Introduction
The growth in the demand for quality sporting services has increased in the country. People are looking for better management of sporting services across the globe. It is hence crucial to come up with a clear plan on how to introduce a well-organized business for purchasing and operating a professional sports team since the field offers a wide range of opportunities. Purchasing and operating a sports team calls for effective planning, allocation of resources, financial management, quality marketing and development of a clear plan of exit in case of failure of the plans. There are also different risks associated with the purchasing and operation of sports teams, such as financial loss, economic changes, and exchange rates changes in the market. The report, in this case, entails a well-crafted business plan for purchasing and operating a football team. The focus on football is due to growth in the demand and culture of games. Football is one of the well-paying sports across the globe, and various firms are making profits due to sound management. The name of the firm, in this case, will be known as Smart Sports Company and will be focusing on purchasing and operating football clubs in the US. The goal is to ensure profitability and maximization of the current opportunities in the sports industry as outlined in the report below.
The Overview of Smart Sports Company
Smart Sports Company is a newly formed company that will be focusing on the purchasing and operation of football clubs. The company will be located at Wall Street, New York, US and will be operated from a physical office. There will be a team of management with sports experience, as well as the running of professional activities related to games promotion, purchase of clubs in football, as well as working with related stakeholders. The capital structure of the company will be a composition of debt, and equity and there will be a clear marketing plan to ensure return on investment is attained within the first three years. The company will be involved in the analysis of the trends of the clubs and making moves to purchase them. There will be a strong model of branding to ensure that there is sound control of the market. The business plan will also include the redesigning and upgrading of the marketing methods, as well as the relocation of some of the bought clubs to ensure that they fit the market structure. The main source of the revenues will be the sale of tickets and promotional activities. There will also be optimization on inventory purchasing and management to ensure that the business is profitable. Other features will include risk management related to the firm and growth strategy of the company.
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Marketing Model of the Club
The marketing of Smart Sports Company will entail a combination of approaches to increase the awareness to the public, convince the target customers of the club, and remind them about the services, as well as ways of ensuring that there is a success of operations. It will also entail the application of various approaches of promotion such as advertisements, offering free services, publicity, and public relations, among others. One of the ways of ensuring that the company will be successful is through the use of the marketing mix ( Honig, Karlsson, 2014). Marketing mix entails the combination of price, place, products, and promotion on matters of marketing as outlined below.
Product as a Factor of Marketing Mix
The products which will be offered by the company include sporting services in football. There will be a training of the footballers, shows for the events, such as games and competition, as well as the purchase of the clubs with the view of offering quality management for the market. Others products include printing of sporting apparels for the purchased clubs. The sporting materials will be sold to any other teams through an ordering system. The leading source of income for the company will be sporting events depending on the games and competitions organized by the company. Still, the company will work closely with other related stakeholders to ensure that the products reach a wide number of customers in the market. There will be product reviews and checks to ensure that the quality meets the demands in the market.
Place as a Factor of Marketing Mix
The place as a factor of marketing mix will consist of the avenues and ways through which the customers and the consumers will access the services. There will be two main ways of obtaining the company products, which include real shows, the playgrounds, and fields. The playgrounds will offer live matches and shows; hence the customers will be in a position to enter after paying for the tickets. The other avenue is the online market ( Zimmerer, and Scarboroug, 2015). There will be live streaming of the games and the events in which the customers will have to subscribe to watch the games. Online shows will be convenient for those who lack physical access due to time or location.
Price as a Factor of Marketing Mix
The pricing model of the products of Smart Sports Company will consist of two approaches. One of the pricing models is the use of a premium pricing model and group pricing. Other possible ways include standard pricing and offers for the games and the shows. The premium pricing model will be applied for the special customer who needs quality game treatment (Abrams, 2013). The prices for the shows will be relatively higher than the standards. The goal is to ensure that there is an avenue of maximizing on the returns for the club. The group pricing will be used for bookings of game shows for organized people who come as a group. The goal is to ensure that there is the creation of a wide array of services.
