THE FINANCIAL PLAN

The financial plan section includes start-up costs, cash flow projections, sales and expenses estimates, and financial needs. In this section you will list your start-up needs, including investments required and bank loans. You will do cash flow projections with sales and expense projections for 1-5 years. You will have a cash flow projection by the month for the first year.

A. Investment Required for Start-up

Start-up Costs/Needs

List all the start-up you will have. List all assets that you will need for your business--including equipment, kitchen, dining room, bathrooms, and retail displays. You will have to visit equipment and restaurant supply stores as well as talk with vendors. How much will pre-opening labor and training expenses be? How much will advertising cost?

Investment Required--Bank Loan/Self

Financial planning is important so you will not run out of cash while in the start-up stage. How much will you invest of your own money and how much will you have to borrow?

B. Cash Flow Projections

Sales and Expense Estimates--Worksheets and Assumptions

Projections for sales and expenses include mortgage/rental payments, interest payments, utility bills, wages/salaries/benefits, supplies, insurance, telephone, and state and federal taxes.

Monthly Cash Flow Projection--Year One

Describe you cash flow. How much money will come from various sources?

C. Managing the Books and Records

What type of accounting system will you use. For a small business Quickbooks Pro is good and easy to use.

D. Summary of Financial Needs

In this section you will list your investment and how much you will need to cover start-up expenses, fixed asset purchases, and how much cast to operate the business.

FOOD

How many times will you turn seats and how much will the average customer spend? How does this translate into net sales?

BEVERAGE

How much income will come from tea? What will be the net sales?

RETAIL

How much retail will be sold each month/year? What will be the net income?

LOOSE TEA

How much loose tea will be sold per day/week? What is the cost of the tea and what is the net income?

RETAIL

What will be the average retail income per day/week? What is the net income?

The financial plan section is probably the heart of your business plan. It is important to be as realistic as possible when making your cash flow projections. Start-up costs are important because you need to project how much cash you will need. The investment required will depend on how much you have to invest and how much you will have to borrow. The cash flow projections are just as important. You will have to estimate what you believe your sales to be and what you think your expenses will be. Your expenses should include insurance, telephone, and taxes. Advertising expense should be the largest expenditure, other than equipment, in your start-up costs. It is better to over extimate your startup costs rather than run out of cash.

Section 2 Background information The background information should include your Mission Statement, your business goals and objectives, and a general description of your business.

Section 3 Description of Products The description of products and services will include the features, benefits, and future of your proposed products and services.

Section 4 Management Structure and Organization The Management Structure and Organization section includes the form of ownership, personnel, organizational chart, and outside services and advisors.

Section 5 Marketing Plan The marketing plan includes market strategies, target markets, current and future trends, and marketing tactics.

Section 7 Conclusion The conclusion will include a feasibility statement and and action plan.

Business Plan A business plan is critical when opening a tea room and will help you to begin maximizing your profits. Keeping expenses down, especially startup costs, will give you extra cash later.

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