DHIA BAKERY

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 Table of Contents

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

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

3.0 Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3 Industry Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.2.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.3 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

6.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

6.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

7.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

7.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
7.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
7.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
7.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
7.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
7.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
 DHIA BAKERY

1.0 Executive Summary

Executive Summary
DHIA Bakery is a new organic bakery specializing in gluten, wheat and dairy free products. Within
the last three years there has been significant increase in demand for these bakery products. This
can be explained to a large degree by the fact that up until recently Malaysia had food allergies
that have been undiagnosed. It has been only in the last few years that medical doctors have
begun to diagnosis food allergies correctly. What was once an unknown problem that affected so
many people with no recourse has become a manageable ailment that is easily dealt with through
modification of diet. Besides, most of student in Malaysia made PTPTN money and need to save
their money virtually. So, DHIA Bakery has served exactly low price with use organic goods to
make non allergies and cheaper product. This is very positive for both those people that are
needed as well as bakeries such as DHIA Bakery that specialize in these products.

The Products
DHIA Bakery offers a wide range of exciting products. The first group is spelt breads, muffins, and
pastries. Spelt is used as there are far fewer people that are allergic to this grain. Yeast allergies
are also common and DHIA Bakery offers a menu of yeast free breads. Dairy free muffins and
pastries are offered for vegans. Lastly, egg free breads, muffins, and pastries are offered in order
to make goods price lower than other companies virtually for far the most student group.

Customers
DHIA Bakery will focus on three distinct customer segments. The first group is the Allergy group.
This segment is growing at 15% a year with 15,000 potential customers. The second niche is the
Student group. This segment is also growing at 15% with 15000 potential people. The last group is
the Dieters group. This segment is typically making modifications to their diet based on their desire
to lose weight. This niche also is growing at 15% with 2000 possible customers.

Management Team
Recognizing the importance of human capital, DHIA Bakery has assembled a strong management
team. The team is led by Mr. Dinie. Mr. Dinie comes to DHIA Bakery with 10 years of baking
experience. In addition to his industry specific experience, Mr Dinie has had 2 years of
management experience. Ms. Anis brings financial skills to DHIA Bakery after a 15 year CPA
career. Ms. Ikin will lead the marketing efforts having participated in her own PR firm. Lastly, Mr.
Hairi will be on the team as an assistant baker with over five years of experience.

DHIA Bakery is an exciting opportunity that combines, fresh baked goods with spelt, yeast free,
dairy free, and egg free products, addressing the recent need for these new products. Demand for
these products is expected to grow exponentially as medical doctors become more and more aware
of food allergies Malaysia are afflicted with. Profitability is forecasted to occur by month three.
Through a combination of a strong management team, a solid business model, and exciting,
market demanded products will allow DHIA Bakery to quickly gain market penetration and cash
richness.
 DHIA BAKERY

Highlights

$700,000

$600,000

$500,000

$400,000 Sales
Gross Margin
$300,000
Net Profit

$200,000

$100,000

$0
2010 2011 2012

1.1 Objectives

1. To establish a working storefront for DHIA bakery.

2. To develop the strong presence in the community needed to support sales goals.
3. To develop a full menu by the end of the second quarter.

1.2 Mission

DHIA Bakery aims to be a cornerstone in the community creating a neighborhood atmosphere

where customers feel comfortable and become instant regulars. We are sensitive to the often
over-looked population of allergy sufferers and cater to their needs for healthy, delicious
baked goods. We seek fair and responsible profit, enough to keep the company financially
healthy for the long term and to fairly compensate owners and investors for their money and
risk.

2.0 Company Summary

DHIA Bakery will be located in Kuala Terengganu town at 1372 Lorong Haji Batu Buruk in a
historical and islamic building. This town district is a very popular destination because of the
historical and islamic architecture for weekenders and tourists. It is also located on a way to
go to Taman Tamadun Islam. It is also a prime location for all the employees of the
surrounding downtown businesses. The bakery sells non-wheat and other health specific
breads, sweets and pastries to the surrounding community every Sunday through Friday.
 DHIA BAKERY

2.1 Company Ownership

Currently DHIA Bakery is a sole proprietorship owned by Mr. Dinie. Eventually, as the
company becomes established, DHIA Bakery and Cake will apply to be incorporated.

