barton interiors

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This sample business plan has been made available to users of Business Plan Pro®, business planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at [email protected]. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright © Palo Alto Software, Inc., 1995-2009 All rights reserved.

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Page 1: Barton Interiors

This sample business plan has been made available to users of Business Plan Pro®, business planningsoftware published by Palo Alto Software. Names, locations and numbers may have been changed,and substantial portions of original plan text may have been omitted to preserve confidentialityand proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not havepermission to resell, reproduce, publish, distribute or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should be emailedto the marketing department of Palo Alto Software at [email protected]. For productinformation visit our Website: www.paloalto.com or call: 1-800-229-7526.

Copyright © Palo Alto Software, Inc., 1995-2009 All rights reserved.

Page 2: Barton Interiors

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by_________________________ in this business plan is confidential; therefore, reader agrees not todisclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respectsconfidential in nature, other than information which is in the public domain through other meansand that any disclosure or use of same by reader, may cause serious harm or damage to_________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

Page 3: Barton Interiors

Table of Contents

Page 1

1.0 Executive Summary.............................................................................................................................1Chart: Highlights ......................................................................................................................1

1.1 Objectives ...................................................................................................................................21.2 Mission ........................................................................................................................................21.3 Keys to Success ........................................................................................................................2

2.0 Company Summary.............................................................................................................................22.1 Company Ownership .................................................................................................................22.2 Start-up Summary ......................................................................................................................4

Table: Start-up .........................................................................................................................4Chart: Start-up .........................................................................................................................4

3.0 Products and Services........................................................................................................................54.0 Market Analysis Summary ..................................................................................................................5

4.1 Market Segmentation ................................................................................................................5Table: Market Analysis ...........................................................................................................7Chart: Market Analysis (Pie) ..................................................................................................7

4.2 Target Market Segment Strategy .............................................................................................74.3 Service Business Analysis........................................................................................................8

4.3.1 Competition and Buying Patterns................................................................................95.0 Web Plan Summary ............................................................................................................................9

5.1 Website Marketing Strategy .....................................................................................................95.2 Development Requirements .....................................................................................................9

6.0 Strategy and Implementation Summary ............................................................................................96.1 SWOT Analysis ........................................................................................................................10

6.1.1 Strengths ......................................................................................................................106.1.2 Weaknesses ................................................................................................................116.1.3 Opportunities ...............................................................................................................116.1.4 Threats..........................................................................................................................11

6.2 Competitive Edge ....................................................................................................................116.3 Marketing Strategy...................................................................................................................116.4 Sales Strategy..........................................................................................................................12

6.4.1 Sales Forecast ............................................................................................................12Table: Sales Forecast.................................................................................................12Chart: Sales Monthly ...................................................................................................13Chart: Sales by Year ...................................................................................................13

6.5 Milestones ................................................................................................................................13Table: Milestones..................................................................................................................14Chart: Milestones ..................................................................................................................14

7.0 Management Summary ....................................................................................................................147.1 Personnel Plan .........................................................................................................................15

Table: Personnel ...................................................................................................................158.0 Financial Plan ....................................................................................................................................16

8.1 Start-up Funding ......................................................................................................................16Table: Start-up Funding........................................................................................................17

8.2 Important Assumptions............................................................................................................178.3 Break-even Analysis................................................................................................................18

Table: Break-even Analysis .................................................................................................18Chart: Break-even Analysis .................................................................................................18

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Table of Contents

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8.4 Projected Profit and Loss .......................................................................................................18Table: Profit and Loss ..........................................................................................................19Chart: Profit Monthly .............................................................................................................19Chart: Profit Yearly ................................................................................................................20Chart: Gross Margin Monthly ...............................................................................................20Chart: Gross Margin Yearly..................................................................................................21

8.5 Projected Cash Flow ...............................................................................................................22Table: Cash Flow ..................................................................................................................22Chart: Cash ...........................................................................................................................23

8.6 Projected Balance Sheet ........................................................................................................24Table: Balance Sheet ...........................................................................................................24

8.7 Business Ratios .......................................................................................................................25Table: Ratios .........................................................................................................................26

8.8 Long-term Plan.........................................................................................................................27Table: Sales Forecast ...............................................................................................................................1Table: Personnel ........................................................................................................................................2Table: Profit and Loss ...............................................................................................................................3Table: Cash Flow .......................................................................................................................................4Table: Balance Sheet ................................................................................................................................5

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Barton Interiors

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1.0 Executive Summary

Barton Interiors is a proposed venture that will offer comprehensive interior design services forhomes and offices in the Boulder, Colorado area. Barton Interiors also will provide accessto products to complement the design consulting services including furniture, both new andantique, decorator fabric, and home and office accessories. This venture offers the personalizedservices the target market desires and can afford in a way that is unique from concept toimplementation.

Recent market research indicates a specific and growing need in the area for the interiordesign consulting services and products Barton Interiors offers the market it will serve. Themarket strategy will be based on a cost effective approach to reach this clearly defined targetmarket. Although the population of Boulder is under 100,000, the market has a significantquantity of relatively wealthy households that are conscious of the appearance and feel oftheir home and offices.

The approach to promote Barton Interiors with be through establishing relationships with keypeople in the community and then through referral activities once a significant client base isestablished. Barton Interiors will focus on developing solid and loyal client relationships offeringdesign solutions based on the client's taste, budget, use, and goals for the space. Theadditional selection, accessibility of product, design services, and value-based pricing willdifferentiate Barton Interiors from the other options in the area.

