Business plan; Pasta De Italiano

Business Plan Pasta De' Italiano

Sir Arbab Naseebullah Kasi Rabia Iftikahr, MBA 6th B, CMSID 12285 December 15, 2014

ACKNOWLEDGEMENTS:

Praise and thanks to “ALLAH” Almighty, the one testing us all at all times and making decisions

about what we don’t know and can’t know. The business plan being submitted today is a result of my

great effort. There are innumerous helping hands behind who have guided me on my way. Writing this

plan appeared to be a great experience to me. It added a lot to my knowledge. This project is one of my

memorable experiences in student life. Though words are inadequate in offering thanks to my teacher

but I owe my profound gratitude to Sir Arbab Naseebullah Kasi for stimulating my creative abilities by

assigning this business plan to our class and for his able guidance and useful suggestions, which helped

me in completing the project in time. Whatever I have learnt from him and this project report has put

indelible impression on my mind and it is my conviction that this learning experience will always be a

source of help in my practical life and professional career. Finally, yet importantly, I would like to

express our heartfelt thanks to my beloved parents, for cooperation, help, kindness and blessings, my

family and friends for their help and wishes for the successful completion of the work.

Legal Page

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by Rabia Iftikhar in this business

plan is confidential; therefore, reader agrees not to disclose it without the express written permission of

Rabia Iftikhar.

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 the business owner.

Upon request, this document is to be immediately returned to the respective person.

___________________

Signature

Rabia Iftikhar

January 1st

2014

Table of Contents 1. Executive Summary ............................................................................................................................ 1

Chart: Highlights ................................................................................................................................. 1

1.1. Objectives ..................................................................................................................................... 1 1.2. Mission ......................................................................................................................................... 1

2. Company Summary ............................................................................................................................ 2 2.1. Company Ownership .................................................................................................................... 2 2.2. Start-up Summary ........................................................................................................................ 2

Table: Start-up Funding ...................................................................................................................... 2 Table: Start-up .................................................................................................................................... 3

3. Services ............................................................................................................................................... 3

4. Market Analysis Summary ................................................................................................................. 4 Table: Market Analysis ....................................................................................................................... 5 4.2.1. Competition and Buying Patterns ......................................................................................... 5

5. Strategy and Implementation Summary .............................................................................................. 6

Table: Milestones ................................................................................................................................ 6 5.3. Marketing Strategy ....................................................................................................................... 7

5.4.1. Sales Forecast........................................................................................................................ 7 6. Management Summary ....................................................................................................................... 8

6.1. Personnel Plan .............................................................................................................................. 9

7. Financial Plan...................................................................................................................................... 9

The following sections will outline important financial information. ........................................................ 9 7.1. Important Assumptions ................................................................................................................... 9

Table: General Assumptions ............................................................................................................. 10

7.2. Break-even Analysis .................................................................................................................. 10 Table: Break-even Analysis .............................................................................................................. 10

7.3. Projected Profit and Loss ........................................................................................................... 11 Chart: Profit Monthly ........................................................................................................................ 11 Chart: Profit Yearly........................................................................................................................... 11

Chart: Gross Margin Yearly.............................................................................................................. 12 Table: Profit and Loss ....................................................................................................................... 12 7.4. Projected Cash Flow ............................................................................................................... 12

Table: Cash Flow .............................................................................................................................. 13 Chart: Cash........................................................................................................................................ 13

7.5. Projected Balance Sheet ............................................................................................................. 14 Table: Balance Sheet......................................................................................................................... 14

7.6. Business Ratios .......................................................................................................................... 14 Table: Ratios ..................................................................................................................................... 15

Table: Sales Forecast .................................................................................................................................. 1

Table: Personnel.......................................................................................................................................... 2 Table: General Assumptions ....................................................................................................................... 3 Table: Profit and Loss ................................................................................................................................. 4

Table: Cash Flow ........................................................................................................................................ 6 Table: Balance Sheet................................................................................................................................... 9

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1. Executive Summary

Taste De' Italiano will be the leading pasta restaurant in Quetta with a rapidly developing consumer

brand and growing customer base. The signature line of innovative, premium, pasta dishes include pesto

with smoked salmon, pancetta in an Alfredo sauce, and fresh mussels and clams in a marinara sauce.

