mba-540-business-finance-final
TRANSCRIPT
Business Plan 1
Business Plan
Linda Tylečková, Krisztián Medveczki, Andrew Carl Hansen
[email protected], [email protected], [email protected]
MBA 540 Strategic Financial Management
Kateřina Kalinová
Business Plan Assignment
June 30, 2016
Business Plan 2
1. Business Description
1.1 Introduction
Shopping Malls have become common place in Prague and attract many customers. One of
the newest of these is, ‘Sestka’ which is situated near Terminal 3 of Prague Airport. ‘Sestka’ is
attractive because its location requires an intensive programme of exhibitions and entertainment
primarily aimed at families and young people. It needs this to provide a pull-factor to bring potential
visitors. It features an extensive play area in its central atrium that features a children’s slide that
descends two floors from the top to the bottom of the shopping centre. There is also an extensive
climbing frame and video game centre all offered as free-of-charge attractions. However, with the
food court located on the top floor and one small Julius Meinl cafe next to the play area there is
little opportunity for parents to enjoy a break whilst having their children watched over. Also, there
is no child-friendly food outlet nearby and it is quite common for people to have to walk to the
supermarket for snacks that they consume in the play area. The unique opportunity that arises for
developing a restaurant service in this location is the under-utilised space that currently functions
as a temporary art gallery. This gallery does not attract many visitors and affords a 200 square
metre space that looks onto the entire play area. We propose a start-up company, ‘Numero Sei’
(that shares the name of the shopping mall) that takes up the lease on this attractive space. ‘Numero
sei’ would offer not just another food outlet at ‘Sestka’ because it would provide parents with an
ambient restaurant experience in the knowledge that their children can eat and play in safe
surroundings.
“Numero Sei” would offer a relaxing environment with Italian style hot and cold beverages,
pizzas, pasta, sandwiches and pastries - with an additional child menu. Plans include the creation
of a relaxing and soothing atmosphere with a collection of living plants, light tones of furnishings
Business Plan 3 and quiet, ambient music. All this to incentivize a break from the constant bombardment of
consumer culture and loud mall music, to provide a safe haven for the weary shopper, sort of like
an oasis in the midst of a trade route. With this approach, ‘Numero Sei’ will attract not only families
but all categories of shopper. Amongst restaurant staff there will be a rota of a child minder service
with somebody on-duty to patrol the play area. This person can also promote the restaurant whilst
carrying out a vital service for parents.
1.2 Project objectives
The objective of the project is to turn a profit in the second year of business and to have a
profitable business before the favorable 5-year lease expires. Once established streamlined
operations will minimise waste and help profit margins. The proposed amount of loan
requirement of 2 million Czech Crowns will be used specifically for refurbishment and to cover
the first three months of operations whilst a revenue buffer and cash-flow is being accrued.
Business Plan 4
1.3 Market description
The venue will be the ‘Sestka’ outlet center located next to the Prague Václav Havel
Airport. It is an established ‘Obchodni Centra’ (OC) Most likely customers of the shopping center
would be residents of the greater Prague residential area and travellers transiting to and from the
airport. Such people will be part of the mix of, ‘Numero Sei’ customers. This OC already boasts
80 outlets, amongst them an Albert Hypermarket, fashion, accessories, childrens toys, electricals
and furniture stores. Direct on-site competitors will be restaurants located on the top floor which
are inconveniently placed for ease of access to the play area. Shoppers will be unlikely to return
for snacks or coffee after leaving the premises. However, this habit could be also beneficial because
it limits the number of possible alternatives for the customers to choose from. ‘Sestka’ offers free
parking and is established on the Prague Integrated Transport service with regular bus routes to
housing estates nearby and further afield. The majority of visitors arrive by car. The OC features
free-wifi throughout which would be a distinct feature ‘Numero Sei’ is able to access.
