Record Label Company
Business
Plan
Bring music to life
Prepared By 10200 Bolsa Ave, Westminster, CA, 92683
John Doe info@[Link]
(650) 359-3153 [Link]
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1.
Executive Summary
Introduction
Mission
Objectives
Keys to Success
Financial Highlights
Introduction
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Mission
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Objectives
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Keys to Success
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Financial Highlights
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3 Year profit forecast
Sales Gross Margin Net Profit
15.00k
10.00k
5.00k
0
Year1 Year2 Year3
Financial Year Sales Gross Margin Net Profit
Year1 10000 500 6000
Year2 12000 800 8000
Year3 14000 1200 10000
2.
Business Summary
Start-up Summary
Funding Required
Ownership
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Start-up Summary
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Startup cost
Amount
3.00k
2.00k
1.00k
0
Expenses Assets Investment
Cost distribution Amount
Expenses 1550
Assets 1800
Investment 2050
Funding Required
The detailed startup requirements and expenses are given in the table below.
START-UP FUNDING AMOUNT
Start-up Expenses to Fund $6,650
Start-up Assets to Fund $21,350
TOTAL FUNDING REQUIRED $28,000
Assets
Non-cash Assets from Start-up $2,000
Cash Requirements from Start-up $19,350
START-UP FUNDING AMOUNT
Additional Cash Raised $0
Cash Balance on Starting Date $19,350
TOTAL ASSETS $21,350
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
TOTAL LIABILITIES $0
Capital
Planned Investment
Dexter Clinton $10,000
Family and Friends $18,000
Other $0
Additional Investment Requirement $0
TOTAL PLANNED INVESTMENT $28,000
Loss at Start-up (Start-up Expenses) ($6,650)
TOTAL CAPITAL $21,350
TOTAL CAPITAL AND LIABILITIES $21,350
Total Funding $28,000
Ownership
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3.
Products and
Services
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4.
Market Analysis
Market Segmentation
Target Market Segment Strategy
Service Business Analysis
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Market Segmentation
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Market Analysis
Record Stores: 30.0 %
Consumers at live performances: 70.0 %
Financial Year Units Sold
Record Stores 30
Consumers at live performances 70
Potential Customers Growt Year 1 Year 2 Year 3 Year 4 Year 5 CAG
h R
Record stores 5% 23 24 25 26 27 4.09%
Consumers at live
7% 18,776 20,090 21,496 23,001 24,611 7.00%
performances
Total 7.00% 18,799 20,114 21,521 23,027 24,638 7.00%
Target Market Segment Strategy
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Service Business Analysis
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Competition and Buying Patterns
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5.
Strategy
Sales Strategy
Marketing Strategy
Competitive Edge
Milestones
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Sales Strategy
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Sales Forecast
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Sales Yearly
Record retailer sales Live concert record sales CD sales from website
Contract buy-outs
Year1
Year2
Year3
0 200.00k 400.00k 600.00k 800.00k 1.00M 1.20M 1.40M 1.60M
Financial Year Record retailer s… Live concert reco… CD sales from we… Contract buy-outs
Year1 895665 45000 78451 12354
Year2 1004512 24512 45784 45522
Year3 1245587 12458 41215 45112
Detailed Sales Forecast
Detailed sales forecast data is provided in below table:
SALES FORECAST YEAR 1 YEAR 2 YEAR 3
Sales
Record retailer sales $0 $28,090 $39,076
Live concert record sales $0 $19,000 $24,090
CD sales from website $0 $15,070 $25,600
Contract buy-outs $0 $20,000 $55,000
SALES FORECAST YEAR 1 YEAR 2 YEAR 3
TOTAL SALES $0 $82,160 $143,766
Direct Cost of Sales
Record retailer sales $0 $11,236 $15,630
Live concert record sales $0 $6,650 $8,432
CD sales from website $0 $5,275 $8,960
Contract buy-outs $0 $0 $0
Subtotal Direct Cost of Sales $0 $23,161 $33,022
Marketing Strategy
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Competitive Edge
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Milestones
Several milestones have been established and will act as a set of goals and a tracking mechanism for
achieving the goals. While the milestones are initially static, they can be dynamic if needed. Please see
the following table for detail regarding the milestones.