2.2 Start-up Summary

The primary expense to establish the DHIA Bakery is the mortgage loan estimated at
$50,000 to purchase the vacant space on 1372 Lorong Haji Batu Buruk street. The building
was previously used as a bakery and we plan to buy the used equipment along with the space.
This cost is also calculated into the loan estimate. Mr. Dinie intends to invest $8000 of his
savings to cover the other cost of start-up.

These costs include:

• Advertising brochures.
• Bakery ingredients.
• Insurance.(sosco)
• Bakery accessories, i.e. paper bags, cartons, etc.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $2,000
Stationery etc. $500
Brochures $100
Consultants $2,500
Insurance $950
Mortgage $500
Research and development $0
Bakery Ingredients $9,450
Other $1,000
Total Start-up Expenses $17,000

Start-up Assets
Cash Required $8,000
Other Current Assets $0
Long-term Assets $50,000
Total Assets $58,000

Total Requirements $75,000

 DHIA BAKERY

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $17,000
Start-up Assets to Fund $58,000
Total Funding Required $75,000

Assets
Non-cash Assets from Start-up $50,000
Cash Requirements from Start-up $8,000
Additional Cash Raised $0
Cash Balance on Starting Date $8,000
Total Assets $58,000

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $50,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $9,000
Total Liabilities $59,000

Capital

Planned Investment
Untitled $0
Mr. Dinie $16,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $16,000

Loss at Start-up (Start-up Expenses) ($17,000)

Total Capital ($1,000)

Total Capital and Liabilities $58,000

Total Funding $75,000

Start-up

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
Expenses Assets Investment Loans
 DHIA BAKERY

3.0 Products

DHIA Bakery provides non-gluten baked goods and pastries to diet-conscious and wheat-
allergic consumers. Special considerations are made for all common food allergies such as
dairy, yeast, wheat, and eggs.

Example of goods:

'Spelt' breads muffins and pastries

Spelt flour is the most common wheat-alternative flour as it has the same characteristics as wheat
which provides similar taste, consistency and behaviors creating goods that are just as good as any
wheat baked good.

'Yeast-free' breads
Many people have an allergy to yeast, or have been warned by their doctors not to eat it. We
provide a line of yeast-free breads

'Dairy-free' muffins and pastries

Most breads do not require any dairy products, so they are not a consideration. Muffins and
pastries most often require butter. To avoid this, we use a soy substitute.

'Egg-free 'breads muffins and pastries

Eggs are most common in muffins and pastries. Applesauce can be used as a substitute as it
provides the same amount of moisture that is required.

A lot of flavour based on new outside market

Every month, the new flavour will be produced based on feedback of customers and other country
desired.

4.0 Market Analysis Summary

Our target market includes people who are health conscious, have common food allergies and
want low price. This is a niche market since most bakeries do not cater to these needs with
the exception of high-fiber diets. Besides, we have side target market includes people who like
different flavor variety and unique decorating.
 DHIA BAKERY

4.1 Market Segmentation

Our target market consists of four groups:

The Allergy Group

According to Health Magazine, one out of five people suffer from a common food allergy,
however many bakeries do not cater to their needs.

The Doctor Diet Group

For health reasons, many people are warned off certain foods by their doctors because of high
cholesterol and blood pressure. Currently the main killer in the Kelantan and Terengganu is
heart disease according the Malaysian Heart Association. Many people nowadays aged 50+ are
going on special diets to prevent heart disease.

The Diet Craze Group

According to Magazine, the year 2006 saw 20 new diet fads that discouraged certain foods
such as wheat and dairy. The best selling book on the New Straits Time list for health was the
" Blood Type Diet" which encourages readers to eat only non-gluten flours such as spelt, and to
avoid dairy. While this target market is quite large, it is ever fluctuating since most people
have temporary conscious diet.

Student around the town

Most of students do not have enough time to manage their bundle work. So bread is one of
the alternative to save their time as they can do their work simultaneously. Thus a lot of
flavour will be made over time on time to fulfill the student desired. Furthermore, most
university students want save their PTPTN money rather buy DHIA bread which serve more
low price than the other bread and food services.

