dinner_theater_business_plan

7/29/2019 dinner_theater_business_plan

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Table of Contents

1.0 Executive Summary ............................................................................................................................... 1

1.1 Mission ...............................................................................................................................................2

1.2 Keys to Success ..................................................................................................................................21.3 Objectives .......................................................................................................................................... 3

Chart: Highlights ..................................................................................................................................4

2.0 Company Summary ............................................................................................................................... 42.1 Company Ownership ......................................................................................................................... 4

2.2 Start-up Summary .............................................................................................................................. 5

Chart: Start-up ......................................................................................................................................5Table: Start-up ..................................................................................................................................... 6

3.0 Services .................................................................................................................................................. 6

4.0 Market Analysis Summary .................................................................................................................... 64.1 Market Segmentation ......................................................................................................................... 8

Table: Market Analysis ........................................................................................................................8

Chart: Market Analysis (Pie) ............................................................................................................... 94.2 Target Market Segment Strategy ....................................................................................................... 9

4.3 Service Business Analysis ................................................................................................................. 9

4.3.1 Competition and Buying Patterns ............................................................................................. 105.0 Strategy and Implementation Summary ...............................................................................................10

5.1 Competitive Edge .............................................................................................................................10

5.2 Marketing Strategy ...........................................................................................................................115.3 Sales Strategy ................................................................................................................................... 12

5.3.1 Sales Forecast ............................................................................................................................12

Table: Sales Forecast ..................................................................................................................... 13

Chart: Sales Monthly .....................................................................................................................14Chart: Sales by Year ......................................................................................................................14

5.4 Milestones ........................................................................................................................................15

Table: Milestones ............................................................................................................................... 15


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Table of Contents

................................................................................................................................................................ 22

8.4 Break-even Analysis ........................................................................................................................ 23Table: Break-even Analysis ...............................................................................................................23

Chart: Break-even Analysis ............................................................................................................... 23

8.5 Projected Profit and Loss .................................................................................................................24Chart: Profit Monthly .........................................................................................................................25

Chart: Profit Yearly ............................................................................................................................25

Chart: Gross Margin Monthly ............................................................................................................26Chart: Gross Margin Yearly ...............................................................................................................26

Table: Profit and Loss ........................................................................................................................ 27

................................................................................................................................................................ 278.6 Projected Cash Flow ........................................................................................................................ 28

Table: Cash Flow ............................................................................................................................... 29

Chart: Cash .........................................................................................................................................308.7 Projected Balance Sheet ...................................................................................................................31

Table: Balance Sheet ..........................................................................................................................31

Table: Sales Forecast ................................................................................................................................... 1

...................................................................................................................................................................... 2

Table: Personnel ...........................................................................................................................................3

...................................................................................................................................................................... 3

Table: General Assumptions ........................................................................................................................4

...................................................................................................................................................................... 4

Table: Profit and Loss ..................................................................................................................................5


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Belle Epoque Dinner Theatre

1.0 Executive Summary

Belle Epoque will be a restaurant and exciting Dinner Show located in Bigsmalltown,Upstate, that celebrates the era of cultural refinement, social elegance, and general prosperity

in the last decades of the 19th and first decade of the 20th centuries. The exuberance of the

"Gay 90s" era will be rekindled as we model our restaurant on the establishments of theMontmartre district of Paris such as the famous Moulin de la Galette.

The decor will be similar to that of the restaurant/dance hall/theatres of 1890s, and featureartwork of the Impressionists such as Pierre-Auguste Renoir, Henri de Toulouse-Lautrec, Mary

Cassat, and Berthe Morisot. Hosting and serving staff will dress in period costume.

The combination of a Montmartre dance hall, bon vivants, famous artist and lively music is why

our restaurant is so dynamic. The exciting and exhilarating aspect of this restaurant is that ittranscends beyond decorations and moves into a real life, first person experience - face to

face. From the singing aloud of ditty's, to the hearty, back-slapping laughteror breathtaking can-can dancing - every second is a treasured, emotional meeting with Alfred

Dreyfus or Madam La Goulue, "look-alikes."

Our menu is a varied, international, tasteful extravaganza. Each page is highly illustrated with

artists' drawings of the regional cuisine, a tiny map of the world showing the region andindigenous ingredients. The majority of the menu is the cuisine of France, and America, though

we will offer specialties from Japan, Korea, Phillipines, Italy, Germany, France, Mexico, Spain,Belgium and Middle East. A few pages are devoted to White House and Camp David stylings

where Chef Joachim served the First Family. We will offer a 10 item wine card "By the GlassDaily Selection", wines by the bottle, and a special cellar collection.

Belle Epoque is the first in what hopefully will become a chain of similarly themed restaurants.It offers a new and exciting concept that is already being done in other successful era's such as,

"Capitan Hook" www.capitanhook.com and "Medieval Times" www.medievaltimes.com. Theseconcepts are expanding with cash driven proofs of winning financial operation. Originally

l h d t d t t d idi l f di i t th tl t hi
http://www.capitanhook.com/http://www.medievaltimes.com/http://www.capitanhook.com/http://www.medievaltimes.com/


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1.1 Mission

Belle Epoque offers an impressive, blockbuster revue of international food, fare and drinkcentered around the high culture and exuberant night life of the Montmartre district of 19th

century Paris. Our combination is wonderful food and Impressionist history. This revue also

includes our shows, acts, skits, original music and entertainment for the customer - whom welive to impress and make happy.

In each and every facet of all that we do - the focus remains on the customer. Likewise, ouremployees never work "for us" - rather they work "with us" - and as such - they are our

customers also. We are all serving each other in some capacity.

Our focus includes community service, involvement and family. We will always be deeply

involved with the community and people of Bigsmalltown. Belle Epoque is also an excellentplace to work, a professional environment that is challenging, rewarding, creative, and

respectful of ideas and individuals. Belle Epoque ultimately provides excellent value to itscustomers and fair reward to its owners and employees.

1.2 Keys to Success

1. Production of a high quality menu and superior ingredient sourcing.

2. Training of a crack workforce, with paper lists that detail daily actions, and managerialfollow-up that ensures winning goals are completed. Food production books, recipes,

management routine, records and returns will be detailed.3. Practice by dinner show participants and actors will produce a fantastic show. Continued

excellence in performance will come in diversity of workforce training and a, "QualificationCard," system - similar to the system successfully used by the U.S. Navy.

