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Avant-Garde Shop

Executive Summary

The “Gift Shop” at Avant-Garde Building has long offered a wide range of novelties and stationary inside one of the most prestigious landmark buildings in Jakarta, Indonesia. The Gift Shop’s customers were primarily employees of the Avant-Garde Building’s tenants. The new venture, “PT. Avant-Garde Shop” is taking over this space and redesigning it as the flagship store of the Avant-Garde Building, through a joint operation with PT. ABC Company Indonesia. We will broaden our customer base by focusing not only on tenants, but also on neighbors of and visitors to the Avant-Garde Building. The grand opening is slated for December 9th. Our main priority at PT. ABC Company is to refurbish the existing outlet to become an official store associated with the lifestyle of the professionals who are the focus of our marketing program. [NOTE: *PT is an abbreviation for Indonesian Perseroan Terbatas, meaning Limited Company.]

This business plan lays out our strategy for re-positioning the “Gift Shop” from “just-another-store” to the “Official Store of Avant-Garde.” This plan will detail services to be provided by ABC Company in the joint operation, along with the implementation milestones for each step. ABC Company will provide several strategic recommendations on how to enhance the traffic and image of the retail facility through re-naming and image revamping, re-modeling of interior and merchandise resource planning.

The Market

There are approximately 100 offices inside Avant-Garde Building, and roughly 1,000 visitors daily to Avant-Garde Building. The Avant-Garde Shop has identified three distinct market segments: tenants, neighbors, and visitors.

There are roughly 1,500 Tenants, our primary target customers, who are white-collar workers with large disposable incomes. The secondary target customers are the surrounding office community in the area, who often visit the Avant-Garde Building during lunch hour to meet their colleagues or friends. Both of these groups have already proven their willingness to buy from retail stores within the Avant-Garde building, and out location, on the Mezzanine above the ground floor dining area, is ideal for catching their eye.

The last target customer of the Avant-Garde Shop is visiting guests, both tourists and residents of the Jakarta Metro region who have come to the Avant-Garde Building for a taste of glamour, as the symbol of high-class, high-tech, fast and modern living in Indonesia’s new economy.

The Strategy

PT. Avant-Garde Shop will leverage the existing image and brand-name of the Avant-Garde Building into a formidable brand that reflects power, modernity, wealth, and global sophistication. We will enhance the existing retail space with a new design, and supplement retail sales with catalog and website orders. We must remember that we are not selling merchandise, we are selling a brand, and an image: the New Indonesia.

All monetary amounts in this plan are in 1,000’s of Indonesian Rupiahs (IDR), abbreviated here as Rp.

Gifts novelties souvenir business plan, executive summary chart image

1.1 Objectives

The Avant-Garde Shop has two objectives for the organization. The objectives are lofty, yet achievable. By developing and tracking progress toward the goals, the organization will push everyone both from PT. Avant-Garde and PT. ABC Company to perform their best.

  1. To re-position the current “Gift Store” as the Official Store of Avant-Garde, through re-modeling of the retail space and various marketing program to generate more revenue and contribute to the overall Avant-Garde Building equity.
  2. To achieve a modest net profit of Rp. 1,801,000 by year two and Rp. 6,807,000 by year three.
  3. To achieve revenue of Rp. 90,299,000 by year one, Rp. 95,717,000 by year two and Rp. 101,460,000 by year three.

1.2 Mission

The Avant-Garde Shop is a retail store specializing in the sale of novelty of various product mix. The store, however, will emphasis the sale of official merchandise of the Avant-Garde brand with a full assortment of apparel, accessories and stationary, as well as other lifestyle related novelties.

Our goal in ABC Company is to be the sole supplier to those official merchandise of Avant-Garde. We believe that to attain the Avant-Garde Shop positioning strategy, we will need to be consistent within the theme according to lifestyle association of the target customers.

1.3 Keys to Success

In order to succeed in the merchandising retail, the team of Avant-Garde Shop must consider all aspects of significant value to their customers:

  • Carry an assortment of various mix to fit the more ample frames of their white collar target customer base, and also create an image where visiting guests can associate themselves with the merchandise offers.
  • Provide customers with top notch personalized customer service in an atmosphere of professionalism and hospitality.
  • Advertise and promote in areas where our target customer base will learn about our store, through the implementation of point-of-sales (banners, leaflets, flyers), website and other method of marketing medium to attract visitors to visit the location.
  • Continuously review our inventory and sales and adjust our inventory levels accordingly.

Company Summary

“Gift Shop” at Avant-Garde Building is an established retail business that offers a wide range of novelty inside one of the most prestigious landmark buildings in Jakarta, Indonesia. Now operating with minimal overhead, and a limited staff, the new, revamped “Avant-Garde Shop” will serve a wider customer base that in the end will go hand-in-hand with the image of the Avant-Garde Building and Avant-Garde internationally.

ABC Company has agreed to help “Avant-Garde Shop” in establishing its new identity so it can be utilized as a driver to attract customers to purchase the merchandise.

The hours of operation will be Monday – Saturday 10 a.m. – 6 p.m. and Sunday 12 p.m. – 6 p.m. There will be extended special hours designated during special exhibition events. All merchandise will be purchased and supplied according to the company’s mission and customer focus profile, according to the image associated with Avant-Garde or Avant-Garde Building.

2.1 Company Ownership

“Avant-Garde Shop” is part of the nonprofit organization Avant-Garde. Through this joint cooperation, “Avant-Garde Shop” will share its activities with ABC Company. The details of the profit sharing agreement will be further discussed with all interested parties.

2.2 Start-up Summary

The “Avant-Garde Shop” will start with three months inventory on hand for apparel and accessories, as this is the main revenue generator. The majority of the company’s non-cash assets will reside in inventory.

The purpose of this business plan is to secure a Rp. 166,597,000 investment for its first year of operation. This supplemental financing is required to work on site preparation, inventory, and operational expenses.

Successful operation and building an exposure base will allow the Avant-Garde Shop to be self sufficient and profitable in year two.

Gifts novelties souvenir business plan, company summary chart image

Start-up Expenses
Legal $1,000
Stationery etc. $1,000
Remodeling & Construction $46,000
Marketing Collateral $8,000
Computer and Database Merchandise $13,000
Other $3,000
Total Start-up Expenses $72,000
Start-up Assets
Cash Required $69,315
Start-up Inventory $25,282
Other Current Assets $0
Long-term Assets $0
Total Assets $94,597
Total Requirements $166,597

2.3 Company Locations and Facilities

There are three levels of world class restaurants, banks, cafes, shopping and service facilities, such as a stationery shop, laundry, canteen, money changer, post office and travel agency to service an impressive list of international and multinational tenants.


