Business plan assignment five for BEST CHOICE RESTAURANT no more than $30 bids

User Generated

yvbaxvat1212

Business Finance

Description

The next step you will take in developing your Business Plan is to create financial statements and the loan or investment proposal.

Financial Plan

A. Key assumptions
B. Financial Statements (year 1 by month, years 2 and 3 by quarter)
1 Income statement
2. Balance Sheet
3. Cash Flow Statement
C. Break even analysis
D. Ratio analysis with comparison to industry standards

Loan or Investment Proposal

A. Amount requested
B. Purpose and use of funds
C. Repayment or cash out schedule (exit strategy)
D. Timetable for implementing plan and launching business.

Personal Financial Statement

Include personal financial statements for each owner and major stockholder, showing assets and liabilities held outside the business and personal net worth. Owners will often have to draw on personal assets to finance the business, and these statements will show what is available. Bankers and investors usually want this information as well.

II.Startup Expenses and Capitalization

You will have many expenses before you even begin operating your business. It’s important to estimate these expenses accurately and then to plan where you will get sufficient capital. This is a research project, and the more thorough your research efforts, the less chance that you will leave out important expenses or underestimate them.

Even with the best of research, however, opening a new business has a way of costing more than you anticipate. There are two ways to make allowances for surprise expenses. The first is to add a little “padding” to each item in the budget. The problem with that approach, however, is that it destroys the accuracy of your carefully wrought plan. The second approach is to add a separate line item, called contingencies, to account for the unforeseeable. This is the approach we recommend.

Talk to others who have started similar businesses to get a good idea of how much to allow for contingencies. If you cannot get good information, we recommend a rule of thumb that contingencies should equal at least 20 percent of the total of all other start-up expenses.

Explain your research and how you arrived at your forecasts of expenses. Give sources, amounts, and terms of proposed loans. Also explain in detail how much will be contributed by each investor and what percent ownership each will have.

III.Financial Plan

The financial plan consists of a 12-month profit and loss projection, a four-year profit and loss projection (optional), a cash-flow projection, a projected balance sheet, and a break-even calculation. Together they constitute a reasonable estimate of your company's financial future. More important, the process of thinking through the financial plan will improve your insight into the inner financial workings of your company.

12-Month Profit and Loss Projection

Many business owners think of the 12-month profit and loss projection as the centerpiece of their plan. This is where you put it all together in numbers and get an idea of what it will take to make a profit and be successful.

Your sales projections will come from a sales forecast in which you forecast sales, cost of goods sold, expenses, and profit month-by-month for one year.

Profit projections should be accompanied by a narrative explaining the major assumptions used to estimate company income and expenses.

Research Notes: Keep careful notes on your research and assumptions, so that you can explain them later if necessary, and also so that you can go back to your sources when it’s time to revise your plan.

Four-Year Profit Projection (Optional)

The 12-month projection is the heart of your financial plan. This section is for those who want to carry their forecasts beyond the first year.

Of course, keep notes of your key assumptions, especially about things that you expect will change dramatically after the first year.

Projected Cash Flow

If the profit projection is the heart of your business plan, cash flow is the blood. Businesses fail because they cannot pay their bills. Every part of your business plan is important, but none of it means a thing if you run out of cash.

The point of this worksheet is to plan how much you need before startup, for preliminary expenses, operating expenses, and reserves. You should keep updating it and using it afterward. It will enable you to foresee shortages in time to do something about them—perhaps cut expenses, or perhaps negotiate a loan. But foremost, you shouldn’t be taken by surprise.

There is no great trick to preparing it: The cash-flow projection is just a forward look at your checking account.

For each item, determine when you actually expect to receive cash (for sales) or when you will actually have to write a check (for expense items).

You should track essential operating data, which is not necessarily part of cash flow but allows you to track items that have a heavy impact on cash flow, such as sales and inventory purchases.

You should also track cash outlays prior to opening in a pre-startup column. You should have already researched those for your startup expenses plan.

Your cash flow will show you whether your working capital is adequate. Clearly, if your projected cash balance ever goes negative, you will need more start-up capital. This plan will also predict just when and how much you will need to borrow.

Explain your major assumptions, especially those that make the cash flow differ from the Profit and Loss Projection. For example, if you make a sale in month one, when do you actually collect the cash? When you buy inventory or materials, do you pay in advance, upon delivery, or much later? How will this affect cash flow?

