business plan - eb5projects.com · the company will utilize guerilla marketing techniques, emailing...
TRANSCRIPT
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Table of Contents
1.0 Executive Summary ........................................................................................... 3
1.1 Objectives ............................................................................................................................. 3
1.2 Mission Statement ............................................................................................................... 6
1.3 Keys to Success .................................................................................................................... 6
2.0 Company Summary ........................................................................................... 6
2.1 Company Ownership .......................................................................................................... 6
2.2 Pre-Operating Source and Use of Funds .......................................................................... 7
3.0 Products and Services ........................................................................................ 8
4.0 Market Summary .............................................................................................11
4.1 Demographics Summary .................................................................................................. 14
4.2 Industry Analysis .............................................................................................................. 15
5.0 Marketing Strategy/Implementation .............................................................17
5.1 SWOT Analysis ................................................................................................................. 19
6.0 Management Summary ...................................................................................20
7.0 Financial Summary ..........................................................................................21
7.1 Revenue Forecast............................................................................................................... 21
7.2 Personnel Forecast ............................................................................................................ 23
7.3 Income Statement .............................................................................................................. 24
7.4 Statement of Cash Flow .................................................................................................... 26
7.5 Balance Sheet ..................................................................................................................... 28
7.6 Break-Even Analysis ......................................................................................................... 29
7.7 Best & Worst Case ............................................................................................................ 30
Appendix A – Year 1 Financials ...........................................................................31
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1.0 Executive Summary Terry J Incorporated (“the Company”) is a new entertainment industry venture. Based in
Newark, Delaware, Terry J Inc. will offer a variety of investment and employment vehicles,
including The Vortex nightclub, Vortex Promotional City Tour Bus, and a performance runway
venue that will tie into the new online Vortex Magazine that showcases local talent. Terry J Inc.
will also provide new and existing artists with the gateway into the worldwide, billion dollar
music industry by offering professional promotional services to assist talented individuals and
groups to realize their dreams to be a part of the highly lucrative music and entertainment
business.
Terry J Inc. will contribute to all aspects of the entertainment industry, from creating a local
nightclub venue to presenting fashion shows and providing entertainer management services.
Initially, however, the Company will focus on launching The Vortex Nightclub, affectionately
referred to as The V. The Vortex Nightclub will eliminate the need for local residents and
visitors to seek high quality entertainment in other larger metropolitan areas. The club will offer
big name entertainment and seek to become a major draw to downtown Newark by offering
entertainment options not found in any other area establishments.
In today’s entertainment business, it is necessary to have the proper contacts and industry
knowledge to succeed. Terry J Inc. was founded by an entertainment industry professional with
over 2 decades of experience and expertise. The Company will especially focus on revitalizing
and putting back into the Newark community via its high profile nightclub, while also cultivating
and developing new, fresh local talent in all genres. Terry J Inc. will leverage this expertise,
along with industry connections to offer a range of services, from mentoring their own aspiring
entertainers to providing promotional services to venues and other artists in a variety of genres.
Emphasis will be placed on providing quality entertainment to a diverse audience in order to
maximize its geographical and demographical reach. The Company will work with artists, using
its extensive lists of industry resources and contacts to promote live music concerts and special
events, providing a full array of marketing and advertising promotional services, and facilitating
music CD and downloading sales - handling all the details and negotiating the best contracts
possible.
To achieve its goals, the Company will purchase the Park N Shop Shopping Center in Newark,
Delaware, refurbish it, and utilize three of the retail spaces to house the Company, while the
other spaces will produce rental revenue on a monthly basis.
The market will consist of a several-mile area surrounding downtown Newark, as well as
outlying areas of New Castle County and beyond. Within just a five-mile radius from the
Company’s proposed location downtown, there are more than 158,000 people, including over
58,000 households, with an average household income of $78,000. The state government,
numerous major employers, and University of Delaware, with 21,000 students, are also nearby,
creating a year-round flow of consumers around this area. From here, The V will tap into
multiple growing, related markets. Bars and clubs are a $20 billion a year industry, having
grown over the past few years as consumer spending away from home has increased
substantially. The market for event and concert promotion is $25 billion in the United States,
and event and party planners generate over $6 billion in revenue. According to market research
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firm IBISWorld, “Despite the economic downturn and low discretionary income, Americans
continued to attend and spend at live events over the past five years. As the economy picks up in
the next few years, industry growth will continue… Over the five years to 2018, industry
revenue is projected to continue increasing.” The Company will be a unique hybrid
bar/club/entertainment concept locally, giving it an edge over established businesses and helping
make it a profitable and growing venture that employs many local residents.
Terry J Inc.’s management realizes it will need a comprehensive marketing plan in order to be
successful. Initially, the Company will primarily market its services in the greater Newark area,
expanding regionally as it strategically grows and increases its staff and services. The Company
will sponsor high-visibility live bus tours, as well as runway, scouting and promotional events
that will draw favorable publicity, and develop name recognition within the region. The
Company will push public awareness through traditional marketing channels, as well at via
robust Internet advertising initiatives. The Company will utilize guerilla marketing techniques,
emailing lists, online social networks and event listing sites to push publicity, along with SMS
text message advertising to the Company’s own lists, and sponsored snippets on third-party lists.
The Company will build its brand by marketing events under a consistent name to develop a
loyal clientele that will follow Terry J Inc. from one city to another.
Terry J Inc. is led by its founder and namesake, William J. Terry, a veteran of the entertainment
industry. Mr. Terry brings with him with a unique blend of skill sets and several years of
experience in different facets of the industry – ensuring that this diverse venture will be a
success. He is well-experienced in marketing different music genres, and establishing solid
client relations and public relations. Through over 20 years in the entertainment industry, he has
developed an in-depth knowledge and understanding of the industry and its market dynamics.
Mr. Terry is dedicated to ensuring the long term success and sustainable profitability of the
Company by providing astute financial oversight and employing solid business practices.
To achieve its objectives, Terry J Inc. is seeking investments to achieve a total of $22 million in
funds. These funds will allow the Company to secure a retail lease, complete build-out of the
space, outfit the nightclub, perform marketing, develop the other aspects of the business concept,
and have working capital during its early stages. The following is a breakdown of the
anticipated funding usage:
$5 Million – Demolition of existing structure and build a loft-style, multi-level Night
Club with Corporate Office and 4 Music Production Studios on the top/3rd floor
$4 Million – Lead Certification and new construction
o $1.5 Million - fully operational Solar Panel Grid for entire property
o $1.0 Million - 2 - 60 ft. water towers that will supply and store drinkable Water
from rain, also the water system with be attached to a filtering system that will
also be attached to the city water line as well.
o $1.5 Million - Build a fully self-sustainable Greenhouse, which will produce its
own produce for the Nightclub and to sell to the public a few 3 days out of the
week.
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$6 million - Purchase Property with the existing businesses from the current owner and
the Parking which will basically be the entire property. To rebuild, and reroute the water
lines plus sewage routing underground according to the city planning committee.
