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Shaved Ice Beverage Business Plan
Ice Dreams

Executive Summary

Ice Dreams will sell shave ice as its primary product in addition to soft drinks and frosty Latin drinks
called licuados. Shave ice is the hottest new dessert since frozen yogurt! Shave ice is heating up rapidly
and shows no sign of cooling.

Shave ice has been around for many years, beginning in Asia, then becoming popular in Hawaii. People
would shave ice by hand, creating a cold, flaky snow. Then they'd top it with fruit juices to create a
refreshing treat. Something this good couldn't remain a secret. In recent years, the taste for shave ice has
spread all over the world.

Shave ice is much different than a sno-cone in that it is made by a small counter-top machine that shaves
ice rather than grinding it like a sno-cone machine, which results in ice so fine that it rivals real snow! The
snow is then placed in bowl or cup and filled with high quality tropical fruit flavors. Because the snow is
so soft the syrup is held within its tender texture versus settling to the bottom like traditional sno-cones.
Since the syrup is absorbed into the snow, it must be eaten with a spoon instead of a straw.

Because shave ice is so tender and made with the thickest, best-tasting tropical fruit flavors, it is preferred
by adults and children of all ages and ethnic backgrounds.

A drive-through business will be built on privately-owned commercial property on Highway 86 (Adams
Avenue) in El Centro, California. Other products which will be incorporated into the business including
beverages (soft drinks and licuados).

1.1 Objectives

1. To construct a drive-through building (12' x 20') on existing privately-owned commercial property
(50' x 120').
2. To produce a net profit of at least $50,000 by the third year of operation.
3. To sell 20 different tropical and Mexican flavored syrups.
4. To sell other products such as soft drinks and licuados.

1.2 Mission

Ice Dreams will produce and sell shave ice with 20 different flavored syrups, soft drinks, and licuados to
consumers in El Centro, California. Retail customers will be in the low- to mid-income bracket, and will
range in age from children to adults.

1.3 Keys to Success

The keys to success are:

1. Will be the first business of its kind in the city of El Centro, California.
2. Business will be located on a major city highway, next to several housing developments, the city
pool, near schools and parks, and along a major restaurant and motel strip.
3. Product quality will include a large variety of tropical and Mexican flavored syrups.
4. Business has the potential for expansion into other Imperial County communities.
5. City of El Centro experiences warm to hot weather approximately seven months of the year.
6. Two-way traffic on Highway 86 averages 48,300 vehicles on a daily basis.

Company Summary

Ice Dreams will be known for selling shave ice with 20 different tropical and Mexican flavored syrups to
children and adults in El Centro, California. Other products will include soft drinks and licuados.

2.1 Company Ownership

Ice Dreams will be owned by Ofelia R. Arellano as a sole proprietorship.

2.2 Start-up Summary

Start-up costs will be approximately $52,010 which will include facility construction including sidewalks,
parking, inventory, mandatory city permits, and other expenses associated with opening this business. The
start-up costs will be financed through a loan. Appendix A provides more detailed information regarding
permit requirements, equipment, construction costs, and land improvements required to open this new
business.

Start-up Funding

Start-up Expenses to Fund $36,010

Start-up Assets to Fund $16,000

Total Funding Required $52,010

Assets

Non-cash Assets from Start-up $6,000

Cash Requirements from Start-up $10,000

Additional Cash Raised $0

Cash Balance on Starting Date $10,000

Total Assets $16,000

010 Capital Planned Investment Owner $10.Liabilities and Capital Liabilities Current Borrowing $42.000 Investor $0 Additional Investment Requirement $0 .010 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $42.

000 Total Funding $52.010) Total Capital ($26.200 Other $34.010 Start-up Requirements Start-up Expenses Consultants $100 Insurance $1.000 Loss at Start-up (Start-up Expenses) ($36.010) Total Capital and Liabilities $16.710 .Total Planned Investment $10.

