4 Moons Pizzeria
May 2005
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Table of Contents
1.0
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3
Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2.0
Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1
Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.0
Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.0
Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2
Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3
Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4
5
6
6
7
5.0
Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1
Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
7
7
8
8
6.0
Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
6.1
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
7.0
Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
Start-up Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2
Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3
Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.7
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
1
2
2
10
11
11
12
13
16
18
19
20
4 Moons Pizzeria
1.0 Executive Summary
The following plan is based on years of experience, is highly focused and promises to follow a
path of prosperity. It is based on conservative sales figures, and actual sales may be higher.
The projections contained herein are authentic and will be used as the budget for the business.
4 Moons Pizzeria will show a profit immediately, and will increase sales and profits each year
thereafter.
Highlights
$800,000
$700,000
$600,000
$500,000
Sales
$400,000
Gross Margin
$300,000
Net Profit
$200,000
$100,000
$0
FY 2006
FY 2007
FY 2008
1.1 Objectives
The objective is to lease a site at 555 West Blue Plum Lane. We will need to remodel the
interior according to the Franchisor's design. We plan to duplicate and massage the successful
formula used by Franchisor. We will use our own personal strategies and skills to create our
own success in our 4 Moons Pizzeria. We plan to train our crew to ensure outstanding results
in quality food and customer service. Our objectives are as follows.
• Be the first 4 Moons Pizzeria in Nevada
• Provide the highest quality product, duplicating Franchisor's successful pizzerias in
Oregon
• Give top notch service in a quick and efficient manner
• Keep our menu simple to maintain low food cost
• Maintain the competitive, fast-casual dining at the mid-range price point
• Use marketing strategies to build volume quickly
• First year sales (May 2005 to April 2006) of $677,313 with a 6% growth yearly
• Maintain and expand an outstanding reputation as being the best neighborhood pizzeria
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4 Moons Pizzeria
1.2 Mission
4 Moons Pizzeria exists for the purpose of generating sales and profit. Because we are a
service business, we will also exist to serve our customers. These two reasons for our
existence are inextricable. If one aspect does not exist, the other will cease to exist.
• We will always offer a fresh product and welcoming environment
• We will remain cheerful, courteous, well trained, and focused on pleasing our guests
• We will strive to become the first destination of choice for those in our neighborhood
and community
• Our staff will be offered a workplace where they can prosper and grow in a dignified,
fun, and rewarding manner
• We will give support to and contribute to our community schools, churches, groups,
and businesses
1.3 Keys to Success
Our policy of being operating managing members is to make sure we pass by every table to
greet, visit with, or at least send a smile to our guests.
We will visit any table or answer to any phone call that has feedback, positive or negative. We
will use every means available to satisfy our customers.
We will be committed to the success and happiness of our staff.
We will be committed to providing quality food and beverage at all times.
We will consistently follow the franchisor's proven methods.
2.0 Company Summary
Established in 1958, 4 Moons Pizzerias are an award winning, "Home of the brick oven Pizza".
They offer a comfortable, friendly ambience, with its new "Modern Pizzeria" design. The menu
features pizza, hot calzones, strombollis, sandwiches, baked pastas, and fresh tossed salads.
The pizza dough is made fresh everyday on site. Beverages include soft drinks, imported and
domestic beer, micro brews, and an impressive wine list. Food ingredients are the finest
available including USDA Choice meats.
2.1 Company Ownership
We are an LLC, limited liability company, with four managing owners holding an equal share
(25%) and interest in the franchise.
•
•
•
•
Carol Mittani: General Managing Owner - Hands-on management of all daily restaurant
and company operations.
Steve Solutrian: Vice Managing Owner / Sales and restaurant operations. Hands-on
management of daily operations and sales trends.
Diane Solutrian: Vice Managing Owner / All office procedures. Hands-on management
of daily operations.
Rikard Mittani: Vice Managing Owner / Marketing and future finances and investments.
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4 Moons Pizzeria
Hands-on management of daily operations.
2.2 Start-up Summary
We hope to take advantage of an existing structure located at 555 West Blue Plum Lane, at
Lakeside Center. It is 2,828 square feet. We will remodel according to the Franchisor's designs
to make our concept both visually and functionally suitable.
Construction is estimated at $214,630 - see attached "Franchisor's Construction Cost Sheet"
for item breakdown.*
Start-up cash on hand is estimated for 3 months working capital, inventory, labor and rent.
Short-term assets include phone equipment, smallwares, booths, chairs, tables, pendants,
sconces, and lighting.
Long-term assets include all kitchen equipment, POS system, and signage.
