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Salon & Spa icon Spa Health Club Business Plan

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Visions

Executive Summary

Visions (VS) is a socially and environmentally conscious health club that is concerned not only with physical beauty but also with mental well being. It is a health club with environmental and social concerns that sets it apart from other clubs; all products used are plant safe and cruelty free. We at VS feel that pampering our clients’ leads to the health and well being of the greater society, therefore, we address the special health concerns of our clients with exercise, yoga, and meditation.

The goals of our company are to be profitable and build a product line through name recognition. It is the immediate goal to launch an additional product line into the beauty market, while the long-term goal is to go public with several health club facilities and an active product line.

Spa health club business plan, executive summary chart image

1.1 Keys to Success

  • Create an environment for people to feel good about themselves, both physically and mentally.
  • Provide services for those seeking natural means to strengthen and heal their bodies due to injury or illness.
  • Provide services for the needs of women in shelters and those struggling financially.
  • Provide special activities for various holidays.

1.2 Objectives

  • Break even by the end of year two. 
  • Have an increase in new clients quarterly.
  • Have the company’s work in the community covered in the local media.
  • Ability to increase the percentage of profits donated to charities.

1.3 Mission

The goal of our company is to enhance the lives of men and women by providing an atmosphere that aids the body with relaxation techniques and health conscious alternatives. 

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Company Summary

Visions has been a dream for the founders; it was essential for a salon/health club/spa to nurture mind, body, and spirit. This combination is hard to come by in Seattle, and so the four founders decided to create the Visions health club and sought the backing of three angel investors.

VS is located in the Queen Anne Hill district of Seattle, Washington, and provides a magical setting for this soothing building. It is downtown and in the heart of our target market.

2.1 Start-up Summary

The table that follows details projected starting costs.

Spa health club business plan, company summary chart image

Start-up
Requirements
Start-up Expenses
Legal $7,500
Stationery etc. $500
Brochures $5,000
Consultants $0
Insurance $500
Rent $4,500
Research and development $0
Expensed equipment $2,500
Other $4,500
Total Start-up Expenses $25,000
Start-up Assets
Cash Required $500,000
Start-up Inventory $5,000
Other Current Assets $75,000
Long-term Assets $0
Total Assets $580,000
Total Requirements $605,000
Start-up Funding
Start-up Expenses to Fund $25,000
Start-up Assets to Fund $580,000
Total Funding Required $605,000
Assets
Non-cash Assets from Start-up $80,000
Cash Requirements from Start-up $500,000
Additional Cash Raised $0
Cash Balance on Starting Date $500,000
Total Assets $580,000
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $5,000
Other Current Liabilities (interest-free) $0
Total Liabilities $5,000
Capital
Planned Investment
Investor 1 $200,000
Investor 2 $200,000
Invertor 3 $200,000
Additional Investment Requirement $0
Total Planned Investment $600,000
Loss at Start-up (Start-up Expenses) ($25,000)
Total Capital $575,000
Total Capital and Liabilities $580,000
Total Funding $605,000

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Services

Visions is a combination salon, spa, and health club. We specialize in improving the mind, body, and soul. Each part of the club offers different services: haircuts, color, and styling in the salon, full-body pampering in the spa, and fitness classes in the health club. Each of these services is designed to nurture one’s complete self, and, in turn, improve self image.

Future services include a product line that is pure and natural: no animal testing, and the use of only organic ingredients. Another goal for the future is making our kitchen available for rent by start-up restaurants hoping to introduce their food to our clientele. Ideally, VS would like to create similar clubs in other cities as well.

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Market Analysis Summary

The initial market for VS is Seattle, Washington. With its growing population of moderate to high income professionals, Seattle provides an ideal market. It is also one of the fastest growing areas in the country, with a continually expanding consumer base. Another advantage to the Seattle market is the high level of travel to the area, especially among professionals. This also increases our possible consumer base. 