$4 million - Completely reface the entire plaza, new lighting set-up on the solar grid,
running new water and sewage lines to the 2 newly built buildings, and the cost to dig up
the concrete and lay it back down with new parking lines
$2.5 Million - Demo and relocate 2 of the storefronts in the Plaza for 2 new businesses
that are potential coming in, including a tanning salon and possibly a clothing store.
Exit Strategy
After the first year, the Company will access the finances of the business, keeping in mind that it
could take up to 3-4 years for the project to fully take-off. Depending on the viability, the
Company will either retain the Nightclub and Greenhouse, or bring in other businesses to fill
their spaces and maintain the other businesses in the plaza - completely operating as shopping
plaza and continuing to do business the way it has in the past but with more appealing companies
to attract customers to the plaza. Plan C option is to sell the plaza to investors to regain any
possible loss.
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1.1 Objectives
Develop a client base of loyal customers, talented individuals and premium venues
Create ancillary revenue streams
Build a marquee company that is expandable
1.2 Mission Statement
Terry J Inc. will promote and help reestablish economic growth in the City of Newark in
Delaware. Initially, the Company will seek to create 110 direct employment opportunities within
the Newark Area from investment with goals focused on expansion and increasing that number
within the upcoming years of operation. The Company will create 60-90 indirect positions, due
to construction, as well.
1.3 Keys to Success
Create a full-service entertainment and promotion company
Grow the customer and client lists daily by using a variety of marketing methods
Maintain a lean overhead while continually growing revenues
2.0 Company Summary Terry J Incorporated is a start-up S-Corporation that was registered in the State of Delaware on
June 6, 2014 and will be based in downtown Newark, Delaware. The intent is for the Company
to operate and manage of group of related businesses under a single corporate umbrella.
2.1 Company Ownership
Terry J Incorporated is wholly owned by William J. Terry (100%).
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2.2 Pre-Operating Source and Use of Funds
The Pre-Operating Source & Use of Funds section details the Expenses, Assets, Inventory,
Investment and Debt needed to facilitate the Company’s business objectives. The Pre-Operating
expenses and funding occur before the Company receives revenue.
Expenses
Design Fees $650,000
Fees and Permits $7,000
Marketing $34,900
Professional Services $5,000
Total Expenses $696,900
Assets
Inventory $150,000
Property/Building $12,850,000
Lead Certified Equipment $4,000,000
Reface Plaza $4,000,000
Total Assets $21,000,000
Total Use of Funds $21,696,900
Pre-Operating Use of Funds
Investment
Owner $0
Investor $22,000,000
Total Investment $22,000,000
Debt
Current Debt $0
Long-Term Debt $0
Total Debt $0
Total Source of Funds $22,000,000
Pre-Operating Source of Funds
Total Source of Funds $22,000,000
Total Use of Funds $21,696,900
Month 1 Starting Cash $303,100
Total Source & Use of Funds
$0
$5,000,000
$10,000,000
$15,000,000
$20,000,000
$25,000,000
Investment Debt Expenses Assets Cash
Total Source & Use of Funds
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3.0 Products and Services Terry J Inc. will consist of a group of entertainment-based businesses that share the same vision
and are intertwined via marketing strategies to attract customers to all venues. Initially, the
Company will focus on opening The Vortex Nightclub in one of the many unoccupied spaces in
downtown Newark.
The following are the different businesses envisioned under the Terry J Inc. umbrella.
They are:
The Vortex Nightclub
The Vortex Nightclub or The V is club innovation personified. As more than a singular entity,
the V will function as an entertainment powerhouse, featuring a mobile marketing team that both
advertises for the V Club in Newark as well as hosts outdoor events in a multitude of locations
en route. This approach will embody an avant garde marketing strategy fused directly with a
source of local entertainment to create a completely unexplored business concept.
Newark is a heavily populated college town that has many bars, but lacks any type of legitimate
club. For those individuals seeking an authentic club experience, they are forced to travel to
Philadelphia or Baltimore, which is both inconvenient and expensive. The V will eliminate the
need to travel and spend money outside of the community. As such, The V will position itself as
the go-to destination, not just for its impeccable life entertainment offerings, but for its unrivaled
design.
Ever-aware of its neighbors, The V's environmentally conscious design will greatly add to its
unique appeal. The goal in design is to source “green” and eco-friendly materials and become
the first dance club in the area to be LEED certified. The goal is to ultimately have the club
source its own produce products from company owed greenhouses. The Company wants clients
to have the best possible entertainment experience that is healthy and creates an amazing space
for the dance hall connoisseur to let loose and have fun. To this end, the club will feature several
bars, multi-level dance floors, acoustically cognizant fixtures, and private areas for parties and
special events. There will of course be VIP areas, small scale kitchen service, and lighting and
decorating schemes that epitomize class and cool. Innovation is key for The V. The club will
allow for a massive influx of foot traffic by being designed in such a way that participants
movement through the facility “flows” and promotes movement. This will maximize the amount
of people inside the club without making patrons feel crushed and congested by the crowds.
Hours of operation will be:
Monday thru Thursday 5:00 p.m. to Midnight
Saturday - 8:00 p.m. to 2:00 a.m.
Sunday - Noon to 12 a.m.
Terry J Inc Talent, Entertainment, Production, and Management Agency
Terry J. Inc. Talent Agency and Management Team will manage newly discovered talent in a
variety of genres from vocal performance, hip hop/rap, modeling, acting, and music production.
With more than 20 years of experience in the industry, the Company’s founder will scout the
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best of the best and offer opportunities to deserving individuals who may otherwise have missed
the opportunity due to their demographic locations. The agency’s website will showcase Bio’s
of all artists with short segments of their best performances for organizations to view and request
that individual to audition or to perform. The website will also be the hub of information for all
things-Terry J Inc.-related, including promotional venues, upcoming events, hot news on
entertainment, and where to be when the Company is in a city.
The Fashion hub of the agency will showcase up and coming designers as well many of the
famous names known to-date with a ecommerce portal to purchase and link your right to the
designers’ merchant websites.
The Vortex Promotional City Tour and Runway Show
The Vortex Promotional City Tour and Runway Show will be a new and innovative way to
promote the opening up a nightclub and showcase fashion along with discovered talent. The
Vortex Promotional Tour bus will travel to 24 cites holding entertainment venues consisting of
runway shows, followed by after parties premiering Terry J Inc. artists. Each venue will sell and
promote items exclusively from the Company’s venue merchant stands, giving the communities
the opportunity to take home a piece of the Terry J Inc. agency with them.
Park N Shop Shopping Center
Terry J Inc. will purchase the Park N Shop Shopping Center in Newark, Delaware, refurbish it,
and utilize three of the retail spaces to house the Company. Terry J Inc. will reface the store
fronts, and replace the signage, windows, entrances and pavement in front the building.
Additionally, the 45-50 employees of those businesses that are absorbed by Terry J Inc. will be
placed on the Company payroll, while the other spaces will provide rental/lease revenue on a
monthly basis. Rents will range from $2,500-$3,400 per month. Contracts already in place will
be honored. In addition, any franchise contracts will be bought out, if there are any, which will
be included in the purchase price. The Company will negotiate potential temporary relocation of
businesses and associated cost.
