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Cover Page

This sample business plan has been made available to users of Business Plan Pro, business
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Legal Page
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by
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disclose it without the express written permission of _________________________.
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This is a business plan. It does not imply an offering of securities.

Table of Contents

1.0 Executive Summary.....................................................................................................................1

1.1 Mission...........................................................................................................................................2
1.2 Objectives....................................................................................................................................2
Chart: Highlights...........................................................................................................................3
2.0 Company Summary......................................................................................................................3
2.1 Company Ownership................................................................................................................3
2.2 Start-up Summary....................................................................................................................3
Table: Start-up...............................................................................................................................4
Table: Start-up Funding..............................................................................................................4
Chart: Start-up..............................................................................................................................5
3.0 Products............................................................................................................................................5
4.0 Market Analysis Summary.........................................................................................................5
4.1 Market Segmentation..............................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................6
Table: Market Analysis................................................................................................................6
4.2 Target Market Segment Strategy........................................................................................6
4.3 Industry Analysis.......................................................................................................................7
5.0 Strategy and Implementation Summary.............................................................................7
5.1 Competitive Edge......................................................................................................................7
5.2 Sales Strategy............................................................................................................................7
5.2.1 Sales Forecast....................................................................................................................8
Chart: Sales Monthly...............................................................................................................8
Table: Sales Forecast...............................................................................................................8
5.3 Milestones....................................................................................................................................8
Table: Milestones...........................................................................................................................9
6.0 Management Summary...............................................................................................................9
6.1 Personnel Plan............................................................................................................................9
Table: Personnel............................................................................................................................9
7.0 Financial Plan................................................................................................................................10
7.1 Important Assumptions........................................................................................................10
Table: General Assumptions...................................................................................................10
7.2 Break-even Analysis...............................................................................................................11
7.2 Break-even Analysis...............................................................................................................11
Chart: Break-even Analysis.....................................................................................................11
Table: Break-even Analysis.....................................................................................................11
7.3 Projected Profit and Loss.....................................................................................................12
7.3 Projected Profit and Loss.....................................................................................................12
Table: Profit and Loss................................................................................................................12
7.4 Projected Cash Flow...............................................................................................................13
7.4 Projected Cash Flow...............................................................................................................13
Chart: Cash...................................................................................................................................13
Table: Cash Flow.........................................................................................................................13
7.5 Projected Balance Sheet......................................................................................................15
7.5 Projected Balance Sheet......................................................................................................15
Page 1

Table of Contents

Table: Balance Sheet.................................................................................................................15

Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

Page 2

BikeArt

1.0 Executive Summary

The Concept
BikeArt's mission is to provide the customer with functional items and art work made out of
recycled bicycle parts. The art work will be made by three local artists, one of which is Steve's
wife Shoodnt. Some of the featured products are: wall clocks, picture frames, chairs, tables,
mobiles, wind chimes, book ends, kitchen utensil holders, and many other products.
BikeArt will be a stand-alone kiosk located in the busy Valley River Mall. Through the
outstanding terms and conditions of its lease, BikeArt will be able to display its larger items on
the surrounding floor space. This should significantly increase sales as walk through traffic in
the mall is very high.
BikeArt is forecasted to reach profitability by month nine and will have profits of almost $40,000
by year three.
Beginnings
The first month will be used to set up the kiosk and get things underway. During this month the
part-time employees will be hired and trained. Sales will begin slowly during this first month.
From the second month on, sales will steadily increase from the flow of customers that pass by
the kiosk.
Total startup costs are $45,000. This will be financed through $25,000 put forward by Steve
Useitagyen as equity and another $20,000 in a long-term small business loan.
The Company
The company will be a sole proprietorship owned and operated by Steve Useitagyen.
Steve Useitagyen is well qualified to work in this niche market. He received a joint degree in
business administration and art design from the University of Portland. Throughout college
Steve worked at a bicycle shop, initially as a mechanic, then moved up to sales, and then after
college managed the shop for two years.
BikeArt will use three part-time employees to man the kiosk, in addition to Steve who will take
care of the hiring, payroll, and purchasing.
The Market
BikeArt will target two market segments, industrial art aficionados and bicycle enthusiasts. Both
of these groups are populous in Eugene. BikeArt is focusing on these two groups because they
are the most likely consumers of this type of art work.
BikeArt has several competitors:

Other retailers in the mall.

