Sample Company LLC Business Plan for E-2 Visa 2021 Ms. Applicant Tel: XXX-XXX-XXXX Email: info@mail.com
2 Sample Company Sample Company LLC I Business Plan Table of Contents LIST OF TABLES .......................................................................................................3 LIST OF FIGURES .....................................................................................................3 EXECUTIVE SUMMARY ............................................................................................4 THE E-2 VISA BENEFICIARY....................................................................................5 THE US COMPANY DETAILS ...................................................................................6 Company Ownership................................................................................................... 6 Company Location ...................................................................................................... 6 INVESTMENT & FINANCIAL DETAILS .....................................................................7 Applicant Investment Details....................................................................................... 7 Financial Highlights ..................................................................................................... 7 BUSINESS DESCRIPTION ........................................................................................8 Customers................................................................................................................... 8 Stuffing Needs ............................................................................................................ 9 Operation costs ......................................................................................................... 10 Licensing and Permits............................................................................................... 10 COFFEE MARKET OVERVIEW...............................................................................12 Market size................................................................................................................ 12 Top coffee and café chains in the United States ....................................................... 13 Target audience characteristics ................................................................................ 15 Coffee’s health benefits............................................................................................. 16 How we get our caffeine............................................................................................ 16 American coffee preferences .................................................................................... 17 Online coffee sales ................................................................................................... 18 Competition ............................................................................................................... 19 STRATEGY & IMPLEMENTATION SUMMARY ......................................................21 MANAGEMENT SUMMARY.....................................................................................22 FINANCIAL PROJECTIONS ....................................................................................23 APPENDIX: YEAR 1 FINANCIALS BY MONTH ......................................................29 CONCLUSION..........................................................................................................31
3 SAMPLE COMPANY Ademify LLC I Business Plan List of Tables Table 1 Major highlights .................................................................................................. 7 Table 2 The forecasted prices......................................................................................... 9 Table 3. Calculation of personnel's wages.................................................................... 10 Table 4. Monthly general costs ..................................................................................... 10 Table 5 .......................................................................................................................... 20 Table 6 .......................................................................................................................... 20 Table 7 Start expenses ................................................................................................. 21 Table 8 Revenue and COGS forecast .......................................................................... 23 Table 9 Unit forecast ..................................................................................................... 23 Table 10 Personnel forecast ......................................................................................... 24 Table 11 Profit and Loss statement .............................................................................. 25 Table 12 Cash flow statement....................................................................................... 26 Table 13 Pro forma balance sheet ................................................................................ 27 Table 14 Cash Flow ...................................................................................................... 29 Table 15 Balance Sheet................................................................................................ 30 List of Figures Figure 1 ........................................................................................................................... 4 Figure 2 Financial highlights ........................................................................................... 