Motorcycle Shop Business Plan

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

Chart: Highlights.......................................................................................................................... .1
1.1 Objectives................................................................................................................................... .2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success........................................................................................................................ .2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Start-up Summary....................................................................................................................2
Table: Start-up............................................................................................................................. .3
Table: Start-up Funding............................................................................................................ .3
Chart: Start-up............................................................................................................................. .4
3.0 Products........................................................................................................................................... .4
4.0 Market Analysis Summary.........................................................................................................4
4.1 Market Segmentation............................................................................................................. .5
Table: Market Analysis................................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................5
5.0 Strategy and Implementation Summary............................................................................ .5
5.1 Competitive Edge..................................................................................................................... .5
5.2 Sales Strategy........................................................................................................................... .6
5.2.1 Sales Forecast................................................................................................................... .6
Table: Sales Forecast............................................................................................................. .6
Chart: Sales Monthly.............................................................................................................. .6
Chart: Sales by Year................................................................................................................7
6.0 Management Summary...............................................................................................................7
6.1 Personnel Plan........................................................................................................................... .7
Table: Personnel............................................................................................................................7
7.0 Financial Plan................................................................................................................................. .8
7.0 Financial Plan................................................................................................................................. .8
7.1 Break-even Analysis.................................................................................................................8
Table: Break-even Analysis..................................................................................................... .8
Chart: Break-even Analysis..................................................................................................... .8
7.2 Projected Profit and Loss...................................................................................................... .9
Chart: Profit Monthly.................................................................................................................. .9
Chart: Profit Yearly.......................................................................................................................9
Table: Profit and Loss................................................................................................................10
7.3 Projected Cash Flow...............................................................................................................11
Table: Cash Flow........................................................................................................................ .11
Chart: Cash.................................................................................................................................. .12
7.4 Projected Balance Sheet..................................................................................................... .13
Table: Balance Sheet.................................................................................................................13
7.5 Business Ratios....................................................................................................................... .13
Table: Ratios.................................................................................................................................14
Table: Sales Forecast......................................................................................................................... .1
Page 1
Table of Contents
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 2
Recycled Riding Dreams
1.0 Executive Summary
Recycled Riding Dreams will offer quality used motorcycles and motorcycle parts to a growing
market of motorcycling hobbyists. For the beginner, Recycled Riding Dreams offers excellent
value in a first bike that will not bust the customer's budget. For the experienced biker, quality
used parts will cut the cost of repairs and modifications by 50% to 75%.
Over the past ten years, biking has developed an entirely new customer base among baby
boomer men, ages 40 to 65. Last year, motorcycle sales for this age group was twice that of
young men, ages 18 to 25. In Montclair, motorcycle sales exceeded $6 million in 2000
and sales are predicted to grow by 15% this year.
Montclair is a city of 650,000 residents with an average income of $28,000. The city has seven
motorcycle organizations and sponsors an annual cycling event as part of the city's spring
celebration.
Brian Jefferson, owner of Recycled Riding Dreams is one of most respected and best known
motorcyclist in Montclair. Brian is the president of the largest motorcycle organization in the
city with over 800 members. Last year, Brian lead the motorcycle parade during the city's
spring celebration.
Brian's connection with the motorcycling community and the growing demand for quality used
motorcycles and motorcycle parts will make Recycled Riding Dreams one of the most popular
shops in the city.
Chart: Highlights
Highlights
$270,000
$240,000
$210,000
$180,000 Sales
$150,000 Gross Margin

$120,000 Net Profit
$90,000
$60,000
$30,000
$0
Year 1 Year 2 Year 3
Page 1
1.1 Objectives
The objectives of Recycled Riding Dreams are:
 Capture the majority of the used motorcycle business in the Montclair.

