Business Plan of Ave

Executive Summary The Discount Pharmacy's main goal is to provide prescription medications for our customers at the lowest prices on the market. We will be able to sell prescriptions at reduced prices by carefully maintaining efficiencies in our operations and by targeting a specific segment of the market - those customers who pay for their prescription medications themselves. By focusing on this segment it gives us additional efficiencies - we avoid disruptions in cash flow often associated with insurance payments and we can eliminate unnecessary services for the type of knowledgeable, repeat customer taking maintenance-type medication. The Discount Pharmacy will operate from one store that will serve both mail order customers and those who visit in person. We will thrive by employing friendly and knowledgeable personnel, which, along with our great prices, will drive the repeat business that we will rely upon. We only expect that as the price of medication continues to skyrocket, The Discount Pharmacy will appeal more and more to the customer's sense of value and convenience. Our advertising, mainly through ads in magazines targeted at the over-55 crowd, will be targeted at those who are looking to save money on a pricey but necessary and regular expense. The Discount Pharmacy will be led by John Reeleaf, an MBA with experience in the pharmaceutical industry. Costs will be minimized by maintaining only one pharmacist and filling the void with pharmaceutical techs. We expect to reach profitability by our second year and will generate substantial sales by year three.

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Need actual charts? We recommend using LivePlan as the easiest way to create graphs for your own business plan. Create your own business plan » 1.1 Objectives The objectives for the first three years include: Exceed customer expectations with superior pricing Increase the number of customers by more than 30% per year Develop a business that survives off its own cash flow 1.2 Mission The Discount Pharmacy's mission is to provide our customers with the best prices for their prescription medications. Our convenience and services will exceed the expectations of our customers. 1.3 Keys to Success The keys to success are: Satisfy our customers so they will return again and again Maintain low overhead and operating costs Provide better prices than all our competitors Company Summary The Discount Pharmacy is located in Portland, OR and offers prescription medications at discount prices to our customers by mail order or at the store front. 2.1 Company Ownership The Discount Pharmacy is an Oregon limited liability corporation. The majority stock holder is John Reeleaf. 2.2 Start-up Summary

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The Discount Pharmacy will incur the following start-up equipment costs: Office equipment including chairs, file cabinets, and desks. Front counter, storage bins, cash register. Three computer terminals. Main computer server with a laser printer, and back-up system. Software: Microsoft Office, QuickBooks Pro, drug interaction software, Physician Desk Reference software detailing side effects and other information pertinent to the customer. Assorted bottles, boxes, envelopes, etc. for dispensing and shipment. Scales for shipping. Telecom system. Storefront build-out. Start-up inventory. Rent, utilities, insurance. Please note that these items will be used for more than one year and will therefore be labeled long-term assets, depreciated using G.A.A.P. approved straight-line depreciation.

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Start-up Requirements
Start-up Expenses Legal Rent Utilities Telecom System Insurance Storefront Build-out Expensed Equipment Website development Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets $1,000 $2,000 $400 $400 $300 $15,000 $4,000 $1,000 $24,100 $140,500 $10,000 $0

Long-term Assets Total Assets Total Requirements

$8,500 $159,000 $183,100

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Start-up Funding
Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Seed Funding John Friends and Family Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding $24,100 $159,000 $183,100 $18,500 $140,500 $0 $140,500 $159,000

$0 $0 $0 $0 $0

$50,000 $51,000 $50,000 $32,100 $183,100 ($24,100) $159,000 $159,000 $183,100

Products The Discount Pharmacy offers a wide range of prescription drugs to patients based in Oregon or nationally. Both generics and name brands are offered. In order for a customer to purchase medications mail order, they must first contact The Discount Pharmacy over the phone. The customer then needs to either mail in the prescription, fax it, or email it. Once it is received and payment arrangements are complete, the medicines will be sent out to the customer via U.S.P.S. or U.P.S. Local customers may stop by the store front to pick up the medications. The Discount Pharmacy will only service customers who self pay. The self pay customers will be attracted to The Discount Pharmacy because of its superior prices. For many Americans that do not have drug plans, including the vast majority of Americans over 65, a discount on drugs is very welcome on today's increasingly tight monthly budgets. The Discount Pharmacy will be able to survive on lower margins due to operating efficiencies gained through national mail order operations and not accepting insurance policy drug plans which hampers cash flow. The Discount Pharmacy will also save money by not paying for customer's unlimited access to a pharmacist. If a customer has a question regarding a drug, the pharmaceutical technician will attempt to answer it. As a last resort the pharmacist will provide the answer. Generally, the technician or the accompanying printed literature will answer the question. This model of saving costs by not providing unlimited access to the pharmacist will be successful because the majority of customers will be customers who have been taking said drug for awhile, as opposed to a new prescription,

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and will not require their hand to be held during the transaction. They are interested in The Pharmacy as an inexpensive source for their medication. With each order a printout will accompany the medications providing directions on how to take the medications, other drugs that should be avoided concurrently, and other useful information. The Discount Pharmacy will be using computer print outs from industry software to reduce the cost of providing this information. Note--while the term "self pay" is typically associated with the notion that the customer is paying for the medication out of pocket without insurance, it is used in this context as the customer paying for the medications up front regardless if they have insurance. They may be paying out of pocket, or they may be paying up front and then submitting to their insurance company's drug plan to reimburse them later. Market Analysis Summary The Discount Pharmacy's target market consists of two different groups, local customers or walk-ins, and mail order customers. The Discount Pharmacy will employ two different strategies to reach these two diverse market segments. 4.1 Market Segmentation The Discount Pharmacy's customers can be broken down into two different groups, mail order customers and walk-in customers: Mail order customers. This group of customers orders their medication through the mail in an effort to save money. Generally, the mail order customers are older in age, typically over 50. In general, elderly customers consume more medication relative to younger people. The mail order customer will typically purchase maintenance medications prescriptions for an ongoing ailment that requires regular treatment. This group of customers will also be more likely to purchase several months of medication at once. Walk-in customers. This group of customers are also looking for the lowest prices for their medication. However, they tend to purchase medications monthly at their local pharmacy, often at a higher price. There is not a common demographic for this group of people, other than living in the Portland metropolitan area. Some of these customers will pay for the medications out of pocket and some will submit a claim to their insurance company for reimbursement at a later date.

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Market Analysis
Potential Customers Walk-in customers Mail order customers Total Year 1 Year 2 Year 3 Year 4 Year 5 Growth 8% 345,887 373,558 403,443 435,718 470,575 9% 54,876,345 59,815,216 65,198,585 71,066,458 77,462,439 8.99% 55,222,232 60,188,774 65,602,028 71,502,176 77,933,014 CAGR 8.00% 9.00% 8.99%

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We recommend using LivePlan as the easiest way to create automatic financials for your own business plan. Create your own business plan » 4.2 Target Market Segment Strategy The Discount Pharmacy will seek to attract two different groups of customers and will thus have two strategies to attract them. We anticipate that by far our largest group of customers will be those who order through the mail. These customers will be targeted through an advertising campaign in magazines and newsletters that have an older (>55) audience who regularly need medication and are aware in advance of their needs. For example, one of the main advertising vehicles will be the A.A.R.P monthly newsletter. Walk-in customers will be targeted through advertisements in the local paper, "The Oregonian." Ads will raise awareness for the The Discount Pharmacy and our low prices. 4.3 Competition and Buying Patterns Competition takes many different forms in the pharmacy industry. Chain pharmacies. These are state or national chains such as Rite-Aid. The advantage to these chains are better prices through economies of scale, as well as personalized service. The personalized service takes the form of the chain having a record of your medication purchases as well as any allergies that you have disclosed to them.

