Garretts Bike Shop Business Plan

CONFIDENTIAL

Garrett's Bike Shop TOP-QUALITY GEAR, REPAIR, AND ADVICE FROM YOUR LOCAL CYCLING FANATICS

Business Plan Prepared May 2017

Contact Information Garrett McKenzie [email protected] (555) 555-5555 www.universitycycleworks.com 488 East 11th Avenue, Suite 220 Eugene, OR 97401, United States

Garrett's Bike Shop - QB

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Table of Contents Executive Summary.................................................................................1 What We Sell ...........................................................................................................................................................1 Who We Sell To ......................................................................................................................................................1 Opportunity............................................................................................................................................................2 Expectations ...........................................................................................................................................................3

Opportunity ...............................................................................................5 Problem & Solution...............................................................................................................................................5 Competition ...........................................................................................................................................................5

Execution....................................................................................................7 Marketing & Sales ..................................................................................................................................................7 Operations...............................................................................................................................................................7 Milestones & Metrics ............................................................................................................................................8

Company ....................................................................................................9 Management Team ..............................................................................................................................................9 Overview ...............................................................................................................................................................10 Market Trends.......................................................................................................................................................11

Financial Plan..........................................................................................12 Forecast..................................................................................................................................................................12 Statements.............................................................................................................................................................13

Appendix ..................................................................................................19 Monthly Statements ...........................................................................................................................................19

CONFIDENTIAL - DO NOT DISSEMINATE. This business plan contains confidential, trade-secret information and is shared only with the understanding that you will not share its contents or ideas with third parties without the express written consent of the plan author.


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Executive Summary What We Sell Bicycles. We sell new bicycles, predominantly in the mountain bike style, retro-cruiser is a close second, and sport/touring/racing road bikes a distant third. We also sell some used bikes which we take in on trade as a service to our customers who are buying new bikes. Accessories. We offer a wide variety of accessories. Locks, computer speedometers, fenders, cargo racks, comfortable seats, headlights, helmets, water bottles, panniers/back packs/messenger bags, child seats and trailers, bike storage racks, and auto roof rack systems all fall in this category. Clothing. We rotate our clothing based on the season. For example, in Autumn, we stock jackets and Gore-Tex. In Winter, we offer helmet covers and liners, insulated jerseys and pants, gloves, and shoe covers. In the Spring, we start displaying summer jerseys, and racing shorts Parts. Parts generally refers to pieces or materials necessary to the basic functioning of the bicycle. Generally, parts are installed during service and are an additional charge beyond the service fees.

Who We Sell To The primary market for Garrett's Bike Shop is the university student population, which normally has a turnover/growth of approximately 25% each year. The secondary market is the university faculty and staff, and the tertiary market is the greater Metroburg community.

The university students are our main target market. 1. They are mostly undergraduates, so there is a 25% annual turnover. 2. The lack of parking in the university area and the general ease of bike mobility throughout Metroburg motivates them to use bicycles as inexpensive transport.



2

Athletic pursuits draw them, and the nearby areas for use of mountain and trail bikes provides a great place to ride. 3. There is a new enthusiasm for retro Cruiser bikes, and higher tech cruiser-style bikes with multiple gears, good brakes, etc. among the college age population. 4. Also, main market for racks, locks, throughout, pannier/bags, fenders, rainwear, etc. 5. They want convenience for sales and service.

Opportunity Problem It's hard to buy a good bike in this town without being an "insider" cycling expert. Solution Garrett's is a snob free zone where regular people can get top notch gear and expert advice.



3

Competition Current Alternatives • • • • • •

One local multi-sport store at the local megamall One statewide chain of bicycle shops which started out as Schwinn-only shops, but has had to take on other brands and products. One used bike store that has made a fine business reputation for itself, dealing strictly in used bikes. Three local, including the oldest shop in town. One local multi-location chain, that has specialized in opening shops in small local malls in areas of new housing development. Several garage mechanics offering service only.

The two strongest competitors are the Oldest Shop in Town which carries the cache of being the most stable, and most well known -- a Metroburg institution. The Mountain Bike Specialist targets the same athletic, young, performance and image conscious rider that we target in the university student population. These cyclists are particular about their bike and will go where the name brand they want is sold, or will try every bike and then buy the one that fits best, regardless of store loyalty. Why Us? We offer a welcoming, family-friendly bike shop space with higher quality gear and services.

Expectations Forecast This financial plan was developed based upon previous years' data for the existing store, tracking trends in revenues and expenses. A five-month track of sales, accounts receivables and payables, and inventory from a year-end benchmark was made. The current owner, Han Delbar, has sold the business to Hubert Wheeler for $140,000. The seller, buyer, and the accountant worked together on the plan to balance optimism with reality. An attorney was consulted on specifics of the sale contract.



4

Sales for the first year of new ownership are projected above $500,000, with a gross margin of almost 65%. Profitability is expected at the mid-way point of the fiscal year, in March. Financial Highlights by Year

Financing Needed We plan on bootstrapping the business to start, but may consider loans for future expansion.



5

Opportunity Problem & Solution Problem Worth Solving No full-service bike shop offers a snob-free zone focused on servicing the university market. Our Solution Our market niche has several needs which we strive to meet: • • • • • •

Quality bikes at several price points. Various styles and sizes of bikes, leaning heavily toward the styles most popular with the student population. Range of accessories most practical in the local setting, such as locks, fenders, lights, tires, seats, rainwear, etc. Plenty of replacement components and service parts. Friendly personal relationships between cyclists and shop staff. Prompt and convenient service from on-the-spot flat tire fix, to drop in repairs, to scheduled major maintenance, where the rider can drop their bike off, head to class or work, and be assured that their bike will be ready for the ride home.