Art galleries.
Bicycle retailers.

BikeArt will leverage its competitive advantage of existing in a niche market by being the only
retailer that exclusively deals with bicycle artwork. Since the mall gets lots of foot traffic all day,
it is like having your own show room in the middle of the hallway of a crowded mall.

Page 1

BikeArt

Success
The company plans to grow slowly and establish a sustainable level of sales and cash flow
before seeking to expand. Once this is done, BikeArt will seek to set up other kiosks in Salem,
Corvallis, and Portland. This expansion is estimated to occur sometime after year three.
The Break-even Analysis indicates $15,212 is needed in monthly revenue to reach the breakeven point. Pricing of BikeArt's products will be based on a desired net margin of 12%. Because
BikeArt's products will be locally created works of art, prices are estimated to range from $40 to
$500 per piece.
The business is forecasted to reach profitability by month nine and will have revenues of
$147,000 and profits of $35,500 by the end of year two.
1.1 Mission
BikeArt's mission is to provide the customer with functional items and art work made out of
recycled bicycle parts. We exist to attract and maintain customers. When we adhere to this
maxim, everything else will fall into place. Our services will exceed the expectations of our
customers.

1.2 Objectives
The objectives for the first three years of operation include:
To create a product-based kiosk whose primary goal is to exceed customer's expectations.
The increase in the number of products sold by 20% each year.
To develop a sustainable retail outlet that sells artwork and functional items made out of
recycled parts.

Page 2

BikeArt

Chart: Highlights

2.0 Company Summary

BikeArt is a stand alone kiosk located in the Valley River Mall that sells pieces of art, furniture,
and other items manufactured out of recycled bicycle parts. While some of the items are
functional, they all can be considered art as they are aesthetically pleasing. In addition to the
kiosk, BikeArt will warehouse their purchased products as well as do the back end accounting in
Steve Useitagyen's home. Steve is the founder and operator of BikeArt.
BikeArt will use three part-time employees to man the kiosk, in addition to Steve who will take
care of the hiring, payroll, and purchasing.
The business is forecasted to reach profitability by month nine and will have revenues
of $147,000 by the end of year two.
2.1 Company Ownership
BikeArt is a sole proprietorship founded and owned by Steve Useitagyen.
2.2 Start-up Summary
BikeArt will incur the following start-up costs:

Wheeled kiosk.
Cash register.
Computer system with printer and Internet connection.
Desk, chair, and file cabinet.
Legal fees associated with business formation and contract review.

Page 3

BikeArt

Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Insurance
Rent
Other
Total Start-up Expenses

$300
$0
$0
$0
$300

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$41,600
$0
$0
$3,100
$44,700

Total Requirements

$45,000

Page 4

BikeArt

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$300
$44,700
$45,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$3,100
$41,600
$0
$41,600
$44,700

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$20,000
$0
$0
$20,000

Capital
Planned Investment
Steve
Other
Additional Investment Requirement
Total Planned Investment

$25,000
$0
$0
$25,000

Loss at Start-up (Start-up Expenses)

Total Capital

($300)
$24,700

Total Capital and Liabilities

$44,700

Total Funding

$45,000

Page 5

BikeArt

Chart: Start-up

3.0 Products
BikeArt will sell artwork manufactured from recycled bicycle parts. The art work will be made
by three local artists, one of which is Steve's wife Shoodnt. Some of the featured products are:
wall clocks, picture frames, chairs, tables, mobiles, wind chimes, book ends, kitchen utensil
holders, and many other products.
4.0 Market Analysis Summary
BikeArt's customers can be broadly classified from coming from two different groups, those that
appreciate industrial design artwork, and those who are bicycle enthusiasts and value anything
having to do with cycling.
Being based in Eugene is very fortuitous for BikeArt. Eugene is a progressive city which tends
to favor more industrial tastes compared with more conservative towns. Eugene is also a
bicycling mecca, known nationwide for its affinity for cycling. Having such a high concentration
of cycling enthusiasts provides a large population base of prospective customers.

