FINANCIAL PLAN
FINANCIAL PLAN
How will you fund the business?
Nike plans to solicit a group of prominent doctors and of which we will choose the top twenty doctors to invest $100,000 each. Nike will match the investors.
What is your desired debt and equity position?
Desired debt position is fifty percent as we are in a partnership with a group of doctors. With this ratio, Nike is mitigating how much debt Nike would have to cover should this not work.
Who will provide capital debt funds?
Nike would issue $2 million dollars in stocks which would increase funds.
What role will leasing play in your financial strategy?
Leasing will play a big role in our financial strategy. The ultimate goal is to use a network of doctors to sell/lease the machines needed to create the sneaker.
Will you use outside investors for equity capital?
Nike will use a group of doctors for investors for equity capital.
How will you manage the financial risks your business faces?
Part of Nikes strategy with starting with 20 investors will reduce the financial risks by half and leasing the machines will help offset the financial risks.
What operating procedures, such as developing cash flow budgets or spending limits, will you have to ensure adequate money for debt repayment?
Nike and the Doctors will come up with how much is needed through D&R. They will ensure adequate money for debt repayment through the leasing program. For the first year of this project we will be meeting monthly & quarterly to review numbers to make sure we are on target with covering the debt.
What are the important assumptions that underlie your projections? These assumptions may be associated with both external or internal factors.
External the health trend in society will help push this project to the fullest. Consumers are now real health conscious and willing to do anything to help themselves. Internally, Nike is in a strong financial status and the prominent doctors will bring more to this project.
What financial aspects of your business (equity, asset growth, ROA, ROE, etc.) will you monitor?
What procedures will be used for monitoring overall business performance?
We will be monitoring all equity, asset growth, ROA and ROE. We will keep a closer eye on ROE to ensure the project is going the way it should. Following the plan will be our most useful tool in controlling and monitoring our operation. Based on how well this venture goes, we are going to regularly monitor our plan to see if needs to be changed if problems occur. We are going to create business plan review dates, develop a tracking a system to tracking system to monitor of goals. From there we will make changes to meet our goals.
What level of performance will your business shoot for? These should be targets for next year and in five years. They should be financial performance standards used to monitor the overall business.
Nike will be shooting for the top target possible. In the first year of this program, our goal is to have at least fifty machines in retail stores and have the doctors to have reached out to at least five others to lease the machines. Within five years our goal is to have most shoe retailers that sell Nike have the machines in place and more doctor offices on board.
What yield and output levels could you attain? What efficiency levels will you reach?
In the first three years, Nikes goal is to yield $700,000 and output level goals are to reach $1million a year. Nikes goal is to increase market share by 15%, cutting production costs by 5% per year and aggressively growing a national effort for our leasing program.
B. Contingency Plan
What will you do if you can’t follow through with your primary plan?
Nike will re-group and set new goals to see if the project can make progress.
How are you preparing for an emergency in your business?
Nikes backup plan will be to issue capital through debt.
How will the business function if something happens to one of the key members of the management team?
Nikes employees all have some kind of knowledge of each segment in the company. With that, they will be able to step up in the position.