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McKenzie Roller Rink

Executive Summary

McKenzie Roller Rink is a state of the art facility offering recreational skating to individuals as well as catering to large and small group gatherings. The rink has been at its present location for five years and was formerly known as Roller Kingdom. Due to mismanagement McKenzie Roller Rink has taken over the business with no capital outlay. The rink is located in Eugene, Oregon and has excellent access to major roads and interstates.

With upgraded facilities McKenzie Roller Rink will provide a unique recreational opportunity to the greater Lane County area. A concessions area will serve a wide variety of food choices. Party rooms are available for large groups such as civic organizations, church groups, and school functions. With a dedicated staff McKenzie Roller Rink will be ready to give excellent customer service and would like to see continued growth in dedicated customers. McKenzie Roller Rink will target local markets with special focus given to the large groups looking for a facility to hold their parties and functions.

With an emphasis on customer service McKenzie Roller Rink will differentiate itself from other recreational opportunities in the area by establishing a welcoming friendly atmosphere for the consumers in our target market. It is important to build long-term relationships with civic groups, church groups, and school groups. We will also be involved in community activities. We can’t just market and sell our services, we must deliver those services with a focus on excellence. McKenzie Roller Rink will provide a website that will appeal to all kinds of customers looking for recreational alternatives. Times of operations, descriptions of our facilities, and the costs will be included in the site.

Our management philosophy is based on responsibility and mutual respect. People who work at McKenzie Roller Rink will work in an environment that encourages creativity and having fun. Along with a team of 10 employees, Don Jones will play an active roll in the day to day operations of the facility. Don is the majority owner and has years of experience in running this kind of facility. The other two owners, David Barkley and Paul Robins, will join Don in forming strong leadership for the company. McKenzie Roller Rink would like to see first year sales at over $400,000 with a five to nine percent increase for year two.

Roller skate rink business plan, executive summary chart image

1.1 Mission

McKenzie Roller Rink provides recreational skating to the general public as well as private bookings for group activities. With excellent party facilities and concessions that provide a wide choice of food items, McKenzie Roller Rink is dedicated to providing a first class skating facility that will facilitate family-centered activity. Customer service is going to be a focus with the intent of keeping a positive, fun atmosphere. McKenzie Roller Rink will make safety for our patrons a top priority. Employees of McKenzie Roller Rink are considered a valuable asset to the company and will be treated in such a manner.

1.2 Objectives

  1. Sales increasing to more than $1 million by the third year.
  2. Bring gross margin back up to above 90%, and maintain that level.
  3. Increase a customer approval rating by 20% by the second year.

1.3 Keys to Success

The keys to success in this business are:

  • Marketing: Increasing the interest in skating as a recreational activity.
  • Facilities: Providing an attractive facility that caters to individual and group activities.
  • Customer Service: Provide the kind of customer service that makes the patron feel valuable and create the desire to come back.
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Company Summary

McKenzie Roller Rink is a new enterprise that has taken over an existing facility and has made several improvements. The company that previously leased the building was called Roller Kingdom. The building was leased and upgraded five years ago by the owners of Roller Kingdom, however Roller Kingdom went out of business due to mismanagement. McKenzie Roller Rink has negotiated a lease with the building owners and were able to take over the business with no capital outlay. With an agressive management style and marketing plan, McKenzie Roller Rink plans to offer a unique recreational opportunity that will cater to families as well as civic organizations, schools, and church youth groups. Therefore the numbers in the start-up table reflect just basic start-up expenses, there are no business purchase expenses.

2.1 Company Ownership

McKenzie Roller Rink is a privately-held C corporation owned in majority by president Don Jones. There are two part owners, David Barkley, our attorney; and Paul Robins, our public relations and marketing consultant. Neither owns more than 15%, but both are active participants in management decisions.

2.2 Start-up Summary

Our start-up costs come to $43,000, which is mostly building renovation and the purchase of new equipment. The start-up costs are to be financed by direct owner investment as well as our other two independent investors.

