Castor Design

Business Plan
 Confidentiality Agreement

The undersigned reader of Castor Design’s Business Plan hereby acknowledges that the information provided
is completely confidential and therefore the reader agrees not to disclose anything found in the business plan
without the express written consent of Castor Design.

It is also acknowledged by the reader that the information to be furnished in this business plan is in all
aspects confidential in nature, other than information that is in the public domain through other means and
that any disclosure or use of the same by the reader may cause serious harm and or damage to Castor
Design.

Upon request this business plan document will be immediately returned to Castor Design.

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

Applicable Law

This contract shall be governed by the laws in the state of Michigan.

__________________________________________________

Signature

__________________________________________________

Printed Name

Castor Design | Business Plan Page 2

 Overview

The interior design industry has seen growth and will continue to see revenues increase.
According to Ibis World (2019), trends in the market suggest that the industry is
significantly more successful when economic health is positive, influencing home and
business owners to outsource aspects of interior renovations. Additionally, the consumer
see’s value in creating a personal and creative atmosphere, reflecting their characteristics
in their home.

Castor Design will have a unique offering in that no other interior design company in the
city of Detroit will offer the unique service/product mix, where customers can enjoy
professional interior design services while shopping for high quality and creative
products. The following business plan outlines a five-year strategy of Castor Design and
accompanying financial forecasts that it anticipates on achieving.

Castor Design | Business Plan Page 3

 Table of Contents

Executive Summary .................................................................................................................... 5

Market Summary.................................................................................................................................. 5
Three Year Objectives ........................................................................................................................... 6
Keys to Success..................................................................................................................................... 6
Financing Summary .............................................................................................................................. 6

Castor Design ............................................................................................................................. 7

Industry Overview ...................................................................................................................... 9
Market Needs..................................................................................................................................... 10
Market Trends .................................................................................................................................... 10
Market Segmentation ......................................................................................................................... 11

Strategy & Implementation Summary ..................................................................................... 11

Management Team ............................................................................................................................ 12
SWOT Analysis ................................................................................................................................... 14

Competitive Comparison.......................................................................................................... 15
Marketing Plan ......................................................................................................................... 17
Promotion Strategy ............................................................................................................................ 17

Financial Forecasts ................................................................................................................... 19

Use of Funds....................................................................................................................................... 19
Financial Highlights............................................................................................................................. 20
Financial Indicators............................................................................................................................. 21
Revenue Forecast ............................................................................................................................... 22
Projected Profit and Loss .................................................................................................................... 22
Projected Cash Flow ........................................................................................................................... 23
Projected Balance Sheet ..................................................................................................................... 24
Sensitivity Analysis ............................................................................................................................. 25
Break-Even Analysis............................................................................................................................ 26

Appendix .................................................................................................................................. 27
References................................................................................................................................ 29

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Executive Summary

Castor Design is an innovative interior design firm that specializes in interior design services, premium
modern furniture and premium lighting. This includes the installation, decorating and designing services
in both commercial and residential interior buildings. Castor Design dedicates its services to being the
middle ground between art and design, bringing a sense of irreverence to each project. Materials and
their reuse make up an important part of Castor’s aesthetic, bringing a new and innovative approach to
the interior design industry. At Castor Design, clients can rely on getting the highest quality services and
products in the market while receiving world-class customer service in all of their business needs.

The brand will be recognized as an exclusive, premium brand in all business offerings delivering the
highest degree of quality and customer service. Products and services will be sold at a premium price
point; our pricing strategy relies on our exceptional quality in all of our business offerings; this will be a
reflection from our prices. Distribution will take place in our new studio where we will retail products
and services, as well as our e-commerce platform for distribution of the product (website). Castor
Design will achieve success by offering a product/service mix with the highest degree of quality,
sophistication and design, all while delivering world-class customer service along the way. The following
business plan outlines the five-year growth strategy of Castor Design, the problem it solves in the
market, and the projected financial performance based on its current business model.

Market Summary

Castor Design caters to the interior design industry, initially targeting the city of Detroit. According to
Ibis World (2019), the interior design industry in the United States is expected to be worth USD $17.6
billion in 2020. i The industry has seen steady growth with a CAGR of 3.5% from 2014 through 2019.
Additionally, according to Statista (2017), the city of Detroit has seen substantial growth dating back to
2008, in the past five years, Detroit’s GDP has risen 18.5% from 2013, totaling USD$260.61 in 2017. ii

The overall growth in the interior design industry is expected to be driven from positive economic health
and a shift in home building constructions. With the combination of positive trends in the industry and
economic resurgence in Detroit, Castor Design is poised to capture significant market share in the city of
Detroit.

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Three Year Objectives

Castor Design has identified the following three-year objectives:

• Bring a reputable brand to the city of Detroit that instills quality, value and the highest degree of
customer service (expected with the brand).
• Establishing the Castor brand as a recognizable and important brand for supply lighting,
furniture and design to the city of Detroit.
• Secure strategic location for design studio and showroom.
• Initially invest $50,000 into startup costs and operations in the city of Detroit.
• Expand into developing a design team with local talent by year three.

