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4 Moons Pizzeria
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This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary.............. ............................. .............................. .............................. .............................. .............................. .............................. ......................... ................ ........... .......... ....... ..1 1.1 Objectives............... ............................. ............................. .............................. .............................. .............................. .............................. .............................. .............................. ....................... .......... ..1 1.2 Mission.............. ............................. .............................. .............................. .............................. .............................. .............................. .............................. ............................. .................... ........... ......... ....1 1.3 Keys to Success.............. ............................. .............................. .............................. .............................. .............................. .............................. .............................. ........................... ................ ....2 Chart: Highlights.............. ............................. .............................. .............................. .............................. .............................. .............................. .............................. .......................... ................ .....2 2.0 Company Summary............. ............................ .............................. .............................. .............................. .............................. .............................. .............................. ........................... ............... ...2 2.1 Company Ownership............. ............................ .............................. .............................. .............................. .............................. ........................... .................. ........... ........... ........... ......... ....3 2.2 Start-up Summary............. ............................ .............................. .............................. .............................. .............................. .............................. ......................... ................ ........... ........... .......3. Chart: Start-up.............. ............................. .............................. .............................. ............................. ............................. .............................. .............................. ............................. .................... .......4. Table: Start-up............. ............................ .............................. .............................. .............................. .............................. .............................. .............................. .............................. ..................... ......4 ........................................................................................................................................................................... 4 4.0 Market Analysis Summary.............. ............................. .............................. .............................. .............................. .............................. ...................... ............ ........... ........... ........... ......... ...5 4.1 Market Segmentation.............. ............................. .............................. .............................. .............................. .............................. .............................. ......................... ............... ........... .......5. Table: Market Analysis............... .............................. .............................. .............................. .............................. .............................. .............................. ............................. ................... ......6. Chart: Market Analysis (Pie)............... .............................. .............................. .............................. .............................. .............................. ........................... .................. ............ ........ ..6 4.2 Target Target Market Segment Strategy............. ............................ .............................. .............................. .............................. .............................. ....................... .............. ........... ......6. 4.3 Service Business Analysis............. ............................ .............................. .............................. .............................. .............................. .......................... ................ ........... ........... ........ ...7 4.3.1 Competition and Buying Patterns.............. ............................. .............................. .............................. .............................. .............................. ........................ ........... ..7 5.0 Strategy and and Implementation Summary Summary............... .............................. .............................. .............................. .............................. ..................... ........... ........... ........... ......... ....7 5.1 Competitive Edge............... .............................. .............................. .............................. .............................. .............................. .............................. .............................. ........................ ............ ...7 5.2 Marketing Strategy............. ............................ .............................. .............................. .............................. .............................. .............................. .............................. ......................... ............ ..8 5.3 Sales Strategy.............. ............................. .............................. .............................. .............................. .............................. .............................. .............................. ........................ .............. .......... .....8 5.3.1 Sales Forecast............. ............................ .............................. .............................. .............................. .............................. .............................. .............................. ............................ .............8 Table: Sales Forecast............... .............................. .............................. .............................. .............................. .............................. ............................. ................... ........... ........... ......... ....9 Chart: Sales Monthly............... .............................. .............................. .............................. .............................. .............................. .............................. .................... .......... ........... ......... ...9 Chart: Sales by Year............. ............................ .............................. .............................. .............................. .............................. .............................. ..................... ........... ........... ......... ...10 6.0 Management Summary 10
