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Nursery Business Plan


BUSINESS PLAN     WONDERLAND NURSERY

416 S. Turner Street Spokane, Washington 99204

This plan outlines how this business will provide Spokane with a specialty nursery and garden center that is stylish, respected, and consistent, and which is intelligently staffed with caring and well-informed employees. An unusual feature of this nursery is its café. This plan was provided by Ameriwest Business Consultants, Inc.

  • EXECUTIVE SUMMARY
  • OBJECTIVES & GOALS, AND STRATEGIES FOR ACHIEVING THEM
  • BUSINESS DESCRIPTION, STATUS, & OUTLOOK
  • MANAGEMENT & OWNERSHIP
  • THE SERVICE (AN UNFILLED NEED) & UNIQUENESS OF SERVICE
  • MARKET ANALYSIS
  • MARKETING STRATEGIES
  • FINANCIAL PLANS

EXECUTIVE SUMMARY

BUSINESS DESCRIPTION

The purpose of Wonderland Nursery is to provide Spokane with a nursery and garden center that is stylish, respected, and consistent, and which is intelligently staffed with caring and well-informed employees. The atmosphere is friendly and open. The nursery displays a new attitude. It treats customers like first-class citizens and tries to make them feel like they are at home. On the premises will also be a café to help our customers extend and enhance their visit to our premises. We offer a variety of related items such as pottery, specialty decorations, etc. The facility has a first-rate greenhouse. The services are offered at a competitive price and pricing will be reviewed periodically.

The nursery is normally open Monday, Tuesday, Wednesday, Thursday, Friday, and Saturday, from 9:00 A.M. through 5:00 P.M., and 10:00 A.M. to 4:00 P.M. on Sunday. The café hours are 9:00 A.M. to 5:00 P.M., Monday through Wednesday, 9:00 A.M. through 8:00 P.M. on Thursday through Saturday, and from 10:00 A.M. to 4:00 P.M. on Sunday.

CURRENT POSITION AND FUTURE OUTLOOK

The business is in a restructure mode. It is currently past due on its mortgage payment. Plans call for infusion of new investment in the amount of approximately $275,000 and a new loan of $800,000. Operations are conducted on a 5-acre site, located at 416 S. Turner Street, Spokane, Washington. On the average we serve from 10,000 to 12,000 customers per year. With new funding we plan to increase this amount by at least 15% per year in the future. This is a conservative estimate considering the past year saw a 25% increase in sales. To attain these goals we will use a combination of media advertising, flyers, and word-of mouth. Upon securing the new funding, the future appears very bright. The customers are there, the experience and ability are there, and with a restructure of the organization we are convinced the profit would be there. The café will only get better in its second full year of operation.

MANAGEMENT AND OWNERSHIP

The company is set up as a corporation with Susan Smyth and her husband Robert owning 100% of all outstanding stock. Susan serves as president, chief executive officer, and manager. She provides the leadership to run this company. She has over 5 years of experience as owner and operator of a nursery. Her retail sales background will continue to provide the guiding light for the operation. Susan oversees the entire operation and concentrates on advertising, legal matters, banking, insurance, purchasing, equipment purchases, public relations, and labor. Robert Smyth serves as treasurer and handles all maintenance and development. Helen Brown, office manager, handles sales, display, and backs up Susan in banking, purchasing, and planning. The business employs up to ten additional employees. These employees will be involved in cooking in the café, waiting on tables, and working as laborers. They will be a combination of part-time and full-time. When volume picks up, additional part-time or full-time employees will be hired as the workload requires. Ameriwest Business Consultants, Inc. will provide help in additional areas such as planning and general business advising when necessary and to supplement Susan's overall business knowledge. The services of an accountant, attorney, and a qualified insurance agent have been retained.

UNIQUENESS AND DIFFERENTIATION OF THE SERVICE

Wonderland Nursery is a specialty nursery and provides the ultimate in service and advice to customers. We tend to appeal to upper-end clientele, serious gardeners, and gardening professionals. Nowhere else in Washington does an operation combine the services of a nursery along with those of a café.

The idea of nursery and café is to provide customers with a informal, social setting, and atmosphere that does not exist in this part of the state. In addition we will cater to private parties and special groups in the café throughout the year.

The growth potential is virtually unlimited for the greater Spokane, Washington, area. The population is growing at an accelerated rate. It is rare in today's business world to find a true market void. That is exactly what Wonderland Nursery has done. It is a nursery along with a café for nursery customers and others in the community. Our facility has little true competition in Spokane.

FUNDS REQUIRED AND USAGE

Restructuring expenses will be approximately $1,075,0000. New investors will furnish approximately $275,000, and a new loan will furnish the balance of $800,000 in new funding.

