Restaurant (New Ownership) Business Plan


ROCK ISLAND TAVERN


30338 East Green Ave.
Williamston, PA 11898


This business plan shows a seasoned consideration of all aspects of assuming ownership of a business already in existence. Since the business simply changed hands, information that would normally be speculative, such as traffic, average check price, and income, is more reliable. Entrepreneurs considering purchasing a business rather than starting from the ground up will find this plan very useful.



  • EXECUTIVE SUMMARY
  • NATURE OF VENTURE
  • MARKER DESCRIPTION AND ANALYSIS
  • DESCRIPTION OF PRODUCTS AND SERVICES
  • BUILDING AND EQUIPMENT
  • MANAGEMENT TEAM AND OWNERSHIP
  • BUSINESS STRATEGY
  • FINANCIAL DATA
  • EXHIBITS

EXECUTIVE SUMMARY

Andersen Enterprises, Inc. (AEI) was formed to own and operate the Rock Island Tavern. The tavern is located on East Green Avenue in Williamston, Oakland Township, Pellton County. Pellton County is one of the largest counties in the state and Oakland Township is one of the county's fastest growing townships.

Management will focus on maintaining the Tavern's loyal base of repeat customers and will attract new customers from surrounding communities by providing quality food and beverages at reasonable prices. In addition, AEI will feature good quality entertainment, attractive and comfortable surroundings and consistent, high quality service.



Management

Steven Gresboro, Owner

Steven Gresboro will be responsible for operational and financial management, sales, marketing and promotion. Mr. Gresboro has eight years of experience as a manager/bartender for Benedict Arnold's Pub in Jordan, PA and Junior's Joint in Kingstown, PA. His responsibilities included hiring, managing, and firing of staff personnel as well as food and beverage service, record keeping and inventory management. Mr. Gresboro has been a corporate lender for Penn Financial Corporation serving as Vice President in the middle market lending area for the past 11 years. Hehas extensive knowledge and experience in the field of banking, finance, sales and marketing. Mr. Gresboro graduated from Westminster University in 1983 with a B.S. in Business Administration Marketing. In May 1994, he received a Masters of Business Administration-Finance from St. Joseph's University.


Kevin Painter, Manager


Kevin Painter will be responsible for management of day to day operations. Mr. Painter's principal responsibilities will include staff management, purchasing, inventory management, marketing and promotions. Mr. Painter has seven years experience as a manager/bartender for Gridiron Sports Bar in Grimley, Pa. And Danny's in York River, Pa. His responsibilities included food and beverage service as well as staff management, purchasing, inventory management and recordkeeping.



Market

The company's target market will consist primarily of local residential customers ranging in age from 21 to 45 and local businesses. Research indicates that 90% of local tavern business comes from a three mile radius. The population of Oakland Township is approximately 7539 (estimated 1992) and has grown 7% since 1990 making it one of Pellton County's largest townships. The population demographics reveal a universe of people totaling 5448 in the age group 18 to 59. The local housing area consists of a mix of single family homes, townhouses, apartment dwellings and mobile home parks. The average household income is $43,221 (estimated 1989).



Products/Services

The tavern will feature a wide selection of alcoholic and non-alcoholic beverages including a variety of liquors, wines, and beers. The food menu will include a wide selection of appetizers along with grilled and cold sandwiches, steaks, hoagies, burgers and fries, dinner and dinner specials. AEI will feature live entertainment, a disc jockey, music, video games and amusements. Business hours will be Monday thru Sunday, 11:00 AM-2:00 AM.

Competition

AEI's competition within a three mile radius consists primarily of several local established taverns/pubs/fire halls. The Williamston Fire Hall is located on Rt. 73 one mile east of the Rock Island Tavern, and the Victorian Rose is approximately four miles west on Rt. 73 in Watertown. The Fire Hall is popular and features a good selection of food and beverages with occasional entertainment. However, it has limited hours of operation and is closed on Sundays. The Victorian Rose is established, but has limited food, entertainment and parking and attracts a transient customer base. The tavern is also closed on Sundays. Other local competition includes the Boston Inn located three miles north on Route 206 and the Hill Street Tavern located in Foley Pass.



Uniqueness

The Rock Island Tavern has been in business for over 40 years and is considered a landmark in Williamston. The Tavern is known for its good food, comfortable surroundings, quality entertainment and amusement/games selection. Management will actively promote the tavern as the place to meet and socialize in Williamston. This message will be delivered through local advertisements, direct mail, promotional giveaways, special events (i.e. car shows), and through word-of-mouth.



Purchase Pric

AEI Associates has offered $250M for the purchase of the assets of the Tavern excluding real estate. The assets to be purchased include equipment, machinery, fixtures, supplies, inventory and the liquor license. AEI will negotiate a ten year lease agreement with a ten year renewal option and the right of first refusal should the owner elect to sell the property.