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4.0 Market Summary The National Restaurant Association (NRA) projects that the industry will generate more than
$683 billion in 2014, up from $660 billion in 2013 and $632 billion in 2012, at 990,000 “eating
and drinking” locations nationwide. 1
The “bars and taverns” segment, as shown, will account for an estimated $20 billion in 2014, up
from nearly $19 billion in revenue in 2013.
The market for of Concert and Event Promotion is nearly $25 billion in the United States and has
grown 1.4% annually during the past five years, according to IBISWorld. It is a large and
diverse market, composed of approximately 49,800 companies across the country. The market is
highly fragmented, with most promoters having a limited geographic reach and few employees.
In 2013, the industry’s four largest companies were estimated to account for less than 25.0% of
revenue. “Despite the economic downturn and low discretionary income, Americans continued
to attend and spend at live events over the past five years,” states IBISWorld. “As the economy
picks up in the next few years, industry growth will continue… Over the five years to 2018,
industry revenue is projected to continue increasing.”2
In addition, the market for party and event planners in the United States is valued at around $6
billion annually, according to market research firm IBISWorld. There are more than 328,000
businesses nationwide. The vast majority are small companies, often with just the owner as the
lone employee – IBISWorld reports that the industry employs just over 343,000 people. While
1 National Restaurant Association. “2014 Restaurant Industry Fact Sheet.” Obtained at:
http://www.restaurant.org/News-Research/Research/Facts-at-a-Glance 2 IBISWorld. “Concert & Event Promotion in the US.” April 2014.
http://www.ibisworld.com/industry/default.aspx?indid=1960
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the market was affected by the economic downturn, when companies and individuals scaled back
on discretionary spending, the market has fully recovered and experiencing growth. Revenue
grew 2.5% in 2012, for example, to $6.3 billion, with profit accounting for 15.7% of revenue. In
addition, IBISWorld states that, “The industry can expect to roar back to life with the improving
economy in the five years to 2017. The industry is set to benefit from climbing corporate profit
and per capita disposable income…. Similarly, profit will expand as clients choose higher-priced
options.3
Customers for The V and The Vortex Promotional Tour bus will be targeted through various
promotions and advertising initiatives. They are live music lovers and club-goers, typically ages
18-35 (21+ after 9 p.m.), both males and females. They will include everyone from corporate
professionals to students and blue collar workers. The common bond will be the appreciation of
a great venue for music, drinks, and a great live entertainment environment.
While there are many bars in town, there is nothing like The V. With 21,000-student The
University of Delaware, the state government, and major employers in the area like WL Gore,
DuPont, Dow, Siemens, AstraZeneca, and the Delaware Technology Park, there are huge
numbers of young, educated residents who want more than a local dive bar or music club. The V
will provide this and more.
Potential locations have been found at the Newark Shopping Plaza in Downtown Main Street
Newark, and College Square Shopping, two locations right in downtown that have open spaces,
huge parking lots and a series of unused store fronts that is are perfect locations for the
Company. The population surrounding here, as shown below, is large but the night life and
businesses are minimal.
Downtown Newark, DE and Environs4
Population 1-mi. 3-mi. 5-mi.
2013 Total Population 13,952 74,173 158,324
2013 Male Population 6,142 35,235 75,964
2013 Female Population 7,810 38,938 82,360
% 2013 Male Population 44.02% 47.50% 47.98%
% 2013 Female Population 55.98% 52.50% 52.02%
2013 Total Population: Adult 12,355 61,256 124,735
2013 Total Daytime Population 18,639 72,287 171,720
2013 Total Employees 10,398 32,802 90,836
2013 Total Population: Median Age 23 29 33
3 IBISWorld. “The Party & Event Planners Market.” Sept. 2013. http://www.ibisworld.com/industry/party-event-
planners.html 4 Loopnet/Pitney Bowes MapInfo. “College Square.”
http://www.loopnet.com/xNet/MainSite/Listing/Profile/Profile.aspx?LID=18406839
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Downtown Newark, DE and Environs4
Population 1-mi. 3-mi. 5-mi.
2013 Total Population: Adult Median Age 22 41 43
2013 Total population: Under 5 years 516 3,658 9,508
2013 Total population: 5 to 9 years 431 3,436 8,982
2013 Total population: 10 to 14 years 396 3,502 9,223
2013 Total population: 15 to 19 years 2,514 8,923 14,694
2013 Total population: 20 to 24 years 5,627 12,918 18,666
2013 Total population: 25 to 29 years 688 5,248 12,130
2013 Total population: 30 to 34 years 427 4,188 10,594
2013 Total population: 35 to 39 years 417 3,828 9,845
2013 Total population: 40 to 44 years 389 3,908 10,063
2013 Total population: 45 to 49 years 411 4,226 10,538
2013 Total population: 50 to 54 years 394 4,414 10,691
2013 Total population: 55 to 59 years 362 3,893 9,123
2013 Total population: 60 to 64 years 343 3,511 7,661
2013 Total population: 65 to 69 years 271 2,714 5,643
2013 Total population: 70 to 74 years 193 1,901 3,826
2013 Total population: 75 to 79 years 206 1,632 3,055
2013 Total population: 80 to 84 years 169 1,118 2,097
2013 Total population: 85 years and over 198 1,155 1,985
2013 Households 4,263 26,354 58,347
2013 Household Income: Average $40,422 $73,052 $78,437
Within this market, competitors will include established businesses, including myriad restaurants
and bars, including independent locations and franchised concepts. More specifically to the
downtown area, the Company will compete against venues like Klondike Kate’s, Kildare’s,
Catherine Rooney’s, Grottos, and Deer Park tavern, among others. However, there are no
establishments on the level of The V. The Company will promote a fun and entertaining setting,
introducing an all-encompassing concept to the local market as well as more refined bar and
nightclub environment. On a regional level, the Company will compete against music and
entertainment venues; however, the Company will have an edge against these venues as well
because of its unique presentation of being both a marketing and promotional vehicle fused with
the best source of local entertainment.
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4.1 Demographics Summary
The chart below shows the population for surrounding New Castle County, from which the
Company will also draw.
