Financial Plan

Financial Plan

Financial Assumptions

 

The following table highlights the important assumptions made in this section.

Financial Summary

Vintage Home & Residential Care depends on occupancy in order to be profitable. Total costs outweigh total revenue if there are only three seniors occupying the facility. All sales and marketing goals are focused on getting the facility to its highest possible occupancy level. Vintage Home has two beds available at this time due to current living conditions. As of right now, Founder and CEO Alice Smith lives in one of the 2 bed rooms, while her aunt lives in another. This limits Vintages capacity to three total guests for the first year of operation. In year two, Vintage will be positioned to take on two new guests, which will make the business profitable.

Vintage expects to have sales of $12,300 per month during the first year based on the assumption that there will be 3 guests living at the facility. This figure rises to $19,500 per month in year two due to addition of 2 new guests. Also, an additional $2,000 is added to each of the monthly figures when a new guest is admitted to the facility due to a one time pre-admission fee.

Total costs from employee payroll will be $5,580per month in year 1. Total other expenses are $492 per month and these costs include a groundskeeper, bookkeeper, and handyman. Total expenses for the operation of the facility are $13,531 per month.

Because of the slow growth that will take place over the first two years of operation, Vintage will realize a loss of $14,028 in the first year. As new guests move in, profitability is reached and Vintage will make a profit of $8,116 in the second year. In year 3, Vintages net profit will increase to $26,776. Vintage will be profitable as long as there is an average of at least 4 paying guests. The key to increasing net profits is to increase total capacity for the home.

In order to begin operations at Vintage, a total cash infusion of $45,000 will be needed. Vintage is seeking these funds in the form of equity investment. Vintage is currently owned entirely by Alice Smith.

Startup Expenses and Assumptions

Start-up Expenses:
Start-up year: 2011
Start-up funding:
Initial cash investment (equity) 45,000
Initial loan (short-term)
Initial loan (long-term)
Total cash infusion 45,000
Start-up expenses:
Land purchase
Building(Fence) 2,500
Plant and equipment
Company vehicles
Office furniture
Leasehold improvements
Website 1,500
Logo Design 500
Bathroom Remodel 27,000
Office equipment
Initial inventory 0
Rent deposit
Utility deposits
Research & development
Other start-up expenses
Total start-up expenses 31,500
Organization expenses:
Legal expenses
Accountant expenses
Consultant expenses
Other organization expenses
Total organization expenses 0
Total org. & startup expenses 31,500

 

Assumptions
Reccurrent ratios
Average Days Receivable 0
Average Days Payable 0
Average Days of Inventory 0
% of sales in cash 100%
% of purchases in cash 100%
% of payroll for taxes & benefits 25%
Short-term interest rate 0
Long-term interest rate 0
% tax rate, federal plus state 0

Sales

Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2011 2012 2013
Unit sales (units):
Shared Room 0 0 0 0 0 0 0 0 0 0 0 0 0 24 24
Private Room 3 3 3 3 3 3 3 3 3 3 3 3 36 36 36
ADLs Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Incontinence Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dementia Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transportation 15 15 15 15 15 15 15 15 15 15 15 15 180 300 300
Pre-Admission Fee 1 0 0 1 0 0 0 0 0 0 0 0 2 2 0
Unit prices ($):
Shared Room 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00 3,500.00
Private Room 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00 4,000.00
ADLs Care 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00 500.00
Incontinence Care 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00
Dementia Care 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00 300.00
Transportation 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00 20.00
Pre-Admission Fee 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00 2,000.00
Total sales ($):
Shared Room 0 0 0 0 0 0 0 0 0 0 0 0 0 84,000 84,000
Private Room 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 12,000 144,000 144,000 144,000
ADLs Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Incontinence Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dementia Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transportation 300 300 300 300 300 300 300 300 300 300 300 300 3,600 6,000 6,000
Pre-Admission Fee 2,000 0 0 2,000 0 0 0 0 0 0 0 0 4,000 4,000 0
Total sales ($) 14,300 12,300 12,300 14,300 12,300 12,300 12,300 12,300 12,300 12,300 12,300 12,300 151,600 238,000 234,000
Unit cost ($):
Shared Room 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Private Room 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
ADLs Care 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Incontinence Care 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Dementia Care 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Transportation 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00 15.00
Pre-Admission Fee 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Total cost of sales:
Shared Room 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Private Room 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
ADLs Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Incontinence Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Dementia Care 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Transportation 225 225 225 225 225 225 225 225 225 225 225 225 2,700 4,500 4,500
Pre-Admission Fee 0 0 0 0 0 0 0 0 0 0 0 0 0 1 2
Total cost of sales 225 225 225 225 225 225 225 225 225 225 225 225 2,700 4,501 4,502

