January 2001
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Table of Contents
1.0
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3
Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2
2
2
2.0
Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1
Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.0
Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5
4.0
Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2
Industry Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6
6
7
7
5.0
Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1
Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4
Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
8
9
9
9
10
6.0
Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6.1
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
7.0
Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2
Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.6
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
12
12
13
14
16
18
18
Sigmund's Gourmet Pasta
1.0 Executive Summary
Sigmund's Gourmet Pasta will be the leading gourmet pasta restaurant in
Eugene, OR with a rapidly developing consumer brand and growing customer
base. The signature line of innovative, premium, pasta dishes include pesto with
smoked salmon, pancetta and peas linguini in an alfredo sauce, and fresh
mussels and clams in a marinara sauce. Sigmund's Gourmet Pasta also serves
distinctive salads, desserts, and beverages.
Sigmund's Gourmet Pasta will reinvent the pasta experience for individuals,
families, and take-away customers with discretionary income by selling high
quality, innovative products at a reasonable price, designing tasteful, convenient
locations, and providing industry benchmark customer service.
In order to grow at a rate consistent with our objectives, Sigmund's is offering an
additional $500,000 in equity. Existing members will be given the first right to
subscribe to the additional equity to allow each of them to maintain their
percentage of ownership. The portion not subscribed by existing members will be
available for prospective new investors.
Highlights (Planned)
$800,000
$700,000
$600,000
$500,000
$400,000
Sales
$300,000
Gross Margin
$200,000
Net Profit
$100,000
$0
($100,000)
($200,000)
2001
2002
2003
Page 1
Sigmund's Gourmet Pasta
1.1 Objectives
Sigmund's objectives are to build brand awareness and customer service, while
growing sales by opening new stores. Sigmund's intends to utilize the following
strategies to achieve these objectives:
• Offer high quality, innovative menu items, utilizing premium vegetables,
meats and cheeses.
• Provide an excellent dining value. Sigmund's provides large portions of
fresh, high-quality food for an average guest check of $10.
• Build brand awareness through inexpensive, guerrilla marketing tactics.
• Pursue disciplined restaurant growth.
• Provide superior customer service.
• Leverage the experience, intelligence, and skills of our sophisticated
advisory board.
1.2 Mission
Sigmund's Gourmet Pasta's mission is to provide the customer the finest pasta
meal and dining experience. We exist to attract and maintain customers. When
we adhere to this maxim, everything else will fall into place. Our services will
exceed the expectations of our customers.
1.3 Keys to Success
Location, Location, Location.
Sigmund's site selection criteria are critical to success. Arthur Johnson, former VP
Real Estate, Starbucks, helped us identify the following site selection criteria:
•
•
•
•
Daytime and evening populations.
Shopping patterns.
Car counts.
Household income levels.
Page 2
Sigmund's Gourmet Pasta
2.0 Company Summary
Sigmund's Gourmet Pasta is a gourmet pasta restaurant started in Eugene, OR.
Sigmund's serves individuals, families, and take-away customers with fresh,
creative, attractive pasta dishes, salads and desserts. Sigmund's uses
homemade pasta, fresh vegetables, and premium meats and cheeses.
The Eugene store in the Valley River Shopping Center will be the concept store
on which all future stores will be based.
2.1 Company Ownership
Sigmund's is a privately held Oregon Corporation. The majority stock holder is
Kevin Lewis.
2.2 Start-up Summary
Sigmund's will incur the following start-up costs:
•
•
•
•
•
•
•
•
•
Pasta machines.
Commercial stove.
Commercial refrigerators and freezers.
Commercial dishwasher.
Cabinets with cutting board surfaces.
Chairs and tables.
Beverage dispenser.
Dishware and flatware.
Assorted knives, mixing bowls, and other accessories needed in the
production of food.
• Point-of-Sale terminal.
• Computer with Internet connection, CD-RW, and printer.
Please note that the following items which are considered assets to be used for
more than a year will labeled long-term assets and will be depreciated using
G.A.A.P. approved straight-line depreciation method.
Page 3
Sigmund's Gourmet Pasta
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Menus
Insurance
Rent
Research and Development
Expensed Equipment
Other
Total Start-up Expense
Start-up Assets Needed
Cash Balance on Starting Date
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Total Assets
Total Requirements
$1,000
$100
$1,000
$0
$0
$0
$0
$0
$2,100
$87,900
$0
$87,900
$75,000
$162,900
$165,000
Funding
Investment
Kevin Lewis
Investor 2
Investor 3
Total Investment
$85,000
$40,000
$40,000
$165,000
Short-term Liabilities
Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities
$0
$0
$0
$0
Long-term Liabilities
Total Liabilities
$0
$0
Loss at Start-up
Total Capital
Total Capital and Liabilities
($2,100)
$162,900
$162,900
Page 4
Sigmund's Gourmet Pasta
Start-up
$180,000
$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses
Assets
Investment
Loans
3.0 Products
Sigmund's has created gourmet pastas and salads that are differentiated and
superior to competitors. Customers can taste the quality and freshness of the
product in every bite. The following are some characteristics of the product:
1.
