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Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................1
1.1 Objectives ...................................................................................................................................1
1.2 Keys to Success ........................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................2
2.2 Start-up Summary ......................................................................................................................2
Table: Start-up .........................................................................................................................3
Table: Start-up Funding ..........................................................................................................4
Chart: Start-up .........................................................................................................................5
2.3 Company Locations and Facilities ..........................................................................................5
3.0 Products ...............................................................................................................................................5
3.1 Competitive Comparison..........................................................................................................5
4.0 Market Analysis Summary..................................................................................................................6
4.1 Market Segmentation ................................................................................................................6
Table: Market Analysis ...........................................................................................................6
Chart: Market Analysis (Pie) ..................................................................................................7
4.2 Target Market Segment Strategy.............................................................................................7
4.3 Main Competitors ......................................................................................................................8
5.0 Strategy and Implementation Summary ............................................................................................8
5.1 Value Proposition ......................................................................................................................8
5.2 Competitive Edge ......................................................................................................................8
5.3 Marketing Strategy.....................................................................................................................8
5.4 Sales Forecast ...........................................................................................................................9
Table: Sales Forecast ..........................................................................................................10
Chart: Sales by Year.............................................................................................................10
Chart: Sales Monthly.............................................................................................................11
6.0 Management Summary ....................................................................................................................11
Table: Personnel ...................................................................................................................12
7.0 Financial Plan ....................................................................................................................................12
7.1 Important Assumptions............................................................................................................12
Table: General Assumptions ...............................................................................................12
7.2 Projected Profit and Loss .......................................................................................................12
Chart: Gross Margin Monthly ...............................................................................................13
Chart: Gross Margin Yearly..................................................................................................13
Table: Profit and Loss ..........................................................................................................14
Chart: Profit Monthly .............................................................................................................14
Chart: Profit Yearly................................................................................................................15
7.3 Break-even Analysis................................................................................................................15
Chart: Break-even Analysis .................................................................................................15
Table: Break-even Analysis .................................................................................................16
7.4 Projected Cash Flow...............................................................................................................16
Chart: Cash ...........................................................................................................................16
Table: Cash Flow..................................................................................................................17
7.5 Projected Balance Sheet ........................................................................................................18
Table: Balance Sheet ...........................................................................................................18
7.6 Business Ratios .......................................................................................................................19
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Table of Contents
Table: Ratios .........................................................................................................................20
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

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Chicano Stylez
1.0 Executive Summary
Chicano Stylez (CS) is a dazzling clothing and ac cessories store aimed at the growing Chicano/
Hispanic population in Eugene, Oregon. We are here to provide unique products from Los Angeles
to South America. It is the goal of CS to bec ome Oregon's top cultural retail store. We hope to
obtain both high profits and a reputation for great customer satisfac tion by offering a large
variety of high quality and rare products to our customers.
Located in downtown Eugene, we provide a central loc ation for the growing Hispanic community.
We believe it is important to create an atmosphere of ac ceptance and community care, as well
as a plac e where individuals can identify and bond with aspects of their culture. Our
company takes pride in giving bac k to the community by offering free services to children,
such as story nights, art lessons, and lessons in music appreciation.
Chicano Stylez encourages a creative work environment for it's employees, as well as a deep
respec t for diversity. In addition to this, we offer employee goals such as profit sharing with
company growth.

1.1 Objectives
1.
2.
3.
4.

To
To
To
To

make Chicano Stylez the number one cultural retail store in Oregon.
receive a modest profit margin within the first year.
have a customer base of 5,000 by the end of year one.
ac hieve a positive net profit by year two.

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Chicano Stylez
1.2 Keys to Success
In order for Chicano Stylez to succeed we must:

Offer high-quality products

Provide excellent customer service
Be a helpful and respected member of the community
Create continued customer loyalty, resulting in repeat purchases

2.0 Company Summary

Chicano Stylez is a contemporary retail clothing outlet designed to attrac t the Chicano/
Hispanic population. In addition, CS will provide styles to the population of Eugene who wishes to
dress and ac cessorize in the latest, hip fashions.
The store will remain involved with the community through our outreac h program, to be
described in later sections. We encourage diversity, and do not wish to only target the
Hispanic market; we want ALL of Eugene to come to our store.

2.1 Company Ownership

This will be a simple sole proprietorship owned by Sandra Adams. We intend to wait until the
business grows before we incorporate, if at all.