VS aims to provide health and spa services to those seeking physical and mental well being. Women between the ages of 18 and 70 are the vast market, with an emphasis on professional women in their mid twenties through their mid fifties. Also, women battling or recovering from a serious injury or illness are another specific target market. For men, professionals concerned about their appearance are our main market. They are often in their late twenties through their mid forties. We target anyone who is searching for a natural method to heal body and soul, regardless of age or income.

4.1 Market Segmentation

Our market segmentation is specific to two target groups. Our first target market is the corporate workers of Seattle. We have chosen these people, ranging from early twenties to mid forties, because they are in stressful jobs and could use relaxation and exercise. They also have the financial opportunity to regularly treat themselves to a facial or massage. Often in the working world it is necessary to look healthy and fit, therefore, we offer exercise facilities to keep people fit and happy.

The second group we target is people either recovering from an injury or people who have a condition which needs special attention. We wanted to create a safe environment where people feel comfortable and get the attention they need with out feeling ostracized or sick. We offer special classes, massage, and homeopathic opportunities for people with specific needs.

The chart and table below outline the target markets we have chosen; however, for simplicity’s sake, we break our market into two segments: Women and Other. We firmly believe that women would take advantage of our services more often than men would.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Women 4% 400,000 416,000 432,640 449,946 467,944 4.00%
Other 5% 450,000 472,500 496,125 520,931 546,978 5.00%
Total 4.53% 850,000 888,500 928,765 970,877 1,014,922 4.53%

4.2 Target Market Segment Strategy

We have designed several ways to receive positive attention and publicity for our first year. We plan to open on Mother’s day, offering people a tour of the facilities, facials, manicures, and brunch. People will be allowed to purchase tickets for $20 each and will be offered special benefits and packages.

To continue customer awareness, we have created a monthly newsletter, highlighting monthly specials and other events that are important to the company.

Spa health club business plan, market analysis summary chart image

4.3 Market Needs

Our market’s needs are simple: people want to look and feel good. We aim to please people who want this. It has been determined that our target markets are also interested in social issues such as the environment and community. These ideals provide VS with a competitive edge because we are committed not only to the needs of the community, but it’s concerns as well.

4.3.1 Competition

Our indirect competition includes salons, health clubs, and spas in the Seattle area. Because VS is a full-service salon, there is no direct competition.

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Strategy and Implementation Summary

The Visions name will became familiar to the Seattle community on different levels and by various methods. Interacting and volunteering with local hospitals and survivor support groups makes the health and homeopathic healing area known. Community outreach to women’s shelters and special days at the salon and spa help women nurture their spirit to help them become more productive. Advertising in local Seattle magazines and newspapers helps get VS to the mass public. Initial corporate discounts provide for a demand on the salon as early as the grand opening, and mailings and newsletters keep our client base in touch.

All these promotional methods mesh together to form a sturdy advertising base for the company to grow on.

5.1 Competitive Edge

Our competitive edge is that we offer a relaxing atmosphere that can refresh the mind, body, and soul. Offering special classes for those with serious health concerns sets us apart, as does the availability of all services under one roof.

5.2 Sales Strategy

Our revenue is earned in several ways.  First, with memberships in which there is a monthly charge that provides discounts on services; full price is charged to non-members for services. Our main goal is to foster relationships with clients and keep them through quality of service and products. The second method of sales will be encouraged through repeat business and word-of-mouth advertising.

5.2.1 Sales Forecast

The Sales Forecast is in monthly detail in the chart, and the summary follows in the table.