2.
3.
4.
Sigmund's dough is made with Italian semolina flour.
Cheeses are all imported.
Vegetables are organic and fresh with three shipments a week.
Meats are all top-shelf varieties, organic when possible.
At Sigmund's, food is not the only product. Sigmund's prides themselves on
providing service that is on par with fine dining. This is accomplished through an
extensive training program and only hiring experienced employees.
At A Glance--The Protype Sigmund's Store:
•
•
•
•
•
•
Location: an upscale mall, suburban neighborhood, or urban retail district.
Design: bright, hip, and clean.
Size: 1,200-1,700 square feet.
Employees: six to seven full time.
Seating: 35-45.
Types of transactions: 80% dine in, 20% take away.
Page 5
Sigmund's Gourmet Pasta
4.0 Market Analysis Summary
The market can be divided into three target markets, individuals, families and
take-away business. Please see the next session for an intricate analysis of the
different segments.
Sigmund's expansion strategy is to further penetrate the existing markets by
opening an additional store (or stores) in Eugene in 2002. This clustering
approach enables Sigmund's Gourmet Pasta to increase brand awareness and
improve operating and marketing efficiencies. For example:
• Clustering allows Sigmund's to negotiate a fixed percentage contract with
the food wholesalers.
• Marketing expenditures can be spread over multiple revenue centers. This
strategy reduces risks involved with opening new restaurants given that
Sigmund's better understands the competitive conditions, consumer
tastes, and spending patterns in the market. When the Eugene market is
saturated with one or two additional stores, then Sigmund's intends to look
at new markets.
4.1 Market Segmentation
The market can be segmented into three target populations:
• Individuals: people that dine in by themselves.
• Families: a group of people, either friends or a group of non-nuclear
relatives dining together.
• Take away: people that prefer to eat Sigmund's food at another location.
Sigmund's customers are hungry individuals between the ages of 25 and 50,
making up 53% of Eugene (Eugene Chamber of Commerce). Age is not the most
defined demographic of this customer base; all age groups enjoy pasta. The
most defined characteristic of the target market is income. Gourmet pasta stores
have been very successful in high rent, mixed-use urban areas, such as
Northwest 23rd in Portland. These areas have a large day and night population
consisting of business people and families who have household disposable
incomes over $40,000. Combining several key demographic factors, Sigmund's
arrives at a profile of the primary customer as follows:
• Sophisticated families who live nearby.
• Young professionals who work close to the location.
• Shoppers who patronize the high rent stores.
Page 6
Sigmund's Gourmet Pasta
Table: Market Analysis
Market Analysis
Potential Customers
Individuals
Families
Take away
Total
Growth
8%
9%
10%
9.27%
2001
12,457
8,974
24,574
46,005
2002
13,454
9,782
27,031
50,267
2003
14,530
10,662
29,734
54,926
2004
15,692
11,622
32,707
60,021
2005
16,947
12,668
35,978
65,593
CAGR
8.00%
9.00%
10.00%
9.27%
Market Analysis (Pie)
Individuals
Families
Take away
4.2 Industry Analysis
In 1999, global pasta sales reached $8 billion. Pasta sales are estimated to grow
by at least 10% for the next five years. The big four, Pastabilities, PastaFresh,
Pasta Works, and Pasta Perfect contribute $2 billion in combined 2000 revenues.
The rest of the market is primarily made up of independent restaurants. Though
the barrier to entry into the pasta market is low, due to insufficient capitalization,
most entrants fail within their first six months.
4.2.1 Competition and Buying Patterns
National Competition
• Pastabilities. This restaurant offers consumers their choice of noodles,
sauces, and ingredients, allowing the customer to assemble their dish as
they wish. Food quality is average.
• PastaFresh. This company has a limited selection but the dishes are
assembled with high-quality ingredients. The price point is high, but the
food is quite good.
Page 7
Sigmund's Gourmet Pasta
• Pasta Works. This company offers pasta that is reasonably fresh,
reasonably innovative and at a lower price point. The company was sold a
few years ago, and consequently the direction of management has been
stagnant lately and has resulted in excessive employee turnover.
