steven reilly - business plan (mba 552) final draft (fun for all)

This business plan has been submitted on a confidential basis solely for the benefit of selected, highly qualified investors in connection with the private placement of the above securities and is not for use by any other persons. Neither may it be reproduced, stored, or copied in any form. By accepting delivery of this plan, the recipient agrees to return this copy to the corporation at the address listed above if the recipient does not undertake to subscribe to the offering. Do not copy, fax, reproduce, or distribute without permission.

Fun for All Steven Reilly

2534 Williams Rd.

Bath, PA 18014

(610) 837-3794

2016 Business Plan

Table of Contents1. Executive Summary (4)

2. Industry Overview (5)

a. The Industryb. Our Organization and the Conceptc. The Service d. Entry and Growth Strategye. Potential Growth Impediments

3. Market Research and Analysis………………………………………………………………………………………………... (7)

a. Customersb. Total Market Size and Trendsc. Competition d. Market Share Estimatese. Competitive Advantagesf. Estimated Market Share and Sales Forecast

4. The Economics and the Business …………………………………………………………………………………………… (13)

a. Gross and Operating Marginsb. Profit Potential and Durabilityc. Fixed, Variable, and Semivariable Costsd. Months to Breakevene. Months to Reach Positive Cash Flow

5. Marketing Plan ………………………………………………………………………………………………………………………..(15)

a. S.W.O.T. Analysis b. Overall Marketing Strategyc. Membership Pricingd. Service Policiese. Advertising/Promotion/Fundraising Activities

6. Design and Development Plans ………………………………………………………………………………………………(23)

a. Development Status and Tasksb. Difficulties and Risksc. Costs

7. Operational Plan …………………………………………………………………………………………………………………….(25)

a. Geographical Locationb. Facility and Improvementsc. Operating Strategy

8. Management Team ……………………………………………………………………………………………………….……..(27)

a. Organization/Key Management Personnel and Rolesb. Board of Advisorsc. Compensation/Ownership

d. Supporting Professional Advisors and Services

9. Potential Risks and Problems ………………………………………………………………………………………………….(29)

10. Sustainability and Impact ……………………………………………………………………………………………….……….(29)

11. Overall Schedule ……………………………………………………………………………………………………………………..(29)

12. Critical Risks, Problems, and Assumptions ……………………………………………………………………………….(31)

13. The Financial Plan ……………………………………………………………………………………………………………………(31)

14. Appendices

a. Appendix A: Market Analysis ………………………………………………………………………………………….(32)b. Appendix B: Multi-Sensory Room Photographs/Adaptive Recreation Products ……………..(32)c. Appendix C: Timeline: Start-Up Advertising and Promotions ………………………………………..(33)d. Appendix D: Facilty Lease Listing/Remodel in Progress/Aerial Photo …………………………….(34)e. Appendix E: Breakdown of Anticipated Start-Up Costs ………………………………………………….(35)f. Appendix F: 3-Year Projected Human Resources Expenditures ………………………………………(39)g. Appendix G: 1-Year Sales Forecast Pro Forma ………………………………………………………………..(39)h. Appendix H: 2- and 3-Year Sales Forecast Pro Forma …………………………………………………....(40)i. Appendix I: Pro Forma Income Statements ……………………………………………………………………(40)j. Appendix J: Pro Forma Balance Sheets ………………………………………………………………………….(41)k. Appendix K: Pro Forma Cash Flow Analysis (Year 1) ………………………………………………………(42)l. Appendix L: Pro Forma Cash Flow Analysis (Year 2) ………………………………………………………(43)m. Appendix M: Pro Forma Cash Flow Analysis (Year 3) …………………………………………………….(44)n. Appendix N: Cash Flow Chart ……………………………………………………………………………………….(45)o. Appendix O: Breakeven Analysis …………………………………………………………………………………..(45)

1. EXECUTIVE SUMMARY

According to a 2014 clinic report released by the American Academy of Pediatrics, approximately 18% of children and adolescents in the United States have a chronic condition or disability limiting their opportunities to participate in leisurely activities and recreation. Think about it, almost one-fifth of all children in the United States have an impairment which limits their ability to participate in what most people take for granted – the ability to enjoy the physical, mental, and emotional benefits of recreational activity.

The impacts upon these individuals, their families, and society are staggering. In a report issued by the Centers for Disease Control, obesity rates among children with disabilities in the United States are 38 percent above those of children without disabilities. As a result, the CDC notes that special needs individuals are more susceptible than the public at large to acquiring numerous health problems, including heart disease, Type II diabetes, high blood pressure and cancer. At the family level, studies have suggested that parents of special needs children have significantly higher divorce rates than those without special needs children. And on local and national levels, the physical and mental health care costs incurred by special needs individuals are mounting, in part due to their inability to participate in healthy recreational activities.

Although the physical, emotional, and cognitive limitations of special needs individuals have played a significant role in limiting their recreational opportunities, historical factors have also impacted their accessibility to recreation. According to a clinical report issued by the American Academy of Pediatrics, the most frequently identified barriers to recreational opportunities, in addition to a child’s physical limitations, are high costs, lack of nearby facilities or programs, and limited program funding. An article published in the Therapeutic Recreation Journal identified additional reasons for the lack of availability of special needs recreation, including a lack of skills and knowledge necessary to establish a program, lack of adaptive equipment, lack of accessible community transportation, poor attitudes on the part of staff, community resistance, and a lack of awareness of the need for programs for people with disabilities. While favorable legislation and increased awareness have improved the accessibility of special needs individuals to recreational opportunities, much more needs to be done to improve the availability and quality of the programs offered. This is where Fun for All of the Lehigh Valley is playing a role.

At Fun for All of the Lehigh Valley, we seek to alleviate these problems by providing special needs children with accessible recreational experiences tailored to their own physical, sensory, and cognitive needs. Through the use of sensory and adaptive products and the development of specialized classes and programming, our mission to provide inclusive recreational opportunities to disabled individuals in the Lehigh Valley will be realized. Our service will be available for special needs children and their families at rates comparable to those found at local indoor recreational facilities and gymnasiums. Our state-of-the-art facility will be located in Bethlehem, Pennsylvania within close proximity of the Allentown/Bethlehem/Easton (ABE) metropolitan area and within a convenient commute for the remainder of the Lehigh Valley region and beyond.

2. INDUSTRY OVERVIEW

2a. The Industry

The Americans with Disabilities Act (ADA) of 1990 has been instrumental in advancing the causes of handicapped individuals in the United States, particularly with regards to recreational opportunity. Title III of the Act mandates that no individual may be discriminated against on the basis of disability with regards to the full and equal enjoyment of goods, services, and public accommodations, including recreation. While many deem the provision of recreational opportunities for special needs individuals to be misplaced, if not ineffectual, this misconception has dissipated over time. In the course of 25 years since the passage of the ADA, the special needs recreation industry has steadily evolved into a thriving industry. Still, much more needs to be done. Opportunities in the special needs recreation industry will continue to advance as the number of persons diagnosed with special needs disabilities increases.

An examination of one specific form of disability alone, autism, provides a clear illustration of the robustness of the special needs market. According to the 2014 Pennsylvania Autism Census Update, the number of Pennsylvanians receiving autism services has reached over 55,000 individuals. The study also noted that based upon the 2014 CDC prevalence rate of 1 in 68 children being diagnosed with autism, there could be more than 130,000 additional Pennsylvanians living with autism who are not included in this total. By extension, many of these individuals, as well as those suffering from other afflictions, will benefit from the services afforded to them through various recreational organizations, including the programs offered through our own organization, Fun for All of the Lehigh Valley.

2b. Our Organization and Concept

Our Mission: Fun for All will provide disabled children in the Lehigh Valley with adaptive recreational opportunities suitable to their individual needs in a caring, non-judgmental environment.

Fun for All is an adaptive recreation organization which addresses the unique sensory and social issues of special needs children. The Fun for All concept was conceived by Steven and Kathleen Reilly during a birthday party they held for their youngest son at a local children’s recreational facility. During the hustle and bustle of the event, they noticed their oldest son, Colin, who is autistic, holding his ears and becoming increasingly distraught. At the conclusion of the party, Steven and Kathleen discussed Colin’s discomfort and lack of enjoyment due to the frenzied atmosphere and excitement generated by the event. It was during this conversation that the concept of developing a recreational experience specifically for special needs individuals was born.

The Fun for All concept will provide recreational activities similar to those offered at a typical children’s indoor recreational facility, but adapted and implemented to address the physical, sensory, and cognitive needs of special needs individuals. In developing the desired activities for our service, we seek the input of local professionals specializing in adaptive recreational programming and outside vendors capable of providing the technical expertise for configuring and implementing the internal layout of the facility.

The facility we intend to lease is currently undergoing an owner-initiated renovation. Upon completion, we will proceed with leasing a space within the facility, commence with the registration of our service as a non-profit 503(c)3 corporation, and purchase products necessary for operating our service. Upon IRS approval of our application for non-profit status, we will begin fundraising activities and apply for federal grants needed for our operating expenses and for further development of our service offerings.

2c. The Service:

Fun for All will become the preeminent provider of adaptive recreational activities to special needs children in the Lehigh Valley and beyond. Upon our initial launch, our service will include the following:

A Multi-Sensory Environment (MSE), also known as a sensory room, which allows our clientele to engage in visual, olfactory, and tactile activities designed for relaxation, safety, and comfort in their surroundings. See Appendix B for example sensory room photos.

A large recreation room containing adaptive bouncers, trampolines, ball pits, and numerous assorted toys.

A quiet room for promoting calmness and relaxation for our clients and their families. A movie room for presenting special movie viewings for our clients and their families. A multi-purpose room for holding classes, parties, and fundraising events. Relaxing music and dimmed lighting throughout the facility to reduce client anxiety.

Fun for All will become the premier provider of adaptive recreational opportunities for special needs children in the Lehigh Valley. Families of potential clients will initiate contact with our organization via telephone, internet, or through visits to our facility. Prospective clients will be given a pre-participation evaluation with a member of our management team or our Recreational Coordinator. The consultation will include the completion of a background questionnaire by the parent, guardian, or relative of the special needs child. The questionnaire will assist us in gathering information regarding the sensory, fine motor, and physical limitations of the child and to assist us in determining the activities and services we can provide. The consultation will conclude with a guided tour of our facility and a Q&A discussion.

Families wishing to enroll a special needs family member in our service will be given a registration form/waiver to complete, our price listing, and a membership card. Upon our receipt of their first month’s payment, the special needs client and their family will have full access to the services detailed in the membership package they purchase. Additional fees may also apply for periodic classes and special events not covered in the packages.