Spa health club business plan, strategy and implementation summary chart image

Sales Forecast
Year 1 Year 2 Year 3
Unit Sales
Salon 3,275 6,500 9,000
Exercise/Therapy 14,755 18,000 22,000
Spa 2,425 3,500 4,300
Other 600 800 1,000
Total Unit Sales 21,055 28,800 36,300
Unit Prices Year 1 Year 2 Year 3
Salon $55.00 $57.00 $60.00
Exercise/Therapy $8.50 $9.00 $9.00
Spa $45.00 $45.00 $45.00
Other $10.00 $12.00 $15.00
Sales
Salon $180,125 $370,500 $540,000
Exercise/Therapy $125,418 $162,000 $198,000
Spa $109,125 $157,500 $193,500
Other $6,000 $9,600 $15,000
Total Sales $420,668 $699,600 $946,500
Direct Unit Costs Year 1 Year 2 Year 3
Salon $1.00 $1.00 $1.00
Exercise/Therapy $0.00 $0.00 $0.00
Spa $1.00 $1.00 $1.00
Other $3.00 $3.00 $3.00
Direct Cost of Sales
Salon $3,275 $6,500 $9,000
Exercise/Therapy $0 $0 $0
Spa $2,425 $3,500 $4,300
Other $1,800 $2,400 $3,000
Subtotal Direct Cost of Sales $7,500 $12,400 $16,300

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Management Summary

Vision’s location in Seattle will be staffed according to department. The salon will have two full-time stylists and the spa with be staffed with a full-time beauty technician and  masseur. The health department will have three part-time instructors working on rotating shifts. 

Management will have four managers, each with specific areas of expertise: financials, publicity, human resources, and ongoing development.

6.1 Personnel Plan

The Personnel Plan follows. Details are in the appendix.

Personnel Plan
Year 1 Year 2 Year 3
Management $240,000 $275,000 $325,000
Salon $30,720 $31,000 $32,000
Spa $30,720 $31,000 $32,000
Health $34,560 $35,000 $36,000
Other $0 $0 $0
Total People 11 11 11
Total Payroll $336,000 $372,000 $425,000

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Financial Plan

The plan for Visions’ financial future is steady growth. With a foundation of start-up investment from angel investors, VS has a solid cash base from which to establish itself and build name recognition. The eventual goal is to go public with a product line and locations around the country. The company will break-even shortly after the second year, making the location self supporting.

Leasing the location with the option to purchase the property is ideal for the company.  The equipment, including exercise equipment, was purchased with start-up funds, leaving VS with little monthly costs beyond rent, utilities, and payroll. VS has a small staff of service providers whose payroll is subsidized by tips from clients. The managers are paid modestly,with their pay tied to the success of the company.

7.1 Important Assumptions

The main assumptions are the continued market need and the ability to deliver. We have included financial assumptions below.

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 7.25% 7.25% 7.25%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

7.2 Key Financial Indicators

Key to the financial success of VS is continued annual growth. While there are times of the year, especially holidays, where sales are expected to rise substantially, annual growth is imperative. The direct costs of providing our services is small, so increasing the number of clients receiving services will aid the bottom line. The inventory turnover increase shown in the chart is the result of rounding, our inventory remains steady at approximately two months in stock.

Spa health club business plan, financial plan chart image

7.3 Break-even Analysis

The Break-even Analysis in this plan makes many assumptions to achieve an estimate. Almost all cost in the operations will remained fixed. Salary for employees, lease, and utility costs are all considered as fixed costs.

Spa health club business plan, financial plan chart image

Break-even Analysis
Monthly Units Break-even 2,653
Monthly Revenue Break-even $53,005
Assumptions:
Average Per-Unit Revenue $19.98
Average Per-Unit Variable Cost $0.36
Estimated Monthly Fixed Cost $52,060

7.4 Projected Profit and Loss

We expect to return increasing profits over the next three years.