• Perfect Pasta. This company had medium-priced pasta dishes that use
average ingredients, no creativity, and less than average store
atmosphere. Sigmund's is not sure how this company has been able to
grow in size as their whole product is mediocre at best.
Local Competition
• (name omitted)- This is an upscale Italian restaurant that has a limited
selection of pasta dishes. Although the selection is limited and pricey, the
dishes are quite good.
• (name omitted)- An Italian restaurant with a decent pasta selection,
however quality is inconsistent.
• (name omitted)- An upscale restaurant with a large wine selection and
good salads. Everything else is mediocre at best and over-priced. Service
can often be poor.
5.0 Strategy and Implementation Summary
Sigmund's will leverage their two competitive advantages, superior product and
industry benchmarked customer service to build a loyal customer base.
5.1 Competitive Edge
Sigmund's competitive edge is quite simple - superior product and superior
service.
• Product: the product will have the freshest ingredients including
homemade pasta, imported cheeses, organic vegetables and top-shelf
meats. The product will also be developed to enhance presentation,
everything will be aesthetically pleasing.
• Service: customer service will be the priority. All employees will ensure
that the customers are having the most pleasant dining experience. All
employees will go through an extensive training program and only
experienced people will be hired.
Page 8
Sigmund's Gourmet Pasta
5.2 Marketing Strategy
Sigmund's Gourmet Pasta's advertising budget is very limited, so the advertising
program is simple. Sigmund's will do direct mail, banner ads, and inserts, with
inserts in the Register-Guard likely to be the most successful of the campaigns.
Lastly, Sigmund's will leverage personal relationships to get an article about the
opening of Sigmund's in the Register-Guard business section. Previously, friends
who have had their restaurant featured in the Register-Guard have seen a
dramatic increase of sales immediately after the article was published.
5.3 Sales Strategy
The sales strategy will be to allow people to try the superior product and service
for themselves. In essence, the product will speak for itself. The marketing
campaign will attract people into Sigmund's and the sales strategy will be to let
people experience Sigmund's, this will be sufficient to turn the person into a longterm customer.
5.3.1 Sales Forecast
The first two months will be used to get the restaurant up and running. By month
three things will get a bit busier. Sales will gradually increase with profitability
being reached by the beginning of year two.
Table: Sales Forecast (Planned)
Sales Forecast
Sales
Individuals
Families
Take away
Total Sales
2001
$103,710
$150,304
$25,401
$279,415
2002
$262,527
$380,474
$64,300
$707,301
2003
$286,024
$414,528
$70,055
$770,608
Direct Cost of Sales
Individuals
Families
Take away
Subtotal Direct Cost of Sales
2001
$46,669
$67,637
$11,431
$125,737
2002
$118,137
$171,213
$28,935
$318,286
2003
$128,711
$186,538
$31,525
$346,773
Page 9
Sigmund's Gourmet Pasta
Sales Monthly (Planned)
$40,000
$35,000
$30,000
$25,000
Individuals
$20,000
Families
Take away
$15,000
$10,000
$5,000
$0
Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
5.4 Milestones
Sigmund's will have several milestones:
1. Business plan completion. This will be done as a roadmap for the
organization. This will be an indispensable tool for the ongoing
performance and improvement of the company. The business plan will be
also used for raising capital.
2. Set up of the restaurant.
3. Opening of the second store.
4. Profitability.
Table: Milestones (Planned)
Milestones
Milestone
Business plan completion
Set up of the restaurant
Opening of the second store
Profitability
Totals
Start Date
1/1/01
1/1/01
1/1/01
1/1/01
End Date
2/1/01
3/1/01
1/1/02
2/1/02
Budget
Manager
Department
$0
Page 10
Sigmund's Gourmet Pasta
6.0 Management Summary
Kevin Lewis, President, CPA
• Duties: strategic development, back-office administration, financial
analysis, internal control, server, and line cook.
• Education: BS general science and BS accounting, University of Oregon.
• Restaurant experience: two years as a server and busser.
• Business experience: staff accountant (Arthur Andersen) and controller
(Hollywood Video).
Chef Darryl Darci, Executive Chef
• Duties: manages the back of the house, product development, kitchen
hiring, kitchen training, and inventory management.
• Education: Western Culinary Institute.
• Restaurant Experience: fifteen years of restaurant experience at Harrah's
& JQ Hammonds. At JQ Hammonds ran an opening crew for new
properties, also the executive sous chef managing 20 and plated 800
meals a day.
Erika Lewis, General Manager
• Duties: manages the front of the house, human resources, server hiring,
server training, and quality control.
• Education: BS sociology, University of Oregon.