2.2 Start-up Summary

Assets will make up 80% of start-up costs.
The start-up expenses are fairly low in c omparison. Start-up costs foc us on inventory for my
clothing and ac cessories which are extremely important. Expenses include:

Pricing tools
Cash register
Advertising and design of broc hures
Legal fees for security
Consulting fees to help with merchandising and layout of the store to obtain maximum
benefit
Start-up costs will be financed by the owner and a combination of investors

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Chicano Stylez
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Insurance
Rent
Research and development
Expensed equipment
Other
Total Start-up Expenses

$1,000
$2,000
$500
$2,500
$300
$1,000
$500
$3,500
$1,000
$12,300

Start-up Assets
Cash Required
Start-up Inventory

$20,000
$8,000

Other Current Assets

Long-term Assets
Total Assets

$27,000
$0
$55,000

Total Requirements

$67,300

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Chicano Stylez
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$12,300
$55,000
$67,300

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$35,000
$20,000
$0
$20,000
$55,000

Liabilities and Capital

Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)

$0
$12,000
$10,000

Other Current Liabilities (interest-free)

Total Liabilities

$0
$22,000

Capital
Planned Investment
Investor 1
Investor 2
Other
Additional Investment Requirement
Total Planned Investment

$20,000
$15,000
$10,300
$0
$45,300

Loss at Start-up (Start-up Expenses)

Total Capital

($12,300)
$33,000

Total Capital and Liabilities

$55,000

Total Funding

$67,300

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Chicano Stylez

2.3 Company Locations and Facilities

Located in downtown Eugene, we provide a central loc ation for the growing Hispanic community.
We believe it is important to create an atmosphere of ac ceptance and community care, as well
as a plac e where individuals can identify and bond with all aspec ts of their culture.

3.0 Products
Product descriptions, beyond general categories of clothing and ac cessories, have been
omitted from this sample plan bec ause they were considered proprietary and wouldn't be useful
to anybody else.

3.1 Competitive Comparison

Chicano Stylez has many advantages over its leading competitors.
1.
2.
3.

4.

New inventory from the hottest and most renowned Latin-American markets.
Literature, art, and music are an essential part of our store's atmosphere. We offer
these cultural aspec ts, at no cost, to all children.
In addition to Latin-American products, we offer clothing and ac cessories from swap
meets and cultural sub-communities, like Olvera Street in Los Angeles. Our aim is to
bond with the high Chicano population in Eugene, by offering products that combine
both the Latin and American cultures.
Ambiance of creativity, uniqueness, and a sense of comfort that comes with both
recognition of our products.
Page 5

Chicano Stylez
5.

Friendly staff who foster a respect and appreciation for diversity.

4.0 Market Analysis Summary

The primary target customers of Chicano Stylez are the adult Chicano/Hispanic. CS offers
clothing and ac cessories from the top Latin markets of the world, therefore we assume they
are most appealing to people from or familiar with this culture. We believe that the Chicano/
Hispanic customers will increasingly grow as the population in Oregon does.
The secondary target customers of CS are teenagers. We offer unique products to this area,
and expec t an increasing interest amongst young people who generally like to experience new
things. CS also drives to be very competitive with prices and on top of the latest styles around
the world. Teenagers tend to keep up with the latest fads, therefore, we expec t to see a steady
increase in this customer segment.
The last target customers of CS is listed as Other. We expec t to see a wide variety of people
interested in something new and different, from business people to international students. CS
believes that we offer great customer service and an overall welcoming, warm, and educating
atmosphere, which will keep a variety of customers coming bac k.

4.1 Market Segmentation

The Chicano/Hispanic population in the Whittaker Eugene area is dominant, therefore leading to a
high percentage of our expec ted customers.
CS offers a wide variety of items from Latin markets around the world. Teenagers are amongst
the largest group of trend setters and consumers in today's market. CS feels that by offering a
unique product to the Eugene area, many teenagers will be attrac ted, therefore leading to the
second highest percentage of our customer based population.
The last area of potential customers is labeled as Other. Chicano Stylez offers a high-quality
product that is new to many different types of people, both young and old. Our cultural
ambiance will attrac t many interested shoppers, and our customer service will keep people
both c oming bac k, and spreading the word to others. This last segment is quite diverse,
however we do not expec t it to be overwhelming in numbers.