1.4 Competition
The 7 designated ‘restaurants’ at the shopping centre are located in one food court. There
is only one other restaurant that is hardly ever full (due to its location) and the bulk of trade takes
place in the fast-food outlets that offer Thai, Vietnamese and Czech dishes. One sit down cafe
specialises in ice-creams. Italian food is popular amongst Czechs and our main rival is an Italian
restaurant. Given its top-floor location it cannot easily accommodate the needs of families and we
feel this group lacks access to anything other than convenience food and snacks. Out of these our
direct competition would be the restaurant and fast food outlets - 4 establishments in total. Indirect
competition comes from cafes and a substitute product is the hypermarket and those shoppers who
prefer to provide their own ‘packed lunch’ provisions for the trip. ‘Numero Sei’ fills a niche
Business Plan 5 segment that does not currently exist in the OC. It’s broad spread of cafe and full restaurant services
should appeal for those who want a coffee break as much as consumers that require three-course
meals. The focus on providing an oasis or refuge inside the OC should help capitalize on the fact
that other shoppers (and not just families) might find the fast food or coffee bar experience
distasteful. It is worth noting we intend to emphasize in-house consumption of our beverages. In
addition to free Wi-Fi our establishment will offer customer washroom facilities, with child-
changing and disabled access.
2.0. Main Assumptions
2.1 Fixed costs
‘Sestka’ operates through a property leasing agency, Custer and Wakefield, s.r.o. We would
have to enter into negotiations with this firm using their proprietary, ‘Tenant Representation
Service’. This means in practice that rent and length of tenancy are negotiated on an individual
basis and a high price per square meter is to be expected even for this out-of-center development.
Our assumption is that negotiations will result in a 5 year tenancy with an annual increase in line
with inflation. ‘Numero Sei’ will be established as a limited company (s.r.o. in the Czech Republic)
which refers a 100,000 CZK start-up deposit in a business account with a notary fee of 2%. Legal
services will be engaged to set up the company and establish the lease with Custer and Wakefield.
A contingency of 30,000 CZK is allocated for this work.
‘Sestka’ dictates our opening times which are 12 hours each day, 7 days a week between
9:00 am and 9:00 pm. The first few hours of daily opening will be spent getting ready for a 11:00
am opening in the lead up to the lunch period when demand will be higher. The interior of the shop
needs a design by an architect with a systematic approach, understanding how processes work and
Business Plan 6 how people move around inside cafés and restaurants. 20,000 CZK has been allocated for interior
designs and 200,000 CZK for installations, decoration and furnishings. With insight from the
architect material usage can be optimised which will contribute to lower costs and time spent on
installation. We are working on recommendations and examples of previous work from both
prospective architects and builders.
In order to calculate projected turnover we assume that on average there will be 5,000 daily
visitors to ‘Sestka’. Exact visitor figures are not available but the shopping mall is characterised as
being quieter than others in Prague. Weekend and Seasonal events will see fluctuations in actual
daily demand. Given the ‘Numero Sei’s’ focus on family groups we anticipate to serve 5% of that
daily average; 250 customers. Therefore, restaurant layout and equipment needs to provide 300
daily portions (factoring in 20% variance and potential waste).
Construction costs will act as fixed costs broken down to 6 years (the timespan of the
projections for our figures). Financing construction falls within our bank loan proposal and will be
spread over the 6-year period as depreciation will help minimise tax burden and recoup the initial
outlay of cash to help our finances to stay in the black.
In terms of supplies we will enter into a trade account with Makro Cash & Carry ČR located
close to Sestka in Stodulky. This ensures quality are wholesale prices on all ingredients such as
meat, cheeses, beers, wines and spirits. Our premises will be non-smoking which is in line with
“Sestka” policy and should prove less of a deterrent for customers than it would in city center
premises given than the OC focuses a lot of its marketing on children.
We intend to enter into a distributorship agreement with Illy coffee. This will provide
“Numero Sei” with discounted Illy products and the lease an espresso machine from Illy which will
Business Plan 7 lower investment costs for such a costly item. It is planned to lease an automatic La Marzocco
Strada espresso machine and grinder.
Utensils, cooking equipment, cups and saucers, plates and glasses will be an initial outlay
sourced from the Makro professional range.
Leasing at, “Sestka” covers not only services and utility costs but also marketing through
events and promotions. This is done in a highly effective way through social media as well as
traditional print media and posters displayed throughout the Prague Integrated Transport network.