Roller skate rink business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $1,500
Stationery etc. $500
Brochures $1,000
Consultants $1,500
Insurance $2,000
Rent $4,000
Renovations $10,000
Expensed Equipment $10,000
Website $2,500
Total Start-up Expenses $33,000
Start-up Assets
Cash Required $94,000
Start-up Inventory $5,000
Other Current Assets $2,000
Long-term Assets $0
Total Assets $101,000
Total Requirements $134,000
Start-up Funding
Start-up Expenses to Fund $33,000
Start-up Assets to Fund $101,000
Total Funding Required $134,000
Assets
Non-cash Assets from Start-up $7,000
Cash Requirements from Start-up $94,000
Additional Cash Raised $0
Cash Balance on Starting Date $94,000
Total Assets $101,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $14,000
Other Current Liabilities (interest-free) $0
Total Liabilities $14,000
Capital
Planned Investment
Don Jones $70,000
David Barkley $35,000
Paul Robins $15,000
Additional Investment Requirement $0
Total Planned Investment $120,000
Loss at Start-up (Start-up Expenses) ($33,000)
Total Capital $87,000
Total Capital and Liabilities $101,000
Total Funding $134,000

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Products and Services

McKenzie Roller Rink is a state of the art roller rink providing a unique recreational opportunity to the greater Lane County region. A concessions area will serve a wide variety of food choices and party rooms are available to meet the needs of small and large groups such as church youth groups, school functions, and civic organizations. With a dedicated staff McKenzie Roller Rink is ready to give excellent customer service and would like to see continued growth in dedicated customers.

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Market Analysis Summary

McKenzie Roller Rink will focus on local markets including civic groups, school groups and church groups. Special focus will be placed on large group activity such as parties and school functions.

4.1 Market Segmentation

Our market segmentation is broken into three specific groups. Civic organizations, school groups, and church groups are key target markets for McKenzie Roller Rink. Parties with over ten people would be considered a group. It is our intent to create a wholesome family atmosphere and so there will be an effort to encourage families to consider skating as a recreational option. Finally we will target the greater Lane County area to encourage individual activity (groups under ten).

Roller skate rink business plan, market analysis summary chart image

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Group Activity 15% 10,000 11,500 13,225 15,209 17,490 15.00%
Family Activity 10% 5,000 5,500 6,050 6,655 7,321 10.00%
Individual Activity 10% 7,000 7,700 8,470 9,317 10,249 10.00%
Total 12.36% 22,000 24,700 27,745 31,181 35,060 12.36%

4.2 Target Market Segment Strategy

Our choice of target markets is strategic. We believe that with the right facility and the right marketing plan, skating is a recreational activity that still has great potential. Youth groups of all kinds are always planning activities and we intend to provide a choice that will fill the need for a safe, well supervised facility that is fun. In addition, youth attending the facility in groups will experience the facility and activity and the families of those youth will become aware of McKenzie Roller Rink as an entertainment option.

The closest skating facility is over 50 miles away so we will be the only skating facility in the greater Lane County area. Without direct competition it is our intent to market to all segments of Lane County. We are looking for customers who care about having a top notch facility with customer service that will make their night of skating an enjoyable one. Safety will be a priority, we will closely monitor all activity in our facility.

4.3 Service Business Analysis

We are a skating facility which serves the greater Lane County area:

  1. Groups: People who are looking for a recreational alternative that will accommodate groups for parties and other functions.
  2. Families: People who are looking for fun activities that they can do together.
  3. Individual: People who are looking for a place to come and enjoy skating in a great facility. Parents will have a place they can trust to drop their kids off.

4.3.1 Competition and Buying Patterns

The recreational consumer understands the concept of service, and are much more likely to engage in the activity when they are assured the activity is in a safe and fun facility.

Though we do not have any direct competition we will still have to gain the public’s trust and business through an aggressive marketing plan as consumers do have alternative forms of entertainment.

Indirect competition comes from other recreation activities in the area, for example, bowling alleys, movie theatres and restaurants.

