Naledi Threads Business Plan — Key Assumptions
Every footfall, basket, margin, cost and funding assumption behind the model, stated so a funder can test each one independently.
Key Assumptions
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- 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
- 19.1 Revenue and margin
- 19.2 Cost, capital and funding
19.1 Revenue and margin
|
Assumption |
Year 1 |
Year 5 |
Basis |
|---|---|---|---|
|
Revenue |
R1 812 670 |
R2 902 488 |
Built from transactions and average transaction value |
|
Trading density per m² |
R32 958 |
R52 773 |
76% of the national benchmark rising to 104% |
|
Transactions per trading day |
11.5 |
15.7 |
Ramped from 62% of maturity in month 1 |
|
Average transaction value |
R438 |
R512 |
Grown at 4% a year |
|
Units per transaction |
1.62 |
1.62 |
Accessory attachment is the primary lever; not assumed to improve |
|
Average unit retail |
R270 |
R316 |
Derived from transaction value and units |
|
Initial mark-on |
55.6% |
56.5% |
Roughly a 2.25 times cost multiple |
|
Markdown and clearance |
(5.5%) |
(3.4%) |
Better buying accuracy; the cadence enforced from week six |
|
Shrinkage and loss |
(1.6%) |
(0.9%) |
Tags, fitting-room control and cycle counts |
|
Achieved gross margin |
48.5% |
52.2% |
Not assumed to come from raising prices |
19.2 Cost, capital and funding
|
Assumption |
Value |
Basis |
|---|---|---|
|
Base rental |
R248/m²/month escalating at 7.0% |
Close to the national all-centre base rent index |
|
Turnover clause |
7.5% of turnover, greater-of basis |
Becomes the operative basis from Year 3 |
|
Occupancy cost ratio |
11.8% falling to 9.7% |
The constraint that eliminates every regional mall |
|
Owner remuneration |
R168 000 rising to R327 906 |
A real salary charged as a cost from Year 1 |
|
Staff wages |
R201 600 escalating at 5.5% |
Above the R30.23 per hour national minimum wage floor |
|
Sales commission |
1.25% of revenue |
Variable |
|
Card acquiring fees |
1.68% of revenue |
82% card mix |
|
Other operating costs |
R243 480 escalating at 4.5% |
Fifteen line items detailed in Section 11.3 |
|
Capital expenditure |
R417 000 at R7 582/m² |
Entry-level specification; maintenance capital from Year 3 |
|
Founder equity |
R600 000 |
58% of committed funding, fully at risk |
|
Term loan |
R440 000 at 13.50% over 60 months |
Prime plus 300 basis points, six-month capital moratorium |
|
Standby overdraft |
R150 000 |
Undrawn in the base case |
|
Stock turn |
2.6x rising to 3.8x |
Measured on closing inventory |
|
Creditor days |
24 rising to 40 |
Extended on payment behaviour, not on statements |
|
Taxation |
Small Business Corporation rates |
Year 1 assessed loss carried forward; no tax within the projection |