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Kiln Creek Bowling Center

Executive Summary

This plan provides detailed investor information and includes the basic strategic business plan information necessary for initial establishment and operation of Kiln Creek Bowling Center. The plan outlines the plans for business growth, methods, procedures for operation, and infrastructure management.

Kiln Creek Bowling Corporation (Kiln Creek Bowling Center) was formed in Yorktown, Virginia, as a corporation under the Laws of the Commonwealth of Virginia.

The dynamic management team responsible for the design, building, development of company policy, and hands-on-management of the daily operations are Charles H. Collins Jr., Jane W. Collins, and Charles “Chip” Collins III. In addition, a team-oriented and customer-focused staff of 50 will support the management team. Kiln Creek Bowling Corporation will retain the services of a CPA firm to perform professional company audits, prepare taxes and payroll, and serve as a business consultant to assist in setting achievable long-range strategic goals.

Establishment of Kiln Creek Bowling Corporation trading as Kiln Creek Bowling Center provides York County, Hampton, Newport News and the surrounding area quality family entertainment, products, and services.

Based on the current prices in the bowling and restaurant market, Kiln Creek Bowling Center has the potential of making excellent sales the first year. With good management, a healthy annual revenue growth is expected.

The equity for each investor will be based on his or her investment. An in-depth look at Ratios can be found in Topic 7.7, Business Ratios.

Ways to minimize risk factors to Kiln Creek Lane’s success include:

    1. Obtain sufficient capital to build and cover expenses of initial operation. All investor capital will be held in escrow until the project is totally funded.

 

    1. Maintain low overhead cost which increases the bottom line profit. Multi-skilled personnel will be employed, and a continual training program will ensure they deliver consistent, superior service, where customer satisfaction is paramount.

 

    1. Build a sufficient customer base. An excellent location has been determined by demographics, and an aggressive marketing program by a full-time employee will ensure desired results.

 

    1. Establish community involvement to demonstrate how the business will contribute to a better quality of life. Community projects using the bowling center’s facilities will be developed to help civic groups obtain their financial goals. School, church, and other groups will be welcomed for tours of the bowling center.

 

  1. All payments will be cash, check, or credit card, which eliminates the need for invoicing and collections.

1.1 Objectives

Kiln Creek Bowling Corporation will build a 43,000-square-foot building in the Kiln Creek commercial area of York County/Newport News, Virginia. Service/products include 40 computerized bowling lanes, full-service family restaurant, snack bar, billiard and dart parlor, video game room, apparel shop, pro-shop and children’s nursery. In the future a miniature golf course will be added. The project will cost $4.5 million. The commercial funding will  borrowed at 9.5% for a 20 year term. Kiln Creek Bowling Center anticipates opening late in September, with first year gross revenues showing a return on equity. Revenues are expected to grow at a rate above inflation.

1.2 Mission

The purpose of Kiln Creek Bowling Center is to provide the residents of the north side of Hampton Roads with family entertainment in an enjoyable, pleasant atmosphere. It will provide excellent service using the most technologically advanced bowling equipment in a clean facility, which will cater to the entire family. The restaurant will be called “The Train Station,” and its decor will depict the golden era of the railroad industry. Its family environment with casual dining will include multiple TVs. Each customer has the opportunity to select which TV station he or she wants to hear. The design will incorporate both artifacts and reproductions of railroad furniture to capture the romantic era of traveling and dining on a train. The casual dining ambiance, quality of the food, and excellent service will ensure a large, loyal following of customers. The restaurant will also feature a full-service bar, with live entertainment or Karaoke on selected nights.

1.3 Keys to Success

Kiln Creek Bowling Center has three keys to success.

    1. Location. The center will be strategically located to maximize the profits from the modern day bowler. The center will be constructed on Commonwealth Drive in York County, adjacent to the Regal 14 Cinema. This location is a half mile from I-64 exit 265B, in the Kiln Creek Shopping Complex, which includes Super K Department Store, Kroger, Farm Fresh, 14-screen Regal Cinema, an ice rink, six national restaurants, two banks, 35 other store-front type businesses, and a Wal-Mart/Sam’s Club that is presently under construction. This is an excellent location for a multi-purpose bowling center. According to the York County Planning Division’s statistical profile of the primary market area (one to five mile radius) the location is perfect, as described by the National Bowling Council study that outlines the required demographics for a successful bowling center.

 

    1. Low Overhead Cost. Kiln Creek Lane’s management will keep overhead cost at a minimum. First, during construction of the center, Charles Collins Jr. will be project manager, saving approximately 15% of construction costs. His experience at operating bowling centers, as well as his educational background as an industrial engineer, contributes to his ability to streamline operations while minimizing unnecessary expenses. The employment of the best in the field for his staff will allow having many of the key employees doing more than one task. The center will have the most energy-efficient equipment of any center in the area.

 

  1. Wide Range of Services. Kiln Creek Bowling Center will provide entertainment, not only through bowling, but also by having a full-service restaurant/night club, billiards and darts, arcade, snack bar, apparel/pro shop, and children’s nursery. This diversity will bring in more customers and provide them more ways to enjoy themselves and spend their discretionary income.

Bowling entertainment center business plan, executive summary chart image

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Company Summary

The building site is a six-acre tract of wooded flat land, located in the most desirable business area of York County, known as the Kiln Creek business complex. It will be adjacent to the Regal 14 Cinema on Commonwealth Drive. This is the center of York County’s commercial development. The demographic studies coincide precisely with AMF, Brunswick Bowling Corporation, and National Bowling Council requirements for a successful bowling center.

The market for a modern family bowling center in York County is superior to most, due to the tremendous population growth during the past five years, the overwhelming majority of which is within five miles of the building site. Bowling is the number-one family participation sport in the United States. There are 72 million people who bowl at least three games per week. This center will be a high-tech, totally computerized bowling center. The scores will be automatically displayed on a 34-inch color monitor. Additionally, each lane will have its own overhead 34-inch color TV that enables the customer to view his or her favorite TV program while bowling. Each lane is equipped with a telephone that provides the customer with the means to order food and beverages or contact the staff if assistance is needed. The telephone will also allow the bowler to receive incoming phone calls. By far, the most significant factor to affect the bowling business in the forthcoming decade is the dramatic growth of the 35-to-44-year-old segment of the population, which will increase by 42%. This age group represents the prime segment of the population that joins bowling leagues, and that means bottom-line profit for the center will increase.

The facility will be the most modern in the Tidewater area of Virginia. It automates the score-keeping, produces score printouts for each game, shows the bowler how to make a spare, provides league secretarial services to include keeping all required league bowling records. It maintains perpetual data on league, recreation, and leisure bowlers as to what time they bowl and how much money they spend on bowling, food, apparel, pro shop, etc. This invaluable information will be used in various marketing programs such as the frequent bowler program where the bowler receives prizes of his or her choice predicated on the amount of money spent in the center during a preset time. This will be a first for any Virginia bowling center. The data helps determine which promotions work and which do not. With this data, we can form new leagues to meet the needs of the bowler. The system also maintains an accounting system that automatically controls bowling revenue. In addition to the bowling itself, the following services will provide a significant income for the center with the Train Station restaurant providing the most in secondary revenue (see projected annual income and expenditures statement).

