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Table of Contents

1.0 Executive Summary...............................................................................................................................1


Chart: Highlights..................................................................................................................................1
1.1 Mission...............................................................................................................................................1
1.2 Keys to Success..................................................................................................................................2
1.3 Objectives..........................................................................................................................................2
2.0 Company Summary...............................................................................................................................2
2.1 Company Ownership.........................................................................................................................2
2.2 Start-up Summary..............................................................................................................................2
Table: Start-up.....................................................................................................................................3
Chart: Start-up......................................................................................................................................3
..............................................................................................................................................................3
3.0 Services..................................................................................................................................................4
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................5
Table: Market Analysis........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................................6
4.3 Service Business Analysis.................................................................................................................6
4.3.1 Competition and Buying Patterns...............................................................................................7
5.0 Strategy and Implementation Summary.................................................................................................7
5.1 Competitive Edge...............................................................................................................................7
5.2 Marketing Strategy.............................................................................................................................7
5.3 Sales Strategy.....................................................................................................................................8
5.3.1 Sales Forecast..............................................................................................................................8
Table: Sales Forecast.......................................................................................................................9
Chart: Sales Monthly.......................................................................................................................9
Chart: Sales by Year......................................................................................................................10
5.4 Milestones........................................................................................................................................10
Table: Milestones...............................................................................................................................10
Chart: Milestones...............................................................................................................................11
6.0 Web Plan Summary.............................................................................................................................11
6.1 Website Marketing Strategy............................................................................................................11
6.2 Development Requirements.............................................................................................................11
7.0 Management Summary........................................................................................................................12
7.1 Personnel Plan..................................................................................................................................12
Table: Personnel.................................................................................................................................13
8.0 Financial Plan.......................................................................................................................................13
8.1 Important Assumptions....................................................................................................................13
Table: General Assumptions..............................................................................................................13
................................................................................................................................................................13
Chart: Break-even Analysis...............................................................................................................14
Table: Break-even Analysis...............................................................................................................14
8.3 Projected Profit and Loss.................................................................................................................14
Page 1

Table of Contents

Table: Profit and Loss........................................................................................................................15


Chart: Profit Monthly.........................................................................................................................16
Chart: Profit Yearly............................................................................................................................16
Chart: Gross Margin Monthly............................................................................................................17
Chart: Gross Margin Yearly...............................................................................................................17
8.4 Projected Cash Flow........................................................................................................................17
Chart: Cash.........................................................................................................................................18
Table: Cash Flow...............................................................................................................................18
................................................................................................................................................................19
8.5 Projected Balance Sheet...................................................................................................................20
Table: Balance Sheet..........................................................................................................................20
................................................................................................................................................................20
8.6 Business Ratios................................................................................................................................21
Table: Ratios......................................................................................................................................21
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: General Assumptions........................................................................................................................3
......................................................................................................................................................................3
Table: Profit and Loss..................................................................................................................................4
......................................................................................................................................................................4
Table: Cash Flow.........................................................................................................................................5
Table: Balance Sheet....................................................................................................................................6

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Pizzeria del Causamali

1.0 Executive Summary


Pizzeria del Causamali is a new player in the restaurant industry. The restaurant is in a
comfortable, familiar, small town that has a strong need for additional dining options. Bolstered
by the need for more choices in family-oriented dining experiences, combined with the option
for home-delivery, the restaurant is positioned to take advantage of the market need and serve
the families in the Deauville area.
The Deauville's population is rapidly growing with new subdivisions and young families moving
to the rural suburb of the Hewgton area. It is Pizzeria del Causamali's strategy to exploit the
first-mover opportunity and establish itself as the preferred pizza provider to the area. We
believe a locally-owned restaurant is the best option to serve the rapidly growing
population with a fresh, unique menu as opposed to a national chain franchise.
This business plan calls for an exciting, profitable start-up year ahead with future forecasted
growth as we meet the demands of the community. In all, this plan describes a healthy
company with good growth prospects, looking to manage its orderly growth in the near future.

Chart: Highlights

1.1 Mission
Pizzeria del Causamali creates a friendly and pleasant atmosphere for customers in a welldesigned, and productive environment in which people can work happily. We are sensitive to
the look and taste of good pizza as well as to high-quality ingredients. We look to provide the
best possible value to our customers who desire great tasting pizza and to provide customers
with the satisfaction of receiving a great value, both tangibly and intangibly. Additionally,
we are the first home-deliverer of pizzas in our area.

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Pizzeria del Causamali

Our customers are our neighbors as we are residents of our market area. We will also create
and nurture a healthy, creative, respectful, and fun working environment, in which our
employees are fairly compensated and encouraged to respect the customer and the quality of
the product we produce. We seek fair and responsible profit, enough to keep the company
financially healthy for the long term and to fairly compensate owners and investors for
their investment and risk.
1.2 Keys to Success
The keys to success in this business are:

Delivering the customer value proposition.