The new funding will be used as follows: A) $1,000,000 to repay existing debt, B) $20,000 for paving, C) $5,000 for irrigation improvements, D) $10,000 in new inventory, E) $40,000 for reserves and miscellaneous expenses. The paving will make the property much more attractive to both nursery and café customers. The irrigation will save labor and cut losses. The inventory will bring in new customers and help even out the cash flow throughout the year.

PROJECTED 5-YEAR INCOME STATEMENT SUMMARY

(MOST LIKELY CASE)
Projected 1999 Projected 2000 Projected 2001 Projected 2002 Projected 2003
Total Revenue 933,000 1,072,350 1,232,589 1,416,847 1,628,727
Cost of Sales 514,229 591,364 680,068 782,079 899,390
Gross Profit 418,771 480,986 552,521 634,768 729,337
Selling, General, Expense 344,137 371,264 402,338 437,939 478,734
Income Before Taxes 74,634 109,722 150,183 196,829 250,603
Income Taxes 17,390 30,347 45,317 62,577 82,473
INCOME AFTER TAXES 57,244 79,375 104,866 134,252 168,130
(OPTIMISTIC CASE)
Total Revenue 1,119,600 1,286,820 1,479,107 1,700,216 1,954,472
Cost of Sales 617,075 709,637 816,082 938,495 1,079,268
Gross Profit 502,525 577,183 663,025 761,722 875,204
Selling, General, Expense 412,964 445,517 482,806 525,527 574,481
Income Before Taxes 89,561 131,666 180,220 236,195 300,724
Income Taxes 20,868 36,416 54,380 75,092 98,968
INCOME AFTER TAXES 68,693 95,250 125,839 161,102 201,756
(PESSIMISTIC CASE)
Projected 1999 Projected 2000 Projected 2001 Projected 2002 Projected 2003
Total Revenue 746,400 857,880 986,071 1,133,478 1,302,982
Cost of Sales 411,383 473,091 544,054 625,663 719,512
Gross Profit 335,017 384,789 442,017 507,814 583,470
Selling, General, Expense 275,310 297,011 321,870 350,351 382,987
Income Before Taxes 59,707 87,778 120,146 157,463 200,482
Income Taxes 13,912 24,278 36,254 50,062 65,978
INCOME AFTER TAXES 45,795 63,500 83,893 107,402 134,504

Notes:

  1. The most likely case assumes 11,000 customers the first year after the restructuring. The optimistic case assumes revenues and expenses will increase 15% over the most likely case. The pessimistic case assumes revenues and expenses will decrease 15% below the most likely case above.
  2. Cost of goods sold for the nursery will equal 55% of sales and 35% for the cafe.

OBJECTIVES & GOALS, AND STRATEGIES FOR ACHIEVING THEM

  1. To provide a high quality service so that customers will perceive great value and give them the opportunity to interact with our professional staff.
  2. To service an average of 12,000 customers in 1999 and increase that by about 15% over the next four years.
  3. To repay the entire loan amount by the end of the fifteenth year and to provide the shareholders with an exceptionally stable income.
  4. Our goal is to become the premier nursery destination in Spokane, Washington, during the next two years.
  5. Wonderland Nursery plans to closely monitor changing technology to be certain that the company is using the latest and most cost effective equipment and that it keeps up with current trends in the marketplace.

When growth has stabilized we plan to add extra services for customer convenience such as organic produce, greater selection of products, especially seasonal, and continued growth of the food operations. In addition to the above goals we will survey our customers and make changes in our programs and add services to meet their changing ideas in the marketplace.

To obtain the first two sets of goals we will try to maximize sales with an extensive campaign to promote our services. We will utilize the radio stations and newspaper along with brochures, media advertising, pamphlets, use of coupons, referrals, and a variety of other advertising and marketing tools to reach the customer base of Spokane, Washington. We expect to flood the market with advertising until consumers become aware of us and more comfortable with our company. As we grow, word-of-mouth referrals will bring in increasing numbers of customers and we will reduce our reliance on advertising.

The dominant driving force behind our company will be profit and income and to provide the best possible related products and service.

To become the premier nursery in Spokane, Washington, we will offer outstanding quality, good hours, exceptional service, and reasonable pricing. We will listen to our customers and conduct surveys.

We will offer frequent user discounts. In the future we may consider diversification and enter new market areas such as providing organic produce.

BUSINESS DESCRIPTION, STATUS, & OUTLOOK

According to the Nursery Retailer, lawn and garden sales nationwide are expected to top $83 billion in 1999. Of this total, nearly $1 billion will be in Washington. In 1998, lawn and garden sales showed its first slow-down in growth since 1968. Even so, sales still topped the 1997 levels. Most experts attribute this aberrant downturn to one reason, namely El Nino. This year's growth rates are expected to return to normal levels of around 6% to 9%. With Spokane's exploding growth in population that has occurred during the last decade, local nursery sales should continue to be well in excess of national averages. In fact, when most nurseries experienced a flat growth rate in 1998, Wonderland Nursery experienced a 25% growth in sales.