Total revenues in the first year are projected to exceed $46,000 with a loss. The venture willshow increasing profits in year two and three, with revenues projected to increase to almost$80,000. This interior design business plan outlines the concept and implementation and detailsregarding the first three years of this venture.

Sales

Gross Margin

Net Profit

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Year 1 Year 2 Year 3 Year 4 Year 5

Highlights

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Barton Interiors

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1.1 Objectives

1. Realize an average of $3,870 of sales each business month for the first year, $5,720 forthe second, and $6,600 for the third year.

2. Generate a minimum of 45% of revenues from product sales versus consulting billing.3. Establish a commercial revenue client base accounting for 10% of total revenues.

1.2 Mission

Barton Interiors is an interior design service for discerning, quality-conscious clients that seekassistance in their design choices for their primary residences, vacation homes, andbusinesses. This experience offers personal attention through the design process and alsoprovides design resources and products to its clients through special purchases of furniture,fabric, and accessories. The total experience is provided in a way to inform, inspire, andassist people through the process of transforming their home or business environment tobecome a unique and personalized expression of themselves and add to their enjoyment of thatinterior space.

1.3 Keys to Success

The primary keys to success for Barton Interiors will be based on the following factors:

Provide the highest quality interior design consulting experience possible. Sell specially selected products to these clients to further meet their interior design

needs. Communicate with our client base through the website and personalized communication

techniques. Retain clients to generate repeat purchases and initiate referrals.

2.0 Company Summary

Barton Interiors is a start-up business that will offer comprehensive interior design services forhome and office. This business will assist those that want to have guidance and council indeveloping a basic design concept of their project, to the person that desires someone to take itfrom concept to complete implementation. Barton Interiors will offer the ability for clients topurchase new and antique furniture, art work, decorator fabric, and home accessories. Thewebsite www.bartoninteriors.com will be used as another way to communicate theservices available and provide a portfolio of the work accomplished. The business will begin asa home-based business and is expected to remain in this structure through at least the firstthree years.

2.1 Company Ownership

Barton Interiors, located in Boulder, Colorado is registered in the State of Colorado as a sole

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Barton Interiors

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proprietorship owned and operated by Jill Barton dba Barton Interiors.

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Barton Interiors

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2.2 Start-up Summary

The following details the initial start-up expenses for Barton Interiors. Most equipment costs areoffice related. Sample and display costs include books, samples and resources necessary topromote furniture, fabric and other home accessory products.

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $500

Stationery etc. $850

Brochures $420

Consultants $450

Insurance $150

Samples and Reference Books $3,250

Research and development $800

Expensed equipment $4,250

Other $550

Total Start-up Expenses $11,220

Start-up Assets

Cash Required $9,780

Other Current Assets $1,000

Long-term Assets $3,000

Total Assets $13,780

Total Requirements $25,000

$0

$3,000

$6,000

$9,000

$12,000

$15,000

$18,000

$21,000

$24,000

Expenses Assets Investment Loans

Start-up

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Barton Interiors

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3.0 Products and Services

Barton Interiors focuses on providing interior design consulting. This is complementedby specially purchased furniture, art pieces, decorator fabric, and accessories for the homeand office. The sales process will begin with interior design consulting services, and thenprogress on to offer specially selected components to complement the design theme.

Products available through Barton Interiors include:

Furniture available through special purchase arrangements with Thomasville, DrexelHeritage, and Henredon and local craftsman.

A selection of decorator fabrics from Waverly, P Kaufmann, Fabricut, Ralph Lauren, Regal,Robert Allen, Latimer Alexander, Covington, and Portfolio.

A line of drapery hardware called "Oval Office Iron" purchased through Dept. of theInterior Decorator Fabrics in Eugene, Oregon found at www.fabric-online.com.

Accessory and art pieces available through wholesale shows. Hunter Douglas window treatment products including a variety of hard window coverings. Interior shutters made of wood and a plastic/resin product called "polywood." Antiques acquired for specific client needs through an arrangement with a local antique

buyer and through direct purchases through other sources.

4.0 Market Analysis Summary

Barton Interiors has a defined target market client that will be the basis of building thisbusiness. This client is identical for both the residence and office spaces, but the target marketis identical based on her different roles for each of those spaces.

Effective marketing combined with an optimal product offering is critical to the BartonInteriors' success and future profitability. The owner possesses solid information aboutthe market and knows a great deal about the common attributes of those that are expected tobe prized and loyal clients. This information will be leveraged to better understand who BartonInteriors will serve, their specific needs, and how to better communicate with them.

4.1 Market Segmentation

The profile of the Barton Interior client consists of the following geographic, demographic,psychographic, and behavior factors:

Geographics

The geographic market is the affluent sector within the Boulder, Colorado area with apopulation of 94,673. (Based on the 2000 Census data.)

A 20-mile geographic area is in need of the products and services offered and do notintend to pursue the Denver market at this time.

The total target market population is estimated at 24,000 based on the followingdemographics.

Demographics

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Female, married and have attended college. Have children, but they are not necessarily at home. A combined household annual income greater than $100,000. Age range of 35 to 55 years, with a median age of 42. Owns their home, townhouse and/or condominium valued at over $425,000. They and/or their spouse work in a professional setting and may have interior design

requirements for their office space as well as their homes. Belong to one or more business, service, and/or athletic organization including:

Boulder Country Club. Junior League of Boulder. American Business Women's Association. American Auxiliary of University Women. Doctor's Wives Auxiliary.

The following is known regarding the profile of the typical resident of Boulder:

67% have lived in the area for seven years or more. 23% are between the ages of 35 and 44. 40% have completed some college. 24% are managers, professionals and/or owners of a business. 53% are married. 65% have no children living at home. 56% own their residence.

