Retail Store Online Biz

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Table of Contents

1.0 Executive Summary.....................................................................................................................1
Chart: Highlights...........................................................................................................................1
1.1 Objectives....................................................................................................................................1
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Start-up Summary....................................................................................................................2
Table: Start-up Funding..............................................................................................................2
Chart: Start-up..............................................................................................................................3
Table: Start-up...............................................................................................................................4
3.0 Products............................................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................4
4.1 Market Segmentation..............................................................................................................5
Table: Market Analysis................................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................5
4.2 Target Market Segment Strategy........................................................................................5
4.3 Industry Analysis.......................................................................................................................6
4.3.1 Competition and Buying Patterns...............................................................................6
5.0 Strategy and Implementation Summary.............................................................................6
5.1 Competitive Edge......................................................................................................................6
5.2 Marketing Strategy...................................................................................................................6
5.3 Sales Strategy............................................................................................................................7
5.3.1 Sales Forecast....................................................................................................................7
Table: Sales Forecast...............................................................................................................7
Chart: Sales Monthly...............................................................................................................8
Chart: Sales by Year................................................................................................................8
5.4 Milestones....................................................................................................................................8
Table: Milestones...........................................................................................................................9
Chart: Milestones..........................................................................................................................9
6.0 Management Summary...............................................................................................................9
6.1 Personnel Plan..........................................................................................................................10
Table: Personnel..........................................................................................................................10
7.0 Financial Plan................................................................................................................................10
7.1 Important Assumptions........................................................................................................10
Table: General Assumptions...................................................................................................10
7.2 Break-even Analysis...............................................................................................................11
Chart: Break-even Analysis.....................................................................................................11
Table: Break-even Analysis.....................................................................................................11
7.3 Projected Cash Flow...............................................................................................................11
Table: Cash Flow.........................................................................................................................12
Chart: Cash...................................................................................................................................13
7.4 Projected Profit and Loss.....................................................................................................14
Chart: Profit Monthly.................................................................................................................14
Page 1

Table of Contents

Chart: Profit Yearly.....................................................................................................................15
Chart: Gross Margin Monthly.................................................................................................15
Chart: Gross Margin Yearly.....................................................................................................16
Table: Profit and Loss................................................................................................................16
7.5 Projected Balance Sheet......................................................................................................17
7.5 Projected Balance Sheet......................................................................................................17
Table: Balance Sheet.................................................................................................................17
7.6 Business Ratios........................................................................................................................18
7.6 Business Ratios........................................................................................................................18
Table: Ratios.................................................................................................................................18
Table: Sales Forecast...........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................7
Table: Balance Sheet...........................................................................................................................7

Page 2

Dollar Store

1.0 Executive Summary
The Dollar Store is a start-up retail store in Bend, Oregon that provides interesting merchandise
options at bargain prices. Financing will come from the private investments of owners Ted
Brinkman and Jim Spencer. They will donate equity that will be cleared at the end of 36
months. Dividends will be paid quarterly on the outstanding equity.
The Dollar Store will be incorporated as an LLC corporation. This will shield the owners from
issues of personal liability and double taxation. The investors will be treated as shareholders
and therefore will not be liable for more than their personal investments. The majority owner
Ted Brinkman, will contribute from his personal savings toward this business venture. With an
agressive marketing plan The Dollar Store expects to experience steady growth as it becomes
more familiar to the general public.
With the financing in place The Dollar Store will be able to successfully open and maintain
operations through year one. The large capital investments of the owners will provide the public
with a unique and innovative store that will cater to the needs of those on fixed incomes such
as low income families, the elderly, and the large student population in the Bend area. The
successful operation of the Dollar Store will provide a customer base that will allow it to be selfsufficient.

Chart: Highlights

1.1 Objectives
1. To provide a wide range of merchandise at reasonable prices.
2. To achieve a healthy profit margin within the first year.
3. To achieve a modest net profit by year two.

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Dollar Store

4. To be an active and vocal member of the community, and provide continual re-investment
through participation in community activities and financial contributions.
1.2 Mission
The Dollar Store provides a variety of interesting merchandise options at bargain prices.
Dedicated to customer service the Dollar Store will give its patrons the kind of service that is
respectful and prompt. Employees of the Dollar Store will also be treated in a professional
manner with a rewarding work environment and fair compensation. The Dollar Store wants
each customer to feel as though he/she has gotten Fifth Avenue treatment at a bargain price.
1.3 Keys to Success
To succeed in this business we must:





Sell a broad range of products.
Provide for the satisfaction of 100% of our customers.
Be an active member of the community.
Encourage customer input.

