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TRANSCRIPT
Financing Plan Proposal
for
Sherwood Forest Inn Forest Street
Nottingham, Virginia
by:
Robin and Marian Hood 333 Treetop Hill Road
Pine Meadow, Virginia 33333
333-333-3333
TABLE OF CONTENTS
Statement of Purpose 1
Sources and Application of Funds 2
Marketing and Financial Plan 3
Personal Information 4
Personal Statement of Marian and Robin Hood 5
Resume of Marian Hood 6
Resume of Robin Hood
Hoods’ Financial Statement 7
Executive Summary 10
Executive Summary 11
Fact Sheet 12
Financial History and Projections 13
Introduction to Financial Analysis and Projections 14
Business Analysis and Projections 15
Cash Flow Analysis of Tax Returns 18
Inn Partial Tax Returns, 2015, 2016, 2017 19
Appendix 25
Letter of Intent
Partial tax returns of Marian and Robin Hood 2015, 2016, 2017
The full tax returns of Buyers and Sellers available upon request.
STATEMENT OF PURPOSE
We, Marian and Robin Hood, are planning to purchase the Sherwood Forest Inn of Forest Street, Nottingham, Virginia. The Sherwood Forest Inn is a Bed and Breakfast Inn with five guest rooms in the main Inn and a separate cottage style building for the owner’s quarters. The total purchase price will be $675,000.00. We are committing $235,000.00 of our funds, including closing costs and working capital. Of this, our down payment will be $135,000.00. We are seeking first mortgage financing in the amount of $540,000.00.
1
SOURCES AND APPLICATION OF FUNDS
SOURCES First Mortgage Financing $540,000.00 Cash from the Marian and Robin Hood 235,000.00 TOTAL SOURCES: $775,000.00 APPLICATION Purchase of the Sherwood Forest Inn $675,000.00 Closing, Opening Inventory, Prepaids 25,000.00 Injected Working Capital 50,000.00 Ready Reserves 25,000.00 TOTAL APPLICATION $775,000.00
2
Sherwood Forest Inn
MARKETING AND FINANCIAL PLAN
The Sherwood Forest Inn has a strong mid-week room business generated by local businesses. Weekend business is partly from Washington DC, an hour away, but is often the result of local weddings or other local activities. The Inn is small enough to be run by a couple with little outside help other than basic housekeeping. The Inn has five guest rooms currently. The current owners have cleverly figured out how to make a small Bed & Breakfast a very viable business. They offer a catering service for the local businesses, social, cultural and religious groups by catering to their needs for a private meeting space. This is a significant revenue stream. They cater meals for special events dining, showers, anniversary celebrations and faculty lunches. The Sherwood Forest Inn is zoned to offer dining to overnight guests, and has a conditional use variance allowing (any type) dining to outside guests on a reservation basis. Event size ranges from 10 to 100 people with custom menus that prove profitable, are cost efficient, and require minimal, part-time wait staff. Business Objectives
As this business is solid, with strong cash flow, it is not our intention to change anything for a year. We do believe there is room to increase rates but we will do that slowly. Current owners have focused on local business, largely midweek. Possible growth could come from leisure travelers and weekend getaways from the Washington DC area.
3
Personal Information
4
Personal Information Marian and Robin Hood
Our formal resumes (below) exhibit skills not directly related to Innkeeping. Beyond our professional careers, we both have skills and experience that will help us to be successful Innkeepers. Marian has been interested in Innkeeping since she went to Europe with her family in the 1970's and stayed in pensions. The first job she had was waitressing for a family friend's catering company at 14. She loved the job, the uniforms, talking to guests and the camaraderie of working with the other team members ensuring the event was a success and that the guests were pleased. Many other jobs, including restaurant jobs, teaching, lifeguarding and Gino's came and went, but she continued to cater during college summers, and while in grad school. She has even created delicious menus and worked small parties by herself for local friends and neighbors. She is an advocate for a strong community and volunteers at the local Farmers Market, and coaches the local girls' rugby team. Her career has taken her around the world several times, so she knows what is good lodging and what is not so good lodging. Making weary travelers comfortable and providing delicious food for others is how she envisions her life as an Innkeeper. When she attended the Aspiring Innkeeper seminar with her husband Robin, she really saw how her interests and his interests could work together to run a successful business. As an avid world traveler, Robin knows that presentation and comfort are important, and has clear ideas about making space functional. Around the house, Robin fixes things that need to be fixed, and builds things that need to be built. For example, Robin renovated the kitchen and a bathroom of our current home. He built the second bathroom from scratch. He expanded the living space by re-locating the master bedroom, increased privacy by closing off the master bath, created a walk-in closet, built a workshop and shed, and re-designed the outside deck. At this time, he is planning to finish the rest of the unfinished area of the basement. Robin's appreciation for the bow and arrow makes him the perfect partner for the Sherwood Forest Inn. In addition to his carpentry talents, he is a trained electrician and certified firearms safety instructor. Robin likes working with teams, and loves to share his enthusiasm with others. As an Innkeeper, he looks forward to meeting new people, testing new breakfast concoctions, and maintaining the Inn as a well-oiled machine.
