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Convenience Store icon Convenience Store Soda Fountain Business Plan

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The Coffee Break

Executive Summary

With the expansion of the Oregon State University (OSU) campus and tourism growing in the Bend, Oregon area, The Coffee Break will start business to provide convenience while still maintaining nutrition and satisfaction. Market research shows a promising demographic in females, and people over 55 years of age. We will facilitate their demands by offering great food in a timely manner. Also, The Coffee Break will have a small coffee bar, soda fountain, and ice cream case for those who wish to take time from their day to enjoy a delicious refreshment.

Our three main targeted markets are students, business people, and tourists. All of these segments appear to be growing in size and demand. Our prime location will facilitate convenience to many of our customers.

Convenience store soda fountain business plan, executive summary chart image

1.1 Mission

The Coffee Break will set a new precedent for local standards. No longer will convenience stores, ice cream shops, coffee stands, and relaxation be offered separately, but will be combined at one location for convenience and ease. Regardless of the 5 minute customer, or the browser, everyone will feel at ease at The Coffee Break and return for that same level of comfort.

1.2 Keys to Success

The Coffee Break’s keys to success are:

  1. Located near a university, hospital, several small business, and local tourist attractions, the customer base will be ever growing.
  2. First in area to combine a convenience store with a nostalgic setting.
  3. Flexible hours to incorporate both peak and off-peak customers.
  4. Unique and high-quality goods at reasonable prices.

1.3 Objectives

The Coffee Break will be a convenience store for busy college students, local business employees, and tourists. It will soon rise to be the trendy place to shop for quick needs and a little relaxation to a busy day. To achieve this, The Coffee Break will:

  1. Generate $218,000 of sales in year 1, with an 11% growth rate for the next four years.
  2. Realize a gross margin of at least 55% each year.
  3. Show a net profit of $20,000 by the end of the year 1.
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Company Summary

The Coffee Break will be located in the trendy,small town of Bend, Oregon. With OSU recently opening a branch of education in Bend, we have realized the convenience needed by students and employees in the area, The Coffee Break will provide basic goods needed for daily functions at school and the workplace. Whether basic office supplies, personal goods, or other necessary goods, The Coffee Break will have ample supply at a low cost to the customer.

The Coffee Break will also offer a variety of quick, nutritious foods for breakfast, lunch, and dinner. Along with basic staple foods, there will be a deluxe coffee bar, soda fountain, and ice cream parlor. Unlike other convenience stores, you will have the option to peruse the store without hurry or discomfort. A few tables and a counter with bar stools will be established near the soda fountain for those who wish to take a break. This will help to meet the customer’s needs for goods and still provide some relaxation to their day.

2.1 Company Ownership

The Coffee Break will be based as a sole proprietorship. With owner, Bree Sallee, as a long-time resident of Bend, Oregon she will be able to facilitate the needs of the customer base and trends better than an outsider might be able to.

2.2 Start-up Summary

The Coffee Break’s start-up costs will incorporate the costs of machinery and equipment such as tables, chairs, soda fountain, coffee/espresso machine, bookstands, shelving, and other necessary equipment to start operation. The lease on the 2,000 square foot building has been confirmed and minor renovations will be needed to facilitate The Coffee Break’s customer service, delivery, inventory, and stocking requirements.

Costs have been allocated for 1-month supply of basic purchases in the convenience store setting, since general inventory turnaround is between 15 and 20 days. We realize that the 1-month time frame will allow for a small inventory to be maintained during opening months. From there we will be able to determine rate for replenishment.

We have already coordinated with local distributors to set up accounts for purchases and repayment.

Convenience store soda fountain business plan, company summary chart image

Start-up Funding
Start-up Expenses to Fund $227,500
Start-up Assets to Fund $38,500
Total Funding Required $266,000
Assets
Non-cash Assets from Start-up $36,000
Cash Requirements from Start-up $2,500
Additional Cash Raised $0
Cash Balance on Starting Date $2,500
Total Assets $38,500
Liabilities and Capital
Liabilities
Current Borrowing $50,000
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $50,000
Capital
Planned Investment
Bree Sallee $216,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $216,000
Loss at Start-up (Start-up Expenses) ($227,500)
Total Capital ($11,500)
Total Capital and Liabilities $38,500
Total Funding $266,000
Start-up
Requirements
Start-up Expenses
Legal $250
Stationery etc. $150
Brochures $0
Consultants $0
Insurance $425
Rent $1,500
Research and development $0
Expensed equipment $225,000
Other $175
Total Start-up Expenses $227,500
Start-up Assets
Cash Required $2,500
Start-up Inventory $36,000
Other Current Assets $0
Long-term Assets $0
Total Assets $38,500
Total Requirements $266,000

