Prepare A PowerPoint Presentation On Financial Planni 080741
Prepare A Powerpoint Presentation That Details A Financial Plan For Th
Prepare a PowerPoint presentation that details a financial plan for the company you select for your business plan. This must be a new company that you would like to start. The business plan is for a coffee shop. This assignment must be done in PowerPoint in APA format. No other formats will be accepted (i.e., Word). This financial plan will be included in your final business plan in your capstone course. If you were to open up your own company, what would you do? How would you get started? Describe the business, including the type of business. Create the business case. Determine why and how much funding is needed for the company. Determine the sources of funding. Consider self-funding, borrowing, equity, venture capital, etc. Evaluate the requirements of each funding source you determined appropriate. Analyze the associated risks of each funding source. Decide which sources are the best fit for your company based on the requirements of each. Justify your decision. Estimate the cost of capital for both short-term and long-term funding sources. Research current estimated APRs for your selected sources of funding. Create a profit-and-loss statement for a 3-year period. Project revenue, stating realistic assumptions, such as growth per year, in your projections. Estimate direct costs, including marketing, labor, supply costs, etc. The template for this presentation is provided to you above to give everyone an opportunity to maximize points on this assignment. This is the basic outline for the assignment. Follow the guidance below and within the template itself. If you are familiar with PowerPoint, you may “jazz it up” as you wish, but it is not necessary.
Paper For Above instruction
The following paper provides a comprehensive financial plan for a proposed new coffee shop business, outlining critical aspects such as funding requirements, sources of capital, risk analysis, and financial projections over a three-year period. This plan aims to serve as a foundational component of the overall business plan, crucial for securing funding and ensuring strategic financial management.
Introduction to the Business Concept
The envisioned coffee shop is a boutique establishment called “Brew Haven,” aimed at providing high-quality coffee and specialty beverages in a cozy setting. The business is positioned in an urban commercial district targeting young professionals, students, and local residents. The primary services will include gourmet coffee, tea, light snacks, and specialty drinks. The business model emphasizes sustainable practices, locally sourced ingredients, and excellent customer service to differentiate itself in a competitive market.
The rationale for launching Brew Haven stems from the increasing demand for premium coffee experiences and the lack of specialized coffee outlets in the area. The business case hinges on tapping into this niche market and leveraging current coffee consumption trends that favor artisanal and ethically sourced products.
Funding Needs and Sources
The startup capital needed to launch Brew Haven is estimated at $250,000. This amount covers costs such as leasing and renovating the space, purchasing coffee brewing equipment, initial inventory, marketing, licensing, and working capital reserves. To fund this venture, multiple sources are considered:
- Self-funding (personal savings): $50,000
- Bank loan (short-term): $100,000
- Angel investors or venture capital: $50,000
- Equity investment from partners: $50,000
Each source's requirements and associated risks are evaluated. Bank loans demand collateral and regular repayments, exposing the business to repayment risks if revenues fall short. Angel investors and venture capitalists typically seek equity stakes and may influence business decisions, but they provide valuable mentorship and growth capital. Self-funding minimizes external obligations but limits the initial capital available.
Cost of Capital Analysis
Based on current market data, the estimated APR for a short-term bank loan is approximately 6-8%, depending on creditworthiness. Equity investments from angel investors or venture capital typically require a higher expected return, around 15-20%, reflecting the risk involved. The cost of debt financing is lower but must be weighed against the risk of insolvency; equity is more expensive but does not require repayment, sharing risks with investors.
Financial Projections (Profit and Loss Statement)
Over the three-year forecast, revenue projection starts at $200,000 in the first year, with an anticipated annual growth rate of 15%, driven by increasing brand awareness and customer loyalty. Direct costs, including raw materials, labor, marketing, and supplies, are estimated at 70% of revenue in Year 1, decreasing gradually to 65% by Year 3 due to economies of scale.
Year 1 Revenue: $200,000
Year 2 Revenue: $230,000
Year 3 Revenue: $264,500
Direct costs are projected to be $140,000, $149,500, and $172,425 respectively for the three years. Operating expenses, including rent, utilities, salaries, and marketing, are estimated at $80,000 annually, increasing by 5% per year due to inflation and business expansion.
The net profit margin is expected to improve from 10% in Year 1 to 15% by Year 3 as operational efficiencies improve.
Risk Analysis and Justification of Funding Choice
Risk factors include market competition, economic downturns, fluctuating coffee commodity prices, and operational risks. To mitigate these, diversification of revenue streams and maintaining flexible cost controls are vital.
Considering the analysis, financing through a combination of self-funding and bank loans appears optimal, as it balances manageable debt levels with minimal dilution of ownership. Equity financing offers growth support but at the cost of relinquishing some ownership control. Given current APRs, the selected funding sources present acceptable risk-reward trade-offs for a startup of this nature.
Conclusion
This financial plan provides a strategic roadmap for launching Brew Haven, emphasizing sustainable growth and prudent financial management. By carefully selecting funding sources, projecting realistic revenues, and understanding associated risks, the business is positioned for successful market entry and expansion over the initial three years. Continued monitoring and adjustments will be essential to adapt to market conditions and ensure profitability.
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