Cleaning costs are also part of the lease agreement. “Numero Sei” will promote itself through an
on-going digital marketing campaign using Facebook, Yelp, Tripadvisor and Instagram in order to
gain earned customer awareness from reviews and posts to create a digital, ‘word-of-mouth’
endorsement. A small proportion of the marketing budget will go on banner and website
advertisements and on Youtube advertising, given that site’s popularity with children and
teenagers, where we are raise awareness of our restaurant service.
Public health and safety is our concern and we must budget for employee recruitment,
induction and a training program. Cost of the program is around 7000 CZK plus travel expenses
(Illy, 2016). A business liability policy will be a fixed cost annually in the region of 30,000 CZK
through a company such as CzechInsure.
2.2 Variable Costs
Our aim is to be able to serve or take a customer order every 2.4 minutes at peak times. To
speed up payments each employee will be issued with both a cash float and portable card payment
device. Each employee will cover both counter and restaurant area to offer flexibility in service
whilst keeping the number of employees low. In addition a hostess will patrol the play area and
Business Plan 8 will also act to promote the restaurant and lead customers inside to tables. We could increase the
number of employees at the weekend by one for every shift, equaling 160 working hours in total.
We are factoring in 5 waiters working 30 hours per week and one working 10 hours. We could
require 2 chefs due to opening hours and food preparation. In terms of operations the breakdown
schedule would be:
Employees Days Early Shift
(9:00 - 5:00)
Middle Shift
(11:00 - 7:00)
Late Shift
(3:00 - 11:00 last 2
hours for
clearing/cleaning
and preparations)
3 waiters Monday -
Thursday
1 1 1
4 waiters Friday - Sunday 1 2 1
Based on a 40-hour week this means employing 3 full-time waiters, 1 part-time for 3 shifts
and a further 2 for 2 shifts. The hostess role would require 1 full-time (between 11:00am and
6:00pm) and one part-timer for 2 shifts. Chefs would be employed on slightly longer shifts, giving
them a four-day week in exchange for 40 hours. 1 chef would be required for Monday to Thursday
(11:00am to 9:00pm) and 2 for weekend working of three 12 hour shifts and a bonus 4 hours for
weekend working because of long shifts to give them a 40-hour week.
The gross full-time salary for a waiter will be a highly competitive 18,000 CZK per month.
Hostess staff will be offered 14,000 CZK and a chef will earn 30,000 CZK. Social security costs
amounting 34 percent of salaries will increase the wages budget.
2.3 Cost of goods sold
Business Plan 9 The cost of hot drinks and especially coffee can earn a substantial mark-up when sold on to
the customer. However, we estimate that 2 kilograms of coffee beans will be required, on average,
daily at an estimated discounted supplier cost of 1,000 CZK per day. The same amount is estimated
for varieties of tea. Mineral water, fruit juices and other soft drink are factored at 1,500 CZK daily.
Alcoholic bottled beverages will attribute for an estimated 2,000 CZK daily. Foodstuff from raw
ingredients through to pastries and ice creams are estimated at 4,000 CZK daily. This makes an
average daily estimated spend on goods of 8,500 CZK. Paper cups with lids (for takeaway hot
drinks), napkins and consumables would be purchased in bulk equating to roughly 200 CZK per
day. Pastries and sandwiches will be ordered each day from a supplier with a 20-40% margin when
sold on. Although demand will fluctuate calculating on the basis of 250 people per day 70-80
pastries are expected to be sold. As a contingency breakages and repair costs will amount to 0.5%
per month of the initial investment in breakable goods.
2.4 Pricing
Margins are the main consideration in generating income before expenses and taxes. With
high operating expenses there is a little bit of room for pricing that turns a profit and remains
competitive when compared with other food outlets in, ‘Sestka’. We expect to be able to operate at
5 CZK below comparable prices on drinks sold in other outlets, 3 CZK below on pastries and
sandwiches and 10-20 CZK below on main menu prices. We can be competitive with our child
portion menu where the mark up on portion size is usually quite high (usually two-thirds the price
of an adult meal). In the early stages, whilst ‘Numero Sei’ becomes established, there are no plans
to offer a customer loyalty scheme.