010 2.325 Other Current Assets $675 Long-term Assets $4.000 Total Assets $16.3 Company Locations and Facilities Ice Dreams will be located on Highway 86 in El Centro.Total Start-up Expenses $36. According to a study by Cal Trans (Traffic Volumes. The majority of traffic enters and exits via Imperial Avenue and Fourth Avenue traveling through Highway 86. .010 Start-up Assets Cash Required $10.000 Total Requirements $52.000 Start-up Inventory $1. California which experiences a high volume of traffic on a daily basis. 1995).300 vehicles pass through this location on a daily basis making it an ideal location for business. approximately 48.

and other print media.. . It is anticipated that prices will be competitive with other businesses who sell shave ice on a smaller basis.A 240 square foot drive-through facility will be built on a privately-owned commercial property which will also include parking facilities. Guava Grape. The appendix provide additional information on the company facilities. Pina Colada. Twenty different tropical and Mexican flavored syrups will be sold and include the following: Wild Watermelon.3 Sales Literature Sales literature to be distributed to the general community will include fliers. a tentative plot plan. Cherry Jubilee. Raging Bull Restaurant. Raspberry Red. and Sprite. Hortacha. Jamaica. Bodacious Banana. and licuados. 3.1 Product Description One major product will be sold through Ice Dreams which will include shave ice topped with tropical and Mexican flavored syrups. Recreation Center. Pink Lemonade. Steak House. La Fonda Restaurant. Root Beer. Roberto's Restaurant.2 Competitive Comparison No other business in El Centro specifically caters to the shaved ice market on a large scale. 3. Other products will include soft-drinks in three flavors: Coke. Luscious Lime. 3. medium. and large. Orange Mango. China Restaurant. landscaping. and a small sitting area. Products Main products to be sold through the Ice Dreams business will be shave ice topped with tropical and Mexican flavored syrups in three main sizes: small. Strawberry. advertisement in the local newspaper (Imperial Valley Press). and Limon. and several motels. Coke. and licuados in three flavors (strawberry. Donut Shop. and highlights of the traffic study conducted by Cal Trans. Diet-Coke. banana and mango). Other products will include three soft drinks (Sprite. Melon. and Diet-Coke). Papaya. Big John gas station. Tamarindo. Kiwi. Other major businesses located on Highway 86 include Carl's Jr. Manzana. Blue Bubble Gum.

Shave ice is an ideal business for El Centro given both the potential market segment. Utilizing averaged priced units ($1. which manufactures and distributes high- quality syrups and ice shavers. State Highway 111. Black Cherry. All equipment and supplies are available through a regional distributor. They boast no fat.7 million. 1995. Coconut. Shave ice products are ideal for today's health- conscious consumers. and Vanilla. the shave ice business has the potential market of $104. . 1995). no cholesterol. Blueberry. Red Apple. Peach.3% from the previous year. it is anticipated that the frozen dessert market can be divided into two customer segments. Cola. generating $717. up 9. Inc. El Centro is also referred to as the "center of opportunity" with benefits created by the North American Free Trade Agreement (NAFTA) becoming one of Southern California's most promising new commercial/industrial areas. Green Apple. Cinnamon. Baja California. Tangerine.4 Sourcing Ice Dreams will purchase products from Crystal Fresh. The first segment prefers premium ice cream and frozen yogurt products. where Ice Dreams will be located. and State Highway 86. Tutti Frutti.446 gross sales by the third year of operation. and climate.25) for shave ice and other products to be sold. 3.4 billion ice cream category for the year ending May 21. Also. premium ice cream and frozen yogurt products are losing market share to mid-priced and other frozen dessert products. and are relatively low in calories. El Centro is accessible via Interstate 8. 4. The other segment obviously includes those that prefer frozen ice products. Market Analysis Summary El Centro is geographically situated at the junction of major east-west and north-south transportation routes.5 Future Products It is anticipated that 10-15 additional syrups will be added such as Spearmint. Based on this information.1 Market Segmentation According to Advertising Age (September. Mexico. future products to be sold will include ice cream in vanilla and chocolate flavors.3. Mexican flavored syrups will be purchased in Mexicali. location. Information Resources reported that frozen ice products comprised a third of the $2.