7 Figure 3 Coffee consumption worldwide, mllionn 60-kg bags....................................... 12 Figure 4 Domestic consumption of coffeein, million 60-kg bags ................................... 12 Figure 5 Size of the Sample Company market, billion dollars....................................... 13 Figure 6 Number of coffehouse stores in the U.S. ........................................................ 13 Figure 7 Sales of top coffee and cafe chains, 2019 ...................................................... 14 Figure 8 Number of units of selected leading coffee house and coffee chains ............. 15 Figure 9 Total coffee per capita consumption in the United States............................... 15 Figure 10 Share of coffee drinking consumers in the USA, by age group .................... 15 Figure 11 The structure of the population in Manhattan ............................................... 16 Figure 12 Coffee consumption in the USA, by type of coffee ....................................... 17 Figure 13 App usage for ordering cofee........................................................................ 18 Figure 14 The Company management structure .......................................................... 22 Figure 15 ....................................................................................................................... 28
4 Sample Company Sample Company LLC I Business Plan Executive Summary Sample Company LLC will operate its 576 square foot a Coffeeshop and Patisserie in the vacant premises of a former store at XX Broome Street, New York, NY 10013 (see Figure 1). The Company plans to make it a daily necessity for local inhabitants, tourists and office employees to stop by the Cofeeshop and enjoy excellent coffee, various beverages, delicious European desserts and pastires, skillfully created tasty sandwiches and variety of snacks. It will not only be a place to grab quick coffee and food but a place to sit and relax, meet friends, or read a book while enjoying the offerings of the shop. This Coffeeshop and Patisserie will offer a quite unique, inviting and beautifully designed ambience that will want the visitors to stay and keep coming back. The Company will capitalize on its location in SoHo (an acronym for South of Houston Street) – the famously arty neighborhood of the ’70s and ’80s has evolved into one of New York City’s prime shopping districts high-end commercial. Today, the neighborhood is famous for its upscale boutiques, artists, and castiron architecture. But in the mid-1900s, SoHo was known for its factories and industries, earning it the nickname “Hell's Hundred Acres.” These industry buildings now occupaied by the luxury boutiques and independentdesigner outposts that characterize the area. Figure 1
5 SAMPLE COMPANY Ademify LLC I Business Plan After the shopping, people usually take a break with a meal at one of the neighborhood’s many excellent restaurants or enjoy a cup of coffee at one of its Sample Companys. Ademy Applicant also provided $XXX,XXX start-up investment funds. The Company is expected to grow sales revenue from $XXX,XXX in FY2021 to $XXX,XXX in year five. As Sample Company LLC will target to maintain a XX% gross profit margin and reasonable operating expenses, net profits grow from $XXX,XXX to $XXX,XXX during the same period. The E-2 Visa Beneficiary The business activities described in this Business Plan will be overseen by Applicant, who will serve as the Company's Chief Executive Officer. Applicant possesses the necessary knowledge of accounting through continuing education courses and comes from a background in management. In 2017 she launched and successfully developed Patisserie “Dolce” in Astana, Kazakhstan. As CEO of the company she gained extensive knowledge and experience in managing and directing all facets of a business and has a high financial understanding of the business operation. As the CEO of the Company, Applicant will be responsible for the following tasks: • Directly manage and oversee all operatons of the Sample Company • Develop and execute sales and profit plans that are in line with budgetary goals • Plan and execute marketing and promotion strategy including online promotion and social media • Hire, train and oversee the performance of the personell • Maintain high store standards and conditions, and foster a positive environment to provide consistent fast, efficient, and friendly service ensuring a Total Quality experience to both the customers and staff members The Applicant will guide the Company's management and marketing strategy to maintain its effectiveness and competitive abilities. As the CEO of the Company, Applicant will use her experience of managing café to make the Company a wellknown player in the local area.
6 Sample Company Sample Company LLC I Business Plan The US Company Details Sample Company LLC is a company managing a Sample Company. The Company registered in New York on October XX, 20XX. The Company registered address is XXXXXXXXXXXXXX. Company Ownership Sample Company LLC is owned by Applicant (100%). Applicant is a XXX national. Applicant possesses an extensive background in managing café and patisserie. She created and developed own concept patisserie and scaled it to a popular place in XXXX with a high-quality food and excellent service. Applicant successfully completed Patisserie course at De l'École le Cordon Bleu, London, UK in 2019. She also has experience in civil law due to her education (BS in Jurisprudence). Company Location Sample Company LLC will maintain a Sample Company at XX GXXXXX Str. and XXX4XX Broome Street, , New York, NY 10013.