Financing

AEI will provide an equity contribution of $125M in cash. The seller will take back a secured note for $125M over ten years at 9% fixed with no prepayment penalty. AEI will seek to obtain a $45M-$50M secured SBA guaranteed fixed rate term loan amortizing over five to seven years to finance certain initial costs and working capital requirements.


Summary of Historical Financial Results

  1991 1992 1993 1994 1995
Sales 275657 418135 461075 444203 475198
Operating Expenses 65405 115429 122158 141348 146273
Pretax Profit 9570 30569 66278 36618 36487
Total Assets 57980 60212 62939 91676 93730
Total Liabilities 35274 33727 41478 65376 75562
Net Worth 22733 26485 21461 26300 18168

Summary of Financial Projections

  1997 1998 1999 2000 2001
Sales 49900 433930 581984 651822 749595
Operating Expenses 169685 177225 188425 205075 221325
Pretax Profit 14165 22622 32688 45979 70863
Total Assets 317664 308902 306168 309421 330103
Total Liabilities 292500 272500 254500 233500 215000
Net Worth 25164 35402 51688 75921 115103

NATURE OF VENTURE


Background

The tavern/restaurant industry is mature and established, nevertheless, food and alcoholic beverage sales continue to rise nationally. Consumers spent roughly 215 billion at restaurants and taverns in 1995. This growth has been fueled by the long term rise in the portion of food and beverage dollars consumers spend on items prepared outside the home. In addition, changing work and leisure habits and increased advertising and promotion spearheaded by the alcoholic beverage industry have contributed to the industry's growth and have enhanced profitability.



Nature of Products/Services

AEI will offer a wide selection of alcoholic and non-alcoholic beverages, along with a full menu and complete selection of lunch, dinner and snack items. AEI will feature live entertainment on weekends including local and regional bands and music acts. On certain weekday and weekend nights, a disc jockey will complement and/or supplement the live music. For amusement, the Tavern will provide two pool tables, darts and a wide variety of popular video games. AEI will promote drink specials, promotional prizes, giveaways and special events such as (antique car shows) in the adjacent parking lot.



Location of Venture

The Rock Island Tavern is located along an active commercial section of East Green Avenue (Route 45) approximately ½ mile from Route 206 in Williamston, Pellton County, PA.The Tavern is approximately one-half mile east of Watertown and approximately ten miles north of Foley Pass. The surrounding businesses include several international fast food chains, retail shops, and service companies. The Tavern is located next to Gary's Farmer's Market, a very active retail established over 75 years ago.

According to Oakland Township authorities, the surrounding area is expected to continue to grow as a result of continued residential construction and commercial development. The site is locate within 1/4 mile of a new 50 lot single family housing development. The adjoining parcels have been zoned to accommodate additional townhouse development and further retail development to include a multi screen movie theater and strip center.

According to Pennsylvania Department of Transportation (PENNDOT), a 1996 traffic survey for Route 45 and Route 206 determined the average daily traffic counts to be as follows:

Route 45

  • 17,960 vehicles

Route 206

  • North Bound = 8,617 vehicles
  • South Bound = 8,563 vehicles

MARKET DESCRIPTION AND ANALYSIS

AEI will target the local residents and businesses of Oakland Township and surrounding townships in order to develop a loyal base of repeat customers as well as draw new customers from the surrounding communities. In addition, the company will seek to attract the areas growing commuter traffic.



Market Trends

AEI's target market will consist of local residential customers, local businesses and commuter traffic. Research indicates that up to 90% of business comes from within a three mile radius. Consequently, the company will focus on attracting and developing a loyal customer base from the surrounding community. AEI expects to capture commuter traffic traveling to Dentworth, Foley Pass, and Watertown



Demographic and Economic Trends

Pellton County is an urban county of 689,996 persons (estimate 1992) situated in southeastern Pennsylvania. Three major employment centers are located within the county making Pellton County one of the leading industrial and trade complexes in the nation.

Pellton County experienced rapid growth in population, housing and employment following WWII. A residential construction boom occurred during the 1950's and 1960's and has remained strong ever since. Development is likely to remain strong particularly in the western part of the county due to the extensive road network, educated and skilled labor force and availability of land.



Current Competitors

AEI's principal competition comes from local bars, and tavern/restaurants within a ten mile radius. The Williamston Fire Hall is locate within the town of Williamston approximately one mile east on Route 45 in an active commercial are. The Fire Hall is a popular location and features a good selection of alcoholic and non-alcoholic beverages, food and occasional live entertainment.