• Business experience: office and facilities manager, nCube Inc., managed a
staff of five, managed system implementation and construction projects
and negotiated satellite office lease.
Advisory Board
•
•
•
•
John Stevens, VP Food Starbucks Coffee Co., Inc.
Arthur Johnson, Former VP Real Estate Starbucks Coffee Co., Inc.
Donald Davis, franchise owner of Sheraton Hotel and Tony Roma's.
Jerry Slippery, CPA, Partner, Arthur Anderson.
Page 11
Sigmund's Gourmet Pasta
6.1 Personnel Plan
Kevin, Darryl, and Erika will all be working full time. In addition to this
management team, there will be four other full-time employees brought on board
during the end of the third month for the first store. The second store will see the
hiring of five additional employees.
Table: Personnel (Planned)
Personnel Plan
Kevin
Erika
Darryl
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Total Payroll
2001
$36,000
$36,000
$72,000
$11,480
$11,480
$11,480
$10,472
$0
$0
$0
$0
$0
$188,912
2002
$37,800
$37,800
$75,600
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$272,160
2003
$39,690
$39,690
$79,380
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$13,440
$279,720
Total People
Payroll Burden
Total Payroll Expenditures
7
$28,337
$217,249
12
$40,824
$312,984
12
$41,958
$321,678
7.0 Financial Plan
The following sections will outline important financial information.
7.1 Important Assumptions
The following table details important financial assumptions.
Table: General Assumptions
General Assumptions
Short-term Interest Rate %
Long-term Interest Rate %
Tax Rate %
Expenses in Cash %
Personnel Burden %
2001
10.00%
10.00%
30.00%
10.00%
15.00%
2002
10.00%
10.00%
0.00%
10.00%
15.00%
2003
10.00%
10.00%
0.00%
10.00%
15.00%
Page 12
Sigmund's Gourmet Pasta
7.2 Break-even Analysis
The Break-even Analysis indicates that $40,000 will be needed in monthly
revenue to reach the break-even point.
Table: Break-even Analysis
Break-even Analysis:
Monthly Units Break-even
Monthly Sales Break-even
4,000
$40,000
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost
$10.00
$4.50
$22,000
Break-even Analysis
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
$0
$14,000
$28,000
$42,000
$56,000
$70,000
Monthly break-even point
Break-even point = where line intersects with 0
Page 13
Sigmund's Gourmet Pasta
7.3 Projected Profit and Loss
The following table will indicate projected profit and loss.
Table: Profit and Loss (Planned)
Pro Forma Profit and Loss
2001
$279,415
$125,737
$0
-----------$125,737
$153,678
55.00%
2002
$707,301
$318,286
$0
-----------$318,286
$389,016
55.00%
2003
$770,608
$346,773
$0
-----------$346,773
$423,834
55.00%
$1,200
$0
$1,200
$188,912
$28,337
$15,000
$0
$0
$2,400
$18,000
$0
-----------$255,049
($101,370)
$0
$0
$0
$0
($101,370)
-36.28%
$1,200
$0
$1,200
$272,160
$40,824
$35,000
$0
$0
$3,600
$36,000
$0
-----------$389,984
($968)
$0
$0
$0
$0
($968)
-0.14%
$1,200
$0
$1,200
$279,720
$41,958
$35,000
$0
$0
$3,600
$36,000
$0
-----------$398,678
$25,156
$0
$0
$0
$0
$25,156
3.26%
Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales
Gross Margin
Gross Margin %
Operating Expenses:
Advertising/Promotion
Travel
Miscellaneous
Payroll Expense
Payroll Burden
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Contract/Consultants
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense Short-term
Interest Expense Long-term
Taxes Incurred
Extraordinary Items
Net Profit
Net Profit/Sales
Profit Monthly (Planned)
$0
($2,000)
($4,000)
($6,000)
($8,000)
($10,000)
($12,000)
($14,000)
($16,000)
($18,000)
($20,000)
Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Page 14
Sigmund's Gourmet Pasta
Profit Yearly (Planned)
$40,000
$20,000
$0
($20,000)
($40,000)
($60,000)
($80,000)
($100,000)
($120,000)
2001
2002
2003
Page 15
Sigmund's Gourmet Pasta
7.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
Table: Cash Flow (Planned)
Pro Forma Cash Flow
2001
2002
2003
Cash Received
Cash from Operations:
Cash Sales
From Receivables
Subtotal Cash from Operations
$279,415
$0
$279,415
$707,301
$0
$707,301
$770,608
$0
$770,608
Additional Cash Received
Extraordinary Items
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of other Short-term Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
$0
$0
$0
$0
$0
$0
$0
$0
$279,415
$0
$0
$0
$0
$0
$0
$0
$100,000
$807,301
$0
$0
$0
$0
$0
$0
$0
$0
$770,608
Expenditures
Expenditures from Operations:
Cash Spent on Costs and Expenses
Wages, Salaries, Payroll Taxes, etc.
