[O.

DAROK TECH]
[OKUONGHAE NELSON ALELE], [FOUNDER]
 
 
BUSINESS PLAN 2021

The undersigned reader acknowledges that the information provided by [O.DAROK TECH] in this
business plan is confidential; therefore, reader agrees not to disclose it without the express written
permission of [O.DAROK TECH].

It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means and that
any disclosure or use of same by reader may cause serious harm or damage to [O.DAROK TECH].

Upon request, this document is to be immediately returned to [O.DAROK TECH].

 
Signature

___________________
Name (typed or printed)

 
1.0 Executive Summary

[O.DAROK TECH] is a service provider  of graphics, digital prints and web development targeted at
customers between of all ages .  [O.DAROK TECH] not only develops the business, but will support it
with advertising and promotion campaigns.  [OKUONGHAE NELSON]  plans to strengthen partnerships
with retailers by hiring an independent consultant merchandise placement specialist, thereby developing
brand awareness.  [O.DAROK TECH] intends to market its line as an alternative to existing upscale
graphics design, digital prints, web development and differentiate itself by marketing strategies,
exclusiveness, and high brand awareness.
[O.DAROK TECH] is a start-up that creates graphic designs, print in small and large format materials
and develop websites for the public.  It's a brand made exclusively for people who wants to express their
designs through graphics, and printing them digitally.

The key message associated with the [O.DAROK TECH] brand is classy, upscale, versatile, and high-
tech.  The business promotional plan is diverse and includes a range of marketing communications.  In
the future, the business hopes to develop products along its line of market.

Chart: Highlights

Highlights
$1,600,000

$1,400,000

$1,200,000

$1,000,000 Sales

$800,000 Gross Margin

Net Profit
$600,000

$400,000

$200,000

$0
Year 1 Year 2 Year 3
COMPANY NAME

1.1 Objectives

 To establish ourselves as a premier graphics design, digital print and web development business,
targeting professionals --working professionals and medium working professionals in both the
academic, entertainment, design and other industries.
 To sell more than 650K in annual sales by year two, providing high quality graphics with A-list
designs, quality digital prints for people with polished and elegant taste and create elegant
websites.
 To reach a break-even point by the end of year one.

1.2 Mission

[O.DAROK TECH] intends to develop an inventory of unique services that can add value of every
individual’s needs.  These services, which will be carried out as, can be added as staple, simple
pieces to enhance the image experience to every individual that holds design concepts in mind,
quality and high-end design of utmost importance.

It is [O.DAROK TECH]'s mission is to bring back the enchantment of exquisite designs, quality digital
prints all over again in the business's market lines.

1.3 Keys to Success

[O.DAROK TECH] believes that it has the right skill, design concepts and the right people desiring
it to attract a loyal customer base.  But most importantly, it is [O.DAROK TECH]'s business
philosophy that will ensure success. The graphics design and printing industry demands that services
be delivered on time and with high quality execution.  Pursuant to these demands:

[O.DAROK TECH] will satisfy this demand by maintaining acceptable inventory levels that will be
delivered on time according to pre-arranged shipping schedules

In addition to offering a complete line of high quality services, [O.DAROK TECH] will offer a unique
line of services that will encourage design concepts and need to express these designs in digital
prints leading the customer to think of this business first when looking for original products &
services.

2.0 Company Summary

Mission

The mission of the business is to provide [O.DAROK TECH] for consumers, based on style,
expression and quality.
 Legal Business Description

[O.DAROK TECH] is a startup which will be located in Kaunas, Lithuania.  All operations, from
administration to marketing strategies, take place at our office.

Strategy

The [O.DAROK TECH] strategy is to aggressively develop and market a full range of services to
consumers. The company intends to market its brand as an alternative to existing graphic designers
and digital printers and differentiate itself through its marketing strategies, exclusiveness, and brand
awareness. [O.DAROK TECH] intends to build on its core portfolio of services and overcome any
obstacles by using the business’s expertise in the graphic & digital printing industry.