*Confidential and proprietary information omitted from this sample plan.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Remodel Costs
Proscreen/Wallpaper-Menu Boards
Insurance
Franchise Fee
1st month rent
Drafting/Engineering
City fees/Misc costs
Beer and wine license
Training/travel
Utility start-up costs
Design
Total Start-up Expenses
$214,630
$3,644
$1,500
$25,000
$4,242
$3,000
$2,491
$500
$2,000
$5,000
$4,200
$266,207
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$87,286
$41,775
$99,732
$228,793
Total Requirements
$495,000
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4 Moons Pizzeria
Start-up
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Expenses
Assets
Investment
Loans
3.0 Services
4 Moons Pizzerias are comfortable and inviting. We are a fast-casual operation with dine in,
take-out, and delivery. The decor and theme are centered around the cutting edge open
kitchen with brick arches and distinctive lighting. Our energy and atmosphere will appeal to
families, groups, and schools.
The real power and energy of the pizzeria will come from the attentive and courteous service
provided by our managers and staff. Our fresh menu will be prepared by our motivated
kitchen team, and carefully orchestrated to provide the best service to our customers who are
our priority. We will have at least one manager on duty at all times.
Our hours are Sunday thru Thursday 11 am. to 10 pm. Friday and Saturday 11 am. to 11 pm.
Take out available during store hours. Delivery hours are 4 pm to closing everyday we are
open. We will offer delivery all day on Saturday and Sunday and some holidays.
4.0 Market Analysis Summary
Ohno is one of the fastest growing cities in America with Nevada being voted the best small
business state in the country. Ohno is a community diverse in the arts and culture. We have a
strong labor market, low taxes, affordable housing, and natural amenities making Ohno an
attractive place to live and do business.
The greater Ohno metropolitan area population has grown one third through the last decade
and is projected to grow 11.4% in the next five years.
The median age is 36 years old with household incomes averaging $65,895. With a strong
local economy we have a population with disposable cash for dining and entertainment.
According to the Nevada Restaurant Association, Nevada restaurants are expected to lead the
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4 Moons Pizzeria
nation in sales growth at 7.6%. Nevada is also the fastest growing state in the union.
4.1 Market Segmentation
4 Moons target market is a three mile radius of site location. Within the three mile operating
radius is a population of 121,705. The total number of households in this area is 48,839 with
an average income of $58,197.
This area is densely populated, and a desirable part of town in which to live. It is an underserved portion of town, especially to the west up to the Caughlin Ranch area. It is on one of
the most traveled corridors in Ohno, Blue Plum Lane. Located near two of Ohno's most popular
malls, Parklane and Shopper's Square.
Our target market includes adults 20 to 54 years old who socialize and have families. Children
are a big part of our market, at a third of the population is this area. Ages 4 to 19 prefer pizza
over any fast food and often influence family dining decisions. According to one study, 93% of
the U.S. population eats pizza. If we sold one pizza per month with an average of $17.00 per
household, we would generate $721,141 in one month. This illustrates that with effective
marketing, superior product, and proper management we will reach and exceed our projected
sales goals.
In this area we have some of the best schools. 4 Moons Pizzerias provides support for local
area school groups and sports teams, as well as local church groups. We will be involved
through providing sponsorships, discounts, and donations.
Table: Market Analysis
Market Analysis
Potential Customers
Ages 0-19 (preferred
fast food)
Ages 20-54
(w/disposable cash)
Over 55
Total
2005
2006
2007
2008
2009
4%
30,426
31,643
32,909
34,225
35,594
4.00%
4%
61,583
64,046
66,608
69,272
72,043
4.00%
3%
3.87%
26,775
118,784
27,685
123,374
28,626
128,143
29,599
133,096
30,605
138,242
3.40%
3.87%
Growth
CAGR
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4 Moons Pizzeria
Market Analysis (Pie)
Ages 0-19 (preferred fast food)
Ages 20-54 (w/disposable cash)
Over 55
4.2 Target Market Segment Strategy
We haven't ruled any one group or class out in our target market area. Just about everyone
eats pizza. Most residents in this area have busy schedules, and find value in exceptional and
timely service, as well as mouth watering, delightful food. We believe most everyone will
appreciate our value based menu and family atmosphere. We have a strong commitment to
community involvement including sponsorship for school/group teams.
We strongly believe we will overcome any competition in our area. The local competition
includes Sticky Paws Pizza, Damynos, Gridlow's Pizza, Hoopla Take-and-Bake, Clodhopper's,
and Little Sayzar. Most of these are at least two miles from our location and are no
competition to our concepts, ideals, fresh products, and welcoming service.