2d. Entry and Growth Strategy

Steven Reilly, as principal of Fun for All, will receive start-up financing from family members upon signing the lease for the organization’s desired location in Bethlehem, Pennsylvania. The initial funds will be used for registration fees, required permits, consulting fees for interior and exterior facility design, purchases of recreational products and various supplies, and hiring and training of staff. Upon approval of our application for non-profit status, we will commence with the needed facility improvements and anticipate our grand opening in fall 2016.

Within the next three to five years, we seek to lease a larger space in Bethlehem Township to accommodate our expansion plans, which include adding a library room containing children’s books, magazines, and internet access. Additional recreational products including adaptive bicycles, gymnastic equipment, and crafts will also be added. A small concession stand providing hot and cold foods and beverages will also be added, along with a souvenir section for selling products promoting our brand awareness.

Fun for All will fuse adaptive rehabilitative products with traditional playground activities to provide our clients with unique recreational experiences not found in a standard indoor playground environment. We believe our membership prices will be competitive with those incurred at mainstream indoor recreation facilities and local amusement parks. We anticipate that our customers will use our service 5 to 7 times a year, thus recouping their membership costs within that time period.

2e. Potential Growth Impediments

Although there are ample opportunities benefiting Fun for All in the local recreation industry, there are a number of potential setbacks that could impede our growth and expansion plans. The following is a list of possible impediments to fulfilling our organizational goals and mission:

Our competitors may expand their offerings by providing special needs individuals with access to adaptive recreation products and services similar to our own.

Our initial offerings may not attract enough interest from our target market. Our service has minimal advantages (i.e. patents) that would serve as a barrier to entry by

our competitors. Our dependency on our volunteer network could result in inadequate coverage during

peak business hours and during busy holiday seasons. Our fundraising efforts, donation drives, and ability to obtain government grants could

dry up during lean economic times, thus limiting our ability to expand our service and jeopardizing our very existence as a non-profit.

3. MARKET RESEARCH AND ANALYSIS

3a. Customers

We have identified our customer base as consisting of families having one or more children ages 3-17 with a confirmed special needs disability. Such families include those having members diagnosed with Autism Spectrum Disorder (ASD), Down’s syndrome, Pervasive Development Disorder (PDD), and various other chronic afflictions. Our customers are consumers of services offered by numerous non-profit organizations and for profit ventures.

The major purchasers of our service will consist of special needs families within the Lehigh Valley, a region 60 miles north of the Philadelphia metropolitan area in Southeast Pennsylvania. The Lehigh Valley’s official census area encompasses Lehigh and Northampton counties, and includes the Allentown, Bethlehem, and Easton (ABE) metropolitan area (refer to map).

Map: The Lehigh Valley Region

In addition to the Lehigh Valley, we anticipate customer interest from regions outside of our service area, including Berks, Bucks, and Montgomery counties, as well as Warren County and other interior areas of New Jersey.

Our customers will access our service via local routes and by commute via the Pennsylvania Interstate Highway System. Interstates 78 and 80 are the main arteries traversing the region from east and west, with the Pennsylvania Turnpike providing an easy commute from the northern and southern regions. All mentioned routes provide fast and convenient access to our facility in Bethlehem, Pennsylvania.

We expect our service within the Lehigh Valley to be eagerly received within the special needs community. Our goal is to invite families of special needs children to visit with our knowledgeable staff at our state-of-the-art facility to determine the scope of recreational activities we can provide. Membership in our service is typically purchased by a family member, guardian, Power of Attorney, or conservator of the child being enrolled.

We assert that our clients will find the recreational opportunities provided by Fun for All to be eclectic, engaging, socially stimulating, and priced competitively compared with the more established firms in the adaptive recreation industry. The adaptive programs we provide are monitored by our Recreational Programming Coordinator for utmost quality, with improvements made on a continual basis. As word-of-mouth of the depth, breadth, and quality of our services spreads within the special needs community, we anticipate a steadily increasing clientele and a pattern shift away from the more entrenched adaptive recreation firms. In benefitting from this trend away from the current adaptive recreation establishment, we believe Fun for All will develop significant acceptance within the market within 1 to 3 years.

3b. Total Market Size and Trends

The opportunities available in the special needs market are evident on a global scale. According to Fifth Quadrant Analytics, a ratings company and index provider, the disability market represents 1.3 billion people globally who face challenges across three general areas – dexterity, cognition, or sensory issues. Nationally, the Health Resources and Services Administration reports 10.4 million children in the United States as having special healthcare needs, or 14 percent of all U.S. children.

Disability trends are also notable on a statewide level. In Pennsylvania, the number of individuals identified as having a special needs disability has trended upward over the past 15 years. The table below illustrates the increasing prevalence of children diagnosed with a special needs disability in the state of Pennsylvania between 1999 and 2000 and 2013 to 2014:

Table 1-2: IDEA Part B - Children with Disabilities in Pennsylvania for 1999-2000 and 2013-2014

1999-2000 2013-2014 % Change

Age 3-5 21,477 32,464 51.2%Age 6-11 102,040 115,016 12.7%Age 12-17 106,510 131,726 23.7%Age 18-21 12,628 17,043 35.0%Age 6-21 221,178 263,785 19.3%Age 3-21 242,655 296,249 22.1%

Source: Reported by the State of Pennsylvania in accordance with Section 618 of IDEA to U.S. Department of Education, Office of Special Education Programs

Local growth projections for the Lehigh Valley also illustrate sizeable population increases in the coming years. In a report released in 2012 by the Lehigh Valley Planning Commission, the Lehigh Valley population will increase by 11.5% per decade from 2010 to 2040. With regards to disabled persons in the Lehigh Valley, the table below illustrates the presence of a robust special needs population in Lehigh and Northampton Counties between the years 2010-2014:

SubjectLehigh County,

Pennsylvania

Lehigh County,

Pennsylvania

Northampton County, Pennsylva

nia

Northampton County, Pennsylva

niaEstimate Percent Estimate Percent

DISABILITY STATUS OF THE CIVILIAN NONINSTITUTIONALIZED POPULATION Total Civilian Noninstitutionalized Population

349,844 349,844 295,996 295,996

With a disability 48,347 13.8% 37,301 12.6%

Under 18 years 81,800 81,800 63,309 63,309 With a disability 5,428 6.6% 3,026 4.8%

18 to 64 years 216,525 216,525 185,450 185,450

Source: U.S. Census Bureau, 2010-2014 American Community Survey 5-Year Estimates

Based on the age and population demographics noted above, we believe our target customer base will consist of special needs children within Lehigh and Northampton Counties between 3 and 17 years of age. From the census data provided above, we estimate Fun for All’s total market size of potential customers to be the following:

Lehigh County Northampton County Total5,428 3,026 8454

We also expect significant interest from families having special needs members between the ages of 18 and 21, and possibly above this stratum; therefore, our actual market size could be significantly higher than our estimates.

In noting the above 11.5% increase in projected population growth in the Lehigh Valley over the next decade, the market analysis provided in Appendix A assumes a proportional increase in the age 3-17 age demographic per year for the forecasted 5 year period.

3c. Competition

The adaptive recreation industry serves the specialized needs of physically and mentally disabled individuals within the Lehigh Valley. Our competitors consist of non-profit 501(c)3 organizations as well as for profit ventures providing varying levels of recreational activities for special needs and mainstream persons alike.

Although not an exhaustive listing, we view the following organizations and companies as our direct (recreational organizations) and indirect (therapeutic recreational) competitors in the Lehigh Valley:

Recreational (direct):

YMCA of Bethlehem (2014 revenue: $2,213,674) - the YMCA is a leading nonprofit organization specializing in youth development, healthy living, and social responsibility. The local YMCA of Bethlehem is located approximately 5 miles from our facility. YMCA branches serve their local communities by providing persons of all ages and socioeconomic backgrounds with eclectic recreational programs and socialization opportunities. The YMCA price structure is based on annual and monthly membership rates similar to our own.

While programs offered by the YMCA are accessible to special needs individuals, they are not specifically tailored to their complex physical, psychological, or behavioral needs. Additionally, their attentiveness to their clientele is often lacking if nonexistent. Therefore, we intend to exploit this weakness by offering individualized recreational programs to disabled individuals coordinated by our caring staff, at prices competitive with YMCA membership fees.

Freefall Trampoline Park (est. revenue 2014 - $2,000,000) – located in Bethlehem, Pennsylvania within 15 miles of our facility, Freefall Trampoline Park is a 33,000 square foot facility offering wall-to-wall trampolines, various participatory activities, big screen televisions, and a concession area. The company’s pricing structure consists of hourly fees and flat rates for parties and overnight stays.

Safety will be our utmost priority in dealing with our target clientele. Due to the inherent risks involved with the usage of trampolines and the staffing needs required to maintain safe conditions, customer safety would be severely compromised without implementing significant precautions and safety adaptations. Therefore, we intend to compete with their firm by offering alternative activities, safety-enhanced recreational equipment, and well-trained staff to ensure customer safety.

Chuck E. Cheese (avg. store revenue 2014 - $1,550,000) – known primarily as a children and family entertainment franchise, Chuck E. Cheese has a local footprint in Whitehall, Pennsylvania within 10 miles of our facility. Similar to the YMCA, special needs individuals can partake in the various entertainment activities offered at Chuck E. Cheese, such as viewing puppet shows, playing arcade video games, and playing in ball pits. However, for many special needs individuals with severe mobility, cognitive, and sensory issues, the frenzied environment within a typical Chuck E. Cheese is simply overwhelming and offers little benefit to their specific needs. We are confident that we can address this by offering similar activities in a calming setting, thus reducing the likelihood of our customers experiencing sensory overload and anxiety.

Bounce U (est. revenue per location - $500,000)– located in Bethlehem, Pennsylvania approximately 8 miles from our facility, Bounce U is a national franchise specializing in children’s recreation. Each location provides numerous air filled bouncers, slides, and activities for customers to use and enjoy. The firm’s revenue drivers include birthday party and field trip hosting, holiday events, and weekly activities including open bounce, toddler programs, and cosmic light events.

Similar to our safety concerns with Freefall Trampoline Park, we feel that Bounce U facilities are not conducive to many special needs individuals due to their mobility issues. We intend to compete by offering air filled activities adapted to our clientele’s needs.

Live, Learn, & Play (est. revenue - $66,800) – located approximately 18 miles from our facility in Emmaus, Pennsylvania, Live, Learn, & Play is a 501(c)3 non-profit organization assisting local families with autistic and special needs. Although our mission and objectives are similar, we strive to differentiate ourselves from Live, Learn, & Play by offering a competitive fee-based structure, knowledgeable staff, and superior customer service.

Therapeutic /Recreational Services (indirect):

Easter Seals Eastern Pennsylvania (2014 revenue - $2,723,170) - located in Allentown, Pennsylvania approximately 13 miles from our facility, Easter Seals is a world renowned charitable organization serving over 2,500 children in the Lehigh Valley, Berks, Carbon and Monroe Counties. They are organized as a 503(c)3 non-profit which specializes in early intervention, occupational therapy, physical therapy, autism services, and camping/recreation.