Table of Contents
Table: Profit and Loss.............................................................................................................................17 ..................................................................................................................................................................... 17 7.5 Projected Cash Flow.............................................................................................................................18 Table: Cash Flow....................................................................................................................................18 Chart: Cash..............................................................................................................................................19 7.6 Projected Balance Sheet........................................................................................................................20 Table: Balance Sheet...............................................................................................................................20 ..................................................................................................................................................................... 20 7.7 Business Ratios.....................................................................................................................................21 Table: Ratios...........................................................................................................................................21 Table: Sales Forecast.........................................................................................................................................1 ........................................................................................................................................................................... 1 Table: Personnel................................................................................................................................................ 2 ........................................................................................................................................................................... 2 Table: Profit and Loss.......................................................................................................................................3 ........................................................................................................................................................................... 3 Table: Cash Flow..............................................................................................................................................4 Table: Balance Sheet.........................................................................................................................................5 ........................................................................................................................................................................... 5 Table: General Assumptions.............................................................................................................................6
4 Moons Pizzeria
1.0 Executive Summary The following plan is based on years of experience, is highly focused and promises to follow a path of prosperity. It is based on conservative sales figures, and actual sales may be higher. The projections contained herein are authentic and will be used as the budget for the business. 4 Moons Pizzeria will show a profit almost immediately, and will increase sales and profits each year thereafter. 1.1 Objectives The objective is to lease a site at 555 West Blue Plum Lane. We will need to remodel the interior according to the Franchisor's design. We plan to duplicate and massage the successful formula used by Franchisor. We will use our own personal strategies and skills to create our own success in our 4 Moons Pizzeria. We plan to train our crew to ensure outstanding results in quality food and customer service. Our objectives are as follows. • • • • • • • •
Be the first 4 Moons Pizzeria in Nevada Provide the highest quality product, duplicating Franchisor's successful pizzerias in Oregon Give top notch service in a quick and efficient manner Keep our menu simple to maintain low food cost Maintain the competitive, fast-casual dining at the mid-range price point Use marketing strategies to build volume quickly First year sales over $677,000 with a 6% growth yearly Maintain and expand an outstanding reputation as being the best neighborhood pizzeria
1.2 Mission 4 Moons Pizzeria exists for the purpose of generating sales and profit. Because we are a service business, we will also exist to serve our customers. These two reasons for our existence are
4 Moons Pizzeria
1.3 Keys to Success Our policy of being operating managing members is to make sure we pass by every table to greet, visit with, or at least send a smile to our guests. We will visit any table or answer to any phone call that has feedback, positive or negative. We will use every means available to satisfy our customers. We will be committed to the success and happiness of our staff. We will be committed to providing quality food and beverage at all times. We will consistently follow the franchisor's proven methods.
Chart: Highlights
Highlights $800,000 $700,000 $600,000 $500,000
Sales
$400,000
Gross Margin
4 Moons Pizzeria
2.1 Company Ownership We are an LLC, limited liability company, with four managing owners holding an equal share (25%) and interest in the franchise. •
•
•
•
Carol Mittani: General Managing Owner - Hands-on management of all daily restaurant and company operations. Steve Solutrian : Vice Managing Owner / Sales and restaurant operations. Hands-on management of daily operations and sales trends. Diane Solutrian : Vice Managing Owner / All office procedures. Hands-on management of daily operations. Rikard Mittani: Vice Managing Owner / Marketing and future finances and investments. Hands-on management of daily operations.
2.2 Start-up Summary We hope to take advantage of an existing str ucture located at 555 West Blue Plum Lane, at Lakeside Center. It is 2,828 square feet. We will remodel according to the Franchisor's designs to make our concept both visually and functionally suitable. Construction is estimated at $214,630 - see attached "Franchisor's Construction Cost Sheet" for item breakdown.* Start-up cash on hand is estimated for 3 months working capital, inventory, labor and rent. Short-term assets include phone equipment, smallwares, booths, chairs, tables, pendants, sconces, and lighting.