2.0 Company Summary
The Dollar Store sells products and provides excellent customer service for the general public.
We have leased a retail store which we use to market and merchandise our products. It is
located one mile from Main St. on River Way in Bend, Oregon. The company was incorporated
on January 2.
2.1 Company Ownership
The Dollar Store is a privately held corporation. It will be registered as a Subchapter S, with
ownership Ted Brinkman (60%), Jim Spencer (40%).
2.2 Start-up Summary
The building will be leased with a down payment of $3,000 on a four year lease.
Start-up costs will be financed through a combination of owner investment and short-term
borrowing. The start-up chart shows the distribution of financing.
Other miscellaneous expenses include:




Marketing/advertising consultancy fees for assistance in designing our grand-opening ads
and brochures.
Legal fees for corporate organization filings.
Retail merchandising/designing fees for store layout and minor renovations.

Page 2

Dollar Store

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$13,000
$73,500
$86,500

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

$31,000
$42,500
$0
$42,500
$73,500

Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities

$0
$0
$6,000
$500
$6,500

Capital
Planned Investment
Ted Brinkman
Jim Spencer
Other
Additional Investment Requirement
Total Planned Investment
Loss at Start-up (Start-up Expenses)
Total Capital

$40,000
$30,000
$10,000
$0
$80,000
($13,000)
$67,000

Total Capital and Liabilities

$73,500

Total Funding

$86,500

Page 3

Dollar Store

Chart: Start-up

Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal
Stationery, etc.
Brochures
Marketing consultants
Insurance
Rent
Building renovations
Expensed equipment
Other
Total Start-up Expenses

$300
$200
$500
$1,000
$200
$3,000
$5,000
$1,500
$1,300
$13,000

Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets

$42,500
$20,000
$1,000
$10,000
$73,500

Total Requirements

$86,500

Page 4

Dollar Store

3.0 Products
The Dollar Store sells a variety of quality discount merchandise. The types of merchandise we
will carry will include items such as dishware, household goods, toys, cosmetics, candy,
greeting cards, and a list of items too exhaustive to list here. A dedicated staff is committed to
providing excellent customer service.
The merchandise is purchased from a variety of well-known manufacturers such as Procter &
Gamble, General Mills, American Greetings as well as a number of other generic branded
companies. Shipments arrive on a daily basis. We will continue to find new product lines that
can be added to our inventory.
We are able to sell products at very low prices, because we will purchase items from
discontinued lines, seconds, over runs, etc., that cannot be sold to a manufacturer's usual retail
customers.
4.0 Market Analysis Summary
We expect sales to increase steadily as consumers find that they can purchase a variety of
quality items at bargain prices. We intend to tap into the retail market with pricing that will
encourage quantity buying, and our pricing will attract consumers on fixed budgets.
Our target market is the lower income portion of the Bend and Redmond community. This
includes working class individuals, the elderly, and students, many of whom are price conscious
and looking to find a value for their dollar.
4.1 Market Segmentation
The market analysis pie chart shows potential customers and the company's target markets.
The Dollar Store intends to provide affordable shopping alternatives to working class families
with incomes under $25,000, for elderly people on fixed incomes, and also a large student
population that tend to be on strict budgets. Bend makes up the largest market segment. We
expect this market to grow at a rate of 10% per year. This market constitutes the general public
who are looking for affordable merchandise at bargain prices. Redmond constitutes the second
largest market with a fast growing retirement community. There are also many bedroom
communities that shop in the Bend area that will add to the percentage of consumers.
Table: Market Analysis

Market Analysis
Potential Customers
Elderly
Students
Working Class Families
Total

Year 1

Year 2

Year 3

Year 4

Year 5

40,000
20,000
50,000
110,000

44,000
22,000
55,000
121,000

48,400
24,200
60,500
133,100

53,240
26,620
66,550
146,410

58,564
29,282
73,205
161,051

Growth
10%
10%
10%
10.00%

CAGR
10.00%
10.00%
10.00%
10.00%

Page 5

Dollar Store

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy
We focus on the price conscious consumer who is looking for value as well as quality. Both the
Bend and the Redmond groups will be marketed to as they are isolated populations which do
most of their shopping in the greater Bend area. If we can attract and keep these consumers
the word will continue to spread about what our store has to offer.
4.3 Industry Analysis
In an ever changing economy the discount store model is becoming more popular with the
consumer. Providing a large selection of bargain-priced items is our intended goal.
4.3.1 Competition and Buying Patterns
Consumers demand quality customer service, fair pricing, and a convenient location.
Competition is very tough with customer service and location key components. The selection of
merchandise a store provides is also very important.