Keys to Success

Castor Design has identified the following keys to success:

• Highest degree of customer service in the industry, which will be a continuous strategy
throughout the company's life cycle.
• Owner and staff have multiple years of experience, knowledge and expertise in the industry.
Ability to create strategic, long lasting relationships in the industry.
• Capitalizing on the resurgence of the Detroit economy through brand and established
relationships in the industry.
• Exclusive, unique product offerings in the market.

Financing Summary

Startup Expenses Post Financing Liabilities

Salaries $10,000 Liabilities and Capital
Insurance $600 Current Borrowing $0
Rent $4,500 Long-Term Liabilities $0
Utilities $500 Accounts Payable $0
Marketing and Advertising $1,000 Other Current Liabilities $0
Legal $9,000
Incorporation Fees $2,000
Post Financing Investments
Cash on Hand $9,400 Planned Investment
Total Startup Expenses $37,000 Owner $50,000
Investor -
Startup Assets Total Planned Investment $50,000
Computer Equipment $3,000
Office Furniture $5,000
Post Financing Funding
Leasehold Improvements $5,000 Total Liabilities $0
Total Requirements $13,000 Total Planned Investment 50,000
Total Funding $50,000
Total Requirements
Total Startup Expenses $37,000
Total Startup Assets 13,000
Total Requirements $50,000

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Castor Design

Castor Design is a Toronto-based interior design practice that sells both services and products. Services
include the designing, decorating and installation of furniture/lighting, while products that are sold vary
from furniture, lighting to accessories. Castor Design specializes in the reuse of materials, which makes
up an important part of the Castor Design aesthetic, from burn out bulbs converted to make new
lighting, to rusty shipping containers converted to saunas. At Castor Design, nothing is out of question
and the boundaries of design are endless. Castor Design has won awards from the A+ Awards, A’ Design,
AZ Awards, and from numerous design shows. Castor’s products are sold in shops around the world
through an easy to use and effective e-commerce platform where products and services are highlighted
and promoted. Castor Design has worked on interiors projects, custom lighting and furniture design, and
public art commissions throughout North America, Europe, and Asia.

Services Description

Installations • Lighting and fixture

• Commercial
• Residential

Design • Interior
• Residential
• Commercial

Decorating • Interior
• Residential
• Commercial
• Furniture and lighting selection from Castor Products

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Products Product Example Description

Lighting Induction Wall Light:

The aim of the Induction Wall Light is to use a scientific concept to approach lighting
in a unique way. It powers a burnt-out fluorescent bulb through an electromagnetic
field.

The Induction Wall Light offers an opportunity to find interesting new uses for
existing materials without letting them go to waste. Rather than destroying a
fluorescent bulb, which would release gases that might be environmentally harmful
(i.e. Argon and Mercury gases are commonly used in fluorescent bulbs), the
Induction Wall Light can power any intact fluorescent bulb. It demonstrates that
there is still life left in old bulbs even though they seem exhausted.

Furniture Traditional wood-burning sauna is built into a shipping container. The Sauna Box is
completely self-contained with solar power and a wood-fired stove. The box comes
standard with iPod stereo, guitar hook-up, Castor Stool, magnetic truck light, wool
toque and bronze antlers. The Sauna Box can be customized to suit the site.

Accessories This product is in partnership with Harnisch lamps established in 1842. Collaborating
with the oldest gas lamp manufacturers in Canada, Castor was able to use
Harnisch’s knowledge and production methods while stripping the lamps of all
ornamentation to a simple cylindrical shape finished in black chrome.

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Industry Overview

Castor Design participates in the interior design industry, which includes full service interior design
services for residential buildings, full service interior design services for commercial buildings, resale of
merchandise, other services and interior decorating services. The interior design industry comprises of
regarded professionals involved in the process of planning, designing, decorating and administrating
projects in interior spaces.

Ibis World (2018) states the United States market for interior design is expected to generate revenues of
USD$17 Billion in 2019 from 116,370 businesses.iii This industry has performed well as revenues have
increased over five years by 3.5% from 2014 to 2019 and is expected to continue to see revenues
increase into the foreseeable future. Additionally, industry employment in 2019 was 150,601 with
expected growth into 2019.

Interior Design Companies in the United States

Revenue (2019) Employment (2019) Businesses (2019)

USD$17b 150,601 116,370

Revenue Growth (CAGR 14-19) Employment growth (CGAR 14-19) Companies Growth (CAGR 14-19)
3.5% 3.7% 3.3%

Castor Design will initially open operations in the city of Detroit Michigan, which has seen impressive
year over year growth in Gross Domestic Product (GDP). Statista (2017) shows the GDP of Detroit in
2017 was USD$260.61 Billion, a rise from USD$197.97 Billion in 2010.iv Year over year GDP growth in
Detroit ranks amongst the top 5 in the United States. Additionally, in 2017 Detroit and the surrounding
area ranked 14th overall for GDP in the United States. These figures are expected to continue to grow
through 2022, as per Statista (2017).