  • Train Station restaurant
  • Snack bar
  • Shoe rental
  • Billiard and dart parlor
  • Locker rentals
  • Video game room
  • Vending machines, pay phones
  • Ball polisher
  • Nursery for the young children of bowlers

2.1 Company Ownership

Kiln Creek Bowling Corporation is a privately held C corporation owned by Charles H. Collins Jr. and his family. A percentage of the stock will be sold to investors.

2.2 Start-up Summary

During the start-up phase of this project, the following major events will occur, some of them simultaneously:

  • Obtain significant investment
  • Secure a large commercial loan
  • Obtain all required permits
  • Purchase the building site
  • Preliminary architectural drawing
  • Order long lead items, e.g., steel
  • Order bowling and restaurant equipment
  • Approval of final architectural drawing
  • Clear lot/ site prep
  • Start building center (This on six-month time line)
  • Hire key personnel
  • Start development of leagues
  • Finalize operating procedures
  • Intensify marketing campaign
  • Hire remaining staff
  • Train staff
  • Order inventory
  • Open for business
Bowling entertainment center business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Land $0
Building $0
Bowling Equipment $0
Restaurant Equipment $0
Fixtures & Furniture $0
Professional Fees $20,000
Architectural Fees $50,000
Inventory $0
Insurance Operations $30,000
Insurances During Construction $15,000
Marketing $25,000
Payroll During Construction $85,000
Permits $10,000
Company Vehicle (Pickup) $0
Office Supplies $0
Site Work – Parking Lot $0
Rent of Temp Office (Construction Trailer) $3,000
Operational Expenses During Construction $10,000
Construction Elecltrical Power $8,500
Construction Telephones $2,000
Security Deposit Electrical $5,000
Security Deposit Water $1,000
Security Deposit Telephone $500
Grand Opening Cost $0
Financial Cost $0
Start Up Fund $0
Total Start-up Expenses $265,000
Start-up Assets
Cash Required $265,000
Start-up Inventory $0
Other Current Assets $970,000
Long-term Assets $3,000,000
Total Assets $4,235,000
Total Requirements $4,500,000
Start-up Funding
Start-up Expenses to Fund $265,000
Start-up Assets to Fund $4,235,000
Total Funding Required $4,500,000
Assets
Non-cash Assets from Start-up $3,970,000
Cash Requirements from Start-up $265,000
Additional Cash Raised $0
Cash Balance on Starting Date $265,000
Total Assets $4,235,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $3,000,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $3,000,000
Capital
Planned Investment
Investor 1 $1,500,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $1,500,000
Loss at Start-up (Start-up Expenses) ($265,000)
Total Capital $1,235,000
Total Capital and Liabilities $4,235,000
Total Funding $4,500,000

2.3 Company Locations and Facilities

The building will be a 43,000 square foot, pre-engineered, contemporary design bowling center with a facade constructed of masonry and glass. It will have 300 parking spaces.

The center will be strategically located to maximize the profits from the modern-day bowler; it will be constructed on Commonwealth Drive in York County, adjacent to the Regal 14 Cinema. This location is a half mile from I-64 exit 265B, in the Kiln Creek Shopping Complex, which includes Super K Department Store, Kroger, Farm Fresh, 14-screen Regal Cinema, an ice rink, six national restaurants, two banks, 35 other store-front type businesses, and a Wal-Mart/Sam’s Club that is presently under construction. This is an excellent location for a multi-purpose bowling center. According to the York County Planning Division’s statistical profile of the primary market area (one to five mile radius) the location is perfect, as described by the National Bowling Council study that outlines the required demographics for a successful bowling center.

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Products and Services

The bowling business is family entertainment. This is a sport that all ages can participate in and enjoy as individuals or in groups. It is where grandparents take grandchildren of all ages to have a bonding outing. The new computer technology enables anyone to experience the excitement of the sport without having to know how to keep score, because it is done automatically by the computer and displayed on a monitor. The core revenue producer is the league structure, which is all encompassing. The basic element in leagues is its three levels–beginning with youth leagues, it progresses until it reaches the senior citizen. The largest number of league bowlers are in the 35-50 age group, married with two children, homeowning, with an annual income between $40,000 and $75,000.

These leagues are primarily made up of married couples with similar backgrounds. Large corporations, adult school-booster organizations, and churches are excellent sources for forming this type of league. League development is only limited by management’s imagination; however, the key is to find a common interest which each member of the league shares. Kiln Creek Bowling Center is a multi-media entertainment center that will also have a billiard and dart parlor with its own league structure. The Train Station full service restaurant will feature live entertainment or Karaoke for the late-night customers.

3.1 Product and Service Description

We sell food, beverages, and entertainment with pleasant memories.

3.2 Competitive Comparison

The business will be lucrative for the following reasons:

  1. The General Manager has ten years of experience operating a bowling center as an owner/operator. This will be his third bowling project. He was the developer, designer, builder, and operator of Victory Lanes Bowling Center, the first computerized bowling center in Virginia. It had the largest number of leagues and open bowlers in the area. The LPBA National Bowling Tournament was televised live on ESPN from this center–a first for any center in Virginia. The center was honored by the local community for the positive role it had in various civic activities such as American Heart Association, Cancer prevention, and Big Brother/Sister program.
  2. This is a family-oriented and family-operated bowling center.
  3. The center will be aggressively marketed to large and small businesses for league support. There will be an incentive program that rewards the clientele based on amount of money spent in the center.
  4. The location is excellent within the upper middle-class area of York County and Newport News, Virginia. The radius of potential customer base is increased due to the easy access from Interstate 64 at Exit 265B.
  5. Management of Kiln Creek Bowling Center recognizes the needs of the surrounding area and will seize opportunities to support the needs of the customer in the community.

The ability of Kiln Creek Bowling Center to accomplish its goals and lead the bowling industry depends upon the expertise, abilities, and social conscience of the management team. The management team has received awards in the past for their outstanding management of bowling centers and management of local and state bowling tournaments. The high standards set by Kiln Creek Bowling Center’s team will make it difficult for competitors to enter and survive in the market area.

The resulting business environment will consist of a family entertainment marketplace containing only those businesses that truly desire to support the needs of York County and the surrounding area. As a result of these factors, Kiln Creek Bowling Center knows the opportunity exists, and the company has the unique qualifications to provide the highest quality service and family-oriented bowling environment which offers competitive pricing for its customers and still makes an outstanding profit in their demanding market.

3.3 Fulfillment

The bowling industry is unique in that it has three major sources of replacement parts and products. They are AMF, Brunswick, and a network of after-market suppliers. All these sources ship overnight, which reduces the requirement for a large inventory. The restaurant side of the business is serviced by national and local vendors that deliver on a set schedule. They also provide various types of usage data that are helpful in the daily management of the restaurant.