3.0 Bank Loan Proposal
Business Plan 10 2,000,000 CZK for a 72 monthly periods means that, ‘Numero Sei’ would make monthly payments
of 34,098.01 CZK. After 6 years total interest payments would be 439,995.61 paid over the life of
the loan based on 7 per cent interest per annum.
3.1 Requirement
The Lender is FIO Bank, a.s. and the borrower, ‘Numero Sei’, s.r.o.
The loan is a small business start up loan used to finance initial investments in equipment and
premises. The loan amount is 2,000,000 CZK (Czech Koruna). The loan period is 72 months with
a fixed interest of 7%.
Business Plan 11
3.2 Loan Repayment Schedule
Period Principal Interest Payment Balance
0 2,000,000.00
1 -22,431.35 -11,666.67 -34,098.01 1,977,568.65
2 -22,562.20 -11,535.82 -34,098.01 1,955,006.46
3 -22,693.81 -11,404.20 -34,098.01 1,932,312.65
4 -22,826.19 -11,271.82 -34,098.01 1,909,486.46
5 -22,959.34 -11,138.67 -34,098.01 1,886,527.12
6 -23,093.27 -11,004.74 -34,098.01 1,863,433.85
7 -23,227.98 -10,870.03 -34,098.01 1,840,205.86
8 -23,363.48 -10,734.53 -34,098.01 1,816,842.39
9 -23,499.77 -10,598.25 -34,098.01 1,793,342.62
10 -23,636.85 -10,461.17 -34,098.01 1,769,705.77
11 -23,774.73 -10,323.28 -34,098.01 1,745,931.04
12 -23,913.42 -10,184.60 -34,098.01 1,722,017.63
13 -24,052.91 -10,045.10 -34,098.01 1,697,964.72
14 -24,193.22 -9,904.79 -34,098.01 1,673,771.50
15 -24,334.35 -9,763.67 -34,098.01 1,649,437.15
16 -24,476.30 -9,621.72 -34,098.01 1,624,960.86
17 -24,619.07 -9,478.94 -34,098.01 1,600,341.78
18 -24,762.69 -9,335.33 -34,098.01 1,575,579.10
19 -24,907.13 -9,190.88 -34,098.01 1,550,671.96
20 -25,052.43 -9,045.59 -34,098.01 1,525,619.54
21 -25,198.57 -8,899.45 -34,098.01 1,500,420.97
22 -25,345.56 -8,752.46 -34,098.01 1,475,075.41
23 -25,493.41 -8,604.61 -34,098.01 1,449,582.01
24 -25,642.12 -8,455.90 -34,098.01 1,423,939.89
Business Plan 12
25 -25,791.70 -8,306.32 -34,098.01 1,398,148.19
26 -25,942.15 -8,155.86 -34,098.01 1,372,206.04
27 -26,093.48 -8,004.54 -34,098.01 1,346,112.56
28 -26,245.69 -7,852.32 -34,098.01 1,319,866.88
29 -26,398.79 -7,699.22 -34,098.01 1,293,468.09
30 -26,552.78 -7,545.23 -34,098.01 1,266,915.30
31 -26,707.67 -7,390.34 -34,098.01 1,240,207.63
32 -26,863.47 -7,234.54 -34,098.01 1,213,344.16
33 -27,020.17 -7,077.84 -34,098.01 1,186,323.99
34 -27,177.79 -6,920.22 -34,098.01 1,159,146.20
35 -27,336.33 -6,761.69 -34,098.01 1,131,809.87
36 -27,495.79 -6,602.22 -34,098.01 1,104,314.08