4 Moons Pizzeria
Chart: Start-up
Start-up
$320,000 $280,000 $240,000 $200,000 $160,000 $120,000 $80,000 $40,000 $0 Expenses
Table: Start-up
Start-up
Requirements Start-up Expenses
Assets
Investment
Loans
4 Moons Pizzeria
3.0 Services 4 Moons Pizzerias are comfortable and inviting. We are a fast-casual operation with dine in, take-out, and delivery. The decor and theme are centered around the cutting edge open kitchen with brick arches and distinctive lighting. Our energy and atmosphere will appeal to families, groups, and schools. The real power and energy of the pizzeria will come from the attentive and courteous service provided by our managers and staff. Our fresh menu will be prepared by our motivated kitchen team, and carefully orchestrated to provide the best service to our customers who are our priority. We will have at least one manager on duty at all times. Our hours are Sunday thru Thursday 11 am. to 10 pm. Friday and Saturday 11 am. to 11 pm. Take out available during store hours. Delivery hours are 4 pm to closing everyday we are open. We will offer delivery all day on Saturday and Sunday and some holidays. 4.0 Market Analysis Summary Ohno is one of the fastest growing cities in America with Nevada being voted the best small business state in the country. Ohno is a community diverse in the arts a nd culture. We have a strong labor market, low taxes, affordable housing, and natural amenities making Ohno an attractive place to live and do business. The greater Ohno metropolitan area population has grown one third through the last decade and is projected to grow 11.4% in the next five years. The median age is 36 years old with household incomes averaging $65,895. With a strong l ocal economy we have a population with disposable cash for dining and entertainment. According to the Nevada Restaurant Association, Nevada restaurants are expected to lead the nation in sales growth at 7.6%. Nevada is also the fastest growing state in the union.
4 Moons Pizzeria
In this area we have some of the best schools. 4 Moons Pizzerias provides support for local area school groups and sports teams, as well as local church groups. We will be involved through providing sponsorships, discounts, and donations. Table: Market Analysis
Market Analysis
Year 1 Potential Customers Ages 0-19 (preferred fast food) Ages 20-54 (w/disposable cash) Over 55 Total
Year 2
Year 3
Year 4
Year 5
Growth
CAGR
4%
30,426
31,643
32,909
34,225
35,594
4.00%
4%
61,583
64,046
66,608
69,272
72,043
4.00%
3% 3.87%
26,775 118,784
27,685 123,374
28,626 128,143
29,599 133,096
30,605 138,242
3.40% 3.87%
Chart: Market Analysis (Pie)
Market Analysis (Pie)
Ages 0-19 (preferred fast food) Ages 20-54 (w/disposable cash
4 Moons Pizzeria
4.3 Service Business Analysis Pizza Statistics: • • • • • • •
Represent 17% of all restaurants. Americans eat approximately 100 acres of pizza a day. Pizza is a $32+ billion per year industry with continuing overall restaurant growth. Accounts for 10% of all food service sales. 93% of Americans eat pizza at least once a month. 67% of Americans order pizza for a casual evening with friends. Children between 3-11 prefer pizza over all other food groups.
4.3.1 Competition and Buying Patterns 4 Moons Pizzerias are competitive in the mid price point, fast casual dining market. With an average ticket of $17.00, we are priced above Hoopla Take-and-Bake and Damyno but below Squaretable. Quality, Quick, and Simple is the goal of 4 Moons Pizzerias. The customers are provided with the highest quality product. Store design provides a warm and friendly environment for all. 5.0 Strategy and Implementation Summary Emphasize service We will differentiate ourselves with SERVICE! We will establish our business offering as a clear and viable alternative for our target market. Build a relationship-oriented business Build long-term relationships with customers, not single-visit deals. Become their restaurant and destination of choice. Make them understand the value of the relationship.
4 Moons Pizzeria
5.2 Marketing Strategy We will start our marketing during the construction phase. Our main factor in success is simply that a person can enjoy a good pizza, fast service, and friendly familiar faces. We will all be involved in Sales and Marketing. We will gather information about the neighborhoods, use our POS System to track top sellers and gather a customer base for marketing offers. • • • • • • • • •
Kids school tours Gift Certificate Program Phone book advertisement Coupons Door hangers Sporting events for schools and group events Eye catching signage Excellent service and high quality food Word of mouth
5.3 Sales Strategy The marketing strategy discussed previously in this business plan will generate the desired sales. We require our staff to have a thorough and comprehensive understanding of the menus, ingredients and methods of preparation of all of our foods. We train our staff to always describe and recommend items, even to regular customers, and to always up-sell. The key to our employee's success in up-selling is the realization that it almost always brings in better tips because the checks are higher.
