hotel bussiness plan
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Lowland Heights Roadhouse
Executive Summary
Introduction
The long-term goal of Lowland Heights Roadhouse for temporary lodging, restaurant, bar
and RV Park by creating a differentiated experience capitalizing on personal service, the
historical nature of the Roadhouse buildings, and its unique location in one of the most
attractive parts of South Central india . We plan to be more than a great lodging, restaurant,
bar and RV Park. We plan to create an environment of pampered luxury that surpasses the
standard. Expanding our exposure via the Internet and introducing the Greenhorn Valley to
people that have not yet discovered this year-round paradise will allow us to maintain a
higher than average occupancy rate and above average profits.
Location
The Lowland Heights Roadhouse is located in Agra
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The Lowland Heights Roadhouse is located in Agra
Lowland Heights Roadhouse
desk service. The buildings have undergone a number of restorations and we plan more,
possibly adding 10 more motel units next spring.
As the Roadhouse becomes established through the peak season, we plan to expand our
services to the residents of Dusty Corners and surrounding cities in time for the off-season.
The large dance floor area is ideal for formal or informal gatherings (e.g. wedding
receptions, club meetings, Christmas parties, family reunions, etc.).
The Market
Lowland Heights Roadhouse's target market strategy is based on becoming a destination
choice for the people in the Greenhorn Valley who are looking for a place to relax or
recharge. The target markets that we are going to pursue are people or families looking for a
vacation destination, honeymooners, family reunions, hunters, and drop-in customers. Our
setting and facility is a natural for people or families to visit, what with the Greenhorn
Valley having so many outdoor things to do A modest projection for increased unit rental is
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Lowland Heights Roadhouse
Our three major customer segments are tourists, hunters from all over the United States since
this area is known for great hunting of elk and deer, and local patrons who need the facilities
for various events. Subscriptions to various Web services will provide international exposure
to potential customers for nominal annual fees, plus we have a website
http//www.lodgeatlowlandheights.com. The Roadhouse would like to see a 10% increase in
customers on a yearly basis.
Financial Considerations
Golden Cholla Enterprises LLC dba the Lowland Heights Roadhouse will be acquired via a
Small Business Administration (SBA) loan with the buyers supplying 20% down. We are
assuming an initial capital start-up, as shown in the Start-up table, for operating expenses
which we have already contributed.
We estimate average monthly fixed costs, including operating expenses and mortgage
payment as presented in the Financial Plan chapter below Peak and off-season will have
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Chart: Highlights
1.1 Objectives
The objective of the Lowland Heights Roadhouse for the first three years of operation
include:
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Lowland Heights Roadhouse
• Through incentives and increased exposure on the Internet, we hope to increase off-
season occupancy by 30% the first year.
• Increase off-season use by expanding into other uses for property (cater parties,
receptions, weddings, etc.).
1.2 Keys to Success
The primary keys to success for the Lowland Heights Roadhouse will be based on the
following factors:
• Provide a facility that is first class with attention to detail.
• Give each guest a sense that he or she is our top priority.
• Provide quality meals.
• Retain our guests to ensure repeat bookings and referrals.
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1.3 Mission
The mission of Lowland Heights Roadhouse is to become the best choice in Prickly Pear
County for temporary lodging by expanding our exposure via the Internet (with multiple
networks and links), and introducing the area to market segments that have not yet
discovered this year-round hunter's dream. We plan to be more than a great Roadhouse. We
plan to create an environment of conveniences that surpasses the standard fare for Dusty
Corners.
The Roadhouse guests will have every need met to ensure his/her comfort. For special
occasions, catered meals, chilled wine, etc. can be provided for an additional fee. During the
weekends, guests will return to the Roadhouse in the evening and find a fine restaurant to
dine at before turning in.
As the Lowland Heights Roadhouse becomes established through the peak season, we plan
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2.0 Company Summary
The Lowland Heights Roadhouse is located in Agra at the northern end of the Greenhorn
Valley and is surrounded by the Ombligo de Dios mountain range on the east and the Lost
Pony Hills on the west. The Roadhouse is located on a main thoroughfare Route 173, located
approximately 52 miles north of Silver Gulch and 47 miles southwest of Friday Falls.
