I-Drive Stoke Ltd.
Business Plan & Cash Flow Projections
Prepared By Rosetta IT Solutions Ltd. www.rosetta-it.com
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1
I-Drive Stoke Ltd. – Car & Van Rental
CONTENTS The Owner Objectives Market Research Staff Funding Projections for the three accounting years to October 2006, 2007 and 2008, including: -
-
Highlights Survival Ratio Cash Flow Forecasts Profit and Loss Forecasts Balance Sheet Projection Analyses of Operational Expenditure Sales Analysis
Conclusion
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I-Drive Stoke Ltd. – Car & Van Rental THE OWNER The proposed venture is organised by Mr. Mark Smith who is at present the owner of the successful Property managed business “I-PROPERTIES LTD.”. With a substantial experience in the area of business management and a very well established client base Mr. Smith is ideally positioned to undertake this venture. OBJECTIVES Our aim is to provide a local Car and Van Rental Service in Stoke at a completive market rates. In addition to the core business of car rental we are also planning to provide Caravan Storage Facility. We believe that this service will be particular popular as it will provide caravan owners with a very cost effective (£15 pounds per week) and totally secure way of storing their caravans. As well as the above we are also planning to create the facility to store Damaged Vehicles. This facility can be used by individuals as well as other businesses. Finally we also will be offering a Damaged Vehicles Recovery service. Based on such a diversified structure of the proposed business we believe that it will be a very stable and profitable venture. MARKET RESEARCH We envisage that the following points will be our keys to successfully establishing the new business: − Our large client database already includes many addresses of satisfied customers from the Stoke area and beyond. − Many of these customers have asked us when we will open a car rental business. − We have already established a partnership arrangement for the Damaged Vehicle Storage facility with another local business. − At present there are no available Caravan storage facilities available in the local area. − Based on our market research the prices for Car & Van rental are very completive comparing to the competition.
I-Drive Stoke Ltd. – Car & Van Rental STAFF Mr. Smith will be managing this business directly eliminating the need for an additional managerial post. In addition to the manager two support staff will be employed to ensure that the business runs smoothly. FUNDING
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In the initial setup process it is intended to purchase the following types of vehicles: Vehicle Type
Quantity
Large Van
4
Small Van
3
Medium Car Large Car TOTAL
4 4
Type of Purchase Finance Lease (Capital) Finance Lease (Capital) Cash Purchase Cash Purchase
Initial Cost (Incl. VAT) £8,400 £5,250 £24,000 £28,000 £65,650
The estimated setup costs per the cash flow statement are summarised in the table below. Item Cost of Vehicles Legal fees Initial advertising Refurbishment Computers & Furniture CCTV & Security Car Insurance Road Tax Rent & Rate TOTAL Capital introduced by directors Bank loan
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Cost (Incl. VAT) £65,650 £500 £4,000 £3,500 £2,000 £1,500 £2,100 £2,850 £2,500 £84,600 £ 35,000 £ 50,000
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4
I-Drive Stoke Ltd. – Car & Van Rental PROJECTIONS The attached cash flow, profit and loss and balance sheet projections are based on the following assumptions and estimates: -
−
The business will have the capacity to rent out: 4 Medium Cars
- at the rate of £35 per day
4 Large Cars
- at the rate of £50 per day
3 Small Vans
- at the rate of £35 per day
4 Large Vans
- at the rate of £45 per day
We estimate for the vehicle to be initially occupied 10 days per month with the growth up-to 20 days per month by November.
− −
− −
The business will be able to store up-to 20 caravans at the rate of £15 per week. The business will store on average 5 damaged vehicles at the rate of £12 per week. Initial sales in the first month are estimated at £8,300. An estimated £20,000 sales per month is envisaged from December 2006 once the business has reached its full capacity.
Running cash outflow is estimated to be approximately £19,000 per month once the initial setup process is completed. Item Vehicles – Finance Lease Repayments Advertising Car Insurance Vehicle Service & Maintenance Rent & Rate Staff Cost Loan Repayment & Interest Capital Lease - Interest TOTAL
Cost £1,481 £400 £2,100 £750 £2,500 £3,000 £400 £121 £10,752
− Depreciation on vehicles over 5 years on a straight line basis − Interest on the loan of £50,000 repayable over 15 years has been calculated at 5.5% p.a.
