café is aimed to be established in
Sydney within one of the prime shopping mall for attracting large customer base.
This business plans developed has defined the business structure to be private limited
company. It will acquire initial investment from venture capital funds, creditors financing and
bank overdraft for meeting its initial needs of working capital. The forecasted financial statement
prepared for assessing the profitability of the café has ensured that the venture project will be
quite profitable in the future context.
Executive Summary
The business of specialty coffee is growing at an increasing pace within Australia. The
success achieved by the global coffee chain such as Starbucks, the Coffee Bean, Café Coffee
Day and others is the motivation behind undertaking this venture business idea. In this context,
this business plan is developed for establishing the venture idea of providing delicious coffee
drinks in combination with snacks to the customers. The café is aimed to be established in
Sydney within one of the prime shopping mall for attracting large customer base.
This business plans developed has defined the business structure to be private limited
company. It will acquire initial investment from venture capital funds, creditors financing and
bank overdraft for meeting its initial needs of working capital. The forecasted financial statement
prepared for assessing the profitability of the café has ensured that the venture project will be
quite profitable in the future context.
3
Contents
Executive Summary.........................................................................................................................2
Outline of your business proposition...............................................................................................4
Explanation of Business Structure...................................................................................................5
Important Assumptions used for the business.................................................................................5
Summary of Start up expenses and start up balance sheet..............................................................5
Financial Plan..................................................................................................................................6
Key Assumptions drawn for the financial plan............................................................................6
Proforma Profit and loss Statement for next five years...................................................................7
Anticipated return and/or net present value.....................................................................................8
Method of Financing........................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Appendix........................................................................................................................................11
Contents
Executive Summary.........................................................................................................................2
Outline of your business proposition...............................................................................................4
Explanation of Business Structure...................................................................................................5
Important Assumptions used for the business.................................................................................5
Summary of Start up expenses and start up balance sheet..............................................................5
Financial Plan..................................................................................................................................6
Key Assumptions drawn for the financial plan............................................................................6
Proforma Profit and loss Statement for next five years...................................................................7
Anticipated return and/or net present value.....................................................................................8
Method of Financing........................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10
Appendix........................................................................................................................................11
4
Outline of your business proposition
Business name & Location
The name of the venture planned to be established will be ‘Dark Roast’ that will be a
coffeehouse located in Sydney in Australia. The business will mainly to provide the residents a
unique experience while having coffee. This is aimed to be achieved by offering uniquely
flavored coffee drink that they can drink while sitting in a relaxed environment. The coffee is
planned to be established near a shopping mall within Sydney for attracting people to come and
relax after being tired of shopping. The establishment of the coffee house is selected for the
business venture as it is aimed to offer new and unique type of atmosphere to the people in the
coffeehouse that they might not have experienced in the past. The business venture also has large
chance of being successful as it is planned to be established near shopping centre that targets
large number of crowds (Pinson, 2008).
Nature of Business
The coffee house will be the first of its kind providing a relaxed and comfortable
atmosphere to the people for socializing and interacting with each other. The infrastructure of the
coffee house will be developed in such a manner so that customers visiting receive high
enjoyment and relaxation. The designing of the coffee house will be unique in the sense by
featuring stained glass decoration, glasswork and unique design dining’s. The staff members
involved in preparation of the coffee will be highly trained and experienced professionals for
providing customers delicious coffee. It will adopt the use of high quality equipment and
ingredients for delivering higher quality coffee drinks to the customers in comparison to the
competitors (Blackwell, 2017).
Products
The coffee house will provide higher quality coffee products to the customers. In addition
to this, it will also provide complementary food items such as pastries, cookies, fruit juices and
ice tea drinks to the customers.
Market Analysis
The economic growth and development of the country presents a positive state of market
for the success of the business venture planned to be established. The high chances of success for
the coffee house can be attributed due to following factors:
Highly affluent local population
High tourist activity
Increasing students population for gaining higher education
Location within one of best state of the country
The target market segment of the business will be local residents, local businesses, students
and travelers. The key strategy is to develop an atmosphere within the coffee house that appeals
largely to these target customers by providing them delicious coffee (Hazelgren, 2005).