2.3 Company Locations and Facilities

The Coffee Break will be located in Bend, Oregon near the OSU campus and local businesses. There are no plans at this time to expand into additional locations. By keeping The Coffee Break as a small, mom-and-pop facility, customers will travel farther for the level of service and nostalgia offered.

The Coffee Break’s operations will be based out of a 2,000 square foot building. This will provide a cozy atmosphere, while still being large enough to assist our large customer base.

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Products and Services

The Coffee Break will be offering many products and services. Some of these are:

  • Coffee bar/soda fountain
  • Ice cream
  • Magazines, newspapers, and other reading material
  • Personal Goods
  • Beverages and other highly-purchased goods
  • Other

3.1 Product and Service Description

The products and services that The Coffee Break will provide are below. They include:

  • Coffee bar/soda fountain- This will provide a more elaborate choice of beverage beside the standard juice, pop, and water. Use of quality coffee, soda, and other ingredients will establish The Coffee Break as the place for attaining such high-quality goods.
  • Ice cream- A variety of 10 flavors will be available from the local Dairy. Already known for excellence, the ice cream will be available in basic scoops, sundaes, banana splits, and other favorite novelties. Again, this will incorporate great products at lower expense, thus maintaining our customers.
  • Magazines, newspapers, and other reading material- The Coffee Break will offer 3 major newspapers and a variety of magazines tending towards sports, American culture, relaxation, and travel. Due to the location of Coffee Break, little emphasis will be made on news and politics. Rather, as a place of relaxation and leisure, reading material will focus on those subjects.
  • Personal Goods- Due to The Coffee Break’s clientele being based from the OSU campus and businesses, many goods will be available that may be needed on an “emergency” type basis. This will include small quantity of basic medical, beauty, automotive, travel, and office goods.
  • Beverages and other highly-purchased goods- Realizing the basic purchasing pattern of students, we will focus on their needs in such areas such as beverages and other goods.

3.2 Competitive Comparison

Our competition will be more varied. Since this is the first combination of a convenience store and ice cream/soda shop, competition will result from two areas.

  1. Convenience stores- This competition will be from national franchises that have established convenience stores in or near Bend, Oregon. Although they will focus more on the in-and-out customer, we will be able to provide the same speed with better quality and service.
  2. Ice cream/soda shops- One such store exists currently in Bend. While they have a strong customer base, we will be able to break into the market due to our prime location near the OSU campus and the variety of products and services that can be attained at one place.
  3. Coffee shops- There are many coffee shops that offer a place for reading or studying. However, The Coffee Break will focus on providing gourmet coffee for those needing to continue on with their day. We feel that great coffee should not be available only for those who want to stay and mingle. Our coffee will soon be a recognized as a known standard for campus drinks, especially since there are no other nearby coffee shops for those on campus.

3.3 Sales Literature

Because of the small population, heavy sales and marketing will not be needed. Rather, The Coffee Break will emphasize word-of-mouth advertisement, along with promotions broadcast on campus. During the first two weeks of business, flyers will be passed around campus for notification of The Coffee Break and it’s opening. We have allotted a small amount each month for any needed advertising.

3.4 Fulfillment

Again, because of the small population, relationships with manufacturers and distributors will be essential to maintain. Based on preliminary discussions and feedback, manufacturers and distributors are eager to assist with The Coffee Break’s firm establishment in Bend.

Communication is a must and will be maintained regularly. To assist manufacturers and distributors, as well as myself, promptness will aid in all transactions and customer service.

3.5 Future Products and Services

At this time, there are no plans for expanded services or products. As business continues, we will re-evaluate to see if there is a part of the market that is being overlooked or could be better assisted.

3.6 Technology

Due to the basic setting of The Coffee Break, there will be little need for modern technology in the “nostalgic” setting. Plans include attainment of a state of the art coffee/espresso machine and antiqued soda fountain. Coolers will be of high quality to ensure products maintain their proper temperature level.