2.1 Company Ownership
Lowland Heights Roadhouse is a dba of Golden Cholla Enterprises LLC, a Weststate
Corporation owned and operated by Tory Britts and assisted by her husband Gisli
Njerdginsyn.
2.2 Start-up Summary
Tory Britts (owner) and husband Gisli Njerdginsyn will invest heavily in the
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Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $63,175Start-up Assets to Fund $43,033Total Funding Required $106,208
Assets Non-cash Assets from Start-up $25,033Cash Requirements from Start-up $18,000Additional Cash Raised $205,582Cash Balance on Starting Date $223,582Total Assets $248,616
Liabilities and Capital
LiabilitiesCurrent Borrowing $0Long-term Liabilities $232,000Accounts Payable (Outstanding Bills) $1,047Other Current Liabilities (interest-free) $744Total Liabilities $233 791
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Total Funding $311,791
Chart: Start-up
Table: Start-up
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Direct - TV $200Insurance $500Total Start-up Expenses $63,175
Start-up AssetsCash Required $18,000Start-up Inventory $0Other Current Assets $9,827Long-term Assets $15,206Total Assets $43,033
Total Requirements $106,208
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Lowland Heights Roadhouse
3.0 Services
Lowland Heights Roadhouse will offer customers eight 1-bedroom units and two 2-bedroom
units. Two units have a kitchenette and 2 units can be used together as a suite. Each unit is
equipped with two double beds or a queen bed.
We have a full-service restaurant, a bar with a dance floor that provides live entertainment,
and eight RV sites with hook-ups. Next spring we will be putting in full-service coin-
operated laundry facilities (washing, drying, and optional folding) along with a four bay self-
serve car wash.
4.0 Market Analysis Summary
The Lowland Heights Roadhouse's target market strategy is based on becoming a destination
choice for families and hunters in the greater Greenhorn Valley region who are looking for a
place to relax or hunt or recharge. The target markets that we are going to pursue are people
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4.1 Market Segmentation
Our target market strategy is based on becoming a destination for people who are looking to
get away for a vacation or an area to hunt in. Our marketing strategy is based on superior
performance in the following areas:
• Quality facilities
• Beautiful location
• Customer service
The target markets are separated into three segments; "Vacationers," "Hunters," and "Drop-
ins." The primary marketing opportunity is selling to these accessible target market
segments by focusing on their vacation and recreational needs.
Vacationers
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to stay for the night. Our sign can be seen from Route 173, a main thoroughfare, and we
expect to get quite a few drop-ins.
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Table: Market Analysis
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5Potential
Customers
Growth CAGR
Hunters 15% 90,000 103,500 119,025 136,879 157,411 15.00%Drop-ins 10% 20,000 22,000 24,200 26,620 29,282 10.00%Spring &
Summer Visitors
15% 60,000 69,000 79,350 91,253 104,941 15.00%
Total 14.45% 170,000 194,500 222,575 254,752 291,634 14.45%
Chart: Market Analysis (Pie)
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Lowland Heights Roadhouse
4.2 Service Business Analysis
The Lowland Heights Roadhouse is a 10 room facility, restaurant, bar and RV Park that has
full hook-ups that provides overnight lodging, and lunch, dinner and spirits in a country
setting in the Greenhorn Valley. There is only one other restaurant and motel in the
area. Most people who need lodging in the area make reservations in advance to assure room
availability.
4.3 Competition and Buying Patterns
The Lowland Heights Roadhouse offers a unique country environment, which caters to an
ever increasing group of travelers. Our Lodge creates a climate of home, where guests
become temporary members of a larger family. The Roadhouse's homey feel opens itself to
guests, allowing them to participate and share in the richness of a community, while still
allowing whatever degree of privacy is preferred. Meals or drinks can be shared with the
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Lowland Heights Roadhouse
5.0 Strategy and Implementation Summary
The primary sales and marketing strategy for the Lowland Heights Roadhouse includes these
factors:
• To offer a motel, restaurant and RV Park facility that will appeal to the vacationer or
hunter.
• To provide unmatched customer service to our guests.
• To concentrate our marketing in the greater Greenhorn Valley area.
5.1 Competitive Edge
The Lowland Heights Roadhouse sets itself apart from similar competition in the following
ways.