O.DAROK TECH

The company's goal in the next year is to make an overwhelming impact on the graphics design & digital
printing industry and create a large consumer demand for the service. The business's goal in the next 1-5
years is to venture into high-end creative designs and quality digital prints.  It plans to also produce a line
of document products (envelopes, notepads, notebooks).  According to DUBLIN, June 25, 2020
/PRNewswire/ -- The "Commercial Printing Market - Growth, Trends and Forecasts (2020-2025)" report
has been added to ResearchAndMarkets.com's offering.

The Global Commercial Printing Market was valued at USD 400.46 billion in 2019, and it is projected to
be worth USD 460.28 billion by 2025, registering a CAGR of 2.24% during the period 2020-2025.

2.1 Company Ownership

[O.DAROK TECH ] is a SOLE PROPRIETORSHIP startup owned in total by its founder,

[OKUONGHAE NELSON].  The business's Articles of Incorporation will be filed before the business
commences operation.

2.2 Start-up Summary

Total start-up expense (including legal cost, logo design, equipment and related expenses) comes to
$15,650.08.  The table below illustrates a complete breakdown of all start-up assets that are needed,
as total start-up requirements.  Currently, [O.DAROK TECH] does not have short-term liabilities

Table: Start-up

Start-up

Requirements

Start-up Expenses
Branding/Packaging $25,000

Office Equipment $2,000

Website and E-commerce $10,000

Legal Fees $8,000

Tax Deposits $5,000

Inventory $100,000

Total Start-up Expenses $15,650.08

Start-up Assets
Cash Required $5,000
Other Current Assets $0
Long-term Assets $0
Total Assets $5,000

Total Requirements $15,650.08

Start-up

$320,000

$280,000

$240,000

$200,000

$160,000

$120,000

$80,000

$40,000

$0
Expenses Assets Investment Loans
3.0 Products

[O.DAROK TECH] services will be priced at the current market end to reflect the quality and
exclusiveness associated with the brand.  The Company will use high-end materials such as paper,
ink, straw boards, etc.  When a markup is placed on [O.DAROK TECH] services, customers will be
willing to pay the premium because of the perceived value and quality guarantee that comes with all
services.  The [O.DAROK TECH] brand is targeted at customers of all ages.

4.0 Market Analysis Summary

Market Description

The Digital Printing Market is valued at a CAGR of 6.45% over the forecast period 2021 - 2026.
Digital printing is one of the fastest developing segments of the sign industry. Its growth can be seen
in the incredible size of what can now be produced. Whatever the message or product, size has
become a significant trend in advertising.

The Graphics Design and Digital Print Industry

 Significant improvements in print manufacturing efficiency, with just-in-time production, and

increased focus on supply chain management, such as superior demand forecasting, have led to a
reduced amount of wastage in the overall print market. Technological developments aiding digital printing
have ensured the minimization of waste, keeping the print quality at par.
 The advanced technology digital printing involves the use of mild solvents and less-harmful
chemicals than those used in conventional printing technologies, such as offset printing and solid ink
printing. Thus, with the increasing focus on green printing and cost-effective production, the demand for
digital printing solutions is growing in the printed electronics market.
 Commercial printing, as a significant application, is witnessing transitional and structural changes,
as the immediate shift from traditional methods of print to digital is challenging. The printing cost is
expected to take a toll, as it is still a niche method requiring print of shorter/customized batches.
 However, with major consumer-oriented manufacturers gradually shifting to customized
packaging to enhance shelf-visibility, in turn, attracting customers, the adoption of digital printing became
vital. The beverage company, Coca-Cola, had been an early adopter for such a system and launched
multiple campaigns based on digitally printed, highly-customized labels.There is an increased demand for
digital prints wrapped on the glass fronts of office buildings, and huge digitally printed banners displayed
down the sides of buildings. The automotive industry has also become a major part of the digital
advertising world, with cars, buses, vans, and trailers fully wrapped with digital prints.
 The high-priced cost of investment in digital printing acts as a restraint for the growth of the
overall digital printing market. These costs comprised the purchase price and installations fees (if
applicable), maintenance and support costs as well as the price for ink and other consumables.

