Ice Skating Training Facilities

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Financial Plan

Projecting Revenues and Expenses
      The validity of any financial projections depend on detailed and reliable historical economic records combined realistic assumptions to base the economic forecast. Shorter term forecasts have a higher degree of reliability than forecasts that extend 10, 15, or 20 years in the future.

      Determine the essential funding necessary to build out the project using a mixture of start-up capital, investor capital, and a construction loan converted to a long-term (20 to 30 year) fixed rate bank loan.  Add a 20% cushion to cover unanticipated expenses.  Do not rely on generating enough cash flow to generate a target profit to investors and pay back bank loans and also to assume payments for construction loans for various planned stages to achieve final build out of the project. 

      A preferred approach would be for the general partner to own the land and seek financing for the initial site preparation and develop, plus construction of the first stage of the project. Each additional stage could represent a separate financial group on leased land or land that has be subdivided into parcels that can be included as part of a total construction of phase of building out the complete complex.

      While it is possible to talk in generalities, hard numbers must start with a specific plan designed for a site that may require improvements that pertain only to that site for soil compacting, drainage, and access easements. Remember that building codes and zoning restrictions vary from community to community and can represent unanticipated approval delays. to determine the amount of start-up capital, investor capital, and a construction loan converted to a long-term (20 to 30 year) fixed rate bank loan.

Important Assumptions
      The financial plan depends on important assumptions, most of which are shown in the following table as annual assumptions. The monthly assumptions are included in the appendix. From the beginning, we recognize that collection days are critical, but not a factor we can influence easily. At least we are planning on the problem, and dealing with it. Interest rates, tax rates, and personnel burden are based on conservative assumptions.

      Some of the more important underlying assumptions are:

    • The strength of the economy
    • The short and long term forecast for sustained economic growth upon competition of the initial phase of the construction and any subsequent expansions to construct a second, third, or fourth stage of building out the project.
    • The projected rate of growth for sport and fitness memberships to break-even and generate a specific rate of return for investors.
General Assumptions

Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 4.50% 4.50% 4.50%
Inflation Rate
2.25%
2.25% 2.25%
Tax Rate 16.25% 15.00% 16.25%
Other 0 0 0

Pro Forma Projected Organizational Start-up Expenses

Year 1 Year 2 Year 3
Initial Office Lease
$0
$0 $0
Working Capital
$0 $0 $0
Furniture, Fixtures & Equipment purchases
$0 $0 $0
Leasehold Improvements
$0 $0 $0
Security Deposits
$0 $0 $0
Office Supplies
$0 $0 $0
Office Equipment Leases
$0 $0 $0
Attorney Fees
$0 $0 $0
Fees to Develop Prospectus
$0 $0 $0
Commissions to Market Prospectus $0 $0 $0
Architect, Design, and Engineering Fees
$0 $0 $0
Option to Purchase Land for Project
$0 $0 $0
Rezoning Expenses if Required
$0 $0 $0
Obtaining Necessary Permits and Licenses
$0 $0 $0
Feasibility Study
$0 $0 $0
Demographic Study
$0 $0 $0
Marketing Analysis
$0 $0 $0
Preparing and Filing State and Federal Taxes
$0 $0 $0
Miscellaneous and Unforeseen expenses
$0 $0 $0
Total Start-up Costs
$0 $0 $0

Break-even Analysis
      The following table and chart is a summary break-even analysis supported by spread sheets of individual facility amenities management and service expenses:

Pro Forma Break-even Analysis
Monthly Units Break-even $0.00
Monthly Revenue Break-even $0.00
Assumptions:
Average Per-Unit Revenue $0.00
Average Per-Unit Variable Cost $0.00
Estimated Monthly Fixed Cost $0.00

Projected Profit and Loss

      Our projected profit and loss is shown on the following table. A conservative estimate of net profits/sales, with increases each year, should be used. Comparisons to the industry data should use conservative projections that have a very high expectation of being easily attained.

      Detailed monthly projections should be developed for each department of the complex and the supporting data be in the appendix:


Pro Forma Profit and Loss


Year 1 Year 2 Year 3

Sales $0 $0 $0

Direct Cost of Sales $0 $0 $0

Other $0 $0 $0

Total Cost of Sales $0 $0 $0

Gross Margin $0 $0 $0

Gross Margin % 100.00% 100.00% 100.00%






Expenses



Payroll $0 $0 $0

Sales and Marketing and Other Expenses $0 $0 $0

Depreciation $0 $0 $0

Leased Equipment $0 $0 $0

Repairs and Maintenance $0 $0 $0

Landscape Maintenance $0 $0 $0

Accounting Fees $0 $0 $0

Legal Fees $0 $0 $$0

Telephone $0 $0 $0

Utilities (Gas, Electric, Water, Sewer) $0 $0 $0

Insurance $0 $0 $0

Rent $0 $0 $0

Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $0 $0 $0

Profit Before Interest and Taxes $0 $0 $0








$0 $0 $0

Taxes Incurred $0 $0 $0

Net Profit $0 $0 $0

Net Profit/Sales $0 $0 $0
Projected Cash Flow
      The following cash flow projections show our annual amounts only. For more detailed monthly projections please see the appendix.