7 SAMPLE COMPANY Ademify LLC I Business Plan Investment & Financial Details Applicant Investment Details The Applicant will contribute $XXX,XXX of personal capital, equal to 100% of the Company's initial funds. Financial Highlights The following table and graph illustrate the business goals of the Company during the next five years: Table 1 Major highlights 2021 2022 2023 2024 2025 2026 Total Revenue Gross Margin Operating Expenses EBITDA Net Profit Profitability Ratios Gross Margin/ Revenue EBITDA/ Revenue Net Profit % Net Cash Flow Cash BalanceEnding Figure 2 Financial highlights
8 Sample Company Sample Company LLC I Business Plan Business Description Sample Company LLC Sample Company will be located on the first floor of the building located in SoHo neighborhood in Manhattan, NY. The Company will operate Coffeeshop and Patisserie in the area between XX XXXX Str. and XXX-XXX Broome Street in the populous area with high-income inhabitants and tourists. Applicant, Sample Company LLC’s owner, has secured this location through a long term Store Lease Agreement with Riders executed between Sample Company LLC, the Lessee and the XX XXXXX St Realty Corp, the Lessor indicating the detailed square footage of the premises and spaces as well as the pictures of the Sample Company with: - the first year monthly rental fee in the amount of $X,XXX; - the second year monthly rental fee in the amount of $X,XXX; - the third year monthly rental fee in the amount of $X,XXX; - the fourth year monthly rental fee in the amount of $X,XXX.XX; - the fifth year monthly rental fee in the amount of $X,XXX.XX. The floor plan of the X-store premises will include a XXX square foot with the first floor for coffeeshop, and basement space with a storage area and bathroom. Space in the Sample Company will be distributed in the following way: - 376 square feet for the seating area with eight tables and a bar sage, - 200 square feet for the customer service and production area. The premises have the necessary water and electricity hookups and after comprehensive remodeling, it has accommodated the espresso bar and a kitchen and storage area. The Sample Company interior design is in an art deco-style with fancy decor to fit the building. The Sample Company will convey the quality of the served coffee and pastries and will be in line with the positioning as a fancy place where people can relax and enjoy their cup of coffee after shopping. A big window will make passers see customers enjoying their beverages, and an outside signboard will be aimed to grab the attention of the customer traffic. Customers The Company will aim to provide its services for the residents and the city visitors. In 20XX, there were an estimated XXX,XXX people in XXXX XXXXX/XXXX.
9 SAMPLE COMPANY Ademify LLC I Business Plan Some population characteristics include: • Average household income is $XXX,XXX (compared to $XX,XXX average household income by state for the entire US) • Median age is XX years old Products and pricing Sample Company LLC is going to offer its customers the best-tasting coffee in SoHo. This will be achieved by using advanced equipment, high-quality ingredients, and strictly following the preparation guidelines. The store layout, menu listings, and marketing activities will be focused on maximizing the sales of higher-margin espresso drinks. Sample Company LLC will also offer pastries, cakes, sandwiches, and bakery products, as well as milk shakers and snacks. And for the clients that prefer to prepare their coffee at home, Sample Company LLCwill also be selling coffee beans. The Sample Company menu will be built around espresso-based coffee drinks such as lattes, mochas, cappuccinos, etc. The forecasted prices are presented in table 2: Table 2 The forecasted prices Items Price Coffee / tea Pastries Cakes Sandwiches Bakery products Yoghurts / milk shakers Cookies / snacks Stuffing Needs The number of employees in the team is three people: • Owner • Barista (morning shift) • Barista (evening shift) The business owner will receive a fixed salary of $X,XXX per month. Baristas are paid $XX an hour. The morning barista will open the Sample Company at 9:00 am (his work hours will be from 8:00 am to 5:00 pm). The second barista will work from 5 pm to 10 pm.