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Dollar Store

5.0 Strategy and Implementation Summary
The Dollar Store uses a strategy of total market service. Our promise is in our location and the
products we sell, the people we attract, and the atmosphere we create.
We will present a store that is pleasant to shop in with a large variety of merchandise to choose
from.
Ultimately, we are selling more than just merchandise. We are selling ourselves. We want to
provide the kind of customer service that will provide an atmosphere that creates a positive
shopping experience for our customers.
Strategic Assumptions:
1. Every person with income limitations or on fixed incomes is a potential customer.
2. Marketing to these segments of the population will lead to an expansion in overall market
growth.
5.1 Competitive Edge
Our location is a very important competitive edge. We are located in the popular Riverway Mall
which has a high appeal to many different kinds of consumers. There is a good mix of high and
low end shops with several quality restaurants near by. With easy access from Main St. the
Riverway Mall is a popular destination not only for Bend residents, but for people commuting
from Redmond and the outlying areas.
Another competitive edge we will have over our competition is the large variety of merchandise
we will carry. With the sources we are working with it will be possible to carry many name
brand items at a discount price. Add a staff committed to providing great customer service and
the Dollar Store will be an attractive stop for the consumer.
5.2 Marketing Strategy
The Dollar Store will benchmark our objectives for sales promotion and mass selling.
We are focusing our marketing effort on the community of consumers that want a store which
has an interesting variety of merchandise at bar gin prices. We will implement a strategy that
treats these customers as a community. This means our marketing resources will be centered
around both sales promotions (events, displays) and personal sales (customer service, friendly
atmosphere).



We will stay within our marketing budget.
Marketing promotions will be consistent with the Mission Statement.

5.3 Sales Strategy
Employees are paid a straight wage but can achieve a semi-yearly bonus based on profits and
customer satisfaction rates.

Page 7

Dollar Store

All potential sales will be attended to in a timely fashion and long-term salesperson-customer
relationships will take precedence over sales closure.
5.3.1 Sales Forecast
The following table and chart give a run-down on forecasted sales. We expect sales to increase
at a rate of 10% by April. We would like to see another increase of 10% by August.
We expect to experience a steady growth throughout our first year even though we are a new
business enterprise. As we become more familiar to the public we expect to gain more market
share and would like to see progressive growth as we head into the following year. The Dollar
Store, with an aggressive marketing approach expects to increase its share of the market by
offering a unique option to discount shopping.
Note: For company purchases, the per-unit price of inventory purchases includes cost of
shipping.
Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Perishable Items
Non-Perishible Items
Total Sales

$113,500
$212,000
$325,500

$136,200
$254,400
$390,600

$163,440
$305,280
$468,720

Direct Cost of Sales
Perishable Items
Non-Perishable Items
Subtotal Direct Cost of Sales

Year 1
$56,750
$106,000
$162,750

Year 2
$68,100
$127,200
$195,300

Year 3
$81,720
$152,640
$234,360

Sales

Page 8

Dollar Store

Chart: Sales Monthly

Chart: Sales by Year

5.4 Milestones
The milestone table shows how the responsibilities break down in the start up of our store. Ted
Brinkman will head up the drafting of the business plan and will conduct the drive to secure

Page 9

Dollar Store

funding. Jim Spencer will work to secure a site for the store and will handle the details with the
personnel plan. Our accountant Dick Garret will set up our accounting plan.
Table: Milestones

Milestones
Milestone
Business Plan
Secure Start Up Funding
Site Selection
Personal Plan
Accounting Plan
Totals