Taste De' Italiano also serves distinctive salads, desserts, and beverages.

Taste De' Italiano will reinvent the pasta experience for individuals, families, and take-away

customers with discretionary income by selling high quality, innovative products at a reasonable price,

designing tasteful, convenient locations, and providing industry benchmark customer service.

Taste De' Italiano'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

1.1. Objectives

Taste De' Italiano's objectives are to build brand awareness and customer service, while growing

sales by opening new stores. It 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.

Build brand awareness through inexpensive, guerrilla marketing tactics.

Pursue disciplined restaurant growth.

Provide superior customer service.

Leverage the experience, intelligence, and skills of our sophisticated advisory board.

1.2. Mission

Taste De' Italiano 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.

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2. Company Summary

Taste De' Italiano is a restaurant started in Quetta. Taste De' Italiano serves individuals, families, and

take-away customers with fresh, creative, attractive pasta dishes, salads and desserts. It uses homemade

pasta, fresh vegetables, and premium meats and cheese.

2.1. Company Ownership

Taste De' Italiano is a privately held restaurant. The majority stock holder is Rabia Iftikhar.

2.2. Start-up Summary

Taste De' Italiano 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.

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $2,100

Start-up Assets to Fund $162,900

Total Funding Required $165,000

Assets

Non-cash Assets from Start-up $75,000

Cash Requirements from Start-up $87,900

Cash Balance on Starting Date $87,900

Total Assets $162,900

Liabilities and Capital

Liabilities

Long-term Liabilities $80,000

Total Liabilities $80,000

Capital

Planned Investment

Rabia Iftikhar $85,000

Total Planned Investment $85,000

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Loss at Start-up (Start-up Expenses) -$2,100

Total Capital $82,900

Total Capital and Liabilities $162,900

Total Funding $165,000

Chart: Start-up

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $1,000

Stationery etc. $100

Menus $1,000

Total Start-up Expenses $2,100

Start-up Assets

Cash Required $87,900

Long-term Assets $75,000

Total Assets $162,900

Total Requirements $165,000

3. Services

Taste De' Italiano has created 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:

i. Taste De' Italiano dough is made with Italian semolina flour.

ii. Cheeses are all imported.

iii. Vegetables are organic and fresh with three shipments a week.

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iv. Meats are all top-shelf varieties, organic when possible.

At Taste De' Italiano, food is not the only product. Taste De' Italiano 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 Taste De' Italiano Store:

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

Design: Bright and clean.

Size: 1,200-1,700 square feet.

Employees: Eight to ten full time.

Seating: 45-50.

Types of transactions: 80% dine in, 20% take away.

4. Market Analysis Summary

The market can be divided into three target markets, individuals, families and take-away business.

Taste De' Italiano expansion strategy is to further penetrate the existing markets by opening an

additional store (or stores) in Quetta in 2015. This clustering approach enables Taste De' Italiano to

increase brand awareness and improve operating and marketing efficiencies. For example:

Clustering allows Taste De' Italiano 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 Taste De' Italiano better understands the

competitive conditions, consumer tastes, and spending patterns in the market. When the Quetta

market is saturated with one or two additional stores, then Taste De' Italiano 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 relatives dining together.

Take away: People that prefer to eat Taste De' Italiano food at another location.

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. Taste De' Italiano pasta has been very successful in

Cantt and Jinnah road. 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, Taste De' Italiano 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.

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Table: Market Analysis

Market Analysis

2014 2015 2016 Year 4 Year 5

Potential

Customers

Growth CAGR

Individuals 8% 12,457 13,454 14,530 15,692 16,947 8.00%

Families 9% 8,974 9,782 10,662 11,622 12,668 9.00%

Take away 10% 24,574 27,031 29,734 32,707 35,978 10.00%

Total 9.27% 46,005 50,267 54,926 60,021 65,593 9.27%

Chart: Market Analysis (Pie)

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, Pizza & Pasta Co., Yum Pasta, Hot Spot, and Café 76contribute $2

billion in combined 2000 revenues. The rest of the market is primarily made up of independent

restaurants. The barriers to entry into the pasta market are low, due to insufficient capitalization, most

entrants fail within their first six months.