Market Analysis (Pie)

The Allergy Group

The Doctor Group
Student
The Dieters Group
 DHIA BAKERY

Table: Market Analysis

Market Analysis
2010 2011 2012 2013 2014
Potential Customers Growth CAGR
The Allergy Group 15% 15,000 17,500 20,087 23,100 26,566 15.36%
The Doctor Group 15% 2,000 2,300 2,645 3,041 3,498 15.00%
Student 15% 15,000 17,500 20,087 23,101 26,566 15.36%
The Dieters Group 15% 2,000 2,300 2,645 3,041 3,498 15.00%
Total 15.32% 34,000 39,600 45,464 52,283 60,128 15.32%

4.2 Target Market Segment Strategy

In our target market, we will mainly focus on the "allergy group" and "student group" since
they are the most prevalent and steady of customers. We expect that the "doctor diet group"
and the '"diet craze" group will make up a smaller portion of our customers. We have not listed
"regular customers" as a target group since the customers who do not fit into any of our
groups are too varied to segment. We are specifically filling the needs of the "allergy
group" and "student group" so we expect the most business from this group.

4.3 Industry Analysis

DHIA bakery competes in the Food Services Industry. In addition to competing with other
organic and non-wheat bakeries, it competes with all restaurants, delis, bakeries and
supermarkets for a share of its customer’s food ringgits. DHIA bakery is most concerned with
competitors who differentiate their products and services with a healthy, organic focus. Because
this group is so large, DHIA bakery has chosen to limit its analysis to other gluten-free bakeries
and flavour varieties.

4.3.1 Competition and Buying Patterns

Currently there are two bakeries in town that provide wheat goods.

Hawaii Bread Company

Strengths: Makes wheat bread, muffins and cookies everyday. Well established bakery in
town. Sells breads in local grocery stores. It has interesting packing product thus can
make attraction over consumers.

Weaknesses: Does not provide a wide selection of non-wheat goods. Furthermore the texture
and flavor of their wheat goods is very dense and flavorless. They use whole wheat bread
which makes a denser, crumby consistency bread. We use white spelt in our spelt breads and
other goods which has a texture and flavor similar to wheat. Virtually, our spelt bread is good
bread for healthy and most allergy people.

Gardenia Bread Company

Strengths: Makes wheat bread, muffins and brownies every day. Will make custom-ordered
non gluten cakes and bread. It also has unique packing product as attract children and
student consumer.

Weaknesses: Does not produce a wide selection or large quantity of non-wheat goods, almost
produce wheat bread. Their main focus is wheat goods. Besides, it serves high price to
customer
 DHIA BAKERY

5.0 Strategy and Implementation Summary

Our strategy focuses on serving a niche market with quality goods. We are determined to
become a part of the community - an establishment that becomes as much of the community
as a local grocery store. To achieve these goals, we will provide the following:

• Friendly, neighborhood-feel atmosphere.

• Quality baked goods for everyone to enjoy at a fair price.
• Special diet menus in relation to the advice of local healthcare providers.

5.1 Competitive Edge

Our competitive edge is our quality of goods. We use only organic flours of the highest quality
that create incredible non-gluten goods that can't be matched anywhere else in town. We also
focus mainly on non-gluten goods. The other bakeries in town focus on wheat goods and
sometimes, as an afterthought, use alternative flours.

5.2 Sales Strategy

Our strategy focuses on building a customer base by providing good customer experience.
With the addition of the cendol, ais kacang, juice blended and coffee bar in early spring, we
hope to have customers make the bakery their one-stop destination for breakfast and tea
break.

We would also like to work closely with local doctors and elder care homes to bring in
customers with health problems. We are already in negotiations with HSNZ administration to
insure referrals to the bakery for his patients. Furthermore, we also negotiated with
academic institution like UMT, UDM and school around Kuala Terengganu town.

5.2.1 Sales Forecast

Our sales forecast assumes the following changes:

• Bread sales in the summer months will be slightly higher since more people will be
having BBQs and picnics requiring items such as hamburger and hotdog buns.
• Bread and pastry sales will be higher in November and December because of the food-
oriented holidays.
• Coffee sales will be higher in winter months, and for summer months sales of sodas
and iced beverages will increase.
• Bread sales will be higher in July month because new arrival student enter in UDM and
UMT for new session. So more ordered will be make for orientation week.
 DHIA BAKERY

Sales Monthly

$60,000

$50,000

Breads
$40,000
Coffee/Beverages
burger bread
$30,000
hot dog bread
cake
$20,000
'mamak' bread

$10,000 Pastries/Sweets

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Sales by Year

$700,000

$600,000
Breads
$500,000
Coffee/Beverages
$400,000 burger bread
hot dog bread
$300,000
cake
$200,000 'mamak' bread
Pastries/Sweets
$100,000