Payment of Accounts Payable
Subtotal Spent on Operations
2001
2002
2003
$14,854
$217,249
$116,401
$348,504
$36,029
$312,984
$299,621
$648,633
$38,877
$321,678
$346,582
$707,137
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 Short-term Assets
Purchase Long-term Assets
Dividends
Adjustment for Assets Purchased on Credit
Subtotal Cash Spent
$0
$0
$0
$0
$0
$0
$0
$0
$348,504
$0
$0
$0
$0
$0
$100,000
$0
$0
$748,633
$0
$0
$0
$0
$0
$0
$0
$0
$707,137
Net Cash Flow
Cash Balance
($69,089)
$18,811
$58,668
$77,479
$63,471
$140,950
Page 16
Sigmund's Gourmet Pasta
Cash (Planned)
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
Net Cash Flow
$20,000
Cash Balance
$10,000
$0
($10,000)
($20,000)
Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov Dec
Page 17
Sigmund's Gourmet Pasta
7.5 Projected Balance Sheet
The following table will indicate the projected balance sheet.
Table: Balance Sheet (Planned)
Pro Forma Balance Sheet
Assets
Short-term Assets
Cash
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
2001
$18,811
$0
$18,811
2002
$77,479
$0
$77,479
2003
$140,950
$0
$140,950
$75,000
$15,000
$60,000
$78,811
$175,000
$50,000
$125,000
$202,479
$175,000
$85,000
$90,000
$230,950
Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities
2001
$17,282
$0
$0
$17,282
2002
$41,918
$0
$0
$41,918
2003
$45,232
$0
$0
$45,232
Long-term Liabilities
Total Liabilities
$0
$17,282
$0
$41,918
$0
$45,232
$165,000
($2,100)
($101,370)
$61,530
$78,811
$61,530
$265,000
($103,470)
($968)
$160,561
$202,479
$160,561
$265,000
($104,439)
$25,156
$185,717
$230,950
$185,717
Liabilities and Capital
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
7.6 Business Ratios
The following table outlines some of the more important ratios from the
restaurant industry. The final column, Industry Profile, details specific ratios
based on the industry as it is classified by the Standard Industry Classification
(SIC) code, 5812, Eating Places.
Page 18
Sigmund's Gourmet Pasta
Table: Ratios (Planned)
Ratio Analysis
2001
0.00%
2002
153.14%
2003
8.95%
Industry Profile
7.60%
0.00%
0.00%
0.00%
23.87%
76.13%
100.00%
0.00%
0.00%
0.00%
38.27%
61.73%
100.00%
0.00%
0.00%
0.00%
61.03%
38.97%
100.00%
4.50%
3.60%
35.60%
43.70%
56.30%
100.00%
21.93%
0.00%
21.93%
78.07%
20.70%
0.00%
20.70%
79.30%
19.59%
0.00%
19.59%
80.41%
32.70%
28.50%
61.20%
38.80%
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
100.00%
55.00%
91.28%
0.43%
-36.28%
100.00%
55.00%
55.14%
0.17%
-0.14%
100.00%
55.00%
51.74%
0.16%
3.26%
100.00%
60.50%
39.80%
3.20%
0.70%
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Assets
Pre-tax Return on Net Worth
1.09
1.09
21.93%
-128.62%
-164.75%
1.85
1.85
20.70%
-0.48%
-0.60%
3.12
3.12
19.59%
10.89%
13.55%
0.98
0.65
61.20%
1.70%
4.30%
2001
$39,916
2002
$58,942
2003
$64,217
Industry
$0
0.00%
2001
-36.28%
-164.75%
2002
-0.14%
-0.60%
2003
3.26%
13.55%
n.a
n.a
Activity Ratios
Accounts Receivable Turnover
Collection Days
Inventory Turnover
Accounts Payable Turnover
Total Asset Turnover
0.00
0
0.00
7.74
3.55
0.00
0
0.00
7.74
3.49
0.00
0
0.00
7.74
3.34
n.a
n.a
n.a
n.a
n.a
Debt Ratios
Debt to Net Worth
Short-term Liab. to Liab.
