eloquent coverings ltd - company's business plan

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Table of Contents

Page 1

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

1.1 Objectives......................................................................................................................................3

1.2 Mission ..........................................................................................................................................4

1.3 Keys to Success ............................................................................................................................5

2.0 Company Summary .................................................................................................................................6

2.1 Company Ownership .....................................................................................................................6

2.2 Start-up Summary..........................................................................................................................7

3.0 Products and Services ............................................................................................................................8

4.0 Market Analysis Summary .......................................................................................................................9

4.1 Market Segmentation...................................................................................................................10

4.2 Target Market Segment Strategy.................................................................................................12

4.3 Service Business Analysis ...........................................................................................................13

4.3.1 Competition and Buying Patterns ....................................................................................14

5.0 Strategy and Implementation Summary .................................................................................................15

5.1 SWOT Analysis............................................................................................................................15

5.1.1 Strengths ........................................................................................................................16

5.1.2 Weaknesses ...................................................................................................................16

5.1.3 Opportunities ..................................................................................................................16

5.1.4 Threats ...........................................................................................................................17

5.2 Competitive Edge ........................................................................................................................17

5.3 Marketing Strategy ......................................................................................................................18

5.4 Sales Strategy .............................................................................................................................18

5.4.1 Sales Forecast ................................................................................................................19

5.5 Milestones ...................................................................................................................................22

6.0 Management Summary .........................................................................................................................24

6.1 Personnel Plan ............................................................................................................................24

7.0 Financial Plan .......................................................................................................................................25

7.1 Start-up Funding .........................................................................................................................25

7.2 Important Assumptions ................................................................................................................27

7.3 Break-even Analysis ....................................................................................................................27

7.4 Projected Profit and Loss ............................................................................................................28

7.5 Projected Cash Flow....................................................................................................................31

7.6 Projected Balance Sheet .............................................................................................................33

7.7 Business Ratios ...........................................................................................................................34

Eloquent Coverings Business Plan

Page 1

1.0 Executive Summary

Introduction

Today the world is defined by the term "Information Age". All businesses, both large and

small, require effective and efficient business communication solutions in order to

continuously meet their customer expec tations and attain a competitive advantage, and

therefore be successful. Whether a company is large or small it is realized that, the right

amount of financing, materials, talent, and experience are not enough to succeed without a

good communication system in place that enables smooth transaction sealing.

The Company

Eloquent Covering Ltd (ElCov Ltd) is a company established on the foundation of bringing the

world of Business Practices and Intelligence in sync with the world of Information Technology

in order to provide a product and service that would meet its customers needs and wants

based on current trends and open venues for income within its local business market.

Services and Products

Eloquent Covering Ltd. (ElCov Ltd) provides both a service and product that allows their

customer to look and feel better after partaking of their offerings. The service provided is the

use of a system that would have the customer wear a cap the would take an image of their

scalp shape and height of hair, and then using this image to allow them to get a 3D visual

of what different hair pieces would look like on their head before they purchase it. The

customers may also customize these styles. The products being sold are the different hair

pieces (wigs) that would be available to all persons of any ethnic type at a very reasonable

price.

*All products being offered by ElCov Ltd are available for online purchase and will be

delivered at each customer door steps within two (2) days of the purchase. *

The Market

The hair industry is highly fragmented with national chains such as Trinidad Hairs and Santa's

the Hair King, which operates diverse franchises catering to most the market segments,

and also including serveral "teen & hip women" salons that are very restricted in scope and

services. This makes for a highly competitive market that has low barriers to entry and

exit. However, most companies have tried to pursue only one general strategy in gaining

market share. Eloquent Coverings believes that it is possible to offer a differentiated

focused service through improved customer service at no greater significant cost if the


Page 2

right employee incentives are provided.

With this strategy in mind, the company's goal is to increase the number of clients served

by at least 20% per year.

Eloquent Solutions Ltd will target four(4) different market segments:

1. Female between the ages of 17 - 55 of average class of living

2. Professional males between the ages of 30 - 65

3. Persons that are interested in using new technology to aid a looking better

4. Persons that simply just want to by hair wigs for the own use and styling


Page 3

1.1 Objectives

Our business strategy will revolve around the need to provide quality service and products to

our various target clients, in the process of fully satisfying their needs. This shall be

undertaken through recruitment of a professional telemarketing, sales and technical team

and the provision of good quality custom-designed services, catering for the clients'

particular needs.

With time our marketing campaign will increase the knowledge of our services to the various

market segments we shall be targeting. This is particularly so with organizations looking at

establishing a competitive advantage(s) on the market due to increased competition, hence

providing them with the opportunity to focus on their core activities whilst procuring

increased business from new and existing customers. Marketing material shall be

professionally done so as to be reflective of our intended image and reputation. We shall

position ourselves as a quality hair wigs solution service provider that strives to provide

effective and efficient looks and styles for of customers' hair. We intend to establish a good

rapport with all the relevant stakeholders and customers.

In summary we intend to attain the following objectives:

Continuously provide professional quality services on time and on budget.

Develop a follow-up strategy to gauge performance with all our clients.

Implement and maintain a quality control system and assurance policy.

To continuously perform methods of cross-examining working solutions

implemented by other business competitiors to ensure that our product and

services are always the best and most updated for our clients and customers.

To instill a culture of continuous improvement in beating standards of customer

satisfactionand efficiency.

We are fully committed to supporting growth and development in the economy.

Sales increase substantially by end of second year and nearly double year one

revenue by the end of third year.

To increase the number of clients services by at least 20% per year through superior

performance and word-of mouth referrals.

Have a clientele return rate of 90% by end of first year.

Provide quick delivery and feedback to customer purchasing our products online

Become an established community destination by end of first year.

To develop a sustainable start-up business, contributing to increased employment


Page 4

of community residents.

1.2 Mission

Eloquent Covering Ltd offers a premium service of quality wig sales at reasonable prices to

our customers as well as access to our future look system that will enable these customers

to view the way that they would look with certain hair pieces (wigs) before they make a

purchase of the product of their choice via our Future Look system. Eloquent Covering Ltd

exist to attract and maintain customers. When we adhere to this maxim, everything else

will fall into place as our services are aimed exceed the expectations of our customers.

Internally we intend to create and nurture a healthy, creative, respectful and enjoyable

office environment, in which our employees are fairly compensated and encouraged to

respect the customer and the quality of the service we provide. In addition, follow-up will

be mandatory so as ensure customer satisfaction and make any improvements as

recommended by the customers in future. We seek fair and responsible profit, enough to

keep the company financially healthy for the short and long term, and to fairly compensate

investors for the money and risk.


Page 5

1.3 Keys to Success

The keys to this project's success will undoubtedly be effective market segmentation through

identification of several niche markets and implementation strategies. Along these lines

Eloquent Covering Ltd intends to implement personal selling and direct marketing

strategies to its target markets. Hence the key success factors will include the following:

Excellence in fulfilling the promise:

Completely confidential, reliable, trustworthy expertise and service(s) through the

provision of an uncompromising service. This dictates that we have in place the latest

technology, hardware and software, and well-trained personnel so as to fulfill the aforesaid.