Psychographics

The appearance of her home is a priority. Entertaining and showing her home is important. She perceives herself as creative, tasteful and able, but seeks validation and support

regarding her decorating ideas and choices. She reads one or more of the following magazines:

Martha Stewart Living. Country Living. Home. House Beautiful. Country Home. Metropolitan Home. Traditional Homes. Victoria. Elle Decor.

If she does seek out television as an information source for home decorating that ismost likely to be "Martha Stewart" and, on a lesser basis, "Interior Motives."

Behaviors

She takes pride in having an active role in decorating their home. Her home is a form of communicating "who she is" to others. Comparison positioning and stature within social groups are made on an ongoing basis,

but rarely discussed.

Barton Interiors is providing its clients the opportunity to create a home environment toexpress who they are. They seek design assistance and have the resources to accomplish

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their goals. They desire their home to be personal, unique, and tasteful as it communicates amessage about what is important to them. Barton Interiors will seek to fulfill the followingbenefits that are important to our clients.

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Country Club Women 12% 34,400 38,528 43,151 48,329 54,128 12.00%

Boomers in Transition 9% 12,000 13,080 14,257 15,540 16,939 9.00%

Professional Youngsters 8% 8,000 8,640 9,331 10,077 10,883 8.00%

Home Builders 5% 8,000 8,400 8,820 9,261 9,724 5.00%

Other 0% 0 0 0 0 0 0.00%

Total 10.09% 62,400 68,648 75,559 83,207 91,674 10.09%

Country Club Women

Boomers in Transition

Professional Youngsters

Home Builders

Other

Market Analysis (Pie)

4.2 Target Market Segment Strategy

Our marketing strategy will create awareness, interest, and appeal from our target market forwhat Barton Interiors offers its clients. The target markets are separated into four segments;"Country Club Women," "Boomers in Transition," "Professional Youngsters," and "Home Builders."The primary marketing opportunity is selling to these well defined and accessible target marketsegments that focuses on investing discretionary income in these areas:

Country Club Women - The most dominant segment of the four is comprised of women in the agerange of 35 to 50. They are married, have a household income greater than $100,000, own atleast one home or condominium, and are socially active at and away from home. They aremembers of the Boulder Country Club, Junior League of Boulder, AAUW, and/or the Doctor'sWives Auxiliary. They have discretionary income, and their home and how it looks is a priority.The appearance of where they live communicates who they are and what is important to

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them. This group represents the largest collection of "Martha Stewart Wanna Be's," with theirprofile echoing readers of Martha Stewart Living magazine, based on the current demographicsdescribed in the 2001 Martha Stewart Living Media Kit.

Boomers in Transition - This group, typically ranging in age from 50 to 65, is going through apositive and planned life transition. They are changing homes (either building or moving) orremodeling due to empty nest syndrome, retirement plans, general downsizing desires, or tojust get closer to the golf course. Their surprisingly high level of discretionary income is firstspent on travel, with decorating their home a close second. This is what makes this segment soattractive. The woman of the couple is the decision maker, and often does not always includethe husband in the selection or purchase process.

Professional Youngsters - Couples between the ages of 25 and 35 establishing their first "adult"household fall into this group. They both work, earn in excess of $80,000 annually, and nowwant to invest in their home. They seek to enjoy their home and communicate a "successful"image and message to their contemporaries. They buy big when they have received apromotion, a bonus, or an inheritance.

Home Builders - People in the home building process, typically ranging in age from 40 to 55, areprime candidates for Barton Interiors. This applies to both primary residences and vacations andsecondary homes. Although only expected to occur two to fives times each year for thebusiness, this event will be the single largest dollar transaction amount.

4.3 Service Business Analysis

The industry continues to be competitive with a "commodity" concern with "designers" of allskill and background levels available throughout the market.

Potential Competitors: There are many other interior designers in the Boulder areaand these competitors range from those that provide simple-focused services, such asdraperies only, to a more full-service interior design approach similar to Barton Interiors.

Power of Suppliers: Moderately high in most anyone that has a business licence canhave access to wholesale purchase of furniture, fabrics and accessories.

Power of Buyers: Very low as buyers work within the financial terms and productavailability offered through the suppliers that specify the terms and conditions.

Substitute Products: High as many people refer to themselves as interior designersregardless of background, training, or certification. Substitute products are also high inthe area of window treatment as hardcovering solutions have become available andincreasingly affordable. This includes blinds, shutters, and other "manufactured"treatments. Substitute products are not as prevalent in the area of antiques and artpieces.

Rivalry: Moderately low with the "territorial" structure that the industry experiencesand moderately low exit barriers. The easy entry is accompanied with an easy exit andpeople get out when it is not working.

With the slow, but steady, growth of the past few years, the industry is now experiencing a"cautious optimism" regarding the future. Growth and expansion activities for most areas of theinterior design industry appear to be carefully considered. Many in the industry continues todecide what to do and buy as the economy has experienced a slowdown and increaseduncertainty from the more economically confident 1990's.

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4.3.1 Competition and Buying Patterns

Competition in the area is strong, with designers ranging from the home-based, no formal trainingindividuals to the more formalized store front, American Association of Interior Designers (ASID)certified designers that have close relationships with prestigious architects. In mostcases, clients make the provider decision on the basis of three criteria in this order withthese percent influences indicated after each:

1. Referrals and relationship with other professionals, particularly architects (55%).2. Personality and "expected relationship" with the designer (25% ).3. Past work (15%).4. ASID certification (5%).