Spa health club business plan, financial plan chart image

Spa health club business plan, financial plan chart image

Spa health club business plan, financial plan chart image

Spa health club business plan, financial plan chart image

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $420,668 $699,600 $946,500
Direct Cost of Sales $7,500 $12,400 $16,300
Other $0 $0 $0
Total Cost of Sales $7,500 $12,400 $16,300
Gross Margin $413,168 $687,200 $930,200
Gross Margin % 98.22% 98.23% 98.28%
Expenses
Payroll $336,000 $372,000 $425,000
Sales and Marketing and Other Expenses $98,520 $107,000 $112,000
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $40,200 $45,000 $45,000
Insurance $12,000 $12,000 $12,000
Rent $54,000 $54,000 $54,000
Payroll Taxes $84,000 $93,000 $106,250
Other $0 $0 $0
Total Operating Expenses $624,720 $683,000 $754,250
Profit Before Interest and Taxes ($211,553) $4,200 $175,950
EBITDA ($211,553) $4,200 $175,950
Interest Expense $0 $0 $0
Taxes Incurred $0 $1,050 $44,721
Net Profit ($211,553) $3,150 $131,229
Net Profit/Sales -50.29% 0.45% 13.86%

7.5 Projected Cash Flow

The following chart and table show the cash flow for Visions.

Spa health club business plan, financial plan chart image

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $420,668 $699,600 $946,500
Subtotal Cash from Operations $420,668 $699,600 $946,500
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 $420,668 $699,600 $946,500
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $336,000 $372,000 $425,000
Bill Payments $272,635 $323,767 $385,657
Subtotal Spent on Operations $608,635 $695,767 $810,657
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 $608,635 $695,767 $810,657
Net Cash Flow ($187,968) $3,833 $135,843
Cash Balance $312,033 $315,865 $451,708

7.6 Projected Balance Sheet

The following table shows the projected Balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $312,033 $315,865 $451,708
Inventory $1,500 $2,480 $3,260
Other Current Assets $75,000 $75,000 $75,000
Total Current Assets $388,533 $393,345 $529,968
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $388,533 $393,345 $529,968
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $25,085 $26,748 $32,141
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $25,085 $26,748 $32,141
Long-term Liabilities $0 $0 $0
Total Liabilities $25,085 $26,748 $32,141
Paid-in Capital $600,000 $600,000 $600,000
Retained Earnings ($25,000) ($236,553) ($233,403)
Earnings ($211,553) $3,150 $131,229
Total Capital $363,448 $366,598 $497,827
Total Liabilities and Capital $388,533 $393,345 $529,968
Net Worth $363,448 $366,598 $497,827

7.7 Business Ratios

 Industry profile ratios based on the Standard Industrial Classification (SIC) code 7991, Physical Fitness Facilities, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 66.31% 35.29% 15.90%
Percent of Total Assets
Inventory 0.39% 0.63% 0.62% 3.60%
Other Current Assets 19.30% 19.07% 14.15% 31.10%
Total Current Assets 100.00% 100.00% 100.00% 39.00%
Long-term Assets 0.00% 0.00% 0.00% 61.00%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 6.46% 6.80% 6.06% 34.80%
Long-term Liabilities 0.00% 0.00% 0.00% 27.60%
Total Liabilities 6.46% 6.80% 6.06% 62.40%
Net Worth 93.54% 93.20% 93.94% 37.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 98.22% 98.23% 98.28% 0.00%
Selling, General & Administrative Expenses 148.51% 97.78% 84.34% 73.20%
Advertising Expenses 18.54% 11.44% 8.45% 2.40%
Profit Before Interest and Taxes -50.29% 0.60% 18.59% 2.70%
Main Ratios
Current 15.49 14.71 16.49 1.10
Quick 15.43 14.61 16.39 0.73
Total Debt to Total Assets 6.46% 6.80% 6.06% 62.40%
Pre-tax Return on Net Worth -58.21% 1.15% 35.34% 3.00%
Pre-tax Return on Assets -54.45% 1.07% 33.20% 7.90%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -50.29% 0.45% 13.86% n.a
Return on Equity -58.21% 0.86% 26.36% n.a
Activity Ratios
Inventory Turnover 3.53 6.23 5.68 n.a
Accounts Payable Turnover 11.67 12.17 12.17 n.a
Payment Days 28 29 27 n.a
Total Asset Turnover 1.08 1.78 1.79 n.a
Debt Ratios
Debt to Net Worth 0.07 0.07 0.06 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a
Liquidity Ratios
Net Working Capital $363,448 $366,598 $497,827 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Additional Ratios
Assets to Sales 0.92 0.56 0.56 n.a
Current Debt/Total Assets 6% 7% 6% n.a
Acid Test 15.43 14.61 16.39 n.a
Sales/Net Worth 1.16 1.91 1.90 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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Appendix