10 Sample Company Sample Company LLC I Business Plan Table 3. Calculation of personnel's wages Wages per month, $, 2021 Wages per month, $, 2022 Wages per month, $, 2023 Wages per month, $, 2024 Wages per month, $, 2025 Wages per month, $, 2026 Owner Barista (morning) Barista (evening) Operation costs The Company operating costs consist of general expenses. Detailed costs information about the composition of costs can be found in table 4. Table 4. Monthly general costs Value per month Commercial insurance Other expenditures Rent Licensing and Permits A Sample Company in New York City may require a number of licenses and permits, including a Food Service Establishment Permit, Food Protection Certificate; pass a pre-permit inspection; purchase a portable fire extinguisher and get a number of the other permits and fulfill the reqirements1. Thus, Applicant successfully passed Food Protection Exam and received a temporary Food Protection Certificate with FPC number XX-XXXXL issued by New York City Department of Health & Mental Hygiene. Once the normal operation is resumed, the permanent Food Protection Certificate will be mailed to Applicant. Food Service Establishment (general) License was submitted on June XX, 2021 and it is pending for approval. 1 https://www1.nyc.gov/nycbusiness/wizard/result
11 SAMPLE COMPANY Ademify LLC I Business Plan The Lessee provided the temporary NYC Buildings Certificate of Occupancy listing All Building Code occupancy group designations was optained by the Company. The address of the rented premises for Sample Company is XXX Broome Street, New York, NY 10013 and falls under Zoning Use Group 6. Zoning Use Group 6 described in NYC City Planning Zoning includes “retail and service establishments that serve local shopping needs, such as food and small clothing stores, beauty parlors and dry cleaners”. The Certificate of Occupancy will be extended every three months and provided by the Lessee upon its prolongation. Sales Tax Registration of Sample Company LLC was obtained with New York State Department of Taxation and Finance on X/X/2021. Additionaly, Sample Company LLC has signed Pet control service agreement and aquired commercial insurance for the business that includes worker compensation, commercial insurance and umbrella.
12 Sample Company Sample Company LLC I Business Plan Coffee Market Overview Market size Coffee is one of the top 3 best-selling products in the world. About 10 million tons of coffee is consumed worldwide every year (Fig. 3) and this number is only growing. The compound annual growth rate of coffee consumption in the world is 2%. In the United States, coffee consumption is also growing steadily, and today Americans consume an average of about 1.5 million tonnes of coffee a year (Figure 4). It is worth noting that the United States is the world's leading consumer of coffee. At least 1.5 million tons of coffee are imported into the country annually. Figure 3 Coffee consumption worldwide, mllionn 60-kg bags Figure 4 Domestic consumption of coffeein, million 60-kg bags
13 SAMPLE COMPANY Ademify LLC I Business Plan The market for Sample Companys in the United States amounted to $47.5 billion. Growth from 2018 was 5%, which indicates an increase in American demand for coffee (Fig. 5). Along with the size of the market in America, the number of Sample Companys is growing. In 2019, there were 37,274 Sample Companys in the United States, an increase of 5% since 2018. Top coffee and café chains in the United States The Figure 10 shows the sales of selected top coffee and café chains in the United States in 2019. As you can see, Dunkin Donuts and Starbucks are the market leaders. The share of their total revenue among the 8 networks with the highest revenue in the United States is 93.27%. Starbucks' share is 65.15% of the market, while Dunkin Donats's share is 28.12%. Figure 6 Number of coffehouse stores in the U.S. Figure 5 Size of the Sample Company market, billion dollars
14 Sample Company Sample Company LLC I Business Plan At the same time, Starbucks and Dunkin Donuts have the largest number of Sample Companys on the chain. Starbucks has more than 15 times more Sample Companys on the chain than Tim Hortons, which is the third largest coffee chain in the United States. Thus, we can say that the market of chain Sample Companys in the United States is represented mainly by two chains - Starbucks and Dunkin Donuts. Figure 7 Sales of top coffee and cafe chains, 2019