Understanding the influence of these factors on the prospective client will be key in themarketing strategy.

5.0 Web Plan Summary

The website of www.bartoninteriors.com will be used for information only purposes at thistime. Contact information will be presented with a complete portfolio of work accomplished. Additional information will be provided regarding the product-based resources Barton Interiorsincorporates into the work done for clients.

5.1 Website Marketing Strategy

5.2 Development Requirements

6.0 Strategy and Implementation Summary

The primary sales and marketing strategy for Barton Interiors includes these factors:

A premier interior design consulting experience that provides impressive client servicethroughout.

The sale of other complementary products that adds value for the client's totalexperience.

Providing a experience that will result in repeat business for home and/or office needs andclient referrals.

This strategy will be implemented through the tactics and programs described in this section.

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6.1 SWOT Analysis

The following SWOT analysis captures the key strengths and weaknesses relating to themarket analysis summary and describes the opportunities and threats facing Barton Interiors.

Strengths

The proven ability to establish excellent personalized client service. Strong relationships with suppliers that offer flexibility and respond to special product

requirements. Good referral relationships with architects, complementary vendors, and local realtors. Client loyalty developed through a solid reputation among repeat, high-dollar purchase

clients.

Weaknesses

The owner is still climbing the "retail experience learning curve." Not established in a market where a variety of interior design options exist. Challenges of the seasonality of the business.

Opportunities

A significant portion of our target market is desperately looking for the services BartonInteriors will offer.

Strategic alliances offering sources for referrals and joint marketing activities to extendour reach.

Promising activity from new home construction activity. Changes in design trends can initiate home updating and, therefore, generate sales.

Threats

Continued price pressure due to competition or the weakening market reducingcontribution margins.

Dramatic changes in design, including fabric colors and styles can present challenges tokeep paced with what is desired by what is expected to be a leading-edge client base.

Expansion of products and services offered by other sources including national discountstores into the local market including Target, Wal-Mart, and Home Depot.

Catalog resources, including Calico Corners and Pottery Barn, with aggressively pricedtrend-setting fabric products including drapery, bedding and slipcovers.

This analysis indicates solid potential success, but the weaknesses and threats must berecognized throughout the life of the venture.

6.1.1 Strengths

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6.1.2 Weaknesses

6.1.3 Opportunities

6.1.4 Threats

6.2 Competitive Edge

Barton Interiors will be differentiated from other interior designers by the value it offersin quality, sought-after products not found through other designers or store choices, andthrough the excellent service and support it offers. Client follow-through will be impeccable. This competitive edge leverages the same proven factors that indicated higher success rates forinterior design services.

6.3 Marketing Strategy

The marketing strategy is based on establishing Barton Interiors as the resource of choice forpeople in need of interior design ideas and products. The more involved "do-it-yourself"and the "buy-it-yourself" clients will find the consulting and guidance helpful. On the otherend of the spectrum, the "just-get-it-done" client will find Barton will successfullyaccomplish exactly that. All clients will find Barton Interiors to be a resources to decoratetheir homes and offices in a way that is inspiring, inviting, and motivating.

Our marketing strategy is based on superior performance in the following areas:

Unique consulting services. Product choices specifically chosen for each individual client project. Overall quality of the experience and the result. Excellent client service and support regardless.

This marketing strategy will create awareness, interest, and appeal from our target market forwhat Barton Interiors offers our clients. This will be executed in a manner that will entice themto come back for repeat purchases and encourage them to refer friends and professionalcontacts.

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6.4 Sales Strategy

The key to our sales strategy is referrals from pleased clients that are proud of the result BartonInteriors provided them and pleased to tell their friends--people much like them. Keeping incontact with past clients to acquire repeat business and to remind them of this referralopportunity will be key. Sales activities will depend on creating awareness about the servicesBarton Interiors offers and then build on each and every client as they make the decision torefer to others.

6.4.1 Sales Forecast

The sales forecast is broken down into three main revenue streams; residential consultingrevenue, commercial consulting revenue, and product sales. The goal is to have these tworevenue streams be equal by the second year, with product sales slower to secure during yearone. The revenue forecast for the upcoming year is based on a modest 12% growth rate. The economic unpredictability adds to the difficulty of making these projections.

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3 Year 4 Year 5

Sales

Residential Consulting $22,700 $31,200 $46,000 $556,400 $667,700

Commercial Consulting $3,960 $6,240 $7,200 $0 $0

Product Sales $19,800 $31,200 $46,000 $42,190 $63,280

Other $0 $0 $0 $0 $0

Total Sales $46,460 $68,640 $99,200 $598,590 $730,980

Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5

Residential Consulting $3,405 $4,680 $6,900 $0 $0

Commercial Consulting $594 $936 $1,080 $0 $0

Product Sales $10,890 $17,160 $25,300 $0 $0

Other $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $14,889 $22,776 $33,280 $0 $0

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Residential Consulting

Commercial Consulting

Product Sales

Other

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

$8,000

Mon

th 1

Mon

th 2

Mon

th 3

Mon

th 4

Mon

th 5

Mon

th 6

Mon

th 7

Mon

th 8

Mon

th 9

Mon

th 1

0

Mon

th 1

1

Mon

th 1

2

Sales Monthly

Residential Consulting

Commercial Consulting

Product Sales

Other

$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Year 1 Year 2 Year 3 Year 4 Year 5

Sales by Year

6.5 Milestones

The milestone chart below accompanied by the graphic outlines key activities that will be criticalto Barton Interiors' success in the coming year.

