Urban Jazz Premium Liquors — Return on Investment & Valuation
The investment return builds progressively as the business scales. Year 1 represents the investment and ramp-up phase, with a modest operating loss of R135,150 absorbed by the working-capital buffer. From Year 2, the business generates positive net income, with annual profits accelerating…
Section 11 · Business Plan
Return on Investment & Valuation
The investment return builds progressively as the business scales. Year 1 represents the investment and ramp-up phase, with a modest operating loss of R135,150 absorbed by the working-capital buffer. From Year 2, the business generates positive net income, with annual profits accelerating…
With full capital payback achieved in roughly 24 months on the R1.8 million investment.
11.1 Key Investment Metrics
| Metric | Value |
|---|---|
| Total Investment | R 1,800,000 |
| Payback Period | ~30–36 months |
| 5-Year Cumulative Net Profit | R 945,573 |
| 5-Year Cumulative Free Cash Flow | R 1,141,573 |
| Return on Equity (Year 5) | 17.6% |
| Internal Rate of Return (5-Year) | 18–22% |
| Terminal Value (5x EBITDA) | R 3,333,995 |
11.2 Investment Returns Waterfall
The investment return builds progressively as the business scales. Year 1 represents the investment and ramp-up phase, with a modest operating loss of R135,150 absorbed by the working-capital buffer. From Year 2, the business generates positive net income, with annual profits accelerating from R22,557 in Year 2 to R454,643 in Year 5. The cumulative return on the R1.8 million investment reaches positive territory by Year 3 and delivers total equity returns of R777,417 in retained earnings by Year 5.
11.3 Expansion Scenario
If the founder elects to open a second store in Year 4 or 5—funded from accumulated cash flow and a modest additional investment—the combined enterprise could generate annual revenue exceeding R18 million and EBITDA of R1.5–2.0 million, implying an enterprise value of R7.5–10.0 million on a 5x EBITDA multiple. This multi-store trajectory transforms Urban Jazz Premium Liquors from a single-unit lifestyle business into a scalable retail platform with meaningful exit value.
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