4 Moons Pizzeria
Table: Sales Forecast
Sales Forecast
Year 1
Year 2
Year 3
Total Restaurant Sales Other Total Sales
$677,297 $0 $677,297
$717,935 $0 $717,935
$761,011 $0 $761,011
Direct Cost of Sales Cost of Sales Other
Year 1 $135,461 $0 $135,461
Year 2 $143,590 $0 $143,590
Year 3 $152,206 $0 $152,206
Sales
Subtotal Direct Cost of Sales
Chart: Sales Monthly
Sales Monthly $60,000 $50,000 $40,000
Total Restaurant Sales $30,000 $20,000
Other
4 Moons Pizzeria
Chart: Sales by Year
Sales by Year $800,000 $700,000 $600,000 $500,000
Total Restaurant Sales
$400,000
Other
$300,000 $200,000 $100,000 $0 Year 1
Year 2
Year 3
6.0 Management Summary 4 Moons consists of four members with an equal concern in our franchise. We will owner operate our pizzeria daily. We will keep our starting salaries low to keep labor costs down. Each member contributes with a generalized assignment as well as being trained in all restaurant operations, including making pizza, working the counter, and delivering pizza. We are an extremely experienced, and well balanced team.
4 Moons Pizzeria
6.1 Personnel Plan We plan to have a part-time staff to include pizza makers, delivery drivers, and counter persons. We are planning on a staff of 10 employees to come on at peak business levels. Our first month will have a higher labor rate due to training, pre-opening preparation and grand opening labor. We have forecasted labor at 18% of gross sales. We will strive to keep our payroll at 18% or lower. Table: Personnel
Personnel Plan
Year 1
Year 2
Year 3
Wages Other Total People
$126,738 $0 14
$129,228 $0 14
$136,982 $0 14
Total Payroll
$126,738
$129,228
$136,982
4 Moons Pizzeria
7.0 Financial Plan Our main concerns will be aggressive time management to keep labor costs under control. Proper purchasing, food preparation and handling, and control of cheese consumption to keep food costs down. Growth will be sustained through increased sales. 7.1 Start-up Funding Our start-up figures are approximate costs for start-up of a 4 Moons Pizzeria franchise as prescribed by the Franchisor. 4 Moons has $160,000 initial investment, $25,000 of which will cover the franchise fee. Our estimated start up is $505,000. We are seeking an SBA Loan in the amount of $345,000 (see Long term liability line). Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required
$266,207 $238,793 $505,000
Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets
$151,507 $87,286 $0 $87,286 $238,793
4 Moons Pizzeria
7.2 Important Assumptions We are projecting profit based on the performance of other franchises and our own judgement based on the following: •
•
•
•
We assume by using marketing strategies, sales strategies, good customer relationships, fresh food, and good management practices, we will succeed. In order to meet the sales goal in the first year, open for at least 360 days, we would have to sell 111 checks each day with a $17 per check average. Our sales each day should reach an minimum average of $1,881.43. Our forecast is based on an average. Some months will increase and others decrease. We do not predict any major decreases in sales, as Ohno area restaurants are busy all year round.