The business operates on a cash basis; as such there are not debtors or creditors
I-Drive Stoke Ltd. – Car & Van Rental HIGHLIGHTS Prepared By Rosetta IT Solutions Ltd. www.rosetta-it.com
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2006/07
Revenue s 211,545
Net Profit 79,570
Net Profit (%) 37.61
Jul-6
8,300
-13,822
Aug-06
12,130
Sep-06
14,870
Period
Operating Profit
Closing Bank Balance
83,636
101,253
-166.52
-13,594
4,537
3,012
24.83
3,365
11,974
6,532
43.93
6,884
18,787
Oct-06
16,600
6,492
39.11
6,843
25,132
Nov-06
19,890
9,762
49.08
10,112
35,171
Dec-06
19,965
9,817
49.17
10,166
44,723
Jan-07
19,965
9,796
49.07
10,145
54,261
Feb-07
19,965
9,776
48.97
10,124
63,800
Mar-07
19,965
9,756
48.87
10,103
73,338
Apr-07
19,965
9,036
45.26
9,382
82,054
May-07
19,965
9,716
48.66
10,061
91,715
Jun-07
19,965
9,696
48.56
10,040
101,253
2007/08
215,622
84,377
39.13
88,444
186,278
2008/09
239,580
105,181
43.90
109,116
295,768
HIGHLIGHTS 250,000 200,000 150,000
Revenue Profit
100,000 50,000 0
2006/07
2007/08
2008/09
I-Drive Stoke Ltd. – Car & Van Rental SURVIVAL RATIO Description Operating Profit / Assets (%) Acc. Profit / Assets (%) Equity / Debt (%) Working Capital / Assets (%)
Prepared By Rosetta IT Solutions Ltd. www.rosetta-it.com
2006/0 7 50.80 48.30 228.90 60.10
2007/08 35.90 66.60 420.60 74.90
2008/0 9 31.20 77.00 673.20 84.00
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6
Revenues / Assets (%) Survival Ratio
128.50
87.60
68.60
4.66
4.86
5.74
Survival Ratio
6.00 5.00 4.00
2006/07
3.00
2007/08 2008/09
2.00 1.00 0.00
2006/07
2007/08
2008/09
I-Drive Stoke Ltd. – Car & Van Rental
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CASH FLOW (PART 1)
Description
Jul-06
Cash flow provided/used by operating activities Net Income
-13,822
Depreciation
Aug06
Nov06
Dec-06
Jan07
Sep-06
Oct-06
3,012
6,532
6,492
9,762
9,817
9,796
1,060
1,081
1,102
1,123
1,144
1,165
1,186
-12,761
4,094
7,634
7,615
10,906
10,982
10,983
-3,905
3,905 879
620
172
576
13
-16,667
8,878
8,254
7,787
11,482
10,995
10,983
-63,617
-1,260
-1,260
-1,260
-1,260
-1,260
-1,260
-63,617
-1,260
-1,260
-1,260
-1,260
-1,260
-1,260
Amortization of Goodwill Change in long term provisions Cash Earnings Change in Accounts Receivable Change in Inventory Change in Accounts Payable Change in Accrued Expenses Cash flow provided/used by operating activities Cash Flows from Investing Activities Purchase of property, plant, and equipment Disposal of property, plant and equipment Investments in Goodwill Cash flow provided/used by investing activities Cash Flow from Financing Activities Owners' Equity
35,000
Change of long term debt
49,821
-180
-181
-182
-183
-184
-184
84,821
-180
-181
-182
-183
-184
-184
4,537
7,437
6,813
6,345
10,039
9,552
9,538
4,537
11,974
18,787
25,132
35,171
44,723
11,974
18,787
25,132
35,171
44,723
54,261
Change in short term debt Payment of Dividend Cash flow provided/used by financing activities Change in cash and cash equivalents Net Cash in the beginning of the year Net Cash at the end of the year
4,537
I-Drive Stoke Ltd. – Car & Van Rental CASH FLOW (PART 2)
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Description
May07
Jun-07
2006/0 7
2007/0 8
Feb-07
Mar-07
Apr-07
2008/09
Cash flow provided/used by operating activities Net Income