 Offer our customers a superior service, at a low price.
1.2 Mission
The mission of Recycled Riding Dreams is to become the primary resource for used motorcycle
parts in Montclair.
1.3 Keys to Success
The keys to success for Recycled Riding Dreams are:
 Customer referrals.
 Exceeding the customer's expectation for quality, timeliness and price.
2.0 Company Summary
Recycled Riding Dreams will offer quality used motorcycles and motorcycle parts to a growing
market of motorcycling hobbyists. The shop will purchase used and damaged bikes as well as
used motorcycle parts.
2.1 Company Ownership
Recycled Riding Dreams is owned by Brian Jefferson.
2.2 Start-up Summary
Brian Jefferson will invest $55,000 in Recycled Riding Dreams. Brian will also secure a $20,000
loan. The initial inventory for Recycled Riding Dreams will be $45,000. The focus of this
inventory will be on engine and electrical parts. The source of these parts are motorcycle
hobbyists who sell the parts in order to purchase upgrade parts for their own motorcycles. The
following table and chart show projected initial start-up costs for Recycled Riding Dreams.
Page 2
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $200
Insurance $500
Rent $1,300
Display Equipment $3,000
Expensed Equipment $5,000
Total Start-up Expenses $11,000
Start-up Assets
Cash Required $4,000
Start-up Inventory $45,000
Other Current Assets $0
Long-term Assets $15,000
Total Assets $64,000
Total Requirements $75,000
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $11,000
Start-up Assets to Fund $64,000
Total Funding Required $75,000
Assets
Non-cash Assets from Start-up $60,000
Cash Requirements from Start-up $4,000
Additional Cash Raised $0
Cash Balance on Starting Date $4,000
Total Assets $64,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $20,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $20,000
Capital
Planned Investment
Brian Jefferson $55,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $55,000
Loss at Start-up (Start-up Expenses) ($11,000)

Total Capital $44,000
Total Capital and Liabilities $64,000
Page 3
Total Funding $75,000
Chart: Start-up
Start-up
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Expenses Assets Investment Loans
3.0 Products
Recycled Riding Dreams offers the following products:
 Used Motorcycles: These cycles have been inspected and occasionally reconditioned in
order to offer the customer the best value.
 Used Parts: These quality parts include engine parts, bodywork, gas tanks, electrical parts,
frame, and chassis wheels and brakes.
4.0 Market Analysis Summary
Over the past ten years, biking has developed an entirely new customer base among baby
boomer men, ages 40 to 65. Last year, motorcycle sales for this age group was twice that of
young men, ages 18 to 25. These two groups represent 80% of motorcycle sales. In Montclair,
motorcycle sales exceeded $6 million in 2000 and sales are predicted to grow by 10% this year.
The city has ten motorcycle organizations and sponsors an annual cycling event as part of the
city's spring celebration.
The demographics suggest that there is a large market for used motorcycles and motorcycle
parts, especially among experienced bikers. This is particularly important because the
experienced customer will seek out a shop where the owner has a reputation for quality and
service in the motorcycle community.
Page 4
4.1 Market Segmentation
Recycled Riding Dreams will focus on two customer groups:
 Male baby boomers, ages 40 - 65.

 Young men, ages 18 - 25.
Table: Market Analysis
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Male Baby Boomers 6% 85,000 90,100 95,506 101,236 107,310 6.00%
Young Men 5% 70,000 73,500 77,175 81,034 85,086 5.00%
Total 5.55% 155,000 163,600 172,681 182,270 192,396 5.55%
Chart: Market Analysis (Pie)
Market Analysis (Pie)
Male Baby Boomers
Young Men
5.0 Strategy and Implementation Summary
Excellent word of mouth among motorcycle hobbyists is the foundation of Recycled Riding
Dreams. The motorcycle community in Montclair is close and used by its members to locate
resources and services. Each satisfied customer of Recycled Riding Dreams will bring in more
business.
5.1 Competitive Edge
Brian Jefferson, owner of Recycled Riding Dreams is one of most respected and best known
motorcyclist in Montclair. Brian is the president of the largest motorcycle organization in the
Page 5
city with over 800 members. He has been a motorcycle hobbyist for 15 years and has built a
reputation for quality customizing of motorcycles. For the past five years, Brian has served as a
resource in locating used motorcycles and motorcycle parts for hobbyists.
Recycled Riding Dreams' competitive edge is Brian's visibility in the motorcycling community.
5.2 Sales Strategy
Recycled Riding Dreams will open with a Customization Show and Competition. During the first
month of operation, Recycled Riding Dreams will offer a 15% discount on all purchases over
$50. Brian will also offer a standard 10% discount to members of the city's seven motorcycle
11 12
organizations.
10 Month
5.2.1 Sales Forecast
9 Month
8 Month
The table and charts below projected sales forecast for three years.
7 Month
Table: Sales Forecast
6 Month
5 Month
Sales Forecast
4 Month

Sales
3 Month
Used Motorcycles $137,000 $142,000 $152,000

Used Motorcycle Parts $98,000 $110,000 $119,000
2 Month
Total Sales $235,000 $252,000 $271,000