Detroit & United States GDP

GDP for Detroit (2017) Detroit 5 year GDP Growth (13-17) Average YOY GDP Growth (13-17)
USD$260.61 18.5% 3.7%

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Market Needs

There is a growing demand for Interior Design services in the United States as homeowners are
constantly looking for opportunities to create a home environment that expresses who they are and
their interests. According to Ibis World (2018), a rising number of homes are being built and renovated
in the United States each year, leaving the new homeowners an increased need to outsource designs in
their homes.v Today’s society inhabits a busy, working lifestyle for most homeowners, time and efforts
are limited and the need to outsource home renovations has never been so apparent.

Needs in the commercial space show similar trends in that the interior design industry reflects the
lifecycle of entrepreneurs and business owners in that time and effort is limited and the need to
outsource services are apparent. Additionally, a growing emphasis on employee satisfaction can be a
direct result of the workspace in which employees spend most of their time. Businesses are continuously
renovating their space of operations to promote a fun, creative and modern atmosphere as opposed to
traditional office space.

This city of Detroit has seen a substantial resurgence in recent years with new investments, restaurants,
bars and hotels popping up throughout the city. This resurgence also increases the number of homes
being built or renovated. In a city that has seen economic turmoil within the last ten years, the number
of businesses competing in the interior design space has significantly dropped. As the resurgence of the
city of Detroit continues, the need for professional interior design companies has never been so
apparent.

Market Trends

According to Ibis World (2019), there has been a growing demand in the market for the “do it yourself”
(DIY) consumer, with that comes an increased presence of products being sold which can be attributed
to the “buy-it-yourself’ marketvi. Trends suggest consumers are buying products in the interior space
industry and hiring a company to fabricate, install, decorate and install these products. This provides the
consumer with feelings of creativity, pride, innovation and individuality, all characteristics of consumers
in the interior design market. Castor Design will benefit from these trends directly as they are both
designers and retail for interior furniture, lighting and installations. A sense of participation in home
decorating and designing is an increasingly strong trend in the market, which will contribute to the
success of Castor Design.

Another important trend in the market is the overall economic health of the economy. The interior
design industry performs much better when economic health is positive; this increases the number of
homeowners as well as the need for renovations. More specifically, when economic health is positive,
more home construction activity is incurred, which subsequently increases the need for interior design

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and home furnishing. This trend can be directly realized in the city of Detroit as new buildings are
constantly being built and renovated, increasing the need for professional designers.

Market Segmentation

Castor Design will cater to the residents of Detroit and surrounding area initially before expanding
throughout cities across the United States. The interior design industry caters to both a male and female
market with clientele who have a high buying power. Castor Design is a premium brand, selling products
and services with a refined and luxurious taste. As a result, our first target client is the professional
male/female or family household who have a combined income greater than $100,000, owns a house or
is in the process of building a new home/renovations and has a value of over $250,000.

The second target client is the business client, where earnings are healthy and the status of the business
is in good shape; as well the new venture sees value in modern and quality design in the work place,
finding value for the business in hiring professional designers.

The target client has a taste for luxurious and sophisticated design, in addition, our target client sees the
importance of sourcing help in design, decorating or installing while emphasizing the importance of
creativity, individuality and innovation.

Strategy & Implementation Summary

The strategy of Castor Design will be to introduce a unique and innovative service/product mix to the
city of Detroit through the opening of Castor Design studio. We will initially open a small showroom,
highlighting and educating the Castor brand while also distributing our products through the retail
portion of the facility. Customers will receive a unique shopping experience with exclusive, high quality
items as well as professional, quality services that will attract customers to the showroom. We have
used Detroit as an initial strategy for entering the Unites States market because of the resurgence of the
city as well as increasing economic health and trends tailored in the design industry. Detroit is an
excellent market to enter to highlight and educate customers about the Castor Design brand before
launching other showrooms/retailors throughout cities in the United States. The Castor Design brand
has already established itself as an important brand in the interior design industry throughout the
United States through e-commerce sales as 80% of Castor Design sales have come from the United
States.

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Distribution will take place in the proposed Detroit showroom where specific Castor products will be
highlighted and available for purchase through the store. Our online e-commerce platform (website) will
continue to distribute our products and accessories across North America.

The sales strategy for Castor Design will be to attract customers through a strong online presence. Social
media will be at the forefront for the advertising strategy. This will allow the company to track progress
and create a following at a relatively inexpensive cost. The strategy behind advertising will be to
promote and highlight the brand, instilling quality and value added to the customer. Additionally, we will
devote time and effort to conferences/tradeshows in the industry to promote the brand and make
strategic connections with people in the industry.

Management Team

Brian Conrad Richer – Owner/Creative Director

Brian has multiple years of experience in the interior design industry and has used this experience to
start his own successful interior design venture that continues to achieve success and grow. Richards
decorated career in the industry has seen him design installations, which have been showcased in
exhibitions and conventions, and have had products featured in hotels, retail environments, restaurant
and corporate headquarters around the world. With the lead of Brian, Castor Design has won awards
from Architizer A+ Awards, A’ Design, Azure Magazine’s AZ Awards, Interior Design Magazine, and from
numerous design shows. Listed below is both Brian’s experience and education from the past thirty
years.