Wonderland Nursery is a full service nursery and combines entertainment and limited dining at a competitive price. We have a bigger selection of products, more specialized plant selection and offer a much higher level of service than do our competitors. We try to promote an atmosphere that gives people a comfortable place to spend their time and money. Combining a nursery with a café is a relatively new concept for this part of the country. Susan Smyth will continue to operate the business as a corporation. The principal shareholders will be Susan and her husband. New investors will be brought on board and will assume up to a 49% share in ownership. With our new equipment, inventory selections, and property improvements we will also have definite market advantages. Ultimately, we will expand the business to achieve its full potential.

The biggest problem we face is restructuring the operation to give us the time and money needed to fully implement our plans and achieve our goals.

To maintain operations, the business maintains a nursery license, scale license, seed dealers license, health license, occupational use license, and sales tax license.

The future holds the promise for almost unlimited growth and income as the business matures and considers other markets and products. Complementary products such as organic produce, water gardening, newsletter, additional seasonal products, dances, and other functions at the café also can be considered in the future in response to customer surveys indicating their wants and needs. Enhanced food services will be offered in the future as the needs are demonstrated.

MANAGEMENT & OWNERSHIP

Susan Smyth once was a gardener for upper-class clients. She used this experience to develop Wonderland Nursery. The business was successful until the lease was lost on its original location. This precipitated a move to our present location. The move caused us to open grossly undercapitalized. We have managed to survive the past couple of years, but the restructuring we are planning will put us over the top toward achieving our full potential.

Wonderland Nursery will supplement its skills by using outside consultants in areas such as legal work, income tax preparation, insurance, and general business advising.

The business was set up as a corporation primarily for liability reasons and makes it easier to secure investors. To continue operation, as many as thirteen full-and part-time employees will be utilized to help in areas such as bartending, waiting on tables, and for labor. As the business grows, additional part-time or full-time employees may be added to handle the increased workload.

THE SERVICE (AN UNFILLED NEED) & UNIQUENESS OF THE SERVICE

The growth in families in Washington state is the ninth greatest in the country. The past decade has seen this segment of the population grow by more than thirty percent. It is growing five and a half times as fast as the general population.

The few existing nurseries that cater to our clientele are not nearly as knowledgeable or service oriented. They pay little attention to detail and customer satisfaction. Wonderland Nursery and its ownership will embrace the concept of trying to become a focal point for our clientele.

The timing for such a business is perfect. Given the proper kind of financial restructuring, a significant window of opportunity exists for Wonderland Nursery to take advantage of the huge growth of the area. This business will be providing the "Right Service at the Right Time."

It is rare in today's world that a true market void exists. Our service will meet the "unfilled need" described above by providing customers with competitively priced, high service nursery facilities combined with the services of a café on the premises. We are unique to Spokane, and indeed all of Washington.

Customers will be attracted to the nursery because our atmosphere, pricing, and facilities. They will be made to feel welcome and as part of the family.

Some major advantages Wonderland Nursery will have over potential competition and conventional nurseries are:

  • Larger and newer facility
  • Lower operating expenses than most
  • Full service café on site (new concept)
  • Location
  • 6,000 name mailing list
  • Wonderland Nursery will sponsor ethnic festivals and holidays

MARKET ANALYSIS

MARKET OVERVIEW, SIZE, AND SEGMENTS

This market segment has been relatively stable over the past five years.

The market areas we will concentrate on are Central and Western Spokane, Washington. These areas have been growing rapidly for the past several years and should continue for the foreseeable future. Once the concept catches on locally, we feel the potential is unlimited. As we grow we will have the financial capacity to carry on an advertising campaign on a regional basis.

The economy is in the midst of a particularly strong growth period. Many new jobs are being added to the local community. Ever increasing numbers of Californians are coming to this location. All of these factors are cause for a much greater interest in nurseries. All of this activity can only help our attempts to restructure this nursery.

Listed below are just some of the reasons that the Spokane, Washington, area is growing and why it is a good time to be running any kind of business that caters to this growth:

  • The local economy is booming and virtually busting at the seams.
  • Spokane, Washington, has become a magnet for religious organizations. More than 65 nationally based Christian organizations are headquartered here.
  • Spokane, Washington, has a new airport and a nearby Free Trade Enterprise Zone that should grow and attract even more new businesses.
  • The new Seattle Airport is open and provides an economic boost to the entire state, including Spokane, Washington.
  • Gambling in nearby Oregon continues to draw many visitors and some new businesses.
  • Every week, we see articles in the newspapers of California residents and companies relocating here.
  • The world-renowned Five Star Hotel has completed an extensive remodeling.
  • MCI and Quantum Electronics are undergoing large increases in their operations here that should add many hundreds of employees.
  • Many experts predict Spokane, Washington, will become the second fastest growing city in the state between now and the year 2007.
  • King County is predicted to become the largest county in the state by the year 2003.
  • The local economy is now more diversified than it was when troubles occurred in the local economy in the late 1980s and early 1990s.