$0
2010 2011 2012
 DHIA BAKERY

Table: Sales Forecast

Sales Forecast
2010 2011 2012
Sales
Breads $116,973 $125,500 $130,000
Coffee/Beverages $5,619 $6,000 $6,500
burger bread $136,179 $142,000 $145,000
hot dog bread $129,176 $130,500 $135,000
cake $12,395 $12,500 $13,000
'mamak' bread $108,255 $109,000 $110,000
Pastries/Sweets $71,144 $72,500 $73,000
Total Sales $579,741 $598,000 $612,500

Direct Cost of Sales 2010 2011 2012

Breads $83,889 $83,800 $84,000
Coffee/Beverages $2,922 $2,900 $3,200
mamak bread $72,192 $72,200 $73,000
hot dog bread $69,676 $69,900 $71,000
burger bread $72,756 $72,800 $73,000
cake $7,565 $7,600 $8,500
Pastries/Sweets $49,680 $50,000 $52,000
Subtotal Direct Cost of Sales $358,680 $359,200 $364,700
 DHIA BAKERY

5.3 Milestones

The table below displays the milestones that DHIA Bakery would like to accomplish in the first
three years. Emphasis in the first year will be on advertising to make the DHIA Bakery an
established business in town.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

First Advertising
Campaign 12/1/2001 3/1/2002 $5,000 Ms. Anis Marketing
Full-Service Coffee Bar
Integration 2/1/2002 2/28/2002 $5,000 Mr. Dinie Bakery
Establishing a Lunch
Menu 3/1/2002 3/30/2002 $1,000 Mr. Dinie Bakery
Outdoor Cafe Seating 5/1/2002 9/30/2002 $10,000 Mr. Dinie Bakery
Totals $21,000

Milestones

First Advertising Campaign

Full-Service Coffee Bar Integration

Establishing a Lunch Menu

Outdoor Cafe Seating

Dec Jan Feb Mar Apr May Jun Jul Aug Sep
 DHIA BAKERY

6.0 Management Summary

Mr. Dinie is the founder of DHIA Bakery. He brings to the bakery his experience as a baker
and as an entrepreneur. He has worked as a baker for over 10 years including two years as
an apprentice in a well-known Paris patisserie. As a teenager he helped his parents at the
family's general store, both in sales and marketing. For his last two years at his family's
store, he was the general employee manager. His duties at the bakery will include employee
hiring and training, head baker and store management.

Ms. Anis has run her own successful CPA consulting firm for 15 years. His duties will include the
bookkeeping, inventory management and stock fulfillment.

Ms. Ikin runs her own PR company and will be assisting the DHIA Bakery in its marketing
campaigns on a part-time basis.

Mr. Hairi has worked as a baker for over five years and will be the assistant baker. Her
responsibilities will also include the management of the bakery shopping list.

6.1 Personnel Plan

Once the bakery becomes established and the cash flow is steady, we would like to hire one
person for counter help and another assistant baker.

The table below illustrates the needs of the current employees, plus the integration of two
more employees within three months of operation. The new hirings will coincide with the
opening of a cendol,ais batu campur, juice blended menu and coffee bar which will most
certainly require more help.

Table: Personnel

Personnel Plan
2010 2011 2012
Mr. Dinie - Head Baker $21,600 $26,400 $29,040
Ms. Anis $18,000 $23,100 $25,410
Ms. Ikin - Part-time $6,000 $6,500 $7,000
Counter Help - Full Time $14,400 $19,800 $21,780
Assistant Baker - Part time $9,000 $9,900 $10,890
Mr. Hairi - Bookkeeper $15,600 $16,000 $16,000
Total People 6 6 6

Total Payroll $84,600 $101,700 $110,120

 DHIA BAKERY

7.0 Financial Plan

The following sections will outline important financial assumptions.

7.1 Important Assumptions

The current economic climate in the Malaysia appears to be on the brink of recession.
However, we do not believe that if the country does enter a recession that our business will be
unduly affected. Since our products are ones that help contribute to and maintain good health,
we believe that people will continue to buy our products over traditional wheat bread. We are
operating in a niche market, and in addition, the price of our breads and sweets although
slightly higher than traditional bakeries they are not positioned as expensive, luxury items.

