Amusement Park Business Plan

Wasatch Family Fun Center

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Financial Plan

It is anticipated that the multi-million dollar loan that the company will seek to secure will cover the business start-up costs and provide funds for operating expenses for the first year.  Management projects that it will need to obtain additional  investment capital to fund the loan and long-term assets. 

The Highlights chart that accompanies the Executive Summary sets forth the company's anticipated profitability analysis.  Management believes that even minimal revenues should be sufficient to offer investors an acceptable return on investment.

7.1 Important Assumptions

NOTES FOR PROJECTIONS
All sales projections/assumptions are based on operating at 35% +/- of capacity. Refer to the Sales Forecast topic for demographic break down and average cost per person.

1. The figure of £890,000 shown in the Start-up Funding table under Current Borrowing, is the start-up investment, amortized with a 19% interest rate and paid off in five years.
2. Our long-term commercial loan is amortized at 10% interest over 20 years.
3. All pricing has been set by industry standards and the local market.
4. Revenues are strictly a projection based on gross possible players per venue and then using 35% +/- of that capacity for our base calculation.
5. Contract services include: payroll, pest control, trash removal, cable TV.
6. Employees needed and wages have been projected for full time and eight hour shifts.  All payroll will be done through a payroll company, therefore giving a flatter rate and making it easier to project.
7. Weber County tax rates are:
1. Real Estate tax £10.00 per £1,000 of assessed value.
2. Personal Property tax base is .009% of cost of equipment.
3. Business License is £50.00 for first 10,000 sq ft & £5.00 per every additional 1,000 sq. ft. of building space.
8. The income tax rate is estimated before deductions and overhead assumptions are included.

7.2 Valuation

In the following Investment Analysis Table, one should note that the entire (gross loan + points) amount of our long-term liabilities (£4,542,500) is the figure we used to determine the Net Present Value (NPV) and the Internal Rate of Return (IRR) of our company's projected values.

7.3 Key Financial Indicators

These benchmark indicators give I&B Investments a sense of relative comparison for five years of projections.

7.4 Break-even Analysis

Important notice concerning Break-even Analysis

The figures represented in this analysis are connected to the costs presented in the Start-up, Start-up Funding, and Use of Funds tables.

The following chart shows what we need to produce from sales per month to break-even (according to the assumptions).  That is less than 1/2 of our planned 2003 sales level and less than 1/3 +/- for the years beyond.  We strongly believe we can succeed and provide handsome returns for our owners/investors.

For the Break-even Analysis, we assume our per month fixed costs include most of management's payroll, loan payments, investor repayments and an estimation of other basic expenses. 

Margins are harder to assume. Our overall average of £8.50 (goods/services sold to each person) is based on the local market average number of sales and with an average cost of 20% (£8.50 - £1.70 = £6.80 gross profit per each good/services sold). 

We believe that not only will we entertain a much higher number of customers monthly than required by this break-even chart, we believe that we are going to possibly double the amount projected in our cash flow charts in this business plan, because we are going to be the only facilities of its kind within a 50 mile radius. 

7.5 Projected Profit and Loss

Important notes regarding Depreciation & Payroll Burden

1. The depreciation of assets was calculated separately from this Profit and Loss statement. Due to the fact of some accounting issues pertaining to our industry and this program. It appeared to be deducting our depreciation as hard cash expenses and not soft money (tax deduction). Therefore the cash tables did not appear to be reflecting a true statement of cash flow as per our industry (see further explanation below).
   
2. Payroll Burden (overhead/taxes) has been excluded from the Profit and Loss table based on the fact that payroll cost and taxes were pre-calculated and included in the personnel plan table. The basic reason for us doing this is, we plan on using a payroll company. Thus all employee payroll fees, taxes, insurances and other payroll burdens are charged as a flat fee (our industry average fee is: wages + 15% +/- .5%).

As per depreciation figures, our preliminary assessment using a standard 200% declining balance on equipment and assets gives us a first year figure of £190,000 +/-. This figure is considered our income tax deductible base and will adjust each year depending on taxable items, gross income, actual values and depreciation of assets.

Upon reviewing the next table (Profit & Loss), one should note that the company is making a profit in the first month of operation. The yearly analysis is indicated in the table below. The monthly analyses can be found in the appendix.

7.6 Projected Cash Flow

The company's estimated cash flow analysis is outlined in the following table, including the cost and increase in sales and profits made from Phase 2. I&B Investments low overhead will ensure positive cash balance.

7.7 Projected Balance Sheet

Estimated balance sheets for the years 2003-2008 including Phase 2 in the year 2006 are provided below.

7.8 Business Ratios

The company's projected business ratios are provided in the table below.  The final column, Industry Profile, shows significant ratios for the Amusement and Entertainment Industry, as determined by the Standard Industry Classification (SIC) Index code 7999.