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Plan Outline
Art Film Theater Business Plan
Miami Beach Film Society
Financial Plan
The basis for planning has been to look forward with conservative estimates for revenue and expenses. We are committed to the steady growth of revenues through tight control of all inventory, services, and managing sponsorship funds. Our financial plan focus will be to remain profitable while building adequate cash reserves for further stages of development.
We anticipate carrying one month worth of inventory, with the concession turning over more often, and the majority of items in the sales areas will be sold on cash basis, while the website sales will be mostly by credit card (unless customers request a hold at the box office for cash payment). The majority of items in the gallery will be sold on consignment and therefore do not affect inventory turnover.
Our personnel burden will be relatively low at 15% based on assumption that the only benefits paid will be minimal vacation for full time positions, employment fees, and healthcare plan.
The estimate of 8% funding on credit refers to the delay between commitment of funding and actual receipt of funds.
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 slow-growth economy, with slow recovery after a national catastrophe, and have therefore set income levels substantially lower than capacity allows.
- We assume of that there will be no major changes in federal grant funding availability.
- We assume that our summer months will be slower than others, but not as slow as some businesses depending completely on tourism to survive. Our local business will help in our low months.
- We assume that a major weather catastrophe could affect business, and we hope it does not happen at all, especially in our first year.
- We assume a growing interest in the arts and alternative arts appreciation on South Beach.
- We anticipate a very popular success!
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 6.00% | 6.00% | 6.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 0.00% | 0.00% | 0.00% |
| Other | 0 | 0 | 0 |
8.2 Break-even Analysis
Based on our forecasted monthly fixed costs and aniticipated average monthly revenues our monthy break-even forecast is displayed in the table and chart below.
| Break-even Analysis | |
| Monthly Revenue Break-even | £8,872 |
| Assumptions: | |
| Average Percent Variable Cost | 30% |
| Estimated Monthly Fixed Cost | £6,218 |
8.3 Projected Surplus or Deficit
Our projected annual surplus is shown in the table. March surplus is due to the annual Oscar Night fundraiser, and we anticipate adding another major fundraiser to our lowest income month (perhaps August), to help with surplus that may dip at that time. A "Summer Soiree" at the Cinematheque may help to make August a high surplus month instead of a low one. Assumption of a modest first year August fundraiser is included in the table results.
Note that the surplus shown in the second and third years will not actually be a surplus. The profits will be utilized to help update facilities (after a modest phase one opening build-out to get open in the first year), expand personnel, and develop the Miami Beach International Film Festival.
| Surplus and Deficit | |||
| Year 1 | Year 2 | Year 3 | |
| Funding | £149,310 | £216,800 | £258,900 |
| Direct Cost | £44,670 | £55,750 | £67,600 |
| Other Ticket Sales > Accompaniment | £8,250 | £9,000 | £10,000 |
| Other Ticket Sales > Shipment | £1,100 | £1,500 | £2,000 |
| Other Ticket Sales > Ticket Printing | £600 | £800 | £1,000 |
| Other Production Expenses | £1,200 | £1,500 | £2,000 |
| Total Direct Cost | £55,820 | £68,550 | £82,600 |
| Gross Surplus | £93,490 | £148,250 | £176,300 |
| Gross Surplus % | 62.61% | 68.38% | 68.10% |
| Expenses | |||
| Payroll | £16,500 | £30,000 | £35,000 |
| Sales and Marketing and Other Expenses | £19,000 | £29,700 | £34,800 |
| Depreciation | £0 | £120 | £120 |
| Operations Expenses 1 | £1,800 | £1,900 | £2,000 |
| Operations Expenses 2 | £600 | £1,000 | £1,300 |
| Operations Expenses 3 | £1,575 | £1,500 | £1,700 |
| Flood/Wind Insurance | £100 | £250 | £250 |
| Fire/Theft Alarm | £1,200 | £1,200 | £1,200 |
| Liability/Theft/Fire Insurance | £1,200 | £1,300 | £1,400 |
| Rent | £30,160 | £36,000 | £36,500 |
| Payroll Taxes | £2,475 | £4,500 | £5,250 |
| Other | £0 | £0 | £0 |
| Total Operating Expenses | £74,610 | £107,470 | £119,520 |
| Surplus Before Interest and Taxes | £18,880 | £40,780 | £56,780 |
| EBITDA | £18,880 | £40,900 | £56,900 |
| Interest Expense | £0 | £0 | £0 |
| Taxes Incurred | £0 | £0 | £0 |
| Net Surplus | £18,880 | £40,780 | £56,780 |
| Net Surplus/Funding | 12.64% | 18.81% | 21.93% |
8.4 Projected Cash Flow
Cash flow projections are critical to Cinematheque's success. The monthly cash flow is shown in the illustration, with one bar representing the Cash Flow per month, and the other the monthly Cash Balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix.
