11.0 Executive Summary 21.1 Mission 21.2 Objectives 22.0 Company Summary 22.1 Company Ownership 22.2 Start-up Summary 2Table: Start-up 3Table: Start-up Funding 4Chart: Start-up 43.0 Services 44.0 Market Analysis Summary 54.1 Market Segmentation 5Chart: Market Analysis (Pie) 5Table: Market Analysis 64.2 Target Market Segment Strategy 64.3 Competition and Buying Patterns 75.0 Strategy and Implementation Summary 75.1 Competitive Edge 85.2 Sales Strategy 95.2.1 Sales Forecast 9Chart: Sales Monthly 9Table: Sales Forecast 105.3 Milestones 105.3 Milestones 10Table: Milestones 106.0 Management Summary 106.1 Personnel Plan 11Table: Personnel 117.0 Financial Plan 117.1 Important Assumptions 11Table: General Assumptions 127.2 Break-even Analysis 127.2 Break-even Analysis 12Table: Break-even Analysis 12Chart: Break-even Analysis 137.3 Projected Profit and Loss 13Table: Profit and Loss 147.4 Projected Cash Flow 147.4 Projected Cash Flow 14Chart: Cash 14Table: Cash Flow 167.5 Projected Balance Sheet 167.5 Projected Balance Sheet 16Table: Balance Sheet 167.6 Business Ratios 16Table: Ratios 1Table: Sales Forecast 2Table: Personnel 2Table: Personnel 3Table: General Assumptions 3Table: General Assumptions 4Table: Profit and Loss 4Table: Profit and Loss 5Table: Cash Flow 5Table: Cash Flow 7Table: Balance Sheet 7Table: Balance Sheet 1.0 Executive Summary The Enchanted Vineyard Bed & Breakfast is a charming bed and breakfast (B&B) located in the Lorane Valley, outside of Eugene, OR. The valley is well known for its beauty and concentration of vineyards. The B&B will be set up as a sole proprietorship of Missy Stewart. The B&B will reside in The Stewart's newly renovated home. Their home is the center piece for the entire B&B experience. Each of the five rooms have their own private bath. The facility has a wonderful centralized living room for the socialization of the guests, a private garden patio, and an on-site winery on the Stewart's 10 acres of land. To top things off, every room has 65% of their walls as windows offering guests an unprecedented view of the valley. The Market Within the hospitality industry, The Enchanted Vineyard will be competing with hotels and other B&Bs. Although The Enchanted Vineyard competes with hotels, their direct competitors are other B&Bs. Enchanted's facilities are far nicer than other B&Bs for its size. All of the smaller (less than 9 rooms) B&B are a fairly standard house converted into a B&B, nothing noteworthy. Enchanted Vineyard on the other hand is a newly renovated house and vineyard in a picturesque setting. The Enchanted Vineyard will be targeting three distinct groups. The first is weekend getaway travelers, generally people from Eugene looking to escape for the weekend. Eugene is a wonderful town in the Willamette River valley nationally renowned for its wineries, cycling and old growth trees. This customer group is growing at 11% a year with 12,000 potential customers. The second group is out-of-town travelers whi.

1. 11.0 Executive Summary
21.1 Mission
21.2 Objectives
22.0 Company Summary
22.1 Company Ownership
22.2 Start-up Summary
2Table: Start-up
3Table: Start-up Funding
4Chart: Start-up
43.0 Services
44.0 Market Analysis Summary
54.1 Market Segmentation
5Chart: Market Analysis (Pie)
5Table: Market Analysis
64.2 Target Market Segment Strategy
64.3 Competition and Buying Patterns
75.0 Strategy and Implementation Summary
75.1 Competitive Edge
85.2 Sales Strategy
95.2.1 Sales Forecast
9Chart: Sales Monthly
9Table: Sales Forecast
105.3 Milestones
105.3 Milestones
10Table: Milestones
106.0 Management Summary
106.1 Personnel Plan
11Table: Personnel
117.0 Financial Plan
117.1 Important Assumptions
11Table: General Assumptions
127.2 Break-even Analysis
127.2 Break-even Analysis

2. 12Table: Break-even Analysis
12Chart: Break-even Analysis
137.3 Projected Profit and Loss
13Table: Profit and Loss
147.4 Projected Cash Flow
147.4 Projected Cash Flow
14Chart: Cash
14Table: Cash Flow
167.5 Projected Balance Sheet
167.5 Projected Balance Sheet
16Table: Balance Sheet
167.6 Business Ratios
16Table: Ratios
1Table: Sales Forecast
2Table: Personnel
2Table: Personnel
3Table: General Assumptions
3Table: General Assumptions
4Table: Profit and Loss
4Table: Profit and Loss
5Table: Cash Flow
5Table: Cash Flow
7Table: Balance Sheet
7Table: Balance Sheet
1.0 Executive Summary
The Enchanted Vineyard Bed & Breakfast is a charming bed and
breakfast (B&B) located in the Lorane Valley, outside of
Eugene, OR. The valley is well known for its beauty and
concentration of vineyards. The B&B will be set up as a sole
proprietorship of Missy Stewart. The B&B will reside in The
Stewart's newly renovated home. Their home is the center piece
for the entire B&B experience. Each of the five rooms have
their own private bath. The facility has a wonderful centralized
living room for the socialization of the guests, a private garden
patio, and an on-site winery on the Stewart's 10 acres of land.
To top things off, every room has 65% of their walls as

