Here is an exercise to calculate the potential of owning a Fancy Art, NFP® franchise, we have attached a sample cash flow analysis template, to help you envision the possibilities for your new business. This is a good exercise for any business you may decide upon and there are more generic financial templates available at http://bit.ly/Forms-Score for your consideration.
Different communities have different demographics and potential; it is up to you to determine numbers that you feel comfortable with. We can tell you that in our FDD (Franchise Disclosure Document), it states that a territory will have an approximate population of 70,000, from that you can determine the number of households and extrapolate how many of those may become customers. Then, in the FDD it states that from our recommended pricing, you will have a 200% markup on framing or.6667 times retail, with all other profit centers being 100% markup or .50 times retail; so, plug in some numbers and have some fun with this, you can even use this form to gain insight for other franchise offerings, but why would you?
Each location has its own unique potential, so the following exercise is intended to encourage you to think about what is realistic in sales (revenue) and expenses (overhead). Each individuals answers may be different based on their interpretation of the demographics and other variables. You should also realize that it will take a period of time for your business to reach its full potential.
Do your homework, based on the local economy and demographics, project numbers that are realistic and fill in the blanks. We hope that this will help you paint a picture of what to expect and put you in the proper frame of mind about owning a business for yourself, but not by yourself. We will follow up with you regarding your financial information and look forward to inviting you to become a Fancy Art, *N.F.P.® owner.
George M Vodin
1-877/ FncyArt (362-9278)
Cash Flow Analysis Projections
Projected Monthly Sales:
How many prospective customers will visit your shop each day: ______
Of those who visit, how many do you expect will result in sales: (a) ______
What you expect your average sale amount to be:
(b) $________ .00; (a*b) $ ________.00 Daily Sales
What percentage of sales will you expect to be:
Framing: _______%; artwork: ______ %
Percentage Framing Sales (% x Daily Sales):
$________ .00 x .667 (factor) = $ ________.00 gross daily framing profits
Percentage Artwork Sales (% x Daily Sales):
$ ________.00 x .50 (factor) = $ ________.00 gross daily artwork profits
Gross Monthly Operating Profits: (combined daily profits x 30) $____________.00
Projected Monthly Expenses:
Rent: (sq ft x dollars per foot ÷ 12 $___________.00
Payroll: (# employees x hours x hourly rate x 4.3 weeks $___________.00
Commissions: (If Adopted), Avg. weekly amount x 4.3 x.05 $___________.00
Advertising/ Promotion: ((gross monthly sales x .02) x 2) $__________.00
Utilities monthly: (Electric =$______ ; Telephone = $_______ ; Gas = $_______: $__________.00
Insurance: (Yearly Premium ÷ 12) $__________.00
Franchise Fee: (gross monthly sales x .07) $__________.00
Loan Installment: (If Applicable) $__________.00
Taxes & Fees: $__________.00
Gross Monthly Expense totals: $_____________.00
Monthly Net Operating Profits:
(Gross Monthly Profits – Expenses) …………………………………………………………………………..…..$______________.00