9,776
9,756
9,036
9,716
9,696
79,570
84,377
105,181
Depreciation
1,207
1,228
1,249
1,270
1,291
14,109
18,518
21,541
10,984
10,984
10,285
10,986
10,987
93,679
102,895
126,722
-123
123
2,258
-423
346
Amortization of Goodwill Change in long term provisions Cash Earnings Change in Accounts Receivable Change in Inventory Change in Accounts Payable Change in Accrued Expenses Cash flow provided/used by operating activities Cash Flows from Investing Activities Purchase of property, plant, and equipment Disposal of property, plant and equipment Investments in Goodwill Cash flow provided/used by investing activities Cash Flow from Financing Activities
10,984
10,984
10,163
11,109
10,987
95,938
102,472
127,068
-1,260
-1,260
-1,260
-1,260
-1,260
-77,477
-15,115
-15,115
-1,260
-1,260
-1,260
-1,260
-1,260
-77,477
-15,115
-15,115
Owners' Equity
35,000
Change of long term debt
-185
-186
-187
-188
-189
47,792
-2,332
-2,464
Change in short term debt Payment of Dividend Cash flow provided/used by financing activities Change in cash and cash equivalents
-185
-186
-187
-188
-189
82,792
-2,332
-2,464
9,538
9,538
8,716
9,661
9,538
101,253
85,025
109,489
Net Cash in the beginning of the year
54,261
63,800
73,338
82,054
101,253
186,278
Net Cash at the end of the year
63,800
73,338
82,054
91,715
91,715 101,25 3
186,278
295,768
101,253
I-Drive Stoke Ltd. – Car & Van Rental PROFIT & LOSS (PART 1) Description Revenues
Jul-06 8,300
Aug06
Sep06
Oct06
Nov06
Dec06
Jan07
12,130
14,870
16,600
19,890
19,965
19,965
Other Operating Income Direct Cost Production Depreciation
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Gross Profit Main
8,300
12,130
14,870
16,600
19,890
19,965
19,965
20,833
7,683
6,883
8,633
8,633
8,633
8,633
1,060
1,081
1,102
1,123
1,144
1,165
1,186
21,894
8,765
7,986
9,757
9,778
9,799
9,820
-13,594
3,365
6,884
6,843
10,112
10,166
10,145
Unrecoverable Debts Depreciation Warranty Provisions Amortization of Goodwill Total Operation Expenses Operating Profit Interest Income Interest Expenses Total Finance
228
353
352
351
351
350
349
-228
-353
-352
-351
-351
-350
-349
-13,822
3,012
6,532
6,492
9,762
9,817
9,796
-13,822
3,012
6,532
6,492
9,762
9,817
9,796
Other Income Other Expenses Total Others Income before Tax Income Tax Net Profit
I-Drive Stoke Ltd. – Car & Van Rental PROFIT & LOSS (PART 2) Description Revenues
Feb07
Mar07
Apr07
May07
Jun07
2006/0 7
2007/0 8
2008/0 9
19,965
19,965
19,965
19,965
19,96 5
211,545
215,622
239,580
19,965
19,965
19,965
19,965
211,545
215,622
239,580
8,633
8,633
9,333
8,633
19,96 5 8,633
113,800
108,660
108,922
1,207
1,228
1,249
1,270
1,291
14,109
18,518
21,541
Other Operating Income Direct Cost Production Depreciation Gross Profit Main Unrecoverable Debts Depreciation Warranty Provisions Amortization of Goodwill
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Total Operation Expenses Operating Profit
9,841
9,862
10,583
9,904
9,925
127,909
127,178
130,464
83,636
88,444
109,116
10,124
10,103
9,382
10,061
10,04 0
348
347
346
346
345
4,066
4,067
3,935
-348
-347
-346
-346
-345
-4,066
-4,067
-3,935
9,776
9,756
9,036
9,716
9,696
79,570
84,377
105,181
9,776
9,756
9,036
9,716
9,696
79,570
84,377
105,181
Interest Income Interest Expenses Total Finance Other Income Other Expenses Total Others Income before Tax Income Tax Net Profit