Table: General Assumptions

General Assumptions
2010 2011 2012
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 8.50% 8.50% 8.50%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0
 DHIA BAKERY

7.2 Break-even Analysis

Our Break-Even Analysis includes running costs of production. These are fairly low since we
manufacture all of our goods at a low cost to us. Here are the items included in the average
percent variable cost:

• Manufacturing ingredients, i.e. flour, sugar, yeast and butter.

• Payroll.
• Mortgage.
• Utilities.
• Advertising.

The Break-Even Analysis as it appears below indicates that the break-even point will be
attainable each month.

Break-even Analysis

$15,000

$10,000

$5,000
$0
($5,000)

($10,000)
($15,000)
($20,000)

$0 $14,000 $28,000 $42,000 $56,000 $70,000

Monthly break-even point

Break-even point = where line intersects with 0

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $42,988

Assumptions:
Average Percent Variable Cost 62%
Estimated Monthly Fixed Cost $16,392
 DHIA BAKERY

7.3 Projected Profit and Loss

The following table shows the projected profit and loss for DHIA Bakery.

Table: Profit and Loss

Pro Forma Profit and Loss

2010 2011 2012
Sales $579,741 $598,000 $612,500
Direct Costs of Goods $358,680 $359,200 $364,700
Other $0 $0 $0
------------ ------------ ------------
Cost of Goods Sold $358,680 $359,200 $364,700

Gross Margin $221,061 $238,800 $247,800

Gross Margin % 38.13% 39.93% 40.46%

Expenses
Payroll $84,600 $101,700 $110,120
Sales and Marketing and Other
Expenses $23,902 $24,000 $24,000
Depreciation $2,400 $2,000 $1,800
Utilities $24,000 $24,000 $24,000
Insurance $12,000 $24,000 $24,000
Mortgage $48,000 $36,000 $36,000
Payroll Taxes $1,800 $1,800 $1,800
Other $0 $0 $0
------------ ------------ ------------
Total Operating Expenses $196,702 $213,500 $221,720

Profit Before Interest and Taxes $24,360 $25,300 $26,080

EBITDA $26,760 $27,300 $27,880
Interest Expense $4,140 $4,031 $4,001
Taxes Incurred $5,123 $5,317 $5,612

Net Profit $15,097 $15,952 $16,467

Net Profit/Sales 2.60% 2.67% 2.69%

Gross Margin Monthly

$20,000

$18,000

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
 DHIA BAKERY

Gross Margin Yearly

$250,000

$200,000

$150,000

$100,000

$50,000

$0
2010 2011 2012

Profit Monthly

$1,800

$1,600

$1,400

$1,200

$1,000

$800

$600

$400

$200

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
 DHIA BAKERY

Profit Yearly

$18,000

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
2010 2011 2012
 DHIA BAKERY

7.4 Projected Cash Flow

The following chart illustrates a healthy cash balance for the first three years, enabling the
company to grow through reinvestment.

Cash

$350,000

$300,000

$250,000

$200,000
Net Cash Flow
$150,000 Cash Balance

$100,000

$50,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
 DHIA BAKERY

Table: Cash Flow

Pro Forma Cash Flow

2010 2011 2012
Cash Received

Cash from Operations

Cash Sales $579,741 $598,000 $612,500
Subtotal Cash from Operations $579,741 $598,000 $612,500

Additional Cash Received

$0 $0 $0
Received
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 $579,741 $598,000 $612,500

Expenditures 2010 2011 2012

Expenditures from Operations

Cash Spending $84,600 $101,700 $110,120
Bill Payments $175,960 $172,246 $170,219
Subtotal Spent on Operations $260,560 $273,946 $280,339

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current
$0 $0 $0
Borrowing
Other Liabilities Principal $6,000 $0 $0
Repayment
Long-term Liabilities Principal $2,400 $354 $354
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $5,000 $8,000
Dividends $0 $3,000 $4,000
Subtotal Cash Spent $268,960 $282,300 $292,693

Net Cash Flow $310,781 $315,700 $319,807

Cash Balance $318,781 $634,481 $954,288
 DHIA BAKERY

7.5 Projected Balance Sheet

The following table represents the financial position of the DHIA Bakery at the end of each
of the three upcoming fiscal years.