Promotion as a Factor of Marketing Mix
Promotions entail ways in which the company ensures that there is effective communication to the target market. There will be various forms of advertisement in the company, such as the use of audio- visual approaches, online promotion, discounts, as well as the use of publicity and billboards. The said audio-visual promos would entail television and radio ads. Messages will also be created with the view of promoting the club services effectively. On the other hand, online promotions will involve the use of social media and websites. Well-structured messages combining texts and images will also be used to promote club activities.
Revenue Sources
The leading source of income for the company will be sporting events, mainly depending on the games and competitions organized by the company. Others products and services include the printing of sporting apparels for the purchased clubs. The sporting materials will be sold to any other teams through the ordering system.
Taxation and Legal Structure
The company will be a limited public entity hence will be subjected to 30% taxation in a year. There will be the filing of returns after the financial period to ensure compliance with the regulations of the companies. The company will also provide that there is adherence to the employee protection and training of the workers to reduce cases of legal suits. Other features include payment of the rates and hiring attorneys to comply with the regulation in the industry
Market Analysis
| Market Analysis | |||||||
|
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|||
| Potential Customers |
Growth |
CAGR |
|||||
| Children 2-5 years old |
8% |
25,000 |
27,000 |
29,160 |
31,493 |
34,012 |
8.00% |
| Children 6-8 years old |
10% |
20,000 |
22,000 |
24,200 |
26,620 |
29,282 |
10.00% |
| Children 9-11 years old |
10% |
6,000 |
6,600 |
7,260 |
7,986 |
8,785 |
10.00% |
| Children 12-14 years old |
8% |
14,000 |
15,120 |
16,330 |
17,636 |
19,047 |
8.00% |
| Total |
8.81% |
65,000 |
70,720 |
76,950 |
83,735 |
91,126 |
8.81% |
Pro Forma Cash Flow
| Pro Forma Cash Flow | |||
|
Year 1 |
Year 2 |
Year 3 |
|
| Cash Received | |||
| Cash from Operations | |||
| Cash Funding |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| Subtotal Cash from Operations |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| 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 |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| Expenditures |
Year 1 |
Year 2 |
Year 3 |
| Expenditures from Operations | |||
| Cash Spending |
$330,000 |
$361,000 |
$395,000 |
| Bill Payments |
$1,243,453 |
$1,450,199 |
$1,607,245 |
| Subtotal Spent on Operations |
$1,573,453 |
$1,811,199 |
$2,002,245 |
| 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 |
$1,573,453 |
$1,811,199 |
$2,002,245 |
| Net Cash Flow |
$66,548 |
$68,801 |
$97,755 |
| Cash Balance |
$334,547 |
$403,349 |
$501,104 |
Financial Ratios
The three financial ratios that will be used in the measurement of the success of the company include current ratios, profitability ratios and leverage ratios. In the first case, the current ratio will entail the measurement of the value of the current assets compared to the current liabilities. The goal will be to establish the ability to handle the club’s obligations. The second ratio will be the use of the debt-to-equity ratio that will measure the value of the creditors’ investment concerning the shareholders’ holdings. Lastly, there will be the use of net profit margins to check on the value of the profitability of the company in the course of operations.
Financial Risks
In business, there are different types of financial risks. Risks are simply the chances of deviation from the expected outcome. About Smart Sports Company, the main risks include market, credit, liquidity, and operational risks. The market risk entails the changes in the market within a given industry. For instance, the changes in the demand for football games would lead to losses in the company. Still, the decline in the views would lead to losses in the company hence a risk.
Credit risk is associated with the losses due to the sales made in the form of credit to the customers. It also entails the value of money from the investors in the company. High levels of risks will lead to the loss of the internal control of the company. There will be controls on the value of money issued as a credit to the customers to curb the risk (Karlsson, and Honig, 2009). On the other hand, liquidity risk is a type of financial risk associated with the management of the capital and resources of the company. The process of handling the current assets and current liabilities is hence essential. The last type of risks is the operation risk, which entails the cash flow management of the company. It occurs when there is a limited amount of money for paying the bills, as well as handling the internal affairs. The company management will ensure that the above risks are covered to avoid losses.