Table: Market Analysis

Market Analysis
Potential Customers
Chicano/Hispanic 21-35 yrs. old
Teenagers
Other
Total

Growth
10%
6%
4%
8.37%

Year 1

Year 2

Year 3

Year 4

Year 5

2,000
900
300
3,200

2,200
954
312
3,466

2,420
1,011
324
3,755

2,662
1,072
337
4,071

2,928
1,136
350
4,414

CAGR
10.00%
5.99%
3.93%
8.37%

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Chicano Stylez

4.2 Target Market Segment Strategy

Chicano Stylez has three major trends that help its potential success tremendously.
1.
2.
3.

Within the last two to three years there has been world-wide media attention regarding
the "Latin Explosion."
The population increase in the city of Eugene over the past ten years has been
exponential.
The downtown Eugene Whittaker area envelops a high population of the Hispanic/Chicano
population, as well as other small stores, restaurants, and a latino center for career and
social help.

Ac cording to the latest studies, Latin American awareness has increased dramatically, a well
as an interest in this cultural lifestyle, clothing, religion, etc.
The three market segments eac h have their own spec ific needs, CS intends to target eac h
segment's needs individually.
Chicano/Hispanic 21-35 years old: CS provides the population with a variety of
products expressing the Latin c ulture.
Teenagers: Young people strive on uniqueness and trendiness, which we offer in the latest
styles from around the top Latin markets.
Other: The Hispanic culture is amongst the fastest growing sub-culture in the United States
today. People of all rac es are drawn to elements of the Hispanic culture and it's peoples.

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Chicano Stylez
4.3 Main Competitors
Our competitors share our Whittaker community population. La Tiendita/Tac o Loco, Carnec eria
Lupita, and La Fiesta offer a variety of products, however none of these retailers offers free
education to children, or such a wide variety of products from the top Latin-American markets.

La Tiendita loc ated in Tac o Loco combines the atmosphere of a restaurant with shopping.
They do not promote their retail products as much as they do their restaurant, which is
their biggest weakness.

Carnec eria Lupita is a meat store primarily, although it offers several food products from
different countries as well as in bulk quantity. In addition to selling meat, they sell spices,
candles, some clothing, and other ac cessories. The biggest weakness for this store is the
small size in which it has to operate.

La Fiesta is loc ated in the restaurant Las Brasas which adds to its flow of customers.
La Fiesta offers some clothing and ac cessories, but the bulk of the success of the store
stems from its foc us on video rental and selling jewelry. One of the greatest
weaknesses of this retailer is that it has a small operating space and no real defined
product.

5.0 Strategy and Implementation Summary

The following sections will outline the marketing and sales strategy for CS.

5.1 Value Proposition

Chicano Stylez offers customers high quality clothing, unique and diverse products, a cultural
community center, and educational services for children.

5.2 Competitive Edge

The following components make up the competitive edge for CS.

Location
Unique and high quality products and services
Cultural atmosphere
Loyalty amongst customers

5.3 Marketing Strategy

Our marketing strategy will foc us on pricing, promotion, distribution, sales strategy, and
forecast.
Page 8

Chicano Stylez
We are foc using our market on the Hispanic/Chicano population of downtown Eugene. Our
strategy will embrac e these customers as a community with respect and esteem. To do this, our
marketing resources are centered around customer loyalty and satisfac tion. Our strategy also
embrac es the idea of consistency.

The marketing budget will not exceed $5,000 a year.

Our marketing promotions will remain true to our company objectives and mission
statement.

Positioning Statement:
We target people who look for a high quality and unique product as well as a cultural
atmosphere. Unlike other Latin based retailers, we offer community involvement.
Pricing Strategy:

CS is a store for continued customer purchase and loyalty. It is crucial to maintain a

consistent pricing strategy.
We will not exceed a competitor's price by more than 5-10%, and will always honor a
competitor's price when dealing with a customer.

Promotion Strategy:

CS will maintain an advertising plan that will consist of a radio advertisement on the
loc al spanish station and a display in the phone book.
Publicity is the essential strategy for CS. We aim to involve the community through public
relations and utilizing different forms of media to get our name out.

Marketing programs:
Our most important marketing programs are:

Publicity: Through media, get our story and mission statement out in the community.
Sales promotion: Have a prominent booth at the park to collectively speak to the
community and offer our products for free.