3. windows offering guests an unprecedented view of the valley.
The Market
Within the hospitality industry, The Enchanted Vineyard will be
competing with hotels and other B&Bs. Although The
Enchanted Vineyard competes with hotels, their direct
competitors are other B&Bs. Enchanted's facilities are far nicer
than other B&Bs for its size. All of the smaller (less than 9
rooms) B&B are a fairly standard house converted into a B&B,
nothing noteworthy. Enchanted Vineyard on the other hand is a
newly renovated house and vineyard in a picturesque setting.
The Enchanted Vineyard will be targeting three distinct groups.
The first is weekend getaway travelers, generally people from
Eugene looking to escape for the weekend. Eugene is a
wonderful town in the Willamette River valley nationally
renowned for its wineries, cycling and old growth trees. This
customer group is growing at 11% a year with 12,000 potential
customers. The second group is out-of-town travelers which is
growing at 10% with 18,000 potential customers. The last group
of customers the B&B is targeting are University of Oregon
travelers. The university brings thousands of visitors to Eugene
whether they are professors, speakers, or parents. Once a
relationship has been established with the U of O, it will be a
constant stream of business. This customer group is growing at
17% with 12,000 potential customers.
Competitive Edge
The Enchanted Vineyard has two distinct competitive edges that
differentiates it from the competition. The first is the never-
ending attention to detail and customer service. The Stewarts
recognize that their mission is to ensure that their customers
have the finest stay with them. Both Missy and John will do
whatever it takes to ensure the customer's happiness. Their
second competitive edge is the unique facility. The facility is so
wonderful in part because of the actual structure which is a

4. wonderful place to stay. It is also unique because of the
location, overlooking the Lorane Valley, a beautiful area filled
with wineries and vineyards.
Management Team
The Enchanted Vineyard will be able to execute on its strong
business model because of its management. Missy has earned
her MBA providing her with invaluable business skills. While
Missy was pursuing her MBA, she was on a team of five
students that opened up their own service business. Lastly,
Missy has spent numerous years in the B&B industry, providing
her with amazing insight and experience directly related to what
she is doing now.
The Enchanted Vineyard will be able to leverage its amazing
facility and turn it into a beautiful, special B&B serving the
Eugene community. This will be done by the passion and
experience of Missy Stewart, the sole proprietor. The B&B will
become profitable by year two and will earn over $77,000 in
revenue by the end of year three.
1.1 Mission
The Mission of The Enchanted Vineyard Bed & Breakfast is to
provide the finest B&B experience. We exist to attract and
maintain customers. When we adhere to this maxim, everything
else will fall into place. Our services will exceed the
expectations of our customers.
1.2 Objectives
The objectives of The Enchanted Vineyard Bed & Breakfast for
the first three years of operation include:
· To create a B&B whose primary goal is to exceed customer's
expectations.
· The usage of The Enchanted Vineyard Bed & Breakfast by

5. visitors every week through out the year.
· To increase our number of clients by 20% per year through
superior service.
· To develop a sustainable business, surviving off its own cash
flow.
2.0 Company Summary
The Enchanted Vineyard Bed & Breakfast, located in the Lorane
Valley, will offer a luxurious, quaint B&B for people to enjoy.
The Enchanted Vineyard Bed & Breakfast will have four
individual rooms with private baths, a central living
room/socializing area, a garden patio, and an adjoining vineyard
for its guests.
2.1 Company Ownership
The Enchanted Vineyard Bed & Breakfast is a sole
proprietorship of Missy Stewart. The B&B uses John and
Missy's home as the Inn.
2.2 Start-up Summary
The Enchanted Vineyard Bed & Breakfast start-up expenses
include:
· Home office equipment including: computer, copier, fax
machine, extra telephone line, desk and filing cabinet.
· Extra computer for the living room with Internet access via
a DSL line.
· Website creation.
· Advertising/association dues for the local B&B association.
· Remodeling of the house to add two individual bedrooms with

6. baths, a patio and to enlarge the common areas.
Please note that the cost of the remodeling will be depreciated
using the straight line method over a 30-year schedule.
Although the Inn will have to finish their research into tax law,
it does appear that the Inn will be allowed to depreciate the
remodeling as the additions will be used only for business.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
$300
Stationery etc.
$300
Brochures
$300
Consultants
$300
Insurance
$600
Rent
$0
Research and Development
$0
Expensed Equipment

7. $0
Other
$0
Total Start-up Expenses
$1,800
Start-up Assets
Cash Required
$11,200
Start-up Inventory
$1,500
Other Current Assets
$1,500
Long-term Assets
$200,000
Total Assets
$214,200
Total Requirements
$216,000
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
$1,800
Start-up Assets to Fund
$214,200
Total Funding Required
$216,000
Assets

8. Non-cash Assets from Start-up
$203,000
Cash Requirements from Start-up
$11,200
Additional Cash Raised
$0
Cash Balance on Starting Date
$11,200
Total Assets
$214,200
Liabilities and Capital
Liabilities
Current Borrowing
$2,400
Long-term Liabilities
$10,000
Accounts Payable (Outstanding Bills)
$0
Other Current Liabilities (interest-free)
$2,000
Total Liabilities
$14,400
Capital

