Clara's Hardware Store Sample Business Plan

Clara's Hardware Store - Sample Plan

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Confidentiality Agreement

The undersigned reader acknowledges that the information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _______________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _______________.

Upon request, this document is to be immediately returned to _______________.

___________________ Signature

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___________________Date

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

Copyright © Palo Alto Software, Inc. 1995-2008 All rights reserved. Not for resale, reproduction, publication, or distribution. www.paloalto.com

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1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.2 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3.0 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65.2 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

5.2.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

6.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

7.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97.2 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107.3 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117.4 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 137.5 Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Table of Contents

Copyright © Palo Alto Software, Inc. 1995-2008 All rights reserved. Not for resale, reproduction, publication, or distribution. www.paloalto.com

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1.0 Executive Summary

The demographics of home ownership has changed radically in the South Gate section of Gilmore. Today, over 40% of the area's homes are owned by women. In addition, 60% of the area's rentals are owned by women. More often than not, it's a woman who will now head to the hardware store for repair parts and advice. Today's hardware store, which more and more are dominated by the mega-store chains, are cold, uninviting and usually involve more driving time. Clara's Hardware is uniquely positioned to take advantage of this new fact of life. Conveniently located to serve the South Gate area, Clara's Hardware offers parts, material, and advice to tackle any home repair, as well as lawn care. The focus is on helping the customer identify what they want as soon as they enter the store.

Through the use of a selection of hardware goods, superior personal customer attention, and reasonable prices, Clara's Hardware will capitalize on this incredible opportunity. A location has been secured that offers very good foot traffic and easy accessibility. The store will efficiently lay out the store to increase sales and give the customers the upmost in attention. The projected growth rate for Clara's Hardware is quite steady. The store will reach profitability by month six and will have revenue of $100,000 by year three.

1.1 Mission

The mission of Clara's Hardware is to offer quality hardware products in a customer-friendly shopping environment. Our customers will get assistance quickly and will leave the store prepared to get the job done right the first time. Clara's Hardware will also focus on anticipating the seasonal needs of its customers and providing the best products at competitive prices. Most importantly, Clara's Hardware will make the additional 15 minute drive to a mega-hardware store, too far to go and too expensive to entertain.

1.2 Keys to Success

• Location: Clara's Hardware is located in South Gate Plaza. The foot traffic in the plaza is very strong. The plaza's primary tenants are the area's successful supermarket, drug store, and appliance store. South Gate Plaza has easy access points on both of the area's major cross streets and is the biggest shopping center in South Gate's residental area. The closest hardware store to the South Gate area is a twenty minute drive.

• Seasonal Products: Each season has it own unique demand on a homeowner. Clara's Hardware will focus on this pattern and bring in local customers by marketing these items at competitive prices.

• Repair/Project Resource Area: The first section customers will find when they enter is a repair/project resource area that they can use to plan repairs or projects. There will be a repair/project resource person to answer questions and direct them to the section of store where the needed products are.

• In-Store Expertise: Store employees will be knowledgeable in home repairs/projects. In addition, the repair/project resource area will be used to conduct short trainings and demonstrations in home repair and home projects.

Clara's Hardware Store

Page 1Copyright © Palo Alto Software, Inc. 1995-2008 All rights reserved. Not for resale, reproduction, publication, or distribution. www.paloalto.com

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$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

$1,400,000

2003 2004 2005

Sales

Gross Margin

Net Profit

Highlights (Planned)

2.0 Company Summary

Clara's Hardware offers the parts, material, and advice to tackle any home repair, as well as lawn care. The store's owner, Clara Johnson, has worked in the hardware industry for over ten years. Most recently, she was the shift manager at Home Depot located in Waterfront Shopping Center. Her area of expertise was home repairs. She conducted four presentations a week on all manner of home repair.

The business will make a profit in month six, and will grow steadily each consecutive month.

2.1 Company Ownership

Clara's Hardware is owned by Clara Johnson.



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2.2 Start-up Summary

The start-up cost of Clara's Hardware will consist primarily of inventory and display equipment. Clara Johnson will invest $80,000. She will also secure a $150,000 SBA loan.