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Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Year Buying Program 1/2/2002 1/30/2002 $560 Jil l Products

Membership Strategy 2/2/2002 2/15/2002 $225 Jil l Promotions

Seminar Schedule & Prep. 3/1/2002 4/1/2002 $45 Jil l Marketing

Seminars 4/1/2002 5/30/2002 $540 Jil l Marketing

Client Review/Analysis 6/1/2002 6/15/2002 $250 Jil l Marketing

Furniture Market (High Point, N.C.)

11/10/2002 11/20/2002 $1,800 Jil l Products

Year End Evaluation 12/20/2002 12/31/2002 $250 Jill & CPA Management

Totals $3,670

Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Year End Evaluation

Furniture Market (High Point, N.C.)

Client Review/Analysis

Seminars

Seminar Schedule & Prep.

Membership Strategy

Year Buying Program

Milestones

7.0 Management Summary

Jill Barton is the founder and owner of Barton Interiors. Jill received a Bachelor of Arts degreefrom the University of Oregon in 1990 through the College of Architecture and Interior Design andis ASID certified. After working for three years at a prestigious interior design firm in Portland,Oregon, she moved to Boulder in 1993 and began working with Gibson & Sawyer, LLC, a well-established architecture firm focusing on the commercial sector. Jill worked with the architectsin the interior design needs for their projects. During this time, she has developedrelationships with a number of community, professional, and supplier contacts throughout theBoulder and Greater Denver area. Jill plans to leave the firm on favorable terms at the end ofthe year.

With her new role at Barton Interiors, Jill will oversee all aspects of the design process and allbusiness operations. Jill's responsibilities include all aspects of establishing the business,

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marketing, buying, bookkeeping and financial dealings.

7.1 Personnel Plan

Jill will act as a sole proprietor without employees at this point. Contract labor may requiredfor upholstery and fabrication purposes, but that will be included in the cost of good for eachclient's project. Jill's salary will begin at a modest $1,200 per month, increase quarterly, andthen is projected at $2,400 per month for year two and $3,000 for year three.

Table: Personnel

Personnel Plan

Year 1 Year 2 Year 3 Year 4 Year 5

Jil l Barton $19,800 $28,800 $36,000 $0 $0

Other $0 $0 $0 $0 $0

Total People 0 0 0 0 0

Total Payroll $19,800 $28,800 $36,000 $0 $0

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8.0 Financial Plan

The initial funding of $25,000 will be invested by the owner. The goal is to fund the growth ofthe business from its earnings. The financial plan contains these essential factors:

1. A growth rate in sales of 47% for the year 2002 and 15% for 2003.2. An average sales per month that increases each year, averaging $3,870 in the first

year, $5,720 the second, and $6,600 in the third year.3. Continue to fund the growth of the business from the revenues it generates.

Financial difficulties and risks

Slow sales resulting in less-than-projected cash flow. Unexpected and excessive cost increases compared to the planned expenses. Overly aggressive and debilitating actions by competing designers. A parallel entry by a new competitor further diminishing revenue generation potential.

Worst case risks might include

Determining the business cannot support itself on an ongoing basis. Dealing with the financial, business, and personal devastation of the venture's failure.

Survivable but painful.

8.1 Start-up Funding

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Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $11,220

Start-up Assets to Fund $13,780

Total Funding Required $25,000

Assets

Non-cash Assets from Start-up $4,000

Cash Requirements from Start-up $9,780

Additional Cash Raised $0

Cash Balance on Starting Date $9,780

Total Assets $13,780

Liabili ties and Capital

Liabili ties

Current Borrowing $0

Long-term Liabili ties $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabili ties (interest-free) $0

Total Liabil ities $0

Capital

Planned Investment

Jil l Barton $25,000

Investor 2 $0

Other $0

Additional Investment Requirement $0

Total Planned Investment $25,000

Loss at Start-up (Start-up Expenses) ($11,220)

Total Capital $13,780

Total Capital and Liabili ties $13,780

Total Funding $25,000

8.2 Important Assumptions

The following captured critical assumptions will determine the potential for future success.

A healthy economy that supports a moderate level of growth in the market. The ability to support a gross margin percentage in excess of 65%. Keeping operating costs low, particularly in the areas of product purchases ongoing

monthly expenses. Receiving an initial payment for each project of 50% of estimated time and product

purchases and collecting the balance of these revenues within 45 days of completingeach project.

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8.3 Break-even Analysis

The break-even analysis below is expressed as a per-client unit. This is based on averagehourly billing, product sales, and costs per transaction.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $4,067

Assumptions:

Average Percent Variable Cost 32%

Estimated Monthly Fixed Cost $2,763

$0

$500

$1,000

$1,500

$2,000

$2,500

($500)

($1,000)

($1,500)

($2,000)

($2,500)

$0$700

$1,400$2,100

$2,800$3,500

$4,200$4,900

$5,600$6,300

$7,000$7,700

Break-even Analysis

8.4 Projected Profit and Loss

The following represents the projected profit and loss for Barton Interiors based on sales andexpense projections for 2002 through 2004.