9. Planned Investment
Investor 1
$201,600
Investor 2
$0
Other
$0
Additional Investment Requirement
$0
Total Planned Investment
$201,600
Loss at Start-up (Start-up Expenses)
($1,800)
Total Capital
$199,800
Total Capital and Liabilities
$214,200
Total Funding
$216,000
Chart: Start-up
$0
$30,000
$60,000

10. $90,000
$120,000
$150,000
$180,000
$210,000
ExpensesAssetsInvestmentLoans
Start-up
3.0 Services
The Enchanted Vineyard Bed & Breakfast is a small, attractive
B&B that offers travelers a secluded, relaxed setting for
a weekend getaway, change of scenery, sports or cultural
events, family occassions, U of O events, etc. The Enchanted
Vineyard Bed & Breakfast has a large central gathering room
that allows travelers to socialize. The customers will receive the
personal attention of the Stewarts, who will meet any need a
traveler has.
The Enchanted Vineyard Bed & Breakfast provides a wonderful
breakfast feast and can meet any dietary restriction. The
Enchanted Vineyard Bed & Breakfast is centrally located about
15 minutes from downtown Eugene in the heart of the Lorane
Valley wine country. In fact, The Enchanted Vineyard Bed &
Breakfast has its own vineyard which grows grapes for local
wineries and clients are encouraged to explore The Enchanted
Vineyard Bed & Breakfast's 10 acres of land.
4.0 Market Analysis Summary
The Enchanted Vineyard Bed & Breakfast has three different
target groups that it is attempting to attract. The first are people
from the region that just want to get away for the weekend.
They may have activities planned for the weekend, or just chose
to vegetate. The second group are travelers who are passing
through Eugene and prefer to stay in B&Bs instead of a
hotel/motel. The last group is any customer affiliated with the
local school, the University of Oregon. This group may be

11. parents of students or visiting the University on official
business and the University is the entity that sets up the
reservation. While The Enchanted Vineyard Bed & Breakfast
will certainly get customers that fall outside of these groups,
this classification should be fairly accurate.
4.1 Market Segmentation
Our customers can be broadly divided into three groups (please
note it is possible to divide the customers in to much smaller
groups, but we have chosen not to):
1. Weekend getaway customers. These people are from the
region and are looking to get away from their life so they come
to The Enchanted Vineyard Bed & Breakfast to be pampered
and escape.
2. Travelers. These people, for whatever reason, are passing
through Eugene and prefer to stay in a B&B instead of a
hotel/motel.
3. University of Oregon travelers. The University brings a large
number of people through Eugene, and The Enchanted Vineyard
Bed & Breakfast believes that a good portion of their business
will be from the University. Occassions include parent weekend,
orientation, parents visiting, and graduation. Lastly, the
University will often set up rooms for administrative visitors.
Chart: Market Analysis (Pie)
Weekend-Getaway Customers
Travelers
University of Oregon Travelers
Market Analysis (Pie)

12. Table: Market Analysis
Market Analysis
Year 1
Year 2
Year 3
Year 4
Year 5
Potential Customers
Growth
CAGR
Weekend-Getaway Customers
11%
12,000
13,320
14,785
16,411
18,216
11.00%
Travelers

13. 10%
18,000
19,800
21,780
23,958
26,354
10.00%
University of Oregon Travelers
17%
12,000
14,040
16,427
19,220
22,487
17.00%
Total
12.41%
42,000
47,160
52,992
59,589
67,057
12.41%
4.2 Target Market Segment Strategy
The Enchanted Vineyard Bed & Breakfast intends to target
these three customer groups as they make up the largest
population of people who utilize B&Bs. The Enchanted
Vineyard Bed & Breakfast has a three pronged strategy that will
work for all three groups:
· Association membership and advertising. A large number of
visitors will look to regional B&B associations for information
about the different B&Bs in the area. Most associations publish
a guide to the local B&Bs and The Enchanted Vineyard Bed &
Breakfast wants to be in this guide. One of the other perks of

14. membership is visibility on the associations website with a link
to ours. Additionally, we will be a member of the Chamber of
Commerce because people will typically inquire with the local
Chamber when planning a vacation.
· Website. The Enchanted Vineyard Bed & Breakfast will have a
full-service website that allows the visitor to view the B&B,
read details about what it has to offer, provide information on
regional activities, and even allow the visitor to book a
reservation. With the growing use of the Internet, the Web has
become an indispensable tool for planning vacations to areas
that are not close enough to check out in person.
· Strategic relationship with the University of Oregon. The
Enchanted Vineyard Bed & Breakfast will develop a partnership
with the University so when the school is in need of finding
rooms for guests they will use The Enchanted Vineyard Bed &
Breakfast. We will also be advertising with the University so
when students are searching for places for their parents to stay,
they will come across The Enchanted Vineyard Bed & Breakfast
in a school related publication and feel more comfortable with
booking a reservation sight unseen because of the trust bond
they have formed with the University.
4.3 Competition and Buying Patterns
Competition comes in several forms:
1. Other B&Bs. Typically B&Bs have a set of unique features,
something that makes them stand out.
Some B&Bs will create uniqueness down to the level of
different rooms within the B&B. The size of a B&Bs range from
one or two room (traditionally called a home stay) to a country
inn with 30 rooms.
On average most B&Bs have only a couple of rooms and are