15 SAMPLE COMPANY Ademify LLC I Business Plan Target audience characteristics In 2020, men in the United States drank about 1.93 cups of coffee per capita per day. Female respondents’ per capita consumption was lower, standing at roughly 1.82 cups a day that year (Figure 9). U.S. per capita coffee consumption amounted to 1.87 cups per day in 2020. The amount of coffee people drank per day in the United States has remained relatively stable since 2011, only dropping slightly in 2015 and 2016 to 1.85 and 1.64 cups, respectively. In 2020 coffee was still an extremely popular beverage among Americans of all ages. Nearly half of 18 to 24-year-olds drank the beverage and almost 70 percent of seniors did as well. Not only are seniors more likely to be coffee drinkers than their younger cohorts, but they drink about three times as many cups a day as well. Figure 10 Share of coffee drinking consumers in the USA, by age group Figure 9 Total coffee per capita consumption in the United States Figure 8 Number of units of selected leading coffee house and coffee chains
16 Sample Company Sample Company LLC I Business Plan Coffee’s health benefits Several recent studies have shown that coffee drinking may have more positive effects than just keeping you energized. Some studies have shown a reduction in mortality among regular coffee drinkers, especially older drinkers. Furthermore, there’s some indication that coffee may boost cognitive performance in the elderly, when it is normally declining. How we get our caffeine Where and how Americans like to get their coffee seems to change with age as well. Over a third of 18 to 29-year-olds had visited a Sample Company recently, compared to just a quarter of 50 to 64-year-olds. Older Americans were also much more likely to use a standard drip coffee maker, while younger people experimented more with how they got their caffeine kick. The graph on the left shows the structure of the population by age group. As mentioned above, more than 60% of people over 25 years old consume coffee. In Manhattan, the share of the target audience of the total population is 73.1%. Thus, we can conclude about the high potential demand for coffee by the residents of the borough. Figure 11 The structure of the population in Manhattan
17 SAMPLE COMPANY Ademify LLC I Business Plan American coffee preferences The most popular type of coffee is traditional coffee. This type of coffee is preferred by 43% of consumers. At the same time, traditional coffee is divided into two categories - Traditional coffee not gourmet (Traditional coffee drunk hot or iced that is not brewed from premium whole bean or ground varieties) and Traditional coffee gourmet (Traditional coffee drunk hot or iced that is brewed from premium whole bean or ground varieties). Traditional coffee not gourmet is preferred by 32% of consumers, while Traditional coffee gourmet is much less popular - only 13% of coffee consumers buy this type of coffee. The third popular type of coffee is Espresso-based beverages which includes cappuccino, espresso, latte, café mocha, macchiato and caffé Americano. The share of consumers who prefer such drinks is 24%. Slightly less popular drinks are Decaffeinated coffee (a cup of coffee that was decaffeinated or a combination of decaffeinated and caffeinated), Instant coffee (instant coffee from a can or jar or instant coffee from pre-measured stick pack) and Non-espresso based beverages (frozen blended coffee, cold brew coffee and nitro coffee). These drinks are preferred by less than 15% of consumers. Figure 12 Coffee consumption in the USA, by type of coffee
18 Sample Company Sample Company LLC I Business Plan Online coffee sales At the same time, apps for ordering coffee are quite popular in the USA. The largest number of users was registered in 2019. This year, the share of coffee consumers using apps was 27%. Thus, approximately one in four coffee consumers ordered coffee online. In 2020, the share of consumers ordering coffee online fell to 24%, despite the introduction of quarantine measures in connection with the coronavirus epidemic. However, this decline can be justified by eliminating the need of students and employees to get up early in the morning. As people stayed at home and could get up later, their need to consume coffee as an invigorating drink decreased. Summarizing all of the above, we can talk about the high investment potential of the project: • The U.S. is in first place by coffee consumption in the world • The demand for coffee in the country is steadily growing every year. • The coffee market is growing, the number of Sample Companys is increasing, which can indicate an easier entry to the market for new players • More than 60% of people over 25 regularly drink coffee. This age group accounts for 73% of Manhattan's population. Figure 13 App usage for ordering cofee
