business plan
Business Plan
Tuesday, March 14, 2006
® Slide 2
Contact
•Jack Smith
123 Mainstreet
Columbus, IN 47203
(555) 555-5555
• Company Website: www.chipotle.com Slide 3
The Idea
• The idea for Chipotle(pronounced chi-
POAT-lay) is simple: Offer a simple menu
of great food prepared fresh each day,
using many of the same cooking
techniques as gourmet restaurants.
• Then serve the food quickly, in a cool atmosphere. Slide 4
The Sandbox: “Fast-Casual”
• We compete in a category of dining called “fast-casual”—the fastest growing segment of the
restaurant industry.
• The fast-casual market pulls together the finer qualities of multiple restaurant sectors. It takes the
fast from fast-food, the quality and ambience of
casual dining, and adds a focus on health and
freshness , all at an average ticket price below $10.
• Because of these appealing characteristics, sales for the market have grown at an average of 12.5%per
year since 2001. Slide 5
The Business Model
•Using higher-quality ingredients. We use a variety of
ingredients that we purchase from carefully selected
suppliers. We concentrate on where we obtain each
ingredient. Some of the ingredients we use include
naturally raised pork, beef and chicken, as well as
organically grown produce, and we continue to
investigate using even more naturally raised, organically
grown ingredients, in light of pricing considerations.
• A few things, thousands of ways. We only serve a
few things: burritos, burrito bols (a burrito without the
tortilla), tacos and salads. We plan to keep a simple
menu, but we'll always consider sensible additions. Slide 6
The Menu: Choose an Entrée… Slide 7
And Finish Up…
•A focused menu.
You choose exactly
what you want. We
make it while you
watch. That may
mean a little more
salsa, a little less
sour cream,
whatever you'd like.
Build your version of
the perfect burrito.
Price of Desire:
About 5 Bucks. The Customer:
Market Analysis Slide 9
The Customer
• The primary customer for Chipotle’s is between the ages of 25 and 54. The customer is slightly older than the typical fast-
food customer mainly due to their desire for a more healthy
menu without sacrificing speed.
• These customers desire a…
– Focus on freshness, with products made to order, and excluding the
use of frozen ingredients and microwaves
– Focus on innovative flavors , including condiments that fuse elements
from distinct cuisines
– Focus on consumer choice , sometimes provided through extensive
selection of condiments, but frequently extended to complete control of \
product content
– Focus on health, including whole-grain, and or ganic, as well as trans-fat
and MSG free ingredients Slide 10
Bartholomew County, Indiana Slide 11
Community Profile
• Population of Columbus is 40,000
• County (Bartholomew) population is 70,000
• Manufacturing is main industry. Two Fortune 500
companies – Cummins Engine Co. (diesel engines)
and ArvinMeritor (auto parts)
• Also, a regional hub for retail, educational and medical
services
• In 1994, Columbus, Indiana was one of ten cities in the
United States awarded “ All America City” status Slide 12
Business Climate
• Columbus has the best business climate in
Indiana :
• Ranked #1 of any city under 50,000 population in
Indiana (Site Selection Magazine)
• Columbus has the 30
th
best small community
business climate in the United States
• Based on a February 2002 ranking by
BizDemographics of 496 small U.S. cities Slide 13
A Growing Community Slide 14
An Educated Customer Base Slide 15
A Market of Wealth Slide 16
Targeted Customers
• Within Columbus, Indiana, Chipotle’s will target three primary customer segments. These are as
follows:
– The Local Market : Defined as customers within a seven
mile radius of the store location.
– Commuting Workers and Tourists : Customers
commuting into the city on a daily basis or for leisure
travel.
– Commercial Events : Business customers within the
county that require catering services. Target Market Descriptions
Excellent growth in company numbers
and employment
trends
Good growth / new arts
theatre nearby should
improve traffic
Slow to moderate growth /
spending less on
meals away from
home on average
Trends
$100,000
$150,000
$400,000
Projected Sales 400 businesses
9,000 daily commuters /
28,000 annual tourists
58,600 residents / 20,000
households / $58
million local market for
restaurant sales
Size (numbers/dollars) Infrequent but very large
purchases (2 events
per year spending
$600.00 per event)
Infrequent but larger
purchases (1 time but
spends upward of
$12.00 per patron)
Frequent but small
purchases (5 times
per year at about
$9.00 per patron)
Buying Behavior Businesses from 20 to 300
employees
Workers and Tourists ages
21 to 54
Consumers ages 25 to 54 /
$54,000 average
household income
Demographics Commercial business in
Bartholomew County
that need catering
event services
People migrating into
Bartholomew County
for work or tourism
People and households
within 7 miles of the
restaurant
Description Commercial Events
Commuting Workers &
Tourists
Local Market
Name
Target Market #3
Target Market #2
Target Market #1
Description Target Market Strategy
15% off first event promotion
Hotel referral fees
Discount coupons, samples
-Sales Promotions Part-time banquet sales
coordinator
-Personal Selling Annual 5K charity run for
diabetes assn.
-Public Relations Direct mail, business section
of newspaper
Hotel brochures, tourism
directory, billboards,
restaurant guide
Newspaper, yellow pages,
specialty publications,
website
-Advertising Chamber of commerce, HR
managers, event
planners, public
relations managers
Visitors center, community
development, tourism
bureau, hotel concierges
-Contact Sphere
Promotions: On-site catering set-up and
service
At retail location
At retail location
Distribution Banquet style service
Lunch time drive-thru speed is
largest consideration
Product Customization Per head range from $8 to
$12
Entrees between $4 and $16
Entrees between $4 and $6
Pricing Big Burritos For Big Crowds
Gourmet Burritos…Fast
The Gourmet Restaurant
Where You Eat With
Your Hands
Positioning Message
Target Market #3
Target Market #2
Target Market #1
Strategy Slide 19
Commuting Patterns
• More than 16%of Bartholomew County’s workforce
commutes into Columbus on a daily basis.