Our focus group sessions indicated that our target markets think about quality facilities, customer service, and wholesome family fun. There also is a need for a facility to host group parties and such.

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Strategy and Implementation Summary

Differentiate and fulfill the promise.
We must differentiate ourselves from other recreational opportunities in the area. We need to establish a logical and viable alternative for our target market.

Build a relationship-oriented business.
Build long-term relationships with civic groups, school groups, church groups, and the community as a whole. Be supportive and involved in community activities.

Focus on target markets.
We need to focus our efforts on what our facilities have to offer small to large groups of people. Also focus on the outlying target markets in Lane County.

Emphasize customer service and support.
We can’t just market and sell our services, we must actually deliver as well. We need to make sure we have the ability to provide a top-notch facility that will be customer friendly.

5.1 Marketing Strategy

The marketing strategy is the core of the main strategy:

  1. Emphasize customer service.
  2. Build relationships with civic groups, church groups, school groups.
  3. Provide an attractive facility that people will come back to.

5.2 Sales Strategy

We need to sell people on our quality facilities. We sell a quality recreational entertainment option that is affordable and fun.

We have to sell our customer service and safety. Skating is an activity that is conducive to both large groups as well as the individual and we need to give our customers a facility that they can have a quality experience.

5.2.1 Sales Forecast

The important elements of the sales forecast are shown in the following table. The total sales increase to about $515,000 in the third year. The sales forecast table also reflects a slow down in the summer due to school being out and other summer recreational opportunities available to out customers. Concessions will supply a large part of the revenue and we will strive to continue to make improvements in our food choices.

Roller skate rink business plan, strategy and implementation summary chart image

Roller skate rink business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Sales
Skate Rental & Sales $73,000 $92,000 $105,000
Skating $197,000 $225,000 $240,000
Concessions $135,000 $150,000 $170,000
Total Sales $405,000 $467,000 $515,000
Direct Cost of Sales Year 1 Year 2 Year 3
Skate Rental & Sales $2,180 $1,840 $2,100
Skating $0 $0 $0
Concessions $40,500 $45,000 $51,000
Subtotal Direct Cost of Sales $42,680 $46,840 $53,100

5.3 Competitive Edge

McKenzie Roller Rink does not have any direct competition from another roller rink. This fact will not make us complacent but will make us work that much harder to provide a quality product. We will not only serve people already aware of the benefits of skating, we will concentrate our efforts on a marketing plan that will attract people looking for a recreational option that they may not have considered before. With a top-notch facility and a friendly customer conscious staff, McKenzie Roller Rink intends to become a viable option for families, groups, and the general public.

5.4 Milestones

Mr. Jones will be responsible for the business plan and Web plan. Mr. Robins will be responsible for contracting with the painters, food vendors and for the new equipment. Mr. Barkley will be responsible for the accounting plan.

Milestones
Milestone Start Date End Date Budget Manager Department
Business Plan 1/10/2003 1/20/2003 $1,000 Don Jones Majority Owner
Re-paint Interior 2/1/2003 2/15/2003 $2,500 Paul Robins Administrator
Accounting Plan 2/29/2003 3/15/2003 $1,000 David Barkley Accounting
Marketing & Advertising 4/20/2003 6/15/2003 $3,000 Ken Wise Consultant
Sourcing Food Vendors 4/5/2003 4/30/2003 $1,000 Paul Robins Administrator
Sourcing New Equipment 5/6/2003 6/5/2003 $1,000 Paul Robins Administrator
Web Plan 6/8/2003 7/2/2003 $1,000 Don Jones Majority Owner
Totals $10,500

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Web Plan Summary

The McKenzie Roller Rink will focus on providing a website with information that will give a detailed description of our facility, times of operation, and all associated costs.

McKenzie Roller Rink will provide a website that will appeal to all kinds of consumers. A database will be kept that will help in future marketing endeavors. Using Web services provided by our Internet provider, we will be able to track what domain users get to our site from. This will help us decide where our Web marketing dollar is best spent.