Sales Strategy:

Encourage employees to sell by giving bonuses based on performance.

Have a large base knowledge of products so that we can sell quality to the customers.
Display sample items and have a great return policy to build trust and loyalty to
increase customer base.

5.4 Sales Forecast

We expec t sales to increase at a steady rate of approximately 2-5% for the first year. It will
begin slow as we open, but will quickly pick up as our customer base increases. In December it
will jump to 9% due to the holidays.
CS would like to see an increase of 20% for the year 2002, and an increase of 30% for the
year 2003. We feel that we can ac complish this steady goal and maintain this amount of sales.

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Chicano Stylez
Table: Sales Forecast
Sales Forecast
Year 1

Year 2

Year 3

Sales
Clothing and Accesories
Other
Total Sales

$90,200
$0
$90,200

$108,240
$0
$108,240

$140,712
$0
$140,712

Direct Cost of Sales

Clothing and Accesories
Other
Subtotal Direct Cost of Sales

Year 1
$22,550
$0
$22,550

Year 2
$27,060
$0
$27,060

Year 3
$35,178
$0
$35,178

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Chicano Stylez

6.0 Management Summary

The founder of Chicano Stylez, Sandra Adams, believes that employee relationships are of
utmost importance to the success of the business. Within this relationship should lie a high
respec t for creativity and growth. Pay will be constantly evaluated and based on performance
and quality of work performed. It is a high priority to expand on eac h other's strengths and
continue to build.
Organizational Structure:
CS does not separate into departments. The owner, Sandra Adams is the one lead manager
who relates all of the dec isions to the initial goal of the company. Employees are encouraged
to work within their creative and physical boundaries. An evaluation and possible promotion or
bonus will be given every 6 months.
Management Team:
Sandra Adams received her degree in the area of Spanish and cultural learning. She has been
a member of a highly dominated Hispanic community in Los Angeles for the greater part of her
life, and realizes the importance of a cultural community bond. Adams seeks to use her
knowledge and personal vision for the Eugene area to create an atmosphere of equality,
awareness, and respect.

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Chicano Stylez
Table: Personnel
Personnel Plan
Year 1
$23,600
$12,000

Year 2
$24,780
$12,600

Year 3
$26,019
$13,230

Total People

Total Payroll

$35,600

$37,380

$39,249

Manager
Employee

7.0 Financial Plan

The following sections outline the financial plan for Chicano Stylez.

7.1 Important Assumptions

The table below highlights the important assumptions for the company.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1
1
10.00%
10.00%
25.42%
0

Year 2
2
10.00%
10.00%
25.00%
0

Year 3
3
10.00%
10.00%
25.42%
0

7.2 Projected Profit and Loss

The table below provides the expec ted profit and loss for the company.

Page 12

Chicano Stylez

Page 13

Chicano Stylez
Table: Profit and Loss
Pro Forma Profit and Loss
Sales
Direct Cost of Sales

Year 1
$90,200
$22,550

Year 2
$108,240
$27,060

Year 3
$140,712
$35,178

Other
Total Cost of Sales

$0
$22,550

$0
$27,060

$0
$35,178

Gross Margin
Gross Margin %

$67,650
75.00%

$81,180
75.00%

$105,534
75.00%

Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other

$35,600
$14,400
$0
$2,400
$3,600
$3,600
$12,000
$0
$0

$37,380
$16,500
$0
$2,000
$3,800
$3,600
$13,000
$0
$0

$39,249
$16,900
$0
$1,500
$4,000
$3,600
$14,000
$0
$0

Total Operating Expenses

$71,600

$76,280

$79,249

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

($3,950)
($3,950)
$1,070
$0

$4,900
$4,900
$840
$1,015

$26,285
$26,285
$600
$6,528

Net Profit
Net Profit/Sales

($5,020)
-5.57%

$3,045
2.81%

$19,157
13.61%

Page 14

Chicano Stylez

7.3 Break-even Analysis

The chart and table below indicate the Break-even Analysis for CS.

Page 15

Chicano Stylez
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even

$7,956

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

25%
$5,967

7.4 Projected Cash Flow

The cash flow statement can be found in the chart and table below.