Experience

2007- present Castor Design- owner creative director Toronto, ON

Duties include- product design, overseeing
manufacture, brand creative direction

2009- 2018 Parts and Labor Restaurant - owner, operator Toronto, ON

Duties include some day to operation,
Live music programming

2007- 2011 Oddefellows Restaurant- owner, operator Toronto, ON

Duties include day-to-day operations

2000- 2009 Carter Richer and Stark- owner, operator Toronto, ON

Duties include day-to-day operations
Head stone carver

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1996- 2000 Traditional Cut Stone Toronto, ON
Lead stone carver

1995- 1996 Modern Hieroglyphics Ottawa, ON

Lead stone carver

1992- 1995 D.J. Mc Rae Contracting Toronto, ON

Restoration Mason

1990- 1992 Colonial Building Restoration Ottawa, ON

Restoration Mason

Education

Institute of Stone Carving Ajax, ON

Ontario Masonry Training Centre Toronto, ON

York University (English Lit, Philosophy) Toronto, ON

Centennial College (Arts Diploma) Toronto, ON

Castor Design | Business Plan Page 13

SWOT Analysis

Strengths

• Management and staff have multiple years of experience, knowledge and expertise in the
industry.
• Owner/ operator has created long lasting, strategic relationships in the industry.
• 80% of Castor Design sales have come from the United States through e-commerce sales.
• The castor brand is a well-established brand throughout the United States, selling in eight retail
and e-commerce stores already.
• E-commerce platform that will distribute and market the product; cost efficient and very
effective.

Weaknesses

• Retail space has not been secured; sourcing optimal retail location is vital.
• Competition in the United States market overall is high; companies must create competitive
advantages to distinguish their brand.

Opportunities

• Rising economic trends in the city of Detroit, complete resurgence of hotels, restaurants, bars
and shopping in the downtown area.
• Rising positive trends in the design industry in Detroit, growing trend in the downtown area
especially.
• Mark ups in this product range are extremely high; margins can continue to grow through a
strong e-commerce platform, distributing the product throughout the United States.
• Ability to secure strategic location in Detroit while real estate prices are still considerably low.
• Ability to enter the United States market through retail distribution in a prospering city.

Threats

• Relatively low barriers to enter the market.

• Selling premium priced products in a city with relatively low average family income compared to
other major cities in the country.
• Downturn in economy could affect sales significantly.

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Competitive Comparison

The market that Castor Design will directly compete in will consist of a small group of specialty, premium
design studies that are also in the business of selling interior design products in store within the
downtown Detroit area. Castor Design will position themselves as a premium offering within the market.
The following are Castor Design’s direct competitors.

D Met Studio: D MET is an award-winning, design-intensive studio located in Midtown, Detroit. As a full-
service architecture and design studio, D MET brings a fresh sensibility to the beautification and
revitalization of urban space. They specialize in an informed, collaborative design approach that
combines artistic and academic insight with hands on professional experience. Since opening in
Midtown in 2010, D MET has been the Architect and designer for multitude projects. D Met does not sell
individual branded products and accessories and does not have a single source retail location in Detroit.
D Met Studio offers premium services to its clients.

CoG Studio: CoG Studio is a full service design firm. CoG guides their clients through each step of the
design process, from ideation and concept development through final execution. Their cohesive
approach results in projects that are delivered on time and on budget. CoG studio covers a wide range

Castor Design | Business Plan Page 15

of clientele, including commercial and residential clients. CoG does not offer individual items and
products currently does not offer retail distribution. CoG has over ten locations spread throughout the
United States. CoG is a premium offering in the market for their services.

NXT Design: NXT design is a recognizable and established interior design firm with locations in Detroit,
and San Diego. Since 2012, NXT Design has worked with global corporations as well as start-ups,
providing architectural design, interior design, industrial design, graphic and brand design services. NXT
has developed designs for restaurants, offices, schools, retail spaces, event spaces, churches and private
residences. NXT distributes little interior design products through their e-commerce website but does
not offer this as a typical service. Prices are sold at a premium.

Patrick Thompson Design: Patrick Thompson Design (PTD) is a Detroit-based studio specializing in
hospitality, commercial and retail spaces. PTD focuses on creating highly customized interiors, and
works closely with designers, craftsmen and fabricators who value design and process.

PTD brings a holistic approach to each project. The firm provides architecture, interior design, graphic
design, product design and brand management services. Since its inception in 2009, PTD has designed
spaces for museums, hotels, restaurants, offices, retail establishments and residences for clients. The
work ranges from creating custom furniture, lighting and branding, to large-scale hospitality projects.

Competitive edge and advantage

Our competitive edge is a combination of our exceptional product range, world-class customer service
and unique service offerings. Castor Designs has achieved multiple revenue streams in both
commercial/residential designs to selling products to retailers across the globe. No other designer
companies in the Detroit area offer premium, quality products while offering premium design services to
both residential and commercial clients alike. By utilizing our experience and knowledge in the industry
and our state of the art studio and showroom, we will continue to build ongoing relationships with our
customers. Castor Design will solve a niche problem in the market and will create a brand and offering
unlike any in the area.