4.1 Market Segmentation

The company plans to target males between the ages of 26 and 55 with a combined household
income of more than $70,000. Within this group, there are no color barriers, and customers have
diverse backgrounds. The [YOUR COMPANY NAME] customer is a versatile woman who can fit into
any environment and is willing to pay a high price for quality clothing.
 The company's target group is seen as having enough disposable income to spend on high priced
quality clothing.  From 1984 to 1991, for example, disposable personal income grew at a healthy
average annual of 7.0%. Apparel and footwear expenditures increased at a strong .2% annual rate
during the same period.  In the 1990s, however, growth in personal income slowed somewhat and so
did apparel expenditures.  From 2001 to 2008, disposable personal income rose at an average
annual rate of 4.7%, while apparel and footwear expenditures grew 4.5% per year.

According to S&P's, in the women's apparel segment, much of the growth in spending is being driven
by consumers with annual household incomes of more than $70,000. Spending in this segment
increased by approximately 13% in 2008.  Apparel purchases by women from households with
incomes between $40,000 and $69,999 grew by 7% in 2008. Women's apparel sales at department
stores and off-price retailers grew at double-digit rates in 2008.

As growth slows in the mature U.S. apparel and footwear markets, companies are increasingly
looking overseas for growth opportunities.  American brands translate well internationally, and many
expanding economies overseas are interested in buying U.S. products.

International business has therefore become a focus of some U.S. companies.

Many apparel and footwear manufacturers see Europe, with a population of 350 million, as an
attractive market.  Tommy Hilfiger and Polo Ralph Lauren opened flagship stores in London in an
effort to build up their brands in Europe. Expansion in Asia, however, has been sidelined by economic
troubles. In other parts of the world, footwear company Payless ShoeSource Inc., has been
performing well in Canada and South America.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Growth CAGR
Customers
Individuals 15% 2,500,000 2,875,000 3,306,250 3,802,188 4,372,516 15.00%
Organizations 10% 1,500,000 1,650,000 1,815,000 1,996,500 2,196,150 10.00%
Total 12.46% 5,250,000 5,900,000 6,633,750 7,462,438 8,398,791 12.46%
 Chart: Market Analysis (Pie)

Market Analysis (Pie)

Women Aged 26 - 55

Women Under 26

Women Over 55

4.2 Target Market Segment Strategy

[YOUR COMPANY NAME] seeks to compete with like high-quality clothing lines such as:

1.  Costume National

2.  The Row
3.  Stella McCartney
4.  Dolce and Gabanna
5.  Helmut Lang
The Company believes that the same demographic and target market would appreciate and desire
[YOUR COMPANY NAME]'s unique, simple and classic designs.

4.3 Industry Analysis

According to a new study that INSERT NAME collaborated on with ISU graduate student INSERT
NAME, the U.S. industry's fast fashion focus has resulted in diminishing returns on market share --
both at home, and abroad in Japan.

"These findings confirm empirically what scholars have been speculating about," report said. "There was
a very strong push in the 1980s from the apparel industry and associated interest groups to make
American consumers buy 'Made in the USA' apparel. The industry went this route in the hope that U.S.
consumers would support the industry. And they didn't. They just didn't see value when they compared
the quality of U.S. apparel with imports."

Price-conscious consumers shape U.S. market

Based on calculated price and income elasticities, they report that price sensitivity of U.S. consumers
shaped the nation's apparel domestic market to keep product price low rather than increase its quality
with respective price. They found that U.S. consumers were primarily price-conscious in purchasing
clothes. By contrast, Japanese consumers increased their purchases of higher quality, domestically
produced apparel, but decreased the purchase of low quality imported apparel when its price increased.

Census data shows that domestic output of U.S. apparel producers dropped by 40 percent between 1995
and 2004, even though the overall market expanded -- fueled by a 50 percent increase in imports. At the
same time, the Japanese market shrank by 50 percent, but Japanese apparel firms held their domestic
market share during that decrease. Lee says the U.S. now ranks third among apparel importers to the
country.

The researchers contend that the U.S. apparel industry's focus on lower quality, low cost clothes -- an
attempt to compete with inexpensive imports -- was a reason for decreasing industry competitiveness
amid a booming U.S. market.