Timely response to clients' orders: We cannot afford to delay our clients for whatever

reason, as this will have a negative bearing on our image and reputation, including future

business. Hence we need to be continually communicating with the client ensuring we

provide needs-based solutions and quick response to our online product purchasing.

Skill and depth of knowledge: Considering the nature of our services and their relative

infancy on the market, the skill and depth of knowledge of our personnel shall be of utmost

importance in determining the provision of the service(s) to the end-users.

Marketing know-how: In a relatively volatile market there will be a need to aggressively

market our business and the services we provide so as to be continuously at the top of our

prospective and current clients minds. This will also act as a temporary deterrent for

companies contemplating entering our market. Advertising shall be one of our competitive

advantages.

Leveraging from a large pool of expertise: The company's various alliances with

technological partners shall prove invaluable considering the skills and intellectual capacity

these partners will have in the fields of design and system integration, implementation and

execution, lifecycle support and understanding, and in the application of new technology.

This has the potential of proving to be an important differentiator on the market.

Convenience

: Offering clients a wide range of services in one setting, and extendedbusiness hours.


Page 6

2.0 Company Summary

Eloquent Covering Ltd (ElCov Ltd) is a company established on the foundation of bringing the

world of Business Practices and Intelligence in sync with the world of Information Technology

in order to provide a product and service that would meet its customers needs and wants

based on current trends and open venues for income within its local business market. With

the idea of supplying hair pieces that would best suit a customer as well as giving them a

look at what they would look like wearing the hair piece, ElCov Ltd employs this uses of

technology with the intention of establishing close relationships with its clients.

2.1 Company Ownership

Eloquent Covering Ltd is a privately establish and owned company by Jude Bernard, Adio

Colthrust and Rennie Ramlochan. Though relatively new, the direc tors realize their

company's vast potential market and opportunity for growth given implementation of the

appropriate strategies, aided by the necessary finances.

To achieve our objectives, ElCov Ltd is seeking loan financing. This loan will be paid from the

cash flow from the business, and will be secured by the assets of the company, and backed

by the character, experience and personal guarantees of the owners.

Mr. Jude Bernard - is currently an MSc Student at the University of Trinidad and Tobago

(UTT). Mr. Bernard holds a Technician's Diploma in Computer Engineering from UTT, and a

Bachelor of Science in Computer Science with First Class Honors from the University of

Hertfordshire (UH). Mr. Bernard has also participated in UTT's Annual Business Ideas

Competition 2011 and has achieved as award in the catergory of Innovative ICT Application.

Mr. Adio Colthrust - is currently an MSc Student at the University of Trinidad and Tobago

(UTT). Mr. Colthrust holds a Technician's Diploma in Computer Engineering from UTT, and a

Bachelor of Science in Computer Science with First Class Honors from the University of

Hertfordshire (UH). Mr. Colthrust has also participated in UTT's Annual Business Ideas

Competition 2011 and has achieved as award in the catergory of Social Media Enterprises.

Mr. Rennie Ramlochan - is currently an MSc Student at the University of Trinidad and Tobago

(UTT). Mr. Ramlochan holds a BSc in Information Technology from the University of the West

Indies (UWI) with First Class Honors and a BSc in Computer Science from the University of

Hertfordshire (UH) with First Class Honors. Mr. Ramlochan has also participate in UTT's

Annual Business Ideas Competition 2011 and were in the list of finalist.


Page 7

2.2 Start-up Summary

Total start-up expenses covered (including legal costs, logo design, stationery, internet

access, website development and related expenses) came to approximately TT$42,000.

Start-up assets required and utilized are approximated to be TT$792,000 and include but

not limited to the following:

Personal computers

Point of sales computer vehicles

Development of systems to scan and take image of the customers' head

Office furniture

Computer with point of sale terminal

Business Signs

Interior Decore (roofing, walls, flooring, receptionist area, etc)

Assorted Plants

Display shelf for sale of retail products

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $3,500

Stationery etc. $10,000

Insurance $3,000

Rent $7,000

Internet Access $500

Website Developement $8,000

Other $5,000

Total Start-up Expenses $37,000

Start-up Assets

Cash Required $500,000

Start-up Inventory $20,000

Other Current Assets $200,000

Long-term Assets $30,000

Total Assets $750,000

Total Requirements $787,000


Page 8

3.0 Products and Services

Eloquent Covering Ltd. (ElCov Ltd) provides both a service and product that allows their

customer to look and feel better after partaking of their offerings. The service provided is the

use of a system that would have the customer wear a cap the would take an image of their

scalp shape and height of hair, and then using this image to allow them to get a 3D visual

of what different hair pieces would look like on their head before they purchase it. The

products be sold are the different hair pieces (wigs) that would be avaliable to all persons

of any ethnic type at a very reasonable price.

All products being offered by ElCov Ltd are available for online purchase and will be delivered

at each customer door steps within two (2) days of the purchase.

The product mentioned above is to be supplied to ElCov Ltd by a company namely Trinidad

Hairs, a privately owned distributor of hair extension, wigs and weaves. If Trinidad Hairs

fails to maintain a great quality of supplies and a reasonable price to ElCov Ltd, then ElCov

Ltd would approach two (2) other wholesale providers of the aforementioned product with

company namely Summit Cometics Ltd and Santa's The Hair and Wig King in order to select a

new supplier for their standard of products.


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4.0 Market Analysis Summary

With the current rate of growth in the market of hair cosmetics products and service, it

was mandatory that research on the market be done in other to determine whether or not

it is feasible to enter this particular market at the current point and time, and if so, how

being what making strategy of entry should be used on entering the market in order to

gain a fair share of the market's profit.

In order to determine the needs, ElCov Ltd did some market research and on hand interviews

with a few randomly selected citizens of Trinidad and Tobago to assist with analyzing the

feasibility for demand and supply of their product and services as well as the competitors

within the marketof Trinidad and Tobago.

After research, it is evident that there is alot of potential for ElCov Ltd to easily merge into

a market of this type and be very profitable based on the uniqueness of the services

proposed. There are however current competitors on the market that supply the same

product that ElCov Ltd will be supplying. These business are Exotic Glow Cosmetics &

Beauty Supplies, Trinidad Carnival Diary, Pennywise, Monique's Hair & Beauty Supply Store, T

& T Salon Supplies, Hair Plus and Wendy's Variety Shop. These all offer the products,

however, non offers the service that enable their clients to get a view of their look with these

hair pieces before hand, neither do they provide online purchasing or these product as well

as delivery services. These businesses are all small business and only supply for a small

portion of the market. As technology improves, these small businesses grow, and we expect

that these businesses will continue to grow over the years.

Aware of the fact that we will be operating in a predominantly growing market we intend

to ensure that our marketing strategies are considerate of the importance of the fit

between our services capabilities and benefits, and the target market, so as to develop a

strong sustainable competitive position in the market. As a result we intend to implement

a niche marketing strategy, focusing on certain target markets.