Start Date
1/1/2003
2/17/2003
3/1/2003
6/4/2003
7/8/2003

End Date
2/3/2003
4/3/2003
4/22/2003
6/21/2003
7/19/2003

Budget
$1,000
$500
$1,500
$500
$1,000
$4,500

Manager
Brinkman
Brinkman
Spencer
Spencer
Tollman

Department
Owner
Owner
Management
Management
Accounting

Chart: Milestones

6.0 Management Summary
The owners of the Dollar Store believe very strongly that relationships should be forthright,
work should be structured with enough room for creativity, and pay should be fair and equitable
in relation to what the industry is paying. With the right people in place the Dollar Store will
have the incentives to encourage quality people to stay.
Ted Brinkman and Jim Spencer worked together as managers of a group of large regional retail
operations (name omitted) before starting the Dollar Store. Over the past 10 years, under their
direction, the organization became the largest and most well-known in their area. The owners
of the company were looking to sell the company to a national organization and it was at that
point that Jim and Ted decided to branch out on their own. Both bring extensive retail

Page 10

Dollar Store

marketing and finance knowledge to the company. They have the knowledge, experience and
contacts to make the company a success.
6.1 Personnel Plan
The personnel plan is included in the following table. It shows the owner's salary in which Mr.
Brinkman only wants a small draw at the initial start of the store. There will be four full-time
employees and four part-time employees. Mr Spencer will act as the full-time manager to
oversee many of the day-to-day functions of the store. Store employees will start at an hourly
rate and raises will come after the stores first year of operation. The manager will start at a
monthly salary. Salaries and hourly rates are shown in the table below. Full-time employees will
qualify for full benefits.

Page 11

Dollar Store

Table: Personnel

Personnel Plan
Owner
Owner/Manager
Full Time
Full Time
Full Time
Full Time
Part Time
Part Time
Part Time
Part Time
Total People
Total Payroll

Year 1

Year 2

Year 3

$24,000
$30,000
$16,800
$16,800
$16,800
$16,800
$6,000
$6,000
$6,000
$6,000
10

$28,000
$31,500
$17,000
$17,000
$17,000
$17,000
$5,900
$5,900
$5,900
$5,900
10

$30,000
$33,000
$18,500
$18,500
$18,500
$18,500
$6,300
$6,300
$6,300
$6,300
10

$145,200

$151,100

$162,200

7.0 Financial Plan
1. Growth will be moderate; cash flows steady.
2. Marketing costs will remain below 15% of sales.
3. The company will invest residual profits into financial markets and not company expansion
(unless absolutely necessary).
4. Future cash investments will use NOV projections to achieve maximum return with limited
risk.
7.1 Important Assumptions
The personnel burden is very low because benefits are not paid to part-timers. And the shortterm interest rate is extraordinarily low because of Mr. Brinkman's long-standing relationship
with High Desert Credit Union.
Table: General Assumptions

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

Year 1

Year 2

Year 3

1
7.00%
20.00%
25.42%
0

2
7.00%
20.00%
25.00%
0

3
7.00%
20.00%
25.42%
0

Page 12

Dollar Store

7.2 Break-even Analysis
A Break-even Analysis table has been completed on the basis of average costs/prices. With
fixed costs, average sales, and average variable costs, the table and chart show what we need
per month to break-even.

Chart: Break-even Analysis

Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$37,570

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

50%
$18,785

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Dollar Store

7.3 Projected Cash Flow
We are positioning ourselves in the market as a medium risk concern with steady cash flows.
Accounts payable is paid at the end of each month, while sales are in cash, giving the Dollar
Store an excellent cash structure. Fifty percent of cash above a TBA amount will be invested
into semi-liquid stock portfolios to decrease the opportunity cost of cash held.
Table: Cash Flow

Pro Forma Cash Flow
Year 1

Year 2

Year 3

$325,500
$325,500

$390,600
$390,600

$468,720
$468,720

$0
$3,000
$0
$0
$0
$0
$2,000
$330,500

$0
$0
$0
$0
$0
$0
$0
$390,600

$0
$0
$0
$0
$0
$0
$0
$468,720

Year 1

Year 2

Year 3

$145,200
$219,294
$364,494

$151,100
$235,193
$386,293

$162,200
$270,516
$432,716

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

$0
$100
$0
$0
$0
$0
$0
$364,594

$0
$1,200
$0
$0
$0
$0
$0
$387,493

$0
$1,200
$0
$0
$0
$0
$0
$433,916

Net Cash Flow
Cash Balance

($34,094)
$8,406

$3,107
$11,513

$34,804
$46,318

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
Additional Cash Spent

Page 14

Dollar Store

Chart: Cash

7.4 Projected Profit and Loss
We predict advertising costs will go down in the next three years. We will be able to find what
has worked well for us and concentrate on those advertising methods. Normally, a start-up
concern will operate with negative profits through the first two years. We will avoid that kind of
operating loss by knowing our target markets.
Chart: Profit Monthly