The Victorian Rose is an established tavern located approximately three miles west on Route 45 in Watertown on a busy residential/commercial area. The tavern attracts local residents but has a limited and average food selection and limited parking.


DESCRIPTION OF PRODUCTS/SERVICES


Uniqueness of Products/Services

The Rock Island Tavern will differentiate itself from its many local competitors in a variety of ways. The tavern will continue to build upon its reputation as a favorite local spot for socializing, drinking, dining and entertainment. AEI will retain loyal customers and attract new customers by improving the selection of alcoholic beverages, upgrading promotional giveaways and prizes and featuring special events. Moreover, AEI will offer quality live entertainment, theme nights and a popular selection of video games and amusements.

Management will actively promote the tavern through local advertisements, cross couponing and advertising with local merchants, direct mail promotions and through promotional giveaways and special events.



Advantages Over Competition

AEI's principal competitive advantages come from its ability to offer an attractive combination of beverages, food, music, and entertainment which will appeal to a large and growing target market. The principal competitors do not offer this combination and variety to their customers.



BUILDING AND EQUIPMENT

The property consists of a triangular shaped one-half acre lot situated on the east side of East Green Avenue. The building is zoned for general commercial use and consists of a two-story detached commercial dwelling of brick construction with aluminum siding and a shingle roof which is approximately 70 years old.

The first level consists of a horseshoe shaped bar with seating capacity for 22 customers along with a kitchen, adjoining dining/entertainment area and four separate rest rooms. The second floor contains a bedroom, bathroom, office area, conference room and attic. The basement area contains storage space and refrigeration and freezer units for beer and food storage.

The property will be leased to AEI Associates, Inc. under a ten-year lease agreement. However, the principals have the option to buy the property. An appraisal dated July 15, 1993 by Specht Realty, Inc. indicated a market value of $188,600. A purchase price has not yet been agreed upon. The principal equipment consists primarily of kitchen equipment such as a stove, refrigerators and freezers. Other assets include televisions, tables, chairs, air-conditioners, a cash register, desk bedroom and conference room furniture.



MANAGEMENT TEAM AND OWNERSHIP

AEI's management team will consist of Steven Gresboro and Kevin Painter. Steven and Kevin are highly focused, hard working, energetic and broadly experienced individuals whose combined talents provide a strong and qualified management team. Steven and Kevin provide the needed "hands on" experience in the tavern/restaurants business. In addition, Mr. Gresboro brings expertise in the areas of business administration, finance, sales and marketing. His extensive business background and academic credentials compliment the strengths and talents of Kevin Painter.



BUSINESS STRATEGIES

AEI will employ a differentiation strategy that will create value for the customer beyond that available from existing competition. The company will focus on providing a friendly, comfortable and entertaining environment that features a wide selection of quality spirits, beverages and food.



Marketing Plan and Supporting Strategies

AEI will support its differentiation strategy by effective execution of its marketing plan which contains sever integral supporting strategies, including product/service, promotional/sales and pricing.

AEI's product/service strategy will be to provide a wide selection of popular alcoholic and nonalcoholic beverages along with an extensive menu of popular snacks, lunch, and dinner selections. Management will strive to deliver the highest level of consistent, friendly, and courteous customer service to insure a pleasurable drinking and dining experience. In addition, the Tavern will feature a variety of popular live entertainment and music. AEI will also provide popular games and amusements including two pool tables, darts, and video games which will provide a strong source of additional income.

AEI will utilize multiple, constant, but limited advertising and promotional sources. These sources will be selected to maximize the return on allocated advertising/promotional dollars. The local community residents and businesses will be attracted through the yellow pages, local newspaper advertisements, flyers, coupons and periodic direct mail programs.

AEI will offer certain promotional giveaway items, such as T-shirts, key chains, calendars, coffee mugs, which will include the Rock Island Tavern's distinctive logo. In addition, the Tavern will sponsor special events such as a car show and golf outing which will include gifts and cash prizes. The company will also join certain industry associations, such as the Freestone Tavern and Restaurant Association and the local chamber of commerce. These associations provide valuable business tips, allow the business owner to develop industry contacts and build communityrelations.

AEI will utilize a combination of competitor based and prestige pricing. This will insure pricing is in line and local competitors for products and services where little value can be added such as in the case of games and amusements. However, prestige pricing will be employed such as premium micro-brews and liquors or dinner specials where AEI can offer higher quality. The company's strategy will be to position itself among the leading competitors and compete on quality, convenience and customer service, and lastly on price. By developing a high quality image and reputation AEI can maintain premium pricing and maintain its position as the preferred local tavern in the area.

The average customer is expected to spend between $5.00 and $20.00 per visit.