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Local pharmacies. These are the pharmacies where you typically know the pharmacist and they know your medical history. This option is high in personalized service and convenience, and high in price.

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Mail order and Internet pharmacies. These are similar to The Discount Pharmacy.

Canadian pharmacies. These pharmacies are located in Canada where the cost of drugs is lower than in the U.S. These pharmacies can be accessed through mail order, the Internet, or via travel. Recently there has been the trend for trips arranged for senior citizens in Northern States to travel up to Canada for the day to pick up their medicines. Strategy and Implementation Summary The Discount Pharmacy will use their website to develop visibility and disseminate information. 5.1 Competitive Edge The Discount Pharmacy's competitive edge is superior pricing. To do that we must maintain our position as the low cost provider by painstakingly ensuring that costs are kept low through operating efficiencies. We will be able to do that by eliminating some of the services traditionally offered by pharmacies. For example, we will employ only one pharmacist and use pharmaceutical technicians to fill the void. As long as a pharmacist is on site during the hours of operation, we can use the pharmaceutical techs for all other capacities where other pharmacies use pharmacists. Other efficiencies are created by having only a small store front and conducting most of our business through mail order. Finally, The Discount Pharmacy is not designed to hold the patient's hand during their purchase. We expect that the vast majority of our customers will already be informed of how to take the medication, and any side effects or drug interactions that should be avoided. We will simply provide each patient with a print out of all the relevant information for consumption of the medication. 5.2 Marketing Strategy The marketing strategy will be based on targeted advertisements, appealing to the customer's sense of value. The marketing campaign's goal will to be increase awareness of The Discount Pharmacy with their target market. 5.3 Sales Strategy The sales strategy will be based on generating long-term relationships with customers. To facilitate that, we will provide medications at superior prices, have medicines in stock for both quick shipment and store front pick up, and provide superior customer service. All sales agents will be trained to provide friendly, knowledgeable customer service. By keeping to these simple, yet effective, business practices, we expect that our customers will make The Discount Pharmacy their exclusive source for medications. For some, medications are an integral part of their lives, so establishing long-term relationships will ensure a large, loyal customer base. 5.3.1 Sales Forecast During the first month we will focus on setting up the store front and generating both local and national visibility. Sales activity will begin in month two. Sales during months three through five there will mainly consist of local business through the store front. In month six we expect to see a jump in sales from mail order. Sales will grow steadily from month six on.

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Sales Forecast
Year 1 Sales Walk-in customers Mail order customers Total Sales Direct Cost of Sales Walk-in customers Mail order customers $209,600 $232,222 $441,822 Year 1 $83,840 $92,889 Year 2 $399,833 $567,432 $967,265 Year 2 $159,933 $226,973 Year 3 $431,334 $640,543 $1,071,877 Year 3 $172,534 $256,217

Subtotal Direct Cost of Sales

$176,729

$386,906

$428,751

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Milestones
Milestone Office/business set up Establishment of the first stategic relationship Profitability Totals Start Date 1/1/2001 1/1/2001 1/1/2001 End Date 5/1/2001 7/1/2001 11/1/2002 Budget $0 $0 $0 $0 Manager John John Everyone Department Executive Business Development Finance

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Web Plan Summary The website will be used for the dissemination of information as well as a mechanism for email communication. Initially there will be no ordering through our website since we do not expect that method to be widely used and trusted by our target customers. 6.1 Development Requirements The Discount Pharmacy will hire a recent college graduate with a major in computer science to complete and maintain our simple website. This will keep costs down. Management Summary John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug representative. He was able to see first hand the profitability associated with the prescription drug industry, as well as the inefficiencies with which most companies are plagued. John graduated with an MBA from the University of Oregon's innovative entrepreneurship program. While there he was awarded a $50,000 no interest loan through a business plan competition. That seed money will be parlayed, along with some other investments, into start up expenses for The Discount Pharmacy. John received an undergraduate degree in chemistry from the University of Oregon. 7.1 Personnel Plan The Discount Pharmacy will employ the following people: Sales agents/phone representatives: two at month three, an additional person at month sixth. Pharmaceutical technicians: two at month two, a third at month six. Pharmacists: month two. Order fulfillment agents: two for month five, a third for month eight. Counter person/phone representative: one at month three.

Personnel Plan
CEO (John) Pharmacist Pharmacist technician Pharmacist technician Pharmacist technician Sales agent Sales agent Sales agent Counter person/phone rep. Counter person/phone rep. Order fulfillment Total People Year 1 $48,000 $55,000 $27,500 $27,500 $17,500 $19,200 $19,200 $11,520 $14,400 $14,400 $14,400 11 Year 2 $52,000 $60,000 $30,000 $30,000 $30,000 $23,040 $23,040 $23,040 $17,280 $17,280 $17,280 11 Year 3 $60,000 $60,000 $30,000 $30,000 $30,000 $23,040 $23,040 $23,040 $17,280 $17,280 $17,280 11

Total Payroll

$268,620

$322,960

$330,960

Financial Plan The following sections will outline important financial information. 8.1 Break-even Analysis The Break-even Analysis calculates what will be needed in monthly revenue to reach the break-even point.

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Break-even Analysis
Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost $48,808 40% $29,285

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Pro Forma Profit and Loss
Sales Direct Cost of Sales Other Production Expenses Total Cost of Sales Gross Margin Gross Margin % Expenses Year 1 $441,822 $176,729 $0 $176,729 $265,093 60.00% Year 2 $967,265 $386,906 $0 $386,906 $580,359 60.00% Year 3 $1,071,877 $428,751 $0 $428,751 $643,126 60.00%

Payroll Sales and Marketing and Other Expenses Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

$268,620 $8,400 $1,704 $0 $4,800 $3,600 $24,000 $40,293 $0 $351,417 ($86,324) ($84,620) $0 $0 ($86,324) -19.54%

$322,960 $8,400 $1,704 $0 $4,800 $3,600 $24,000 $48,444 $0 $413,908 $166,451 $168,155 $0 $49,935 $116,516 12.05%

$330,960 $8,400 $1,704 $0 $4,800 $3,600 $24,000 $49,644 $0 $423,108 $220,018 $221,722 $0 $66,005 $154,013 14.37%

8.3 Projected Cash Flow The following chart and table display the projected cash flow.

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Pro Forma Cash Flow
Year 1 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 $441,822 $441,822 $0 $0 $0 $0 $967,265 $967,265 $0 $0 $0 $0 $1,071,877 $1,071,877 $0 $0 $0 $0 Year 2 Year 3

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 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

$0 $0 $0 $441,822 Year 1 $268,620 $244,177 $512,797 $0 $0 $0 $0 $0 $0 $0 $512,797 ($70,975) $69,525

$0 $0 $0 $967,265 Year 2 $322,960 $546,807 $869,767 $0 $0 $0 $0 $0 $0 $0 $869,767 $97,498 $167,024

$0 $0 $0 $1,071,877 Year 3 $330,960 $589,427 $920,387 $0 $0 $0 $0 $0 $0 $0 $920,387 $151,490 $318,513