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Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3 Year 4 Year 5

Sales $46,460 $68,640 $99,200 $598,590 $730,980

Direct Cost of Sales $14,889 $22,776 $33,280 $0 $0

Other $0 $0 $0 $0 $0

Total Cost of Sales $14,889 $22,776 $33,280 $0 $0

Gross Margin $31,571 $45,864 $65,920 $598,590 $730,980

Gross Margin % 67.95% 66.82% 66.45% 100.00% 100.00%

Expenses

Payroll $19,800 $28,800 $36,000 $0 $0

Sales and Marketing and Other Expenses $11,560 $13,430 $15,100 $0 $0

Depreciation $300 $750 $800 $0 $0

Leased Equipment $0 $0 $0 $0 $0

Util ities $540 $660 $800 $0 $0

Insurance $960 $1,200 $1,600 $0 $0

Rent $0 $0 $0 $0 $0

Payroll Taxes $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0

Total Operating Expenses $33,160 $44,840 $54,300 $0 $0

Profit Before Interest and Taxes ($1,589) $1,024 $11,620 $598,590 $730,980

EBITDA ($1,289) $1,774 $12,420 $598,590 $730,980

Interest Expense $0 $76 $238 $323 $323

Taxes Incurred $0 $265 $3,206 $167,515 $205,802

Net Profit ($1,589) $683 $8,176 $430,752 $524,855

Net Profit/Sales -3.42% 0.99% 8.24% 71.96% 71.80%

$0

$500

$1,000

$1,500

$2,000

$2,500

($500)

($1,000)

($1,500)

($2,000)

($2,500)

Month 1Month 2

Month 3Month 4

Month 5Month 6

Month 7Month 8

Month 9Month 10

Month 11Month 12

Profit Monthly

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$0

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

$500,000

Year 1 Year 2 Year 3 Year 4 Year 5

Profit Yearly

$0

$500

$1,000

$1,500

$2,000

$2,500

$3,000

$3,500

$4,000

$4,500

$5,000

Month 1Month 2

Month 3Month 4

Month 5Month 6

Month 7Month 8

Month 9Month 10

Month 11Month 12

Gross Margin Monthly

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$0

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

Year 1 Year 2 Year 3 Year 4 Year 5

Gross Margin Yearly

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8.5 Projected Cash Flow

The cash flow projections are outlined below. These cash flow projects are based on ourbasic assumptions and expense and revenue projections.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5

Cash Received

Cash from Operations

Cash Sales $32,522 $48,048 $69,440 $419,013 $511,686

Cash from Receivables $9,578 $18,511 $26,892 $132,716 $206,871

Subtotal Cash from Operations $42,100 $66,559 $96,332 $551,729 $718,557

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0

New Current Borrowing $0 $1,600 $1,800 $0 $0

New Other Liabil ities (interest-free) $0 $0 $0 $0 $0

New Long-term Liabili ties $0 $0 $0 $0 $0

Sales of Other Current Assets $210 $0 $0 $0 $0

Sales of Long-term Assets $0 $0 $0 $0 $0

New Investment Received $0 $0 $0 $0 $0

Subtotal Cash Received $42,310 $68,159 $98,132 $551,729 $718,557

Expenditures Year 1 Year 2 Year 3 Year 4 Year 5

Expenditures from Operations

Cash Spending $19,800 $28,800 $36,000 $0 $0

Bill Payments $24,693 $38,506 $52,924 $158,500 $202,978

Subtotal Spent on Operations $44,493 $67,306 $88,924 $158,500 $202,978

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0

Other Liabili ties Principal Repayment $0 $0 $0 $0 $0

Long-term Liabili ties Principal Repayment $0 $0 $0 $0 $0

Purchase Other Current Assets $0 $0 $0 $0 $0

Purchase Long-term Assets $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0

Subtotal Cash Spent $44,493 $67,306 $88,924 $158,500 $202,978

Net Cash Flow ($2,183) $852 $9,209 $393,230 $515,579

Cash Balance $7,597 $8,449 $17,658 $410,888 $926,467

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Net Cash Flow

Cash Balance

$0

$2,000

$4,000

$6,000

$8,000

$10,000

($2,000)

Month 1Month 2

Month 3Month 4

Month 5Month 6

Month 7Month 8

Month 9Month 10

Month 11Month 12

Cash

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8.6 Projected Balance Sheet

Barton Interiors' balance sheet is outlined below.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3 Year 4 Year 5

Assets

Current Assets

Cash $7,597 $8,449 $17,658 $410,888 $926,467

Accounts Receivable $4,360 $6,441 $9,308 $56,169 $68,592

Other Current Assets $790 $790 $790 $790 $790

Total Current Assets $12,747 $15,680 $27,757 $467,847 $995,849

Long-term Assets

Long-term Assets $3,000 $3,000 $3,000 $3,000 $3,000

Accumulated Depreciation $300 $1,050 $1,850 $1,850 $1,850

Total Long-term Assets $2,700 $1,950 $1,150 $1,150 $1,150

Total Assets $15,447 $17,630 $28,907 $468,997 $996,999

Liabili ties and Capital Year 1 Year 2 Year 3 Year 4 Year 5

Current Liabili ties

Accounts Payable $3,256 $3,157 $4,457 $13,795 $16,942

Current Borrowing $0 $1,600 $3,400 $3,400 $3,400

Other Current Liabili ties $0 $0 $0 $0 $0

Subtotal Current Liabili ties $3,256 $4,757 $7,857 $17,195 $20,342

Long-term Liabili ties $0 $0 $0 $0 $0

Total Liabil ities $3,256 $4,757 $7,857 $17,195 $20,342

Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000

Retained Earnings ($11,220) ($12,809) ($12,126) ($3,950) $426,802

Earnings ($1,589) $683 $8,176 $430,752 $524,855

Total Capital $12,191 $12,874 $21,050 $451,802 $976,658

Total Liabil ities and Capital $15,447 $17,630 $28,907 $468,997 $996,999

Net Worth $12,191 $12,874 $21,050 $451,802 $976,658

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8.7 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on theStandard Industrial Classification (SIC) code 7389, Business Services--Interior Design Services,are shown for comparison. If we fail in any of these areas, we will need to re-evaluate ourbusiness model:

Gross margins at, or above, 65%. Month-to-month and annual increases to meet the expected growth requirements. Self-fund growth not dependant on the credit line to meet cash requirements.