Shave ice is similar to a Mexican favorite called raspado. Shave ice has a low food cost and is easy to prepare.3 Industry Analysis One of the best known shave ice businesses is Sno Biz Shave Ice under the parent company of Crystal Fresh. Ice Dream's shave ice meets the quality required by these customers since it will also cater to the large Latino population in El Centro with its Mexican flavored syrups. $1. 4. it is preferred over raspados. The Hispanic population will be of special interest since it comprises 65% of El Centro's total population.00 (small). Shave ice is an ideal product for the health-conscious consumer. teenagers. 6. Sno Biz products are sold at the San Diego Zoo. Dealerships such as Sno Biz have demonstrated the success and feasibility of selling shave ice. This population will be targeted with Mexican flavored syrups and licuados. which keeps speed-of-service at optimum levels to keep up with high-traffic volumes. . 3. Sno Biz syrups products are also sold in Wal Marts throughout the country. and the San Diego Military base with great success. Sno-cones are sold in cups at prices ranging from $1.2 Target Market Segment Strategy Ice Dreams will target the low. The potential success for selling shave ice is attributed to the following: 1.50 (large). 5. 2.000 individual dealerships throughout the United States. Ice Dreams will be a relatively simple business to operate.16. 4. While no Sno Biz dealership currently exists in California.to mid-income consumers who want to have a high quality dessert for moderate prices. The Sno Biz dealership has been in existence for the last 11 years with over 3. and adults. Ice Dreams will be easy to maintain and clean. Market research conducted in El Centro did surface one raspado (sno-cone) business on a small scale called "Snow Shack" located on State Street. Lion Country Safari. Inc.Ice Dreams will target all segments of El Centro's population: children. 4. Shave ice is a product that has yielded a considerable profit in terms of cost to produce at $0.25 (medium) to $1. Compared to other food service products. Snow Shack consists of a small trailer that accommodates only one employee. but because it is softer and tastier.

79.75 (medium) to $2.29. Competitors in this type of business primarily sell raspados or sno-cones and do not focus on the shave ice market.00 each. one person trailer with limited choices of syrups. $1.79 (regular) and $3. and Wal-Mart. Each sold sno-cones in one regular size at $1. Several businesses in Mission Bay sold shave ice with prices ranging from $1.25 (large) per unit. shave ice sold as high as $5. showed that in some locations. one flavor was $1. The keys to success will definitely focus on selling shave ice and not sno-cones made with coarse ice and selling high quality syrups. California revealed that shave ice is sold along with other products. . Hawaii.15 (large). In terms of licuados. Research conducted in Bullhead City. For example. 4. In interviewing the current owner. Snow Shack sells sno-cones through a small. Other competitors sell sno-cones through Garcia's Market and the Wal-Mart store which also have limited syrup selections and do not necessarily focus on the sno-cone or shave ice industry as their primary product.3. the majority of sno-cones were sold by the flavor and not necessarily by the size.99 (medium) and $2. and three flavors sold for $2. Research conducted in Honolulu. 4. Research in San Diego.00 for a regular size. • Snow Shack o Strengths: The main strength of Snow Shack is that it is the only business in El Centro that caters to the sno-cone market. two flavors were $2.25 (small).39 (large). prices were $2. The following are strengths and weaknesses of each. Garcia's Market.1 Competition and Buying Patterns The shave ice business will be new to El Centro.79 (small). Arizona noted that the Sno Biz dealership only sells shave ice as their primary product.3.79. Shave ice units sold for $1. $1.2 Main Competitors Main competitors include the Snow Shack. Prices will also be competitive with those of the competition. One major competitor is the "Snow Shack" located on State Street. It also has very reasonable prices.Sno-cones were also found to be sold at Garcia's Food Market and Wal Mart. However. he indicated that during his first year in business he was selling 200 units per day.

an additional product to be sold in year two will include ice cream in flavors of vanilla and chocolate.3. 4. is that they do not sell quality syrups. Syrups are also not of good quality. The business will be located in a high traffic area of El Centro.00 and the convenience to the shopper in buying sno-cones while doing their shopping. • Wal-Mart o Strengths: Main strength of sno-cones sold by Wal-Mart is the convenience to the shopper and low price. . newspaper ads. and through its grand opening ceremonies. o Weaknesses: The primary weakness of Snow Shack is that it does not sell shave ice but rather sno-cones made from very coarse ice. Strategy and Implementation Summary Ice Dreams is planning for slow growth by expanding flavors available from 20 to 30 in year two of operation. o Weaknesses: Wal-Mart's weakness. Customers will be reached through advertisements such as fliers.1 Marketing Strategy Ice Dream's overall marketing strategy will be to create an image of offering the highest quality shave ice in Imperial County. California currently has no key players since no other business of this type currently exists in the Imperial Valley. 5. like Garcia's Market. o Weaknesses: The main weakness of sno-cones sold by Garcia's Market is that they do not sell quality syrups and prefer to sell the more inexpensive brand with lower quality taste. Also. Also. the sno-cone business is not their primary focus or product.3 Industry Participants The shaved ice industry in El Centro. • Garcia's Market o Strengths: The main strength of sno-cones sold by Garcia's Market is their low price of $1.