Easter Seals is funded primarily through government agencies, private insurers, fee-for service, and public philanthropic contributions/donations. We intend to compete with Easter Seals through extensive donation drives, competitive fee structures, a depth of recreational service offerings, and a compassionate and knowledgeable staff.

Lehigh Valley Health Network (2014 revenue – $1,647,152) - with numerous branches located in Allentown and Bethlehem, Pennsylvania, LVHN Children’s Hospital is a non-profit hospital network offering services including outpatient rehabilitation, physical therapy, and occupational therapy.

We believe LVHN does not provide sufficient recreational opportunity for special needs children, and we intend to take advantage of this oversight in their treatment programming. Therefore, we will compete for market share by offering special needs children a greater breadth of recreational opportunities specifically designed to improve their sensory and socialization needs.

3d. Market Share Estimates:

Based on our proximity with our identified competitors and their 2014 revenues, our market share estimates for the special needs recreation market in the Lehigh Valley are as follows:

Easter S

eals of E

astern Pennsyl

vania

YMCA of Bethlehem

Freefall Trampolin

e Park

Lehigh Valley H

ealth N

etwork

(LVHN)

Chuck E. C

heese - W

hitehall

Bounce U

(esti

mated)

Live, L

earn, & Play

Others0.00%5.00%

10.00%15.00%20.00%25.00%30.00%

Estimated Market Share (Special Needs Recreation - Lehigh Valley) (2014 Revenues)

3e. Competitive Advantages

Fun for All will provide significant value for our clients and their families in several ways. Particularly with rehabilitative service organizations specializing in therapeutic programming, recreation and socialization opportunities are often marginalized. Recreational activities, if offered, are sporadic in number and often held separately in satellite branches away from where therapeutic activities are administered. At Fun for All, our clients will have the advantage of participating in a full range of recreational activities that are both adaptive and therapeutic within the confines of one facility.

Unlike other recreational facilities in the Lehigh Valley, Fun for All will offer additional amenities such as the calming ambience of our quiet room, which is particularly suitable for clients displaying problematic behaviors during their visits. Our multi-purpose room will also provide unlimited opportunities for holding additional programs and events, as well as being a suitable venue for fundraising activities and donation drives.

From a cost perspective, we seek to make our services affordable to families across Lehigh and Northampton Counties. The demographics of the Lehigh Valley region include special needs children and their families spanning across the socioeconomic spectrum. As our organization grows, we seek to make our membership fees even more competitive and affordable.

Ultimately, we believe the value added by the recreational opportunities that we offer and the cost benefits that we provide, in comparison with our competitors, will attract a growing and loyal customer base for our organization.

3f. Estimated Market Share and Sales Forecast

Our projected 1- and 3-year sales forecasts are presented in Appendices G and H. Our assumptions in constructing these forecasts are as follows:

Per U.S. Census Bureau data (ACS 5-Year Estimate 2010-2014), the total special needs market for individuals aged 0-17 in the Lehigh Valley is 8454 persons.

We expect to entice 10% of this market, totaling 845 potential clients, to visit our facility.in our first year of operation. Of this group, we seek to attain a minimum 5.0% enrollment in our base membership (42 clients), with a minimum 12.0% (10 clients) enrolling in our gold membership.

In year 2, we expect a 5.0% increase in base membership purchases over the previous year and a 2.0% increase in gold memberships purchased over the same period.

In year 3, we expect an additional 5.0% increase in base membership sales over year 2 sales, with a 2.0% increase in gold membership sales over the same period.

We believe that within one year of operation, we can capture close to 1% of the special needs recreation market within the Lehigh Valley and amass over $98,000 in net income, not including proceeds received from donations, fundraising, and grants.

As a contingency, we will consider expanding our targeted age demographic to include potential clients between 18-21 years of age if our revenues projections differ significantly from our actual results.

4. THE ECONOMICS AND THE BUSINESS

4a. Pro Forma Income Statements

Fun for All’s pro forma income statements for its first three years of operations are provided in Appendix I. The following assumptions were made in preparing these statements:

Due to our organization as a non-profit 503(c)3 service corporation, no cost of goods sold figures were calculated in projecting our gross margins.

Advertising and promotion expenses represent 4.0% of each month’s sales (refer to section 5e for further information regarding the individual costs comprising this expense).

Salaries & Fringe benefits, which are fixed expenses, are projected to comprise approximately 38% of sales.

Utilities, which are variable expenses, comprise 2.0% of sales. Insurance expenses, which are fixed and paid quarterly, comprise approximately

1% of sales in the applicable months. Lease expenses are fixed, and we estimate they will comprise approximately 8.0%

of monthly sales. Wages are fixed expenses since overtime is not permitted. They comprise

approximately 1% of sales. Depreciation amounts vary monthly in accordance with the MACRS 7-year scale

– accelerated depreciation method used.

A 20 percent reduction in membership sales would severely impact our ability to generate the revenues required for maintaining our operations. Due to the modest membership sales we projected throughout our 3-year forecast, any further reduction in sales would impede our ability to make payroll costs and negatively impact our advertising and promotion budgets. Our firm also depends on its ability to borrow from outside sources to maintain positive cash flow; therefore, a further reduction in sales could impair our ability to meet debt service requirements and may result in our default without a significant increase in donations, grants, and fundraising revenues. Our ability to obtain additional capital from our funding sources will also be gravely impacted in light of a serious shortfall in sales.

4b. Pro Forma Cash Flow Analysis

Our projected monthly cash flows for the next three years are presented in Appendices K-M. Prior to our grand opening in October 2016, Fun for All will receive start-up capital totaling $40,000. We anticipate satisfying this initial loan within 3 years at an agreed interest rate of 20%. At the end of year 1, we project the necessity of obtaining additional capital from friends and family totaling $35,000, which will be paid within 4 years at 20% interest. At the end of year 2, we anticipate having to borrow an additional $40,000 from family and through self-funding. The family loan will be paid within 4 years of the loan origination at 20% interest.

* Note: We anticipate the acceleration of our loan payments as our donation drives, fundraising efforts, and acquisitions of grant funding will permit.

Our service is predicated as a membership model whereby all applicable payments are due by the first of each month. Non-payment of membership dues will result in the suspension of member access until such payments are received. Therefore, no trade credit will be offered to members in satisfying their membership fees. Additionally, we wish to negotiate trade credit with our vendors with our accounts payable due net 90 days. Additionally, our projected salary and wage costs include 3.0% increases for all full- and part-time employees at the beginning of our 2nd and 3rd years of operation, pursuant to approval by our board of advisors. With regards to inventory costs, we expect expenditures of approximately 3.0% of monthly sales.

Please refer to section 4a for a discussion regarding a sales reduction scenario and its impact upon our operations.

4d. Breakeven (Unit Sales)

Fun for All anticipates a breakeven in membership sales at approximately 402 units in year 1, 444 units in year 2, and 485 units in year 3. Due to our very conservative projections in our unit sales projections each year, we believe it will be difficult to sell the required number of units to meet the above breakeven figures. Therefore, we will attempt to alleviate projected shortfalls in membership sales through extensive donation and fundraising efforts, as well as by obtaining both government and private grant funding. The additional cost-reduction efforts listed in section 4e will also be considered.

4e. Cost Control

Efforts to reduce costs as a means to increase our net income will be evaluated on a continual basis. Such efforts include the following:

Upon completion of our 3-year lease, we will consider moving to a different location of equal or greater square footage at a smaller lease cost, as our cash flow requirements dictate.

Additional purchases of recreational products, office supplies, and promotional materials will be sourced from lower cost providers than those obtained from our current providers.

We are currently running a lean human resources plan; however, additional cost savings could be realized by eliminating the part-time recreational assistant position. This will require an even greater dependency on our volunteer network and client families to ensure safe operating conditions.

5. MARKETING PLAN

5a. SWOT Analysis

The following SWOT Analysis provides a breakdown of Fun for All’s strengths, weaknesses, opportunities, and threats in its efforts to gain market share against its competitors in the special needs recreation industry:

Internal Organizational Strengths:

Strengths Description Means for Improvement

Market The Lehigh Valley region and surrounding areas are a hub for special needs services; strong demand for special needs recreation with continued growth opportunities as the local population expands.

Combining high quality services, superior customer service, and a caring staff will increase our market share.

Product Fun for All’s superior programming and flexible scheduling arrangements for special needs individuals in our state-of-the-art facility will attract additional clients as word of our service spreads.

Monitoring the efficacy of our programs and classes to ensure they meet the expectations of our clients and their families; continuous improvement of our offerings to maintain their relevance and effectiveness.

Staffing/Human Resources Fun for All’s management team consists of highly experienced and well-trained professionals in the special needs recreation industry; strengths include fundraising, coordination of personnel, and event planning/execution.

Continue to add seasoned professionals in all areas of our organization, including senior management positions, board memberships, and recreation staff. Continue to attract new and repeat volunteers to ensure coverage needs; encourage family participation.

Marketing Fun for All employs several individuals with in-depth knowledge of special needs fundraising and marketing strategies.

We will continue to develop our brand awareness both locally and throughout the region as our growth permits. This includes leveraging social media, cross promotions with our partner firms, fundraising events, and print media.

Service Affordability Fun for All is branded as a recreation non-profit and does not offer therapeutic services; therefore, our customers are able to use FSS funding along with personal means to afford our services; membership rates will be graduated based on net family income.

Continue to employ an expanded offering of recreational services and to monitor competitor prices; will seek to decrease our margins short-term to attract more customers from all socio-economic levels.

Internal Organizational Weaknesses:


Poor Economy The potential for an economic downturn/recession may impact our bottom-line by reducing the number of clients using our service. Clients may have less discretionary income or have less access to FSS funding as government funding sources are cut.

As economic conditions warrant, we may need to reduce our membership rates and various operational/fixed costs where appropriate to increase our free cash flow and ensure the survival of the organization.

Lack of Company Recognition As a start-up non-profit organization, we will be competing against numerous entrenched organizations and companies having name recognition and significant local market share.

We will counter our infancy in the special needs recreation industry by focusing on the quality of our service offerings, touting the expertise of our staff, and servicing our customers and their families in a supportive, non-judgmental manner.

Staffing/Human Resources Concerns

As a start-up, we anticipate there will be coverage issues considering the number of clients we expect to serve and the number of offerings we intend to provide. We also expect to have difficulty filling some open positions in the short-term in light of the wages that we are initially able to pay.

We seek to increase the number of volunteers that can assist our recreational support team as a means to alleviate potential staffing issues. We will aggressively seek to attract military retirees and other underrepresented groups to fill open positions while remaining EEOC compliant.