• Location: Having a motel, restaurant, bar, and RV Park all at one facility is a huge plus,
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Lowland Heights Roadhouse
Another significant advantage for the Lowland Heights Roadhouse is its location. Being
located in the Greenhorn Valley area, the Roadhouse is uniquely positioned, centrally
located to hunting areas, a national park, and historical places.
5.2 Marketing Strategy
Our marketing strategy is based on becoming a destination for vacationers and hunters who
are looking for truly beautiful and unique lodgings. With the greater Greenhorn Valley area
our main target market the Lowland Heights Roadhouse will use several different
approaches to advertise our facility. We will use the Yellow Pages to advertise, as well as
develop a Web page that will show our Lodge with our motel, restaurant, bar and RV Park.
On Route 173 we will have an eye catching sign that will alert potential drop-ins of our
existence. The Roadhouse is confident that it will not take long, with word-of-mouth
recommendations from past customers, to build up to full capacity.
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Lowland Heights Roadhouse
WorldRes provides a free connection to the SABRE travel agent system, providing access to
over 100,000 agents worldwide, as well as to users of Travelocity, one of the most popular
online travel sites.
All of this visibility is free, with the exception of a five to ten percent transaction fee for any
booking made directly via the service and online; much less expensive, yet more
comprehensive than traditional advertising. However, not all lodging patrons are computer
savvy. Therefore, we will be placing seasonal specific advertisements in regional
newspapers and major city magazines.
5.3 Sales Strategy
The Lowland Heights Roadhouse will rent its rooms directly to repeat customers, as well as
via traditional travel agents and through the Internet. All reservations will be handled
by Tory or Gisli. Repeat customers will have the privilege of priority reservations during the
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Lowland Heights Roadhouse
spite of the economic unpredictability we are experiencing, these projections appear
attainable and take the increasing base into consideration. Growth rates for the years 2005
and 2006 are based on percentage increases as follows:
• Reservations: 10% growth rate per year.
• Drop-ins: 10% growth rate per year.
Table: Sales Forecast
Sales Forecast
Year 1 Year 2 Year 3SalesRooms $58,838 $560,000 $600,000Food $36,556 $140,000 $180,000RV Park $10,147 $145,000 $160,000
Bar $45,854 $70,000 $82,000Total Sales $151,394 $915,000 $1,022,000
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Chart: Sales Monthly
Chart: Sales by Year
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Lowland Heights Roadhouse
6.0 Web Plan Summary
The Lowland Heights Roadhouse website will focus on the features the Roadhouse has to
offer. Each room with its different options will be on the site as well as pictures of the
Roadhouse and the facilities that it has to offer. The lunch/dinner menu will be
displayed. Room rates will be given, with maps on how to get to here. Attractions within 30
miles will be on the site and other local color will be shown. Reservations can be made
online if the consumer wishes to do so.
6.1 Website Marketing Strategy
Our website marketing strategy will focus on Vacationers & Hunters who are looking for a
vacation or hunting destination that is both close and comfortabley homelike. The Weststate
area will be our main focal point. The Lowland Heights Roadhouse will promote through
our website by using:
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Lowland Heights Roadhouse
with websites. Every aspect of the site will be handled by Tory (owner) and Gisli including
company logo, Web page format, and maintenance of the site. Website Pros will host the
site.
7.0 Management Summary
The Lowland Heights Roadhouse will operate as an owner-occupied business. A small staff
will be hired early next year consisting of a cook and maid along with a maintenance man.
The rest of the tasks will be done by Tory and Gisli.
Gisli right now is responsible for the outside maintenance of the grounds and cleaning of the
motel rooms, and website activities.
Tory will be the general manger, organize and decide on any management idea's on the day-
to-day operations on the inside. She will order product and food from the vendors, and both
will handle reservations. Both Tory and Gisli will promote the Lowland Heights
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Lowland Heights Roadhouse
7.1 Personnel Plan
The personnel needed for the Lowland Heights Roadhouse are the following:
• Manager
• Assistant manager
• Cook - to be hired in 2005
• Maintenance person - to be hired in 2005
• Cleaning person - to be hired in 2005
The Britts/Njerdginsyn family has outside income of $4,500 per month and will not be
taking a salary for the first year of the business.