U.S. Census Bureau American Communities Survey
People QuickFacts
New Castle County Delaware
Population, 2013 estimate 549,684 925,749
Population, 2010 (April 1) estimates base 538,479 897,936
Population, percent change, April 1, 2010 to July 1, 2013 2.1% 3.1%
Population, 2010 538,479 897,934
Persons under 5 years, percent, 2013 6.2% 6.1%
Persons under 18 years, percent, 2013 22.3% 22.0%
Persons 65 years and over, percent, 2013 13.4% 15.9%
Female persons, percent, 2013 51.6% 51.6%
White alone, percent, 2013 (a) 67.6% 71.1%
Black or African American alone, percent, 2013 (a) 24.7% 22.1%
American Indian and Alaska Native alone, percent, 2013 (a) 0.4% 0.7%
Asian alone, percent, 2013 (a) 5.0% 3.6%
Native Hawaiian and Other Pacific Islander alone, percent, 2013 (a) 0.1% 0.1%
Two or More Races, percent, 2013 2.3% 2.4%
Hispanic or Latino, percent, 2013 (b) 9.2% 8.7%
White alone, not Hispanic or Latino, percent, 2013 60.1% 64.1%
Living in same house 1 year & over, percent, 2008-2012 85.1% 85.8%
Foreign born persons, percent, 2008-2012 10.0% 8.3%
Language other than English spoken at home, pct age 5+, 2008-2012 14.4% 12.3%
High school graduate or higher, percent of persons age 25+, 2008-2012
89.2% 87.7%
Bachelor's degree or higher, percent of persons age 25+, 2008-2012 33.5% 28.5%
Veterans, 2008-2012 37,481 76,752
Mean travel time to work (minutes), workers age 16+, 2008-2012 24.9 24.8
Housing units, 2013 218,592 412,009
Homeownership rate, 2008-2012 70.2% 72.7%
Housing units in multi-unit structures, percent, 2008-2012 22.9% 17.7%
Median value of owner-occupied housing units, 2008-2012 $251,200 $241,100
Households, 2008-2012 200,618 334,076
Persons per household, 2008-2012 2.61 2.62
Per capita money income in past 12 months (2012 dollars), 2008-2012 $32,247 $29,733
Median household income, 2008-2012 $64,670 $60,119
Persons below poverty level, percent, 2008-2012 10.7% 11.5%
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4.2 Industry Analysis
The Company will operate in this distinct industry, Drinking Places (Alcoholic Beverages)
(NAICS 722410). All data presented in this section is retrieved from the U.S. Census Bureau.
The map below shows sales per capita.
The map below shows sales in millions.
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Drinking Places (Alcoholic Beverages)
This industry comprises establishments known as bars, taverns, nightclubs, or drinking places
primarily engaged in preparing and serving alcoholic beverages for immediate consumption.
These establishments may also provide limited food services.
Establishments Total Sales Annual Payroll Paid Employees
46,924 $18,318,068,000 $4,183,499,000 356,194
$11,745 $51,427
Employees per Establishment Payroll as a Percent of Sales
USA Drinking Places (Alcoholic Beverages)
Sales per Establishment Payroll per Establishment
$390,377 $89,155
7.6 22.8%
Annual Payroll per Employee Sales Per Employee
Establishments Total Sales Annual Payroll Paid Employees
1,290 $472,529,000 $109,038,000 8,238
$366,302 $84,526
New Jersey Drinking Places (Alcoholic Beverages)
Sales per Establishment Payroll per Establishment
Annual Payroll per Employee Sales Per Employee
6.4 23.1%
Employees per Establishment Payroll as a Percent of Sales
$13,236 $57,360
Establishments Total Sales Annual Payroll Paid Employees
84 $22,669,000 $4,623,000 309
Payroll per Establishment
$269,869 $55,036
Annual Payroll per Employee Sales Per Employee
Employees per Establishment Payroll as a Percent of Sales
3.7 20.4%
Newark Drinking Places (Alcoholic Beverages)
Sales per Establishment
$14,961 $73,362
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5.0 Marketing Strategy/Implementation Terry J Inc. will primarily market its services in the greater Newark area and surrounding states
with a niche marketing approach to target and attract customers and artists of all ages and genres.
High-visibility promotional events will draw favorable publicity, and develop name recognition
within the region. The Terry J Inc. team will also focus on capitalizing on extensive list of
industry resources, contacts, and influential associates developed throughout the owner’s years in
the industry. The Company will also drive awareness by using traditional marketing channels
such as radio and TV advertising.
In true Terry J Inc. style, conventional and traditional avenues of promotion are made obsolete
by the addition of a new sector of the Terry Group that merges Club V advertisement and
promotion into its own profit-making entity. For the first two to three years of operation, the
Company will be launching its promotional bus tour, which will circumnavigate 24 cities on the
East Coast, hosting V sponsored parties. These street events will feature new talent as well as
the Vortex's own MC's and professional models and dancers known as the V Girls. The purpose
of these shows is to advertise the Vortex nightclub and create revenue by hosting these outdoor
stage spectaculars. The tour bus team will essentially create an outdoor dance party with a
fashion show, bringing all forms of entertainment and art to the public. After the two-three year
tour is completed, the talent and employees of the tour bus team venture will be assimilated into
positions working for The Vortex Nightclub as well as the Vortex Magazine. At this time, the
Vortex nightclub and online magazine will have enough exposure to bring in big name draws to
the club and to focus on signing new talent to the Terry J. Inc. label. Any talent that signs with
the group commits to allocating ten percent of their profits directly back to the Group in
exchange for booking, exposure, and future performance tours. The Group discovers, cultivates,
and leases out new talent for the entertainment industry.
The Company also sees the need for other creative approaches to marketing to its customers. For
marketers, the currently economic climate is creating a need to both cut costs and reach
consumers in more ways than ever. Creative marketing initiatives are not only cost-effective but
they also can result in new revenue streams. Tactics for succeeding in the new economy include:
Grassroots market research: The Company will communicate with its customers via online
forums and monitor ratings and review sites and industry blogs to determine the prevailing
consumer attitudes, the level of Terry J Inc. brand recognition and trends the Company needs to
address.
Customer retention/cross-selling: The Company will also place a premium on marketing to
the existing customer bases of Terry J Inc. artists and venues. It is much cheaper and far more
effective because of the existing relationships and an understanding of their needs.
Video: The Terry J Inc. brand and its services will be presented through dynamic multimedia
communications vehicles. Videos, in particular, are often the most effective methods of
communicating a message, and the Company’s industry connections and capabilities will allow it
to create marketing videos that can be deployed to YouTube, Google Video, and other sites.
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Relevancy-based marketing initiatives: With the wide-ranging technological capabilities of
Terry J Inc., the Company will be able to reach customers across a variety of devices, including
e-mail, smartphones, text messages, and instant messages. This all hinges on creating a pertinent
message that is tailored to individual customer segments.
Enhanced search marketing: As the Internet becomes the primary source for both business-to-
business and business-to-consumer information, a strong presence on major search engines is
paramount to educate customers and form a dialogue that extends beyond one medium.
Effective search optimization includes using a multi-channel approach with social media, such as
Facebook, Twitter, and blogs, as well as mobile, and local search.
The Company will also drive awareness by using traditional marketing channels such as radio
and TV advertising, flyers and other printed materials, and aggressive online advertising and
through live scouting and entertainment events. Additionally, the Company will employ the
following methods:
Internet Advertising: The Company will allot portions of its marketing budget for strategic
Internet marketing, including search engine optimization. This tactic involves organically
improving the quality and volume of traffic to its website through search engines. Search engine
optimization can also target different kinds of searches, including image, local, and industry-
specific vertical search engines.
