Naledi Threads Business Plan — Returns
What the owner actually earns, why the salary rather than the profit is the real return, and the exit assumptions behind the plan.
Returns
Jump to section
- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Business
- 3. Market Analysis
- 4. Location Strategy
- 5. Products and Merchandise Strategy
- 6. SWOT and Competitive Position
- 7. Marketing and Sales
- 8. Operations
- 9. People, Compliance and Controls
- 10. Implementation Plan
- 11. Financial Plan
- 12. Break-Even
- 13. Working Capital and Debt Service
- 14. Returns
- 15. Sensitivity and Scenarios
- 16. Risk Management
- 17. Trigger Points and Management Response
- 18. Key Performance Indicators
- 19. Key Assumptions
- 20. Conclusion
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Capital and Pre-Opening Schedules
- C. Appendix C: Funding and Debt Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 14.1 Returns summary
- 14.2 Owner economics — the return that actually matters
- 14.3 What would have to be true
14.1 Returns summary
|
Measure |
Value |
Basis |
|---|---|---|
|
Total funding requirement |
R1 036 030 |
Fit-out, inventory, deposits, launch and working capital |
|
Founder equity |
R600 000 |
Fully at risk, subordinated |
|
Year 5 EBITDA after owner remuneration |
R202 071 |
At a 7.0% margin |
|
Terminal value multiple applied |
3.5x |
A realistic multiple for a single-site independent boutique |
|
Terminal enterprise value |
R707 248 |
|
|
Terminal equity value |
R1 010 144 |
After the loan is fully repaid, plus closing cash |
|
Project internal rate of return |
6.3% |
On free cash flow with the terminal value |
|
Net present value at a 15% hurdle |
(R300 784) |
The project does not clear a market hurdle |
|
Return to equity |
3.8% |
On the R600 000 contribution |
|
Owner remuneration drawn over five years |
R1 244 700 |
Charged as a cost, so it does not appear in the return |
|
Owner remuneration plus terminal equity |
R2 254 844 |
What the founder actually receives |
|
Payback on invested capital |
Not within five years |
Invested capital is not recovered within the window |
|
Terminal multiple |
Terminal value |
Project IRR |
NPV at 15% |
Return to equity |
|---|---|---|---|---|
|
2.0x |
R404 142 |
0.5% |
(R451 482) |
-5.3% |
|
2.5x |
R505 178 |
2.6% |
(R401 249) |
-1.9% |
|
3.0x |
R606 213 |
4.6% |
(R351 017) |
1.2% |
|
3.5x |
R707 248 |
6.3% |
(R300 784) |
3.8% |
|
4.0x |
R808 284 |
8.0% |
(R250 552) |
6.3% |
|
4.5x |
R909 320 |
9.6% |
(R200 319) |
8.5% |
|
5.0x |
R1 010 355 |
11.1% |
(R150 087) |
10.6% |
14.2 Owner economics — the return that actually matters
|
What the founder puts in and takes out |
R |
|---|---|
|
Equity contributed at inception |
(600 000) |
|
Owner remuneration, Year 1 |
168 000 |
|
Owner remuneration, Year 2 |
204 000 |
|
Owner remuneration, Year 3 |
253 914 |
|
Owner remuneration, Year 4 |
290 880 |
|
Owner remuneration, Year 5 |
327 906 |
|
Total remuneration drawn |
1 244 700 |
|
Terminal equity value at 3.5x Year 5 EBITDA |
1 010 144 |
|
Total received against R600 000 at risk |
2 254 844 |
14.3 What would have to be true
|
For the project to clear a 15% hurdle |
Required |
Plan |
Comment |
|---|---|---|---|
|
Revenue uplift across all five years |
+7.4% |
— |
The single most efficient lever; operating leverage does the rest |
|
Or gross margin improvement |
+2.6 points |
52.2% at Year 5 |
Requires markdown to 2.0% and shrinkage to 0.5%, both aggressive |
|
Or occupancy reduction |
–18% |
9.7% of sales at Year 5 |
Requires a rent that community-centre landlords do not offer |
|
Or terminal multiple |
Above 8.0x |
3.5x assumed |
Not achievable for a single-site independent |
|
Or units per transaction |
+0.19 units |
1.62 |
Entirely within management control and the cheapest of the five |
The most instructive line is the last. Moving units per transaction from 1.62 to 1.81 — one additional accessory on roughly one transaction in five — would deliver most of the required revenue uplift at no additional rent, staff or marketing cost. It is not a certainty, but it is the only lever on this list that a well-run store can move by decision rather than by circumstance, and it is why Section 5.2 gives accessories attention out of proportion to their revenue share.