0.28
1.00
0.26
1.00
0.24
1.00
n.a
n.a
$1,530
0.00
$35,561
0.00
$95,717
0.00
n.a
n.a
0.28
22%
1.09
4.54
$0
0.29
21%
1.85
4.41
0.00
0.30
20%
3.12
4.15
0.00
n.a
n.a
n.a
n.a
n.a
Sales Growth
Percent of Total Assets
Accounts Receivable
Inventory
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Total Assets
Short-term Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Business Vitality Profile
Sales per Employee
Survival Rate
Additional Ratios
Net Profit Margin
Return on Equity
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 (Planned)
Sales Forecast
Sales
Individuals
Families
Take away
Total Sales
Jan
$0
$0
$0
$0
Feb
$0
$0
$0
$0
Mar
$3,895
$5,645
$954
$10,494
Apr
$6,813
$9,874
$1,669
$18,356
May
$7,906
$11,458
$1,936
$21,300
Jun
$9,286
$13,458
$2,274
$25,018
Jul
$10,057
$14,575
$2,463
$27,095
Aug
$10,664
$15,455
$2,612
$28,731
Sep
$12,044
$17,455
$2,950
$32,449
Oct
$13,424
$19,455
$3,288
$36,167
Nov
$14,804
$21,455
$3,626
$39,885
Dec
$14,817
$21,474
$3,629
$39,920
Direct Cost of Sales
Individuals
Families
Take away
Subtotal Direct Cost of Sales
Jan
$0
$0
$0
$0
Feb
$0
$0
$0
$0
Mar
$1,753
$2,540
$429
$4,722
Apr
$3,066
$4,443
$751
$8,260
May
$3,558
$5,156
$871
$9,585
Jun
$4,179
$6,056
$1,023
$11,258
Jul
$4,526
$6,559
$1,108
$12,193
Aug
$4,799
$6,955
$1,175
$12,929
Sep
$5,420
$7,855
$1,327
$14,602
Oct
$6,041
$8,755
$1,480
$16,275
Nov
$6,662
$9,655
$1,632
$17,948
Dec
$6,668
$9,663
$1,633
$17,964
Page 1
Appendix
Appendix Table: Personnel (Planned)
Personnel Plan
Kevin
Erika
Darryl
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Full time employee
Total Payroll
Jan
$3,000
$3,000
$6,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
$12,000
Feb
$3,000
$3,000
$6,000
$280
$280
$280
$280
$0
$0
$0
$0
$0
$13,120
Mar
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$112
$0
$0
$0
$0
$0
$15,472
Apr
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
May
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Jun
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Jul
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Aug
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Sep
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Oct
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Nov
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Dec
$3,000
$3,000
$6,000
$1,120
$1,120
$1,120
$1,120
$0
$0
$0
$0
$0
$16,480
Total People
Payroll Burden
Total Payroll Expenditures
3
$1,800
$13,800
7
$1,968
$15,088
7
$2,321
$17,793
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
7
$2,472
$18,952
Page 2
Appendix
Appendix Table: General Assumptions
General Assumptions
Short-term Interest Rate %
Long-term Interest Rate %
Tax Rate %
Expenses in Cash %
Personnel Burden %
Jan
10.00%
10.00%
30.00%
10.00%
15.00%
Feb
10.00%
10.00%
30.00%
10.00%
15.00%
Mar
10.00%
10.00%
30.00%
10.00%
15.00%
Apr
10.00%
10.00%
30.00%
10.00%
15.00%
May
10.00%
10.00%
30.00%
10.00%
15.00%
Jun
10.00%
10.00%
30.00%
10.00%
15.00%
Jul
10.00%
10.00%
30.00%
10.00%
15.00%
Aug
10.00%
10.00%
30.00%
10.00%
15.00%
Sep
10.00%
10.00%
30.00%
10.00%
15.00%
Oct
10.00%
10.00%
30.00%
10.00%
15.00%
Nov
10.00%
10.00%
30.00%
10.00%
15.00%
Dec
10.00%
10.00%
30.00%
10.00%
15.00%
Page 3
Appendix
Appendix Table: Profit and Loss (Planned)
Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Production Expenses