"I think because U.S. consumers have been price conscious, they generated the whole trend in the
industry called 'fast fashion,'" the ISU study said. "American consumers want styles to change quickly and
they want to see new merchandise in their favorite stores almost every week -- and at affordable prices.
And that has meant that U.S. companies produce lower quality items that last a shorter period of time."
 Japanese consumers prefer higher quality apparel

The study found that Japanese consumers' preference for higher quality, luxury apparel and their
willingness to pay for it encourage the nation's domestic producers to focus on those types of
products. And that focus allowed the Japanese apparel industry to differentiate their output from the
lower quality imported apparel and allow it to maintain its domestic market share. 

The researchers see the study amplifying the cultural differences between the U.S. and Japanese
apparel markets.

"The most interesting thing about the Japanese market is that they don't think young people have money
and older people have all the disposable income," said a researcher, who lived in Japan from 2005 to
2010. "So there are so many commercials on TV targeting older people buying very nice fashion clothes-
things you don't see in the U.S. And all of the department stores are filled with clothes that appeal to older
people, too."

The researcher says the study should also give U.S. apparel producers something to think about as
they move forward.

"I think the U.S. apparel industry has been and continues to be extremely strong in terms of its
portfolio of global brands," she said. "But companies should look more into being socially responsible
in their production -- no sweatshops -- with environmentally friendly materials and processes,
sustainable design and style choices that will last a long time."

4.3.1 Competition and Buying Patterns

Although the apparel industry is mature and slow growing, it exists in a dynamic and competitive
environment.  In order to improve profitability, many companies are restructuring to create leaner
organizations and adopt new technologies.  Consolidation has been prevalent in this industry in the
past few years, as larger companies gain leverage in market position and cost cutting.  In the apparel
industry, companies can operate as retailers or manufacturers (wholesalers) or both.  For instance,
American Apparel, a vertical retailer, manufactures and markets its own apparel and accessories.   A
company like VG Corporation is a manufacturer and sells solely to retail channels. A company like
Tommy Hilfiger does both, selling its products to both retailers and consumers (through retail outlets).

5.0 Strategy and Implementation Summary

Marketing

[YOUR COMPANY NAME] not only develops the clothing line but supports it with advertising and
promotion campaigns. The Company plans to strengthen its partnership with retailers by developing
brand awareness.

Marketing Communications

The key message associated the [YOUR COMPANY NAME] line is classy, upscale, versatile, and
not the most expensive clothing. The Company's promotional plan is diverse and includes a range of
marketing communications:

 Public relations. Press releases are issued to both technical trade journals and major business
 publications such as DNR Magazine.
 Trade shows. [YOUR NAME]  will attend and participate in several trade shows such as Magic
in Las Vegas.
 Internet. [YOUR COMPANY NAME] plans to establish a presence on the Internet by developing
a website. Plans are underway to develop a professional and effective site that will be interactive
and from which sales will be generated worldwide. In the future, this is expected to be one of the
Company's primary marketing channels.
 Other. The company also plans to use various other channels including billboards, print
advertising and attending target market events.5.1 SWOT Analysis
 The SWOT analysis provides [YOUR COMPANY NAME] with an opportunity to examine the
internal strengths and weaknesses the Company must address.  It also allows to examine the
opportunities presented to [YOUR COMPANY NAME] as well as potential threats.

5.1.1 Strengths

 High quality clothing with large attention to detail in the design, the fabrics and the manufacturing.
 Valuable classic pieces that can be used as a "staple" in any woman's closet year after year.
 An excellent alternative and happy medium choice for women that want high-end clothing choices
at an affordable and realistic price.
 Several items from the clothing line are made to be mixed and matched, offering versatility and
purchasing value for the consumer.
 Couture yet classic clothing at an attainable price.

5.1.2 Weaknesses

 Access to additional operating capital.

 Owner is still climbing the "retail experience curve."
 Lack of recognition of the clothing line and brand.
 No physical storefront location in operation, which hinders the visibility of the line.
 Challenges of the seasonality of the business.