Outline of your business proposition
Business name & Location
The name of the venture planned to be established will be ‘Dark Roast’ that will be a
coffeehouse located in Sydney in Australia. The business will mainly to provide the residents a
unique experience while having coffee. This is aimed to be achieved by offering uniquely
flavored coffee drink that they can drink while sitting in a relaxed environment. The coffee is
planned to be established near a shopping mall within Sydney for attracting people to come and
relax after being tired of shopping. The establishment of the coffee house is selected for the
business venture as it is aimed to offer new and unique type of atmosphere to the people in the
coffeehouse that they might not have experienced in the past. The business venture also has large
chance of being successful as it is planned to be established near shopping centre that targets
large number of crowds (Pinson, 2008).
Nature of Business
The coffee house will be the first of its kind providing a relaxed and comfortable
atmosphere to the people for socializing and interacting with each other. The infrastructure of the
coffee house will be developed in such a manner so that customers visiting receive high
enjoyment and relaxation. The designing of the coffee house will be unique in the sense by
featuring stained glass decoration, glasswork and unique design dining’s. The staff members
involved in preparation of the coffee will be highly trained and experienced professionals for
providing customers delicious coffee. It will adopt the use of high quality equipment and
ingredients for delivering higher quality coffee drinks to the customers in comparison to the
competitors (Blackwell, 2017).
Products
The coffee house will provide higher quality coffee products to the customers. In addition
to this, it will also provide complementary food items such as pastries, cookies, fruit juices and
ice tea drinks to the customers.
Market Analysis
The economic growth and development of the country presents a positive state of market
for the success of the business venture planned to be established. The high chances of success for
the coffee house can be attributed due to following factors:
Highly affluent local population
High tourist activity
Increasing students population for gaining higher education
Location within one of best state of the country
The target market segment of the business will be local residents, local businesses, students
and travelers. The key strategy is to develop an atmosphere within the coffee house that appeals
largely to these target customers by providing them delicious coffee (Hazelgren, 2005).
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5
Explanation of Business Structure
Dark Toast will be private owned company shared by five members having equal shares.
It is registered as Limited Liability Company with government to have ease of business and to
limit the liability of all the members who have invested in the business. Limited Liability
Company can be regarded as the corporate structure in which the members do not possess any
personal liability for meeting its debt obligations. It integrates the characteristics of both the
partnership and sole proprietorship and this enables the company to have tax benefit. It can be
regarded as simplest way of structuring the business to protect its personal assets from any
losses. As such, the business venture planned to be established will be a limited liability
company that will help in reduction of financial risk to the owners of bearing the losses (Finch,
2013).
Important Assumptions used for the business
It is highly expected there will growth in the business for next 20 years especially
demand of coffee will increase in upcoming years. It seems that there will be no
saturation point in the business for next few years.
There will be constant growth of 10% for next 5 years and it will be divided evenly
throughout the year.
Demand of coffee Dark Roast will rise throughout the period of 5 years due to marketing
performed by the members. It is expected that marketing expenses will be around 5% of
the total sales (Davies and Crawford, 2011)
Summary of Start up expenses and start up balance sheet
Before starting the business there are multiples expenses such as buying or lease out the
space for carrying out the business, buying the long term assets, arranging the working capital
and other expenditures like legal expenses. Below table will elaborate further about the expenses
incurred in various assets:
Expenses incurred for buying the assets
Long Term Items Amount
Refrigerators $ 9,000.00
Counter made of wood $ 18,000.00
Ice Machine and milk coolers $ 7,500.00
Software $ 10,500.00
Espresso Machine $ 16,500.00
Fetco Coffee Brewer $ 4,500.00
Furniture and fixtures $ 22,500.00
Other Assets $ 19,500.00
Total Long Term Assets $ 108,000.00
Current Assets
Inventory $ 30,000.00
Cash $ 15,000.00
Other current assets $ 120,000.00
Explanation of Business Structure
Dark Toast will be private owned company shared by five members having equal shares.
It is registered as Limited Liability Company with government to have ease of business and to
limit the liability of all the members who have invested in the business. Limited Liability
Company can be regarded as the corporate structure in which the members do not possess any
personal liability for meeting its debt obligations. It integrates the characteristics of both the
partnership and sole proprietorship and this enables the company to have tax benefit. It can be
regarded as simplest way of structuring the business to protect its personal assets from any
losses. As such, the business venture planned to be established will be a limited liability
company that will help in reduction of financial risk to the owners of bearing the losses (Finch,
2013).
Important Assumptions used for the business
It is highly expected there will growth in the business for next 20 years especially
demand of coffee will increase in upcoming years. It seems that there will be no
saturation point in the business for next few years.
There will be constant growth of 10% for next 5 years and it will be divided evenly
throughout the year.