15. often booked up in advance. Particularly during special events,
demand outstrips supply for the B&Bs.
The B&Bs differentiate themselves by personal service
offerings and the general ambiance of the Inn. Finally, B&Bs
usually have a very nice sit down breakfast for their guests.
This is not a simple continental breakfast of juice, coffee, and a
bagel, but an elaborate spread of gourmet food such as quiche, a
portabello mushroom, fresh roasted garlic and sun-dried tomato
omelette, or some sort of fresh smoked fish.
Guests of B&Bs are looking not just for a room to sleep in but
the whole experience in staying in a lovely setting, with
interesting people to chat with and people present to pamper
them in any way possible.
2. Hotels/motels. These facilities are generally much more
sterile in character relative to B&Bs.
The rooms are typically the same throughout the facility (unlike
B&Bs where each room is typically different). The guests of
hotels generally use the hotel as a place to stay at night.
The operator will usually see the guest when they check in and
when they check out. This differs from a B&B where the guests
are encouraged to spend time in communal rooms and socialize
with the operators and the other guests.
Breakfasts, if included, are sparse. The typical guests
are looking for a room to stay in at night and not much more
than that.
5.0 Strategy and Implementation Summary
The Enchanted Vineyard Bed & Breakfast will be using
advertising and membership in associations to drive in

16. prospective customers. They will also use their website as a
complete source of information about the B&B. Missy will then
turn these leads into customers through unsurpassed
attentiveness in one-on-one phone inquiries/conversations.
5.1 Competitive Edge
The Enchanted Vineyard Bed & Breakfast's two competitive
advantages are:
· Attention to personalized service. While anyone at a B&B
should reasonably expect good service, there are ways of setting
yourself apart.
This will be done through the unrelenting pursuit of personal
attention. In the Eugene area there are several larger (more than
six rooms) B&Bs that offer outstanding service, but it is not
personal. The service is provided by employees, not the owner.
At The Enchanted Vineyard Bed & Breakfast all interactions
with the customer will be with Missy or John who see it as their
duty to do whatever it takes to make the customer feel at home.
The feeling of personal attention, or more accurately defined as
a sense of person concern, really adds a positive dimension to
the B&B experience. Not only will the Stewarts be offering
personal concern, but they will be providing the concern, not
some employee.
· Uniqueness and beauty of the facility. The Enchanted
Vineyard Bed & Breakfast will be housed in the Stewart's home.
The Stewarts will be renovating their farm house to
accommodate their new guests. They will be building two more
bedrooms with private baths, a patio, and enlarging the common
area.
One unique aspect of The Enchanted Vineyard Bed & Breakfast

17. is the setting within the Lorane Valley region, known for its
outstanding wine production housing both vineyards and
wineries.
To compliment this setting, The Enchanted Vineyard Bed &
Breakfast will have a large outside patio allowing guests to
spend relaxing time outside with a nice view of the valley.
Guests can also wander through The Enchanted Vineyard Bed &
Breakfast's own vineyard.
Each room in the B&B is 65% glass overlooking the hillside and
vineyard. There is not a room in the house that doesn't have a
breath-taking view.
5.2 Sales Strategy
The Enchanted Vineyard Bed & Breakfast's sales strategy will
be two pronged:
1. Personal attention in regard to calls of inquiry. It is Missy's
strategy to be willing to spend a fair amount of time on the
phone to prospective clients. While most B&Bs will be pleasant
on the phone and willing to answer any question, the sooner
they are off the phone, the sooner they can get back to the work
they were previously doing.
Missy has the attitude that the more time she can spend on the
phone with inquiries, the more likely she will be able to turn
them into customers.
2. Very detailed website. Missy recognizes that over 95% of her
clients have Web access and 80% used the Web to research their
vacations. This usage is compelling enough to have a
comprehensive website that offers enough information to allow
the visitor to make a decision to stay with The Enchanted
Vineyard Bed & Breakfast.

18. The website will have 3D walk-through tours allowing people to
see the different bedrooms as well as common areas. Online
pricing and reservations are also available as well as a resource
page that details the different activities in the area.
While Missy would like to encourage people to call with
questions, if they do not they will be able answer almost all
questions with the website.
5.2.1 Sales Forecast
The first three months will be used for the renovation of the
home to fully accommodate guests. Once complete the house
will have five different rooms. There will be no sales activity
during this time. By month four, the B&B will be ready to go.
Missy will have already been advertising, become a B&B
association member, as well as have formed a strategic
relationship with the University so business will ramp up fairly
quickly. From month five on, business will steadily grow.
Beginning with month five, Missy will hire one full-time
employee. This employee will perform housecleaning as well as
outdoor maintenance. This will free up Missy's time so she can
spend it with the clients.
Chart: Sales Monthly
Weekend-Getaway Customers
Travelers
University of Oregon Travelers
$0
$1,000
$2,000
$3,000
$4,000
$5,000

