Streetfire Kitchens Business Plan — Break-Even and Debt Service
Break-even at 100 covers per service on three trucks, falling to 83 on five, and debt service through three loss-making years.
Break-Even and Debt Service
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- Overview & contents
- i. Important Notice and Basis of Preparation
- 1. Executive Summary
- 2. The Operating Model
- 3. Licensing, Food Safety and Trading Rights
- 4. Market and Customers
- 5. SWOT and Competitive Position
- 6. Operations and Team
- 7. Financial Plan
- 8. Break-Even and Debt Service
- 9. Investment Analysis
- 10. Sensitivity and Scenario Analysis
- 11. Risk Analysis
- 12. Implementation Roadmap
- 13. Key Performance Indicators
- 14. Key Assumptions
- 15. Conclusion and Recommendation
- A. Appendix A: Consolidated Financial Summary
- B. Appendix B: Truck-Day and Trading Schedules
- C. Appendix C: Funding, Debt and Working Capital Schedules
- D. Appendix D: Risk Register
- E. Appendix E: Glossary
- 8.1 Break-even
- 8.2 Debt service
8.1 Break-even
|
Break-even measure |
Value |
Interpretation |
|---|---|---|
|
Contribution per truck-day |
R3 704 |
Blended across the three service types at the mid-plan mix |
|
Fixed cash costs at three trucks |
R2 617 239 |
Central overhead plus per-truck ownership costs |
|
Break-even truck-days |
707 |
2.66 trucks fully utilised |
|
Break-even covers per service, three trucks |
100 |
Against a plan of 106.6 — headroom 6.2% |
|
Break-even covers per service, four trucks |
89 |
Headroom widens to 16.5% |
|
Break-even covers per service, five trucks |
83 |
Headroom widens to 22.1% |
|
Five-truck capacity |
1 330 truck-days |
At full utilisation |
|
Margin of safety at five trucks |
46.8% |
How far volume can fall before losses |
|
Fleet size |
Truck-days available |
Fixed cash costs (R) |
Break-even covers per service |
Headroom |
|---|---|---|---|---|
|
3 trucks |
798 |
2 617 239 |
100 |
6.2% |
|
4 trucks |
1 064 |
2 751 239 |
89 |
16.5% |
|
5 trucks |
1 330 |
2 885 239 |
83 |
22.1% |
Two ways of stating the same thing. In fleet terms the business needs about 2.7 trucks trading at full utilisation to cover its overhead. In operational terms, at the three-truck launch configuration it needs the average truck to serve 100 people per service against a plan of 107 — headroom of only 6.2 per cent. The second is the number to put on the wall, because it is the one a truck manager can influence on any given day.
8.2 Debt service
|
R |
Year 1 |
Year 2 |
Year 3 |
Year 4 |
Year 5 |
|---|---|---|---|---|---|
|
Opening balance |
2 137 000 |
1 813 707 |
1 445 153 |
1 431 961 |
1 277 252 |
|
Drawn in the year |
— (drawn at close) |
— |
479 500 |
479 500 |
— |
|
Interest at 14.00% |
299 180 |
253 919 |
269 451 |
267 604 |
178 815 |
|
Capital repaid |
323 293 |
368 554 |
492 692 |
634 209 |
722 997 |
|
Total debt service |
622 473 |
622 473 |
762 143 |
901 813 |
901 812 |
|
Closing balance |
1 813 707 |
1 445 153 |
1 431 961 |
1 277 252 |
554 255 |
|
of which current portion |
368 554 |
492 692 |
634 209 |
722 997 |
0 |
|
of which non-current portion |
1 445 153 |
952 461 |
797 752 |
554 255 |
554 255 |
|
EBITDA |
(1 380 153) |
(412 216) |
560 057 |
1 803 341 |
2 736 480 |
|
Debt service cover |
-2.22x |
-0.66x |
0.73x |
2.00x |
3.03x |
|
Gearing |
35.6% |
41.0% |
45.1% |
33.3% |
11.2% |