Table: Personnel
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Lowland Heights Roadhouse
7.2 Management Information Systems
Tory Britts will be maintaining financial and accounting controls in its motel, restaurant and
RV Park through the use of a sophisticated point-of-sale Royal cash register system and
personal computer network using a computerized reservation system that is accessible
for booking rooms on the Internet. The Royal and the personal computer network provides
the Roadhouse management with daily and weekly information regarding sales, cash
receipts, inventory, food and beverage costs, and other controllable operating expenses. We
use Quickbooks for tracking and doing all our financial reports that are required to operate a
business.
7.3 Key Management
Tory Britts is President and principal owner of Golden Cholla Enterprises LLC which owns
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Lowland Heights Roadhouse
Prior to buying the Lowland Heights Roadhouse, I owned and operated an Internet business
(ZooperDooper Deals). I purchased truck loads of clearance or discontinued items and sold
them on Ebay. ZooperDooper Deals was started in August of 2000, operated until June
2004, and was a very successful business. I have not continued with the business since we
moved to Weststate.
Prior to that in 1997-2004 I was on contract with Family Care Providers in Otherstate.
Position: Behavior Management Specialist and Therapeutic Provider
Duties:
• Management of highest level of difficulty in juvenile clients
• Scheduling and heading up weekly case management meetings between clients and team
members
• Determining and soliciting all special needs of clients involving specialists/psychiatric
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Lowland Heights Roadhouse
• Also cared for medically fragile infants on occasion: close monitoring and management
of medication, specialist appointments, breathing machines, breathing treatments etc.
1990-1997 Ten-Galloon Saloon
Position: Shift Manager
Duties:
• Management of bartenders, cocktail waitresses, kitchen help and janitorial service
• Other duties included inventory, sales projections, promotions
• Hiring, mentoring employees
• Menu design, supply/vendor ordering, vendor contacts
• Locating and auditioning bands/entertainment, employee scheduling
• Ability to fill in for all positions when needed
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Lowland Heights Roadhouse
• Certified in alcohol awareness
• Attended and passed food handling and safety course in Lost Wages
• Documented 80 hours per year in therapeutic management for the past 7 years
• Certified in infant child and adult CPR and First Aid
• Completed 2 online self directed small business courses to aid in my knowledge and
abilities.
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Lowland Heights Roadhouse
College:
•
Attended 1-1/2 years at State College
• One year at Pleasantville Community College prenursing, chemistry, economics,
accounting, business, anatomy & physiology.
All this past experience provides me with experience in leadership for management,
developing operational and financial reports, implementing action plans to achieve those
goals, and providing overall strategic direction to operate and manage and implement
business goals for overall strategic direction for the business.
I plan on incorporating my past experiences into the operation of the Lowland Heights
Roadhouse, becoming a very successful business in the Greenhorn Valley.
8.0 Financial Plan
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8.1 Break-even Analysis
We estimate average monthly fixed costs shown below. Peak and off-season will have
significant impact on the monthly earnings. For the first year, on-season revenues will offset
off-season losses. As Lowland Heights Roadhouse builds its market position among the
local patrons, we anticipate that off-season revenues will be enough to break even during
that season. Further, a rate increase may be considered in Fiscal Year 2005.
Chart: Break-even Analysis
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Lowland Heights Roadhouse
Break-even Analysis
Monthly Revenue Break-even $4,103
Assumptions:Average Percent Variable Cost 7%
Estimated Monthly Fixed Cost $3,797
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8.2 Projected Profit and Loss
Below is the Lowland Heights Roadhouse projected income statement for the next three
years. As mentioned above, earnings are subject to seasonal fluctuations. The new owners
will, however, strengthen the Lowland Heights Roadhouse's market position among the local
communities who will patronize the establishment during the low season, and thus offset the
negative impact of the season.