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Market Analysis Summary

Studies have shown that most customers to a convenience store are 18-35 years of age and male. This has led others to focus on females and individuals who are over 55 years of age. The Coffee Break will target customers from the OSU campus, local businesses, and tourists. This will provide a strong local clientele and a new tourism.

While convenience stores are nothing new, we will distinguish ourselves from that genre and focus more on a cafe/store emphasizing on convenience. Research has shown that ice cream/frozen yogurt and quick, healthy meals attract our targeted demographic of females and those over 55 years of age.

4.1 Market Segmentation

The Coffee Break has three major customer groups, as mentioned in the chart and table, that will be targeted.

Convenience store soda fountain business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
OSU Students 21% 3,000 3,630 4,392 5,314 6,430 21.00%
Tourists 12% 60,000 67,200 75,264 84,296 94,412 12.00%
Business People 8% 9,500 10,260 11,081 11,967 12,924 8.00%
Other 3% 1,500 1,545 1,591 1,639 1,688 3.00%
Total 11.76% 74,000 82,635 92,328 103,216 115,454 11.76%

4.2 Target Market Segment Strategy

Because The Coffee Break being located near the Oregon State University (OSU) campus, many students will find it as a resourceful break to their busy days. Also, travel time from local nearby businesses is minimum compared to other convenience stores and ice cream parlors.

Bend, Oregon is a tourism mecca for Oregon residents and other visitors. Offering skiing, snowboarding, and other winter attractions nearby, as well as summer attractions (including hiking and mountain biking), visitors will always be in need of convenient materials such as food, beverages, and other materials to supplement their activities.

The market will vary greatly based on two factors: the OSU schedule and tourism (weather). The OSU schedule will vary according to the number of students near The Coffee Break. Summers will tend to decrease the customer base of students as many choose not to attend school during this time. Also, the weather will affect tourism. Depending on snow amounts in the winter and sunshine in the summer, the number of tourists can vary. It will be important to recognize upcoming seasonal patterns and plan accordingly.

Convenience store soda fountain business plan, market analysis summary chart image

4.2.2 Market Growth

Most convenient stores have males, ages 18-34, as main customers. Recent trends have indicated that many stores are trying to incorporate females and those over the age of 55. By providing the “nostalgic” feeling, we expect to increase the number of customers over 55. This will still enable us to serve others in the basic age group of 18-34, or typical students.

4.2.3 Market Needs

Because our market is threefold, we have researched the needs of each.

  1. OSU campus students- Students often have different schedules from business people. Breaks can vary in time and length, so a facility close and convenient to the campus is needed. By providing basic foods and supplies, students will be attracted to this time-saving, delectable store.
  2. Tourism- Many people that travel look for unique stores at a location. The Coffee Break will pride itself on the “good ol’ days” feeling brought with our soda fountain and ice cream parlor setting. However, we recognize that a business will not support itself on these factors alone, so a coffee bar, reasonable meals, and other basic goods will be available for purchase. This will enable a one-stop shopping experience for those planning or returning from their daily activities. With over 30 developed parks and many trails, recreation is available year-round.
  3. Local business people- Business people eat out frequently during the work week and over time, facilities become mundane. The Coffee Break will provide a new source for nutritious, quick meals and favorite snacks. With the convenience of The Coffee Break, all transactions will be prompt and efficient.

4.3 Service Business Analysis

Convenience stores are nothing new. In order to succeed, a business must understand the importance and impact of merchandising, location, and competition. Due to the strong reliance on other industries, it is important to recognize the industry’s needs and trends.

A distinction of convenience stores and other grocery stores is just that: convenience. To maximize this, location must be easily accessible (including ample parking) and prompt service. Our location will be beneficial for all, especially students at the OSU campus. Also, by providing the variety of food and non-food products, The Coffee Break will be able to facilitate the needs of customers better. We will expand our hours to a greater time frame, allowing convenience to be based on the customers schedule.

Although many convenience stores offer gasoline, we have opted to exclude this service. Instead, we will focus on prompt service and general purchases towards food and non-food products. Our friendly and clean atmosphere, will create a standard for convenience stores in the area. This in turn will convert the industry’s percentage of weekly customers and transaction amount to increase.

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Strategy and Implementation Summary

Convenience is in the eye of the beholder. By being a convenience store, we will focus mainly on customers located within a close proximity of The Coffee Break.