Website: An attractive and user-friendly website will be professionally designed. It will outline
the Company’s philosophy and services, as well as spotlight the experienced Terry J Inc.
management, as well as the Company’s talented artists. A calendar of events, especially
Company sponsored promotional events, bus tour and live concerts will encourage return visitors
to the website.
Outdoor marketing: The Company’s signage, on its building and company vehicles will be
prominently placed for maximum visibility to both foot and vehicular traffic.
Word of mouth: Terry J Inc.’s adherence to offering a quality service paired with superior
public relations and customer service will garner a solid and positive reputation within the
industry and local communities. The Company’s clients will undoubtedly return for additional
services, while also spreading the word to their friends, family and colleagues. Through this
simple marketing tactic, Terry J Inc. will become further recognized as the premier full-service
entertainment and promotion and talent Management Company.
19
5.1 SWOT Analysis
Internal
Factors
External
Factors
Positive Negative
Appeals to all genres of artists & aficionados
Travels to a wide variety of
Strengths WeaknessesOwner has 20 years experience and
in-depth knowledge of the industry
Innovative/comprehensive business concept
Offers something for everyone
Adding new clients and ancillary revenue
other music and entertainment types
Threats
Playing off popularity of rap and R&B and
streams as Company grows
and production/management companies
Prolonged economic recovery
running in a timely manner of the lucrative national market
Not having the Company up and
Other existing entertainment venues
Expanding to capture a sizeable share
cities within the region
New Company
Lacks brand recognition
Niche market without current consumers
Currently undercapitalized
OpportunitiesCapturing a large share of a lucrative
market with a wide region
20
6.0 Management Summary William Terry, Owner, Chief Executive Officer, and President
Terry J Inc. will be owned and managed by its founder and namesake, William Terry, who
possesses the requisite management skills and experience to successfully run this operation. Mr.
Terry is an entrepreneurial-minded leader who is a veteran of the entertainment industry. During
his 20 years in the industry, he has gained considerable experience and expertise that will be
invaluable toward the success of the Company. Mr. Terry has outstanding customer service,
public relations, and communications skills, and is well-connected within the industry and the
community, making penetration into the marketplace easily attainable.
As a strong team builder and experienced promoter with expertise in efficiently coordinating
resources, he will oversee the day-to-day operation of the Company. He will work directly with
every aspect of club design, talent management, and public relations. Mr. Terry will also work
closely with the Company’s Chief Operating Officer, Colleen Olkowski who will assist with the
creation and execution of planning and management strategies.
The Company will greatly benefit from Mr. Terry’s numerous direct ties to several local
governing bodies and social services. Mr. Terry has been a resident of Newark for several years
and is a great proponent of bringing in local businesses that will put money directly back into the
community to help Newark achieve a growth potential that would otherwise never be possible
because of the constant ebb and flow of the migratory living situations of University of Delaware
students.
21
7.0 Financial Summary 7.1 Revenue Forecast
The Revenue Forecast section details the revenue that the Company will receive. This section
also details the direct costs.
Year 1 Year 2 Year 3 Year 4 Year 5
Units
Door Cover 147,571 261,128 353,906 431,786 526,802
Bar Drinks 254,228 449,859 609,693 743,859 907,550
Food 16,690 29,532 40,025 48,833 59,579
Venue 96,000 122,980 166,675 203,353 248,102
Talent Agency 2,432 4,304 5,834 7,117 8,684
Studio Time 3,722 5,735 6,819 7,732 8,344
Total Units 520,678 873,575 1,182,988 1,442,716 1,759,095
Unit Price
Door Cover $4.68 $4.68 $4.68 $4.68 $4.68
Bar Drinks $4.25 $4.25 $4.25 $4.25 $4.25
Food $6.00 $6.00 $6.00 $6.00 $6.00
Venue $36.00 $36.00 $36.00 $36.00 $36.00
Talent Agency $225.00 $225.00 $225.00 $225.00 $225.00
Studio Time $100.00 $100.00 $100.00 $100.00 $100.00
Revenue
Door Cover $690,420 $1,221,706 $1,655,777 $2,020,139 $2,464,682
Bar Drinks $1,080,468 $1,911,900 $2,591,196 $3,161,403 $3,857,086
Food $100,137 $177,194 $240,151 $292,997 $357,473
Venue $3,456,000 $4,427,288 $6,000,299 $7,320,696 $8,931,655
Talent Agency $547,309 $968,469 $1,312,565 $1,601,402 $1,953,800
Studio Time $372,170 $573,496 $681,859 $773,178 $834,360
Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256
Unit Cost
Door Cover $0.23 $0.23 $0.23 $0.23 $0.23
Bar Drinks $1.28 $1.28 $1.28 $1.28 $1.28
Food $2.10 $2.10 $2.10 $2.10 $2.10
Venue $1.80 $1.80 $1.80 $1.80 $1.80
Talent Agency $11.25 $11.25 $11.25 $11.25 $11.25
Studio Time $5.00 $5.00 $5.00 $5.00 $5.00
Direct Costs
Door Cover $34,521 $61,085 $82,789 $101,007 $123,234
Bar Drinks $324,141 $573,570 $777,359 $948,421 $1,157,126
Food $35,048 $62,018 $84,053 $102,549 $125,116
Venue $172,800 $221,364 $300,015 $366,035 $446,583
Talent Agency $27,365 $48,423 $65,628 $80,070 $97,690
Studio Time $18,609 $28,675 $34,093 $38,659 $41,718
Direct Cost of Revenue $612,484 $995,136 $1,343,937 $1,636,741 $1,991,466
Yearly Revenue
22
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Yearly Revenue Projections
Studio Time
Talent Agency
Venue
Food
Bar Drinks
Door Cover
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Month
12
Year 1 Revenue Projections
Studio Time
Talent Agency
Venue
Food
Bar Drinks
Door Cover
23
7.2 Personnel Forecast
The Personnel section breaks down the payroll expense line on the Income Statement. It
provides total headcount, average salary per category and total pay per category.
Year 1 Year 2 Year 3 Year 4 Year 5
Headcount
T.J Inc Corp Staff 18 20 22 24 26
PRMO Tour Staff 51 58 65 72 79
The V Night Club 41 46 51 56 61
Total Headcount 110 124 138 152 166
Compensation
T.J Inc Corp Staff $59,948 $61,747 $63,599 $65,507 $67,472
PRMO Tour Staff $25,020 $25,770 $26,543 $27,340 $28,160
The V Night Club $27,924 $28,762 $29,625 $30,514 $31,429
Payroll
T.J Inc Corp Staff $1,079,070 $1,234,936 $1,399,182 $1,572,172 $1,754,282
PRMO Tour Staff $1,276,000 $1,494,671 $1,725,315 $1,968,451 $2,224,623
The V Night Club $1,144,900 $1,323,058 $1,510,874 $1,708,769 $1,917,178
Total Payroll $3,499,970 $4,052,665 $4,635,371 $5,249,392 $5,896,083
Yearly Personnel
24
7.3 Income Statement
The Income Statement is also known as a Profit & Loss Statement. This table breaks down
Revenue, Cost of Revenue, Operating Expenses, Depreciation, Interest, Taxes, and bottom line
Earnings for the first five years.