4. Distribution of some profits to the workforce will breed cyclical results that exceed first fiveyear goals.

5. Unusual interior design and outdoor landscaping.6. The actors and staff learn habits, quips, funny answers and anecdotal comments for

t j t Si il i t t th hi hl fit bl d ld k "Ed


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New menu items in response to diners' increasingly sophisticated tastes, and heightened

interest in health and nutrition.

Greater efforts by lawmakers to regulate restaurants.

According to Norwalk, CT basedAdams Beverage Group and Restaurants and Institutions

magazine (June 1)

Wine sales in restaurants rose 8.1% lat year

1.3 Objectives

1. Build and create a restaurant that celebrates the belle epoque/gay 90s era inEuropean/American history. Celebrating the high society of that era will be done via skits,

acts, drinks, music, demonstrations, food, a small museum, fantastic show and dance. Themeasurable objectives will be:

o Opening night in full regalia and profitability within two months

o Gross sales receipts of $1,000,000 by third month

o Food costs not to exceed 35% total operation

2. Deliver a stunning, unbelievable, international menu to the local and summer "swell"community that produces 96% satisfaction surveys or higher and profits in excess of 200%

Return on Investment (ROI). Surveys to be done for sixteen weeks by an independentthird-party review agency.

3. The international menu will reflect the Belle Epoque era of the late 19th and early 20thcenturies. This objective will be reviewed by a number of friends who are Presidents and

Continental Directors of their respective countries in the World Association of Cooks

Societies (WACS)(www.wacs2000.org).

4. Continuous analysis and outsider inspections will be held to fine-tune objectives via goalplanning, Directives, Operations, Objectives ands Milestones (DOOM) and weekly Best
http://www.wacs2000.org/http://www.wacs2000.org/


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Chart: Highlights

Sales

Gross Margin

Net Profit

$0

$1,000,000

$2,000,000

$3,000,000

$4,000,000

$5,000,000$6,000,000

$7,000,000

$8,000,000

$9,000,000

$10,000,000

$11,000,000

Year 1 Year 2 Year 3

Highlights

2.0 Company Summary

Belle Epoque is a restaurant with lunch and dinner menus and a theme show for dinner only. Itwelcomes artists, historians, living history interpreters, and re-enactors to its grounds for, plein

aire painting sessions, historical shows and events. It features the culinary adventuresand exquisite tastes of late 19th century Paris as prepared under the exacting standards

of Executive Chef Joachim Oignons.

Chef Joachim retired as a Senior Chief Petty Officer and was the first ever American Culinary

Federation Executive Chef in Camp David's history. As a Navy Executive Chef to the President


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2.2 Start-up Summary

Start-up expenses include legal costs, artwork, property lease or purchase, remodeling, logodesign, computer software, stationery, liquor license, and related expenses.

Start-up assets required include short-term assets (office furniture, tablewear and glasswear,

signage, and small kitchen equipment and utensils, kitchen and server uniforms and costumesetc.) and initial cash to handle the first few months of operations - as sales and accounts

receivable play through the cash flow. Inventory for the first two weeks of operations will needto be ordered and delivered in the week prior to opening.

Long-term assets include office computers, serving staff workstations, kitchen terminals, POSterminals, security and fire alarm systems, shelving, food storage.

This plan assumes moving into a retrofit of a former restaurant where tables, chairs and kitchenstoves and equipment are in place. If that is not available an additional $500,000 to $600,000

will be needed for a scratch start.

Chart: Start-up

$300,000

$350,000

$400,000

$450,000

Start-up


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Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal and Attorney's Fees $12,288Stationery and Office Supplies $12,341Brochures $3,382

Consultants $3,900Insurance $9,809Remodeling Expenses $19,400Utilities $2,000Liquor License $100,000Rent or Mortgage 1st month/startup $14,000Research and Development $1,300Total Start-up Expenses $178,420

Start-up Assets

Cash Required $50,000Start-up Inventory $75,000

Other Current Assets $17,000Long-term Assets $175,000Total Assets $317,000

Total Requirements $495,420

3.0 Services

Belle Epoque offers a first-of-its-kind in the area entertainment and dining concept withexcellent, tasty food. The interaction with live human actors from 1890s Paris is fascinating.The concept is not content to just deliver the service of good food and friendliness though. It

offers colorful, haute culture actors by day, and an entertaining, optional Moulin de la Galetteevening dinner show that will amaze and delight Our table side service is extremely fun and


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Tourism dollars generated in Bigsmalltown are $3.64 billion (Source: Rovelstad & Associates,Longwoods International)

TOURIST SEASON IS BASICALLY FIVE MONTHS LONG - FROM MAY TO SEPTEMBER

Restaurants generate $1.006 billion

Retail generates $675 million

Lodging generates $1.183 billion

Automobile generates $449 million

Recreation generates $303 million

Transportation generates $30 million

Bigsmalltown at a Glance as of 2003 - The Official Border County Government Report

PEOPLE

102,326 year round residents with an estimated summer population of 614,261

5% of the people are under 5 years old

22% percent are under 18 years old

20% are over the age of 65 years old Per capital income is $24,172

Median household income is $41,591 and is increasing

There are 91,000 housing units consisting of 46% year round residents and 54% used for

seasonal and recreational

GEOGRAPHY

Encompassing 256 square miles of land area located at the southern tip of Upstate

Made up of 16 municipalities

30 miles of white sandy beaches and islands with thousands of acres on the mainland

preserved for open space, farmlands and natural conservation

With over 70 square miles Village Township is the largest geographically of all the


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4.1 Market Segmentation

We use this topic to explain the Market Analysis table and chart, below. Our analysis is basedon a list of potential customer groups, each of which is a market segment.

The family segment looking for fun while on their week of vacation.

The local residents included in the summer population looking to see something new or totake guests in town out to a great, proud place. Local residents are increasing with

condominium ownership and increased building.

Long distance drivers coming in especially to experience our dinner show. This lastgeographic segment will normally travel one driving day or up to 300 miles for a short

weekend stay.