5.1.3 Opportunities

 Growing market with a significant percentage of the target market still not knowing we exist.
 Strategic alliances offering sources for referrals and joint marketing activities to extend [YOUR
COMPANY NAME] 's reach.
 Promising activity from high levels of online shopping reported in the last three years.
 Changes in buying trends for high fashion, therefore generating sales.
 Increasing sales opportunities beyond a "100-mile" target area by offering sales of the items from
a virtual online store.
 Creating buzz and attracting consumers by word-of-mouth by offering high end clothing for less
cost than Prada, Hermes and Vera Wang, for example.

5.1.4 Threats

1) Rapid rise of consignment stores. Shops such as Buffalo Exchange, American Vintage, Aardvarks,
Goodwill, etc. provides rich and poor alike fantastic deals on used or vintage clothing and sometimes
overlooked high-end design items. Current trends have established that it is much more chic to mix and
match used clothing pieces with couture for a style statement.  This is also appealing as this method
is economical for consumers. 
1. 2) Current trends have established that it is much more chic to mix and match used  clothing
pieces with couture for a style statement.  This is also appealing as this method is economical for
consumers. ", [YOUR COMPANY NAME] will have to work harder to portray its company image
 and convince the target market that they can afford [YOUR COMPANY NAME]'s clothing pieces
and designs.

5.2 Competitive Edge

In a market where consumers are barraged by advertising and marketing campaigns delivering an
onslaught of lifestyle and fashion messages, a brand name is a powerful weapon.  Brands have become
an increasingly significant factor in apparel and footwear. Many consumers have less time to shop and
are spending their disposable income more carefully. Established brand names, with their quality image,
make the shopping experience easier and faster for many consumers.  For manufacturers, brands build
consumer loyalty, which translates into repeat business and brand notoriety. 

The company's name, [YOUR COMPANY NAME], is a competitive advantage in itself.  The name is not
attached to any particular group of customers and it allows entry into different segments of the industry. 
Another competitive advantage is the company's marketing strategy. Through the use of celebrities,
advertising, promotion, and giveaways, the company is able to develop its presence in the market.
Although the Company will use retailers to sell its line, most of the sales will be done online.

What makes [YOUR COMPANY NAME] clothing so unique is the versatility of each piece.   Most of the
clothing can be worn during the day at work and in turn be used again in the evening out on the town. 
The clothing is designed with women's fashion needs in mind, but also on their hectic fast-paced
lifestyles.  In addition, several of the pieces from the clothing line are designed to be mixed and matched
offering more "bang for your buck".  Women will be more inclined to purchase several pieces from each
emerging clothing line for the convenience and style behind this concept.

5.3 Marketing Strategy

[YOUR COMPANY NAME] will focus its marketing efforts through the following several key vehicles:
Exclusive Fashion Show Venues - The Company will attend and exhibit in large pre-collection fashion
shows in addition to annual industry fashion shows (i.e. Fashion Week).  [YOUR COMPANY NAME] will
also exhibit the lines at many other fashion trade shows in order to introduce the brand and the designs to
potential retail and boutique buyers.

Celebrity Representation - [YOUR COMPANY NAME] will propose the use of a few key pieces to the
likes of celebrity stylists and handlers to further promote the Company's chic and exclusive image

Lookbook.nu - Lookbook is an excellent way for designers to connect with potential clients on a personal
level.  This allows for the clothing to be presented to would-be consumers on a one-on-one basis via the
internet (where many women shop today). Many do not live in a large metropolitan area where fashion
has a large presence, so this would reach those who are looking for high design that is original.  This will
also keep people in the loop when it comes to the debut of new lines being presented by [YOUR
COMPANY NAME]

Marketing and Public Relations - The Company will hire a professional individual or firm be in
contact with fashion magazines such as Glamour, Vogue, Instyle and Harper's Bazaar to announce
the debut of new collections and increase visibility amongst [YOUR COMPANY NAME] 's target
market.