Page 6

BikeArt

4.1 Market Segmentation

BikeArt's market can be divided into two groups, industrial art collectors and bicycle
enthusiasts. The industrial art collectors are characterized by people who collect art with an
industrial edge. Industrial art is typically characterized through the use of either technical
looking structures or using parts that existed for another function for the basis of the art work.
Industrial art is the opposite of organic art. Industrial is typically sharp angles, straight lines.
The other market is of bicyclist enthusiasts. Eugene is a bicyclist town, one of the hottest in the
country. In a town of 130,000, there are three bicycle manufacturers, miles upon miles of bike
lanes and independent bike paths. If you drive around town you will see just about everyone
on bicycles, from small children to grandmothers. This culture will lend itself to BikeArt. The
bicycle enthusiasts are people that ride a lot and appreciate anything related to bicycles,
including bicycle art pieces.

Chart: Market Analysis (Pie)

Table: Market Analysis

Market Analysis
Potential Customers

Growth

Industrial art collectors

Bicycling enthusiasts
Total

8%
10%
9.39%

Year 1

Year 2

Year 3

Year 4

Year 5

5,644
12,545
18,189

6,096
13,800
19,896

6,584
15,180
21,764

7,111
16,698
23,809

7,680
18,368
26,048

CAGR
8.00%
10.00%
9.39%

Page 7

BikeArt

4.2 Target Market Segment Strategy

BikeArt's market can be divided into two groups, industrial art collectors and bicycle
enthusiasts. The industrial art collectors are characterized by people who collect art with an
industrial edge. Industrial art is typically characterized through the use of either technical
looking structures or using parts that existed for another function for the basis of the art work.
Industrial art is the opposite of organic art. Industrial is typically sharp angles, straight lines.
The other market is of bicyclist enthusiasts. Eugene is a bicyclist town, one of the hottest in the
country. In a town of 130,000, there are three bicycle manufacturers, miles upon miles of bike
lanes and independent bike paths. If you drive around town you will see just about everyone
on bicycles, from small children to grandmothers. This culture will lend itself to BikeArt. The
bicycle enthusiasts are people that ride a lot and appreciate anything related to bicycles,
including bicycle art pieces.
4.3 Industry Analysis
BikeArt has several different competitors:

Other retailers in the mall. For people that are shopping at BikeArt for gifts for other
people, they are also likely to visit other retailers in the mall. While the other retailers are
not direct competitors, their products will act as a substitute product.

Art galleries. These retailers specifically sell different types of artwork. While some might
specialize or carry a theme of industrial art, none of them sell bicycle-specific art. People
that are looking for a wide range of art work are more likely to go to these retailers.

Bicycle retailers. Some bicycle shops do carry gifts for cycling enthusiasts. Sometimes
this gift section will be art work based on bicycles. Some of BikeArt's artists also sell to
bicycle shops so they might have identical pieces. The bicycle retailers do not however,
have the same selection as BikeArt. As BikeArt grows, they will be able to leverage their
vendors to make BikeArt the exclusive dealer for their bicycle art.