3.4 Technology

Today’s bowling center is part entertainment, part sport, and part business. AMF BOSS Scoring and AMF BOSS are the systems that work together to intelligently combine all three. Instead of being bogged down with routine, the manager of the bowling center is free to manage. AMF BOSS Scoring makes each game an entertaining experience for bowlers of every skill level. Bowlers follow their score on an advanced 3D score grid that’s graphically appealing and easy to read. Over 100 exciter animations add visual fun to every game situation. What’s more, bumper deployment can be controlled by the scorer so parents and children can share a lane with a minimum of disruption. With its combination of features, AMF BOSS Scoring makes bowling more fun for everyone–and that makes bowlers want to come back.

AMF BOSS Scoring is a professional scoring system; it helps bowlers improve. AMF BOSS Scoring has the industry’s most reliable and accurate scoring camera. Working with it are high resolution monitors, with a sharper picture than any standard TV set. Bowlers can choose five or ten frame scoregrids, pindication and ball speed displays, plus instant replay, all of which help them evaluate or adjust their play after every shot. Add handicapping and the system that has everything the serious bowler wants and needs.

AMF BOSS Scoring helps get a better return on money invested in a bowling center. With video merchandising and revenue-generating games like 40 Frame and Strike Shot, powered by a Pentium processor and displayed on high-resolution VGA monitors, AMF BOSS Scoring gives the center more opportunities for enhanced revenue.

AMF BOSS is the perfect business partner. Developed jointly by Microsoft and AMF, this Front Desk/Back Office system is flexible and efficient. With easy-to-understand graphics created by an award-winning design firm, and an optional touch screen complemented by a custom keyboard, training is fast and easy. And advanced COM (Component Object Model) technology makes future upgrades and programming add-ons a breeze. With inherent revenue-generating capability and superior bowling business software, the entire bowling center can be managed more effectively. AMF BOSS can be configured to the specific needs of this particular center, now, and in the future with additional modules such as Video Merchandising Leagues and Tournaments.

3.5 Future Products and Services

Kiln Creek Bowling Center will expand its family entertainment options during its second year of operation. There will be a miniature golf course and a batting cage. These two activities will increase revenue during the summer, which is the time of year the bowling revenue is at its lowest point.

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Market Analysis Summary

The prime market of a bowling center is a five-mile radius. However, if the center has easy access to the Interstate highway system, that radius can be extended to seven to ten miles. The demographics of Kiln Creek Bowling Center are:

  • Total population in the five-mile radius is in excess of 300,000.
  • 77.8% are white.
  • 47.5% are 25 to 50 years old.
  • 61% own their homes.
  • The average income is $43,682.

According to the National Bowling Council, the demographics of the prime market area are a perfect match of the most likely person to join a league.

4.1 Target Market Segment Strategy

Marketing Plan

A full-time public relations coordinator will be a vital part of Kiln Creek Bowling Center’s management team. She will be responsible for assuring customer satisfaction, generating public awareness of the type of entertainment offered at the center, and filling the various leagues with bowlers. Publicity will be generated through:

  • Cable ads
  • Radio spots
  • Internet website
  • Direct mail
  • Print ads
  • Discount booklet
  • Promotional coupons
  • Customer Frequent Bowler Program
  • Membership in various organizations
  • Fund raisers
  • Community Involvement Program
  • Business-to-business personal contact
  • Telecommunications call services

4.1.1 Market Needs

The demographics of Kiln Creek Bowling Center indicate it will be filling a void that has existed for years in the local entertainment market. This market has a higher income than the average section of Virginia; therefore, more money is available for entertainment.

During the past ten years, large chains like AMF Bowling and Brunswick Bowling have been buying up various local bowling centers until they control the market. When they control the market, they cut services, raise prices, and drive away core business, due to their indifference to customers’ concerns. The chain always moves decision-making to its headquarters. Now the center is no longer a community-oriented business, and the customers see it as a big corporation that doesn’t care about local inputs. This is why there has been a downward trend nationally in the bowling industry, but an increase in business where good, locally-owned and operated centers exist.

4.1.3 Market Growth

As the population ages, the potential market also increases. The centers that have a good marketing program and provide excellent service will increase their customer base.

4.2 Service Business Analysis

Kiln Creek Bowling Center will be competing for the customers’ dollars with other recreation and leisure establishments such as movie theaters, sports venues, theme parks, night clubs, etc.

4.2.1 Competition and Buying Patterns

Competition in the bowling business in York County is mild. As described in the following section, one of the bowling centers will be closed in 2002. None of the incumbent establishments have either the level of technology, or the wide range of services provided by Kiln Creek Bowling Center. Furthermore, customer service, which is the underlying criteria for success in this business, has not been stressed by the current management of the competing bowling centers. Like other types of entertainment, price is not the only buying criterion as customers expect to enjoy the whole process of having fun. Customer service, a spotless environment, and properly working equipment equally contribute to ensuring the customer will want to come back again.

4.2.2 Main Competitors

There are three bowling centers within seven miles of Kiln Creek Bowling Center. All are owned by AMF Bowling Corporation. Two of them, AMF Hiddenwood and AMF Denbigh, will not have any impact on the Kiln Creek potential customers. Both are located on the southwest side of the railroad which divides the entire region. No easy roadway connects their customer base to Kiln Creek’s potential customers. However, Kiln Creek Bowling Center may gain customers from AMF Hiddenwood when it closes in 2002. That is when Christopher Newport University, the owner of the building, is scheduled to replace it with a new math building. The third center, AMF York, was designed and built in 1983 by this plan’s author. He operated it until 1994, when it was sold to AMF. Kiln Creek Bowling Center will have a major impact on this center. The lack of concern for the customer is why several leagues have indicated they will move to Kiln Creek when it opens.

4.3 Market Segmentation

The bowling market is targeted according to household income. The three major categories are $25,000 to $34,999, $35,000 to $49,000, and $50,000 to $75,000. (See chart and table below.)

Bowling entertainment center business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Household Income $25,000-34,999 5% 54,600 57,330 60,197 63,207 66,367 5.00%
Household Income $35,000-49,999 10% 64,500 70,950 78,045 85,850 94,435 10.00%
Household Income $50,000-74,999 10% 59,100 65,010 71,511 78,662 86,528 10.00%
Total 8.54% 178,200 193,290 209,753 227,719 247,330 8.54%

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Strategy and Implementation Summary

Customer service is paramount in the bowling business. The starting point to accomplish this is to have a trained and motivated staff that enjoys working directly with the public. It is always easier to please your customers when the facility is spotless and all of the equipment is in proper working order. The center will establish community involvement to demonstrate how the business will contribute to a better quality of life. Community projects using the bowling center’s facilities will be developed to help civic groups obtain their financial goals. School, church, and other groups will be welcomed for tours of the bowling center.

5.1 Competitive Edge

Kiln Creek Bowling Center’s competitive advantage is derived from many factors. The following differentiate it from its competitors.