Competition The foremost competitive advantage of Garrett's Bike Shop is our university location. The university is over 100 years old and as it has grown, Metroburg has grown around it. Parking is almost nonexistent, with all campus parking permit or meter controlled, and local streets filled to capacity with the vehicles of residents. Bicycles are an obvious and popular transportation solution. The negotiations of the past two years also brings the advantage of continued financial agreements with major suppliers. This is an advantage over a start-up bicycle shop, but, is more a leveling of the bike path when compared to other established shop in Metroburg. Traditionally a start-up store will be placed on a Cash On Delivery (COD) status by bicycle manufacturers and parts/accessories suppliers. The COD status stays in effect until the new shop demonstrates its ability to manage its orders and cash flow. This also means the new shop must have more funding to be able to write checks on a moments notice, for large amounts.



6

Strategic Alliances • • • • •

Bicycle manufacturers - continuation of dating programs and financial agreements. Accessory suppliers - continuation of financial agreements. Metroburg Parks Dept. - we sponsor printed map of city bike paths to publish on our website. University Security Office - maintenance, supply service contract for cycle security. HooDaThunkIt - website design and maintenance, search engine placement.



7

Execution Marketing & Sales

Operations Locations & Facilities Garrett's Bike Shop is 1,500 square foot store of interior space located on the university campus in Metroburg. Our location, in the first block off campus in a commercial area featuring the university bookstore, a private bookstore, bank, cafes, coffee shops and popular watering holes is ideal. We get constant, daily visual exposure. Students and staff throng the sidewalk outside our door, and we reap the benefits. Our nearest competitor is almost a mile away. For the student customer, on foot, in a hurry, Garrett's Bike Shop is the immediate solution to their needs. Technology Our bike shop is equipped with the latest technology to help maintain your bicycle needs. Whether older bike parts, or newer technologies, we stock inventory of whichever parts you seek to maintain your bike is in peak condition. With our customized online tracking system, we can keep record of what we took care of on your bike from the last visit and maintain an ongoing record for future visits. This allows us to specialize your visits each time you visit our shop.



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Equipment & Tools We recognize that all bikes require basic tune-ups, to complex maintenance. With an array of bikes in mind, we have the right equipment and tools to cater to your biking needs.

Milestones & Metrics Milestone

Due Date

Who's Responsible

Develop Branding

July 12, 2017

Marketing

Choose POS Systems

July 20, 2017

Mike

Review Monthly Numbers

August 08, 2017

Sabrina

Review Forecast

August 17, 2017

Sabrina



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Company Management Team Garrett McKenzie – Founder/Owner After a successful run as a mortgage broker, Garrett will apply his business acumen to leading a company he is passionate about. Jill Bloom – Shop Manager After a decade of bike-shop experience and five completed triathlons, Jill will anchor the services side of the business. Heather Gibson – Investor Heather is an avid cyclist and small business investor. Her expertise is in small business expansion.

The current assistant manager, Hubert Wheeler, is buying Garrett's Bike Shop, and will manage the business. He has a B.S. degree in Economics and an M.A. in Comparative Literature. His passion however has always been cycling. He originally worked at his local bike shop when he was in college. After several years trying to find suitable work in his degree field, he gave up chasing the chimera of these fields and decided to work with something substantial, and returned to his youthful enjoyment of bicycles. He attended two of the major bicycle mechanic training programs, at New England Bicycle Academy and the United Bicycle Institute. These courses covered mechanical service and maintenance, frame building and repair, wheel building, and shop organization, sales, and management. He has 12 years of progressively responsible experience in bicycle shops with the last five at Garrett's Bike Shop. One of the other full-time employees, Valerie Pede has expressed interest in learning more about the bike industry and she will be promoted to be the new assistant manager. Val has been with us for three years. She graduated from State University at Metroburg with tandem B.S. degrees in Exercise Physiology and Recreation Management. She loves to cycle, and has kept



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her contacts at the university active. Her knowledge and expertise draws many women bicyclists to our store where they know they will get the care and attention which is usually missing from traditionally male staffed shops. The current owner, Han Delbar will be available as a resource. Additional resources are: •

Order Out of Chaos, our full-cycle bookkeeping service.

•

Continental Shelf Bank.

•

Newt Ria, a partner at Weasel, Stoat, Muskrat who advised on the sale/purchase arrangements.

Overview Ownership & Structure Garrett's Bike Shop is a subchapter S corporation, and is currently owned by Han Delbar. Hubert Wheeler, current assistant manager of Garrett's Bike Shop, is purchasing Garrett's Bike Shop from Delbar, acquiring existing inventory, and assuming outstanding accounts payable and dating program debts to suppliers, location lease, customer base and information, and Garrett's Bike Shop's business name and goodwill. The business will continue to be a subchapter S corporation. Exchange of ownership will occur on July 1st. To establish an accurate accounting of existing inventory and outstanding debts, the prior year's closing inventory and year end financial statement as reviewed by the business' CPA were used as benchmarks. The sales, orders placed, deliveries received, and accounts payable payments made have been tracked each month, and a trial balance of these will be run June 15 to establish the final purchase price for inventory on hand, and the amount of Accounts Payable assumed. The figures presented here are conservative, realistic estimates used for planning purposes. Company History The current assistant manager, Hubert Wheeler, is buying Garrett's Bike Shop, and will manage the business. He has a B.S. degree in Economics and an M.A. in Comparative Literature. His passion however has always been cycling. He originally worked at his local bike shop when he was in college. After several years trying to find suitable work in his degree field, he gave up



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chasing the chimera of these fields and decided to work with something substantial, and returned to his youthful enjoyment of bicycles. He attended two of the major bicycle mechanic training programs, at New England Bicycle Academy and the United Bicycle Institute. These courses covered mechanical service and maintenance, frame building and repair, wheel building, and shop organization, sales, and management. He has 12 years of progressively responsible experience in bicycle shops with the last five at Garrett's Bike Shop. One of the other full-time employees, Valerie Pede has expressed interest in learning more about the bike industry and she will be promoted to be the new assistant manager. Val has been with us for three years. She graduated from State University at Metroburg with tandem B.S. degrees in Exercise Physiology and Recreation Management. She loves to cycle, and has kept her contacts at the university active. Her knowledge and expertise draws many women bicyclists to our store where they know they will get the care and attention which is usually missing from traditionally male staffed shops.