I-Drive Stoke Ltd. – Car & Van Rental BALANCE SHEET (PART 1) Aug-06
Sep06
Oct06
Nov06
11,974
18,787
25,132
35,171
44,723
54,261
8,442
11,974
18,787
25,132
35,171
44,723
54,261
Fixed Assets
63,617
64,877
66,137
67,397
68,657
69,917
71,177
Acc. Depreciation
-1,060
-2,142
-3,244
-4,367
-5,511
-6,677
-7,863
62,557
62,735
62,893
63,030
63,146
63,240
63,314 117,575
Description Cash
Jul-06 4,537
Dec-06
Jan-07
Accounts Receivable Inventory Other Accounts Receivable Total Current Assets
3,905
Goodwill Total Fixed Assets Total Assets
70,999
74,710
81,680
88,162
98,317
107,96 3
879
1,498
1,670
2,245
2,258
2,258
879
1,498
1,670
2,245
2,258
2,258
Accounts Payable Other Payables Bank and S.T. Liabilities Tax Due VAT Payable Salary & Benefits Payable Total Current Liabilities
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11
L.T. Liabilities
49,821
49,640
49,459
49,278
49,095
48,911
48,727
Total L.T. Liabilities
49,821
49,640
49,459
49,278
49,095
48,911
48,727
Total Liabilities
49,821
50,519
50,957
50,947
51,340
51,170
50,985
Owners Equity
35,000
35,000
35,000
35,000
35,000
35,000
35,000
-13,822
-10,809
-4,277
2,215
11,977
21,793
31,590
21,178
24,191
30,723
37,215
46,977
66,590
70,999
74,710
81,680
88,162
98,317
56,793 107,96 3
Other Provisions Pension Provision
Profit Provision Retained Earnings Total Equity Total Equity and Liabilities
117,575
I-Drive Stoke Ltd. – Car & Van Rental BALANCE SHEET (PART 2)
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Description Cash
Feb-07
Mar-07
Apr-07
May-07
Jun-07
2006/0 7
2007/0 8
2008/09
63,800
73,338
82,054
91,715
101,253
101,253
186,278
295,768
Total Current Assets
63,800
73,338
82,054
91,715
101,253
101,253
186,278
295,768
Fixed Assets
72,437
73,697
74,957
76,217
77,477
77,477
92,592
107,707
Acc. Depreciation
-9,070
-10,299
-11,548
-12,818
-14,109
-14,109
-32,628
-54,169
63,367
63,398
63,409
63,399
63,368
63,368
59,964
53,538
127,166
136,736
145,463
155,114
164,621
164,621
246,243
349,305
2,258
2,258
2,136
2,258
2,258
2,258
1,835
2,181
Accounts Receivable Inventory Other Accounts Receivable
Goodwill Total Fixed Assets Total Assets Accounts Payable Other Payables Bank and S.T. Liabilities Tax Due VAT Payable Salary & Benefits Payable Total Current Liabilities
2,258
2,258
2,136
2,258
2,258
2,258
1,835
2,181
48,542
48,356
48,169
47,981
47,792
47,792
45,460
42,997
Total L.T. Liabilities
48,542
48,356
48,169
47,981
47,792
47,792
45,460
42,997
Total Liabilities
50,800
50,614
50,305
50,239
50,051
50,051
47,296
45,177
Owners Equity
35,000
35,000
35,000
35,000
35,000
35,000
35,000
35,000
41,366
51,122
60,158
69,874
79,570
79,570
163,947
269,128
L.T. Liabilities Other Provisions Pension Provision
Profit Provision Retained Earnings Total Equity Total Equity and Liabilities
76,366
86,122
95,158
104,874
114,570
114,570
198,947
304,128
127,166
136,736
145,463
155,114
164,621
164,621
246,243
349,305
I-Drive Stoke Ltd. – Car & Van Rental ANALYSIS OF OPERATIONAL EXPNDITURE (PART 1) Description
Jul-06
Aug06
Sep06
Oct06
Nov06
Dec06
Jan07
Fixed Expenses Rates Rent
417
417
417
417
417
417
417
2,083
2,083
2,083
2,083
2,083
2,083
2,083
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Building Insurance Advertising
50
50
50
50
50
50
50
4,000
1,200
400
400
400