Milestone Start Date End Date Budget Manager Department
Business
Business plan completion 1/1/2021 2/15/2021 $0 Dexter
Development
First compilation released 2/15/2021 5/1/2021 $0 Dexter Marketing
Second compilation
5/1/2021 9/15/2021 $0 Dexter Marketing
released
The first band signed 2/15/2021 10/30/2021 $0 Dexter Sales
First revenue stream 10/30/2021 2/28/2022 $0 Dexter Sales
Band representation
10/30/2021 6/30/2022 $0 Dexter Sales
currently full
Totals $0
6.
Web Plan Summary
Website Marketing Strategy
Development Requirements
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Website Marketing Strategy
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Development Requirements
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7.
Management Plan
Personnel Plan
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Personnel Plan
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PERSONNEL PLAN YEAR 1 YEAR 2 YEAR 3
Dexter $0 $0 $30,000
Sales $0 $12,000 $13,000
Distribution $1,600 $12,000 $13,000
TOTAL PEOPLE 1 3 3
Total Payroll $1,600 $24,000 $56,000
8.
Financial Plan
Important Assumptions
Brake-even Analysis
Projected Profit and Loss
Projected Cash Flow
Projected Balance Sheet
Business Ratios
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Important Assumptions
The financial projections of the company are forecast on the basis of the following assumptions. These
assumptions are quite conservative and are expected to show deviation but to a limited level such that
the company’s major financial strategy will not be affected.
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10,00% 11,00% 12,00%
Long-term Interest Rate 10,00% 10,00% 10,00%
Tax Rate 26,42% 27,76% 28,12%
Other 0 0 0
Brake-even Analysis
Monthly Units Break-even 5530
Monthly Revenue Break-even $159 740
Assumptions:
Average Per-Unit Revenue $260,87
Average Per-Unit Variable Cost $0,89
Estimated Monthly Fixed Cost $196 410
Projected Profit and Loss
Year 1 Year 2 Year 3
Sales $309 069 $385 934 $462 799
Direct Cost of Sales $15 100 $19 153 $23 206
Other $0 $0 $0
TOTAL COST OF SALES $15 100 $19 153 $23 206
Gross Margin $293 969 $366 781 $439 593
Gross Margin % 94,98% 94,72% 94,46%
Year 1 Year 2 Year 3
Expenses
Payroll $138 036 $162 898 $187 760
Sales and Marketing and Other Expenses $1 850 $2 000 $2 150
Depreciation $2 070 $2 070 $2 070
Leased Equipment $0 $0 $0
Utilities $4 000 $4 250 $4 500
Insurance $1 800 $1 800 $1 800
Rent $6 500 $7 000 $7 500
Payroll Taxes $34 510 $40 726 $46 942
Other $0 $0 $0
Total Operating Expenses $188 766 $220 744 $252 722
Profit Before Interest and Taxes $105 205 $146 040 $186 875
EBITDA $107 275 $148 110 $188 945
Interest Expense $0 $0 $0
Taxes Incurred $26 838 $37 315 $47 792
Net Profit $78 367 $108 725 $139 083
Net Profit/Sales 30,00% 39,32% 48,64%
Profit Yearly
Profit
15.00k
10.00k
5.00k
0
Year1 Year2 Year3
Financial Year Profit
Year1 10000
Year2 12000
Year3 14000
Gross Margin Yearly
Gross Margin
Year1
Year2
0 1.00k 2.00k 3.00k 4.00k 5.00k 6.00k 7.00k 8.00k 9.00k 10.00k 11.00k 12.00k 13…
Financial Year Gross Margin
Year1 10000
Year2 12000
Projected Cash Flow
Cash Received Year 1 Year 2 Year 3
Cash from Operations
Cash Sales $40 124 $45 046 $50 068
Cash from Receivables $7 023 $8 610 $9 297
SUBTOTAL CASH FROM OPERATIONS $47 143 $53 651 $59 359