Total Cost of Sales
Gross Margin
Gross Margin %
Operating Expenses:
Advertising/Promotion
Travel
Miscellaneous
Payroll Expense
Payroll Burden
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Contract/Consultants
Total Operating Expenses
Profit Before Interest and Taxes
Interest Expense Short-term
Interest Expense Long-term
Taxes Incurred
Extraordinary Items
Net Profit
Net Profit/Sales
Jan
$0
$0
$0
-----------$0
$0
0.00%
Feb
$0
$0
$0
-----------$0
$0
0.00%
Mar
$10,494
$4,722
$0
-----------$4,722
$5,772
55.00%
Apr
$18,356
$8,260
$0
-----------$8,260
$10,096
55.00%
May
$21,300
$9,585
$0
-----------$9,585
$11,715
55.00%
Jun
$25,018
$11,258
$0
-----------$11,258
$13,760
55.00%
Jul
$27,095
$12,193
$0
-----------$12,193
$14,902
55.00%
Aug
$28,731
$12,929
$0
-----------$12,929
$15,802
55.00%
Sep
$32,449
$14,602
$0
-----------$14,602
$17,847
55.00%
Oct
$36,167
$16,275
$0
-----------$16,275
$19,892
55.00%
Nov
$39,885
$17,948
$0
-----------$17,948
$21,937
55.00%
Dec
$39,920
$17,964
$0
-----------$17,964
$21,956
55.00%
$100
$0
$100
$12,000
$1,800
$1,250
$0
$0
$200
$1,500
$0
-----------$16,950
($16,950)
$0
$0
$0
$0
($16,950)
0.00%
$100
$0
$100
$13,120
$1,968
$1,250
$0
$0
$200
$1,500
$0
-----------$18,238
($18,238)
$0
$0
$0
$0
($18,238)
0.00%
$100
$0
$100
$15,472
$2,321
$1,250
$0
$0
$200
$1,500
$0
-----------$20,943
($15,171)
$0
$0
$0
$0
($15,171)
-144.57%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($12,006)
$0
$0
$0
$0
($12,006)
-65.41%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($10,387)
$0
$0
$0
$0
($10,387)
-48.76%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($8,342)
$0
$0
$0
$0
($8,342)
-33.34%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($7,200)
$0
$0
$0
$0
($7,200)
-26.57%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($6,300)
$0
$0
$0
$0
($6,300)
-21.93%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($4,255)
$0
$0
$0
$0
($4,255)
-13.11%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($2,210)
$0
$0
$0
$0
($2,210)
-6.11%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($165)
$0
$0
$0
$0
($165)
-0.41%
$100
$0
$100
$16,480
$2,472
$1,250
$0
$0
$200
$1,500
$0
-----------$22,102
($146)
$0
$0
$0
$0
($146)
-0.37%
Page 4
Appendix
Appendix Table: Cash Flow (Planned)
Pro Forma Cash Flow
Cash Received
Cash from Operations:
Cash Sales
From Receivables
Subtotal Cash from Operations
Additional Cash Received
Extraordinary Items
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of other Short-term Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
0.00%
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$0
$0
$0
$0
$0
$0
$10,494
$0
$10,494
$18,356
$0
$18,356
$21,300
$0
$21,300
$25,018
$0
$25,018
$27,095
$0
$27,095
$28,731
$0
$28,731
$32,449
$0
$32,449
$36,167
$0
$36,167
$39,885
$0
$39,885
$39,920
$0
$39,920
$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
$0
$10,494
$0
$0
$0
$0
$0
$0
$0
$0
$18,356
$0
$0
$0
$0
$0
$0
$0
$0
$21,300
$0
$0
$0
$0
$0
$0
$0
$0
$25,018
$0
$0
$0
$0
$0
$0
$0
$0
$27,095
$0
$0
$0
$0
$0
$0
$0
$0
$28,731
$0
$0
$0
$0
$0
$0
$0
$0
$32,449
$0
$0
$0
$0
$0
$0
$0
$0
$36,167
$0
$0
$0
$0
$0
$0
$0
$0
$39,885
$0
$0
$0
$0
$0
$0
$0
$0
$39,920
Expenditures
Expenditures from Operations:
Cash Spent on Costs and Expenses
Wages, Salaries, Payroll Taxes, etc.