19. $6,000
$7,000
M
o
n
t
h
1
M
o
n
t
h
2
M
o
n
t
h
3
M
o
n
t
h
4
M

20. o
n
t
h
5
M
o
n
t
h
6
M
o
n
t
h
7
M
o
n
t
h
8
M
o
n
t
h

21. 9
M
o
n
t
h
1
0
M
o
n
t
h
1
1
M
o
n
t
h
1
2
Sales Monthly
Table: Sales Forecast
Sales Forecast

22. Year 1
Year 2
Year 3
Sales
Weekend-Getaway Customers
$11,396
$42,000
$54,000
Travelers
$13,089
$60,000
$62,000
University of Oregon Travelers
$11,265
$46,000
$49,000
Total Sales
$35,750
$148,000
$165,000
Direct Cost of Sales
Year 1
Year 2
Year 3
Weekend-Getaway Customers
$6,117
$22,260
$28,620

23. Travelers
$7,031
$31,800
$32,860
University of Oregon Travelers
$6,044
$24,380
$25,970
Subtotal Direct Cost of Sales
$19,193
$78,440
$87,450 5.3 Milestones
The Enchanted Vineyard Bed & Breakfast will have several
milestones early on:
1. Business plan completion. This will be done as a road map
for the organization. While we do not need a business plan to
raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Joining the different associations. This is, in effect, the
coming out party for announcing to the world that you are a real
B&B, ready for business.
3. Completion of the facility renovations.
4. Our 100th client.
Table: Milestones
Milestones

24. Milestone
Start Date
End Date
Budget
Manager
Department
Business Plan Completion
1/1/2001
1/1/2001
$0
ABC
Department
Join Different Associations
2/1/2001
2/1/2001
$600
ABC
Department
Completion of Facility Renovations
1/1/2001
4/1/2001
$200,000
ABC
Department
100th Client
7/1/2001
7/1/2001
$0

25. ABC
Department
Name me
1/1/2003
1/15/2003
$0
ABC
Department
Name me
1/1/2003
1/15/2003
$0
ABC
Department
Name me
1/1/2003
1/15/2003
$0
ABC
Department
Name me
1/1/2003
1/15/2003
$0
ABC
Department
Name me
1/1/2003
1/15/2003
$0
ABC
Department
Name me
1/1/2003
1/15/2003
$0

26. ABC
Department
Totals
$200,600
6.0 Management Summary
The Enchanted Vineyard Bed & Breakfast is owned and
operated by Missy Stewart. It will be a sole proprietorship.
Missy has a degree in philosophy from Ponoma College and an
MBA from University of Oregon. While Missy was pursuing her
undergraduate degree, she worked in a B&B and had a wide
range of responsibilities. This is the experience where she was
first bit by the B&B bug. She dreamed of some day having a
B&B run from her house, with the excitement of taking care of
travelers.
Missy's concentration in school was in general management
with the intent of someday opening her own business. Missy
participated in the PACE, a group project where teams of five
students worked together for two entire semesters creating their
own company and then eventually selling it at the end of the
year. Missy's group formed a service-based company which was
an invaluable experience for the needs she would face in
opening up her own B&B.
Missy's education coupled with her practical experiences has
given her the ideal skill-set required for operating a B&B. The
only other thing that is truly required is passion, and Missy
recognized her passion over seven years ago while working at a
B&B. Missy has everything needed to succeed and will fulfill
her destiny.
6.1 Personnel Plan

27. Missy will be the sole employee from months one to five. At
month five things will be getting busier and the need will
develop for an additional person. This new employee will be
used for house cleaning and outside maintenance. This will free
up Missy's time so she can spend more time with the
customers. John will be helping when possible, but John's
contribution to the company will be primarily emotional and
financial support of Missy's dream. John will be covering their
living expenses while Missy is building the business. At some
point within the first year the revenue from the B&B will
exceed the mortgage payments for the remodel and at some
point will cover the entire mortgage for the home.
Table: Personnel
Personnel Plan
Year 1
Year 2
Year 3
Missy
$3,000
$6,000
$12,000
Housekeeping/Outdoor Maintenance
$12,000
$18,000
$18,000
Total People
2
2

28. 2
Total Payroll
$15,000
$24,000
$30,000
7.0 Financial Plan
The following sections will detail important financial
information.
7.1 Important Assumptions
The following table highlights some of the important financial
assumptions for The Enchanted Vineyard Bed & Breakfast.
Table: General Assumptions
General Assumptions
Year 1
Year 2
Year 3
Plan Month
1
2
3
Current Interest Rate
10.00%
10.00%

29. 10.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
Tax Rate
25.00%
25.00%
25.00%
Other
0
0
0 7.2 Break-even Analysis
The Break-even Analysis indicates that monthly revenue must
exceed $8,600 to break even.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$8,674
Assumptions:
Average Percent Variable Cost
54%
Estimated Monthly Fixed Cost
$4,017
Chart: Break-even Analysis

30. $0
$500
$1,000
($500)
($1,000)
($1,500)
($2,000)
($2,500)
($3,000)
($3,500)
($4,000)
$0
$1,000
$2,000
$3,000
$4,000
$5,000
$6,000
$7,000
$8,000
$9,000
$10,000
$11,000
Break-even Analysis
7.3 Projected Profit and Loss
The following table will indicate projected profit and loss.
Table: Profit and Loss
Pro Forma Profit and Loss