4.3 Service Business Analysis
Pizza Statistics:
•
•
•
•
•
•
•
Represent 17% of all restaurants.
Americans eat approximately 100 acres of pizza a day.
Pizza is a $32+ billion per year industry with continuing overall restaurant growth.
Accounts for 10% of all food service sales.
93% of Americans eat pizza at least once a month.
67% of Americans order pizza for a casual evening with friends.
Children between 3-11 prefer pizza over all other food groups.
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4 Moons Pizzeria
4.3.1 Competition and Buying Patterns
4 Moons Pizzerias are competitive in the mid price point, fast casual dining market. With an
average ticket of $17.00, we are priced above Hoopla Take-and-Bake and Damyno but below
Squaretable.
Quality, Quick, and Simple is the goal of 4 Moons Pizzerias. The customers are provided with
the highest quality product. Store design provides a warm and friendly environment for all.
5.0 Strategy and Implementation Summary
Emphasize service
We will differentiate ourselves with SERVICE! We will establish our business offering as a clear
and viable alternative for our target market.
Build a relationship-oriented business
Build long-term relationships with customers, not single-visit deals. Become their restaurant
and destination of choice. Make them understand the value of the relationship.
Focus on target markets
We need to focus our offerings on specific population groups as the key market segment we
should own. We do not want to compete for the buyers who go to "fast food" or "take and
bake" types of restaurants. We definitely want to be able to sell to smart, quality conscious
customers.
Utilize the various skills of our Managing Owners and learn through the extensive
training program provided by Franchisor.
5.1 Competitive Edge
Clearly our competitive edge will be our customer service experience and management
approach. Our smiling, unassuming, and good natured approach to all of our customers will be
evident, and highly appreciated.
We will constantly monitor our product to ensure quality food and beverage at all times. Our
recipes are delicious, made fresh daily, and our toppings go all the way to the edge of the
pizza crust.
5.2 Marketing Strategy
We will start our marketing during the construction phase. Our main factor in success is simply
that a person can enjoy a good pizza, fast service, and friendly familiar faces.
We will all be involved in Sales and Marketing. We will gather information about the
neighborhoods, use our POS System to track top sellers and gather a customer base for
marketing offers.
• Kids school tours
• Gift Certificate Program
• Phone book advertisement
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4 Moons Pizzeria
•
•
•
•
•
•
Coupons
Door hangers
Sporting events for schools and group events
Eye catching signage
Excellent service and high quality food
Word of mouth
5.3 Sales Strategy
The marketing strategy discussed previously in this business plan will generate the desired
sales.
We require our staff to have a thorough and comprehensive understanding of the menus,
ingredients and methods of preparation of all of our foods. We train our staff to always
describe and recommend items, even to regular customers, and to always up-sell. The key to
our employee's success in up-selling is the realization that it almost always brings in better tips
because the checks are higher.
We will emphasize service to differentiate ourselves. We will establish our business offerings as
a clear and viable alternative for our target market, from the scores of "slow delivery", "frozen
dough", and "your average" pizza chains.
We will build long-term relationships with our customers, becoming their destination of choice
for delivery, take out, and dine in. We will sell ourselves as the best neighborhood and
community pizzeria.
5.3.1 Sales Forecast
We are forecasting sales of approximately $677,313 in our first fiscal year (May 2005 to April
2006) with an opening date of mid-May 2005. We foresee sales increasing at .5% monthly, an
overall yearly rate of 6% per year. Our forecast is conservative and is based on an average of
$17.00 average per order.
We are convinced that our business will increase with time. We have a strong management
team who will be on property daily to monitor daily operations. We will constantly watch food
quality, customer service, and costs.
Table: Sales Forecast
Sales Forecast
FY 2006
FY 2007
FY 2008
Sales
Total Restaurant Sales
Other
Total Sales
$677,297
$0
$677,297
$717,935
$0
$717,935
$761,011
$0
$761,011
Direct Cost of Sales
Cost of Sales
Other
Subtotal Direct Cost of Sales
FY 2006
$135,461
$0
$135,461
FY 2007
$143,590
$0
$143,590
FY 2008
$152,206
$0
$152,206
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4 Moons Pizzeria
Sales Monthly
$70,000
$60,000
$50,000
$40,000
Total Restaurant Sales
$30,000
Other
$20,000
$10,000
$0
May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Sales by Year
$800,000
$700,000
$600,000
$500,000
Total Restaurant Sales
$400,000
Other
$300,000
$200,000
$100,000
$0
FY 2006
FY 2007
FY 2008
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4 Moons Pizzeria
6.0 Management Summary
4 Moons consists of four members with an equal concern in our franchise. We will owner
operate our pizzeria daily. We will keep our starting salaries low to keep labor costs down.