19 SAMPLE COMPANY Ademify LLC I Business Plan Competition The territory adjacent to the Sample Company is considered a local market; the residents can become customers due to their convenient location. The Isochron method can be used to analyze the local market potential. Following this method, three areas of residence are considered: the near one within a X-minute walk radius, the middle one within a XX-minute radius, and the far one - up to XX minutes. Accordingly, they provide XX%, XX%, and XX% of local sales. The intersection of zones with similar competitor zones allows us to estimate the "average" potential loss (with similar advertising and promotion costs). The method also allows us to consider the influence of natural obstacles such as a railway or a river. For the analysis, existing competitors in the area where the Sample Company was located were mapped. The result is shown in the diagram below. The Sample Company is located in Manhattan. Since the far-field boundaries XX minutes walk away, we used the Area Calculator2 service to estimate the area used in the isochron method accurately. Next, we multiplied the area of the territory by the population density in Manhattan. Thus, the number of the population in the zone was obtained. Manhattan's population density is XX.X thousand people / sq. mile. 2 https://www.mapsdirections.info/en/
20 Sample Company Sample Company LLC I Business Plan The zone radius of the accessible territory is X,X mi. Accordingly, we calculated the number of people living within walking distance of our Sample Company. This number was 146 thousand people. The table below shows the size of each zone's territory, the number of residents, and potential customers. Table 5 Zone radius, mi Zone Area, sq.mi Number of people per zone Share of local sales The number of potential customers in the zone Near zone Middle zone Far zone Further, we divided each zone into four areas: northeast, southeast, southwest, northwest. In each of the four areas of each zone, we counted the number of competitors. We then assumed that all other things being equal, each store would have the same market share. The results are shown in Table 6. Table 6 Number of potential clients Number of competitors The number of potential customers, taking into account the competitors’ clients Near zone Middle zone Far zone Near zone Middle zone Far zone Near zone Middle zone Far zone Northeast Southeast Southwest Northwest Under it, the potential of our local clientele = XX.X thousand people. Thus, in general, other things being equal, we can count on serving XX.X% of the local clientele. Assuming that every potential customer buys 1 cup of coffee at least once a month, then the Sample Company's potential monthly turnover will be $XXX,XXX at $X per cup. Conclusion This number of customers is quite enough to ensure the planned load of the Sample Company. The most promising direction of the geomarketing strategy is the southeast. There are no competitors in the middle and far zones in this direction, which will attract all potential customers. The second promising direction is northwest, due to the absence of competitors in the near-field, and a small number of competitors in the far-field.
21 SAMPLE COMPANY Ademify LLC I Business Plan Therefore, we will concentrate our marketing efforts towards these zones to get better marketing ROI. Strategy & Implementation Summary Our Company is preparing to start a business in July 2021. The start expenses are in Table 7: Table 7 Start expenses We have finished the premises renovation, bought all equipment and start recruiting the personnel. After that, our Company will be ready to proceed with work.
22 Sample Company Sample Company LLC I Business Plan Management Summary The management structure of the Company will be as follows: Applicant, CEO & Administrator. Figure 14 The Company management structure
23 SAMPLE COMPANY Ademify LLC I Business Plan Financial Projections The following is a five-year revenue forecast. Table 8 Revenue and COGS forecast 2 021 2 022 2 023 2 024 2 025 2 026 Revenue Coffee / tea Pastries Cakes Sandwiches Bakery products Yoghurts / milk breakfasts Cookies / snacks Total Revenue Direct Cost of Revenue Total Direct Costs Gross Margin Gross Margin/Revenue The table below shows the units and pricing assumptions underlying the revenue forecast: Table 9 Unit forecast 2 021 2 022 2 023 2 024 2 025 2 026 Units Coffee / tea Pastries Cakes Sandwiches Bakery products Yoghurts / milk breakfasts Cookies / snacks Total Units Unit Price Coffee / tea Pastries Cakes Sandwiches Bakery products Yoghurts / milk breakfasts Cookies / snacks
24 Sample Company Sample Company LLC I Business Plan The Company's personnel forecast is outlined below. Personnel wages indicate the average salary per position, and personnel costs are total wages for each job. Table 10 Personnel forecast 2021 2022 2023 2024 2025 2026 Year-end personnel count Owner Barista (morning) Barista (evening) Total personnel ($ per month) Owner Barista (morning) Barista (evening) Personnel costs Owner Barista (morning) Barista (evening) Total costs The Company intends to deploy its funding to maximize growth and profitability. In the Profit and Loss table below, gross margin equals revenue minus direct costs. The "bottom line" or profit (as measured before and after interest, taxes, depreciation, and amortization) equals gross margin minus operating expenses. Figure 12 Annual revenue