  • Nanking Noodle.
  • Izzi Pizza.
  • Rice & Co.
  • Pho Hoa.
  • Siam Square.


  • Daily Bread.
  • Pan de France.
  • Starbucks.
  • Country Style Donut.
  • Cigar Bar.
  • Quickly.

Mini Market/Convenient/Stationary:

  • Century.
  • AmPm.
  • Martinizing Laundry.
  • Paper Clip.
  • NexCom/Fujitsu.

The Avant-Garde Shop will be located at the Mezzanine Level of Avant-Garde Building. On this level, there is also Cigar Bar. The Mezzanine Level offers a strategic point where outside visitors can observe the daily market activities from the observation balcony; that will afford us good exposure for visiting guests.

Another advantage of this location is the proximity to the library, which is located on the same level. This complex will attract many potential customers (visiting guests) to our immediate vicinity.

By locating in close proximity to the daily action of buying and selling, the Avant-Garde Shop will enjoy a guided traffic that eventually will built its customer base through word-of-mouth. The popularity of Avant-Garde Building will bring outside visitors that will help spawn traffic to the Avant-Garde Shop.

This space occupies 35 meters square and has been leased by the management of Avant-Garde Building. We feel it is essential to our initial and ongoing success that we locate ourselves in the heartbeat of the community. We also strive to create an atmosphere of acceptance, as well as a retail environment where individuals can identify and practice their lifestyle.


Avant-Garde-themed merchandise will be the product focus of the Avant-Garde Shop. Our task is to make sure that the Avant-Garde-themed merchandise is keeping up with the latest category trend and needs. The following lists shows examples of products within their respective categories:

Avant-Garde-Themed Novelties/Stationary

  • T-Shirts.
  • Caps.
  • Bags.
  • Pens.
  • Memopads.
  • Calculators.
  • Clocks.
  • Umbrellas.
  • Key chains.
  • Mugs.
  • Golf Balls.
  • Golf Club Covers.

Indonesia’s Arts and Crafts (small size merchandise that will consist of 15% of total merchandise displayed)

  • Silver jewelry.
  • Masks.
  • Other ethnic accessories.


  • Books (history books about Avant-Garde and topics related to Indonesia’s commerce, politics, and social sciences).
  • Magazines.

Merchandise will be managed by ABC Company; they will find the right supplier, propose a design concept and day-to-day retail activity. Inventory management will be tracked through our computerized cash register, so that each month we are aware of the style, trend and quantity on every item sold in the store for future planning. Re-orders are drop-shipped by ABC Company, or can be rush ordered directly through our channel, if needed.

3.1 Product Description

Product pricing will be adjusted according to the re-positioning effort to enable premium charges to each product. All products are quality checked when they arrive and quality checked before the customer takes them home to ensure they meet the standards of the official store of the Avant-Garde.

Products will not limited to one type per category, for example we will offer 3 types of different kinds of key chains or 5 different design types for caps or t-shirts, because we know that customers want options!


Pricing example

  • Official Avant-Garde Caps: Rp. 55,000 – Rp. 150,000.
  • Key Chains: Rp. 20,000 – Rp. 55,000.
  • Golf Shirts: Rp. 120,000 – Rp. 350,000.
  • Golf Balls (3): Rp. 70,000.
  • Umbrellas: Rp. 20,000.
  • Memo Pads: Rp. 45,000.
  • Pen/Stylus/Pencils: Rp. 15,000 – Rp. 35,000.
  • Clocks: Rp. 85,000.
  • Coffee Mugs: Rp. 65,000 – Rp. 80,000.
  • Key Chains: Rp. 45,000 – Rp. 55,000.
  • Avant-Garde Theme Checker Game: Rp. 120,000.
  • Bags: Rp. 130,000 – Rp. 350,000
  • Calculators: Rp. 30,000.

3.2 Competitive Comparison

When we positioned the “Gift Store” as the official “Avant-Garde Shop” for the Avant-Garde Building, we narrowed our competition in a niche portion of the market as more than 80 percent of the inventory will be exclusively marked under Avant-Garde brand.

In general, however, our other product mixes, such as Indonesia’s ethnic arts and crafts, will face competition from other specialty souvenir stores in the area around the “Golden Triangle” and other establishments that carry ethnic merchandise.

3.3 Sales Literature

After much research, we found that the product mix we have compiled in the attached catalog most closely meets the needs of the consumer niche that we are focusing upon. An online catalog will also be offered to supplement the awareness of this new, revamped store of the Avant-Garde Building.

Our sales literature is simple, because we realize that most sales depend on existing foot traffic from visitors, tenants and guests of the Avant-Garde Building, thus the sales generation will depend on the image communication from the management of Avant-Garde. We will produce flyers in-house on an as-needed basis. These will primarily showcase new products and/or to advertise special sales promotions. The flyers will be distributed inside the Avant-Garde Building, especially in those areas which have the most significant traffic, such as cafes and restaurants at Ground Level.

Avant-Garde Shop will use additional targeted advertising and sales program to generate publicity and build a customer base.

  • Standing banner or metal post with the new logo and color theme, announcing the opening of the new Avant-Garde Shop.
  • 2,000 flyers to be distributed inside the Avant-Garde Building and in establishments surrounding the Golden Triangle.

3.4 Sourcing

Avant-Garde Shop will partner with ABC Company for all merchandise as outlined below:

  • With ABC Company, who have the expertise of running the retail and supply chain management, the Avant-Garde Shop under ABC Company Management will place quarterly reorders with qualified manufacturers on all Avant-Garde-themed merchandise.
  • For all other products we will work directly with the manufacturer and minimize the selection by purchasing small amounts for store display.
  • Seasonal gift orders will be handled personally with ABC Company and with direct communication to ABC Company office.

We will also work to solidify our relationships with manufacturers and suppliers so that we may achieve decreased cost of goods. Our competitors, both direct and indirect, purchase from the same sources and we believe that through marketing programs and strategic alliances we will begin to gain a competitive advantage.

3.5 Technology

Retail establishments have a tendency to have a high number of SKUs because of the level of inventory. It is imperative that an advanced inventory and point of sales program be utilized to maintain stock levels and track sales. The Avant-Garde Shop will utilize database merchandise software for all tracking and accounting purposes as well as inventory management and point of sale transactions that will be summed into one database for handling the online store as well.