Table: Balance Sheet

Pro Forma Balance Sheet

2010 2011 2012
Assets

Current Assets
Cash $318,781 $634,481 $954,288
Other Current Assets $0 $0 $0
Total Current Assets $318,781 $634,481 $954,288

Long-term Assets
Long-term Assets $50,000 $55,000 $63,000
Accumulated Depreciation $2,400 $4,400 $6,200
Total Long-term Assets $47,600 $50,600 $56,800
Total Assets $366,381 $685,081 $1,011,088

Liabilities and Capital 2010 2011 2012

Current Liabilities
Accounts Payable $301,684 $607,786 $921,680
Current Borrowing $0 $0 $0
Other Current Liabilities $3,000 $3,000 $3,000
Subtotal Current Liabilities $304,684 $610,786 $924,680

Long-term Liabilities $47,600 $47,246 $46,892

Total Liabilities $352,284 $658,032 $971,572

Paid-in Capital $16,000 $16,000 $16,000

Retained Earnings ($17,000) ($4,903) $7,049
Earnings $15,097 $15,952 $16,467
Total Capital $14,097 $27,049 $39,516
Total Liabilities and Capital $366,381 $685,081 $1,011,088

Net Worth $14,097 $27,049 $39,516

 DHIA BAKERY

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 5461, Retail Bakeries, are shown for comparison.

Table: Ratios

Ratio Analysis
2010 2011 2012 Industry Profile
Sales Growth 0.00% 3.15% 2.42% 2.58%

Percent of Total Assets

Other Current Assets 0.00% 0.00% 0.00% 29.82%
Total Current Assets 87.01% 92.61% 94.38% 55.20%
Long-term Assets 12.99% 7.39% 5.62% 44.80%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 83.16% 89.16% 91.45% 25.40%

Long-term Liabilities 12.99% 6.90% 4.64% 23.07%
Total Liabilities 96.15% 96.05% 96.09% 48.47%
Net Worth 3.85% 3.95% 3.91% 51.53%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 38.13% 39.93% 40.46% 36.64%
Selling, General & Administrative
Expenses 64.14% 57.51% 52.56% 23.68%
Advertising Expenses 4.13% 3.70% 3.50% 1.65%
Profit Before Interest and Taxes 4.20% 4.23% 4.26% 1.92%

Main Ratios
Current 1.05 1.04 1.03 1.70
Quick 1.05 1.04 1.03 0.96
Total Debt to Total Assets 96.15% 96.05% 96.09% 5.56%
Pre-tax Return on Net Worth 143.43% 78.63% 55.87% 56.30%
Pre-tax Return on Assets 5.52% 3.10% 2.18% 12.72%

Additional Ratios 2010 2011 2012

Net Profit Margin 2.60% 2.67% 2.69% n.a
Return on Equity 107.09% 58.97% 41.67% n.a

Activity Ratios
Accounts Payable Turnover 1.58 0.79 0.53 n.a
Payment Days 118 347 577 n.a
Total Asset Turnover 1.58 0.87 0.61 n.a

Debt Ratios
Debt to Net Worth 24.99 24.33 24.59 n.a
Current Liab. to Liab. 0.86 0.93 0.95 n.a

Liquidity Ratios
Net Working Capital $14,097 $23,695 $29,608 n.a
Interest Coverage 5.88 6.28 6.52 n.a

Additional Ratios
Assets to Sales 0.63 1.15 1.65 n.a
Current Debt/Total Assets 83% 89% 91% n.a
Acid Test 1.05 1.04 1.03 n.a
Sales/Net Worth 41.12 22.11 15.50 n.a
Dividend Payout 0.00 0.19 0.24 n.a
 Appendix

Appendix Table: Sales Forecast

Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Breads 0% $9,720 $9,780 $9,780 $9,780 $9,800 $10,000 $9,770 $9,600 $9,600 $9,563 $9,680 $9,900
Coffee/Beverages 0% $0 $379 $462 $500 $518 $518 $519 $520 $547 $550 $556 $550
burger bread 0% $11,900 $11,900 $11,990 $11,990 $11,900 $11,900 $11,990 $11,700 $11,700 $9,100 $10,109 $10,000
hot dog bread 0% $10,900 $10,900 $10,910 $10,850 $10,900 $10,800 $10,781 $11,082 $10,983 $9,770 $10,500 $10,800
cake 0% $900 $903 $950 $1,068 $1,100 $1,312 $1,010 $1,000 $1,090 $990 $998 $1,074
'mamak' bread 0% $8,900 $8,900 $8,990 $8,905 $9,000 $9,000 $8,990 $8,880 $9,200 $9,300 $9,290 $8,900
Pastries/Sweets 0% $5,744 $6,260 $6,376 $6,019 $5,924 $6,586 $6,058 $6,076 $5,474 $5,400 $5,667 $5,560
Total Sales $48,064 $49,022 $49,458 $49,112 $49,142 $50,116 $49,118 $48,858 $48,594 $44,673 $46,800 $46,784