400
400
2,100
2,100
2,100
2,100
2,100
2,100
750
750
750
750
5,800
5,800
5,800
5,800
1,000
1,000
1,000
1,000
1,000
1,000
1,000
1,000
Accountancy Fees Legal Fees
500
Building Work
3,500
Computers & Furniture
2,000
CCTV & Security
1,500
Car Insurance
2,100
Road Tax (Van & Minibus) Service & Maint. (Van & Minibus)
2,850
Total Fixed Expenses
19,00 0
5,850
5,050
1,000
1,000
1,000
Personnel Cost Managing Director Company Secretary Car Cleaner Total Personnel Cost Total
833
833
833
833
833
833
833
1,833 20,83 3
1,833
1,833
2,833
2,833
2,833
2,833
7,683
6,883
8,633
8,633
8,633
8,633
I-Drive Stoke Ltd. – Car & Van Rental ANALYSIS OF OPERATIONAL EXPNDITURE (PART 2) Description
Feb07
Mar07
Apr07
May07
Jun07
2006/0 7
2007/0 8
2008/0 9
Fixed Expenses Rates Rent Building Insurance Advertising
417
417
417
417
417
5,000
5,250
5,513
2,083
2,083
2,083
2,083
2,083
25,000
25,000
25,000
50
50
50
50
50
600
600
600
400
400
400
400
400
9,200
4,800
4,800
700
1,200
1,200
Accountancy Fees Legal Fees
700
500
Building Work
3,500
Computers & Furniture
2,000
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CCTV & Security
1,500
Car Insurance
2,100
Road Tax (Van & Minibus) Service & Maint. (Van & Minibus) Total Fixed Expenses
2,100
2,100
2,100
2,100
25,200
25,200
25,200
2,850
3,610
3,610
750
750
750
750
750
6,750
9,000
9,000
5,800
5,800
6,500
5,800
5,800
82,800
74,660
74,922
Managing Director
1,000
1,000
1,000
1,000
1,000
9,000
12,000
12,000
Company Secretary
1,000
1,000
1,000
1,000
1,000
12,000
12,000
12,000
833
833
833
833
833
10,000
10,000
10,000
Total Personnel Cost
2,833
2,833
2,833
2,833
2,833
31,000
34,000
34,000
Total
8,633
8,633
9,333
8,633
8,633
113,800
108,660
108,922
Personnel Cost
Car Cleaner
I-Drive Stoke Ltd. – Car & Van Rental SALES ANALYSIS Jul06
Aug06
Sep06
Oct06
Nov06
Dec06
Revenues
8,300
12,130
14,870
16,600
19,890
19,965
Medium Car Rental
1,400
1,960
2,520
2,800
3,500
3,500
19,96 5 3,500
Large Car Rental
2,000
2,800
3,600
4,000
5,000
5,000
5,000
5,000
Small Van Rental
1,050
1,470
1,890
2,100
2,625
2,625
2,625
2,625
Large Van Rental
1,800
2,520
3,240
3,600
4,500
4,500
4,500
4,500
120
240
480
960
1,125
1,200
1,200
1,200
1,800
2,880
2,880
2,880
2,880
2,880
2,880
2,880
130
260
260
260
260
260
260
260
Description
Caravan Storage Damaged Vehicles Storage Damaged Vehicles Recovery
Description Revenues
Mar07
Apr-07
May07
Jun-07
Jan07
2006/07
Feb07 19,965 3,500
2007/08
2008/09
19,965
19,965
19,965
19,965
211,545
215,622
239,580
Medium Car Rental
3,500
3,500
3,500
3,500
36,680
37,800
42,000
Large Car Rental
5,000
5,000
5,000
5,000
52,400
54,000
60,000
Small Van Rental
2,625
2,625
2,625
2,625
27,510
28,350
31,500
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15
Large Van Rental
4,500
4,500
4,500
4,500
47,160
48,600
54,000
Caravan Storage
1,200
1,200
1,200
1,200
11,325
12,960
14,400
Damaged Vehicles Storage
2,880
2,880
2,880
2,880
33,480
31,104
34,560
260
260
260
260
2,990
2,808
3,120
Damaged Vehicles Recovery
I-Drive Stoke Ltd. – Car & Van Rental CONCLUSION From a detailed review of the enclosed projections, it is to be concluded that the expected profits are comfortably sufficient to justify the pursuing of the objectives detailed at the beginning of this business plan.
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