Market Trends Trends in the bicycle industry usually last for a time. Some of them have been: •

1960s - Big rush on 10 speeds.

•

1970s - Touring bikes became popular.

•

1980s and 1990s - Huge growth of mountain bikes

•

1990s - The rumored but exaggerated death of "road bikes" and the unfulfilled prophesy of a boom in the tandem market.

•

2000s - Popularity of retro 'cruisers.'



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Financial Plan Forecast Sales vary season to season and with the academic school year. Surprisingly, summer is the slowest season because there are fewer students in town. Business picks up in August with the return of the students and staff, and flourishes in September. Accessories and rainwear sales increase in the autumn and early winter. Repairs and maintenance are steady. Holiday sales are brisk, though generally leaning again to accessories, parts, rainwear, gloves, helmets, headlights, etc. Winter sales are moderate, and then pick up in springtime as people put away their skies and look forward to local outdoor activities, longer daylight hours, and drier weather. We have three large sales promotions each year. 1.

Back to school in August/September. This is our biggest sale of the year. New bicycles, locks, helmets, racks, fenders, backpacks. We always search for a special purchase of good quality, but value priced bikes for this sale such as year end models, slow sellers, new line looks to break into the market. These bikes will almost always sell out to students seeking great values.

2. Year-end holidays. This also overlaps the beginning of Winter term. The retail market demands some participation in this annual buying frenzy, yet, this sale produces lower revenue than our other two events. We sell fewer bikes, and more accessories and clothing. 3. Spring. This coincides with both the return of nice weather, and beginning of Spring term. We feature new bicycles, and repair/maintenance/tune-up specials. It is important to us to have a good selection on hand at this time. When people decide they want that new bike, they want it now. If we don't have the bike then, and make the sale immediately, many riders will decide that they really can get another season out of their old bike, and will spend their discretionary income on some other purchase. Additionally, we have some special buys available for June graduation. We get some small monthly revenue from these sources: • •

Sale of used bicycles taken in on trade. Repair classes taught at the University Outdoor Center, once a term.



•

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Monthly service contract for repairs and parts with the University Security Office.

Statements Net Profit (or Loss) by Year



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Profit and Loss Statement FY2016

FY2017

FY2018

$1,446,425

$1,433,153

$1,584,365

Direct Costs

$532,342

$524,423

$593,890

Gross Margin

$914,084

$908,729

$990,475

63%

63%

63%

Salary

$88,400

$91,860

$95,475

Employee Related Expenses

$15,912

$16,535

$17,185

Insurance

$4,260

$4,260

$4,260

Leased Equipment

$1,800

$1,800

$1,800

$144,643

$143,315

$158,436

Lease

$56,400

$56,400

$56,400

Utilities

$3,600

$3,600

$3,600

$72,321

$71,658

$79,218

Total Operating Expenses

$387,336

$389,428

$416,375

Operating Income

$526,748

$519,301

$574,100

$7,650

$6,783

$5,054

Depreciation and Amortization

$14,860

$15,635

$14,207

Income Taxes

$75,636

$74,532

$82,605

$1,017,823

$1,010,801

$1,116,275

$428,602

$422,352

$468,090

30%

29%

30%

Revenue

Gross Margin % Operating Expenses

Marketing

Office Expenses

Interest Incurred

Total Expenses Net Profit Net Profit / Sales

About the Profit and Loss Statement In negotiating the smooth transition in ownership, the landlord agreed to continue the current lease unchanged. As surety, one month's rent was required as a deposit at the time of sale. This is shown in the starting expenses. Further, the landlord agreed that if, after 11 months operation the new company was solvent and current in lease payments, that the deposit could be applied to the twelfth month's rent.



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The mid-summer months of July and August are slow months when a large part of the university population is gone on summer break. The mid-winter months are traditionally loss months. The weather is the most inclement and discretionary income is at its lowest after the holiday binges. However, we try to keep our entire staff on board to work on our own inventory, store refurbishing, and staff training.



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Balance Sheet As of Period's End

Starting Balances

FY2016

FY2017

FY2018

Cash

$25,000

$140,078

$493,984

$950,745

Accounts Receivable

$15,000

$61,692

$47,049

$51,086

$0

$435,427

$494,666

$496,073

Total Current Assets

$40,000

$637,198

$1,035,699

$1,497,903

Long-Term Assets

$61,500

$97,700

$87,700

$87,700

($14,860)

($27,638)

($41,844)

$61,500

$82,840

$60,062

$45,856

$101,500

$720,038

$1,095,761

$1,543,758

$10,000

$32,691

$33,003

$33,736

Income Taxes Payable

$22,909

$19,157

$20,901

Sales Taxes Payable

$19,586

$11,557

$11,590

Short-Term Debt

$28,017

$29,745

$31,580

$103,203

$93,462

$97,806

$97,733

$67,987

$36,408

Inventory Other Current Assets

Accumulated Depreciation Total Long-Term Assets Total Assets Accounts Payable

Prepaid Revenue Total Current Liabilities

$10,000

Long-Term Debt Total Liabilities

$10,000

$200,936

$161,450

$134,214

Paid-in Capital

$50,700

$50,700

$50,700

$50,700

Retained Earnings

$40,800

$39,800

$468,402

$890,754

$428,602

$422,352

$468,090

$91,500

$519,102

$941,454

$1,409,544

$101,500

$720,038

$1,102,904

$1,543,758

Earnings Total Owner's Equity Total Liabilities & Equity



17

About the Balance Sheet Our goal is to repay the loans from our family within the first year, and we project paying Han Delbar his entire purchase price within five years. Other balance sheet information is shown in the table. Cash Flow by Year



18

Cash Flow Statement FY2016

FY2017

FY2018

$428,602

$422,352

$468,090

$14,860

$15,635

$14,207

($46,692)