There are two specific sub-groups of clientele within each of the listed segments: the lunch

crowd, casual drinking (wine specifically, market encouraged), and our nightly "Admiral's Table"crowd. Both of these segments (especially wine drinkers) are slightly more sophisticated;

average bar drinking age is about 25 to 34-plus years old while the dining room averages 35 to

54-plus. Household income is upper middle, in the $75,000 and up range. We hold thesespecific two groups to be similar to McCormick & Schmick's - a close match to our offerings

(data as reported in Market Watch, October, 2003).

Some of the more recent trends include correlating behavioral patterns and so-calledpsychographics, which produced the famous classification of, "yuppies," as young urban

professionals, and of course the, "baby boomers," with certain buying patterns. We believeboth of these segments will frequent Belle Epoque.

Teenagers sort themselves into marketing groups with names like, "preppies, dudes, gothic,jocks, and skaters." Each of these labels actually stands for certain sets of behavior patterns,

and has some value in segmentation. These segments will attend our offerings in groups forl i d j Th l ill d i h h i f l di i d


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Chart: Market Analysis (Pie)

Weekly summer population

Weekly winter population

Long distance customers

Market Analysis (Pie)

4.2 Target Market Segment Strategy

We cannot survive just waiting for customers to come to us. Instead, we must focus on the

specific market segments whose needs match our offerings. Focusing on targeted segments isthe key to our future. We will attract customers with live performances and distribution ofbrochures.


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4.3.1 Competition and Buying Patterns

In one part of the restaurant market competition depends on reputation, advertising, andthe dining experience of the customer. In another, competition centers around location and

parking. In most cases the restaurant industry strongly relies on word-of-mouth

recommendations over advertising. Word of mouth is the secret in retaining long-term satisfiedcustomers. This, combined with changing drama shows each year, and other side acts, will

ensure that diners return.

Customers will choose our business over others from the first time they see our actors dressed

up in the mall handing out brochures or in parking lots staging mini-shows. We have extensiveexperience with free publicity. For instance, Chef Joachim recently appeared on the Today

show. He has also filmed many other shows all over the world and in a number of differentlanguages.

Appearances on the public boardwalks, streets and anywhere that is free - such as at hugeevents, competitions, conventions and more, will attract the public. Customers will definitely

choose us due to our personal and face-to-face interaction in a dining experience. Host andserving staff will dress in period costumes, and those with a yen toward acting and performance

will be encouraged to play the parts of denizens of Montmartre, during the Paris' culturalheyday. Staff will regularly portray famous members of Parisian high society includingImpressionist painters, theatre doyens, writers, philosophers, etc.

All too often the problem with today's restaurants is that they look great, have waterfalls or

beautiful physical decoration, or great motifs and themes, but are missing thehuman element...the host or server who is unpredictable and physically shakes your hand. The

dining experience should not be another video simulator or Nintendo game. Even seriousbusinessmen and businesswomen can get excited over a corporate event held in our Belle

Epoque restaurant where they can talk with actors who believe that they are back in that era(called first person acting). What might someone say and what answer might come back?

Something snappy or robust?


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The ultimate edge is that we allow people to be in our show and to walk a few hours or days inhistory's shoes. This is the opportunity for customers to gain instant fame on stage with the

crowds cheering and clapping. That is a competitive edge, with benefit, that all humans dreamof. But, beyond that, we also will offer the opportunity to live and work in our historic world for

a reasonable price.

Patrons are not forced to attend the dinner show. They can still have dinner in our separate

dining room.

Chef Joachim Oignons' experience at the White House and at Camp David provide acclaim,reputation, and credibility when combined with his 30 years of naval service.

We start with a critical competitive edge: there are few competitors we know of that can claim

anywhere near as much hype, attention to detail and people, excitement, dancing, singing orshowmanship with historic proportions. The closest thing to our platform in this geographic

area is The Capsized SailorSeafood on the Pier. Our positioning on this point is very hard tomatch, as long as we maintain this focus in our strategy, marketing, business development,

and fulfillment. We are aware that the tendency to dilute this expertise with prematureexpansion will dull the importance of our competitive edge. Also, excessive changing of our

plan and rollout could break the creative side of the operation.

5.2 Marketing Strategy

Marketing will be our life blood of crowd draws and excitement. Our Marketing Strategy hasbeen explained a bit already. Our Sales Strategy is the easiest of our plans.

Our Marketing Strategy first and foremost is born out of three governing functions:

1. An indignant refusal to adopt typical high cost advertising schemes in print, television orinternet campaigns. Throwing tens of thousands of dollars at billboards or magazines is a

crutch for those less creative. The impact we can have with other creative means will beimpressive.


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5.3 Sales Strategy

Sales in our business is customer service. It is repeat business. One doesn't just sell a glass orbottle of wine and boost the check price, one develops a proposal that works for the client, that

convinces him or her to crave the wine. Direct-in house sales classes will be held to teach staff

how to "get in with the smile," "enjoy laughter with customers" and then go for the boost in thecheck price by selling that dessert, beer or wine. We can also make money with our extensive

selections of tea, coffee, cheese and cigars.

With our innovative, drama sales platforms wallets will fly out of pants pockets and purses. Our

independent tests and studies show that what sells most is human interaction and excitement.Paying attention to people, listening and talking with them, admiring their face and clothes -

this adoration - this sales truth of genuine, heartfelt, over-the-top achievement - this iswhat makes dynamic drama sales happen. Our goal is extraordinary attention to reveal

extraordinary sales.

We must always be aware of the big-company feeder phenomenon of the split between selling

the restaurant and failure to fulfill the sale with entertainment and luscious food, which leads toclient dissatisfaction. The human sale should be developed and scoped, sold, and fulfilled by the

same people. If you see, run over to meet and greet Impressionist painter Edgar Degas andhis retinue of Paris Ballet dancers on the mall as you are shopping, then you expect to see himthat night at the restaurant. Our customers should never buy into a sale from one partner and

have it delivered by anybody other than that same partner. The promise shall be fulfilled.

5.3.1 Sales Forecast

Lunch Hour Sales are figured on starting in April of 2005 with 27 available days of weather

x 190 seatings (based @ 200 seats avail total over a three hour period with 1.0 turnovers -10:30 AM to 1:30 PM) at $14.00 average check take. In May this rises to 220 covers or a 1.1

ratio. For the months of June, July and August this escalates to full capacity of the 200 seatsand two turnovers, with a cap of 385 out of 400 in four hours and 27 days of good weather.