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Breads $7,000 $7,100 $7,100 $7,116 $7,200 $7,402 $7,200 $7,110 $7,000 $6,661 $6,500 $6,500
Coffee/Beverages $0 $190 $251 $250 $255 $256 $283 $285 $280 $288 $289 $295
mamak bread $6,000 $6,100 $6,100 $6,200 $6,220 $6,200 $6,226 $6,300 $6,220 $5,426 $5,400 $5,800
hot dog bread $6,000 $6,000 $6,000 $5,900 $5,906 $5,900 $5,860 $5,870 $5,800 $4,850 $5,890 $5,700
burger bread $6,000 $6,089 $6,089 $6,100 $6,100 $6,100 $6,200 $6,200 $6,289 $5,190 $6,199 $6,200
cake $539 $600 $590 $690 $690 $700 $780 $683 $693 $550 $500 $550
Pastries/Sweets $4,500 $4,500 $4,600 $4,400 $4,300 $4,500 $4,210 $4,230 $4,240 $3,200 $3,500 $3,500
Subtotal Direct Cost of Sales $30,039 $30,579 $30,730 $30,656 $30,671 $31,058 $30,759 $30,678 $30,522 $26,165 $28,278 $28,545
 Appendix

Appendix Table: Personnel

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Mr. Dinie - Head Baker 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Ms. Anis 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Ms. Ikin - Part-time 0% $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Counter Help - Full Time 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Assistant Baker - Part time 0% $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Mr. Hairi - Bookkeeper 0% $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300 $1,300
Total People 6 6 6 6 6 6 6 6 6 6 6 6

Total Payroll $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050
 Appendix

Appendix Table: General Assumptions

General Assumptions
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Long-term Interest Rate 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50% 8.50%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
 Appendix

Appendix Table: Profit and Loss

Pro Forma Profit and Loss

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $48,064 $49,022 $49,458 $49,112 $49,142 $50,116 $49,118 $48,858 $48,594 $44,673 $46,800 $46,784
Direct Costs of Goods $30,039 $30,579 $30,730 $30,656 $30,671 $31,058 $30,759 $30,678 $30,522 $26,165 $28,278 $28,545
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Cost of Goods Sold $30,039 $30,579 $30,730 $30,656 $30,671 $31,058 $30,759 $30,678 $30,522 $26,165 $28,278 $28,545

Gross Margin $18,025 $18,443 $18,728 $18,456 $18,471 $19,058 $18,359 $18,180 $18,072 $18,508 $18,522 $18,239
Gross Margin % 37.50% 37.62% 37.87% 37.58% 37.59% 38.03% 37.38% 37.21% 37.19% 41.43% 39.58% 38.99%

Expenses
Payroll $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050
Sales and Marketing and Other
$1,918 $2,064 $2,112 $1,992 $1,992 $1,992 $1,968 $1,968 $1,992 $1,992 $1,992 $1,920
Expenses
Depreciation $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Utilities $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
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
Mortgage $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Payroll Taxes 15% $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $16,318 $16,464 $16,512 $16,392 $16,392 $16,392 $16,368 $16,368 $16,392 $16,392 $16,392 $16,320

Profit Before Interest and Taxes $1,708 $1,979 $2,216 $2,064 $2,079 $2,666 $1,991 $1,812 $1,680 $2,116 $2,130 $1,919
EBITDA $1,908 $2,179 $2,416 $2,264 $2,279 $2,866 $2,191 $2,012 $1,880 $2,316 $2,330 $2,119
Interest Expense $353 $351 $350 $349 $347 $346 $344 $343 $341 $340 $339 $337
Taxes Incurred $406 $407 $467 $429 $433 $580 $412 $367 $335 $444 $448 $395

Net Profit $948 $1,221 $1,400 $1,287 $1,299 $1,740 $1,235 $1,102 $1,004 $1,332 $1,344 $1,186
Net Profit/Sales 1.97% 2.49% 2.83% 2.62% 2.64% 3.47% 2.51% 2.26% 2.07% 2.98% 2.87% 2.54%
 Appendix