Table: Start-up

Start-up

Requirements

Start-up ExpensesLegal $1,000Stationery etc. $0Brochures $0Consultants $0Insurance $0Rent $3,000Start-Up Inventory $50,000Display Set-Up $5,000Cash Reserve for Hiring $20,000Advertising $0Other $0Total Start-up Expense $79,000

Start-up Assets NeededCash Balance on Starting Date $121,000Other Short-term Assets $0Total Short-term Assets $121,000

Long-term Assets $30,000Total Assets $151,000Total Requirements $230,000

Funding

InvestmentClara Johnson $80,000Silent PartnerOther $0Total Investment $80,000

Short-term LiabilitiesAccounts Payable $0Current Borrowing $0Other Short-term Liabilities $0Subtotal Short-term Liabilities $0

Long-term Liabilities $150,000Total Liabilities $150,000

Loss at Start-up ($79,000)Total Capital $1,000Total Capital and Liabilities $151,000



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$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

Expenses Assets Investment Loans

Start-up

3.0 Products

Clara's Hardware offers the parts, material, and advice to tackle any home repair, as well as lawn care. The primary focus will be to satisfy the seasonal needs of the area's customers.

• Fall/Winter: Weatherization projects.• Spring: Garden/lawn projects/home improvement projects.• Summer: Outdoor building projects.

4.0 Market Analysis Summary

In the past ten years, most local hardware stores have closed due to the success of large hardware mega-stores drawing away local customers. The attraction of the larger stores has always been price and and a large inventory. Customers would rather drive 20 minutes and make sure they will find what they want rather than drive five minutes and hope the local store will have it at a low price. Yet these same hardware mega-stores are sterile and not customer-friendly. Customers can wander the aisles, aimlessly lost, looking for a two dollar item. And when they do find the right section, they will most likely select the most popular brand no matter how large the selection is. What these store offer in price and selection, they lose in creating a confusing, frustrating maze for their customers.

Clara believes that a local hardware store can provide a reasonable selection in the most important product areas, be competitive in pricing, and offer the customer a shopping environment that will assure repeat business.



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4.1 Market Segmentation

Clara's Hardware will focus on three significant customer groups:

• Women home owners: Many women home owners perform their own home repairs and home improvement projects. Clara knows this first hand since she has helped many of these women in mastering the skills needed to do the work successfully. Clara's Hardware will be uniquely designed to be responsive to the shopping environment that will attract and retain this important customer group.

• Customers who need assistance in planning a project/repair: This customer group can have the most frustrating experience in the hardware mega-stores. If they can't make the scheduled demos or trainings, they are left to sort thing out with whoever they can flag down in the store help them. Clara's Hardware will be set-up to provide resources and assistance as soon as they walk into the store.

• Local repair and home improvement professionals: The South Gate area supports a good number of repair and home improvement professionals. Currently, the hardware mega-stores have their business but Clara's Hardware can win a increasing share of this customer group through aggressive marketing. Time is money and if Clara's Hardware can save them a trip outside the area, they will buy there.

Table: Market Analysis

Market AnalysisPotential Customers Growth 2002 2003 2004 2005 2006 CAGRWomen Home Owners 10% 15,000 16,500 18,150 19,965 21,962 10.00%New Repair/Project Customers 20% 40,000 48,000 57,600 69,120 82,944 20.00%Repair/Home Improvement Professionals

5% 42 44 46 48 50 4.46%

Total 17.51% 55,042 64,544 75,796 89,133 104,956 17.51%

Women Home Owners

New Repair/Project Customers

Repair/Home Improvement Professionals

Market Analysis (Pie)



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5.0 Strategy and Implementation Summary

Clara's Hardware will be heavily promoting the store. We will use the local paper, The Gilmore Sun, to advertise. In addition, we will have a drawing for five $1,000 home improvement gift certificates that can be redeemed at selected home improvement professionals. We will have new drawings each week for the first eight weeks of the store's operation. Clara's Hardware will use the drawings to make connections with the local home improvement professionals. It is our plan to recoup some of the gift certificate money in material purchases that will be made by the home improvement professionals the winners select.

