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 Table of Contents

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

Chart: Highlights ......................................................................................................................1
1.1 Objectives ...................................................................................................................................1
1.2 Mission........................................................................................................................................1
1.3 Keys to Success ........................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................2
2.2 Start-up Summary ......................................................................................................................3
Table: Start-up Funding ..........................................................................................................3
Chart: Start-up .........................................................................................................................4
Table: Start-up .........................................................................................................................4
2.3 Company Locations and Facilities ..........................................................................................4
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 Main Competitors ......................................................................................................................6
5.0 Strategy and Implementation Summary ............................................................................................7
5.1 Competitive Edge ......................................................................................................................7
5.2 Sales Strategy............................................................................................................................7
5.2.1 Sales Forecast ..............................................................................................................7
Table: Sales Forecast ...................................................................................................8
Chart: Sales Monthly......................................................................................................8
Chart: Sales by Year......................................................................................................9
6.0 Management Summary.......................................................................................................................9
6.1 Personnel Plan ...........................................................................................................................9
Table: Personnel .....................................................................................................................9
7.0 Financial Plan ......................................................................................................................................9
7.1 Break-even Analysis................................................................................................................10
Table: Break-even Analysis .................................................................................................10
Chart: Break-even Analysis .................................................................................................10
7.2 Projected Profit and Loss .......................................................................................................11
Chart: Profit Monthly .............................................................................................................11
Chart: Profit Yearly................................................................................................................11
Chart: Gross Margin Monthly ...............................................................................................12
Chart: Gross Margin Yearly..................................................................................................12
Table: Profit and Loss ..........................................................................................................13
7.3 Projected Cash Flow...............................................................................................................14
Table: Cash Flow..................................................................................................................14
Chart: Cash ...........................................................................................................................15
7.4 Projected Balance Sheet ........................................................................................................16
Table: Balance Sheet ...........................................................................................................16
7.5 Business Ratios .......................................................................................................................16
Table: Ratios .........................................................................................................................17
Table: Sales Forecast ...............................................................................................................................1
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 Table of Contents
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

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 Aztec Food Imports

1.0 Executive Summary

Aztec Food Imports (Aztec) will offer food product imports from Mexico to meet increased
demand for these product by the city's growing Hispanic/Latino community in the greater
Richmond area. Over the last five years, this community has grown by 70%, and represents half
of the Richmond Metro population (250,000). Aztec has been successful over the competition in
supplying imported mexican food products to the area's two PriceRight supermarkets. From
this base, Aztec will build a successful business serving the area's large and small markets.

1.1 Objectives
· Establish Aztec Food Imports as the number one importer of mexican food products in
Richmond.
· Increase the number of mexican food products being carried in loc al markets by 20% over
the next two years.
· Build solid working relationships with the purchasing agents of the loc al stores serving
Richmond's growing Hispanic/Latino population.

1.2 Mission
Aztec's mission is to supply Mexican food imports to Richmond stores which are currently being
poorly served by importers loc ated over 150 miles away. Raymond Garcia, co-owner of Aztec,
will utilize his importing bac kground, his experience in the food retail market, as well as his
contac ts in Mexico to bring in products that area customers demand.

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 Aztec Food Imports

1.3 Keys to Success

The keys to success in Aztec's business are:

1. Offering items of a high quality-value relationship which are not available everywhere.
This is essential for maintaining the niche market sectors mentioned in the mission
statement.
2. Reliable and timely deliveries. Aztec must make good on its delivery promises. Because
of the nature of doing business in Mexico, this requires long-range planning in
sc heduling orders, taking into ac count Mexican business prac tices.
3. A reliable administration that is ready to serve customers, prepare ac curate billing,
follow-up on orders and other documentation, and maintain a close watch on expenses
and collection of ac counts receivable.

2.0 Company Summary

Aztec Food Imports will import Mexican food products to the loc al markets of the Richmond
Metro area.

2.1 Company Ownership

Aztec's ownership is shared equally between Raymond Garcia and Jose Arroyo. Raymond
has eight years of importing experience. Jose Arroya has 10 years experience in managing
imports from Mexico and shipping to the U.S. market. Raymond Garcia is responsible for the
daily management, sales, and store deliveries. Jose Arroya is responsible for the quality control
and shipping of the goods from Mexico to the U.S.

