A pawn shop can be very lucrative and with proper management and financial planning, you give your startup shop the best chance for success. Even if you are operating an on-going entity already, it is always good to try and do some forecasting for cash flow planning purposes. This will help make decision making smarter and easier.
This 5-year financial model has all the bells and whistles you need to plan out a monthly and annual profit and loss pro-forma as well as expected cash flows and cash availability. The user starts off on the control tab by defining global assumptions such as the start year, exit month, exit multiple if applicable, and financing assumptions. The expected year 1 operational break-even revenue is also displayed based on fixed and variable expected costs.
The nuts and bolts of this model are the revenue inputs. The user will have assumptions for up to 4 product categories. These categories allow for variation in the average pricing, expected sales volumes, and growth therein and expected margin.
Another aspect of the pawn business is loans. This model has assumptions for each of the revenue categories in regards to the average value of loans (collateral given), average loans per month, average loan days, and average annual interest rate applied. The only purpose of the loan logic in this model is to account for interest revenue. It is assumed that the principal will go out and come back within the same month.
Operating expenses are modeled fairly simply with a description of the line item, start month, and monthly cost in each of the five years for up to 34 slots. There are separate cost schedules for one-time startup costs (starting inventory is automated based on the defined months inventory is pre-purchased for at launch) and future capital expenditures.
The model wraps up with a monthly and annual pro forma detail that drives all the way down to EBITDA/cash flow and these are rolled up into an annual Executive Summary display that shows the revenue, expenses, and profit/loss in a few primary line items.
Plenty of visuals were done so that the story is easily understood when assumptions change.