Important Financial Information of Hoosier Pet Palace - Essay Example

Financial Plan Financial Plan Summary This plan outlines the most important financial information of Hoosier Pet Palace.Hoosier Pet Palace is the newest for-profit business coming to Bloomington, IN. Unlike most businesses where their only goal is to make money, HPP is also looking to solve a social issue within the community. The purpose of this business is to provide animals a home when their owners are out of town for long periods. This is a prevalent problem within the Bloomington community because of all the part time residents who leave for various breaks, most notably, summer vacation when classes are over. During this time, a majority of the students on campus leaves and return to their homes and if they have a pet, they must either take it home with them where it might not be allowed, or they have to find a boarder, which is where we come in. We will be offering not only students, but also all members of the Bloomington community, the ability board their animals for extended periods for a fee. Some of the major sources of revenue to the Hoosier Pet Palace include pet grooming and boarding, breeding, and handling. On the other hand, the expenses are in the form of food for dogs, veterinary services, wages, electricity, interest on loan and others. Situational Review Hoosier Pet Palace is a unique entity, being the first to incorporate both pet care service and waste food recycling, Hoosier Pet Palace has a great potential for growth and limited competition in Bloomington, Indiana. There are two major pet care service providers in Bloomington: Canine Companions and The Dog House. Canine Companions was established in 1993 that distinguish themselves from others as “the only complete full-service one-stop pet care facility in the Bloomington area.” Not only do they provide daycare, they also provide boarding programs, medical treatments, training, exercise options, and grooming services. The Dog House, established in 2005, prides themselves as “Bloomington’s first and only cage-free boarding and doggy daycare facility.” Both of them have been in Bloomington for years and have established a customer base, which would compete directly with Hoosier Pet Palace. However, unlike Hoosier Pet Palace, they only provide caring services for dogs. Not only would Hoosier Pet Palace provide our service to owners of dogs, we would also provide our service to owners of cats, rabbits, birds, and more. Sources of Start-up Funding Hoosier Pet Palace needs approximately $185,000 for start-up and is in the process of going to banks and different loan agencies to borrow sufficient starting capital to acquire all necessary property, materials, and resources. We will be presenting our business plan to different loan agencies hoping for investment. We believe that our business will be successful because of the need that we will be satisfying. Our target market is in abundance in the Bloomington area, so we see a direct need to have an animal boarding facility available to them. Another reason we believe our business will be successful is because of the “green” initiative that we will be basing our company off. This will appeal to not only the students of the community but also the environmental friendly activists in the community. Strategy for Paying the Loan The bank loan is the largest expense the Hosier Pet Palace will incur throughout the first three years of operation. The business believes it will be successful in its activities and generate enough revenue to continue the business and pay the loan. This is justified by the fact that the target market is abundant in the area and there is need for an animal boarding facility. In addition, the college students have many pets that need services that will be offered by Hoosier Pet Palace. Operational Expenses during start-up Period Hoosier Pet Palace needs approximately $185,000 for starting up the business. This money will go into paying start-up expenses shown in the table below and acquiring the list of equipment for pet care. Accounting $206.50 Advertising $1,999.23 Electricity $1,780.50 Legal requirements $ 899.45 Misc $809 Wages $23,515.38 Dog Shows $759.00 Repairs 1,980.00 Tax on sales $147.72 Veterinary $906.45 Rent $3,358.45 Additionally, Hoosier Pet Palace will need the following equipment for pet care: Cages: Should be clean, escape proof, and large enough. Nesting and bedding material, which should be aspen. Hoosier could also use toilet paper or facial tissue, which is economical. Food dishes Water bottles Exercise wheel Toys For grooming, the following are required at the start: Grooming tables Haunch holders Furmicator Brushes Blade combs Rakes Mat Knives Nail Clippers Combs Pet Dryers Scissor adjustment and care Pet Shampoo Ear powder Styptic powder Pet bathtubs Projected revenues during Start-up The following shows projected revenues for the first week of operation Boarding & grooming $4,567.00 Breeding $2,450.34 Handling $3,654.00 Total Revenues $10,679.34 Operational Financial Goals a. Yearly Revenue Projections The table below shows the projected sources of yearly revenues. Source of revenue 2014 2015 2016 Boarding and Grooming $111,100.37 $182,111.00 $202, 143.64 Breeding $10,400 $12,700 $55,000 Handling $32, 000 $40,00 $52,000 Total Revenues $153,500 $234,871.00 $309,143.64.64 b. Yearly Expense Projections The table below shows the projected yearly expenses at the Hoosier pet Palace Expenses 2014 2015 2016 Accounting $206.50 $200 $200 Advertising $1,999.23 $2,000.19 &2003.00 Electricity $1,780.50 $1,800.00 $1,779.78 Interest on loan $20,204.30 $20,204.30 $20,204.30 Misc $809 $810 $806 Wages $23,515.38 $24,510.43 $25,645.78 Dog Shows $759.00 $800.00 &768.45 Repairs 1,980.00 $1,980.20 $2,000.00 Tax on sales $147.72 $148.00 $156.90 Veterinary $906.45 $950.56 $19 Rent $3,358.45 $3,434.76 $3,300.00 Cemetery $133.42 $134.43 $135.65 Total Expenses $55,799.95 $56,972.87 $54,247.31 c. Percentage Growth Rates – over 1-5 years The projected percentage of growth rate is determined by the percentage sales over the year as shown in the table below Year 1 Year 2 Year 3 Year 4 Year 5 Sales 0.0% 47.0% 14.3% 14.91% 15.0% Project the Cash flow planning The table indicates the projected balance sheet for the first operation year. Hoosier Pet Palace Balance Sheet As at 31st December, 2014 ASSETS Cash $4,000.00 Trade Notes and Accounts Receivable $29,343.00 Trade Notes and Accounts Receivable $588.00 $2,355.00 Equipment & Furniture $134,00.00 Other Assets $143,000.00 TOTAL ASSETS $487,581.00 LIABILITIES & CAPITAL Accounts Payable $1,000.00 Notes & Bonds Payable in 1 year $$310,000.00 Capital Accounts $176,581.00 TOTAL CAPITAL & LIABILITIES $487,581.00 Financial Control With the limited funds for start-up at the Hoosier Pet Palace, there is need for financial management across the investment portfolio. The financial control encompasses four main stages of budget execution, which include commitment, verification, order of payment, and payment. Hoosier Pet Palace will utilize functional system of financial control by avoiding unbudgeted expenditure, disregard for commitment, and lack of proper plan in using cash, concealing excess expenditure, and non-compliance with financial regulations. The company will ensure improved and coordinated financial control across its portfolio of programmes and initiatives. This will be achieved through improved financial skills training. The portfolio will deliver a set of control activities and management of finances. Work Cited Bplans.com. Financial Planning Business Plan. Web. 16 November, 2013. http://www.bplans.com/financial_planning_business_plan/financial_plan/ Read More