4.2.1. Competition and Buying Patterns

National Competition

a) Pizza & Pasta Co.: 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.

b) Yum Pasta: This Company has a limited selection but the dishes are assembled with high-

quality ingredients. The price point is high, but the food is quite good.

c) Hot Spot: 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.

d) Café 76: This Company had medium-priced pasta dishes that use average ingredients, no

creativity, and less than average store atmosphere. Taste De' Italiano is not sure how this

company has been able to grow in size as their whole product is mediocre at best.

Local Competition

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a) Musketeers: 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.

b) RV Pizza: An Italian restaurant with a decent pasta selection, however quality is inconsistent.

c) Serena: 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. Strategy and Implementation Summary

Taste De' Italiano will leverage their two competitive advantages, superior product and industry

benchmarked customer service to build a loyal customer base.

5.1. Competitive Edge

Taste De' Italiano 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

Taste De' Italiano 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 Start Date End Date Budget Manager Department

Business plan

completion

6/12/2013 8/12/2013 - Ramshah Marketing

Set up of the

restaurant

6/12/2013 4/5/2014 $162,900 All Department

Profitability 16/12/2013 31/11/2014 - Ramshah Department

Opening of the

second store

6/1/2015 6/30/2015 $100,000 Ramshah,

Sidra and

Zarqa

Department

Totals $262,900

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5.3. Marketing Strategy

Taste De' Italiano Gourmet Pasta's advertising budget is very limited, so the advertising program is

simple. Taste De' Italiano will do direct mail, banner ads, and inserts, with inserts in the Register-Guard

likely to be the most successful of the campaigns.

Lastly, Taste De' Italiano will leverage personal relationships to get an article about the opening of

Taste De' Italiano 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 Taste De'

Italiano and the sales strategy will be to let people experience Taste De' Italiano, this will be sufficient to

turn the person into a long-term customer.

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

2014 2015 2016

Sales

Individuals $103,710 $262,527 $286,024

Families $150,304 $380,474 $414,528

Take away $25,401 $64,300 $70,055

Total Sales $279,415 $707,301 $770,608

Direct Cost of Sales 2014 2015 2016

Individuals $46,669 $118,137 $128,711

Families $67,637 $171,213 $186,538

Take away $11,431 $28,935 $31,525

Subtotal Direct Cost of Sales $125,737 $318,286 $346,773

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Chart: Sales Monthly

Chart: Sales by Year

6. Management Summary

Rabia Iftikhar, President

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

server, and line cook.

Education: B.Com and MBA, BUITEMS.

Restaurant experience: two years as a server and busser.

Chef Ramshah Hassan, 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.

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Zarqa Qamar, 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, Cube Inc., managed a staff of five, managed

system implementation and construction projects and negotiated satellite office lease.

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

Ramshah, Zarqa, and Sidra 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

2014 2015 2016

Ramshah $30,000 $37,800 $39,690

Sidra $30,000 $37,800 $39,690

Zarqa $62,000 $75,600 $79,380

Full time employee $11,480 $13,440 $13,440




Full time employee - $13,440 $13,440





Total People 7 12 12

Total Payroll $166,912 $272,160 $279,720

7. Financial Plan

The following sections will outline important financial information.

7.1. Important Assumptions

The following table details important financial assumptions.

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Table: General Assumptions

General Assumptions

2014 2015 2016

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 30.00% 30.00% 30.00%

Other 0 0 0

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 45%

Estimated Monthly Fixed Cost $17,059

Chart: Break-even Analysis

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7.3. Projected Profit and Loss

The following table will indicate projected profit and loss.