5.0 Strategy and Implementation Summary

BikeArt will leverage its competitive advantage of being the only retailer that exclusively deals
with bicycle artwork. This is significant as Eugene is truly a bicycling town. BikeArt will also be
able to use its outstanding terms and conditions of their lease with Valley River Center that
allows them to display their products not only on the kiosk itself but also on the surrounding
floor space. Since the mall gets lots of foot traffic all day, it is like having your own show room
in the middle of the hallway of a crowded mall. Most retailers could only dream of this
arrangement.
5.1 Competitive Edge
BikeArt's competitive edge is its specialization in bicycle art. No one else concentrates on this
specific type of art. This is truly a competitive edge since BikeArt is based in Eugene, Biketown
USA. By only concentrating on this niche, prospective customers will correctly assume that
BikeArt has the largest selection and are more likely to come to BikeArt as opposed to going to
a bicycle shop looking for some art.

Page 8

BikeArt

5.2 Sales Strategy

BikeArt's sales strategy will be based on display and local/environmental support. BikeArt will
be able to leverage the outstanding terms of their lease with the mall that allows them to
occupy seven feet of floor space in all directions around the kiosk. This space will provide
BikeArt with ample area to display larger pieces that they sell. Because they are located in the
mall, there will be sufficient walk-through traffic to notice all of BikeArt's wares on display. This
will be the first step in the sale process.
The second step is emphasizing all of the work that is done by local artists and all of the art
pieces are made out of recycled bicycle parts. Eugene in general seems to be a very close knit
supportive town of local residents, and Eugene shows their support of their own through the
purchase of local products. Additionally, all of the artwork is made out of recycled bicycle parts
which will be emphasized as an environmentally sound practice, something that will be warmly
received by Eugenians.
5.2.1 Sales Forecast
The first month will be used to set up the kiosk and get things underway. During this month
the part-time employees will be hired and trained. Sales will begin slowly during this first
month. From the second month on, sales will steadily increase because there will be a steady
flow of customers that pass by the kiosk.

Chart: Sales Monthly

Page 9

BikeArt

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

$58,229
$87,531
$145,760

$115,475
$178,745
$294,220

$126,547
$189,785
$316,332

Year 1
$29,115
$43,766
$72,880

Year 2
$57,738
$89,373
$147,110

Year 3
$63,274
$94,893
$158,166

Sales
Industrial art collectors
Bicycling enthusiasts
Total Sales
Direct Cost of Sales
Industrial art collectors
Bicycling enthusiasts
Subtotal Direct Cost of Sales

5.3 Milestones
BikeArt will have several milestones early on:
1. Business plan completion. This will be done as a road map for the organization. While we
do not need a business plan to raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Set up the kiosk.
3. First turnover of inventory.
4. Revenue exceeding $25,000.
Table: Milestones

Milestones
Milestone
Business plan completion
Set up the kiosk
First turnover of inventory
Totals

Start Date
1/1/2001
1/1/2001
1/1/2001

End Date
2/1/2001
2/1/2001
******

Budget
$0
$0
$0
$0

Manager
ABC
ABC
ABC

Department
Marketing
Department
Department

6.0 Management Summary

Steve Useitagyen received a joint degree in business administration and art design from the
University of Portland. Throughout college Steve worked at a bicycle shop, initially as a
mechanic, then moved up to sales, and then after college managed the shop for two years.
Steve knew at some point in his life that he needed to have his own business as he preferred to
work for himself as opposed to someone else. It took his experience as manager of the bike
shop to gain the confidence that he could operate his own business. With assurances of his
wife's support and her contribution of art work to sell, Steve undertook the task of writing a
business plan for his dream.