Online commerce is becoming an increasingly attractive option due to the the global reach of the medium; this could be an additional re-positioning element to increase the visibility of the Avant-Garde Shop.

3.6 Future Products

Future expansion may allow for a horizontal increase of our product line by offering additional product categories: sport gear and accessories. We won’t rule out the possibility of vertically integrating through our own line business gift products. We will also explore new services such as providing a gift certificates for our customers, or a membership cards for discounted price at affiliated retail establishments.

It is our dream to become more than just another souvenir store at Avant-Garde Building, but also an extended official representative of Avant-Garde to the public.

After the success of launching the official Avant-Garde Shop, we will plan to open another one as “annex store” at another “over-the-counter” exchange establishment. Our effort at ABC Company will not stop within the boundary of Jakarta Metro Area, but will expand to other cities as well, such as similar building themes for the Malang Stock Exchange, and so on.

Market Analysis Summary

The Avant-Garde Shop has identified three distinct market segments: tenants, neighbors, and visitors.

There are approximately 100 offices inside Avant-Garde Building, and roughly 1,000 visitors daily to Avant-Garde Building. The primary target customer of the Avant-Garde Shop will be the tenants with large disposable income, around 1,500 people.

The secondary target customers are the surrounding office community in the area, who often visit the Avant-Garde Building during lunch hour to meet their colleagues or friends.

The last target customer of the Avant-Garde Shop is visiting guests. As the store’s popularity increases, we expect to see an assortment of curiosity seekers, and local residents from the outside the Jakarta Metropolitan Area.

We are confident that we will capture the essence of the Avant-Garde brand appealingly, so when people visit Avant-Garde Building, they ought to purchase a memoir of visit through Avant-Garde theme merchandise offered.

4.1 Market Segmentation

This category commonly includes Avant-Garde employees, who possess the strongest “sense of belonging,” although this also includes all employees whose companies reside inside the Avant-Garde Building.

This will comprise the largest segment of our target market (53%); we will focus on tenants for several simple reasons:

  • The group will be the first to become aware that there is a new, revamped store.
  • They have the sense of belonging or attachment to the whole idea of working inside one the most prestigious buildings in Jakarta.
  • This group will also make the most “lifestyle” purchases, either buying for themselves or as a gift for a friend or relative.

The second potential segment (26%) is nearby workers within the “Golden Triangle” radius, who are drawn to the Avant-Garde building by the handful of retail food establishments. Perhaps, they will not be aware of the store’s existence until their second visit to Avant-Garde Building, but as they repeatedly spend lunch/break time here, they will become aware of the existence of the Avant-Garde Shop via sales literature (flyers, banners, etc.).

  • This group does not necessarily have an attachment to Avant-Garde, but may make impulse purchases, if the selection of merchandise fits their styles and needs.
  • This also means that the merchandise aimed at them does not have to be Avant-Garde-themed, as it could be generic products such as trinkets or ethnic arts and crafts.

Guests/ Visitors
This last segment (21%) has not yet been fully cultivated. This segment is as important as the other two, particularly in communicating the image of Avant-Garde Building itself as a destination spot within the Jakarta Metropolitan Area. They will maybe unaware of the store existence until several visit to Avant-Garde Building, this we will implement advertising effort such as guided tour, distribute flyer at the entry door, or positioning of banner inside the high traffic area of Avant-Garde Building.

  • This group shops at Avant-Garde Building infrequently, but may be subject to impulse purchases once they are in the store.
  • They will likely purchase the Avant-Garde-themed merchandise as a memoir of their only or rare visits to the Avant-Garde Building.


Benefits Sought

Product Segment

Purchase Behavior

Avant-Garde Brand Image


Sense of belonging.



Avant-Garde-themed merchandise, specific niche merchandise.

Planned shopping.

Specific product look ups.



Memoir of visit.

Value shopping.

Avant-Garde-themed merchandise.

Indonesian arts and crafts.

Various product mix.

Impulse shopping.

Random selection.



Memoir of visit.

Value Shopping.

Generic Avant-Garde-themed merchandise.

Books and magazines.

Various product mix.

Traffic shoppers.

Random shopping.

Medium – Low.

Gifts novelties souvenir business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Tenants 1% 1,590 1,606 1,622 1,638 1,654 0.99%
Neighbors 1% 780 788 796 804 812 1.01%
Guests or Visitors 1% 630 636 642 648 654 0.94%
Total 0.99% 3,000 3,030 3,060 3,090 3,120 0.99%

4.2 Target Market Segment Strategy

We want to clearly differentiate the Tenants from the other two segments (Neighbors and Guests). The focus strategy for the category of Tenants is to establish the sense of “belonging,” meaning that we need to create the Avant-Garde Shop as if it is their own. For example, the customers should feel a sense of pride in owning an “Avant-Garde” coffee mug, and displaying it in their office or home. This will give us a large opportunity for multiple sales and allow us to gain further access into the community’s numerous occasions, such as giving the themed merchandise for their friends and families as tokens.

While the Neighbors and Guests categories for the Avant-Garde Shop will be the next important ones, they mostly fall under the rubric of “accidental” shoppers or impulse shoppers. With the Tenants, purchases might be conducted after several visits to the store because of their close proximity and frequency of visiting the Avant-Garde Building. On the other hand, with Neighbors and particularly with Visiting Guests, the purchase decision will be decided instantly after viewing the selection of merchandise that is suitable to their own needs.

People around Jakarta Metropolitan Area have gradually but firmly recognized Avant-Garde as an historical, elegant and prestigious place to be; it is synonymous with modern Indonesia and its way toward excellence in the global economy. Avant-Garde Building is the “embassy” of commerce with representative offices of multi-national firms internationally. There is already a trend of putting the Avant-Garde image in every tenant’s logo or corporate name. We may feature some of the finest tenants’ logos, in conjunction with the Avant-Garde logo, in our merchandise.

4.2.2 Market Needs

There are several important needs in the official theme business that are being either undeserved or not met to any standard of quality at all. Avant-Garde and ABC Company plan to meet and service those needs.

  • ABC Company will provide a large assortment of sizes to compliment the theme series of all merchandise of the Avant-Garde Shop.
  • Focus and attention to customer’s personal preferences and customer retention will be given high priority. The inconsistency in positioning the current Gift Store has caused the decline of the store’s image, which is preventing the establishment from growing.