Table: General Assumptions
General Assumptions
Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other
Year 1
Year 2
Year 3
1 0.00% 7.00% 30.00% 0
2 0.00% 7.00% 30.00% 0
3 0.00% 7.00% 30.00% 0
4 Moons Pizzeria
7.3 Break-even Analysis Break-even based on fixed costs including rent, insurance, maintenance, investor note, and pre-opening amortization. Additionally, controllables such as service labor, kitchen labor, management labor, excess rent, advertising, royalty, and legal/professional fees are included. Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$22,254
Assumptions: Average Percent Variable Cost
20% $17,804
Estimated Monthly Fixed Cost
Chart: Break-even Analysis
Break-even Analysis $20,000 $16,000 $12,000 $8,000 $4,000 $0
4 Moons Pizzeria
7.4 Projected Profit and Loss As the Profit and Loss table shows, the company expects to continue its steady growth in profitability over the next three years. We predicted a conservative 6% per year increase in sales. The first month may have higher payroll due to employee training and restaurant set up. Our operating expenses include rent at $4,242 estimate per month, royalty fees of 5% of gross sales, equipment rental and repair, utilities projected at 11% of gross sales, administrative charges including PC charges, cleaning supplies, payroll charges, and office supplies. Marketing fees are 4% of gross sales per month.
Chart: Profit Monthly
Profit Monthly $20,000 $18,000 $16,000 $14,000 $12,000 $10,000
4 Moons Pizzeria
Chart: Profit Yearly
Profit Yearly
$240,000 $210,000 $180,000 $150,000 $120,000 $90,000 $60,000 $30,000 $0 Year 1
Year 2
Chart: Gross Margin Monthly
Gross Margin Monthly $50,000 $45,000
Year 3
4 Moons Pizzeria
Chart: Gross Margin Yearly
Gross Margin Yearly
$600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 Year 1
Year 2
Year 3
Table: Profit and Loss
Pro Forma Profit and Loss
Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales
Year 1
Year 2
Year 3
$677,297 $135,461 $0 $135,461
$717,935 $143,590 $0 $143,590
$761,011 $152,206 $0 $152,206
4 Moons Pizzeria
7.5 Projected Cash Flow The cash flow depends on assumptions for good daily operational management, good traffic counts in the restaurant, inventory turnover, payment days, and accounts receivable management. We do not predict any new financing until we open our second franchise. Principal amounts are based on a loan of $345,000 with a 10 year SBA Loan at 7% interest. Table: Cash Flow
Pro Forma Cash Flow
Year 1
Year 2
Year 3
$677,297 $677,297
$717,935 $717,935
$761,011 $761,011
$0 $0 $0 $0 $0 $0 $0 $677,297
$0 $0 $0 $0 $0 $0 $0 $717,935
$0 $0 $0 $0 $0 $0 $0 $761,011
Year 1
Year 2
Year 3
Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending
$126 738
$129 228
$136 982
4 Moons Pizzeria
Chart: Cash
Cash $320,000 $280,000 $240,000 $200,000
Net Cash Flow
$160,000
Cash Balance
$120,000 $80,000 $40,000 $0 1 h t n o M
2 h t n o M
3 h t n o M
4 h t n o M
5 h t n o M
6 h t n o M
7 h t n o M
8 h t n o M
9 h t n o M
0 1 h t n o M
1 1 h t n o M
2 1 h t n o M
4 Moons Pizzeria
7.6 Projected Balance Sheet The balance sheet is quite solid. We do not project any real trouble meeting our debt obligations--as long as we can achieve our specific sales objectives. Table: Balance Sheet
Pro Forma Balance Sheet
Year 1
Year 2
Year 3
$338,382 $6,044 $41,775 $386,201
$575,931 $6,471 $41,775 $624,177
$831,525 $6,859 $41,775 $880,159
$99,732 $30,000 $69,732 $455,933
$99,732 $60,000 $39,732 $663,909
$99,732 $90,000 $9,732 $889,891
Year 1
Year 2
Year 3
$26,338 $0 $0 $26,338
$26,730 $0 $0 $26,730
$28,072 $0 $0 $28,072
$322,424 $348 762
$296,092 $322 822
$267,855 $295 927
Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities
4 Moons Pizzeria
7.7 Business Ratios The company's projected business ratios are provided in the following table. The final column, Industry Profile, shows ratios for the "Pizza Restaurant Industry", as determined by the Standard Industry Classification 5812.0600 with annual sales of $500,000 to $999,000. Table: Ratios
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
n.a.