25 SAMPLE COMPANY Ademify LLC I Business Plan Table 11 Profit and Loss statement 2 021 2 022 2 023 2 024 2 025 2 026 Gross revenue COGS Salary and wages General costs Other expenditures Total costs Earnings before interest, taxes, depreciation, and amortization Amortization Earnings before interest and taxes Interest paid Profit before taxes Federal self-employment tax Federal net income tax State (PA) net income tax Net profit Profit accrual The chart below demonstrates when the Company is expected to become profitable. Break-even occurs when revenue equals expenses. According to the financials, month three will be the poin t at which break-even will occur. Figure 13 Break-even analysis
26 Sample Company Sample Company LLC I Business Plan The following depictions of the Company's projected cash flow show that the Company expects to maintain sufficient cash balances over this five-year plan. The "pro forma cash flow" table differs from the "pro forma profit and loss" (P&L) table. Pro forma cash flow is intended to represent the actual flow of cash in and out of the Company. In comparison, the revenue and expense projections on the P&L table include "noncash" items and exclude funding and investment illustration. Table 12 Cash flow statement 2 021 2 022 2 023 2 024 2 025 2 026 Cash at the beginning of the period Cash received from customers COGS Operating profit margin Salary and wages General costs Interest paid Taxes Cash flow from operating activities Land Building costs Purchase of equipment Other expenditures Cash flow from investing activities Proceeds from capital contributed Proceeds from loan Payments on loan Cash flow from financing activities Net cash flow FCFF Cash at the end of the period
27 SAMPLE COMPANY Ademify LLC I Business Plan The balance sheet below highlights the Company's projected assets, liabilities, and capital: Table 13 Pro forma balance sheet 2 021 2 022 2 023 2 024 2 025 2 026 Assets Fixed assets PP&E Investments inprogress Current assets Accounts receivable Inventories Cash TOTAL ASSETS Equity and liabilities Owner's equity Capital stock Retained earnings Long-term debts Long-term debts Short-term debts Short-term debts Accounts payable Taxes payable TOTAL EQUITY AND CAPITAL
28 Sample Company Sample Company LLC I Business Plan The chart in Figure 15 shows a sensitivity analysis of the project. The purpose of the sensitivity analysis is to determine how a change in the project's input data affects its financial result. It identifies the critical limits of change in these data. For example, revenue decreases or expenses increase that leave the NPV (net present value) positive. The more extensive these limits are, the less risky the project is. The sensitivity analysis algorithm is as follows: we change the selected parameters, reducing them by 50%, and then increasing by 50% in 10% increments; after each change, we recalculate its economy and display the size (NPV) on the graph. As can be seen from the diagram, the project's net present value remains positive with a 40% decrease in revenue and any changes in wages and capital costs. Figure 15
Appendix: Year 1 Financials by Month Table 14 Cash Flow Month 1 2 3 4 5 6 7 8 9 10 Cash at the beginning of the period Cash received from customers COGS Operating profit margin Salary and wages General costs Interest paid Taxes Cash flow from operating activities Land Building costs Purchase of equipment Other expenditures Cash flow from investing activities Proceeds from capital contributed Proceeds from loan Payments on loan Previous investments Cash flow from financing activities Net cash flow FCFF Cash at the end of the period
Table 15 Balance Sheet Month 1 2 3 4 5 6 7 8 9 10 11 12 Assets Fixed assets PP&E Investments in-progress Current assets Accounts receivable Inventories Cash TOTAL ASSETS Equity and liabilities Owner's equity Capital stock Retained earnings Long-term debts Long-term debts Short-term debts Short-term debts Accounts payable Taxes payable TOTAL EQUITY AND CAPITAL
Conclusion Let's summarize the data presented above: • Coffee consumption in the US is growing, with a moderate CAGR of 2%. • The project's investment period is short, and the Company may start working at the beginning of 2021. • Company owners invested $XXX,XXX, and the Company will reach a breakeven point in the Xrd month. The total Company profit will $X XXX thousand, big enough to make the investment idea attractive. Based on all the above, it can be concluded that financing the project is a productive investment with low risk.
www.masterplans.ruRkJQdWJsaXNoZXIy MjcxODE=