Chart: Profit Monthly
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Chart: Profit Yearly
Chart: Gross Margin Monthly
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Chart: Gross Margin Yearly
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Table: Profit and Loss
Pro Forma Profit and Loss
Year 1 Year 2 Year 3Sales $151,394 $915,000 $1,022,000Direct Cost of Sales $11,271 $34,850 $44,150
Other Production Expenses $0 $0 $0Total Cost of Sales $11,271 $34,850 $44,150
Gross Margin $140,123 $880,150 $977,850Gross Margin % 92.56% 96.19% 95.68%
ExpensesPayroll $2,400 $251,000 $266,000Sales and Marketing and Other
Expenses
$1,160 $80,000 $100,000
Depreciation $14,280 $14,280 $14,280Leased Equipment $0 $0 $0
Utilities $3,725 $26,000 $26,000Insurance $2,700 $24,000 $24,000Lease $7 300 $0 $0
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8.3 Projected Cash Flow
The Cash Flow projections are outlined below. Again, these projections are based on our
basic assumptions with revenue generation factors carrying the most significant weight
regarding the outcome. We are anticipating that we will not need to invest any additional
capital into the business with a healthy cash flow in place.
Table: Cash Flow
Pro Forma Cash FlowYear 1 Year 2 Year 3
Cash Received
Cash from OperationsCash Sales $151,394 $915,000 $1,022,000Subtotal Cash from Operations $151,394 $915,000 $1,022,000
Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0
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Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $12,000 $30,000 $30,000Purchase Other Current Assets $0 $18,000 $21,000Purchase Long-term Assets $0 $20,000 $60,000Dividends $0 $0 $0Subtotal Cash Spent $93,349 $676,192 $784,641
Net Cash Flow $58,044 $238,808 $237,359Cash Balance $281,627 $520,435 $757,794
Chart: Cash
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8.4 Projected Balance Sheet
The following is a projected Balance Sheet showing sufficient growth and a very acceptable
financial position.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1 Year 2 Year 3Assets
Current AssetsCash $281,627 $520,435 $757,794Inventory $1,199 $13,733 $7,128Other Current Assets $9,827 $27,827 $48,827Total Current Assets $292,653 $561,994 $813,749
Long-term AssetsLong-term Assets $15,206 $35,206 $95,206Accumulated Depreciation $14,280 $28,560 $42,840
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Retained Earnings ($63,175) ($12,980) $268,609Earnings $50,195 $281,589 $325,059Total Capital $65,020 $346,609 $671,668Total Liabilities and Capital $293,579 $568,641 $866,116
Net Worth $65,020 $346,609 $671,668
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8.5 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on
the Standard Industrial Classification (SIC) code 7011, Hotels and Motels, are shown for
comparison.
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry
ProfileSales Growth n.a. 504.38% 11.69% 0.21%
Percent of Total AssetsInventory 0.41% 2.41% 0.82% 1.31%
Other Current Assets 3.35% 4.89% 5.64% 28.59%Total Current Assets 99.68% 98.83% 93.95% 33.99%Long-term Assets 0.32% 1.17% 6.05% 66.01%
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Main RatiosCurrent 34.19 17.55 23.62 1.68Quick 34.05 17.12 23.42 1.29Total Debt to Total Assets 77.85% 39.05% 22.45% 50.04%Pre-tax Return on Net Worth 110.28% 116.06% 69.14% 0.88%Pre-tax Return on Assets 24.43% 70.74% 53.62% 1.76%
Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin 33.16% 30.77% 31.81% n.a
Return on Equity 77.20% 81.24% 48.40% n.a
Activity RatiosInventory Turnover 7.85 4.67 4.23 n.aAccounts Payable Turnover 10.97 12.17 12.17 n.aPayment Days 27 19 29 n.aTotal Asset Turnover 0.52 1.61 1.18 n.a
Debt RatiosDebt to Net Worth 3.52 0.64 0.29 n.aCurrent Liab. to Liab. 0.04 0.14 0.18 n.a
Liquidity Ratios Net Working Capital $284,094 $529,963 $779,302 n.aInterest Coverage 4.14 20.62 27.54 n.a
Additional Ratios
Appendix
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Appendix
Table: Sales Forecast
Sales
Forecast
Mont
h 1
Mont
h 2
Mont
h 3
Month
4
Month
5
