Financial Plan & Projections — MzanziMart Soweto Market Spaza Shop

15.1 Basis of preparation

Sponsor headline revenue is preserved exactly as briefed. Everything beneath it is independently re-derived. A full retail profit and loss is built from a realistic blended gross margin (around 26–28%, reflecting the store’s category and service mix) and the store’s operating costs, rent, staff, utilities and electricity, security, marketing, shrinkage and administration, to arrive at EBITDA. Beneath EBITDA, the model applies component depreciation on the equipment and fit-out, interest on the R240,000 SME term loan at 15%, and South African Small Business Corporation (SBC) tax at the applicable progressive rates for a qualifying small company. The three statements integrate and the balance sheet ties to zero every year, enforced by an automated assertion. All figures are in thousands of rand unless stated.

15.2 Key assumptions

Assumption	Value	Basis
Blended gross margin	26% → 28%	Category & value-added service mix; buying scale
Funding	R300k equity + R240k loan	Owner equity + SME term loan (15%, 5-yr)
Shrinkage (theft & spoilage)	1.5% of revenue	Township-retail norm; loss prevention
Corporate tax	SBC progressive	Qualifying small business corporation
Depreciation	Component (4–8 yr)	Fit-out/shelving 6yr; fridges/freezers 8yr; POS 4yr; CCTV 5yr
Inventory turns	12.0 → 13.2×	Fast-moving FMCG; ~monthly turn
Repo / prime	7.0% / 10.5%	SARB, mid-2026
Exit valuation	3×–5× EV/EBITDA	Small-retail comparables (illustrative)

Key findingRe-derived net profit runs below the sponsor’s illustrative figures

Preserving revenue exactly, the fully-loaded model produces net profit of roughly R48k, R130k, R213k, R302k and R410k across Years 1–5, below the sponsor’s illustrative R265k to R840k. The difference is a realistic gross margin and full costs: township convenience retail is a thin-margin, high-volume business, and once realistic gross margins, the store’s full operating costs (including shrinkage and security), depreciation, term-loan interest and tax are applied, net margins land in the low-to-mid single digits rising toward roughly 8%, a realistic, fundable trajectory, not the double-digit-and-rising margins in the illustrative figures. The store is genuinely profitable and cash-generative; the gap is the honest, fully-costed view.

15.3 Projected profit & loss

R’000	Year 1	Year 2	Year 3	Year 4	Year 5
Revenue	2850	3300	3780	4290	4870
Cost of goods sold	(2109)	(2426)	(2759)	(3110)	(3506)
Gross profit	741	875	1021	1180	1364
Gross margin	26%	26.5%	27%	27.5%	28%
Operating expenses	(607)	(664)	(725)	(790)	(855)
EBITDA	134	211	296	390	509
Depreciation	(50)	(50)	(53)	(58)	(55)
Interest (term loan)	(36)	(29)	(22)	(14)	(7)
Profit before tax	48	132	221	317	446
Tax (SBC)	(0)	(3)	(9)	(16)	(36)
Net profit after tax	48	130	213	302	410
Net margin	1.7%	3.9%	5.6%	7%	8.4%

Figure 14. *Margin trajectory: gross, EBITDA and net.*

Figure 15. *Year-1 revenue-to-EBITDA build.*

15.4 Operating economics

The per-rand economics show why disciplined retailing matters. Of every R100 of revenue, roughly R72 is the cost of goods, leaving about R28 of gross profit; staff, rent and utilities, security and shrinkage, and other operating costs then absorb most of the balance, leaving an EBITDA of around R10 per R100 at scale. There is little slack in these economics: a few points of gross margin, a controlled shrinkage rate, and tight cost management are the difference between a thin and a healthy result. This is a volume-and-discipline business, and the model reflects that reality.

Figure 16. *Illustrative operating economics per R100 of revenue, at scale.*

15.4b Working capital and liquidity

Working capital is modest and self-funding. Inventory, the store’s main working-capital asset, turns roughly monthly (about 12 times a year, rising as buying sharpens), so cash is not tied up in slow stock. Because customers pay cash or card at the till while the store buys on short terms, the cash conversion cycle is short and largely self-financing: each day’s sales fund the next replenishment. The R25,000 working-capital reserve in the raise, together with operating cash flow, comfortably covers the modest swings, and closing cash builds steadily from around R187,000 in Year 1 to over R800,000 by Year 5. No further funding beyond the R540,000 raise is required in any year of the plan.

15.5 Projected cash flow

R’000	Year 1	Year 2	Year 3	Year 4	Year 5
EBITDA	134	211	296	390	509
Tax paid	(0)	(3)	(9)	(16)	(36)
Working-capital movement	(88)	(8)	(8)	(8)	(8)
Operating cash flow	46	200	279	367	465
Capital expenditure	(315)	(0)	(18)	(28)	(23)
Interest & debt service	(84)	(77)	(70)	(62)	(55)
Equity & loan raised	540	0	0	0	0
Dividends	—	—	(64)	(106)	(164)
Closing cash	187	311	439	609	831

Figure 17. *Operating cash flow, capex and closing cash.*

15.6 Projected balance sheet

R’000	Year 1	Year 2	Year 3	Year 4	Year 5
Equipment & fit-out (net)	265	215	180	150	118
Inventory	176	197	219	241	266
Cash	187	311	439	609	831
Total assets	628	723	837	1000	1215
Term loan	192	144	96	48	0
Trade payables	88	101	115	130	146
Share capital / equity in	300	300	300	300	300
Retained earnings	48	178	326	522	769
Total equity & liabilities	628	723	837	1000	1215

Figure 18. *Balance-sheet build: asset composition.*

StrengthThree statements that integrate — and a balance sheet that ties every year

The model is fully integrated: the profit and loss drives cash flow and retained earnings, capital expenditure and depreciation drive net equipment value, working capital reflects inventory and payables, and funding and dividends flow through equity. The balance sheet ties to zero in every year, machine-verified, and the store stays in a healthy cash position throughout, needing no rescue funding beyond the R540,000 raise. This integrity is what separates a bankable financial plan from a set of disconnected projections.

MzanziMart Soweto Market Spaza Shop Business Plan — Financial Plan & Projections