®
Business Plan
Tuesday, March 14, 2006
Contact
• Jack Smith
123 Mainstreet
Columbus, IN 47203
(555) 555-5555
jsmith@chipotle.com
• Company Website: www.chipotle.com
Slide 2
The Idea
• The idea for Chipotle (pronounced chiPOAT-lay) is simple: Offer a simple menu
of great food prepared fresh each day,
using many of the same cooking
techniques as gourmet restaurants.
• Then serve the food quickly, in a cool
atmosphere.
Slide 3
The Sandbox: “Fast-Casual”
• We compete in a category of dining called “fastcasual”—the fastest growing segment of the
restaurant industry.
• The fast-casual market pulls together the finer
qualities of multiple restaurant sectors. It takes the
fast from fast-food, the quality and ambience of
casual dining, and adds a focus on health and
freshness, all at an average ticket price below $10.
• Because of these appealing characteristics, sales for
the market have grown at an average of 12.5% per
year since 2001.
Slide 4
The Business Model
• Using higher-quality ingredients. We use a variety of
ingredients that we purchase from carefully selected
suppliers. We concentrate on where we obtain each
ingredient. Some of the ingredients we use include
naturally raised pork, beef and chicken, as well as
organically grown produce, and we continue to
investigate using even more naturally raised, organically
grown ingredients, in light of pricing considerations.
• A few things, thousands of ways. We only serve a
few things: burritos, burrito bols (a burrito without the
tortilla), tacos and salads. We plan to keep a simple
menu, but we'll always consider sensible additions.
Slide 5
The Menu: Choose an Entrée…
Slide 6
And Finish Up…
•
A focused menu.
You choose exactly
what you want. We
make it while you
watch. That may
mean a little more
salsa, a little less
sour cream,
whatever you'd like.
Build your version of
the perfect burrito.
Price of Desire:
About 5 Bucks.
Slide 7
The Customer:
Market Analysis
The Customer
• The primary customer for Chipotle’s is between the ages of 25
and 54. The customer is slightly older than the typical fastfood customer mainly due to their desire for a more healthy
menu without sacrificing speed.
• These customers desire a…
– Focus on freshness, with products made to order, and excluding the
use of frozen ingredients and microwaves
– Focus on innovative flavors, including condiments that fuse elements
from distinct cuisines
– Focus on consumer choice, sometimes provided through extensive
selection of condiments, but frequently extended to complete control of
product content
– Focus on health, including whole-grain, and organic, as well as trans-fat
and MSG free ingredients
Slide 9
Bartholomew County, Indiana
Slide 10
Community Profile
• Population of Columbus is 40,000
• County (Bartholomew) population is 70,000
• Manufacturing is main industry. Two Fortune 500
companies – Cummins Engine Co. (diesel engines)
and ArvinMeritor (auto parts)
• Also, a regional hub for retail, educational and medical
services
• In 1994, Columbus, Indiana was one of ten cities in the
United States awarded “All America City” status
Slide 11
Business Climate
• Columbus has the best business climate in
Indiana:
• Ranked #1 of any city under 50,000 population in
Indiana (Site Selection Magazine)
• Columbus has the 30th best small community
business climate in the United States
• Based on a February 2002 ranking by
BizDemographics of 496 small U.S. cities
Slide 12
A Growing Community
Slide 13
An Educated Customer Base
Slide 14
A Market of Wealth
Slide 15
Targeted Customers
• Within Columbus, Indiana, Chipotle’s will target
three primary customer segments. These are as
follows:
– The Local Market: Defined as customers within a seven
mile radius of the store location.
– Commuting Workers and Tourists: Customers
commuting into the city on a daily basis or for leisure
travel.
– Commercial Events: Business customers within the
county that require catering services.
Slide 16
Target Market Descriptions
Description
Target Market #1
Target Market #2
Target Market #3
Name
Local Market
Commuting Workers &
Tourists
Commercial Events
Description
People and households
within 7 miles of the
restaurant
People migrating into
Bartholomew County
for work or tourism
Commercial business in
Bartholomew County
that need catering
event services
Demographics
Consumers ages 25 to 54 /
$54,000 average
household income
Workers and Tourists ages
21 to 54
Businesses from 20 to 300
employees
Buying Behavior
Frequent but small
purchases (5 times
per year at about
$9.00 per patron)
Infrequent but larger
purchases (1 time but
spends upward of
$12.00 per patron)
Infrequent but very large
purchases (2 events
per year spending
$600.00 per event)
Size (numbers/dollars)
58,600 residents / 20,000
households / $58
million local market for
restaurant sales
9,000 daily commuters /
28,000 annual tourists
400 businesses
Projected Sales
$400,000
$150,000
$100,000
Trends
Slow to moderate growth /
spending less on
meals away from
home on average
Good growth / new arts
theatre nearby should
improve traffic
Excellent growth in
company numbers
and employment
trends
Target Market Strategy
Strategy
Target Market #1
Target Market #2
Target Market #3
Positioning Message
The Gourmet Restaurant
Where You Eat With
Your Hands
Gourmet Burritos…Fast
Big Burritos For Big Crowds
Pricing
Entrees between $4 and $6
Entrees between $4 and $16
Per head range from $8 to
$12
Lunch time drive-thru speed is
largest consideration
Banquet style service
At retail location
On-site catering set-up and
service
Visitors center, community
development, tourism
bureau, hotel concierges
Chamber of commerce, HR
managers, event
planners, public
relations managers
Hotel brochures, tourism
directory, billboards,
restaurant guide
Direct mail, business section
of newspaper
Product Customization
Distribution
At retail location
Promotions:
-Contact Sphere
-Advertising
Newspaper, yellow pages,
specialty publications,
website
-Public Relations
Annual 5K charity run for
diabetes assn.