Risk Mitigation
The control of the risks in the company will be done in several ways. In the case of market risks, the company will invest in research and development, as well as insurance policy covers. The goal will be to ensure that there is a financial cushion in case of losses. The operational and liquidity risks will be handled through effective management of the cash flows. The cash flows will be managed in such a way that there is no allowance for massive outflow of the resources. There will be balance on credit given and the amount of loans accessed (Karlsson, and Honig, 2009). Then lastly, the credit risk will be managed through the control of the loans, payment, and advances given to the outside parties. The objective will be to ensure that there is a minimized loss of resources.
Investment Strategy
The company will float shares with a view of encouraging public investment. There should be a combination of stocks, which will include preference shares and ordinary shares in the market. The shares will be priced at discounts to ensure that there is an attraction of investors (Abrams, 2013). For example, the share price of $100 will be priced at $90 with a view of encouraging the investors to subscribe. Shares are effective methods of raising capital since they do not have complicated ways of issuing in the market.
The Exit Strategy of the Company
The exit strategy of the company will entail three approaches. One of the methods will be through merging up with other similar businesses to ensure that there are minimal losses in the course of liquidation. The process will entail the choice of the right company to merge with and hence improve the value and the overall market performance. The second exit strategy method will be through liquidation. Liquidation will entail the analysis of the debts of the firm, the total value, and the capital structure and then selling the assets with the aim of paying off the creditors and shareholders. The last method of exit method is via acquisition. The acquisition is a method with which a company is bought by another and then gets transformed. The technique is crucial when there is a financial crisis. The choice of the above approaches is based on the nature of the situation and the prevailing circumstances of the market.
Financial Statements
Cash Flow (Zimmerer & Scarboroug, 2016)
| Pro Forma Cash Flow | |||
|
Year 1 |
Year 2 |
Year 3 |
|
| Cash Received | |||
| Cash from Operations | |||
| Cash Funding |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| Subtotal Cash from Operations |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| 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 |
$1,640,000 |
$1,880,000 |
$2,100,000 |
| Expenditures |
Year 1 |
Year 2 |
Year 3 |
| Expenditures from Operations | |||
| Cash Spending |
$330,000 |
$361,000 |
$395,000 |
| Bill Payments |
$1,243,453 |
$1,450,199 |
$1,607,245 |
| Subtotal Spent on Operations |
$1,573,453 |
$1,811,199 |
$2,002,245 |
| 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 |
$1,573,453 |
$1,811,199 |
$2,002,245 |
| Net Cash Flow |
$66,548 |
$68,801 |
$97,755 |
| Cash Balance |
$334,547 |
$403,349 |
$501,104 |
Projected Balance Sheet (Zimmerer & Scarboroug, 2016)
| Pro Forma Balance Sheet | |||
|
Year 1 |
Year 2 |
Year 3 |
|
| Assets | |||
| Current Assets | |||
| Cash |
$334,547 |
$403,349 |
$501,104 |
| Other Current Assets |
$50,000 |
$50,000 |