Financial Strategy

AEI will be owned and operated by Steven Gresboro who will own 100% of the company's capital stock.

AEI will seek to obtain a $45M-$50M secured SBA guaranteed term loan at a fixed rate amortizing over five to seven years to finance initial costs and working capital needs. The remaining balance of the required funding will be provided through a secured $125M seller note to be repaid over 10 years bearing interest at 9% fixed per annum. AEI's cash contribution will be $125M which will consist of an equity contribution and shareholder note.



Overall Growth Strategy

AEI expects to realize strong consistent, sales and earnings growth in year one that will increase steadily by year five. This growth will be principally attributable to the increase in local population as a result of continued expansion of residential housing developments and from the establishments of new local businesses within immediate area. A new 50 lot single family home development is under construction within one-quarter mile of the Tavern. AEI expects the other surrounding land parcels will be sold for commercial development to include a large townhouse development, multi-screen movie theater and a retail strip center. The company expects to develop additional loyal customers through execution of this advertising/promotional programs, and will focus on attracting the areas growing commuter traffic. Through the five year period, management will effectively control purchases and overhead to maximize operating efficiency and profitability. In addition, operating expenditures will be carefully managed to insure incremental revenue growth results in increased bottom-line profitability.


FINANCIAL DATA

Historical Financial Statement Analysis

For the purposes of this projection it is assumed AEI took over operations on January 1, 1997. A brief analysis of the 1995 financial statements is as follows:

1995 Income Statement


Sales

Sales increased by 6.9% in 1995 and have increased by an average (16.2% over the past four years). Management attributes this growth to increased advertising and promotion efforts in conjunction with an upgraded food, beverage, games/amusement selection.


Operating Expenses

Management has demonstrated effective control of expenses over the past four years in relation to sales growth. Operating expenses increased by $5M in 1995 but declined in a percentage of sales by 1% to 30.8%. Major expense items include officer salaries, utilities, taxes, rent and insurance costs.

1995 Balance Sheet

Inventory

Inventory levels have been very stable year after year and are comprised primarily of liquor, food and beer. Minimum inventory levels are maintained due to the perishable nature of the aforementioned items. Management purchases liquor and food on a weekly basis. Beer is purchased twice a week.


Fixed Assets

Equipment includes principally kitchen appliances and accessories, refrigerators, beer coolers, compressors, freezers, furniture and fixtures.


Long Term Debt

This represents the remaining balance of a bank term loan to finance equipment purchases and building improvements. In addition, the principal has provided periodic loans to the company to support working capital requirements and for renovations and improvements.



Estimated Initial Costs

Desired Minimum Cash Balance   $20,000
Initial Expenditures    
License/Permit Fees 1,500  
Wages/Payroll Taxes 5,000  
Prepaid Insurance 8,400  
Inventory 5,000  
Deposits 1,400  
Bank Fees 2,000  
Advertising and Promotion 2,000  
Legal and Accounting 2,000  
Total Initial Expenditures   $47,300
Assets Purchased    
Equipment 150,000  
Liquor License 50,000  
Goodwill 50,000  
Total Assets Purchased   250,000
Total Initial Costs   297,300
Financing Requirements    
Seller Note 125,000  
Bank Financing 47,000  
Equity Investment 125,000  
Total Financing Requirements $297,300    

Five Year Financial Projects and Assumptions

These Financial Projections are based on estimates and assumptions set forth therein, and have been delivered for the information and convenience of persons who wish to evaluate the feasibility of the company's strategy and goals. Each such person who has received them realizes that financial projections are inherently speculative. The Financial Projections are based upon the company's Assumptions reflecting conditions it expects to exist or the course of action it expects to take. Because events and circumstance do not occur as anticipated, there will be difference between the Financial Projections and actual results, and those differences may be material. The Financial Projections are based upon detailed underlying assumptions.

Income Statement

Sales

Sales are projected to reach $499,000 in 1997 and increase by 7% in 1998, 9% in 1999, 12% in 2000 and 15% in 2001. Sales through the projection period will be fueled by the increase in local population as a result of continued expansion of residential housing developments and from the establishment of new local businesses within the immediate area. AEI will attract and develop new customers through execution of its advertising/promotional programs.

AEI's principal sources of revenue will be generated through the sale of beer and liquor. Beer sales are expected to represent approximately 50% of total revenue. Draft and bottle beer sales will comprise the bulk of total beer revenue. Liquor sales are projected to represent approximately 15% of total revenue which is in line with historical percentage. This percentage is projected to remain relatively stable year to year as beer continues to be the dominant beverage. Food sales will comprise the remaining 35% of sales. Sales of food are expected to grow moderately year to year due to management's focus on beverage sales. The gross margin is expected to remain relatively stable at 40% of sales through the projection period. This assumption is based onhistorical figures and industry averages.