4.3 Industry Analysis

In general, retail businesses with similar target markets tend to concentrate together in malls. As this strategy has generally worked well for retailers, such a trend is expected to continue, with new shopping centers coming into operation. For instance, Harco Mas Mangga Dua and Glodok Plaza are focusing on the computer and electronic markets. In contrast, smaller outlets from the development of ITC Kuningan are dedicated to fashion retail, whilst STC Senayan is targeting retailer of youth fashion and sports merchandise, while Plaza Senayan and Plaza Indonesia are serving high-end segments of the retail market.

Most low- to mid-range merchandise and knick-knacks are heavily Chinese-manufactured products, as they offer a lower cost of purchasing and slightly higher quality than locally-manufactured products.

Retail sales in Indonesia according to a recent study by MasterCard International (MasterIndex of Retail) for the first half of 2004 are expected to manifest year-on-year growth of 8.0% to reach 120.1 trillion Rupiah in the first six months. Consumer confidence in Indonesia has declined from previous optimistic level of 57.5 to the current 49.0. This could possibly be attributed to the rising uncertainty leading up to the presidential election.

Country Value Growth
Australia* A$ 77 Billion 4.5%
China Yuan 2,457 Billion 14%
Hong Kong* HK$ 86.2 Billion 6.8%
Indonesia Rp. 120.1 Trillion 8%
Japan* Y 57.1 Trillion 4.5%
Korea* Won 66.6 Trillion 8.2%
Malaysia RG 27.4 Billion 9.2%
New Zealand* NZ$ 15.2 Billion 5%
Philippines Peso 290.2 Billion 5.6%
Singapore* SG$ 12 Billion 3.9%
Taiwan* NT$ 1,376 Billion 5.5%
Thailand* Bath 856 Billion 10.8%

* Excludes hospitality, catering and auto sales
Source: MasterIndex of Retail Forecast 2004.

Due to its current rapid expansion, the retail property sector in Greater Jakarta is expected to become saturated, with new retail developments over the next three to four years as land for retail projects become increasingly scarce. In light of the situation, several major retailers, including Ramayana and Matahari, have confirmed plans for expansions to the area outside Java and Bali to take advantage of growth opportunities within a wider region.

Theme-based merchandise stores vary in terms of the scope of their merchandise:

  • One (Few) Merchandise Categories: many of these offer only apparel, for establishments in the core of the entertainment district, such as Hard Rock Cafe or Planet Hollywood, along with their brand-building-through-merchandising strategy.
  • Multiple Merchandise Categories: these are retail stores with a wide range of product categories, varying from electronics, to stationary, apparel, novelties, etc.; for example, Duty Free Shops at various airports, with broad product mixes, including both their own brands and those of other vendors.

4.3.1 Competition and Buying Patterns

Competition in this particular retail area is relatively low, as the Avant-Garde Shop uniquely belongs to the whole identity of Avant-Garde Building or Avant-Garde image and lifestyle. Knock-off products will be our biggest threat in this market, thus product differentiation and standards must be implemented to limit such damage to the image and value of the Avant-Garde Shop.

Ethnic arts and crafts based upon Indonesia’s Sabang to Merauke, will face stiff competition from other stores in the area such as Pasaraya Grande or Sarinah that mostly offer similar products, from traditional wooden masks to charms. To anticipate this, a branding strategy on each product must be implemented to differentiate between standard commodities and premium items. One solution is to put only a minimum amount of this kind of product in the display, as a positioning method to give this merchandise a premium value.

With other items, such as magazines, books and generic stationary, we will face competition from retail vendors inside the Avant-Garde Building such as AmPm and Paper Clip.

However, we are not really selling mugs, or caps, or t-shirts; we are selling the image of the Avant-Garde Building. The Avant-Garde brand relies on the building’s reputation for high-class, high-tech, fast and modern living in Jakarta. Avant-Garde is the symbol of Indonesia’s economic success, and a mug or cap casually displayed links the owner to that success. The key to the consumer’s buying decision is the image the brand communicates to its audience. The signage and interior of the shop, the appearance and demeanor of the staff, and the kind of merchandise offered will all reinforce this image. 

4.3.2 Main Competitors

The Avant-Garde Shop will be the official specialty shop of Avant-Garde in the metropolitan area. We are competing with other stores selling similar merchandise, and also with other stores selling similar icons of modern life in Jakarta. [Competitors’ data omitted.]

Strategy and Implementation Summary

Our strategy is based on serving the niche of collectors and shoppers. The Avant-Garde Shop will leverage its competitive edge to quickly gain market exposure. We will support our product selection with excellent customer service, allowing visitors to the store to feel equally at “home” as the Tenants of the landmark building and to create a memorable visiting experience.

The Avant-Garde Shop will rely on two forms of media for their marketing campaign. Our main priority is to raise awareness of the Avant-Garde Shop among the first main target markets, the Tenants. Simple banners or a standing post will be put on the areas with largest traffic. Additional prints such as flyers and catalog will also be put into consideration and distributed during the first couple of months after the re-launching day, December 9th 2004.

Our second strategy is to use Customer Relationship Management to pull customers to coming into the Avant-Garde Shop by putting the Avant-Garde Shop as the last destination in its guided tour, or offering discounted prices in cooperation with retail food establishments inside the Avant-Garde Building, such as Daily Bread or Rice & Co. Another proposed relationship strategy is creating a loyalty card program that can be “annexed” to several other programs, such as discounts at favorite restaurants, corporate gift discount, etc.

5.1 Competitive Edge

The Avant-Garde Shop’s competitive edge can be summed up as the recognition of Avant-Garde Building as the symbol of successful commerce in Indonesia. There is a sense of prestige to buying merchandise based on the Avant-Garde theme. Our complete assortment and latest product designs will also immediately appeal to customers.

Once established, our selection of items and services will set us apart from similar stores. For example, Hard Rock Cafe is identified with “hip, cool, young”, while our Avant-Garde brand is associated with “Indonesia’s finest, global sophistication and money.” The other edge that we want to develop in the future is to become a platform of ordering other merchandise for PT. ABC Company in helping with the SSI development in manufacturing sectors.

Indeed, our store should appeal to a wider selection of the population. Some items may seem to push the limits of taste to build positioning of the Avant-Garde brand. Part of a customer’s desire to explore the store is their curiosity about the historical context of Avant-Garde and Avant-Garde Building, a total experience where they can feel first hand what it’s like to be inside the most important building that runs the nation’s commerce. Also, the customers must feel that they were treated professionally and that the sales staff truly wanted to help the customer in any way possible. Having this level of customer service helps support the Avant-Garde brand and product selection in appealing to a wide range of customers.