• This commuting inflow surges the daily workforce to over 39,000 employees
.
Almost 9,000
worker’s
commute into Bartholomew
County every day. Slide 20
Customer Ring Study
• The proposed location for Chipotle is500 Franklin Street in Columbus, IN
• Within a 7 mile radius of this location the market
contains…
$54,000
Average Household Income 20,000
Households 58,600
Population 7 Miles
Description
Source: Easidemographics.com Slide 21
The Size of the Market
• According to the 2002 Economic Census for Bartholomew County:
– Full Service Restaurants: 104
– Total Restaurant Sales ‘02: $78 million
–Average Sales Per Rest: $750,000 Slide 22
Targeted Market Size in Dollars • According to the Consumer Expenditure Survey in 2003, consumers spent an estimated $885on
“Food away from home”
• This would predict the 7 mile market radius to be worth approximately $52 millionin restaurant
and meal preparation services. ($885 times
58,600 consumers) and could support about 70
establishments. Slide 23
The Food Service Market in Columbus, IN Source: Google Earth
Future Site of Chipotle
Future Site of Chipotle
X Slide 24
The Competition
•Qdoba , is a “fresh-Mex” chain that offers more choices,
like poblano pesto burritos, but less discipline in its
execution. Its wider menu offerings sometimes
compromise food quality. Nonetheless, Qdoba is a
series competitor in all respects as it plays in the same
“sand box.” In 2003, Qdoba was acquired by Jack in the
Box Inc., a publicly traded (NYSE: JBX) restaurant
company headquartered in San Diego.
• Bajio Mexican Grill is also a fresh-Mex franchise chain
that again offers more choices than Chipotle, but its
franchising model puts a strain on store-to-store
consistency. Slide 25
The Message Slide 26
The Sales Approach
• Chipotle will use a combination of the following media in creating its advertising and promotional
campaign:
– Yellow Pages
– Newspaper
–Direct Mail
–Radio
– Website Slide 27
The Sales Approach
$19,770.00
Total Annual Advertis ing and Media Costs $3,720.00
Media Costs (600 :30 seco nd ads @ $6.20 per spot)
Radio (QMIX 103 / Adult Contemporary & WTIU/NPR) $3,850.00
Distribution (5,000 @ $.50 pe r piece @ $.27 postage)
Direct Mail (Brochures
and Special Occasions) $7800.00
Media Costs (24 ads @ $328) $800.00
Ad Design Costs
Newspaper (The Republic: Circulation 28,000)
$3,600.00
Category: Restaurant s, Restaurant Guide
Annual Cost
Yellow Pages (South Central Edition) Media Slide 28
The Inner Workings: The Line Slide 29
Two Things, Thousands of Ways
• We only serve a few things, so we can concentrate on doing them very well. And we use only the best
ingredients. But they're simple. And that idea,
taking something simple and elevating it to
something special is what Chipotle is all about.
• It's all summed up in our name. A chipotle pepper is just a simple jalapeño pepper that's been smoked
and dried elevating it from ordinary to something
extraordinary. Tasting is believing. Slide 30
The Inner Workings
• Chipotle will be open six days a weekfrom the
hours of 10:00am to 9:00pm .
• To operate the location we require 8 full-time
employees and 7 part-timestaffers all of which
work on a rotating schedule which avoids overtime
scheduling. Wages are about $8.00 to $9.00 per
hour .
• It is imperative that we keep food costs below 28%
of sales and labor costs just under 40%. Slide 31
Location Design
• The design of Chipotle mirrors the idea behind our food: simple ingredients put together in
creative, new ways , elevating them to a higher
level.
• Each Chipotle uses the same basic materials— wood, concrete, raw steel and metals—but no
two look the same. Slide 32
Location Interiors Slide 33
Location Exteriors Slide 34
The Management Team
•Jack Smith, Location Manager
Mr. Smith will oversee the day-to-day operations and
management of the location. He has over 14 years of
experience in retail fast food and is one of the founding
members of Chipotle.
• Loretta Johnson, Assistant Manager
Ms. Johnson is an experienced chef with over 12 years of
commercial cooking knowledge . She will oversee the all
ingredient purchasing and grill staffing according to the
philosophies of Chipotle as presented within this business
plan. Slide 35
The Legal Structure
• Chipotle will be legally formed as an “s” corporation.
• This structure was selected for its pass through tax advantages, limited liability protection, and freedom from
having to pay corporate income taxes.
