Retail Furniture Manufacturer Business Plan

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Table of Contents
1.0 Executive Summary.....................................................................................................................1

Chart: Highlights...........................................................................................................................1
1.1 Mission...........................................................................................................................................2
1.2 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Company Locations and Facilities.......................................................................................2
2.3 Start-up Summary....................................................................................................................3
Table: Start-up..............................................................................................................................3
Table: Start-up Funding.............................................................................................................3
Chart: Start-up..............................................................................................................................3
3.0 Products and Services.................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................5
4.1 Market Segmentation..............................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................5
Table: Market Analysis................................................................................................................6
5.0 Strategy and Implementation Summary.............................................................................6
5.1 Competitive Edge......................................................................................................................6
5.2 Sales Strategy............................................................................................................................6
5.2.1 Sales Forecast....................................................................................................................6
Table: Sales Forecast..............................................................................................................7
Chart: Sales Monthly...............................................................................................................7
Chart: Sales by Year................................................................................................................8
6.0 Management Summary...............................................................................................................8
6.1 Personnel Plan............................................................................................................................8
Table: Personnel............................................................................................................................8
7.0 Financial Plan..................................................................................................................................9
7.0 Financial Plan..................................................................................................................................9
7.1 Break-even Analysis.................................................................................................................9
Chart: Break-even Analysis......................................................................................................9
Table: Break-even Analysis......................................................................................................9
7.2 Projected Profit and Loss.....................................................................................................10
7.2 Projected Profit and Loss.....................................................................................................10
Chart: Profit Monthly.................................................................................................................10
Chart: Profit Yearly.....................................................................................................................10
Chart: Gross Margin Monthly.................................................................................................11
Chart: Gross Margin Yearly.....................................................................................................11
Table: Profit and Loss................................................................................................................12
7.3 Projected Cash Flow...............................................................................................................13
7.3 Projected Cash Flow...............................................................................................................13
Chart: Cash...................................................................................................................................13
Table: Cash Flow.........................................................................................................................13
7.4 Projected Balance Sheet......................................................................................................14
7.4 Projected Balance Sheet......................................................................................................14
Page
Table of Contents
Table: Balance Sheet.................................................................................................................14

7.5 Business Ratios........................................................................................................................14
7.5 Business Ratios........................................................................................................................14
Table: Ratios.................................................................................................................................15
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................6
Table: Balance Sheet...........................................................................................................................6
Page
The House of Pine
1.0 Executive Summary
Producing and selling furniture is a $12 billion industry. The focus of the industry is on the
affluent customer who can spend upwards to $3,000 on furniture purchases. In Richmond,
there are fifteen furniture stores that are competing for these customers with deep pockets.
Those customers who can't afford these high prices are left with a poor selection of inferior
products.
In the Richmond Metro area, there are approximately 50,000 residents with modest incomes
that do not have a furniture store to caters to their needs for affordable quality furniture. This
income demographic has grown tremendously over the past five years but has not been
responded to by the area furniture stores. Targeting customers with modest incomes is good
business. They are expected to make up half of metro population by 2020--making them the
fastest-growing segment of the city's housing market.
There are three modest-income housing renovation projects underway in Richmond with a
combined total of 1,500 units that will be sold as affordable housing.
As the Richmond Metro section revives, The House of Pine will offer customized, ready-to-finish
pine furniture that's hand made and surprisingly affordable. We offer:
 Truly Custom Furniture: An unfinished furniture piece that is crafted for the customer.
We'll customize any piece or create a whole new piece from a customer's rough sketch.
 Heirloom Quality Furniture: The furniture is made to last for generations. It's hand
crafted, so each piece is unique.
 Handmade from Quality Pine: Every piece is made by a professional craftsman from the
finest pine available. Every piece of pine is checked for grain and texture before it's used.
Chart: Highlights
Highlights
$1,100,000
$1,000,000
$900,000
$800,000
$700,000 Sales
$600,000
Gross Margin
$500,000
Net Profit
$400,000
$300,000
$200,000
$100,000
$0
Year 1 Year 2 Year 3
Page 1
The House of Pine
1.1 Mission
The House of Pine's Mission is simple. The customer gets what he/she wants; furniture (one
piece or a whole house full) that fits the customer's space, taste, budget and style preference,
from top to bottom!
1.2 Keys to Success
The Keys to Success for The House of Pine are as follows:
 Offer our customers affordable quality furniture that will last.