6.00%
6.00%
5.24%
Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets
1.33% 9.16% 84.71% 15.29% 100.00%
0.97% 6.29% 94.02% 5.98% 100.00%
0.77% 4.69% 98.91% 1.09% 100.00%
4.34% 35.11% 43.74% 56.26% 100.00%
Current Liabilities Long-term Liabilities Total Liabilities Net Worth
5.78% 70.72% 76.49% 23.51%
4.03% 44.60% 48.62% 51.38%
3.15% 30.10% 33.25% 66.75%
18.93% 25.48% 44.41% 55.59%
100.00% 80.00% 48.50% 4.43% 48.46%
100.00% 80.00% 47.42% 0.00% 49.56%
100.00% 80.00% 46.77% 0.00% 50.06%
100.00% 61.91% 39.08% 2.55% 1.38%
14.66
23.35
31.35
1.14
Sales Growth Percent of Total Assets
Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current
4 Moons Pizzeria
Dividend Payout
0.00
0.00
0.00
n.a
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
$57,500 $0 $57,500
$57,788 $0 $57,788
$58,076 $0 $58,076
$58,366 $0 $58,366
$58,658 $0 $58,658
$58,952 $0 $58,952
$59,246 $0 $59,246
$59,542 $0 $59,542
$59,840 $0 $59,840
$60,139 $0 $60,139
$60,440 $0 $60,440
Sales Total Restaurant Sales Other Total Sales
0% 0%
$28,750 $0 $28,750
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
Cost of Sales
$5,750
$ 11,500
$ 11,557
$ 11,616
$ 11,673
$11,732
$ 11,791
$ 11,849
$ 11,909
$ 11,968
$ 12,028
$12,088
$0
$0
$0
$0
$0
$0
$5,750
$11,500
$11,557
$11,616
$11,673
$11,732
Other Subtotal Direct Cost of Sales
$0 $11,791
$0 $11,849
$0 $11,909
$0 $11,968
$0 $12,028
$0 $12,088
Page 1
Appendix
Table: Personnel
Personnel Plan Month 1 Wages Other Total People
Total Payroll
18% 0%
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$10,000 $0 14
$10,350 $0 14
$10,402 $0 14
$10,454 $0 14
$10,506 $0 14
$10,558 $0 14
$10,611 $0 14
$10,664 $0 14
$10,718 $0 14
$10,771 $0 14
$10,825 $0 14
$10,879 $0 14
$10,000
$10,350
$10,402
$10,454
$10,506
$10,558
$10,611
$10,664
$10,718
$10,771
$10,825
$10,879
Page 2
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Month 1 Sales D ir ec t C os t of Sa le s Other Costs of Sales Total Cost of Sales
Gross Margin Gross Margin %
Month 10
Month 11
$28,750
$57,500
Month 2
$57,788
Month 3
$58,076
Month 4
$58,366
Month 5
$58,658
Month 6
$58,952
Month 7
$59,246
$59,542
$59,840
$60,139
$60,440
$ 5, 750
$ 11 ,50 0
$ 11 ,5 57
$ 11 ,6 16
$ 11 ,6 73
$ 11 ,7 32
$ 11 ,7 91
$ 11 ,8 49
$ 11 ,9 09
$ 11 ,96 8
$ 12 ,0 28
$ 12 ,0 88
$0
Month 8
$0
Month 9
$0
$0
$0
Month 12
$0
$0
$0
$0
$0
$0
$5,750
$11,500
$11,557
$11,616
$11,673
$11,732
$11,791
$11,849
$11,909
$11,968
$12,028
$12,088
$0
$23,000
$ 46,000
$ 46,231
$ 46,460
$ 46,693
$ 46,926
$ 47,161
$ 47,397
$ 47,633
$ 47,872
$ 48,111
$ 48,352
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
80.00%
$10,000
$10,350
$10,402
$10,454
$10,506
$10,558
$10,611
$10,664
$10,718
$10,771
$10,825
$10,879
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$0 $2,500
$4,242
$4,242
$4,242