• Ownership of shares will be broken down as follows:
Owner Shares Percent Owned Jack Smith 1,000 50%
Loretta Johnson 500 25%
Equity Investors 500 25% Slide 36
Risk Management
• Chipotle will require the following types of insurance in its efforts to manage risk:
– General Liability (up to $2 Million in coverage)
– Worker’s Compensation Policy
– Property Insurance (building & contents)
• In addition, it will also provide health carefor its two
member management team estimated at about
$1,000 per month. Slide 37
Required Start-Up Funds
$907,900
Totals $15,000
Working Capital $5000
Advertising $12,000
Furniture & Smallwares
$2500
Legal & Accounting $900
Deposits $4,500
Initial Inventory $68,000
Equipment $580,000
Building $220,000
Real Estate Amount
Item Slide 38
Capital Strategy
$23,900
-Owners $684,000
-Commercial Bank Loan (Rea l Estate & 80% Building) $200,000
-4 Investors ($50 ,000 each will get 25 % share of company) $907,900
Total Amount Required
$5,406.17
Total Monthly Loan Payment 240
-Term In Months 7.25%
-Interest Rate $684,000
-Principal Amount Borrowed
Debt Service Payments Slide 39
The Milestones
• Present business plan to investors March 2006
• Finish legal work around investments March –April 2006
• Request and review construction bids April 2006
• Obtain building permits May 2006
• Begin construction May 2006
• Begin final fixturing of location July 2006
• Conduct health department inspections August 2006
• Begin hiring and grand opening marketing August 2006
• Cold opening August 22
th
, 2006
• Grand opening September 1
st
, 2006 Chipotle
5-Jul-06
Required Start-Up Funds Required Start-Up Funds Amount Totals Depreciation Notes
Fixed Assets
Real Estate220,000 $
Buildings580,000 20.00 years
Leasehold Improvements- 7.00 years
Equipment68,000 7.00 years
Furniture and Fixtures12,000 5.00 years
Vehicles- 5.00 years
Other Fixed Asset
s
- 5.00 year
s
Total Fixed Assets880,000
Operating Capital
Pre-Opening Salaries and Wages-
Prepaid Insurance Premiums-
Beginning Inventory4,500
Legal and Accounting Fees2,500
Rent Deposits-
Utility Deposits900
Supplies-
Advertising and Promotions5,000
Licenses-
Other Initial Start-Up Costs-
Working Capital (Cash On Hand)15,000
Total Operating Capital27,900
Total Required Funds907,900 $
Sources of Funding Amount Totals Loan Rate Term in Months Monthly Payments
Owner's Cash Injection24.66% 223,900
Outside Investors0.00% -
Additional Loans or Debt
Commercial Loan0.00% - 9.00% 84.00 $0.00
Commercial Mortgage75.34% 684,000 8.00% 240.00 $5,721.25
Total Sources of Funding100.00% 907,900$ $5,721.25 Chipotle
5-Jul-06
Salaries and Wages Salaries and Related Expenses # Assumption
s
Wage Base Monthly Year One Year Two Year Three
Percent Change3.00% 3.00%
Salaries and Wages
Owner's Compensation1 4,167$ 50,000 51,500 53,045
Salaries1 3,333 40,000 41,200 42,436
Wages
Full-Time Employees8 11,093 133,120 137,114 141,227
Estimated Hours Per Week40.00
Estimated Rate Per Hour8.00 $
Part-Time Employees7 4,550 54,600 56,238 57,925
Estimated Hours Per Week20.00
Estimated Rate Per Hour7.50 $
Independent Contractors- - - -
Total Salaries and Wages17 23,143 277,720 286,052 294,633
Payroll Taxes and Benefits
Social Security6.20% 94,200$ 1,435 17,219 17,735 18,267
Medicare1.45% 336 4,027 4,148 4,272
Federal Unemployment Tax (FUTA)0.80% 7,000$ 79 952 952 952
State Unemployment Tax (SUTA)2.70% 7,000$ 268 3,213 3,213 3,213
Employee Pension Programs0.00% - - - -
Worker's Compensation750 9,000 9,270 9,548
Employee Health Insurance1,200 14,400 14,832 15,277
Other Employee Benefit Programs- - - -
Total Payroll Taxes and Benefits4,068 48,811 50,150 51,529
Total Salaries and Related Expenses27,211 326,531 336,202 346,163 Chipotle
5-Jul-06
Fixed Operating Expenses Fixed Operating Expenses Monthly Year One Year Two Year Three Notes
Percent Change3.00% 3.00%
Expenses
Advertising1,667 $ 20,000 20,600 21,218
Car and Truck Expenses- - - -
Commissions and Fees- - - -
Contract Labor- - - -
Credit Card and Bank Charges300 3,600 3,708 3,819
Customer Discounts and Refunds- - - -
Dues and Subscriptions- - - -
Entertainment- - - -
Insurance (Liability and Property)250 3,000 3,090 3,183
Internet150 1,800 1,854 1,910
Legal and Professional Fees200 2,400 2,472 2,546
Office Expenses200 2,400 2,472 2,546
Postage and Delivery- - - -
Rent (on business property)- - - -
Rent of Vehicles and Equipment- - - -
Repairs and Maintenance500 6,000 6,180 6,365
Supplies500 6,000 6,180 6,365
Telephone and Communications200 2,400 2,472 2,546
Travel- - - -
Utilities600 7,200 7,416 7,638
Total Expenses4,567 54,800 56,444 58,137
Other Expenses
Depreciation3,426 41,114 41,114 41,114
Interest
Commercial Loan- - - -
Commercial Mortgage4,516 54,198 52,998 51,698
Line of Credit- - - -
Total Other Expenses7,943 95,312 94,112 92,812
Total Fixed Operating Expenses12,509 150,112 150,556 150,950 Chipotle
5-Jul-06
Projected Sales Forecast Products and Services Assumption
s
% January February March
April May June July
Augus
tSeptember Octobe
rNovember December Totals
Local Market Food Sales
Price Per Unit1.00 $ 100.00%
Variable Cost Per Unit0.28 $ 28.00%
Gross Margin Per Unit0.72 $ 72.00%
Projected Unit Sales