Each member contributes with a generalized assignment as well as being trained in all
restaurant operations, including making pizza, working the counter, and delivering pizza. We
are an extremely experienced, and well balanced team.
• Please see our attached resumes for a precise summary.*
Carol Mittani will be General Manager working every day to insure success. Steve Solutrian,
Diane Solutrian, and Rikard Mittani will be on site various hours, and during peak dinner hours
to help with general operational tasks, plus opening to closing hours on the weekend.
* Confidential and proprietary information omitted from this sample plan.
6.1 Personnel Plan
We plan to have a part-time staff to include pizza makers, delivery drivers, and counter
persons. We are planning on a staff of 10 employees to come on at peak business levels.
Our first month will have a higher labor rate due to training, pre-opening preparation and
grand opening labor.
We have forecasted labor at 18% of gross sales. We will strive to keep our payroll at 18% or
lower.
Table: Personnel
Personnel Plan
Wages
Other
Total People
FY 2006
$126,738
$0
14
FY 2007
$129,228
$0
14
FY 2008
$136,982
$0
14
Total Payroll
$126,738
$129,228
$136,982
7.0 Financial Plan
Our main concerns will be aggressive time management to keep labor costs under control.
Proper purchasing, food preparation and handling, and control of cheese consumption to keep
food costs down. Growth will be sustained through increased sales.
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4 Moons Pizzeria
7.1 Start-up Funding
Our start-up figures are approximate costs for start up of a 4 Moons Pizzeria franchise as
prescribed by the Franchisor.
4 Moons has paid a franchise fee of $25,000 and has $125,000 initial investment.
Our estimated start up is $470,000. We are seeking an SBA Loan in the amount of $345,000
(see Long term liability line).
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$266,207
$228,793
$495,000
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$151,507
$87,286
$0
$87,286
$238,793
Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Other Current Liabilities
Total Liabilities
$0
$345,000
$0
$345,000
Capital
Planned Investment
Solutrian, Steve and Diane
Mittani, Rikard and Carol
Additional Investment Requirement
Total Planned Investment
Loss at Start-up (Start-up Expenses)
Total Capital
$75,000
$75,000
$0
$150,000
($266,207)
($116,207)
Total Capital and Liabilities
$228,793
Total Funding
$495,000
7.2 Important Assumptions
We are projecting profit based on the performance of other franchises and our own judgement
based on the following:
• We assume by using marketing strategies, sales strategies, good customer
relationships, fresh food, and good management practices, we will succeed.
• In order to meet the sales of $677,313 in the first year, open for at least 360 days, we
would have to sell 111 checks each day with a $17 per check average.
• Our sales each day should reach an minimum average of $1881.43.
• Our forecast is based on an average. Some months will increase and others decrease.
We do not predict any major decreases in sales, as Ohno area restaurants are busy all
year round.
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4 Moons Pizzeria
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
FY 2006
1
0.00%
7.00%
30.00%
0
FY 2007
2
0.00%
7.00%
30.00%
0
FY 2008
3
0.00%
7.00%
30.00%
0
7.3 Break-even Analysis
Break-even based on fixed costs including rent, insurance, maintenance, investor note, and
pre-opening amortization. Additionally, controllables such as service labor, kitchen labor,
management labor, excess rent, advertising, royalty, and legal/professional fees are included.
Annual break even point is approximately $435,204.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$36,365
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
20%
$29,092
Break-even Analysis
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
$0
$12,000
$24,000
$36,000
$48,000
$60,000
Monthly break-even point
Break-even point = where line intersects with 0
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4 Moons Pizzeria
7.4 Projected Profit and Loss
As the Profit and Loss table shows, the company expects to continue its steady growth in
profitability over the next three years. We predicted a conservative 6% per year increase in
sales.
The first month may have higher payroll due to employee training and restaurant set up.
Our operating expenses include rent at $4,242 estimate per month, royalty fees of 5% of
gross sales, equipment rental and repair, utilities projected at 11% of gross sales,
administrative charges including PC charges, cleaning supplies, payroll charges, and office
supplies.
Marketing fees are 4% of gross sales per month.