Marketing: promoting a new company, product, and delivery channels to a rural
community.
Product quality and consistency.
Pricing effectively with respect to the project quality and customer value proposition.
Family-oriented atmosphere with occasional nights of family entertainment.
Management: products delivered on time, costs controlled, marketing budgets managed.
There is a temptation to fixate on growth at the expense of profits.
Reporting and controls in place for inventory and financials.

1.3 Objectives
The objectives for Pizzeria del Causamali are:

To establish the market presence needed to support marketing and sales goals and to
attract customers.
To reach healthy monthly sales by the end of the year, and average monthly sales
increasing modestly by steadily through Year 3.
To achieve double digit profit margins.
To develop top-rated relationships with 2-4 well-respected, all encompassing distributors.

2.0 Company Summary


Pizzeria del Causamali is a privately-owned pizza restaurant offering a product menu that does
not currently exist in the area and first to offer home delivery. Our customers are many of the
young families and students in the area.
2.1 Company Ownership
Pizzeria del Causamali will be established as a limited liability company (LLC) with Marion E. and
Marianne K. Bruxellesprot as the sole owners.
2.2 Start-up Summary
Our start-up costs cover the renovation of the occupied store space, professional fees,
and expenses associated with opening our first location. The start-up costs are to be financed
by direct owner investment, financial institutions, and private investors. The assumptions are
shown in the following table and illustration.

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Pizzeria del Causamali

Table: Start-up

Start-up
Requirements
Start-up Expenses
Professional Fees (Legal, Accounting, Consulting)
Placemats, Stationery, Business Cards
Renovation
Marketing
Rent
Expensed Equipment
Insurance
Website Development
Misc Expense
Total Start-up Expenses

$1,800
$1,100
$8,300
$2,500
$2,000
$5,000
$350
$1,000
$3,800
$25,850

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$23,100
$6,000
$5,250
$20,300
$54,650

Total Requirements

$80,500

Chart: Start-up

Page 3

Pizzeria del Causamali

Table: Start-up Funding


Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$25,850
$54,650
$80,500

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$31,550
$23,100
$0
$23,100
$54,650

Liabilities and Capital


Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$25,000
$9,500
$0
$34,500

Capital
Planned Investment
Investor 1
Owners
Additional Investment Requirement
Total Planned Investment
Loss at Start-up (Start-up Expenses)
Total Capital

$15,000
$30,000
$1,000
$46,000
($25,850)
$20,150

Total Capital and Liabilities

$54,650

Total Funding

$80,500

3.0 Services
Pizzeria del Causamali offers high quality pizza to a growing community that currently has
limited availability of restaurants and no availability to delivery. At start up we will be open for
dinner 4 p.m. to 10 p.m. Sunday - Thursday and 3 p.m. to 11 p.m. Friday and Saturday. We
will consider opening earlier and serving lunch if there is a demand, and if forecast and financial
analysis can justify the increased costs.
Our menu will include 4 sizes of pizzas with various combinations of toppings. Predefined, highmargin pizzas will be highlighted on the menu. Additionally, breadsticks, beer, and soda will be
included in the initial menu offerings.

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Pizzeria del Causamali

4.0 Market Analysis Summary


Our primary target market is people who desire a comfortable, family-oriented environment for
dine-in pizza. Our secondary target market also desires a delivery service for pizza, or a takeout approach. There is overlap of these segments.
Deauville and its surrounding communities are a growing middle-class area with nearly 14,000
residents. A majority of these residents are families of four or more. The boom in the area is
primarily in response to an exodus of families moving out of the over-populated areas and into
a more rural setting.
According to a Growth Plan Deauville conducted in 2001, population within Deauville is
expected to increase. However, the number of persons per household is expected to decline,
meaning the need for additional housing in Deauville will continue to grow. From the same
plan, population is listed as being evenly distributed by age groupings, with approximately 33%
of the population being minors. Another 40% are less than 54 years of age, indicating a major
concentration of the Deauville population being families. The report forecasts there being
nearly 1,900 households in the Deauville by 2005. This is driving the need for more quality,
family-oriented restaurants.
Additionally, Deauville residents frequently visit the building in which Pizzeria del Causamali is
located. Tanning and video rental businesses are adjacent to the restaurant, so we are
providing a new convenience for families to select a movie and pick up a pizza.
With the expected continued growth in the area, estimated at 7% annually, opportunities to
serve Deauville and its surrounding communities will increase. The company will sell
predominantly to individuals, but it will also accept some catering jobs to individual parties,
schools, and company functions in the Deauville area.
4.1 Market Segmentation
Those residents of neighboring communities of Deauville, including Doughbuoy, d'Ohtown,
and Doe Valley are included in the Market Segmentation. Only those residents of Deauville are
included in the delivery, as delivery radius is limited to a 5-mile radius in the city of Deauville.
An estimated 53% of Deauville residents live within the Sanitary District, or within this 5-mile
radius.