The estimated population of King County in 1999 is 500,000 people. The number of households is approaching 200,000. Currently, this market is growing at an annual rate of 3-5%. Projections see this trend continuing for the balance of this decade.

From the above figures it can readily be seen that the potential market for our services is huge. We feel with our pricing and value we will become a price and industry leader within two years.

CUSTOMER PROFILE

Our surveys have shown the following mix of patrons for our facilities:

  • Majority are women
  • Income of typical customers is in the $50,000 and up range
  • Large numbers of professional gardeners
  • Range of age of clientele is 35-75
  • Majority of patrons are in the upper-income brackets
  • Majority of our customers come from the 12345, 12346, 12347, 12348, and 12349 Zip code areas

Beyond the local market we could eventually tap into a more regional market. The advantage of our service is that it could appeal to all segments of the community. By expanding the role of the café, we can continue to become an even greater focal point for the local community.

COMPETITION

Our primary competition is the nurseries listed below. On a limited basis there are few competitors such as nurseries, landscapers, and related businesses.

The following table summarizes the local competition:

Competitor Name Strengths Weaknesses
Handles Nursery1004 N. Main Well established Good local supportWell maintainedBrings in popular brandsPotential to expandOwner well known in areaServes large portion of Mexicanpopulation Dirty and has bad smellFilthy & small restroomsPoor securityAllow underage patronsPoor facilities/maintenanceLack of parking
Figures Nursery1000 E. State Good locationGood local supportOwner prominent in Hispaniccommunity Always filthyOutdated facilitiesFailure to keep up withrecent trends
Gardners Palace2815 Warner Newly remodeledSufficient parkingFair neighborhoodSpecialty nurseryNew owner Caters to upper classLocation is hard to findVery smallUnfriendly personnelNo amenities

The marketplace is currently shared by the above outlined 3 major participants. This market is stable and increasing about 5-7% per year.

The driving force behind Wonderland Nursery is Susan Smyth. She has able support from her husband, Robert, and from Helen Brown, office manager, and Nancy White, file manager.

Risk Analysis

RATINGS
ELEMENT LOW MEDIUM HIGH
Industry (Maturity and Cyclicality) X
Market/Local Economy X
Competitive Position X
Dependence upon other Companies X
Vulnerability to Substitutes X
Technology X
Distribution X
Regulatory Environment X
Suppliers X
Strategy X
Assumptions X
Finanical Performance X
Management Performance X
Inflation/Interest Rates X
Others X
Overall Risk X

Identification of Strengths & Weaknesses

Functions Strong Average Weak Major Strengths and/or Weaknesses
(+) (O) (-) Compared to Competitors
General Administration X Hardworking, direct, effective, charismatic
(Management)
Marketing X Original, consistently appealing
Finance/Planning X Will hire consultants to help
Human Resources X Better performance achievable
Operations X Energy to accomplish tasks
Production X
Purchasing X High perceived quality
Distribution X
Servicing X High customer satisfaction
Quality of Service X
Company Policies X
Product Mix X Several choices available
Product Features X
Options X
Warranties/Guarantees X
Reliability X Best product and service available
Desirability X
Advertising X Hire consultants to improve, lack of money
Market Leadership X Best independent around
Sales Force X
Overhead X Existing levels are too high; can be greatly
reduced with new funding
Pricing X Low for service
Delivery Time X
Location X
Facilities X Best combination around

We feel we will have strengths in product features, management, marketing, human resources, quality of service, operations, product mix, reliability, desirability, highly trained sales force, pricing, location, and facilities.

We will have low risk exposure in the areas of technology, inflation/interest rates, regulatory environment, management ability, location, facilities, and suppliers.

We perceive medium risk exposure in the local economy, strategy, and vulnerability to substitutes, finance, and planning. We have retained the services of specialists to help in various areas such as marketing, accounting, legal, and general overall business operation advice.

We have a high degree of risk in this overhead and lack of working capital. With our proposed new funding, we should overcome most of our weaknesses.

MARKETING STRATEGIES

PRICING AND VALUE

Our intention is to raise the public's awareness of our company. We plan to review our prices and those of our competitors every three months. We will review direct material costs, direct labor costs, and total overhead expenses. We will continually monitor the cost of providing our service to each customer. We will offer various free or reduced rate programs to get customers acquainted with us.