Page 10

BikeArt

6.1 Personnel Plan

Steve will begin the first two weeks setting up the kiosk and interviewing people. During the
second half of the first month Steve will hire and train three part-time people to operate the
kiosk during the day.
From month two on, there will always be one of the part-time employees running the
kiosk. Steve will be taking care of all the financials, setting up vendor relations, and correcting
any problems that BikeArt encounters.
Table: Personnel

Personnel Plan
Year 1

Year 2

Year 3

Steve
Part-time employee
Part-time employee
Part-time employee
Total People

$36,000
$10,100
$10,100
$10,100
4

$40,000
$10,800
$10,800
$10,800
4

$44,000
$10,800
$10,800
$10,800
4

Total Payroll

$66,300

$72,400

$76,400

7.0 Financial Plan

The following sections will outline the important financial assumptions, key financial indicators,
Break-even Analysis, profit and loss, cash flow, and balance sheet.
7.1 Important Assumptions
The following table highlights some of the important financial assumptions for BikeArt.
Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
10.00%
10.00%
25.42%
0

2
10.00%
10.00%
25.00%
0

3
10.00%
10.00%
25.42%
0

Page 11

BikeArt

7.2 Break-even Analysis

The Break-even Analysis indicates $15,212 is needed in monthly revenue to reach the breakeven point.

Chart: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$15,212

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

50%
$7,606

Page 12

BikeArt

7.3 Projected Profit and Loss

The following table will indicate projected profit and loss.
Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

$145,760
$72,880
$0
$72,880

$294,220
$147,110
$0
$147,110

$316,332
$158,166
$0
$158,166

$72,880
50.00%

$147,110
50.00%

$158,166
50.00%

Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$66,300
$0
$624
$0
$1,200
$1,200
$12,000
$9,945
$0

$72,400
$0
$624
$0
$1,200
$1,200
$12,000
$10,860
$0

$76,400
$0
$624
$0
$1,200
$1,200
$12,000
$11,460
$0

Total Operating Expenses

$91,269

$98,284

$102,884

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($18,389)
($17,765)
$1,745
$0

$48,826
$49,450
$1,258
$11,892

$55,282
$55,906
$703
$13,872

Net Profit
Net Profit/Sales

($20,134)
-13.81%

$35,676
12.13%

$40,706
12.87%

Sales
Direct Cost of Sales
Other
Total Cost of Sales
Gross Margin
Gross Margin %

Expenses

Page 13

BikeArt

7.4 Projected Cash Flow

The following chart and table will indicate projected cash flow.

Chart: Cash

Page 14

BikeArt

Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$145,760
$145,760

$294,220
$294,220

$316,332
$316,332

$0
$0
$0
$0
$0
$0
$0
$145,760

$0
$0
$0
$0
$0
$0
$0
$294,220

$0
$0
$0
$0
$0
$0
$0
$316,332

Year 1

Year 2

Year 3

$66,300
$97,938
$164,238

$72,400
$197,290
$269,690

$76,400
$188,085
$264,485

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$0
$0
$0
$4,783
$0
$0
$0
$169,021

$0
$0
$0
$5,270
$0
$0
$0
$274,960

$0
$0
$0
$5,825
$0
$0
$0
$270,309

Net Cash Flow

Cash Balance

($23,261)
$18,339

$19,260
$37,600

$46,023
$83,622

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Page 15

BikeArt

7.5 Projected Balance Sheet

The following table will indicate the projected balance sheet.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$18,339
$12,204
$0
$30,543

$37,600
$27,220
$0
$64,819

$83,622
$15,588
$0
$99,210

$3,100
$624
$2,476
$33,019

$3,100
$1,248
$1,852
$66,671

$3,100
$1,872
$1,228
$100,438

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$13,236
$0
$0
$13,236

$16,482
$0
$0
$16,482

$15,367
$0
$0
$15,367

Long-term Liabilities
Total Liabilities

$15,217
$28,453

$9,947
$26,430

$4,123
$19,490

$25,000
($300)
($20,134)
$4,566
$33,019

$25,000
($20,434)
$35,676
$40,242
$66,671

$25,000
$15,242
$40,706
$80,948
$100,438

$4,566

$40,242

$80,948

Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 16

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$0
$0

$1,245
$2,245
$3,490

$1,854
$3,258
$5,112

$2,354
$4,214
$6,568

$2,987
$5,214
$8,201

$4,254
$7,245
$11,499

$5,385
$8,457
$13,842

$6,458
$9,365
$15,823

$7,548
$10,255
$17,803

$8,254
$11,547
$19,801

$8,745
$12,687
$21,432

$9,145
$13,044
$22,189

Sales
Industrial art collectors
Bicycling enthusiasts
Total Sales
Direct Cost of Sales