Chart: Profit Monthly

Chart: Profit Yearly

Chart: Gross Margin Monthly

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Chart: Gross Margin Yearly

Table: Profit and Loss

Pro Forma Profit and Loss

2014 2015 2016

Sales $279,415 $707,301 $770,608

Direct Cost of Sales $125,737 $318,286 $346,773

Other Production Expenses - - -

Total Cost of Sales $125,737 $318,286 $346,773

Gross Margin $153,678 $389,016 $423,834

Gross Margin % 55.00% 55.00% 55.00%

Expenses

Payroll $166,912 $272,160 $279,720

Sales and Marketing and Other Expenses $2,400 $2,400 $2,400

Depreciation $15,000 $15,000 $15,000

Insurance $2,400 $3,600 $3,600

Rent $18,000 $36,000 $36,000

Total Operating Expenses $204,712 $329,160 $336,720

Profit Before Interest and Taxes -$51,034 $59,856 $87,114

EBITDA -$36,034 $74,856 $102,114

Interest Expense $8,000 $8,000 $8,000

Taxes Incurred - $15,557 $23,734

Net Profit -$59,034 $36,299 $55,380

Net Profit/Sales -21.13% 5.13% 7.19%

7.4. Projected Cash Flow

The following chart and table will indicate projected cash flow.

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Table: Cash Flow

Pro Forma Cash Flow

2014 2015 2016

Cash Received

Cash from Operations

Cash Sales $279,415 $707,301 $770,608

Subtotal Cash from Operations $279,415 $707,301 $770,608

Expenditures 2014 2015 2016

Expenditures from Operations

Cash Spending $166,912 $272,160 $279,720

Bill Payments $136,690 $372,140 $417,494

Subtotal Spent on Operations $303,602 $644,300 $697,214

Net Cash Flow -$24,187 $63,001 $73,394

Cash Balance $63,713 $126,714 $200,107

Chart: Cash

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7.5. Projected Balance Sheet

The following table will indicate the projected balance sheet.

Table: Balance Sheet

Pro Forma Balance Sheet

2014 2015 2016

Assets

Current Assets

Cash $63,713 $126,714 $200,107

Other Current Assets $0 $0 $0

Total Current Assets $63,713 $126,714 $200,107

Long-term Assets

Long-term Assets $75,000 $75,000 $75,000

Accumulated Depreciation $15,000 $30,000 $45,000

Total Long-term Assets $60,000 $45,000 $30,000

Total Assets $123,713 $171,714 $230,107

Liabilities and Capital 2014 2015 2016

Current Liabilities

Accounts Payable $19,846 $31,549 $34,562

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $19,846 $31,549 $34,562

Long-term Liabilities $80,000 $80,000 $80,000

Total Liabilities $99,846 $111,549 $114,562

Paid-in Capital $85,000 $85,000 $85,000

Retained Earnings ($2,100) ($61,134) ($24,835)

Earnings ($59,034) $36,299 $55,380

Total Capital $23,866 $60,165 $115,545

Total Liabilities and Capital $123,713 $171,714 $230,107

Net Worth $23,866 $60,165 $115,545

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.

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Table: Ratios

Ratio Analysis

2014 2015 2016 Industry

Profile

Sales Growth N/A 153.14% 8.95% 7.60%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 35.60%

Total Current Assets 51.50% 73.79% 86.96% 43.70%

Long-term Assets 48.50% 26.21% 13.04% 56.30%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 16.04% 18.37% 15.02% 32.70%

Long-term Liabilities 64.67% 46.59% 34.77% 28.50%

Total Liabilities 80.71% 64.96% 49.79% 61.20%

Net Worth 19.29% 35.04% 50.21% 38.80%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 55.00% 55.00% 55.00% 60.50%