The above prognosis influenced our decision to enter the IT business services for supplies of

this nature.


Page 10

4.1 Market Segmentation

Our target market for our services and products will be Female between the ages of 17 - 55

of average class of living, professional males between the ages of 30 - 65 as research shows

that 25% of men have already begin baliding by the age of 30 and the rest as they near 60

years. These men are expected to be earning an average income of 5000 or more per

month. Eloquent Covering Ltd also targets person that will just be eager to trying our

service provided. Due to our unique, we anticipate to approximately 1500 people that

would be interested in our service provided to customers for viewing themselves with the

new hair styles before actually purchasing it as this would give the customers a bigger

insite as to how and on what they will be investing their monies the next time they are about

to do their hair. The 4th area of target that we would be advertising towards are persons

that simply just want to by their hair product and not utilize our services provided. These

hair replacement customers most of the time already have a trend of style in which they

are comfortable with and don't wish to change this. These are very good customers as

they would play a major role in the purchasing of our products which are perceived to be of

the greater standard among others in the market area.

The following shows the analysis of our company's market segmentation.

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Females 30% 1,200 1,560 2,028 2,636 3,427 30.00%

Males 20% 100 120 144 173 208 20.09%

Hair Replacement Clients 25% 400 500 625 781 976 24.98%

Business Services Clients 60% 1,500 2,400 3,840 6,144 9,830 60.00%

Total 45.75% 3,200 4,580 6,637 9,734 14,441 45.75%


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4.2 Target Market Segment Strategy

Eloquent Covering Ltd will target each of the four (4) groups pointed out in the marketing

segementation at different angels and levels. Our target market segments are fairly broad,

in part because our services appeal to such a wide range of people.

Our marketing strategy will be based mainly on making the right service(s) available to the

right target customer. We will ensure that our services' prices take into consideration our

customers' budgets, and that our business is will advertised by us and in turn our

customers due to the services and quality of services provided.

ElCov Ltd will be using market penetration to promote and sell their products and also

utilizing the marketing mix as much as they can to get the best results. For creating this

competitive advantage, the company would pitch the product at a low initial price on the

market in order to gain a share on the market and to encourage early adoption and trial.

We will also be utilizing the wealth of promotional tools including advertising, sales

promotion, direct marketing and social marketing and heavily promote the product as well

as our service because of its physical features, attributes, functionality, branding and

uniqueness of characteristics. Our service i.e. the use of our Future Look System will be

introduced into the market at a price that is very reasonble for its target customers.

ElCov Ltd is aspiring to be the cost leader in the market for the supply of their products. In

order to achieve this, we will be seeking innovations or alternative sources to supply our

product at a lower cost. This way, we will be able to lower our sale price and still make a

good profit which in turn would tend to push off other competitors for the product sales.

Our service will be sold to the focused target market highlighting its differenciation and

uniqueness of service which would bring an overall competitive advantage for the business.


Page 13

4.3 Service Business Analysis

Eloquent Coverings Ltd is currently in the "Hair" industry. This is a fair diverse industry. On

one end of the spectrum you have the traditional hair shop where a customer can go to

purchase a wig, while on the other end you have the fashionable boutique salons that sells (a

small variety) and dress their customers with these wigs, and also give advise to them as to

how they look with it. Right between these two services in where ElCov services falls as

well be providing a large range of wigs, and innovative system so that users can see how they

look before the fact of purchase, as well as trained staff to help guide customers in selecting

the most suitable wig.

Most similar salons are owner operated, with additional hairstyling or station employees,

or with independently contracted stylists who work on commission. (ElCov Ltd uses a mix

of these two models.)

Currently, most of the competitors on the local market buy their product from a local sales

person who get his products wholesale from hair manufacturing companies. ElCov has

intensions of leaving out this man in the middle which has his marked up price and liaise

directly with personnel from these manufacturing companies.


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4.3.1 Competition and Buying Patterns

The key element in purchase decisions of products made at the company's client level is trust

in the professional reputation and reliability of the business. The most important factor in

this market will be the quality of the products and service.

Clients also choose products based on proximity to their daily travels from home and work,

and good pricing.

The buying patterns of men and women are quite different. Typically men are more price or

convenience sensitive. Men typically care less about the task of getting a hair piece that

looks best on them. For them whatever is easiest works best. Women on the other hand

are more caught up in hair styling and tend to bond more with their stylists. Because they

bond more, they are much more loyal to their stylist. Based of this fact, they focus more on

quality of service.

The nature of competition where product is concerned in this industry boils down to who

provide the better quality product at a cheaper price and to have an extraordinary service

provided in order to keep customers. In line of the industry where service is concerned,

clients rarely compare service providers directly, but visits based on word-of-mouth

recommendation by friends, colleagues, family and other significant ones.

ElCov Ltd, being the only one in the service field that can provided the most accurate result

of look for a client, has no competition in this field and would use this differentiation as a

method in gain customers attention and then using the staff and service provided to gain

their trust.


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5.0 Strategy and Implementation Summary

Eloquent Coverings employs a strategy for creating a defendable position in an industry, to

cope successfully with the five competitive forces and thereby yield a superior return on

investment for the company. The generic strategies are approaches to outperforming

competitors in the industry. Eloquent Coverings will be utilizing the Differentiation Focus

strategy as their main mean of competing. With the implementation of this strategy on,

Eloquent Solutions will be able to market the uniqueness of the services promised to be

offered and potentially earn above-average returns from its industry.

Through the implementation of a fair, effective and competitive remuneration policy we

intend to optimize our human resource output and advancement. We need the right people

in the right place at the right time if we are to ensure optimum growth. We intend to

develop our team so that our people can grow as the company grows -- a mutually

beneficial relationship. As a result we intend to vigorously search and find the right people

for our organization.

5.1 SWOT Analysis

Eloquent Coverings Ltd has a valuable inventory of strengths that will help it succeed.

These strengths includes well trained staff in customer relations and customer-focus

business practices and more. Strengths are valuable, but it is also important to realize the

weaknesses the ElCov must address. These weaknesses include: lack brand equity that many

over its competitors have earned over years of service, and others.

ElCov strengths will help it capitalize on emerging opportunities. These opportunities

include, but are not limited to, an increase in income and publicity from use internet

services. Threats that ElCov should be aware of include, increasing technology that can

enhance other innovative competitor to successfully compete with us on the market.

The following are, the SWOT analysis information for Eloquent Coverings Ltd. These are the

current known strenghts, weakness, opportunities and threats.


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5.1.1 Strengths

Competitive prices for our products

Well trained staff in customer relations and customer-focus business practices

The only business on the local market to offer a service that the Future Look system

provided

A wide range of wigs available for all ethnic cultures

A unique, current business environment appropriate business model.

Strong relationship with our product provider often being able to negotiate lower

purchasing price for products

Rapid turnover rate based of market demand for product and profit margin

Clear vision of the market need

5.1.2 Weaknesses

The larger cost associated with the companys start-up

Lack of true experience running in running a business

As a new entrant to the market, ElCov lacks brand equity that many over its

competitors have earned over years of service.

