Financial Plan for a Startup : Saudi Coffee
My Business Plan
I will Invest SAR800,000 cash savings for equipment and "working capital. " (Note: In an emergency, I can borrow u
Buying Equipment (Roasting Machines) for SAR540,000 during organizing period for business
Buying Green (unroasted) Coffee Beans for cash on delivery - SAR2/pound after receiving bulk order for roast bean
Also there are additional variable costs per pound roasted for fuel, labor, packaging, transportation, etc to deliver b
Average time from order to delivery is 30 days
Rent, Utilities, Insurance, Bookkeeping, etc (fixed costs) - SAR10,000/month - SAR120,000 per year"Fixed Cost" (Ca
Sell roasted, packaged, and delivered beans to retailer for SAR6/pound
Average time from delivery until when retailer pays is 2 months (Typical "Net 60" Payment Terms)
Sounds like a no-lose proposition! - Let's project two scenarios
Scenario 1- Assume steady orders & sales of 25,000 pounds per month
Profit & Loss (P&L) Statement [Simplified] Starting Period
Unit Sales (in pounds)
Sales Revenue SAR0.00
Variable costs of good sold SAR0.00
General & Administrative (G&A) Expense SAR0.00
Depreciation (3 years straight line on SAR540,000 roasting equipment) SAR0.00
Net Profit (calculated monthly) SAR0.00
Total Profit SAR0.00
Statement of Cash Flows [Simplified] Starting Period
Unit Sales (in pounds)
Cash Received
Capital Purchases
General & Administrative (Fixed) Expense
Variable Expense for current month's production
Net Cash flow for Month
Cash on Hand
All assumptions the same as Scenario 1 Above, but assume sales of:
25,000 pounds per month for months 1-3
50,000 pounds per month for months 4-6
100,000 pounds per month for months 7-9
200,000 pounds per month for months 10-12
and so on…
Profit & Loss (P&L) Statement [Simplified] Organizing Period
Unit Sales (in pounds)
Sales Revenue -- matched to when order confirmed SAR0.00
Variable Costs [approx. Cost of Goods Sold] SAR0.00
General & Administrative Expense SAR0.00
Depreciation 3 years straight line on SAR540,000 roasting equipment SAR0.00
Net Profit (calculated monthly) SAR0.00
Total Profit SAR0.00
Statement of Cash Flows [Simplified] Organizing Period
Unit Sales (in pounds)
Cash Received
Capital Purchases
General & Administrative (Fixed) Expense
Variable Expense for Production
Net Cash flow for Month
Cash on Hand
n an emergency, I can borrow up to another SAR800,000 from friends and family)
eiving bulk order for roast beans ("variable cost" as depends on number of pounds roasted)
transportation, etc to deliver beans to retailer is SAR2/pound
0,000 per year"Fixed Cost" (Called a "fixed cost" because it doesn’t depend on amount of beans roasted)
yment Terms)
Scenario 1- Assume steady unit sales of 25,000 pounds per month
first order placed on the 1st January, first product delivered by the end of Jan
Scenario 1 - Profit and Loss Statement - Calculated Monthly
January February March April May
Scenario 1 - Cash Flow Statement - Calculated Monthly
January February March April May
Scenario 2 - Assume Rapid Increases in Sales
Scenario 2 - Profit and Loss Statement - Calculated Monthly
January February March April May
Scenario 2 - Cash Flow Statement - Calculated Monthly
January February March April May
unds per month
oduct delivered by the end of January, first cash payment received on the 1st April
June July August September October
June July August September October
June July August September October
June July August September October
November December
Year 2
November December January
November December
Year 2
November December January
February March April May
February March April May
June July August September October
June July August September October
November December
November December