Newspaper advertisements will be purchased during the first three months of business until a clientele is built. etc. and good citizenship. 5. This will be a promotional strategy to encourage business. 3.1. 4.25 • Large $1. 5. Ice Dreams will "adopt a school" and provide shave ice to individuals who are selected for having excellent attendance. motels.50 . Flier distribution to consumers' homes within a five-mile radius.3 Positioning Statement Distribution of shave ice will be through the business facility only. Other incentives will include sponsoring a good attendance program by purchasing a bike and raffling it to students with the best attendance. 2. and the gas station to customers who purchase any product at Ice Dreams. good grades.A special marketing program will also be incorporated by offering special coupon prices for nearby restaurants.00 • Medium $1. city pool. schools. Promoting products for an introductory price at its Grand Opening. a small portable ice shaver will be purchased such that the product could be sold on site at various fund raising functions through churches.2 Distribution Strategy Major marketing will be conducted through newspaper advertisements and local flier distribution during the first three months of operation.1.4 Pricing Strategy Shave ice will be offered at the following prices: • Small $1. 5. It is anticipated that in the future. the donut shop. 5.1. Total costs will be approximately $500. 5. Ice Dreams will offer discounts to recreational groups such as children/adult baseball and football teams who play in nearby facilities.1 Promotion Strategy Ice Dreams will promote shave ice to customers by: 1.1.

. 5. As indicated.2.2 Sales Strategy Sales strategy will be directly linked to marketing programs since all sales will be through the business facility only. 1997 (or sooner if construction is completed before the targeted date) with a grand opening anticipated by then. 5.Soft Drinks • Regular $0. Sales and units costs for the first six months of 1997 are shown in the sales forecast as projected numbers.1 Sales Forecast Consumer sales will start in January.35 Products will be sold on a cash basis only. primary sales will occur during the peak warm weather months as noted in the following chart and table.79 • Large $0.99 Licuados • Regular $1.

114 $17.383 $104.Sales Forecast Year 1 Year 2 Year 3 Sales Sales $52.217 $77.446 Direct Cost of Sales Year 1 Year 2 Year 3 Cost of Sales $12.446 Other $0 $0 $0 Total Sales $52.217 $77.383 $104.772 $24.227 Other $0 $0 $0 .

3 Milestones Sample Milestones topic text. Milestones Milestone Start Date End Date Budget Manager Department Sample Milestones 1/4/2008 1/4/2008 $0 ABC Department LeGrande Finish Business Plan 5/7/2009 6/6/2009 $100 Dude Fromage Acquire Financing 5/17/2009 7/6/2009 $200 Dudette Legumers Ah HA! Event 5/27/2009 6/1/2009 $60 Marianne Bosses Chèvre Oooooh Noooooo! Event 6/26/2009 7/1/2009 $250 Marionette deBlâme . starting date. During the year we will be keeping track of implementation against plan.772 $24.227 5. and budget. The milestones table and chart show the specific detail about actual program activities that should be taking place during the year.114 $17. ending date. Each one has its manager. with reports on the timely completion of these activities as planned.Subtotal Direct Cost of Sales $12.

Arellano is a graduate of the University of California. Business expertise include: Budget Control .Grande Opening 7/6/2009 7/11/2009 $500 Gloworm Nobs Marketing Program Starts 6/6/2009 7/1/2009 $1.1 Organizational Structure Ofelia R. Long range plans will include a second employee to assist with the weekend hours. Ofelia will oversee the business primarily during the weekend hours and Frank Arellano will oversee the business during weekdays along with one employee. Arellano. She has spent the last six years working as an administrator overseeing a budget of approximately $800. Ice Dreams will require minimum daily supervision after it has been established since all three products are fairly easy to make.000. Arellano is the most important member of the management team. Dr. 6.2 Management Team Ofelia R.000 Glower Marketeers Plan vs. the owner.360 Management Summary Ice Dreams will hire an employee to assist with the business. will have one individual assisting her with the business. Actual Review 11/1/2009 11/8/2009 $0 Galore Alles First Break-even Month 3/5/2010 4/4/2010 $0 Bouys Salers Hire Employees 2/1/2010 3/3/2010 $150 Gulls HRM Upgrade Business Plan Pro 4/22/2010 4/24/2010 $100 Brass Bossies Totals $2. 6. Santa Barbara with several advanced degrees (Masters and Doctorate in Psychology).