5.1.3 Opportunities

The ability to spread fixed costs over a large area as sales increase, increasing

profit margin

The ability to grow on the market due to the current buying trend on the product

and calcuated increase in market demand expect

Can buy over smaller business the already have a name and push our product ans

services through them. The customer may see it as another business stepping

their game up, but in fact would be the same owners operating under a different

name, which brings profit from an additional stream

With the qualty of service and products, ElCov may be able to bounce other

competitors of the market, leave a great share for themselves.

Increase in income and publicity from use internet services


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5.1.4 Threats

Competition from already establish business that offer a wide range of our products

With increasing technology, there is a possibility that another competitot can invest

in a more innovative solution to provide the service that our current Future Look

system offers and cause us to become updated.

With current monitoring of the world econmic scales, if the local market were to

be affected by any decrease in employment or earnings, the client's in turn would

not have the full freedom of spending any leisure monies and before, therefore

causing our sales ratio to drop.

5.2 Competitive Edge

Our competitive edge is our dominance of high-technology service and traditional high-quality

wigs at a cost just below the average market price. Although there are many wig stores, and many

computer programming firms, none have brought the two crafts together as we have.

We focus on a special kind of customer, the person who wants very high quality of wig at a

faction of the cost, thoses that are about qualities of services, thoses that just want a product on

the go and others that like to try new trend and styles in the market and those that prefer making

a purchase and having it delievered at their door steps. Our customer might be part of a larger

corporations, small or medium business, or in a home office with or without a home-office

business. What is important to the customer is elegance, great customer relations, ease of use,

ergonomics, and practicality.

The product strategy is also based on quality, in this case the intersection of technical

understanding with very high quality of customer services and support.

An important competitive edge is our Future Look system, which allows a customer or client to see

themselveswearing their product of choice before they purchase it. This is actually a feature that

enhances the sense of quality and trust for our customers.


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5.3 Marketing Strategy

One core element of our strategy will be that of differentiation from our competitors. In

terms of marketing, we intend to sell our company as a differentiated focus strategic ally,

due to our Future Look system. In price for our products, we intend to offer reasonable and

competitive prices in comparison to competition and we need to be able to sustain that.

Market penetration through lower prices shall be undertaken where need be. Our service

marketing will strive to ensure that we establish long-term relationships with clients. Our

primary intention will be to sell a relationship more than services.

Our service marketing will emphasize the benefits of speed, interaction and flexibility to be

gained from utilizing our services. The approach will be entirely needs-driven and a

thorough understanding of the business requirements, business processes and technology

strategy of the customer being the basis on which an Eloquent Coverings Ltd solution will

be built. Once the needs and processes are understood and described, leading edge

products and best-of-industry skills will be applied to design and develop a fitting solution to

satisfy the need and enable the customer's business in the most cost effective way

5.4 Sales Strategy

One of ElCov Ltd sales strategy will be based on extremely professional interactions with

the customer. Typically the current competitors concentrate on being quick and somewhat

inexpensive, often at the expense of customer service. Anytime that a prospective customer

is speaking with someone at ElCov's the employee will have an opportunity to impress the

customer. Employee training will emphasize seizing these opportunities.

ElCov will also provide complimentary coffee for clients within to use their systems for view

their hair styles as well as provide a 5% discount on all items in the store for customers

that used the Future Look system. Each new customer will be able to participate in a

promotion the our company will be offering. Each customer would be given a card that is

punch each time they make a purchase at our business. After this card has been punch 10

times the customer will be given a coupon for a free chance to use the Future Look system as

well as 10% off all items store wide.

As customer feedback start to be collected, ElCov Ltd will keep looking and new and

improved ways in maintaining the competitive advantage through there sales strategy.


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5.4.1 Sales Forecast

Eloquent Covering Ltd will be receiving its income from sales of their products and uses of

their Future Look system.

ElCov Ltd expects a growth rate of between 10-25% each year for the next three (3) years.

Unit price per item could fluctuate however, the decrease or increase in selling price would

be a strategic move based on the moves that current competition on the market may take.

The sales are projected at levels shown below for the company to have a fair idea of how to

plan each financial year. If the sales were projected higher than the approximate value then

at the end of the financial year, the companies status would project a great profit income

than expect which would be somewhat of a misleading expectation of the companies

profits. If the sales were projected lower than the approximate value then the company

stand a chance in running into depth after seeking financial resources for the financial year.

The important elements of the Sales Forecasts are shown in the chart and table below.

Initial sales forecast indicate first year revenue of $363,861 increasing to $458,109 million

by the end of the second year, then $575,226 million by the end of the third year. These

figures are based on revenue from minimum average estimates from ElCov Ltd.

We expect income to increase steadily over the next three years, as the reputation of the

business and services to increase as the business becomes more apparent to target

markets and the general public.

The sales forecast table shows our expectations for the next three years. The attached

appendix shows the monthly growth.


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Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Use of Future Look system 1,784 2,020 2,500