      Cash flow projections are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month, and the other the monthly balance. The annual cash flow figures are included here and the more important detailed monthly numbers are included in the appendix and summarized in the Pro Forma Cash Flow Chart below.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Revenues Received



Revenues  from Memberships $0 $0 $0
Facilities Contracts
$0 $0 $0
Admissions
$0 $0 $0
Services
$0 $0 $0
Sales Sports Shop
$0 $0 $0
Sales Food Court
$0 $0 $0
Receivables $0 $0 $0
Sales of Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Moneys Received $0 $0 $0
Revenues Subtotal from Operations $0 $0 $0




Obligations - Accounts Payable



Sales Tax Collected
$0 $0 $0
Short-Term Construction Loans
$0 $0 $0
Long-term Liabilities Fixed Interest Loans
$0 $0 $0
New Other Liabilities (interest free) $0 $0 $0
Subtotal Cash Received $778,144 $1,015,638 $1,241,246

Expenditures Year 1 Year 2 Year 3
Expenditures from Operations


Cash Spending $0 $0 $0
Bill Payments $0 $0 $0
Subtotal Spent on Operations $$0 $0 $0
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 $0 $0 $0
Net Cash Flow $0 $0 $0
Cash Balance $0 $0 $0


Projected Balance Sheet
     The balance sheet in the following table shows managed but sufficient growth of net worth, and a sufficiently healthy financial position. The monthly projections are included in the appendix.

Note: The operation expenses should be tracked independently for the pre construction planing, construction phase, and grand opening of the business operation.  If there are management and services supplied by one entity, these should be tracked as a separately to each division of the center to properly allocated the expenses and returns on investment for any partnerships or corporations.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets $0 $0 $0
Current Assets $0 $0 $0
Cash $0 $0 $0
Accounts Receivable $0 $0 $0
Inventory $0 $0 $0
Other Current Assets $0 $0 $0
Total Current Assets $0 $0 $0
Long-term Assets $0 $0 $0
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $0 $0 $0




Liabilities and Capital

Year 1 Year 2 Year 3
Current Liabilities $0 $0 $0
Accounts Payable $0 $0 $0
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $0 $0 $0
Long-term Liabilities $0 $0 $0
Total Liabilities $0 $0 $0
Paid-in Capital $0 $0 $0
Retained Earnings $0 $0 $0
Earnings $0 $0 $0
Total Capital $0 $0 $0
Total Liabilities and Capital $0 $0 $0
Net Worth $0 $0 $0

Business Ratios
       Business ratios is a form of financial analysis using financial ratios and norms to provide a means of assessing a firm's strengths and weaknesses for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7991, Sports Programs - Indoor Courts, are shown for comparison.   PDF Key Business Ratios Quick Reference Guide
Free Business Statistics, Financial Ratios and Industry  BizStats offers free business financial ratios for 250 industries, along with other well organized business and industry statistics.

Business Ratios Abstract:

Main Ratios -

  • Current. Measures company's ability to meet financial obligations. Expressed as the number of times current assets exceed current liabilities. A high ratio indicates that a company can pay its creditors. A number less than one indicates potential cash flow problems.

  • Quick. This ratio is very similar to the Acid Test and measures a company's ability to meet its current obligations using its most liquid assets. It shows Total Current Assets excluding Inventory divided by Total Current Liabilities.

  • Total Debt to Total Assets. Percentage of Total Assets financed with debt.

  • Pre-Tax Return on Net Worth. Indicates shareholders earnings before taxes for each dollar invested. This ratio is not applicable if the subject company's net worth for the period being analyzed has a negative value.

  • Pre-Tax Return on Assets. Indicates profit as a percentage of Total Assets before taxes. Measures a company's ability to manage and allocate resources.

Additional Ratios -

  • Net Profit Margin. This ratio is calculated by dividing Sales into the Net Profit, expressed as a percentage.

  • Return on Equity. This ratio is calculated by dividing Net Profit by Net Worth, expressed as a percentage.

