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Plan Outline
Nightclub Saloon Business Plan
The Nightclub
This sample business plan can be edited directly in Business Plan Pro software.
Financial Plan
The financial projections for this plan are presented in the tables and charts of the following subtopics.
7.1 Important Assumptions
The financial plan depends on important assumptions, most of which are illustrated in the following table.
The key underlying assumptions are:
- We assume a slow-growth economy of five percent the first year, and three percent thereafter, without major recession.
- We assume that we will grow as managers during the process, this growth will manifest itself as flat line expense growth over the five-year period, leading to increased annual cash flow.
- We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
- We assume continued popularity of nightclubs in America and the growing demand for high-energy themed and casual dining venues.
| General Assumptions | |||
| Year 1 | Year 2 | Year 3 | |
| Plan Month | 1 | 2 | 3 |
| Current Interest Rate | 10.00% | 10.00% | 10.00% |
| Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
| Tax Rate | 25.42% | 25.00% | 25.42% |
| Other | 0 | 0 | 0 |
7.2 Break-even Analysis
Example Break-Even Analysis formulas are presented in the text below. Business Plan Pro's interactive table and chart are still linked to the program spreadsheets.
Fixed Costs £X,xxx,xxx
Variable Costs £Xxx,xxx
Revenue (Estimated)£X,xxx,xxx
*S = Gross Sales
S = £ + [(£Xxx,xxx/ £X,xxx,xxx) x S]
S = £X,xxx,xxx + [(.xxxx) x S]
S = £X,xxx,xxx
Break Even Point = £X,xxx,xxx
Average Nightly Break Even Revenues – approximately £ X,xxx
Minimum Nightly Required Spending Per Person - £8.75 + £9.75 = £18.50
Minimum Nightly Required Incoming Traffic – Xxx
| Break-even Analysis | |
| Monthly Revenue Break-even | £140,703 |
| Assumptions: | |
| Average Percent Variable Cost | 16% |
| Estimated Monthly Fixed Cost | £117,995 |
7.3 Projected Profit and Loss
Projected profit and loss statement for the nightclub follows. Three years' annual totals are shown below. Monthly breakdown for year one appears in the appendix.
| Pro Forma Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Sales | £2,276,340 | £2,503,974 | £2,754,371 |
| Direct Cost of Sales | £367,380 | £404,119 | £444,531 |
| Other Production Expenses | £0 | £0 | £0 |
| Total Cost of Sales | £367,380 | £404,119 | £444,531 |
| Gross Margin | £1,908,960 | £2,099,855 | £2,309,840 |
| Gross Margin % | 83.86% | 83.86% | 83.86% |
| Expenses | |||
| Payroll | £391,936 | £411,528 | £432,104 |
| Sales and Marketing and Other Expenses | £411,576 | £430,574 | £451,284 |
| Depreciation | £0 | £0 | £0 |
| Fees--Credit Card | £10,764 | £10,982 | £11,202 |
| Fees--Professional | £7,500 | £7,650 | £7,803 |
| Taxes--Admission | £0 | £0 | £0 |
| Taxes--Excise | £391,536 | £399,368 | £407,355 |
| Taxes--Property | £0 | £0 | £0 |
| Leased Equipment | £2,496 | £2,550 | £2,601 |
| Utilities | £36,000 | £36,720 | £37,454 |
| Insurance | £22,500 | £22,950 | £23,409 |
| Rent | £75,000 | £75,000 | £76,500 |
| Payroll Taxes | £66,629 | £69,960 | £73,458 |
| Other | £0 | £0 | £0 |
| Total Operating Expenses | £1,415,937 | £1,467,282 | £1,523,170 |
| Profit Before Interest and Taxes | £493,023 | £632,573 | £786,670 |
| EBITDA | £493,023 | £632,573 | £786,670 |
| Interest Expense | £0 | £0 | £0 |
| Taxes Incurred | £121,122 | £158,143 | £199,945 |
| Net Profit | £371,901 | £474,430 | £586,725 |
| Net Profit/Sales | 16.34% | 18.95% | 21.30% |
7.4 Projected Cash Flow
The following chart illustrates our monthly cash flow for year one. The table shows three years of annual totals. First year monthly figures as presented in the appendix. The months are weighted according to the amount of weeks in that month in a typical calendar year.
| Pro Forma Cash Flow | |||
| Year 1 | Year 2 | Year 3 | |
| Cash Received | |||
| Cash from Operations | |||
| Cash Sales | £2,048,706 | £2,253,577 | £2,478,934 |
| Cash from Receivables | £205,193 | £248,153 | £272,969 |
| Subtotal Cash from Operations | £2,253,899 | £2,501,730 | £2,751,903 |
| 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 | £2,253,899 | £2,501,730 | £2,751,903 |
| Expenditures | Year 1 | Year 2 | Year 3 |
| Expenditures from Operations | |||
| Cash Spending | £391,936 | £411,528 | £432,104 |
| Bill Payments | £1,445,416 | £1,583,120 | £1,731,944 |
| Subtotal Spent on Operations | £1,837,352 | £1,994,648 | £2,164,048 |
| 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 | £1,837,352 | £1,994,648 | £2,164,048 |
| Net Cash Flow | £416,547 | £507,082 | £587,855 |
| Cash Balance | £491,547 | £998,629 | £1,586,484 |
7.5 Projected Balance Sheet
The following Balance Sheet indicates healthy growth of net worth and a strong financial position. The monthly estimates are included in the appendix.