Th Di t C t f S l i thi t i 38% f S l F t


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Be in the Show Sales are figured on 10 participants per night at $65.00 with 27 days of goodweather. The Direct Cost of Sales in this category is 25% of Sales Forecast.

Catering Sales are not desired to be our strong suit or a strong sales platform. But, we doexpect to do at least two events in the summer including the Boulevarier Festival. The Direct

Cost of Sales in this category is 55% of Sales Forecast.

High Tea with a Lady, Wives of the Impressionist PaintersSales will be brisk at 30

people per afternoon for 27 days of good weather each month. Prix Fixe will be $18.00 per

person from 2:00 PM to 4:00 PM each day. The Direct Cost of Sales in this category is 38% ofSales Forecast.

Table: Sales Forecast

Sales Forecast


Unit Sales

Lunch Sales 78,975 86,873 95,560High Tea Sales 9,720 10,692 11,761

Dinner Sales 66,335 72,969 80,265Dinner Show Sales 68,074 74,881 82,370Bar Sales 28,350 31,185 34,304Be In the Show Sales 3,240 3,564 3,920Catering Sales 4 4 5Total Unit Sales 254,698 280,168 308,185

Unit Prices Year 1 Year 2 Year 3Lunch Sales $14.00 $14.98 $16.03High Tea Sales $18.00 $19.26 $20.61Dinner Sales $24.00 $25.68 $27.48Dinner Show Sales $55.00 $58.85 $62.97

Bar Sales $28.57 $30.57 $32.71Be In the Show Sales $65.00 $69.55 $74.42Catering Sales $7,250.00 $7,757.50 $8,300.53

Sales


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Chart: Sales Monthly

Lunch Sales

High Tea Sales

Dinner Sales

Dinner Show Sales

Bar Sales

Be In the Show Sales

Catering Sales

$0

$200,000

$400,000

$600,000

$800,000

$1,000,000

$1,200,000

Month1

Month2

Month3

Month4

Month5

Month6

Month7

Month8

Month9

Month10

Month11

Month12

Sales Monthly

Chart: Sales by Year

Sales by Year


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5.4 Milestones

The accompanying table lists important program milestones, with dates and managers incharge, and budgets for each. The milestone schedule indicates our emphasis on planning forimplementation.

What the table doesn't show is the commitment behind it. Our business plan includes completeprovisions for plan-vs.-actual analysis, and we will hold monthly follow-up meetings to discuss

the variance and course corrections.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager DepartmentBusiness Plan 10/18/2004 1/23/2005 $709 J. Oignons BODProperty scouting 12/18/2003 6/1/2004 $580 A. Spergras PropertyInterior Design 8/30/2004 10/30/2004 $11,548 T. Matto GourmetPrint Design & Production 9/22/2004 11/12/2004 $45,723 O. Bergene Media & PRScript writing 9/22/2004 9/22/2004 $4,000 C. Wensleydale TheatricalMenu rollout 2/4/2005 4/12/2005 $430 J. Oignons F & BStage design and build 2/2/2005 3/28/2005 $19,050 C. Wensleydale TheatricalLegal rollout 1/1/2004 6/1/2004 $22,288 S. Prouts LegalDesign sketches 12/22/2004 1/22/2005 $300 O. Bergene Media & PRLogo design 1/22/2005 2/12/2005 $100 J.Oignons Media & PRTotals $104,728

Chart: Milestones

Business Plan

Milestones


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6.0 Web Plan Summary

The "Belle Epoque" website will be the virtual business card and portfolio for the company, aswell as its online "home."

It will showcase the 1890s Paris high-society decor of the restaurant, and the exuberant, social

elegance of the Moulin de la Galette show and costumes of our staff.

The website needs to be a simple yet classy and well designed website that, at the same time,

is in keeping with the latest trends in user interface design. A site that is too flashy, or tries touse too much of the latest Shockwave or Flash technology can be over done, and cause

potential customers to look elsewhere for online excitement as well as a meal or show. Aparticular, small section will offer a stunning and robust Flash MX presentation of

the gay 90s Paris Impressionist arts scene.

To further show off its expertise the website may create a resources area, offering articles,

research, re-enacting tips and sales to interested parties. We will accept reservations online aswell as partner with Amazon, PayPal and book sellers to sell products while holding no

inventory. Of course, all of the items will be totally Impressionist/Moulin Rouge/Age ofElegance in nature. We will accept all credit cards via our merchant accounts.

The key to the website strategy will be combining a very well designed front end, with a backend capable of recording leads and proposal requests, as well as running our own online

marketing program.

We will sell targeted advertising to specific market groups, as well as partnering with online

retailers to sell relevant products to the users.

6.1 Website Marketing Strategy

Marketing for us will center primarily around distribution of our URL, initially via paper means.That will plug and pull unique hits on our real time database reporting and stats. Our


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6.2 Development Requirements

The website will be initially developed with few technical resources. A simple hostingprovider, Ludditeorgweb.com services, will host the site and provide the technical back end outof Sunscorch City, USA.

We will work with a contracted user interface designer to develop the simple, classy, yetInternet focused site. The user interface designer will work with a graphic artist to come up

with the website logo, and the website graphics. A number of articles, photos and features will

be provided based on our recreation of the 1890s Paris Boulevardier lifestyle.

The maintenance of the site will be done by the owner. As the website rolls out futuredevelopment such as newsletters and downloadable games, a technical resource may need to

be contracted to build the high-end items.

7.0 Management Summary

The initial management team depends on the founder, Joachim Oignons and his recruitment ofmanagers. As we grow, we may take on additional consulting help, plus graphic/editorial,

sales, and marketing. By opening, Belle Epoque's management team will be composed of:

Executive Chef Joachim will manage the kitchen staff and oversee the financials

Serving Staff manager - T.O. Matto

Sommelier/Bar manager - A. Bisynthe

Performance manager - C. Wensleydale

* Management team resumes, confidential and proprietary information have been removed

from this sample plan.