Word of Mouth - Naturally, when a great product is presented into the general market place and fills a
definite need, word will spread.  For instance, if Jane wants to know where Mary got that fantastic skirt
that she wore to the party, Mary will tell her. .  In turn, Jane will go to the website or visit the boutique for
the same or similar pieces.  When Samantha asks Jane where she got her lovely slim cut trousers,
Samantha may take interests in browsing the catalog.  And so on and so forth.
5.4 Sales Strategy

Sales and Distribution Strategy

[YOUR COMPANY NAME] intends to build a sales team that will be tasked with generating sales
leads on a regional and national basis.  They will also be responsible for establishing connections
with retail outlets.

A key factor in the success of [YOUR COMPANY NAME] will be its distribution. The company plans
to use the following retail distribution channels:

 Department stores 
 Apparel specialty stores 
 Internet store

In recent years, several large retail chains-particularly in the athletic footwear sector have developed
formats called superstores, which have more square footage dedicated to a particular product
category. 

Consumers buy apparel and footwear from a variety of retail outlets. In 1998, discount, off-price, and
factory outlet stores accounted for 30% of apparel sales, specialty stores accounted for roughly 22%,
department stores for 18%, and major chains for 17%, according to data from NPD Group Inc., the
remaining 13% was sold through mail order and other means. 

Differences exist in the distribution mix for men's, women's, and children's items.  For example, more
women's apparel is purchased in specialty and department stores than is the case for men's apparel. 
Men's apparel is more prevalent in discount stores and general merchandise chains.  In the children's
segment, a considerably higher portion of apparel is purchased in discount stores

Catalogs are another important method of distribution. Consumers have less time to shop, and for some,
catalog shopping offers a more convenient and pleasant alternative. In 2008 (latest available) an
estimated 13.3 billion direct mail catalogs were printed in the United States--more than 50 for every man,
woman, and child in the nation. According to NPD Group, approximately 6% of apparel retail sales were
through direct mail/catalogs in 2008, representing a 29% decline from 2007.

The distribution channel that has received the most attention recently is the Internet.  Consumers like
the convenience of being able to shop from anywhere and at any time they wish.  Manufacturers with
Internet sites use them for marketing and informational purposes. .  With further technological
advances in hardware, software, and data pipelines, shopping for apparel and footwear continues
to gain popularity.

5.4.1 Sales Forecast

The following table and charts portray [YOUR COMPANY NAME] 's sales forecast.  The Company
expects that sales will start off a bit conservatively and will steadily increase over the course of the
first year.  As indicated in the table, sales are forecasted to increase rapidly, with an average annual
growth rate of approximately 5%.
Sales Forecast
Year 1 Year 2 Year 3
Sales
Online Sales $251,609 $301,931 $362,317
Wholesales $1,140,115 $1,368,138 $1,641,766
Total Sales $1,391,724 $1,670,069 $2,004,083

Direct Cost of Sales Year 1 Year 2 Year 3

Manufacturing $901,368 $946,436 $993,758
Other $0 $0 $0
Subtotal Direct Cost of Sales $901,368 $946,436 $993,758

Sales Monthly

$240,000

$210,000

$180,000

$150,000 Online Sales

$120,000 Wholesales

$90,000

$60,000

$30,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12
m
 Sales by Year

$2,100,000

$1,800,000

$1,500,000
Online Sales
$1,200,000
Wholesales
$900,000

$600,000

$300,000

$0
Year 1 Year 2 Year 3

6.0 Management Summary

The Company's management philosophy is based on responsibility and mutual respect.  [YOUR
COMPANY NAME] will have an environment and structure that encourages productivity and respect for
customers and fellow employees

The initial run of operations will be provided by the owner herself, [YOUR NAME].   Her experience
has been drawn from her involvement and passion in design and in retail in past starting from when
she interned for the Oscar Odelia Custom Tailors showroom in Downtown Los Angeles one summer. 
There she learned the ropes of the business, including pattern making and sewing. She will handle
outsourcing manufacturing, accounting, trade show assistance, couriers and sales.  As the demand
for the product grows, she will hire the appropriate personnel accordingly.

6.1 Personnel Plan

The Personnel Plan chronicles the growth of the organization to approximately 2 employees in Year
2.  Each year may require a few additional people besides those indicated, based on the growth of
the company in accordance with the Business Plan.