Synthetic Machine Made Wigs 203 250 300

Human Hair Hand Tied Cranial Prosthesis 213 274 290

Human Hair Machine Made Wigs 335 390 467

Hand-tied Synthetic Cranial Prosthesis 235 250 275

Vacuum Base Cranial Prosthesis 132 200 300

Custom Quality Breathable Base Cranial

Prosthesis

157 210 287

Standard Cap Wigs 722 1,124 1,275

Monofilament Cap Wigs 270 320 390

Capless Wigs 390 450 535

Lace Wigs 245 300 425

Total Unit Sales 4,686 5,788 7,044

Unit Prices Year 1 Year 2 Year 3

Use of Future Look system $20.00 $20.00 $20.00

Synthetic Machine Made Wigs $240.00 $240.00 $240.00

Human Hair Hand Tied Cranial Prosthesis $330.00 $330.00 $330.00

Human Hair Machine Made Wigs $310.00 $310.00 $310.00

Hand-tied Synthetic Cranial Prosthesis $260.00 $260.00 $260.00

Vacuum Base Cranial Prosthesis $270.00 $270.00 $270.00


Prosthesis

$520.00 $520.00 $520.00

Standard Cap Wigs $90.00 $90.00 $90.00

Monofilament Cap Wigs $120.00 $120.00 $120.00

Capless Wigs $150.00 $150.00 $150.00

Lace Wigs $500.00 $500.00 $500.00

Sales

Use of Future Look system $35,680 $40,400 $50,000

Synthetic Machine Made Wigs $48,720 $60,000 $72,000

Human Hair Hand Tied Cranial Prosthesis $70,290 $90,420 $95,700

Human Hair Machine Made Wigs $103,850 $120,900 $144,770

Hand-tied Synthetic Cranial Prosthesis $61,100 $65,000 $71,500

Vacuum Base Cranial Prosthesis $35,640 $54,000 $81,000


Prosthesis

$81,640 $109,200 $149,240

Standard Cap Wigs $64,980 $101,160 $114,750

Monofilament Cap Wigs $32,400 $38,400 $46,800

Capless Wigs $58,500 $67,500 $80,250

Lace Wigs $122,500 $150,000 $212,500

Total Sales $715,300 $896,980 $1,118,510

Direct Unit Costs Year 1 Year 2 Year 3

Use of Future Look system $0.00 $0.00 $0.00

Synthetic Machine Made Wigs $60.00 $60.00 $60.00

Human Hair Hand Tied Cranial Prosthesis $198.00 $198.00 $198.00

Human Hair Machine Made Wigs $186.00 $186.00 $186.00

Hand-tied Synthetic Cranial Prosthesis $117.00 $117.00 $117.00

Vacuum Base Cranial Prosthesis $148.50 $148.50 $148.50


Prosthesis

$312.00 $312.00 $312.00

Standard Cap Wigs $40.50 $40.50 $40.50

Monofilament Cap Wigs $60.00 $60.00 $60.00


Page 21

Capless Wigs $82.50 $82.50 $82.50

Lace Wigs $300.00 $300.00 $300.00

Direct Cost of Sales

Use of Future Look system $0 $0 $0

Synthetic Machine Made Wigs $12,180 $15,000 $18,000

Human Hair Hand Tied Cranial Prosthesis $42,174 $54,252 $57,420

Human Hair Machine Made Wigs $62,310 $72,540 $86,862

Hand-tied Synthetic Cranial Prosthesis $27,495 $29,250 $32,175

Vacuum Base Cranial Prosthesis $19,602 $29,700 $44,550


Prosthesis

$48,984 $65,520 $89,544

Standard Cap Wigs $29,241 $45,522 $51,638

Monofilament Cap Wigs $16,200 $19,200 $23,400

Capless Wigs $32,175 $37,125 $44,138

Lace Wigs $73,500 $90,000 $127,500

Subtotal Direct Cost of Sales $363,861 $458,109 $575,226


Page 22

5.5 Milestones

The following table lists important program milestones, with dates and managers in

charge, and budgets for each. The milestone schedule indicates our emphasis on planning for

implementation of our business.


Page 23

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Prepare Sample Milestone 12/15/2011 12/16/2011 $0 Jude Bernard HR & Finance

Finish Business Plan 12/16/2011 12/18/2011 $0 Jude Bernard HR & Finance

Acquire Financing 12/19/2011 1/2/2012 $0 Jude Bernard HR & Finance

Website Development 1/2/2012 1/14/2012 $8,000 Rennie

Ramlochan

IT Department

Develop Future Look System 1/3/2012 2/3/2012 $200,000 Rennie

Ramlochan

IT Department

Obtain Building for Business 12/20/2011 12/26/2011 $50,000 Adio Coltrust Maketing & Development

Legal Issues 12/20/2011 12/26/2011 $3,500 Adio Coltrust Maketing & Development

Prep Building for operation 12/27/2011 1/27/2012 $42,000 Adio Coltrust Maketing & Development

Purchasing Inventory Items 12/27/2011 1/8/2012 $20,000 Jude Bernard HR & Finance

Logo Design 12/20/2011 12/27/2011 $4,000 Adio Coltrust Maketing & Development

Opening Advertising Campaign 12/27/2011 2/13/2012 $24,000 Adio Coltrust Maketing & Development

Hire Employees 2/5/2012 2/5/2012 $0 Jude Bernard HR & Finance

Training Employees 2/6/2012 2/6/2012 $0 Rennie

Ramlochan

IT Department

Grande Opening 2/13/2012 2/13/2012 $2,000 Adio Coltrust Maketing & Development

Marketing Campaign 2/13/2012 2/27/2012 $10,000 Adio Coltrust Maketing & Development

Business Evaluation 2/28/2012 3/1/2012 $0 Jude Bernard HR & Finance

Develop New Business

Approaches

3/1/2012 3/1/2012 $0 Jude Bernard HR & Finance

Other Accessories 1/2/2012 3/4/2012 $100,000 Jude Bernard HR & Finance

Totals $463,500


Page 24

6.0 Management Summary

The management team of Eloquent Coverings Ltd. is comprised of experienced IT,

Marketing & Development and Human Resource Management & Finance specialist. Our

management team possesses a breadth of functional experience within each of their

respective areas of function. Mr. Bernard will share the senior HR Management and Finance

responsibilities, with Mr. Colthrust as the managing director of sales/marketing and

development and Mr. Ramlochan as head management of the IT Department and New

Technology Development

The organizational structure and personnel plan reflect our intentions to maintain an

organization that is customer oriented and technologically proficient, while efficiently

managing cost controls and productivity.

6.1 Personnel Plan

The are currently 3 employees at Eloquent Coverings Ltd. By the opening date the company

is expected to have a total of 10 employees and at the end of a 3 year period, a total of 15

employees. The growth of the company will be determined by how accurately and

efficiently the company is able to implement the facets of this business plan. The Personal

Plan table reflects the staffing level and salaries required to facilitate the company's growth

in the market.

As business income and power increase, so will the number in personnels increase in order

to better facilitate and manage the power gain in the market segmentation.

Table: Personnel

Personnel Plan


HR and Finance $120,000 $160,000 $160,000

IT and New Technology Development $90,000 $96,000 $105,000

Sales, Marketing and Developement $120,000 $132,600 $140,000

Total People 10 12 15

Total Payroll $330,000 $388,600 $405,000


Page 25

7.0 Financial Plan

The premier element in our financial plan is initiating, maintaining, and improving the factors

that create, stabilize, and increase our cash flow. These factors are as follows:

1. We must create visibility so as to create customer flow.

2. We must maintain a dependable, cheerful employee force so as to minimize

turnover.

3. We must create a brisk turnaround on our retail products, always maintaining

viable stock levels.

4. Set cash flow as first priority, growth as second, and profits as third.

5. Harvest willingness to follow the project objectives and contribute valuable input to

strategy and implementation decisions.

Our financial plan for the next three years includes revenue streams from product sales and

service usage. The projections for the first year are therefore much different from the

starting balances for our last year. The major accompanying expense is a much higher

personnel payroll, inventory products, advertising, as well as high rent for the location, to

accommodate of business services.

We want to finance growth mainly through cash flow and equity. We recognize that this

means we will have to grow more slowly than we might like.

ElCov is seeking financing to achieve the goal of becoming a great provider of hair wigs and

visionary services. We will use this money to renovate the new space so that we can build

our clientele base, increase revenues, maintain a positive cash flow, and steadily increase

the net worth of the business with good management.

7.1 Start-up Funding

The following table depicts the total start-up funding estimate for Eloquent Coverings Ltd

to begin offering their services to the public comfortably from inception to 1 month.