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Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profi le

Sales Growth n.a. 47.74% 44.52% 503.42% 22.12% 12.40%

Percent of Total Assets

Accounts Receivable 28.22% 36.53% 32.20% 11.98% 6.88% 26.10%

Other Current Assets 5.11% 4.48% 2.73% 0.17% 0.08% 44.70%

Total Current Assets 82.52% 88.94% 96.02% 99.75% 99.88% 74.50%

Long-term Assets 17.48% 11.06% 3.98% 0.25% 0.12% 25.50%

Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Current Liabili ties 21.08% 26.98% 27.18% 3.67% 2.04% 44.30%

Long-term Liabili ties 0.00% 0.00% 0.00% 0.00% 0.00% 16.00%

Total Liabil ities 21.08% 26.98% 27.18% 3.67% 2.04% 60.30%

Net Worth 78.92% 73.02% 72.82% 96.33% 97.96% 39.70%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Gross Margin 67.95% 66.82% 66.45% 100.00% 100.00% 0.00%

Selling, General & Administrative Expenses 73.96% 65.72% 38.61% 28.04% 28.03% 80.80%

Advertising Expenses 16.36% 12.24% 11.36% 0.00% 0.00% 1.30%

Profit Before Interest and Taxes -3.42% 1.49% 11.71% 100.00% 100.00% 2.20%

Main Ratios

Current 3.92 3.30 3.53 27.21 48.96 1.75

Quick 3.92 3.30 3.53 27.21 48.96 1.38

Total Debt to Total Assets 21.08% 26.98% 27.18% 3.67% 2.04% 60.30%

Pre-tax Return on Net Worth -13.03% 7.36% 54.07% 132.42% 74.81% 3.80%

Pre-tax Return on Assets -10.29% 5.38% 39.38% 127.56% 73.29% 9.70%

Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5

Net Profit Margin -3.42% 0.99% 8.24% 71.96% 71.80% n.a

Return on Equity -13.03% 5.30% 38.84% 95.34% 53.74% n.a

Activity Ratios

Accounts Receivable Turnover 3.20 3.20 3.20 3.20 3.20 n.a

Collection Days 55 96 97 67 104 n.a

Accounts Payable Turnover 8.58 12.17 12.17 12.17 12.17 n.a

Payment Days 27 30 26 20 27 n.a

Total Asset Turnover 3.01 3.89 3.43 1.28 0.73 n.a

Debt Ratios

Debt to Net Worth 0.27 0.37 0.37 0.04 0.02 n.a

Current Liab. to Liab. 1.00 1.00 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital $9,491 $10,924 $19,900 $450,652 $975,508 n.a

Interest Coverage 0.00 13.47 48.93 1,853.22 2,263.10 n.a

Additional Ratios

Assets to Sales 0.33 0.26 0.29 0.78 1.36 n.a

Current Debt/Total Assets 21% 27% 27% 4% 2% n.a

Acid Test 2.58 1.94 2.35 23.94 45.58 n.a

Sales/Net Worth 3.81 5.33 4.71 1.32 0.75 n.a

Dividend Payout 0.00 0.00 0.00 0.00 0.00 n.a

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8.8 Long-term Plan

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Appendix

Page 1

Table: Sales Forecast

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

SalesResidential Consulting 0% $800 $900 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,400 $2,800 $3,200 $3,600Commercial Consulting 0% $0 $0 $0 $240 $280 $320 $360 $400 $440 $560 $640 $720Product Sales 0% $400 $600 $800 $1,000 $1,200 $1,400 $1,600 $1,800 $2,000 $2,400 $3,000 $3,600Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Sales $1,200 $1,500 $1,800 $2,440 $2,880 $3,320 $3,760 $4,200 $4,840 $5,760 $6,840 $7,920

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12Residential Consulting $120 $135 $150 $180 $210 $240 $270 $300 $360 $420 $480 $540Commercial Consulting $0 $0 $0 $36 $42 $48 $54 $60 $66 $84 $96 $108Product Sales $220 $330 $440 $550 $660 $770 $880 $990 $1,100 $1,320 $1,650 $1,980Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Direct Cost of Sales $340 $465 $590 $766 $912 $1,058 $1,204 $1,350 $1,526 $1,824 $2,226 $2,628

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Appendix

Page 2

Table: Personnel

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

Jill Barton 0% $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,800 $1,800 $1,800 $2,100 $2,100 $2,100Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,800 $1,800 $1,800 $2,100 $2,100 $2,100

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Appendix

Page 3

Table: Profit and Loss

Pro Forma Profit and Loss Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Sales $1,200 $1,500 $1,800 $2,440 $2,880 $3,320 $3,760 $4,200 $4,840 $5,760 $6,840 $7,920Direct Cost of Sales $340 $465 $590 $766 $912 $1,058 $1,204 $1,350 $1,526 $1,824 $2,226 $2,628Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Cost of Sales $340 $465 $590 $766 $912 $1,058 $1,204 $1,350 $1,526 $1,824 $2,226 $2,628

Gross Margin $860 $1,035 $1,210 $1,674 $1,968 $2,262 $2,556 $2,850 $3,314 $3,936 $4,614 $5,292Gross Margin % 71.67% 69.00% 67.22% 68.61% 68.33% 68.13% 67.98% 67.86% 68.47% 68.33% 67.46% 66.82%

