(BRAND)
(tac) requires $217,556 to launch using a lean approach. We’ve already raised $XX,000 through personal investments and a small community grant.
We are currently seeking additional funding from outside angel investors and business loans. Start-up funds will be used for product design and development, inventory and operating expenses such as marketing, rent, utilities and payroll.
We will also use a portion of the initial investment to purchase production equipment that will produce future benefits for the company.
A small portion of our investment will be used to create an online clothing store. There are inexpensive e-commerce tools that provide easy ways to create an online store where we can sell our product globally.
We will use the funds we obtain from investment in this apparel brand business plan to pay for initial brand development costs, such as licensing and permits and product development. We will use the remainder of the start-up funds to cover operating expenses, such as production costs, utilities, wages and marketing to increase retail sales.
INCOME STATEMENT
Based on our marketing plans, location and product offerings, we expect to collect annual sales of $245,322 in year one, $363,825 in year two and $1,156,400 in year three.
Our average cost of goods sold will be 43 percent, which leaves us with a gross margin of 57 percent. Our minimum monthly fixed costs are $12,945 per month, so we will need to generate sales of $22,710 per month to break even. We will become profitable on a monthly basis before the end of our first year.
By the end of our first year, we’ll break even, with a net income of $11,190. In our third year, we will earn net income of $169,084. The accompanying income statement demonstrates our company’s profitability.
CASH FLOW
Our business will collect immediate payment from customers, so our cash flow statement will be substantially similar to our income statement. Our cash flow statement clearly demonstrates our ability to cover all bills.
BALANCE SHEET
(tac) will launch with $XXX,XXX in equity capital and $XX,000 in loans. Credit amounts and supplier terms for inventory will appear in our balance sheet as short-term liabilities.
We base our projections on the assumption that the economy, consumer spending habits and population growth in the United States will remain steady for the foreseeable future.
We must also assume that our present and future suppliers will continue to sell inventory to us at prices that allow us to maintain our present margins. It is also important that we are able to hire reliable employees at reasonable wages.