1 Month
Direct Cost of Sales Year 1 Year 2 Year 3

Used Motorcycles $62,500 $63,000 $69,000
MonthMonth
Used Motorcycle Parts $45,000 $54,000 $58,000

Subtotal Direct Cost of Sales $107,500 $117,000 $127,000
Chart: Sales Monthly
Sales Monthly
$21,000
$18,000
$15,000
Used Motorcycles
$12,000
Used Motorcycle Parts
$9,000
$6,000
$3,000
$0
Page 6
Chart: Sales by Year
Sales by Year
$270,000
$240,000
$210,000
$180,000
Used Motorcycles
$150,000
Used Motorcycle Parts
$120,000
$90,000
$60,000
$30,000
$0
6.0 Management Summary
Brian Jefferson will manage the daily operations of the shop.
6.1 Personnel Plan
Besides Brian Jefferson, Recycled Riding Dreams will have one additional employee.
Table: Personnel
Personnel Plan
Brian Jefferson $36,000 $39,000 $42,000
Staff Person $33,600 $35,000 $37,000
Total People 2 2 2
Total Payroll $69,600 $74,000 $79,000
Page 7
7.0 Financial Plan
The following is the financial plan for Recycled Riding Dreams.
7.1 Break-even Analysis
The monthly break-even point is approximately $16,000.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $16,638
Assumptions:
Average Percent Variable Cost 46%
Estimated Monthly Fixed Cost $9,027
Chart: Break-even Analysis
Break-even Analysis
$10,000
$8,000
$6,000
$4,000
$2,000
$0
($2,000)
($4,000)
($6,000)
($8,000)
$0 $6,000 $12,000 $18,000 $24,000 $30,000

$3,000 $9,000 $15,000 $21,000 $27,000 $33,000
Page 8
7.2 Projected Profit and Loss
The following table and charts shows projected profit and loss for three years.
Chart: Profit Monthly
Profit Monthly
$7,000
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
($1,000)
($2,000)
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Page 9
Chart: Profit Yearly
Profit Yearly
$16,000
$14,000
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Table: Profit and Loss
Pro Forma Profit and Loss

Sales $235,000 $252,000 $271,000
Direct Cost of Sales $107,500 $117,000 $127,000
Other Production Expenses $0 $0 $0
Total Cost of Sales $107,500 $117,000 $127,000
Gross Margin $127,500 $135,000 $144,000

Gross Margin % 54.26% 53.57% 53.14%
Expenses
Payroll $69,600 $74,000 $79,000
Sales and Marketing and Other Expenses $6,000 $6,000 $6,000
Depreciation $4,284 $4,284 $4,284
Leased Equipment $0 $0 $0
Utilities $2,400 $2,400 $2,400
Insurance $0 $0 $0
Rent $15,600 $15,600 $15,600
Payroll Taxes $10,440 $11,100 $11,850
Other $0 $0 $0
Total Operating Expenses $108,324 $113,384 $119,134
Profit Before Interest and Taxes $19,176 $21,616 $24,866

EBITDA $23,460 $25,900 $29,150
Interest Expense $2,000 $2,000 $2,000
Taxes Incurred $5,153 $5,885 $6,860
Net Profit $12,023 $13,731 $16,006

Net Profit/Sales 5.12% 5.45% 5.91%
Page 10
Page 11
7.3 Projected Cash Flow

The table and chart show the projected cash flow for three years.
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $94,000 $100,800 $108,400
Cash from Receivables $116,820 $149,451 $160,645
Subtotal Cash from Operations $210,820 $250,251 $269,045
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 $210,820 $250,251 $269,045
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations

Cash Spending $69,600 $74,000 $79,000
Bill Payments $108,864 $160,218 $172,854
Subtotal Spent on Operations $178,464 $234,218 $251,854
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 $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $178,464 $234,218 $251,854
Net Cash Flow $32,356 $16,033 $17,191

Cash Balance $36,356 $52,389 $69,580
Page 12
Chart: Cash
Cash
$40,000
$36,000
$32,000
$28,000
$24,000
Net Cash Flow
$20,000
Cash Balance
$16,000
$12,000
$8,000
$4,000
$0

Page 13
7.4 Projected Balance Sheet
The table shows the projected balance sheet for three years.
Table: Balance Sheet
Pro Forma Balance Sheet