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Table: Personnel

Personnel Plan


Executive Chef Joachim Oignons-owner $59,000 $61,950 $65,048Serving Staff Manager $36,000 $37,800 $39,690Sommelier/Bar Manager $36,000 $37,800 $39,690Performance Manager $36,000 $37,800 $39,690Host/Serving Staff $129,024 $135,475 $142,249Kitchen Staff $169,344 $177,811 $186,702Performance Staff $124,416 $130,637 $137,169Bar Staff $32,256 $33,869 $35,562Bookkeeper/Office Assistant $12,000 $12,600 $13,230Total People 0 0 0

Total Payroll $634,040 $665,742 $699,029

8.0 Financial Plan

We are assuming a low start-up funding figure of approximated $500,000. The business will

grow exponentially by a net worth of about two million dollars per year and this growth is basedoff of sheer cash profits and managerial excellence. Growth will be self financed. No additionalfunding will be needed.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following

table as annual assumptions. The monthly assumptions are included in the appendices. Fromthe beginning, we recognize that our direct marketing will be critical to advertising, a factor we

can influence easily. Weather and catastrophe cannot be so easily planned on and would delayproject by a year (hurricane, tornado, etc...) At least we are planning on the potential problem,

and dealing with it.


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Table: General Assumptions

General Assumptions


Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00%Long-term Interest Rate 8.20% 8.20% 8.20%Tax Rate 25.00% 25.00% 25.00%Other 0 0 0

8.2 Start-up Funding

Start-up funding requirements come to just shy of $500,000. This presumes we can move into

an established, equiped restaurant space. Expenses and asset purchases will increasedramatically if we must fully outfit and equip a space for its first use as a restaurant.

Funding will be through a combination of owner investment, outside investment, and long-termloans. A small amount of current borrowing (credit card purchases) complete the start-up

funding.


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Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $178,420Start-up Assets to Fund $317,000Total Funding Required $495,420

Assets

Non-cash Assets from Start-up $267,000Cash Requirements from Start-up $50,000Additional Cash Raised $420

Cash Balance on Starting Date $50,420Total Assets $317,420

Liabilities and Capital

Liabilities

Current Borrowing $5,420Long-term Liabilities $40,000Accounts Payable (Outstanding Bills) $0Other Current Liabilities (interest-free) $0Total Liabilities $45,420

Capital

Planned Investment

Owner $50,420Investor $400,000Additional Investment Requirement $0Total Planned Investment $450,420

Loss at Start-up (Start-up Expenses) ($178,420)Total Capital $272,000

Total Capital and Liabilities $317 420


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8.3 Business Ratios

The following table shows the projected businesses ratios. We expect to maintain healthyratios for profitability, risk, and return. The Standard Industrial Classification (SIC) Code for

the industry we chose is French Restaurant (5812.0104), though there is no SIC that accurately

describes our offering platform of dinner theatre. We used the Industry Ratios report for EatingPlaces (5812) to generate the industry profile shown in the following table.


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Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 17.70% 17.70% 7.60%

Percent of Total Assets

Inventory 1.79% 1.69% 1.25% 3.60%Other Current Assets 0.46% 0.22% 0.14% 35.60%Total Current Assets 95.58% 98.01% 98.84% 43.70%Long-term Assets 4.42% 1.99% 1.16% 56.30%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 5.68% 4.76% 3.47% 32.70%Long-term Liabilities 0.90% 0.33% 0.13% 28.50%Total Liabilities 6.58% 5.09% 3.60% 61.20%Net Worth 93.42% 94.91% 96.40% 38.80%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%Gross Margin 69.27% 70.13% 70.69% 60.50%Selling, General & Administrative Expenses 32.12% 34.20% 34.10% 39.80%

Advertising Expenses 1.12% 1.10% 1.08% 3.20%Profit Before Interest and Taxes 56.94% 59.34% 61.10% 0.70%

Main Ratios

Current 16.82 20.61 28.50 0.98Quick 16.50 20.25 28.14 0.65Total Debt to Total Assets 6.58% 5.09% 3.60% 61.20%Pre-tax Return on Net Worth 126.67% 74.25% 56.06% 1.70%Pre-tax Return on Assets 118.34% 70.48% 54.04% 4.30%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 42.67% 44.48% 45.81% n.aReturn on Equity 95.01% 55.69% 42.04% n.a

Activity Ratios


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8.4 Break-even Analysis

The following chart and table summarize our break-even analysis. We expect to reach break-even a few months into the business operation. With favorable response from PR exposure and

teaser advertising, in the first month we open, April of 2005, we may achieve goal and break

even.

The break-even assumes variable costs of 38% percent of revenue. This assumption is

probably too high, and therefore conservative. With initial monthly expenses of over$86,600 we will need averaged monthly revenues of about $140,000 to break-even.

Table: Break-even Analysis

Break-even Analysis

Monthly Units Break-even 127,018Monthly Revenue Break-even $127,018

Assumptions:

Average Per-Unit Revenue $1.00Average Per-Unit Variable Cost $0.38Estimated Monthly Fixed Cost $78,751

Chart: Break-even Analysis

$40,000

$60,000Break-even Analysis


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8.5 Projected Profit and Loss

Our advertising budget pulls data from several tables; the fact that we are spending less thanthe industry average will be due to getting such great reviews in the consumer and press

related magazines and newspapers. Also, of specific note is our unique marketing stunts and

plan that does not rely on traditional advertising schemes.

We are profitable in the first year at just over $3 million. As with the break-even, we are

projecting very conservatively regarding cost of sales and gross margin. Our cost of goodsshould be much lower, and gross margin higher, than in this projection. We prefer to project

conservatively so that we make sure we have enough cash.

Based on 30+ years of restaurant experience we have budgeted for continued computer and

equipage purchases. If we do open in a previously equipped restaurant space we know we willneed replacements. If we must open with brand new, guaranteed equipment, we will not have

replacement expenses as soon. Normal wear and tear and breakage of plates, glasses,tableware, etc. are budgeted monthly.

Labor costs may be lower than the pro forma projects - but we are planning on worst-case

scenario of our attention being diverted as we grow into exactly what we need andwhen. Later years may be lower as we learn more about how much labor is truly critical.Conversely, if our dinner and show concept is well received, we may have to increase staff (and

therefore labor costs) to serve the customer demand.

The Gross Margin Percentage holds steady from year to year due to holding menu and show

prices with minimal increases to cover increased food costs and operating expenses. This maybe unrealistic - the quandary is - do we want to raise our prices each year or hold them fast.