-Personal Selling
-Sales Promotions
Part-time banquet sales
coordinator
Discount coupons, samples
Hotel referral fees
15% off first event promotion
Commuting Patterns
• More than 16% of Bartholomew County’s workforce
commutes into Columbus on a daily basis.
• This commuting inflow surges the daily workforce to over
39,000 employees.
Almost 9,000
worker’s
commute into
Bartholomew
County every day.
Slide 19
Customer Ring Study
• The proposed location for Chipotle is
500 Franklin Street in Columbus, IN
• Within a 7 mile radius of this location the market
contains…
Description
7 Miles
Population
58,600
Households
20,000
Average Household Income
$54,000
Source: Easidemographics.com
Slide 20
The Size of the Market
• According to the 2002 Economic Census for
Bartholomew County:
– Full Service Restaurants:
– Total Restaurant Sales ‘02:
– Average Sales Per Rest:
104
$78 million
$750,000
Slide 21
Targeted Market Size in Dollars
• According to the Consumer Expenditure Survey
in 2003, consumers spent an estimated $885 on
“Food away from home”
• This would predict the 7 mile market radius to be
worth approximately $52 million in restaurant
and meal preparation services. ($885 times
58,600 consumers) and could support about 70
establishments.
Slide 22
The Food Service Market in Columbus, IN
Future Site of Chipotle
X
Source: Google Earth
Slide 23
The Competition
• Qdoba, is a “fresh-Mex” chain that offers more choices,
like poblano pesto burritos, but less discipline in its
execution. Its wider menu offerings sometimes
compromise food quality. Nonetheless, Qdoba is a
series competitor in all respects as it plays in the same
“sand box.” In 2003, Qdoba was acquired by Jack in the
Box Inc., a publicly traded (NYSE: JBX) restaurant
company headquartered in San Diego.
• Bajio Mexican Grill is also a fresh-Mex franchise chain
that again offers more choices than Chipotle, but its
franchising model puts a strain on store-to-store
consistency.
Slide 24
The Message
Slide 25
The Sales Approach
• Chipotle will use a combination of the following
media in creating its advertising and promotional
campaign:
–
–
–
–
–
Yellow Pages
Newspaper
Direct Mail
Radio
Website
Slide 26
The Sales Approach
Media
Annual Cost
Yellow Pages (South Central Edition)
Category: Restaurants, Restaurant Guide
$3,600.00
Newspaper (The Republic: Circulation 28,000)
Ad Design Costs
$800.00
Media Costs (24 ads @ $328)
$7800.00
Direct Mail (Brochures and Special Occasions)
Distribution (5,000 @ $.50 per piece @ $.27 postage)
$3,850.00
Radio (QMIX 103 / Adult Contemporary & WTIU/NPR)
Media Costs (600 :30 second ads @ $6.20 per spot)
$3,720.00
Total Annual Advertising and Media Costs
$19,770.00
Slide 27
The Inner Workings: The Line
Slide 28
Two Things, Thousands of Ways
• We only serve a few things, so we can concentrate
on doing them very well. And we use only the best
ingredients. But they're simple. And that idea,
taking something simple and elevating it to
something special is what Chipotle is all about.
• It's all summed up in our name. A chipotle pepper is
just a simple jalapeño pepper that's been smoked
and dried elevating it from ordinary to something
extraordinary. Tasting is believing.
Slide 29
The Inner Workings
• Chipotle will be open six days a week from the
hours of 10:00am to 9:00pm.
• To operate the location we require 8 full-time
employees and 7 part-time staffers all of which
work on a rotating schedule which avoids overtime
scheduling. Wages are about $8.00 to $9.00 per
hour.
• It is imperative that we keep food costs below 28%
of sales and labor costs just under 40%.
Slide 30
Location Design
• The design of Chipotle mirrors the idea behind
our food: simple ingredients put together in
creative, new ways, elevating them to a higher
level.
• Each Chipotle uses the same basic materials—
wood, concrete, raw steel and metals—but no
two look the same.
Slide 31
Location Interiors
Slide 32
Location Exteriors
Slide 33
The Management Team
• Jack Smith, Location Manager
Mr. Smith will oversee the day-to-day operations and
management of the location. He has over 14 years of
experience in retail fast food and is one of the founding
members of Chipotle.
• Loretta Johnson, Assistant Manager
Ms. Johnson is an experienced chef with over 12 years of
commercial cooking knowledge. She will oversee the all
ingredient purchasing and grill staffing according to the
philosophies of Chipotle as presented within this business
plan.
Slide 34
The Legal Structure
• Chipotle will be legally formed as an “s” corporation.
• This structure was selected for its pass through tax
advantages, limited liability protection, and freedom from
having to pay corporate income taxes.
• Ownership of shares will be broken down as follows:
Owner
Shares
Jack Smith
Loretta Johnson
Equity Investors
1,000
500
500
Percent Owned
50%
25%
25%
Slide 35
Risk Management
• Chipotle will require the following types of insurance
in its efforts to manage risk:
– General Liability (up to $2 Million in coverage)
– Worker’s Compensation Policy
– Property Insurance (building & contents)
• In addition, it will also provide health care for its two
member management team estimated at about
$1,000 per month.