  • Location.  Best location of any bowling center–only one-half mile off Interstate 64 in the prime business district of the area.
  • Low Overhead Cost.  Kiln Creek Bowling Center’s management will keep overhead costs to a minimum. First, during construction of the center, Charles Collins will be project manager, saving approximately 15% of construction costs. His experience at operating bowling centers, as well as his educational background as an industrial engineer, contributes to his ability to streamline operations while minimizing unnecessary expenses. The employment of the best in the field for his staff will allow many of the key employees to do more than one task. The center will have the most energy-efficient equipment of any center in the area and have the most technologically advanced equipment on today’s bowling equipment market.
  • Wide Range of Services.  Kiln Creek Bowling Center will provide entertainment, not only through bowling, but also by having a full-service restaurant/night club, miniature golf course (in future years), arcade, snack bar, apparel/pro shop, and children’s nursery. This diversity will bring in more customers and provide them more ways to enjoy themselves and spend their discretionary income.

5.2 Value Proposition

Kiln Creek Bowling Center will be the most modern and technologically advanced bowling center in the state of Virginia. The center is designed to fulfill the entire family’s recreation and entertainment needs in a clean, safe environment. We will cater to the high income households and ensure they receive the best customer service in the industry.

5.3 Sales Strategy

Kiln Creek Bowling Center provides a venue for the entire family to enjoy their leisure time participating in a competitive sport that requires minimum strength and athletic ability. The light exercise will help improve their health, and they will experience a clean facility where the service is the best in the industry, at a fair price.

5.3.1 Sales Forecast

The chart and table below show Kiln Creek Bowling Center’s projected Sales Forecast. Annual projections for three years are shown here, with first year monthly figures in the appendix.

Bowling entertainment center business plan, strategy and implementation summary chart image

Bowling entertainment center business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Open Bowling Games 108,217 113,628 119,309
League Bowling Games 231,596 243,176 255,334
Apparel/Pro Shop 2,504 2,629 2,760
Food and Beverage 101,729 106,815 112,156
Tournament 4,000 4,200 4,410
Special Events 191 200 210
Nursery 7,002 7,352 7,719
Billiards 10,200 10,710 11,245
Locker Rentals 7,200 7,560 7,938
Arcade 76,800 80,640 84,672
Advertisement 480 504 529
Shoe Rental 21,600 22,680 23,814
Total Unit Sales 571,519 600,094 630,096
Unit Prices Year 1 Year 2 Year 3
Open Bowling Games $2.75 $2.75 $2.75
League Bowling Games $2.57 $2.57 $2.57
Apparel/Pro Shop $30.00 $30.00 $30.00
Food and Beverage $5.50 $5.50 $5.50
Tournament $10.00 $10.00 $10.00
Special Events $300.00 $300.00 $300.00
Nursery $1.50 $1.50 $1.50
Billiards $8.00 $8.00 $8.00
Locker Rentals $3.00 $3.00 $3.00
Arcade $0.25 $0.25 $0.25
Advertisement $50.00 $50.00 $50.00
Shoe Rental $2.00 $2.00 $2.00
Sales
Open Bowling Games $297,597 $312,477 $328,100
League Bowling Games $595,202 $624,962 $656,208
Apparel/Pro Shop $75,120 $78,870 $82,800
Food and Beverage $559,510 $587,483 $616,858
Tournament $40,000 $42,000 $44,100
Special Events $57,300 $60,000 $63,000
Nursery $10,503 $11,028 $11,579
Billiards $81,600 $85,680 $89,960
Locker Rentals $21,600 $22,680 $23,814
Arcade $19,200 $20,160 $21,168
Advertisement $24,000 $25,200 $26,450
Shoe Rental $43,200 $45,360 $47,628
Total Sales $1,824,831 $1,915,900 $2,011,665
Direct Unit Costs Year 1 Year 2 Year 3
Open Bowling Games $0.13 $0.13 $0.13
League Bowling Games $0.06 $0.06 $0.06
Apparel/Pro Shop $1.00 $1.00 $1.00
Food and Beverage $0.12 $0.12 $0.12
Tournament $0.04 $0.04 $0.04
Special Events $3.46 $3.46 $3.46
Nursery $0.02 $0.02 $0.02
Billiards $0.01 $0.01 $0.01
Locker Rentals $0.00 $0.00 $0.00
Arcade $0.00 $0.00 $0.00
Advertisement $0.00 $0.00 $0.00
Shoe Rental $0.02 $0.00 $0.00
Direct Cost of Sales
Open Bowling Games $14,552 $14,772 $15,510
League Bowling Games $14,760 $14,591 $15,320
Apparel/Pro Shop $2,505 $2,629 $2,760
Food and Beverage $12,051 $12,818 $13,459
Tournament $165 $168 $176
Special Events $660 $692 $727
Nursery $120 $147 $154
Billiards $140 $107 $112
Locker Rentals $0 $0 $0
Arcade $0 $0 $0
Advertisement $0 $0 $0
Shoe Rental $353 $0 $0
Subtotal Direct Cost of Sales $45,304 $45,923 $48,219

5.4 Milestones

The following table presents important events and their scheduled start and ending dates.

Bowling entertainment center business plan, strategy and implementation summary chart image

Milestones
Milestone Start Date End Date Budget Manager Department
Financing in Place 12/1/2000 2/1/2001 $0 ABC Marketing
Accounting System 1/1/2001 2/1/2001 $0 ABC Marketing
Start Construction 3/1/2001 9/1/2001 $0 ABC Marketing
Hire Key Employees 3/1/2001 8/1/2001 $0 ABC Marketing
Personnel Handbook 4/1/2001 5/1/2001 $0 ABC Marketing
Operations Handbook 4/1/2001 5/1/2001 $0 ABC Marketing
Direct Mailer 5/1/2001 7/1/2001 $0 ABC Marketing
Press Release 5/1/2001 6/1/2001 $0 ABC Marketing
Newspaper Ads 7/1/2001 7/1/2001 $0 ABC Marketing
TV Ad 7/1/2001 8/1/2001 $0 ABC Marketing
Mall Info Booth 7/1/2001 8/1/2001 $0 ABC Marketing
1600 Fall League Bowlers 5/1/2001 8/1/2001 $0 ABC Marketing
200 Billiard League Members 5/1/2001 8/1/2001 $0 ABC Marketing
50 Dart League Members 4/1/2001 8/1/2001 $0 ABC Web
12 Month Tournament Schedule 7/1/2001 8/1/2001 $0 ABC Web
Restaurant Menu 3/1/2001 3/1/2001 $0 ABC Department
3 Month Entertainment Schedule 7/1/2001 8/1/2001 $0 ABC Department
Frequent Bowling Program 6/1/2001 7/1/2001 $0 ABC Department
Hire Remaining Staff 7/1/2001 8/1/2001 $0 ABC Department
Train Staff 8/1/2001 8/1/2001 $0 ABC Department
Open Bowling Center 9/1/2001 9/1/2001 $0 ABC Department
Totals $0

5.5 Marketing Strategy

Kiln Creek Bowling Center’s Marketing Plan was introduced in topic 4.2 Target Market Segment Strategy.  Additional information appears in the following topics.

5.5.1 Pricing Strategy

All prices will be competitive and fair to the customer. The cost of products sold will determine the selling price after adding overhead and profit.