Page 26

Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $37,000

Start-up Assets to Fund $750,000

Total Funding Required $787,000

Assets

Non-cash Assets from Start-up $250,000

Cash Requirements from Start-up $500,000

Additional Cash Raised $43,000

Cash Balance on Starting Date $543,000

Total Assets $793,000

Liabil ities and Capital

Liabil ities

Current Borrowing $0

Long-term Liabil ities $300,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabil ities (interest-free) $0

Total Liabil ities $300,000

Capital

Planned Investment

Owners $30,000

Entrepreneur $500,000

Additional Investment Requirement $0

Total Planned Investment $530,000

Loss at Start-up (Start-up Expenses) ($37,000)

Total Capital $493,000

Total Capital and Liabil ities $793,000

Total Funding $830,000


Page 27

7.2 Important Assumptions

The following table shows important financials assumptions for our plan, including a

projected interest rate for the long-term loan we are seeking. We are also assuming:

1. No serious disability on the part of either owner which prevents her from working

2. No new direct competition for hair replacement services in Anytown in the next

three years

3. No sudden changes in licensing or technology which would make our services

obsolete

4. Access to equity capital and financing to support our financial plan.

5. Our financial progress based on realistic sales to minimum sales against highest

expenses.

6. There will not be an economic crash that would greatly hinder our target market's

access to their personal luxury finds.

7.3 Break-even Analysis

Our Break-even Analysis will be based on running costs, that is, costs we shall incur in

keeping the business running, including salaries and wages, rent, computer maintenance

costs, water and electricity, and insurance amongst others. Hence many fixed costs shall be

included in these costs. We will thus ensure that our sales levels are running comfortably

above break-even. The following table summarizes our break-even analysis for ElCov Ltd.

Table: Break-even Analysis

Break-even Analysis

Monthly Units Break-even 581

Monthly Revenue Break-even $88,741

Assumptions:

Average Per-Unit Revenue $152.65

Average Per-Unit Variable Cost $77.65

Estimated Monthly Fixed Cost $43,600


Page 28

7.4 Projected Profit and Loss

Initial marketing and training expenses will be relatively high as we seek to become known

on the market and staff get trained in provision of our services. This will be brought about by

the development of sales literature, advertising expenses, function expenses including

lunches and dinners with interested stakeholders. As our market share increases and capital

is generated, further marketing programs and the expansion of those in existence at the time

will be undertaken, to ensure market development. However with time these programs will

start generating revenue for the business, which we shall in turn reinvest. The following table

and charts presents the profit and loss information for Eloquent Coverings


Page 29

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $715,300 $896,980 $1,118,510

Direct Cost of Sales $363,861 $458,109 $575,226

Other Costs of Sales $0 $0 $0

Total Cost of Sales $363,861 $458,109 $575,226

Gross Margin $351,439 $438,871 $543,284

Gross Margin % 49.13% 48.93% 48.57%

Expenses

Payroll $330,000 $388,600 $405,000

Marketing/Promotion $60,000 $0 $0

Depreciation $0 $0 $0

Rent $84,000 $84,000 $0

Util ities $13,200 $0 $0

Insurance $36,000 $0 $0

Payroll Taxes $0 $0 $0

Other $0 $0 $0

Total Operating Expenses $523,200 $472,600 $405,000

Profit Before Interest and Taxes ($171,761) ($33,729) $138,284

EBITDA ($171,761) ($33,729) $138,284

Interest Expense $29,068 $17,910 $8,680

Taxes Incurred $0 $0 $32,401

Net Profit ($200,829) ($51,639) $97,203

Net Profit/Sales -28.08% -5.76% 8.69%


Page 30


Page 31

7.5 Projected Cash Flow

The chart and table below provide details to the company's cash flow situation. The chart

shows a monthly breakdown while the table shows a year-end statement.


Page 32

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $715,300 $896,980 $1,118,510

Subtotal Cash from Operations $715,300 $896,980 $1,118,510

Additional Cash Received

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

New Current Borrowing $0 $0 $0

New Other Liabil ities (interest-free) $60,000 $0 $0

New Long-term Liabil ities $0 $0 $0

Sales of Other Current Assets $0 $0 $0

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

New Investment Received $0 $0 $0

Subtotal Cash Received $775,300 $896,980 $1,118,510

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $330,000 $388,600 $405,000

Bill Payments $579,441 $654,200 $650,963

Subtotal Spent on Operations $909,441 $1,042,800 $1,055,963

Additional Cash Spent

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

Principal Repayment of Current Borrowing $0 $0 $0

Other Liabil ities Principal Repayment $0 $0 $0

Long-term Liabil ities Principal Repayment $66,000 $70,000 $80,000

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $0 $0 $0

Dividends $0 $0 $0

Subtotal Cash Spent $975,441 $1,112,800 $1,135,963

Net Cash Flow ($200,141) ($215,820) ($17,453)

Cash Balance $342,859 $127,039 $109,586


Page 33

7.6 Projected Balance Sheet

The Balance Sheet shows our projected steady increase in net worth with no accounts

receivable, our cash sales go immediately into our assets. We also expect a steady increase in

retained earnings. The following table and chart shows the projected balance sheet for

Eloquent Coverings Ltd.


Page 34

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $342,859 $127,039 $109,586

Inventory $124,035 $156,163 $196,086

Other Current Assets $200,000 $200,000 $200,000

Total Current Assets $666,894 $483,202 $505,672

Long-term Assets

Long-term Assets $30,000 $30,000 $30,000

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $30,000 $30,000 $30,000

Total Assets $696,894 $513,202 $535,672

Liabil ities and Capital Year 1 Year 2 Year 3

Current Liabil ities

Accounts Payable $110,722 $48,670 $53,937

Current Borrowing $0 $0 $0

Other Current Liabil ities $60,000 $60,000 $60,000

Subtotal Current Liabil ities $170,722 $108,670 $113,937

Long-term Liabil ities $234,000 $164,000 $84,000

Total Liabil ities $404,722 $272,670 $197,937

Paid-in Capital $530,000 $530,000 $530,000

Retained Earnings ($37,000) ($237,829) ($289,468)

Earnings ($200,829) ($51,639) $97,203

Total Capital $292,172 $240,533 $337,736

Total Liabil ities and Capital $696,894 $513,202 $535,672

Net Worth $292,172 $240,533 $337,736

7.7 Business Ratios

The following table presents important business ratios for Eloquent Coverings Ltd. These

figures come from the communications services industry, as determined by the Standard

Industry Classification (SIC) Index.