Slide 36
Required Start-Up Funds
Item
Amount
Real Estate
$220,000
Building
$580,000
Equipment
$68,000
Furniture & Smallwares
$12,000
Initial Inventory
$4,500
Deposits
$900
Legal & Accounting
$2500
Advertising
$5000
Working Capital
$15,000
Totals
$907,900
Slide 37
Capital Strategy
Total Amount Required
$907,900
-4 Investors ($50,000 each will get 25% share of company)
$200,000
-Commercial Bank Loan (Real Estate & 80% Building)
$684,000
-Owners
$23,900
Debt Service Payments
-Principal Amount Borrowed
$684,000
-Interest Rate
7.25%
-Term In Months
240
Total Monthly Loan Payment
$5,406.17
Slide 38
The Milestones
•
•
•
•
•
•
•
•
•
•
Present business plan to investors
Finish legal work around investments
Request and review construction bids
Obtain building permits
Begin construction
Begin final fixturing of location
Conduct health department inspections
Begin hiring and grand opening marketing
Cold opening
Grand opening
March 2006
March –April 2006
April 2006
May 2006
May 2006
July 2006
August 2006
August 2006
August 22th, 2006
September 1st, 2006
Slide 39
Chipotle
Required Start-Up Funds
Required Start-Up Funds
Fixed Assets
Real Estate
Buildings
Leasehold Improvements
Equipment
Furniture and Fixtures
Vehicles
Other Fixed Assets
Total Fixed Assets
Operating Capital
Pre-Opening Salaries and Wages
Prepaid Insurance Premiums
Beginning Inventory
Legal and Accounting Fees
Rent Deposits
Utility Deposits
Supplies
Advertising and Promotions
Licenses
Other Initial Start-Up Costs
Working Capital (Cash On Hand)
Total Operating Capital
5-Jul-06
Amount
$
Totals
220,000
580,000
68,000
12,000
-
Depreciation
20.00
7.00
7.00
5.00
5.00
5.00
Notes
years
years
years
years
years
years
880,000
4,500
2,500
900
5,000
15,000
27,900
Total Required Funds
$
907,900
Sources of Funding
Owner's Cash Injection
Outside Investors
Additional Loans or Debt
Commercial Loan
Commercial Mortgage
Amount
24.66%
0.00%
Totals
223,900
-
0.00%
75.34%
684,000
Total Sources of Funding
100.00%
$
907,900
Loan Rate
Term in Months
Monthly Payments
9.00%
8.00%
84.00
240.00
$0.00
$5,721.25
$5,721.25
Chipotle
Salaries and Wages
Salaries and Related Expenses
5-Jul-06
#
Assumptions
Wage Base
Monthly
Year One
Percent Change
Salaries and Wages
Owner's Compensation
1
Salaries
1
Wages
Full-Time Employees
8
Estimated Hours Per Week
Estimated Rate Per Hour
Part-Time Employees
7
Estimated Hours Per Week
Estimated Rate Per Hour
Independent Contractors
Total Salaries and Wages
17
Payroll Taxes and Benefits
Social Security
Medicare
Federal Unemployment Tax (FUTA)
State Unemployment Tax (SUTA)
Employee Pension Programs
Worker's Compensation
Employee Health Insurance
Other Employee Benefit Programs
Total Payroll Taxes and Benefits
Total Salaries and Related Expenses
$
$
40.00
8.00
$
20.00
7.50
6.20%
1.45%
0.80%
2.70%
0.00%
$
94,200
$
$
7,000
7,000
Year Two
Year Three
3.00%
3.00%
4,167
3,333
50,000
40,000
51,500
41,200
53,045
42,436
11,093
133,120
137,114
141,227
4,550
54,600
56,238
57,925
23,143
277,720
286,052
294,633
1,435
336
79
268
750
1,200
4,068
17,219
4,027
952
3,213
9,000
14,400
48,811
17,735
4,148
952
3,213
9,270
14,832
50,150
18,267
4,272
952
3,213
9,548
15,277
51,529
27,211
326,531
336,202
346,163
Chipotle
Fixed Operating Expenses
5-Jul-06
Fixed Operating Expenses
Monthly
Year One
Percent Change
Expenses
Advertising
Car and Truck Expenses
Commissions and Fees
Contract Labor
Credit Card and Bank Charges
Customer Discounts and Refunds
Dues and Subscriptions
Entertainment
Insurance (Liability and Property)
Internet
Legal and Professional Fees
Office Expenses
Postage and Delivery
Rent (on business property)
Rent of Vehicles and Equipment
Repairs and Maintenance
Supplies
Telephone and Communications
Travel
Utilities
Total Expenses
Other Expenses
Depreciation
Interest
Commercial Loan
Commercial Mortgage
Line of Credit
Total Other Expenses
Total Fixed Operating Expenses
$
Year Two
Year Three
3.00%
3.00%
1,667
300
250
150
200
200
500
500
200
600
4,567
20,000
3,600
3,000
1,800
2,400
2,400
6,000
6,000
2,400
7,200
54,800
20,600
3,708
3,090
1,854
2,472
2,472
6,180
6,180
2,472
7,416
56,444
21,218
3,819
3,183
1,910
2,546
2,546
6,365
6,365
2,546
7,638
58,137
3,426
41,114
41,114
41,114
4,516
7,943
54,198
95,312
52,998
94,112
51,698
92,812
12,509
150,112
150,556
150,950
Notes
Chipotle
Projected Sales Forecast
Products and Services
Assumptions
Local Market Food Sales
Price Per Unit
$
Variable Cost Per Unit
$
Gross Margin Per Unit
$
Projected Unit Sales
Seasonality Factor
Year One
Year Two Growth
Year Three Growth
Fixed Expense Allocation
Projected Revenue
Variable Costs
Gross Margin
Fixed Expenses
Profit
$
Breakeven Sales Revenue $
Breakeven Sales Units
Commuter Food Sales
Price Per Unit