37 -27,656.18 -6,441.83 -34,098.01 1,076,657.90
38 -27,817.51 -6,280.50 -34,098.01 1,048,840.39
39 -27,979.78 -6,118.24 -34,098.01 1,020,860.62
40 -28,142.99 -5,955.02 -34,098.01 992,717.62
41 -28,307.16 -5,790.85 -34,098.01 964,410.46
42 -28,472.29 -5,625.73 -34,098.01 935,938.18
43 -28,638.37 -5,459.64 -34,098.01 907,299.81
44 -28,805.43 -5,292.58 -34,098.01 878,494.38
45 -28,973.46 -5,124.55 -34,098.01 849,520.91
46 -29,142.47 -4,955.54 -34,098.01 820,378.44
47 -29,312.47 -4,785.54 -34,098.01 791,065.97
48 -29,483.46 -4,614.55 -34,098.01 761,582.50
49 -29,655.45 -4,442.56 -34,098.01 731,927.06
50 -29,828.44 -4,269.57 -34,098.01 702,098.62
51 -30,002.44 -4,095.58 -34,098.01 672,096.18
52 -30,177.45 -3,920.56 -34,098.01 641,918.73
53 -30,353.49 -3,744.53 -34,098.01 611,565.24
Business Plan 13
54 -30,530.55 -3,567.46 -34,098.01 581,034.69
55 -30,708.64 -3,389.37 -34,098.01 550,326.05
56 -30,887.78 -3,210.24 -34,098.01 519,438.27
57 -31,067.96 -3,030.06 -34,098.01 488,370.31
58 -31,249.19 -2,848.83 -34,098.01 457,121.13
59 -31,431.47 -2,666.54 -34,098.01 425,689.66
60 -31,614.82 -2,483.19 -34,098.01 394,074.83
61 -31,799.24 -2,298.77 -34,098.01 362,275.59
62 -31,984.74 -2,113.27 -34,098.01 330,290.85
63 -32,171.32 -1,926.70 -34,098.01 298,119.53
64 -32,358.98 -1,739.03 -34,098.01 265,760.55
65 -32,547.74 -1,550.27 -34,098.01 233,212.81
66 -32,737.60 -1,360.41 -34,098.01 200,475.20
67 -32,928.57 -1,169.44 -34,098.01 167,546.63
68 -33,120.66 -977.36 -34,098.01 134,425.97
69 -33,313.86 -784.15 -34,098.01 101,112.11
70 -33,508.19 -589.82 -34,098.01 67,603.92
71 -33,703.66 -394.36 -34,098.01 33,900.26
72 -33,900.26 -197.75 -34,098.01 0.00
Business Plan 14 The proprietor wishes to invest 2,000,000 CZK of their own and donated money and use
the 2,000,000 CZK bank loan to finance set up costs in order to make the restaurant operational.
Net revenue would be used to cover loan installation payments and the remainder will be reinvested
in the company. By covering setting up costs the loan allows owner invested cash to act as a buffer
in the early years of operation and as a contingency can also act as a guarantee of loan repayment
in any course of events.
The chart above illustrates, and it is worth noting, that the loan plays an essential part in
helping, ‘Numero Sei’ to set up operations and that through effective debt management its
importance will diminish year-on-year as our restaurant draws in revenue from sales.