Payment of Accounts Payable
Subtotal Spent on Operations
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Dec
$190
$13,800
$57
$14,047
$190
$15,088
$1,710
$16,988
$662
$17,793
$1,852
$20,307
$1,016
$18,952
$6,066
$26,034
$1,149
$18,952
$9,184
$29,284
$1,316
$18,952
$10,387
$30,655
$1,409
$18,952
$11,870
$32,232
$1,483
$18,952
$12,706
$33,140
$1,650
$18,952
$13,396
$33,998
$1,818
$18,952
$14,902
$35,671
$1,985
$18,952
$16,408
$37,345
$1,986
$18,952
$17,864
$38,802
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 Short-term Assets
Purchase Long-term Assets
Dividends
Adjustment for Assets Purchased on Credit
Subtotal Cash Spent
$0
$0
$0
$0
$0
$0
$0
$0
$14,047
$0
$0
$0
$0
$0
$0
$0
$0
$16,988
$0
$0
$0
$0
$0
$0
$0
$0
$20,307
$0
$0
$0
$0
$0
$0
$0
$0
$26,034
$0
$0
$0
$0
$0
$0
$0
$0
$29,284
$0
$0
$0
$0
$0
$0
$0
$0
$30,655
$0
$0
$0
$0
$0
$0
$0
$0
$32,232
$0
$0
$0
$0
$0
$0
$0
$0
$33,140
$0
$0
$0
$0
$0
$0
$0
$0
$33,998
$0
$0
$0
$0
$0
$0
$0
$0
$35,671
$0
$0
$0
$0
$0
$0
$0
$0
$37,345
$0
$0
$0
$0
$0
$0
$0
$0
$38,802
($14,047)
$73,853
($16,988)
$56,865
($9,813)
$47,052
($7,678)
$39,374
($7,984)
$31,390
($5,636)
$25,754
($5,137)
$20,617
($4,410)
$16,207
($1,550)
$14,658
$495
$15,153
$2,540
$17,693
$1,118
$18,811
Net Cash Flow
Cash Balance
Page 5
Appendix
Appendix Table: Balance Sheet (Planned)
Pro Forma Balance Sheet
Assets
Short-term Assets
Cash
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Starting Balances
$87,900
$0
$87,900
Jan
$73,853
$0
$73,853
Feb
$56,865
$0
$56,865
Mar
$47,052
$0
$47,052
Apr
$39,374
$0
$39,374
May
$31,390
$0
$31,390
Jun
$25,754
$0
$25,754
Jul
$20,617
$0
$20,617
Aug
$16,207
$0
$16,207
Sep
$14,658
$0
$14,658
Oct
$15,153
$0
$15,153
Nov
$17,693
$0
$17,693
Dec
$18,811
$0
$18,811
$75,000
$0
$75,000
$162,900
$75,000
$1,250
$73,750
$147,603
$75,000
$2,500
$72,500
$129,365
$75,000
$3,750
$71,250
$118,302
$75,000
$5,000
$70,000
$109,374
$75,000
$6,250
$68,750
$100,140
$75,000
$7,500
$67,500
$93,254
$75,000
$8,750
$66,250
$86,867
$75,000
$10,000
$65,000
$81,207
$75,000
$11,250
$63,750
$78,408
$75,000
$12,500
$62,500
$77,653
$75,000
$13,750
$61,250
$78,943
$75,000
$15,000
$60,000
$78,811
Accounts Payable
Current Borrowing
Other Short-term Liabilities
Subtotal Short-term Liabilities
$0
$0
$0
$0
Jan
$1,653
$0
$0
$1,653
Feb
$1,653
$0
$0
$1,653
Mar
$5,761
$0
$0
$5,761
Apr
$8,839
$0
$0
$8,839
May
$9,992
$0
$0
$9,992
Jun
$11,448
$0
$0
$11,448
Jul
$12,261
$0
$0
$12,261
Aug
$12,901
$0
$0
$12,901
Sep
$14,357
$0
$0
$14,357
Oct
$15,812
$0
$0
$15,812
Nov
$17,268
$0
$0
$17,268
Dec
$17,282
$0
$0
$17,282
Long-term Liabilities
Total Liabilities
$0
$0
$0
$1,653
$0
$1,653
$0
$5,761
$0
$8,839
$0
$9,992
$0
$11,448
$0
$12,261
$0
$12,901
$0
$14,357
$0
$15,812
$0
$17,268
$0
$17,282
$165,000
($2,100)
$0
$162,900
$162,900
$162,900
$165,000
($2,100)
($16,950)
$145,950
$147,603
$145,950
$165,000
($2,100)
($35,188)
$127,712
$129,365
$127,712
$165,000
($2,100)
($50,359)
$112,541
$118,302
$112,541
$165,000
($2,100)
($62,365)
$100,535
$109,374
$100,535
$165,000
($2,100)
($72,752)
$90,148
$100,140
$90,148
$165,000
($2,100)
($81,094)
$81,806
$93,254
$81,806
$165,000
($2,100)
($88,294)
$74,606
$86,867
$74,606
$165,000
($2,100)
($94,594)
$68,306
$81,207
$68,306
$165,000
($2,100)
($98,849)
$64,051
$78,408
$64,051
$165,000
($2,100)
($101,059)
$61,841
$77,653
$61,841
$165,000
($2,100)
($101,225)
$61,675
$78,943
$61,675
$165,000
($2,100)
($101,370)
$61,530
$78,811
$61,530
Liabilities and Capital
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
Page 6