• History Based Budgeting • Object-Code Budgeting • Program Budgeting • Planned Programming Budgeting Systems Personnel Management • Management by Goals and Objectives Strategic Planning • Long-Range Planning • Total Quality Management • Operational Planning Public Relations • Advertising for Educational Purposes • Marketing Research • Consulting Community Leadership • Advisory Boards • Business and Educational Partnerships City Planning and Development • Board of Director. San Ysidro Chamber of Commerce . San Ysidro Planning and Development Group Business Needs Assessment and Consultation • Board of Directors.

Arellano spent over 35 years in the retail business handling marketing and inventory for a major food chain. Mr.232 $11.800 $11. Mr. Arellano will also assist in the building design. landscaping layout and business marketing. . Arellano will supervise the business during the week days which means managing one employee. 6.681 Owner $0 $0 $0 Total People 1 1 1 Total Payroll $10. Mr. • The most important indicator in our case is that minimal inventory will have to be stored for these products.Frank Arellano will serve as a consultant on a volunteer basis. He is familiar with all aspects of business management and operations having owned and operated his own grocery store in El Centro. Personnel Plan Year 1 Year 2 Year 3 Assistant $10.232 $11.800 $11.681 Financial Plan • We want to finance growth mainly through cash flow. We recognized that this means we will have to grow slowly.3 Personnel Plan Monthly personnel cost estimates are included in the following table.

00% 30. There are some seasonal variations with the months of March through September being the highest sales months.00% 10.00% 10. .00% 30.00% Other 0 0 0 7.7.00% 10.00% Tax Rate 30.2 Key Financial Indicators The following Benchmark chart shows our key financial indicators.00% Long-term Interest Rate 10.1 Important Assumptions Monthly sales are the largest indicator for this business.00% 10. General Assumptions Year 1 Year 2 Year 3 Plan Month 1 2 3 Current Interest Rate 10.

4 Projected Profit and Loss We expect significant profits in all three years. . Break-even Analysis Monthly Revenue Break-even $1.685 Assumptions: Average Percent Variable Cost 23% Estimated Monthly Fixed Cost $1.294 7.3 Break-even Analysis The following table and chart show the current break-even analysis.7.

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219 Gross Margin % 76.383 $104.227 Gross Margin $40.446 Direct Cost of Sales $12.114 $17.80% .227 Other Costs of Sales $0 $0 $0 Total Cost of Sales $12.03% 76.611 $80.772 $24.114 $17.103 $59.217 $77.80% 77.772 $24.Pro Forma Profit and Loss Year 1 Year 2 Year 3 Sales $52.

525 Depreciation $400 $400 $400 Utilities $1.135 $16.563 Net Profit $14.626 $1.315 .255 $18.765 Profit Before Interest and Taxes $24.681 Marketing/Promotion $1.789 $1.973 $43.876 $63.573 $43.659 $28.720 $1.576 Taxes Incurred $6.466 $1.530 $16.298 Payroll Taxes $0 $0 $0 Other $0 $0 $0 Total Operating Expenses $15.476 $63.410 $1.632 $2.248 $1.861 Insurance $1.854 Interest Expense $3.Expenses Payroll $10.282 $12.200 $1.454 EBITDA $24.232 $11.800 $11.595 $43.

Pro Forma Cash Flow Year 1 Year 2 Year 3 Cash Received Cash from Operations Cash Sales $52.5 Projected Cash Flow Projected cash flow is estimated for the next three years as shown in the table below.Net Profit/Sales 28.446 .446 Subtotal Cash from Operations $52.95% 41.383 $104.47% 7.217 $77.217 $77.383 $104.07% 36.

232 $11.970 $48.383 $104. VAT.550 Subtotal Spent on Operations $36.459 $34.800 $11.446 Expenditures Year 1 Year 2 Year 3 Expenditures from Operations Cash Spending $10. HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $52.231 .202 $60.217 $77.681 Bill Payments $25.Additional Cash Received Sales Tax.259 $46.