Word-of-mouth will be our largest market promoter. Students and business people will find the convenience and quality of The Coffee Break to be one that others should know about. In order for initial customers to be found, a distribution of flyers will be an inexpensive way of notifying those on campus.

With word-of-mouth and concentrating on the concentrated market, we will be able to assist more customers at a higher level of quality while also conserving efficiency.

5.1 Sales Strategy

Similar to that of our marketing strategy, most of our sales strategy is related to location. In order to keep sales high, The Coffee Break will provide a fun, relaxed atmosphere while offering a plentiful stock of goods. By starting with 2-month’s inventory, we will be able to see initial customer’s demands and work with our distributors so that we can maintain a variety of goods at low costs in time efficient manner.

5.1.1 Sales Forecast

Below is a chart and table forecasting sales for The Coffee Break. Sales are set to fluctuate, with peak sales during the winter ski season and late summer; this is when tourism is at it’s peak.

Convenience store soda fountain business plan, strategy and implementation summary chart image

Convenience store soda fountain business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Total Revenue $218,000 $250,000 $269,000
Other $0 $0 $0
Total Sales $218,000 $250,000 $269,000
Direct Cost of Sales Year 1 Year 2 Year 3
Total Costs $99,000 $105,000 $110,000
Other $0 $0 $0
Subtotal Direct Cost of Sales $99,000 $105,000 $110,000

5.2 Competitive Edge

Convenience stores are nothing new and can frequently be found is towns and cities. Location and demand are essential to be successful and profitable. The Coffee Break’s location will be a large factor to it’s success. Often, students do not want to travel distances between classes or during their scheduled day. We will be able to facilitate their needs at a great convenience, while still providing exceptional quality. Also, our location will be easily accessible for those who are traveling to Mount Bachelor or other outdoor recreation areas.

The Coffee Break will not only offer convenience, but good quality foods and goods. We’ll offer a feeling of nostalgia by operating a soda fountain and ice cream extension to the basic convenience store. We will also will provide high quality beverages, including a small coffee bar. Unlike other convenience stores, we will offer food different from that of a common convenience store’s food selection. We will provide a variety of meals and snacks that are tasty and nutritious.

Our location, merchandise, and attention to customer service will put The Coffee Break ahead of competition. Also, our extended hours will facilitate those who need items after supermarkets have closed.

5.3 Marketing Strategy

With the new OSU campus and other nearby attractions, our location has created a great potential market. With little competition nearby, we will be able to create a customer base with little marketing and advertising. However, The Coffee Break will initially advertise with flyers to students and faculty at the campus for familiarization.

Once we have been established, we may offer special promotions and weekly specials, but this will be of little focus. By focusing on nostalgia and relaxation, we want customers to expect the quality and price to be dependable and constant.

5.3.1 Pricing Strategy

We will price point most of our goods at a $0.03-$0.10 price increase over the competitors. This will be not sway customers, due to the convenience and efficiency saved by shopping at The Coffee Break, versus other convenience stores. Top selling products will be at a smaller price increase in order to sway customers from other stores.

5.3.2 Promotion Strategy

Location is our best promotion tool. With our location near businesses, schools, and major attractions, little promotion will be need to attract customers. We intend on our convenience and variety of goods to be the biggest selling factor, not that of daily “specials.”

5.4 Strategic Alliances

Bend, Oregon is a tourist attraction for the Pacific Northwest. To help promote businesses around the area to tourists, most goods will be provided by local establishments. These will be able to offer well-prepared foods better than a larger company.

Also, with a population about 50,000, Bend residents know local standards for dining and goods. We will supply these in a convenient manner for those on the go or wanting more convenience than may be otherwise eligible.

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Management Summary

The Coffee Break will operate under the owner, Bree Sallee. At start-up there will be 4 other employees, this will be increased as the market shows demand for more assistance.

6.1 Organizational Structure

Owner, Bree Sallee, will be sole manager while The Coffee Break gets established. Due to the fluctuation in operational factors, most work will be carried on by students who desire flexible hours. All employees will answer directly to Bree Sallee.

By having smaller shifts, this will also save in the compensation needed for employees, such as insurance.