5.1 Competitive Edge

Clara's Hardware's competitive edge is:

• Location: Clara's Hardware is located in South Gate Plaza. The foot traffic in the plaza is very strong. The closest hardware store to the South Gate area is a twenty minute drive.

• Seasonal Products: Each season has it own unique demand on a homeowner. Clara's Hardware will focus on this pattern and bring in local customers by marketing these items at competitive prices.

• Repair/Project Resource Area: The first section customers will find when they enter the store is a repair/project resource area that they can use to plan repairs or projects. There will be a repair/project resource person there to answer their questions and direct them to the section of store where the needed products are.

• In-Store Expertise: Store employees will be knowledgeable in home repairs/projects. In addition, the repair/project resource area will be used to conduct short trainings and demonstrations in home repair and home projects.

5.2 Sales Strategy

The sales strategy of Clara's Hardware is simple. First, create a shopping environment that will create confidence in the customer that he or she will get the needed material, part, or instructions to get the job done right the first time. Second, make the store easy to navigate, so customer can get in and out as quickly as possible. Third, know your customer's seasonal hardware needs and offer it at competitive prices.



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5.2.1 Sales Forecast

Clara's Hardware will hit the ground running in April. Table: Sales Forecast (Planned)

Sales ForecastSales 2003 2004 2005Hardware $964,000 $1,090,000 $1,240,000Other $0 $0 $0Total Sales $964,000 $1,090,000 $1,240,000

Direct Cost of Sales 2003 2004 2005Hardware $474,000 $500,000 $612,000Other $0 $0 $0Subtotal Direct Cost of Sales $474,000 $500,000 $612,000

$0

$10,000

$20,000

$30,000

$40,000

$50,000

$60,000

$70,000

$80,000

$90,000

$100,000

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

Hardware

Other

Sales Monthly (Planned)



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6.0 Management Summary

Clara Johnson is a excellent staff supervisor and will do very well in managing the staff of Clara's Hardware.

6.1 Personnel Plan

Clara's Hardware will have the following staff members:

• Manager.• Assistant Manager.• Office Manager/Accountant.• Checkers (full time and part time).• Two Customer Assistants.• Stockers (full time and part time).

Table: Personnel (Planned)

Personnel Plan2003 2004 2005

Manager $36,000 $40,000 $45,000Assistant Manager $36,000 $39,000 $43,000Office Manager/Bookkeeper $36,000 $39,000 $42,000Checkers $32,400 $35,500 $40,000Customer Assistants $60,000 $68,000 $74,000Stockers $39,600 $44,000 $48,000Other $0 $0 $0Total Payroll $240,000 $265,500 $292,000

Total People 9 9 9Payroll Burden $36,000 $39,825 $43,800Total Payroll Expenditures $276,000 $305,325 $335,800



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7.0 Financial Plan

The following is the financial plan for Clara's Hardware.

7.1 Break-even Analysis

The monthly sales break-even point is $50,526.

Table: Break-even Analysis

Break-even Analysis:Monthly Units Break-even 842Monthly Sales Break-even $50,526

Assumptions:Average Per-Unit Revenue $60.00Average Per-Unit Variable Cost $3.00Estimated Monthly Fixed Cost $48,000

($50,000)

($40,000)

($30,000)

($20,000)

($10,000)

$0

$10,000

$20,000

$0 $12,000 $24,000 $36,000 $48,000 $60,000

Monthly break-even point

Break-even point = where line intersects with 0

Break-even Analysis



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7.2 Projected Profit and Loss

The following table and chart highlight the projected profit and loss for three years.