8.4 Important Assumptions The following table details important financial assumptions.

General Assumptions
Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 1 10.00% 10.00% 30.00% 0 Year 2 2 10.00% 10.00% 30.00% 0 Year 3 3 10.00% 10.00% 30.00% 0

8.5 Projected Balance Sheet The following table shows the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Year 2 Year 3

$69,525 $28,838 $0 $98,364 $8,500 $1,704 $6,796 $105,160 Year 1 $32,484 $0

$167,024 $63,135 $0 $230,159 $8,500 $3,408 $5,092 $235,251 Year 2 $46,059 $0

$318,513 $69,963 $0 $388,477 $8,500 $5,112 $3,388 $391,865 Year 3 $48,660 $0

Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

$0 $32,484 $0 $32,484 $183,100 ($24,100) ($86,324) $72,676 $105,160 $72,676

$0 $46,059 $0 $46,059 $183,100 ($110,424) $116,516 $189,192 $235,251 $189,192

$0 $48,660 $0 $48,660 $183,100 $6,092 $154,013 $343,205 $391,865 $343,205

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Ratio Analysis
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 Additional Ratios Net Profit Margin Return on Equity Activity Ratios Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Year 1 0.00% 27.42% 0.00% 93.54% 6.46% 100.00% 30.89% 0.00% 30.89% 69.11% 100.00% 60.00% 93.39% 1.28% -19.54% 3.03 2.14 30.89% -118.78% -82.09% Year 1 -19.54% -118.78% 10.34 8.52 27 4.20 Year 2 118.93% 26.84% 0.00% 97.84% 2.16% 100.00% 19.58% 0.00% 19.58% 80.42% 100.00% 60.00% 44.47% 0.50% 17.21% 5.00 3.63 19.58% 87.98% 70.75% Year 2 12.05% 61.59% 8.41 12.17 26 4.11 Year 3 10.82% 17.85% 0.00% 99.14% 0.86% 100.00% 12.42% 0.00% 12.42% 87.58% 100.00% 60.00% 42.20% 0.45% 20.53% 7.98 6.55 12.42% 64.11% 56.15% Year 3 14.37% 44.87% 6.44 12.17 29 2.74 Industry Profile 11.07% 36.78% 26.80% 90.26% 9.74% 100.00% 45.28% 14.93% 60.21% 39.79% 100.00% 14.44% 2.35% 0.38% 1.99% 1.74 0.86 63.63% 5.59% 15.37% n.a n.a n.a n.a n.a n.a

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

0.45 1.00 $65,880 0.00 0.24 31% 2.14 6.08 0.00

0.24 1.00 $184,100 0.00 0.24 20% 3.63 5.11 0.00

0.14 1.00 $339,817 0.00 0.37 12% 6.55 3.12 0.00

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

Executive Summary Sample Pharmacy is in the retail pharmacy business. It is located in Bangalore, India. Sample Pharmacy presently owns 3 retail outlets in Bangalore, India. Sample Pharmacy’s primary products are prescription medicines. Sample Pharmacy is positioned as a premium pharmacy that caters to the upscale clientele. Customers shop from sample Pharmacy for the following reasons: Knowledgeable pharmacist Availability of medications 'WOW factor' - Fun, Service & Refreshing Ambience Sample Pharmacy is founded by experienced entrepreneurs who have passion and skill for business. Revenues of Sample Pharmacy is expected to grow at 3.6 times in the fiscal year 2008. Sample Pharmacy’s purpose is to create a vision in the hearts and minds of its community as a company that cares about the welfare of its employees, the quality of its products and services, and the honesty and integrity of its business relationships. 1.0 Objectives Break even by March 31, 2008 EBIDTA in excess of Rs I0 Lakhs for the FY ending March 2009 EBIDTA in excess of Rs 20 Lakhs for the FY ending March 2010 EBIDTA in excess of Rs 30 Lakhs for the FY ending March 2011 1.01 Mission Sample pharmacy is in the retail pharmacy business. Sample Pharmacy’s vision is to provide its customers with a great store ambience, hygiene, good assortment of merchandise, great service and convenience. Sample Pharmacy’s purpose is to create a vision in the hearts and minds of its community as a company that cares about the welfare of its employees, the quality of its products and services, and the honesty and integrity of its business relationships. Sample Pharmacy’s ideal team member is humble, respectful, customer centered (has the needs of the customer in mind), has integrity, honesty & a high moral code and sets the highest standards of excellence in his endeavors. Sample Business Plan, Sample Pharmacy 5 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Sample Pharmacy’s customers buy from them because their staff members welcome them with a beautiful smile, greet them by saying "Good Morning", "Thank You", "Welcome" and help them in making an informed decision. Besides Sample Pharmacy’s customers like Sample Pharmacy’s store ambience & hygiene, service, product availability and trust the quality of Sample Pharmacy’s products. 1.02 Keys to success The keys to Sample Pharmacy’s success are: 1. Good Customer Service 2. Inventory Management 3. Effective Operations 2.0 Company summary Sample Pharmacy is a company incorporated in December 2005. The core business of Sample Pharmacy is pharmacy retail. 2.01 Company ownership Sample Pharmacy is a privately held company with majority of its shares held by its Founder and Chairman NAME WITHHELD

. 2.02 Past performance table FY 2007 Sales Rs 3,139,121 Gross Margin Rs 533,650 Gross Margin 17.00% Operating Expenses Rs 2,500,000 Inventory Turnover 3.76 Balance Sheet FY 2007 Current Assets Cash Rs 308,375 Inventory Rs 1,387,725 Other Current Assets Rs 1,123,045 Total Current Assets Rs 2,819,145 Long-term Assets Long-term Assets Rs 3,525,054 Total Long-term Assets Rs 3,525,054Sample Business Plan, Sample Pharmacy 6 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Total Assets Rs 6,344,199 Current Liabilities Other Current Liabilities (Interest free) Rs 270,400 Total Current Liabilities Rs 270,400 Long-term Liabilities Rs 2,950,000 Total Liabilities Rs 3,220,400 Paid-in Capital Rs 5,000,000 Earnings (Rs 1,876,201) Total Capital Rs 3,123,799 Total Capital and Liabilities Rs 6,344,199 Other Inputs Payment Days 7 2.03 Company locations and facilities Head Office: GF 2, 301.11 Mezzanine Floor, Mosque Rd. Frazer Town, Bangalore 560005 Sample Pharmacy Store Locations: Store 1: GF 2, 301.11 Pentagon Complex, Mosque Rd. Frazer Town Bangalore 560005 Sample Pharmacy’s Frazer Town location was the first location opened by Sample Pharma cy. The Frazer Town location opened for business on May 14, 2006. Store 2: #150/4, Bearing No 86/1, New Tippasandra Main Road, HAL 3rd stage, Bangalore 560075. Sample Pharmacy’s Tippasandra location is the second location opened by Sample Pharmacy . It opened on May 14, 2006 shortly after the opening of store 1. Store 3: Esteem Plaza, #359/20, 13th main road, Sadashivnagar, Bangalore 560080. Sample Pharmacy’s sadashivnagar location opened on May 22, 2006. All Sample Pharmacy’s locations are leased premises. Sample Pharmacy stores range in square footage from 120 sq. ft. - 430 sq. ft. 2.04 Sales literature Sample Pharmacy’s sales flyer will present a very professional image of its business. It will be designed by a good graphic designer. Sample Business Plan, Sample Pharmacy 7 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. The objective of the sales flyer and sales brochure is to present a very professional image of our business and position ourselves as a trusted business. This sales flyer will be part of its marketing program where it will be used as newspaper inserts and distribute it to our geographic target. 3.0 Product and service summary Sample Pharmacy will sell prescription medications and OTC medications primarily through its retail outlets. Sample Pharmacy’s primary focus will be prescription medications and OTC medications. However Sample Pharmacy may carry a range of toiletries and daily use items like shampoos, conditioners and other skin and hair care items. 3.01 Product and service description