$14,643

($4,037)

($435,427)

($59,238)

($1,407)

Change in Accounts Payable

$22,691

$312

$732

Change in Income Tax Payable

$22,909

($3,752)

$1,744

Change in Sales Tax Payable

$19,586

($8,029)

$33

$26,529

$381,923

$483,506

Net Cash Flow from Operations Net Profit Depreciation and Amortization Change in Accounts Receivable Change in Inventory

Change in Prepaid Revenue Net Cash Flow from Operations Investing & Financing Assets Purchased or Sold

($36,200)

$3,000

Investments Received Change in Long-Term Debt

$97,733

($29,745)

($31,580)

Change in Short-Term Debt

$28,017

$1,728

$1,835

Dividends & Distributions

($1,000)

Net Cash Flow from Investing & Financing

$88,550

($28,017)

($26,745)

Cash at Beginning of Period

$25,000

$140,078

$493,984

Net Change in Cash

$115,078

$353,906

$456,761

Cash at End of Period

$140,078

$493,984

$950,745

About the Cash Flow Statement The cash flow reflects the seasonality of bicycle sales and the varying payment programs. At times, the business is inventory heavy, stocking up for the beginning of school rush, or specific sales. At other times, there is negative cash flow as long-term accounts payable, net 90, net 60 payments coincide with regular net 30 invoices.



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Appendix Monthly Statements Profit and Loss Statement (With Monthly Detail) FY2016