Business Ratios

Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 0.00% 0.00% 0.00%
Percent of Total Assets 0.00% 0.00% 0.00% 0.00%
Accounts Receivable 0.00% 0.00% 0.00% 0.00%
Inventory 0.00% 0.00% 0.00% 3.60%
Other Current Assets 0.00% 0.00% 0.00% 31.10%
Total Current Assets 100.00% 100.00% 100.00% 39.00%
Long-term Assets 0.00% 0.00% 0.00% 61.00%
Total Assets 100% 100% 100% 100%
Current Liabilities 0.00% 0.00% 0.00% 34.80%
Long-term Liabilities 0.00% 0.00% 0.00% 27.60%
Total Liabilities 0.00% 0.00% 0.00% 62.40%
Net Worth 0.00% 0.00% 0.00% 37.60%





Percent of Sales



Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 0.00% 0.00% 0.00% 73.20%
Advertising Expenses 0.00% 0.00% 0.00% 2.40%
Profit Before Interest and Taxes 0.00% 0.00% 0.00% 2.70%





Main Ratios Year 1 Year 2 Year 3 Industry Profile
Current 0.00% 0.00% 0.00% 1.10%
Quick 0.00% 0.00% 0.00% 0.73%
Total Debt to Total Assets 0.00% 0.00% 0.00% 62.40%
Pre-tax Return on Net Worth 0.00% 0.00% 0.00% 3.00%
Pre-tax Return on Assets 0.00% 0.00% 0.00% 7.90%





Additional Ratios Year 1 Year 2 Year 3 Industry Profile
Net Profit Margin 0.00% 0.00% 0.00% n.a
Return on Equity 0.00% 0.00% 0.00% n.a
Activity Ratios 0.00% 0.00% 0.00% n.a
Accounts Receivable Turnover 0.00% 0.00% 0.00% n.a
Collection Days 0 0 0 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 0.00 0.00 0.00 n.a
Payment Days 0 28 29 n.a
Total Asset Turnover 0 1.79 1.47 n.a
Debt Ratios 0
0 0 n.a
Debt to Net Worth 0.00 0.00 0.00 n.a
Current Liabilities to projected Liabilities 0.02 0.03 0.03 n.a
Liquidity Ratios 0.00 0.00 0.00 n.a
Net Working Capital 0.00 0.00 0.00 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios 0.00 0.00 0.00 n.a
Assets to Sales 0.00 0.00 0.00 n.a
Current Debt/Total Assets 0% 0% 0% n.a
Acid Test 0.00 0.00 0.00 n.a
Sales/Net Worth 0.00 0.00 0.00 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Business Owner's Toolkit: Business Ratios

Abstract

In order to assess how your business is doing, you'll need more than an individual year of numbers extracted from the financial statements. Each year has to be viewed in context of the whole picture. 

The true meaning of figures from the financial statements emerges only when they are compared to other figures. Such comparisons are the essence of why business and financial ratios have been developed.

Various ratios can be established from key figures on the financial statements. These ratios are very simple to calculate — sometimes they are simply expressed in the format "x:y," and other times they are simply one number divided by another, with the answer expressed as a percentage. However, these simple ratios can be a powerful tool because they allow you to immediately grasp the relationship expressed.

When you routinely calculate and record a group of ratios at the end of every accounting period, you can assess the performance of your business over time, and compare your business to others in the same industry or to others of a similar size. By doing so, you won't be alone — banks routinely use business ratios to evaluate a business that's applying for a loan, and some creditors use them to determine whether to extend credit to you.

When you compare changes in your business's ratios from period to period, you can pinpoint improvements in performance or developing problem areas. By comparing your ratios to those in other businesses, you can see possibilities for improvement in key areas. A number of sources, including many trade or business associations and organizations, provide data for comparison purposes; they are also available from commercial services. Your accountant may be a good source of information on how your business compares to similar ones in your particular locale.

There are dozens and dozens of financial ratios that you can look at, but many will have little or no meaning for your business. In the following sections we'll concentrate on those that are most commonly considered to have the most value for making small business decisions. The ratios fall into four categories:

References:
  1. Park and Recreation owned and operated community rinks
  2. Church Owned and Operated Community Centers
  3. Private Membership Skating Clubs
  4. Privately Owned Rinks Open to Public
  1. Market Analysis Summary
  2. Amenities and Services
  3. Naming Rights
  4. Strategy and Implementation Summary
  5. School and Community Programs & Activities
  6. Charter Schools   High School of the Arts
  7. Competitive & Recreation Athletes Health & Wellness Services
  8. Management Summary
  9. Job Descriptions
  10. Financial Plan
  11. Ice Rink Executive Summary
  • Historical Background:
Resources:

The following internet links have been gleaned from personal communications
combined with information from public institutions and athletic organizations/
associations that have a web presence with information concerning team and
individual sports programs:

Sports & Learning Complex Business Plan
Market Analysis Summary
Sports Facility Amenities
Sports Facility Services
Naming Rights
Strategy and Implementation Summary
Community Programs & Activities
Competitive Sports & Recreational Activities
PDF  Marketing Skating To Schools
PDF  Long Term Leasing Skating Rinks

All materials are copy protected. 
The limited use of the materials for education purposes is allowed providing
credit is given for the source of the materials.


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