Customer response surveys combined with economic condition analysis will yield the answer tothis after the first twelve months. Either way, at worst, we forecast profits between $3-$4

million per annum.


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Chart: Profit Monthly

$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Profit Monthly

Chart: Profit Yearly

$4,500,000

$5,000,000

Profit Yearly


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Chart: Gross Margin Monthly

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Gross Margin Monthly

Chart: Gross Margin Yearly

$7 000 000

$8,000,000

Gross Margin Yearly


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Table: Profit and Loss

Pro Forma Profit and Loss


Sales $7,666,320 $9,023,259 $10,620,375Direct Cost of Sales $2,355,984 $2,695,245 $3,113,008Other Production Expenses $0 $0 $0Total Cost of Sales $2,355,984 $2,695,245 $3,113,008

Gross Margin $5,310,336 $6,328,013 $7,507,367Gross Margin % 69.27% 70.13% 70.69%

Expenses

Payroll $634,040 $665,742 $699,029Sales and Marketing and Other Expenses $92,807 $81,632 $81,632Depreciation $12,000 $12,000 $12,000MICROS syterm, phones, security, fire, computerupgrades

$10,000 $10,000 $10,000

Exterminating $300 $300 $300Ceramic/Glass/Silver Upkeep $2,400 $2,400 $3,000Maintenance/Repairs $22,000 $20,000 $22,000

Linen and Dry Cleaning $2,100 $2,400 $2,700Dish and Cleaning Supplies $4,800 $5,000 $5,250Office Products Upkeep $2,400 $2,500 $2,600Paper Products Upkeep $9,600 $10,000 $11,000Utilities $28,160 $30,160 $32,160Insurance $8,604 $9,104 $9,604Rent $49,800 $54,800 $56,800Employee Healthcare $36,000 $38,000 $40,000Comps/Donations/Handouts $30,000 $30,000 $30,000Payroll Taxes $0 $0 $0

Total Operating Expenses $945,011 $974,038 $1,018,075

Profit Before Interest and Taxes $4,365,325 $5,353,975 $6,489,292EBITDA $4,377,325 $5,365,975 $6,501,292

Interest Expense $3,223 $2,388 $1,691Taxes Incurred $1,090,525 $1,337,897 $1,621,900


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8.6 Projected Cash Flow

The plan projects a $11,340,000 net worth by 2007 (three years of operation in a high activityvacation environment). The plan anticipates full staffing, a small management team, and

maximum acceptance by the dining public. The highest sales will be in the prime summer

vacation months, but we believe our unique offering will draw customers to Belle Epoque allyear long.

If our sales and profits forecasts prove accurate Chef Joachim will expand his managementteam and accelerate the long-term plan of opening a second and third Belle Epoque restaurants

in other demographic markets. The opening of the second venue will be financed by the profitsfrom this restaurant, and the third site will be financed by the profits from the first two

ventures. Obviously this will result in substantial changes in the cash flow and profit figures inyear two and year three of this plan.

Cash flow projections are critical to our success. The monthly cash flow is shown in theillustration, with one bar representing the cash flow per month, and the other the monthly cash

balance. The annual cash flow figures are included here and the more important detailedmonthly numbers are included in the appendices.


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Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $7,666,320 $9,023,259 $10,620,375Subtotal Cash from Operations $7,666,320 $9,023,259 $10,620,375

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $536,642 $631,628 $743,426New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0Subtotal Cash Received $8,202,962 $9,654,887 $11,363,802

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $634,040 $665,742 $699,029Bill Payments $3,530,306 $4,242,530 $5,009,854Subtotal Spent on Operations $4,164,346 $4,908,272 $5,708,883

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $536,642 $631,628 $743,426Principal Repayment of Current Borrowing $5,400 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $6,900 $8,000 $9,000Purchase Other Current Assets $0 $0 $0Purchase Long-term Assets $0 $0 $0Dividends $100,000 $250,000 $500,000Subtotal Cash Spent $4,813,288 $5,797,900 $6,961,309

$ $ $


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Chart: Cash

Net Cash Flow

Cash Balance

$0

$400,000

$800,000

$1,200,000

$1,600,000

$2,000,000

$2,400,000

$2,800,000

$3,200,000

Month1

Month2

Month3

Month4

Month5

Month6

Month7

Month8

Month9

M

onth10

M

onth11

M

onth12

Cash


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8.7 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, anda sufficiently healthy financial position. The monthly estimates are included in the appendices.

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $3,440,094 $7,297,081 $11,699,574Inventory $66,090 $128,473 $149,814Other Current Assets $17,000 $17,000 $17,000Total Current Assets $3,523,184 $7,442,555 $11,866,387

Long-term Assets

Long-term Assets $175,000 $175,000 $175,000Accumulated Depreciation $12,000 $24,000 $36,000Total Long-term Assets $163,000 $151,000 $139,000Total Assets $3,686,184 $7,593,555 $12,005,387

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $209,488 $361,168 $416,300Current Borrowing $20 $20 $20Other Current Liabilities $0 $0 $0Subtotal Current Liabilities $209,508 $361,188 $416,320

Long-term Liabilities $33,100 $25,100 $16,100Total Liabilities $242,608 $386,288 $432,420

Paid-in Capital $450,420 $450,420 $450,420

Appendix


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Appendix

Table: Sales Forecast

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

Lunch Sales 0% 5,130 5,940 10,395 10,395 10,395 5,940 5,130 5,130 5,130 5,130 5,130 5,130High Tea Sales 0% 810 810 810 810 810 810 810 810 810 810 810 810Dinner Sales 0% 2,970 3,780 10,395 10,395 10,395 5,000 5,000 4,000 3,700 3,500 3,700 3,500Dinner Show Sales 0% 2,727 5,427 8,640 8,640 8,640 7,000 6,000 5,000 5,000 4,000 3,000 4,000Bar Sales 0% 1,350 1,350 5,400 5,400 5,400 1,350 1,350 1,350 1,350 1,350 1,350 1,350Be In the Show Sales 0% 270 270 270 270 270 270 270 270 270 270 270 270Catering Sales 0% 0 0 0 1 1 0 0 0 2 0 0 0

Total Unit Sales 13,257 17,577 35,910 35,911 35,911 20,370 18,560 16,560 16,262 15,060 14,260 15,060

