Page 164 - Business Plans that Work A Guide for Small Business

Financial Plan: Telling Your Story in Numbers • 153

Under long-term
Significant investment is required in each location for assets, Lazybones shows
the property plant and
laundry and other equipment (video cameras, bar code equipment for the four new
company stores, but nothing
scanners, etc.). Historically, the company has been able to for franchise support.
finance this equipment as well as its installation with the
equipment manufacturer, Continental-Girbau. This financing
is shown as part of the long-term debt on the balance sheet.

10.5 Statement of Cash Flows

Exhibit 10.9 Simple Five-Year Statement of Cash Flows

Year 1 Year 2 Year 3 Year 4 Year 5
Cash flows from operations -$458,721 $98,293 $741,905 $1,517,209 $2,151,099
Cash used by investing activities -$244,400 $0 $0 $0 $0
Cash used by financing activities $775,494 -$60,057 -$65,691 -$71,853 -$46,450
Net increase (decrease) in cash $72,373 $38,236 $676,214 $1,445,356 $2,104,649
Cash at beginning of the period $65,800 $138,173 $176,408 $852,623 $2,297,979
Cash at end of period $138,173 $176,408 $852,623 $2,297,979 $4,402,628

As we look at the
Most Lazybones customers will pay up front for a semester balance sheet and cash
flow statement, we think
or year with a credit card, and most customers sign up in there needs to be a deeper
the first month or two of a semester. This results in the explanation. Dan notes that
company being flush with cash early in a semester, and then they are borrowing about
$500,000 to fund growth,
slowly spending the cash on delivering services. Nevertheless, but the balance sheet shows
we intend to borrow money (about $500,000) to open new $775,494 in year one, and
the cash flow statement
company stores, and to pay for the heavy administrative burden shows $830,400. We suspect
that Dan has $500,000 com-
associated with entering franchising. This borrowing is reflected ing from friends and family to
fund growing the corporate
in the first month of the balance sheet and cash flow statement infrastructure, and the other
(Exhibit 10.10). Principal and interest payments (all money debt is for equipment for
loaned is assumed to be at 9 percent over seven years) are the new company-owned
stores and is provided by
included throughout the financials. Continental-Girbau. But this
needs clarification.