Year 1 Year 2 Year 3 Year 4 Year 5
Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256
Direct Cost of Revenue $612,484 $995,136 $1,343,937 $1,636,741 $1,991,466
Merchant Fees $95,291 $140,794 $188,821 $229,140 $277,579
Total Cost of Revenue $707,774 $1,135,930 $1,532,757 $1,865,881 $2,269,045
Gross Profit $5,644,932 $8,250,323 $11,055,289 $13,410,135 $16,236,211
Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7%
Operating Expenses
Travel Gas $5,500 $6,050 $6,655 $7,321 $8,053
Truck Insurance $7,500 $8,250 $9,075 $9,983 $10,981
Marketing & Advertising $317,635 $469,313 $629,402 $763,801 $925,263
Business Insurance $18,000 $19,800 $21,780 $23,958 $26,354
Professional Services $60,000 $66,000 $72,600 $79,860 $87,846
Utilities & Related $180,000 $198,000 $217,800 $239,580 $263,538
Travel & Entertainment $90,000 $99,000 $108,900 $119,790 $131,769
Dues & Subscriptions $18,000 $19,800 $21,780 $23,958 $26,354
Total Payroll $3,499,970 $4,052,665 $4,635,371 $5,249,392 $5,896,083
Payroll Taxes $419,996 $486,320 $556,245 $629,927 $707,530
Payroll Benefits $104,999 $121,580 $139,061 $157,482 $176,882
Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652
Operating Profit $923,331 $2,703,546 $4,636,620 $6,105,084 $7,975,558
Operating Profit Percentage 14.5% 28.8% 36.8% 40.0% 43.1%
Depreciation $267,361 $275,694 $284,028 $292,361 $300,694
Earning Before Interest & Taxes $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864
EBIT Percentage 10.3% 25.9% 34.6% 38.1% 41.5%
Interest Expense $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0
Earnings $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864
Earnings Percentage 10.3% 25.9% 34.6% 38.1% 41.5%
Yearly Income Statement
25
$0
$2,000,000
$4,000,000
$6,000,000
$8,000,000
$10,000,000
$12,000,000
$14,000,000
$16,000,000
$18,000,000
$20,000,000
Year 1 Year 2 Year 3 Year 4 Year 5
Yearly Income Statement
Gross Revenue
Gross Profit
Operating Profit
Earning Before
Interest & Taxes
Earnings
($100,000)
$0
$100,000
$200,000
$300,000
$400,000
$500,000
$600,000
$700,000
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Month
12
Year 1 Income Statement
Gross Revenue
Gross Profit
Operating Profit
Earning Before
Interest & Taxes
Earnings
26
7.4 Statement of Cash Flow
The Statement of Cash Flow illustrates the Company’s cash received and cash spent for the five
year period. The table is broken down into three main categories; Operating, Investing, and
Financing. The Operating Activities report the Company’s business operations. Investing
Activities detail the Company’s property, plant, and equipment transactions. Financing
Activities account for the Company’s paid-in capital and debt.
Year 1 Year 2 Year 3 Year 4 Year 5
Operating Activities
Cash Received
Gross Revenue $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256
Total Cash Received $6,352,706 $9,386,253 $12,588,047 $15,276,016 $18,505,256
Cash Used
Cost of Revenue $707,774 $1,135,930 $1,532,757 $1,865,881 $2,269,045
Payroll/Taxes/Benefits $4,024,966 $4,660,564 $5,330,677 $6,036,801 $6,780,496
Other Operating Expenses $696,635 $886,213 $1,087,992 $1,268,250 $1,480,157
Additional Inventory $10,465 $13,116 $8,430 $10,212 $12,380
Interest Expense $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0
Total Cash Used $5,439,840 $6,695,823 $7,959,856 $9,181,143 $10,542,077
Net Cash From/(Used By) Operating $912,865 $2,690,430 $4,628,190 $6,094,873 $7,963,178
Investing Activities
Cash Received
Proceeds from Property/Land $0 $0 $0 $0 $0
Proceeds from Equipment $0 $0 $0 $0 $0
Total Cash Received $0 $0 $0 $0 $0
Cash Used
Purchase of Property/Land $0 $0 $0 $0 $0
Purchase of Equipment $250,000 $250,000 $250,000 $250,000 $250,000
Total Cash Used $250,000 $250,000 $250,000 $250,000 $250,000
Net Cash From/(Used By) Investing ($250,000) ($250,000) ($250,000) ($250,000) ($250,000)
Financing Activities
Cash Received
Proceeds from Investors $0 $0 $0 $0 $0
Proceeds from Long-Term Debt $0 $0 $0 $0 $0
Total Cash Received $0 $0 $0 $0 $0
Cash Used
Dividends Paid $0 $0 $0 $0 $0
Repayment of Long-Term Debt $0 $0 $0 $0 $0
Total Cash Used $0 $0 $0 $0 $0
Net Cash From/(Used By) Financing $0 $0 $0 $0 $0
Net Cash Flow $662,865 $2,440,430 $4,378,190 $5,844,873 $7,713,178
Cash Balance $965,965 $3,406,395 $7,784,586 $13,629,459 $21,342,637
Yearly Statement of Cash Flow
27
($200,000)
$0
$200,000
$400,000
$600,000
$800,000
$1,000,000
$1,200,000M
on
th 1
Mo
nth
2
Mo
nth
3
Mo
nth
4
Mo
nth
5
Mo
nth
6
Mo
nth
7
Mo
nth
8
Mo
nth
9
Mo
nth
10
Mo
nth
11
Mo
nth
12
Year 1 Statement of Cash Flow
Net Cash Flow Cash Balance
28
7.5 Balance Sheet
The Balance Sheet shows the Company’s Assets, Liabilities, and Shareholders’ Equity for a
given time period.
Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $965,965 $3,406,395 $7,784,586 $13,629,459 $21,342,637
Inventory $160,465 $173,582 $182,012 $192,223 $204,603
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $1,126,431 $3,579,977 $7,966,597 $13,821,682 $21,547,240
Long-Term Assets
Property/Building $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000
Lead Certified Equipment $4,250,000 $4,500,000 $4,750,000 $5,000,000 $5,250,000
Reface Plaza $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000
Accumulated Depreciation ($267,361) ($543,056) ($827,083) ($1,119,444) ($1,420,139)
Total Long-Term Assets $20,832,639 $20,806,944 $20,772,917 $20,730,556 $20,679,861
Total Assets $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101
Liabilities
Current Liabilities
Current Debt $0 $0 $0 $0 $0
Total Current Liabilities $0 $0 $0 $0 $0
Long-Term Liabilities
Long-Term Debt $0 $0 $0 $0 $0
Total Long-Term Liabilities $0 $0 $0 $0 $0
Total Liabilities $0 $0 $0 $0 $0
Shareholders' Equity
Paid-in Capital
Owner $0 $0 $0 $0 $0
Investor $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000
Total Paid-in Capital $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000
Retained Earnings
Previous Retained Earnings ($696,900) ($40,930) $2,386,921 $6,739,514 $12,552,237
Current Earnings $655,970 $2,427,852 $4,352,593 $5,812,723 $7,674,864
Total Retained Earnings ($40,930) $2,386,921 $6,739,514 $12,552,237 $20,227,101
Total Shareholders' Equity $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101
Total Liabilities & Equity $21,959,070 $24,386,921 $28,739,514 $34,552,237 $42,227,101
Yearly Balance Sheet
29
7.6 Break-Even Analysis
The Operating Break-Even accounts for the Company’s revenue and expenses on the Income
Statement.