Seasonality Factor8.00% 7.00% 8.50% 8.75% 8.75% 8.75% 8.75% 7.50% 8.50% 8.50% 8.50% 8.50% 100.00%
Year One32,000 28,000 34,000 35,000 35,000 35,000 35,000 30,000 34,000 34,000 34,000 34,000 400,000
Year Two Growth3.00% 32,960 28,840 35,020 36,050 36,050 36,050 36,050 30,900 35,020 35,020 35,020 35,020 412,000
Year Three Growth2.00% 33,619 29,417 35,720 36,771 36,771 36,771 36,771 31,518 35,720 35,720 35,720 35,720 420,240
Fixed Expense Allocation60.00%
Projected Revenue400,000 $
Variable Costs112,000
Gross Margin288,000
Fixed Expenses90,067
Profi
t
197,933 49.48%
Breakeven Sales Revenu
e
125,093.17 $
Breakeven Sales Units125,093
Commuter Food Sales
Price Per Unit1.00 $ 100.00%
Variable Cost Per Unit0.28 $ 28.00%
Gross Margin Per Unit0.72 $ 72.00%
Projected Unit Sales
Seasonality Factor6.67% 6.67% 9.33% 9.33% 9.33% 8.00% 6.67% 8.00% 8.00% 9.33% 9.33% 9.33% 100.00%
Year One10,000 10,000 14,000 14,000 14,000 12,000 10,000 12,000 12,000 14,000 14,000 14,000 150,000
Year Two Growth3.00% 10,300 10,300 14,420 14,420 14,420 12,360 10,300 12,360 12,360 14,420 14,420 14,420 154,500
Year Three Growth3.00% 10,609 10,609 14,853 14,853 14,853 12,731 10,609 12,731 12,731 14,853 14,853 14,853 159,135
Fixed Expense Allocation15.00%
Projected Revenue150,000 $
Variable Costs42,000
Gross Margin108,000
Fixed Expenses22,517
Profi
t
85,483 56.99%
Breakeven Sales Revenu
e
31,273.29 $
Breakeven Sales Units31,273 Chipotle
5-Jul-06
Projected Sales Forecast - Page 2 Products and Services Assumption
s
% January February March
April May June July
Augus
tSeptember Octobe
rNovember December Totals
Catering Events
Price Per Unit1.00 $ 100.00%
Variable Cost Per Unit0.32 $ 32.00%
Gross Margin Per Unit0.68 $ 68.00%
Projected Unit Sales
Seasonality Factor5.00% 5.00% 5.00% 7.50% 7.50% 7.50% 10.00% 10.00% 10.00% 10.00% 10.00% 12.50% 100.00%
Year One5,000 5,000 5,000 7,500 7,500 7,500 10,000 10,000 10,000 10,000 10,000 12,500 100,000
Year Two Growth4.00% 5,200 5,200 5,200 7,800 7,800 7,800 10,400 10,400 10,400 10,400 10,400 13,000 104,000
Year Three Growth4.00% 5,408 5,408 5,408 8,112 8,112 8,112 10,816 10,816 10,816 10,816 10,816 13,520 108,160
Fixed Expense Allocation15.00%
Projected Revenue100,000 $
Variable Costs32,000
Gross Margin68,000
Fixed Expenses22,517
Profi
t
45,483 45.48%
Breakeven Sales Revenu
e
33,112.90 $
Breakeven Sales Units33,113
Beverages
Price Per Unit1.00 $ 100.00%
Variable Cost Per Unit0.18 $ 18.00%
Gross Margin Per Unit0.82 $ 82.00%
Projected Unit Sales
Seasonality Factor8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 9.00% 9.00% 9.00% 9.00% 100.00%
Year One4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,500 4,500 4,500 4,500 50,000
Year Two Growth3.00% 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,635 4,635 4,635 4,635 51,500
Year Three Growth2.00% 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,728 4,728 4,728 4,728 52,530
Fixed Expense Allocation10.00%
Projected Revenue50,000 $
Variable Costs9,000
Gross Margin41,000
Fixed Expenses15,011
Profi
t
25,989 51.98%
Breakeven Sales Revenu
e
18,306.32 $
Breakeven Sales Units18,306 Chipotle
5-Jul-06
Cash Receipts and Disbursements Accounts Receivable Collections
Percent of Collections
0 to 30 days100.00%
31 to 60 days0.00%
More than 60 days0.00%
Total Collections Percentage 100.00%
Accounts Payable Disbursements
Number of Days to Pay Suppliers
0 to 30 days100.00%
31 to 60 days0.00%
More than 60 days0.00%
Total Disbursements Percentage 100.00%
Line of Credit Assumptions
Desired Minimum Cash Balance- $
Line of Credit Interest Rate9.00%
Income Tax Assumptions
Effective Income Tax Rate0.00%
Amortization of Start-Up Expenses
Amortization Period in Years- Chipotle
Projected Income Statement - Year One
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Income
Local Market Food Sales32,000 28,000 34,000 35,000 35,000 35,000 35,000 30,000 34,000 34,000 34,000 34,000 400,000
Commuter Food Sales10,000 10,000 14,000 14,000 14,000 12,000 10,000 12,000 12,000 14,000 14,000 14,000 150,000
Catering Events5,000 5,000 5,000 7,500 7,500 7,500 10,000 10,000 10,000 10,000 10,000 12,500 100,000
Beverages4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,500 4,500 4,500 4,500 50,000
Total Income51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000
Cost of Sales
Local Market Food Sales8,960 7,840 9,520 9,800 9,800 9,800 9,800 8,400 9,520 9,520 9,520 9,520 112,000
Commuter Food Sales2,800 2,800 3,920 3,920 3,920 3,360 2,800 3,360 3,360 3,920 3,920 3,920 42,000
Catering Events1,600 1,600 1,600 2,400 2,400 2,400 3,200 3,200 3,200 3,200 3,200 4,000 32,000
Beverages720 720 720 720 720 720 720 720 810 810 810 810 9,000
Total Cost of Sales14,080 12,960 15,760 16,840 16,840 16,280 16,520 15,680 16,890 17,450 17,450 18,250 195,000
Gross Margin36,920 34,040 41,240 43,660 43,660 42,220 42,480 40,320 43,610 45,050 45,050 46,750 505,000
Total Salary and Wages27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 326,531
Fixed Business Expenses
Advertising1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 1,667 20,000
Car and Truck Expenses- - - - - - - - - - - - -
Commissions and Fees- - - - - - - - - - - - -
Contract Labor- - - - - - - - - - - - -