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 Aztec Food Imports

2.2 Start-up Summary

The start-up cost of Aztec Food Imports will consist primarily of inventory. Raymond Garcia and
Jose Arroya will eac h invest $50,000. They will also secure a $100,000 SBA loan.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $15,300
Start-up Assets to Fund $184,700
Total Funding Required $200,000

Assets
Non-cash Assets from Start-up $80,000
Cash Requirements from Start-up $104,700
Additional Cash Raised $0
Cash Balance on Starting Date $104,700
Total Assets $184,700

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000

Capital

Planned Investment
Raymond Garcia $50,000
IJose Arroya $50,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $100,000

Loss at Start-up (Start-up Expenses) ($15,300)

Total Capital $84,700

Total Capital and Liabilities $184,700

Total Funding $200,000

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 Aztec Food Imports

Table: Start-up
Start-up

Requirements

Start-up Expenses
Legal $5,000
Stationery etc. $800
Brochures $2,000
Consultants $0
Insurance $0
Rent $3,000
Expensed Equipment $4,000
Utilities $500
Other $0
Total Start-up Expenses $15,300

Start-up Assets
Cash Required $104,700
Start-up Inventory $60,000
Other Current Assets $0
Long-term Assets $20,000
Total Assets $184,700

Total Requirements $200,000

2.3 Company Locations and Facilities

Aztec Food Imports will have warehouse space loc ated in the Fillmore industrial district.

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 Aztec Food Imports

3.0 Products
Aztec's product line is rather extensive amounting to over 200 items:

· Beverages.
· Canned foods.
· Chile peppers.
· Desserts.
· Packaged foods.
· Salsas.
· Snac ks.
· Spices and herbs.

Aztec also carries the popular brands:

· Ducal.
· Herdez.
· Juanita's.
· La Costeña.
· La Joya.
· La Lec honera.
· La Sierra.
· Pico Pica.

4.0 Market Analysis Summary

The Hispanic/Latino population in the Richmond Metro area has grown by 10% over the past
five years. The current population stands at over 100,000. It is projected that the population
will continue its growth pattern for the next five years and will eventually reac h over 160,000. A
majority of these inner-city residents live in family groups of six or more members. The
average household income for the area is $32,000.

There are four major supermarkets that operate in the area and over 50 smaller food
stores that serve the metro communities. Last year, the four major supermarkets grossed over
$150,000,000 in sales. There are plans to build additional supermarkets in the Richmond Metro
area in 2003 and 2004. Two of the current supermarkets in the Richmond Metro area are
part the loc al PriceRight chain. PriceRight is planning a new store in the area in 2004.

Though it is difficult to know the exac t sales figures for the small markets in the area,
traditionally, the community residents have been supportive of the smaller store if their prices
are competitive. Last year, Wilson Foods Imports grossed $1.5 million in sales with smaller
markets in the Richmond Metro area.

4.1 Market Segmentation

Aztec Food Imports will serve all retail food outlets in the Richmond Metro area. These include
neighborhood markets and supermarkets.

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 Aztec Food Imports

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Supermarkets 20% 4 5 6 7 8 18.92%
Neighborhood Markets 20% 50 60 72 86 103 19.80%
Other 0% 0 0 0 0 0 0.00%
Total 19.74% 54 65 78 93 111 19.74%

4.2 Target Market Segment Strategy

Aztec Food Imports will have two distinct marketing approaches:

· For Neighborhood Markets: Raymond will promote a small group of popular mexican food
products that are likely to move fast in smaller stores. These products will be priced to
be attrac tive to the small store owner. Once successful, Raymond will expand the
product group.

· For Supermarkets: Raymond will promote the complete line of products that Aztec can
provide. Aztec prices will reflect a stronger import connection in Mexico that will results
in lower prices and more product.