The Avant-Garde Shop believes it has a significant competitive advantage over these chains on non-Avant-Garde-themed merchandise because of the following benefits:

  • Sense of Belonging – Community.
  • Valued Image.
  • More Substantial Customer Service.
  • Greater Product Selections.
  • Higher Product Quality.
  • Loyalty Program.

5.2 Marketing Strategy

The retail marketing strategy of the Avant-Garde Shop centers on creating a corporate identity that clearly defines our market niche in terms that benefit our customer. Other specific strategies that will be used follow:

  1. Print Ads – Keeping the Avant-Garde Shop name in all theme merchandise will be necessary. We plan on running banners inside the Avant-Garde Building. In addition we plan on utilizing our catalog as a method of increasing our sales revenue.
  2. Press Releases – Also posted in our newsletter and website (both Avant-Garde Building’s website and Avant-Garde Shop’s website). The local business magazines: Prospektif, SWA and others that have close relationship with PT. ABC Company and PT. Avant-Garde to run releases and/or stories concerning the opening of Avant-Garde Shop.
  3. Grand Opening – A Grand Opening is the most successful of any in-store promotions. December 9th of 2004 will be set as a momentum to introduce the new Avant-Garde Shop day of the Avant-Garde Shop along with an exhibition sponsored by PT. ABC Company.
  4. Word of Mouth – By giving first-time customers great service and a wide selection of products, the word is sure to spread. Also, the many contacts that we already have in the area will prove to be most beneficial in spreading the word.

All marketing decisions with regard to specific media choices, frequency, size, and expenditures will be conducted on an ongoing basis with careful considerations of returns generated.

5.2.1 Pricing Strategy

We will encourage impulse buying, so it is important that we maintain a flexible pricing strategy.

  • Our pricing strategy will be based on competitive parity guidelines. We will not exceed our margin by more than a normal of 70% on all of our theme merchandise.
  • Price says a lot about a product. The products that are unique and not available elsewhere in the region will be marked up to meet the demand curve. We are not afraid of premium pricing a premium product. 

We will allow a 10% discount for all PT. Avant-Garde staff, available by showing their ID tags to the sales staff. Seasonal discounts will also be offered during special events, such as end-of-year clearance sale.

5.2.2 Promotion Strategy

Brand identity is the key issue with consumers. Direct mail is planned in the form of post card-sized mailings. Our form of advertisement will be put out in Press Release and through the Public Relation channels. Giving away promotional merchandise such as apparel and stationary is a must, especially during events that are sponsored by Avant-Garde. To enhance our brand-building strategy, we will establish cooperation from many vendors to participate in our sales program, for example, sweepstakes of two round-trip airline tickets to Bali.

5.2.3 Distribution Strategy

Our customers will buy our products at our location. However, we anticipate a significant amount of mail order sales in order to meet or exceed our Sales Forecast. We will receive orders by mail, phone, or fax, process them immediately, and ship the goods via a courier service.

In the event we are out of an item or we don’t stock it, PT. ABC Company vendors will have to offer drop shipping as a service to the Avant-Garde Shop. This will allow us to keep our service at a high level, yet let us keep our inventory levels in check.

In the future, electronic commerce with a secure website will be thoroughly investigated for feasibility, but for now, all website orders will be handled by phone or fax with various payment options (bank transfers, COD).

All telephone orders will be taken at the store through either our local number. Mail orders will be processed at the Avant-Garde store and shipped from the store. All debits and credits, order transactions, charge backs, and price discounts will be accounted for on our accounting system at the ABC Company office.

5.2.4 Marketing Programs

Distinctive Logo:
The new revamped logo will be easy to recognize and attach to the existing Avant-Garde image of exclusivity, prestige and wealth. The team of ABC Company will work closely with Avant-Garde’s staff to bring the solid brand name in the re-positioning effort of the Avant-Garde Shop.

Distinctive Interiors:
The new store will maximize the efficiency of the total 33 square meters space, as well as adding exclusivity and a modern ambience to the existing store. ABC Company will appoint our trusted interior designer and contractor who has expertise in revamping the interiors of several prestigious establishments in the Jakarta Metro Area.

Advertising and Promotion:
In the first year, the Avant-Garde Shop plans to set aside Rp. 200,000 for advertising and promotion each month, with the program beginning in December of 2004, after the launching of the new store. This would not be considered a serious advertising budget for any business, but we feel the exposure will come from publicity and promotion, so most of the funds will be spent on a good publicist who will get the word out about the charitable contribution program and positive image it projects to the public. We also believe that word-of-mouth advertising will be valuable.

5.2.5 Positioning Statement

From “just-another-store” at the Avant-Garde Building we will transform this space into the official store of the Avant-Garde. The Avant-Garde Shop is the only place in Indonesia that carries the official merchandise of the Avant-Garde brand.

5.3 Sales Strategy

The Avant-Garde Shop will approach sales from a salesperson-customer relationship basis. All sales associates will be trained and encouraged to assist customers in a personal manner, utilizing first names and asking the questions needed to provide the customers with the services they desire. Gathering key customer information and seeking performance feedback on the products and services offered will assist us in the following ways:

  • Targeting our marketing efforts more effectively.
  • Developing product offers and merchandising formats that will increase sales.
  • Developing services that enhance the shopping experience.
  • Training and developing sales associates in order to effectively service the customer.
  • Develop future sales opportunities in wholesale that allow for continued growth of the business.

Products will be showcased via lifestyle merchandising that inspires and promotes multiple purchases. We look to create a strong visual impact, creating an invitation to touch and purchase.

Proper software must be implemented to enhance our CRM system, features include:


  • Customer transactions: receipts, gift certificates, special orders, gift registry.
  • Bar code scanning.
  • Price check.
  • Inventory lookup.
  • Gift receipts.

Transaction Tracking

  • Track and review each register transaction.
  • Daily summaries by store and register.

Customer Management

  • Multiple ship-to addresses.
  • Preferences.
  • Advanced reporting: minimum purchases within inventory class, geographic.

Inventory Management

  • Item entry: matrix, 12 customizable categories, unlimited bar codes.
  • Pricing: markdown, price changes.
  • Physical counts.

Purchase Orders & Receiving

  • Quick receiving.
  • Order approval process.


  • Full contact management.
  • Multiple contacts for a single vendor.
  • Link multiple brands.
  • Link multiple remit to contacts for payable generation.
  • Track terms and payment.


  • Complete inventory performance profiling.
  • Ordering analysis.
  • Search multiple unrelated brands, classes, styles, etc.
  • Exceptions based on: on-hand levels, sell-thru performance, sales performance, aging.
  • Data export to excel.