Operating Expenses

Due to significant sales growth through the projection period, expenses are forecasted to increase although decline as percentage of sales, but remaining within industry averages. Operating expenses are projected to decline as a percentage of sales from 34.0% in 1997 to 29.5% by 2001 as a result of effective management and control of expenses.


Taxes

The effective tax rate is projected to be 40%.

Balance Sheet

Fixed Assets

Fixed assets are stated at cost. Depreciation is provided over the estimated useful lines of the assets under the straight-line method for financial reporting purpose and accelerated methods for income tax purposes. Fixed assets include principally machinery and equipment to be depreciated over seven years.


Goodwill

The excess of the purchase price over the fair market value of the assets acquired is being amortized using the straight-line method over a 15 year period.

Liquor License

The liquor license will be amortized using the straight line method over a 15 year period.


Accounts Payable

The majority of suppliers are expected to extend 30-day terms and AEI will pay within those terms.


Long Term Debt

Long term debt will consist of the remaining principal balance of a bank term loan amortizing over five to seven years. Also included, will be the remaining principal balance of the seller note amortizing over ten years at a fixed rate of 9% per annum. In addition, a shareholder note will pay the minimum interest allowable with no specific repayment schedule.


Net Worth

AEI expects to achieve profitability in 1997 and thereafter. The company plans to financegrowth through cash flow from operations. No additional equity will be required after 1997. Net worth is expected to improve from 1997 and thereafter comprising a greater percentage of total capitalization.

Annual Projections Cash Flow Analysis

  12/31/97 12/31/98 12/31/99 12/31/00 12/31/01
Cash flow from operating activities:          
Net income (loss) $5,164 $10,238 $16,266 $24,252 39183
Depreciation & amortization 28,120 25,260 25,260 25,260 25,260
(Increase) decrease in inventory (9000) (500) (500)    
Incr. (decr.) in payables & accruals 12,500 3,500 3,500 1,500 4,000
(Increase) decrease in intagibles (100000)        
(Increase) decrease in other/deposits (3000)        
Net case from operating activities $(66,216) $38,498 $44,526 $51,012 $68,443
Cash flows from investment activities:          
(Purchase) Sale of equipment/RE $(150,000) $20,000      
Net cash from investment activities $(150,000) $20,000      
Cash flow from financing activities:          
Increase (decrease) in CPLTD $22,500        
Increase (decrease) in long term debt 257,500 (22,500) (22,500) (22,500) (22,500)
Increase in additional paid in capital 20,000        
Net cash from financing activities $300,000 $(22,500) $(22,500) $(22,500) $(22,500)
Net change in cash:          
Increase (decrease) in cash 83,784 35,998 22,026 28,512 45,943
Cash-Beginning of year 83,784 119,782 141,808 170,321  
Cash-End of year $83,784 $119,782 $141,808 $170,321 $216,263
Core cash required $19,192 $20,536 $22,384 $25,070 $28,831
Cumulative excess cash flow $64,592 $99,246 $119,424 $145,250 $187,433