Table: Profit and Loss (Planned)

Pro Forma Profit and Loss2003 2004 2005

Sales $964,000 $1,090,000 $1,240,000Direct Cost of Sales $474,000 $500,000 $612,000Other Production Expenses $0 $0 $0

------------ ------------ ------------Total Cost of Sales $474,000 $500,000 $612,000Gross Margin $490,000 $590,000 $628,000Gross Margin % 50.83% 54.13% 50.65%Operating Expenses: Advertising/Promotion $75,000 $100,000 $100,000Travel $0 $0 $0Miscellaneous $0 $0 $0Payroll Expense $240,000 $265,500 $292,000Payroll Burden $36,000 $39,825 $43,800Depreciation $4,284 $4,285 $4,285Leased Equipment $0 $0 $0Utilities $6,000 $6,000 $6,000Insurance $0 $0 $0Rent $36,000 $36,000 $36,000Inventory $0 $0 $0Contract/Consultants $0 $0 $0

------------ ------------ ------------Total Operating Expenses $397,284 $451,610 $482,085Profit Before Interest and Taxes $92,716 $138,390 $145,915Interest Expense Short-term $0 $0 $0Interest Expense Long-term $13,375 $10,500 $7,500Taxes Incurred $23,802 $38,367 $41,525Extraordinary Items $0 $0 $0Net Profit $55,539 $89,523 $96,891Net Profit/Sales 5.76% 8.21% 7.81%

($20,000)

($15,000)

($10,000)

($5,000)

$0

$5,000

$10,000

$15,000

$20,000


Profit Monthly (Planned)



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7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Table: Cash Flow (Planned)

Pro Forma Cash Flow 2003 2004 2005

Cash ReceivedCash from Operations: Cash Sales $964,000 $1,090,000 $1,240,000From Receivables $0 $0 $0 Subtotal Cash from Operations $964,000 $1,090,000 $1,240,000

Additional Cash ReceivedExtraordinary Items $0 $0 $0Sales Tax, VAT, HST/GST Received $0 $0 $0New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of other Short-term Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0 Subtotal Cash Received $964,000 $1,090,000 $1,240,000

Expenditures 2003 2004 2005Expenditures from Operations:Cash Spent on Costs and Expenses $62,818 $69,087 $80,302Wages, Salaries, Payroll Taxes, etc. $276,000 $305,325 $335,800Payment of Accounts Payable $515,297 $616,784 $713,784 Subtotal Spent on Operations $854,115 $991,196 $1,129,886

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $30,000 $30,000 $30,000Purchase Other Short-term Assets $0 $0 $0Purchase Long-term Assets $0 $0 $0Dividends $0 $0 $0 Adjustment for Assets Purchased on Credit $0 $0 $0 Subtotal Cash Spent $884,115 $1,021,196 $1,159,886

Net Cash Flow $79,885 $68,804 $80,114Cash Balance $200,885 $269,689 $349,803



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($50,000)

$0

$50,000

$100,000

$150,000

$200,000

$250,000


Net Cash Flow

Cash Balance

Cash (Planned)



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7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

AssetsShort-term Assets 2003 2004 2005Cash $200,885 $269,689 $349,803Other Short-term Assets $0 $0 $0Total Short-term Assets $200,885 $269,689 $349,803Long-term AssetsLong-term Assets $30,000 $30,000 $30,000Accumulated Depreciation $4,284 $8,569 $12,854Total Long-term Assets $25,716 $21,431 $17,146Total Assets $226,601 $291,120 $366,949

Liabilities and Capital2003 2004 2005

Accounts Payable $50,062 $55,058 $63,997Current Borrowing $0 $0 $0Other Short-term Liabilities $0 $0 $0Subtotal Short-term Liabilities $50,062 $55,058 $63,997

Long-term Liabilities $120,000 $90,000 $60,000Total Liabilities $170,062 $145,058 $123,997

Paid-in Capital $80,000 $80,000 $80,000Retained Earnings ($79,000) ($23,461) $66,062Earnings $55,539 $89,523 $96,891Total Capital $56,539 $146,062 $242,952Total Liabilities and Capital $226,601 $291,120 $366,949Net Worth $56,539 $146,062 $242,952

7.5 Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 5251, Hardware Stores, are shown for comparison.