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Marketing Plan

The marketing strategy for Castor Design will be a key component to the company's success. The
marketing plan will cover three objectives.

1. Emphasize the brand name and our unique product/service mix through focus of online
advertising.
2. Focus on securing our exceptional retail location in downtown Detroit.
3. Continue to create strategic relationships in the industry by highlighting the brand through
important trade shows and conferences.

Pricing Strategy

The pricing strategy for Castor Design will be to price our services as a premium offering in the market.
Our prices will be a luxury in the market but will reflect our exceptional quality characteristics as well as
our world-class customer service.

Products will be priced at a premium. We will offer high quality, professional, industry approved
products to our customers. Services will also be priced at a premium, utilizing our exceptionally
knowledgeable staff of trained professionals along with our history of proven success we will position
ourselves as a premium offering in the market.

Promotion Strategy

Social Media

Social media will be a significant portion of the advertising strategy for Castor Design. Social media
platforms such as Facebook, Instagram, Twitter and YouTube allow the company to advertise directly to
the target audience and track progress at a relatively inexpensive cost. Social media platforms are also
an effective way to create a following behind the brand, tracking popular trends and promotions with
the brand.

Pay-Per-Click

The pay-per-click strategy of Castor Design will be used through Google Shopping/Ad Words/Places. This
platform allows us to reach the target market while tracking a strict budget plan. Pay-per-click

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advertising is an efficient way to target our demographic and drive traffic through search engines.
Google Places will also be utilized to help consumers locate our new showroom in downtown Detroit.

Public Relations

We will create different PR programs in the community that will create traffic to the shop. Initial grand
opening promotions that will see different games that allow customers to win services/products. This
will help to help promote the brand and attract customers to the store.

With an elusive PR campaign, along with other marketing efforts, an important aspect of the generated
business will come from word-of-mouth referrals. This type of business relies on the public’s perception
along with consumer’s personal experience. It will be a key strategy for Castor Design to develop
ongoing word-of-mouth referrals with the business. Not only is this an effective strategy for generating
more clientele, but it is also the most cost efficient form of marketing for the business. This will be a key
component to the company’s success.

Website/E-Commerce

The website will continue tell the story behind the Castor Design brand. Search engine optimization will
be integrated into the website so that the company shows up when users search for related queries.

The website will continue to use an e-commerce style platform that will be an easy to use shopping
experience. The shopping process through the website will allow consumers to have a unique shopping
experience where they can easily search the products, learn about the brand and determine which
products suit their needs best.

Castor Design | Business Plan Page 18

Financial Forecasts

Use of Funds

Startup Expenses Post Financing Liabilities

Salaries $10,000 Liabilities and Capital
Insurance $600 Current Borrowing $0
Rent $4,500 Long-Term Liabilities $0
Utilities $500 Accounts Payable $0
Marketing and Advertising $1,000 Other Current Liabilities $0
Legal $9,000
Incorporation Fees $2,000
Post Financing Investments
Cash on Hand $9,400 Planned Investment
Total Startup Expenses $37,000 Owner $50,000
Investor -
Startup Assets Total Planned Investment $50,000
Computer Equipment $3,000
Office Furniture $5,000
Post Financing Funding
Leasehold Improvements $5,000 Total Liabilities $0
Total Requirements $13,000 Total Planned Investment 50,000
Total Funding $50,000
Total Requirements
Total Startup Expenses $37,000
Total Startup Assets 13,000
Total Requirements $50,000

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Financial Highlights

Financial Highlights ($000)

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 23 24 25 26 27 28 29 30 31 32 33 34 342 567 759 951 1143
Gross Margin 19 20 21 21 22 23 24 25 26 27 28 29 284 474 635 796 957
Operating Expense 7 5 5 5 5 5 5 5 5 5 5 5 67 62 74 86 99
EBITDA 7 10 11 12 13 14 15 16 17 18 18 19 171 356 494 630 762
Net Profit 7 10 11 12 13 14 15 16 17 17 18 19 169 355 493 628 761

Gross Margin/Revenue 81% 82% 82% 82% 83% 83% 83% 83% 84% 84% 84% 84% 83% 84% 84% 84% 84%
EBITDA/Revenue 32% 43% 45% 47% 48% 50% 51% 52% 54% 55% 56% 57% 50% 63% 65% 66% 67%
Net Profit/Revenue 32% 43% 45% 46% 48% 49% 51% 52% 53% 54% 56% 57% 50% 63% 65% 66% 67%

Net Cash Flow 7 10 11 12 13 14 15 16 17 18 18 19 171 356 494 630 762

Cash Balance - Ending 17 28 39 51 64 78 93 109 125 143 161 181 181 537 1031 1661 2423

Projected Operating Highlights By Year ($000) Projected Revenues By Year ($000)