 Customize any piece as requested by a customer.
 And if customizing a piece won't quite work, create a whole new piece from scratch, exactly
to the customer's specifications.
2.0 Company Summary
The House of Pine will offer customized, ready-to-finish pine furniture that's hand made and
surprisingly affordable. Our target customers are young families and young adults with modest
incomes who are looking for the same selection and quality that the high-end customer
receives. Each piece is handcrafted from the finest pine and built to last for generations.
2.1 Company Ownership
The House of Pine is owned by Richard Putnam. Richard has over 10 years of experience in
furniture manufacturing.
2.2 Company Locations and Facilities
The House of Pine will be centrally located in the industrial section of the Richmond Metro area.
Page 2
The House of Pine
2.3 Start-up Summary
The House of Pine's start-up costs consists mostly of furniture manufacturing equipment and
transport containers. Richard Putnam will invest $50,000. In addition, he will secure a
$130,000 loan.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $200
Insurance $1,000
Rent $2,000
Expensed Equipment $60,000
Total Start-up Expenses $64,200
Start-up Assets
Cash Required $5,800
Start-up Inventory $50,000
Other Current Assets $0
Long-term Assets $60,000
Total Assets $115,800
Total Requirements $180,000
Chart: Start-up
Start-up
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses Assets Investment Loans
Page 3
The House of Pine
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $64,200
Start-up Assets to Fund $115,800
Total Funding Required $180,000
Assets
Non-cash Assets from Start-up $110,000
Cash Requirements from Start-up $5,800
Additional Cash Raised $0
Cash Balance on Starting Date $5,800
Total Assets $115,800
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $130,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $130,000
Capital
Planned Investment
Richard Putnam $50,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $50,000
Loss at Start-up (Start-up Expenses) ($64,200)

Total Capital ($14,200)
Total Capital and Liabilities $115,800
Total Funding $180,000
3.0 Products and Services
The House of Pine will offer wood products for the bedroom, living and dining room, and the
storage room:
 Beds;
 Dressers;
 Chest;
 Armoires;
 Entertainment centers;
 Bookcases;
 Tables;
 Chairs;
 Benches.
Page 4
The House of Pine
4.0 Market Analysis Summary
In the Richmond Metro area, there are approximately 50,000 residents with modest

incomes. They are expected to make up half of the metro population by 2020--making them
the fastest-growing segment of the city's housing market.
It is estimated that the Richmond Metro area will need 10,000 units of affordable housing in the
next seven years. Currently, there are three renovation projects that represent 1,500 new
housing units. Next year, two new construction projects will be completed offering another
1,000 units of affordable housing. Another 1,000 unit project, to be located in the Garden
Meadows section downtown, is currently in the planning stages.
There are changes occuring around the State University, located downtown, that will also
impact the revival of the Richmond Metro area. Two off-campus housing projects will be
completed mid-year that will add an additional 2,000 family housing units to the university
area.
4.1 Market Segmentation
The growth of affordable housing in the Richmond Metro area is critical to the success of The
House of Pine.
We will aggressively market our target customers who live in the Metro area:
 Young working families;