31. Year 1
Year 2
Year 3
Sales
$35,750
$148,000
$165,000
Direct Cost of Sales
$19,193
$78,440
$87,450
Other
$0
$0
$0
Total Cost of Sales
$19,193
$78,440
$87,450
Gross Margin
$16,557
$69,560
$77,550
Gross Margin %
46.31%
47.00%
47.00%

32. Expenses
Payroll
$15,000
$24,000
$30,000
Sales and Marketing and Other Expenses
$1,800
$3,200
$3,800
Depreciation
$20,004
$20,004
$20,004
Leased Equipment
$0
$0
$2,000
Utilities
$2,400
$2,400
$2,400
Insurance
$1,470
$1,470
$1,470
mortgage
$5,280
$5,280

33. $5,280
Payroll Taxes
$2,250
$3,600
$4,500
Other
$0
$0
$0
Total Operating Expenses
$48,204
$59,954
$69,454
Profit Before Interest and Taxes
($31,647)
$9,606
$8,096
EBITDA
($11,643)
$29,610
$28,100
Interest Expense
$1,225
$1,265
$1,065
Taxes Incurred
$0
$2,085

34. $1,758
Net Profit
($32,873)
$6,256
$5,273
Net Profit/Sales
-91.95%
4.23%
3.20% 7.4 Projected Cash Flow
The following chart and table will indicate projected cash flow.
Chart: Cash
Net Cash Flow
Cash Balance
$0
$2,000
$4,000
$6,000
$8,000
$10,000
($2,000)
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7

35. Month 8
Month 9
Month 10
Month 11
Month 12
Cash
Table: Cash Flow
Pro Forma Cash Flow
Year 1
Year 2
Year 3
Cash Received
Cash from Operations
Cash Sales
$25,025
$103,600
$115,500
Cash from Receivables
$6,978

36. $32,634
$47,718
Subtotal Cash from Operations
$32,003
$136,234
$163,218
Additional Cash Received
Sales Tax, VAT, HST/GST Received
$0
$0
$0
New Current Borrowing
$2,000
$0
$0
New Other Liabilities (interest-free)
$3,800
$0
$0
New Long-term Liabilities
$0
$0
$0
Sales of Other Current Assets
$0
$0
$0
Sales of Long-term Assets
$0

37. $0
$0
New Investment Received
$0
$0
$0
Subtotal Cash Received
$37,803
$136,234
$163,218
Expenditures
Year 1
Year 2
Year 3
Expenditures from Operations
Cash Spending
$15,000
$24,000
$30,000
Bill Payments
$31,690
$102,287
$110,868
Subtotal Spent on Operations
$46,690

38. $126,287
$140,868
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
$0
$0
$0
Principal Repayment of Current Borrowing
$0
$1,000
$1,000
Other Liabilities Principal Repayment
$0
$0
$0
Long-term Liabilities Principal Repayment
$750
$1,000
$1,000
Purchase Other Current Assets
$0
$0
$0
Purchase Long-term Assets
$0
$6,000
$10,000
Dividends
$0

39. $0
$5,000
Subtotal Cash Spent
$47,440
$134,287
$157,868
Net Cash Flow
($9,637)
$1,947
$5,350
Cash Balance
$1,563
$3,510
$8,860 7.5 Projected Balance Sheet
The following table will indicate the projected balance sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1
Year 2
Year 3
Assets

40. Current Assets
Cash
$1,563
$3,510
$8,860
Accounts Receivable
$3,747
$15,513
$17,295
Inventory
$3,573
$12,920
$14,404
Other Current Assets
$1,500
$1,500
$1,500
Total Current Assets
$10,383
$33,443
$42,059
Long-term Assets

41. Long-term Assets
$200,000
$206,000
$216,000
Accumulated Depreciation
$20,004
$40,008
$60,012
Total Long-term Assets
$179,996
$165,992
$155,988
Total Assets
$190,379
$199,435
$198,047
Liabilities and Capital
Year 1
Year 2
Year 3
Current Liabilities
Accounts Payable
$4,001
$8,802
$9,140

42. Current Borrowing
$4,400
$3,400
$2,400
Other Current Liabilities
$5,800
$5,800
$5,800
Subtotal Current Liabilities
$14,201
$18,002
$17,340
Long-term Liabilities
$9,250
$8,250
$7,250
Total Liabilities
$23,451
$26,252
$24,590
Paid-in Capital
$201,600
$201,600
$201,600
Retained Earnings
($1,800)
($34,673)
($33,417)

43. Earnings
($32,873)
$6,256
$5,273
Total Capital
$166,927
$173,183
$173,456
Total Liabilities and Capital
$190,379
$199,435
$198,047
Net Worth
$166,927
$173,183
$173,456
7.6 Business Ratios
The business ratios reflect both a cross-sectional analysis and
time-series analysis of the company's risk and profitability. The
cross-sectional analysis consists of a comparison of our firm's
ratios and those of the hotel and motel industry averages. The
reader will note that there are some significant differences in
the ratios, especially in regards to the way our company is
leveraged. This is due to the fact that industry averages also
include very large hotel chains that usually have much higher
capital costs and investments in long-term assets. Furthermore,
Enchanted Vineyards B&B has lower SG&A costs than other
hotels and motels since B&Bs usually provide fewer services
than larger competitors.
Table: Ratios

44. Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
Sales Growth
n.a.
313.99%
11.49%
5.90%
Percent of Total Assets
Accounts Receivable
1.97%
7.78%
8.73%
5.00%
Inventory
1.88%
6.48%
7.27%
1.00%

45. Other Current Assets
0.79%
0.75%
0.76%
26.00%
Total Current Assets
5.45%
16.77%
21.24%
32.00%
Long-term Assets
94.55%
83.23%
78.76%
68.00%
Total Assets
100.00%
100.00%
100.00%
100.00%
Current Liabilities
7.46%
9.03%
8.76%
19.40%
Long-term Liabilities
4.86%
4.14%
3.66%
34.60%
Total Liabilities

46. 12.32%
13.16%
12.42%
54.00%
Net Worth
87.68%
86.84%
87.58%
46.00%
Percent of Sales
Sales
100.00%
100.00%
100.00%
100.00%
Gross Margin
46.31%
47.00%
47.00%
0.00%
Selling, General & Administrative Expenses
138.22%
42.64%
43.67%
75.10%
Advertising Expenses
5.03%

47. 1.22%
1.09%
1.90%
Profit Before Interest and Taxes
-88.52%
6.49%
4.91%
2.50%
Main Ratios
Current
0.73
1.86
2.43
1.45
Quick
0.48
1.14
1.59
1.05
Total Debt to Total Assets
12.32%
13.16%
12.42%
54.00%
Pre-tax Return on Net Worth
-19.69%
4.82%

48. 4.05%
1.70%
Pre-tax Return on Assets
-17.27%
4.18%
3.55%
3.70%
Additional Ratios
Year 1
Year 2
Year 3
Net Profit Margin
-91.95%
4.23%
3.20%
n.a
Return on Equity
-19.69%
3.61%
3.04%
n.a
Activity Ratios

49. Accounts Receivable Turnover
2.86
2.86
2.86
n.a
Collection Days
55
79
121
n.a
Inventory Turnover
8.85
9.51
6.40
n.a
Accounts Payable Turnover
8.92
12.17
12.17
n.a
Payment Days
27
22
29
n.a
Total Asset Turnover
0.19
0.74
0.83
n.a

50. Debt Ratios
Debt to Net Worth
0.14
0.15
0.14
n.a
Current Liab. to Liab.
0.61
0.69
0.71
n.a
Liquidity Ratios
Net Working Capital
($3,819)
$15,441
$24,718
n.a
Interest Coverage
-25.83
7.59
7.60
n.a

51. Additional Ratios
Assets to Sales
5.33
1.35
1.20
n.a
Current Debt/Total Assets
7%
9%
9%
n.a
Acid Test
0.22
0.28
0.60
n.a
Sales/Net Worth
0.21
0.85
0.95
n.a
Dividend Payout
0.00
0.00
0.95
n.aTable: Sales Forecast
Sales Forecast

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

53. Weekend-Getaway Customers
0%
$0
$0
$0
$654
$745
$784
$804
$1,245
$1,587
$1,874
$2,245
$1,458
Travelers
0%
$0
$0
$0
$654
$702
$754
$815
$1,345
$1,698
$1,985
$2,458
$2,678
University of Oregon Travelers
0%
$0

54. $0
$0
$598
$965
$654
$712
$800
$1,874
$1,787
$1,987
$1,888
Total Sales
$0
$0
$0
$1,906
$2,412
$2,192
$2,331
$3,390
$5,159
$5,646
$6,690
$6,024

55. Direct Cost of Sales
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Weekend-Getaway Customers
$0
$0
$0
$340
$387
$423
$434
$671
$856
$1,010
$1,211
$786
Travelers
$0
$0
$0

56. $340
$365
$407
$439
$725
$916
$1,070
$1,325
$1,444
University of Oregon Travelers
$0
$0
$0
$311
$502
$353
$384
$431
$1,010
$964
$1,071
$1,018
Subtotal Direct Cost of Sales
$0
$0
$0
$991
$1,254
$1,182
$1,257
$1,828
$2,782
$3,044
$3,607

57. $3,248 Table: Personnel
Personnel Plan
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Missy
0%
$250
$250
$250
$250

58. $250
$250
$250
$250
$250
$250
$250
$250
Housekeeping/Outdoor Maintenance
0%
$0
$0
$0
$0
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
$1,500
Total People
1
1
1
1
2
2
2
2
2
2
2
2

59. Total Payroll
$250
$250
$250
$250
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750 Table: General Assumptions
General Assumptions

60. Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Plan Month
1
2
3
4
5
6
7
8
9
10
11
12
Current Interest Rate

61. 10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Long-term Interest Rate
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Tax Rate
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%

62. 25.00%
25.00%
25.00%
25.00%
25.00%
Other
0
0
0
0
0
0
0
0
0
0
0
0 Table: Profit and Loss
Pro Forma Profit and Loss

63. Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Sales
$0
$0
$0
$1,906
$2,412
$2,192
$2,331
$3,390
$5,159
$5,646
$6,690
$6,024
Direct Cost of Sales
$0
$0
$0
$991
$1,254
$1,182
$1,257
$1,828