1400 1400
Revenue
1200 1200

1000 1000
Gross Margin
800 800

600 600
EBITDA
400 400

200 200
Net Profit
0 0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5

Projected Cash Flow By Year ($000) Projected Net Income By Year ($000)
3000 800
700
2500
600
2000 Net Cash Flow
500
1500 400
300
1000 Cash Balance
200
500
100
0 0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 1 Year 2 Year 3 Year 4 Year 5

Castor Design | Business Plan Page 20

Financial Indicators

Financial Indicators
Year 1 Year 2 Year 3
Profitability %'s:
Gross Margin 83% 84% 84%
Net Profit Margin 50% 63% 65%
EBITDA to Revenue 50% 63% 65%
Return on Assets 77% 62% 46%
Return on Equity 77% 62% 46%

Financial Indicators
90%
Gross Margin
80%
70%
60% Net Profit Margin

50%
40%
EBITDA to Revenue
30%
20%
10% Return on Assets

0%
Year 1 Year 2 Year 3

Castor Design | Business Plan Page 21

Revenue Forecast

Revenue Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Revenue Forecast
Product Sales - Lighting, Furniture and Accessories 102,000 207,000 279,000 351,000 423,000
Custom Installation Projects 240,000 360,000 480,000 600,000 720,000

Total Revenue $ 342,000 $ 567,000 $ 759,000 $ 951,000 $ 1,143,000

Direct Cost of Revenue

Product Sales - Lighting, Furniture and Accessories 10,200 20,700 27,900 35,100 42,300
Custom Installation Projects - - - - -

Subtotal Cost of Revenue $ 10,200 $ 20,700 $ 27,900 $ 35,100 $ 42,300

Projected Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue 342,000 567,000 759,000 951,000 1,143,000
Subtotal Cost of Revenue 58,200 92,700 123,900 155,100 186,300
Total Cost of Revenue $ 58,200 $ 92,700 $ 123,900 $ 155,100 $ 186,300

Gross Margin $ 283,800 $ 474,300 $ 635,100 $ 795,900 $ 956,700

Gross Margin/Revenue 83% 84% 84% 84% 84%

Expenses
Insurance 2,400 2,640 2,904 3,194 3,514
Rent 18,000 19,800 21,780 23,958 26,354
Utilities 1,800 1,980 2,178 2,396 2,635
Sales and Marketing 4,800 5,280 5,808 6,389 7,028
Legal 24,000 10,000 11,000 12,100 13,310
Incorporation Fees 2,000 - - - -
Misc SG&A 13,680 22,680 30,360 38,040 45,720
Total Operating Expenses $ 53,000 $ 39,700 $ 43,670 $ 48,037 $ 52,841
Wages & Payroll 46,380 55,656 66,787 80,145 96,174
Depreciation, Amortization & Taxes 1,350 1,350 1,350 1,350 1,350
Net Income $ 169,390 $ 354,914 $ 492,933 $ 628,328 $ 760,616
Net Income/Revenue 50% 63% 65% 66% 67%

Revenue By Year (000s)

1400
1200
1000
800
600
400
200
0
Year 1 Year 2 Year 3 Year 4 Year 5

Castor Design | Business Plan Page 22


40,000
30,000
20,000
10,000
-
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month
Projected Cash Flow
Beginning Cash Balance
Cash Inflows
Income from Sales
Accounts Receivable
Total Cash Inflows
Cash Outflows
Investing Activities
New Fixed Assets Purchases
Inventory Addition to Bal.Sheet
Cost of Sales
Operating Activities
Salaries and Wages
Fixed Business Expenses
Taxes
Financing Activities
Loan Payments
Line of Credit Interest
Line of Credit Repayments
Dividends Paid
Total Cash Outflows
Cash Flow
Operating Cash Balance
Ending Cash Balance
Castor Design | Business Plan
Year 1 Revenue Monthly
Pro Forma Cash Flow
Year 1 Year 2
$ 10,000 $ 180,740
$ 342,000 $ 567,000
$ - $ -
$ 342,000 $ 567,000
$ - $ -
$ - $ -
$ 58,200 $ 92,700
$ 46,380 $ 55,656
$ 66,680 $ 62,380
$ - $ -
$ - $ -
$ - $ -
$ - $ -
$ - $ -
$ 171,260.00 $ 210,736.00
$ 170,740.00 $ 356,264.00
$ 180,740.00 $ 537,004.00
$ 180,740.00 $ 537,004.00
Month Month
10 11 12
Year 3 Year 4 Year 5
$ 537,004 $ 1,031,287 $ 1,660,965
$ 759,000 $ 951,000 $ -
$ - $ - $ -
$ 759,000 $ 951,000 $ 1,143,000
$ - $ - $ -
$ - $ - $ -
$ 123,900 $ 155,100 $ 186,300
$ 66,787 $ 80,145 $ 96,174
$ 74,030 $ 86,077 $ 98,561
$ - $ - $ -
$ - $ - $ -
$ - $ - $ -
$ - $ - $ -
$ - $ - $ -
$ 264,717.20 $ 321,321.64 $ 381,034.27
$ 494,282.80 $ 629,678.36 $ 761,965.73
$ 1,031,286.80 $ 1,660,965.16 $ 2,422,930.89
$ 1,031,286.80 $ 1,660,965.16 $ 2,422,930.89
Page 23
Projected Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $ 180,740 $ 537,004 $ 1,031,287 $ 1,660,965 $ 2,422,931
Other Current Assets $ 27,000 $ 27,000 $ 27,000 $ 27,000 $ 27,000
Total Current Assets $ 207,740 $ 564,004 $ 1,058,287 $ 1,687,965 $ 2,449,931