Oct '15

Nov '15

Dec '15

Jan '16

Feb '16

Mar '16

Apr '16

May '16

Jun '16

Jul '16

Aug '16

Sep '16

Revenue

$86,400

$99,500

$118,050

$128,025

$131,450

$142,050

$99,650

$112,575

$108,725

$122,775

$140,250

$156,975

Direct Costs

$32,088

$36,646

$43,579

$47,157

$48,475

$52,732

$35,275

$40,694

$39,836

$45,533

$52,322

$58,005

$54,312

$62,854

$74,471

$80,868

$82,975

$89,319

$64,375

$71,881

$68,889

$77,242

$87,928

$98,971

63%

63%

63%

63%

63%

63%

65%

64%

63%

63%

63%

63%

Salary

$7,366

$7,366

$7,366

$7,366

$7,367

$7,367

$7,367

$7,367

$7,367

$7,367

$7,367

$7,367


$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

$1,326

Insurance

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

Leased Equipment

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

Marketing

$8,640

$9,950

$11,805

$12,803

$13,145

$14,205

$9,965

$11,257

$10,873

$12,277

$14,025

$15,698

Lease

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Office Expenses

$4,320

$4,975

$5,903

$6,401

$6,572

$7,103

$4,982

$5,629

$5,436

$6,139

$7,013

$7,848


$27,157

$29,122

$31,904

$33,401

$33,915

$35,506

$29,145

$31,085

$30,507

$32,614

$35,235

$37,745

Operating Income

$27,155

$33,732

$42,567

$47,467

$49,060

$53,813

$35,229

$40,796

$38,382

$44,628

$52,692

$61,227

Gross Margin


Utilities



Interest Incurred Depreciation and Amortization Income Taxes

20

$750

$739

$729

$717

$707

$696

$684

$674

$662

$652

$640

$1,144

$1,144

$1,144

$1,144

$1,283

$1,283

$1,283

$1,283

$1,283

$1,283

$1,283

$1,303

$3,902

$4,775

$6,103

$6,839

$7,059

$7,773

$4,988

$5,824

$5,464

$6,403

$7,613

$8,893

Total Expenses

$64,291

$72,437

$83,470

$89,269

$91,450

$97,999

$71,388

$79,570

$77,763

$86,496

$97,105

$106,585

Net Profit

$22,109

$27,063

$34,580

$38,756

$40,000

$44,051

$28,262

$33,005

$30,962

$36,279

$43,145

$50,390

26%

27%

29%

30%

30%

31%

28%

29%

28%

30%

31%

32%

Net Profit / Sales



FY2017

21

Oct '16

Nov '16

Dec '16

Jan '17

Feb '17

Mar '17

Apr '17

May '17

Jun '17

Jul '17

Aug '17

Sep '17

$118,345

$118,344

$118,344

$118,345

$118,344

$118,345

$118,344

$118,344

$121,435

$121,555

$121,793

$121,615

$43,322

$43,322

$43,322

$43,323

$43,321

$43,323

$43,322

$43,322

$44,404

$44,446

$44,529

$44,467

$75,023

$75,022

$75,022

$75,023

$75,022

$75,023

$75,022

$75,022

$77,031

$77,109

$77,264

$77,148

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

Salary

$7,655

$7,654

$7,655

$7,654

$7,655

$7,654

$7,656

$7,655

$7,656

$7,655

$7,656

$7,655


$1,378

$1,378

$1,377

$1,378

$1,378

$1,378

$1,378

$1,378

$1,378

$1,378

$1,378

$1,378

Insurance

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

Leased Equipment

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$11,834

$11,834

$11,835

$11,834

$11,835

$11,834

$11,835

$11,834

$12,144

$12,155

$12,179

$12,162

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Office Expenses

$5,918

$5,917

$5,917

$5,917

$5,917

$5,918

$5,917

$5,917

$6,072

$6,078

$6,089

$6,081


$32,289

$32,289

$32,289

$32,289

$32,289

$32,289

$32,290

$32,290

$32,754

$32,771

$32,808

$32,781

Operating Income

$42,733

$42,733

$42,733

$42,734

$42,733

$42,733

$42,732

$42,732

$44,277

$44,338

$44,456

$44,367

Revenue Direct Costs Gross Margin


Marketing Lease Utilities

Interest Incurred

$629

$617

$606

$594

$583

$572

$560

$548

$536

$524

$513

$501


$1,303

$1,303

$1,302

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

Income Taxes

$6,120

$6,122

$6,124

$6,125

$6,127

$6,129

$6,130

$6,132

$6,366

$6,377

$6,396

$6,384

Total Expenses

$83,663

$83,653

$83,644

$83,634

$83,624

$83,615

$83,605

$83,595

$85,363

$85,422

$85,548

$85,435

Net Profit

$34,682

$34,691

$34,700

$34,711

$34,720

$34,730

$34,739

$34,749

$36,072

$36,133

$36,245

$36,180

29%

29%

29%

29%

29%

29%

29%

29%

30%

30%

30%

30%

Net Profit / Sales



FY2018

22

Oct '17

Nov '17

Dec '17

Jan '18

Feb '18

Mar '18

Apr '18

May '18

Jun '18

Jul '18

Aug '18

Sep '18

$131,503

$131,483

$131,533

$131,773

$132,052

$131,934

$132,353

$132,352

$132,363

$132,264

$132,392

$132,363

$49,306

$49,300

$49,316

$49,401

$49,498

$49,458

$49,603

$49,604

$49,607

$49,573

$49,617

$49,607

$82,197

$82,184

$82,216

$82,372

$82,554

$82,477

$82,749

$82,749

$82,756

$82,691

$82,775

$82,756

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

63%

Salary

$7,955

$7,956

$7,956

$7,956

$7,956

$7,956

$7,955

$7,957

$7,957

$7,957

$7,957

$7,957


$1,432

$1,432

$1,432

$1,432

$1,432

$1,432

$1,432

$1,432

$1,433

$1,432

$1,432

$1,432

Insurance

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

$355

Leased Equipment

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$13,150

$13,148

$13,154

$13,177

$13,205

$13,194

$13,235

$13,235

$13,236

$13,227

$13,239

$13,236

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$4,700

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Office Expenses

$6,575

$6,574

$6,577

$6,589

$6,602

$6,597

$6,617

$6,618

$6,618

$6,613

$6,620

$6,618


$34,617

$34,615

$34,623

$34,659

$34,701

$34,683

$34,746

$34,747

$34,748

$34,734

$34,753

$34,749

Operating Income

$47,580

$47,568

$47,594

$47,713

$47,853

$47,794

$48,003

$48,002

$48,007

$47,957

$48,022

$48,007



Marketing Lease Utilities

Interest Incurred

$488

$477

$464

$453

$440

$428

$415

$403

$390

$378

$366

$352


$1,184

$1,184

$1,184

$1,183

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

Income Taxes

$6,265

$6,886

$6,892

$6,911

$6,935

$6,927

$6,961

$6,962

$6,965

$6,959

$6,971

$6,971

Total Expenses

$96,004

$92,461

$92,480

$92,607

$92,758

$92,679

$92,910

$92,899

$92,895

$92,828

$92,890

$92,864

Net Profit

$35,499

$39,022

$39,053

$39,166

$39,294

$39,255

$39,443

$39,453

$39,468

$39,436

$39,502

$39,499

27%

30%

30%

30%

30%

30%

30%

30%

30%

30%

30%

30%

Net Profit / Sales



23

FY2016

FY2017

FY2018

$1,446,425

$1,433,153

$1,584,365

$532,342

$524,423

$593,890

$914,084

$908,729

$990,475

63%

63%

63%

Salary

$88,400

$91,860

$95,475


$15,912

$16,535

$17,185

$4,260

$4,260

$4,260



Insurance Leased Equipment

$1,800

$1,800

$1,800

$144,643

$143,315

$158,436

Lease

$56,400

$56,400

$56,400

Utilities

$3,600

$3,600

$3,600

Marketing

$72,321

$71,658

$79,218


Office Expenses

$387,336

$389,428

$416,375

Operating Income

$526,748

$519,301

$574,100

Interest Incurred

$7,650

$6,783

$5,054


$14,860

$15,635

$14,207

Income Taxes

$75,636

$74,532

$82,605

$1,017,823

$1,010,801

$1,116,275

$428,602

$422,352

$468,090

30%

29%

30%

Total Expenses Net Profit Net Profit / Sales



24

Cash Flow Statement (With Monthly Detail) FY2016

Oct '15

Nov '15

Dec '15

Jan '16

Feb '16

Mar '16

Apr '16

May '16

Jun '16

Jul '16

Aug '16

Sep '16

$22,109

$27,063

$34,580

$38,756

$40,000

$44,051

$28,262

$33,005

$30,962

$36,279

$43,145

$50,390

$1,144

$1,144

$1,144

$1,144

$1,283

$1,283

$1,283

$1,283

$1,283

$1,283

$1,283

$1,303

Change in Accounts Receivable

($18,484)

($5,233)

($7,388)

($3,942)

($1,338)

($4,271)

$16,976

($5,196)

$1,419

($5,664)

($6,910)

($6,661)

Change in Inventory

($442,249)

($21,358)

$256

$3,835

$5,153

$9,409

($8,047)

($2,628)

($3,486)

$2,211

$7,918

$13,558


$137,841

($50,390)

($65,725)

($1,336)

$379

$554

($1,670)

($372)

$118

$546

$1,427

$1,321


$3,902

$4,775

$6,103

($7,941)

$7,059

$7,773

($16,683)

$5,824

$5,464

($9,873)

$7,613

$8,893


$2,891

$3,745

$4,897

($6,100)

$5,576

$6,366

($13,878)

$4,429

$4,496

($6,873)

$6,500

$7,537

($292,847)

($40,254)

($26,132)

$24,416

$58,111

$65,164

$6,244

$36,344

$40,255

$17,909

$60,977

$76,342

Net Cash Flow from Operations Net Profit Depreciation and Amortization

Change in Prepaid Revenue

Net Cash Flow from Operations Investing & Financing Assets Purchased or Sold

($10,000)

($25,000)

($1,200)


$123,479

($2,283)

($2,294)

($2,305)

($2,317)

($2,329)

($2,340)

($2,352)

($2,364)

($2,376)

($2,387)

($2,399)




$26,521


($1,000)

Net Cash Flow from Investing & Financing Cash at Beginning of Period Net Change in Cash