  • Store management: centralized administration from a single location.
  • Employees: complete rights-based security.


  • Integrated Accounting with QuickBooks.

5.3.1 Sales Forecast

The following table and chart give a run-down on forecasted sales. We expect sales to increase at a rate of 1% per month for each product in the first few months and a modest yearly 6% growth each year, while cost of goods sold increases 2% each year. This is a conservative rate, given the 8% average economic growth rate in Indonesia, which is considerably higher in the metro region.

Note: For company purchases, the per-unit price of inventory purchases includes cost of shipping.

Gifts novelties souvenir business plan, strategy and implementation summary chart image

Gifts novelties souvenir business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Apparel $34,496 $36,566 $38,760
Stationary $12,048 $12,771 $13,537
Novelty $22,194 $23,526 $24,937
Accessories $10,146 $10,755 $11,400
Traditional Arts & Crafts $3,805 $4,033 $4,275
Books & Magazines $5,073 $5,377 $5,700
Others $2,537 $2,689 $2,851
Total Sales $90,299 $95,717 $101,460
Direct Cost of Sales Year 1 Year 2 Year 3
Apparel $9,659 $9,852 $10,049
Stationary $3,373 $3,441 $3,510
Novelty $6,214 $6,339 $6,465
Accessory $2,841 $2,898 $2,956
Traditional Arts & Crafts $1,065 Rp.1,087 Rp.1,108
Books & Magazines $1,420 Rp.1,449 Rp.1,478
Others $710 Rp.725 Rp.739
Subtotal Direct Cost of Sales $25,282 $22,530 $22,980

5.4 Value Proposition

Our message to the audience is that we will sell only 100% made in Indonesia products; a tag specifically made by ABC will be attached to each item to promote the buying local campaign. This will give added value for the Avant-Garde shop in communicating its identity as a helping institution to create more jobs and economic growth among Indonesia’s small size businesses.

To encourage further buying and positive communication of the new store, Avant-Garde Shop will provide a substantial community value to patronizing the development of Small Scale Industries (SSI) in Indonesia through the LB-ABC (non-profit association of helping small scale business and industry in Indonesia). For every purchase a customer makes from the Avant-Garde Shop, LB-ABC will donate up to 5% of the sale for various small business funding, shown in the Pro Forma Profit and Loss below under Marketing Expenses.

5.5 Milestones

The Milestone table reflects critical dates for renovating, redesigning, preparing and launching the new Avant-Garde Shop. The table defines our break-even month and other key markers that will help us measure our success.

Gifts novelties souvenir business plan, strategy and implementation summary chart image

Milestone Start Date End Date Budget Manager Department
Exploring Needs 9/18/2004 10/5/2004 $0 All Department
Concept Development 10/5/2004 10/20/2004 $0 Nicko W. Department
Identity Development 10/5/2004 10/20/2004 $0 Eric W. Department
Find Suppliers 10/5/2004 10/27/2004 $0 UKMI Department
Set Pricing 10/27/2004 10/29/2004 $0 Nicko W. Department
Business Plan Review 10/28/2004 11/2/2004 $0 Nicko W. Department
Refinement and Revision 10/28/2004 11/2/2004 $0 Eric W. Department
Waiting Approval 11/3/2004 11/10/2004 $0 All Department
Brief Supplier and Contractor 11/11/2004 11/12/2004 $0 Donny T. Department
Interior Revamp Design 11/13/2004 11/16/2004 $0 Havidhi Department
Marketing Collateral and POS 11/19/2004 12/6/2004 $0 Eric W. Department
Construction 11/19/2004 12/6/2004 $0 Basuki T. Department
Weekly Progress Report 11/19/2004 12/8/2004 $0 Donny T. Department
Launching 12/9/2004 12/9/2004 $0 All Department
Totals $0

Web Plan Summary

Avant-Garde Building has launched its first international website in January of 2004. The website can be viewed at [proprietary and confidential information removed]; while the Jakarta Stock Exchange also owns a domain. Both can be utilized to advertise the new Avant-Garde Shop, as well as linked to our own website that list all the merchandise and services we offer.

6.1 Development Requirements

Optional costs that the Avant-Garde Shop will expect to incur with development of its website include:

Development Costs

  • Site Design  – Rp. 22,000,000
  • Hosting fee of Rp. 1,700,000 per year, including 60 e-mail addresses.

Ongoing Costs

  • Search Engine Registration  – $200 per year.
  • Site Design Changes  – Changes in the site, such as photography costs (estimated at Rp. 300,000 – Rp. 600,000 per shot), are considered to be part of Marketing and Advertising.

Management Summary

The management of the Avant-Garde Shop is made of the interim management team from PT. ABC Company, who will monitor the growth of the retail store, as well as making improvements and business maneuvers, if necessary. The many administrative functions of the Avant-Garde Shop would become the primary focus of the other team member, PT. Avant-Garde.

7.1 Organizational Structure

The organization will be a relatively dynamic one, since the majority of personnel are involved in both planning and operation.

There are three functioning groups within the company: Shareholders, who make the final decisions, then the two teams from PT. ABC Company, acting as Interim Management and Business Development Consultants, in as well as the Corporate Communications Division of PT. Avant-Garde.

7.2 Personnel Plan

The personnel plan is included in the following table. It shows the Store Staff’s salary as other functions are working inside both PT. Avant-Garde and PT. ABC Company.

Personnel Plan
Year 1 Year 2 Year 3
Store Staff $9,600 $11,000 $11,000
Marketing/Store Manager $12,000 $12,400 $12,400
Total People 2 2 2
Total Payroll $21,600 $23,400 $23,400

Financial Plan

The initial funding from investors (ABC Company and XYZ Company) will enable us to renovate the space and buy initial inventory. With heavy marketing and outreach to customers who work outside the Avant-garde Building, we expect to pass the break-even point early in the second year of this plan.

We will keep costs to a minimum: 2 full-time employees will run the shop, while advisors and directors from AMC Company will oversee operations under their existing duties at PT. ABC Company. We will begin paying dividends to these investors in the second year.

Please note that all tables and charts show data in 1,000’s of Indonesian Rupiah (Rp.).

8.1 Start-up Funding

Approximately Rp. 166,597,000 will be needed from the shareholders for these purposes. Some of the funding is priority as it’s crucially important to go on to the next step of development. The remainder of the start-up capital required, for the continuation of operations, will be provided by the end of the project. We will start paying dividends to the investors in year two of operations (see Cash Flow table for details).