Page 35

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 25.40% 24.70% 3.38%

Percent of Total Assets

Inventory 17.80% 30.43% 36.61% 3.43%

Other Current Assets 28.70% 38.97% 37.34% 47.76%

Total Current Assets 95.70% 94.15% 94.40% 62.16%

Long-term Assets 4.30% 5.85% 5.60% 37.84%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabil ities 24.50% 21.17% 21.27% 24.44%

Long-term Liabil ities 33.58% 31.96% 15.68% 22.82%

Total Liabil ities 58.08% 53.13% 36.95% 47.26%

Net Worth 41.92% 46.87% 63.05% 52.74%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 49.13% 48.93% 48.57% 100.00%

Selling, General & Administrative Expenses 77.21% 54.68% 39.88% 69.91%

Advertising Expenses 8.39% 0.00% 0.00% 2.38%

Profit Before Interest and Taxes -24.01% -3.76% 12.36% 2.30%

Main Ratios

Current 3.91 4.45 4.44 1.64

Quick 3.18 3.01 2.72 1.26

Total Debt to Total Assets 58.08% 53.13% 36.95% 60.85%

Pre-tax Return on Net Worth -68.74% -21.47% 38.37% 11.12%

Pre-tax Return on Assets -28.82% -10.06% 24.19% 4.35%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -28.08% -5.76% 8.69% n.a

Return on Equity -68.74% -21.47% 28.78% n.a

Activity Ratios

Inventory Turnover 5.57 3.27 3.27 n.a

Accounts Payable Turnover 6.23 12.17 12.17 n.a

Payment Days 27 49 29 n.a

Total Asset Turnover 1.03 1.75 2.09 n.a

Debt Ratios

Debt to Net Worth 1.39 1.13 0.59 n.a

Current Liab. to Liab. 0.42 0.40 0.58 n.a

Liquidity Ratios

Net Working Capital $496,172 $374,533 $391,736 n.a

Interest Coverage -5.91 -1.88 15.93 n.a

Additional Ratios

Assets to Sales 0.97 0.57 0.48 n.a

Current Debt/Total Assets 24% 21% 21% n.a

Acid Test 3.18 3.01 2.72 n.a

Sales/Net Worth 2.45 3.73 3.31 n.a

Dividend Payout 0.00 0.00 0.00 n.a

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

Unit Sales

Use of Future Look system 100 107 114 122 131 140 150 160 171 183 196 210

Synthetic Machine Made Wigs 10 10 15 20 15 10 12 16 20 20 25 30

Human Hair Hand Tied Cranial Prosthesis 11 15 15 10 10 10 15 20 20 25 27 35

Human Hair Machine Made Wigs 30 25 20 20 15 15 20 25 25 35 45 60

Hand-tied Synthetic Cranial Prosthesis 10 10 10 15 15 10 20 20 20 25 35 45

Vacuum Base Cranial Prosthesis 5 5 7 10 5 10 10 15 5 10 20 30


Prosthesis

10 12 10 15 10 5 5 15 10 10 20 35

Standard Cap Wigs 35 38 42 46 51 50 45 68 75 82 90 100

Monofilament Cap Wigs 25 25 30 25 20 15 10 25 15 15 25 40

Capless Wigs 45 35 30 25 25 25 20 30 25 30 45 55

Lace Wigs 30 35 20 15 15 10 10 25 10 15 25 35

Total Unit Sales 311 317 313 323 312 300 317 419 396 450 553 675

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

Use of Future Look system $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00 $20.00

Synthetic Machine Made Wigs $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00 $240.00

Human Hair Hand Tied Cranial Prosthesis $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00 $330.00

Human Hair Machine Made Wigs $0.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00 $310.00

Hand-tied Synthetic Cranial Prosthesis $0.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00 $260.00

Vacuum Base Cranial Prosthesis $0.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00 $270.00


Prosthesis

$0.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00 $520.00

Standard Cap Wigs $0.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00 $90.00

Monofilament Cap Wigs $0.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00 $120.00

Capless Wigs $0.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00 $150.00

Lace Wigs $0.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00 $500.00

Sales

Use of Future Look system $2,000 $2,140 $2,280 $2,440 $2,620 $2,800 $3,000 $3,200 $3,420 $3,660 $3,920 $4,200

Synthetic Machine Made Wigs $2,400 $2,400 $3,600 $4,800 $3,600 $2,400 $2,880 $3,840 $4,800 $4,800 $6,000 $7,200

Human Hair Hand Tied Cranial Prosthesis $3,630 $4,950 $4,950 $3,300 $3,300 $3,300 $4,950 $6,600 $6,600 $8,250 $8,910 $11,550

Human Hair Machine Made Wigs $9,300 $7,750 $6,200 $6,200 $4,650 $4,650 $6,200 $7,750 $7,750 $10,850 $13,950 $18,600

Hand-tied Synthetic Cranial Prosthesis $2,600 $2,600 $2,600 $3,900 $3,900 $2,600 $5,200 $5,200 $5,200 $6,500 $9,100 $11,700

Vacuum Base Cranial Prosthesis $1,350 $1,350 $1,890 $2,700 $1,350 $2,700 $2,700 $4,050 $1,350 $2,700 $5,400 $8,100


Prosthesis

$5,200 $6,240 $5,200 $7,800 $5,200 $2,600 $2,600 $7,800 $5,200 $5,200 $10,400 $18,200

Appendix

Page 2

Standard Cap Wigs $3,150 $3,420 $3,780 $4,140 $4,590 $4,500 $4,050 $6,120 $6,750 $7,380 $8,100 $9,000

Monofilament Cap Wigs $3,000 $3,000 $3,600 $3,000 $2,400 $1,800 $1,200 $3,000 $1,800 $1,800 $3,000 $4,800

Capless Wigs $6,750 $5,250 $4,500 $3,750 $3,750 $3,750 $3,000 $4,500 $3,750 $4,500 $6,750 $8,250

Lace Wigs $15,000 $17,500 $10,000 $7,500 $7,500 $5,000 $5,000 $12,500 $5,000 $7,500 $12,500 $17,500

Total Sales $54,380 $56,600 $48,600 $49,530 $42,860 $36,100 $40,780 $64,560 $51,620 $63,140 $88,030 $119,100

Direct Unit Costs Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Use of Future Look system 0.00% $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00 $0.00

Synthetic Machine Made Wigs 25.00% $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00

Human Hair Hand Tied Cranial Prosthesis 60.00% $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00 $198.00

Human Hair Machine Made Wigs 60.00% $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00 $186.00

Hand-tied Synthetic Cranial Prosthesis 45.00% $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00 $117.00

Vacuum Base Cranial Prosthesis 55.00% $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50 $148.50


Prosthesis

60.00% $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00 $312.00

Standard Cap Wigs 45.00% $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50 $40.50

Monofilament Cap Wigs 50.00% $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00 $60.00

Capless Wigs 55.00% $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50 $82.50

Lace Wigs 60.00% $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00

Direct Cost of Sales

Use of Future Look system $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Synthetic Machine Made Wigs $600 $600 $900 $1,200 $900 $600 $720 $960 $1,200 $1,200 $1,500 $1,800

Human Hair Hand Tied Cranial Prosthesis $2,178 $2,970 $2,970 $1,980 $1,980 $1,980 $2,970 $3,960 $3,960 $4,950 $5,346 $6,930

Human Hair Machine Made Wigs $5,580 $4,650 $3,720 $3,720 $2,790 $2,790 $3,720 $4,650 $4,650 $6,510 $8,370 $11,160

Hand-tied Synthetic Cranial Prosthesis $1,170 $1,170 $1,170 $1,755 $1,755 $1,170 $2,340 $2,340 $2,340 $2,925 $4,095 $5,265

Vacuum Base Cranial Prosthesis $743 $743 $1,040 $1,485 $743 $1,485 $1,485 $2,228 $743 $1,485 $2,970 $4,455


Prosthesis

$3,120 $3,744 $3,120 $4,680 $3,120 $1,560 $1,560 $4,680 $3,120 $3,120 $6,240 $10,920

