Financial Plan and Conclusion

Financial Plan and Conclusion
1. Financial Plan
A total of 39,500 will be committed in startup costs. The specific startup items have been described in table 1. Essentially, the flagship startup components are: lighting and studio/sound equipment, opening inventory, operating capital, fees and permits, and FFE. Lighting and studio/sound equipment are inclusive of 8 speakers, 2 amplifiers, 2 cd decks, 2 microphones, 2 switchers, 3 wash moving head lights, 1 LED DJ light, 5 DJ fog machines, 3 laser machines, 1 centerpiece effect DJ light, and other assorted lighting items. The opening inventory, on the other hand, is inclusive of all wine, beer, liquor, and other consumables (non-alcoholic drinks and beverages). The fees and permits component is inclusive of all fees we shall incur such as attorney, consultant, and accountant fees. Lastly, FFEs include, but they are not limited to, foldable chairs and tables, coolers, liquor racks, wine glasses, beer cups, etc.
In essence, while a total of $17,000 will be needed to settle salaries for 8 employees, space rent will take a maximum of $19,000 within the three month period. These figures, in addition to the initial capital outlay, bring the total amount of cash that will be needed for the first three months to $75,500.
The startup will be financed through use of equity financing. Equity financing has been selected because it is relatively safer than debt financing. It is important to note that unlike equity financing, Longnecker, Petty, and Palich (2016) are of the opinion that debt financing carries with it some significant risk, In the words of the authors, “if the firm fails to earn profits, creditors still insist on being repaid, regardless of the firm’s actual performance” (Longnecker, Petty, and Palich, 2016, p. 322). This is unlike is the case with equity financing which is provided by shareholders and, thus, may not have to be repaid back if the business posts dismal returns. This being a startup, and with no track record, equity financing will be the most viable financing during the first three months of the business.
The business plan will be implemented within a span of one year. Continuous assessments will be done every three months to ensure that the medium-term plan remains on course. Towards this end, corrective action will be instituted if deviations are identified. This is especially important given that according to Coyle (2000), most businesses do not live to celebrate their first birthday.
2. Conclusion
In the future, the company intends to open additional branches in several States. It is hoped that New York will serve as a launching pad for the company’s operation countrywide. The next State the company will take into consideration after New York is Las Vegas. This is particularly the case given that Las Vegas is known for its vibrant night life and amazing fun activities. In essence, the business model YOLO Concepts has embraced is relatively new. This effectively means that the company is likely to be a ‘first mover’ in this particular space if it is successful. There are various first mover advantages the company could reap if it manages to wither the various challenges associated with startups within the first year and succeeds in its expansionary plans.
It is also important to note that the company intends to rollout numerous future products in an attempt to ensure that customers find excitement in new experiences and formats. In that regard, therefore, various theme nights will be incorporated. These, as it has been pointed out elsewhere in this plan, include but they are not limited to, Arabian Night, Lemons and Tequila Party, etc. YOLO Concepts intends to be a premier ‘nightclub on the move’ entertainment company that is committed to not only attracting new clientele but also retaining the existing customers.
This plan will be implemented by way of taking good care of the interests of all the stakeholders – i.e. employees, suppliers, customers, the regulatory agencies, shareholders, and other partners (such as those from whom we rent space). When all stakeholders are satisfied, then the business will be more likely to succeed due to the level of commitment each of these stakeholders will demonstrate in seeking to ensure that the business succeeds. It is also important to note that in addition to strictly adhering to timelines, with regard to the implementation of various objectives, effort will be made to embrace the latest technology so as to not only maintain a competitive advantage, but also reduce operational costs.
References
Coyle, B. (2000). Capital Structuring. Chicago: Glenlake Publishing.
Longnecker, J.G., Petty, J.W., & Palich, L.E. (2016). Small Business Management: Launching & Growing Entrepreneurial Ventures (18th ed.). Mason, OH: Cengage Learning.
Appendices
Particulars
Figures in in $
1. Lighting and Audio/Sound Equipment
14,000
2. Opening Inventory
8,000
3. Operating Capital
12,000
4. Fees and Permits
2,000
5. FFE (Furniture, Fixtures, and other Equipment)
3,500
Startup Costs
Capital Expenditures
Table 1