$50,000 |
| Total Current Assets |
$384,547 |
$453,349 |
$551,104 |
| Long-term Assets | |||
| Long-term Assets |
$200,000 |
$200,000 |
$200,000 |
| Accumulated Depreciation |
$0 |
$0 |
$0 |
| Total Long-term Assets |
$200,000 |
$200,000 |
$200,000 |
| Total Assets |
$584,547 |
$653,349 |
$751,104 |
| Liabilities and Capital |
Year 1 |
Year 2 |
Year 3 |
| Current Liabilities | |||
| Accounts Payable |
$112,448 |
$119,799 |
$133,204 |
| Current Borrowing |
$0 |
$0 |
$0 |
| Other Current Liabilities |
$0 |
$0 |
$0 |
| Subtotal Current Liabilities |
$112,448 |
$119,799 |
$133,204 |
| Long-term Liabilities |
$0 |
$0 |
$0 |
| Total Liabilities |
$112,448 |
$119,799 |
$133,204 |
| Paid-in Capital |
$860,000 |
$860,000 |
$860,000 |
| Accumulated Surplus/Deficit |
($342,000) |
($387,900) |
($326,450) |
| Surplus/Deficit |
($45,900) |
$61,450 |
$84,350 |
| Total Capital |
$472,100 |
$533,550 |
$617,900 |
| Total Liabilities and Capital |
$584,548 |
$653,349 |
$751,104 |
| Net Worth |
$472,100 |
$533,550 |
$617,900 |
Standard Ratios (Zimmerer & Scarboroug, 2016)
| Ratio Analysis | ||||
|
Year 1 |
Year 2 |
Year 3 |
Industry Profile |
|
| Funding Growth |
n.a. |
14.63% |
11.70% |
4.07% |
| Percent of Total Assets | ||||
| Other Current Assets |
8.55% |
7.65% |
6.66% |
33.94% |
| Total Current Assets |
65.79% |
69.39% |
73.37% |
42.54% |
| Long-term Assets |
34.21% |
30.61% |
26.63% |
57.46% |
| Total Assets |
100.00% |
100.00% |
100.00% |
100.00% |
| Current Liabilities |
19.24% |
18.34% |
17.73% |
24.50% |
| Long-term Liabilities |
0.00% |
0.00% |
0.00% |
23.36% |
| Total Liabilities |
19.24% |
18.34% |
17.73% |
47.86% |
| Net Worth |
80.76% |
81.66% |
82.27% |
52.14% |
| Percent of Funding | ||||
| Funding |
100.00% |
100.00% |
100.00% |
100.00% |
| Gross Surplus |
98.54% |
98.56% |
98.57% |
100.00% |
| Selling, General & Administrative Expenses |
101.34% |
95.30% |
94.55% |
68.43% |
| Advertising Expenses |
2.20% |
2.13% |
2.14% |
3.66% |
| Surplus Before Interest and Taxes |
-2.80% |
3.27% |
4.02% |
2.96% |
| Main Ratios | ||||
| Current |
3.42 |
3.78 |
4.14 |
1.13 |
| Quick |
3.42 |
3.78 |
4.14 |
0.70 |
| Total Debt to Total Assets |
19.24% |
18.34% |
17.73% |
56.09% |
| Pre-tax Return on Net Worth |
-9.72% |
11.52% |
13.65% |
4.33% |
| Pre-tax Return on Assets |
-7.85% |
9.41% |
11.23% |
9.87% |
| Additional Ratios |
Year 1 |
Year 2 |
Year 3 |
|
| Net Surplus Margin |
-2.80% |
3.27% |
4.02% |
n.a |
| Return on Equity |
-9.72% |
11.52% |
13.65% |
n.a |
| Activity Ratios | ||||
| Accounts Payable Turnover |
12.06 |
12.17 |
12.17 |
n.a |
| Payment Days |
27 |
29 |
28 |
n.a |
| Total Asset Turnover |
2.81 |
2.88 |
2.80 |
n.a |
| Debt Ratios | ||||
| Debt to Net Worth |
0.24 |
0.22 |
0.22 |
n.a |
| Current Liab. to Liab. |
1.00 |
1.00 |
1.00 |
n.a |
| Liquidity Ratios | ||||
| Net Working Capital |
$272,100 |
$333,550 |
$417,900 |
n.a |
| Interest Coverage |
0.00 |
0.00 |
0.00 |
n.a |
| Additional Ratios | ||||
| Assets to Funding |
0.36 |
0.35 |
0.36 |
n.a |
| Current Debt/Total Assets |
19% |
18% |
18% |
n.a |
| Acid Test |
3.42 |
3.78 |
4.14 |
n.a |
| Funding/Net Worth |
3.47 |
3.52 |
3.40 |
n.a |
| Dividend Payout |
0.00 |
0.00 |
0.00 |
n.a |
General Assumptions (Zimmerer & Scarboroug, 2016)
| General Assumptions | |||||||||||||
|
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
||
| Plan Month |
1 |
2 |
3 |
4 |
5 |
6 |
7 |
8 |
9 |
10 |
11 |
12 |
|