4.3 Main Competitors

Currently, Ac me Food Importers loc ated in Wilsonville supplies the Richmond area food stores
with imported mexican food products. Wilsonville is 150 miles north of Richmond. Only in the
past two years has the demand for these products grown sufficiently to impac t Ac me's ability

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 Aztec Food Imports
to satisfy demand. Besides the distance, Ac me is plagued with weak import connections in
Mexico. These fac tors contribute to the high wholesale price of Ac me's imported products.

5.0 Strategy and Implementation Summary

Aztec Food Imports will foc us on bec oming the leading provider of wholesale imported mexican
food product in the Richmond Metro area.

5.1 Competitive Edge

Raymond Garcia and Jose Arroyo are the competitive edge of Aztec Food Imports. Raymond
has worked for both Acme Food Imports and Wilson Food Imports over the past eight years.
In his last position with Wilson, Raymond imported mexican food products to numerous markets in
the southwest. He generated sales in excess of $2 million annually. His strength is his customer
relations and he has been successful in expanding the range of imported mexican food purchased
by the markets in his sales region.

Jose has been a shipping agent for M. Zegarra Exporting loc ated in Mexico City for the past
ten years. The company exported $20 million of products to the U.S last year. Jose's
responsibility was to eliminate the shipping obstac les and oversee the timely delivery of
product to the U.S.

5.2 Sales Strategy

Aztec Food Imports will have two distinct sales approaches:

· For Neighborhood Markets: Raymond will promote a small group of popular mexican food
products that are likely to move fast in smaller stores. These items will be pac kaged as a
group at an attrac tive price. Raymond will make frequent visits to these stores to build a
strong working relationship that will lead to more purchases.

· For Supermarkets: Raymond will promote the complete line of products that Aztec can
provide. Aztec prices will reflect a stronger import connection in Mexico that will results
in lower prices and more product. Raymond will promote new seasonal products and
provide assistance on marketing the products to the Hispanic/Latino community.

5.2.1 Sales Forecast

The following is the sales forecast for three years.

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 Aztec Food Imports

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Supermarkets $209,500 $260,000 $310,000
Neighborhood Markets $124,000 $160,000 $200,000
Total Sales $333,500 $420,000 $510,000

Direct Cost of Sales Year 1 Year 2 Year 3

Supermarkets $85,900 $110,000 $130,000
Neighborhood Markets $18,300 $23,000 $24,000
Subtotal Direct Cost of Sales $104,200 $133,000 $154,000

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 Aztec Food Imports

6.0 Management Summary

The two owners will co-manage the business. Raymond Garcia is responsible for the daily
management, sales, and store deliveries. Jose Arroyo is responsible for the quality control and
shipping of the goods from Mexico to the U.S.

6.1 Personnel Plan

Aztec Food Imports will have two additional delivery employees and an office manager supervised
by Raymond.

Table: Personnel
Personnel Plan
Year 1 Year 2 Year 3
Raymond Garcia $36,000 $45,000 $50,000
Jose Arroyo $36,000 $45,000 $50,000
Delivery Persons $48,000 $54,000 $60,000
Office Manager $31,200 $34,000 $38,000
Other $0 $0 $0
Total People 5 5 5

Total Payroll $151,200 $178,000 $198,000

7.0 Financial Plan

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 Aztec Food Imports
The following sections outline conservative estimates of the financial performance of Aztec Food
Imports.

7.1 Break-even Analysis

The monthly break-even point is $26,514.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $26,514

Assumptions:
Average Percent Variable Cost 31%
Estimated Monthly Fixed Cost $18,230

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 Aztec Food Imports

7.2 Projected Profit and Loss

The following table and charts will highlight the next three years.

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Aztec Food Imports

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 Aztec Food Imports

Table: Profit and Loss

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $333,500 $420,000 $510,000
Direct Cost of Sales $104,200 $133,000 $154,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $104,200 $133,000 $154,000

Gross Margin $229,300 $287,000 $356,000

Gross Margin % 68.76% 68.33% 69.80%

Expenses
Payroll $151,200 $178,000 $198,000
Sales and Marketing and Other Expenses $0 $0 $0
Depreciation $2,880 $2,880 $2,880
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $0 $0 $0
Rent $36,000 $36,000 $36,000
Payroll Taxes $22,680 $26,700 $29,700
Other $0 $0 $0

Total Operating Expenses $218,760 $249,580 $272,580

Profit Before Interest and Taxes $10,540 $37,420 $83,420

EBITDA $13,420 $40,300 $86,300
Interest Expense $9,233 $7,876 $6,460
Taxes Incurred $392 $8,863 $23,088

Net Profit $915 $20,681 $53,872

Net Profit/Sales 0.27% 4.92% 10.56%

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 Aztec Food Imports

7.3 Projected Cash Flow

The following table and chart highlight the projected cash flow for three years.

