Business plan on operating pro forma

Abstract:

Venture firms utilize investments from private and public investors for preparing their allocations to budget. The firm decides on revenue or profit being shared among investors as a percentage of capital in shares or revenue. For Kudler foods the venture start up firm the operating pro forma is prepared for next 12 months with financial statement and investment scenario from venture investments. Kudler foods is a small start up business in the suburban area for creek manor, a small town in the outskirts. The firm uses venture financing to include capital requirements as well as ongoing operational aspects. The firm is expecting short term break even, so it requires all operations to run smoothly for next few years.
Keywords: operations, budget, funds, profit, share

Kudler foods

Kudler foods is a small stored foods supplier firm based in a small town. I and my wife decided to setup and start this year with help of venture finances and some of our own resources. The overall outlook for the venture looks good in that there are a lot many customers within town, it is brimming with commerce and there is expectation of family and friends to start something new.

Stored foods

The storage foods category includes number of items and product for home food supplies. The idea of the firm supplies for food purposes was envisaged by my wife and we expect to hire both her sister and my brother to share their expertise in this venture. The firm has a small market in the town which needs a regular supply of food essentials and we expect to have these products in the market. The firm has a good expectation of meeting new customers and enlarging with possible food outlets.

Competitive product and strategy

The product range of food supplies in stored form is idea which is modern and allows foods which become stale easily in open to be available for later use. This includes products like milk, butter, fresh vegetables, etc. The kudler foods firm would provide elaborate products ranging from vegetables, non vegetable products, dairy products and ready to eat food as well. The category of ready to eat food is expected to cater to the young, and a lot number of other people.
In the distribution strategy we expect to include four to five outlets at end of 2 years with the expectation of having covered most of expenses. The channel strategy for distributing physical foods across town would certainly expect more from product quality, the range of products, available customers, preferences and purchase behavior. Door to door distributions are not as good and their utility is low in the town.

Market Analysis

The best guidance for firm before startup of operations is to conduct a effective market analysis. There are not many market suppliers of stored foods and therefore the competitive scale of market is low. The performance of small stores has been good in the region, though the high quality, end services, variety of products is different. So market has different suppliers of different varieties of goods and lower number of stores with a complete product range. Customer expectations have been for a richer experience, high utility and ease of availability of products. According to Adams (2013), the operating pro forma is a succinct statement which provides details on scale, valuation, and strategy for budgeting the investments and operations for the venture investors. According to Price (2011), the pro forma is a necessary and important statement for investors, which shows least risk of strategy. This makes the firm more assured of allocating investments from venture capitalists. This pro forma is provided below;

Operating Pro Forma

Income statement 2015
Revenues
Product revenues110, 000
Legal fees(10, 000)
Total revenues100, 000
Operating expenses
Bank service charges1, 000
Dues and subscriptionpermits4, 000
Depreciation500
Insurance 10, 000
Operating Supplies3, 000
Equipment10, 000
Inventory10, 000
Payroll expenses
Salaries and wages20, 000
Benefits and taxes1, 200
Rent10, 000
Telephone500
Travel and entertainment800
Total expense(71, 000)
Net ordinary income29, 000
Other income/expense
Interest expense(25, 674)
Total other income/expense(25, 674)
Net income 4, 325
Balancesheet 2015
Assets
Current assets20, 500
Cash 4, 325
Accounts receivable
Total current assets24, 825
Property and equipment
Furniture35, 000
Fixtures30, 000
Less depreciation500
Net property and equipment59, 500
Total assets89, 325
Current liabilities and stockholders’ equity
Accounts payable25, 000
Line of credit
Accrued expenses35, 800
Long term liabilities
Notes payable25, 674
Stockholder’s equity
Common stock1000
Additional pay in capital 26, 000
Retained earnings(Deficit)24, 149
Total stockholder equity2, 851
Total liabilities and equity89, 325
Conclusion
The Kudler Foods firm is expected to be a first venture for the town. This is the first high quality stored food outlet for town which is set to be a happening place. The venture is expected to bring large number of firms and customers to be serviced. Kudler foods is poised to meet challenge of new startup venture.

References

Adams, P. (2013, Dec 21). Why Venture Capital Investors Should Want to See Your Five Year Financial Proforma. Retrieved 12 July 2015, from http://www. rockiesventureclub. org/entrepreneur/why-venture-capital-investors-should-want-to-see-your-five-year-financial-proforma/
Price, W. R. (2011, April 4). What financials do we need for investors? Retrieved 12 July 2015, from http://news. gcase. org/2011/04/04/what-financials-do-we-need-for-investors/
www. bankrate. com, (2015). Retrieved 12 July 2015, from http://www. bankrate. com/calculators/mortgages/mortgage-payment-calculator. aspx