Sample Pharmacy’s primary business will come from prescription medications and OTC medications. The price range will be at the maximum retail price (i.e. suggestive retail price). Sample Pharmacy will also evaluate other revenue streams like advertising and selling shelf space. 3.02 Competitive comparison Sample Pharmacy will position itself as a premium pharmacy that caters to the upscale clientele. The top three reasons customers shop from sample pharmacy is: Knowledgeable pharmacist Availability of medications 'WOW factor' - Fun, Service & Refreshing Ambience 3.03 Fulfillment Sample Pharmacy plans on buying products directly from distributors. Distribution is a major concern for Sample Pharmacy. Lot of prescription medication distributors do not supply to organized retailers as the chemist association in the city wants to thwart the competition from organized retailers. However, Sample Pharmacy can go to the physical location of the distributors and buy products directly from their counter. However, there are distributors who do supply to Sample Pharmacy at their place of business. 3.04 Technology Today, a lot of good retail businesses use technology to manage their business better. The first area of concern is the Point Of Sale (POS) software. A good Point Of Sale (POS) software allows the user to serve his customers quickly. It allows the user to obtain specific reports like VAT returns, category & sub-category sales, customer databases with customer information, purchases made by the customer for a particular period, prescriptions of the customer and average ticket price per customer. Sample Business Plan, Sample Pharmacy 8 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Preferably Sample Pharmacy would like the customer relationship software to be integrated with the POS software. The customer relationship software should tell what customers are buying and will use statistical analysis to tell what they will buy next. It should also have the names, addresses and contact information of customers. It should make it easy to profile and segregate customers based on certain demographic parameters. If it can profile customers on psychographic factors, that's even better. 3.05 Future products and services Sample Pharmacy is evaluating selling products online. Sample Pharmacy may prepare a separate business plan for the online retail business when decides to go ahead with the project. 4.0 Market Analysis Summary The entire volume of business for prescription medicines and over-the-counter medications is about Rs 1 lakh per day in Frazer town (2 km radius around our store), Rs 2.85 lakhs per day in Tippasandara (1 km radius around our store), and Rs 1.93 lakhs per day in sadashivnagar (2 km radius around our store). This is got by calculating the entire sales of all the pharmacies put together. Sample Pharmacy did a market research through its internal team to determine the results. This also includes a small percentage of personal care products. Sample Pharmacy will do a market survey that gives information about the 3 greatest fears and three benefits that customers face when they buy from a pharmacy. Sample Pharmacy will focus on diabetic patients in and around its two km radius. According to information from sources on the internet and the Deccan Herald - the local newspaper, there are at least 500,000 diabetic patients in Bangalore. Sample Pharmacy will need to do another market research that tells them how many diabetic patients are there in its geographic target market. Sample Pharmacy’s target market focus will be: 2 Km geographic radius High & Mid income prospects Diabetic Patients Young mothers and women between the ages of 26 - 45 4.01 Market segmentation Sample Pharmacy will initially target the following 3 segments: 1. The modern women & young mother - Women between the ages of 26-45 2. Diabetic Patients 3. Incidental shoppers 4.02 Target market segmentationSample Business Plan, Sample Pharmacy 9 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. According to a survey done by Sample Pharmacy, it found that there are at least 4 gynecologists and/or pediatricians in the 2 km radius of each of our locations. This shows that there are substantial amount of

women who use these services and therefore have a need for medications. If it is estimated that there are 20 footfalls per day in each of these clinics, then that is about 80-100 customers per day in this segment alone. Focusing on women (with children) will help other categories of products like skin care, hair care & baby care as well. According to a local newspaper source on the internet, the entire city of Bangalore has about 500,000 diabetic patients. Sample Pharmacy assumes that there is a good chance that a sizable amount of diabetic patients live in its geographic target. Sample Pharmacy is fairly certain about sadashivnagar where there are about 3 diabetic clinics. However, Thippasandra and Frazer town are locations where market research should help Sample Pharmacy. Sample Pharmacy’s third market segment is the other category. These are incidental and convenience shoppers who live in the neighborhood. Sample Pharmacy will not go after them consciously. Sample Pharmacy’s main focus will be on the first two groups: The Modern Women & Diabetics. 4.03 Market needs The three basic needs (according to Sample Pharmacy) that buyers look for in a pharmacy is: Safety of medications Hygiene Availability of medications Knowledgeable pharmacist Sample Pharmacy plans on doing market research that will either agree or disagree with its opinion. The research should talk about the needs of each segment i.e Women (gynecology), pediatric, Diabetic and Cardiac 4.04 Market trends Today, there are not many players in the organized retail pharmacy market. Most of the pharmacies are owned by independent mom & pop operations. However things are changing now. Lot of big players are entering the market. Huge companies get into the retail sector and start multiple store chains. And they bypass the supply chain by buying directly from stockiest or even the manufacturer. They cut out the distributor and thus can pass on the benefit to the customer by offering a 10-15% discount. However it's difficult for the independent retailer to offer such discounts as these margins go to the distributor. Another trend that is happening is that a lot of companies are trying to sell consumer goods like shampoos, soaps and others through retail pharmacies. The reason for doing that is because consumers tend to trust pharmacists more than departmental stores and because pharmacies are more hygienic. This trend was spotted by an article in the financial times. Sample Business Plan, Sample Pharmacy 10 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. 4.05 Market growth The pharmacy market in India is growing at about 9% annually. At the moment, in our current geographic targets the total volume of business is about Rs 400,000 per day. i.e Frazer Town = Rs 93,000; Tippasandara = Rs 265,000; Sadashivnagar = Rs 129,000. Sample Pharmacy expects this growth to be in proportionate to the national growth. 5.0 Service business analysis Sample Pharmacy’s business fits into 3 industries; one is the retail industry that is valued at 180 billion dollars, the pharmaceutical industry that is valued at approximately 93 billion dollars and the personal care market at 3.7 billion dollars. However, Sample Pharmacy’s core business will come from diabetics in its immediate 2 km radius. According to a dietician in the Indian Bureau of Marketing and research, the diabetic market in India in valued at $100 million or Rs 500 Crores. Sample Pharmacy’s immediate 2 km radius should have at least 1000 diabetics that spend Rs 1000 per month. That comes up to Rs 1 million in monthly sales. Sample Pharmacy also plans on targeting women and children. The reason for this is that there are sizable gaenocologists and pediatrics in the area. The retail pharmacy industry is dominated by many independent retailers, it is fairly unorganized at the moment. There are a few organized players like Trust, Subiksha, Apollo and LifeKen. The Reliance Group, India's largest conglomerate is planning on getting into the retail sector shortly. This should increase competition in the retail sector. 5.01 Industry participants The pharmacy retail industry is made up of many small independent retailers or mom & pops. The industry is fairly unorganized. In each of Sample Pharmacy’s locations, there are at least 10 pharmacies in the two kilometer radius that compete with Sample Pharmacy There are very few regional and national chains. Among the regional chains, Lifeken pharma, Trust, Apollo & Subiksha are some of the major players. Most of the pharmacies do not offer discounts, however subiksha offers a 10% discount on all medications & a newly launched pharmacy chain ayurvadulu offers a 4% discount to all customers and 14% discount to senior citizens. Although they