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Unit Sales
Salon 0% 160 210 260 300 300 275 290 310 290 300 280 300
Exercise/Therapy 0% 900 960 1,100 1,100 1,200 1,350 1,350 1,275 1,430 1,390 1,350 1,350
Spa 0% 120 150 180 200 220 200 225 260 240 240 200 190
Other 0% 50 50 50 50 50 50 50 50 50 50 50 50
Total Unit Sales 1,230 1,370 1,590 1,650 1,770 1,875 1,915 1,895 2,010 1,980 1,880 1,890
Unit Prices Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Salon $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00
Exercise/Therapy $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50 $8.50
Spa $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00 $45.00
Other $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Sales
Salon $8,800 $11,550 $14,300 $16,500 $16,500 $15,125 $15,950 $17,050 $15,950 $16,500 $15,400 $16,500
Exercise/Therapy $7,650 $8,160 $9,350 $9,350 $10,200 $11,475 $11,475 $10,838 $12,155 $11,815 $11,475 $11,475
Spa $5,400 $6,750 $8,100 $9,000 $9,900 $9,000 $10,125 $11,700 $10,800 $10,800 $9,000 $8,550
Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Total Sales $22,350 $26,960 $32,250 $35,350 $37,100 $36,100 $38,050 $40,088 $39,405 $39,615 $36,375 $37,025
Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Salon 0.00% $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Exercise/Therapy 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00
Spa 0.00% $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00 $1.00
Other 0.00% $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00 $3.00
Direct Cost of Sales
Salon $160 $210 $260 $300 $300 $275 $290 $310 $290 $300 $280 $300
Exercise/Therapy $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Spa $120 $150 $180 $200 $220 $200 $225 $260 $240 $240 $200 $190
Other $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Subtotal Direct Cost of Sales $430 $510 $590 $650 $670 $625 $665 $720 $680 $690 $630 $640
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
Management 0% $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Salon 0% $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560
Spa 0% $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560
Health 0% $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880 $2,880
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 11 11 11 11 11 11 11 11 11 11 11 11
Total Payroll $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 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 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25% 7.25%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $22,350 $26,960 $32,250 $35,350 $37,100 $36,100 $38,050 $40,088 $39,405 $39,615 $36,375 $37,025
Direct Cost of Sales $430 $510 $590 $650 $670 $625 $665 $720 $680 $690 $630 $640
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $430 $510 $590 $650 $670 $625 $665 $720 $680 $690 $630 $640
Gross Margin $21,920 $26,450 $31,660 $34,700 $36,430 $35,475 $37,385 $39,368 $38,725 $38,925 $35,745 $36,385
Gross Margin % 98.08% 98.11% 98.17% 98.16% 98.19% 98.27% 98.25% 98.20% 98.27% 98.26% 98.27% 98.27%
Expenses
Payroll $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000
Sales and Marketing and Other Expenses $5,000 $6,070 $6,700 $6,750 $9,250 $9,250 $9,250 $9,250 $9,250 $9,250 $9,250 $9,250
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $2,500 $3,300 $3,700 $3,800 $3,400 $2,800 $3,200 $3,700 $3,600 $3,600 $3,400 $3,200
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
Rent $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500 $4,500
Payroll Taxes 25% $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $48,000 $49,870 $50,900 $51,050 $53,150 $52,550 $52,950 $53,450 $53,350 $53,350 $53,150 $52,950
Profit Before Interest and Taxes ($26,080) ($23,420) ($19,240) ($16,350) ($16,720) ($17,075) ($15,565) ($14,083) ($14,625) ($14,425) ($17,405) ($16,565)
EBITDA ($26,080) ($23,420) ($19,240) ($16,350) ($16,720) ($17,075) ($15,565) ($14,083) ($14,625) ($14,425) ($17,405) ($16,565)
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 ($26,080) ($23,420) ($19,240) ($16,350) ($16,720) ($17,075) ($15,565) ($14,083) ($14,625) ($14,425) ($17,405) ($16,565)
Net Profit/Sales -116.69% -86.87% -59.66% -46.25% -45.07% -47.30% -40.91% -35.13% -37.11% -36.41% -47.85% -44.74%