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Pizzeria del Causamali

Table: Market Analysis

Market Analysis
Year 1
Potential Customers

Growth

Dine-In or Take-Out
Delivery
Total

7%
7%
7.00%

Year 2

Year 3

Year 4

Year 5
CAGR

13,860
5,000
18,860

14,830
5,350
20,180

15,868
5,725
21,593

16,979
6,126
23,105

18,168
6,555
24,723

7.00%
7.00%
7.00%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy


Including Deauville and its surrounding areas, no pizza establishments exist. In Deauville one
to two restaurants serve pizza, but not as a primary menu item. These pizza outlets are in
taverns which are not conducive to family-type atmosphere. No eating establishments in the
Deauville area provide home-delivery service.
4.3 Service Business Analysis
Other family-oriented restaurants in the area include: Subway(R), What's Cookin' diner, and
Colonial House supper club. Subway serves sandwiches, wraps, and salads, none of which are
direct competition to the pizza establishment. The diner is open until 2 p.m. each day and
focuses on the breakfast crowd, with a limited sandwich availability for lunch. The supper club
has a Chicken and Pizza buffet once a week for approximately $6; the pizza served as part of
the buffet are frozen pizzas.

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Pizzeria del Causamali

Other restaurants in Deauville are taverns and are not conducive to family activities. One of
the bars in Deauville serves a homemade pizza.
In conversations with an independent pizza operator in Lakeshore Haven, an hour's drive away,
he indicated pizza sales in his community are thriving despite competition from 4 other pizza
establishments, including Pizza Hut(R). While exact figures were not shared, he indicated a
high level of penetration into the pizza market in his area with profitable margins. He also
provided suggestions and tips to minimize costs, and components of his restaurant he would do
differently, including payroll handling, vendors, and layout.
4.3.1 Competition and Buying Patterns
There is minimal competition for pizza in the Deauville area, besides the bar establishments
previously mentioned. The closest locales for pizza to the Deauville area are Bolingbrooke,
Avro, and de Havilland. None of these competing pizza locations deliver to the Deauville area.
Additionally, Pizzeria del Causamali would be the only family-oriented, non-smoking restaurant
in Deauville.
5.0 Strategy and Implementation Summary
Our strategy is based on delivering a strong customer value proposition in a niche market. The
world is full of small, family-oriented towns that do not have endless opportunities for dining
out. We are looking to offer the Deauville and its surrounding areas a new choice in food
options.
Also:

What begins as a need to satisfy a need in the community, can eventually turn into a
mainstay in the small town community.
We are building our marketing infrastructure so that we can eventually reach additional
towns with the same offering.
We focus on satisfying the needs of small towns.

5.1 Competitive Edge


Our competitive edge is to be first-to-the-market with pizza in a friendly, non-smoking, familyoriented dine-in experience, and first-to-the-area with food delivery.
Additionally, the location of Pizzeria del Causamali is crucial as a convenience model to
customers. Deauville residents frequent the video rental store adjacent to the restaurant. This
location is directly in the center of activity in this rural community--it is within walking distance
of the middle and high schools, the local church, and within 2 miles of the existing large
subdivisions and apartment complexes in the area.
5.2 Marketing Strategy
To drive customers to Pizzeria del Causamali, we will employ several techniques outlined below.
Advertising in Bolingbrooke Post, de Havilland Buyer's Guide, Deauville Register, and Deauville
Shopping News will be used to promote the Grand Opening of Pizzeria del Causamali. As part
of the advertising, a coupon will be available to customers. Intermittent newspaper