5.5.2 Promotion Strategy

We will use Cable TV, the leisure time section of the newspaper, and our website advertising as our three main ways to reach our customers.

  1. Advertising. Will develop our positioning message: Family recreation in a clean, safe environment where customer service is paramount.
  2. Sales Brochure. We reward our customers for spending money with us through our Frequent Bowler Program.
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Management Summary

Our management philosophy is based on mutual respect for all contributions made by our employees without regard to the position they hold in the company. People who work at Kiln Creek Bowling Center want to work here because the work environment enables them to work smarter–not harder, and they know their suggestions are appreciated.

The ability of Kiln Creek to accomplish its goals and lead the bowling industry is significantly related to the expertise, abilities, and social conscience of the management team. The management team has received awards in the past for their outstanding performance. The high standards set by Kiln Creek’s team will make it difficult for competitors to enter and survive in the market area.

6.1 Organizational Structure

The Kiln Creek Bowling Center business organization has been structured and established to promote effective daily operations as well as future company growth. The structure provides comprehensive management oversight of business activities without excessive manpower used in management positions. The teams include 60 employees under one General Manager with five associate managers. Our management divisions are, Administrative, Bowling Operations, Restaurant and Facilities Management.

6.2 Personnel Plan

The Personnel Plan chart reflects how we will utilize our people’s assets. Most of them will be cross trained.

Administrative
    General Manager
    Accountant/Secretary
    League Coordinator/Public Relations
    Tournament Coordinator/Bowling Manager

Operations
    Bowling/Billiard Manager
    Shift Leader
    Front Desk Operator
    Day Care Staff
    Housekeeping
    Porters

Restaurant
    Restaurant Manager
    Food/Beverage Manager
    Chef
    Bartender
    Line Cooks
    Dishwasher/Bus Boy
    Wait Staff/Cashiers

Facilities Maintenance
    Chief Engineer
    First Class Mechanic
    Second Class Mechanic
    Pin Chaser

Personnel Plan
Year 1 Year 2 Year 3
Manager $72,000 $75,600 $79,380
All Other Employees $350,000 $367,500 $385,875
Other $0 $0 $0
Total People 50 50 50
Total Payroll $422,000 $443,100 $465,255

6.3 Management Team

Title: CEO/General Manager
Name: Charles “Chuck” Collins, Jr.
Background:
  Graduated from East Tennessee State University with a B.S. in Industrial Education/Engineering. Taught school and coached football for two years. The highlights of his Naval career before he retired as a US Navy Commander in 1983 include:

  1. The first F-14 Aircraft Rework Project Officer. His task was to ensure approximately 1 million square feet of new construction was completed on time and on budget: outfitted work space with the highest tech equipment available, hired and trained personnel, and ensured production schedule was met.
  2. AIMD Department head on two different aircraft carriers where each received the battle efficient E award.
  3. Project Officer for developing a computer model to be used for aircraft maintenance personnel manning.

After his retirement from the Navy, he designed and was the general contractor on Virginia’s first computerized-scoring bowling center. He was the owner and general manager of the center for ten years. During this time he was also the consultant on several other new centers which were built in Virginia. He was selected as Hampton Roads Bowling Association’s Man of the Year in 1986.

Responsibilities:  Design Kiln Creek Bowling Center and be the project manager during construction. He will be Kiln Creek Bowling Center’s general manager after it is open for business. He will develop and implement the operation, safety, maintenance, training, and marketing programs for the center. He will represent Kiln Creek Bowling Center at formal and informal functions.

Title: Senior Staff
Name: Jane W. Collins
Background:
  Graduated from Radford University with a B.S. in Education. Taught high school for twenty years. She was co-owner of Victory Lanes Bowling Center and managed the Bowling Center Night Club for nine years. She received an outstanding approval rating form the ABC Board and the Health Department. She hired her staff and signed all contracts for the various entertainment groups. She designed logos and purchased uniforms and required supplies.

Responsibilities:  Will be the company’s human resource director. Participate in all company business strategic plans. Coordinate all training and safety programs. Represent Kiln Creek Bowling at various formal and informal functions.

Title: Food /Beverage Manager
Name: Charles H. “Chip” Collins III
Background:
  Two years of local junior college with a business management major. Twelve years working in various positions in the restaurant business. Eight years as manager of 11th Frame Restaurant. During his tenure food sales increased while meeting or exceeding all financial goals. He started a catering and private parties program. He hired all employees, purchased the food, and ensured it was properly prepared.

Responsibilities:  Day-to-day management of the operation of the restaurant, including: hiring, menu development, inventory control, food purchase, marketing, and setting policy for cleanliness and food preparation.

Title: Accountant/Secretary
Name: Dawn Ballowe
Background:
  Has a B.S. in Accounting. Has ten years experience as lead accountant of company with five years of it in the bowling industry working with Charles Collins, Jr. She has proven secretarial skills.

Responsibilities:  Handle all secretarial duties for the company. Be company’s internal accountant with duties to include: make daily journal entries, check all deposits, revenue, make daily bank deposits, balance bank statements, compile monthly P/L, journal trial balance, account payable, check register, prepare checks for signature and prepare graphs and charts as required. Will be point-of-contact for external payroll, tax payment, and outside CPA services.

Title: Tournament Coordinator/Bowling Operations Manager
Name: James D. Bohlken
Background:

  • Retired December 2000 Newport News Planning Department Supervisor.
  • Twenty-four years on Board of Directors of Hampton Roads Bowling Association.
  • Four years President HRBA.
  • Three years Secretary HRBA.
  • Hall of Fame HRBA.
  • Twelve years Board of Directors of Virginia State Bowling Association.
  • Three years President VSBA.
  • Two years Secretary VSBA.
  • Hall of Fame VSBA.
  • State Bowling Association Director of Tournament.
  • Four year Co-Tournament Manager of Virginia Colonial Tournament, 1800 teams of four. This will move to Kiln Creek Center.

Title: Public Relations/League Coordinator
Name: To Be Selected
Background Requirements:
  Have B.S./B.A. in marketing, media, or communications. Understand the bowling/restaurant business. Have five years experience.

Responsibilities:  Develop a bowling league and tournament program. Manage the multi-media marketing, develop Internet website and update as required. Design corporation information package. Be corporation’s historian, point-of-contact for visitors, design award program and community involvement program.

Title: Bowling Equipment Facility Engineer
Name: To be selected
Background:
  B.S. in Electrical or Mechanical Engineering or have five years of AMF Bowling equipment experience with an industrial electrical background.

Responsibilities:  Have a preventive maintenance program that includes all bowling equipment, restaurant equipment, and all facility equipment. Document all repair actions and determine the most economical way to maintain and repair all equipment. Establish part inventory and method of controlling usage.

Executive Support Agencies and Individuals

Individuals and organizations will be assisting as required in the areas of expertise listed below.

  • Legal Services
  • Accounting Services
  • Insurance Company
  • Banking Services
  • Architectural and Design Services
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Financial Plan

The commercial loan that the company expects to secure shortly will cover the start-up expenses and provide operating cash. The company needs to attract additional investor capital to cover the remaining long-term assets. The following sections show in detail that Kiln Creek Bowling Center will be profitable from the beginning. Its healthy profits will be sufficient to pay back the loan and provide return to the owners.