Assets
Current Assets
Cash $36,356 $52,389 $69,580
Accounts Receivable $24,180 $25,929 $27,884
Inventory $10,550 $18,834 $20,390
Other Current Assets $0 $0 $0
Total Current Assets $71,086 $97,153 $117,854
Long-term Assets
Long-term Assets $15,000 $15,000 $15,000
Accumulated Depreciation $4,284 $8,568 $12,852
Total Long-term Assets $10,716 $6,432 $2,148
Total Assets $81,802 $103,585 $120,002
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $5,779 $13,830 $14,241
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $5,779 $13,830 $14,241
Long-term Liabilities $20,000 $20,000 $20,000

Total Liabilities $25,779 $33,830 $34,241
Paid-in Capital $55,000 $55,000 $55,000

Retained Earnings ($11,000) $1,023 $14,754
Earnings $12,023 $13,731 $16,006
Total Capital $56,023 $69,754 $85,761
Total Liabilities and Capital $81,802 $103,585 $120,002
Net Worth $56,023 $69,754 $85,761
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 5015, Motor Vehicle Parts Used, are shown for
comparison.
Page 14
Table: Ratios
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 7.23% 7.54% 12.20%
Percent of Total Assets

Accounts Receivable 29.56% 25.03% 23.24% 28.00%
Inventory 12.90% 18.18% 16.99% 38.90%
Other Current Assets 0.00% 0.00% 0.00% 16.40%
Total Current Assets 86.90% 93.79% 98.21% 83.30%
Long-term Assets 13.10% 6.21% 1.79% 16.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 7.06% 13.35% 11.87% 38.90%

Long-term Liabilities 24.45% 19.31% 16.67% 12.30%
Total Liabilities 31.51% 32.66% 28.53% 51.20%
Net Worth 68.49% 67.34% 71.47% 48.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 54.26% 53.57% 53.14% 23.10%
Selling, General & Administrative Expenses 49.14% 48.12% 47.23% 14.00%
Advertising Expenses 2.55% 2.38% 2.21% 0.70%
Profit Before Interest and Taxes 8.16% 8.58% 9.18% 2.00%
Main Ratios
Current 12.30 7.02 8.28 2.16
Quick 10.47 5.66 6.84 0.96
Total Debt to Total Assets 31.51% 32.66% 28.53% 51.20%
Pre-tax Return on Net Worth 30.66% 28.12% 26.66% 5.30%
Pre-tax Return on Assets 21.00% 18.94% 19.05% 10.90%
Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 5.12% 5.45% 5.91% n.a
Return on Equity 21.46% 19.69% 18.66% n.a
Activity Ratios
Accounts Receivable Turnover 5.83 5.83 5.83 n.a
Collection Days 57 60 60 n.a
Inventory Turnover 6.76 7.96 6.48 n.a
Accounts Payable Turnover 19.84 12.17 12.17 n.a
Payment Days 27 21 30 n.a
Total Asset Turnover 2.87 2.43 2.26 n.a
Debt Ratios
Debt to Net Worth 0.46 0.48 0.40 n.a
Current Liab. to Liab. 0.22 0.41 0.42 n.a
Liquidity Ratios
Net Working Capital $65,307 $83,322 $103,613 n.a
Interest Coverage 9.59 10.81 12.43 n.a
Additional Ratios
Assets to Sales 0.35 0.41 0.44 n.a
Current Debt/Total Assets 7% 13% 12% n.a
Acid Test 6.29 3.79 4.89 n.a
Sales/Net Worth 4.19 3.61 3.16 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
Used Motorcycles 0% $9,000 $11,000 $12,000 $12,000 $12,000 $12,000 $12,000 $11,000 $12,000 $11,000 $12,000 $11,000
Used Motorcycle Parts 0% $4,000 $5,000 $7,000 $8,000 $9,000 $10,000 $8,000 $9,000 $10,000 $10,000 $9,000 $9,000
Total Sales $13,000 $16,000 $19,000 $20,000 $21,000 $22,000 $20,000 $20,000 $22,000 $21,000 $21,000 $20,000
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
Used Motorcycles $5,000 $5,000 $6,000 $6,000 $6,000 $6,000 $6,000 $5,000 $6,000 $5,000 $6,000 $500
Used Motorcycle Parts $2,000 $2,500 $3,500 $4,000 $4,500 $5,000 $4,000 $4,500 $5,000 $5,000 $4,500 $500
Subtotal Direct Cost of Sales $7,000 $7,500 $9,500 $10,000 $10,500 $11,000 $10,000 $9,500 $11,000 $10,000 $10,500 $1,000
Page 1
Appendix
Table: Personnel
Personnel Plan
Brian Jefferson 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
Staff Person 0% $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Total People 2 2 2 2 2 2 2 2 2 2 2 2
Total Payroll $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800
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 $13,000 $16,000 $19,000 $20,000 $21,000 $22,000 $20,000 $20,000 $22,000 $21,000 $21,000 $20,000
Direct Cost of Sales $7,000 $7,500 $9,500 $10,000 $10,500 $11,000 $10,000 $9,500 $11,000 $10,000 $10,500 $1,000
Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $7,000 $7,500 $9,500 $10,000 $10,500 $11,000 $10,000 $9,500 $11,000 $10,000 $10,500 $1,000
Gross Margin $6,000 $8,500 $9,500 $10,000 $10,500 $11,000 $10,000 $10,500 $11,000 $11,000 $10,500 $19,000
Gross Margin % 46.15% 53.13% 50.00% 50.00% 50.00% 50.00% 50.00% 52.50% 50.00% 52.38% 50.00% 95.00%
Expenses
Payroll $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800
Sales and Marketing and Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Expenses
Depreciation $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357 $357
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300
Payroll Taxes 15% $870 $870 $870 $870 $870 $870 $870 $870 $870 $870 $870 $870
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027 $9,027
Profit Before Interest and Taxes ($3,027) ($527) $473 $973 $1,473 $1,973 $973 $1,473 $1,973 $1,973 $1,473 $9,973
EBITDA ($2,670) ($170) $830 $1,330 $1,830 $2,330 $1,330 $1,830 $2,330 $2,330 $1,830 $10,330
Interest Expense $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167 $167
Taxes Incurred ($958) ($208) $92 $242 $392 $542 $242 $392 $542 $542 $392 $2,942
Net Profit ($2,236) ($486) $214 $564 $914 $1,264 $564 $914 $1,264 $1,264 $914 $6,864
Net Profit/Sales -17.20% -3.03% 1.13% 2.82% 4.35% 5.75% 2.82% 4.57% 5.75% 6.02% 4.35% 34.32%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow

Cash Received
Cash from Operations

Cash Sales $5,200 $6,400 $7,600 $8,000 $8,400 $8,800 $8,000 $8,000 $8,800 $8,400 $8,400 $8,000
Cash from Receivables $0 $260 $7,860 $9,660 $11,420 $12,020 $12,620 $13,160 $12,000 $12,040 $13,180 $12,600
Subtotal Cash from Operations $5,200 $6,660 $15,460 $17,660 $19,820 $20,820 $20,620 $21,160 $20,800 $20,440 $21,580 $20,600
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 $5,200 $6,660 $15,460 $17,660 $19,820 $20,820 $20,620 $21,160 $20,800 $20,440 $21,580 $20,600
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 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800 $5,800
Bill Payments $69 $2,104 $2,839 $3,134 $3,652 $14,500 $15,030 $12,185 $12,507 $16,104 $12,545 $14,195
Subtotal Spent on Operations $5,869 $7,904 $8,639 $8,934 $9,452 $20,300 $20,830 $17,985 $18,307 $21,904 $18,345 $19,995
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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $5,869 $7,904 $8,639 $8,934 $9,452 $20,300 $20,830 $17,985 $18,307 $21,904 $18,345 $19,995
Net Cash Flow ($669) ($1,244) $6,821 $8,726 $10,368 $520 ($210) $3,175 $2,493 ($1,464) $3,235 $605
Page 5
Appendix
Cash Balance $3,331 $2,087 $8,909 $17,635 $28,003 $28,523 $28,313 $31,487 $33,981 $32,517 $35,752 $36,356
Table: Balance Sheet
Pro Forma Balance Sheet