Standard Cap Wigs $1,418 $1,539 $1,701 $1,863 $2,066 $2,025 $1,823 $2,754 $3,038 $3,321 $3,645 $4,050

Monofilament Cap Wigs $1,500 $1,500 $1,800 $1,500 $1,200 $900 $600 $1,500 $900 $900 $1,500 $2,400

Capless Wigs $3,713 $2,888 $2,475 $2,063 $2,063 $2,063 $1,650 $2,475 $2,063 $2,475 $3,713 $4,538

Lace Wigs $9,000 $10,500 $6,000 $4,500 $4,500 $3,000 $3,000 $7,500 $3,000 $4,500 $7,500 $10,500

Subtotal Direct Cost of Sales $29,021 $30,303 $24,896 $24,746 $21,116 $17,573 $19,868 $33,047 $25,013 $31,386 $44,879 $62,018

Appendix

Page 3

Table: Personnel

Personnel Plan


HR and Finance $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

IT and New Technology Development $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500

Sales, Marketing and Developement $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000

Total People 10 10 10 10 10 10 10 10 10 10 10 10

Total Payroll $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500

Appendix

Page 4

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $54,380 $56,600 $48,600 $49,530 $42,860 $36,100 $40,780 $64,560 $51,620 $63,140 $88,030 $119,100

Direct Cost of Sales $29,021 $30,303 $24,896 $24,746 $21,116 $17,573 $19,868 $33,047 $25,013 $31,386 $44,879 $62,018

Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $29,021 $30,303 $24,896 $24,746 $21,116 $17,573 $19,868 $33,047 $25,013 $31,386 $44,879 $62,018

Gross Margin $25,360 $26,297 $23,705 $24,785 $21,745 $18,528 $20,913 $31,514 $26,608 $31,754 $43,152 $57,083

Gross Margin % 46.63% 46.46% 48.77% 50.04% 50.73% 51.32% 51.28% 48.81% 51.54% 50.29% 49.02% 47.93%

Expenses

Payroll $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500

Marketing/Promotion $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000

Utilities $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100

Insurance $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

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

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600 $43,600

Profit Before Interest and Taxes ($18,241) ($17,303) ($19,896) ($18,816) ($21,856) ($25,073) ($22,688) ($12,087) ($16,993) ($11,846) ($449) $13,483

EBITDA ($18,241) ($17,303) ($19,896) ($18,816) ($21,856) ($25,073) ($22,688) ($12,087) ($16,993) ($11,846) ($449) $13,483

Interest Expense $2,700 $2,649 $2,599 $2,548 $2,498 $2,448 $2,397 $2,347 $2,296 $2,246 $2,195 $2,145

Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($20,940) ($19,952) ($22,494) ($21,364) ($24,353) ($27,520) ($25,085) ($14,433) ($19,289) ($14,092) ($2,644) $11,338

Net Profit/Sales -38.51% -35.25% -46.28% -43.13% -56.82% -76.23% -61.51% -22.36% -37.37% -22.32% -3.00% 9.52%

Appendix

Page 5

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $54,380 $56,600 $48,600 $49,530 $42,860 $36,100 $40,780 $64,560 $51,620 $63,140 $88,030 $119,100

Subtotal Cash from Operations $54,380 $56,600 $48,600 $49,530 $42,860 $36,100 $40,780 $64,560 $51,620 $63,140 $88,030 $119,100

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other Liabilities (interest-free) $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000

New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

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

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

Subtotal Cash Received $59,380 $61,600 $53,600 $54,530 $47,860 $41,100 $45,780 $69,560 $56,620 $68,140 $93,030 $124,100

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

Expenditures from Operations

Cash Spending $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500 $27,500

Bill Payments $2,862 $84,720 $51,187 $38,697 $38,647 $38,596 $38,546 $39,386 $64,284 $38,830 $52,715 $90,972

Subtotal Spent on Operations $30,362 $112,220 $78,687 $66,197 $66,147 $66,096 $66,046 $66,886 $91,784 $66,330 $80,215 $118,472

Additional Cash Spent

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

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

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500

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

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

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $35,862 $117,720 $84,187 $71,697 $71,647 $71,596 $71,546 $72,386 $97,284 $71,830 $85,715 $123,972

Net Cash Flow $23,518 ($56,120) ($30,587) ($17,167) ($23,787) ($30,496) ($25,766) ($2,826) ($40,664) ($3,690) $7,315 $128

Cash Balance $566,518 $510,398 $479,812 $462,645 $438,858 $408,362 $382,596 $379,770 $339,106 $335,415 $342,731 $342,859

Appendix

Page 6

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $543,000 $566,518 $510,398 $479,812 $462,645 $438,858 $408,362 $382,596 $379,770 $339,106 $335,415 $342,731 $342,859

Inventory $20,000 $58,041 $60,606 $55,711 $50,965 $49,850 $52,277 $52,410 $66,093 $61,081 $62,772 $89,757 $124,035

Other Current Assets $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000 $200,000

Total Current Assets $763,000 $824,559 $771,004 $735,522 $713,610 $688,708 $660,639 $635,006 $645,863 $600,186 $598,187 $632,488 $666,894

Long-term Assets

Long-term Assets $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000

Total Assets $793,000 $854,559 $801,004 $765,522 $743,610 $718,708 $690,639 $665,006 $675,863 $630,186 $628,187 $662,488 $696,894

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

Current Liabilities

Accounts Payable $0 $82,999 $49,897 $37,409 $37,360 $37,311 $37,263 $37,214 $63,004 $37,116 $49,709 $87,154 $110,722

Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other Current Liabilities $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 $45,000 $50,000 $55,000 $60,000

Subtotal Current Liabilities $0 $87,999 $59,897 $52,409 $57,360 $62,311 $67,263 $72,214 $103,004 $82,116 $99,709 $142,154 $170,722

Long-term Liabilities $300,000 $294,500 $289,000 $283,500 $278,000 $272,500 $267,000 $261,500 $256,000 $250,500 $245,000 $239,500 $234,000

Total Liabilities $300,000 $382,499 $348,897 $335,909 $335,360 $334,811 $334,263 $333,714 $359,004 $332,616 $344,709 $381,654 $404,722

Paid-in Capital $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000 $530,000

Retained Earnings ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000) ($37,000)

Earnings $0 ($20,940) ($40,892) ($63,387) ($84,750) ($109,104) ($136,624) ($161,708) ($176,142) ($195,430) ($209,522) ($212,166) ($200,829)

Total Capital $493,000 $472,060 $452,108 $429,614 $408,250 $383,896 $356,376 $331,292 $316,859 $297,570 $283,478 $280,834 $292,172

Total Liabilities and Capital $793,000 $854,559 $801,004 $765,522 $743,610 $718,708 $690,639 $665,006 $675,863 $630,186 $628,187 $662,488 $696,894

Net Worth $493,000 $472,060 $452,108 $429,614 $408,250 $383,896 $356,376 $331,292 $316,859 $297,570 $283,478 $280,834 $292,172

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