5
Resumes of Marian and Robin Hood.
6
3/8 2018
Marian and Robin Hood
333 Treetop Hill Road
Pine Meadow, Virginia, 33333
Sherwood Forest Inn
333-333-3333
200033000235581
679000
35700
985281
460000
460000
525281
985281
215000
1832
7
Chase Visa 1000 1000 M
Navy Visa 15000 700 M
Navy Auto Loan 13066 350 M
Primary
333 Treetop Hill Road
Nov 2005
$385,000
$329,000
Your Choice Address
NA
$300,000
$2,000
Good
Rental Property
222 W Nowhere Street
May 2003
$198,000
$350,000
Fargo Address
NA
$160,000
$1,000
Good
IRA ($85,000); 401K ($163,000); Audi A3 ($14,000); Toyota 2013 ($6,000); Ford F-150 ($15,700)
8
03/08/2018
Marian Hood 333-33-3333
03/08/2018
Robin Hood 333-33-3333
9
Executive Summary
10
Sherwood Forest Inn Executive Summary
Property: The Sherwood Forest Inn Forest Street Nottingham, Virginia 22222 555-555-5555 www.sherwoodforestinn.com Owners: Sherwood Forest Inn LLC King Richard Forest Street Nottingham, Virginia 22222 Buyers: Marian and Robin Hood 333 Treetop Hill Road Pine Meadow, Virginia 33333 Agreement: Robin and Marian Hood agree to purchase the Sherwood Forest
Inn for $675,000.00. We are investing $235,000.00 of our funds. We are seeking first mortgage financing in the amount of $540,000.00
11
Fact Sheet The Sherwood Forest Inn
Name: The Sherwood Forest Inn Address Forest Street, Nottingham, Virginia Acreage: ¾ acre; town lot Number of rooms: 5 Guest Rooms 4 rooms on second floor
1 room on first floor Room Amenities: Private en suite baths, Cable TV, Individually controlled
heat and air conditioning, Wi-Fi throughout Public Areas: Large common room with wood burning fireplace; small
pub within the common room; separate library Dining Rooms: Two dining rooms comfortably seat 40 people Kitchen: Commercial equipment with lots of granite, separate prep
room, very comfortable and pleasant workspace Amenities Special: Full Liquor License Public External Areas: Rocking porch, outdoor patio, and a magnificent walled
perennial garden. Parking for 22 cars Facilities: Two-bay carport with attached large storage room Owners’ Quarters: 375 square foot separate cottage Strengths: Physical Excellent condition, great kitchen, building has been
meticulously maintained. Business Occupancy rate, profitability, complimentary group
luncheon business, full liquor license Website: www.sherwoodforestinn.com Extras: High Google ranking 50 outstanding reviews from TripAdvisor 90 awesome reviews from Bedandbreakfast.com Two great golf courses within 5 minutes of the Inn Two additional golf courses within 15 minutes of
Nottingham
12
Sherwood Forest Inn Financial History and Projections
13
SHERWOOD FOREST INN
FINANCIAL ANALYSIS AND PROJECTIONS
The following three pages present the internal business profit and loss along with the tax return reports for the last three years. Numbers have not been adjusted, but for analysis they are placed in our format. Lines 7 through 18 are summaries of detailed income and expenses on lines 19-140. Cash flow on line 17, shows a consistent cash flow, $76,900.00 in 2017, sufficient to cover debt service and supply a reasonable return. A fourth page shows monthly income and occupancy, showing a stable, year round business activity.