Credit Card and Bank Charges300 300 300 300 300 300 300 300 300 300 300 300 3,600
Customer Discounts and Refunds- - - - - - - - - - - - -
Dues and Subscriptions- - - - - - - - - - - - -
Entertainment- - - - - - - - - - - - -
Insurance (Liability and Property)250 250 250 250 250 250 250 250 250 250 250 250 3,000
Internet150 150 150 150 150 150 150 150 150 150 150 150 1,800
Legal and Professional Fees200 200 200 200 200 200 200 200 200 200 200 200 2,400
Office Expenses200 200 200 200 200 200 200 200 200 200 200 200 2,400
Postage and Delivery- - - - - - - - - - - - -
Rent (on business property)- - - - - - - - - - - - -
Rent of Vehicles and Equipment- - - - - - - - - - - - -
Repairs and Maintenance500 500 500 500 500 500 500 500 500 500 500 500 6,000
Supplies500 500 500 500 500 500 500 500 500 500 500 500 6,000
Telephone and Communications200 200 200 200 200 200 200 200 200 200 200 200 2,400
Travel- - - - - - - - - - - - -
Utilities600 600 600 600 600 600 600 600 600 600 600 600 7,200
Total Fixed Business Expenses4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 54,800
Total Other Expenses7,986 7,978 7,971 7,963 7,955 7,947 7,939 7,931 7,923 7,915 7,906 7,898 95,312
Net Income(2,844) (5,716) 1,492 3,920 3,928 2,495 2,763 612 3,910 5,358 5,366 7,074 28,358 Chipotle
Projected Cash Flow Statement - Year One
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Beginning Cash Balance15,000 14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763
Cash Inflows
Income from Sales51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000
Accounts Receivable- - - - - - - - - - - - -
Total Cash Inflows51,000 47,000 57,000 60,500 60,500 58,500 59,000 56,000 60,500 62,500 62,500 65,000 700,000
Cash Outflows
Investing Activities
New Capital Purchases- - - - - - - - - - - - -
Cost of Sales14,080 12,960 15,760 16,840 16,840 16,280 16,520 15,680 16,890 17,450 17,450 18,250 195,000
Operating Activities
Salaries and Wages27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 27,211 326,531
Fixed Business Expenses4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 4,567 54,800
Taxes- - - - - - - - - - - - -
Financing Activities-
Loan Payments5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 68,655
Line of Credit Interest- - - - - - - - - - - - -
Line of Credit Repayments- - - - - - - - - - - - -
Dividends Paid- - - - - - - - - - - - -
Total Cash Outflows51,579 50,459 53,259 54,339 54,339 53,779 54,019 53,179 54,389 54,949 54,949 55,749 644,986
Cash Flow(579) (3,459) 3,741 6,161 6,161 4,721 4,981 2,821 6,111 7,551 7,551 9,251 55,014
Operating Cash Balance14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763 70,014
Line of Credit Drawdowns- - - - - - - - - - - - -
Ending Cash Balance14,421 10,962 14,704 20,865 27,026 31,747 36,728 39,550 45,661 53,212 60,763 70,014
Line of Credit Balance- - - - - - - - - - - - Chipotle
Balance Sheet - Year One
Base Period End of Year One
Assets
Current Assets
Cash15,000 70,014
Accounts Receivable- -
Inventory4,500 4,500
Prepaid Expenses8,400 8,400
Other Curren
t
- -
Total Current Assets27,900 82,914
Fixed Assets
Real Estate220,000 220,000
Buildings580,000 580,000
Leasehold Improvements- -
Equipment68,000 68,000
Furniture and Fixtures12,000 12,000
Vehicles- -
Other Fixed Asset
s
- -
Total Fixed Assets880,000 880,000
Less: Accumulated Depreciation- 41,114
Total Assets907,900 921,800
Liabilities and Owner's Equity
Liabilities
Accounts Payable- -
Notes Payable- -
Mortgage Payable684,000 669,543
Line of Credit Balance- -
Total Liabilities684,000 669,543
Owner's Equity
Common Stock223,900 223,900
Retained Earnings- 28,358
Dividends Dispersed- -
Total Owner's Equity223,900 252,258
Total Liabilities and Owner's Equity907,900 921,800
Statement Balances Statement Balances Chipotle Year End Summary
Year One % Year Two % Year Three %
Income
Local Market Food Sales400,000 412,000 420,240
Commuter Food Sales150,000 154,500 159,135
Catering Events100,000 104,000 108,160
Beverages50,000 51,500 52,530
Total Income700,000 100.00% 722,000 100.00% 740,065 100.00%
Cost of Sales
Local Market Food Sales112,000 115,360 117,667
Commuter Food Sales42,000 43,260 44,558
Catering Events32,000 33,280 34,611
Beverages9,000 9,270 9,455
Total Cost of Sales195,000 27.86% 201,170 27.86% 206,292 27.87%
Gross Margin505,000 72.14% 520,830 72.14% 533,773 72.13%
Total Salary and Wages326,531 46.65% 336,202 46.57% 346,163 46.77%
Fixed Business Expenses
Advertising20,000 20,600 21,218
Car and Truck Expenses- - -
Commissions and Fees- - -
Contract Labor- - -
Credit Card and Bank Charges3,600 3,708 3,819
Customer Discounts and Refunds- - -
Dues and Subscriptions- - -
Entertainment- - -
Insurance (Liability and Property)3,000 3,090 3,183
Internet1,800 1,854 1,910
Legal and Professional Fees2,400 2,472 2,546
Office Expenses2,400 2,472 2,546
Postage and Delivery- - -
Rent (on business property)- - -
Rent of Vehicles and Equipment- - -
Repairs and Maintenance6,000 6,180 6,365
Supplies6,000 6,180 6,365
Telephone and Communications2,400 2,472 2,546
Travel- - -
Utilities7,200 7,416 7,638
Total Fixed Business Expenses54,800 7.83% 56,444 7.82% 58,137 7.86%
Total Other Expenses54,198 7.74% 52,998 7.34% 51,698 6.99%