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Table: Ratios (Planned)

Ratio Analysis2002 2003 2004 Industry Profile

Sales Growth 0.00% 13.07% 13.76% 6.00%

Percent of Total AssetsAccounts Receivable 0.00% 0.00% 0.00% 11.00%Inventory 0.00% 0.00% 0.00% 48.50%Other Short-term Assets 0.00% 0.00% 0.00% 20.20%Total Short-term Assets 88.65% 92.64% 95.33% 79.70%Long-term Assets 11.35% 7.36% 4.67% 20.30%Total Assets 100.00% 100.00% 100.00% 100.00%

Other Short-term Liabilities 0.00% 0.00% 0.00% 37.60%Subtotal Short-term Liabilities 22.09% 18.91% 17.44% 30.00%Long-term Liabilities 52.96% 30.92% 16.35% 19.70%Total Liabilities 75.05% 49.83% 33.79% 49.70%Net Worth 24.95% 50.17% 66.21% 50.30%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00%Gross Margin 50.83% 54.13% 50.65% 33.80%Selling, General & Administrative Expenses 45.07% 45.92% 42.83% 21.10%Advertising Expenses 7.78% 9.17% 8.06% 1.90%Profit Before Interest and Taxes 9.62% 12.70% 11.77% 1.10%

Main RatiosCurrent 4.01 4.90 5.47 2.24Quick 4.01 4.90 5.47 0.58Total Debt to Total Assets 75.05% 49.83% 33.79% 57.30%Pre-tax Return on Net Worth 187.64% 101.94% 63.15% 2.20%Pre-tax Return on Assets 46.82% 51.14% 41.81% 5.30%

Business Vitality Profile 2002 2003 2004 IndustrySales per Employee $107,111 $121,111 $137,778 $0Survival Rate 0.00%

Additional Ratios 2002 2003 2004Net Profit Margin 5.76% 8.21% 7.81% n.aReturn on Equity 98.23% 61.29% 39.88% n.a

Activity RatiosAccounts Receivable Turnover 0.00 0.00 0.00 n.aCollection Days 0 0 0 n.aInventory Turnover 0.00 0.00 0.00 n.aAccounts Payable Turnover 11.29 11.29 11.29 n.aTotal Asset Turnover 4.25 3.74 3.38 n.a

Debt RatiosDebt to Net Worth 3.01 0.99 0.51 n.aShort-term Liab. to Liab. 0.29 0.38 0.52 n.a

Liquidity RatiosNet Working Capital $150,823 $214,631 $285,806 n.aInterest Coverage 6.93 13.18 19.46 n.a

Additional RatiosAssets to Sales 0.24 0.27 0.30 n.aCurrent Debt/Total Assets 22% 19% 17% n.aAcid Test 4.01 4.90 5.47 n.aSales/Net Worth 17.05 7.46 5.10 n.aDividend Payout $0 0.00 0.00 n.a



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Appendix Table: Sales Forecast (Planned)

Sales ForecastSales Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005Hardware $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000

Direct Cost of Sales Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005Hardware $25,000 $30,000 $35,000 $37,000 $42,000 $45,000 $50,000 $42,000 $45,000 $42,000 $39,000 $42,000 $474,000 $500,000 $612,000Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Direct Cost of Sales $25,000 $30,000 $35,000 $37,000 $42,000 $45,000 $50,000 $42,000 $45,000 $42,000 $39,000 $42,000 $474,000 $500,000 $612,000

Appendix


Business

Plan Pro Sample

Appendix Table: Personnel (Planned)

Personnel PlanApr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005

Manager $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $40,000 $45,000Assistant Manager $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $39,000 $43,000Office Manager/Bookkeeper $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $39,000 $42,000Checkers $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $32,400 $35,500 $40,000Customer Assistants $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $60,000 $68,000 $74,000Stockers $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $39,600 $44,000 $48,000Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Payroll $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $240,000 $265,500 $292,000

Total People 9 9 9 9 9 9 9 9 9 9 9 9 9 9 9Payroll Burden $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $39,825 $43,800Total Payroll Expenditures $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $276,000 $305,325 $335,800