Long-term Assets
Long-term Assets $ 13,000 $ 13,000 $ 13,000 $ 13,000 $ 13,000
Accumulated Depreciation $ 1,350 $ 2,700 $ 4,050 $ 5,400 $ 6,750
Total Long-term Assets $ 11,650 $ 10,300 $ 8,950 $ 7,600 $ 6,250
Total Assets $ 219,390 $ 574,304 $ 1,067,236 $ 1,695,565 $ 2,456,180

Liabilities and Capital

Current Liabilities
Accounts Payable $ - $ - $ - $ - $ -
Current Borrowing $ - $ - $ - $ - $ -
Other Current Liabilities $ - $ - $ - $ - $ -
Subtotal Current Liabilities $ - $ - $ - $ - $ -

Long-term Liabilities $ - $ - $ - $ - $ -
Total Liabilities $ - $ - $ - $ - $ -

Common Stock $ 50,000 $ 50,000 $ 50,000 $ 50,000 $ 50,000

Retained Earnings $ 169,390 $ 524,304 $ 1,017,237 $ 1,645,565 $ 2,406,181
Total Capital $ 219,390 $ 574,304 $ 1,067,237 $ 1,695,565 $ 2,456,181
Total Liabilities and Capital $ 219,390 $ 574,304 $ 1,067,236 $ 1,695,565 $ 2,456,180

Castor Design | Business Plan Page 24

Sensitivity Analysis

Best Case Scenario (Revenue Increase by 15%)

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 393,300 $ 652,050 $ 872,850 $ 1,093,650 $ 1,314,450
Cost of Goods Sold $ 11,730 $ 23,805 $ 32,085 $ 40,365 $ 48,645
Gross Margin $ 381,570 $ 628,245 $ 840,765 $ 1,053,285 $ 1,265,805
Gross Margin/Revenue 97% 96% 96% 96% 96%
Operating Expenses $ 66,680 $ 62,380 $ 74,030 $ 86,077 $ 98,561
EBIT $ 314,890 $ 565,865 $ 766,735 $ 967,208 $ 1,167,244
EBIT/Revenue 80% 87% 88% 88% 89%

Worst Case Scenario (Revenue Decrease by 15%)

Year 1 Year 2 Year 3 Year 4 Year 5
Revenue $ 290,700 $ 481,950 $ 645,150 $ 808,350 $ 971,550
Cost of Goods Sold $ 8,670 $ 17,595 $ 23,715 $ 29,835 $ 35,955
Gross Margin $ 282,030 $ 464,355 $ 621,435 $ 778,515 $ 935,595
Gross Margin Revenue 97% 96% 96% 96% 96%
Operating Expenses $ 66,680 $ 62,380 $ 74,030 $ 86,077 $ 98,561
EBIT $ 215,350 $ 401,975 $ 547,405 $ 692,438 $ 837,034
EBIT/Revenue 74% 83% 85% 86% 86%

Castor Design | Business Plan Page 25

Break-Even Analysis

VARIABLE
NET UNITS NET REVENUE FIXED COST TOTAL COST TOTAL PROFIT
COST
- $0 $118,036 $0 $118,036 -$118,036
20 $20,000 $118,036 $3,000 $121,036 -$101,036
40 $40,000 $118,036 $6,000 $124,036 -$84,036
60 $60,000 $118,036 $9,000 $127,036 -$67,036
80 $80,000 $118,036 $12,000 $130,036 -$50,036
100 $100,000 $118,036 $15,000 $133,036 -$33,036
120 $120,000 $118,036 $18,000 $136,036 -$16,036
140 $140,000 $118,036 $21,000 $139,036 $964
160 $160,000 $118,036 $24,000 $142,036 $17,964
180 $180,000 $118,036 $27,000 $145,036 $34,964
200 $200,000 $118,036 $30,000 $148,036 $51,964
220 $220,000 $118,036 $33,000 $151,036 $68,964
240 $240,000 $118,036 $36,000 $154,036 $85,964
260 $260,000 $118,036 $39,000 $157,036 $102,964
280 $280,000 $118,036 $42,000 $160,036 $119,964
300 $300,000 $118,036 $45,000 $163,036 $136,964
320 $320,000 $118,036 $48,000 $166,036 $153,964