6.1 Website Marketing Strategy

More and more people are looking for a recreational opportunity that they can either participate in as a family or a group activity. It is the intent of McKenzie Roller Rink to promote such an opportunity, and through our website we intend to promote our quality facility that is ideal for groups large and small.

The main focus for McKenzie Roller Rink website will be:

  1. A detailed view of our facilities through photographs.
  2. A list of all our times of operation.
  3. A description of what our facility has to offer large and small groups.
  4. A description of our concessions area and the kinds of food and beverages we serve.

6.2 Development Requirements

McKenzie Roller Rink website will be initially developed with few technical resources. A simple hosting provider, AOL Web services, will host the site.

McKenzie Roller Rink will work with a contracted user interface designer to develop a simple, but informative Internet-focused site. The user interface designer will work with Don Jones to come up with a website logo, and the website graphics. Initially a $1,000 dollars will be invested into the implementation of this site.

The maintenance of the site will be done by McKenzie Roller Rink and as the website evolves it is possible that we will look into developing newsletters and downloadable market research reports. McKenzie Roller Rink can also look into pre-packaged solutions through AOL Web services.

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Management Summary

Our management philosophy is based on responsibility and mutual respect. People who work at McKenzie Roller Rink want to work here because we have an environment that encourages creativity and fun. The team includes 10 employees, under one majority owner and two partial owners. Don Jones will play an active role in the day to day business operations of the Rink. Don has owned several ice skating rinks in the Mid-West and has a wealth of experience in successfully running this kind of facility. Both David Barkley and Paul Robins have been working in the Lane County area for years leading successful companies. Together the owners will make a strong team and will lead McKenzie Roller Rink with sound business experience.

7.1 Personnel Plan

The Personnel Plan reflects the need to keep our workforce at no more than nine full and part time employees. Our total employment should not increase the first year. Detailed monthly projections are included in the appendix.

Personnel Plan
Year 1 Year 2 Year 3
Don Jones $42,000 $44,000 $46,000
David Barkley $36,000 $38,000 $40,000
Paul Robins $30,000 $32,000 $34,000
Part Time $10,800 $12,000 $13,500
Part Time $10,800 $12,000 $13,500
Part Time $10,800 $12,000 $13,500
Full Time $21,600 $23,000 $24,500
Full Time $21,600 $23,000 $24,500
Full Time $21,600 $23,000 $24,500
Total People 9 9 9
Total Payroll $205,200 $219,000 $234,000

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Financial Plan

The financial plan contains these essential factors:

  1. A growth rate of 5% for the year 2004.
  2. Do not depend on credit lines to support cash flow.
  3. An average sales per business day (305 days per year) in excess of $1,000.

8.1 Important Assumptions

The financial plan depends on Important Assumptions, most of which are shown in the following table. The key underlying assumptions are:

  • We assume a slow-growth economy, without major recession.
  • We assume there will not be any direct competitors for at least several years.
  • We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the tables.
General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 8.00% 8.00% 8.00%
Long-term Interest Rate 15.00% 15.00% 15.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

8.2 Break-even Analysis

Our Break-even Analysis is shown below.

Roller skate rink business plan, financial plan chart image

Break-even Analysis
Monthly Revenue Break-even $35,022
Assumptions:
Average Percent Variable Cost 11%
Estimated Monthly Fixed Cost $31,332

8.3 Projected Profit and Loss

The most important assumption in the Projected Profit and Loss statement is a steady growth into 2006. The increase in gross margin is based on an agressive marketing approach, and it is critical.

Month-by-month assumptions for profit and loss are included in the appendix.