Selling, General & Administrative

Expenses

91.28% 55.14% 51.74% 39.80%

Advertising Expenses 0.43% 0.17% 0.16% 3.20%

Profit Before Interest and Taxes -18.26% 8.46% 11.30% 0.70%

Main Ratios

Current 3.21 4.02 5.79 0.98

Quick 3.21 4.02 5.79 0.65

Total Debt to Total Assets 80.71% 64.96% 49.79% 61.20%

Pre-tax Return on Net Worth -247.35% 86.19% 68.47% 1.70%

Pre-tax Return on Assets -47.72% 30.20% 34.38% 4.30%

Additional Ratios 2014 2015 2016

Net Profit Margin -21.13% 5.13% 7.19% N/A

Return on Equity -247.35% 60.33% 47.93% N/A

Activity Ratios

Accounts Payable Turnover 7.89 12.17 12.17 N/A

Payment Days 27 24 29 N/A

Total Asset Turnover 2.26 4.12 3.35 N/A

Debt Ratios

Debt to Net Worth 4.18 1.85 0.99 N/A

Current Liab. to Liab. 0.20 0.28 0.30 N/A

Liquidity Ratios

Net Working Capital $43,866 $95,165 $165,545 N/A

16

Interest Coverage -6.38 7.48 10.89 N/A

Additional Ratios

Assets to Sales 0.44 0.24 0.30 N/A

Current Debt/Total Assets 16% 18% 15% N/A

Acid Test 3.21 4.02 5.79 N/A

Sales/Net Worth 11.71 11.76 6.67 N/A

Dividend Payout 0.00 0.00 0.00 N/A

Appendix

Page 1

Table: Sales Forecast

Sales Forecast

Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Sales

Individuals - - $3,895 $6,813 $7,906 $9,286 $10,057 $10,664 $12,044 $13,424 $14,804 $14,817

Families - - $5,645 $9,874 $11,458 $13,458 $14,575 $15,455 $17,455 $19,455 $21,455 $21,474

Take away - - $954 $1,669 $1,936 $2,274 $2,463 $2,612 $2,950 $3,288 $3,626 $3,629

Total Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920

Direct Cost of

Sales


Individuals - - $1,753 $3,066 $3,558 $4,179 $4,526 $4,799 $5,420 $6,041 $6,662 $6,668

Families - - $2,540 $4,443 $5,156 $6,056 $6,559 $6,955 $7,855 $8,755 $9,655 $9,663

Take away - - $429 $751 $871 $1,023 $1,108 $1,175 $1,327 $1,480 $1,632 $1,633

Subtotal Direct

Cost of Sales

- - $4,722 $8,260 $9,585 $11,258 $12,193 $12,929 $14,602 $16,275 $17,948 $17,964

Appendix

Page 2

Table: Personnel

Personnel Plan


Ramshah $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

Sidra $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

Zarqa $3,500 $3,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500

Full time employee - $280 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120



Full time employee - $280 $112 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120

Full time employee - - - - - - - - - - - -





Total People 3 7 7 7 7 7 7 7 7 7 7 7

Total Payroll $8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980

Appendix

Page 3

Table: General Assumptions

General

Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 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

10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Tax Rate 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 0 0 0 0 0 0 0 0 0 0 0 0

Appendix

Page 4

Table: Profit and Loss

Pro Forma

Profit and

Loss


Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920

Direct Cost

of Sales

- - $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

- - $4,722 $8,260 $9,585 $11,258 $12,193 $12,929 $14,602 $16,275 $17,948 $17,964

Gross

Margin

- - $5,772 $10,096 $11,715 $13,760 $14,902 $15,802 $17,847 $19,892 $21,937 $21,956

Gross

Margin %

00% 00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00%

Expenses

Payroll $8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980

Sales and

Marketing

and Other

Expenses

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

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

- - - - - - - - - - - -

Utilities - - - - - - - - - - - -

Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Payroll

Taxes

15% - - - - - - - - - - - -

Other - - - - - - - - - - - -

Appendix

Page 5

Total

Operating

Expenses

$11,650 $12,770 $17,122 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130

Profit

Before

Interest and

Taxes

($11,650) ($12,770) ($11,350) ($8,034) ($6,415) ($4,370) ($3,228) ($2,328) ($283) $1,762 $3,807 $3,826

EBITDA ($10,400) ($11,520) ($10,100) ($6,784) ($5,165) ($3,120) ($1,978) ($1,078) $967 $3,012 $5,057 $5,076

Interest

Expense

$667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667

Taxes

Incurred

- - - - - - - - - - - -

Net Profit ($12,317) ($13,437) ($12,017) ($8,701) ($7,081) ($5,037) ($3,894) ($2,995) ($950) $1,095 $3,140 $3,159

Net

Profit/Sales

00% 00% -114.51% -47.40% -33.25% -20.13% -14.37% -10.42% -2.93% 3.03% 7.87% 7.91%

Appendix

Page 6

Table: Cash Flow

Pro Forma

Cash Flow


Cash

Received

Cash from

Operations

Cash Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920

Subtotal Cash

from

Operations

- - $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

- - - - - - - - - - - -

New Other

Liabilities

(interest-free)