 Students;
 Young adults.
Chart: Market Analysis (Pie)
Market Analysis (Pie)
Young Working Families
Students
Young Adults
Page 5
The House of Pine
Table: Market Analysis
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Young Working Families 12% 3,000 3,360 3,763 4,215 4,721 12.00%
Students 10% 5,000 5,500 6,050 6,655 7,321 10.00%
Young Adults 10% 10,000 11,000 12,100 13,310 14,641 10.00%
Total 10.34% 18,000 19,860 21,913 24,180 26,683 10.34%
5.0 Strategy and Implementation Summary
The House of Pine will focus on the modest income furniture customer who live in the Richmond
Metro area.
5.1 Competitive Edge
Most of Richmond's fifteen furniture stores are dispersed throughout the city adjacent to
affluent or suburban communities. The stores downtown are high end and offer no affordable
products to the Metro residents.
The primary reason for the price of the furniture is the type of wood that is used. A
bedroom set made of pine can cost a customer $400. The same set made in oak or maple will
cost $800. The profits are higher by focusing on the more expensive wood. When using pine,
many manufacturers improve their profits by using cheaper construction techniques. The
resulting poor quality of these products have added to a popular misconception that pine is an
inferior wood.
The Richmond furniture stores offer a very limited selection of styles in pine. Most products are
selected to maximize the store's profit, not the customer's satisfaction, since it is believed the
customer has few options.
The House of Pine will build its furniture to last generations and will offer the customer all the
popular styles.
5.2 Sales Strategy
We will advertise in the university daily student newspaper as well as the Metro area
advertising flyer. In the advertisements for the store opening, we will have a 20% off coupon.
We will continue this discount for the first month of operation.
The metro area also has six community organizations that send out weekly flyers to all
community residents. We will advertise in the these flyers.
5.2.1 Sales Forecast
The following is the sales forecast for the three years.
Page 6
The House of Pine
Table: Sales Forecast
Sales Forecast
Sales
Furniture $964,000 $1,000,000 $1,050,000
Other $0 $0 $0
Total Sales $964,000 $1,000,000 $1,050,000
Direct Cost of Sales Year 1 Year 2 Year 3

Furniture $432,000 $430,000 $450,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $432,000 $430,000 $450,000
Chart: Sales Monthly
Sales Monthly
$100,000
$90,000
$80,000
$70,000
$60,000
Furniture
$50,000
Other
$40,000
$30,000
$20,000
$10,000
$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Page 7
The House of Pine
Chart: Sales by Year
Sales by Year
$1,000,000
$800,000
Furniture
$600,000
Other
$400,000
$200,000
$0
6.0 Management Summary
The store's owner, Richard Putnam, has worked in the furniture manufacturing industry for over
ten years. This experience began at Ingram's Fine Furniture, where he worked for five years.
Within three years, he reached the position of shift manager. Most recently, Richard was the
operations manager at Wasserman Furniture Manufacturing.
Richard is an excellent staff supervisor and will do well managing the staff of The House of Pine.
6.1 Personnel Plan
The House of Pine will have the following staff members:
 Manager;
 Assistant manager;
 Office manager/accountant;
 Checkers (1.5);
 Production staff (5);
 Stockers (1.5);
Table: Personnel
Personnel Plan
Manager $36,000 $40,000 $45,000
Assistant Manager $36,000 $39,000 $43,000
Office Manager/Bookkeeper $36,000 $39,000 $42,000
Checkers $32,400 $35,500 $40,000
Production Staff $120,000 $130,000 $140,000
Stockers $39,600 $43,000 $46,000
Total People 9 9 9
Total Payroll $300,000 $326,500 $356,000
Page 8
The House of Pine
7.0 Financial Plan
The following is the Financial plan for The House of Pine.
7.1 Break-even Analysis
The following table and chart show our monthly sales break-even point.
Chart: Break-even Analysis
Break-even Analysis
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
$0 $20,000 $40,000 $60,000 $80,000 $100,000

$10,000 $30,000 $50,000 $70,000 $90,000 $110,000
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $69,767
Assumptions:
Average Percent Variable Cost 45%
Estimated Monthly Fixed Cost $38,502
Page 9
The House of Pine
7.2 Projected Profit and Loss
The following table and charts highlight the projected profit and loss for three years.
Chart: Profit Monthly
Profit Monthly
$10,000
$8,000
$6,000
$4,000
$2,000
$0
($2,000)
($4,000)
($6,000)