Roller skate rink business plan, financial plan chart image

Roller skate rink business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $405,000 $467,000 $515,000
Direct Cost of Sales $42,680 $46,840 $53,100
Other Costs of Goods $0 $0 $0
Total Cost of Sales $42,680 $46,840 $53,100
Gross Margin $362,320 $420,160 $461,900
Gross Margin % 89.46% 89.97% 89.69%
Expenses
Payroll $205,200 $219,000 $234,000
Sales and Marketing and Other Expenses $50,000 $60,000 $65,000
Depreciation $0 $0 $0
Rent $42,000 $45,000 $48,000
Utilities $12,000 $14,000 $14,000
Insurance $12,000 $14,000 $16,000
Payroll Taxes $30,780 $32,850 $35,100
Other $24,000 $30,000 $35,000
Total Operating Expenses $375,980 $414,850 $447,100
Profit Before Interest and Taxes ($13,660) $5,310 $14,800
EBITDA ($13,660) $5,310 $14,800
Interest Expense $0 $0 $0
Taxes Incurred $0 $1,593 $4,440
Net Profit ($13,660) $3,717 $10,360
Net Profit/Sales -3.37% 0.80% 2.01%

8.4 Projected Cash Flow

The following table and chart illustrate McKenzie Roller Rink’s cash flow situation. Cash Flow will be negative for year one as we start up the business and slowly create awareness about our facility. We have planned for this with enough extra cash to keep the cash balance positive.

Roller skate rink business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $405,000 $467,000 $515,000
Subtotal Cash from Operations $405,000 $467,000 $515,000
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 $405,000 $467,000 $515,000
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $205,200 $219,000 $234,000
Bill Payments $207,429 $243,718 $269,060
Subtotal Spent on Operations $412,629 $462,718 $503,060
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 $0 $0
Subtotal Cash Spent $412,629 $462,718 $503,060
Net Cash Flow ($7,629) $4,282 $11,940
Cash Balance $86,371 $90,653 $102,593

8.5 Projected Balance Sheet

The balance sheet is quite solid. We do not project any real trouble meeting our debt obligations – as long as we can achieve our specific objectives.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $86,371 $90,653 $102,593
Inventory $4,114 $4,515 $5,118
Other Current Assets $2,000 $2,000 $2,000
Total Current Assets $92,485 $97,168 $109,711
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $92,485 $97,168 $109,711
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $19,145 $20,111 $22,294
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $19,145 $20,111 $22,294
Long-term Liabilities $0 $0 $0
Total Liabilities $19,145 $20,111 $22,294
Paid-in Capital $120,000 $120,000 $120,000
Retained Earnings ($33,000) ($46,660) ($42,943)
Earnings ($13,660) $3,717 $10,360
Total Capital $73,340 $77,057 $87,417
Total Liabilities and Capital $92,485 $97,168 $109,711
Net Worth $73,340 $77,057 $87,417

8.6 Business Ratios

Business Ratios for the years of this plan are shown below. Industry profile ratios based on the Standard Industrial Classification (SIC) code 7999, Roller Rinks are shown for comparison.

The following will enable us to keep on track. If we fail in any of these areas, we will need to re-evaluate our business model:

  1. Gross margins at or above 88%.
  2. Do not depend on credit line to meet cash requirements.
  3. Month-to-month annual comparisons indicate an increase of 5% or greater.
Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 15.31% 10.28% 5.73%
Percent of Total Assets
Inventory 4.45% 4.65% 4.67% 2.87%
Other Current Assets 2.16% 2.06% 1.82% 33.26%
Total Current Assets 100.00% 100.00% 100.00% 43.21%
Long-term Assets 0.00% 0.00% 0.00% 56.79%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 20.70% 20.70% 20.32% 21.91%
Long-term Liabilities 0.00% 0.00% 0.00% 28.81%
Total Liabilities 20.70% 20.70% 20.32% 50.72%
Net Worth 79.30% 79.30% 79.68% 49.28%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 89.46% 89.97% 89.69% 100.00%
Selling, General & Administrative Expenses 92.83% 89.17% 87.68% 76.43%
Advertising Expenses 0.00% 0.00% 0.00% 2.77%
Profit Before Interest and Taxes -3.37% 1.14% 2.87% 1.89%
Main Ratios
Current 4.83 4.83 4.92 1.18
Quick 4.62 4.61 4.69 0.80
Total Debt to Total Assets 20.70% 20.70% 20.32% 1.76%
Pre-tax Return on Net Worth -18.63% 6.89% 16.93% 61.12%
Pre-tax Return on Assets -14.77% 5.46% 13.49% 4.52%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -3.37% 0.80% 2.01% n.a
Return on Equity -18.63% 4.82% 11.85% n.a
Activity Ratios
Inventory Turnover 10.91 10.86 11.02 n.a
Accounts Payable Turnover 11.10 12.17 12.17 n.a
Payment Days 29 29 29 n.a
Total Asset Turnover 4.38 4.81 4.69 n.a
Debt Ratios
Debt to Net Worth 0.26 0.26 0.26 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $73,340 $77,057 $87,417 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.23 0.21 0.21 n.a
Current Debt/Total Assets 21% 21% 20% n.a
Acid Test 4.62 4.61 4.69 n.a
Sales/Net Worth 5.52 6.06 5.89 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Skate Rental & Sales 0% $4,000 $5,000 $7,000 $7,000 $7,000 $5,000 $5,000 $5,000 $7,000 $7,000 $7,000 $7,000
Skating 0% $14,000 $15,000 $18,000 $18,000 $18,000 $14,000 $14,000 $14,000 $18,000 $18,000 $18,000 $18,000
Concessions 0% $10,000 $11,000 $12,000 $12,000 $12,000 $10,000 $10,000 $10,000 $12,000 $12,000 $12,000 $12,000
Total Sales $28,000 $31,000 $37,000 $37,000 $37,000 $29,000 $29,000 $29,000 $37,000 $37,000 $37,000 $37,000
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
Skate Rental & Sales $800 $100 $140 $140 $140 $100 $100 $100 $140 $140 $140 $140
Skating $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Concessions $3,000 $3,300 $3,600 $3,600 $3,600 $3,000 $3,000 $3,000 $3,600 $3,600 $3,600 $3,600
Subtotal Direct Cost of Sales $3,800 $3,400 $3,740 $3,740 $3,740 $3,100 $3,100 $3,100 $3,740 $3,740 $3,740 $3,740
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
Don Jones 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
David Barkley 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Paul Robins 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Part Time 0% $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
Part Time 0% $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
Part Time 0% $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900 $900
Full Time 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Full Time 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Full Time 0% $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800
Total People 9 9 9 9 9 9 9 9 9 9 9 9
Total Payroll $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100

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 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
Long-term Interest Rate 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00% 15.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
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 $28,000 $31,000 $37,000 $37,000 $37,000 $29,000 $29,000 $29,000 $37,000 $37,000 $37,000 $37,000
Direct Cost of Sales $3,800 $3,400 $3,740 $3,740 $3,740 $3,100 $3,100 $3,100 $3,740 $3,740 $3,740 $3,740
Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $3,800 $3,400 $3,740 $3,740 $3,740 $3,100 $3,100 $3,100 $3,740 $3,740 $3,740 $3,740
Gross Margin $24,200 $27,600 $33,260 $33,260 $33,260 $25,900 $25,900 $25,900 $33,260 $33,260 $33,260 $33,260
Gross Margin % 86.43% 89.03% 89.89% 89.89% 89.89% 89.31% 89.31% 89.31% 89.89% 89.89% 89.89% 89.89%
Expenses
Payroll $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100
Sales and Marketing and Other Expenses $4,000 $4,000 $4,500 $4,500 $4,500 $3,000 $3,000 $3,000 $4,500 $5,000 $5,000 $5,000
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Utilities $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Insurance $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Payroll Taxes 15% $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565 $2,565
Other $500 $500 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $3,000 $3,000 $3,000
Total Operating Expenses $29,665 $29,665 $31,665 $31,665 $31,665 $30,165 $30,165 $30,165 $31,665 $33,165 $33,165 $33,165
Profit Before Interest and Taxes ($5,465) ($2,065) $1,595 $1,595 $1,595 ($4,265) ($4,265) ($4,265) $1,595 $95 $95 $95
EBITDA ($5,465) ($2,065) $1,595 $1,595 $1,595 ($4,265) ($4,265) ($4,265) $1,595 $95 $95 $95
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 ($5,465) ($2,065) $1,595 $1,595 $1,595 ($4,265) ($4,265) ($4,265) $1,595 $95 $95 $95
Net Profit/Sales -19.52% -6.66% 4.31% 4.31% 4.31% -14.71% -14.71% -14.71% 4.31% 0.26% 0.26% 0.26%