Personnel

Personnel Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2011 2012 2013
Administrator $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $19,200 $19,200
Asst Admin/Direct Care $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $14,400 $14,400 $14,400
Direct Care Staff 1st Shift $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $26,280 $26,280 $17,280
Direct Care Staff 2nd Shift $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $2,190 $26,280 $26,280 $17,280
Overnight Staff $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $23,360 $23,360
Subtotal $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $66,960 $109,520 $91,520
Total Headcount 3 3 3 3 3 3 3 3 3 3 3 3 3 5 5
Total payroll $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $66,960 $109,520 $91,520
Taxes & benefits $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total payroll exp $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $5,580 $66,960 $109,520 $91,520

Profit And Loss Statement

P & L Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2011 2012 2013
Sales ($) 14,300 12,300 12,300 14,300 12,300 12,300 12,300 12,300 12,300 12,300 12,300 12,300 151,600 238,000 234,000
Cost of sales
Material ($) 225 225 225 225 225 225 225 225 225 225 225 225 2,700 4,500 4,500
Labor ($) – – – – – – – – – – – – – – –
Other ($) – – –
Total cost of sales 225 225 225 225 225 225 225 225 225 225 225 225 2,700 4,500 4,500
Gross profit ($) 14,075 12,075 12,075 14,075 12,075 12,075 12,075 12,075 12,075 12,075 12,075 12,075 148,900 233,500 229,500
Operating expenses ($)
Marketing and Advertising expenses
Sales and Marketing Payroll ($) – – – – – – – – – – – – – – –
Marketing Strategies Budget ($) 210 10 10 10 10 10 210 10 10 10 10 10 620 620 620
Ads ($) – – –
Catalog ($) – – –
Mailing ($) – – –
Promotional Material ($) – – –
Shows ($) – – –
PR ($) – – –
Other ($) – – –
Total Marketing and Advertising expenses 210 10 10 10 10 10 210 10 10 10 10 10 620 620 620
General and Administrative Expenses
Adminstration Payroll ($) 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 6,975 83,700 136,900 114,400
Merchant Services ($) 584 504 504 584 504 504 504 504 504 504 504 504 6,208 9,532 9,372
Laundry and Dry Cleaning 75 75 75 75 75 75 75 75 75 75 75 75 900 900 900
Recreational Activities 150 150 150 150 150 150 150 150 150 150 150 150 1,800 1,800 1,800
Rent ($) 3,100 3,100 3,100 3,100 3,100 3,100 3,100 3,100 3,100 3,100 3,100 3,100 37,200 37,200 37,200
Auto Expenses 300 300 300 300 300 300 300 300 300 300 300 300 3600 3600 3600
Utilities ($) 250 250 250 250 250 250 250 250 250 250 250 250 3000 3000 3000
Telephone ($) 200 200 200 200 200 200 200 200 200 200 200 200 2400 2400 2400
Insurance ($) 300 300 300 300 300 300 300 300 300 300 300 300 3600 3600 3600
Household Supplies ($) 50 50 50 50 50 50 50 50 50 50 50 50 600 600 600
Offce Supplies ($) 50 50 50 50 50 50 50 50 50 50 50 50 600 600 600
Travel ($) 0 0 0
Medical and First Aid ($) 50 50 50 50 50 50 50 50 50 50 50 50 600 600 600
Food ($) 750 750 750 750 750 750 750 750 750 750 750 750 9000 15000 15000
Toiletries ($) 0
Linens ($) 75 75 75 75 75 75 75 75 75 75 75 75 900 900 900
Repair and Maintenance ($) 150 150 150 150 150 150 150 150 150 150 150 150 1800 1800 1800
Licensing and Membership Fees ($) 50 50 50 50 50 50 50 50 50 50 50 50 600 600 600
Depreciation ($) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Ammortization 0
Miscellaneous ($) 0 0 0
Total General and Administrative Expenses 13109 13029 13029 13109 13029 13029 13029 13029 13029 13029 13029 13029 156508 219032 196372
Other expenses
Consultants ($) 0 0 0
Legal ($) 0 0 0
Bookkeeper ($) $ 41.67 $ 41.67 42 42 42 42 42 42 42 42 42 42 500 500 500
Groundskeeper ($) $ 200.00 $ 200.00 200 200 200 200 200 200 200 200 200 200 2400 2400 2400
Handyman ($) $ 250.00 $ 250.00 250 250 250 250 250 250 250 250 250 250 3000 3000 3000
Other Payroll
Total Other expenses ($) $492 $492 492 492 492 492 492 492 492 492 492 492 5900 5900 5900
Total expenses ($) $13,811 $13,531 13531 13611 13531 13531 13731 13531 13531 13531 13531 13531 163028 225552 202892
Profit ($) $264 -$1,456 -1456 464 -1456 -1456 -1656 -1456 -1456 -1456 -1456 -1456 -14028 8116 26776
Interest expenses – Short Term $0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0
Interest expenses – Long Term $0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0
Taxes ($) $0 $0 0 0 0 0 0 0 0 0 0 0 0 0 0
Net profit ($) $264 -$1,456 -1456 464 -1456 -1456 -1656 -1456 -1456 -1456 -1456 -1456 -14028 8116 26776