| Pro Forma Balance Sheet | |||
| Year 1 | Year 2 | Year 3 | |
| Assets | |||
| Current Assets | |||
| Cash | £491,547 | £998,629 | £1,586,484 |
| Accounts Receivable | £22,441 | £24,685 | £27,153 |
| Inventory | £12,653 | £40,820 | £44,902 |
| Other Current Assets | £0 | £0 | £0 |
| Total Current Assets | £526,640 | £1,064,134 | £1,658,539 |
| Long-term Assets | |||
| Long-term Assets | £0 | £0 | £0 |
| Accumulated Depreciation | £0 | £0 | £0 |
| Total Long-term Assets | £0 | £0 | £0 |
| Total Assets | £526,640 | £1,064,134 | £1,658,539 |
| Liabilities and Capital | Year 1 | Year 2 | Year 3 |
| Current Liabilities | |||
| Accounts Payable | £72,239 | £135,303 | £142,983 |
| Current Borrowing | £0 | £0 | £0 |
| Other Current Liabilities | £0 | £0 | £0 |
| Subtotal Current Liabilities | £72,239 | £135,303 | £142,983 |
| Long-term Liabilities | £0 | £0 | £0 |
| Total Liabilities | £72,239 | £135,303 | £142,983 |
| Paid-in Capital | £567,750 | £567,750 | £567,750 |
| Retained Earnings | (£485,250) | (£113,349) | £361,081 |
| Earnings | £371,901 | £474,430 | £586,725 |
| Total Capital | £454,401 | £928,831 | £1,515,556 |
| Total Liabilities and Capital | £526,640 | £1,064,134 | £1,658,539 |
| Net Worth | £454,401 | £928,831 | £1,515,556 |
7.6 Business Ratios
The Ratios table below outlines important ratios for this Nightclub. The last column, Industry Profile, is derived from the Standard Industrial Classification (SIC) Index code 5813, for Drinking Places.
| Ratio Analysis | ||||
| Year 1 | Year 2 | Year 3 | Industry Profile | |
| Sales Growth | n.a. | 10.00% | 10.00% | 1.90% |
| Percent of Total Assets | ||||
| Accounts Receivable | 4.26% | 2.32% | 1.64% | 4.60% |
| Inventory | 2.40% | 3.84% | 2.71% | 3.10% |
| Other Current Assets | 0.00% | 0.00% | 0.00% | 44.60% |
| Total Current Assets | 100.00% | 100.00% | 100.00% | 52.30% |
| Long-term Assets | 0.00% | 0.00% | 0.00% | 47.70% |
| Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
| Current Liabilities | 13.72% | 12.71% | 8.62% | 28.20% |
| Long-term Liabilities | 0.00% | 0.00% | 0.00% | 23.10% |
| Total Liabilities | 13.72% | 12.71% | 8.62% | 51.30% |
| Net Worth | 86.28% | 87.29% | 91.38% | 48.70% |
| Percent of Sales | ||||
| Sales | 100.00% | 100.00% | 100.00% | 100.00% |
| Gross Margin | 83.86% | 83.86% | 83.86% | 42.30% |
| Selling, General & Administrative Expenses | 67.36% | 64.67% | 62.20% | 23.40% |
| Advertising Expenses | 8.79% | 8.39% | 8.01% | 2.40% |
| Profit Before Interest and Taxes | 21.66% | 25.26% | 28.56% | 2.80% |
| Main Ratios | ||||
| Current | 7.29 | 7.86 | 11.60 | 1.14 |
| Quick | 7.12 | 7.56 | 11.29 | 0.74 |
| Total Debt to Total Assets | 13.72% | 12.71% | 8.62% | 51.30% |
| Pre-tax Return on Net Worth | 108.50% | 68.10% | 51.91% | 5.20% |
| Pre-tax Return on Assets | 93.62% | 59.44% | 47.43% | 10.60% |
| Additional Ratios | Year 1 | Year 2 | Year 3 | |
| Net Profit Margin | 16.34% | 18.95% | 21.30% | n.a |
| Return on Equity | 81.84% | 51.08% | 38.71% | n.a |
| Activity Ratios | ||||
| Accounts Receivable Turnover | 10.14 | 10.14 | 10.14 | n.a |
| Collection Days | 59 | 34 | 34 | n.a |
| Inventory Turnover | 10.89 | 15.12 | 10.37 | n.a |
| Accounts Payable Turnover | 21.01 | 12.17 | 12.17 | n.a |
| Payment Days | 27 | 23 | 29 | n.a |
| Total Asset Turnover | 4.32 | 2.35 | 1.66 | n.a |
| Debt Ratios | ||||
| Debt to Net Worth | 0.16 | 0.15 | 0.09 | n.a |
| Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
| Liquidity Ratios | ||||
| Net Working Capital | £454,401 | £928,831 | £1,515,556 | n.a |
| Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
| Additional Ratios | ||||
| Assets to Sales | 0.23 | 0.42 | 0.60 | n.a |
| Current Debt/Total Assets | 14% | 13% | 9% | n.a |
| Acid Test | 6.80 | 7.38 | 11.10 | n.a |
| Sales/Net Worth | 5.01 | 2.70 | 1.82 | n.a |
| Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |