Professional Documents
Culture Documents
Executive Summary
Trestle Creek Cabinets will be formed as a cabinet company specializing in custom cabinets for the high-end residential, resort, and commercial market. Its founders have extensive experience in the construction and cabinet industry. Trestle Creek Cabinets will operate under the umbrella of Trestle Creek, Inc., a construction company sharing staff, office space, and administration costs. However, for the purpose of business planning, we are treating Trestle Creek Cabinets as a separate company. Over some years of being involved with the construction of luxury homes, the company owners have seen a need for a cabinet line with a broad selection of design choices, high-end finishes, along with top of the line organization, customer service, and quality. Trestle Creek Cabinets will meet those customers needs. Building a strong market position in the high-end residential, resort, and commercial development segments, the company projects revenues to grow substantially between FY1 and FY3. By maintaining an average gross margin of over 25%, the company estimates handsome net profits by FY3. The company owners have provided the capital to cover the start-up expenses. The company currently seeks a 3year commercial loan to cover the operating expenses.
1.1 Objectives
The company objectives are:
To be a top cabinet supplier to luxury homes in the regional market. Revenues to more than double Year1 levels by the end of Year2. Aim to have 70% of sales in high-end residential customer segment. 20% of sales in mid-range residential customer segment. 10% of sales in commercial development segment. To have a showroom within 3 months in a prominent retail space.
1.2 Mission
To deliver a high-quality product, on time and within budget while also providing a fast, error free ordering system.
Company Summary
Trestle Creek Cabinets is a new company that will provide expertise and quality in the cabinet supplier market while meeting the demanding organizational, scheduling, and quality needs of architects, owners, and construction professionals.
Start-up Requirements Start-up Expenses Business Cards Drill Press Cabinet Jacks Kitchen Builder Software Lateral File Sign Seat Cushions Phone Transfer First/Last/ Deposit Marketing Level Package Sure Trak Software Estimating Data Base Software Lease Buyout Total Start-up Expenses Start-up Assets Cash Required
$100 $1,916 $713 $2,495 $236 $1,154 $338 $64 $2,400 $4,430 $1,005 $499 $2,200 $7,092 $24,642 $89,299
Other Current Assets Long-term Assets Total Assets Total Requirements Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Martin Kribs Brent Palmer Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding
$0 $40,000 $0 $0 $40,000
Products
Our product is essentially made with two main components. 1. 2. The boxes and shelves will be ordered from two different suppliers (Cab Parts, Scheers), and will be delivered in kitset form. They can be finished with custom veneers. The doors, panels, and drawer fronts will come from four different suppliers: Bergmeyer Manufacturing, Homestead Woods, Decore, and Southwest Door Company. We will have 4-6 custom designs, with unlimited different custom finishes, available from Bergmeyer Manufacturing. The other suppliers will provide their stock products.
Market Analysis
Year 1 Potential Customers High-end residential Mid-range residential Commercial development Total Growth 3% 5% 7% 5.55% 5,260 3,500 10,000 18,760 Year 2 5,418 3,675 10,700 19,793 Year 3 5,581 3,859 11,449 20,889 Year 4 5,748 4,052 12,250 22,050 Year 5 5,920 4,255 13,108 23,283 CAGR 3.00% 5.00% 7.00% 5.55%
Sales Forecast
Year 1 Sales Cabinets Other Total Sales Direct Cost of Sales Cabinets Other Subtotal Direct Cost of Sales $442,000 $0 $442,000 Year 1 $301,600 $0 $301,600 Year 2 $1,000,000 $0 $1,000,000 Year 2 $725,000 $0 $725,000 Year 3 $1,500,000 $0 $1,500,000 Year 3 $1,087,500 $0 $1,087,500
5.3 Milestones
The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation.
Milestones
Milestone Business Plan Online Research Open Accounts with Suppliers Door Research Design Doors Order Sample Doors Design Sales Literature Print Sales Literature Make Industry Contacts Showroom Feasability Study Totals Start Date 1/15/2001 1/15/2001 1/15/2001 1/15/2001 1/15/2001 1/22/2001 1/22/2001 2/1/2001 1/15/2001 1/25/2001 End Date 1/31/2001 1/19/2001 1/26/2001 1/26/2001 1/26/2001 2/1/2001 1/31/2001 2/7/2001 2/28/2001 1/31/2001 Budget $2,000 $350 $350 $500 $450 $1,000 $1,000 $300 $1,000 $1,000 $7,950 Manager Department Brent & Marketing Marty Brent Marketing Brent Brent & Marty Marty Marty Brent & Marty Brent Marty & Brent Marty & Brent Web Web Department Department Department Department Department Department
Management Summary
Martin Kribs, President, has 20 years of construction experience, from general contracting, construction management, and having his own cabinet business. Brent Palmer, V. President, has three years of construction experience and spent the last six years in management within the hospitality industry. As the company grows, we will take on an administration/showroom assistant.
Personnel Plan
Martin Kribs Brent Palmer Carpenters Administration Assistant Total People Total Payroll Year 1 $24,000 $24,000 $18,000 $12,000 4 $78,000 Year 2 $38,000 $35,000 $60,000 $24,000 6 $157,000 Year 3 $45,000 $40,000 $85,000 $25,000 7 $195,000
Financial Plan
Below are the initial financial goals for the company:
Obtain an operating line of credit from a financial institution. Finance growth through retained earnings. Operate on a 25-30% gross margin.
The financial plan for Trestle Creek Cabinets is outlined in the following sections.
General Assumptions
Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 1 10.00% 10.00% 16.25% 0 Year 2 2 10.00% 10.00% 15.00% 0 Year 3 3 10.00% 10.00% 16.25% 0
Break-even Analysis
Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost $38,806 68% $12,327
We do not expect to have major problems with cash flow as most of our contracts will require a 50% deposit upon signing.
The balance sheet shows a healthy growth of net worth and a strong financial position.
Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout
4.59 4.59 55.69% -22.04% -9.77% Year 1 -2.61% -22.04% 6.67 58 14.63 27 3.75 1.26 0.39 $92,257 -1.88 0.27 22% 2.66 8.46 0.00
2.59 2.59 54.07% 40.45% 18.58% Year 2 2.74% 34.38% 6.67 39 12.17 21 5.77 1.18 0.72 $106,350 10.66 0.17 39% 0.91 12.56 0.00
2.81 2.81 39.83% 63.17% 38.01% Year 3 5.96% 52.90% 6.67 46 12.17 25 5.34 0.66 0.89 $181,125 56.14 0.19 36% 1.13 8.87 0.00
1.64 1.28 57.00% 7.50% 17.40% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a