Chart: Profit Yearly
Profit Yearly
$50,000
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Page 10
The House of Pine
Chart: Gross Margin Monthly
Gross Margin Monthly

$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Chart: Gross Margin Yearly
Gross Margin Yearly
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Page 11
The House of Pine
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $964,000 $1,000,000 $1,050,000
Direct Cost of Sales $432,000 $430,000 $450,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $432,000 $430,000 $450,000
Gross Margin $532,000 $570,000 $600,000

Gross Margin % 55.19% 57.00% 57.14%
Expenses
Payroll $300,000 $326,500 $356,000
Sales and Marketing and Other Expenses $60,000 $60,000 $60,000
Depreciation $11,424 $11,424 $11,424
Leased Equipment $0 $0 $0
Utilities $9,600 $9,600 $9,600
Insurance $12,000 $12,000 $12,000
Rent $24,000 $24,000 $24,000
Payroll Taxes $45,000 $48,975 $53,400
Other $0 $0 $0
Total Operating Expenses $462,024 $492,499 $526,424
Profit Before Interest and Taxes $69,976 $77,501 $73,576

EBITDA $81,400 $88,925 $85,000
Interest Expense $11,917 $10,001 $8,002
Taxes Incurred $17,418 $20,250 $19,672
Net Profit $40,641 $47,250 $45,902

Net Profit/Sales 4.22% 4.72% 4.37%
Page 12
The House of Pine
7.3 Projected Cash Flow
Chart: Cash
Cash
$70,000
$60,000
$50,000
$40,000
Net Cash Flow
$30,000
Cash Balance
$20,000
$10,000
$0

Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $723,000 $750,000 $787,500
Cash from Receivables $198,158 $248,400 $260,278
Subtotal Cash from Operations $921,158 $998,400 $1,047,778
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 $921,158 $998,400 $1,047,778
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $300,000 $326,500 $356,000
Bill Payments $539,935 $627,157 $637,580
Subtotal Spent on Operations $839,935 $953,657 $993,580
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 $19,992 $19,992 $19,992
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $859,927 $973,649 $1,013,572
Net Cash Flow $61,231 $24,751 $34,206

Cash Balance $67,031 $91,782 $125,988
Page 13
The House of Pine
7.4 Projected Balance Sheet
The following table highlights the projected balance sheet for three years.
Table: Balance Sheet
Pro Forma Balance Sheet

Assets
Current Assets
Cash $67,031 $91,782 $125,988
Accounts Receivable $42,842 $44,442 $46,664
Inventory $51,700 $39,895 $43,895
Other Current Assets $0 $0 $0
Total Current Assets $161,573 $176,118 $216,547
Long-term Assets
Long-term Assets $60,000 $60,000 $60,000
Accumulated Depreciation $11,424 $22,848 $34,272
Total Long-term Assets $48,576 $37,152 $25,728
Total Assets $210,149 $213,270 $242,275
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $73,700 $49,563 $52,658
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $73,700 $49,563 $52,658
Long-term Liabilities $110,008 $90,016 $70,024

Total Liabilities $183,708 $139,579 $122,682
Paid-in Capital $50,000 $50,000 $50,000

Retained Earnings ($64,200) ($23,559) $23,691
Earnings $40,641 $47,250 $45,902
Total Capital $26,441 $73,691 $119,593
Total Liabilities and Capital $210,149 $213,270 $242,275
Net Worth $26,441 $73,691 $119,593
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 5712, Furniture Stores, are shown for comparison.
The following is an explanation of the plans divergence with industry ratio profile.
 Sales Growth - will start below the industry average but will be closer to the average after
the third year of operation.
 Accounts Receivable - is slightly below average due to the low use of credit for purchases
(25%).
 Inventory - is below the industry average because 20% of the furniture will be built to
order.
 Long Term Assets, Long Term Liabilities, and Expense of Sales - are higher
because The House Of Pine builds furniture on site.
Page 14
The House of Pine
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 3.73% 5.00% 6.20%
Percent of Total Assets