Demand of coffee Dark Roast will rise throughout the period of 5 years due to marketing
performed by the members. It is expected that marketing expenses will be around 5% of
the total sales (Davies and Crawford, 2011)
Summary of Start up expenses and start up balance sheet
Before starting the business there are multiples expenses such as buying or lease out the
space for carrying out the business, buying the long term assets, arranging the working capital
and other expenditures like legal expenses. Below table will elaborate further about the expenses
incurred in various assets:
Expenses incurred for buying the assets
Long Term Items Amount
Refrigerators $ 9,000.00
Counter made of wood $ 18,000.00
Ice Machine and milk coolers $ 7,500.00
Software $ 10,500.00
Espresso Machine $ 16,500.00
Fetco Coffee Brewer $ 4,500.00
Furniture and fixtures $ 22,500.00
Other Assets $ 19,500.00
Total Long Term Assets $ 108,000.00
Current Assets
Inventory $ 30,000.00
Cash $ 15,000.00
Other current assets $ 120,000.00
6
Total Current Assets $ 165,000.00
Total Assets $ 273,000.00
(Sellars, 2009)
In addition to above expenses it is expected that there is requirement of working capital
that includes inventory of $ 30000, cash of $15000 and other current assets of $ 12000. The total
assets amount to $273000 which is financed partially by members and partially by the long term
loan from bank bearing interest rate of 12%.
Break up finance and total of liabilities and equity
Amount provided by members $ 175,000.00
Amount taken from bank $ 98,000.00
Total Equity and Liabilities $ 273,000.00
Balance Sheet at the beginning of the business
Liabilities Amount Assets Amount
Current Assets
Inventory
$
30,000.00
Long Term Liabilities Cash
$
15,000.00
Bank Loan
$
98,000.00 Other current assets
$
120,000.00
Equity Long Term Assets
Capital Contributed by the
members
$
175,000.00 Equipment and furniture
$
97,500.00
Software
$
10,500.00
$
273,000.00 Total
$
273,000.00
Financial Plan
Key Assumptions drawn for the financial plan
It is expected that in first year of sale will be approx 20000 units and sale price per unit
will be $ 7.5. It is expected that sale volume will rise 10 % annually.
Direct material will be 15% of total sales, labour or salaries will amount $24000 per year.
There will be no change in labour or salaries during five years.
Advertisement expenses amount to 5% of sales annually and there will no change during
the five years (Samonas, 2015)
Total Current Assets $ 165,000.00
Total Assets $ 273,000.00
(Sellars, 2009)
In addition to above expenses it is expected that there is requirement of working capital
that includes inventory of $ 30000, cash of $15000 and other current assets of $ 12000. The total
assets amount to $273000 which is financed partially by members and partially by the long term
loan from bank bearing interest rate of 12%.
Break up finance and total of liabilities and equity
Amount provided by members $ 175,000.00
Amount taken from bank $ 98,000.00
Total Equity and Liabilities $ 273,000.00
Balance Sheet at the beginning of the business
Liabilities Amount Assets Amount
Current Assets
Inventory
$
30,000.00
Long Term Liabilities Cash
$
15,000.00
Bank Loan
$
98,000.00 Other current assets
$
120,000.00
Equity Long Term Assets
Capital Contributed by the
members
$
175,000.00 Equipment and furniture
$
97,500.00
Software
$
10,500.00
$
273,000.00 Total
$
273,000.00
Financial Plan
Key Assumptions drawn for the financial plan
It is expected that in first year of sale will be approx 20000 units and sale price per unit
will be $ 7.5. It is expected that sale volume will rise 10 % annually.
Direct material will be 15% of total sales, labour or salaries will amount $24000 per year.
There will be no change in labour or salaries during five years.
Advertisement expenses amount to 5% of sales annually and there will no change during
the five years (Samonas, 2015)
7
Depreciation will be calculated at 15% on written down value basis on equipment and
furniture and 25% on software on written down value basis.
Lease rent will be paid at 10000 $ per year with no change during the five years.
Interest on bank loan is paid annually at the end of each year
Tax rate is approx 30% annually calculated on profit before tax.
All the sales are made on cash basis and expenses are paid for each year in same year and
there will be no account receivable and account payable at the end of each year. It means
all cash is collected a paid as it arises and in same period.
