20% Discount on Business Plan Pro Premier Edition
Click here to buy now or call 0845 351 9924
 

Wi-Fi Kiosks Business Plan

Stroll Net

This sample business plan can be edited directly in Business Plan Pro software.

previous
next

Financial Plan

Sales: Stroll Net is basing their projected Internet usage sales on the financial snapshot information provided to them by Supplier One, Inc. Internet usage was estimated by calculating the average number of minutes each customer will spend accessing the Internet and then generating a conservative estimate as to how many transactions will be made per day.

Cost of Goods Sold: The cost of goods sold was determined by the "retail profit analysis" we obtained from Supplier One, Inc. The cost of prepaid calling cards is 20% of the selling price. The cost of Internet access is £50 per month, paid to Supplier Two for networking fees. The cost of terminal placement is 20% of total internet access sales.

Salaries Expense: The founders of Stroll Net, Cam Piotr and Bob Green, will receive a salary of £24,000 in year one, £26,400 in year two, and £29,040 in year three.

Payroll Expense: Stroll Net intends to hire eight full-time employees at £10.00/hour and a full-time technician at £12.00/hour. The total cost of employing nine people at these rates for the first year is £14,720/month.

Rent Expense: Stroll Net is looking to purchase a 2200 square foot facility at £104.74/sq. foot.

Utilities Expense: Stroll Net is responsible for the payment of utilities including electric, water and garbage disposal. The basic monthly service charge for utilities expense will be £168.04. The phone bill will generated by five phone lines; one will be dedicated to a modem and four for business purposes. The basic monthly service charge for each line provided by Bellsouth is £59.95/month. Therefore, the total cost associated with the five phone lines is estimated at £299.75/month.

Marketing Expense: Stroll Net will allocate £50,000 for promotional expenses at the time of start-up. These dollars will be used for advertising on television, radio, the Internet and the local newspapers in order to build consumer awareness. For additional information, please refer to section 5.0 of the business plan.

Insurance Expense: Stroll Net has allocated £1,500 for insurance for the first year. As revenue increases in the second and third year of business, Stroll Net intends to invest more money for additional insurance coverage.

Legal and Consulting Fees: The cost of obtaining legal consultation in order to draw up the paper work necessary for client contracts is £1,500.

Depreciation: In depreciating our capital equipment, we used the Modified Accelerated Cost Recovery Method. We depreciated our terminals over a three-year time period.

Taxes: Stroll Net is an LLC and, as an entity, it is not taxed. However, there is a 10% payroll burden.

 

7.1 Important Assumptions

Basic assumptions are presented in the table below.

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 11.50% 10.00% 10.00%
Tax Rate 25.00% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

Break-even data is presented in the chart and table below. With estimated monthly operating expenses at approximately £37,400, including everything from payroll to rent and insurance to maintenance of the kiosks, and average direct costs at roughly 90¢ for every £7.46 of sales, we reach break-even at approximately 5,700 sales per month. We project reaching the break-even point in the seventh month.

Break-even Analysis
Monthly Units Break-even 5,166
Monthly Revenue Break-even £38,557
Assumptions:
Average Per-Unit Revenue £7.46
Average Per-Unit Variable Cost £0.90
Estimated Monthly Fixed Cost £33,925

7.3 Projected Profit and Loss

The following table contains our projections for profit and loss data. We anticipate a net profit of approximately £134,300 in the first year, as the Stroll Net idea catches on and sales increase. With a net profit margin of 18%, these projections are well within a reasonable range.

 

 

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales £727,071 £908,806 £1,136,007
Direct Cost of Sales £87,343 £109,176 £136,470
Other £0 £0 £0
Total Cost of Sales £87,343 £109,176 £136,470
Gross Margin £639,728 £799,630 £999,537
Gross Margin % 87.99% 87.99% 87.99%
Expenses
Payroll £284,498 £309,440 £397,952
Sales and Marketing and Other Expenses £53,598 £59,174 £68,279
Depreciation £44,676 £45,000 £45,000
Utilities £5,613 £6,174 £6,792
Insurance £1,500 £6,000 £7,500
Maintenence/Repairs £3,500 £4,200 £5,800
Travel £13,717 £24,652 £29,961
Payroll Taxes £0 £0 £0
Total Operating Expenses £407,102 £454,640 £561,284
Profit Before Interest and Taxes £232,626 £344,990 £438,253
EBITDA £277,302 £389,990 £483,253
Interest Expense £10,877 £8,500 £7,500
Taxes Incurred £55,437 £84,122 £109,483
Net Profit £166,311 £252,367 £321,270
Net Profit/Sales 22.87% 27.77% 28.28%