6.2 Management Team

Bree Sallee, is owner/manager. With many years of experience in the retail and food channels, she understands the fluctuation in market demands. Also, she has resided in Bend for the past 15 years, cultivating an understanding for the local market. She has a Bachelor’s degree from Boise State University.

The need for additional managers will be evaluated based on our personnel need and budget.

6.3 Personnel Plan

The Coffee Break will start with 4 employees, along with owner. From there, we will be able to determine the need for additional help. As the recreational season fluctuates along with the school term, we will gather employees accordingly.

Personnel Plan
Year 1 Year 2 Year 3
Bree Sallee $19,200 $20,525 $22,450
Other $3,360 $3,360 $3,360
Cashier 1 $6,720 $7,436 $7,602
Cashier 2 $6,720 $7,436 $7,602
Cashier 3 $6,720 $7,436 $7,602
Cashier 4 $6,720 $7,436 $7,602
Total People 6 6 6
Total Payroll $49,440 $53,629 $56,220

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Financial Plan

The following sections will outline the important financial assumptions, key financial indicators, break-even analysis, profit and loss, cash flow, balance sheet, and key ratios.

7.1 Important Assumptions

The following table highlights some of the more important financial assumptions for The Coffee Break.

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 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Break-even Analysis

The Break-even Analysis can be seen in the chart and table below.

Convenience store soda fountain business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $12,904
Assumptions:
Average Percent Variable Cost 45%
Estimated Monthly Fixed Cost $7,044

7.3 Projected Profit and Loss

The Coffee Break’s profit and loss statement can be found in the table below.

Convenience store soda fountain business plan, financial plan chart image

Convenience store soda fountain business plan, financial plan chart image

Convenience store soda fountain business plan, financial plan chart image

Convenience store soda fountain business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $218,000 $250,000 $269,000
Direct Cost of Sales $99,000 $105,000 $110,000
Other $0 $0 $0
Total Cost of Sales $99,000 $105,000 $110,000
Gross Margin $119,000 $145,000 $159,000
Gross Margin % 54.59% 58.00% 59.11%
Expenses
Payroll $49,440 $53,629 $56,220
Sales and Marketing and Other Expenses $4,572 $5,550 $6,800
Depreciation $0 $0 $0
Insurance $5,100 $5,200 $5,400
Rent $18,000 $19,800 $21,780
Utilities $0 $0 $0
Leased Equipment $0 $0 $0
Payroll Taxes $7,416 $8,044 $8,433
Other $0 $0 $0
Total Operating Expenses $84,528 $92,223 $98,633
Profit Before Interest and Taxes $34,472 $52,777 $60,367
EBITDA $34,472 $52,777 $60,367
Interest Expense $4,323 $3,125 $1,875
Taxes Incurred $7,406 $12,413 $14,867
Net Profit $22,743 $37,239 $43,626
Net Profit/Sales 10.43% 14.90% 16.22%

7.4 Projected Cash Flow

The following chart and table present the cash flow assumptions for The Coffee Break.

Convenience store soda fountain business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $218,000 $250,000 $269,000
Subtotal Cash from Operations $218,000 $250,000 $269,000
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 $218,000 $250,000 $269,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $49,440 $53,629 $56,220
Bill Payments $105,740 $160,580 $168,839
Subtotal Spent on Operations $155,180 $214,209 $225,059
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $12,500 $12,500 $12,500
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $167,680 $226,709 $237,559
Net Cash Flow $50,320 $23,291 $31,441
Cash Balance $52,820 $76,111 $107,552

7.5 Business Ratios

The following table contains important ratios for the convenience stores industry, as determined by the Standard Industry Classification (SIC) Index code, 5411, Grocery Store (convenience).