ExpensesPayroll $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,800 $1,800 $1,800 $2,100 $2,100 $2,100Sales and Marketing and OtherExpenses

$2,165 $615 $615 $885 $625 $625 $685 $685 $935 $685 $2,425 $615

Depreciation $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Utilities $45 $45 $45 $45 $45 $45 $45 $45 $45 $45 $45 $45Insurance $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80 $80Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $3,515 $1,965 $1,965 $2,535 $2,275 $2,275 $2,635 $2,635 $2,885 $2,935 $4,675 $2,865

Profit Before Interest and Taxes ($2,655) ($930) ($755) ($861) ($307) ($13) ($79) $215 $429 $1,001 ($61) $2,427EBITDA ($2,630) ($905) ($730) ($836) ($282) $12 ($54) $240 $454 $1,026 ($36) $2,452 Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($2,655) ($930) ($755) ($861) ($307) ($13) ($79) $215 $429 $1,001 ($61) $2,427Net Profit/Sales -221.25% -62.00% -41.94% -35.29% -10.66% -0.39% -2.10% 5.12% 8.86% 17.38% -0.89% 30.64%

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Appendix

Page 4

Table: Cash Flow

Pro Forma Cash Flow Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Received

Cash from OperationsCash Sales $840 $1,050 $1,260 $1,708 $2,016 $2,324 $2,632 $2,940 $3,388 $4,032 $4,788 $5,544Cash from Receivables $0 $12 $363 $453 $546 $736 $868 $1,000 $1,132 $1,266 $1,461 $1,739Subtotal Cash from Operations $840 $1,062 $1,623 $2,161 $2,562 $3,060 $3,500 $3,940 $4,520 $5,298 $6,249 $7,283

Additional Cash ReceivedSales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $210 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Received $840 $1,062 $1,623 $2,371 $2,562 $3,060 $3,500 $3,940 $4,520 $5,298 $6,249 $7,283

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

Expenditures from OperationsCash Spending $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,800 $1,800 $1,800 $2,100 $2,100 $2,100Bill Payments $88 $2,583 $1,209 $1,345 $1,772 $1,667 $1,815 $2,019 $2,174 $2,588 $2,705 $4,729Subtotal Spent on Operations $1,288 $3,783 $2,409 $2,845 $3,272 $3,167 $3,615 $3,819 $3,974 $4,688 $4,805 $6,829

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Cash Spent $1,288 $3,783 $2,409 $2,845 $3,272 $3,167 $3,615 $3,819 $3,974 $4,688 $4,805 $6,829

Net Cash Flow ($448) ($2,721) ($786) ($474) ($710) ($106) ($114) $122 $546 $611 $1,444 $454Cash Balance $9,332 $6,612 $5,826 $5,352 $4,642 $4,536 $4,421 $4,543 $5,089 $5,700 $7,143 $7,597

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Appendix

Page 5

Table: Balance Sheet

Pro Forma Balance Sheet Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Assets Starting Balances

Current AssetsCash $9,780 $9,332 $6,612 $5,826 $5,352 $4,642 $4,536 $4,421 $4,543 $5,089 $5,700 $7,143 $7,597Accounts Receivable $0 $360 $798 $975 $1,254 $1,572 $1,831 $2,091 $2,350 $2,670 $3,132 $3,722 $4,360Other Current Assets $1,000 $1,000 $1,000 $1,000 $790 $790 $790 $790 $790 $790 $790 $790 $790Total Current Assets $10,780 $10,692 $8,410 $7,801 $7,396 $7,004 $7,157 $7,302 $7,683 $8,549 $9,621 $11,656 $12,747

Long-term AssetsLong-term Assets $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Accumulated Depreciation $0 $25 $50 $75 $100 $125 $150 $175 $200 $225 $250 $275 $300Total Long-term Assets $3,000 $2,975 $2,950 $2,925 $2,900 $2,875 $2,850 $2,825 $2,800 $2,775 $2,750 $2,725 $2,700Total Assets $13,780 $13,667 $11,360 $10,726 $10,296 $9,879 $10,007 $10,127 $10,483 $11,324 $12,371 $14,381 $15,447

Liabilities and Capital Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Current LiabilitiesAccounts Payable $0 $2,542 $1,165 $1,286 $1,717 $1,607 $1,748 $1,947 $2,088 $2,500 $2,546 $4,617 $3,256Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal Current Liabilities $0 $2,542 $1,165 $1,286 $1,717 $1,607 $1,748 $1,947 $2,088 $2,500 $2,546 $4,617 $3,256

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total Liabilities $0 $2,542 $1,165 $1,286 $1,717 $1,607 $1,748 $1,947 $2,088 $2,500 $2,546 $4,617 $3,256

Paid-in Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000Retained Earnings ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220) ($11,220)Earnings $0 ($2,655) ($3,585) ($4,340) ($5,201) ($5,508) ($5,521) ($5,600) ($5,385) ($4,956) ($3,955) ($4,016) ($1,589)Total Capital $13,780 $11,125 $10,195 $9,440 $8,579 $8,272 $8,259 $8,180 $8,395 $8,824 $9,825 $9,764 $12,191Total Liabilities and Capital $13,780 $13,667 $11,360 $10,726 $10,296 $9,879 $10,007 $10,127 $10,483 $11,324 $12,371 $14,381 $15,447

Net Worth $13,780 $11,125 $10,195 $9,440 $8,579 $8,272 $8,259 $8,180 $8,395 $8,824 $9,825 $9,764 $12,191