Net Income28,358 4.05% 34,073 4.72% 36,661 4.95% Chipotle
Projected Income Statement - Year Two
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Income
Local Market Food Sales32,960 28,840 35,020 36,050 36,050 36,050 36,050 30,900 35,020 35,020 35,020 35,020 412,000
Commuter Food Sales10,300 10,300 14,420 14,420 14,420 12,360 10,300 12,360 12,360 14,420 14,420 14,420 154,500
Catering Events5,200 5,200 5,200 7,800 7,800 7,800 10,400 10,400 10,400 10,400 10,400 13,000 104,000
Beverages4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,120 4,635 4,635 4,635 4,635 51,500
Total Income52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000
Cost of Sales
Local Market Food Sales9,229 8,075 9,806 10,094 10,094 10,094 10,094 8,652 9,806 9,806 9,806 9,806 115,360
Commuter Food Sales2,884 2,884 4,038 4,038 4,038 3,461 2,884 3,461 3,461 4,038 4,038 4,038 43,260
Catering Events1,664 1,664 1,664 2,496 2,496 2,496 3,328 3,328 3,328 3,328 3,328 4,160 33,280
Beverages742 742 742 742 742 742 742 742 834 834 834 834 9,270
Total Cost of Sales14,518 13,365 16,249 17,369 17,369 16,792 17,048 16,182 17,429 18,006 18,006 18,838 201,170
Gross Margin38,062 35,095 42,511 45,021 45,021 43,538 43,822 41,598 44,986 46,470 46,470 48,238 520,830
Total Salary and Wages28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 336,202
Fixed Business Expenses
Advertising1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 1,717 20,600
Car and Truck Expenses- - - - - - - - - - - - -
Commissions and Fees- - - - - - - - - - - - -
Contract Labor- - - - - - - - - - - - -
Credit Card and Bank Charges309 309 309 309 309 309 309 309 309 309 309 309 3,708
Customer Discounts and Refunds- - - - - - - - - - - - -
Dues and Subscriptions- - - - - - - - - - - - -
Entertainment- - - - - - - - - - - - -
Insurance (Liability and Property)258 258 258 258 258 258 258 258 258 258 258 258 3,090
Internet155 155 155 155 155 155 155 155 155 155 155 155 1,854
Legal and Professional Fees206 206 206 206 206 206 206 206 206 206 206 206 2,472
Office Expenses206 206 206 206 206 206 206 206 206 206 206 206 2,472
Postage and Delivery- - - - - - - - - - - - -
Rent (on business property)- - - - - - - - - - - - -
Rent of Vehicles and Equipment- - - - - - - - - - - - -
Repairs and Maintenance515 515 515 515 515 515 515 515 515 515 515 515 6,180
Supplies515 515 515 515 515 515 515 515 515 515 515 515 6,180
Telephone and Communications206 206 206 206 206 206 206 206 206 206 206 206 2,472
Travel- - - - - - - - - - - - -
Utilities618 618 618 618 618 618 618 618 618 618 618 618 7,416
Total Fixed Business Expenses4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 56,444
Total Other Expenses7,890 7,881 7,873 7,864 7,856 7,847 7,839 7,830 7,821 7,812 7,803 7,794 94,112
Net Income(2,549) (5,507) 1,918 4,436 4,444 2,970 3,263 1,047 4,445 5,937 5,946 7,723 34,073 Chipotle
Projected Cash Flow Statement - Year Two
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Beginning Cash Balance70,014 69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748
Cash Inflows
Income from Sales52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000
Accounts Receivable- - - - - - - - - - - - -
Total Cash Inflows52,580 48,460 58,760 62,390 62,390 60,330 60,870 57,780 62,415 64,475 64,475 67,075 722,000
Cash Outflows
Investing Activities
New Capital Purchases- - - - - - - - - - - - -
Cost of Sales14,518 13,365 16,249 17,369 17,369 16,792 17,048 16,182 17,429 18,006 18,006 18,838 201,170
Operating Activities
Salaries and Wages28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 28,017 336,202
Fixed Business Expenses4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 4,704 56,444
Taxes- - - - - - - - - - - - -
Financing Activities-
Loan Payments5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 68,655
Line of Credit Interest- - - - - - - - - - - - -
Line of Credit Repayments- - - - - - - - - - - - -
Dividends Paid- - - - - - - - - - - - -
Total Cash Outflows52,960 51,807 54,691 55,811 55,811 55,234 55,489 54,624 55,870 56,447 56,447 57,279 662,471
Cash Flow(380) (3,347) 4,069 6,579 6,579 5,096 5,381 3,156 6,545 8,028 8,028 9,796 59,529
Operating Cash Balance69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748 129,544
Line of Credit Drawdowns- - - - - - - - - - - - -
Ending Cash Balance69,634 66,288 70,357 76,936 83,515 88,611 93,992 97,148 103,693 111,720 119,748 129,544
Line of Credit Balance- - - - - - - - - - - - Chipotle
Balance Sheet - Year Two
End of Year One End of Year Two
Assets
Current Assets
Cash70,014 129,544
Accounts Receivable- -
Inventory4,500 4,500
Prepaid Expenses8,400 8,400
Other Curren
t
- -
Total Current Assets82,914 142,444
Fixed Assets
Real Estate220,000 220,000
Buildings580,000 580,000
Leasehold Improvements- -
Equipment68,000 68,000
Furniture and Fixtures12,000 12,000
Vehicles- -
Other Fixed Asset
s
- -
Total Fixed Assets880,000 880,000
Less: Accumulated Depreciation41,114 82,229
Total Assets921,800 940,215
Liabilities and Owner's Equity
Liabilities
Accounts Payable- -
Notes Payable- -
Mortgage Payable669,543 653,885
Line of Credit Balance- -
Total Liabilities669,543 653,885
Owner's Equity
Common Stock223,900 223,900
Retained Earnings28,358 62,430