Cost of capital of the business is anticipated at 8 %
Proforma Profit and loss Statement for next five years
It is important draft the Proforma of profit and loss statement in order to estimate cash
outflows and inflows from the business. Profit and loss statement provides overview of business
income and expenses. The below budgeted profit and loss statement shows income and expenses
that will be earned by Dark Roast in upcoming five years:
Calculation of depreciation
Equipment and
furniture
$
97,500.00
Depreciation rate 15%
Method WDV
Calculation of depreciation
Software
$
10,500.00
Depreciation
rate 25%
Method WDV
Depreciation of each year
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Equipment and
furniture
$
14,625.00
$
12,431.25
$
10,566.56
$
8,981.58
$
7,634.34
Software
$
2,625.00
$
1,968.75
$
1,476.56
$
1,107.42
$
830.57
Total
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Proforma Profit and loss Statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Units Sold 20000 22000 24200 26620 29282
Unit price
$
7.50
$
7.50
$
7.50
$
7.50
$
7.50
Depreciation will be calculated at 15% on written down value basis on equipment and
furniture and 25% on software on written down value basis.
Lease rent will be paid at 10000 $ per year with no change during the five years.
Interest on bank loan is paid annually at the end of each year
Tax rate is approx 30% annually calculated on profit before tax.
All the sales are made on cash basis and expenses are paid for each year in same year and
there will be no account receivable and account payable at the end of each year. It means
all cash is collected a paid as it arises and in same period.
Cost of capital of the business is anticipated at 8 %
Proforma Profit and loss Statement for next five years
It is important draft the Proforma of profit and loss statement in order to estimate cash
outflows and inflows from the business. Profit and loss statement provides overview of business
income and expenses. The below budgeted profit and loss statement shows income and expenses
that will be earned by Dark Roast in upcoming five years:
Calculation of depreciation
Equipment and
furniture
$
97,500.00
Depreciation rate 15%
Method WDV
Calculation of depreciation
Software
$
10,500.00
Depreciation
rate 25%
Method WDV
Depreciation of each year
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Equipment and
furniture
$
14,625.00
$
12,431.25
$
10,566.56
$
8,981.58
$
7,634.34
Software
$
2,625.00
$
1,968.75
$
1,476.56
$
1,107.42
$
830.57
Total
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Proforma Profit and loss Statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Units Sold 20000 22000 24200 26620 29282
Unit price
$
7.50
$
7.50
$
7.50
$
7.50
$
7.50
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8
Total Revenue
$
150,000.00
$
165,000.00
$
181,500.00
$
199,650.00
$
219,615.00
Expenses
Raw Material and other
materials
$
22,500.00
$
24,750.00
$
27,225.00
$
29,947.50
$
32,942.25
Salaries or wages
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
Advertisement
$
7,500.00
$
8,250.00
$
9,075.00
$
9,982.50
$
10,980.75
Depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Lease Rent
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
EBIT
$
68,750.00
$
83,600.00
$
99,156.88
$
115,631.00
$
133,227.09
Interest
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
EBT
$
56,990.00
$
71,840.00
$
87,396.88
$
103,871.00
$
121,467.09
Tax @ 30%
$
17,097.00
$
21,552.00
$
26,219.06
$
31,161.30
$
36,440.13
EAT or Net profit
$
39,893.00
$
50,288.00
$
61,177.81
$
72,709.70
$
85,026.96
Note: Proforma of cash flow statement for five years has been shown in appendix
Anticipated return and/or net present value
Formula: Present value of cash inflows less present value of cash outflows (Hiduke, 2013)
Calculation of net present value
Present value of cash inflows $ 290,983.37
Present value of cash outflows $ 273,000.00
Net present value $ 17,983.37
Method of Financing
Bank Loans: The venture project can be financed through using the debt sources such as
gaining funds through bank. The criteria includes past record of applicant’s credibility
and assurance of repaying the loans on the basis of business plan developed. In this
context, the potential source of finance that can be utilized for funding the venture project
can be Enterprise Finance Guarantee. This involves gaining funds from the government
for carrying out regular operational activities. The scheme ensures that viable businesses
secure the working capital so that their entrepreneurial idea can be converted into reality
(Brigham and Michael, 2013).