Historical Financial Statements: Balance Sheet

  FYE FYE
  12/31/91 12/31/92
ASSETS
Current assets:
Cash & equivalents $1,034 1.8% $401 0.7%
Accounts receivable 400 0.7% 400 0.7%
Inventories 9,899 17.1% 9,473 15.7%
Total current assets $11,333 19.5% $10,274 17.1%
Gross fixed assets $25,506 44.0% $32,056 53.2%
Less: accumulated depreciation 1,612 2.8% 5,171 8.6%
Net fixed assets $23,894 41.2% $26,885 44.7%
Other assets:
Shareholder loans $2,753 4.7% $2,753 4.6%
Other assets-Liquor license 20,000 34.5% 20,000 33.2%
Prepaids 0.0% 300 0.5% 840
Loan origination fees 0.0% 0.0% 10,036 15.9%
TOTAL ASSETS $57,980 100.0% $60,212 100.0%
LIABILITIES
Accounts payable $3,668 6.3% $5,013 8.3%
Current long term debt-bank 812 1.4% 3,462 5.7%
Current long term debt-seller 5,975 10.3% 3,922 6.5%
Accruals 0.0% 0.0% 0.0% 0.0%
Total current liabilities $10,455 18.0% $12,397 20.6%
Long term debt-bank $24,792 42.8% $21,330 35.4%
Long term debt-shareholder 0.0% 0.0% 6,355 10.1%
TOTAL LIABILITIES $35,247 60.8% $33,727 56.0%
NET WORTH
Common stock $100 0.2% $100 0.2%
Additional paid in capital 12,999 22.4% 12,999 21.6%
Retained earnings (deficit) 9,634 16.6% 13,386 22.2%
Total net worth $22,733 39.2% $26,485 44.0%
TOTAL LIABILITIES & NET WORTH $57,980 100.0% $60,212 100.0%
FYE FYE FYE
12/31/93 12/31/94 12/31/95
$210 0.3% $843 0.9% $202 0.2%
400 0.6% 400 0.4% 400 0.4%
8,494 13.5% 8,919 9.7% 8,473 9.0%
$9,104 14.5% $10,162 11.1% $9,075 9.7%
$32,809 52.1% $67,059 73.1% $83,075 88.6%
9858 15.7% 15,418 16.8% 26,279 28.0%
$22,951 36.5% $51,641 56.3% $56,796 60.6%
0.0% 0.0% 0.0%      
20,000 31.8% 20,000 21.8% 20,000 21.3%
1.3% 1,850 2.0% 1,850 2.0%  
8,023 8.8% 6,010 6.4%    
$62,931 100.0% $91,676 100.0% $93,731 100.0%
$5,555 8.8% $3,060 3.3% $7,072 7.5%
3,462 5.5% 825 0.9% 2,375 2.5%
5,382 8.6% 4,498 4.9% 4,794 5.1%
0.0%          
$14,399 22.9% $8,383 9.1% $14,241 15.2%
$20,724 32.9% $22,566 24.6% $21,644 23.1%
34,427 37.6% 39,677 42.3%    
$41,478 65.9% $65,376 71.3% $75,562 80.6%
$100 0.2% $100 0.1% $100 0.1%
12,999 20.7% 12,999 14.2% 12,999 13.9%
8,362 13.3% 13,201 14.4% 5,068 5.4%
$21,461 34.1% $26,300 28.7% $18,167 19.4%
$62,939 100.0% $91,676 100.0% $93,729 100.0%

Annual Projections:Balance Sheet

  PROJ PROJ
  12/31/97 12/31/98
ASSETS
Current assets:
Cash & equivalents $83,784 26.4% $119,782 38.8%
Inventories 9,000 2.8% 9,500 3.1%
Total Current assets $92,784 29.2% $129,282 41.9%
Gross fixed assets $150,000 47.2% $130,000 42.1%
Less: accumulated depreciation 21,450 6.8% 40,040 13.0%
Net fixed assets $128,550 40.5% $89,960 29.1%
Other assets:
Prepaids $2,000 0.6% $2,000 0.6%
Deposits 1,000 0.3% 1,000 0.3%
Other assets-Liquor license 46,665 14.7% 43,330 14.0%
Goodwill 46,665 14.7% 43,330 14.0%
TOTAL ASSETS $317,664 100.0% $308,902 100.0%
LIABILITIES
Notes payable@P+1% $ 0.0% $ 0.0%
Accounts payable 7,500 2.4% 8,500 2.8%
Current long term debt-bank 10,000 3.1% 10,000 3.2%
Current long term debt-seller 12,500 3.9% 12,500 4.0%
Accruals 5,000 1.6% 7,500 2.4%
Total current liabilities $35,000 11.0% $38,500 12.5%
Long term debt-bank@9% $40,000 12.6% $30,000 9.7%
Long term debt-seller@9% 112,500 35.4% 100,000 32.4%
Long term debt-shareholder 105,000 33.1% 105,000 34.0%
TOTAL LIABILITIES $292,500 92.1% $273,500 88.5%
NET WORTH
Common stock $100 0.0% $100 0.0%
Additional paid in capital 19,900 6.3% 19,900 6.4%
Retained earnings (deficit) 5,164 1.6% 15,402 5.0%
Total net worth $25,164 7.9% $35,402 11.5%
TOTAL LIABILITIES & NET WORTH $317,664 100.0% $308,902 100.0%
PROJ PROJ PROJ
12/31/99 12/31/100 12/31/101
$141,808 46.3% $170,321 55.0% $216,263 65.5%
10,000 3.3% 10,000 3.2% 10,000 3.0%
$151,808 49.6% $180,321 58.3% $226,263 68.5%
$130,000 42.5% $130,000 42.0% $130,000 39.4%
58,630 19.1% 77,220 25.0% 95,810 29.0%
$71,370 23.3% $52,780 17.1% $34,190 10.4%
$2,000 0.7% $2,000 0.6% $2,000 0.6%
1,000 0.3% 1,000 0.3% 1,000 0.3%
39,995 13.1% 36,660 11.8% 33,325 10.1%
39,995 13.1% 36,660 11.8% 33,325 10.1%
$306,168 100.0% $309,421 100.0% $309,421 100.0%
$ 0.0% $ 0.0% $ 0.0%
10,000 3.3% 10,000 3.2% 12,000 3.6%
10,000 3.3% 10,000 3.2% 10,000 3.0%
12,500 4.1% 12,500 4.0% 12,500 3.8%
9,500 3.1% 11,000 3.6% 13,000 3.9%
$42,000 13.7% $43,500 14.1% $47,500 14.4%
$20,000 6.5% $10,000 3.2% $ 0.0%
87,500 28.6% 75,000 24.2% 62,500 18.9%
105,000 34.3% 105,000 33.9% 105,000 31.8%
$254,500 83.1% $233,500 75.5% $215,000 65.1%
$100 0.0% $100 0.0% $100 0.0%
19,900 6.5% 19,900 6.4% 19,900 6.0%
31,668 10.3% 55,921 18.1% 95,103 28.8%
$51,668 16.9% $75,921 24.5% $115,103 34.9%
$306,168 100.0% $309,421 100.0% $330,103 100.0%