Accounts Receivable 20.39% 20.84% 19.26% 21.00%
Inventory 24.60% 18.71% 18.12% 38.80%
Other Current Assets 0.00% 0.00% 0.00% 21.70%
Total Current Assets 76.88% 82.58% 89.38% 81.50%
Long-term Assets 23.12% 17.42% 10.62% 18.50%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 35.07% 23.24% 21.73% 44.90%

Long-term Liabilities 52.35% 42.21% 28.90% 13.70%
Total Liabilities 87.42% 65.45% 50.64% 58.60%
Net Worth 12.58% 34.55% 49.36% 41.40%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 55.19% 57.00% 57.14% 37.60%
Selling, General & Administrative Expenses 50.97% 52.28% 52.77% 20.80%
Advertising Expenses 6.22% 6.00% 5.71% 4.40%
Profit Before Interest and Taxes 7.26% 7.75% 7.01% 1.60%
Main Ratios
Current 2.19 3.55 4.11 1.82
Quick 1.49 2.75 3.28 0.76
Total Debt to Total Assets 87.42% 65.45% 50.64% 58.60%
Pre-tax Return on Net Worth 219.58% 91.60% 54.83% 3.80%
Pre-tax Return on Assets 27.63% 31.65% 27.07% 9.20%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 4.22% 4.72% 4.37% n.a
Return on Equity 153.70% 64.12% 38.38% n.a
Activity Ratios
Accounts Receivable Turnover 5.63 5.63 5.63 n.a
Collection Days 57 64 63 n.a
Inventory Turnover 10.73 9.39 10.74 n.a
Accounts Payable Turnover 8.33 12.17 12.17 n.a
Payment Days 27 37 29 n.a
Total Asset Turnover 4.59 4.69 4.33 n.a
Debt Ratios
Debt to Net Worth 6.95 1.89 1.03 n.a
Current Liab. to Liab. 0.40 0.36 0.43 n.a
Liquidity Ratios
Net Working Capital $87,873 $126,555 $163,889 n.a
Interest Coverage 5.87 7.75 9.19 n.a
Additional Ratios
Assets to Sales 0.22 0.21 0.23 n.a
Current Debt/Total Assets 35% 23% 22% n.a
Acid Test 0.91 1.85 2.39 n.a
Sales/Net Worth 36.46 13.57 8.78 n.a
Dividend Payout 0.00 0.00 0.00 n.a
Page 15
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
Furniture 0% $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000
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
Furniture $20,000 $22,000 $31,000 $34,000 $40,000 $42,000 $45,000 $38,000 $41,000 $37,000 $35,000 $47,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $20,000 $22,000 $31,000 $34,000 $40,000 $42,000 $45,000 $38,000 $41,000 $37,000 $35,000 $47,000
Page 1
Appendix
Table: Personnel
Personnel Plan
Manager 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
Assistant Manager 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
Office Manager/Bookkeeper 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
Checkers 0% $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700 $2,700
Production Staff 0% $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Stockers 0% $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300 $3,300
Total People 9 9 9 9 9 9 9 9 9 9 9 9
Total Payroll $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Page 2
Appendix
Table: General Assumptions
General Assumptions
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
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $50,000 $60,000 $70,000 $75,000 $85,000 $90,000 $100,000 $85,000 $90,000 $85,000 $79,000 $95,000
Direct Cost of Sales $20,000 $22,000 $31,000 $34,000 $40,000 $42,000 $45,000 $38,000 $41,000 $37,000 $35,000 $47,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $20,000 $22,000 $31,000 $34,000 $40,000 $42,000 $45,000 $38,000 $41,000 $37,000 $35,000 $47,000
Gross Margin $30,000 $38,000 $39,000 $41,000 $45,000 $48,000 $55,000 $47,000 $49,000 $48,000 $44,000 $48,000
Gross Margin % 60.00% 63.33% 55.71% 54.67% 52.94% 53.33% 55.00% 55.29% 54.44% 56.47% 55.70% 50.53%
Expenses
Payroll $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Sales and Marketing and Other $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Expenses
Depreciation $952 $952 $952 $952 $952 $952 $952 $952 $952 $952 $952 $952
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Payroll Taxes 15% $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750 $3,750
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502 $38,502
Profit Before Interest and Taxes ($8,502) ($502) $498 $2,498 $6,498 $9,498 $16,498 $8,498 $10,498 $9,498 $5,498 $9,498
EBITDA ($7,550) $450 $1,450 $3,450 $7,450 $10,450 $17,450 $9,450 $11,450 $10,450 $6,450 $10,450
Interest Expense $1,069 $1,056 $1,042 $1,028 $1,014 $1,000 $986 $972 $958 $945 $931 $917
Taxes Incurred ($2,871) ($467) ($163) $441 $1,645 $2,549 $4,654 $2,258 $2,862 $2,566 $1,370 $2,574
Net Profit ($6,700) ($1,090) ($381) $1,029 $3,839 $5,949 $10,858 $5,268 $6,678 $5,987 $3,197 $6,007
Net Profit/Sales -13.40% -1.82% -0.54% 1.37% 4.52% 6.61% 10.86% 6.20% 7.42% 7.04% 4.05% 6.32%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $37,500 $45,000 $52,500 $56,250 $63,750 $67,500 $75,000 $63,750 $67,500 $63,750 $59,250 $71,250
Cash from Receivables $0 $417 $12,583 $15,083 $17,542 $18,833 $21,292 $22,583 $24,875 $21,292 $22,458 $21,200
Subtotal Cash from Operations $37,500 $45,417 $65,083 $71,333 $81,292 $86,333 $96,292 $86,333 $92,375 $85,042 $81,708 $92,450
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 $37,500 $45,417 $65,083 $71,333 $81,292 $86,333 $96,292 $86,333 $92,375 $85,042 $81,708 $92,450
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 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000
Bill Payments $358 $11,368 $30,171 $54,228 $51,669 $61,759 $60,506 $65,809 $46,566 $60,270 $48,627 $48,604
Subtotal Spent on Operations $25,358 $36,368 $55,171 $79,228 $76,669 $86,759 $85,506 $90,809 $71,566 $85,270 $73,627 $73,604
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 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666 $1,666
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 $27,024 $38,034 $56,837 $80,894 $78,335 $88,425 $87,172 $92,475 $73,232 $86,936 $75,293 $75,270
Net Cash Flow $10,476 $7,383 $8,246 ($9,561) $2,957 ($2,091) $9,120 ($6,142) $19,143 ($1,894) $6,415 $17,180
Page 5
Appendix
Cash Balance $16,276 $23,659 $31,905 $22,344 $25,301 $23,209 $32,329 $26,187 $45,330 $43,436 $49,851 $67,031
Table: Balance Sheet
Pro Forma Balance Sheet