Funding Sources Our fundraising efforts and donations may dry up as conditions in the national economy continue to erode Our customers’ access to Family Self-Sufficient (FSS) funding may deteriorate as funds budgeted to social services are cut. Our accessibility to government grant funding may also be slashed.

The Lehigh Valley area continues to be relatively strong in terms of the number and willingness of donors to contribute to our cause. We will continue to focus on developing our ties to partnership organizations as a means to increase our exposure to potential donors. We may also consider lobbying efforts as permissible by law to argue against cuts in aid to our special needs clients and their families.

External Organizational Opportunities:


Location The Lehigh Valley is experiencing burgeoning economic growth and development due to its close proximity to Philadelphia, western New Jersey, and New York City.

Our future growth strategy is to leverage our marketing efforts to include these areas as economic conditions permit.

Strategic partnerships We seek to form strategic alliances with both non-profit organizations and for profit ventures to increase our visibility to the public and increase our brand awareness.

Our goal is to form long-term partnerships with local non-profits, such as with the Miracle League of the Lehigh Valley and ML of Northampton County, as well as with for profit ventures – such as the Lehigh Valley IronPigs, the AAA affiliate of the Philadelphia Phillies.

Availability of Funding Sources Per figures available from the Lehigh Valley Community Foundation , the number of households reporting charitable contributions in Lehigh and Northampton Counties was approximately 88.08% (2005 figures), with private contributions and grants in both counties totaling $402,4710,761 in 2009.

By leveraging the fundraising talents of our advisory board members, we seek to obtain adequate funding for growing our non-profit organization.

External Organizational Threats:


Competition Competition for funding sources among the various non-profit organizations and corporations in the Lehigh Valley could be fierce, thus making fundraising more difficult.

We must exploit the service gaps of our competitors by providing programs and services not currently offered elsewhere.

Economic Conditions A recessionary economy could also impact our ability to raise necessary capital for operations and expansion. Donations and government/private grants could be blunted, thus causing shortfalls in anticipated capital acquisition.

We will engage in a vigorous marketing campaign to ensure that our fundraising initiatives produce the required capital for maintaining our operations and fulfilling our mission.

Market Position/Product Issues Due to our position in the industry, our service may be perceived to be unneeded in light of the availability of other recreational service providers in the Lehigh Valley region.

We will rely on positive word-of-mouth customer feedback within the special needs community to substantiate the importance of our service within the industry.

HR Issues Any inability to attract needed volunteers could cause staffing shortfalls, resulting in cancelled programming and impacting our free cash flow.

We will seek to attract volunteers from various local schools and organizations so that they may fulfill their community service requirements. Adequate volunteer coverage will ensure that our services can operate with minimal disruption.

5b. Overall Marketing Strategy

As mentioned in the Market Research and Analysis section, we will direct our marketing efforts to families having special needs children between the ages of 3 and 17 years of age. Our initial marketing campaign will target families of special needs children residing in the Allentown/Bethlehem/Easton metropolitan region, as we believe a significant portion of our potential customer base resides in this area. Secondary efforts will be directed to the suburban areas of the Lehigh Valley, including the more affluent sections of Northampton and Lehigh Counties, such as Lower Nazareth, Center Valley, and South Whitehall.

The following table delineates our targeted marketing philosophies for both the ABE metropolitan region and the remaining Lehigh Valley market segment:

Market Segment Customer Expectations Customer Marketing Strategy

Allentown/Bethlehem/Easton Metropolitan Area Customers

1. Low Cost2. Supportive

Environment

1. Accentuate the availability of Family Self-Sufficiency (FSS) grants to defray the cost of our membership fees.2. Promote the qualities of our caring, non-judgmental staff.

Remaining Lehigh Valley Customer Base

1. Competitive Prices2. Convenience of Use

1. Emphasize the affordability of our annual & monthly rates with those offered at both traditional and specialized recreational facilities.2. Contrast the flexibility of our operating hours with those offered at other facilities.

Fun for All will also direct its overall marketing and advertising efforts to both market segments by emphasizing the following:

Our ability to offer recreational activities focusing on the specific sensory, physical, and cognitive needs of each of our clients.

The activities and programs we provide are recreational, yet provide therapeutic benefits for our clients.

Our service will assist our clients in developing their coping techniques and socialization skills.

Fun for All has a knowledgeable staff of recreation professionals specializing in the care of special needs individuals.

Our service allows special needs children and their families to engage with each other in a relaxing, highly interactive, and non-judgmental environment.

Most of all, our service is FUN!

Once our target customers and their families experience the benefits, convenience, and affordability that Fun for All provides, we expect positive word-of-mouth within the local special needs community to drive additional membership sales, thus allowing us to sustain and eventually expand our operations. The cornerstone of our long-term growth strategy is to move our operations to a larger facility within the Lehigh/Northampton County area which will allow us to purchase additional recreational products and expand on the recreational opportunities that we can provide. Additionally, as the economic climate and our fundraising efforts permit, we will seek to add an additional location closer to the city of Philadelphia or further to the west of our current location, preferably near the city of Lancaster. Our ability to obtain government grants will also be a determinant in our ability to both improve and expand.

5c. Membership Pricing

Families of special needs children wishing to access our service may do so by purchasing a monthly or annual membership. As mentioned in the Industry Overview section, families of potential clients must complete our signup registration form disclosing important information regarding their special needs family member. A separate form which discloses our membership rates will also be attached to the registration form.

Pricing of our annual memberships will be a tiered system based on the level of services offered in each tier. The pricing scale will be implemented as follows (cash only at this time):

Annual Membership (12 Month Contract) – full price paid at signup:

$360.00 per year (per child) for our base package.

$480.00 per year (per child) for our gold package.

*The base package includes full access to all activities and areas listed in section 2c.

*The gold service package includes full access to services provided in the base package, plus free access to all recreational classes and special events, and favored access to our service during peak time periods.

Monthly Membership Rates (no contract required – fees must be paid on or before the 1 st of each month):

$30.00 per month (per child) for base service package. $40.00 per month (per child) for gold service package.

- Although not anticipated at this time, we may elect to assess a nominal one-time enrollment fee with each membership sold at the time of sign-up. Special classes and events not included in our annual and monthly base packages will require an additional fee of $15.00 per class/event.

- Drop-in visits, with the exception of those conducted through our introductory screening process, are not permitted at this time.

The above pricing scale is comparable to those typically offered at mainstream recreational facilities and gyms. Our estimates suggest that the above pricing scale will enable us to sell a greater amount of memberships within our targeted demographics, thus allowing us to increase our market share in the Lehigh Valley over time. Additionally, due to our organization as a non-profit service corporation, our cost of goods sold (COGS) will be significantly minimized, thus generating significant gross profits. Additionally, by keeping our operating costs minimized through decreased labor costs, combined with our anticipated tax-exempt status, we believe we will generate the required net income for maintaining and eventually expanding our service. Our anticipated revenue streams provided through our donation and fundraising drives and via our receipt of government grant funds will also increase our ability to expand our operations beyond the Lehigh Valley region.

5d. Service Policies

Customers wishing to cancel their monthly or annual memberships may do so in writing or by visiting our facility. Annual membership refunds will be mailed by paper check within 30 days of the cancellation date on a pro-rated basis.

5e. Advertising/Promotion/Fundraising Activities

Our ability to promote our organization as a cost effective provider of recreational activities for special needs children is crucial for ensuring our longevity and growth. Throughout the Lehigh Valley, and particularly in the ABE metropolitan region, it is essential for us to gain exposure to our target customers as a means to nurture our brand awareness and to spur customer interest. A key ingredient for fostering our brand awareness is for representatives of Fun for All to appear at local sponsorship events promoting the causes of other special needs organizations. The following is a tentative listing of sponsorship events in which Fun for All representatives will be attending in 2016:

2016 Autism Speaks Walk – Saturday, April 16, 2016, Allentown, Pennsylvania Easton’s Angel’s disABILITY Awareness Fun Walk & 5K, Sunday, April 19, 2016,

Easton, Pennsylvania 2016 Autism Speaks Resource Fair, date TBA, Allentown, Pennsylvania 2016 One Step Forward Celebration, May 25, 2016, The ARC of Lehigh and

Northampton Counties, Bethlehem, Pennsylvania 2016 Highmark Walk for a Healthy Community, Saturday, June 4, 2016, DeSales

University, Center Valley, Pennsylvania 2016 Highmark Annual Golf Outing, Monday, August 1, 2016, Silvercreek Golf Course,

Hellertown, Pennsylvania 2016 Allen D. Deibler Memorial Golf Tournament, September 30, 2016, Southmoore

Golf Club, Bath, Pennsylvania

* We anticipate expenditures for sponsorship events to comprise 25% of our monthly promotion budget (1% of sales per month).

Another facet for maximizing our fundraising efforts and brand awareness is through our leveraging of social media. To ensure maximum Return on Investment (ROI) for our marketing and advertising dollars, we will purchase promotional ads and sponsored posts through social media outlets such as Facebook and Twitter. This will allow us to target families of special needs children in close proximity to our geographic location and to pinpoint potential clients within the age 3-17 age demographic. Our ability to purchase advertising through social media outlets will increase the visibility of our service and enable us to publicize and promote our future fundraising events.

* We anticipate expenditures for social media advertising to comprise 50% of our monthly promotion budget (2% of sales per month).

An additional marketing strategy we seek to implement is to form strategic partnerships with local non-profit organizations and for profit ventures. These partnerships will allow us to reach a broader audience within the special needs community and to further increase our brand awareness. The following organizations have been identified as potential strategic partners for our organization:

The ARC of Lehigh and Northampton County Camelot House

The Miracle League of the Lehigh Valley; The Miracle League of Northampton County

The Lehigh Valley IronPigs The ARCH (Autism Resource Community Hub) of the Lehigh Valley The Coco Foundation

Our goal in leveraging these partnerships is to display our brochures, promotional materials, and business cards on community billboards within their facilities to promote the recreational activities provided by our service.

A particularly important organization that we seek to cultivate a long-term partnership with is The Lehigh Valley IronPigs, the AAA baseball affiliate of the Philadelphia Phillies. Located in Allentown, Pennsylvania, the Lehigh Valley IronPigs organization has dedicated itself to helping special needs causes since its founding in 2007. Specifically, we would like to purchase outfield wall advertising at Coca-Cola Park, the club’s 8,278-seat stadium, to facilitate outdoor advertising for our service. We also intend to use similar advertising techniques at both Miracle League baseball stadiums in Schnecksville and Easton, Pennsylvania. Partnering with the Lehigh Valley IronPigs will also enable us to enjoy potential benefits from their fundraising events and grants facilitated through IronPigs Charities.

* We anticipate costs incurred for facilitating strategic partnership efforts to comprise 25% of our promotion budget each month (1% of monthly sales).