0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Industrial art collectors

$0

$623

$927

$1,177

$1,494

$2,127

$2,693

$3,229

$3,774

$4,127

$4,373

$4,573

Bicycling enthusiasts

$0

$1,123

$1,629

$2,107

$2,607

$3,623

$4,229

$4,683

$5,128

$5,774

$6,344

$6,522

Subtotal Direct Cost of Sales

$0

$1,745

$2,556

$3,284

$4,101

$5,750

$6,921

$7,912

$8,902

$9,901

$10,716

$11,095

Page 1

Appendix
Table: Personnel

Personnel Plan
Steve
Part-time employee
Part-time employee
Part-time employee
Total People
Total Payroll

0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$3,000
$200
$200
$200
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,000
$900
$900
$900
4

$3,600

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

Page 2

Appendix
Table: General Assumptions

General Assumptions
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

10

11

12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Tax Rate

30.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

Plan Month

Other

Month 12

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$0

$3,490

$5,112

$6,568

$8,201

$11,499

$13,842

$15,823

$17,803

$19,801

$21,432

$22,189

Direct Cost of Sales

$0

$1,745

$2,556

$3,284

$4,101

$5,750

$6,921

$7,912

$8,902

$9,901

$10,716

$11,095

Other

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Cost of Sales

$0

$1,745

$2,556

$3,284

$4,101

$5,750

$6,921

$7,912

$8,902

$9,901

$10,716

$11,095

Gross Margin
Gross Margin %

$0

$1,745

$2,556

$3,284

$4,101

$5,750

$6,921

$7,912

$8,902

$9,901

$10,716

$11,095

0.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

$3,600

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$52

$52

$52

$52

$52

$52

$52

$52

$52

$52

$52

$52

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Leased Equipment
Utilities
Insurance

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$540
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$855
$0

$5,392

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

$7,807

Profit Before Interest and Taxes

($5,392)

($6,062)

($5,251)

($4,523)

($3,707)

($2,058)

($886)

$105

$1,095

$2,094

$2,909

$3,288

EBITDA

($5,340)

($6,010)

($5,199)

($4,471)

($3,655)

($2,006)

($834)

$157

$1,147

$2,146

$2,961

$3,340

$163

$160

$157

$154

$151

$147

$144

$141

$137

$134

$130

$127

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Rent
Payroll Taxes
Other
Total Operating Expenses

Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales

15%

($5,555)

($6,222)

($5,408)

($4,677)

($3,857)

($2,205)

($1,030)

($36)

$957

$1,960

$2,779

$3,161

0.00%

-178.29%

-105.79%

-71.21%

-47.03%

-19.17%

-7.44%

-0.23%

5.38%

9.90%

12.97%

14.24%

Page 4

Appendix
Table: Cash Flow

Pro Forma Cash Flow

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Sales

$0

$3,490

$5,112

$6,568

$8,201

$11,499

$13,842

$15,823

$17,803

$19,801

$21,432

$22,189

Subtotal Cash from Operations

$0

$3,490

$5,112

$6,568

$8,201

$11,499

$13,842

$15,823

$17,803

$19,801

$21,432

$22,189

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$3,490

$5,112

$6,568

$8,201

$11,499

$13,842

$15,823

$17,803

$19,801

$21,432

$22,189

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$3,600

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$5,700

$63

$2,036

$5,872

$5,681

$6,324

$7,290

$9,787

$10,435

$11,229

$12,216

$13,208

$13,795

$3,663

$7,736

$11,572

$11,381

$12,024

$12,990

$15,487

$16,135

$16,929

$17,916

$18,908

$19,495

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$381

$384

$387

$390

$393

$397

$400

$403

$407

$410

$414

$417

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,044

$8,120

$11,959

$11,771

$12,417

$13,386

$15,887

$16,538

$17,336

$18,326

$19,322

$19,912

Net Cash Flow

($4,044)

