Page 156 - Business Plans that Work A Guide for Small Business

Financial Plan: Telling Your Story in Numbers • 147

Exhibit 10.4 Owned Store COGS Breakdown by Percent

Variable Cost Breakdown
Cost of Goods Laundry % Storage % Overall %
Sold
Dry cleaning 4.2 2.6
Laundry supplies 3.0 1.8
We like how, after Dan
Payroll (COGS) 25.9 9.9 19.6 explains a portion of the
Bulking commissions 3.9 2.4 3.3 model (i.e., costs), he has a
table that breaks down the
Storage supplies 1.4 0.5 cost elements. Again, decom-
posing the business model
Shipping 4.4 1.7 into smaller parts helps you
generate more accurate
Truck rentals 6.0 2.4 financials.
Utilities 5.0 3.0
Payroll tax expenses 5.1 1.0 3.5
Merchant services 2.7 1.8 2.3
Discount services 0.1 0.2 3.5
Total COGS 49.9 27.1 44.2

Operating Expenses
Managers’ salaries, which do not vary based on workload,
are separated under operating expenses. The next
Again, avoid adjectives
largest location cost is rent. Since the business can use like conservative or cautious.
inexpensive “industrial” space, Lazybones rents are lower Entrepreneurs seldom are
than those for typical franchise businesses. The rents also cautious in their projections.
However, we like that he has
vary tremendously by location. To be cautious, we have chosen the highest cost loca-
based our model store’s rent on the most expensive of tion as his base model.
our four locations, Boston.
We have also included a factor increase of 5 percent per
year to offset expense escalations (Exhibit 10.5).