Business Plan 15
4.0 Balance Sheet Forecast (for 6 years)
Assets (CZK) 31.12.2017 31.12.2018 31.12.2019 31.12.2020 31.12.2021 31.12.2022
Cash & Cash Equivalents 1 523 663,57 1 469 716,38 1 642 786,43 2 058 355,74 2 732 812,96 3 683 494,96
Short term investments 3 225 500,00 3 239 010,00 3 303 790,20 3 369 866,00 3 437 263,32 3 506 008,59
Inventory: Food 20 000,00 21 000,00 22 050,00 23 152,50 24 310,13 25 525,63
Inventory: Wine 200 000,00 210 000,00 220 500,00 231 525,00 243 101,25 255 256,31
Inventory: Liquor 35 000,00 36 750,00 38 587,50 40 516,88 42 542,72 44 669,85
Inventory: Beer 7 000,00 7 350,00 7 717,50 8 103,38 8 508,54 8 933,97
Inventory: Other Beverages 5 000,00 5 250,00 5 512,50 5 788,13 6 077,53 6 381,41
Total Inventory 267 000,00 280 350,00 294 367,50 309 085,88 324 540,17 340 767,18
TOTAL CURRENT ASSETS 4 482 164,00 4 428 376,00 4 652 209,00 5 119 136,00 5 845 536,00 6 848 736,00
Fixed Assets
Furniture & Equipment 1 000 000,00 974 359,00 948 718,00 923 077,00 897 436,00 871 795,00
Leasehold Improvements 1 160 000,00 928 000,00 696 000,00 464 000,00 232 000,00 0,00
Accumulated Depreciation 311 041,00 311 041,00 311 041,00 311 041,00 311 041,00 311 041,00
TOTAL LONG-TERM ASSETS 2 471 041,00 2 213 400,00 1 955 759,00 1 698 118,00 1 440 477,00 1 182 836,00
TOTAL ASSETS 6 953 205,00 6 641 776,00 6 607 968,00 6 817 254,00 7 286 013,00 8 031 572,00
Liabilities and Equity (CZK) 31.12.2017 31.12.2018 31.12.2019 31.12.2020 31.12.2021 31.12.2022
Accounts Payable 50 000,00 0,00 0,00 0,00 0,00 0,00
Short term expenses 3 175 500,00 3 239 010,00 3 303 790,20 3 369 866,00 3 437 263,32 3 506 008,59
Loan Instalments 1 722 017,88 1 423 939,76 1 104 313,64 779 582,52 412 074,40 17 999,28
TOTAL LIABILITIES 4 947 518,00 4 662 950,00 4 408 104,00 4 149 449,00 3 849 338,00 3 524 008,00
Paid in capital 2 000 000,00 0,00 0,00 0,00 0,00 0,00
Accumulated other
comprehensive income
5 687,00 -27 723,00 25 413,00 83 691,00 184 821,00 312 634,00
Retained Earnings 0,00 2 006 549,38 2 174 451,43 2 584 114,74 3 251 853,91 4 194 930,81
TOTAL EQUITY 2 005 687,00 1 978 826,00 2 199 864,00 2 667 806,00 3 436 675,00 4 507 565,00
TOTAL LIABILITIES& EQUITY 6 953 205,00 6 641 776,00 6 607 968,00 6 817 254,00 7 286 013,00 8 031 573,00
Business Plan 16
5.0 Income Statement Forecast (for 6 years)
2017 2018 2019 2020 2021 2022
Sales 7 394 256,00 7 763 968,80 8 152 167,24 8 559 775,60 8 987 764,38 9 437 152,60
COGS -3 175 500,00 -3 239
010,00
-3 303 790,20 -3 369 866,00 -3 437 263,32 -3 506 008,59
Gross margin 4 218 756,00 4 524 958,80 4 848 377,04 5 189 909,60 5 550 501,06 5 931 144,01
Premises lease -1 382 400,00 -1 410
048,00
-1 438 248,96 -1 467 013,94 -1 496 354,22 -1 526 281,30
Equipment lease -50 000,00 -51 000,00 -52 020,00 -53 060,40 -54 121,61 -55 204,04
Wages -1 473 600,00 -1 503
072,00
-1 533 133,44 -1 563 796,11 -1 595 072,03 -1 626 973,47
Social payments on wages -501 024,00 -511 044,48 -521 265,37 -531 690,68 -542 324,49 -553 170,98
Business liability insurance -30 000,00 -31 500,00 -33 075,00 -34 728,75 -36 465,19 -38 288,45
OPEX -3 437 024,00 -3 506
664,48
-3 577 742,77 -3 650 289,87 -3 724 337,53 -3 799 918,24
EBITDA 781 732,00 1 018 294,32 1 270 634,27 1 539 619,72 1 826 163,52 2 131 225,77
Depreciation -311 041,00 -311 041,00 -311 041,00 -311 041,00 -311 041,00 -311 041,00
Amortization 0,00 0,00 0,00 0,00 0,00 0,00
Depreciation & Amortization -311 041,00 -311 041,00 -311 041,00 -311 041,00 -311 041,00 -311 041,00
EBIT 470 691,00 707 253,32 959 593,27 1 228 578,72 1 515 122,52 1 820 184,77
Interest -131 194,00 -111 098,00 -89 550,00 -66 445,00 -41 668,00 -15 101,00
Earnings before Taxes (EBT) 339 497,00 596 155,32 870 043,27 1 162 133,72 1 473 454,52 1 805 083,77
Taxes (19%) -64 504,43 -113 269,51 -165 308,22 -220 805,41 -279 956,36 -342 965,92