Total Revenue
$
150,000.00
$
165,000.00
$
181,500.00
$
199,650.00
$
219,615.00
Expenses
Raw Material and other
materials
$
22,500.00
$
24,750.00
$
27,225.00
$
29,947.50
$
32,942.25
Salaries or wages
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
Advertisement
$
7,500.00
$
8,250.00
$
9,075.00
$
9,982.50
$
10,980.75
Depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Lease Rent
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
EBIT
$
68,750.00
$
83,600.00
$
99,156.88
$
115,631.00
$
133,227.09
Interest
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
EBT
$
56,990.00
$
71,840.00
$
87,396.88
$
103,871.00
$
121,467.09
Tax @ 30%
$
17,097.00
$
21,552.00
$
26,219.06
$
31,161.30
$
36,440.13
EAT or Net profit
$
39,893.00
$
50,288.00
$
61,177.81
$
72,709.70
$
85,026.96
Note: Proforma of cash flow statement for five years has been shown in appendix
Anticipated return and/or net present value
Formula: Present value of cash inflows less present value of cash outflows (Hiduke, 2013)
Calculation of net present value
Present value of cash inflows $ 290,983.37
Present value of cash outflows $ 273,000.00
Net present value $ 17,983.37
Method of Financing
Bank Loans: The venture project can be financed through using the debt sources such as
gaining funds through bank. The criteria includes past record of applicant’s credibility
and assurance of repaying the loans on the basis of business plan developed. In this
context, the potential source of finance that can be utilized for funding the venture project
can be Enterprise Finance Guarantee. This involves gaining funds from the government
for carrying out regular operational activities. The scheme ensures that viable businesses
secure the working capital so that their entrepreneurial idea can be converted into reality
(Brigham and Michael, 2013).
9
Venture Capital: This type of financing options involves realizing funds through equity
sources such as gaining funds from investment banks and other financial institutions. The
investors gain private equity stake in startup companies having strong growth potential.
Thus, this type of financing can be regarded as an investment funding in which money
from different private investors are realized by a start-up company to meet its capital
needs.
Creditor Finance: This type of financing options involves gaining resources form the
suppliers on credit in return of promise to meet the obligations in the future context by
repaying the amount due. The creditors in this type of financing option can be family or
friends who provide support for an entrepreneur to establish the business plan developed
into reality (Bromwich and Bhimani, 2005)
Bank Overdraft: This can also be regarded as a major source of financing available for
funding the entrepreneurial venture. The bank overdraft can be regarded as an extension
of credit that is provided by the bank that enables an individual to withdraw the money
even if there are no funds in the account. The business is required to pay interest on the
amount of overdraft used and is regarded as a potential source of short-term funds that
can be utilized for meeting the temporary cash shortage (Damodaran, 2011).
Conclusion
Thus, it can be stated that development of business plan is essential to be developed for
converting the potential idea of a venture project into reality. The business idea planned to be
established in the present context is Coffee House in the prime site location of the Sydney. It has
been assessed on the basis of the projected profit and loss for the venture project that it will be a
profitable business option that is expected to provide good returns in the future. This is supported
by the positive state of economic growth within country due to large tourist and students visiting
the country on yearly basis.
Venture Capital: This type of financing options involves realizing funds through equity
sources such as gaining funds from investment banks and other financial institutions. The
investors gain private equity stake in startup companies having strong growth potential.
Thus, this type of financing can be regarded as an investment funding in which money
from different private investors are realized by a start-up company to meet its capital
needs.
Creditor Finance: This type of financing options involves gaining resources form the
suppliers on credit in return of promise to meet the obligations in the future context by
repaying the amount due. The creditors in this type of financing option can be family or
friends who provide support for an entrepreneur to establish the business plan developed
into reality (Bromwich and Bhimani, 2005)
Bank Overdraft: This can also be regarded as a major source of financing available for
funding the entrepreneurial venture. The bank overdraft can be regarded as an extension
of credit that is provided by the bank that enables an individual to withdraw the money
even if there are no funds in the account. The business is required to pay interest on the
amount of overdraft used and is regarded as a potential source of short-term funds that
can be utilized for meeting the temporary cash shortage (Damodaran, 2011).
Conclusion
Thus, it can be stated that development of business plan is essential to be developed for
converting the potential idea of a venture project into reality. The business idea planned to be
established in the present context is Coffee House in the prime site location of the Sydney. It has
been assessed on the basis of the projected profit and loss for the venture project that it will be a
profitable business option that is expected to provide good returns in the future. This is supported
by the positive state of economic growth within country due to large tourist and students visiting
the country on yearly basis.
10
References
Blackwell, E. 2017. How to Prepare a Business Plan: Your Guide to Creating an Excellent
Strategy, Forecasting Your Finances and Producing a Persuasive Plan. Kogan Page Publishers.