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
SUBTOTAL CASH RECEIVED $47 143 $53 651 $55 359
Expenditures from Operations
Cash Spending $21 647 $24 204 $26 951
Bill Payments $13 539 $15 385 $170 631
SUBTOTAL SPENT ON OPERATIONS $35 296 $39 549 $43 582
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
SUBTOTAL CASH SPENT $35 296 $35 489 $43 882
Net Cash Flow $11 551 $13 167 $15 683
Cash Received Year 1 Year 2 Year 3
Cash Balance $21 823 $22 381 $28 239
Projected Balance Sheet
Assets Year 1 Year 2 Year 3
Current Assets
Cash $184 666 $218 525 $252 384
Accounts Receivable $12 613 $14 493 $16 373
Inventory $2 980 $3 450 $3 920
Other Current Assets $1 000 $1 000 $1 000
TOTAL CURRENT ASSETS $201 259 $237 468 $273 677
Long-term Assets
Long-term Assets $10 000 $10 000 $10 000
Accumulated Depreciation $12 420 $14 490 $16 560
TOTAL LONG-TERM ASSETS $980 $610 $240
TOTAL ASSETS $198 839 $232 978 $267 117
Current Liabilities
Accounts Payable $9 482 $10 792 $12 102
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
SUBTOTAL CURRENT LIABILITIES $9 482 $10 792 $12 102
Long-term Liabilities $0 $0 $0
TOTAL LIABILITIES $9 482 $10 792 $12 102
Paid-in Capital $30 000 $30 000 $30 000
Retained Earnings $48 651 $72 636 $96 621
Earnings $100 709 $119 555 $138 401
TOTAL CAPITAL $189 360 $222 190 $255 020
TOTAL LIABILITIES AND CAPITAL $198 839 $232 978 $267 117
Net Worth $182 060 $226 240 $270 420
Business Ratios
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 4,35% 30,82% 63,29% 4,00%
Percent of Total Assets
Accounts Receivable 5,61% 4,71% 3,81% 9,70%
Inventory 1,85% 1,82% 1,79% 9,80%
Other Current Assets 1,75% 2,02% 2,29% 27,40%
Total Current Assets 138,53% 150,99% 163,45% 54,60%
Long-term Assets -9,47% -21,01% -32,55% 58,40%
TOTAL ASSETS 100,00% 100,00% 100,00% 100,00%
Current Liabilities 4,68% 3,04% 2,76% 27,30%
Long-term Liabilities 0,00% 0,00% 0,00% 25,80%
Total Liabilities 4,68% 3,04% 2,76% 54,10%
NET WORTH 99,32% 101,04% 102,76% 44,90%
Percent of Sales
Sales 100,00% 100,00% 100,00% 100,00%
Gross Margin 94,18% 93,85% 93,52% 0,00%
Selling, General & Administrative Expenses 74,29% 71,83% 69,37% 65,20%
Advertising Expenses 2,06% 1,11% 0,28% 1,40%
Profit Before Interest and Taxes 26,47% 29,30% 32,13% 2,86%
Main Ratios
Current 25,86 29,39 32,92 1,63
Quick 25,4 28,88 32,36 0,84
Total Debt to Total Assets 2,68% 1,04% 0,76% 67,10%
Pre-tax Return on Net Worth 66,83% 71,26% 75,69% 4,40%
Pre-tax Return on Assets 64,88% 69,75% 74,62% 9,00%
Additional Ratios
Net Profit Margin 19,20% 21,16% 23,12% N.A.
Return on Equity 47,79% 50,53% 53,27% N.A.
Year 1 Year 2 Year 3 Industry Profile
Activity Ratios
Accounts Receivable Turnover 4,56 4,56 4,56 N.A.
Collection Days 92 99 106 N.A.
Inventory Turnover 19,7 22,55 25,4 N.A.
Accounts Payable Turnover 14,17 14,67 15,17 N.A.
Payment Days 27 27 27 N.A.
Total Asset Turnover 1,84 1,55 1,26 N.A.
Debt Ratios
Debt to Net Worth 0 -0,02 -0,04 N.A.
Current Liab. to Liab. 1 1 1 N.A.
Liquidity Ratios
Net Working Capital $120 943 $140 664 $160 385 N.A.
Interest Coverage 0 0 0 N.A.
Additional Ratios
Assets to Sales 0,45 0,48 0,51 N.A.
Current Debt/Total Assets 4% 3% 2% N.A.
Acid Test 23,66 27,01 30,36 N.A.
Sales/Net Worth 1,68 1,29 0,9 N.A.
Dividend Payout 0 0 0 N.A.
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