7.4 Projected Cash Flow

Cash flow data for the first three years is presented in the chart and table below. The table shows anticipated repayment of the long-term loan, as well as projected dividends which will be paid to investors in years two and three. In year three, we will purchase two more paykiosks terminals for new locations. The more detailed monthly cash flow data can be found in the appendix.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales £727,071 £908,806 £1,136,007
Subtotal Cash from Operations £727,071 £908,806 £1,136,007
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 £727,071 £908,806 £1,136,007
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending £284,498 £309,440 £397,952
Bill Payments £184,060 £327,202 £366,049
Subtotal Spent on Operations £468,558 £636,642 £764,001
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 £10,000 £10,000 £10,000
Purchase Other Current Assets £0 £0 £0
Purchase Long-term Assets £0 £0 £40,000
Dividends £0 £100,000 £200,000
Subtotal Cash Spent £478,558 £746,642 £1,014,001
Net Cash Flow £248,513 £162,163 £122,006
Cash Balance £308,513 £470,676 £592,682

7.5 Projected Balance Sheet

Our projected balance sheet is presented in the table below. As sales increase, and we repay our long-term loan, the net worth of the company will increase from £281,710 at start-up to over £610,000 by year three.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash £308,513 £470,676 £592,682
Other Current Assets £11,400 £11,400 £11,400
Total Current Assets £319,913 £482,076 £604,082
Long-term Assets
Long-term Assets £312,810 £312,810 £352,810
Accumulated Depreciation £44,676 £89,676 £134,676
Total Long-term Assets £268,134 £223,134 £218,134
Total Assets £588,047 £705,210 £822,216
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable £50,026 £24,822 £30,558
Current Borrowing £0 £0 £0
Other Current Liabilities £0 £0 £0
Subtotal Current Liabilities £50,026 £24,822 £30,558
Long-term Liabilities £90,000 £80,000 £70,000
Total Liabilities £140,026 £104,822 £100,558
Paid-in Capital £310,171 £310,171 £310,171
Retained Earnings (£28,461) £37,850 £90,217
Earnings £166,311 £252,367 £321,270
Total Capital £448,021 £600,388 £721,658
Total Liabilities and Capital £588,047 £705,210 £822,216
Net Worth £448,021 £600,388 £721,658