Expenses Payroll Marketing/Promotion Depreciation
4%
Rent Royalty fees Equip rent/repair Utilities Admin charges
Total Operating Expenses
Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred
Net Profit Net Profit/Sales
$4,242
$4,242
$4,242
$4,242
$4,242
$4,242
$4,242
$4,242
$4,242
5%
$0 $250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
$0 $ 250
11%
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$0 $250
$17,242
$17,592
$17,644
$17,696
$17,748
$17,800
$17,853
$17,906
$17,960
$18,013
$18,067
$18,121
$5,758
$28,408
$28,587
$28,764
$28,945
$29,126
$29,308
$29,491
$29,673
$29,859
$30,044
$30,231 $32,731
$8,258
$30,908
$31,087
$31,264
$31,445
$31,626
$31,808
$31,991
$32,173
$32,359
$32,544
$2,013
$2,001
$1,989
$1,977
$1,966
$1,954
$1,942
$1,930
$1,918
$1,905
$1,893
$1,881
$1,124
$7,922
$7,979
$8,036
$8,094
$8,152
$8,210
$8,268
$8,327
$8,386
$8,445
$8,505
$2,622
$18,485
$18,619
$18,751
$18,886
$19,020
$19,156
$19,293
$19,429
$19,567
$19,706
$19,845
9.12%
32.15%
32.22%
32.29%
32.36%
32.43%
32.49%
32.56%
32.63%
32.70%
32.77%
32.83%
Page 3
Appendix
Table: Cash Flow
Pro Forma Cash Flow Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash Received
Cash from Operations Cash Sales
$28,750
$57,500
$57,788
$58,076
$58,366
$58,658
$58,952
$59,246
$59,542
$59,840
$60,139
$60,440
Subtotal Cash from Operations
$28,750
$57,500
$57,788
$58,076
$58,366
$58,658
$58,952
$59,246
$59,542
$59,840
$60,139
$60,440
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0 $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing
0.00%
New Other Liabilities (interestfree) 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
$28,750
$57,500
$ 57,788
$58,076
$58,366
$58,658
Subtot al Cas h Re ceiv ed
Expenditures
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
$58,952
Month 7
$59,2 46
Month 8
$59,542
Month 9
$0
$59,840
$60,1 39
$60,440
Month 10
Month 11
Month 12
$10,879
Expenditures from Operations Cash Spending
$10,000
$10,350
$10,402
$10,454
$10,506
$10,558
$10,611
$10,664
$10,718
$10,771
$10,825
$263
$8,538
$27,619
$26,300
$26,404
$26,506
$26,612
$26,717
$26,822
$26,929
$27,034
$27,142
$10,263
$18,888
$38,021
$36,753
$36,910
$37,065
$37,224
$37,382
$37,539
$37,700
$37,860
$38,021
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Long-term Assets Dividends
Bill Payments Subtotal Spent on Operations
Additional Cash Spent
Subtot al Cas h Spe nt
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,993
$2,005
$2,017
$2,028
$2,040
$2,052
$2,064
$2,076
$2,088
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$10,263
$ 20,881
$ 40,026
$ 38,770
$ 38,938
$39,105
$39,276
$ 39, 446
$39,615
$39,788
$0 $2,100
$39,960
$0 $2,113
$0 $40,134
Page 4
Appendix Net Cash Flow
$18,487
$36,619
$ 17,762
$19,306
$19,428
$19,553
$19,676
$19,800