759 $56.702 $70. HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $10. VAT.500 $10.854 7. Pro Forma Balance Sheet Year 1 Year 2 Year 3 Assets .731 Net Cash Flow $5.500 $10.6 Projected Balance Sheet The balance sheet shows a slow but steady upward growth in net worth after initial start-up.715 Cash Balance $15.139 $69.681 $33.458 $20.500 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $46. Additional Cash Spent Sales Tax.458 $36.

142 $72.000 $4.342 $75.339 Long-term Assets Long-term Assets $4.200 Total Long-term Assets $3.038 $38.Current Assets Cash $15.328 $1.000 $4.089 $4.854 Inventory $905 $1.000 Accumulated Depreciation $400 $800 $1.638 $41.800 Total Assets $20.200 $2.810 Other Current Assets $675 $675 $675 Total Current Assets $17.139 Liabilities and Capital Year 1 Year 2 Year 3 Current Liabilities Accounts Payable $480 $3.071 .600 $3.458 $36.139 $69.

581 Long-term Liabilities $0 $0 $0 Total Liabilities $31.315 Total Capital ($11.000 Retained Earnings ($36.010 $10.000 $10.099 $14.595 $43.099 $14.558 Total Liabilities and Capital $20.558 .010) ($21.581 Paid-in Capital $10.638 $41.244 $60.139 Net Worth ($11.244 Earnings $14.342 $75.351) $7.000 $10.510 $21.990 $24.Current Borrowing $31.351) $17.244 $60.990 $24.659 $28.510 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $31.351) $17.

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08% 35.00% Current Liabilities 155.29% 19.00% 100.00% 100.33% 39.21% 2.26% 96.70% Long-term Liabilities 0.38% 3.10% Total Current Assets 82.20% Net Worth -55.03% 76.27% 1.50% Selling.71% 80.00% 41.00% 48.27% 43.56% 92. General & Administrative Expenses 48.41% 32.73% 56.00% 100.63% 0.80% Advertising Expenses 0.60% Other Current Assets 3.00% 0.00% 100.30% Total Assets 100.80% 60.50% Total Liabilities 155.90% 40.73% 40.70% Long-term Assets 17.60% Percent of Total Assets Inventory 4.00% Gross Margin 76.97% 7.74% 3.20% 34.29% 19.00% 58.41% 3.00% 100.77% 0.00% 58.41% 61.44% 7.00% 28.39% 3.80% Percent of Sales Sales 100.80% 77.59% 38.00% 100.52% 0.Ratio Analysis Year 1 Year 2 Year 3 Industry Profile Sales Growth 0.00% 0.20% .

691 $2.330 $1.78% 33.63% 76.63% 76.65% 34.330 $1.323 $1.691 $5.972 $1.361 $4.330 $1.361 $4.927 $369 Net Profit/Sales 12.922 $1.60% 33.038 $3.912 $1.138 $3.63% 76.223 $1.323 $1.361 $4.63% 76.361 $4. The standard industry indicators shown are for SIC 5812.751 $2. The ratios show a plan for balanced.361 $2.071 $3. eating places.071 $3.691 $5.128 Gross Margin % 77.171 $3.7 Business Ratios Standard business ratios are included in the table that follows.323 $1.330 $1.361 $4.691 $5.138 $3.63% 77.128 $4.323 Expenses Profit Before Interest $826 $830 $3.63% 76.330 $623 Gross Margin $2.917 $1.751 $5.35% 77.58% 34.35% Expenses Payroll $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 Marketing/Promotion $180 $180 $105 $105 $105 $105 $105 $105 $105 $105 Depreciation $37 $33 $33 $33 $33 $33 $33 $33 $33 $33 Utilities $85 $85 $85 $85 $85 $185 $185 $185 $185 $185 Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 Payroll Taxes 23% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Operating $1.967 $1.361 $4.30% 12.330 $1.128 $2.977 $1.751 Direct Cost of Sales $623 $623 $1. healthy growth.171 $3.330 $1.69% 33.691 $5.43% Pro Forma Cash Flow .223 $1.691 $5.171 $3.330 $1.298 $1.330 $1.330 $1.071 $838 Interest Expense $343 $336 $328 $321 $314 $306 $299 $292 $284 $277 Taxes Incurred $145 $148 $843 $845 $847 $819 $822 $824 $826 $158 Net Profit $338 $346 $1.330 $1.038 $3.330 $1. 7.35% 76.038 $805 and Taxes EBITDA $863 $863 $3.74% 33.302 $1.330 $623 Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Cost of Sales $623 $623 $1.691 $5. Pro Forma Profit and Loss Month Month Month Month Month Month Month Month Month Month 1 2 3 4 5 6 7 8 9 10 Sales $2.330 $1.56% 34.071 $3.63% 76.038 $3.223 $1.87% 13.323 $1.138 $3.