$
Variable Cost Per Unit
$
Gross Margin Per Unit
$
Projected Unit Sales
Seasonality Factor
Year One
Year Two Growth
Year Three Growth
Fixed Expense Allocation
Projected Revenue
Variable Costs
Gross Margin
Fixed Expenses
Profit
5-Jul-06
$
Breakeven Sales Revenue $
Breakeven Sales Units
1.00
0.28
0.72
%
February
March
April
May
June
July
August September
October November December
Totals
8.00%
32,000
32,960
33,619
7.00%
28,000
28,840
29,417
8.50%
34,000
35,020
35,720
8.75%
35,000
36,050
36,771
8.75%
35,000
36,050
36,771
8.75%
35,000
36,050
36,771
8.75%
35,000
36,050
36,771
7.50%
30,000
30,900
31,518
8.50%
34,000
35,020
35,720
8.50%
34,000
35,020
35,720
8.50%
34,000
35,020
35,720
8.50%
34,000
35,020
35,720
100.00%
400,000
412,000
420,240
6.67%
10,000
10,300
10,609
6.67%
10,000
10,300
10,609
9.33%
14,000
14,420
14,853
9.33%
14,000
14,420
14,853
9.33%
14,000
14,420
14,853
8.00%
12,000
12,360
12,731
6.67%
10,000
10,300
10,609
8.00%
12,000
12,360
12,731
8.00%
12,000
12,360
12,731
9.33%
14,000
14,420
14,853
9.33%
14,000
14,420
14,853
9.33%
14,000
14,420
14,853
100.00%
150,000
154,500
159,135
100.00%
28.00%
72.00%
3.00%
2.00%
60.00%
400,000
112,000
288,000
90,067
197,933
January
49.48%
125,093.17
125,093
1.00
0.28
0.72
100.00%
28.00%
72.00%
3.00%
3.00%
15.00%
150,000
42,000
108,000
22,517
85,483
31,273.29
31,273
56.99%
Chipotle
Projected Sales Forecast - Page 2
Products and Services
Assumptions
Catering Events
Price Per Unit
$
Variable Cost Per Unit
$
Gross Margin Per Unit
$
Projected Unit Sales
Seasonality Factor
Year One
Year Two Growth
Year Three Growth
Fixed Expense Allocation
Projected Revenue
Variable Costs
Gross Margin
Fixed Expenses
Profit
$
Breakeven Sales Revenue $
Breakeven Sales Units
Beverages
Price Per Unit
$
Variable Cost Per Unit
$
Gross Margin Per Unit
$
Projected Unit Sales
Seasonality Factor
Year One
Year Two Growth
Year Three Growth
Fixed Expense Allocation
Projected Revenue
Variable Costs
Gross Margin
Fixed Expenses
Profit
$
Breakeven Sales Revenue $
Breakeven Sales Units
1.00
0.32
0.68
5-Jul-06
%
February
March
April
May
June
July
August September
October November December
Totals
5.00%
5,000
5,200
5,408
5.00%
5,000
5,200
5,408
5.00%
5,000
5,200
5,408
7.50%
7,500
7,800
8,112
7.50%
7,500
7,800
8,112
7.50%
7,500
7,800
8,112
10.00%
10,000
10,400
10,816
10.00%
10,000
10,400
10,816
10.00%
10,000
10,400
10,816
10.00%
10,000
10,400
10,816
10.00%
10,000
10,400
10,816
12.50%
12,500
13,000
13,520
100.00%
100,000
104,000
108,160
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
8.00%
4,000
4,120
4,202
9.00%
4,500
4,635
4,728
9.00%
4,500
4,635
4,728
9.00%
4,500
4,635
4,728
9.00%
4,500
4,635
4,728
100.00%
50,000
51,500
52,530
100.00%
32.00%
68.00%
4.00%
4.00%
15.00%
100,000
32,000
68,000
22,517
45,483
January
45.48%
33,112.90
33,113
1.00
0.18
0.82
100.00%
18.00%
82.00%
3.00%
2.00%
10.00%
50,000
9,000
41,000
15,011
25,989
18,306.32
18,306
51.98%
Chipotle
Cash Receipts and Disbursements
5-Jul-06
Accounts Receivable Collections
Percent of Collections
0 to 30 days
31 to 60 days
More than 60 days
Total Collections Percentage
100.00%
0.00%
0.00%
100.00%
Accounts Payable Disbursements
Number of Days to Pay Suppliers
0 to 30 days
31 to 60 days
More than 60 days
Total Disbursements Percentage
100.00%
0.00%
0.00%
100.00%
Line of Credit Assumptions
Desired Minimum Cash Balance
Line of Credit Interest Rate
Income Tax Assumptions
Effective Income Tax Rate
Amortization of Start-Up Expenses
Amortization Period in Years
$
9.00%
0.00%
-
Chipotle
Projected Income Statement - Year One
January
February
Income
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Income
32,000
10,000
5,000
4,000
51,000
28,000
10,000
5,000
4,000
47,000
34,000
14,000
5,000
4,000
57,000
35,000
14,000
7,500
4,000
60,500
35,000
14,000
7,500
4,000
60,500
35,000
12,000
7,500
4,000
58,500
35,000
10,000
10,000
4,000
59,000
30,000
12,000
10,000
4,000
56,000
34,000
12,000
10,000
4,500
60,500
34,000
14,000
10,000
4,500
62,500
34,000
14,000
10,000
4,500
62,500
34,000
14,000
12,500
4,500
65,000
400,000
150,000
100,000
50,000
700,000
Cost of Sales
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Cost of Sales
8,960
2,800
1,600
720
14,080
7,840
2,800
1,600
720
12,960
9,520
3,920
1,600
720
15,760
9,800
3,920
2,400
720
16,840
9,800
3,920
2,400
720
16,840
9,800
3,360
2,400
720
16,280
9,800
2,800
3,200
720
16,520
8,400
3,360
3,200
720
15,680
9,520
3,360
3,200
810
16,890
9,520
3,920
3,200
810
17,450
9,520
3,920
3,200
810
17,450
9,520
3,920
4,000
810
18,250
112,000
42,000
32,000
9,000
195,000
Gross Margin
36,920
34,040
41,240
43,660
43,660
42,220
42,480
40,320
43,610
45,050
45,050
46,750
505,000
Total Salary and Wages
27,211
27,211
27,211
27,211
27,211
27,211