Notice the levels of Cash Balance grows to allow development of future projects.
Notice that the Net Cash Flow, is of course, typically low of non-profit organizations in the first year of such an expansion.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Funding | £137,365 | £199,456 | £238,188 |
| Cash from Receivables | £9,596 | £16,282 | £20,050 |
| Subtotal Cash from Operations | £146,961 | £215,738 | £258,238 |
| Additional Cash Received | |||
| Sales Tax, VAT, HST/GST Received | £0 | £0 | £0 |
| New Current Borrowing | £0 | £0 | £0 |
| New Other Liabilities (interest-free) | £0 | £0 | £0 |
| New Long-term Liabilities | £0 | £0 | £0 |
| Sales of Other Current Assets | £0 | £0 | £0 |
| Sales of Long-term Assets | £0 | £0 | £0 |
| New Investment Received | £0 | £0 | £0 |
| Subtotal Cash Received | £146,961 | £215,738 | £258,238 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | £16,500 | £30,000 | £35,000 |
| Bill Payments | £108,502 | £145,224 | £166,531 |
| Subtotal Spent on Operations | £125,002 | £175,224 | £201,531 |
| Additional Cash Spent | |||
| Sales Tax, VAT, HST/GST Paid Out | £0 | £0 | £0 |
| Principal Repayment of Current Borrowing | £0 | £0 | £0 |
| Other Liabilities Principal Repayment | £0 | £0 | £0 |
| Long-term Liabilities Principal Repayment | £0 | £0 | £0 |
| Purchase Other Current Assets | £0 | £0 | £0 |
| Purchase Long-term Assets | £0 | £0 | £0 |
| Dividends | £0 | £0 | £0 |
| Subtotal Cash Spent | £125,002 | £175,224 | £201,531 |
| Net Cash Flow | £21,960 | £40,514 | £56,707 |
| Cash Balance | £38,652 | £79,165 | £135,872 |
8.5 Projected Balance Sheet
The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly estimates are included in the appendix.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | £38,652 | £79,165 | £135,872 |
| Accounts Receivable | £2,349 | £3,410 | £4,072 |
| Inventory | £4,796 | £5,986 | £7,258 |
| Other Current Assets | £0 | £0 | £0 |
| Total Current Assets | £45,796 | £88,561 | £147,202 |
| Long-term Assets | |||
| Long-term Assets | £10,000 | £10,000 | £10,000 |
| Accumulated Depreciation | £0 | £120 | £240 |
| Total Long-term Assets | £10,000 | £9,880 | £9,760 |
| Total Assets | £55,796 | £98,441 | £156,962 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | £10,224 | £12,090 | £13,831 |
| Current Borrowing | £0 | £0 | £0 |
| Other Current Liabilities | £0 | £0 | £0 |
| Subtotal Current Liabilities | £10,224 | £12,090 | £13,831 |
| Long-term Liabilities | £0 | £0 | £0 |
| Total Liabilities | £10,224 | £12,090 | £13,831 |
| Paid-in Capital | £44,000 | £44,000 | £44,000 |
| Accumulated Surplus/Deficit | (£17,308) | £1,572 | £42,352 |
| Surplus/Deficit | £18,880 | £40,780 | £56,780 |
| Total Capital | £45,572 | £86,352 | £143,132 |
| Total Liabilities and Capital | £55,796 | £98,441 | £156,962 |
| Net Worth | £45,572 | £86,352 | £143,132 |