Assets Starting Balances
Current Assets
Cash $5,800 $16,276 $23,659 $31,905 $22,344 $25,301 $23,209 $32,329 $26,187 $45,330 $43,436 $49,851 $67,031
Accounts Receivable $0 $12,500 $27,083 $32,000 $35,667 $39,375 $43,042 $46,750 $45,417 $43,042 $43,000 $40,292 $42,842
Inventory $50,000 $30,000 $24,200 $34,100 $37,400 $44,000 $46,200 $49,500 $41,800 $45,100 $40,700 $38,500 $51,700
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $55,800 $58,776 $74,942 $98,005 $95,410 $108,676 $112,451 $128,579 $113,404 $133,472 $127,136 $128,643 $161,573
Long-term Assets
Long-term Assets $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000 $60,000
Accumulated Depreciation $0 $952 $1,904 $2,856 $3,808 $4,760 $5,712 $6,664 $7,616 $8,568 $9,520 $10,472 $11,424
Total Long-term Assets $60,000 $59,048 $58,096 $57,144 $56,192 $55,240 $54,288 $53,336 $52,384 $51,432 $50,480 $49,528 $48,576
Total Assets $115,800 $117,824 $133,038 $155,149 $151,602 $163,916 $166,739 $181,915 $165,788 $184,904 $177,616 $178,171 $210,149
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 $10,390 $28,360 $52,518 $49,608 $59,749 $58,289 $64,273 $44,544 $58,648 $47,039 $46,062 $73,700
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 $10,390 $28,360 $52,518 $49,608 $59,749 $58,289 $64,273 $44,544 $58,648 $47,039 $46,062 $73,700
Long-term Liabilities $130,000 $128,334 $126,668 $125,002 $123,336 $121,670 $120,004 $118,338 $116,672 $115,006 $113,340 $111,674 $110,008
Total Liabilities $130,000 $138,724 $155,028 $177,520 $172,944 $181,419 $178,293 $182,611 $161,216 $173,654 $160,379 $157,736 $183,708
Paid-in Capital $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Retained Earnings ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200) ($64,200)
Earnings $0 ($6,700) ($7,790) ($8,171) ($7,142) ($3,303) $2,646 $13,504 $18,772 $25,450 $31,437 $34,634 $40,641
Total Capital ($14,200) ($20,900) ($21,990) ($22,371) ($21,342) ($17,503) ($11,554) ($696) $4,572 $11,250 $17,237 $20,434 $26,441
Total Liabilities and Capital $115,800 $117,824 $133,038 $155,149 $151,602 $163,916 $166,739 $181,915 $165,788 $184,904 $177,616 $178,171 $210,149
Net Worth ($14,200) ($20,900) ($21,990) ($22,371) ($21,342) ($17,503) ($11,554) ($696) $4,572 $11,250 $17,237 $20,434 $26,441
Page 6
Appendix
Page 1