25

$133

$133

$134

$135

$135

$136

$137

$137

$138

$139

$139

$139,000

($2,150)

($2,161)

($2,172)

($27,182)

($2,193)

($2,204)

($2,215)

($2,226)

($2,238)

($2,249)

($3,460)

$25,000

($128,847)

($171,251)

($199,544)

($177,299)

($146,370)

($83,399)

($79,359)

($45,231)

($7,203)

$8,469

$67,197

($153,847)

($42,404)

($28,293)

$22,245

$30,929

$62,971

$4,040

$34,129

$38,028

$15,672

$58,728

$72,882

($128,847)

($171,251)

($199,544)

($177,299)

($146,370)

($83,399)

($79,359)

($45,231)

($7,203)

$8,469

$67,197

$140,078



FY2017

26

Oct '16

Nov '16

Dec '16

Jan '17

Feb '17

Mar '17

Apr '17

May '17

Jun '17

Jul '17

Aug '17

Sep '17

$34,682

$34,691

$34,700

$34,711

$34,720

$34,730

$34,739

$34,749

$36,072

$36,133

$36,245

$36,180

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

$1,303

Change in Accounts Receivable

$15,955

$0

$0

$0

$1

($1)

$0

$0

($1,241)

($48)

($96)

$72

Change in Inventory

($1,207)

($1,145)

($5,984)

($5,977)

($5,995)

($6,078)

($6,176)

($6,135)

($5,200)

($5,157)

($5,078)

($5,106)


($1,331)

($875)

$1,442

$724

$4

$28

$42

$2

$177

$97

$15

($12)

$6,120

$6,122

($16,785)

($12,241)

$6,127

$6,129

($12,251)

$6,132

$6,366

($12,251)

$6,396

$6,384

($15,965)

$3,621

$3,621

($7,242)

$3,620

$3,621

($7,241)

$3,621

$3,838

($7,235)

$3,863

$3,849

$39,557

$43,717

$18,297

$11,278

$39,780

$39,732

$10,416

$39,672

$41,316

$12,842

$42,647

$42,669

Change in Long-Term Debt

($2,411)

($2,423)

($2,436)

($2,448)

($2,460)

($2,472)

($2,485)

($2,497)

($2,509)

($2,522)

($2,535)

($2,547)


$140

$141

$141

$142

$143

$144

$144

$145

$146

$147

$147

$148

Net Cash Flow from Operations Net Profit Depreciation and Amortization

Change in Income Tax Payable Change in Sales Tax Payable Change in Prepaid Revenue

Net Cash Flow from Operations Investing & Financing Assets Purchased or Sold Investments Received




27

Net Cash Flow from Investing & Financing

($2,271)

($2,283)

($2,294)

($2,305)

($2,317)

($2,329)

($2,340)

($2,352)

($2,364)

($2,376)

($2,387)

($2,399)

Cash at Beginning of Period

$140,078

$177,364

$218,798

$234,802

$243,774

$281,237

$318,640

$326,716

$364,036

$402,988

$413,454

$453,714

$37,286

$41,434

$16,003

$8,972

$37,463

$37,403

$8,076

$37,320

$38,952

$10,466

$40,260

$40,270

$177,364

$218,798

$234,802

$243,774

$281,237

$318,640

$326,716

$364,036

$402,988

$413,454

$453,714

$493,984

Net Change in Cash




FY2018

28

Oct '17

Nov '17

Dec '17

Jan '18

Feb '18

Mar '18

Apr '18

May '18

Jun '18

Jul '18

Aug '18

Sep '18

$35,499

$39,022

$39,053

$39,166

$39,294

$39,255

$39,443

$39,453

$39,468

$39,436

$39,502

$39,499

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

$1,184

($3,692)

$8

($20)

($96)

($113)

$48

($168)

$0

($5)

$40

($51)

$12

Change in Inventory

($311)

($308)

($291)

($207)

($109)

($150)

($4)

($4)

$0

($35)

$10

$0


$449

$225

$0

$12

$18

$1

$16

$9

$0

($4)

$4

$2

$6,265

$6,886

($12,265)

($13,132)

$6,935

$6,927

($13,812)

$6,962

$6,965

($13,929)

$6,971

$6,971

($7,752)

$3,804

$3,807

($7,593)

$3,844

$3,835

($7,638)

$3,864

$3,866

($7,736)

$3,867

$3,865

$35,785

$50,821

$31,469

$19,334

$51,053

$51,099

$19,022

$51,469

$51,478

$18,957

$51,486

$51,533

Net Cash Flow from Operations Net Profit Depreciation and Amortization Change in Accounts Receivable

Change in Income Tax Payable Change in Sales Tax Payable Change in Prepaid Revenue


$3,000


($2,560)

($2,573)

($2,586)

($2,599)

($2,612)

($2,625)

($2,638)

($2,651)

($2,664)

($2,678)

($2,691)

($2,704)


$149

$149

$150

$151

$152

$152

$153

$154

$155

$156

$156

$157






29

$589

($2,423)

($2,436)

($2,448)

($2,460)

($2,472)

($2,485)

($2,497)

($2,509)

($2,522)

($2,535)

($2,547)

$493,984

$530,358

$578,756

$607,789

$624,676

$673,269

$721,896

$738,433

$787,405

$836,374

$852,809

$901,760

$36,374

$48,397

$29,033

$16,887

$48,593

$48,627

$16,537

$48,972

$48,969

$16,435

$48,951

$48,985

$530,358

$578,756

$607,789

$624,676

$673,269

$721,896

$738,433

$787,405

$836,374

$852,809

$901,760

$950,745



30

FY2016

FY2017

FY2018

$428,602

$422,352

$468,090

$14,860

$15,635

$14,207

($46,692)

$14,643

($4,037) ($1,407)

Net Cash Flow from Operations Net Profit Depreciation and Amortization Change in Accounts Receivable Change in Inventory

($435,427)

($59,238)