Table: Personnel
Personnel Plan
Year 1 Year 2 Year 3
[YOUR NAME] $0 $60,000 $85,000
Administration $0 $36,000 $40,000
Total People 1 2 4

Total Payroll $0 $96,000 $125,000

7.0 Financial Plan

The Company is seeking a substantial long-term business investment for the purpose of developing
and marketing the clothing line.  This funding will cover operating expenses and product development
leading to the launch in 2011.

7.1 Start-up Funding

[YOUR COMPANY NAME] start-up costs are detailed above, in the Start-up Table.  The following
table shows how these start-up costs will be funded by private or public investor capital.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $316,000
Start-up Assets to Fund $5,000
Total Funding Required $321,000

Assets
Non-cash Assets from Start-up $0
Cash Requirements from Start-up $5,000
Additional Cash Raised $0
Cash Balance on Starting Date $5,000
Total Assets $5,000
Liabilities and Capital

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

Capital

Planned Investment
Investor 1 $98,000
Investor 2 $0
Additional Investment Requirement $223,000
Total Planned Investment $321,000

Loss at Start-up (Start-up Expenses) ($316,000)

Total Capital $5,000

Total Capital and Liabilities $5,000

Total Funding $321,000

7.2 Important Assumptions

The table below contains important assumptions which the company will use to ensure its success;
the primary assumption is that the economy will remain in its present upturn.

7.3 Break-even Analysis

With a high gross margin and estimated fixed monthly expenses, the required monthly break-even
sales volume is shown below.

Break-even Analysis

Monthly Revenue Break-even $48,857

Assumptions:
Average Percent Variable Cost 65%
Estimated Monthly Fixed Cost $17,214

Break-even Analysis

$12,000

$9,000

$6,000

$3,000

$0

($3,000)

($6,000)

($9,000)

($12,000)

($15,000)

$0 $16,000 $32,000 $48,000 $64,000 $80,000

$8,000 $24,000 $40,000 $56,000 $72,000 $88,000
7.4 Projected Profit and Loss

[YOUR COMPANY NAME] is in the early stage of development, thus initial projections have only
been made on accounts that are believed to most drive the income statement.

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $1,391,724 $1,670,069 $2,004,083
Direct Cost of Sales $901,368 $946,436 $993,758
Other $0 $0 $0
Total Cost of Sales $901,368 $946,436 $993,758

Gross Margin $490,356 $723,633 $1,010,325

Gross Margin % 35.23% 43.33% 50.41%

Expenses
Payroll $0 $96,000 $125,000
Sales and Marketing and Other Expenses $90,000 $94,500 $99,225
Depreciation $2,004 $1,999 $1,999
Branding/Design $20,000 $21,000 $22,050
Office Equipment $4,000 $4,200 $4,410
Inventory Storage $2,400 $2,520 $2,646
Postage and Delivery $45,357 $47,625 $50,006
Legal $2,000 $2,100 $2,205
Phone $1,800 $1,890 $1,985
Utilities $3,600 $3,780 $3,969
Website Maintenance $1,440 $1,512 $1,588
Adminstrative Expense $3,970 $4,169 $4,377
Travel $30,000 $31,500 $33,075

Total Operating Expenses $206,571 $312,795 $352,535

Profit Before Interest and Taxes $283,785 $410,838 $657,790
EBITDA $285,789 $412,837 $659,789
Interest Expense ($916) ($2,749) ($4,582)
Taxes Incurred $85,410 $124,076 $198,711

Net Profit $199,291 $289,511 $463,660

Net Profit/Sales 14.32% 17.34% 23.14%
 Profit Yearly

$500,000

$450,000

$400,000
$350,000

$300,000

$250,000

$200,000

$150,000
$100,000

$50,000

$0
Year 1 Year 2 Year 3

Gross Margin Yearly

$1,000,000

$800,000

$600,000

$400,000

$200,000

$0
Year 1 Year 2 Year 3

7.5 Projected Cash Flow

The projected cash flow assumes the company receives the required investment in one installment--
in June 2011.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $1,391,724 $1,670,069 $2,004,083
Subtotal Cash from Operations $1,391,724 $1,670,069 $2,004,083