Page 15

Dollar Store

Chart: Profit Yearly

Chart: Gross Margin Monthly

Page 16

Dollar Store

Chart: Gross Margin Yearly

Table: Profit and Loss

Pro Forma Profit and Loss
Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales

$325,500
$162,750
$0
$162,750

$390,600
$195,300
$0
$195,300

$468,720
$234,360
$0
$234,360

Gross Margin
Gross Margin %

$162,750
50.00%

$195,300
50.00%

$234,360
50.00%

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

$145,200
$12,000
$1,143
$36,000
$3,300
$3,600
$21,780
$2,400

$151,100
$0
$1,143
$0
$0
$0
$22,665
$0

$162,200
$0
$1,143
$0
$0
$0
$24,330
$0

Total Operating Expenses

$225,423

$174,908

$187,673

Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred

($62,673)
($61,530)
$34
$0

$20,392
$21,535
$161
$5,058

$46,687
$47,830
$77
$11,847

Net Profit
Net Profit/Sales

($62,707)
-19.26%

$15,173
3.88%

$34,763
7.42%

Expenses

Page 17

Dollar Store

7.5 Projected Balance Sheet
All of our tables will be updated monthly to reflect past performance and future assumptions.
Future assumptions will not be based on past performance but rather on economic cycle
activity, regional industry strength, and future cash flow possibilities. We expect solid growth in
net worth beyond the year 2006.
Table: Balance Sheet

Pro Forma Balance Sheet
Year 1

Year 2

Year 3

$8,406
$23,650
$1,000
$33,056

$11,513
$21,615
$1,000
$34,128

$46,318
$25,938
$1,000
$73,256

$10,000
$1,143
$8,857
$41,914

$10,000
$2,286
$7,714
$41,843

$10,000
$3,429
$6,571
$79,827

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$32,221
$2,900
$500
$35,621

$18,177
$1,700
$500
$20,377

$22,598
$500
$500
$23,598

Long-term Liabilities
Total Liabilities

$0
$35,621

$0
$20,377

$0
$23,598

$82,000
($13,000)
($62,707)
$6,293
$41,914

$82,000
($75,707)
$15,173
$21,466
$41,843

$82,000
($60,534)
$34,763
$56,229
$79,827

$6,293

$21,466

$56,229

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

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

7.6 Business Ratios
We expect our net profit margin and gross margin, to increase steadily over the three-year
period. Our net working capital will increase handsomely by year three, proving that we have
the cash flows to remain a going concern. The following table shows these important financial
ratios, based upon NAICS industry code 452112, Discount Department Stores.