In consultation with our Board of Advisors, Fun for All senior management will also coordinate in-house fundraising events in our multi-purpose room each month. These events will include guest speakers donating their time to discuss topics pertinent to special needs individuals, such as financial planning, institutionalized living, and estate planning. Additional events such as bake sales, Chinese auctions, holiday activities, and motivational speaker presentations will also be held. For a nominal fee, members and non-members alike can attend these events with the proceeds benefiting Fun for All. Additional fundraising events held at off-site locations will also be given future consideration as our operations permit.

Additionally, Fun for All will maintain a robust online presence by obtaining a domain name through RCN, our internet service provider. Visitors to our web site can peruse information regarding our mission and organizational goals, as well as view a calendar of our future fundraising events. A donation link will also permit visitors to make online tax-deductible donations.

Fun for All will also seek additional funding by applying for government grants. The federal government utilizes various grant programs administered on state and local levels as a means to fund programs that provide needed social benefits for the public. Upon filing our Articles of Incorporation, we will consult with our attorneys, Davison & McCarthy, PC, to assist with our federal and state applications for 501©3 registration and tax-exempt status. Once approved, we will begin the process of screening our eligibility for government grant opportunities as well as for private grants.

Appendix B provides the anticipated timeline of our advertising and promotional activities leading to our grand opening in fall 2016.

6. DESIGN AND DEVELOPMENT PLANS

6a. Development Status and Tasks

A detailed timeline of our design and developmental tasks is provided in section 11. Our ability to meet the deadlines listed in the timeline and ensure the successful launch of our service requires the following competencies:

Knowledge of the design and implementation of adaptive recreational products. Fun for All will contract with TFH USA, a leading provider of special needs goods, to develop our sensory room and supply recreational products for our facility.

Experience in the development and measurement of recreational programming for special needs individuals. In addition to the experiences of its principals, Fun for All will fill three positions needed for devising and implementing our programs and measuring their efficacy.

The ability to network and forge strategic partnerships with targeted organizations. The principals of Fun for All will leverage their own talents and the extensive experience of their board of advisors to cultivate strategic partnerships beneficial to the organization.

As a trial run for our service, Fun for All will open its doors on September 18, 2016 for a one week sneak preview. The special needs community and other interested parties will be invited to visit the facility and immerse themselves in our recreational environment. Participants will also be asked to complete a survey providing us with valuable information regarding their impressions of the facility and guidance for improving our service. Results will be gathered at the end of the preview week and suggestions implemented as warranted prior to our grand opening.

6b. Difficulties and Risks

For cost reduction purposes, we have elected to lease a space smaller that our operations initially would dictate, thus increasing the possibility that our facility will be aesthetically unappealing to our customers. To reduce this risk, we intend to remove and cycle smaller recreational products within our facility to increase our space requirements as needed. An additional measure, though not anticipated, is to convert our quiet room into an additional space for positioning recreational products for customer use.

Additionally, we have projected the completion of the owner-initiated renovations of the facility to occur by the week of March 13, 2016. While we expect renovations to be finished at that time, we recognize that delays beyond our control could push the completion date further into the future. Our contingency in this case is to continue with our non-profit registration efforts and to begin the process of ordering recreational products for the facility with the condition that they be delivered upon completion of the renovations and our signing of the lease.

Finally, as mentioned in our SWOT analysis, we anticipate that there could be potential staffing problems resulting in a lack of adequate coverage during peak operating times and holiday periods. Although we expect board approval to hire three full-time and one part-time staff member, their hiring will not ensure that we have the human resources required for operating purposes. Therefore, our on-going strategy to alleviate our staffing concerns is to develop a network of community volunteers and to encourage family participation throughout the facility. We may elect to add additional part-time staff members in the future as our board of advisors and operating successes permit. Conversely, we may elect to eliminate our part-time staff and rely more on our volunteer network if our cash flow needs necessitate this measure.

6c. Costs

An itemized listing and breakdown of anticipated start-up costs is provided in Appendix E. Both the table and the pie chart provide an estimated breakdown of costs we expect to incur prior to our grand opening in fall 2016. A forecast of estimated payroll costs for the next three years is provided in Appendix F.

7. OPERATIONAL PLAN

7a. Geographical Location

Fun for All will be located on Route 191 in Bethlehem, Pennsylvania at the following address:

Fun for All

198 Nazareth Pike

Bethlehem, PA 18020

The facility is in close proximity to the Route 22 corridor linking the Allentown, Bethlehem, and Easton (ABE) metropolitan areas, Interstates 78 and 80, which link the Lehigh Valley region to western New Jersey, and the Pennsylvania Turnpike, linking our service area with the Scranton/Wilkes Barre region to the north and the city of Philadelphia to the south.

Our facility has ample parking and is easily accessible via personal transportation as well as via local public transportation carriers such as LANta Van Service and LANTABUS.

Fun for All’s anticipated hours of operation will be as follows:

Operating Business Hours:

Monday through Friday – 8:00a.m. – 7:00p.m.

Saturday – 8:00a.m. – 8:00p.m.

Sunday – 10:00a.m. – 6:00p.m.

Weekly Hours of Operation: 75 Hours

7b. Facilities and Improvements

The facility we are surveying for lease, Hecktown Square, was formerly occupied by a catering company and is currently undergoing a complete owner-initiated renovation (Appendix C). Upon completion of the renovation project, we seek to enter into a three year agreement with The James Balliet Commercial Group to lease a 1500 square foot space within the facility at a rental rate of $1,750.00 per month.

Upon signing of the lease, we will consult with TFH USA to commence with the design of our Multi-Sensory Room (MSR) and with IWS to assist with the internal design of the remainder of the facility. Expenditures for the exterior of the facility, with the exception of signage installation, will be minimal due to the mentioned owner-initiated renovations. Upon completion of the Multi-Sensory Room and remaining interior, we will proceed with purchasing the various recreational products (adaptive toys, bouncers, etc.) needed for operations and to position these items within the various rooms of the facility. Our estimated cost for supplying recreation products for the facility is $20,947, $1,088 for purchases of office products, $996 for office equipment, $811 for marketing and promotional items, $274 for building/remodeling items, and $2,835 for other miscellaneous costs such as consulting and attorney fees.

7c. Operating Strategy

The following chart provides a listing of the companies used by Fun for All in facilitating its grand opening and operations:

Supplier Business RoleTFH USA (www.specialneedstoys.com/usa/) 1. Supplying adaptive recreational products

for use throughout the facility.2. Contracted as a design consultant for our

Multi-Sensory RoomIWS (www.interiorworkplace.com) 1. Contracted as a design consultant for the

remaining interior of the facility.Blastzone (www.blastzone.com) 1. Suppliers of our inflatable party

Moonwalk.Office Max (www.officemax.com) 1. Suppliers of our promotional flyers,

membership cards, brochures, and stationary.

Vistaprint (www.vistaprint.com) 1. Provider of our business cards.Leading Edge Signs & Imaging (www.leadingedgesigns.net)

1. Manufacturer of our promotional banners and outdoor signage.

Walmart (www.walmart.com) 1. Supplier of office equipment, office supplies, housewares, and furnishings.

Palmer Retail Solutions 1. Provider of our cash wrap counter

http://www.walmart.com/

http://www.leadingedgesigns.net/

http://www.vistaprint.com/

http://www.officemax.com/

http://www.blastzone.com/

http://www.interiorworkplace.com/

http://www.specialneedstoys.com/usa/

(www.palmerretailsolutions.com)Home Depot (www.homedepot.com) 1. Provider of various houseware items and

maintenance supplies.Office Depot/Best Buy/Staples (www.officedepot.com / www.bestbuy.com) / (www.staples.com)

1. Providers of our computer system and copier supplies.

Dollar Tree (www.dollartree.com) 1. Supplier of cleaning products.

8. MANAGEMENT TEAM

8a. Organization/Key Management Personnel and Roles

Fun for All’s mission of providing special needs children in the Lehigh Valley with adaptive recreational opportunities requires a caring and dedicated team of professionals and volunteers. The following individuals will be providing their talents and skills to Fun for All for fulfilling its mission and objectives:

Steven Thomas Reilly – Executive Director: Steven Reilly is a 1991 graduate of Pennsylvania State University with a Bachelor’s Degree in Government Administration and a minor in History. Steven is currently completing his Master’s Degree in Business Administration (MBA) at Shippensburg University with an anticipated graduation in May 2016. For the past six years, Steven has been a volunteer for the Miracle League of the Lehigh Valley baseball league and currently has two children participating in the program. For the past 19 years, Steven has worked for the transfer agent of MainStay Investments, a subsidiary of New York Life Insurance Company, as a service representative. He holds FINRA Series 6 and 7 licenses. Steven’s experience in financial services, technical writing, and volunteerism will be invaluable in fulfilling Fun for All’s mission and objectives. Steven’s primary responsibilities involve spearheading the organization’s fundraising, donation drives, and advertising. Steven will also manage Fun for All’s day-to-day operations.

Recreation Program Coordinator (vacant) – We are seeking to hire a full-time Recreation Program Coordinator to assist the Executive Director in developing the programming and classes offered to our clients. This is a salaried position which requires potential candidates to have a Bachelor’s degree and prior experience in caring for special needs persons and the development of special needs programs. The ideal candidate must possess all of the required licenses, be CPR certified, and satisfy all required pre-clearances. The RPC will also serve as both a mentor and resource for our Recreational Assistants and volunteers.

http://www.dollartree.com/

http://www.staples.com/

http://www.bestbuy.com/

http://www.officedepot.com/

http://www.homedepot.com/

http://www.palmerretailsolutions.com/

Recreational Assistant (part-time) (vacant) – We are seeking to hire an additional Recreational Assistant to serve as a direct contact with our special needs clients and their families. As a front-line representative of our organization, the candidate must be customer friendly, patient, and willing to assist our clients in an eager and non-judgmental manner. The candidate will be expected to assist our clients and their families throughout the different stations within the facility, and will also serve as a source of information for our volunteers. The candidate must also be CPR certified and satisfy all required pre-clearances.

** The part-time Recreational Assistant is expected to work weekends for 5 hours per day, totaling 10 hours per week. Fun for All’s work week begins Monday and ends Sunday.

Volunteers – On a continual basis, we will be seeking individuals from surrounding communities to serve as volunteer ‘angels.’ Volunteers will be expected to accompany our clients throughout the facility and serve as ‘play companions’ as they utilize the various interactive toys and activities within each of our stations. Our goal is to have volunteers on-site each day to ensure that we have adequate coverage. We are particularly seeking to recruit retirees, former military personnel, and members of local church groups and civic organizations to donate their time for volunteering. We will also aggressively recruit students from local high schools, colleges, and universities to serve as volunteers as a means to fulfill their community service requirements. Accordingly, we anticipate having an ample pool of available volunteers to assist us in fulfilling our mission and objectives throughout the year.