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

Lunch Sales $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00

High Tea Sales $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00 $18.00

Dinner Sales $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00 $24.00

Dinner Show Sales $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00 $55.00

Bar Sales $20.00 $20.00 $35.00 $35.00 $35.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00Be In the Show Sales $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00 $65.00

Catering Sales $0.00 $0.00 $0.00 $9,000.00 $10,000.00

$0.00 $0.00 $0.00 $5,000.00 $0.00 $0.00 $0.00

Sales

Lunch Sales $71,820 $ 83,160 $145,530 $145,530 $145,530 $ 83,160 $71,820 $ 71,820 $ 71,820 $ 71,820 $71,820 $ 71,820

High Tea Sales $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580 $14,580

Dinner Sales $71,280 $90,720 $249,480 $249,480 $249,480 $120,000 $120,000 $96,000 $88,800 $84,000 $88,800 $84,000

Dinner Show Sa les $149,985 $298,485 $475,200 $475,200 $475,200 $385,000 $330,000 $275,000 $275,000 $220,000 $165,000 $220,000

Bar Sales $27,000 $ 27,000 $189,000 $189,000 $189,000 $ 27,000 $ 27,000 $ 27,000 $ 27,000 $ 27,000 $ 27,000 $ 27,000

Be In the Show Sales $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550 $17,550

Catering Sales $0 $0 $0 $9,000 $10,000 $0 $0 $0 $10,000 $0 $0 $0Total Sales $352,215 $531,495 $1,091,34

0$1,100,34

0$1,101,34

0$647,290 $580,950 $501,950 $504,750 $434,950 $384,750 $434,950

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

Lunch Sales 38.00% $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32 $5.32High Tea Sa les 38.00% $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84 $6.84Dinner Sales 36.00% $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64 $8.64Dinner Show Sales 25.00% $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75 $13.75Bar Sales 36.00% $7.20 $7.20 $12.60 $12.60 $12.60 $7.20 $7.20 $7.20 $7.20 $7.20 $7.20 $7.20Be In the Show Sales 25.00% $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25 $16.25Cater ing Sa les 55.00% $0.00 $0.00 $0.00 $4,950.00 $5,500.00 $0.00 $0.00 $0.00 $2,750.00 $0.00 $0.00 $0.00

Page 1

Appendix


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Appendix

Direct Cost of Sales

Lunch Sales $27,292 $31,601 $ 55,301 $ 55,301 $55,301 $31,601 $27,292 $27,292 $27,292 $27,292 $27,292 $27,292

High Tea Sales $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540 $5,540

Dinner Sales $25,661 $32,659 $89,813 $89,813 $89,813 $43,200 $43,200 $34,560 $31,968 $30,240 $31,968 $30,240

Dinner Show Sales $37,496 $74,621 $118,800 $118,800 $118,800 $96,250 $82,500 $68,750 $68,750 $55,000 $41,250 $55,000

Bar Sales $9,720 $9,720 $68,040 $68,040 $68,040 $9,720 $9,720 $9,720 $9,720 $9,720 $9,720 $9,720

Be In the Show Sales $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388 $4,388

Catering Sales $0 $0 $0 $4,950 $5,500 $0 $0 $0 $5,500 $0 $0 $0

Subtotal Direct Cost of Sales $110,097 $158,529 $341,882 $346,832 $347,382 $190,699 $172,640 $150,250 $153,158 $132,180 $120,158 $132,180

Page 2

Appendix


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Appendix

Table: Personnel

Personnel Plan

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month10

Month11

Month12

Executive Chef Joachim Oignons-owner

0% $4,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Serving Staff Manager 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Sommelier/Bar Manager 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Performance Manager 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Host/Serving Staff 0% $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752 $10,752Kitchen Staff 0% $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112 $14,112Performance Staff 0% $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368 $10,368Bar Staff 0% $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688 $2,688Bookkeeper/Office Assistant 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 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $51,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920

Page 3

Appendix


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Appendix

Table: General Assumptions

General Assumptions


Plan Month 1 2 3 4 5 6 7 8 9 10 11 12

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term InterestRate

8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20% 8.20%

Tax Rate 25.00% 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

Page 4

Appendix


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Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $352,215 $531,495 $1,091,340

$1,100,340

$1,101,340

$647,290 $580,950 $501,950 $504,750 $434,950 $384,750 $434,950

Direct Cost of Sales $110,097 $158,529 $341,882 $346,832 $347,382 $190,699 $172,640 $150,250 $153,158 $132,180 $120,158 $132,180Other ProductionExpenses

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $110,097 $158,529 $341,882 $346,832 $347,382 $190,699 $172,640 $150,250 $153,158 $132,180 $120,158 $132,180

Gross Margin $242,118 $372,966 $749,458 $753,508 $753,958 $456,591 $408,311 $351,701 $351,593 $302,771 $264,593 $302,771

Gross Margin % 68.74% 70.17% 68.67% 68.48% 68.46% 70.54% 70.28% 70.07% 69.66% 69.61% 68.77% 69.61%

Expenses

Payroll $51,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920

Sales and Marketing andOther Expenses

$2,846 $3,671 $3,671 $3,671 $3,671 $3,671 $12,671 $13,671 $13,671 $14,251 $13,671 $3,671

Depreciation $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

MICROS syterm, phones,security, fire, computerupgrades

$0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000 $0 $0

Exterminating $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25

Ceramic/Glass/SilverUpkeep

$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Maintenance/Repairs $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Linen and Dry Cleaning $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175

Dish and CleaningSupplies

$400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400

Office Products Upkeep $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Paper Products Upkeep $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800

Utilities $1,430 $1,430 $1,430 $1,430 $1,430 $1,430 $2,430 $3,430 $3,430 $3,430 $3,430 $3,430

Insurance $717 $717 $717 $717 $717 $717 $717 $717 $717 $717 $717 $717

Rent $1,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400

Employee Healthcare $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Comps/Donations/Handouts

15% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $66,613 $73,438 $73,438 $73,438 $73,438 $73,438 $83,438 $85,438 $85,438 $96,018 $85,438 $75,438

Profit Before Interest andTaxes

$175,505 $299,528 $676,020 $680,070 $680,520 $383,153 $324,872 $266,262 $266,154 $206,752 $179,154 $227,333