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $100,000 $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 $321,000 $0 $0
Subtotal Cash Received $1,812,724 $1,670,069 $2,004,083
Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $0 $96,000 $125,000
Bill Payments $1,005,026 $1,362,547 $1,402,668
Subtotal Spent on Operations $1,005,026 $1,458,547 $1,527,668
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $18,326 $18,326 $18,326
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $100,000 $0 $0
Purchase Long-term Assets $100,000 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $1,223,352 $1,476,873 $1,545,994

Net Cash Flow $589,372 $193,196 $458,089

Cash Balance $594,372 $787,569 $1,245,658
 MonthMonth
1 Month
2
Chart: Cash

Cash
$600,000

$500,000

$400,000

Net Cash Flow

$300,000
Cash Balance
$200,000

$100,000

$0

7.6 Projected Balance Sheet

[YOUR COMPANY NAME] projected balance sheets for the first three years of operation are
provided below.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $594,372 $787,569 $1,245,658
Other Current Assets $100,000 $100,000 $100,000
Total Current Assets $694,372 $887,569 $1,345,658
Long-term Assets
Long-term Assets $100,000 $100,000 $100,000
Accumulated Depreciation $2,004 $4,003 $6,002
Total Long-term Assets $97,996 $95,997 $93,998
Total Assets $792,368 $983,566 $1,439,656

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $185,404 $105,416 $116,172
Current Borrowing ($18,326) ($36,652) ($54,978)
Other Current Liabilities $100,000 $100,000 $100,000
Subtotal Current Liabilities $267,078 $168,764 $161,194
Long-term Liabilities $0 $0 $0
Total Liabilities $267,078 $168,764 $161,194

Paid-in Capital $642,000 $642,000 $642,000

Retained Earnings ($316,000) ($116,709) $172,802
Earnings $199,291 $289,511 $463,660
Total Capital $525,291 $814,802 $1,278,462
Total Liabilities and Capital $792,368 $983,566 $1,439,656

Net Worth $525,291 $814,802 $1,278,462

7.7 Business Ratios

The following table contains important business ratios from the women's clothing industry, as
determined by the Standard Industry Classification (SIC) Index, code 5137.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 5.90% 5.94% -13.62%

Percent of Total Assets

Other Current Assets 12.62% 11.88% 10.19% 35.13%
Total Current Assets 87.63% 88.59% 90.42% 83.28%
Long-term Assets 12.37% 11.41% 9.58% 16.72%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 33.71% 19.48% 15.31% 42.36%
Long-term Liabilities 0.00% 0.00% 0.00% 47.31%
Total Liabilities 33.71% 19.48% 15.31% 89.66%
Net Worth 66.29% 80.52% 84.69% 10.34%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 35.23% 35.79% 36.36% 53.63%
Selling, General & Administrative 52.08% 34.23% 24.85% 19.29%
Expenses
Advertising Expenses 12.00% 14.00% 6.00% 0.73%
Profit Before Interest and Taxes 20.39% 14.56% 13.78% 6.42%

Main Ratios
Current 2.60 4.55 5.91 1.65
Quick 2.60 4.55 5.91 1.05
Total Debt to Total Assets 33.71% 19.48% 15.31% 89.66%
Pre-tax Return on Net Worth 54.20% 32.09% 26.43% 272.80%
Pre-tax Return on Assets 35.93% 25.84% 22.38% 28.19%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 14.32% 10.33% 9.85% n.a
Return on Equity 37.94% 22.46% 18.50% n.a

Activity Ratios
Accounts Payable Turnover 6.42 12.17 12.17 n.a
Payment Days 27 43 29 n.a
Total Asset Turnover 1.76 1.75 1.59 n.a

Debt Ratios
Debt to Net Worth 0.51 0.24 0.18 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $427,295 $581,480 $737,278 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.57 0.57 0.63 n.a
Current Debt/Total Assets 34% 19% 15% n.a
Acid Test 2.60 4.55 5.91 n.a
Sales/Net Worth 2.65 2.18 1.88 n.a
Dividend Payout 0.00 0.00 0.00 n.a