Brigham, F., and Michael C. 2013. Financial management: Theory & practice. Cengage
Learning.
Bromwich, M. and Bhimani, A., 2005. Management accounting: Pathways to progress. Cima
publishing.
Damodaran, A, 2011. Applied corporate finance. John Wiley & sons.
Davies, T. and Crawford, I., 2011. Business accounting and finance. Pearson.
Finch, B. 2013. How to Write a Business Plan. Kogan Page Publishers.
Hazelgren, B. 2005. Your First Business Plan: A Simple Question and Answer Format Designed
to Help You Write Your Own Plan. Sourcebooks, Inc.
Hiduke, G. 2013. Small Business: An Entrepreneur's Business Plan. Cengage Learning.
Pinson, L. 2008. Anatomy of a Business Plan: A Step-by-step Guide to Building the Business and
Securing Your Company's Future. Aka associates.
Samonas, M. 2015. Financial Forecasting, Analysis, and Modelling: A Framework for Long-
Term Forecasting. John Wiley & Sons.
Sellars, D. 2009. Business Plan Project: A Step-by-Step Guide to Writing a Business Plan.
Business Expert Press.
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Blackwell, E. 2017. How to Prepare a Business Plan: Your Guide to Creating an Excellent
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to Help You Write Your Own Plan. Sourcebooks, Inc.
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11
Appendix
Proforma of cash flow statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Cash inflow revenue
$
150,000.00
$
165,000.00
$
181,500.00
$
199,650.00
$
219,615.00
Cash outflow for expenses
Raw Material and other
materials
$
22,500.00
$
24,750.00
$
27,225.00
$
29,947.50
$
32,942.25
Salaries or wages
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
Advertisement
$
7,500.00
$
8,250.00
$
9,075.00
$
9,982.50
$
10,980.75
Lease Rent
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
Interest
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
Total
$
75,760.00
$
78,760.00
$
82,060.00
$
85,690.00
$
89,683.00
Cash flow before Dep and
tax
$
74,240.00
$
86,240.00
$
99,440.00
$
113,960.00
$
129,932.00
Less: Depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Cash flow before tax
$
56,990.00
$
71,840.00
$
87,396.88
$
103,871.00
$
121,467.09
Less: tax
$
17,097.00
$
21,552.00
$
26,219.06
$
31,161.30
$
36,440.13
Cash flow after tax
$
39,893.00
$
50,288.00
$
61,177.81
$
72,709.70
$
85,026.96
Add: depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Cash flow
$
57,143.00
$
64,688.00
$
73,220.94
$
82,798.70
$
93,491.87
PVF @ 12% 0.926 0.857 0.794 0.735 0.681
Present value of cash
inflows
$
52,910.19
$
55,459.53
$
58,125.14
$
60,859.52
$
63,629.00
Appendix
Proforma of cash flow statement
Particulars Year 1 Year 2 Year 3 Year 4 Year 5
Cash inflow revenue
$
150,000.00
$
165,000.00
$
181,500.00
$
199,650.00
$
219,615.00
Cash outflow for expenses
Raw Material and other
materials
$
22,500.00
$
24,750.00
$
27,225.00
$
29,947.50
$
32,942.25
Salaries or wages
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
$
24,000.00
Advertisement
$
7,500.00
$
8,250.00
$
9,075.00
$
9,982.50
$
10,980.75
Lease Rent
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
$
10,000.00
Interest
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
$
11,760.00
Total
$
75,760.00
$
78,760.00
$
82,060.00
$
85,690.00
$
89,683.00
Cash flow before Dep and
tax
$
74,240.00
$
86,240.00
$
99,440.00
$
113,960.00
$
129,932.00
Less: Depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Cash flow before tax
$
56,990.00
$
71,840.00
$
87,396.88
$
103,871.00
$
121,467.09
Less: tax
$
17,097.00
$
21,552.00
$
26,219.06
$
31,161.30
$
36,440.13
Cash flow after tax
$
39,893.00
$
50,288.00
$
61,177.81
$
72,709.70
$
85,026.96
Add: depreciation
$
17,250.00
$
14,400.00
$
12,043.13
$
10,089.00
$
8,464.91
Cash flow
$
57,143.00
$
64,688.00
$
73,220.94
$
82,798.70
$
93,491.87
PVF @ 12% 0.926 0.857 0.794 0.735 0.681
Present value of cash
inflows
$
52,910.19
$
55,459.53
$
58,125.14
$
60,859.52
$
63,629.00
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