Breakeven Analysis

$300,000

$250,000
COST-VOLUME-PROFIT

$200,000

$150,000

$100,000

$50,000

$0
0

20

40

60

80

100

120

140

160

180

200

220

240

260

280

300

320

NET UNITS

Castor Design | Business Plan Page 26

Appendix

Year 1 Profit & Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Revenue 23,000 24,000 25,000 26,000 27,000 28,000 29,000 30,000 31,000 32,000 33,000 34,000
Subtotal Cost of Revenue 4,300 4,400 4,500 4,600 4,700 4,800 4,900 5,000 5,100 5,200 5,300 5,400
Total Cost of Revenue $ 4,300 $ 4,400 $ 4,500 $ 4,600 $ 4,700 $ 4,800 $ 4,900 $ 5,000 $ 5,100 $ 5,200 $ 5,300 $ 5,400

Gross Margin $ 18,700 $ 19,600 $ 20,500 $ 21,400 $ 22,300 $ 23,200 $ 24,100 $ 25,000 $ 25,900 $ 26,800 $ 27,700 $ 28,600
Gross Margin/Revenue 81% 82% 82% 82% 83% 83% 83% 83% 84% 84% 84% 84%

Expenses
Insurance 200 200 200 200 200 200 200 200 200 200 200 200
Rent 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500 1,500
Utilities 150 150 150 150 150 150 150 150 150 150 150 150
Sales and Marketing 400 400 400 400 400 400 400 400 400 400 400 400
Legal 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000
Incorporation Fees 2,000 - - - - - - - - - - -
Misc SG&A 1,140 1,140 1,140 1,140 1,140 1,140 1,140 1,140 1,140 1,140 1,140 1,140
Total Operating Expenses $ 7,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390 $ 5,390

EBIT $ 11,310 $ 14,210 $ 15,110 $ 16,010 $ 16,910 $ 17,810 $ 18,710 $ 19,610 $ 20,510 $ 21,410 $ 22,310 $ 23,210
EBIT/Revenue 49% 59% 60% 62% 63% 64% 65% 65% 66% 67% 68% 68%

Castor Design | Business Plan Page 27

 Year 1 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

Revenue
$ 23,000.0 $ 24,000.0 $ 25,000.0 $ 26,000.0 $ 27,000.0 $ 28,000.0 $ 29,000.0 $ 30,000.0 $ 31,000.0 $ 32,000.0 $ 33,000.0 $ 34,000.0
New Current Borrowing
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Long-Term Liabilities
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -

Sale of Other Current Assets

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Sale of Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
New Investment Received
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Subtotal Cash Received
$ 23,000.0 $ 24,000.0 $ 25,000.0 $ 26,000.0 $ 27,000.0 $ 28,000.0 $ 29,000.0 $ 30,000.0 $ 31,000.0 $ 32,000.0 $ 33,000.0 $ 34,000.0

Expenditures

Expenditures from Operations

$ 15,555.0 $ 13,655.0 $ 13,755.0 $ 13,855.0 $ 13,955.0 $ 14,055.0 $ 14,155.0 $ 14,255.0 $ 14,355.0 $ 14,455.0 $ 14,555.0 $ 14,655.0
Subtotal Spent on Operations
$ 15,555.0 $ 13,655.0 $ 13,755.0 $ 13,855.0 $ 13,955.0 $ 14,055.0 $ 14,155.0 $ 14,255.0 $ 14,355.0 $ 14,455.0 $ 14,555.0 $ 14,655.0

Additional Cash Spent

Current Borrowing Repay

$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
L-T Liabilities Principal Repay
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Inventory
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Purchase Long-Term Assets
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Dividends
$ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ - $ -
Cash Spent
$ 15,555.0 $ 13,655.0 $ 13,755.0 $ 13,855.0 $ 13,955.0 $ 14,055.0 $ 14,155.0 $ 14,255.0 $ 14,355.0 $ 14,455.0 $ 14,555.0 $ 14,655.0

Net Cash Flow

$ 7,445.0 $ 10,345.0 $ 11,245.0 $ 12,145.0 $ 13,045.0 $ 13,945.0 $ 14,845.0 $ 15,745.0 $ 16,645.0 $ 17,545.0 $ 18,445.0 $ 19,345.0
Cash Balance
$ 17,445.0 $ 27,790.0 $ 39,035.0 $ 51,180.0 $ 64,225.0 $ 78,170.0 $ 93,015.0 $ 108,760.0 $ 125,405.0 $ 142,950.0 $ 161,395.0 $ 180,740.0

Castor Design | Business Plan Page 28

References

i
https://www.ibisworld.com/search/default.aspx?st=GDP

ii
https://www.statista.com/statistics/183873/gdp-of-the-detroit-metro-area/

iii
https://www.ibisworld.com/search/default.aspx?st=GDP

iv
https://www.statista.com/statistics/248083/real-gross-domestic-product-gdp-of-the-united-states-by-
metropolitan-area/

v
https://www.ibisworld.com/industry-trends/market-research-reports/construction/building-developing-general-
contracting/remodeling.html

vi
https://www.ibisworld.com/industry-trends/market-research-reports/retail-trade/building-material-garden-
equipment-supplies-dealers/home-improvement-stores.html

Castor Design | Business Plan Page 29