Appendix


Business

Plan Pro Sample

Appendix Table: Profit and Loss (Planned)

Pro Forma Profit and LossApr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005

Sales $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000Direct Cost of Sales $25,000 $30,000 $35,000 $37,000 $42,000 $45,000 $50,000 $42,000 $45,000 $42,000 $39,000 $42,000 $474,000 $500,000 $612,000Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------Total Cost of Sales $25,000 $30,000 $35,000 $37,000 $42,000 $45,000 $50,000 $42,000 $45,000 $42,000 $39,000 $42,000 $474,000 $500,000 $612,000Gross Margin $25,000 $30,000 $35,000 $38,000 $43,000 $45,000 $50,000 $43,000 $45,000 $43,000 $40,000 $53,000 $490,000 $590,000 $628,000Gross Margin % 50.00% 50.00% 50.00% 50.67% 50.59% 50.00% 50.00% 50.59% 50.00% 50.59% 50.63% 55.79% 50.83% 54.13% 50.65%Operating Expenses: Advertising/Promotion $20,000 $25,000 $5,000 $0 $5,000 $5,000 $0 $5,000 $0 $0 $5,000 $5,000 $75,000 $100,000 $100,000Travel $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Miscellaneous $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Payroll Expense $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $240,000 $265,500 $292,000Payroll Burden $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $39,825 $43,800Depreciation $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $4,284 $4,285 $4,285Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $6,000 $6,000 $6,000Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Rent $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $36,000 $36,000 $36,000Inventory $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Contract/Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------Total Operating Expenses $46,857 $51,857 $31,857 $26,857 $31,857 $31,857 $26,857 $31,857 $26,857 $26,857 $31,857 $31,857 $397,284 $451,610 $482,085Profit Before Interest and Taxes ($21,857) ($21,857) $3,143 $11,143 $11,143 $13,143 $23,143 $11,143 $18,143 $16,143 $8,143 $21,143 $92,716 $138,390 $145,915Interest Expense Short-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Interest Expense Long-term $1,229 $1,208 $1,188 $1,167 $1,146 $1,125 $1,104 $1,083 $1,063 $1,042 $1,021 $1,000 $13,375 $10,500 $7,500Taxes Incurred ($6,926) ($6,920) $587 $2,993 $2,999 $3,605 $6,612 $3,018 $5,124 $4,530 $2,137 $6,043 $23,802 $38,367 $41,525Extraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Net Profit ($16,160) ($16,146) $1,369 $6,983 $6,998 $8,413 $15,427 $7,042 $11,956 $10,571 $4,986 $14,100 $55,539 $89,523 $96,891Net Profit/Sales -32.32% -26.91% 1.96% 9.31% 8.23% 9.35% 15.43% 8.28% 13.28% 12.44% 6.31% 14.84% 5.76% 8.21% 7.81%

Appendix


Business

Plan Pro Sample

Appendix Table: Cash Flow (Planned)

Pro Forma Cash Flow Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005

Cash ReceivedCash from Operations: Cash Sales $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000From Receivables $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash from Operations $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000

Additional Cash ReceivedExtraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Received $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000 $964,000 $1,090,000 $1,240,000

Expenditures Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005Expenditures from Operations:Cash Spent on Costs and Expenses $4,280 $5,279 $4,527 $4,466 $5,464 $5,823 $6,122 $5,460 $5,469 $5,107 $5,066 $5,754 $62,818 $69,087 $80,302Wages, Salaries, Payroll Taxes, etc. $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $23,000 $276,000 $305,325 $335,800Payment of Accounts Payable $1,284 $38,823 $47,284 $40,728 $40,493 $49,288 $52,497 $54,896 $49,144 $49,110 $45,952 $45,798 $515,297 $616,784 $713,784 Subtotal Spent on Operations $28,564 $67,101 $74,812 $68,194 $68,958 $78,111 $81,619 $83,356 $77,612 $77,217 $74,018 $74,553 $854,115 $991,196 $1,129,886