Analysis Month
Operating Break-Even 11
Break-Even
Operating Break-Even
$0
$10,000,000
$20,000,000
$30,000,000
$40,000,000
$50,000,000
$60,000,000
$70,000,000
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59
Month
Accumulated Revenue Accumulated Expenses
30
7.7 Best & Worst Case
The Best and Worst Case analysis illustrates what the Company’s financial statements might
look like with an increase or decrease in Revenue.
10%
Year 1 Year 2 Year 3 Year 4 Year 5
Gross Revenue $6,987,976 $10,324,878 $13,846,851 $16,803,618 $20,355,781
Total Cost of Revenue $778,552 $1,249,523 $1,686,033 $2,052,469 $2,495,950
Gross Profit $6,209,425 $9,075,355 $12,160,818 $14,751,149 $17,859,832
Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7%
Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652
Operating Profit $1,487,824 $3,528,579 $5,742,149 $7,446,098 $9,599,179
Operating Profit Percentage 21.3% 34.2% 41.5% 44.3% 47.2%
Earning Before Interest & Taxes $1,220,463 $3,252,884 $5,458,122 $7,153,737 $9,298,485
EBIT Percentage 17.5% 31.5% 39.4% 42.6% 45.7%
Interest Expense $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0
Earnings $1,220,463 $3,252,884 $5,458,122 $7,153,737 $9,298,485
Earnings Percentage 17.5% 31.5% 39.4% 42.6% 45.7%
Net Cash Flow $1,227,359 $3,265,462 $5,483,719 $7,185,886 $9,336,799
Cash Balance $1,530,459 $4,795,921 $10,279,640 $17,465,527 $26,802,326
Best Case -- Revenue Increase By:
10%
Year 1 Year 2 Year 3 Year 4 Year 5
Gross Revenue $5,717,435 $8,447,628 $11,329,242 $13,748,415 $16,654,730
Total Cost of Revenue $636,997 $1,022,337 $1,379,482 $1,679,293 $2,042,141
Gross Profit $5,080,438 $7,425,291 $9,949,761 $12,069,122 $14,612,590
Gross Margin Percentage 88.9% 87.9% 87.8% 87.8% 87.7%
Total Operating Expenses $4,721,601 $5,546,777 $6,418,669 $7,305,051 $8,260,652
Operating Profit $358,838 $1,878,514 $3,531,092 $4,764,071 $6,351,937
Operating Profit Percentage 6.3% 22.2% 31.2% 34.7% 38.1%
Earning Before Interest & Taxes $91,477 $1,602,819 $3,247,064 $4,471,710 $6,051,243
EBIT Percentage 1.6% 19.0% 28.7% 32.5% 36.3%
Interest Expense $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0
Earnings $91,477 $1,602,819 $3,247,064 $4,471,710 $6,051,243
Earnings Percentage 1.6% 19.0% 28.7% 32.5% 36.3%
Net Cash Flow $98,372 $1,615,398 $3,272,662 $4,503,859 $6,089,557
Cash Balance $401,472 $2,016,870 $5,289,532 $9,793,391 $15,882,948
Worst Case -- Revenue Decrease By:
31
Appendix A – Year 1 Financials
Year 1 Monthly Forecast illustrates the Company’s first 12 months after the Pre-Operating stage.
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Units
Door Cover 8,493 9,046 9,634 10,261 10,928 11,639 12,396 13,202 14,061 14,975 15,949 16,987
Bar Drinks 14,632 15,584 16,597 17,677 18,826 20,051 21,355 22,744 24,223 25,799 27,477 29,264
Food 961 1,023 1,090 1,160 1,236 1,316 1,402 1,493 1,590 1,694 1,804 1,921
Venue 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000 8,000
Talent Agency 140 149 159 169 180 192 204 218 232 247 263 280
Studio Time 214 228 243 259 276 294 313 333 355 378 402 428
Total Units 32,443 34,033 35,726 37,529 39,449 41,494 43,673 45,993 48,464 51,095 53,898 56,883
Unit Price
Door Cover $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68 $4.68
Bar Drinks $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25 $4.25
Food $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00
Venue $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00 $36.00
Talent Agency $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00 $225.00
Studio Time $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00
Revenue
Door Cover $39,737 $42,321 $45,074 $48,005 $51,128 $54,453 $57,995 $61,767 $65,784 $70,063 $74,620 $79,473
Bar Drinks $62,186 $66,230 $70,538 $75,126 $80,012 $85,216 $90,759 $96,662 $102,949 $109,645 $116,776 $124,371
Food $5,763 $6,138 $6,537 $6,963 $7,415 $7,898 $8,411 $8,959 $9,541 $10,162 $10,823 $11,527
Venue $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000 $288,000
Talent Agency $31,500 $33,549 $35,731 $38,055 $40,530 $43,166 $45,974 $48,964 $52,148 $55,540 $59,153 $63,000
Studio Time $21,420 $22,813 $24,297 $25,877 $27,560 $29,353 $31,262 $33,295 $35,461 $37,767 $40,224 $42,840
Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061
Unit Cost
Door Cover $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23 $0.23
Bar Drinks $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28 $1.28
Food $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10 $2.10
Venue $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80 $1.80
Talent Agency $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25 $11.25
Studio Time $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00
Year 1 Revenue
32
Direct Costs
Door Cover $1,987 $2,116 $2,254 $2,400 $2,556 $2,723 $2,900 $3,088 $3,289 $3,503 $3,731 $3,974
Bar Drinks $18,656 $19,869 $21,161 $22,538 $24,004 $25,565 $27,228 $28,999 $30,885 $32,893 $35,033 $37,311
Food $2,017 $2,148 $2,288 $2,437 $2,595 $2,764 $2,944 $3,135 $3,339 $3,557 $3,788 $4,034
Venue $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400 $14,400
Talent Agency $1,575 $1,677 $1,787 $1,903 $2,026 $2,158 $2,299 $2,448 $2,607 $2,777 $2,958 $3,150
Studio Time $1,071 $1,141 $1,215 $1,294 $1,378 $1,468 $1,563 $1,665 $1,773 $1,888 $2,011 $2,142
Direct Cost of Revenue $39,706 $41,352 $43,105 $44,972 $46,960 $49,078 $51,333 $53,735 $56,294 $59,019 $61,921 $65,011
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Headcount
T.J Inc Corp Staff 18 18 18 18 18 18 18 18 18 18 18 18
PRMO Tour Staff 51 51 51 51 51 51 51 51 51 51 51 51
The V Night Club 41 41 41 41 41 41 41 41 41 41 41 41
Total Headcount 110 110 110 110 110 110 110 110 110 110 110 110
Compensation
T.J Inc Corp Staff $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996 $4,996
PRMO Tour Staff $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085 $2,085
The V Night Club $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327 $2,327
Payroll
T.J Inc Corp Staff $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923 $89,923
PRMO Tour Staff $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333 $106,333
The V Night Club $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408 $95,408
Total Payroll $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664
Year 1 Personnel
33
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061
Direct Cost of Revenue $39,706 $41,352 $43,105 $44,972 $46,960 $49,078 $51,333 $53,735 $56,294 $59,019 $61,921 $65,011
Merchant Fees $6,862 $7,019 $7,185 $7,363 $7,552 $7,754 $7,969 $8,197 $8,441 $8,700 $8,977 $9,271