27,211
27,211
27,211
27,211
27,211
27,211
326,531
Fixed Business Expenses
Advertising
Car and Truck Expenses
Commissions and Fees
Contract Labor
Credit Card and Bank Charges
Customer Discounts and Refunds
Dues and Subscriptions
Entertainment
Insurance (Liability and Property)
Internet
Legal and Professional Fees
Office Expenses
Postage and Delivery
Rent (on business property)
Rent of Vehicles and Equipment
Repairs and Maintenance
Supplies
Telephone and Communications
Travel
Utilities
Total Fixed Business Expenses
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
1,667
300
250
150
200
200
500
500
200
600
4,567
20,000
3,600
3,000
1,800
2,400
2,400
6,000
6,000
2,400
7,200
54,800
Total Other Expenses
7,986
7,978
7,971
7,963
7,955
7,947
7,939
7,931
7,923
7,915
7,906
7,898
95,312
(2,844)
(5,716)
1,492
3,920
3,928
2,495
2,763
612
3,910
5,358
5,366
7,074
28,358
Net Income
March
April
May
June
July
August September
October
November
December
Totals
Chipotle
Projected Cash Flow Statement - Year One
January
February
Beginning Cash Balance
15,000
14,421
10,962
14,704
20,865
27,026
31,747
36,728
39,550
45,661
53,212
60,763
Cash Inflows
Income from Sales
Accounts Receivable
Total Cash Inflows
51,000
51,000
47,000
47,000
57,000
57,000
60,500
60,500
60,500
60,500
58,500
58,500
59,000
59,000
56,000
56,000
60,500
60,500
62,500
62,500
62,500
62,500
65,000
65,000
700,000
700,000
14,080
12,960
15,760
16,840
16,840
16,280
16,520
15,680
16,890
17,450
17,450
18,250
195,000
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
27,211
4,567
-
5,721
51,579
5,721
50,459
5,721
53,259
5,721
54,339
5,721
54,339
5,721
53,779
5,721
54,019
5,721
53,179
5,721
54,389
5,721
54,949
5,721
54,949
5,721
55,749
326,531
54,800
68,655
644,986
(3,459)
3,741
6,161
6,161
4,721
4,981
2,821
6,111
7,551
7,551
9,251
55,014
14,704
20,865
27,026
31,747
36,728
39,550
45,661
53,212
60,763
70,014
Cash Outflows
Investing Activities
New Capital Purchases
Cost of Sales
Operating Activities
Salaries and Wages
Fixed Business Expenses
Taxes
Financing Activities
Loan Payments
Line of Credit Interest
Line of Credit Repayments
Dividends Paid
Total Cash Outflows
Cash Flow
Operating Cash Balance
Line of Credit Drawdowns
Ending Cash Balance
Line of Credit Balance
(579)
14,421
14,421
-
10,962
10,962
-
March
14,704
-
April
20,865
-
May
27,026
-
June
31,747
-
July
36,728
-
August September
39,550
-
45,661
-
October
53,212
-
November
60,763
-
December
70,014
-
Totals
-
Chipotle
Balance Sheet - Year One
Base Period
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Other Current
Total Current Assets
Fixed Assets
Real Estate
Buildings
Leasehold Improvements
Equipment
Furniture and Fixtures
Vehicles
Other Fixed Assets
Total Fixed Assets
Less: Accumulated Depreciation
End of Year One
15,000
4,500
8,400
27,900
70,014
4,500
8,400
82,914
220,000
580,000
68,000
12,000
880,000
220,000
580,000
68,000
12,000
880,000
-
41,114
Total Assets
907,900
921,800
Liabilities and Owner's Equity
Liabilities
Accounts Payable
Notes Payable
Mortgage Payable
Line of Credit Balance
Total Liabilities
684,000
684,000
669,543
669,543
223,900
223,900
223,900
28,358
252,258
907,900
921,800
Owner's Equity
Common Stock
Retained Earnings
Dividends Dispersed
Total Owner's Equity
Total Liabilities and Owner's Equity
Statement Balances
Statement Balances
Chipotle
Year End Summary
Year One
Income
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Income
400,000
150,000
100,000
50,000
700,000
Cost of Sales
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Cost of Sales
%
Year Two
%
Year Three
%
100.00%
412,000
154,500
104,000
51,500
722,000
100.00%
420,240
159,135
108,160
52,530
740,065
100.00%
112,000
42,000
32,000
9,000
195,000
27.86%
115,360
43,260
33,280
9,270
201,170
27.86%
117,667
44,558
34,611
9,455
206,292
27.87%
Gross Margin
505,000
72.14%
520,830
72.14%
533,773
72.13%
Total Salary and Wages
326,531
46.65%
336,202
46.57%
346,163
46.77%
7.82%
21,218
3,819
3,183
1,910
2,546
2,546
6,365
6,365
2,546
7,638
58,137
7.86%
Fixed Business Expenses
Advertising
Car and Truck Expenses
Commissions and Fees
Contract Labor
Credit Card and Bank Charges
Customer Discounts and Refunds
Dues and Subscriptions
Entertainment
Insurance (Liability and Property)
Internet
Legal and Professional Fees
Office Expenses
Postage and Delivery
Rent (on business property)
Rent of Vehicles and Equipment
Repairs and Maintenance
Supplies
Telephone and Communications
Travel
Utilities
Total Fixed Business Expenses
20,000
3,600
3,000
1,800
2,400
2,400
6,000
6,000
2,400
7,200
54,800
7.83%
20,600
3,708
3,090
1,854
2,472
2,472
6,180
6,180
2,472
7,416
56,444
Total Other Expenses
54,198
7.74%
52,998
7.34%
51,698
6.99%
Net Income
28,358
4.05%
34,073