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Pizzeria del Causamali

advertisements will continue throughout the year to promote upcoming events. Most initiatives
will focus on the local Deauville papers as the target of these papers is specifically the Deauville
residents. Additional marketing efforts will come in the form of on-box coupons for future
purchases.
Additionally, family-oriented events will be hosted by Pizzeria del Causamali to attract
customers such as trivia nights, birthday parties, and prize giveaways. Frequent buyer cards
will be employed to entice repeat customers. Pizzeria del Causamali will also sponsor a local
Little League baseball team, and a bowling team to publicize the restaurant within the
community events.
Future plans of working in coordination with the adjacent video store to offer "bundle savings" if
both pizza and video rentals are purchased will be pursued within the second year of operation.
5.3 Sales Strategy
The Deauville area has expressed its need for additional restaurants, specifically a desire for
pizza. Because of this, there is pent-up demand for pizza in this area. We will expect a high
rate of sales growth within the first 3 months as this customer desire is met.
For the next year, we continue to focus on a growing presence in the community and
advertising heavily throughout the community. As a major convention center and water park
open in nearby Fairchild, we will focus our attention on becoming the recognized provider of
pizza to that establishment.
5.3.1 Sales Forecast
Our sales forecast assumes a modest change in annual costs to accommodate new entry into
the market.
We are expecting to increase sales modestly but steadily over the next year, which is
a respectable growth rate. The growth forecast is assumed given this is a new product for the
area using new channels of availability. We are not projecting significant change in the product
line, or in the proportion between different lines.
Based on industry averages and the absence of competition for pizza in the Deauville area, we
are predicting an average of 25 pizzas sold each week night (Sunday - Wednesday). On the
weekends (Thursday - Saturday), we are estimating 40 pizzas are sold each day. Of those
pizzas ordered, we are expecting approximately 1/3 to be dine-in customers. Those customers
dining in will most likely order drinks and/or beer (on average 4 for each family). Additionally,
we are estimating that approximately one-third of the pizza orders will be accompanied by an
order for breadsticks. Our estimated average prices for each item are as follows:

Pizza: $12
Breadsticks: $2.50
Beer: $2.50/pint
Drinks: $1.70 refillable

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Pizzeria del Causamali

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

$133,900
$18,667
$37,333
$50,773
$240,673

$143,808
$19,973
$39,947
$54,327
$258,055

$153,875
$21,371
$42,743
$58,130
$276,120

Year 1
$42,848
$3,733
$7,467
$2,539
$56,587

Year 2
$44,990
$3,920
$7,840
$2,666
$59,416

Year 3
$47,240
$4,116
$8,232
$2,799
$62,387

Sales
Pizza
Breadsticks
Beer
Drinks
Total Sales
Direct Cost of Sales
Pizza
Breadsticks
Beer
Drinks
Subtotal Direct Cost of Sales

Chart: Sales Monthly

Page 9

Pizzeria del Causamali

Chart: Sales by Year

5.4 Milestones
The following table lists important program milestones, with dates and managers in charge, and
budgets for each. The milestone schedule indicates our emphasis on planning for
implementation.
Table: Milestones

Milestones
Milestone
Business Plan

Start Date
1/8/2004

End Date
1/31/2004

Budget
$0

Secure Start-up Funding

2/1/2004

3/1/2004

$0

Site Selection

1/8/2004

2/1/2004

$0

Architect Designs/Redesign

2/15/2004

3/1/2004

$500

Technology Design

3/15/2004

4/1/2004

$5,000

Personnel Plan

3/1/2004

3/15/2004

$0

Accounting Plan

3/1/2004

3/31/2004

$400

Renovation

4/1/2004

5/15/2004

$7,800

Equipment Installation

5/1/2004

5/15/2004

$2,000

Marketing Plans

3/4/2004

4/30/2004

$2,500

Grand Opening

5/1/2004

5/15/2004

$2,500

Totals

Manager
Marianne
Bruxellesprot
Marianne
Bruxellesprot
Marion
Bruxellesprot
Marion
Bruxellesprot
Marianne
Bruxellesprot
Marianne
Bruxellesprot
Marianne
Bruxellesprot
Marion
Bruxellesprot
Marion
Bruxellesprot
Marianne
Bruxellesprot
Marianne
Bruxellesprot

Department
Management
Management
Operations
Operations
Technical
Management
Management
Operations
Operations
Marketing
Marketing

$20,700

Page 10

Pizzeria del Causamali

Chart: Milestones

6.0 Web Plan Summary


The Pizzeria del Causamali website will be the virtual business card and portfolio for the
company, as well as its online "home." It will showcase the history, product information,
and offers for Pizzeria del Causamali. Special online-only offers will be made available on the
website, along with customer's opportunity to sign-up for email news and offers.
The Pizzeria del Causamali website needs to be a simple yet classy and well designed website
that, at the same time, is in keeping with the latest trends in user interface design. Customers
will be coming to the site for product information, history, and offers.
Future elements of the site can contain online ordering, if customers express an interest in this
functionality.
6.1 Website Marketing Strategy
Our Internet marketing activities will be focused on product information and offers. Future
opportunities exist in offering online ordering.
6.2 Development Requirements
The Pizzeria del Causamali website will be initially developed with few technical resources. A
simple hosting provider, Yahoo! Web services, will host the site and provide the technical back
end. The owner's expertise in professional Web development will lead this effort.

