I, with 2 partners, are opening an Organic restaurant in Leawood, KS using local farmer products.
Financial Plan requirements:
Financials demonstrate the viability of a business while they help justify the need for funding. In this section describe financial estimates and rationale which include financial statements and forms that document the viability of your proposed business and its soundness as an investment.
1. Prepare three-year projections for income, expenses, and sources of funds.
- Base predictions on industry and historical trends.
- Make realistic assumptions.
- Allow for funding changes at different stages of your companyÂ's growth.
- Present a written rationale for your projections.
2. Indicate your startup costs.
- Detail how startup funds will be used to advance your proposed business
- List current capital and any other sources of funding you may have.
- Document your calculations.
- Use reasonable estimates and/or actual data (where possible).
3. Create a cash-flow statement.
See attached file for solution.
// In the new business, financial plan plays a, important role, as it helps in determining the capital structure and amount of capital required to start the business. In this context, there will be a discussion about the estimated start-up cost along with projection and assumptions for opening the restaurant in United States. In addition to this, we will also emphasis on the amount of cash flow in/out from the business in upcoming three years. //
To open the restaurant in Leawood, a city in South United States, it is decided to take a building on rent with minimum space of 3,000 Sq feet. The start-up cost includes expenses related to equipment, furniture, painting, reconstruction, rent, start-up labor, liquor license, and legal and consulting cost associated with opening the restaurant. At the beginning of business, $97,000 will be allocated for business operation reserve. All the start-up cost forecast is based on the market analysis, knowledge and experience in the industry.
All the three partners will give $110,000 as a start-up capital and in addition to this; they will provide a loan guarantee of $ 300,000. A grant of $130,000 has been received from the state government for opening the restaurant in this particular area. It has also been decided to generate $200,000 from equity investment (Godsey, 2010).
Start-up expenses for the current assets are as under
Start-up Expenses (Current and Long term Assets)
Fixtures and Lighting $32,250.00
Bar Equipment $26,183.00
Sound and Televisions $8,378.00
Office Equipment (2 Computers, Fax, Printer, Safe) $6,500.00
Long-term Assets (All kitchen equipment) $65,000.00
// Income and expense account and cash ...
Detailed solution to posting attached. All calculations shown.