Cash Flow

Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2011 2012 2013
Beginning cash 13,500 13,764 12,309 10,853 11,317 9,862 8,406 6,750 5,295 3,839 2,383 928 13,500 (528) 7,588
Cash in:
Net profit 264 (1,456) (1,456) 464 (1,456) (1,456) (1,656) (1,456) (1,456) (1,456) (1,456) (1,456) (14,028) 8,116 26,776
Depreciation & amort. – – – – – – – – – – – – – – –
Change in accts payable – – – – – – – – – – – – – – –
Current borrowing – – –
Long-term borrowing – – –
Increase other liabilities – – –
Capital input – – –
Total cash in 264 (1,456) (1,456) 464 (1,456) (1,456) (1,656) (1,456) (1,456) (1,456) (1,456) (1,456) (14,028) 8,116 26,776
Cash out:
Change in A/R – – – – – – – – – – – – – – –
Change in inventory – – – – – – – – – – – – – – –
Change other ST assets – – –
Capital expenditures – – –
Loan repayment (ST) – – –
Loan repayment (LT) – – –
Dividends – – –
Owner withdrawal – – –
Total cash out – – – – – – – – – – – – – – –
Net cash flow 264 (1,456) (1,456) 464 (1,456) (1,456) (1,656) (1,456) (1,456) (1,456) (1,456) (1,456) (14,028) 8,116 26,776
Cash balance 13,764 12,309 10,853 11,317 9,862 8,406 6,750 5,295 3,839 2,383 928 (528) (528) 7,588 34,364

Balance Sheet

Balance Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 2011 2012 2013
Current assets:
Cash 13,764 12,309 10,853 11,317 9,862 8,406 6,750 5,295 3,839 2,383 928 (528) (528) 7,588 34,364
Accounts Receivable – – – – – – – – – – – – – – –
Inventory
Deposits – – – – – – – – – – – – – – –
Total Current Assets 13,764 12,309 10,853 11,317 9,862 8,406 6,750 5,295 3,839 2,383 928 (528) (528) 7,588 34,364
Fixed Assets
Capital Assets 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500
Less accumulated depreciation – – – – – – – – – – – – – – –
Book Value 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500 31,500
Other Assets – – – – – – – – – – – – – – –
Total Assets 45,264 43,809 42,353 42,817 41,362 39,906 38,250 36,795 35,339 33,883 32,428 30,972 30,972 39,088 65,864
Current Liabilities
Accounts Payable – – – – – – – – – – – – – – –
Short-term Notes – – – – – – – – – – – – – – –
Other Short Term Liabilities
Total Current Liab. – – – – – – – – – – – – – – –
Long-term Liabilities – – –
Total Liabilities – – – – – – – – – – – – – – –
Beginning Capital 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000 45,000
Profit or (Loss) 264 (1,191) (2,647) (2,183) (3,638) (5,094) (6,750) (8,205) (9,661) (11,117) (12,572) (14,028) (14,028) (5,912) 20,864
Owner’s Withdrawal – – – – – – – – – – – – – – –
Capital – End of Period 45,264 43,809 42,353 42,817 41,362 39,906 38,250 36,795 35,339 33,883 32,428 30,972 30,972 39,088 65,864
Total Liabilities and Equity 45,264 43,809 42,353 42,817 41,362 39,906 38,250 36,795 35,339 33,883 32,428 30,972 30,972 39,088 65,864