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Chicano Stylez
Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

$90,200
$90,200

$108,240
$108,240

$140,712
$140,712

$0

$0

$0

$0
$0
$0
$0
$0
$0
$90,200

$0
$0
$0
$0
$0
$0
$108,240

$0
$0
$0
$0
$0
$0
$140,712

Year 1

Year 2

Year 3

$35,600
$55,718
$91,318

$37,380
$69,506
$106,886

$39,249
$82,209
$121,458

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing

$0
$0

$0
$0

$0
$0

Other Liabilities Principal Repayment

Long-term Liabilities Principal Repayment
Purchase Other Current Assets

$0
$2,400
$0

$0
$2,400
$0

$0
$2,400
$0

Purchase Long-term Assets

Dividends
Subtotal Cash Spent

$0
$0
$93,718

$0
$0
$109,286

$0
$0
$123,858

Net Cash Flow

Cash Balance

($3,518)
$16,482

($1,046)
$15,437

$16,854
$32,290

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
Bill Payments
Subtotal Spent on Operations

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Chicano Stylez
7.5 Projected Balance Sheet
The Balance Sheet is found in the following table.

Table: Balance Sheet

Pro Forma Balance Sheet
Year 1

Year 2

Year 3

Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets

$16,482
$3,080
$27,000
$46,562

$15,437
$4,300
$27,000
$46,736

$32,290
$6,055
$27,000
$65,346

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

$0
$0
$0
$46,562

$0
$0
$0
$46,736

$0
$0
$0
$65,346

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities

$8,982
$0
$0

$8,511
$0
$0

$10,364
$0
$0

Subtotal Current Liabilities

$8,982

$8,511

$10,364

$9,600
$18,582

$7,200
$15,711

$4,800
$15,164

Assets

Liabilities and Capital

Current Liabilities

Long-term Liabilities
Total Liabilities
Paid-in Capital

$45,300

$45,300

$45,300

($12,300)
($5,020)
$27,980

($17,320)
$3,045
$31,025

($14,275)
$19,157
$50,182

Total Liabilities and Capital

$46,562

$46,736

$65,346

Net Worth

$27,980

$31,025

$50,182

Retained Earnings
Earnings
Total Capital

Page 18

Chicano Stylez
7.6 Business Ratios
The following table contains important ratios from the retail clothing industry, Code 5999, as
determined by the Standard Industry Classification (SIC) Index.

Page 19

Chicano Stylez
Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
20.00%

Year 3
30.00%

Industry Profile
6.30%

6.61%
57.99%
100.00%
0.00%
100.00%

9.20%
57.77%
100.00%
0.00%
100.00%

9.27%
41.32%
100.00%
0.00%
100.00%

39.30%
23.90%
80.10%
19.90%
100.00%

19.29%
20.62%
39.91%
60.09%

18.21%
15.41%
33.62%
66.38%

15.86%
7.35%
23.21%
76.79%

46.00%
14.00%
60.00%
40.00%

100.00%
75.00%

100.00%
75.00%

100.00%
75.00%

100.00%
34.10%

95.57%
7.22%
-4.38%

56.75%
6.88%
4.53%

49.76%
5.45%
18.68%

19.80%
2.60%
1.10%

5.18

5.49

6.31

1.77

4.84
39.91%
-17.94%
-10.78%

4.99
33.62%
13.09%
8.69%

5.72
23.21%
51.18%
39.31%

0.67
60.00%
2.60%
6.50%

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

-5.57%
-17.94%

2.81%
9.81%

13.61%
38.17%

n.a
n.a

Activity Ratios
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover

7.55
6.09
47
1.94

7.33
8.11
46
2.32

6.79
8.11
41
2.15

n.a
n.a
n.a
n.a

Debt Ratios
Debt to Net Worth
Current Liab. to Liab.

0.66
0.48

0.51
0.54

0.30
0.68

n.a
n.a

$37,580
-3.69

$38,225
5.83

$54,982
43.81

n.a
n.a

0.52
19%
4.84
3.22
0.00

0.43
18%
4.99
3.49
0.00

0.46
16%
5.72
2.80
0.00

n.a
n.a
n.a
n.a
n.a

Sales Growth
Percent of Total Assets
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets

Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 20

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Clothing and Accesories
Other
Total Sales
Direct Cost of Sales
Clothing and Accesories
Other
Subtotal 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

