7.0 Financial Plan

The financial plan contains these essential factors:

  • A growth rate in sales of 5% for the year 2005, to $786,000 in total revenues.
  • An average sales per business day (340 days per year) in excess of $2,300.

Difficulties and Risks:

  • Slow sales resulting in less-than projected cash flow.
  • A parallel entry into the market by another competitor.
  • Unexpected cost increases compared with the forecasted sales.

7.1 Important Assumptions

The following assumptions will determine the potential for future success.

  • A healthy economy that supports a moderate level of growth in our market.
  • The ability to maintain at least a 5% growth each year.
  • Keeping operating costs low, particularly in the area of personnel and ongoing monthly expenses.

Table: General Assumptions


7.2 Break-even Analysis

The following chart and table summarize our break-even analysis. We don't really expect to reach break-even until a few months into the business operation. We will be charging $4.00 for a bucket of balls and we speculate that if for every two buckets of balls purchased we sell one drink at a cost of $2.00 we will have an average cost per unit of 25%.

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even $43,860
Average Percent Variable Cost 6%
Estimated Monthly Fixed Cost $41,242

Chart: Break-even Analysis

7.3 Projected Profit and Loss

The ...

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