Dividends Dispersed- -
Total Owner's Equity252,258 286,330
Total Liabilities and Owner's Equity921,800 940,215
Statement Balances Statement Balances Chipotle
Projected Income Statement - Year Three
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Income
Local Market Food Sales33,619 29,417 35,720 36,771 36,771 36,771 36,771 31,518 35,720 35,720 35,720 35,720 420,240
Commuter Food Sales10,609 10,609 14,853 14,853 14,853 12,731 10,609 12,731 12,731 14,853 14,853 14,853 159,135
Catering Events5,408 5,408 5,408 8,112 8,112 8,112 10,816 10,816 10,816 10,816 10,816 13,520 108,160
Beverages4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,202 4,728 4,728 4,728 4,728 52,530
Total Income53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065
Cost of Sales
Local Market Food Sales9,413 8,237 10,002 10,296 10,296 10,296 10,296 8,825 10,002 10,002 10,002 10,002 117,667
Commuter Food Sales2,971 2,971 4,159 4,159 4,159 3,565 2,971 3,565 3,565 4,159 4,159 4,159 44,558
Catering Events1,731 1,731 1,731 2,596 2,596 2,596 3,461 3,461 3,461 3,461 3,461 4,326 34,611
Beverages756 756 756 756 756 756 756 756 851 851 851 851 9,455
Total Cost of Sales14,871 13,694 16,647 17,807 17,807 17,213 17,484 16,607 17,878 18,473 18,473 19,338 206,292
Gross Margin38,968 35,942 43,536 46,131 46,131 44,603 44,914 42,660 46,116 47,644 47,644 49,483 533,773
Total Salary and Wages28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 346,163
Fixed Business Expenses
Advertising1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 1,768 21,218
Car and Truck Expenses- - - - - - - - - - - - -
Commissions and Fees- - - - - - - - - - - - -
Contract Labor- - - - - - - - - - - - -
Credit Card and Bank Charges318 318 318 318 318 318 318 318 318 318 318 318 3,819
Customer Discounts and Refunds- - - - - - - - - - - - -
Dues and Subscriptions- - - - - - - - - - - - -
Entertainment- - - - - - - - - - - - -
Insurance (Liability and Property)265 265 265 265 265 265 265 265 265 265 265 265 3,183
Internet159 159 159 159 159 159 159 159 159 159 159 159 1,910
Legal and Professional Fees212 212 212 212 212 212 212 212 212 212 212 212 2,546
Office Expenses212 212 212 212 212 212 212 212 212 212 212 212 2,546
Postage and Delivery- - - - - - - - - - - - -
Rent (on business property)- - - - - - - - - - - - -
Rent of Vehicles and Equipment- - - - - - - - - - - - -
Repairs and Maintenance530 530 530 530 530 530 530 530 530 530 530 530 6,365
Supplies530 530 530 530 530 530 530 530 530 530 530 530 6,365
Telephone and Communications212 212 212 212 212 212 212 212 212 212 212 212 2,546
Travel- - - - - - - - - - - - -
Utilities637 637 637 637 637 637 637 637 637 637 637 637 7,638
Total Fixed Business Expenses4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 58,137
Total Other Expenses7,785 7,776 7,767 7,758 7,749 7,739 7,730 7,721 7,711 7,701 7,692 7,682 92,812
Net Income(2,509) (5,526) 2,077 4,681 4,691 3,172 3,493 1,248 4,714 6,251 6,261 8,109 36,661 Chipotle
Projected Cash Flow Statement - Year Three
January February March
April May June July Augus
tSeptember Octobe
r
November December Totals
Beginning Cash Balance129,544 129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292
Cash Inflows
Income from Sales53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065
Accounts Receivable- - - - - - - - - - - - -
Total Cash Inflows53,839 49,636 60,183 63,938 63,938 61,816 62,398 59,267 63,995 66,117 66,117 68,821 740,065
Cash Outflows
Investing Activities
New Capital Purchases- - - - - - - - - - - - -
Cost of Sales14,871 13,694 16,647 17,807 17,807 17,213 17,484 16,607 17,878 18,473 18,473 19,338 206,292
Operating Activities
Salaries and Wages28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 28,847 346,163
Fixed Business Expenses4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 4,845 58,137
Taxes- - - - - - - - - - - - -
Financing Activities-
Loan Payments5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 5,721 68,655
Line of Credit Interest- - - - - - - - - - - - -
Line of Credit Repayments- - - - - - - - - - - - -
Dividends Paid- - - - - - - - - - - - -
Total Cash Outflows54,284 53,107 56,060 57,220 57,220 56,626 56,897 56,020 57,291 57,885 57,885 58,751 679,247
Cash Flow(445) (3,471) 4,123 6,718 6,718 5,191 5,502 3,247 6,704 8,231 8,231 10,070 60,818
Operating Cash Balance129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292 190,362
Line of Credit Drawdowns- - - - - - - - - - - - -
Ending Cash Balance129,099 125,628 129,751 136,469 143,187 148,378 153,879 157,126 163,830 172,061 180,292 190,362
Line of Credit Balance- - - - - - - - - - - - Chipotle
Balance Sheet - Year Three
End of Year Two End of Year Three
Assets
Current Assets
Cash129,544 190,362
Accounts Receivable- -
Inventory4,500 4,500
Prepaid Expenses8,400 8,400
Other Curren
t
- -
Total Current Assets142,444 203,262
Fixed Assets
Real Estate220,000 220,000
Buildings580,000 580,000
Leasehold Improvements- -
Equipment68,000 68,000
Furniture and Fixtures12,000 12,000
Vehicles- -
Other Fixed Asset
s
- -
Total Fixed Assets880,000 880,000
Less: Accumulated Depreciation82,229 123,343
Total Assets940,215 959,919
Liabilities and Owner's Equity
Liabilities
Accounts Payable- -
