Create A New Venture Financial Plan With Two Parts ✓ Solved

Create A New Venture Financial Plan That Has Two Parts 1 An Excel Sp

Create a new venture financial plan that has two parts: 1) an Excel spreadsheet with estimates for the financial information, and 2) a written document with a summary of key financial information. This assessment examines crafting a business plan, building a strategic plan, identifying sources of financing, creating a financial plan, and managing cash flow. You will create a financial requirement plan that estimates all the financial information related to starting the new venture and operating it for the first 12 months. Your financial plan will include a spreadsheet with estimated financial information for your new venture and a summary of the key financial information for your new venture. A well thought out and fact-based business plan increases the likelihood of success for your new venture.

A business plan is a written summary of your proposed new venture that includes operational and financial details, marketing opportunities and strategy, and the needed skills and ability of its management (Scarborough & Cornwall, 2019). The plan also identifies the required sources of financing and reviews how debt and equity will be managed. The financial plan is a tool used to identify and estimate the initial investment required to get your new venture up and running as well as the monthly operating expenses and revenues required to break even and achieve profitability in the first 12 months. Finally, cash management involves forecasting, collecting, disbursing, and investing the cash your new venture will need to operate.

Sample Paper For Above instruction

Introduction

For this financial planning exercise, I have chosen to start a new organic juice bar. This venture aligns with current health trends and offers a unique service in the urban area where I intend to locate it. The plan includes preparing an Excel spreadsheet with estimates for startup costs, operating expenses, revenues, and cash reserves, complemented by a comprehensive written summary outlining key financial aspects and funding strategies.

Part 1: Financial Plan Worksheet

The initial investment required for launching the organic juice bar includes several startup costs such as leasehold improvements, equipment purchase, licenses, permits, initial inventory, and operational setup. Based on research, the estimated startup costs amount to approximately $150,000. This includes a $50,000 lease deposit and build-out costs of $70,000, along with equipment costs of $15,000, licensing, and initial inventory of $15,000.

Monthly operating expenses are projected at around $20,000, covering rent ($5,000), salaries for staff ($8,000), utilities ($1,500), marketing ($1,000), supplies ($2,000), and miscellaneous expenses ($2,500). These figures are based on current market research in the target area and industry standards.

To achieve break-even and profitability within the first year, the beverage bar needs monthly revenues of approximately $25,000. This encompasses product sales, estimated at 1,250 transactions/month with an average sale of $20, and additional revenue streams such as catering and merchandise.

Additional cash reserves are projected to be $30,000, which will help mitigate unforeseen expenses or cash flow constraints, especially during initial months of operation.

Part 2: Financial Report Summary

• Initial Investment: Estimated at $150,000 to cover build-out, equipment, licensing, inventory, and initial working capital.
• Monthly Operating Expenses: Approximately $20,000, including rent, payroll, utilities, marketing, and supplies.
• Monthly Revenues: Targeted at $25,000 to break-even and generate profit.
• Cash Reserves: Recommended at $30,000 to buffer against cash flow irregularities and unexpected costs.
• Funding Sources Review: To finance the initial investment and first year's operational costs, three potential sources include bank loans, angel investors, and government grants designed for small food businesses. Each source will require specific actions such as preparing a detailed business plan, demonstrating collateral, and presenting a compelling value proposition to investors.

Conclusion

This financial plan serves as a roadmap for establishing and operating a successful organic juice bar within the first year. It provides a clear outline of startup costs, ongoing expenses, revenue targets, and cash reserves necessary for sustainability. Securing diverse funding sources will be essential to cover the initial investment and operational needs, reducing financial risks and fostering growth.

References

• Scarborough, N. M., & Cornwall, J. R. (2019). Essentials of entrepreneurship and small business management (9th ed.). Pearson.
• Hisrich, R. D., Peters, M. P., & Shepherd, D. A. (2017). Entrepreneurship (10th ed.). McGraw-Hill Education.
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