Case Weddings

Case Weddings

CASE – Bluegrass Wedding Center

Capital & Operating Forecast

The former capital requirements are forecasted in the left half of the table. Proposed financial structure is in the right half of the table

land (3-2 acre site) | $200,000.00 | Chad + Julie | $20,000 (52%) |

building + improvements | $470,000.00 | Wendy Smith | $20,000 (6%) |

working capital | $65,000.00 | Mary McMann | $20,000 (6%) |

TOTAL capital required | $735,000.00 | Jack Richards | $15,000 (3%) |

| | Outside investor/bank | $660,000 (33%) |

| | Total | 735,000 (100%) |

The market potential (sales projection) for the first year was estimated to be $816,000 (what is approximately about 5% of $16M greater Lexington area market).

First year operating forecast is projected here:

Sales$816,000

Less Cost of Goods Sold$195,840

Gross Profit$620,160

Less Operating Expenses$252,960

Operating Profit$367,200

After the business plan evolved, they developed new ideas for the facility and total capital required increased to $1,000,000. Now the couple would need to raise $925,000 from an investor.

Problem to answer

How Julie and Chad are going to raise the capital to fund their business idea.

Recommendations

I think that Chad and Julie should start their business in more “entrepreneurial approach”. By this I mean:

They should try to minimize resources they own – instead of purchasing land and building, they can lease it. The goal is to minimize risk when the cash flow problems appear. When you have a high fixed costs, it can kill the business during seasonal downturn.

I would totally agree with Dr. Bentler recommendation to create a more scaled down plan that requires less initial capital. I would recommend them to start in smaller, they don't have to offer all the services in one place from the beginning. They can decide to grow later when the...