Are some expenses payable in advance? When?

Are there irregular expenses, such as quarterly tax payments, maintenance and repairs, or seasonal inventory buildup, that should be budgeted?

Loan payments, equipment purchases, and owner's draws usually do not show on profit and loss statements but definitely do take cash out. Be sure to include them.

And of course, depreciation does not appear in the cash flow at all because you never write a check for it.

Opening Day Balance Sheet

A balance sheet is one of the fundamental financial reports that any business needs for reporting and financial management. A balance sheet shows what items of value are held by the company (assets), and what its debts are (liabilities). When liabilities are subtracted from assets, the remainder is owners’ equity.

Use a startup expenses and capitalization spreadsheet as a guide to preparing a balance sheet as of opening day. Then detail how you calculated the account balances on your opening day balance sheet.

Optional: Some people want to add a projected balance sheet showing the estimated financial position of the company at the end of the first year. This is especially useful when selling your proposal to investors.

Break-Even Analysis

A break-even analysis predicts the sales volume, at a given price, required to recover total costs. In other words, it’s the sales level that is the dividing line between operating at a loss and operating at a profit.

Expressed as a formula, break-even is:

Breakeven Sales =

Fixed Costs

1- Variable Costs

(Where fixed costs are expressed in dollars, but variable costs are expressed as a percent of total sales.)

Include all assumptions upon which your break-even calculation is based.
All submissions should be completed using APA formatting and standards.

User generated content is uploaded by users for the purposes of learning and should be used following Studypool's honor code & terms of service.

Explanation & Answer

Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work. Please let me know if there is anything needs to be changed or added. I will be also appreciated that you can let me know if there is any problem or you have not received the work Good luck in your study and if you need any further help in your assignments, please let me know Can you please confirm if you have received the work? Once again, thanks for allowing me to help you R MESSAGE TO STUDYPOOL NO OUTLINE IS NEEDED

Report: Financial Plan and Loan Proposal (2)

Financial Plan and Loan Proposal (2)
by HAL

General metrics
12,235

1,826

266

7 min 18 sec

14 min 2 sec

characters

words

sentences

reading
time

speaking
time

Writing Issues
No issues found

Plagiarism
This text seems 100% original. Grammarly found no matching text on
the Internet or in ProQuest’s databases.

Report was generated on Friday, Nov 23, 2018, 10:14 PM

Page 1 of 2

Report: Financial Plan and Loan Proposal (2)

Unique Words

22%

Measures vocabulary diversity by calculating the
percentage of words used only once in your
document

unique words

Rare Words

40%

Measures depth of vocabulary by identifying words
that are not among the 5,000 most common English
words.

rare words

Word Length

2.9

Measures average word length

characters per word

Sentence Length

6.9

Measures average sentence length

words per sentence

Report was generated on Friday, Nov 23, 2018, 10:14 PM

Page 2 of 2


Running head: BEST CHOICE RESTAURANT

Financial Plan and Loan Proposal
Name
Course
Instructor
Date

1

BEST CHOICE RESTAURANT

2

Financial Plan and Loan Proposal
Financial Plan
The subsidize required $363,000 throughout the first year for redesigns, furniture, kitchen
gear, legal fees, permits, food and restaurant supplies, working capital, marketing, and faculty.
Key assumptions
The financial plan depends on significant assumptions, most of which appear in the
following table as annual figures. The key underlying assumptions are:
The business plan relies upon essential assumptions, depicted in Table 1 as yearly
figures. The critical fundamental presumptions are:


We will assume a moderate economic development, without subsidence.



We assume that there are no unforeseen changes in the anticipation in the prevalence of
our restaurant.



We will assume that access to speculations and financing are adequate to keep up and
satisfy our financial plan.

Table 1. General Assumptions

BEST CHOICE RESTAURANT

3

Table 2. Monthly General Assumptions.
Personal Statement
The following tables show the assets and liabilities of both the shareholders that will
invest in the restaurant and the restaurant owner.
Shareholder

BEST CHOICE RESTAURANT

Owner

4

BEST CHOICE RESTAURANT

5

. Financial Statements
1 Income statement
The most critical supposition in the Projected Profit and Loss articulation is the gross
margin. The profit and loss exhibit unobtrusive increments in incomes over th...


Anonymous
Really great stuff, couldn't ask for more.

Studypool
4.7
Trustpilot
4.5
Sitejabber
4.4

Similar Content

Related Tags