Numerous package deals will be available to customers. The following examples are various marketing strategies we may try:

  • Discounts for larger or repeat purchases
  • Special party rates for the café
  • We will continue the use of our newsletter to help promote value to our customers

SELLING TACTICS

Our company's marketing strategy will incorporate plans to promote our line of services through several different channels and on different levels of use. We will advertise heavily on the popular local radio stations and in newspapers.

We will try to satisfy the market void in this area for indoor entertainment. We will flood the market with advertising and try to go after our specific targets. We will try to capture their attention, pique their interest, and make them feel that they must have our services.

We will offer continuous promotional rates. The results sell themselves. We will offer discounts to frequent users. The more a customer uses our services the cheaper it will become for them.

We also are a MasterCard and Visa charge card merchant which enables us to more readily serve our customers.

In order to market our facility, we shall consider a variety of promotions including:

  • Reserve certain hours for unique groups such as children, senior citizens, service clubs, adults, etc.
  • Conduct special theme nights, use ethnic holidays, family night, charity promotion night, game night, contest night, etc.
  • Cultivate local churches and women's organizations.
  • Promote birthday parties.
  • Early bird specials.

ADVERTISING, PROMOTION, AND DISTRIBUTION OF SERVICES

We recognize that the key to success at this time requires extensive promotion. Advertising goals include all of the following:

  • Position the company as the premier nursery in Central/Western Spokane, Washington.
  • Increase public awareness of Wonderland Nursery and its benefits.
  • Increase public awareness of our company and establish a professional image.
  • Maximize efficiency by continually monitoring media effectiveness.
  • Consider a possible credit coupon in some of the advertisements.
  • Develop a brochure or pamphlet to explain our service and company.
  • Continue use of a distinctive business card and company letterhead.
  • Use a mix of media to saturate the marketplace.

PUBLIC RELATIONS

We will develop a public relations policy that will help increase awareness of our company and product. To achieve these goals we will consider some or all of the following:

  • Develop a press release and a company backgrounder as a public relations tool.
  • Develop a telephone script to handle customer and advertiser contact.
  • Develop a survey to be completed by customers to help determine the following:
  • 1. How did they hear about us?
  • 2. What influenced them to use our service?
  • 3. How well did our service satisfy their needs?
  • 4. How efficient was our service?
  • 5. Did they have any problems getting through to us?
  • 6. Did they shop competitors before selecting us?
  • 7. How did they initially perceive our company and product?
  • 8. Where are most of our customers located?
  • 9. Do they have suggestions for improving our service or our approach to advertising?
  • 10. What additional services would they like us to offer?
  • 11. Would they recommend us to others?
  • Maintain membership in the Chamber of Commerce to keep abreast of developments in the community and market trends.

FINANCIAL PLANS

Data Sheet #1

GENERAL:

Fiscal Year in which Projections/Calculations are to start ..............................................................................................1999

Number of Months in which Projections/Calculations are to start..........................................................................................1

The purpose for this analysis is Business Start-Up, Expansion, or Review ........................................................... START-UP

Owner's contribution to business (include both cash and time in dollar equivalency) ........................................$6,000,000.00

Indicate below if the figures are actual, annualized, or projected for each year in the analysis:

1999 Projected
2000 Projected
2001 Projected
2002 Projected
2003 Projected

INDICATE THE TYPE OF BUSINESS ENTITY YOU HAVE IN THE BOX TO THE RIGHT:  C

START-UP/EXPANSION EXPENSES: EXPENSES FOR YEAR:
% of Sales $ Amounts
Inventory 160,000.00 Advertising & Marketing Expenses 2.59% 0.00
Advertising 0.00 Bad Debts 0.00% 0.00
Telephone/Utilities 0.00 Contract Labor 0.70% 0.00
Professional Fees 0.00 Depreciation 0.00% 4,500.00
Organizational Expenses 0.00 Direct Labor Expenses 3.28% 0.00
Furniture/Fixtures 0.00 Dues, Subscriptions, and Memberships 0.00% 1,000.00
Land 750,000.00 Employee Reimbursement Expenses 0.00% .0.00
Buildings 300,000.00 Freight/Shipping 0.27% 0.00
Machinery/Equipment 65,000.00 Furniture or Fixtures Purchases 0.00% 1,000.00
Rent Deposits 0.00 Insurance 0.00% 8,996.00
Insurance 0.00 Lease Expenses 0.00% 0.00
Leasehold Improvements 0.00 Leasehold Expenses 0.00% 0.00
Licenses/Fees/Permits 0.00 Machinery & Equipment Purchases 0.00% 0.00
Miscellaneous 0.00 Office Supplies and Postage 0.16% 0.00
Property Improvements 25,000.00 Professional Fees 0.00% 4,250.00
Property Taxes 0.00 Permits/Licenses 0.00% 1,940.00
Other #3 0.00 Rent 0.00% 0.00
Other #4 0.00 Repair & Maintenance 0.00% 1,700.00
TOTAL 1,300,000.00 Salaries-Officers 0.00% 38,400.00
LOAN data:(If Needed) Salaries-Administrative 0.00% 0.00
Amount of Loan 1 $800,000.00 Salaries and Wages-Other 10.56% 0.00
Term of Loan 1 (Months) 180 Salaries-Manager 0.00% 0.00
Interest Rate for Loan 1 11% Telephone/Utilities 0.00% 11,700.00
First Year of Loan 1 1999 Property Improvements 0.00% 2,550.00
First Payment Month 8 Property Taxes 0.00% 9,000.00
Other #3 0.00% 0.00
Amount of Loan 2 $0.00 Other #4 0.00% 0.00
Term of Loan 2 (Months) 60 Miscellaneous/Contingency Expenses 2.50% 0.00
Interest Rate for Loan 2 0.00% TOTAL FIRST YEAR EXPENSES INCLUDING INTEREST PAID
First Year of Loan 2 1999 AND COST OF GOODS SOLD: $858,366
First Payment Month 1
PERCENTAGE OF TOTAL PAYROLL ALLOTTED TO PAYROLL TAXES AND BENEFITS 10.00%
PERCENTAGE OF NET SALES EXPECTED FOR THE COST OF GOODS SOLD: Café 35.00%
PERCENTAGE OF NET SALES EXPECTED FOR THE COST OF GOODS SOLD: Nursery 55.00%