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 $28,000 $31,000 $37,000 $37,000 $37,000 $29,000 $29,000 $29,000 $37,000 $37,000 $37,000 $37,000
Subtotal Cash from Operations $28,000 $31,000 $37,000 $37,000 $37,000 $29,000 $29,000 $29,000 $37,000 $37,000 $37,000 $37,000
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 $28,000 $31,000 $37,000 $37,000 $37,000 $29,000 $29,000 $29,000 $37,000 $37,000 $37,000 $37,000
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 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100 $17,100
Bill Payments $14,518 $15,544 $15,630 $18,667 $18,305 $18,210 $15,484 $16,165 $16,260 $19,036 $19,805 $19,805
Subtotal Spent on Operations $31,618 $32,644 $32,730 $35,767 $35,405 $35,310 $32,584 $33,265 $33,360 $36,136 $36,905 $36,905
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 $31,618 $32,644 $32,730 $35,767 $35,405 $35,310 $32,584 $33,265 $33,360 $36,136 $36,905 $36,905
Net Cash Flow ($3,618) ($1,644) $4,270 $1,233 $1,595 ($6,310) ($3,584) ($4,265) $3,640 $864 $95 $95
Cash Balance $90,382 $88,738 $93,007 $94,241 $95,836 $89,526 $85,941 $81,676 $85,316 $86,181 $86,276 $86,371
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 $94,000 $90,382 $88,738 $93,007 $94,241 $95,836 $89,526 $85,941 $81,676 $85,316 $86,181 $86,276 $86,371
Inventory $5,000 $4,180 $3,740 $4,114 $4,114 $4,114 $3,410 $3,410 $3,410 $4,114 $4,114 $4,114 $4,114
Other Current Assets $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Total Current Assets $101,000 $96,562 $94,478 $99,121 $100,355 $101,950 $94,936 $91,351 $87,086 $91,430 $92,295 $92,390 $92,485
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 $101,000 $96,562 $94,478 $99,121 $100,355 $101,950 $94,936 $91,351 $87,086 $91,430 $92,295 $92,390 $92,485
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 $14,000 $15,027 $15,008 $18,056 $17,695 $17,695 $14,946 $15,626 $15,626 $18,375 $19,145 $19,145 $19,145
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 $14,000 $15,027 $15,008 $18,056 $17,695 $17,695 $14,946 $15,626 $15,626 $18,375 $19,145 $19,145 $19,145
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $14,000 $15,027 $15,008 $18,056 $17,695 $17,695 $14,946 $15,626 $15,626 $18,375 $19,145 $19,145 $19,145
Paid-in Capital $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000 $120,000
Retained Earnings ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000) ($33,000)
Earnings $0 ($5,465) ($7,530) ($5,935) ($4,340) ($2,745) ($7,010) ($11,275) ($15,540) ($13,945) ($13,850) ($13,755) ($13,660)
Total Capital $87,000 $81,535 $79,470 $81,065 $82,660 $84,255 $79,990 $75,725 $71,460 $73,055 $73,150 $73,245 $73,340
Total Liabilities and Capital $101,000 $96,562 $94,478 $99,121 $100,355 $101,950 $94,936 $91,351 $87,086 $91,430 $92,295 $92,390 $92,485
Net Worth $87,000 $81,535 $79,470 $81,065 $82,660 $84,255 $79,990 $75,725 $71,460 $73,055 $73,150 $73,245 $73,340

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