Table: Cash Flow

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $83,375 $105,000 $127,500
Cash from Receivables $194,775 $300,644 $367,563
Subtotal Cash from Operations $278,150 $405,644 $495,063

Additional Cash Received

Sales Tax, VAT, 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 $278,150 $405,644 $495,063

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $151,200 $178,000 $198,000
Bill Payments $110,267 $250,753 $256,610
Subtotal Spent on Operations $261,467 $428,753 $454,610

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $14,160 $14,160 $14,160
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $275,627 $442,913 $468,770

Net Cash Flow $2,523 ($37,269) $26,293

Cash Balance $107,223 $69,953 $96,246

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 Aztec Food Imports

7.4 Projected Balance Sheet

The following table highlights the projected balance sheet for three years.

Table: Balance Sheet

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets

Current Assets
Cash $107,223 $69,953 $96,246
Accounts Receivable $55,350 $69,706 $84,643
Inventory $15,950 $44,366 $46,602
Other Current Assets $0 $0 $0
Total Current Assets $178,523 $184,025 $227,491

Long-term Assets
Long-term Assets $20,000 $20,000 $20,000
Accumulated Depreciation $2,880 $5,760 $8,640
Total Long-term Assets $17,120 $14,240 $11,360
Total Assets $195,643 $198,265 $238,851

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $24,188 $20,289 $21,163
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $24,188 $20,289 $21,163

Long-term Liabilities $85,840 $71,680 $57,520

Total Liabilities $110,028 $91,969 $78,683

Paid-in Capital $100,000 $100,000 $100,000

Retained Earnings ($15,300) ($14,385) $6,296
Earnings $915 $20,681 $53,872
Total Capital $85,615 $106,296 $160,168
Total Liabilities and Capital $195,643 $198,265 $238,851

Net Worth $85,615 $106,296 $160,168

7.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 5149, Groc eries and Related Products, are shown
for comparison.

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 Aztec Food Imports

Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 25.94% 21.43% 4.60%

Percent of Total Assets

Accounts Receivable 28.29% 35.16% 35.44% 33.30%
Inventory 8.15% 22.38% 19.51% 26.00%
Other Current Assets 0.00% 0.00% 0.00% 20.90%
Total Current Assets 91.25% 92.82% 95.24% 80.20%
Long-term Assets 8.75% 7.18% 4.76% 19.80%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 12.36% 10.23% 8.86% 45.20%

Long-term Liabilities 43.88% 36.15% 24.08% 10.00%
Total Liabilities 56.24% 46.39% 32.94% 55.20%
Net Worth 43.76% 53.61% 67.06% 44.80%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 68.76% 68.33% 69.80% 44.10%
Selling, General & Administrative Expenses 68.48% 63.41% 59.24% 26.70%
Advertising Expenses 0.00% 0.00% 0.00% 0.70%
Profit Before Interest and Taxes 3.16% 8.91% 16.36% 0.80%

Main Ratios
Current 7.38 9.07 10.75 1.69
Quick 6.72 6.88 8.55 1.01
Total Debt to Total Assets 56.24% 46.39% 32.94% 55.20%
Pre-tax Return on Net Worth 1.53% 27.79% 48.05% 3.60%
Pre-tax Return on Assets 0.67% 14.90% 32.22% 8.00%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 0.27% 4.92% 10.56% n.a
Return on Equity 1.07% 19.46% 33.63% n.a