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $30,000 $30,000 $30,000Purchase Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Adjustment for Assets Purchased on Credit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Cash Spent $31,064 $69,601 $77,312 $70,694 $71,458 $80,611 $84,119 $85,856 $80,112 $79,717 $76,518 $77,053 $884,115 $1,021,196 $1,159,886

Net Cash Flow $18,936 ($9,601) ($7,312) $4,306 $13,542 $9,389 $15,881 ($856) $9,888 $5,283 $2,482 $17,947 $79,885 $68,804 $80,114Cash Balance $139,936 $130,334 $123,022 $127,328 $140,870 $150,259 $166,141 $165,285 $175,173 $180,456 $182,938 $200,885 $200,885 $269,689 $349,803

Appendix


Business

Plan Pro Sample

Appendix Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

AssetsShort-term Assets Starting Balances Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005Cash $121,000 $139,936 $130,334 $123,022 $127,328 $140,870 $150,259 $166,141 $165,285 $175,173 $180,456 $182,938 $200,885 $200,885 $269,689 $349,803Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Short-term Assets $121,000 $139,936 $130,334 $123,022 $127,328 $140,870 $150,259 $166,141 $165,285 $175,173 $180,456 $182,938 $200,885 $200,885 $269,689 $349,803Long-term AssetsLong-term Assets $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000Accumulated Depreciation $0 $357 $714 $1,071 $1,428 $1,785 $2,142 $2,499 $2,856 $3,213 $3,570 $3,927 $4,284 $4,284 $8,569 $12,854Total Long-term Assets $30,000 $29,643 $29,286 $28,929 $28,572 $28,215 $27,858 $27,501 $27,144 $26,787 $26,430 $26,073 $25,716 $25,716 $21,431 $17,146Total Assets $151,000 $169,579 $159,620 $151,951 $155,900 $169,085 $178,117 $193,642 $192,429 $201,960 $206,886 $209,011 $226,601 $226,601 $291,120 $366,949

Liabilities and CapitalApr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar 2003 2004 2005

Accounts Payable $0 $37,239 $45,926 $39,389 $38,854 $47,541 $50,660 $53,258 $47,503 $47,577 $44,433 $44,072 $50,062 $50,062 $55,058 $63,997Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Short-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Short-term Liabilities $0 $37,239 $45,926 $39,389 $38,854 $47,541 $50,660 $53,258 $47,503 $47,577 $44,433 $44,072 $50,062 $50,062 $55,058 $63,997

Long-term Liabilities $150,000 $147,500 $145,000 $142,500 $140,000 $137,500 $135,000 $132,500 $130,000 $127,500 $125,000 $122,500 $120,000 $120,000 $90,000 $60,000Total Liabilities $150,000 $184,739 $190,926 $181,889 $178,854 $185,041 $185,660 $185,758 $177,503 $175,077 $169,433 $166,572 $170,062 $170,062 $145,058 $123,997

Paid-in Capital $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 $80,000 $80,000 $80,000Retained Earnings ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($79,000) ($23,461) $66,062Earnings $0 ($16,160) ($32,306) ($30,937) ($23,954) ($16,956) ($8,543) $6,884 $13,926 $25,882 $36,453 $41,439 $55,539 $55,539 $89,523 $96,891Total Capital $1,000 ($15,160) ($31,306) ($29,937) ($22,954) ($15,956) ($7,543) $7,884 $14,926 $26,882 $37,453 $42,439 $56,539 $56,539 $146,062 $242,952Total Liabilities and Capital $151,000 $169,579 $159,620 $151,951 $155,900 $169,085 $178,117 $193,642 $192,429 $201,960 $206,886 $209,011 $226,601 $226,601 $291,120 $366,949Net Worth $1,000 ($15,160) ($31,306) ($29,937) ($22,954) ($15,956) ($7,543) $7,884 $14,926 $26,882 $37,453 $42,439 $56,539 $56,539 $146,062 $242,952

Appendix


Business

Plan Pro Sample

Clara's Hardware Store Sample Business Plan

Documents

Transcript of Clara's Hardware Store Sample Business Plan