Total Cost of Revenue $46,568 $48,370 $50,290 $52,335 $54,512 $56,832 $59,302 $61,933 $64,735 $67,719 $70,897 $74,282
Gross Profit $410,888 $419,531 $428,737 $438,541 $448,983 $460,104 $471,949 $484,564 $497,999 $512,308 $527,548 $543,779
Gross Margin Percentage 89.8% 89.7% 89.5% 89.3% 89.2% 89.0% 88.8% 88.7% 88.5% 88.3% 88.2% 88.0%
Operating Expenses
Travel Gas $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458
Truck Insurance $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625
Marketing & Advertising $22,873 $23,395 $23,951 $24,544 $25,175 $25,847 $26,563 $27,325 $28,137 $29,001 $29,922 $30,903
Business Insurance $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Professional Services $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Utilities & Related $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000
Travel & Entertainment $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Dues & Subscriptions $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Total Payroll $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664 $291,664
Payroll Taxes $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000 $35,000
Payroll Benefits $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750 $8,750
Total Operating Expenses $389,870 $390,392 $390,948 $391,541 $392,172 $392,844 $393,560 $394,322 $395,134 $395,998 $396,919 $397,900
Operating Profit $21,018 $29,139 $37,789 $47,000 $56,811 $67,260 $78,389 $90,242 $102,865 $116,310 $130,629 $145,879
Operating Profit Percentage 4.6% 6.2% 7.9% 9.6% 11.3% 13.0% 14.8% 16.5% 18.3% 20.1% 21.8% 23.6%
Depreciation $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,222 $22,917
Earning Before Interest & Taxes ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962
EBIT Percentage -0.3% 1.5% 3.2% 5.0% 6.9% 8.7% 10.6% 12.4% 14.3% 16.2% 18.1% 19.9%
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Earnings ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962
Earnings Percentage -0.3% 1.5% 3.2% 5.0% 6.9% 8.7% 10.6% 12.4% 14.3% 16.2% 18.1% 19.9%
Year 1 Income Statement
34
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Operating Activities
Cash Received
Gross Revenue $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061
Total Cash Received $457,456 $467,902 $479,027 $490,876 $503,496 $516,936 $531,251 $546,496 $562,734 $580,027 $598,445 $618,061
Cash Used
Cost of Revenue $46,568 $48,370 $50,290 $52,335 $54,512 $56,832 $59,302 $61,933 $64,735 $67,719 $70,897 $74,282
Payroll/Taxes/Benefits $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414 $335,414
Other Operating Expenses $54,456 $54,978 $55,535 $56,127 $56,758 $57,430 $58,146 $58,908 $59,720 $60,585 $61,506 $62,486
Additional Inventory $622 $662 $705 $751 $800 $852 $907 $967 $1,029 $1,096 $1,168 $905
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Accrued $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Used $437,059 $439,425 $441,944 $444,627 $447,484 $450,528 $453,769 $457,221 $460,898 $464,814 $468,984 $473,088
Net Cash From/(Used By) Operating $20,396 $28,477 $37,083 $46,249 $56,011 $66,408 $77,482 $89,275 $101,836 $115,213 $129,461 $144,973
Investing Activities
Cash Received
Proceeds from Property/Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Proceeds from Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Used
Purchase of Property/Land $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase of Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000
Total Cash Used $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $250,000
Net Cash From/(Used By) Investing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($250,000)
Financing Activities
Cash Received
Proceeds from Investors $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Proceeds from Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Cash Used
Dividends Paid $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment of Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cash Used $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash From/(Used By) Financing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Cash Flow $20,396 $28,477 $37,083 $46,249 $56,011 $66,408 $77,482 $89,275 $101,836 $115,213 $129,461 ($105,027)
Cash Balance $323,496 $351,973 $389,057 $435,306 $491,317 $557,725 $635,207 $724,482 $826,318 $941,531 $1,070,992 $965,965
Year 1 Statement of Cash Flow
35
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
Current Assets
Cash $323,496 $351,973 $389,057 $435,306 $491,317 $557,725 $635,207 $724,482 $826,318 $941,531 $1,070,992 $965,965
Inventory $150,622 $151,284 $151,989 $152,741 $153,541 $154,393 $155,300 $156,267 $157,296 $158,392 $159,560 $160,465
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $474,118 $503,257 $541,046 $588,046 $644,858 $712,118 $790,507 $880,749 $983,614 $1,099,924 $1,230,552 $1,126,431
Long-Term Assets
Property/Building $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000 $12,850,000
Lead Certified Equipment $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,250,000
Reface Plaza $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000 $4,000,000
Accumulated Depreciation ($22,222) ($44,444) ($66,667) ($88,889) ($111,111) ($133,333) ($155,556) ($177,778) ($200,000) ($222,222) ($244,444) ($267,361)
Total Long-Term Assets $20,827,778 $20,805,556 $20,783,333 $20,761,111 $20,738,889 $20,716,667 $20,694,444 $20,672,222 $20,650,000 $20,627,778 $20,605,556 $20,832,639
Total Assets $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070
Liabilities
Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-Term Liabilities
Long-Term Debt $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-Term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Shareholders' Equity
Paid-in Capital
Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Investor $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000
Total Paid-in Capital $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000 $22,000,000
Retained Earnings
Previous Retained Earnings ($696,900) ($698,104) ($691,187) ($675,621) ($650,843) ($616,253) ($571,215) ($515,048) ($447,029) ($366,386) ($272,299) ($163,892)
Current Earnings ($1,204) $6,917 $15,566 $24,778 $34,589 $45,038 $56,167 $68,019 $80,643 $94,087 $108,406 $122,962
Total Retained Earnings ($698,104) ($691,187) ($675,621) ($650,843) ($616,253) ($571,215) ($515,048) ($447,029) ($366,386) ($272,299) ($163,892) ($40,930)
Total Shareholders' Equity $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070
Total Liabilities & Equity $21,301,896 $21,308,813 $21,324,379 $21,349,157 $21,383,747 $21,428,785 $21,484,952 $21,552,971 $21,633,614 $21,727,701 $21,836,108 $21,959,070
Year 1 Balance Sheet