Net income 274 992,57 482 885,81 704 735,05 941 328,32 1 193 498,16 1 462 117,85
Business Plan 17
6.0 Cash Flow Development
Cash Flow (CZK) 31.12.2017 31.12.2018 31.12.2019 31.12.2020 31.12.2021 31.12.2022
Operating activities
Consolidated net income 274 992,57 482 885,81 704 735,05 941 328,32 1 193 498,16 1 462 117,85
Other current assets 2 000 000,00 0,00 0,00 0,00 0,00 0,00
Inventory -267 000,00 -280 350,00 -294 367,50 -309 085,88 -324 540,17 -340 767,18
Insurance -30 000,00 -31 500,00 -33 075,00 -34 728,75 -36 465,19 -38 288,45
Accounts payable -50 000,00 0,00 0,00 0,00 0,00 0,00
Depreciation and
amortization
311 041,00 311 041,00 311 041,00 311 041,00 311 041,00 311 041,00
Interest Paid -131 194,00 -111 098,00 -89 550,00 -66 445,00 -41 668,00 -15 101,00
Annuity Paid -409 176,00 -409 176,00 -409 176,00 -409 176,00 -409 176,00 -409 176,00
Training -15 000,00 -15 750,00 -16 537,50 -17 364,38 -18 232,59 -19 144,22
Net cash by Operating
activities
1 683 663,57 -53 947,19 173 070,05 415 569,32 674 457,21 950 682,01
Investing activities
Purchases of Furniture and
Equipment
-1 000 000,00 0,00 0,00 0,00 0,00 0,00
Purchases of Leasehold
Improvements
-1 160 000,00 0,00 0,00 0,00 0,00 0,00
Net cash by Investing
activities
-2 160 000,00 0,00 0,00 0,00 0,00 0,00
Financing activities
Paid-in Capital 2 000 000,00 0,00 0,00 0,00 0,00 0,00
Retained earnings 0,00 1 523 663,57 1 469 716,38 1 642 786,43 2 058 355,74 2 732 812,96
Net cash by Financing
activities
2 000 000,00 1 523 663,57 1 469 716,38 1 642 786,43 2 058 355,74 2 732 812,96
Total 1 523 663,57 1 469 716,38 1 642 786,43 2 058 355,74 2 732 812,96 3 683 494,96
Business Plan 18
Cash flow shows a high amount of surplus cash in 2017 whilst the business is being set up.
This then drops markedly in 2018 when cash from 2017 has been spent on the business. The best
way to illustrate this is in the chart above. The loan is essential for our start-up costs and once
established it is projected that net cash in the business will start to show a surplus in the first quarter
of 2018. It then rises year on year as the business becomes dependent on cash it can draw from its
own operations rather than borrowed and donated capital. This is in line with the income statement
that shows growing net profit year on year. The business becomes self-sustaining in 2019.
Business Plan 19
7.0 Financial Analysis (Ratios)
Ratios 2017 2018 2019 2020 2021 2022
Rentability
ROE 13,71% 24,24% 33,73% 38,68% 39,10% 36,81%
ROA 6,77% 10,40% 14,48% 18,30% 21,49% 23,77%
Net Profit Margin 3,72% 6,22% 8,64% 11,00% 13,28% 15,49%
Liquidity
Current Ratio 1,41 1,42 1,50 1,64 1,89 2,28
Quick Ratio 1,35 1,36 1,43 1,57 1,81 2,18
Cash Ratio 0,31 0,32 0,37 0,50 0,71 1,05
Activity
Inventory Turnover 11,89 11,84 11,50 11,17 10,85 10,54
Solvency
debt/assets 24,77% 21,44% 16,71% 11,44% 5,66% 0,22%
Interest coverage 3,59 6,37 10,72 18,49 36,36 120,53
Business Plan 20
Liquidity ratios in the first year of operation are strong given that 2,000,000 CZK cash from
donations and savings help to offset the effect of taking out a loan. From the 3rd year onward
liquidity ratios show an upward swing, stating increasing ability to cover liabilities. It would be
possible to take out dividends from 2019 onwards without damaging the productivity of the
company according to data. Debt to assets falls with each year as no new debt is taken on by the
company. Interest coverage rises year on year as there is more net profit to cover repayment of the
loan. During the first year profit margin is really low, but grows steadily throughout the life of the
loan, ROE and ROA both reflect the gradual switch from the dependence on the long-term long as
business assets and equity both grow. The chart above also shows our level of confidence in
meeting the loan obligation and creating revenue through efficient operations.