Table: Profit and Loss
Pro Forma Profit and Loss
Total Cost of Sales
FY 2006
$677,297
$135,461
$0
-----------$135,461
FY 2007
$717,935
$143,590
$0
-----------$143,590
FY 2008
$761,011
$152,206
$0
-----------$152,206
Gross Margin
Gross Margin %
$541,836
80.00%
$574,345
80.00%
$608,805
80.00%
Total Operating Expenses
$126,738
$27,092
$30,000
$50,904
$33,865
$3,000
$74,503
$3,000
-----------$349,102
$129,228
$28,717
$30,000
$50,904
$35,897
$5,400
$78,973
$3,000
-----------$362,119
$136,982
$30,440
$30,000
$52,431
$38,051
$5,400
$83,711
$3,000
-----------$380,015
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
$192,734
$23,367
$50,810
$212,226
$21,648
$57,173
$228,790
$19,738
$62,716
Net Profit
Net Profit/Sales
$118,557
17.50%
$133,404
18.58%
$146,336
19.23%
Sales
Direct Cost of Sales
Other Costs of Sales
Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Royalty fees
Equip rent/repair
Utilities
Admin charges
Page 13
4 Moons Pizzeria
Profit Monthly
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
($2,000)
May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Profit Yearly
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
FY 2006
FY 2007
FY 2008
Page 14
4 Moons Pizzeria
Gross Margin Monthly
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Gross Margin Yearly
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
FY 2006
FY 2007
FY 2008
Page 15
4 Moons Pizzeria
7.5 Projected Cash Flow
The cash flow depends on assumptions for good daily operational management, good traffic
counts in the restaurant, inventory turnover, payment days, and accounts receivable
management. We do not predict any new financing until we open our second franchise.
Principal amounts are based on a loan of $345,000 with a 10 year SBA Loan at 7% interest.
Cash
$250,000
$200,000
$150,000
Net Cash Flow
Cash Balance
$100,000
$50,000
$0
May Jun
Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr
Page 16
4 Moons Pizzeria
Table: Cash Flow
Pro Forma Cash Flow
FY 2006
FY 2007
FY 2008
$677,297
$677,297
$717,935
$717,935
$761,011
$761,011
$49,985
$52,984
$56,163
$0
$0
$0
$0
$0
$0
$727,282
$0
$0
$0
$0
$0
$0
$770,919
$0
$0
$0
$0
$0
$0
$817,174
FY 2006
FY 2007
FY 2008
$126,738
$367,514
$494,252
$129,228
$406,680
$535,908
$136,982
$442,822
$579,804
$49,757
$52,985
$56,164
$0
$0
$0
$0
$0
$0
Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
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
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current
Borrowing
Other Liabilities Principal
Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
$22,576
$26,332
$28,237
$0
$0
$0
$566,585
$0
$0
$0
$615,225
$0
$0
$0
$664,205
Net Cash Flow
Cash Balance
$160,696
$247,982
$155,693
$403,676
$152,968
$556,644
Page 17
4 Moons Pizzeria
7.6 Projected Balance Sheet
The balance sheet is quite solid. We do not project any real trouble meeting our debt
obligations--as long as we can achieve our specific sales objectives.
Table: Balance Sheet
Pro Forma Balance Sheet
FY 2006
FY 2007
FY 2008
Current Assets
Cash
Other Current Assets
Total Current Assets
$247,982
$41,775
$289,757
$403,676
$41,775
$445,451
$556,644
$41,775
$598,419
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$99,732
$30,000
$69,732
$359,489
$99,732
$60,000
$39,732
$485,183
$99,732
$90,000
$9,732
$608,151
Liabilities and Capital
FY 2006
FY 2007
FY 2008
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$34,488
$0
$228
$34,716
$53,111
$0
$226
$53,337
$57,981
$0
$225
$58,206
$322,424
$357,140
$296,092
$349,429
$267,855
$326,061
$150,000
($266,207)
$118,557
$2,350
$359,489
$150,000
($147,650)
$133,404
$135,754
$485,183
$150,000
($14,246)
$146,336
$282,090
$608,151
$2,350
$135,754
$282,090
Assets
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
Page 18
4 Moons Pizzeria
7.7 Business Ratios
The company's projected business ratios are provided in the following table. The final column,
Industry Profile, shows ratios for the "Pizza Restaurant Industry", as determined by the
Standard Industry Classification 5812.0600 with annual sales of $500,000 to $999,000.