Historical Financial Statements: Income Statement

  FYE FYE
  12/31/91 12/31/92
Net sales $275,657 100.0% $418,135 100.0%
Cost of sales 199,205 72.3% 269,589 64.5%
Gross profit $76,452 27.7% $148,546 35.5%
Operating expenses:
Officers salaries $ 0.0% $2,250 0.5%
Utilities 13,430 4.9% 20,424 4.9%
Supplies 266 0.1% 556 0.1%
License & permits 3,284 1.2% 2,930 0.7%
Telephone 979 0.4% 1,725 0.4%
Trash removal 1,293 0.5% 2,343 0.6%
Insurance 1,892 0.7% 14,886 3.6%
Payroll taxes 11,513 4.2% 14,044 3.4%
Accounting & legal 1,759 0.6% 5,010 1.2%
Repairs & maintenance 4,630 1.7% 8,988 2.1%
Rent 19,596 7.1% 28,540 6.8%
Depreciation & amortization 1,613 0.6% 3,558 0.9%
Bank charges 670 0.2% 886 0.2%
Office expense 1,187 0.4% 0.0% 419
Advertising & promotion 1,750 0.6% 6.333 1.5%
Cleaning & exterminating 517 0.2% 983 0.2%
Coil cleaning & water testing 68 0.0% 149 0.0%
Dues & subscriptions 173 0.1% 182 0.0%
Linen & laundry 587 0.2% 1,642 0.4%
Theft & loss 0.0% 0.0% 0.0% 0.0%
Miscellaneous 118 0.0% 0.0% 225
Total operating expenses: $65,325 23.7% $115,429 27.6%
Operating profit (loss) $11,127 4.0% $33,117 7.9%
Interest expense $1,812 0.7% $2,650 0.6%
Other income (expense) 355 0.1% 102 0.0%
Pretax income (loss) $9,670 3.5% $30,569 7.3%
Taxes $ 0.0% $ 0.0%
Net income (loss) $9,670 3.5% $30,569 7.3%
FYE FYE FYE
12/31/93 12/31/94 12/31/95
$461,075 100.0% $444,203 100.0% $475,198 100.0%
270,210 58.6% 264,168 59.5% 290,382 61.1%
$190,865 41.4% $180,035 40.5% $184,816 38.9%
$11,225 2.4% $17,300 3.9% $20,800 4.4%
21,245 4.6% 23,681 5.3% 19,633 4.1%
0.0% 9,860 2.2% 13,025 2.7%  
1,370 0.3% 642 0.1% 550 0.1%
1,595 0.2% 1,722 0.4% 1,634 0.3%
2,400 0.5% 2,340 0.5% 2,184 0.5%
8,999 2.0% 11,444 2.6% 11.334 2.4%
12,677 2.7% 15,213 3.4% 15,727 3.3%
3,593 0.8% 3,960 0.9% 2,440 0.5%
8,938 1.9% 5,005 1.1% 6,037 1.3%
31,100 6.7% 31,200 7.0% 31,375 6.6%
3,954 0.9% 6,398 1.4% 7,129 1.5%
1,010 0.2% 1,155 0.3% 1,037 0.2%
0.1% 511 0.1% 527 0.1%  
8,311 1.8% 6,726 1.5% 5,084 1.1%
814 0.2% 248 0.1% 562 0.1%
191 0.0% 659 0.1% 1,021 0.2%
225 0.0% 0.0% 200 0.0%  
3,867 0.8% 2,059 0.5% 24 0.0%
4,700 1.0%        
0.0% 1,225 0.3% 1,250 0.3%  
$122,158 27.6% $141,348 31.8% $146,273 30.8%
$68,707 14.9% $38,687 8.7% $38,543 8.1%
$2,506 0.5% $2,174 0.5% $2,199 0.5%
77 0.0% 105 0.0% 143 0.0%
$66,278 14.4% $36,618 8.2% $36,487 7.7%
$ 0.0% $ 0.0% $ 0.0%
$66,278 14.4% $36,618 8.2% $36,487 7.7%

