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Day Spa Business Plan
My Business Venture is the Day Spa and my financial plan is to initiate, maintain, and improve the factors that will increase and stabilize my cash flow. My business will implement effective cost management to increase the business net worth in the first year and in the foreseeable future. The paper presents the pro-formal balance sheet based on some important assumptions. The current assets will be:
My financial plan depends on some important assumptions listed as follows:
The plan assumes that the U.S. economy will continue to improve and the economy will not slide back into a major recession.
It is also assumed that the tax rates and interest rates will be based on the conservative rate.
The current average interest rate will be 6% and the long-term interest rate will be 5.25%.
It is also assumed that the tax rate will be 34%
The venture will achieve a success by recording sales growth.
It is also assumed that through the marketing strategy, the company will record higher sales. (Dul, & Hak 2008).
The Table 1 provides general assumption by which my Day Spa Business Venture is based.
Table 1: General Assumptions
Year 1
Year 2
Year 3
Year 4
Year 5
Plan Month
Current Interest Rate
6.00%
6.00%
6.00%
6.00%
6.00%
Long-term Interest Rate
5.25%
5.25%
5.25%
5.25%
5.25%
Tax Rate
34%
34%
34%
34%
Cash,
Accounts Receivable,
Inventory, and Other Current Assets.
The overall current assets will be $266,779. The company liabilities are the obligation that the company will need to settle. The company current liabilities are accounts payable and current borrowing. The overall current liabilities will be $107,790. Similarly, the company does not have long-term liabilities at present, and the company total capital is $152,334, which is equivalent to the company's net worth.
The data in the statements of income reveals that the company net sales is $845,590 at the end of 2013 fiscal year, and the costs of goods sold are $318,343, making the company to record gross profits of $527,249. The company total operating expenses are $167,216. Based on the company gross profits minus the operating expenses and taxation, the company net income for 2013 fiscal year will be $346,504 revealing that my business venture will be a viable business.
The company budget is also presented in Table 3 and the budget is prepared based on the following assumption:
The U.S. economy…
References
Dul, J. & Hak, T. (2008). Case Study Methodology in Business Research. First Edition, Charon Tec Ltd., Great Britain.
Finch, B. (2007). How to Write a Business Plan. Second Edition, MPG Books Ltd. press, Great Britain.
Palepu, K.G. Healy, P.M, Bernard, V.L. (2004).Business Analysis & Valuation: Using Financial Statements. Third Edition, Mason, Ohio.
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