Notes Payable- -
Mortgage Payable653,885 636,928
Line of Credit Balance- -
Total Liabilities653,885 636,928
Owner's Equity
Common Stock223,900 223,900
Retained Earnings62,430 99,091
Dividends Dispersed- -
Total Owner's Equity286,330 322,991
Total Liabilities and Owner's Equity940,215 959,919
Statement Balances Statement Balances Chipotle
5-Jul-06
Financial Ratios Ratio Year One Year Two Year Three
Liquidity
Current Ratio0.12 0.22 0.32
Quick Ratio0.10 0.20 0.30
Safety
Debt to Equity Ratio2.65 2.28 1.97
Debt to Coverage Ratio0.10 0.11 0.12
Profitability
Sales Growth - 0.03 0.03
COGS to Sales0.28 0.28 0.28
Gross Profit Margin0.72 0.72 0.72
SG&A to Sales0.54 0.54 0.55
Net Profit Margin0.04 0.05 0.05
Return on Equity0.11 0.12 0.11
Return on Assets0.03 0.04 0.04
Owner's Compensation to Sales0.07 0.07 0.07
Efficiency
Days in Receivables- - -
Accounts Receivable Turnover- - -
Days in Inventory8.31 8.05 7.85
Inventory Turnover43.33 44.70 45.84
Sales to Total Assets0.76 0.77 0.77 Chipotle
5-Jul-06
Breakeven Analysis Breakeven Analysis Dollars Percent
Annual Sales Revenue700,000 $ 100.00%
Cost of Sales195,000 27.86%
Gross Margin505,000 72.14%
Salaries and Wages326,531
Fixed Operating Expenses150,112
Total Fixed Business Expenses476,642
Breakeven Sales Calculation476,642
72.14%
Breakeven Sales in Dollars660,692 $ Chipotle
Amortization Schedule Loan Type Assumption
s
January February March
April May June July
Augus
tSeptember Octobe
r
November December Totals
Commercial Loan
Principal Amount- $
Interest Rate9.00%
Loan Term in Months84.00
Monthly Payment Amou
n
$0.00
Year One
Interest- - - - - - - - - - - - -
Principal- - - - - - - - - - - - -
Loan Balance- - - - - - - - - - - -
Year Two
Interest- - - - - - - - - - - - -
Principal- - - - - - - - - - - - -
Loan Balance- - - - - - - - - - - -
Year Three
Interest- - - - - - - - - - - - -
Principal- - - - - - - - - - - - -
Loan Balance- - - - - - - - - - - -
Commercial Mortgage
Principal Amount684,000.00 $
Interest Rate8.00%
Loan Term in Months240.00
Monthly Payment Amou
n
$5,721.25
Year One
Interest4,560 4,552 4,544 4,537 4,529 4,521 4,513 4,505 4,497 4,488 4,480 4,472 54,198
Principal1,161 1,169 1,177 1,185 1,193 1,200 1,208 1,217 1,225 1,233 1,241 1,249 14,457
Loan Balance682,839 681,670 680,493 679,308 678,116 676,915 675,707 674,490 673,266 672,033 670,792 669,543
Year Two
Interest4,464 4,455 4,447 4,438 4,430 4,421 4,412 4,404 4,395 4,386 4,377 4,368 52,998
Principal1,258 1,266 1,274 1,283 1,292 1,300 1,309 1,318 1,326 1,335 1,344 1,353 15,657
Loan Balance668,285 667,019 665,744 664,461 663,170 661,870 660,561 659,244 657,917 656,582 655,238 653,885
Year Three
Interest4,359 4,350 4,341 4,332 4,323 4,313 4,304 4,294 4,285 4,275 4,266 4,256 51,698
Principal1,362 1,371 1,380 1,389 1,399 1,408 1,417 1,427 1,436 1,446 1,456 1,465 16,957
Loan Balance652,523 651,152 649,772 648,382 646,984 645,576 644,158 642,731 641,295 639,849 638,393 636,928 Chipotle
Financial Diagnostics This sheet performs a few tests on your numbers to see if they seem within certain reasonable ranges.
Remember, no computer can tell whether your projections are truly well-constructed, only a human can do that.
But these tests can at least look for values that are critically out of range.
Financial Diagnostics Value Findings
General Financing Assumptions
Owner's Cash Injection into the Business24.66% Owner's injection is reasonable
Cash Request as percent of Total Required Funds1.65% Cash request seems reasonable with respect to total request
Loan Assumptions
Commercial Loan Interest rate9.00% Interest rate seems reasonable
Commercial Loan Term in Months84 Loan term seems within range for this type of loan
Commercial Mortgage Interest rate8.00% Interest rate seems reasonable
Commercial Mortgage Term in Months240.00 Loan term seems within range for this type of loan
Loan Payments as a Percent of Projected Sales0.82% Calculated loan payments as a percent of sales seem resonable
Income Statement
Gross Margin as a Percent of Sales72.14% Gross margin percentage seems reasonable
Owner's Compensation Lower Limit Check50,000 $ An owner's compensation amount has been established
Owner's Compensation Upper Limit Check176.32% Owner's compensation may be too high relative to profitability of business
Advertising Expense Levels as a Percent of Sales2.86% Advertising as a percent of sales may be too low
Profitability Levels28,358 $ The business is showing a profit
Profitability as a Percent of Sales4.05% The projection does not seem highly unreasonable
Cash Flow Statement
Desired Operating cash Flow Levels- $ The financial projection provides the desired level of cash flow
Line of Credit Drawdowns- $ The business doesn't seem to require a line of credit
Accounts Receivable Ratio to Sales0.00% Accounts receivable amount as a percent of sales seems reasonable
Balance Sheet
Does the Base Period Balance Sheet Balance?- The balance sheet does balance
Does the Final Balance Sheet Balance- The balance sheet does balance
Debt to Equity Ratio265.42% The debt to equity ratio seems reasonable
Breakeven Analysis
Breakeven Levels39,308 $ The sales projection exceeds the projected break-even sales level