Business Plan 21
8.0 Business Plan Assessment
Key risk factors and a SWOT analysis form the content of the business plan assessment.
Our string unique selling point gives us confidence that ‘Numero Sei’ will prove a viable addition
to the mix of eating options on offer at, ‘Sestka’.
8.1 Key Risk Factors
Training and induction in staff is necessary to try to mitigate against the consequences of
poor staff attitude turning away new and returning customers. Also, ‘Sestka’ in the past has
renegotiated lease terms in order to move stores around within the shopping centre. We feel that
this risk is minimal given the positive attraction the restaurant location will have for families.
However, it is a factor that needs to be mentioned.
8.2 Unique Selling Point
Restaurants are plentiful and deciding on a USP that effectively differentiates this business
from others like it can be tricky. However, in addition to the usual customer friendly requirements
to enjoy a high quality meal at competitive prices the location at, ‘Sestka’ offers an opportunity to
give parents and families a child minding service restaurant where added value means having
somebody keep watch over your playing children while being able to enjoy a relaxing restaurant
experience that offers a change from the usual shopping experience where children have to be
catered for or dragged around the shops.
Business Plan 22
8.3 Factors Affecting Success (SWOT analysis)
STRENGTHS
● Shoppers are confined into a space with limited venues offering drinks and food
near the provided indoor play and recreation area for children and families. The
chance of attracting customers is high.
● Our place differs in many ways (calm place, suitable for families, healthy menu)
and as more and more people propagate healthy lifestyle, Numero Sei is perfect
choice. Chance to get families and people, who are not fans of foodcourt
possibilities.
● Unique child-minder on patrol in the play area gives potential customers with child
a sense of security and to stay longer in the restaurant.
● Shopping mall already exists, people are passing by, no need for marketing outside
Sestka. Sestka’s promotion of a regular program of family and child-friendly events
is in alignment with the strategy adopted by, ‘Numero Sei’.
● Leasing deal is favorable.
● Margin is really high on coffee and food products, the project doesn’t need
complicated machinery, barrier of entry is low.
WEAKNESSES
● Although assumptions are credible, they are still assumptions of future growth
● Possible patterns in the periodicity of sales are unknown at the moment.
Business Plan 23
● We will train employees but cannot guarantee high levels of motivation from
employees.
● People traveling from and to the airport won't visit Numero Sei regularly. They are
more likely to visit so-called, ‘duty free’ stores in the airport departure area.
OPPORTUNITIES
● Some shoppers (mainly men) are usually weary and tired during the day at a
shopping outlet. Fathers are not always thrilled to baby-sit their children whilst their
partner shops for accessories. Customer retention can be strong if workforce is able.
● Opportunity to expand into other shopping malls, chain of Numero Sei´s coffee´s
places.
● If we manage to create a strong association in customer minds between our service
and a visit to ‘Sestka’ then we will generate repeat custom. Word of mouth and other
recommendations via social media will also help to achieve this end.
THREATS
● Initial cost is high without any guarantee that Numero Sei will beat already
established competition.
● There is no certainty that Numero Sei will be attractive for potential buyers.
● Inability to fulfill the idea of finding calm and family-friendly place in the middle
of shopping centre.
● Invested money to find and educate stuff, but no certainty that customers will come
back on regular basis.