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Pizzeria del Causamali

The user interface designer will work with a graphic artist to come up with the website logo,
and the website graphics.
The maintenance of the site will be done by the owners. If the website rolls out future
development such as newsletters and online ordering, the internal staff at Pizzeria del
Causamali will design, implement, and execute the technology.
7.0 Management Summary
We are a small company owned and operated by Marion and Marianne Bruxellesprot, husband
and wife, as a partnership. Management style reflects the participation of the owners. The
company respects its community of co-workers and treats all workers well.
Marianne Bruxellesprot is a 1998 graduate of University School of Business with High Honors
and Distinction in Business. Her experience with general business, technology, and operations
is a great asset to this venture.
Additionally, Otho Colderobby is an advisor to the owners. Otho is a 1991 graduate
of State College with a degree in Economics. Furthermore, Otho graduated in 1995 with a
Masters in Business Administration from University School of Business with emphases in
Marketing and Finance. Otho held a senior finance management position with Frito Lay for 5
years. Otho is currently a managing consultant with a marketing strategy firm. He also spent
5 years in a strategic services consulting practice.
7.1 Personnel Plan
The personnel table assumes a level need of employees, and 5% per annum pay raises.
Staffing for a 7-day a week restaurant necessitates two shifts. In addition to the hours open
for serving we anticipate an additional hour before opening for prep and as much as an hour
after closing for cleanup. This is approximately 8 hours of staffing necessary Sunday Thursday and 10 hours on both Friday and Saturday.
The two kitchen lead positions are part-time, earning $9/hr. The kitchen leads will serve as the
shift leaders of the kitchen/wait staff. Kitchen staff will serve as the wait staff. There will be
one dedicated dishwashing position per shift. Wages for kitchen/wait staff, dishwashers, and
delivery drivers, who are all part-time, are $6/hr, with opportunities for all to share the
combined earn tips. It is imperative the people serving as the kitchen lead are over 21 and can
legally serve alcohol.
Hourly part-time positions as kitchen/wait, dishwashing, and delivery staff average out to be
approximately 30 hours per week each. Delivery staff will work 5 hour shifts each night, with
an extra delivery staff member added on Thursdays, Fridays, and Saturdays. During the week
if this person is not delivering, they will work in the kitchen as needed, directed by the kitchen
lead.

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Pizzeria del Causamali

Table: Personnel

Personnel Plan
Kitchen Leads
Kitchen/Wait
Dishwasher
Owner
Delivery
Total People
Total Payroll

Year 1

Year 2

Year 3

$28,080
$37,440
$15,600
$9,000
$15,600
12

$29,484
$39,312
$16,380
$9,450
$16,380
12

$30,958
$41,278
$17,199
$9,923
$17,199
12

$105,720

$111,006

$116,556

8.0 Financial Plan


The financial picture is quite encouraging. We will be slow to take on debt and heavily investing
our own assets, but with our increase in sales we do expect to apply for a credit line with the
bank, to a limit of $50,000. The credit line is supported by assets.
8.1 Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following
table. The key underlying assumptions are:

We assume a fairly high-growth economy for pizza in the Deauville area, given the lack of
competition and interest in having a pizza restaurant available in the area and pent-up
demand.
We assume, of course, that there are no unforeseen changes in technology to make our
products immediately obsolete.
We assume access to equity capital and financing sufficient to maintain our financial plan as
shown in the tables.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
6.00%
5.00%
30.00%
0

2
6.00%
5.00%
30.00%
0

3
6.00%
5.00%
30.00%
0

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Pizzeria del Causamali

8.2 Break-even Analysis


Our break-even analysis is based on running costs, the "burn-rate" costs we incur to keep the
business running, not on theoretical fixed costs that would be relevant only if we were
closing. The essential insight here is that our sales level seems to be running comfortably above
break-even.

Chart: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$16,283

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

24%
$12,454

8.3 Projected Profit and Loss


We expect to be profitable in the first year, with profits increasing over the next two years, as
we establish a loyal customer base.

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Pizzeria del Causamali

Table: Profit and Loss

Pro Forma Profit and Loss


Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales

$240,673
$56,587
$0
$56,587

$258,055
$59,416
$0
$59,416

$276,120
$62,387
$0
$62,387

Gross Margin
Gross Margin %

$184,087
76.49%

$198,639
76.98%

$213,733
77.41%

Payroll
Sales and Marketing and Other Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Website Hosting and Maintenance
Other

$105,720
$7,250
$2,040
$14,400
$7,200
$4,200
$8,042
$600
$0

$111,006
$7,250
$1,836
$14,400
$7,200
$4,500
$8,444
$50
$0

$116,556
$7,500
$1,652
$14,400
$7,200
$4,800
$8,866
$50
$0

Total Operating Expenses

$149,452

$154,686

$161,024

Profit Before Interest and Taxes


EBITDA
Interest Expense
Taxes Incurred

$34,635
$36,675
$1,088
$10,064

$43,954
$45,790
$700
$12,976

$52,709
$54,361
$225
$15,745

Net Profit
Net Profit/Sales

$23,483
9.76%

$30,278
11.73%

$36,739
13.31%

Expenses

Page 15

Pizzeria del Causamali

Chart: Profit Monthly

Chart: Profit Yearly

Page 16

Pizzeria del Causamali

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

8.4 Projected Cash Flow


The following table and chart is the projected cash flow for three years.