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 14.68% 7.60% 5.50%
Percent of Total Assets
Inventory 15.78% 12.12% 9.28% 24.20%
Other Current Assets 0.00% 0.00% 0.00% 29.80%
Total Current Assets 100.00% 100.00% 100.00% 59.40%
Long-term Assets 0.00% 0.00% 0.00% 40.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 82.07% 44.02% 22.31% 33.90%
Long-term Liabilities 0.00% 0.00% 0.00% 23.20%
Total Liabilities 82.07% 44.02% 22.31% 57.10%
Net Worth 17.93% 55.98% 77.69% 42.90%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 54.59% 58.00% 59.11% 21.90%
Selling, General & Administrative Expenses 45.39% 44.54% 44.56% 14.70%
Advertising Expenses 1.98% 2.10% 2.40% 0.90%
Profit Before Interest and Taxes 15.81% 21.11% 22.44% 0.70%
Main Ratios
Current 1.22 2.27 4.48 1.57
Quick 1.03 2.00 4.07 0.60
Total Debt to Total Assets 82.07% 44.02% 22.31% 57.10%
Pre-tax Return on Net Worth 268.15% 102.41% 63.50% 3.60%
Pre-tax Return on Assets 48.07% 57.33% 49.34% 8.50%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 10.43% 14.90% 16.22% n.a
Return on Equity 202.28% 76.81% 47.36% n.a
Activity Ratios
Inventory Turnover 8.34 10.29 10.23 n.a
Accounts Payable Turnover 8.57 12.17 12.17 n.a
Payment Days 27 31 29 n.a
Total Asset Turnover 3.48 2.89 2.27 n.a
Debt Ratios
Debt to Net Worth 4.58 0.79 0.29 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $11,243 $48,482 $92,108 n.a
Interest Coverage 7.97 16.89 32.20 n.a
Additional Ratios
Assets to Sales 0.29 0.35 0.44 n.a
Current Debt/Total Assets 82% 44% 22% n.a
Acid Test 1.03 2.00 4.07 n.a
Sales/Net Worth 19.39 5.16 2.92 n.a
Dividend Payout 0.00 0.00 0.00 n.a

7.6 Projected Balance Sheet

The Balance Sheet below provides numbers that are important to the financial well-being of The Coffee Break.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $52,820 $76,111 $107,552
Inventory $9,900 $10,500 $11,000
Other Current Assets $0 $0 $0
Total Current Assets $62,720 $86,611 $118,552
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $62,720 $86,611 $118,552
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $13,977 $13,129 $13,944
Current Borrowing $37,500 $25,000 $12,500
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $51,477 $38,129 $26,444
Long-term Liabilities $0 $0 $0
Total Liabilities $51,477 $38,129 $26,444
Paid-in Capital $216,000 $216,000 $216,000
Retained Earnings ($227,500) ($204,757) ($167,518)
Earnings $22,743 $37,239 $43,626
Total Capital $11,243 $48,482 $92,108
Total Liabilities and Capital $62,720 $86,611 $118,552
Net Worth $11,243 $48,482 $92,108

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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
Sales
Total Revenue 0% $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Sales $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
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
Total Costs $8,000 $8,000 $8,000 $9,000 $9,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $9,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $8,000 $8,000 $8,000 $9,000 $9,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $9,000
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
Bree Sallee 0% $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600
Other 0% $0 $0 $560 $560 $560 $560 $0 $0 $0 $0 $560 $560
Cashier 1 0% $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560
Cashier 2 0% $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560
Cashier 3 0% $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560
Cashier 4 0% $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560 $560
Total People 5 5 6 6 6 6 5 5 5 5 6 6
Total Payroll $3,840 $3,840 $4,400 $4,400 $4,400 $4,400 $3,840 $3,840 $3,840 $3,840 $4,400 $4,400

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 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 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 $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
Direct Cost of Sales $8,000 $8,000 $8,000 $9,000 $9,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $9,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $8,000 $8,000 $8,000 $9,000 $9,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $9,000
Gross Margin $4,500 $8,000 $10,500 $13,000 $12,500 $12,000 $10,500 $8,000 $8,000 $9,000 $11,000 $12,000
Gross Margin % 36.00% 50.00% 56.76% 59.09% 58.14% 60.00% 56.76% 50.00% 50.00% 52.94% 57.89% 57.14%
Expenses
Payroll $3,840 $3,840 $4,400 $4,400 $4,400 $4,400 $3,840 $3,840 $3,840 $3,840 $4,400 $4,400
Sales and Marketing and Other Expenses $381 $381 $381 $381 $381 $381 $381 $381 $381 $381 $381 $381
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Insurance $425 $425 $425 $425 $425 $425 $425 $425 $425 $425 $425 $425
Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $576 $576 $660 $660 $660 $660 $576 $576 $576 $576 $660 $660
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $6,722 $6,722 $7,366 $7,366 $7,366 $7,366 $6,722 $6,722 $6,722 $6,722 $7,366 $7,366
Profit Before Interest and Taxes ($2,222) $1,278 $3,134 $5,634 $5,134 $4,634 $3,778 $1,278 $1,278 $2,278 $3,634 $4,634
EBITDA ($2,222) $1,278 $3,134 $5,634 $5,134 $4,634 $3,778 $1,278 $1,278 $2,278 $3,634 $4,634
Interest Expense $408 $399 $391 $382 $373 $365 $356 $347 $339 $330 $321 $313
Taxes Incurred ($789) $220 $686 $1,313 $1,190 $1,067 $856 $233 $235 $487 $828 $1,080
Net Profit ($1,841) $659 $2,058 $3,939 $3,571 $3,202 $2,567 $698 $705 $1,461 $2,485 $3,241
Net Profit/Sales -14.73% 4.12% 11.12% 17.90% 16.61% 16.01% 13.87% 4.36% 4.40% 8.59% 13.08% 15.43%