Data Sheet #2

SOURCE/AMOUNTS OF INCOME FOR YEAR 1999
Nursery sales $797,000.00
Café sales $130,000.00
Source of Income #3 $0.00
Source of Income #4 $0.00
Other Income/Exp. (Net) $6,000.00
TOTAL INCOME $933,000.00
PERCENTAGE OF INCOME GROWTH
For Second Year 2000 15.00%
For Third Year 2001 15.00%
For Fourth Year 2002 15.00%
For Fifth Year 2003 15.00%
PERCENTAGE OF INCREASE IN EXPENSES:
For Second Year 5.00%
For Third Year 5.25%
For Fourth Year 5.50%
For Fifth Year 5.75%
PERCENTAGE OF NET INCOME TO BE PAID OUT IN DIVIDENDS
For First Year 1999 50.00%
For Second Year 2000 60.00%
For Third Year 2001 65.00%
For Fourth Year 2002 70.00%
For Fifth Year 2003 75.00%

Number of Customers Expected to Serve the First Year: 12,000

Average Income received from each Customer: $77.75

Operating Data 1999 2000 2001 2002 2003
Days Sales in Accounts Receivable 20.0 20.0 20.0 20.0 20.0
Days Materials Cost in Inventory 30.0 30.0 30.0 30.0 30.0
Days Finished Goods in Inventory 45.0 45.0 45.0 45.0 45.0
Days Materials Cost in Payables 20.0 20.0 20.0 20.0 20.0
Days Payroll Expenses accrued 20.0 20.0 20.0 20.0 20.0
Days Operating Expenses accrued 25.0 25.0 25.0 25.0 25.0

RE-STRUCTURE EXPENSES

Category Amount
Cash and Working Capital $28,150
Material-Supplies-Inventory 10,000
Furniture and Fixtures 25,500
Equipment 40,000
Rent Deposits 9,700
License Fees/Permits 1,000
Insurance (First year paid in advance) 1,800
Utilities & Telephone 500
Legal, Professional, and Consulting Fees 1,500
Security System & Leasehold Improvements 5,000
Initial Entertainment Budget 6,000
Opening Advertisement & Promotion 3,000
Miscellaneous 2,850
TOTAL $135,000