7.6 Business Ratios

The following table outlines some of the more important ratios from the Data communications services industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 4899.9901.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 25.00% 25.00% 1.63%
Percent of Total Assets
Other Current Assets 1.94% 1.62% 1.39% 53.65%
Total Current Assets 54.40% 68.36% 73.47% 74.50%
Long-term Assets 45.60% 31.64% 26.53% 25.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.51% 3.52% 3.72% 24.78%
Long-term Liabilities 15.30% 11.34% 8.51% 18.28%
Total Liabilities 23.81% 14.86% 12.23% 43.06%
Net Worth 76.19% 85.14% 87.77% 56.94%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 87.99% 87.99% 87.99% 52.82%
Selling, General & Administrative Expenses 73.78% 60.22% 59.71% 30.92%
Advertising Expenses 6.14% 4.95% 3.96% 0.82%
Profit Before Interest and Taxes 31.99% 37.96% 38.58% 6.18%
Main Ratios
Current 6.39 19.42 19.77 1.84
Quick 6.39 19.42 19.77 1.60
Total Debt to Total Assets 23.81% 14.86% 12.23% 54.39%
Pre-tax Return on Net Worth 49.50% 56.05% 59.69% 8.03%
Pre-tax Return on Assets 37.71% 47.71% 52.39% 17.61%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 22.87% 27.77% 28.28% n.a
Return on Equity 37.12% 42.03% 44.52% n.a
Activity Ratios
Accounts Payable Turnover 4.63 12.17 12.17 n.a
Payment Days 27 45 27 n.a
Total Asset Turnover 1.24 1.29 1.38 n.a
Debt Ratios
Debt to Net Worth 0.31 0.17 0.14 n.a
Current Liab. to Liab. 0.36 0.24 0.30 n.a
Liquidity Ratios
Net Working Capital £269,887 £457,254 £573,524 n.a
Interest Coverage 21.39 40.59 58.43 n.a
Additional Ratios
Assets to Sales 0.81 0.78 0.72 n.a
Current Debt/Total Assets 9% 4% 4% n.a
Acid Test 6.39 19.42 19.77 n.a
Sales/Net Worth 1.62 1.51 1.57 n.a
Dividend Payout 0.00 0.40 0.62 n.a
previous
next
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 11.50% 10.00% 10.00%
Tax Rate 25.00% 25.00% 25.42%
Other 0 0 0
Break-even Analysis
Monthly Units Break-even 5,166
Monthly Revenue Break-even £38,557
Assumptions:
Average Per-Unit Revenue £7.46
Average Per-Unit Variable Cost £0.90
Estimated Monthly Fixed Cost £33,925
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales £727,071 £908,806 £1,136,007
Direct Cost of Sales £87,343 £109,176 £136,470
Other £0 £0 £0
Total Cost of Sales £87,343 £109,176 £136,470
Gross Margin £639,728 £799,630 £999,537
Gross Margin % 87.99% 87.99% 87.99%
Expenses
Payroll £284,498 £309,440 £397,952
Sales and Marketing and Other Expenses £53,598 £59,174 £68,279
Depreciation £44,676 £45,000 £45,000
Utilities £5,613 £6,174 £6,792
Insurance £1,500 £6,000 £7,500
Maintenence/Repairs £3,500 £4,200 £5,800
Travel £13,717 £24,652 £29,961
Payroll Taxes £0 £0 £0
Total Operating Expenses £407,102 £454,640 £561,284
Profit Before Interest and Taxes £232,626 £344,990 £438,253
EBITDA £277,302 £389,990 £483,253
Interest Expense £10,877 £8,500 £7,500
Taxes Incurred £55,437 £84,122 £109,483
Net Profit £166,311 £252,367 £321,270
Net Profit/Sales 22.87% 27.77% 28.28%
Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales £727,071 £908,806 £1,136,007
Subtotal Cash from Operations £727,071 £908,806 £1,136,007
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 £727,071 £908,806 £1,136,007
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending £284,498 £309,440 £397,952
Bill Payments £184,060 £327,202 £366,049
Subtotal Spent on Operations £468,558 £636,642 £764,001
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 £10,000 £10,000 £10,000
Purchase Other Current Assets £0 £0 £0
Purchase Long-term Assets £0 £0 £40,000
Dividends £0 £100,000 £200,000
Subtotal Cash Spent £478,558 £746,642 £1,014,001
Net Cash Flow £248,513 £162,163 £122,006
Cash Balance £308,513 £470,676 £592,682
Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash £308,513 £470,676 £592,682
Other Current Assets £11,400 £11,400 £11,400
Total Current Assets £319,913 £482,076 £604,082
Long-term Assets
Long-term Assets £312,810 £312,810 £352,810
Accumulated Depreciation £44,676 £89,676 £134,676
Total Long-term Assets £268,134 £223,134 £218,134
Total Assets £588,047 £705,210 £822,216
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable £50,026 £24,822 £30,558
Current Borrowing £0 £0 £0
Other Current Liabilities £0 £0 £0
Subtotal Current Liabilities £50,026 £24,822 £30,558
Long-term Liabilities £90,000 £80,000 £70,000
Total Liabilities £140,026 £104,822 £100,558
Paid-in Capital £310,171 £310,171 £310,171
Retained Earnings (£28,461) £37,850 £90,217
Earnings £166,311 £252,367 £321,270
Total Capital £448,021 £600,388 £721,658
Total Liabilities and Capital £588,047 £705,210 £822,216
Net Worth £448,021 £600,388 £721,658
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 25.00% 25.00% 1.63%
Percent of Total Assets
Other Current Assets 1.94% 1.62% 1.39% 53.65%
Total Current Assets 54.40% 68.36% 73.47% 74.50%
Long-term Assets 45.60% 31.64% 26.53% 25.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 8.51% 3.52% 3.72% 24.78%
Long-term Liabilities 15.30% 11.34% 8.51% 18.28%
Total Liabilities 23.81% 14.86% 12.23% 43.06%
Net Worth 76.19% 85.14% 87.77% 56.94%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 87.99% 87.99% 87.99% 52.82%
Selling, General & Administrative Expenses 73.78% 60.22% 59.71% 30.92%
Advertising Expenses 6.14% 4.95% 3.96% 0.82%
Profit Before Interest and Taxes 31.99% 37.96% 38.58% 6.18%
Main Ratios
Current 6.39 19.42 19.77 1.84
Quick 6.39 19.42 19.77 1.60
Total Debt to Total Assets 23.81% 14.86% 12.23% 54.39%
Pre-tax Return on Net Worth 49.50% 56.05% 59.69% 8.03%
Pre-tax Return on Assets 37.71% 47.71% 52.39% 17.61%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 22.87% 27.77% 28.28% n.a
Return on Equity 37.12% 42.03% 44.52% n.a
Activity Ratios
Accounts Payable Turnover 4.63 12.17 12.17 n.a
Payment Days 27 45 27 n.a
Total Asset Turnover 1.24 1.29 1.38 n.a
Debt Ratios
Debt to Net Worth 0.31 0.17 0.14 n.a
Current Liab. to Liab. 0.36 0.24 0.30 n.a
Liquidity Ratios
Net Working Capital £269,887 £457,254 £573,524 n.a
Interest Coverage 21.39 40.59 58.43 n.a
Additional Ratios
Assets to Sales 0.81 0.78 0.72 n.a
Current Debt/Total Assets 9% 4% 4% n.a
Acid Test 6.39 19.42 19.77 n.a
Sales/Net Worth 1.62 1.51 1.57 n.a
Dividend Payout 0.00 0.40 0.62 n.a