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 $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
Subtotal Cash from Operations $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
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 $12,500 $16,000 $18,500 $22,000 $21,500 $20,000 $18,500 $16,000 $16,000 $17,000 $19,000 $21,000
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
Expenditures from Operations
Cash Spending $3,840 $3,840 $4,400 $4,400 $4,400 $4,400 $3,840 $3,840 $3,840 $3,840 $4,400 $4,400
Bill Payments $83 $2,534 $3,519 $4,293 $11,627 $13,455 $11,324 $12,072 $11,462 $11,464 $11,713 $12,193
Subtotal Spent on Operations $3,923 $6,374 $7,919 $8,693 $16,027 $17,855 $15,164 $15,912 $15,302 $15,304 $16,113 $16,593
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 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 $1,042 $1,041 $1,041 $1,041 $1,041
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 $4,965 $7,416 $8,961 $9,735 $17,069 $18,897 $16,206 $16,954 $16,343 $16,345 $17,154 $17,634
Net Cash Flow $7,535 $8,584 $9,539 $12,265 $4,431 $1,103 $2,294 ($954) ($343) $655 $1,846 $3,366
Cash Balance $10,035 $18,618 $28,157 $40,422 $44,854 $45,957 $48,250 $47,296 $46,953 $47,609 $49,455 $52,820
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 $2,500 $10,035 $18,618 $28,157 $40,422 $44,854 $45,957 $48,250 $47,296 $46,953 $47,609 $49,455 $52,820
Inventory $36,000 $28,000 $20,000 $12,000 $9,900 $9,900 $8,800 $8,800 $8,800 $8,800 $8,800 $8,800 $9,900
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $38,500 $38,035 $38,618 $40,157 $50,322 $54,754 $54,757 $57,050 $56,096 $55,753 $56,409 $58,255 $62,720
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $38,500 $38,035 $38,618 $40,157 $50,322 $54,754 $54,757 $57,050 $56,096 $55,753 $56,409 $58,255 $62,720
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 $2,418 $3,384 $3,908 $11,176 $13,078 $10,921 $11,690 $11,080 $11,074 $11,309 $11,712 $13,977
Current Borrowing $50,000 $48,958 $47,916 $46,874 $45,832 $44,790 $43,748 $42,706 $41,664 $40,623 $39,582 $38,541 $37,500
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $50,000 $51,376 $51,300 $50,782 $57,008 $57,868 $54,669 $54,396 $52,744 $51,697 $50,891 $50,253 $51,477
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $50,000 $51,376 $51,300 $50,782 $57,008 $57,868 $54,669 $54,396 $52,744 $51,697 $50,891 $50,253 $51,477
Paid-in Capital $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000 $216,000
Retained Earnings ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500) ($227,500)
Earnings $0 ($1,841) ($1,182) $876 $4,815 $8,385 $11,587 $14,154 $14,852 $15,557 $17,018 $19,502 $22,743
Total Capital ($11,500) ($13,341) ($12,682) ($10,624) ($6,685) ($3,115) $87 $2,654 $3,352 $4,057 $5,518 $8,002 $11,243
Total Liabilities and Capital $38,500 $38,035 $38,618 $40,157 $50,322 $54,754 $54,757 $57,050 $56,096 $55,753 $56,409 $58,255 $62,720
Net Worth ($11,500) ($13,341) ($12,682) ($10,624) ($6,685) ($3,115) $87 $2,654 $3,352 $4,057 $5,518 $8,002 $11,243

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