25%

$5,000

$6,000

$6,500

$6,500

$7,000

$7,000

$7,500

$7,500

$8,000

$8,500

$9,500

$11,200

0%

$0
$5,000

$0
$6,000

$0
$6,500

$0
$6,500

$0
$7,000

$0
$7,000

$0
$7,500

$0
$7,500

$0
$8,000

$0
$8,500

$0
$9,500

$0
$11,200

Month 1
$1,250
$0
$1,250

Month 2
$1,500
$0
$1,500

Month 3
$1,625
$0
$1,625

Month 4
$1,625
$0
$1,625

Month 5
$1,750
$0
$1,750

Month 6
$1,750
$0
$1,750

Month 7
$1,875
$0
$1,875

Month 8
$1,875
$0
$1,875

Month 9
$2,000
$0
$2,000

Month 10
$2,125
$0
$2,125

Month 11
$2,375
$0
$2,375

Month 12
$2,800
$0
$2,800

Page 1

Appendix
Table: Personnel
Personnel Plan
Month 1
$1,000
$800

Month 2
$1,000
$800

Month 3
$1,500
$850

Month 4
$1,500
$850

Month 5
$1,700
$900

Month 6
$2,000
$900

Month 7
$2,000
$900

Month 8
$2,000
$1,000

Month 9
$2,500
$1,000

Month 10
$2,550
$1,000

Month 11
$2,850
$1,500

Month 12
$3,000
$1,500

Total People

Total Payroll

$1,800

$1,800

$2,350

$2,350

$2,600

$2,900

$2,900

$3,000

$3,500

$3,550

$4,350

$4,500

Manager
Employee

0%
0%

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate

Month 1
1
10.00%

Month 2
2
10.00%

Month 3
3
10.00%

Month 4
4
10.00%

Month 5
5
10.00%

Month 6
6
10.00%

Month 7
7
10.00%

Month 8
8
10.00%

Month 9
9
10.00%

Month 10
10
10.00%

Month 11
11
10.00%

Month 12
12
10.00%

Long-term Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Tax Rate
Other

30.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$5,000
$1,250

Sales
Direct Cost of Sales
Other

Month 2
$6,000
$1,500

Month 3
$6,500
$1,625

Month 4
$6,500
$1,625

Month 5
$7,000
$1,750

Month 6
$7,000
$1,750

Month 7
$7,500
$1,875

Month 8
$7,500
$1,875

Month 9
$8,000
$2,000

Month 10
$8,500
$2,125

Month 11
$9,500
$2,375

Month 12
$11,200
$2,800

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,250

$1,500

$1,625

$1,625

$1,750

$1,750

$1,875

$1,875

$2,000

$2,125

$2,375

$2,800

$3,750
75.00%

$4,500
75.00%

$4,875
75.00%

$4,875
75.00%

$5,250
75.00%

$5,250
75.00%

$5,625
75.00%

$5,625
75.00%

$6,000
75.00%

$6,375
75.00%

$7,125
75.00%

$8,400
75.00%

Payroll

$1,800

$1,800

$2,350

$2,350

$2,600

$2,900

$2,900

$3,000

$3,500

$3,550

$4,350

$4,500

Sales and Marketing and Other

Expenses
Depreciation
Leased Equipment

$1,300

$1,300

$900

$1,300

$1,300

$1,100

$1,300

$1,100

$1,300

$1,300

$900

$1,300

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

$0
$200

Utilities
Insurance
Rent

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$300
$300
$1,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$4,900

$4,900

$5,050

$5,450

$5,700

$5,800

$6,000

$5,900

$6,600

$6,650

$7,050

$7,600

Profit Before Interest and Taxes

($1,150)

($400)

($175)

($575)

($450)

($550)

($375)

($275)

($600)

($275)

$75

$800

EBITDA
Interest Expense

($1,150)
$98

($400)
$97

($175)
$95

($575)
$93

($450)
$92

($550)
$90

($375)
$88

($275)
$87

($600)
$85

($275)
$83

$75
$82

$800
$80

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

($1,248)
-24.97%

($497)
-8.28%

($270)
-4.15%

($668)
-10.28%

($542)
-7.74%

($640)
-9.14%

($463)
-6.18%

($362)
-4.82%

($685)
-8.56%

($358)
-4.22%

($7)
-0.07%

$720
6.43%

Total Cost of Sales

Gross Margin
Gross Margin %

Expenses

Payroll Taxes
Other
Total Operating Expenses

Taxes Incurred
Net Profit
Net Profit/Sales

15%

Page 4

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

$5,000
$5,000

$6,000
$6,000

$6,500
$6,500

$6,500
$6,500

$7,000
$7,000

$7,000
$7,000

$7,500
$7,500

$7,500
$7,500

$8,000
$8,000

$8,500
$8,500

$9,500
$9,500

$11,200
$11,200

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing

New Other Liabilities (interest-free)