7.1 Important Assumptions

NOTES FOR PROJECTIONS

  1. League Bowler Revenue (see table below)
    • Fall/Winter Long Season–35 Weeks
    • Fall/Winter Short Season–16 Weeks
    • Summer Season–13 Weeks
  2. Food and Beverage Revenue will be 50% of total bowling revenue.
  3. There will be 600 lockers rented at $3.00 each per month.
  4. Shoes will rent for $2.50 per pair.
  5. Food and Beverage Cost will be 27% of Food and Beverage Sales.
  6. Apparel and Pro Shop items cost will be 25% of sales.
  7. Open Bowling is 50% of League Bowling.
  8. Sales / Food tax is not included in revenue.
  9. Contract Services include pest control, trash removal, cable TV, uniform rental
  10. for maintenance and bar towel rental.
  11. York County tax rates are:
    • Real Estate tax $8.60 per $1,000.00 of assessed value.
    • Personal Property tax base is 25% of cost of equipment at 4% per thousand.
    • Business License is $.20 per $100 for Food & Beverage Revenue and $.36 per $100 for Bowling and Billiards.

Fall and Winter Seasons – Total: $493,800

  • Adult Night:  35 Weeks, 1,200 people, $8.00/person, League Revenue: $336,000
  • Adult Day:  35 Weeks, 400 people, $7.50/person,  League Revenue: $105,000
  • Youth: 35 Weeks, 160 people, $6.00/person, League Revenue: $33,600
  • Adult Night:  16 Weeks, 150 people, $8.00/person, League Revenue: $19,200

Summer Season – Total: $101,400

  • Adult Night:  13 Weeks, 600 people, $8.00/person, League Revenue:  $62,400
  • Adult Day:  13 Weeks, 200 people, $7.50/person, League Revenue:  $19,500
  • Youth and Day Care:  13 Weeks, 250 people, $6.00/person, League Revenue:  $19,500

Total League Revenue: $595,200

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 9.50% 9.50% 9.50%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

These benchmark indicators give Kiln Creek Bowling Center a sense of relative comparison for three years of projections.

Bowling entertainment center business plan, financial plan chart image

7.3 Break-even Analysis

With the average monthly fixed costs and projected profit margin, Kiln Creek Bowling Center will break even with the monthly sales revenue shown in the table and chart following.

Bowling entertainment center business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 24,564
Monthly Revenue Break-even $78,432
Assumptions:
Average Per-Unit Revenue $3.19
Average Per-Unit Variable Cost $0.08
Estimated Monthly Fixed Cost $76,485

7.4 Projected Profit and Loss

One should note that the company is making a profit in the first month of operation. The yearly analysis is indicated in the table below, monthly analyses can be found in the appendix.

Bowling entertainment center business plan, financial plan chart image

Bowling entertainment center business plan, financial plan chart image

Bowling entertainment center business plan, financial plan chart image

Bowling entertainment center business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $1,824,831 $1,915,900 $2,011,665
Direct Cost of Sales $45,304 $45,923 $48,219
Food and Beverage $153,076 $153,076 $153,076
Total Cost of Sales $198,380 $198,999 $201,295
Gross Margin $1,626,451 $1,716,901 $1,810,370
Gross Margin % 89.13% 89.61% 89.99%
Expenses
Payroll $422,000 $443,100 $465,255
Sales and Marketing and Other Expenses $150,840 $175,328 $184,102
Depreciation $204,996 $204,996 $204,996
Leased Equipment $0 $0 $0
Utilities $52,680 $55,314 $58,079
Insurance $24,000 $0 $0
Rent $0 $0 $0
Payroll Taxes $63,300 $66,465 $69,788
Other $0 $0 $0
Total Operating Expenses $917,816 $945,203 $982,220
Profit Before Interest and Taxes $708,635 $771,698 $828,150
EBITDA $913,631 $976,694 $1,033,146
Interest Expense $285,000 $282,242 $276,451
Taxes Incurred $108,624 $122,364 $140,223
Net Profit $315,012 $367,092 $411,475
Net Profit/Sales 17.26% 19.16% 20.45%

7.5 Projected Cash Flow

The company’s estimated cash flow analysis is outlined in the following table. Kiln Creek Bowling’s profitability will ensure positive cash balance.

Bowling entertainment center business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $1,824,831 $1,915,900 $2,011,665
Subtotal Cash from Operations $1,824,831 $1,915,900 $2,011,665
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $1,824,831 $1,915,900 $2,011,665
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $422,000 $443,100 $465,255
Bill Payments $815,752 $903,301 $928,904
Subtotal Spent on Operations $1,237,752 $1,346,401 $1,394,159
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $58,071 $63,835
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $1,237,752 $1,404,472 $1,457,994
Net Cash Flow $587,079 $511,428 $553,671
Cash Balance $852,079 $1,363,507 $1,917,178

7.6 Projected Balance Sheet

Estimated balance sheets for the years 2001-2003 are provided below.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $852,079 $1,363,507 $1,917,178
Inventory $3,354 $10,104 $10,989
Other Current Assets $970,000 $970,000 $970,000
Total Current Assets $1,825,433 $2,343,610 $2,898,167
Long-term Assets
Long-term Assets $3,000,000 $3,000,000 $3,000,000
Accumulated Depreciation $204,996 $409,992 $614,988
Total Long-term Assets $2,795,004 $2,590,008 $2,385,012
Total Assets $4,620,437 $4,933,618 $5,283,179
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $70,425 $74,586 $76,506
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $70,425 $74,586 $76,506
Long-term Liabilities $3,000,000 $2,941,929 $2,878,094
Total Liabilities $3,070,425 $3,016,515 $2,954,600
Paid-in Capital $1,500,000 $1,500,000 $1,500,000
Retained Earnings ($265,000) $50,012 $417,104
Earnings $315,012 $367,092 $411,475
Total Capital $1,550,012 $1,917,104 $2,328,579
Total Liabilities and Capital $4,620,437 $4,933,618 $5,283,179
Net Worth $1,550,012 $1,917,104 $2,328,579