4.72%
36,661
4.95%
Chipotle
Projected Income Statement - Year Two
January
February
Income
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Income
32,960
10,300
5,200
4,120
52,580
28,840
10,300
5,200
4,120
48,460
35,020
14,420
5,200
4,120
58,760
36,050
14,420
7,800
4,120
62,390
36,050
14,420
7,800
4,120
62,390
36,050
12,360
7,800
4,120
60,330
36,050
10,300
10,400
4,120
60,870
30,900
12,360
10,400
4,120
57,780
35,020
12,360
10,400
4,635
62,415
35,020
14,420
10,400
4,635
64,475
35,020
14,420
10,400
4,635
64,475
35,020
14,420
13,000
4,635
67,075
412,000
154,500
104,000
51,500
722,000
Cost of Sales
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Cost of Sales
9,229
2,884
1,664
742
14,518
8,075
2,884
1,664
742
13,365
9,806
4,038
1,664
742
16,249
10,094
4,038
2,496
742
17,369
10,094
4,038
2,496
742
17,369
10,094
3,461
2,496
742
16,792
10,094
2,884
3,328
742
17,048
8,652
3,461
3,328
742
16,182
9,806
3,461
3,328
834
17,429
9,806
4,038
3,328
834
18,006
9,806
4,038
3,328
834
18,006
9,806
4,038
4,160
834
18,838
115,360
43,260
33,280
9,270
201,170
Gross Margin
38,062
35,095
42,511
45,021
45,021
43,538
43,822
41,598
44,986
46,470
46,470
48,238
520,830
Total Salary and Wages
28,017
28,017
28,017
28,017
28,017
28,017
28,017
28,017
28,017
28,017
28,017
28,017
336,202
Fixed Business Expenses
Advertising
Car and Truck Expenses
Commissions and Fees
Contract Labor
Credit Card and Bank Charges
Customer Discounts and Refunds
Dues and Subscriptions
Entertainment
Insurance (Liability and Property)
Internet
Legal and Professional Fees
Office Expenses
Postage and Delivery
Rent (on business property)
Rent of Vehicles and Equipment
Repairs and Maintenance
Supplies
Telephone and Communications
Travel
Utilities
Total Fixed Business Expenses
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
1,717
309
258
155
206
206
515
515
206
618
4,704
20,600
3,708
3,090
1,854
2,472
2,472
6,180
6,180
2,472
7,416
56,444
Total Other Expenses
7,890
7,881
7,873
7,864
7,856
7,847
7,839
7,830
7,821
7,812
7,803
7,794
94,112
(2,549)
(5,507)
1,918
4,436
4,444
2,970
3,263
1,047
4,445
5,937
5,946
7,723
34,073
Net Income
March
April
May
June
July
August September
October
November
December
Totals
Chipotle
Projected Cash Flow Statement - Year Two
January
February
Beginning Cash Balance
70,014
69,634
66,288
70,357
76,936
83,515
Cash Inflows
Income from Sales
Accounts Receivable
Total Cash Inflows
52,580
52,580
48,460
48,460
58,760
58,760
62,390
62,390
62,390
62,390
14,518
13,365
16,249
17,369
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
5,721
52,960
5,721
51,807
(3,347)
Cash Outflows
Investing Activities
New Capital Purchases
Cost of Sales
Operating Activities
Salaries and Wages
Fixed Business Expenses
Taxes
Financing Activities
Loan Payments
Line of Credit Interest
Line of Credit Repayments
Dividends Paid
Total Cash Outflows
Cash Flow
Operating Cash Balance
Line of Credit Drawdowns
Ending Cash Balance
Line of Credit Balance
(380)
69,634
69,634
-
66,288
66,288
-
March
August September
October
88,611
93,992
97,148
60,330
60,330
60,870
60,870
57,780
57,780
17,369
16,792
17,048
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
5,721
54,691
5,721
55,811
5,721
55,811
4,069
6,579
70,357
76,936
70,357
-
April
76,936
-
May
November
December
103,693
111,720
119,748
62,415
62,415
64,475
64,475
64,475
64,475
67,075
67,075
722,000
722,000
16,182
17,429
18,006
18,006
18,838
201,170
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
28,017
4,704
-
5,721
55,234
5,721
55,489
5,721
54,624
5,721
55,870
5,721
56,447
5,721
56,447
5,721
57,279
336,202
56,444
68,655
662,471
6,579
5,096
5,381
3,156
6,545
8,028
8,028
9,796
59,529
83,515
88,611
93,992
97,148
103,693
111,720
119,748
129,544
83,515
-
June
88,611
-
July
93,992
-
97,148
-
103,693
-
111,720
-
119,748
-
129,544
-
Totals
-
Chipotle
Balance Sheet - Year Two
End of Year One
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Other Current
Total Current Assets
End of Year Two
70,014
4,500
8,400
82,914
129,544
4,500
8,400
142,444
220,000
580,000
68,000
12,000
880,000
220,000
580,000
68,000
12,000
880,000
41,114
82,229
Total Assets
921,800
940,215
Liabilities and Owner's Equity
Liabilities
Accounts Payable
Notes Payable
Mortgage Payable
Line of Credit Balance
Total Liabilities
669,543
669,543
653,885
653,885
223,900
28,358
252,258
223,900
62,430
286,330
921,800
940,215
Fixed Assets
Real Estate
Buildings
Leasehold Improvements
Equipment
Furniture and Fixtures
Vehicles
Other Fixed Assets
Total Fixed Assets
Less: Accumulated Depreciation
Owner's Equity
Common Stock
Retained Earnings
Dividends Dispersed
Total Owner's Equity
Total Liabilities and Owner's Equity
Statement Balances
Statement Balances
Chipotle