| Current Interest Rate |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
|
| Long-term Interest Rate |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
10.00% |
|
| Tax Rate |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
0.00% |
|
| Other |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
0 |
Cash Flow for the Company (Zimmerer & Scarboroug, 2016)
| Pro Forma Cash Flow | |||||||||||||
|
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
||
| Cash Received | |||||||||||||
| Cash from Operations | |||||||||||||
| Cash Funding |
$110,000 |
$110,000 |
$180,000 |
$180,000 |
$180,000 |
$180,000 |
$120,000 |
$130,000 |
$130,000 |
$120,000 |
$100,000 |
$100,000 |
|
| Subtotal Cash from Operations |
$110,000 |
$110,000 |
$180,000 |
$180,000 |
$180,000 |
$180,000 |
$120,000 |
$130,000 |
$130,000 |
$120,000 |
$100,000 |
$100,000 |
|
| Additional Cash Received | |||||||||||||
| Sales Tax, VAT, HST/GST Received |
0.00% |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| New Current Borrowing |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| New Other Liabilities (interest-free) |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| New Long-term Liabilities |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Sales of Other Current Assets |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Sales of Long-term Assets |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| New Investment Received |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Subtotal Cash Received |
$110,000 |
$110,000 |
$180,000 |
$180,000 |
$180,000 |
$180,000 |
$120,000 |
$130,000 |
$130,000 |
$120,000 |
$100,000 |
$100,000 |
|
| Expenditures |
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
|
| Expenditures from Operations | |||||||||||||
| Cash Spending |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
$27,500 |
|
| Bill Payments |
$544 |
$18,658 |
$87,325 |
$116,325 |
$116,992 |
$136,325 |
$136,658 |
$146,325 |
$145,992 |
$134,658 |
$87,325 |
$116,325 |
|
| Subtotal Spent on Operations |
$28,044 |
$46,158 |
$114,825 |
$143,825 |
$144,492 |
$163,825 |
$164,158 |
$173,825 |
$173,492 |
$162,158 |
$114,825 |
$143,825 |
|
| Additional Cash Spent | |||||||||||||
| Sales Tax, VAT, HST/GST Paid Out |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Principal Repayment of Current Borrowing |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Other Liabilities Principal Repayment |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Long-term Liabilities Principal Repayment |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Purchase Other Current Assets |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Purchase Long-term Assets |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Dividends |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
|
| Subtotal Cash Spent |
$28,044 |
$46,158 |
$114,825 |
$143,825 |
$144,492 |
$163,825 |
$164,158 |
$173,825 |
$173,492 |
$162,158 |
$114,825 |
$143,825 |
|
| Net Cash Flow |
$81,956 |
$63,842 |
$65,175 |
$36,175 |
$35,508 |
$16,175 |
($44,158) |
($43,825) |
($43,492) |
($42,158) |
($14,825) |
($43,825) |
|
| Cash Balance |
$349,956 |
$413,798 |
$478,973 |
$515,148 |
$550,656 |
$566,831 |
$522,672 |
$478,847 |
$435,356 |
$393,197 |
$378,372 |
$334,547 |
Balance Sheet (Zimmerer & Scarboroug, 2016)
| Pro Forma Balance Sheet | |||||||||||||
|
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
||
| Assets | Starting Balances | ||||||||||||