8b. Board of Advisors

In addition to Steven Reilly serving as a non-voting board member, we seek to leverage the talents of the following individuals to serve on a voluntary basis on Fun for All’s board of advisors:

Kathleen Reilly – Kathleen is a 1998 graduate of Pennsylvania State University with a Bachelor’s Degree in Human Development and Family Studies. Kathleen has been a Miracle League of the Lehigh Valley volunteer for the past six years and, along with Steven, has two children participating in the program. Kathleen’s previous working experience includes six years working in the financial services industry, five years as a caregiver with Comfort Keepers, one year with Traditions of Hanover at Home as a caregiver, and one year as a Therapeutic Staff Support (TSS) with Providence.

Melissa Borland: Melissa is the current President and CEO of the Lehigh Valley Zoo and previously served as Executive Director of the Miracle League of the Lehigh Valley for six years. A graduate of Kutztown University, Melissa has extensive leadership, volunteer, and fundraising experience. Melissa previously worked for Lifespan and Cornell Abraxas creating programs for children in need.

Kyle O’Neill: Kyle is a former Commissioner and Executive Director of the Miracle League of the Lehigh Valley and is currently serving on the advisory board of the Coco Foundation. Kyle is a graduate of Loyola University in Maryland and has prior experience in nonprofit management. Kyle also has extensive advertising experience.

Charlie Indelicato: Charlie is a volunteer with the Miracle League of the Lehigh Valley and has one child participating in the program. Charlie has served as both a coach and an announcer during his tenure with the Miracle League, and his participation in various behind-the-scenes activities has ensured the smooth operation of the program over the years. Charlie has superior organizational skills and leadership ability.

8c. Compensation/Ownership:

Pursuant the approval of the voting members of our board of advisors, the following compensation will be paid to Fun for All employees:

- Executive Director (Steven Reilly): $35,000/year- Recreational Program Coordinator: $30,000/year- Recreational Assistant (part-time): $10.00 per hour

Upon board approval, we anticipate salary increases of 3% per year after our first year of operation for the Executive Director, Recreational Program Coordinator, and Recreational Assistant. Additionally, no bonuses or milestone awards will be paid to any Fun for All employees resulting from the organization’s performance. Any profits or dividends realized from Fun for All’s cash flow activities will be reinvested back into the organization.

8d. Supporting Professional Advisors and Services:

Accounting and payroll services will be provided by Paychex for bookkeeping purposes and to ensure our compliance with all applicable federal, state, and local financial reporting requirements. Attorney services will be provided by Davison & McCarthy, PC for assistance in our non-profit registration and for handling various legal matters.

9. POTENTIAL RISKS AND PROBLEMS

A discussion for reducing our potential risks and problems is presented in the Means for Improvement blocks in the Internal Organizational Weaknesses/ External Organizational Threats portions of our SWOT Analysis in section 5a.

10. SUSTAINABILITY AND IMPACT

Fun for All will operate in full compliance with all federal, state, and local environmental mandates and statutes. Where economically feasible, we will implement voluntary practices and procedures designed to reduce our waste stream and carbon footprint. Energy-efficient light bulbs and power strips will also be installed and used in applicable areas throughout the facility

to reduce our energy consumption. We will also actively engage in a recycling program for waste paper, cardboard, glass, and plastic by providing applicable waste receptacles within the facility. Waste and recycling receptacles will also be placed at the outside of the facility.

11. OVERALL SCHEDULE

Fun for All’s timeline of milestones and activities for commencing its operations is provided in the following table:

Deadline Date Completed Activities/Milestone AchievedMarch 13, 2016 (Week 1) 1. Owner-initiated renovations of the

facility completed.2. Start-up funding obtained by

principals Steven and Kathleen Reilly.

3. File PA Nonprofit Articles of Incorporation with the Secretary of State to incorporate as a non-profit corporation.

April 10, 2016 (Week 5) 1. Signing of lease through KW Commercial- The James Balliet Commercial Group.

2. Begin strategic partnership/sponsorship efforts.

April 24, 2016 (Week 7) 1. Apply for 501(c)3 tax-exemption with the IRS and through the PA Department of Revenue.

2. Register for PA Charitable Solicitation/Fundraising.

3. Obtain required building permits and business license from City of Bethlehem.

May 15, 2016 (Week 10) 1. Contract with TFH USA to begin design and construction of Multi-Sensory Room (MSR).

2. Consult with IWS concerning layout of the remaining interior of the facility.

3. Commence internal remodeling (painting, etc.)

4. Begin purchases of recreation products and office equipment

June 12, 2016 (Week 14) 1. Commence purchasing of advertising/ and promotional items.

June 19, 2016 (Week 15) 1. Advertising/promotional items arrive from suppliers.

July 3, 2016 (Week 17) 1. Completion of MSR and internal

remodeling.2. Order exterior signage for facility.3. Installation of cash wrap counter.

July 24, 2016 (Week 20) 1. Installation of exterior signage.2. Order office equipment (computer,

telephony).3. Obtain domain name for web site

(funforallrecreation.com)August 7, 2016 (Week 22) 1. Arrival/installation of all office

equipment.August 14, 2016 (Week 23) 1. Positioning and testing of all

recreation products.2. Testing functionality of all office

equipment.August 21, 2016 (Week 24) 1. Hiring of employees.September 11, 2016 (Week 27) 1. Training of employees.September 18, 2016 (Week 28) 1. Sneak-peak opening (one week)

2. Tabulation/analysis of sneak-peak survey results; implement changes.

October 3, 2016 (Week 30) 1. FUN FOR ALL GRAND OPENING

12. CRITICAL RISKS, PROBLEMS, AND ASSUMPTIONS

In constructing Fun for All’s sales forecast and financial statements, the following assumptions, risks, and problems were noted:

The sales forecast officially begins in October 2016, which is the month of Fun for All’s grand opening.

Of our total estimated market base (8454), we anticipate that 10% of this group, totaling 845 potential clients, will visit our facility and sample our service.

Of the 845 potential clients, we are forecasting that 5% of this group, totaling 42 persons, will purchase base memberships in October 2016.

Of the 845 potential clients, we are forecasting that sales of 1.25% of this group, totaling 10 persons, will purchase gold memberships in October 2016.

Promotion and advertising costs are assumed to total 4% of monthly sales. We assume that accounts receivable will not apply since all monthly membership fees

must be paid by the first of each month. Cost of goods will be minimized since Fun for All is a service organization. Organizational cash flow could be impeded if our forecasts of membership sales do not

meet our expectations. Additional cash flow issues could result if our donation drives, fundraising efforts, and grant filings do not bring sufficient cash inflows.

Our assumptions do not account for the potential of terminated memberships, which will ultimately decrease our growth projections and anticipated sales receipts.

We assume that our application for federal and state tax-exemption status will be accepted; therefore, our earnings will not be subject to federal and state taxation.

13. THE FINANCIAL PLAN

13a. Initial Financing Costs

The principals of Fun for All, Steven and Kathleen Reilly, seek to obtain a $40,000 loan from family members as initial seed capital for start-up costs. The start-up funding will be allocated as follows:

Start-Up Allocation Item Budgeted AmountRecreation Products Purchases $20,947

Office Products Purchases $1,088Office Equipment Purchases $996

Marketing and Promotional Costs $811Building/Remodeling Costs $273

Other Costs (Consulting Fees, Attorney) $2,835Utilities (Electric, Water/Sewer) $300

First Month Lease Payment $1,750Insurance Costs $300

Miscellaneous Costs (Sponsorship Fund, Etc.) $10,700Total Start-Up Distribution Costs $40,000

14. APPENDICIES

Appendix A: Market Analysis

MARKET ANALYSISPotential

Customers (Lehigh Valley)

Conservative Growth Rate

Year 1 Year 2 Year 3 Year 4 Year 5 CAGR

3-17 Age Bracket

1.15% 8551 8649 8748 8849 8951 1.0%

Appendix B: (Multi-Sensory Room Photographs)

Adaptive Recreation Products

Appendix C: Start-Up Advertising and Promotions Timeline (Beginning March 13, 2016)

Task Start Week End Week Priority Cost

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwi2kJTC_aXLAhWGqR4KHXzpA3YQjRwIBw&url=http://www.walmart.com/ip/Skywalker-Trampolines/19502992&psig=AFQjCNHxbYb89zPCWV7-w6GEMM_K4gLLmQ&ust=1457144784728539

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&source=images&cd=&cad=rja&uact=8&ved=0ahUKEwjlg_vj_aXLAhXGWh4KHTqADxIQjRwIBw&url=http://www.amazon.com/Bazoongi-48-Bouncer-Red-Exclusive/dp/B0052OSPMY&psig=AFQjCNHxbYb89zPCWV7-w6GEMM_K4gLLmQ&ust=1457144784728539

Order Business Cards 14 15 High $30Order Brochures 14 15 High $30

Order Promotional Flyers 14 15 High $20Order Membership Cards 14 15 High $50

Order Promotional Banners (3) 14 15 High $225Order Stationary 14 15 Medium $85

Order/Install Outdoor Signage 17 18 High $250Order Miscellaneous Office

Items14 15 Medium $121

Begin Strategic Partnerships 2 8 High N/A

Appendix D: (Facilty Lease Listing/Remodel in Progress/Aerial Photo)

Space Available: 1,500 SF

Rental Rate: $1,750.00 /Month

Lease Type: NNN

Appendix E: (Breakdown of Anticipated Start-Up Costs)

Recreation Products

Product Name Supplier Quantity Unit Cost Unit Cost x Quantity

Bubble Mirror TFH USA 1 $305 $305Unbreakable Mirror TFH USA 1 $74 $74

Table Top Bubble Column TFH USA 2 $429 $858Interactive Bubble Tube TFH USA 1 $1,879 $1,879

Interactive Hurricane Tube TFH USA 1 $1,699 $1,699Bubble Wall Tall TFH USA 1 $1,599 $1,599Sound Controller TFH USA 1 $439 $439Wireless Receiver TFH USA 1 $179 $179SNAP Projector TFH USA 1 $899 $899

Laser Star Projector TFH USA 1 $219 $219Fiber Optic Curtain TFH USA 1 $1,399 $1,399

Fiber Optic Waterfall TFH USA 1 $1,499 $1,499Color Mirror Ball w/ Bracket TFH USA 1 $221 $221

Coral Ball Pool TFH USA 1 $699 $699Somation Vibro Ball Pool TFH USA 1 $3,399 $3,399

Upside Down Climber TFH USA 1 $629 $629Mini Plasma Ball TFH USA 2 $19 $38

Wiggly Gigly Legs TFH USA 1 $19 $19

Rain Rush TFH USA 1 $27 $27Band in a Box TFH USA 1 $29 $29

Giant Step and Play Piano TFH USA 1 $79 $79Multi-Sensory Balls TFH USA 2 $19 $38

Sensory Ball Set TFH USA 2 $15 $30Sensory Bead Curtain TFH USA 1 $59 $59

Sensory Shapes (Set of 6) TFH USA 1 $22 $22Exploration Center TFH USA 1 $299 $299