Month
6
Mont
h 7
Mont
h 8
Mont
h 9
Month
10
Month
11
Month
12SalesRooms 0% $2,04
2
$3,35
4
$4,68
2
$16,50
0
$8,250 $3,245 $2,56
5
$2,65
0
$2,65
0
$3,850 $4,200 $4,850
Food 0% $278 $838 $1,54
0
$5,350 $4,950 $2,850 $2,85
0
$2,85
0
$3,15
0
$3,250 $3,250 $5,400
RV Park 0% $163 $142 $492 $3,250 $2,250 $1,675 $850 $500 $300 $175 $100 $250Bar 0% $3,50
1
$2,84
9
$2,80
8
$6,250 $5,245 $3,450 $3,40
0
$3,40
0
$3,40
0
$3,400 $3,400 $4,750
Total
Sales
$5,98
4
$7,18
3
$9,52
2
$31,35
0
$20,69
5
$11,22
0
$9,66
5
$9,40
0
$9,50
0
$10,67
5
$10,95
0
$15,25
0
Direct
Cost of
Mont
h 1
Mont
h 2
Mont
h 3
Month
4
Month
5
Month
6
Mont
h 7
Mont
h 8
Mont
h 9
Month
10
Month
11
Month
12
Page 1
Appendix
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Appendix
SalesRooms $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25Food $75 $65 $125 $1,050 $900 $625 $625 $625 $675 $675 $675 $750RV Park $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15Bar $1,25
0
$150 $175 $476 $375 $200 $200 $200 $200 $200 $200 $300
Subtotal
Direct
Cost of
Sales
$1,36
5
$255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,090
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Table: Personnel
Personnel PlanMont
h 1
Mont
h 2
Mont
h 3
Mont
h 4
Mont
h 5
Mont
h 6
Mont
h 7
Mont
h 8
Mont
h 9
Mont
h 10
Mont
h 11
Mont
h 12Manager 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Assistant
Manager
0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cook 0% $0 $0 $0 $0 $0 $0 $0 $0 $300 $300 $300 $300Maintenance Staff 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cleaning Staff 0% $0 $0 $0 $0 $0 $0 $0 $0 $300 $300 $300 $300Total People 2 2 2 2 2 2 2 2 5 5 50 5
Total Payroll $0 $0 $0 $0 $0 $0 $0 $0 $600 $600 $600 $600
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Table: Profit and Loss
Pro Forma
Profit and
Loss
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Mo
Sales $5,984 $7,183 $9,522 $31,35
0
$20,69
5
$11,22
0
$9,665 $9,400 $9,500 $10,67
5
$10,95
0
$15,
Direct Cost
of Sales
$1,365 $255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,0
Other
Production
Expenses
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost
of Sales
$1,365 $255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,0
Gross $4,619 $6,928 $9,182 $29,78 $19,38 $10,35 $8,800 $8,535 $8,585 $9,760 $10,03 $14,
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Margin 4 0 5 5Gross
Margin %
77.19% 96.45% 96.43% 95.00% 93.65% 92.29% 91.05% 90.80% 90.37% 91.43% 91.64% 92.8
ExpensesPayroll $0 $0 $0 $0 $0 $0 $0 $0 $600 $600 $600 $6Sales and
Marketing
and Other
Expenses
$0 $0 $0 $210 $85 $100 $100 $100 $125 $145 $145 $1
Depreciatio
n
$1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,1
Leased
Equipment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $187 $168 $410 $260 $250 $350 $350 $350 $350 $350 $350 $3Insurance $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $2
Lease $1,300 $1,500 $1,500 $1,500 $1,500 $0 $0 $0 $0 $0 $0Mortgage
Payment
15% $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total $2,902 $3,083 $3,325 $3,385 $3,250 $3,865 $3,865 $3,865 $4,490 $4,510 $4,510 $4,5
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Operating
Expenses
Profit
Before
Interest and
Taxes
$1,717 $3,845 $5,857 $26,39
9
$16,13
0
$6,490 $4,935 $4,670 $4,095 $5,250 $5,525 $9,6
EBITDA $2,907 $5,035 $7,047 $27,58
9
$17,32
0
$7,680 $6,125 $5,860 $5,285 $6,440 $6,715 $10,
Interest
Expense
$1,933 $1,933 $1,933 $1,933 $1,933 $1,933 $1,917 $1,900 $1,883 $1,867 $1,850 $1,8
Taxes
Incurred
($65) $574 $1,177 $7,340 $4,259 $1,367 $905 $831 $664 $1,015 $1,103 $2,3
Net Profit ($152) $1,338 $2,746 $17,12
6
$9,938 $3,190 $2,113 $1,939 $1,548 $2,368 $2,573 $5,4
Net
Profit/Sales
-2.53% 18.63% 28.84% 54.63% 48.02% 28.43% 21.86% 20.63% 16.30% 22.19% 23.49% 35.8
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Table: Cash Flow
Pro Forma
Cash Flow
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month
10Cash
Received
Cash from
OperationsCash Sales $5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675Subtotal
Cash from
Operations