Activity Ratios
Accounts Receivable Turnover 4.52 4.52 4.52 n.a
Collection Days 56 72 74 n.a
Inventory Turnover 3.83 4.41 3.39 n.a
Accounts Payable Turnover 5.56 12.17 12.17 n.a
Payment Days 27 33 29 n.a
Total Asset Turnover 1.70 2.12 2.14 n.a

Debt Ratios
Debt to Net Worth 1.29 0.87 0.49 n.a
Current Liab. to Liab. 0.22 0.22 0.27 n.a

Liquidity Ratios
Net Working Capital $154,335 $163,736 $206,328 n.a
Interest Coverage 1.14 4.75 12.91 n.a

Additional Ratios
Assets to Sales 0.59 0.47 0.47 n.a
Current Debt/Total Assets 12% 10% 9% n.a
Acid Test 4.43 3.45 4.55 n.a
Sales/Net Worth 3.90 3.95 3.18 n.a

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 Aztec Food Imports
Dividend Payout 0.00 0.00 0.00 n.a

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 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
Sales
Supermarkets 0% $14,000 $14,000 $14,000 $16,000 $16,000 $17,500 $18,000 $18,000 $20,000 $20,000 $20,000 $22,000
Neighborhood Markets 0% $5,000 $5,000 $6,000 $6,000 $8,000 $10,000 $12,000 $12,000 $13,000 $14,000 $16,000 $17,000
Total Sales $19,000 $19,000 $20,000 $22,000 $24,000 $27,500 $30,000 $30,000 $33,000 $34,000 $36,000 $39,000

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Supermarkets $4,000 $4,000 $4,000 $4,400 $6,000 $6,300 $8,000 $8,200 $9,000 $10,000 $10,000 $12,000
Neighborhood Markets $1,000 $1,000 $1,000 $1,080 $1,200 $1,280 $1,700 $1,740 $1,800 $2,000 $2,000 $2,500
Subtotal Direct Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500

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 Appendix
Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Raymond Garcia 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Jose Arroyo 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Delivery Persons 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Office Manager 0% $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600 $2,600
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600

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 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 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 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% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

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 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 $19,000 $19,000 $20,000 $22,000 $24,000 $27,500 $30,000 $30,000 $33,000 $34,000 $36,000 $39,000
Direct Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $5,000 $5,000 $5,000 $5,480 $7,200 $7,580 $9,700 $9,940 $10,800 $12,000 $12,000 $14,500

Gross Margin $14,000 $14,000 $15,000 $16,520 $16,800 $19,920 $20,300 $20,060 $22,200 $22,000 $24,000 $24,500
Gross Margin % 73.68% 73.68% 75.00% 75.09% 70.00% 72.44% 67.67% 66.87% 67.27% 64.71% 66.67% 62.82%

Expenses
Payroll $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600
Sales and Marketing and Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Depreciation $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240 $240
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Payroll Taxes 15% $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890 $1,890
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230 $18,230

Profit Before Interest and Taxes ($4,230) ($4,230) ($3,230) ($1,710) ($1,430) $1,690 $2,070 $1,830 $3,970 $3,770 $5,770 $6,270
EBITDA ($3,990) ($3,990) ($2,990) ($1,470) ($1,190) $1,930 $2,310 $2,070 $4,210 $4,010 $6,010 $6,510
Interest Expense $824 $814 $804 $794 $784 $774 $765 $755 $745 $735 $725 $715
Taxes Incurred ($1,516) ($1,513) ($1,210) ($751) ($664) $275 $392 $323 $968 $911 $1,513 $1,666

Net Profit ($3,537) ($3,531) ($2,824) ($1,753) ($1,550) $641 $914 $753 $2,258 $2,125 $3,531 $3,888
Net Profit/Sales -18.62% -18.58% -14.12% -7.97% -6.46% 2.33% 3.05% 2.51% 6.84% 6.25% 9.81% 9.97%

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 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 Received

Cash from Operations

Cash Sales $4,750 $4,750 $5,000 $5,500 $6,000 $6,875 $7,500 $7,500 $8,250 $8,500 $9,000 $9,750
Cash from Receivables $0 $475 $14,250 $14,275 $15,050 $16,550 $18,088 $20,688 $22,500 $22,575 $24,775 $25,550
Subtotal Cash from Operations $4,750 $5,225 $19,250 $19,775 $21,050 $23,425 $25,588 $28,188 $30,750 $31,075 $33,775 $35,300