offer a discount, their pharmacies are not very clean and hygienic. 5.02 Distribution patterns In prescription medications, the supply chain goes from the manufacturer to the stockists to the distributor and then to the retailer. In FMCG products, the products are sold from the manufacturer to the distributor and then to the retailer. Sample Business Plan, Sample Pharmacy 11 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. However, the reliance group, one of the largest conglomerates in India is planning on acquiring many of distributors and consolidating the industry. They plan on being a national distributor. This should level the playing field as many of the independent retailers have a chemist association that boycotts distributors for supplying to organized retailers. Therefore, many distributors are reluctant to supply to organized retailers. Since Sample Pharmacy is an organized retailer, the problem of boycott is taken care by consolidation from the reliance group. 5.03 Competition and buying Most customers buy medications & toiletries from places that are close to their homes. Most business is generated through word of mouth. Multi-Chain stores like lifeken, apollo and trust don't really have great advertising campaigns. Their business is primarily through word of mouth. There are some other customers who buy specialty medicines from specialty pharmacies like cash pharmacy in Bangalore. 5.04 Main competitors The following are some of Sample Pharmacy’s main competitors: 1. Surana Medicals, Frazer Town: Been in the market for a long time, the awareness about the store, location, established base of regular customers, fairly organized store are some of his strenghts. No real good customer service, no organized brand identity and no active marketing plan are some of his weaknesses. 2. Balaji Medicals, Sadashivnagar: Been in the market for a long time, good awareness about the store, established base of regular customers, good availability of medicines are some of his strenghts. Poor customer service, poor presentation of the store are some of his weaknesses. 3. Medicine House, CMH road: Highly visible location close to a major hospital, good inventory of medicines and experienced staff are some of his strengths. Below average work culture, delays to customer requests are some of his weaknesses. 4. Prakash Medicals, 80 ft road: Highly visible location, huge inventory of products and experienced staff are some of his strenghts. Delays in customer requests and unorganization are some of his weaknesses. This clearly shows that there is a big opportunity in the retail pharmacy market for a really well organized, customer oriented and hygienic pharmacy. 5.05 Value proposition Sample Pharmacy’s value proposition is knowledgeable pharmacist, availability of medicines and 'wow factor' - fun, service and refreshing ambience. 6.0 Sales strategySample Business Plan, Sample Pharmacy 12 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Most of Sample Pharmacy’s sales will come from its retail outlets. Each sales associate will be trained to be a customer relationship associate using our sales processes modeled after Rick Segel's and Brian Tracy's sales methods. Home deliveries will be made to customers for extra convenience. Sample Pharmacy will use soft suggestive selling techniques to increase our average ticket size (ATS). A database of customers with demographic information about what they buy and when they buy have to be maintained. Most likely Sample Pharmacy will use salesforce.com as our database vendor. 6.01 Pricing strategy Most of Sample Pharmacy’s prices will be manufacturer suggested prices. Moreover, it is hard to charge higher prices for the same product and the same brand. However, Sample Pharmacy should have a mark-down section in its stores, that way Sample Pharmacy can offer a discount on some products. This will ensure that products sell faster than normal, build traffic, have customers come back to its stores more often and develop a perception among customers that our pricing is competitive. 6.02 Promotion strategy The following will be Sample Pharmacy’s promotion strategy for the fiscal year 2007 -08. 1. An awareness campaign throughout the year by farming its geographic target 2. One launch event or anniversary celebration per year 3. Two health camps per store per year. 4. One charity event per year. 5. Two contests per year.

6. 22 Q&A answer ads in Frazer times, 4 profile ads per year (one every quarter), 1 sale ad per year. 7. 1 sale per store per year. 8. Direct mailers to diabetics, genecology, cardiac, pediatric and dermatology patients every quarter i.e. 4 times a year. 9. Direct mailers of birthday cards with a gift coupon every month. 10. Market research (internal) twice a year. 11. Market research through an external agency, if required, once a year. 12. One Diwali promotion a year. 13. One Christmas and New Year promotion per year. 14. Listing on Just dial 15. Listing on the Yellow Pages 16. Implementation will be measured by filling up the pre and post promotion form. 6.03 Sales forecast table FY 2008 Prescription Medications Rs 8,912,198 FMCG Rs 5,800,333Sample Business Plan, Sample Pharmacy 13 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Total Sales Rs 14,712,531 Direct Cost of Sales Cost of goods sold PM Rs 7,397,124 Cost of goods sold FMCG Rs 4,814,277 Subtotal Direct Cost of Sales Rs 12,211,401 6.04 Sales forecast explanation Sample Pharmacy expects sales to be 60% medicines and 40% FMCG. Sample Pharmacy believes sales will increase to average sale of Rs 30,000 per day per store by the end of the fiscal year 2007-08. Sample Pharmacy expects its sales to increase by 15% on average every month during the fiscal year 2007-08. In the fiscal year 2008-09, Sample Pharmacy expects sales to increase by Rs 14,000 on average every month for prescription medicines and Rs 10,000 on average for FMCG products. 6.05 Sales program All Sample Pharmacy sales associates will be extremely presentable. They will wear uniforms at all times of work and present a consistent and professional image of the company. They will be trained in its sales processes. Every new hire has to be trained in its sales process before they get involved in any interaction with the customer. 7.0 Marketing plan Sample Pharmacy marketing strategy is to improve the image of its company by improving the quality of its ads and its communication materials. Sample Pharmacy realizes that its business cards, envelopes and letterheads are tools to promote its business. Therefore Sample Pharmacy will get them designed by a good graphic designer thus presenting a classy upscale image of its business. It’s sensory package has to be upscale & exciting. The store interiors & store front should not have anything that is printed from it’s computer on an A4 sheet or cut in pieces of paper as this makes its business look extremely unprofessional. All communication material has to be finished up by a good professional designer to give its business a strong professional image Store staff have to always wear uniforms and present a professional image of the business. The core value proposition of Sample Pharmacy is knowledgeable staff, availability of medicines and the 'wow' factor - service, fun & refreshing ambience. 7.01 Strengths Good ambience: Our stores are very nicely designed & soothing music is played in the background to provide our customers a great shopping experience.Sample Business Plan, Sample Pharmacy 14 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Continuous improvement: We constantly strive to improve ourselves & get better at what we do all the time. 7.02 Weaknesses Owners are still climbing the retail learning curve Certain operational weaknesses as the operations manual is still being developed Cash flows are uncertain, since the last 10 months All stores are not as professional as they need to be, employees need to wear uniforms, the store displays need to be much more clearly organized There are certain missed accountabilities