14
Sherwood Forest Inn
Business Analysis
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A B C D E F G H I J K L M NF
Sherwood Forest Inn 2015 2015 Tax 2016 2016 Tax 2017 2017 Tax Future 1 Future 2
Number of Rooms 5 5 5 5 5 5 5 5
Occupancy Rate 57% 57% 53% 53% 62% 62% 64% 64%
Average Price/Room $76 $76 $78 $195 $90 $90 $100 $110
Annual # of Rooms 1038 1038 971 971 1133 1133 1168 1168
Number of Guests/Year 1972 1972 1845 1845 2153 2153 2219 2219
SUMMARY
Sales $209,822 $204,432 $185,013 $188,921 $200,204 $201,644 $241,800 $253,480
Cost of Goods $75,781 $72,665 $67,152 $64,721 $57,893 $55,815 $53,736 $53,736
Gross Profit $134,041 $131,767 $117,861 $124,200 $142,311 $145,829 $188,064 $199,744
Expenses
Labor Related $5,517 $0 $6,041 $0 $0 $0 $11,182 $11,182
Operating Expenses $16,740 $24,815 $17,013 $26,785 $35,886 $30,622 $36,408 $37,870
Marketing $2,721 $2,720 $1,478 $2,978 $3,166 $3,172 $11,463 $11,872
Occupancy Expenses $25,098 $30,242 $24,159 $30,898 $26,360 $35,433 $24,903 $25,931
Total Expenses $50,076 $57,777 $48,691 $60,661 $65,412 $69,227 $83,956 $86,855
Cash Flow pre Debt, Owner, Deprec. $83,965 $73,990 $69,170 $63,539 $76,900 $76,602 $104,107 $112,888
Ratio Cash Flow to Sales 40% 36% 37% 34% 38% 38% 43% 45%
Income Room Revenue
Room Revenue 79,110 204,432 75,382 188,921 101,740 201,644 116,800 128,480
Room Revenue Other
Total Room Revenue 79,110 204,432 75,382 188,921 101,740 201,644 116,800 128,480
Other Income
Food & Beverage 109,386 83,431 78,456 125,000 125,000
Beverage
Spa Services
Weddings/Site Fees
Gifts and Products 7,404 11,321 20,008
Sales Tax
Other Tips 13,922 14,879
Total Other Income 130,712 0 109,631 0 98,464 0 125,000 125,000
Total Income 209,822 204,432 185,013 188,921 200,204 201,644 241,800 253,480
Cost of Goods SoldFood 75,289 72,665 50,238 64,721 57,893 55,815 53,736 53,736
Beverage 16,914 0 0
Function
Gifts and Products 229 0 0
Spa Services 263 0 0
Total Cost of Goods Sold 75,781 72,665 67,152 64,721 57,893 55,815 53,736 53,736
ExpensesLabor Expense
Wages
Uncategorized Wages 5,517 4,004 10,000 10,000
Front Desk/Innkeeping
Housekeeping
Inn Sitter 2,037
Food Service
Less Owner Compensation
Maintenance/Grounds
Total Wages 5,517 0 6,041 0 0 0 10,000 10,000
Other Labor Costs
Casual Labor
Payroll Taxes 900 900
Workers Comp 200 200
Benefits 70 70
Recruitment/Training 12 12
Payroll Service
Total Other Labor 0 0 0 0 0 0 1,182 1,182
Total Labor 5,517 0 6,041 0 0 0 11,182 11,182
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Sherwood Forest Inn
Business Analysis
1
A B C D E F G H I J K L M NF
Sherwood Forest Inn 2015 2015 Tax 2016 2016 Tax 2017 2017 Tax Future 1 Future 2
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Operating Expenses
Supplies
Inn and Guest 3,525 8,443 6,702 7,856 5,430 8,102 7,012 7,351
Restaurant 3,677 1,875 1,875
Office 2,187 1,648 2,539 2,539 725 760
Other
Total Supplies 3,525 10,630 6,702 9,504 11,646 10,641 9,613 9,986
Bank Fees
Credit Card Discounts 3,531 3,439 4,677 3,185 5,233 5,233 5,803 6,084
Other Charges 15 44
Total Bank Fees 3,531 3,439 4,677 3,200 5,233 5,277 5,803 6,084
Laundry
Service and Supplies 1,187 1,735 1,735
Purchases 725 760
Total Laundry 0 0 0 0 1,187 0 2,460 2,495
Communications
Telephone 2,693 2,774
Internet Connection 153
Other Communication
Total Communications 0 0 153 0 0 0 2,693 2,774
Professional 850
Consulting
Legal 3,456
Accounting 1,800 2,000 1,448 1,451
Other
Total Professional 0 1,800 0 3,456 2,000 850 1,448 1,451
Vehicle 1,635 1,799
Operating
Insurance 1,000 1,000
Lease
Total Vehicle 0 0 0 0 0 0 2,635 2,799
Maintenance