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$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

Sales of Long-term Assets
New Investment Received

$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

Subtotal Cash Received

$5,000

$6,000

$6,500

$6,500

$7,000

$7,000

$7,500

$7,500

$8,000

$8,500

$9,500

$11,200

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Expenditures from Operations

Cash Spending

$1,800

$1,800

$2,350

$2,350

$2,600

$2,900

$2,900

$3,000

$3,500

$3,550

$4,350

$4,500

Bill Payments
Subtotal Spent on Operations

$6,667
$8,467

$3,928
$5,728

$4,309
$6,659

$2,982
$5,332

$3,007
$5,607

$4,086
$6,986

$4,799
$7,699

$4,986
$7,986

$5,020
$8,520

$5,107
$8,657

$5,388
$9,738

$5,438
$9,938

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$0

$200
$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

$8,667

$5,928

$6,859

$5,532

$5,807

$7,186

$7,899

$8,186

$8,720

$8,857

$9,938

$10,138

Long-term Liabilities Principal Repayment

Purchase Other Current Assets

Subtotal Cash Spent

0.00%

Net Cash Flow

($3,667)

$72

($359)

$968

$1,193

($186)

($399)

($686)

($720)

($357)

($438)

$1,062

Cash Balance

$16,333

$16,405

$16,047

$17,014

$18,207

$18,021

$17,622

$16,936

$16,216

$15,859

$15,421

$16,482

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

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
Cash
Inventory

$20,000
$8,000

$16,333
$6,750

$16,405
$5,250

$16,047
$3,625

$17,014
$2,000

$18,207
$1,925

$18,021
$1,925

$17,622
$2,063

$16,936
$2,063

$16,216
$2,200

$15,859
$2,338

$15,421
$2,613

$16,482
$3,080

Other Current Assets

Total Current Assets

$27,000
$55,000

$27,000
$50,083

$27,000
$48,655

$27,000
$46,672

$27,000
$46,014

$27,000
$47,132

$27,000
$46,946

$27,000
$46,685

$27,000
$45,999

$27,000
$45,416

$27,000
$45,196

$27,000
$45,033

$27,000
$46,562

Long-term Assets
Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Accumulated Depreciation

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
$55,000

$0
$50,083

$0
$48,655

$0
$46,672

$0
$46,014

$0
$47,132

$0
$46,946

$0
$46,685

$0
$45,999

$0
$45,416

$0
$45,196

$0
$45,033

$0
$46,562

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$10,000

$6,532

$5,800

$4,287

$4,498

$6,357

$7,011

$7,413

$7,289

$7,591

$7,930

$7,973

$8,982

$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

Subtotal Current Liabilities

$10,000

$6,532

$5,800

$4,287

$4,498

$6,357

$7,011

$7,413

$7,289

$7,591

$7,930

$7,973

$8,982

Long-term Liabilities

$12,000

$11,800

$11,600

$11,400

$11,200

$11,000

$10,800

$10,600

$10,400

$10,200

$10,000

$9,800

$9,600

Total Liabilities

$22,000

$18,332

$17,400

$15,687

$15,698

$17,357

$17,811

$18,013

$17,689

$17,791

$17,930

$17,773

$18,582

Total Long-term Assets

Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities

Paid-in Capital

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

$45,300

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

($12,300)

Earnings
Total Capital

$0
$33,000

($1,248)
$31,752

($1,745)
$31,255

($2,015)
$30,985

($2,683)
$30,317

($3,225)
$29,775

($3,865)
$29,135

($4,328)
$28,672

($4,690)
$28,310

($5,375)
$27,625

($5,733)
$27,267

($5,740)
$27,260

($5,020)
$27,980

Total Liabilities and Capital

$55,000

$50,083

$48,655

$46,672

$46,014

$47,132

$46,946

$46,685

$45,999

$45,416

$45,196

$45,033

$46,562

Net Worth

$33,000

$31,752

$31,255

$30,985

$30,317

$29,775

$29,135

$28,672

$28,310

$27,625

$27,267

$27,260

$27,980

Retained Earnings

Page 6