Proforma Cash Flow / Balance

Proforma Cash Flow / Balance Sheet / Income Statement

With any business there are certain risks associated with the operations of that business. The following financial projections reflect certain reasonable assumptions that are inherent in the operations of any business. The following reflects a worst case scenario. A great deal of research has gone into the analysis of the local market, competition, and market research as presented in the previous sections of this business plan. It is the opinion of the partnership that the business will operate under better conditions than those reflected in the following financial statements.

The following projections are based on several assumptions that must be taken into consideration. These assumptions reflect the previous knowledge and experience of the partners involved. The assumptions are as follows.

Boarding - The facility has the capacity to house 25 dogs at one time. However, it is unreasonable to assume that the facility will be at full capacity each and every day throughout the duration of these proforma statements. The boarding business is subject to seasonal highs and lows. People tend to board their dogs during the summer months and during the Christmas holidays when they go on extended trips. Business is expected to be at a steady 15 kennels full throughout the rest of the year. The worst case scenario reflected in the financials reflects and average of 15 cages full for 365 days a year. Year 2 reflects the kennel at full capacity as a product of increased advertising and general business growth. Year three also reflects full capacity. The minimum charged for services is 25.00. This is used as the basis of calculations. However, it is not known how many customers will prefer the value-added services. Therefore, boarding estimates are conservative and this portion of the business is expected to be much better than illustrated.

Grooming - Dog grooming services will stem from several different marketing channels, boarded dogs and outside activities. The pricing structure reflects different prices for different sizes of dogs. Past experience tells us that most dogs fall into the medium category. Therefore the financial projections will be based on the medium price range. It would be impossible to accurately predict the number of small, medium, and large dogs that will come into be groomed. The average groomer can groom 10 dogs a day, considering all of the other tasks that will have to be completed, such as cleaning the facility and assisting with training.

Breeding - Breeding is the most difficult of the three divisions to predict from a financial standpoint. Maintaining the health of top breeding stock requires proper attention to diet, prenatal veterinary care, and the coverage of any emergencies that might occur during the pregnancy and infancy of the puppies. It is recommended that *****es not be bred more than once a year to allow them time to recover. Let us assume that the facility will maintain 5 breeding *****es and one stud. Each ***** will whelp an average of 5 pups per year and that the sale of these pups will average $4,000 each. Breeding stock imported from Europe typically averages $10,000 U.S. per dog after import expenses and other costs.

These assumptions based on the experience and past knowledge of the staff as well as industry averages. It is felt that they represent realistic estimates. It is difficult to predict certain aspects of the financial data, such as the number of small dogs that will need grooming vs. some of the large dogs that will come in. Conservative estimates give room for error. This was the method chosen for the estimation of proforma statements.

Initial capital will come from $50,000 total form the partners. A small business loan of $495,000.00 will be used to finance the remainder of capital start up costs, plus one year's operating expenses. The term of the loan will be 10 years at an annual rate of 4.5%.

Pro-Forma Balance Sheet

ASSETS

Current Assets

Cash

Net accounts receivable

Inventory

Temporary investment

Prepaid expenses

Total Current Assets $316,691 $402,262 $424,276

Fixed Assets

Long-term investments

Land

Buildings (net of depreciation)

Plant & equipment (net)

Furniture & fixtures (net)

Total Net Fixed Assets $2,270 $2,323 $2,420

TOTAL ASSETS

LIABILITIES

Current Liabilities

Accounts payable

Short-term notes

Current portion of long-term notes

Accruals & other payables

Total Current Liabilities $298 $305 $312

Long-term Liabilities

Mortgage

Other long-term liabilities

Total Long-term Liabilities $1,340 $1,416 $1,505

SHAREHOLDERS' EQUITY

Capital stock

Retained earnings

Total Shareholders' Equity $317,323 $402,864 $424,879

TOTAL LIABILITIES & EQUITY

Proforma Income Statement

REVENUE

Gross sales

Less sales returns and allowances

Net Sales

COST OF SALES

Beginning inventory

Plus goods purchased / manufactured

Total Goods Available

Less ending inventory

Total Cost of Goods Sold

Gross Profit (Loss)

OPERATING EXPENSES

Selling

Salaries and wages

Commissions

Advertising

Depreciation

Total Selling Expenses

General/Administrative

Salaries and wages

Employee benefits

Payroll taxes

Insurance

Mortgage

Utilities

Depreciation & amortization

Office supplies