Question: Analyze the financial model that you created: Using industry research, compare gross profit margins, profitability, growth rate and other benchmarks to the industry standards. When
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- Analyze the financial model that you created:
- Using industry research, compare gross profit margins, profitability, growth rate and other benchmarks to the industry standards.
- When is the startup expected to be profitable? What are the primary risks to this timeframe?
- What do the projected financial sheets show about the growth and potential return on investment for the entrepreneurial startup?
- Startup Capital
- Based on startup costs and projected profitability, how much money will be needed to start and operate the business for the first three years?
- List potential sources for startup capital, and analyze their motivations, interest in the business idea and required return.
- Identify any impact to cash flow from your choice of startup capital
- Financial Feasibility Analysis
- Based on the information, research, and analysis, provide a summary financial feasibility conclusion.
- Analyze the financial model that you created:
- THIS IS FOR THE HOSPITALITY INDUSTRY
| Projected Profit and Loss | |||
| Year 1 | Year 2 | Year 3 | |
| Revenue | $ 770,100 | $ 808,605 | $ 849,035 |
| Less COGS | $ 250,000 | $ 255,000 | $ 260,100 |
| Gross Margin | $ 520,100 | $ 553,605 | $ 588,935 |
| Percent Gross Margin | 68% | 68% | 69% |
| Operating and General Expenses | |||
| Marketing and Sales | $ 23,103 | $ 24,258 | $ 25,471 |
| Payroll | $ 113,000 | $ 113,000 | $ 113,000 |
| Rent | $ 72,000 | $ 72,000 | $ 72,000 |
| Utilities | $ 24,000 | $ 24,240 | $ 24,482 |
| Other | $ 24,000 | $ 24,000 | $ 24,000 |
| Total Expenses | $ 256,103 | $ 257,498 | $ 258,953 |
| Earnings Before Interest, Taxes Ammortization (EBITA) | $ 263,997 | $ 296,107 | $ 329,982 |
| Less Ammortization | $ 150,000 | $ 150,000 | $ 150,000 |
| Earnings Before Interest, Taxes | $ 113,997 | $ 146,107 | $ 179,982 |
| Less Interest | $ 4,500 | $ 4,500 | $ 4,500 |
| Less Taxes | $ - | $ 20,000 | $ 35,000 |
| Net Earnings (Profit/Loss) | $ 109,497 | $ 121,607 | $ 140,482 |
| Startup Item | Amount | Notes, Descriptions and Assumptions |
| Renting Building | $ 17,000.00 | After taxes and paperwork fees, total startup for first month's rent including down payment |
| Equipment | $ 750,000.00 | Jacuzzis, fixures, Soaps & Bath Amenities, Towels, Kitchen Appliances, Luggage Racks, Hotel Furniture, Ironing & Laundry Supplies, Security cameras, POS system |
| Pre-Opening Marketing Expenses | $ 25,000.00 | Social Media, Fliers, Website Ads |
| Training Employees | $ 64,000.00 | 20-25 Employees - $16/ hour 40 hours/week for first month |
| Total | $ 856,000.00 |
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