691 $5.691 $5.691 $5. VAT. 0.751 Subtotal Cash from $2.691 $5.691 $5.691 $5.751 Operations Additional Cash Received Sales Tax.751 $2.691 $2. Month Month Month Month Month Month Month Month Month Month Month 1 2 3 4 5 6 7 8 9 10 11 Cash Received Cash from Operations Cash Sales $2.751 $2.751 $2.751 $5.691 $5.691 $5.691 $5.691 $5.691 $5.751 $2.691 $5.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 HST/GST Received New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Borrowing New Other Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 (interest-free) New Long- term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Liabilities Sales of Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Current Assets Sales of Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Assets New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 .691 $2.751 $5.

793 $4.841 $2.691 $5.783 $2.751 $2.683 $3.835 $2.786 $2.746 $3.162 $2.691 $5.664 $1.Investment Received Subtotal Cash $2.686 $3.691 $5.751 $2.691 $5.764 $859 Payments Subtotal Spent on $928 $1.062 $3.691 $2.691 $5.893 $3.846 $2.759 Operations Additional Cash Spent Sales Tax.786 $2.751 $5. $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 HST/GST Paid Out Principal Repayment $875 $875 $875 $875 $875 $875 $875 $875 $875 $875 $875 of Current Borrowing Other Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Principal Repayment Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 . VAT.741 $3.691 $5.751 Received Month Month Month Month Month Month Month Month Month Month Month Expenditures 1 2 3 4 5 6 7 8 9 10 11 Expenditures from Operations Cash $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 Spending Bill $28 $886 $1.735 $3.

081 ($1.130 $1.945 $16.621 $4.023 $754 $1.634 Cash Spent Net Cash $948 $90 $2.814 $14.788) $117 Flow Cash Balance $10.077 $17.539 $2.133 $1.668 $4.304 $17.633 .661 $3.516 $17.038 $13.558 $4.610 $4.937 $4.561 $4.223 $19.948 $11.070 $1.148 $18.Liabilities Principal Repayment Purchase Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Current Assets Purchase Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Assets Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal $1.075 $1.803 $2.061 $13.616 $4.

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814 $14.288 $16.000 $16.135 $33.897 $3.963 $3.463 $840 $1.914 $22.000 $4.013 $23.948 $11.864 $3.746 $2.666 $3.000 $4.010 $34.199 $15.732 $3.463 $1.510 $37.260 $32.831 $3.079 $1.000 $4.751 $2.385 $31.760 $35.000 $4.000 $4.000 $10.051 $24.633 $15.952 $17.385 $38.000 Assets Accumulat ed $0 $37 $70 $103 $136 $169 $202 $235 $268 $301 $334 $367 $400 Depreciati on Total Long-term $4.693 $2.069 $2.260 $39.000 $4.525 $17.885 $35.697 $23.000 $12.463 $1.010 $41.325 $702 $1.722 $19.061 $13.442 $19.635 $36.945 $16.158 $20.093 $25.038 Assets Long-term Assets Long-term $4.141 $22.463 $1.215 $19.148 $18.736 $798 $1.798 $3.600 Assets Total $16.000 $4.031 $19.741 $2.688 $2.286 $20.361 $21.135 $40.510 Borrowing Other .765 $3.223 $19.638 Assets Liabilities Month Month Month Month Month Month Month Month Month Month Month Month and 1 2 3 4 5 6 7 8 9 10 11 12 Capital Current Liabilities Accounts $0 $824 $1.787 $3.304 $17.699 $3.463 $1.816 $20.792 $15.633 $3.325 $12.Pro Forma Balance Sheet Month Month Month Month Month Month Month Month Month Month Month Month 1 2 3 4 5 6 7 8 9 10 11 12 Startin g Assets Balance s Current Assets Cash $10.000 $4.038 $13.000 $4.000 $3.096 $19.000 $4.760 $480 Payable Current $42.463 $1.077 $17.458 Inventory $1.930 $3.083 $18.000 $4.000 $4.463 $1.217 $905 Other Current $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 Assets Total Current $12.516 $17.