Annual Projections: Income Statement

  PROJ PROJ
  12/31/97 12/31/98
Net sales $499,000 100.0% $533,930 100.0%
Cost of sales 299,400 60.0% 320,358 60.0%
Gross profit $199,600 40.0% $213,572 40.0%
Operating expenses:
Officers salaries $50,000 10.0% $53,000 9.9%
Utilities 24,900 5.0% 26,200 4.9%
Supplies 1,000 0.2% 1,000 0.2%
License & permits 1,500 0.3% 1,500 0.3%
Telephone 1,800 0.4% 1,800 0.3%
Trash removal 2,500 0.5% 2,600 0.5%
Insurance 12,000 2.4% 12,500 2.3%
Payroll taxes 16,000 3.2% 17,000 3.2%
Accounting & legal 2,000 0.4% 1,500 0.3%
Repairs & maintenance 3,000 0.6% 3,500 0.7%
Rent 16,800 3.4% 16,800 3.1%
Depreciation-Fixed assets 21,450 4.3% 18,590 3.5%
Amortization-Liquor license 3,335 0.7% 3,335 0.6%
Bank charges 1,000 0.2% 1,000 0.2%
Office expense 500 0.1% 600 0.1%
Advertising & promotion 5,000 1.0% 7,000 1.3%
Cleaning & exterminating 500 0.1% 500 0.1%
Coil cleaning & water testing 1,000 0.2% 1,100 0.2%
Dues & subscriptions 200 0.0% 200 0.0%
Linen & laundry 3,000 0.6% 3,200 0.6%
Theft & loss 2,000 0.4% 4,000 0.7%
Miscellaneous 200 0.0% 300 0.1%
Total operating expenses: $169,685 34.0% $177,225 33.2%
Operating profit (loss) $29,915 6.0% $36,347 6.8%
Interest expense $15,750 3.2% $13,725 2.6%
Other income (expense) 0.0% 0.0% 0.0% 0.0%
Pretax income (loss) $14,165 2.8% $22,622 4.2%
Taxes $5,666 1.1% $9,049 1.7%
Amortization-Goodwill $3,335 0.7% $3,335 0.6%
Net income (loss) $5,164 1.0% $10,238 1.9%
PROJ PROJ PROJ
12/31/99 12/31/100 12/31/101
$581,984 100.0% $651,822 100.0% $749,595 100.0%
349,190 60.0% 391,093 60.0% 449,757 60.0%
$232,793 40.0% $260,729 40.0% $299,838 40.0%
$56,000 9.6% $59,000 9.1% $62,000 8.3%
28,000 4.8% 32,600 5.0% 37,500 5.0%
1,200 0.2% 1,400 0.2% 1,600 0.2%
1,700 0.3% 1,900 0.3% 2,100 0.3%
1,900 0.3% 1,900 0.3% 2,100 0.3%
2,700 0.5% 2,800 0.4% 3,000 0.4%
13,000 2.2% 14,000 2.1% 15,000 2.0%
18,100 3.1% 20,000 3.1% 22,500 3.0%
1,700 0.3% 1,900 0.3% 2,100 0.3%
4,500 0.8% 5,000 0.8% 5,000 0.7%
16,800 2.9% 16,800 2.6% 16,800 2.2%
18,590 3.2% 18,590 2.9% 18,590 2.5%
3,335 0.6% 3,335 0.5% 3,335 0.4%
1,200 0.2% 1,400 0.2% 1,500 0.2%
700 0.1% 800 0.1% 1,000 0.1%
9,000 1.5% 12,000 1.8% 15,000 2.0%
600 0.1% 700 0.1% 800 0.1%
1,300 0.2% 1,500 0.2% 1,600 0.2%
350 0.1% 350 0.1% 300 0.0%
3,400 0.6% 3,600 0.6% 3,900 0.5%
4,000 0.7% 5,000 0.8% 5,000 0.7%
350 0.1% 500 0.1% 600 0.1%
$188,425 32.4% $205,075 31.5% $221,325 29.5%
$44,368 7.6% $55,654 8.5% $78,513 10.5%
$11,700 2.0% $9,675 1.5% $7,650 1.0%
0.0%          
$32,668 5.6% $45,979 7.1% $70,863 9.5%
$13,067 2.2% $18,391 2.8% $28,345 3.8%
$3,335 0.6% $3,335 0.5% $3,335 0.4%
$16,266 2.8% $24,252 3.7% $39,183 5.2%
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