Marketing needs to be more active, we have to have solid promotions strategy, solid research methods, spread the word and be well known in our communities. 7.03 Opportunities The retail pharmacy industry is fairly unorganized. Most pharmacies in Sample Pharmacy’s communities are fairly unorganized, unhygienic and lack good customer service. There is a great opportunity for a pharmacy to provide good service in a hygienic & dynamic atmosphere. 7.04 Threats Emerging Competition from organized retailers; Reliance, India's largest conglomerate plans on venturing into the pharmacy retail space. And there are also rumors that other organized retailers may follow suit. Possible price ceiling by government regulation: Since medicines are important to the community at large, the government may have a price ceiling on the pricing of medicines. 7.05 SWOT analysis Sample Pharmacy’s strengths include our wonderful store ambience and continuous learning attitude of its organization. Some of its weaknesses is that customer service needs to get better, Sample Pharmacy needs to get better people and Sample Pharmacy needs to have much more active marketing and promotion activities. Sample Pharmacy’s opportunities are that there are not that many organized players in the market and the competitors are nothing special. Sample Pharmacy’s threats are that there is such a big gap for an organized retailer that it seems attractive for large retailers to enter the market. However, Sample Pharmacy does believe it can beat anybody of any size if it focuses on being the best. 7.06 Competitive edge Sample Pharmacy’s competitive edge is the trust we generate among our customers by positioning ourselves as a world class pharmacy. Also, the design of Sample Pharmacy’s stores and the ambience give Sample Pharmacy a distinct competitive edge with our competition. 7.07 Positioning statementSample Business Plan, Sample Pharmacy 15 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. For the person who has a need for medications in its geographic target, who is usually between the age of 25-45 with middle to upper-middle class income. Unlike, many mom and pop operations, who's pharmacies are cluttered, dusty and customer service is poor to non-existent, Sample Pharmacy operated pharmacies are organized, hygienic, have a great atmosphere and are positioned in a manner where people trust the quality of its products. 7.08 Strategy pyramid Sample Pharmacy’s main strategy is to position itself as a pharmacy that can be trusted. This is done by portraying a professional image where all employees wear a uniform and the store is neatly organized. Providing good customer service where staff welcome them with a beautiful smile and even carry customer's bag to the car. Sample Pharmacy will use consultative selling and relationship selling methods to position itself as a pharmacy that customers trust. All Sample Pharmacy communication materials will be professionally designed by exceptionally good graphic designers to portray a strong image of its business. Position ourselves as experts in our field Sample Pharmacy will have banners in front of its stores that have a punch line that says "Prescription medicines is our specialty." Sample Pharmacy will have flyers giving a brief description of its business and its staff will distribute these flyers to its geographic target. Sample Pharmacy will have a small 3 page brochure giving a brief description about its business. 7.09 Distribution strategy Sample Pharmacy’s distribution strategy will be mainly through its retail outlets. Sample Pharmacy will also offer home delivery of medicines as this will be convenient for its customers. 7.10 Strategic alliances It may be beneficial to have tie-ups with doctors and clinics around the area where doctors give Sample Pharmacy customers a discount. This should help the doctors as this will bring them more customers and will help Sample Pharmacy customers as this will give them benefits to shop at Sample Pharmacy stores. It also brings Sample Pharmacy closer to doctors as this will help Sample Pharmacy promote its business in their clinics. It may also be beneficial to have tie-ups with other brands where they give us coupons and other incentives for customers to purchase their products. Sample Pharmacy is still developing plans for comarketing programs with its vendors. 8.0 Web plan summarySample Business Plan, Sample Pharmacy 16 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected].

Initially, Sample Pharmacy will not sell products online however Sample Pharmacy may sell products online at a later period which is undecided. Sample Pharmacy will however have a discussion board, groups, events and articles that change on a frequent basis, this will keep its customers coming back and involved in the website. 8.01 Website marketing strategy Section omitted 8.02 Development requirements Section omitted 9.0 Management summary Sample Pharmacy’s philosophy is to hire people who are humble and have a quest for excellence. For Sample Pharmacy to be successful, Sample Pharmacy should be extremely organized. Sample Pharmacy will need solid sales people with excellent salesmanship skills, A great manager who can motivate and discipline these sales people and a good solid marketing manager. Sample Pharmacy will have to prepare very clear job descriptions and clear position statements where every person is aware of what results he or she is responsible for. Sample Pharmacy will have to have a list of requirements for every position when they interview him so that they make good hiring decisions. 9.01 Organizational chart Section ommited 9.02 Organizational structure Sample Pharmacy’s organizational structure will have one managing director, one accounts department that is outsourced, one operations manager that will handle store operations. At the store level we will have 8 pharmacists and 3 housekeepers. The pharmacist’s shifts will be scheduled in a manner such that there will 2 pharmacists during peak times. 9.03 Management team Section omitted 9.04 Management team gaps Section omitted 10.0 General assumptions tableSample Business Plan, Sample Pharmacy 17 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. General Assumptions FY08 FY09 FY10 Current Interest Rate 14% 14% 14% Long-term Interest Rate 14% 14% 14% Tax Rate 33% 33% 33% Other 10.01 Profit and loss table Pro Forma Profit and Loss FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Sales Rs14,712,531 Rs29,550,232 Rs32,800,757 Rs36,408,840 Rs40,413,813 Direct Costs of Goods Rs12,211,401 Rs24,526,692 Rs26,896,621 Rs29,855,249 Rs33,139,327 Franchise fee Rs294,251 Rs591,005 Rs656,015 Rs728,177 Rs808,276 ------------ ------------ ------------ ------------ -----------Cost of Goods Sold Rs12,505,651 Rs25,117,697 Rs27,552,636 Rs30,583,426 Rs33,947,603 Gross Margin Rs2,206,880 Rs4,432,535 Rs5,248,121 Rs5,825,414 Rs6,466,210 Gross Margin % 15.00% 15.00% 16.00% 16.00% 16.00% Operating Expenses Sales and Marketing Expenses Sales and Marketing Payroll Rs0 Rs120,000 Rs132,000 Rs145,200 Rs159,720 Total marketing expenses Rs349,992 Rs360,000 Rs360,000 Rs360,000 Rs360,000 Other Sales and Marketing Expenses Rs0 Rs0 Rs0 Rs0 Rs0 ------------ ------------ ------------ ------------ -----------Total Sales and Marketing Expenses Rs349,992 Rs480,000 Rs492,000 Rs505,200 Rs519,720 Sales and Marketing % 2.38% 1.62% 1.50% 1.39% 1.29% General and Administrative Expenses General and Administrative Payroll Rs1,160,000 Rs1,030,800 Rs1,138,000 Rs1,266,000 Rs1,392,100 Depreciation Rs240,000 Rs300,000 Rs315,000 Rs330,750 Rs347,288 Rent Rs780,000 Rs819,000 Rs859,950 Rs902,948 Rs948,095 Printing & Stationary Rs30,000 Rs30,000 Rs31,500 Rs33,075 Rs34,729 Postage Rs6,000 Rs6,000 Rs6,300 Rs6,615 Rs6,946 Payroll Taxes Rs12,000 Rs12,000 Rs217,950 Rs240,503 Rs263,037 Office expenses Rs6,000 Rs6,000 Rs6,300 Rs6,615 Rs6,946 Outlet maintenance Rs27,600 Rs27,600 Rs28,980 Rs30,429 Rs31,950