$19,927
$20,052
$20,179
$ 20,306
Cash Balance
$105,773
$142,393
$160,154
$179,460
$198,888
$218,441
$238,117
$257,918
$277,845
$297,897
$318,076
$338,382
Table: Balance Sheet
Pro Forma Balance Sheet Month 1 Assets
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Starting Balances
Current Assets Cas h Inventory Other Current Assets Total Current Assets
$87,286 $10,000 $41,775 $139,061
$105,773 $4,250 $41,775 $151,798
$142 ,393 $5,750 $41,775 $189,918
$160,1 54 $5,779 $41,775 $207,708
$179,460 $5,808 $41,775 $227,043
$198,888 $5,837 $41,775 $246,499
$218,441 $5,866 $41,775 $266,082
$238,117 $5,896 $41,775 $285,788
$257,918 $5,925 $41,775 $305,617
$277,845 $5,955 $41,775 $325,574
$2 97,897 $5,984 $41,775 $345,656
$318,076 $6,014 $41,775 $365,865
$338,38 2 $6,044 $41,775 $386,201
$99,732 $0 $99,732 $238,793
$99,732 $2,500 $97,232 $249,030
$99,732 $5,000 $94,732 $284,650
$99,732 $7,500 $92,232 $299,940
$99,732 $10,000 $89,732 $316,775
$99,732 $12,500 $87,232 $333,731
$99,732 $15,000 $84,732 $350,814
$99,732 $17,500 $82,232 $368,020
$99,732 $20,000 $79,732 $385,349
$99,732 $22,500 $77,232 $402,806
$99,732 $25,000 $74,732 $420,388
$99,732 $27,500 $72,232 $438,097
$99,732 $30,000 $69,732 $455,933
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$ 25,924 $0 $0 $25,924
$ 26,028 $0 $0 $26,028
$ 26,130 $0 $0 $26,130
$ 26,234 $0 $0 $26,234
$ 26,338 $0 $0 $26,338
Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital
Current Liabilities Acc ou nts P ayabl e Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth
$0 $0 $0 $0
$7,616 $0 $0 $7,616
$ 26 ,743 $0 $0 $26,743
$ 25,420 $0 $0 $25,420
$ 25,521 $0 $0 $25,521
$ 25,62 0 $0 $0 $25,620
$25,722 $0 $0 $25,722
$ 25,824 $0 $0 $25,824
$345,000 $345,000
$345,000 $352,616
$343,007 $369,750
$341,002 $366,422
$338,985 $364,506
$336,957 $362,577
$334,917 $360,639
$332,865 $358,689
$160,000 ($266,207)
$160,000 ($266,20 7) $2,622 ($103,58 5) $249,030
$160,000 ($266,20 7) $21,107 ( $8 5, 10 0)
$160,000 ($266,20 7) $39,725 ( $6 6, 48 2)
$160,000 ($266,20 7) $ 58,476 ( $4 7, 731 )
$160,000 ($266,20 7) $ 77,362 ( $28 ,8 45)
$160,000 ($266,20 7) $ 96,382 ( $9, 82 5)
$160,000 $160,000 $160,000 $160,000 $160,000 $160,000 ($266,20 ($266,20 ($266,20 ($266,20 ($266,20 ($266,20 7) 7) 7) 7) 7) 7) $115,538 $134,831 $154,260 $173,828 $193,533 $213,378 $ 9, 331 $ 28 ,6 24 $ 48 ,0 53 $ 67 ,6 21 $ 87 ,32 6 $1 07 ,1 71
$284,650
$299,940
$316,775
$333,731
$350,814
$368,020
$385,349
$402,806
$420,388
$ 9, 331
$ 28 ,6 24
$ 48 ,0 53
$ 67 ,6 21
$0 ($106,207) $238,793 ( $1 06 ,2 07 )
( $1 03 ,58 5)
( $8 5, 10 0)
( $6 6, 48 2)
( $4 7, 731 )
( $28 ,8 45)
( $9, 82 5)
$330,801 $356,725
$328,725 $354,753
$326,637 $352,767
$324,537 $350,771
$438,097 $ 87 ,32 6
$322,424 $348,762
$455,933 $1 07 ,1 71
Page 5