Table: Ratios
Ratio Analysis
Sales Growth
FY 2006
0.00%
FY 2007
6.00%
FY 2008
6.00%
Industry Profile
5.24%
Percent of Total Assets
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
11.62%
80.60%
19.40%
100.00%
8.61%
91.81%
8.19%
100.00%
6.87%
98.40%
1.60%
100.00%
35.11%
43.74%
56.26%
100.00%
9.66%
89.69%
99.35%
0.65%
10.99%
61.03%
72.02%
27.98%
9.57%
44.04%
53.62%
46.38%
18.93%
25.48%
44.41%
55.59%
100.00%
80.00%
100.00%
80.00%
100.00%
80.00%
100.00%
61.91%
62.50%
61.42%
60.77%
39.08%
4.00%
28.46%
0.00%
29.56%
0.00%
30.06%
2.55%
1.38%
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
8.35
8.35
99.35%
7208.17%
47.11%
8.35
8.35
72.02%
140.38%
39.28%
10.28
10.28
53.62%
74.11%
34.37%
1.14
0.79
49.97%
3.97%
7.93%
Additional Ratios
Net Profit Margin
Return on Equity
FY 2006
17.50%
5045.72%
FY 2007
18.58%
98.27%
FY 2008
19.23%
51.88%
n.a
n.a
11.66
1.88
8.01
1.48
7.72
1.25
n.a
n.a
152.00
0.10
2.57
0.15
1.16
0.18
n.a
n.a
$255,042
8.25
$392,114
9.80
$540,213
11.59
n.a
n.a
0.53
10%
8.35
288.25
0.00
0.68
11%
8.35
5.29
0.00
0.80
10%
10.28
2.70
0.00
n.a
n.a
n.a
n.a
n.a
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Activity Ratios
Accounts Payable Turnover
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
Page 19
Appendix
Appendix Table: Sales Forecast
Sales Forecast
Sales
Total Restaurant Sales
Other
Total Sales
Direct Cost of Sales
Cost of Sales
Other
Subtotal Direct Cost of Sales
0%
0%
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
$28,750
$0
$28,750
$57,500
$0
$57,500
$57,788
$0
$57,788
$58,076
$0
$58,076
$58,366
$0
$58,366
$58,658
$0
$58,658
$58,952
$0
$58,952
$59,246
$0
$59,246
$59,542
$0
$59,542
$59,840
$0
$59,840
$60,139
$0
$60,139
$60,440
$0
$60,440
May
$5,750
$0
$5,750
Jun
$11,500
$0
$11,500
Jul
$11,557
$0
$11,557
Aug
$11,616
$0
$11,616
Sep
$11,673
$0
$11,673
Oct
$11,732
$0
$11,732
Nov
$11,791
$0
$11,791
Dec
$11,849
$0
$11,849
Jan
$11,909
$0
$11,909
Feb
$11,968
$0
$11,968
Mar
$12,028
$0
$12,028
Apr
$12,088
$0
$12,088
Page 20
Appendix
Appendix Table: Personnel
Personnel Plan
Wages
Other
Total People
Total Payroll
18%
0%
May
$10,000
$0
14
Jun
$10,350
$0
14
Jul
$10,402
$0
14
Aug
$10,454
$0
14
Sep
$10,506
$0
14
Oct
$10,558
$0
14
Nov
$10,611
$0
14
Dec
$10,664
$0
14
Jan
$10,718
$0
14
Feb
$10,771
$0
14
Mar
$10,825
$0
14
Apr
$10,879
$0
14
$10,000
$10,350
$10,402
$10,454
$10,506
$10,558
$10,611
$10,664
$10,718
$10,771
$10,825
$10,879
Page 21
Appendix
Appendix Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Royalty fees
Equip rent/repair
Utilities
Admin charges
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
4%
5%
11%
May
$28,750
$5,750
$0
-----------$5,750
Jun
$57,500
$11,500
$0
-----------$11,500
Jul
$57,788
$11,557
$0
-----------$11,557
Aug
$58,076
$11,616
$0
-----------$11,616
Sep
$58,366
$11,673
$0
-----------$11,673
Oct
$58,658
$11,732
$0
-----------$11,732
Nov
$58,952
$11,791
$0
-----------$11,791
Dec
$59,246
$11,849
$0
-----------$11,849
Jan
$59,542
$11,909
$0
-----------$11,909
Feb
$59,840
$11,968
$0
-----------$11,968
Mar
$60,139
$12,028
$0
-----------$12,028
Apr
$60,440
$12,088
$0
-----------$12,088
$23,000
80.00%
$46,000
80.00%