$22,691

$312

$732


$22,909

($3,752)

$1,744


$19,586

($8,029)

$33

$26,529

$381,923

$483,506

Change in Prepaid Revenue


($36,200)

$3,000


$97,733

($29,745)

($31,580)


$28,017

$1,728

$1,835


($1,000)

$88,550

($28,017)

($26,745)

$25,000

$140,078

$493,984



$115,078

$353,906

$456,761

$140,078

$493,984

$950,745



31

Balance Sheet (With Monthly Detail) As of Period's End

Starting Balances

Oct '15

Nov '15

Dec '15

Jan '16

Feb '16

Mar '16

Apr '16

May '16

Jun '16

Jul '16

Aug '16

Sep '16

Cash

$25,000

($128,847)

($171,251)

($199,544)

($177,299)

($146,370)

($83,399)

($79,359)

($45,231)

($7,203)

$8,469

$67,197

$140,078

Accounts Receivable

$15,000

$33,484

$38,717

$46,105

$50,047

$51,385

$55,656

$38,680

$43,877

$42,458

$48,122

$55,031

$61,692

$0

$442,249

$463,607

$463,351

$459,516

$454,363

$444,954

$453,001

$455,629

$459,115

$456,904

$448,986

$435,427

$40,000

$346,887

$331,074

$309,912

$332,264

$359,378

$417,211

$412,322

$454,275

$494,370

$513,494

$571,214

$637,198

$61,500

$71,500

$71,500

$71,500

$71,500

$96,500

$96,500

$96,500

$96,500

$96,500

$96,500

$96,500

$97,700

($1,144)

($2,288)

($3,432)

($4,576)

($5,859)

($7,142)

($8,425)

($9,708)

($10,991)

($12,274)

($13,557)

($14,860)

$61,500

$70,356

$69,212

$68,068

$66,924

$90,641

$89,358

$88,075

$86,792

$85,509

$84,226

$82,943

$82,840

Total Assets

$101,500

$417,243

$400,286

$377,980

$399,188

$450,019

$506,569

$500,397

$541,067

$579,879

$597,721

$654,157

$720,038

Accounts Payable

$10,000

$147,841

$97,451

$31,726

$30,389

$30,768

$31,322

$29,653

$29,280

$29,398

$29,943

$31,370

$32,691


$3,902

$8,677

$14,780

$6,839

$13,898

$21,671

$4,988

$10,812

$16,276

$6,403

$14,016

$22,909

Sales Taxes Payable

$2,891

$6,636

$11,533

$5,433

$11,009

$17,375

$3,497

$7,926

$12,422

$5,549

$12,049

$19,586

Short-Term Debt

$26,521

$26,654

$26,787

$26,921

$27,056

$27,191

$27,327

$27,464

$27,601

$27,739

$27,878

$28,017

$181,155

$139,418

$84,826

$69,583

$82,731

$97,559

$65,465

$75,482

$85,697

$69,634

$85,313

$103,203

$123,479

$121,196

$118,902

$116,596

$114,279

$111,951

$109,611

$107,259

$104,895

$102,519

$100,132

$97,733


Total Current Assets Long-Term Assets Accumulated Depreciation

Total LongTerm Assets

Prepaid Revenue

Total Current Liabilities Long-Term Debt

$10,000



Total Liabilities

32

$10,000

$304,634

$260,614

$203,728

$186,179

$197,010

$209,510

$175,075

$182,741

$190,592

$172,154

$185,445

$200,936

Paid-in Capital

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

Retained Earnings

$40,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$39,800

$22,109

$49,172

$83,752

$122,508

$162,508

$206,559

$234,821

$267,826

$298,788

$335,067

$378,212

$428,602

$91,500

$112,609

$139,672

$174,252

$213,008

$253,008

$297,059

$325,321

$358,326

$389,288

$425,567

$468,712

$519,102

$101,500

$417,243

$400,286

$377,980

$399,188

$450,019

$506,569

$500,397

$541,067

$579,879

$597,721

$654,157

$720,038

Earnings

Total Owner's Equity Total Liabilities & Equity



FY2017

33

Oct '16

Nov '16

Dec '16

Jan '17

Feb '17

Mar '17

Apr '17

May '17

Jun '17

Jul '17

Aug '17

Sep '17

$177,364

$218,798

$234,802

$243,774

$281,237

$318,640

$326,716

$364,036

$402,988

$413,454

$453,714

$493,984

$45,737

$45,737

$45,737

$45,737

$45,737

$45,737

$45,737

$45,737

$46,977

$47,025

$47,121

$47,049

$436,634

$437,779

$443,763

$449,740

$455,735

$461,813

$467,989

$474,125

$479,324

$484,482

$489,560

$494,666

$659,736

$702,314

$724,302

$739,251

$782,708

$826,191

$840,442

$883,898

$929,290

$944,961

$990,395

$1,035,699

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

$97,700

Accumulated Depreciation

($16,163)

($17,466)

($18,768)

($20,071)

($21,374)

($22,677)

($23,980)

($25,283)

($26,586)

($27,889)

($29,192)

($30,495)