Appendix Table: Cash Flow

Pro Forma Cash Flow

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received

Cash from Operations

Cash Sales $48,064 $49,022 $49,458 $49,112 $49,142 $50,116 $49,118 $48,858 $48,594 $44,673 $46,800 $46,784
Subtotal Cash from Operations $48,064 $49,022 $49,458 $49,112 $49,142 $50,116 $49,118 $48,858 $48,594 $44,673 $46,800 $46,784

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 $48,064 $49,022 $49,458 $49,112 $49,142 $50,116 $49,118 $48,858 $48,594 $44,673 $46,800 $46,784

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Expenditures from Operations

Cash Spending $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050 $7,050
Bill Payments $12,800 $14,481 $14,800 $15,000 $15,000 $15,000 $14,755 $15,095 $14,650 $14,900 $14,690 $14,789
Subtotal Spent on Operations $19,850 $21,531 $21,850 $22,050 $22,050 $22,050 $21,805 $22,145 $21,700 $21,950 $21,740 $21,839

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
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal Repayment $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Long-term Liabilities Principal
$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Repayment
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 $20,550 $22,231 $22,550 $22,750 $22,750 $22,750 $22,505 $22,845 $22,400 $22,650 $22,440 $22,539

Net Cash Flow $27,514 $26,791 $26,908 $26,362 $26,392 $27,366 $26,613 $26,013 $26,194 $22,023 $24,360 $24,245
Cash Balance $35,514 $62,305 $89,213 $115,575 $141,967 $169,333 $195,946 $221,959 $248,153 $270,176 $294,536 $318,781
 Appendix

Appendix Table: Balance Sheet

Pro Forma Balance Sheet

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances

Current Assets
Cash $8,000 $35,514 $62,305 $89,213 $115,575 $141,967 $169,333 $195,946 $221,959 $248,153 $270,176 $294,536 $318,781
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $8,000 $35,514 $62,305 $89,213 $115,575 $141,967 $169,333 $195,946 $221,959 $248,153 $270,176 $294,536 $318,781

Long-term Assets
Long-term Assets $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
Accumulated Depreciation $0 $200 $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,200 $2,400
Total Long-term Assets $50,000 $49,800 $49,600 $49,400 $49,200 $49,000 $48,800 $48,600 $48,400 $48,200 $48,000 $47,800 $47,600
Total Assets $58,000 $85,314 $111,905 $138,613 $164,775 $190,967 $218,133 $244,546 $270,359 $296,353 $318,176 $342,336 $366,381

Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Current Liabilities
Accounts Payable $0 $27,066 $53,136 $79,144 $104,720 $130,313 $156,439 $182,316 $207,728 $233,418 $254,609 $278,125 $301,684
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $9,000 $8,500 $8,000 $7,500 $7,000 $6,500 $6,000 $5,500 $5,000 $4,500 $4,000 $3,500 $3,000
Subtotal Current Liabilities $9,000 $35,566 $61,136 $86,644 $111,720 $136,813 $162,439 $187,816 $212,728 $237,918 $258,609 $281,625 $304,684

Long-term Liabilities $50,000 $49,800 $49,600 $49,400 $49,200 $49,000 $48,800 $48,600 $48,400 $48,200 $48,000 $47,800 $47,600
Total Liabilities $59,000 $85,366 $110,736 $136,044 $160,920 $185,813 $211,239 $236,416 $261,128 $286,118 $306,609 $329,425 $352,284

Paid-in Capital $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000 $16,000
Retained Earnings ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000) ($17,000)
Earnings $0 $948 $2,169 $3,569 $4,855 $6,154 $7,894 $9,130 $10,231 $11,235 $12,567 $13,911 $15,097
Total Capital ($1,000) ($52) $1,169 $2,569 $3,855 $5,154 $6,894 $8,130 $9,231 $10,235 $11,567 $12,911 $14,097
Total Liabilities and Capital $58,000 $85,314 $111,905 $138,613 $164,775 $190,967 $218,133 $244,546 $270,359 $296,353 $318,176 $342,336 $366,381

Net Worth ($1,000) ($52) $1,169 $2,569 $3,855 $5,154 $6,894 $8,130 $9,231 $10,235 $11,567 $12,911 $14,097