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $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 $4,750 $5,225 $19,250 $19,775 $21,050 $23,425 $25,588 $28,188 $30,750 $31,075 $33,775 $35,300

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Expenditures from Operations

Cash Spending $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600 $12,600
Bill Payments $157 $4,697 $4,700 $4,999 $5,435 $5,541 $6,443 $6,738 $12,520 $18,899 $20,331 $19,808
Subtotal Spent on Operations $12,757 $17,297 $17,300 $17,599 $18,035 $18,141 $19,043 $19,338 $25,120 $31,499 $32,931 $32,408

Additional Cash Spent

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
Long-term Liabilities Principal Repayment $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180 $1,180
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
Subtotal Cash Spent $13,937 $18,477 $18,480 $18,779 $19,215 $19,321 $20,223 $20,518 $26,300 $32,679 $34,111 $33,588

Net Cash Flow ($9,187) ($13,252) $770 $996 $1,835 $4,104 $5,365 $7,670 $4,450 ($1,604) ($336) $1,712
Cash Balance $95,513 $82,261 $83,031 $84,027 $85,862 $89,966 $95,331 $103,000 $107,451 $105,847 $105,511 $107,223

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 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
Assets Starting Balances

Current Assets
Cash $104,700 $95,513 $82,261 $83,031 $84,027 $85,862 $89,966 $95,331 $103,000 $107,451 $105,847 $105,511 $107,223
Accounts Receivable $0 $14,250 $28,025 $28,775 $31,000 $33,950 $38,025 $42,438 $44,250 $46,500 $49,425 $51,650 $55,350
Inventory $60,000 $55,000 $50,000 $45,000 $39,520 $32,320 $24,740 $15,040 $10,934 $11,880 $13,200 $13,200 $15,950
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $164,700 $164,763 $160,286 $156,806 $154,547 $152,132 $152,731 $152,808 $158,184 $165,831 $168,472 $170,361 $178,523

Long-term Assets
Long-term Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Accumulated Depreciation $0 $240 $480 $720 $960 $1,200 $1,440 $1,680 $1,920 $2,160 $2,400 $2,640 $2,880
Total Long-term Assets $20,000 $19,760 $19,520 $19,280 $19,040 $18,800 $18,560 $18,320 $18,080 $17,840 $17,600 $17,360 $17,120
Total Assets $184,700 $184,523 $179,806 $176,086 $173,587 $170,932 $171,291 $171,128 $176,264 $183,671 $186,072 $187,721 $195,643

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current Liabilities
Accounts Payable $0 $4,541 $4,534 $4,818 $5,252 $5,326 $6,224 $6,328 $11,891 $18,220 $19,677 $18,974 $24,188
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $4,541 $4,534 $4,818 $5,252 $5,326 $6,224 $6,328 $11,891 $18,220 $19,677 $18,974 $24,188

Long-term Liabilities $100,000 $98,820 $97,640 $96,460 $95,280 $94,100 $92,920 $91,740 $90,560 $89,380 $88,200 $87,020 $85,840
Total Liabilities $100,000 $103,361 $102,174 $101,278 $100,532 $99,426 $99,144 $98,068 $102,451 $107,600 $107,877 $105,994 $110,028

Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Retained Earnings ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300) ($15,300)
Earnings $0 ($3,537) ($7,068) ($9,892) ($11,645) ($13,194) ($12,553) ($11,640) ($10,887) ($8,629) ($6,505) ($2,973) $915
Total Capital $84,700 $81,163 $77,632 $74,808 $73,056 $71,506 $72,147 $73,060 $73,813 $76,071 $78,195 $81,727 $85,615
Total Liabilities and Capital $184,700 $184,523 $179,806 $176,086 $173,587 $170,932 $171,291 $171,128 $176,264 $183,671 $186,072 $187,721 $195,643

Net Worth $84,700 $81,163 $77,632 $74,808 $73,056 $71,506 $72,147 $73,060 $73,813 $76,071 $78,195 $81,727 $85,615

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