Page 5

Appendix


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Appendix

EBITDA $176,505 $300,528 $677,020 $681,070 $681,520 $384,153 $325,872 $267,262 $267,154 $207,752 $180,154 $228,333

Interest Expense $311 $303 $295 $288 $280 $272 $265 $257 $249 $242 $234 $226

Taxes Incurred $43,799 $74,806 $168,931 $169,946 $170,060 $95,720 $81,152 $66,501 $66,476 $51,628 $44,730 $56,777

Net Profit $131,396 $224,419 $506,793 $509,837 $510,180 $287,161 $243,456 $199,504 $199,429 $154,883 $134,190 $170,330

Net Profit/Sales 37.31% 42.22% 46.44% 46.33% 46.32% 44.36% 41.91% 39.75% 39.51% 35.61% 34.88% 39.16%

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Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $352,215 $531,495 $1,091,340

$1,100,340

$1,101,340

$647,290 $580,950 $501,950 $504,750 $434,950 $384,750 $434,950

Subtotal Cash from Operations $352,215 $531,495 $1,091,340

$1,100,340

$1,101,340

$647,290 $580,950 $501,950 $504,750 $434,950 $384,750 $434,950

Additional Cash Received

Sales Tax, VAT, HST/GSTReceived

7.00% $24,655 $37,205 $76,394 $77,024 $77,094 $45,310 $40,667 $35,137 $35,333 $30,447 $26,933 $30,447

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 $376,870 $568,700 $1,167,734

$1,177,364

$1,178,434

$692,600 $621,617 $537,087 $540,083 $465,397 $411,683 $465,397

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 $51,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920 $52,920

Bill Payments $4,932 $152,261 $288,870 $619,528 $539,007 $527,194 $229,424 $273,304 $237,848 $251,615 $214,824 $191,498

Subtotal Spent on Operations $56,852 $205,181 $341,790 $672,448 $591,927 $580,114 $282,344 $326,224 $290,768 $304,535 $267,744 $244,418

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $24,655 $37,205 $76,394 $77,024 $77,094 $45,310 $40,667 $35,137 $35,333 $30,447 $26,933 $30,447

Principal Repayment of CurrentBorrowing

$450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450 $450

Other Liabilities PrincipalRepayment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities PrincipalRepayment

$575 $575 $575 $575 $575 $575 $575 $575 $575 $575 $575 $575

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 $100,000

Subtota l Cash Spent $82,532 $243,411 $419,209 $750,497 $670,046 $626,449 $324,035 $362,386 $327,126 $336,007 $295,701 $375,890

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pp

Net Cash Flow $294,338 $325,289 $748,525 $426,867 $508,388 $66,151 $297,581 $174,701 $212,957 $129,390 $115,981 $89,507

Cash Balance $344,758 $670,047 $1,418,571

$1,845,438

$2,353,826

$2,419,978

$2,717,559

$2,892,260

$3,105,216

$3,234,606

$3,350,587

$3,440,094

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pp

Table: Balance Sheet

Pro Forma Balance Sheet


Assets StartingBalances

Current Assets

Cash $50,420 $344,758 $670,047 $1,418,571

$1,845,438

$2,353,826

$2,419,978

$2,717,559

$2,892,260

$3,105,216

$3,234,606

$3,350,587

$3,440,094

Inventory $75,000 $55,048 $79,265 $170,941 $173,416 $173,691 $95,349 $86,320 $75,125 $76,579 $66,090 $60,079 $66,090Other Current Assets $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000 $17,000

Total Current Assets $142,420 $416,807 $766,312 $1,606,513

$2,035,854

$2,544,517

$2,532,327

$2,820,879

$2,984,385

$3,198,795

$3,317,696

$3,427,666

$3,523,184

Long-term Assets

Long-term Assets $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000 $175,000Accumulated Depreciation $0 $1,000 $2,000 $3,000 $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000

Total Long-term Assets $175,000 $174,000 $173,000 $172,000 $171,000 $170,000 $169,000 $168,000 $167,000 $166,000 $165,000 $164,000 $163,000Total Assets $317,420 $590,807 $939,312 $1,778,5

13$2,206,8

54$2,714,5

17$2,701,3

27$2,988,8

79$3,151,3

85$3,364,7

95$3,482,6

96$3,591,6

66$3,686,1

84

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 $143,016 $268,127 $601,560 $521,090 $519,598 $220,272 $265,393 $229,420 $244,427 $208,469 $184,274 $209,488Current Borrowing $5,420 $4,970 $4,520 $4,070 $3,620 $3,170 $2,720 $2,270 $1,820 $1,370 $920 $470 $20Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $5,420 $147,986 $272,647 $605,630 $524,710 $522,768 $222,992 $267,663 $231,240 $245,797 $209,389 $184,744 $209,508

Long-term Liabilities $40,000 $39,425 $38,850 $38,275 $37,700 $37,125 $36,550 $35,975 $35,400 $34,825 $34,250 $33,675 $33,100Total Liabilities $45,420 $187,411 $311,497 $643,905 $562,410 $559,893 $259,542 $303,638 $266,640 $280,622 $243,639 $218,419 $242,608

Paid-in Capital $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420 $450,420Retained Earnings ($178,420) ($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($178,42

0)($278,42

0)Earnings $0 $131,396 $355,815 $862,608 $1,372,4

44$1,882,6

24$2,169,7

85$2,413,2

41$2,612,7

45$2,812,1

73$2,967,0

57$3,101,2

47$3,271,5

76Total Capital $272,000 $403,396 $627,815 $1,134,6

08$1,644,4

44$2,154,6

24$2,441,7

85$2,685,2

41$2,884,7

45$3,084,1

73$3,239,0

57$3,373,2

47$3,443,5

76Total Liabilities and Capital $317,420 $590,807 $939,312 $1,778,5

13$2,206,8

54$2,714,5

17$2,701,3

27$2,988,8

79$3,151,3

85$3,364,7

95$3,482,6

96$3,591,6

66$3,686,1

84

Net Worth $272,000 $403,396 $627,815 $1,134,608

$1,644,444

$2,154,624

$2,441,785

$2,685,241

$2,884,745

$3,084,173

$3,239,057

$3,373,247

$3,443,576

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