7.7 Business Ratios

The company’s projected business ratios are provided in the table below. The final column, Industry Profile, shows significant ratios for the Bowling Center industry, as determined by the Standard Industry Classification (SIC) Index code 7933.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 4.99% 5.00% 0.30%
Percent of Total Assets
Inventory 0.07% 0.20% 0.21% 4.10%
Other Current Assets 20.99% 19.66% 18.36% 34.80%
Total Current Assets 39.51% 47.50% 54.86% 44.30%
Long-term Assets 60.49% 52.50% 45.14% 55.70%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 1.52% 1.51% 1.45% 30.10%
Long-term Liabilities 64.93% 59.63% 54.48% 23.30%
Total Liabilities 66.45% 61.14% 55.92% 53.40%
Net Worth 33.55% 38.86% 44.08% 46.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 89.13% 89.61% 89.99% 0.00%
Selling, General & Administrative Expenses 71.72% 70.45% 69.42% 73.90%
Advertising Expenses 3.70% 3.70% 3.70% 3.40%
Profit Before Interest and Taxes 38.83% 40.28% 41.17% 2.30%
Main Ratios
Current 25.92 31.42 37.88 1.59
Quick 25.87 31.29 37.74 1.08
Total Debt to Total Assets 66.45% 61.14% 55.92% 53.40%
Pre-tax Return on Net Worth 27.33% 25.53% 23.69% 2.50%
Pre-tax Return on Assets 9.17% 9.92% 10.44% 5.30%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 17.26% 19.16% 20.45% n.a
Return on Equity 20.32% 19.15% 17.67% n.a
Activity Ratios
Inventory Turnover 4.61 6.82 4.57 n.a
Accounts Payable Turnover 12.58 12.17 12.17 n.a
Payment Days 27 29 30 n.a
Total Asset Turnover 0.39 0.39 0.38 n.a
Debt Ratios
Debt to Net Worth 1.98 1.57 1.27 n.a
Current Liab. to Liab. 0.02 0.02 0.03 n.a
Liquidity Ratios
Net Working Capital $1,755,008 $2,269,025 $2,821,661 n.a
Interest Coverage 2.49 2.73 3.00 n.a
Additional Ratios
Assets to Sales 2.53 2.58 2.63 n.a
Current Debt/Total Assets 2% 2% 1% n.a
Acid Test 25.87 31.29 37.74 n.a
Sales/Net Worth 1.18 1.00 0.86 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

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
Unit Sales
Open Bowling Games 0% 12,490 10,690 12,709 10,691 8,182 5,673 5,673 5,291 9,818 9,818 9,818 7,364
League Bowling Games 0% 26,731 22,879 27,198 22,880 17,510 12,140 12,140 11,323 21,012 21,012 21,012 15,759
Apparel/Pro Shop 0% 334 184 167 134 100 150 100 117 234 200 234 550
Food and Beverage 0% 8,796 8,518 9,777 8,155 8,227 7,618 7,982 7,014 8,437 9,636 9,773 7,796
Tournament 0% 550 550 270 150 100 400 800 50 80 300 450 300
Special Events 0% 22 22 25 5 15 17 14 20 10 14 10 17
Nursery 0% 800 867 950 833 567 267 267 250 500 567 567 567
Billiards 0% 930 930 930 800 800 750 750 750 800 900 930 930
Locker Rentals 0% 600 600 600 600 600 600 600 600 600 600 600 600
Arcade 0% 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400 6,400
Advertisement 0% 40 40 40 40 40 40 40 40 40 40 40 40
Shoe Rental 0% 2,350 2,550 2,250 1,350 1,150 1,200 1,050 1,250 1,750 2,250 2,350 2,100
Total Unit Sales 60,043 54,230 61,316 52,038 43,691 35,255 35,816 33,105 49,681 51,737 52,184 42,423
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Open Bowling Games $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75 $2.75
League Bowling Games $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57 $2.57
Apparel/Pro Shop $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00 $30.00
Food and Beverage $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50 $5.50
Tournament $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Special Events $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00
Nursery $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50
Billiards $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00 $8.00
Locker Rentals $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
Arcade $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25 $0.25
Advertisement $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00
Shoe Rental $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00 $2.00
Sales
Open Bowling Games $34,348 $29,398 $34,950 $29,400 $22,501 $15,601 $15,601 $14,550 $27,000 $27,000 $27,000 $20,251
League Bowling Games $68,699 $58,799 $69,899 $58,802 $45,001 $31,200 $31,200 $29,100 $54,001 $54,001 $54,001 $40,501
Apparel/Pro Shop $10,020 $5,520 $5,010 $4,020 $3,000 $4,500 $3,000 $3,510 $7,020 $6,000 $7,020 $16,500
Food and Beverage $48,378 $46,849 $53,774 $44,853 $45,249 $41,899 $43,901 $38,577 $46,404 $52,998 $53,752 $42,878
Tournament $5,500 $5,500 $2,700 $1,500 $1,000 $4,000 $8,000 $500 $800 $3,000 $4,500 $3,000
Special Events $6,600 $6,600 $7,500 $1,500 $4,500 $5,100 $4,200 $6,000 $3,000 $4,200 $3,000 $5,100
Nursery $1,200 $1,301 $1,425 $1,250 $851 $401 $401 $375 $750 $851 $851 $851
Billiards $7,440 $7,440 $7,440 $6,400 $6,400 $6,000 $6,000 $6,000 $6,400 $7,200 $7,440 $7,440
Locker Rentals $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Arcade $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Advertisement $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Shoe Rental $4,700 $5,100 $4,500 $2,700 $2,300 $2,400 $2,100 $2,500 $3,500 $4,500 $4,700 $4,200
Total Sales $192,284 $171,906 $192,597 $155,824 $136,200 $116,500 $119,802 $106,512 $154,274 $165,149 $167,662 $146,120
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Open Bowling Games 0.00% $0.13 $0.11 $0.09 $0.11 $0.17 $0.18 $0.19 $0.09 $0.14 $0.14 $0.13 $0.20
League Bowling Games 0.00% $0.06 $0.05 $0.04 $0.05 $0.07 $0.08 $0.09 $0.10 $0.06 $0.06 $0.06 $0.10
Apparel/Pro Shop 0.00% $7.50 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Food and Beverage 0.00% $1.37 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Tournament 0.00% $0.30 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Special Events 0.00% $30.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Nursery 0.00% $0.15 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Billiards 0.00% $0.15 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Locker Rentals 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Arcade 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Advertisement 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Shoe Rental 0.00% $0.15 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Direct Cost of Sales
Open Bowling Games $1,624 $1,176 $1,144 $1,144 $1,391 $1,021 $1,078 $476 $1,375 $1,375 $1,276 $1,473
League Bowling Games $1,604 $1,144 $1,088 $1,144 $1,226 $971 $1,093 $1,132 $1,261 $1,261 $1,261 $1,576
Apparel/Pro Shop $2,505 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Food and Beverage $12,051 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Tournament $165 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Special Events $660 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Nursery $120 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Billiards $140 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Locker Rentals $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Arcade $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Advertisement $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Shoe Rental $353 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $19,220 $2,320 $2,232 $2,288 $2,617 $1,992 $2,170 $1,608 $2,635 $2,635 $2,537 $3,049
Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Manager 0% $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
All Other Employees 0% $33,000 $34,000 $35,000 $33,000 $25,000 $21,000 $21,000 $23,000 $30,000 $32,000 $32,000 $31,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 50 50 50 50 35 30 30 30 35 50 50 50
Total Payroll $39,000 $40,000 $41,000 $39,000 $31,000 $27,000 $27,000 $29,000 $36,000 $38,000 $38,000 $37,000