Projected First-Year Monthly Budget 1999

Month Start-Up Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
CASH RECEIPTS:
Nursery Sales $4,782 $11,158 $15,143 $47,023 $295,687 $168,167 $78,106
Café Sales $3,510 $4,160 $4,940 $6,500 $13,000 $20,020 $20,020
Source of Income #3 $0 $0 $0 $0 $0 $0 $0
Source of Income #4 $0 $0 $0 $0 $0 $0 $0
Other Income/Expense (Net) $500 $500 $500 $500 $500 $500 $500
Owner 's Equity 600,000
Loan 800,000
Total Cash Received 1,400,000 8,792 15,818 20,583 54,023 309,187 188,687 98,626
DISBURSEMENTS:
Cost of Goods Sold/Inventory 160,000 $3,859 $7,593 $10,058 $28,138 $167,178 $99,499 $49,965
Advertising / Marketing Exp. 0 $215 $397 $520 $1,386 $7,992 $4,872 $2,540
Bad Debts $0 $0 $0 $0 $0 $0 $0
Contract Labor $58 $107 $141 $375 $2,164 $1,320 $688
Depreciation $375 $375 $375 $375 $375 $375 $375
Direct Labor $272 $502 $658 $1,754 $10,116 $6,167 $3,216
Dues/Subscrip./Memberships $83 $83 $83 $83 $83 $83 $83
Employee Reimbursement Exp. $0 $0 $0 $0 $0 $0 $0
Freight / Shipping $22 $41 $54 $144 $832 $508 $265
Furniture or Fixtures Purchases 0 $83 $83 $83 $83 $83 $83 $83
Insurance 0 $750 $750 $750 $750 $750 $750 $750
Land 750,000
Buildings 300,000
Lease Expenses $0 $0 $0 $0 $0 $0 $0
Leasehold Expenses 0 $0 $0 $0 $0 $0 $0 $0
Mach./Equipment Purchases 65,000 $0 $0 $0 $0 $0 $0 $0
Organizational Expenses 0 $0 $0 $0 $0 $0 $0 $0
Office Supplies and Postage $13 $25 $32 $87 $499 $305 $159
Payroll Taxes/Employee Benefits $435 $532 $598 $1,060 $4,590 $2,923 $1,677
Professional Fees 0 $354 $354 $354 $354 $354 $354 $354
Permits / Licenses 0 $162 $162 $162 $162 $162 $162 $162
Rent 0 $0 $0 $0 $0 $0 $0 $0
Repair & Maintenance $142 $142 $142 $142 $142 $142 $142
Salaries-Officers $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,200
Salaries-Administrative $0 $0 $0 $0 $0 $0 $0
Salaries and Wages-Other $875 $1,617 $2,120 $5,650 $32,587 $19,866 $10,359
Salaries-Manager $0 $0 $0 $0 $0 $0 $0
Telephone / Utilities 0 $975 $975 $975 $975 $975 $975 $975
Property Improvements 25,000 $213 $213 $213 $213 $213 $213 $213
Property Taxes 0 $750 $750 $750 $750 $750 $750 $750
Other #3 0 $0 $0 $0 $0 $0 $0 $0
Other #4 0 $0 $0 $0 $0 $0 $0 $0
Misc./Contingency Expenses 0 $207 $383 $502 $1,338 $7,717 $4,705 $2,453
Total Cash Paid Out 1,300,000 13,043 18,283 21,770 47,019 240,763 147,250 78,409
LOANS SECTION:
Interest 7,333 7,317 7,301 7,285 7,268 7,251 7,234
Principal 1,759 1,776 1,792 1,808 1,825 1,842 1,858
Cash Pyts to Loans 9,093 9,093 9,093 9,093 9,093 9,093 9,093
Taxable Income -11,584 -9,782 -8,487 -280 61,156 34,186 12,983
Income Tax (State & Federal) 1,449 1,449 1,449 1,449 1,449 1,449 1,449
NET INCOME -13,033 -11,232 -9,937 -1,729 59,707 32,736 11,534
LOANS (Balance) 800,000 798,241 796,465 794,673 792,865 791,040 789,198 787,340
DIVIDENDS PAID 2,385 2,385 2,385 2,385 2,385 2,385 2,385
BEGINNING CASH 100,000
Month 8 Month 9 Month 10 Month 11 Month 12 TOTALS
$53,399 $71,730 $19,925 $10,361 $21,519 $797,000
$14,950 $11,960 $10,010 $8,970 $11,960 $130,000
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$500 $500 $500 $500 $500 $6,000
68,849 84,190 30,435 19,831 33,979 933,000
$34,602 $43,638 $14,462 $8,838 $16,021 $483,850
$1,770 $2,167 $775 $500 $867 $24,000
$0 $0 $0 $0 $0 $0
$479 $587 $210 $136 $235 $6,500
$375 $375 $375 $375 $375 $4,500
$2,240 $2,743 $981 $634 $1,097 $30,379
$83 $83 $83 $83 $83 $1,000
$0 $0 $0 $0 $0 $0
$184 $226 $81 $52 $90 $2,500
$83 $83 $83 $83 $83 $1,000
$750 $750 $750 $750 $750 $8,996
$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
$111 $135 $48 $31 $54 $1,500
$1,266 $1,478 $734 $587 $783 $16,664
$354 $354 $354 $354 $354 $4,250
$162 $162 $162 $162 $162 $1,940
$0 $0 $0 $0 $0 $0
$142 $142 $142 $142 $142 $1,700
$3,200 $3,200 $3,200 $3,200 $3,200 $38,400
$0 $0 $0 $0 $0 $0
$7,215 $8,835 $3,160 $2,041 $3,534 $97,860
$0 $0 $0 $0 $0 $0
$975 $975 $975 $975 $975 $11,700
$213 $213 $213 $213 $213 $2,550
$750 $750 $750 $750 $750 $9,000
$0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0 $0
$1,709 $2,092 $748 $483 $837 $23,175
56,661 68,986 28,286 20,389 30,605 $771,464
7,217 7,200 7,183 7,165 7,148 $86,902
1,875 1,893 1,910 1,928 1,945 $22,211
9,093 9,093 9,093 9,093 9,093 $109,113
4,970 8,004 -5,034 -7,723 -3,774 $74,634
1,449 1,449 1,449 1,449 1,449 $17,390
3,521 6,555 -6,483 -9,172 -5,223 $57,244
785,464 783,572 781,662 779,734 777,789
2,385 2,385 2,385 2,385 2,385 $28,622