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Dollar Store

Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

20.00%

20.00%

6.06%

Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets

56.43%
2.39%
78.87%
21.13%
100.00%

51.66%
2.39%
81.56%
18.44%
100.00%

32.49%
1.25%
91.77%
8.23%
100.00%

47.62%
28.89%
80.40%
19.60%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

84.99%
0.00%
84.99%
15.01%

48.70%
0.00%
48.70%
51.30%

29.56%
0.00%
29.56%
70.44%

17.64%
10.82%
28.46%
71.54%

100.00%
50.00%
69.26%
0.00%
-19.25%

100.00%
50.00%
46.12%
0.00%
5.22%

100.00%
50.00%
42.54%
0.00%
9.96%

100.00%
27.06%
9.93%
1.10%
3.24%

0.93
0.26
84.99%
-996.49%
-149.61%

1.67
0.61
48.70%
94.25%
48.35%

3.10
2.01
29.56%
82.89%
58.39%

3.98
1.18
41.68%
7.89%
13.53%

Sales Growth
Percent of Total Assets

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

Year 1

Year 2

Year 3

Net Profit Margin
Return on Equity

-19.26%
-996.49%

3.88%
70.68%

7.42%
61.82%

n.a
n.a

10.84
7.62
28
7.77

8.63
12.17
42
9.33

9.86
12.17
27
5.87

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

5.66
1.00

0.95
1.00

0.42
1.00

n.a
n.a

($2,564)
-1,821.00

$13,752
126.66

$49,658
606.32

n.a
n.a

0.13
85%
0.26
51.73
0.00

0.11
49%
0.61
18.20
0.00

0.17
30%
2.01
8.34
0.00

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

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

Page 19

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$6,000
$12,000
$18,000

$6,500
$13,000
$19,500

$7,000
$14,000
$21,000

$7,500
$15,000
$22,500

$8,500
$17,000
$25,500

$9,000
$18,000
$27,000

$9,000
$18,000
$27,000

$9,000
$18,000
$27,000

$10,000
$19,000
$29,000

$12,000
$21,000
$33,000

$12,000
$21,000
$33,000

$17,000
$26,000
$43,000

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

Perishable Items

$3,000

$3,250

$3,500

$3,750

$4,250

$4,500

$4,500

$4,500

$5,000

$6,000

$6,000

$8,500

Non-Perishable Items

$6,000

$6,500

$7,000

$7,500

$8,500

$9,000

$9,000

$9,000

$9,500

$10,500

$10,500

$13,000

Subtotal Direct Cost of Sales

$9,000

$9,750

$10,500

$11,250

$12,750

$13,500

$13,500

$13,500

$14,500

$16,500

$16,500

$21,500

Sales
Perishable Items
Non-Perishible Items
Total Sales

0%
0%

Page 1

Appendix
Table: Personnel

Personnel Plan
Owner
Owner/Manager
Full Time
Full Time
Full Time
Full Time
Part Time
Part Time
Part Time
Part Time
Total People
Total Payroll

0%
0%
0%
0%
0%
0%
0%
0%
0%
0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$2,000
$2,500
$1,400
$1,400
$1,400
$1,400
$500
$500
$500
$500
10

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

Page 2

Appendix
Table: General Assumptions

General Assumptions
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

1

2

3

4

5

6

7

8

9

10

11

12

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

7.00%

Long-term Interest Rate

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

20.00%

Tax Rate

30.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

25.00%

0

0

0

0

0

0

0

0

0

0

0

0

Plan Month
Current Interest Rate

Other

Month 12

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other Costs of Goods
Total 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

$18,000

$19,500

$21,000

$22,500

$25,500

$27,000

$27,000

$27,000

$29,000

$33,000

$33,000

$43,000

$9,000

$9,750

$10,500

$11,250

$12,750

$13,500

$13,500

$13,500

$14,500

$16,500

$16,500

$21,500

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$9,000

$9,750

$10,500

$11,250

$12,750

$13,500

$13,500

$13,500

$14,500

$16,500

$16,500

$21,500

Gross Margin

$9,000

$9,750

$10,500

$11,250

$12,750

$13,500

$13,500

$13,500

$14,500

$16,500

$16,500

$21,500

Gross Margin %

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

50.00%

Expenses
Payroll

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

Sales and Marketing and Other
Expenses
Depreciation

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$1,000

$95

$95

$95

$95

$95

$95

$95

$95

$95

$95

$95

$95

Rent

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Utilities

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$0

Insurance

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

$1,815
$200

Total Operating Expenses

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,810

$18,510

Profit Before Interest and Taxes

($9,810)

($9,060)

($8,310)

($7,560)

($6,060)

($5,310)

($5,310)

($5,310)

($4,310)

($2,310)

($2,310)

$2,990

EBITDA

($9,715)

($8,965)

($8,215)

($7,465)

($5,965)

($5,215)

($5,215)

($5,215)

($4,215)

($2,215)

($2,215)

$3,085

Interest Expense

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$18

$17

Taxes Incurred

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Payroll Taxes
Other

15%

Net Profit

($9,810)

($9,060)

($8,310)

($7,560)

($6,060)

($5,310)

($5,310)

($5,310)

($4,310)

($2,310)

($2,328)