Projected Income Statement - Year Three
January
February
Income
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Income
33,619
10,609
5,408
4,202
53,839
29,417
10,609
5,408
4,202
49,636
35,720
14,853
5,408
4,202
60,183
36,771
14,853
8,112
4,202
63,938
36,771
14,853
8,112
4,202
63,938
36,771
12,731
8,112
4,202
61,816
36,771
10,609
10,816
4,202
62,398
31,518
12,731
10,816
4,202
59,267
35,720
12,731
10,816
4,728
63,995
35,720
14,853
10,816
4,728
66,117
35,720
14,853
10,816
4,728
66,117
35,720
14,853
13,520
4,728
68,821
420,240
159,135
108,160
52,530
740,065
Cost of Sales
Local Market Food Sales
Commuter Food Sales
Catering Events
Beverages
Total Cost of Sales
9,413
2,971
1,731
756
14,871
8,237
2,971
1,731
756
13,694
10,002
4,159
1,731
756
16,647
10,296
4,159
2,596
756
17,807
10,296
4,159
2,596
756
17,807
10,296
3,565
2,596
756
17,213
10,296
2,971
3,461
756
17,484
8,825
3,565
3,461
756
16,607
10,002
3,565
3,461
851
17,878
10,002
4,159
3,461
851
18,473
10,002
4,159
3,461
851
18,473
10,002
4,159
4,326
851
19,338
117,667
44,558
34,611
9,455
206,292
Gross Margin
38,968
35,942
43,536
46,131
46,131
44,603
44,914
42,660
46,116
47,644
47,644
49,483
533,773
Total Salary and Wages
28,847
28,847
28,847
28,847
28,847
28,847
28,847
28,847
28,847
28,847
28,847
28,847
346,163
Fixed Business Expenses
Advertising
Car and Truck Expenses
Commissions and Fees
Contract Labor
Credit Card and Bank Charges
Customer Discounts and Refunds
Dues and Subscriptions
Entertainment
Insurance (Liability and Property)
Internet
Legal and Professional Fees
Office Expenses
Postage and Delivery
Rent (on business property)
Rent of Vehicles and Equipment
Repairs and Maintenance
Supplies
Telephone and Communications
Travel
Utilities
Total Fixed Business Expenses
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
1,768
318
265
159
212
212
530
530
212
637
4,845
21,218
3,819
3,183
1,910
2,546
2,546
6,365
6,365
2,546
7,638
58,137
Total Other Expenses
7,785
7,776
7,767
7,758
7,749
7,739
7,730
7,721
7,711
7,701
7,692
7,682
92,812
(2,509)
(5,526)
2,077
4,681
4,691
3,172
3,493
1,248
4,714
6,251
6,261
8,109
36,661
Net Income
March
April
May
June
July
August September
October
November
December
Totals
Chipotle
Projected Cash Flow Statement - Year Three
January
February
Beginning Cash Balance
129,544
129,099
125,628
129,751
136,469
143,187
148,378
153,879
157,126
Cash Inflows
Income from Sales
Accounts Receivable
Total Cash Inflows
53,839
53,839
49,636
49,636
60,183
60,183
63,938
63,938
63,938
63,938
61,816
61,816
62,398
62,398
59,267
59,267
14,871
13,694
16,647
17,807
17,807
17,213
17,484
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
5,721
54,284
5,721
53,107
5,721
56,060
5,721
57,220
5,721
57,220
(3,471)
4,123
6,718
129,751
136,469
Cash Outflows
Investing Activities
New Capital Purchases
Cost of Sales
Operating Activities
Salaries and Wages
Fixed Business Expenses
Taxes
Financing Activities
Loan Payments
Line of Credit Interest
Line of Credit Repayments
Dividends Paid
Total Cash Outflows
Cash Flow
Operating Cash Balance
Line of Credit Drawdowns
Ending Cash Balance
Line of Credit Balance
(445)
129,099
129,099
-
125,628
125,628
-
March
129,751
-
April
136,469
-
May
November
December
163,830
172,061
180,292
63,995
63,995
66,117
66,117
66,117
66,117
68,821
68,821
740,065
740,065
16,607
17,878
18,473
18,473
19,338
206,292
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
28,847
4,845
-
5,721
56,626
5,721
56,897
5,721
56,020
5,721
57,291
5,721
57,885
5,721
57,885
5,721
58,751
346,163
58,137
68,655
679,247
6,718
5,191
5,502
3,247
6,704
8,231
8,231
10,070
60,818
143,187
148,378
153,879
157,126
163,830
172,061
180,292
190,362
143,187
-
June
148,378
-
July
153,879
-
August September
157,126
-
163,830
-
October
172,061
-
180,292
-
190,362
-
Totals
-
Chipotle
Balance Sheet - Year Three
End of Year Two
End of Year Three
129,544
4,500
8,400
142,444
190,362
4,500
8,400
203,262
220,000
580,000
68,000
12,000
880,000
220,000
580,000
68,000
12,000
880,000
82,229
123,343
Total Assets
940,215
959,919
Liabilities and Owner's Equity
Liabilities
Accounts Payable
Notes Payable
Mortgage Payable
Line of Credit Balance
Total Liabilities
653,885
653,885
636,928
636,928
223,900
62,430
286,330
223,900
99,091
322,991
940,215
959,919
Assets
Current Assets
Cash
Accounts Receivable
Inventory
Prepaid Expenses
Other Current
Total Current Assets
Fixed Assets
Real Estate
Buildings
Leasehold Improvements
Equipment
Furniture and Fixtures
Vehicles
Other Fixed Assets
Total Fixed Assets
Less: Accumulated Depreciation
Owner's Equity
Common Stock
Retained Earnings
Dividends Dispersed
Total Owner's Equity
Total Liabilities and Owner's Equity
Statement Balances
Statement Balances
Chipotle