Inn and Rooms 2,595 6,125 4,083 9,301 6,004 6,354
Restaurant 2,500 2,500
Grounds 2,542 2,886 2,761 1,434 1,528
Other 7,142 2,962 8,975
Total Maintenance 9,684 2,962 5,481 6,125 15,819 9,301 9,938 10,382
Other Operating
Travel and Education 5,984 4,500 4,553 1,234 1,257
Commission 350 385
Miscellaneous 234 257
Total Other Operating 0 5,984 0 4,500 0 4,553 1,818 1,899
Total Operating 16,740 24,815 17,013 26,785 35,886 30,622 36,408 37,870
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Sherwood Forest Inn
Business Analysis
1
A B C D E F G H I J K L M NF
Sherwood Forest Inn 2015 2015 Tax 2016 2016 Tax 2017 2017 Tax Future 1 Future 2
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Marketing Expenses
Internet 5,836 6,070
Management
Listings
Pay Per Click
Website
Total Internet 0 0 0 0 0 0 5,836 6,070
Advertising 2,004 2,003 855 2,355 2,587 2,587 5,627 5,802
Publications
Brochures and Print
Organization Dues 717 717 623 623 579 585
Public Relations
Direct Mail
Total Advertising 2,721 2,720 1,478 2,978 3,166 3,172 5,627 5,802
Total Marketing 2,721 2,720 1,478 2,978 3,166 3,172 11,463 11,872
Occupancy Expenses
Utilities
Misc. Utilities 11,045 11,054 143 11,303 12,060 11,706 13,463 13,872
Gas & Elelctric 5,009
Heating Oil
Electric
Water/Sewer 1,199
Cable/Sat. & Telephone 4,870
Total Utilities 11,045 11,054 11,221 11,303 12,060 11,706 13,463 13,872
Other Occupancy
Waste Removal 1,225 1,260
Equipment Rental 2,267 1,945 1,892 1,892 1,187 234 257
Contract Services 5,417 5,761 4,548 8,225 1,725 1,760
Insurance- Prop. Liability 4,175 4,175 4,937 4,456 3,729 3,729 2,836 3,070
Real Estate Taxes 6,211 6,159 4,592 5,994 4,332 8,894 4,420 4,712
Other Taxes
Licenses 1,400 1,492 1,517 1,492 1,692 1,692 1,000 1,000
Miscellaneous
Total Other Occupancy 14,053 19,188 12,938 19,595 14,300 23,727 11,440 12,059
Total Occupancy 25,098 30,242 24,159 30,898 26,360 35,433 24,903 25,931
Total Expenses 50,076 57,777 48,691 60,661 65,412 69,227 83,956 86,855
Total Net Business Cash Flow $83,965 $73,990 $69,170 $63,539 $76,900 $76,602 $104,107 $112,888
17
SHERWOOD FOREST INN TAX RETURNS 2015, 2016, 2017
Using the Tax Returns for 2015, 2016 and 2017 as a base, we calculate the cash flow before interest, depreciation and payments to the owner as follows:
Year Ending Year Ending Year Ending
2015 2016 2017
Line 21: Income $30,655.00 $13,685.00 $20,187.00
Minus Other Income (non inn related) -25,100.00 -20,100.00 -18,000.00
Inn Income: 5,555.00 -6,415.00 2,187.00
Add Back:
Line 10; Guaranteed Payments to Partners 9,439.00 11,825.00 11,886.00
Line 15: Interest 30,788.00 30,342.00 26,839.00
Line 16c: Depreciation 21,541.00 21,120.00 21,023.00
Statement 3: Amortization 6,667.00 6,667.00 6,667.00
Statement 3: Legal & Acctng (Fee for Inn Sale) 8,000.00
Total Addback: 68,435.00 69,954.00 74,415.00
Total Cash Flow Analysis $73,990.00 $63,539.00 $76,602.00
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VA22222
5
FOREST STREET
NOTTINGHAM
THE SHERWOOD FOREST INN
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THE SHERWOOD FOREST INN
NOTTINGHAM VA
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22222
FOREST STREET
21
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7THE SHERWOOD FOREST INN
FOREST STREET
NOTTINGHAM VA 22222
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Appendix
1) Letter of Intent
2) Partial Tax Returns for Marian and Robin Hood (2015, 2016, 2017)
3) Internal Profit & Loss Statements for the Inn
4) Monthly Income and Occupancy Report (2015, 2016, 2017)
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