Start-up Funding
Start-up Expenses to Fund $72,000
Start-up Assets to Fund $94,597
Total Funding Required $166,597
Non-cash Assets from Start-up $25,282
Cash Requirements from Start-up $69,315
Additional Cash Raised $0
Cash Balance on Starting Date $69,315
Total Assets $94,597
Liabilities and Capital
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0
Planned Investment
PT. XYZ (32%) $63,307
PT. ABC Indonesia (62%) $103,290
Additional Investment Requirement $0
Total Planned Investment $166,597
Loss at Start-up (Start-up Expenses) ($72,000)
Total Capital $94,597
Total Capital and Liabilities $94,597
Total Funding $166,597

8.2 Important Assumptions

  • We assume that we at least secured our purchase of merchandise in the first two years of operation.
  • All employees except Store Staff are working under Interim Management Team.
  • The Avant-Garde Shop assumes a medium growth in the beginning, without major recession.
  • The Avant-Garde Shop assumes of course that there are no unforeseen significant increase of the retail space.

8.3 Key Financial Indicators

The key indicators of financial success are all positive in our plan: increasing sales, increasing control over costs, and increasing profit margins.

Gifts novelties souvenir business plan, financial plan chart image

8.4 Break-even Analysis

Our break-even analysis is summarized by the following chart and table (all numbers in 1,000’s of Rupiah). At a 28% variable (direct) cost of goods, we will break-even when monthly sales hit Rp. 8,022,000. We will reach the break-even point early in our second year.

Gifts novelties souvenir business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $8,022
Average Percent Variable Cost 28%
Estimated Monthly Fixed Cost $5,776

8.5 Projected Profit and Loss

The following chart and table indicates projected profit and loss. Our rent is the highest operating expense, at Rp. 28,000,000 per month, because of the high cost per square meter inside the Avant-Garde Building.

Gifts novelties souvenir business plan, financial plan chart image

Gifts novelties souvenir business plan, financial plan chart image

Gifts novelties souvenir business plan, financial plan chart image

Gifts novelties souvenir business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $90,299 $95,717 $101,460
Direct Cost of Sales $25,282 $22,530 $22,980
Other Costs of Sales $0 Rp.0 Rp.0
Total Cost of Sales $25,282 $22,530 $22,980
Gross Margin $65,017 $73,187 $78,480
Gross Margin % 72.00% 76.46% 77.35%
Payroll $21,600 $23,400 $23,400
Marketing/Promotion $4,515 $4,786 $5,073
Depreciation $0 $0 $0
Rent $28,800 $28,800 $28,800
Utilities $12,000 $12,000 $12,000
Other $2,400 $2,400 $2,400
Total Operating Expenses $69,315 $71,386 $71,673
Profit Before Interest and Taxes ($4,297) $1,801 $6,807
EBITDA ($4,297) $1,801 $6,807
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $0
Net Profit ($4,297) $1,801 $6,807
Net Profit/Sales -4.76% 1.88% 6.71%

8.6 Projected Cash Flow

Cash flow projections are critical to our success. The following table shows cash flow for the first three years, and the chart illustrates monthly cash flow in the first year. Monthly cash flow projections are included in the appendix. This table shows our planned dividends paid out to investors in the second and third years.

Gifts novelties souvenir business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $90,299 $95,717 $101,460
Subtotal Cash from Operations $90,299 $95,717 $101,460
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 $90,299 $95,717 $101,460
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $21,600 $23,400 $23,400
Bill Payments $59,711 $66,981 $71,309
Subtotal Spent on Operations $81,311 $90,381 $94,709
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 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $3,000 $3,000
Subtotal Cash Spent $81,311 $93,381 $97,709
Net Cash Flow $8,988 $2,336 $3,751
Cash Balance $78,303 $80,639 $84,390

8.7 Projected Balance Sheet

The table shows the annual balance sheet results. After the first year, when we establish profitability, we project a steady growth in net worth despite dividend payments to initial investors. Detailed monthly projections are in the appendix.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Current Assets
Cash $78,303 $80,639 $84,390
Inventory $15,840 $14,116 $14,398
Other Current Assets $0 $0 $0
Total Current Assets $94,143 $94,755 $98,787
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $94,143 $94,755 $98,787
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $3,844 $5,654 $5,880
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $3,844 $5,654 $5,880
Long-term Liabilities $0 $0 $0
Total Liabilities $3,844 $5,654 $5,880
Paid-in Capital $166,597 $166,597 $166,597
Retained Earnings ($72,000) ($79,297) ($80,496)
Earnings ($4,297) $1,801 $6,807
Total Capital $90,300 $89,101 $92,908
Total Liabilities and Capital $94,143 $94,755 $98,787
Net Worth $90,300 $89,101 $92,908

8.8 Business Ratios

The following table outlines some of the more important ratios from the Gift, Novelty, and Souvenir Shop industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 5947.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 6.00% 6.00% 0.44%
Percent of Total Assets
Inventory 16.83% 14.90% 14.57% 34.88%
Other Current Assets 0.00% 0.00% 0.00% 23.80%
Total Current Assets 100.00% 100.00% 100.00% 76.55%
Long-term Assets 0.00% 0.00% 0.00% 23.45%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 4.08% 5.97% 5.95% 34.24%
Long-term Liabilities 0.00% 0.00% 0.00% 15.29%
Total Liabilities 4.08% 5.97% 5.95% 49.53%
Net Worth 95.92% 94.03% 94.05% 50.47%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 72.00% 76.46% 77.35% 39.04%
Selling, General & Administrative Expenses 76.76% 74.58% 70.64% 24.17%
Advertising Expenses 0.00% 0.00% 0.00% 1.96%
Profit Before Interest and Taxes -4.76% 1.88% 6.71% 1.36%
Main Ratios
Current 24.49 16.76 16.80 1.99
Quick 20.37 14.26 14.35 0.81
Total Debt to Total Assets 4.08% 5.97% 5.95% 51.50%
Pre-tax Return on Net Worth -4.76% 2.02% 7.33% 2.37%
Pre-tax Return on Assets -4.56% 1.90% 6.89% 4.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -4.76% 1.88% 6.71% n.a
Return on Equity -4.76% 2.02% 7.33% n.a
Activity Ratios
Inventory Turnover 1.78 1.50 1.61 n.a
Accounts Payable Turnover 16.53 12.17 12.17 n.a
Payment Days 27 25 29 n.a
Total Asset Turnover 0.96 1.01 1.03 n.a
Debt Ratios
Debt to Net Worth 0.04 0.06 0.06 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $90,300 $89,101 $92,908 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 1.04 0.99 0.97 n.a
Current Debt/Total Assets 4% 6% 6% n.a
Acid Test 20.37 14.26 14.35 n.a
Sales/Net Worth 1.00 1.07 1.09 n.a
Dividend Payout 0.00 1.67 0.44 n.a