Assets Starting Balances
Current Assets
Cash $4,000 $3,331 $2,087 $8,909 $17,635 $28,003 $28,523 $28,313 $31,487 $33,981 $32,517 $35,752 $36,356
Accounts Receivable $0 $7,800 $17,140 $20,680 $23,020 $24,200 $25,380 $24,760 $23,600 $24,800 $25,360 $24,780 $24,180
Inventory $45,000 $38,000 $30,500 $21,000 $11,000 $11,550 $12,100 $11,000 $10,450 $12,100 $11,000 $11,550 $10,550
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $49,000 $49,131 $49,727 $50,589 $51,655 $63,753 $66,003 $64,073 $65,537 $70,881 $68,877 $72,082 $71,086
Long-term Assets
Long-term Assets $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Accumulated Depreciation $0 $357 $714 $1,071 $1,428 $1,785 $2,142 $2,499 $2,856 $3,213 $3,570 $3,927 $4,284
Total Long-term Assets $15,000 $14,643 $14,286 $13,929 $13,572 $13,215 $12,858 $12,501 $12,144 $11,787 $11,430 $11,073 $10,716
Total Assets $64,000 $63,774 $64,013 $64,518 $65,227 $76,968 $78,861 $76,574 $77,681 $82,668 $80,307 $83,155 $81,802
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 $2,009 $2,734 $3,024 $3,169 $13,996 $14,624 $11,773 $11,966 $15,688 $12,063 $13,996 $5,779
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 $2,009 $2,734 $3,024 $3,169 $13,996 $14,624 $11,773 $11,966 $15,688 $12,063 $13,996 $5,779
Long-term Liabilities $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
Total Liabilities $20,000 $22,009 $22,734 $23,024 $23,169 $33,996 $34,624 $31,773 $31,966 $35,688 $32,063 $33,996 $25,779
Paid-in Capital $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000 $55,000
Retained Earnings ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000) ($11,000)
Earnings $0 ($2,236) ($2,721) ($2,507) ($1,942) ($1,028) $237 $801 $1,715 $2,980 $4,244 $5,159 $12,023
Total Capital $44,000 $41,764 $41,279 $41,493 $42,058 $42,972 $44,237 $44,801 $45,715 $46,980 $48,244 $49,159 $56,023
Total Liabilities and Capital $64,000 $63,774 $64,013 $64,518 $65,227 $76,968 $78,861 $76,574 $77,681 $82,668 $80,307 $83,155 $81,802
Net Worth $44,000 $41,764 $41,279 $41,493 $42,058 $42,972 $44,237 $44,801 $45,715 $46,980 $48,244 $49,159 $56,023
Page 6

Motorcycle Shop Business Plan

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

1.0 Executive Summary

$150,000 Gross Margin

The objectives of Recycled Riding Dreams are:

 Capture the majority of the used motorcycle business in the Montclair.

1.3 Keys to Success

The keys to success for Recycled Riding Dreams are:

2.0 Company Summary

2.1 Company Ownership

Recycled Riding Dreams is owned by Brian Jefferson.

2.2 Start-up Summary

Total Requirements $75,000

Table: Start-up Funding

Liabilities and Capital

Loss at Start-up (Start-up Expenses) ($11,000)

Total Capital and Liabilities $64,000

Total Funding $75,000

Recycled Riding Dreams offers the following products:

4.0 Market Analysis Summary

4.1 Market Segmentation

Recycled Riding Dreams will focus on two customer groups:

 Male baby boomers, ages 40 - 65.

Table: Market Analysis

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Male Baby Boomers

5.0 Strategy and Implementation Summary

5.1 Competitive Edge

5.2 Sales Strategy

Year 1 Year 2 Year 3

Used Motorcycles $137,000 $142,000 $152,000

Total Sales $235,000 $252,000 $271,000

Direct Cost of Sales Year 1 Year 2 Year 3

Used Motorcycle Parts $45,000 $54,000 $58,000

Chart: Sales Monthly

Chart: Sales by Year

6.0 Management Summary

Brian Jefferson will manage the daily operations of the shop.

6.1 Personnel Plan

Total Payroll $69,600 $74,000 $79,000

7.0 Financial Plan

The following is the financial plan for Recycled Riding Dreams.

7.1 Break-even Analysis

The monthly break-even point is approximately $16,000.

Table: Break-even Analysis

Monthly Revenue Break-even $16,638

Chart: Break-even Analysis

$0 $6,000 $12,000 $18,000 $24,000 $30,000

7.2 Projected Profit and Loss

Chart: Profit Monthly

Chart: Profit Yearly

Table: Profit and Loss

Pro Forma Profit and Loss

Gross Margin $127,500 $135,000 $144,000

Total Operating Expenses $108,324 $113,384 $119,134

Profit Before Interest and Taxes $19,176 $21,616 $24,866