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 $22,350 $26,960 $32,250 $35,350 $37,100 $36,100 $38,050 $40,088 $39,405 $39,615 $36,375 $37,025
Subtotal Cash from Operations $22,350 $26,960 $32,250 $35,350 $37,100 $36,100 $38,050 $40,088 $39,405 $39,615 $36,375 $37,025
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 $22,350 $26,960 $32,250 $35,350 $37,100 $36,100 $38,050 $40,088 $39,405 $39,615 $36,375 $37,025
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 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000 $28,000
Bill Payments $5,667 $20,062 $21,904 $22,905 $23,120 $25,130 $24,563 $25,000 $26,447 $26,317 $25,377 $26,143
Subtotal Spent on Operations $33,667 $48,062 $49,904 $50,905 $51,120 $53,130 $52,563 $53,000 $54,447 $54,317 $53,377 $54,143
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 $33,667 $48,062 $49,904 $50,905 $51,120 $53,130 $52,563 $53,000 $54,447 $54,317 $53,377 $54,143
Net Cash Flow ($11,317) ($21,102) ($17,654) ($15,555) ($14,020) ($17,030) ($14,513) ($12,913) ($15,042) ($14,702) ($17,002) ($17,118)
Cash Balance $488,683 $467,581 $449,927 $434,372 $420,352 $403,322 $388,808 $375,896 $360,854 $346,153 $329,151 $312,033
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 $500,000 $488,683 $467,581 $449,927 $434,372 $420,352 $403,322 $388,808 $375,896 $360,854 $346,153 $329,151 $312,033
Inventory $5,000 $4,570 $4,060 $3,470 $2,820 $2,150 $1,525 $860 $1,140 $1,460 $770 $1,140 $1,500
Other Current Assets $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000
Total Current Assets $580,000 $568,253 $546,641 $528,397 $512,192 $497,502 $479,847 $464,668 $452,036 $437,314 $421,923 $405,291 $388,533
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 $580,000 $568,253 $546,641 $528,397 $512,192 $497,502 $479,847 $464,668 $452,036 $437,314 $421,923 $405,291 $388,533
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 $5,000 $19,333 $21,141 $22,137 $22,282 $24,312 $23,732 $24,118 $25,568 $25,472 $24,505 $25,278 $25,085
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 $5,000 $19,333 $21,141 $22,137 $22,282 $24,312 $23,732 $24,118 $25,568 $25,472 $24,505 $25,278 $25,085
Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $5,000 $19,333 $21,141 $22,137 $22,282 $24,312 $23,732 $24,118 $25,568 $25,472 $24,505 $25,278 $25,085
Paid-in Capital $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000 $600,000
Retained Earnings ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000) ($25,000)
Earnings $0 ($26,080) ($49,500) ($68,740) ($85,090) ($101,810) ($118,885) ($134,450) ($148,533) ($163,158) ($177,583) ($194,988) ($211,553)
Total Capital $575,000 $548,920 $525,500 $506,260 $489,910 $473,190 $456,115 $440,550 $426,468 $411,843 $397,418 $380,013 $363,448
Total Liabilities and Capital $580,000 $568,253 $546,641 $528,397 $512,192 $497,502 $479,847 $464,668 $452,036 $437,314 $421,923 $405,291 $388,533
Net Worth $575,000 $548,920 $525,500 $506,260 $489,910 $473,190 $456,115 $440,550 $426,468 $411,843 $397,418 $380,012 $363,448

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