Page 17

Pizzeria del Causamali

Chart: Cash

Table: Cash Flow

Pro Forma Cash Flow


Year 1

Year 2

Year 3

$240,673
$240,673

$258,055
$258,055

$276,120
$276,120

$0
$0
$0
$0
$0
$0
$0
$240,673

$0
$0
$0
$0
$0
$0
$0
$258,055

$0
$0
$0
$0
$0
$0
$0
$276,120

Year 1

Year 2

Year 3

$105,720
$105,383
$211,103

$111,006
$115,007
$226,013

$116,556
$120,774
$237,330

$0
$0
$0
$6,000
$0
$0
$0
$217,103

$0
$0
$0
$10,000
$0
$0
$0
$236,013

$0
$0
$0
$9,000
$0
$0
$0
$246,330

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

Page 18

Pizzeria del Causamali

Net Cash Flow


Cash Balance

$23,570
$46,670

$22,042
$68,712

$29,789
$98,501

Page 19

Pizzeria del Causamali

8.5 Projected Balance Sheet


As shown in the balance sheet in the following table, we expect a healthy growth in net worth.
The monthly projections are in the appendices.
Table: Balance Sheet

Pro Forma Balance Sheet


Year 1

Year 2

Year 3

$46,670
$1,720
$5,250
$53,640

$68,712
$1,994
$5,250
$75,956

$98,501
$2,094
$5,250
$105,845

$20,300
$2,040
$18,260
$71,900

$20,300
$3,876
$16,424
$92,380

$20,300
$5,528
$14,772
$120,617

Year 1

Year 2

Year 3

$9,267
$0
$0
$9,267

$9,469
$0
$0
$9,469

$9,968
$0
$0
$9,968

$19,000
$28,267

$9,000
$18,469

$0
$9,968

$46,000
($25,850)
$23,483
$43,633
$71,900

$46,000
($2,367)
$30,278
$73,911
$92,380

$46,000
$27,911
$36,739
$110,649
$120,617

$43,633

$73,911

$110,649

Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 20

Pizzeria del Causamali

8.6 Business Ratios


Standard business ratios are included in the following table. Industry profile ratios are shown
for comparison, and are based on Standard Industrial Classification (SIC) code 5812.0600,
Pizza Restaurants. The ratios show a plan for balanced, healthy growth. Our return on sales
and return on assets remain strong in percentage terms.
Table: Ratios
Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

7.22%

7.00%

5.24%

Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

2.39%
7.30%
74.60%
25.40%
100.00%

2.16%
5.68%
82.22%
17.78%
100.00%

1.74%
4.35%
87.75%
12.25%
100.00%

3.54%
34.82%
43.85%
56.15%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

12.89%
26.43%
39.31%
60.69%

10.25%
9.74%
19.99%
80.01%

8.26%
0.00%
8.26%
91.74%

20.80%
28.42%
49.22%
50.78%

100.00%
76.49%
39.83%
0.00%
14.39%

100.00%
76.98%
39.27%
0.00%
17.03%

100.00%
77.41%
38.77%
0.00%
19.09%

100.00%
61.18%
38.56%
2.28%
1.44%

5.79
5.60
39.31%
76.88%
46.66%

8.02
7.81
19.99%
58.52%
46.82%

10.62
10.41
8.26%
47.43%
43.51%

0.99
0.67
52.80%
2.77%
5.88%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin


Return on Equity

9.76%
53.82%

11.73%
40.97%

13.31%
33.20%

n.a
n.a

31.29
11.35
30
3.35

32.00
12.17
30
2.79

30.53
12.17
29
2.29

n.a
n.a
n.a
n.a

0.65
0.33

0.25
0.51

0.09
1.00

n.a
n.a

$44,373
31.85

$66,487
62.79

$95,877
234.26

n.a
n.a

0.30
13%
5.60
5.52

0.36
10%
7.81
3.49

0.44
8%
10.41
2.50

n.a
n.a
n.a
n.a

Activity Ratios
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth

Page 21

Pizzeria del Causamali

Dividend Payout

0.00

0.00

0.00

n.a

Page 22

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$7,200
$1,000
$2,000
$2,720
$12,920