Financial Ratios
Ratio
Liquidity
Current Ratio
Quick Ratio
Safety
Debt to Equity Ratio
Debt to Coverage Ratio
Profitability
Sales Growth
COGS to Sales
Gross Profit Margin
SG&A to Sales
Net Profit Margin
Return on Equity
Return on Assets
Owner's Compensation to Sales
Efficiency
Days in Receivables
Accounts Receivable Turnover
Days in Inventory
Inventory Turnover
Sales to Total Assets
5-Jul-06
Year One
Year Two
Year Three
0.12
0.10
0.22
0.20
0.32
0.30
2.65
0.10
2.28
0.11
1.97
0.12
0.28
0.72
0.54
0.04
0.11
0.03
0.07
0.03
0.28
0.72
0.54
0.05
0.12
0.04
0.07
0.03
0.28
0.72
0.55
0.05
0.11
0.04
0.07
8.31
43.33
0.76
8.05
44.70
0.77
7.85
45.84
0.77
Chipotle
Breakeven Analysis
Breakeven Analysis
Annual Sales Revenue
Cost of Sales
Gross Margin
5-Jul-06
$
Dollars
700,000
195,000
505,000
Salaries and Wages
Fixed Operating Expenses
Total Fixed Business Expenses
326,531
150,112
476,642
Breakeven Sales Calculation
476,642
72.14%
Breakeven Sales in Dollars
$
660,692
Percent
100.00%
27.86%
72.14%
Chipotle
Amortization Schedule
Loan Type
Commercial Loan
Principal Amount
$
Interest Rate
Loan Term in Months
Monthly Payment Amoun
Assumptions
Year One
Interest
Principal
Loan Balance
Year Two
Interest
Principal
Loan Balance
Year Three
Interest
Principal
Loan Balance
February
March
April
May
June
July
August September
October
November
December
Totals
9.00%
84.00
$0.00
Year One
Interest
Principal
Loan Balance
Year Two
Interest
Principal
Loan Balance
Year Three
Interest
Principal
Loan Balance
Commercial Mortgage
Principal Amount
$
Interest Rate
Loan Term in Months
Monthly Payment Amoun
January
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
684,000.00
8.00%
240.00
$5,721.25
4,560
1,161
682,839
4,552
1,169
681,670
4,544
1,177
680,493
4,537
1,185
679,308
4,529
1,193
678,116
4,521
1,200
676,915
4,513
1,208
675,707
4,505
1,217
674,490
4,497
1,225
673,266
4,488
1,233
672,033
4,480
1,241
670,792
4,472
1,249
669,543
54,198
14,457
4,464
1,258
668,285
4,455
1,266
667,019
4,447
1,274
665,744
4,438
1,283
664,461
4,430
1,292
663,170
4,421
1,300
661,870
4,412
1,309
660,561
4,404
1,318
659,244
4,395
1,326
657,917
4,386
1,335
656,582
4,377
1,344
655,238
4,368
1,353
653,885
52,998
15,657
4,359
1,362
652,523
4,350
1,371
651,152
4,341
1,380
649,772
4,332
1,389
648,382
4,323
1,399
646,984
4,313
1,408
645,576
4,304
1,417
644,158
4,294
1,427
642,731
4,285
1,436
641,295
4,275
1,446
639,849
4,266
1,456
638,393
4,256
1,465
636,928
51,698
16,957
Chipotle
Financial Diagnostics
This sheet performs a few tests on your numbers to see if they seem within certain reasonable ranges.
Remember, no computer can tell whether your projections are truly well-constructed, only a human can do that.
But these tests can at least look for values that are critically out of range.
Financial Diagnostics
General Financing Assumptions
Owner's Cash Injection into the Business
Cash Request as percent of Total Required Funds
Value
24.66%
1.65%
Loan Assumptions
Commercial Loan Interest rate
Commercial Loan Term in Months
Commercial Mortgage Interest rate
Commercial Mortgage Term in Months
Loan Payments as a Percent of Projected Sales
Cash Flow Statement
Desired Operating cash Flow Levels
Line of Credit Drawdowns
Accounts Receivable Ratio to Sales
$
$
Balance Sheet
Does the Base Period Balance Sheet Balance?
Does the Final Balance Sheet Balance
Debt to Equity Ratio
Breakeven Analysis
Breakeven Levels
Interest rate seems reasonable
Loan term seems within range for this type of loan
8.00%
240.00
Interest rate seems reasonable
Loan term seems within range for this type of loan
72.14%
50,000
176.32%
2.86%
28,358
4.05%
0.00%
265.42%
$
Owner's injection is reasonable
Cash request seems reasonable with respect to total request
9.00%
84
0.82%
Income Statement
Gross Margin as a Percent of Sales
Owner's Compensation Lower Limit Check
$
Owner's Compensation Upper Limit Check
Advertising Expense Levels as a Percent of Sales
Profitability Levels
$
Profitability as a Percent of Sales
Findings
39,308
Calculated loan payments as a percent of sales seem resonable
Gross margin percentage seems reasonable
An owner's compensation amount has been established
Owner's compensation may be too high relative to profitability of business
Advertising as a percent of sales may be too low
The business is showing a profit
The projection does not seem highly unreasonable
The financial projection provides the desired level of cash flow
The business doesn't seem to require a line of credit
Accounts receivable amount as a percent of sales seems reasonable
The balance sheet does balance
The balance sheet does balance
The debt to equity ratio seems reasonable
The sales projection exceeds the projected break-even sales level