| Current Assets | |||||||||||||
| Cash |
$268,000 |
$349,956 |
$413,798 |
$478,973 |
$515,148 |
$550,656 |
$566,831 |
$522,672 |
$478,847 |
$435,356 |
$393,197 |
$378,372 |
$334,547 |
| Other Current Assets |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
$50,000 |
| Total Current Assets |
$318,000 |
$399,956 |
$463,798 |
$528,973 |
$565,148 |
$600,656 |
$616,831 |
$572,672 |
$528,847 |
$485,356 |
$443,197 |
$428,372 |
$384,547 |
| Long-term Assets | |||||||||||||
| Long-term Assets |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
| Accumulated Depreciation |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| Total Long-term Assets |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
$200,000 |
| Total Assets |
$518,000 |
$599,956 |
$663,798 |
$728,973 |
$765,148 |
$800,656 |
$816,831 |
$772,672 |
$728,847 |
$685,356 |
$643,197 |
$628,372 |
$584,547 |
| Liabilities and Capital |
Month 1 |
Month 2 |
Month 3 |
Month 4 |
Month 5 |
Month 6 |
Month 7 |
Month 8 |
Month 9 |
Month 10 |
Month 11 |
Month 12 |
|
| Current Liabilities | |||||||||||||
| Accounts Payable |
$0 |
$15,781 |
$83,448 |
$112,448 |
$112,448 |
$131,781 |
$131,781 |
$141,447 |
$141,448 |
$131,781 |
$83,448 |
$112,448 |
$112,448 |
| Current Borrowing |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| Other Current Liabilities |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| Subtotal Current Liabilities |
$0 |
$15,781 |
$83,448 |
$112,448 |
$112,448 |
$131,781 |
$131,781 |
$141,447 |
$141,448 |
$131,781 |
$83,448 |
$112,448 |
$112,448 |
| Long-term Liabilities |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
$0 |
| Total Liabilities |
$0 |
$15,781 |
$83,448 |
$112,448 |
$112,448 |
$131,781 |
$131,781 |
$141,447 |
$141,448 |
$131,781 |
$83,448 |
$112,448 |
$112,448 |
| Paid-in Capital |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
$860,000 |
| Accumulated Surplus/Deficit |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
($342,000) |
| Surplus/Deficit |
$0 |
$66,175 |
$62,350 |
$98,525 |
$134,700 |
$150,875 |
$167,050 |
$113,225 |
$69,400 |
$35,575 |
$41,750 |
($2,075) |
($45,900) |
| Total Capital |
$518,000 |
$584,175 |
$580,350 |
$616,525 |
$652,700 |
$668,875 |
$685,050 |
$631,225 |
$587,400 |
$553,575 |
$559,750 |
$515,925 |
$472,100 |
| Total Liabilities and Capital |
$518,000 |
$599,956 |
$663,798 |
$728,973 |
$765,148 |
$800,656 |
$816,831 |
$772,673 |
$728,848 |
$685,356 |
$643,198 |
$628,373 |
$584,548 |
| Net Worth |
$518,000 |
$584,175 |
$580,350 |
$616,525 |
$652,700 |
$668,875 |
$685,050 |
$631,225 |
$587,400 |
$553,575 |
$559,750 |
$515,925 |
$472,100 |
References
Abrams, R. M. (2013). The successful business plan: secrets & strategies . The Planning Shop.
Honig, B., & Karlsson, T. (2014). Institutional forces and the written business plan. Journal of Management , 30 (1), 29-48.
Karlsson, T., & Honig, B. (2009). Judging a business by its cover: An institutional perspective on new ventures and the business plan. Journal of Business Venturing , 24 (1), 27-45.
Longenecker, J. G., Moore, C. W., Petty, J. W., & Palich, L. (2017). Small-business management . South-Western Publishing Company.
Scarborough, N. M., Zimmerer, T. W., & Naumes, W. (2016). Effective small business management (Vol. 2). Upper Saddle River, NJ: Prentice Hall.
Zimmerer, T. W., & Scarboroug, N. M. (2015). Essentials of entrepreneurship and small business management . Prentice-Hall.