- - - - - - - - - - - -

New Long-

term

Liabilities

- - - - - - - - - - - -

Sales of Other

Current

Assets

- - - - - - - - - - - -

Sales of

Long-term

Assets

- - - - - - - - - - - -

Appendix

Page 7

New

Investment

Received

- - - - - - - - - - - -

Subtotal Cash

Received

- - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec

Expenditures

from

Operations

Cash

Spending

$8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980

Bill Payments $86 $2,567 $2,724 $7,407 $10,871 $12,208 $13,856 $14,784 $15,551 $17,224 $18,898 $20,515

Subtotal

Spent on

Operations

$8,586 $12,187 $16,696 $22,387 $25,851 $27,188 $28,836 $29,764 $30,531 $32,204 $33,878 $35,495

Additional

Cash Spent

Sales Tax,

VAT,

HST/GST

Paid Out

- - - - - - - - - - - -

Principal

Repayment of

Current

Borrowing

- - - - - - - - - - - -

Other

Liabilities

Principal

Repayment

- - - - - - - - - - - -

Long-term

Liabilities

Principal

Repayment

- - - - - - - - - - - -

Appendix

Page 8

Purchase

Other Current

Assets

- - - - - - - - - - - -

Purchase

Long-term

Assets

- - - - - - - - - - - -

Dividends - - - - - - - - - - - -

Subtotal Cash

Spent

$8,586 $12,187 $16,696 $22,387 $25,851 $27,188 $28,836 $29,764 $30,531 $32,204 $33,878 $35,495

Net Cash

Flow

($8,586) ($12,187) ($6,202) ($4,031) ($4,551) ($2,169) ($1,741) ($1,033) $1,918 $3,962 $6,007 $4,425

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

Appendix

Page 9

Table: Balance Sheet

Pro

Forma

Balance

Sheet


Assets Starting

Balances

Current

Assets

Cash $87,900 $79,314 $67,128 $60,926 $56,895 $52,344 $50,175 $48,434 $47,401 $49,318 $53,281 $59,288 $63,713

Other

Current

Assets

- - - - - - - - - - - - -

Total

Current

Assets

$87,900 $79,314 $67,128 $60,926 $56,895 $52,344 $50,175 $48,434 $47,401 $49,318 $53,281 $59,288 $63,713

Long-

term

Assets

Long-

term

Assets

$75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000

Accumul

ated

Depreciat

ion

- $1,250 $2,500 $3,750 $5,000 $6,250 $7,500 $8,750 $10,000 $11,250 $12,500 $13,750 $15,000

Total

Long-

term

Assets

$75,000 $73,750 $72,500 $71,250 $70,000 $68,750 $67,500 $66,250 $65,000 $63,750 $62,500 $61,250 $60,000

Total

Assets

$162,900 $153,064 $139,628 $132,176 $126,895 $121,094 $117,675 $114,684 $112,401 $113,068 $115,781 $120,538 $123,713

Appendix

Page 10

Liabilitie

s and

Capital


Current

Liabilitie

s

Accounts

Payable

- $2,481 $2,481 $7,046 $10,466 $11,747 $13,364 $14,267 $14,979 $16,596 $18,214 $19,831 $19,846

Current

Borrowin

g

- - - - - - - - - - - - -

Other

Current

Liabilitie

s

- - - - - - - - - - - - -

Subtotal

Current

Liabilitie

s

- $2,481 $2,481 $7,046 $10,466 $11,747 $13,364 $14,267 $14,979 $16,596 $18,214 $19,831 $19,846

Long-

term

Liabilitie

s

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

Total

Liabilitie

s

$80,000 $82,481 $82,481 $87,046 $90,466 $91,747 $93,364 $94,267 $94,979 $96,596 $98,214 $99,831 $99,846

Paid-in

Capital

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

Retained

Earnings

($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100)

Earnings - ($12,317 ($25,753 ($37,770 ($46,471 ($53,553 ($58,589 ($62,484 ($65,478 ($66,428 ($65,333 ($62,193 ($59,034)

Total

Capital

$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

Appendix

Page 11

Total

Liabilitie

s and

Capital

$162,900 $153,064 $139,628 $132,176 $126,895 $121,094 $117,675 $114,684 $112,401 $113,068 $115,781 $120,538 $123,713

Net

Worth

$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

Business plan; Pasta De Italiano

Business

Transcript of Business plan; Pasta De Italiano