Retail Furniture Manufacturer Business Plan

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Retail Furniture Manufacturer Business Plan

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This is a business plan. It does not imply an offering of securities.

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

Table: Balance Sheet.................................................................................................................14

1.0 Executive Summary

1.2 Keys to Success

The Keys to Success for The House of Pine are as follows:

 Offer our customers affordable quality furniture that will last.

2.0 Company Summary

2.1 Company Ownership

2.2 Company Locations and Facilities

2.3 Start-up Summary

Total Requirements $180,000

Table: Start-up Funding

Liabilities and Capital

Loss at Start-up (Start-up Expenses) ($64,200)

Total Capital and Liabilities $115,800

Total Funding $180,000

3.0 Products and Services

4.0 Market Analysis Summary

In the Richmond Metro area, there are approximately 50,000 residents with modest

4.1 Market Segmentation

 Young working families;

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Young Working Families

Table: Market Analysis

5.0 Strategy and Implementation Summary

5.1 Competitive Edge

5.2 Sales Strategy

5.2.1 Sales Forecast

The following is the sales forecast for the three years.

Table: Sales Forecast

Direct Cost of Sales Year 1 Year 2 Year 3

Chart: Sales Monthly

Chart: Sales by Year

6.0 Management Summary

6.1 Personnel Plan

The House of Pine will have the following staff members:

Total Payroll $300,000 $326,500 $356,000

7.0 Financial Plan

The following is the Financial plan for The House of Pine.

7.1 Break-even Analysis

Chart: Break-even Analysis

$0 $20,000 $40,000 $60,000 $80,000 $100,000

Table: Break-even Analysis

Monthly Revenue Break-even $69,767

7.2 Projected Profit and Loss

Chart: Profit Monthly

Month 1 Month 3 Month 5 Month 7 Month 9 Month 11

Chart: Profit Yearly

Chart: Gross Margin Monthly

Gross Margin Monthly

Chart: Gross Margin Yearly

Gross Margin Yearly

Table: Profit and Loss

Pro Forma Profit and Loss

Gross Margin $532,000 $570,000 $600,000

Total Operating Expenses $462,024 $492,499 $526,424

Profit Before Interest and Taxes $69,976 $77,501 $73,576