$2,973

Net Profit/Sales

-54.50%

-46.46%

-39.57%

-33.60%

-23.77%

-19.67%

-19.67%

-19.67%

-14.86%

-7.00%

-7.05%

6.91%

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

Cash Sales

$18,000

$19,500

$21,000

$22,500

$25,500

$27,000

$27,000

$27,000

$29,000

$33,000

$33,000

$43,000

Subtotal Cash from Operations

$18,000

$19,500

$21,000

$22,500

$25,500

$27,000

$27,000

$27,000

$29,000

$33,000

$33,000

$43,000

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$3,000

$0
$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$2,000

$0

Subtotal Cash Received

$18,000

$19,500

$21,000

$22,500

$25,500

$27,000

$27,000

$27,000

$29,000

$33,000

$38,000

$43,000

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

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$12,100

$6,221

$6,931

$16,152

$17,965

$18,768

$21,013

$20,913

$20,115

$20,185

$22,318

$25,242

$23,472

$18,321

$19,031

$28,252

$30,065

$30,868

$33,113

$33,013

$32,215

$32,285

$34,418

$37,342

$35,572

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

$100

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$18,321

$19,031

$28,252

$30,065

$30,868

$33,113

$33,013

$32,215

$32,285

$34,418

$37,342

$35,672

Net Cash Flow

($321)

$469

($7,252)

($7,565)

($5,368)

($6,113)

($6,013)

($5,215)

($3,285)

($1,418)

$658

$7,328

Cash Balance

$42,180

$42,649

$35,397

$27,832

$22,465

$16,352

$10,340

$5,125

$1,840

$421

$1,079

$8,406

Cash Received
Cash from Operations

Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing

0.00%

Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Subtotal Cash Spent

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

$42,500
$20,000
$1,000
$63,500

$42,180
$11,000
$1,000
$54,180

$42,649
$10,725
$1,000
$54,374

$35,397
$11,550
$1,000
$47,947

$27,832
$12,375
$1,000
$41,207

$22,465
$14,025
$1,000
$37,490

$16,352
$14,850
$1,000
$32,202

$10,340
$14,850
$1,000
$26,190

$5,125
$14,850
$1,000
$20,975

$1,840
$15,950
$1,000
$18,790

$421
$18,150
$1,000
$19,571

$1,079
$18,150
$1,000
$20,229

$8,406
$23,650
$1,000
$33,056

$10,000
$0
$10,000
$73,500

$10,000
$95
$9,905
$64,084

$10,000
$190
$9,810
$64,183

$10,000
$286
$9,714
$57,661

$10,000
$381
$9,619
$50,826

$10,000
$476
$9,524
$47,013

$10,000
$571
$9,429
$41,631

$10,000
$667
$9,333
$35,523

$10,000
$762
$9,238
$30,213

$10,000
$857
$9,143
$27,932

$10,000
$952
$9,048
$28,619

$10,000
$1,048
$8,952
$29,181

$10,000
$1,143
$8,857
$41,914

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
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$6,000
$0
$500
$6,500

$6,395
$0
$500
$6,895

$15,554
$0
$500
$16,054

$17,342
$0
$500
$17,842

$18,067
$0
$500
$18,567

$20,315
$0
$500
$20,815

$20,242
$0
$500
$20,742

$19,445
$0
$500
$19,945

$19,445
$0
$500
$19,945

$21,475
$0
$500
$21,975

$24,471
$0
$500
$24,971

$22,361
$3,000
$500
$25,861

$32,221
$2,900
$500
$35,621

Long-term Liabilities
Total Liabilities

$0
$6,500

$0
$6,895

$0
$16,054

$0
$17,842

$0
$18,567

$0
$20,815

$0
$20,742

$0
$19,945

$0
$19,945

$0
$21,975

$0
$24,971

$0
$25,861

$0
$35,621

$80,000
($13,000)
$0
$67,000
$73,500

$80,000
($13,000)
($9,810)
$57,190
$64,084

$80,000
($13,000)
($18,870)
$48,130
$64,183

$80,000
($13,000)
($27,181)
$39,819
$57,661

$80,000
($13,000)
($34,741)
$32,259
$50,826

$80,000
($13,000)
($40,801)
$26,199
$47,013

$80,000
($13,000)
($46,111)
$20,889
$41,631

$80,000
($13,000)
($51,422)
$15,578
$35,523

$80,000
($13,000)
($56,732)
$10,268
$30,213

$80,000
($13,000)
($61,042)
$5,958
$27,932

$80,000
($13,000)
($63,352)
$3,648
$28,619

$82,000
($13,000)
($65,680)
$3,320
$29,181

$82,000
($13,000)
($62,707)
$6,293
$41,914

$67,000

$57,190

$48,130

$39,819

$32,259

$26,199

$20,889

$15,578

$10,268

$5,958

$3,648

$3,320

$6,293

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth

Page 6

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