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Business

Financial Plan

7.0 Financial Plan
It is key to our financial success to grow Rutabaga Sweets not just as a dessert bar, but as a company. We are looking for an investment of $300,000 seed money with the hopes of eventually selling an established chain of dessert bars or establishing our company as a gourmet franchise. This means we must always be reinvesting in the future of Rutabaga Sweets.

7.1 Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following table. The key underlying assumptions are:
We assume a slow-growth economy, without major recession.
We assume of course that there are no unforeseen changes in technology to make products immediately obsolete.
We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.

General Assumptions
General Assumptions
FY 2003 FY 2004 FY 2005
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Break-even Analysis
For our break-even analysis, we assume running costs including our full payroll, rent, and utilities, and an estimation of other running costs. Payroll alone, at our present run rate, is only about $4,000.
Margins are harder to assume that far in the future.

Break-even Analysis
Break-even Analysis

Monthly Revenue Break-even $13,251

Assumptions:
Average Percent Variable Cost 19%
Estimated Monthly Fixed Cost $10,689

Break-even Analysis



7.3 Projected Profit and Loss
An important assumption when calculating our P&L is the increase in sales from year to year. We are basing our assumptions on the financial success of Finale Dessertery in Boston, Massachusetts. They reported a 50% increase in sales the second year of business followed by a 30% increase the next year. We feel Rutabaga Sweets can match, if not beat those sales, considering the National...