$12,600
$1,750
$3,500
$4,760
$22,610

$11,160
$1,550
$3,100
$4,216
$20,026

$12,000
$1,667
$3,333
$4,533
$21,533

$11,460
$1,592
$3,183
$4,329
$20,564

$11,340
$1,575
$3,150
$4,284
$20,349

$11,820
$1,642
$3,283
$4,465
$21,210

$11,160
$1,550
$3,100
$4,216
$20,026

$11,320
$1,642
$3,283
$4,465
$20,710

$11,640
$1,617
$3,233
$4,397
$20,887

$10,560
$1,467
$2,933
$3,989
$18,949

$11,640
$1,617
$3,233
$4,397
$20,887

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,304
$200
$400
$136
$3,040

$4,032
$350
$700
$238
$5,320

$3,571
$310
$620
$211
$4,712

$3,840
$333
$667
$227
$5,067

$3,667
$318
$637
$216
$4,839

$3,629
$315
$630
$214
$4,788

$3,782
$328
$657
$223
$4,991

$3,571
$310
$620
$211
$4,712

$3,622
$328
$657
$223
$4,831

$3,725
$323
$647
$220
$4,915

$3,379
$293
$587
$199
$4,459

$3,725
$323
$647
$220
$4,915

Sales
Pizza
Breadsticks
Beer
Drinks
Total Sales

0%
0%
0%
0%

Direct Cost of Sales


Pizza
Breadsticks
Beer
Drinks
Subtotal Direct Cost of Sales

32%
20%
20%
5%

Page 1

Appendix
Table: Personnel

Personnel Plan
Kitchen Leads
Kitchen/Wait
Dishwasher
Owner
Delivery
Total People
Total Payroll

0%
0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$2,340
$3,120
$1,300
$750
$1,300
12

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

Page 2

Appendix
Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

Month 12
12

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

6.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

Page 3

Appendix
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

Month 12

$12,920

$22,610

$20,026

$21,533

$20,564

$20,349

$21,210

$20,026

$20,710

$20,887

$18,949

$20,887

$3,040

$5,320

$4,712

$5,067

$4,839

$4,788

$4,991

$4,712

$4,831

$4,915

$4,459

$4,915

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$3,040

$5,320

$4,712

$5,067

$4,839

$4,788

$4,991

$4,712

$4,831

$4,915

$4,459

$4,915

Gross Margin

$9,880

$17,290

$15,314

$16,467

$15,726

$15,561

$16,220

$15,314

$15,880

$15,973

$14,491

$15,973

Gross Margin %

76.47%

76.47%

76.47%

76.47%

76.47%

76.47%

76.47%

76.47%

76.68%

76.47%

76.47%

76.47%

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$500

$750

$750

$750

$750

$750

$750

$750

$250

$250

$500

$500

Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation

$170

$170

$170

$170

$170

$170

$170

$170

$170

$170

$170

$170

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

$1,200

Utilities

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

$600

Insurance

$350

$350

$350

$350

$350

$350

$350

$350

$350

$350

$350

$350

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

$670
$50
$0

Total Operating Expenses

$12,350

$12,600

$12,600

$12,600

$12,600

$12,600

$12,600

$12,600

$12,100

$12,100

$12,350

$12,350

Profit Before Interest and Taxes

($2,470)

$4,690

$2,714

$3,866

$3,125

$2,961

$3,619

$2,714

$3,779

$3,872

$2,140

$3,622

EBITDA

($2,300)

$4,860

$2,884

$4,036

$3,295

$3,131

$3,789

$2,884

$3,949

$4,042

$2,310

$3,792

$102

$100

$98

$96

$94

$92

$90

$88

$85

$83

$81

$79

($772)

$1,377

$785

$1,131

$910

$861

$1,059

$788

$1,108

$1,137

$618

$1,063

Rent

Payroll Taxes
Website Hosting and Maintenance
Other

Interest Expense
Taxes Incurred

15%
15%

Net Profit

($1,801)

$3,213

$1,831

$2,639

$2,122

$2,008

$2,471

$1,838

$2,586

$2,652

$1,441

$2,480

Net Profit/Sales

-13.94%

14.21%

9.14%

12.26%

10.32%

9.87%

11.65%

9.18%

12.49%

12.70%

7.61%

11.87%

Page 4

Appendix
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 10

Month 11

Month 12

Cash Sales

$12,920

$22,610

$20,026

$21,533

$20,564

$20,349

$21,210

$20,026

$20,710

$20,887

$18,949

$20,887

Subtotal Cash from Operations

$12,920

$22,610

$20,026

$21,533

$20,564

$20,349

$21,210

$20,026

$20,710

$20,887

$18,949

$20,887

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$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