$46,231
80.00%
$46,460
80.00%
$46,693
80.00%
$46,926
80.00%
$47,161
80.00%
$47,397
80.00%
$47,633
80.00%
$47,872
80.00%
$48,111
80.00%
$48,352
80.00%
$10,000
$1,150
$2,500
$4,242
$1,438
$250
$3,163
$250
-----------$22,992
$10,350
$2,300
$2,500
$4,242
$2,875
$250
$6,325
$250
-----------$29,092
$10,402
$2,312
$2,500
$4,242
$2,889
$250
$6,357
$250
-----------$29,201
$10,454
$2,323
$2,500
$4,242
$2,904
$250
$6,388
$250
-----------$29,311
$10,506
$2,335
$2,500
$4,242
$2,918
$250
$6,420
$250
-----------$29,421
$10,558
$2,346
$2,500
$4,242
$2,933
$250
$6,452
$250
-----------$29,532
$10,611
$2,358
$2,500
$4,242
$2,948
$250
$6,485
$250
-----------$29,644
$10,664
$2,370
$2,500
$4,242
$2,962
$250
$6,517
$250
-----------$29,755
$10,718
$2,382
$2,500
$4,242
$2,977
$250
$6,550
$250
-----------$29,868
$10,771
$2,394
$2,500
$4,242
$2,992
$250
$6,582
$250
-----------$29,981
$10,825
$2,406
$2,500
$4,242
$3,007
$250
$6,615
$250
-----------$30,095
$10,879
$2,418
$2,500
$4,242
$3,022
$250
$6,648
$250
-----------$30,209
$8
$2,013
($601)
$16,908
$2,001
$4,472
$17,030
$1,989
$4,512
$17,149
$1,977
$4,552
$17,272
$1,966
$4,592
$17,394
$1,954
$4,632
$17,517
$1,942
$4,673
$17,642
$1,930
$4,714
$17,765
$1,918
$4,754
$17,891
$1,905
$4,796
$18,016
$1,893
$4,837
$18,143
$1,881
$4,879
($1,403)
-4.88%
$10,435
18.15%
$10,528
18.22%
$10,620
18.29%
$10,714
18.36%
$10,808
18.43%
$10,903
18.49%
$10,998
18.56%
$11,093
18.63%
$11,190
18.70%
$11,286
18.77%
$11,383
18.83%
Page 22
Appendix
Appendix Table: Cash Flow
Pro Forma Cash Flow
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
$28,750
$28,750
$57,500
$57,500
$57,788
$57,788
$58,076
$58,076
$58,366
$58,366
$58,658
$58,658
$58,952
$58,952
$59,246
$59,246
$59,542
$59,542
$59,840
$59,840
$60,139
$60,139
$60,440
$60,440
$2,122
$0
$0
$0
$0
$0
$0
$30,872
$4,244
$0
$0
$0
$0
$0
$0
$61,744
$4,265
$0
$0
$0
$0
$0
$0
$62,053
$4,286
$0
$0
$0
$0
$0
$0
$62,362
$4,307
$0
$0
$0
$0
$0
$0
$62,673
$4,329
$0
$0
$0
$0
$0
$0
$62,987
$4,351
$0
$0
$0
$0
$0
$0
$63,303
$4,372
$0
$0
$0
$0
$0
$0
$63,618
$4,394
$0
$0
$0
$0
$0
$0
$63,936
$4,416
$0
$0
$0
$0
$0
$0
$64,256
$4,438
$0
$0
$0
$0
$0
$0
$64,577
$4,460
$0
$0
$0
$0
$0
$0
$64,900
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
$10,000
$588
$10,588
$10,350
$18,205
$28,555
$10,402
$34,220
$44,622
$10,454
$34,363
$44,816
$10,506
$34,507
$45,013
$10,558
$34,651
$45,209
$10,611
$34,796
$45,408
$10,664
$34,943
$45,607
$10,718
$35,088
$45,806
$10,771
$35,236
$46,007
$10,825
$35,384
$46,209
$10,879
$35,533
$46,412
$2,122
$4,243
$4,254
$4,264
$4,275
$4,286
$4,297
$4,307
$4,394
$4,416
$4,438
$4,461
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,993
$2,005
$2,017
$2,028
$2,040
$2,052
$2,064
$2,076
$2,088
$2,100
$2,113
$0
$0
$0
$12,710
$0
$0
$0
$34,791
$0
$0
$0
$50,881
$0
$0
$0
$51,097
$0
$0
$0
$51,316
$0
$0
$0
$51,535
$0
$0
$0
$51,757
$0
$0
$0
$51,978
$0
$0
$0
$52,276
$0
$0
$0
$52,511
$0
$0
$0
$52,747
$0
$0
$0
$52,986
$18,161
$105,447
$26,952
$132,400
$11,172
$143,572
$11,265
$154,836
$11,358
$166,194
$11,452
$177,646
$11,546
$189,192
$11,640
$200,832
$11,660
$212,493
$11,745
$224,238
$11,830
$236,068
$11,914
$247,982
Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
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
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current
Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance
7.38%
Page 23
Appendix
Appendix Table: Balance Sheet
Pro Forma Balance Sheet
Assets
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
Starting Balances
Current Assets
Cash
Other Current Assets
Total Current Assets
$87,286
$41,775
$129,061
$105,447
$41,775
$147,222
$132,400
$41,775
$174,175
$143,572
$41,775
$185,347
$154,836
$41,775
$196,611
$166,194
$41,775
$207,969
$177,646
$41,775
$219,421
$189,192
$41,775
$230,967
$200,832
$41,775
$242,607
$212,493
$41,775
$254,268
$224,238
$41,775
$266,013
$236,068
$41,775
$277,843
$247,982
$41,775
$289,757
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$99,732
$0
$99,732
$228,793
$99,732
$2,500
$97,232
$244,454
$99,732
$5,000
$94,732
$268,907
$99,732
$7,500
$92,232
$277,579
$99,732
$10,000
$89,732
$286,343
$99,732
$12,500
$87,232
$295,201
$99,732
$15,000
$84,732
$304,153
$99,732
$17,500
$82,232
$313,199
$99,732
$20,000
$79,732
$322,339
$99,732
$22,500
$77,232
$331,500
$99,732
$25,000
$74,732
$340,745
$99,732
$27,500
$72,232
$350,075
$99,732
$30,000
$69,732
$359,489
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
Jan
Feb
Mar
Apr
$0
$0
$0
$0
$17,065
$0
($0)
$17,064
$33,075
$0
$0
$33,075
$33,213
$0
$11
$33,224
$33,352
$0
$33
$33,385
$33,491
$0
$65
$33,556
$33,632
$0
$108
$33,740
$33,773
$0
$162
$33,935
$33,914
$0
$227
$34,141
$34,057
$0
$228
$34,284
$34,200
$0
$228
$34,427
$34,344
$0
$228
$34,572
$34,488
$0
$228
$34,716
$345,000
$345,000
$345,000
$362,064
$343,007
$376,082
$341,002
$374,226
$338,985
$372,370
$336,957
$370,513
$334,917
$368,657
$332,865
$366,800
$330,801
$364,942
$328,725
$363,009
$326,637
$361,064
$324,537
$359,109
$322,424
$357,140
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$150,000
($266,207)
$0
($116,207)
$228,793
$150,000
($266,207)
($1,403)
($117,610)
$244,454
$150,000
($266,207)
$9,032
($107,175)
$268,907
$150,000
($266,207)
$19,560
($96,647)
$277,579
$150,000
($266,207)
$30,180
($86,027)
$286,343
$150,000
($266,207)
$40,895
($75,312)
$295,201
$150,000
($266,207)
$51,703
($64,504)
$304,153
$150,000
($266,207)
$62,606
($53,601)
$313,199
$150,000
($266,207)
$73,604
($42,603)
$322,339
$150,000
($266,207)
$84,697
($31,510)
$331,500
$150,000
($266,207)
$95,887
($20,320)
$340,745
$150,000
($266,207)
$107,173
($9,034)
$350,075
$150,000
($266,207)
$118,557
$2,350
$359,489
Net Worth
($116,207)
($117,610)
($107,175)
($96,647)
($86,027)
($75,312)
($64,504)
($53,601)
($42,603)
($31,510)
($20,320)
($9,034)
$2,350
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Page 24
Appendix
Appendix Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Tax Rate
May
1
0.00%
7.00%
30.00%
0
Jun
2
0.00%
7.00%
30.00%
0
Jul
3
0.00%
7.00%
30.00%
0
Aug
4
0.00%
7.00%
30.00%
0
Sep
5
0.00%
7.00%
30.00%
0
Oct
6
0.00%
7.00%
30.00%
0
Nov
7
0.00%
7.00%
30.00%
0
Dec
8
0.00%
7.00%
30.00%
0
Jan
9
0.00%
7.00%
30.00%
0
Feb
10
0.00%
7.00%
30.00%
0
Mar
11
0.00%
7.00%
30.00%
0
Apr
12
0.00%
7.00%
30.00%
0
Page 25