Owners association fees Rs54,000 Rs56,700 Rs59,535 Rs62,512 Rs65,637 Telephone Rs108,000 Rs113,400 Rs119,070 Rs125,024 Rs131,275 Electricity Rs132,000 Rs132,660 Rs139,293 Rs146,258 Rs153,571 Professional fees Rs180,000 Rs198,000 Rs207,900 Rs218,295 Rs229,210Sample Business Plan, Sample Pharmacy 18 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Legal fees Rs84,000 Rs92,400 Rs97,020 Rs101,871 Rs106,965 Travel & conveyance Rs7,200 Rs8,400 Rs8,820 Rs9,261 Rs9,724 Bank charges Rs91,992 Rs91,992 Rs96,592 Rs101,421 Rs106,492 Staff welfare Rs30,000 Rs31,800 Rs33,390 Rs35,060 Rs36,812 ------------ ------------ ------------ ------------ -----------Total General and Administrative Expenses Rs2,948,792 Rs2,956,752 Rs3,365,600 Rs3,616,635 Rs3,870,775 General and Administrative % 20.04% 10.01% 10.26% 9.93% 9.58% Other Expenses: Other Payroll Rs153,000 Rs168,000 Rs183,000 Rs192,150 Rs201,757 Consultants Rs12,000 Rs12,000 Rs12,600 Rs13,230 Rs13,892 Other Expenses Rs0 Rs0 Rs0 Rs0 Rs0 ------------ ------------ ------------ ------------ -----------Total Other Expenses Rs165,000 Rs180,000 Rs195,600 Rs205,380 Rs215,649 Other % 1.12% 0.61% 0.60% 0.56% 0.53% ------------ ------------ ------------ ------------ -----------Total Operating Expenses Rs3,463,784 Rs3,616,752 Rs4,053,200 Rs4,327,215 Rs4,606,144 Profit Before Interest and Taxes (Rs1,256,904) Rs815,783 Rs1,194,922 Rs1,498,200 Rs1,860,066 EBITDA (Rs1,016,904) Rs1,115,783 Rs1,509,922 Rs1,828,950 Rs2,207,354 Interest Expense Rs579,246 Rs417,275 Rs548,678 Rs505,989 Rs456,914 Taxes Incurred Rs0 Rs119,552 Rs213,261 Rs327,430 Rs463,040 Other Income Advertising Rs74,000 Rs120,000 Rs126,000 Rs132,300 Rs138,915 Licensing sadashivnagar Rs126,500 Rs143,750 Rs150,938 Rs158,484 Rs166,409 Total Other Income Rs200,500 Rs263,750 Rs276,938 Rs290,784 Rs305,324 Net Other Income Rs200,500 Rs263,750 Rs276,938 Rs290,784 Rs305,324 Net Profit (Rs1,635,650) Rs542,705 Rs709,921 Rs955,566 Rs1,245,436 Net Profit/Sales -11.12% 1.84% 2.16% 2.62% 3.08% 10.02 Projected profit explanation Sample Pharmacy is expected to achieve profitability in about two years from opening. i.e. Profitability is expected in the fiscal year 2009. This is due to its high overhead costs and high rentals in certain locations. 10.03 Break-even analysis table Monthly Revenue Break-even Rs 1,697,933 AssumptionsSample Business Plan, Sample Pharmacy 19 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Average Percentage Variable Cost 83% Estimated monthly fixed cost Rs 288,649 10.04 Break even explanation Sample Pharmacy predicts that its break even to be about 18,00,000 in sales per month. After calculating income from advertising and licensing its sadashivnagar outlet, Sample Pharmacy predicts that its break even will come down to Rs 17,00,000 per month. Sample Pharmacy predicts that it will break even by March 31, 2009. 10.05 Benchmarks chart Section ommited 10.06 Key financial indicators Sample Pharmacy is expected to grow at around 3.6 times in the fiscal year 2007. This is mainly due to higher marketing budgets, effective marketing and effective sales training. Sample Pharmacy’s gross margin is expected to be between 14% - 17%. Sample Pharmacy’s inventory turnover is expected to be 12 to 15 turns per year. Sample Pharmacy does not plan to sell on credit. 11.0 Cash flow table Pro Forma Cash Flow FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Cash Received

Cash from Operations Cash Sales Rs14,712,531 Rs29,550,232 Rs32,800,757 Rs36,408,840 Rs40,413,813 Cash from Receivables Rs0 Rs0 Rs0 Rs0 Rs0 Subtotal Cash from Operations Rs14,712,531 Rs29,550,232 Rs32,800,757 Rs36,408,840 Rs40,413,813 Additional Cash Received Non Operating (Other) Income Rs200,500 Rs263,750 Rs276,938 Rs290,784 Rs305,324 Sales Tax, VAT, HST/GST Received 8.00% Rs1,177,002 Rs2,364,019 Rs2,624,061 Rs2,912,707 Rs3,233,105 New Current Borrowing Rs0 Rs0 Rs0 Rs0 Rs0 New Other Liabilities (interest-free) Rs0 Rs0 Rs0 Rs0 Rs0 New Long-term Liabilities Rs1,500,000 Rs0 Rs0 Rs0 Rs0 Sales of Other Current Assets Rs0 Rs0 Rs0 Rs0 Rs0 Sales of Long-term Assets Rs0 Rs0 Rs0 Rs0 Rs0 New Investment Received Rs0 Rs0 Rs0 Rs0 Rs0 Subtotal Cash Received Rs17,590,033 Rs32,178,000 Rs35,701,755 Rs39,612,332 Rs43,952,241Sample Business Plan, Sample Pharmacy 20 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Expenditures Expenditures from Operations Cash Spending Rs1,313,000 Rs1,318,800 Rs1,453,000 Rs1,603,350 Rs1,753,577 Bill Payments Rs14,552,977 Rs28,375,508 Rs30,706,949 Rs34,007,668 Rs37,592,855 Subtotal Spent on Operations Rs15,865,977 Rs29,694,308 Rs32,159,949 Rs35,611,018 Rs39,346,432 Additional Cash Spent Non Operating (Other) Expense Rs0 Rs0 Rs0 Rs0 Rs0 Sales Tax, VAT, HST/GST Paid Out Rs1,177,002 Rs2,364,019 Rs0 Rs0 Rs0 Principal Repayment of Current Borrowing Rs0 Rs0 Rs0 Rs0 Rs0 Other Liabilities Principal Repayment Rs0 Rs0 Rs0 Rs0 Rs0 Long-term Liabilities Principal Repayment Rs152,636 Rs236,140 Rs284,198 Rs325,642 Rs375,423 Purchase Other Current Assets Rs70,500 Rs0 Rs0 Rs0 Rs0 Purchase Long-term Assets Rs0 Rs0 Rs0 Rs0 Rs0 Dividends Rs0 Rs0 Rs0 Rs0 Rs0 Subtotal Cash Spent Rs17,266,116 Rs32,294,467 Rs32,444,147 Rs35,936,660 Rs39,721,855 Net Cash Flow Rs323,918 (Rs116,467) Rs3,257,609 Rs3,675,672 Rs4,230,386 Cash Balance Rs632,293 Rs515,826 Rs3,773,434 Rs7,449,106 Rs11,679,492 11.02 Projected cash flow explanation Paid-up capital + Loan from the director = Rs 73,60,000 approx. The business will need about Rs 15,00,000 to fund its working capital requirements. The business expects positive cash flow from the month of December 2008 onwards. 11.03 Balance sheet table Pro Forma Balance Sheet FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Assets Current Assets Cash Rs632,293 Rs515,826 Rs3,773,434 Rs7,449,106 Rs11,679,492 Accounts Receivable Rs0 Rs0 Rs0 Rs0 Rs0 Inventory Rs1,391,653 Rs2,157,591 Rs2,366,071 Rs2,626,339 Rs2,915,237 Other Current Assets Rs1,193,545 Rs1,193,545 Rs1,193,545 Rs1,193,545 Rs1,193,545 Total Current Assets Rs3,217,490 Rs3,866,962 Rs7,333,051 Rs11,268,990 Rs15,788,274 Long-term Assets Long-term Assets Rs3,525,054 Rs3,525,054 Rs3,525,054 Rs3,525,054 Rs3,525,054Sample Business Plan, Sample Pharmacy 21 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Accumulated Depreciation Rs240,000 Rs540,000 Rs855,000 Rs1,185,750 Rs1,533,038 Total Long-term Assets Rs3,285,054 Rs2,985,054 Rs2,670,054 Rs2,339,304 Rs1,992,017 Total Assets Rs6,502,544 Rs6,852,016 Rs10,003,105 Rs13,608,294 Rs17,780,290 Liabilities and Capital Current Liabilities Accounts Payable Rs446,632 Rs489,538 Rs590,843 Rs653,402 Rs722,280 Current Borrowing Rs0 Rs0 Rs0 Rs0 Rs0 Other Current Liabilities Rs270,400 Rs270,400 Rs2,894,461 Rs5,807,168 Rs9,040,273 Subtotal Current Liabilities Rs717,032 Rs759,938 Rs3,485,304 Rs6,460,569 Rs9,762,553