Activity Play Panel Center TFH USA 1 $549 $549Tactile Box TFH USA 1 $119 $119

Weighted Tactile Beanbags TFH USA 1 $29 $29Pop Up Firetruck TFH USA 1 $17 $17

Tactile Weighted Ball TFH USA 1 $17 $17Jungle Jumparoo TFH USA 1 $449 $449

Bumble Bee Rocker TFH USA 1 $32 $32Lady Bug Rocker TFH USA 1 $32 $32Six Foot Parachute TFH USA 1 $39 $39AAR Trampoline TFH USA 4 $249 $996

Bouncer w/ Handles Orange TFH USA 2 $119 $238Bouncer w/ Handles Pink TFH USA 2 $119 $238

Rockerski TFH USA 1 $699 $699Wheelchair Activity Arch TFH USA 1 $69 $69

Shape Sorting Cube TFH USA 1 $17 $17Memory Cubes TFH USA 1 $44 $44

Rainbow Beads Abacus TFH USA 1 $28 $28Construction Puzzle TFH USA 1 $12 $12

4 Ring Basketball Stand TFH USA 1 $189 $189Target Nets TFH USA 1 $49 $49

Inflatable Party Moonwalk Blastzone 1 $399 $399Play-Doh/Crayons/Paper Walmart 10 $5 $50

Totals $19,435 $20,947

Office Products


Cash Wrap Counter Palmer Retail Solutions 1 $750 $750

Draperies Walmart 3 $12 $36Office Chairs Walmart 3 $40 $120

Vacuum Walmart 1 $55 $55Plastic Buckets Dollar Tree 2 $7 $14Disinfectants Dollar Tree 5 $1 $5

Cleaning Wipes Dollar Tree 5 $1 $5Toiletries (pack of 12) Dollar Tree 1 $6 $6Ladder (Aluminum) Walmart 1 $48 $48

Power Strips Walmart 5 $5 $25Light Bulbs (4 Pack) Walmart 4 $6 $24

Totals $931 $1,088

Office Equipment


Cash Register Walmart 1 $179 $179All-In-One Computer Best Buy 1 $350 $350

Telephones Walmart 2 $29 $29Memory Cards (Backup

Storage)Walmart 2 $15 $30

Credit Card Reader Office Depot 1 $63 $63Security System w/Hard

DriveWalmart 1 $179 $179

Laminating Machine (Cards) Walmart 1 $20 $20Audio Receiver w/Speakers Walmart 1 $96 $96

DVD Player Walmart 1 $50 $50Totals $981 $996

Marketing and Promotional Items


Business Cards (Pack of 500) Vistaprint 3 $10 $30Name Tags Staples 3 $15 $45All-In-One

Printer/Copier/Scanner/Fax Machine

Walmart 1 $60 $60

Promotional Flyers Office Max 1 $20 $20Membership Cards Office Max 5 $10 $50

Brochures Office Max 1 $30 $30Outdoor Signage (Banner) Leading Edge Signs 1 $250 $250

Promotional Banners (Stadium)

Leading Edge Signs 1 $125 $125

Promotional Banners Leading Edge Signs 2 $50 $100Stationary Office Max 1 $85 $85

Printer Ink Cartridge Staples 1 $16 $16Totals $671 $811

Building/Remodeling


Paint/Painting Supplies Home Depot 10 $15 $150Throw Rugs Walmart 2 $50 $100

Plants (entryway) Home Depot 3 $8 $24Totals $73 $274

Other Costs


Telephone/Internet Service RCN 1 $125 $125Consulting Fee (TFH USA) TFH USA 1 $1,000 $1,000

Consulting Fee (Interior Design) IWS 1 $1,000 $1,000

Consulting Fee (Legal) Davison & McCarthy, PC 1 $400 $400

Accounting/Payroll Fee Paychex 1 $310 $310Totals $2,835 $2,835

Start-Up Cost Breakdown:

$20,947

$1,088 $996

$811 $274

$2,835

Start-Up Costs

Recreational Products Office Products Office EquipmentMarketing/Promotional Items Building/Remodeling Other Costs

Appendix F: 3-Year Projected Human Resources Expenditures

Year Year 1 Year 2 Year 3Projected Pay

IncreaseN/A 3.00% 3.00%

Executive Director – Steven Reilly

$35,000 $36,050 $37,132

Recreational Program Coordinator (FT)

$30,000 $30,900 $31,827

Recreational Assistant (PT)

$5,200 $5,356 $5,517

Number of Employees 3 3 3Total Payroll $70,200 $72,306 $74,476

Appendix G: Sales Forecast 1st Year Pro Forma

Fun for All of the Lehigh ValleySales Collections

Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1Oct-16 Nov-16 Dec-16 Jan-17 Feb-17 Mar-17 Apr-17 May-17 Jun-17 Jul-17 Aug-17 Sep-17

Product A - units sold 42.00 42.00 42.00 42.00 42.00 42.00 42.00 42.00 43.00 43.00 43.00 42.00 - price/unit $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360Total Sales $15,120 $15,120 $15,120 $15,120 $15,120 $15,120 $15,120 $15,120 $15,480 $15,480 $15,480 $15,120Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Product B - units sold 10.00 10.00 11.00 10.00 11.00 11.00 11.00 11.00 10.00 10.00 11.00 10.00 - price/unit $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480Total Sales $4,800 $4,800 $5,280 $4,800 $5,280 $5,280 $5,280 $5,280 $4,800 $4,800 $5,280 $4,800Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Sales $19,920 $19,920 $20,400 $19,920 $20,400 $20,400 $20,400 $20,400 $20,280 $20,280 $20,760 $19,920Total Cost of Goods Sold $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Collections - % same month 100.00% $19,920 $19,920 $20,400 $19,920 $20,400 $20,400 $20,400 $20,400 $20,280 $20,280 $20,760 $19,920 - % second month 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 - % third month 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total collections $19,920 $19,920 $20,400 $19,920 $20,400 $20,400 $20,400 $20,400 $20,280 $20,280 $20,760 $19,920

Accounts Receivable - opening $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 - plus sales $19,920 $19,920 $20,400 $19,920 $20,400 $20,400 $20,400 $20,400 $20,280 $20,280 $20,760 $19,920 - less collections $19,920 $19,920 $20,400 $19,920 $20,400 $20,400 $20,400 $20,400 $20,280 $20,280 $20,760 $19,920 - closing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0(Increase)/Decrease $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Appendix H: Sales Forecast 2- and 3-Year Pro Forma

Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3Oct-17 Nov-17 Dec-17 Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Jan-19 Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19

44.00 44.00 45.00 45.00 44.00 44.00 44.00 44.00 45.00 44.00 44.00 45.00 47.00 47.00 47.00 47.00 46.00 46.00 47.00 46.00 46.00 46.00 47.00 47.00$360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360 $360

$15,840 $15,840 $16,200 $16,200 $15,840 $15,840 $15,840 $15,840 $16,200 $15,840 $15,840 $16,200 $16,920 $16,920 $16,920 $16,920 $16,560 $16,560 $16,920 $16,560 $16,560 $16,560 $16,920 $16,920$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

11.00 11.00 10.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 11.00 10.00 11.00 11.00 11.00 11.00 11.00 10.00 11.00 11.00 11.00 11.00 11.00 11.00$480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480 $480

$5,280 $5,280 $4,800 $5,280 $5,280 $5,280 $5,280 $5,280 $5,280 $5,280 $5,280 $4,800 $5,280 $5,280 $5,280 $5,280 $5,280 $4,800 $5,280 $5,280 $5,280 $5,280 $5,280 $5,280$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$21,120 $21,120 $21,000 $21,480 $21,120 $21,120 $21,120 $21,120 $21,480 $21,120 $21,120 $21,000 $22,200 $22,200 $22,200 $22,200 $21,840 $21,360 $22,200 $21,840 $21,840 $21,840 $22,200 $22,200$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$21,120 $21,120 $21,000 $21,480 $21,120 $21,120 $21,120 $21,120 $21,480 $21,120 $21,120 $21,000 $22,200 $22,200 $22,200 $22,200 $21,840 $21,360 $22,200 $21,840 $21,840 $21,840 $22,200 $22,200$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

$21,120 $21,120 $21,000 $21,480 $21,120 $21,120 $21,120 $21,120 $21,480 $21,120 $21,120 $21,000 $22,200 $22,200 $22,200 $22,200 $21,840 $21,360 $22,200 $21,840 $21,840 $21,840 $22,200 $22,200

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0$21,120 $21,120 $21,000 $21,480 $21,120 $21,120 $21,120 $21,120 $21,480 $21,120 $21,120 $21,000 $22,200 $22,200 $22,200 $22,200 $21,840 $21,360 $22,200 $21,840 $21,840 $21,840 $22,200 $22,200$21,120 $21,120 $21,000 $21,480 $21,120 $21,120 $21,120 $21,120 $21,480 $21,120 $21,120 $21,000 $22,200 $22,200 $22,200 $22,200 $21,840 $21,360 $22,200 $21,840 $21,840 $21,840 $22,200 $22,200

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

Appendix I: Pro Forma Income Statement

Fun for All of the Lehigh ValleyIncome Statement Year 1 Year 2 Year 3

Sales $243,000.00 $253,920.00 $264,120.00Cost of Goods Sold $0.00 $0.00 $0.00Gross Margin $243,000.00 $253,920.00 $264,120.00

Operating Expenses - Advertising & Promotion $9,739.00 $10,154.00 $10,563.00 - Salaries & Fringe Benefits $91,260.00 $93,997.80 $96,818.80 - Wages $2,430.00 $2,539.20 $2,641.20 - Depreciation $7,902.94 $15,717.84 $23,536.21Lease Expense $21,000.00 $21,000.00 $21,000.00Utilities $4,871.00 $5,076.00 $5,255.00Insurance $503.25 $530.25 $553.25Total Operating Expenses $137,706.19 $149,015.09 $160,367.46

Operating Profit $105,293.81 $104,904.91 $103,752.54

Non Operating Income/Expenses $0.00 $0.00 $0.00 - Interest Expense $7,046.10 $11,117.87 $14,198.89

Profit Before Taxes $98,247.71 $93,787.05 $89,553.65Income Taxes $0.00 $0.00 $0.00Net Income $98,247.71 $93,787.05 $89,553.65

Appendix J: Pro Forma Balance Sheets

Fun for All of the Lehigh ValleyBalance Sheet Year 1 Year 2 Year 3

$42,979.00 $43,344.00 $43,709.00AssetsCurrent Assets - Cash $80,704.98 $162,980.21 $234,266.48 - Accounts Receivable $0.00 $0.00 $0.00 - Inventory $27,554.00 $35,150.00 $42,977.00Total Current Assets $108,258.98 $198,130.21 $277,243.48