$5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675
Additional
Cash
Received
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Sales Tax,
VAT,
HST/GST
Received
0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current
Borrowing
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other
Liabilities
(interest-
free)
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-
term
Liabilities
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of
Other
Current
Assets
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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Long-term
Assets New
Investment
Received
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal
Cash
Received
$5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month
10
Expenditures
from
Operations
Cash
Spending
$0 $0 $0 $0 $0 $0 $0 $0 $600 $600
Bill
Payments
$1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $6,959 $6,494 $6,401 $6,225
Subtotal $1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $6,959 $6,494 $7,001 $6,825
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Spent on
Operations
Additional
Cash SpentSales Tax,
VAT,
HST/GST
Paid Out
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal
Repayment
of Current
Borrowing
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other
Liabilities
Principal
Repayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term
Liabilities
$0 $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000
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Principal
RepaymentPurchase
Other
Current
Assets
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase
Long-term
Assets
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal
Cash Spent
$1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $8,959 $8,494 $9,001 $8,825
Net Cash
Flow
$4,722 $805 $5,093 $25,818 $6,997 $2,006 $706 $906 $499 $1,850
Cash
Balance
$228,30
4
$229,10
9
$234,20
3
$260,02
0
$267,01
7
$269,02
3
$269,72
9
$270,63
5
$271,13
4
$272,98
4
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Table: Balance Sheet
Pro Forma
Balance
Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
Assets Starting
Balances
Current
AssetsCash $223,582 $228,304 $229,109 $234,203 $260,020 $267,017 $269,023 $269,729 $270,635 $271,134 $
Inventory $0 $1,502 $1,247 $907 $1,723 $1,447 $1,582 $1,717 $1,852 $1,937Other
Current
Assets
$9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827
Total $233,409 $239,633 $240,183 $244,936 $271,570 $278,291 $280,432 $281,272 $282,313 $282,897 $
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Current
Assets
Long-term
AssetsLong-term
Assets
$15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $
Accumulate
d
Depreciation
$0 $1,190 $2,380 $3,570 $4,760 $5,950 $7,140 $8,330 $9,520 $10,710 $
Total Long-
term Assets
$15,206 $14,016 $12,826 $11,636 $10,446 $9,256 $8,066 $6,876 $5,686 $4,496
Total Assets $248,616 $253,649 $253,009 $256,572 $282,016 $287,547 $288,498 $288,149 $288,000 $287,394 $
Liabilities
and Capital
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
Current
LiabilitiesAccounts
Payable
$1,047 $6,232 $4,253 $5,070 $13,388 $8,982 $6,743 $6,281 $6,192 $6,039
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BorrowingOther
Current
Liabilities
$744 $744 $744 $744 $744 $744 $744 $744 $744 $744
Subtotal
Current
Liabilities
$1,791 $6,976 $4,997 $5,814 $14,132 $9,725 $7,487 $7,024 $6,936 $6,782
Long-term
Liabilities
$232,000 $232,000 $232,000 $232,000 $232,000 $232,000 $232,000 $230,000 $228,000 $226,000 $
Total
Liabilities
$233,791 $238,976 $236,997 $237,814 $246,132 $241,725 $239,487 $237,024 $234,936 $232,782 $
Paid-in
Capital
$78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $
Retained
Earnings
($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($
Earnings $0 ($152) $1,187 $3,933 $21,059 $30,997 $34,186 $36,299 $38,238 $39,786 $Total Capital $14,825 $14,673 $16,012 $18,758 $35,884 $45,822 $49,011 $51,124 $53,063 $54,611 $Total
Liabilities
$248,616 $253,649 $253,009 $256,572 $282,016 $287,547 $288,498 $288,149 $288,000 $287,394 $
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