($4,630)

($6,847)

($5,203)

($4,216)

($1,887)

($2,045)

($715)

$467

$1,475

$2,110

$2,277

Cash Balance

$37,556

$32,926

$26,079

$20,875

$16,659

$14,772

$12,727

$12,011

$12,478

$13,952

$16,062

$18,339

Cash Received
Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

Expenditures

0.00%

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Long-term Liabilities Principal Repayment

Subtotal Cash Spent

Page 5

Appendix

Page 6

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$41,600
$0
$0
$41,600

$37,556
$0
$0
$37,556

$32,926
$1,920
$0
$34,846

$26,079
$2,812
$0
$28,891

$20,875
$3,612
$0
$24,488

$16,659
$4,511
$0
$21,170

$14,772
$6,324
$0
$21,096

$12,727
$7,613
$0
$20,340

$12,011
$8,703
$0
$20,714

$12,478
$9,792
$0
$22,270

$13,952
$10,891
$0
$24,843

$16,062
$11,788
$0
$27,850

$18,339
$12,204
$0
$30,543

$3,100
$0
$3,100
$44,700

$3,100
$52
$3,048
$40,604

$3,100
$104
$2,996
$37,842

$3,100
$156
$2,944
$31,835

$3,100
$208
$2,892
$27,380

$3,100
$260
$2,840
$24,010

$3,100
$312
$2,788
$23,884

$3,100
$364
$2,736
$23,076

$3,100
$416
$2,684
$23,398

$3,100
$468
$2,632
$24,902

$3,100
$520
$2,580
$27,423

$3,100
$572
$2,528
$30,378

$3,100
$624
$2,476
$33,019

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$0
$0
$0

$1,840
$0
$0
$1,840

$5,684
$0
$0
$5,684

$5,472
$0
$0
$5,472

$6,084
$0
$0
$6,084

$6,964
$0
$0
$6,964

$9,440
$0
$0
$9,440

$10,062
$0
$0
$10,062

$10,823
$0
$0
$10,823

$11,777
$0
$0
$11,777

$12,749
$0
$0
$12,749

$13,338
$0
$0
$13,338

$13,236
$0
$0
$13,236

Long-term Liabilities
Total Liabilities

$20,000
$20,000

$19,619
$21,460

$19,236
$24,920

$18,849
$24,320

$18,459
$24,543

$18,065
$25,029

$17,668
$27,109

$17,268
$27,330

$16,865
$27,688

$16,458
$28,235

$16,048
$28,796

$15,634
$28,972

$15,217
$28,453

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$25,000
($300)
$0
$24,700
$44,700

$25,000
($300)
($5,555)
$19,145
$40,604

$25,000
($300)
($11,778)
$12,922
$37,842

$25,000
($300)
($17,186)
$7,514
$31,835

$25,000
($300)
($21,863)
$2,837
$27,380

$25,000
($300)
($25,720)
($1,020)
$24,010

$25,000
($300)
($27,924)
($3,224)
$23,884

$25,000
($300)
($28,954)
($4,254)
$23,076

$25,000
($300)
($28,990)
($4,290)
$23,398

$25,000
($300)
($28,033)
($3,333)
$24,902

$25,000
($300)
($26,073)
($1,373)
$27,423

$25,000
($300)
($23,295)
$1,405
$30,378

$25,000
($300)
($20,134)
$4,566
$33,019

Net Worth

$24,700

$19,145

$12,922

$7,514

$2,837

($1,020)

($3,224)

($4,254)

($4,290)

($3,333)

($1,373)

$1,405

$4,566

Assets

Starting Balances

Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

Page 7