Fixed Assets - Land $0.00 $0.00 $0.00 - Buildings $0.00 $0.00 $0.00 less Accumulated Depreciation $0.00 $0.00 $0.00 net Buildings $0.00 $0.00 $0.00 - Equipment $20,212.47 $40,199.77 $60,195.96 less Accumulated Depreciation $7,902.94 $23,620.77 $47,156.98 net Equipment $19,651.06 $39,083.23 $58,524.02 - Vehicles $0.00 $0.00 $0.00 less Accumulated Depreciation $0.00 $0.00 $0.00 net Vehicles $0.00 $0.00 $0.00Total Fixed Assets $19,651.06 $39,083.23 $58,524.02Total Assets $127,910.04 $237,213.43 $335,767.50

Year 1 Year 2 Year 3Liabilities and Equities $42,979.00 $43,344.00 $43,709.00Current Liabilities - Accounts Payable $454.75 $472.50 $475.50 - Income Taxes $0.00 $0.00 $0.00 - Current Portion Long Term Debt $13,160.18 $23,755.47 $18,290.30Total Current Liabilities $13,614.93 $24,227.97 $18,765.80

Long-Term Liabilities - Long-Term Loans $16,047.40 $20,950.71 $35,413.29 - Mortgage $0.00 $0.00 $0.00Total Long Term Loans $16,047.40 $20,950.71 $35,413.29Owners' Equity $0.00 $0.00 $0.00 - Share Capital $0.00 $0.00 $0.00 - Retained Earnings $98,247.71 $192,034.76 $281,588.41Total Owners' Equity $98,247.71 $192,034.76 $281,588.41

Total Liabilities and Equities $127,910.04 $237,213.43 $335,767.50

Appendix K: Pro Forma Cash Flow (Year 1)

Fun for All of the Lehigh ValleyCash Flow

Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 1 Year 142644 42675 42705 42736 42767 42795 42826 42856 42887 $42,917.00 $42,948.00 $42,979.00

Opening Cash $0.00 $9,582.26 $11,719.76 $14,179.47 $21,134.23 $28,656.18 $36,178.14 $43,569.10 $51,087.55 $58,495.21 $65,777.12 $73,626.47

Cash Flow from Operations Net Income $7,614.32 $7,744.74 $8,254.50 $7,718.02 $8,322.61 $8,356.20 $8,262.01 $8,422.55 $8,342.54 $8,248.35 $8,854.66 $8,107.22 Plus Depreciation $765.31 $744.06 $723.39 $703.30 $683.76 $664.77 $646.31 $628.36 $610.90 $593.94 $577.44 $561.40 (Increase)/Decrease in Accounts Receivable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Inventory -$20,847.00 -$612.00 -$612.00 -$598.00 -$612.00 -$612.00 -$612.00 -$612.00 -$608.00 -$608.00 -$623.00 -$598.00 Increase/(Decrease) in Accounts Payable $10,423.50 -$4,905.75 -$5,058.75 -$7.00 $3.50 $3.50 $0.00 $0.00 -$2.00 -$1.00 $7.50 -$8.75 Increase/(Decrease) in Income Taxes Payable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Operations -$2,043.87 $2,971.05 $3,307.14 $7,816.31 $8,397.87 $8,412.47 $8,296.31 $8,438.90 $8,343.44 $8,233.29 $8,816.60 $8,061.87

Cash Flow from Investing Activities (Increase)/Decrease in Land $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Buildings $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Equipment -$27,554.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Vehicles $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Investing Activities -$27,554.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Cash Flow from Financing Activities Increase in Borrowed Funds $40,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Loan Principal Payments) -$819.88 -$833.54 -$847.43 -$861.56 -$875.92 -$890.52 -$905.36 -$920.45 -$935.79 -$951.38 -$967.24 -$983.36 Increase/(Decrease) in Share Capital $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Dividend Payments) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Financing Activities $39,180.12 -$833.54 -$847.43 -$861.56 -$875.92 -$890.52 -$905.36 -$920.45 -$935.79 -$951.38 -$967.24 -$983.36

Net Cash Flow $9,582.26 $2,137.51 $2,459.71 $6,954.76 $7,521.96 $7,521.96 $7,390.96 $7,518.46 $7,407.66 $7,281.91 $7,849.36 $7,078.51

Closing Cash $9,582.26 $11,719.76 $14,179.47 $21,134.23 $28,656.18 $36,178.14 $43,569.10 $51,087.55 $58,495.21 $65,777.12 $73,626.47 $80,704.98

Appendix L: Pro Forma Cash Flow (Year 2)

Fun for All of the Lehigh ValleyCash Flow

Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2 Year 2$43,009.00 $43,040.00 $43,070.00 $43,101.00 $43,132.00 $43,160.00 $43,191.00 $43,221.00 $43,252.00 $43,282.00 $43,313.00 $43,344.00

Opening Cash $80,704.98 $87,308.77 $94,190.82 $100,954.06 $108,022.26 $114,895.80 $121,770.34 $128,516.39 $135,394.43 $142,597.88 $149,340.42 $156,214.96

Cash Flow from Operations Net Income $7,335.42 $7,533.39 $7,487.80 $7,864.23 $7,729.88 $7,795.03 $7,726.57 $7,921.54 $8,316.37 $7,913.89 $8,107.36 $8,055.58 Plus Depreciation $1,522.10 $1,479.82 $1,438.72 $1,398.76 $1,359.91 $1,322.14 $1,285.42 $1,249.71 $1,215.00 $1,181.26 $1,148.45 $1,116.55 (Increase)/Decrease in Accounts Receivable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Inventory -$634.00 -$634.00 -$630.00 -$644.00 -$630.00 -$630.00 -$630.00 -$630.00 -$644.00 -$630.00 -$630.00 -$630.00 Increase/(Decrease) in Accounts Payable $11.75 $9.00 -$2.00 $6.00 -$3.50 -$3.50 $0.00 $0.00 $7.00 -$3.50 -$3.50 $0.00 Increase/(Decrease) in Income Taxes Payable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Operations $8,235.27 $8,388.21 $8,294.52 $8,624.99 $8,456.29 $8,483.66 $8,381.98 $8,541.25 $8,894.37 $8,461.65 $8,622.30 $8,542.13


Cash Flow from Financing Activities Increase in Borrowed Funds $35,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Loan Principal Payments) -$1,481.48 -$1,506.17 -$1,531.27 -$1,556.80 -$1,582.74 -$1,609.12 -$1,635.94 -$1,663.21 -$1,690.93 -$1,719.11 -$1,747.76 -$1,776.89 Increase/(Decrease) in Share Capital $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Dividend Payments) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Financing Activities $33,518.52 -$1,506.17 -$1,531.27 -$1,556.80 -$1,582.74 -$1,609.12 -$1,635.94 -$1,663.21 -$1,690.93 -$1,719.11 -$1,747.76 -$1,776.89

Net Cash Flow $6,603.79 $6,882.04 $6,763.24 $7,068.19 $6,873.54 $6,874.54 $6,746.04 $6,878.04 $7,203.44 $6,742.54 $6,874.54 $6,765.24

Closing Cash $87,308.77 $94,190.82 $100,954.06 $108,022.26 $114,895.80 $121,770.34 $128,516.39 $135,394.43 $142,597.88 $149,340.42 $156,214.96 $162,980.21

Appendix M: Pro Forma Cash Flow (Year 3)Fun for All of the Lehigh ValleyCash Flow

Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3 Year 3$43,374.00 $43,405.00 $43,435.00 $43,466.00 $43,497.00 $43,525.00 $43,556.00 $43,586.00 $43,617.00 $43,647.00 $43,678.00 $43,709.00

Opening Cash $162,980.21 $166,275.40 $172,677.35 $179,070.30 $185,324.24 $191,395.29 $197,021.88 $203,284.83 $209,362.13 $215,441.42 $221,394.72 $227,817.17

Cash Flow from Operations Net Income $6,998.02 $7,239.36 $7,340.85 $7,302.29 $7,213.35 $6,857.68 $7,597.94 $7,506.38 $7,602.46 $7,561.33 $8,119.94 $8,214.05 Plus Depreciation $2,279.22 $2,215.92 $2,154.37 $2,094.53 $2,036.36 $1,979.80 $1,924.81 $1,871.35 $1,819.37 $1,768.84 $1,719.71 $1,671.94 (Increase)/Decrease in Accounts Receivable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Increase)/Decrease in Inventory -$666.00 -$666.00 -$666.00 -$666.00 -$655.00 -$641.00 -$666.00 -$655.00 -$644.00 -$634.00 -$634.00 -$634.00 Increase/(Decrease) in Accounts Payable Increase/(Decrease) in Income Taxes Payable $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Operations $8,629.25 $8,798.28 $8,829.22 $8,730.82 $8,589.21 $8,186.73 $8,865.74 $8,723.47 $8,769.58 $8,688.42 $9,203.15 $9,252.00


Cash Flow from Financing Activities Increase in Borrowed Funds $40,000.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Loan Principal Payments) -$2,357.05 -$2,396.34 -$2,436.27 -$2,476.88 -$2,518.16 -$2,560.13 -$2,602.80 -$2,646.18 -$2,690.28 -$2,735.12 -$2,780.70 -$2,802.68 Increase/(Decrease) in Share Capital $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 (Dividend Payments) $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 Total Cash Flow from Financing Activities $37,642.95 -$2,396.34 -$2,436.27 -$2,476.88 -$2,518.16 -$2,560.13 -$2,602.80 -$2,646.18 -$2,690.28 -$2,735.12 -$2,780.70 -$2,802.68

Net Cash Flow $3,295.20 $6,401.95 $6,392.95 $6,253.95 $6,071.05 $5,626.60 $6,262.95 $6,077.30 $6,079.30 $5,953.30 $6,422.45 $6,449.32

Closing Cash $166,275.40 $172,677.35 $179,070.30 $185,324.24 $191,395.29 $197,021.88 $203,284.83 $209,362.13 $215,441.42 $221,394.72 $227,817.17 $234,266.48

Appendix N: Cash Flow Chart

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Appendix O: Breakeven Analysis

Breakeven AnalysisProduct A Year 1 Year 2 Year 3Selling Price $360.00 $360.00 $360.00Variable Cost $0.00 $0.00 $0.00Contribution $360.00 $360.00 $360.00

Product B $0.00 $0.00 $0.00Selling Price $480.00 $480.00 $480.00Variable Cost $0.00 $0.00 $0.00Contribution $480.00 $480.00 $480.00

Fixed Expenses $144,752.29 $160,132.95 $174,566.350

Product ABreakeven Volume (units) 402 445 485Units Sold 507 532 559

steven reilly - business plan (mba 552) final draft (fun for all)

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