$0

$0

New Long-term Liabilities

$0

$0

$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

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$12,920

$22,610

$20,026

$21,533

$20,564

$20,349

$21,210

$20,026

$20,710

$20,887

$18,949

$20,887

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Spending

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

$8,810

Bill Payments

$9,590

$2,921

$9,309

$9,037

$10,016

$9,381

$9,359

$9,806

$9,113

$9,189

$9,254

$8,409

$18,400

$11,731

$18,119

$17,847

$18,826

$18,191

$18,169

$18,616

$17,923

$17,999

$18,064

$17,219

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$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

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

$500

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Spent

$18,900

$12,231

$18,619

$18,347

$19,326

$18,691

$18,669

$19,116

$18,423

$18,499

$18,564

$17,719

Net Cash Flow

($5,980)

$10,379

$1,407

$3,187

$1,238

$1,658

$2,541

$910

$2,288

$2,388

$386

$3,168

Cash Balance

$17,120

$27,499

$28,906

$32,093

$33,331

$34,989

$37,530

$38,440

$40,728

$43,116

$43,501

$46,670

Cash Received
Cash from Operations

Additional Cash Received


Sales Tax, VAT, HST/GST Received
New Current Borrowing

0.00%

Expenditures from Operations

Subtotal Spent on Operations


Additional Cash Spent

Long-term Liabilities Principal Repayment

Page 5

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$23,100
$6,000
$5,250
$34,350

$17,120
$2,960
$5,250
$25,330

$27,499
$1,862
$5,250
$34,611

$28,906
$1,649
$5,250
$35,805

$32,093
$1,773
$5,250
$39,116

$33,331
$1,694
$5,250
$40,275

$34,989
$1,676
$5,250
$41,915

$37,530
$1,747
$5,250
$44,527

$38,440
$1,649
$5,250
$45,339

$40,728
$1,691
$5,250
$47,669

$43,116
$1,720
$5,250
$50,086

$43,501
$1,561
$5,250
$50,312

$46,670
$1,720
$5,250
$53,640

$20,300
$0
$20,300
$54,650

$20,300
$170
$20,130
$45,460

$20,300
$340
$19,960
$54,571

$20,300
$510
$19,790
$55,595

$20,300
$680
$19,620
$58,736

$20,300
$850
$19,450
$59,725

$20,300
$1,020
$19,280
$61,195

$20,300
$1,190
$19,110
$63,637

$20,300
$1,360
$18,940
$64,279

$20,300
$1,530
$18,770
$66,439

$20,300
$1,700
$18,600
$68,686

$20,300
$1,870
$18,430
$68,742

$20,300
$2,040
$18,260
$71,900

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$9,500
$0
$0
$9,500

$2,611
$0
$0
$2,611

$9,008
$0
$0
$9,008

$8,702
$0
$0
$8,702

$9,703
$0
$0
$9,703

$9,070
$0
$0
$9,070

$9,031
$0
$0
$9,031

$9,503
$0
$0
$9,503

$8,806
$0
$0
$8,806

$8,880
$0
$0
$8,880

$8,975
$0
$0
$8,975

$8,089
$0
$0
$8,089

$9,267
$0
$0
$9,267

$25,000
$34,500

$24,500
$27,111

$24,000
$33,008

$23,500
$32,202

$23,000
$32,703

$22,500
$31,570

$22,000
$31,031

$21,500
$31,003

$21,000
$29,806

$20,500
$29,380

$20,000
$28,975

$19,500
$27,589

$19,000
$28,267

$46,000
($25,850)
$0
$20,150
$54,650

$46,000
($25,850)
($1,801)
$18,349
$45,460

$46,000
($25,850)
$1,412
$21,562
$54,571

$46,000
($25,850)
$3,243
$23,393
$55,595

$46,000
($25,850)
$5,883
$26,033
$58,736

$46,000
($25,850)
$8,005
$28,155
$59,725

$46,000
($25,850)
$10,014
$30,164
$61,195

$46,000
($25,850)
$12,484
$32,634
$63,637

$46,000
($25,850)
$14,323
$34,473
$64,279

$46,000
($25,850)
$16,909
$37,059
$66,439

$46,000
($25,850)
$19,561
$39,711
$68,686

$46,000
($25,850)
$21,003
$41,153
$68,742

$46,000
($25,850)
$23,483
$43,633
$71,900

$20,150

$18,349

$21,562

$23,393

$26,033

$28,155

$30,164

$32,634

$34,473

$37,059

$39,711

$41,153

$43,633

Starting Balances

Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

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