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest Rate 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50% 9.50%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $192,284 $171,906 $192,597 $155,824 $136,200 $116,500 $119,802 $106,512 $154,274 $165,149 $167,662 $146,120
Direct Cost of Sales $19,220 $2,320 $2,232 $2,288 $2,617 $1,992 $2,170 $1,608 $2,635 $2,635 $2,537 $3,049
Food and Beverage $13,194 $12,812 $14,543 $12,313 $12,412 $11,575 $12,075 $10,744 $12,701 $14,349 $14,538 $11,820
Total Cost of Sales $32,414 $15,132 $16,775 $14,601 $15,029 $13,567 $14,245 $12,352 $15,336 $16,984 $17,075 $14,869
Gross Margin $159,870 $156,774 $175,822 $141,223 $121,172 $102,933 $105,557 $94,160 $138,938 $148,165 $150,587 $131,251
Gross Margin % 83.14% 91.20% 91.29% 90.63% 88.97% 88.35% 88.11% 88.40% 90.06% 89.72% 89.82% 89.82%
Expenses
Payroll $39,000 $40,000 $41,000 $39,000 $31,000 $27,000 $27,000 $29,000 $36,000 $38,000 $38,000 $37,000
Sales and Marketing and Other Expenses $13,590 $12,740 $12,215 $9,650 $12,325 $10,750 $8,810 $15,580 $14,940 $13,520 $12,680 $14,040
Depreciation $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083 $17,083
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $4,300 $4,700 $5,300 $3,500 $3,490 $3,490 $4,000 $3,600 $4,000 $5,300 $5,500 $5,500
Insurance $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $5,850 $6,000 $6,150 $5,850 $4,650 $4,050 $4,050 $4,350 $5,400 $5,700 $5,700 $5,550
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $81,823 $82,523 $83,748 $77,083 $70,548 $64,373 $62,943 $71,613 $79,423 $81,603 $80,963 $81,173
Profit Before Interest and Taxes $78,047 $74,251 $92,074 $64,140 $50,624 $38,560 $42,614 $22,547 $59,515 $66,562 $69,624 $50,078
EBITDA $95,130 $91,334 $109,157 $81,223 $67,707 $55,643 $59,697 $39,630 $76,598 $83,645 $86,707 $67,161
Interest Expense $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750 $23,750
Taxes Incurred $16,289 $12,625 $17,081 $10,097 $6,718 $3,702 $4,716 ($301) $8,941 $10,703 $11,469 $6,582
Net Profit $38,008 $37,876 $51,243 $30,292 $20,155 $11,107 $14,148 ($902) $26,823 $32,109 $34,406 $19,746
Net Profit/Sales 19.77% 22.03% 26.61% 19.44% 14.80% 9.53% 11.81% -0.85% 17.39% 19.44% 20.52% 13.51%

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 Received
Cash from Operations
Cash Sales $192,284 $171,906 $192,597 $155,824 $136,200 $116,500 $119,802 $106,512 $154,274 $165,149 $167,662 $146,120
Subtotal Cash from Operations $192,284 $171,906 $192,597 $155,824 $136,200 $116,500 $119,802 $106,512 $154,274 $165,149 $167,662 $146,120
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $192,284 $171,906 $192,597 $155,824 $136,200 $116,500 $119,802 $106,512 $154,274 $165,149 $167,662 $146,120
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $39,000 $40,000 $41,000 $39,000 $31,000 $27,000 $27,000 $29,000 $36,000 $38,000 $38,000 $37,000
Bill Payments $3,978 $117,845 $74,841 $80,576 $67,100 $65,144 $59,320 $59,412 $60,124 $71,927 $77,593 $77,892
Subtotal Spent on Operations $42,978 $157,845 $115,841 $119,576 $98,100 $92,144 $86,320 $88,412 $96,124 $109,927 $115,593 $114,892
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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
Subtotal Cash Spent $42,978 $157,845 $115,841 $119,576 $98,100 $92,144 $86,320 $88,412 $96,124 $109,927 $115,593 $114,892
Net Cash Flow $149,306 $14,061 $76,756 $36,247 $38,100 $24,356 $33,482 $18,101 $58,150 $55,222 $52,070 $31,228
Cash Balance $414,306 $428,367 $505,123 $541,371 $579,471 $603,827 $637,308 $655,409 $713,559 $768,781 $820,851 $852,079
Pro Forma Balance Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances
Current Assets
Cash $265,000 $414,306 $428,367 $505,123 $541,371 $579,471 $603,827 $637,308 $655,409 $713,559 $768,781 $820,851 $852,079
Inventory $0 $21,142 $18,822 $16,591 $14,303 $11,686 $9,694 $7,523 $5,915 $3,279 $2,899 $2,791 $3,354
Other Current Assets $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000 $970,000
Total Current Assets $1,235,000 $1,405,448 $1,417,190 $1,491,714 $1,525,673 $1,561,157 $1,583,520 $1,614,832 $1,631,324 $1,686,839 $1,741,680 $1,793,642 $1,825,433
Long-term Assets
Long-term Assets $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000
Accumulated Depreciation $0 $17,083 $34,166 $51,249 $68,332 $85,415 $102,498 $119,581 $136,664 $153,747 $170,830 $187,913 $204,996
Total Long-term Assets $3,000,000 $2,982,917 $2,965,834 $2,948,751 $2,931,668 $2,914,585 $2,897,502 $2,880,419 $2,863,336 $2,846,253 $2,829,170 $2,812,087 $2,795,004
Total Assets $4,235,000 $4,388,365 $4,383,024 $4,440,465 $4,457,341 $4,475,742 $4,481,022 $4,495,251 $4,494,660 $4,533,092 $4,570,850 $4,605,729 $4,620,437
Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Current Liabilities
Accounts Payable $0 $115,357 $72,140 $78,338 $64,922 $63,167 $57,340 $57,421 $57,732 $69,341 $74,991 $75,463 $70,425
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $115,357 $72,140 $78,338 $64,922 $63,167 $57,340 $57,421 $57,732 $69,341 $74,991 $75,463 $70,425
Long-term Liabilities $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000 $3,000,000
Total Liabilities $3,000,000 $3,115,357 $3,072,140 $3,078,338 $3,064,922 $3,063,167 $3,057,340 $3,057,421 $3,057,732 $3,069,341 $3,074,991 $3,075,463 $3,070,425
Paid-in Capital $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000 $1,500,000
Retained Earnings ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000) ($265,000)
Earnings $0 $38,008 $75,884 $127,127 $157,420 $177,575 $188,682 $202,830 $201,927 $228,751 $260,860 $295,265 $315,012
Total Capital $1,235,000 $1,273,008 $1,310,884 $1,362,127 $1,392,420 $1,412,575 $1,423,682 $1,437,830 $1,436,927 $1,463,751 $1,495,860 $1,530,265 $1,550,012
Total Liabilities and Capital $4,235,000 $4,388,365 $4,383,024 $4,440,465 $4,457,341 $4,475,742 $4,481,022 $4,495,251 $4,494,660 $4,533,092 $4,570,850 $4,605,729 $4,620,437
Net Worth $1,235,000 $1,273,008 $1,310,884 $1,362,127 $1,392,420 $1,412,575 $1,423,682 $1,437,830 $1,436,927 $1,463,751 $1,495,860 $1,530,265 $1,550,012

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