Projected Second-Year Monthly Budget 2000

Month Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Month 19 Month 20
CASH RECEIPTS:
Nursery Sales $5,499 $12,832 $17,414 $54,076 $340,040 $193,392 $89,822 $61,409
Café Sales $4,037 $4,784 $5,681 $7,475 $14,950 $23,023 $23,023 $17,193
Source of Income #3 $0 $0 $0 $0 $0 $0 $0 $0
Source of Income #4 $0 $0 $0 $0 $0 $0 $0 $0
Other Income/Expense (Net) $525 $525 $525 $525 $525 $525 $525 $525
Owner 's Equity
Loan
Total Cash Received 10,061 18,141 23,620 62,076 355,515 216,940 113,370 79,126
DISBURSEMENTS:
Cost of Goods Sold/Inventory $4,437 $8,732 $11,566 $32,358 $192,255 $114,424 $57,460 $39,792
Advertising / Marketing Exp. $247 $456 $598 $1,594 $9,191 $5,603 $2,922 $2,035
Bad Debts $0 $0 $0 $0 $0 $0 $0 $0
Contract Labor $67 $124 $162 $432 $2,489 $1,517 $791 $551
Depreciation $394 $394 $394 $394 $394 $394 $394 $394
Direct Labor $313 $577 $757 $2,017 $11,633 $7,092 $3,698 $2,576
Dues/Subscrip./Memberships $88 $88 $88 $88 $88 $88 $88 $88
Employee Reimbursement Exp. $0 $0 $0 $0 $0 $0 $0 $0
Freight / Shipping $26 $48 $62 $166 $957 $584 $304 $212
Furniture or Fixtures Purchases $88 $88 $88 $88 $88 $88 $88 $88
Insurance $787 $787 $787 $787 $787 $787 $787 $787
Land
Buildings
Lease Expenses $0 $0 $0 $0 $0 $0 $0 $0
Leasehold Expenses $0 $0 $0 $0 $0 $0 $0 $0
Mach./Equipment Purchases $0 $0 $0 $0 $0 $0 $0 $0
Organizational Expenses $0 $0 $0 $0 $0 $0 $0 $0
Office Supplies and Postage $144 $144 $144 $144 $144 $144 $144 $144
Payroll Taxes/Employee Benefits $468 $580 $655 $1,187 $5,247 $3,330 $1,897 $1,423
Professional Fees $372 $372 $372 $372 $372 $372 $372 $372
Permits / Licenses $170 $170 $170 $170 $170 $170 $170 $170
Rent $0 $0 $0 $0 $0 $0 $0 $0
Repair & Maintenance $149 $149 $149 $149 $149 $149 $149 $149
Salaries-Officers $3,360 $3,360 $3,360 $3,360 $3,360 $3,360 $3,360 $3,360
Salaries-Administrative $0 $0 $0 $0 $0 $0 $0 $0
Salaries and Wages-Other $1,007 $1,860 $2,438 $6,498 $37,475 $22,846 $11,913 $8,298
Salaries-Manager $0 $0 $0 $0 $0 $0 $0 $0
Telephone / Utilities $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024 $1,024
Property Improvements $223 $223 $223 $223 $223 $223 $223 $223
Property Taxes $788 $788 $788 $788 $788 $788 $788 $788
Other #3 $0 $0 $0 $0 $0 $0 $0 $0
Other #4 $0 $0 $0 $0 $0 $0 $0 $0
Misc./Contingency Expenses $238 $440 $577 $1,539 $8,875 $5,410 $2,821 $1,965
Total Cash Paid Out 14,387 20,400 24,401 53,375 275,706 168,391 89,390 64,437
LOANS SECTION:
Interest 7,130 7,112 7,094 7,075 7,057 7,038 7,019 7,000
Principal 1,963 1,981 1,999 2,018 2,036 2,055 2,074 2,093
Cash Pyts to Loans 9,093 9,093 9,093 9,093 9,093 9,093 9,093 9,093
Taxable Income -11,456 -9,371 -7,874 1,626 72,752 41,511 16,960 7,689
Income Tax (State & Federal) 2,529 2,529 2,529 2,529 2,529 2,529 2,529 2,529<

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