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
Apparel 0% $2,720 $2,747 $2,775 $2,802 $2,830 $2,859 $2,887 $2,916 $2,945 $2,975 $3,005 $3,035
Stationary 0% $950 $960 $969 $979 $989 $998 $1,008 $1,019 $1,029 $1,039 $1,049 $1,060
Novelty 0% $1,750 $1,768 $1,785 $1,803 $1,821 $1,839 $1,858 $1,876 $1,895 $1,914 $1,933 $1,952
Accessories 0% $800 $808 $816 $824 $832 $841 $849 $858 $866 $875 $884 $893
Traditional Arts & Crafts 0% $300 $303 $306 $309 $312 $315 $318 $322 $325 $328 $331 $335
Books & Magazines 0% $400 $404 $408 $412 $416 $420 $425 $429 $433 $437 $442 $446
Others 0% $200 $202 $204 $206 $208 $210 $212 $214 $217 $219 $221 $223
Total Sales $7,120 $7,191 $7,263 $7,336 $7,409 $7,483 $7,558 $7,634 $7,710 $7,787 $7,865 $7,944
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
Apparel $805 $805 $805 $805 $805 $805 $805 $805 $805 $805 $805 $805
Stationary $281 $281 $281 $281 $281 $281 $281 $281 $281 $281 $281 $281
Novelty $518 $518 $518 $518 $518 $518 $518 $518 $518 $518 $518 $518
Accessory $237 $237 $237 $237 $237 $237 $237 $237 $237 $237 $237 $237
Traditional Arts & Crafts $89 $89 $89 $89 $89 $89 $89 $89 $89 $89 $89 $89
Books & Magazines $118 $118 $118 $118 $118 $118 $118 $118 $118 $118 $118 $118
Others $59 $59 $59 $59 $59 $59 $59 $59 $59 $59 $59 $59
Subtotal Direct Cost of Sales $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107
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
Store Staff 0% $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Marketing/Store Manager 0% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Total People 2 2 2 2 2 2 2 2 2 2 2 2
Total Payroll $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

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 $7,120 $7,191 $7,263 $7,336 $7,409 $7,483 $7,558 $7,634 $7,710 $7,787 $7,865 $7,944
Direct Cost of Sales $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107
Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107 $2,107
Gross Margin $5,013 $5,084 $5,156 $5,229 $5,302 $5,376 $5,451 $5,527 $5,603 $5,680 $5,758 $5,837
Gross Margin % 70.41% 70.70% 70.99% 71.28% 71.56% 71.85% 72.12% 72.40% 72.67% 72.94% 73.21% 73.48%
Payroll $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Marketing/Promotion $376 $376 $376 $376 $376 $376 $376 $376 $376 $376 $376 $376
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Utilities 15% $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Other $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Total Operating Expenses $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776
Profit Before Interest and Taxes ($763) ($692) ($620) ($547) ($474) ($400) ($325) ($249) ($173) ($96) ($18) $60
EBITDA ($763) ($692) ($620) ($547) ($474) ($400) ($325) ($249) ($173) ($96) ($18) $60
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($763) ($692) ($620) ($547) ($474) ($400) ($325) ($249) ($173) ($96) ($18) $60
Net Profit/Sales -10.71% -9.62% -8.54% -7.46% -6.40% -5.34% -4.30% -3.27% -2.25% -1.23% -0.23% 0.76%

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 $7,120 $7,191 $7,263 $7,336 $7,409 $7,483 $7,558 $7,634 $7,710 $7,787 $7,865 $7,944
Subtotal Cash from Operations $7,120 $7,191 $7,263 $7,336 $7,409 $7,483 $7,558 $7,634 $7,710 $7,787 $7,865 $7,944
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 $7,120 $7,191 $7,263 $7,336 $7,409 $7,483 $7,558 $7,634 $7,710 $7,787 $7,865 $7,944
Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Expenditures from Operations
Cash Spending $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Bill Payments $133 $3,976 $3,976 $3,976 $3,976 $3,976 $3,976 $3,976 $3,976 $3,976 $4,504 $19,288
Subtotal Spent on Operations $1,933 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $6,304 $21,088
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 $1,933 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $5,776 $6,304 $21,088
Net Cash Flow $5,187 $1,415 $1,487 $1,559 $1,633 $1,707 $1,782 $1,857 $1,934 $2,011 $1,561 ($13,145)
Cash Balance $74,502 $75,918 $77,405 $78,964 $80,597 $82,304 $84,086 $85,943 $87,877 $89,887 $91,448 $78,303

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 $69,315 $74,502 $75,918 $77,405 $78,964 $80,597 $82,304 $84,086 $85,943 $87,877 $89,887 $91,448 $78,303
Inventory $25,282 $23,175 $21,068 $18,962 $16,855 $14,748 $12,641 $10,534 $8,427 $6,321 $4,214 $17,947 $15,840
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $94,597 $97,678 $96,986 $96,366 $95,819 $95,345 $94,945 $94,620 $94,370 $94,197 $94,101 $109,395 $94,143
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 $94,597 $97,678 $96,986 $96,366 $95,819 $95,345 $94,945 $94,620 $94,370 $94,197 $94,101 $109,395 $94,143
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 $3,843 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $19,156 $3,844
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 $3,843 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $19,156 $3,844
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $3,843 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $3,844 $19,156 $3,844
Paid-in Capital $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597 $166,597
Retained Earnings ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000) ($72,000)
Earnings $0 ($763) ($1,455) ($2,075) ($2,622) ($3,096) ($3,496) ($3,821) ($4,070) ($4,244) ($4,340) ($4,358) ($4,297)
Total Capital $94,597 $93,834 $93,142 $92,522 $91,975 $91,501 $91,101 $90,776 $90,527 $90,353 $90,257 $90,239 $90,300
Total Liabilities and Capital $94,597 $97,678 $96,986 $96,366 $95,819 $95,345 $94,945 $94,620 $94,370 $94,197 $94,101 $109,395 $94,143
Net Worth $94,597 $93,834 $93,142 $92,522 $91,975 $91,501 $91,101 $90,776 $90,527 $90,353 $90,257 $90,239 $90,300