$81,537

$80,234

$78,932

$77,629

$76,326

$75,023

$73,720

$72,417

$71,114

$69,811

$68,508

$67,205

Total Assets

$741,273

$782,549

$803,233

$816,880

$859,034

$901,213

$914,162

$956,314

$1,000,404

$1,014,772

$1,058,903

$1,102,904

Accounts Payable

$31,360

$30,485

$31,927

$32,651

$32,655

$32,683

$32,725

$32,727

$32,904

$33,001

$33,016

$33,003


$29,029

$35,151

$18,366

$6,125

$12,252

$18,381

$6,130

$12,262

$18,628

$6,377

$12,773

$19,157

Sales Taxes Payable

$3,621

$7,242

$10,863

$3,621

$7,241

$10,862

$3,621

$7,242

$11,080

$3,845

$7,708

$11,557

Short-Term Debt

$28,157

$28,298

$28,440

$28,582

$28,725

$28,868

$29,013

$29,158

$29,303

$29,450

$29,597

$29,745

$92,168

$101,176

$89,596

$70,979

$80,873

$90,795

$71,489

$81,389

$91,916

$72,673

$83,094

$93,462

$95,321

$92,898

$90,462

$88,015

$85,555

$83,083

$80,598

$78,101

$75,591

$73,069

$70,535

$67,987

$187,489

$194,074

$180,058

$158,994

$166,428

$173,877

$152,087

$159,490

$167,507

$145,742

$153,629

$161,450

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

$468,402

Cash Accounts Receivable Inventory Other Current Assets

Total Current Assets Long-Term Assets

Prepaid Revenue


Total Liabilities Paid-in Capital Retained Earnings



Earnings

34

$34,682

$69,373

$104,073

$138,784

$173,504

$208,234

$242,973

$277,722

$313,794

$349,927

$386,172

$422,352

Total Owner's Equity

$553,784

$588,475

$623,175

$657,886

$692,606

$727,336

$762,075

$796,824

$832,896

$869,029

$905,274

$941,454

Total Liabilities & Equity

$741,273

$782,549

$803,233

$816,880

$859,034

$901,213

$914,162

$956,314

$1,000,404

$1,014,772

$1,058,903

$1,102,904



FY2018

35

Oct '17

Nov '17

Dec '17

Jan '18

Feb '18

Mar '18

Apr '18

May '18

Jun '18

Jul '18

Aug '18

Sep '18

$530,358

$578,756

$607,789

$624,676

$673,269

$721,896

$738,433

$787,405

$836,374

$852,809

$901,760

$950,745

$50,741

$50,733

$50,753

$50,849

$50,961

$50,913

$51,081

$51,081

$51,086

$51,046

$51,097

$51,086

$494,977

$495,285

$495,575

$495,782

$495,891

$496,041

$496,044

$496,048

$496,048

$496,083

$496,073

$496,073

$1,076,075

$1,124,773

$1,154,116

$1,171,306

$1,220,121

$1,268,850

$1,285,559

$1,334,534

$1,383,508

$1,399,937

$1,448,929

$1,497,903

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700

$87,700


($28,822)

($30,006)

($31,189)

($32,373)

($33,557)

($34,741)

($35,925)

($37,109)

($38,293)

($39,477)

($40,661)

($41,844)


$58,878

$57,694

$56,511

$55,327

$54,143

$52,959

$51,775

$50,591

$49,407

$48,223

$47,039

$45,856

Total Assets

$1,134,954

$1,182,467

$1,210,627

$1,226,632

$1,274,263

$1,321,809

$1,337,334

$1,385,125

$1,432,915

$1,448,160

$1,495,969

$1,543,758

Accounts Payable

$33,452

$33,678

$33,678

$33,690

$33,708

$33,709

$33,725

$33,734

$33,735

$33,731

$33,734

$33,736


$25,422

$32,308

$20,043

$6,911

$13,846

$20,773

$6,961

$13,923

$20,888

$6,959

$13,930

$20,901

Sales Taxes Payable

$3,805

$7,609

$11,416

$3,823

$7,667

$11,502

$3,864

$7,728

$11,594

$3,858

$7,725

$11,590

Short-Term Debt

$29,894

$30,043

$30,194

$30,345

$30,496

$30,649

$30,802

$30,956

$31,111

$31,266

$31,423

$31,580

$92,573

$103,638

$95,330

$74,768

$85,717

$96,632

$75,352

$86,341

$97,328

$75,814

$86,812

$97,806

$65,427

$62,855

$60,269

$57,670

$55,058

$52,434

$49,796

$47,145

$44,481

$41,803

$39,112

$36,408

$158,001

$166,492

$155,599

$132,438

$140,776

$149,066

$125,148

$133,486

$141,808

$117,617

$125,924

$134,214

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$50,700

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

$890,754

Cash Accounts Receivable Inventory Other Current Assets


Prepaid Revenue


Total Liabilities Paid-in Capital Retained Earnings



Earnings


36

$35,499

$74,521

$113,574

$152,740

$192,034

$231,289

$270,732

$310,185

$349,653

$389,089

$428,591

$468,090

$976,953

$1,015,975

$1,055,028

$1,094,194

$1,133,488

$1,172,743

$1,212,186

$1,251,639

$1,291,107

$1,330,543

$1,370,045

$1,409,544

$1,134,954

$1,182,467

$1,210,627

$1,226,632

$1,274,263

$1,321,809

$1,337,334

$1,385,125

$1,432,915

$1,448,160

$1,495,969

$1,543,758



As of Period's End

37

Starting Balances

FY2016

FY2017

FY2018

Cash

$25,000

$140,078

$493,984

$950,745

Accounts Receivable

$15,000

$61,692

$47,049

$51,086

$0

$435,427

$494,666

$496,073

$40,000

$637,198

$1,035,699

$1,497,903



$61,500

$97,700

$87,700

$87,700

($14,860)

($27,638)

($41,844)

$61,500

$82,840

$60,062

$45,856

$101,500

$720,038

$1,095,761

$1,543,758

$10,000

$32,691

$33,003

$33,736


$22,909

$19,157

$20,901

Sales Taxes Payable

$19,586

$11,557

$11,590

Short-Term Debt

$28,017

$29,745

$31,580

$103,203

$93,462

$97,806

$97,733

$67,987

$36,408

$10,000

$200,936

$161,450

$134,214

Paid-in Capital

$50,700

$50,700

$50,700

$50,700

Retained Earnings

$40,800

$39,800

$468,402

$890,754

$428,602

$422,352

$468,090

$91,500

$519,102

$941,454

$1,409,544

$101,500

$720,038

$1,102,904

$1,543,758


Total Long-Term Assets Total Assets Accounts Payable

Prepaid Revenue

Total Current Liabilities

$10,000

Long-Term Debt

Total Liabilities

Earnings



Garretts Bike Shop Business Plan

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