Long-term Liabilities Rs4,297,364 Rs4,061,224 Rs3,777,026 Rs3,451,384 Rs3,075,961 Total Liabilities Rs5,014,396 Rs4,821,162 Rs7,262,330 Rs9,911,953 Rs12,838,514 Paid-in Capital Rs5,000,000 Rs5,000,000 Rs5,000,000 Rs5,000,000 Rs5,000,000 Retained Earnings (Rs1,876,201) (Rs3,511,851) (Rs2,969,146) (Rs2,259,225) (Rs1,303,659) Earnings (Rs1,635,650) Rs542,705 Rs709,921 Rs955,566 Rs1,245,436 Total Capital Rs1,488,149 Rs2,030,854 Rs2,740,775 Rs3,696,341 Rs4,941,776 Total Liabilities and Capital Rs6,502,544 Rs6,852,016 Rs10,003,105 Rs13,608,294 Rs17,780,290 Net Worth Rs1,488,149 Rs2,030,854 Rs2,740,775 Rs3,696,341 Rs4,941,776 11.04 Balance sheet explanation Sample Pharmacy’s projected financial statements show that it will not have difficulty meeting its debt obligations as long as it meets its objectives. Sample Pharmacy has taken a fairly conservative approach to its financial planning. The business will see an increase in net worth from 2009 onwards. 12.0 Financial plan summary Sample Pharmacy’s goal is to break even much faster than what it has forecasted in its financial plan. Sample Pharmacy plans on raising Rs 40 lakhs in equity. Part of the capital will be used to finance its operating expenses and the remaining will be kept as cash reserves that may be used to pay off existing debt, acquire other businesses and/or generate additional revenue streams. 12.01 Long-term plan Sample Pharmacy’s growth in FY 2008 is expected to be 3.68 times from its previous year. In FY 2009 Sample Pharmacy expects 100% growth in revenues and the fiscal years 2010, 2011 and 2012 sales is expected to grow at about 11%. 12.02 ValuationSample Business Plan, Sample Pharmacy 22 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Sample Pharmacy has valued its company at Rs 90,00,000. New issues of its stock is priced at 2.5 times the face value. 12.03 Investment offering At this point Sample Pharmacy may get in investors who invest Rs 40 lakhs into the company for about 25 - 30% of the total capital structure. Sample Pharmacy would ideally prefer 1 to 4 investors. The price of the shares is very nominally priced at 2.5 times the face value. 12.04 Use of funds Working capitalRs 1,500,000 Cash reserves (for acquisitions or debt) Rs 2,500,000 Total Rs 4,000,000 12.05 Use of funds explanation About Rs 15,00,000 will be used for working capital purposes. We will have some additional funds as cash reserves to retire existing debt or for acquisitions, capital improvements or other opportunities that may come up. 12.06 Payback Sample Pharmacy does not plan on paying its investors any dividends. Sample Pharmacy’s philosophy is to reinvest the money back into the business and increase shareholder value. Sample Pharmacy plans on a management buyout by 2012 at 3 times the original investment of the investor. This buyout will be financed by internal accruals, provided there are enough cash reserves. Sample Pharmacy predicts it will have cash reserves to buy back 50% of the shares. 12.07 Ratios table Ratio Analysis FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 Sales Growth 368.68% 100.85% 11.00% 11.00% 11.00% Percent of Total Assets Accounts Receivable 0.00% 0.00% 0.00% 0.00% 0.00% Inventory 21.40% 31.49% 23.65% 19.30% 16.40% Other Current Assets 18.36% 17.42% 11.93% 8.77% 6.71% Total Current Assets 49.48% 56.44% 73.31% 82.81% 88.80% Long-term Assets 50.52% 43.56% 26.69% 17.19% 11.20% Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% Current Liabilities 11.03% 11.09% 34.84% 47.48% 54.91% Long-term Liabilities 66.09% 59.27% 37.76% 25.36% 17.30% Total Liabilities 77.11% 70.36% 72.60% 72.84% 72.21% Net Worth 22.89% 29.64% 27.40% 27.16% 27.79%Sample Business Plan, Sample Pharmacy 23 This business plan is only a sample. The name of the actual business and the owners have been changed for confidentiality reasons. For business plan services, email [email protected]. Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% 100.00% Gross Margin 15.00% 15.00% 16.00% 16.00% 16.00% Selling, General & Administrative Expenses 26.12% 13.16% 13.84% 13.38% 12.92% Advertising Expenses 2.38% 1.22% 1.10% 0.99% 0.89% Profit Before Interest and Taxes -8.54% 2.76% 3.64% 4.11% 4.60% Main Ratios Current 4.49 5.09 2.1 1.74 1.62 Quick 2.55 2.25 1.43 1.34 1.32 Total Debt to Total Assets 77.11% 70.36% 72.60% 72.84% 72.21% Pre-tax Return on Net Worth -123.38% 19.62% 23.58% 26.84% 28.39% Pre-tax Return on Assets -28.24% 5.82% 6.46% 7.29% 7.89% Additional Ratios Net Profit Margin -11.12% 1.84% 2.16% 2.62% 3.08% Return on Equity -109.91% 26.72% 25.90% 25.85% 25.20% Activity Ratios Accounts Receivable Turnover 0 0 0 0 0 Collection Days 0 0 0 0 0 Inventory Turnover 8.65 13.82 11.89 11.96 11.96 Accounts Payable Turnover 33.58 58.05 52.14 52.14 52.14 Payment Days 6 6 6 7 7 Total Asset Turnover 2.26 4.31 3.28 2.68 2.27 Debt Ratios Debt to Net Worth 3.37 2.37 2.65 2.68 2.6 Current Liab. to Liab. 0.14 0.16 0.48 0.65 0.76 Liquidity Ratios Net Working Capital Rs2,500,459 Rs3,107,024 Rs3,847,747 Rs4,808,421 Rs6,025,721 Interest Coverage -2.17 1.96 2.18 2.96 4.07 Additional Ratios Assets to Sales 0.44 0.23 0.3 0.37 0.44 Current Debt/Total Assets 11% 11% 35% 47% 55% Acid Test 2.55 2.25 1.43 1.34 1.32 Sales/Net Worth 9.89 14.55 11.97 9.85 8.18 Dividend Payout 0 0 0 0 0