64. $2,782
$3,044
$3,607
$3,248
Other
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Total Cost of Sales
$0
$0
$0
$991
$1,254
$1,182
$1,257
$1,828
$2,782
$3,044
$3,607
$3,248

65. Gross Margin
$0
$0
$0
$915
$1,158
$1,010
$1,074
$1,562
$2,377
$2,602
$3,083
$2,776
Gross Margin %
0.00%
0.00%
0.00%
48.01%
48.01%
46.08%
46.08%
46.08%
46.08%
46.08%

66. 46.08%
46.08%
Expenses

67. Payroll
$250
$250
$250
$250
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
Sales and Marketing and Other Expenses
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150
$150

68. Depreciation
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
$1,667
Leased Equipment
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Utilities
$200
$200
$200
$200
$200
$200

69. $200
$200
$200
$200
$200
$200
Insurance
$150
$120
$120
$120
$120
$120
$120
$120
$120
$120
$120
$120
mortgage
$440
$440
$440
$440
$440
$440
$440
$440
$440
$440
$440
$440
Payroll Taxes
15%

70. $38
$38
$38
$38
$263
$263
$263
$263
$263
$263
$263
$263
Other
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0

71. Total Operating Expenses
$2,895
$2,865
$2,865
$2,865
$4,590
$4,590
$4,590
$4,590
$4,590
$4,590
$4,590
$4,590
Profit Before Interest and Taxes
($2,895)
($2,865)

72. ($2,865)
($1,950)
($3,432)
($3,579)
($3,515)
($3,027)
($2,212)
($1,988)
($1,507)
($1,814)
EBITDA
($1,228)
($1,198)
($1,198)
($283)
($1,765)
($1,912)
($1,848)
($1,360)
($545)
($321)
$160
($147)
Interest Expense
$103
$103
$103
$103
$102
$101
$101
$100
$99
$98

73. $98
$114
Taxes Incurred
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Net Profit
($2,998)
($2,968)
($2,968)
($2,052)

74. ($3,533)
($3,681)
($3,616)
($3,127)
($2,311)
($2,086)
($1,605)
($1,927)
Net Profit/Sales
0.00%
0.00%
0.00%
-107.67%
-146.49%
-167.91%
-155.12%
-92.25%
-44.80%
-36.95%
-23.98%
-32.00% Table: Cash Flow
Pro Forma Cash Flow

75. Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash Received

76. Cash from Operations
Cash Sales
$0
$0
$0
$1,334
$1,688
$1,534
$1,632
$2,373
$3,611
$3,952
$4,683
$4,217
Cash from Receivables

77. $0
$0
$0
$0
$19
$577
$721
$659
$710
$1,035
$1,553
$1,704
Subtotal Cash from Operations
$0
$0
$0
$1,334
$1,707
$2,111
$2,353
$3,032
$4,321
$4,987
$6,236
$5,921

78. 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

79. $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$2,000
New Other Liabilities (interest-free)
$0
$0
$0
$0
$0
$0
$0
$0
$3,800
$0
$0
$0
New Long-term Liabilities
$0
$0
$0
$0
$0
$0
$0
$0
$0

80. $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

81. $0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Cash Received
$0
$0
$0
$1,334
$1,707
$2,111
$2,353
$3,032
$8,121
$4,987
$6,236
$7,921

82. 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

83. Cash Spending
$250
$250
$250
$250
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
$1,750
Bill Payments
$36
$1,080
$1,051
$1,084
$2,062
$2,398
$2,384
$2,650
$3,774
$5,086
$4,634
$5,451
Subtotal Spent on Operations

84. $286
$1,330
$1,301
$1,334
$3,812
$4,148
$4,134
$4,400
$5,524
$6,836
$6,384
$7,201
Additional Cash Spent

85. 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

86. $0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Long-term Liabilities Principal Repayment
$0
$0
$0
$83
$83
$83
$83
$83
$83
$83
$83
$83
Purchase Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0

87. $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
$286
$1,330
$1,301

88. $1,417
$3,895
$4,231
$4,218
$4,483
$5,608
$6,919
$6,467
$7,285
Net Cash Flow
($286)
($1,330)
($1,301)
($83)
($2,188)
($2,120)
($1,864)
($1,451)
$2,514
($1,932)
($232)

89. $636
Cash Balance
$10,914
$9,584
$8,283
$8,200
$6,012
$3,892
$2,028
$577
$3,091
$1,158
$926
$1,563 Table: Balance Sheet
Pro Forma Balance Sheet
Month 1
Month 2
Month 3
Month 4

90. Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Assets
Starting Balances

91. Current Assets
Cash
$11,200
$10,914
$9,584
$8,283
$8,200
$6,012
$3,892
$2,028
$577
$3,091
$1,158
$926
$1,563
Accounts Receivable
$0
$0
$0
$0
$572
$1,276
$1,357

92. $1,335
$1,693
$2,531
$3,190
$3,644
$3,747
Inventory
$1,500
$1,500
$1,500
$1,500
$1,509
$1,379
$1,300
$1,383
$2,011
$3,060
$3,349
$3,968
$3,573
Other Current Assets
$1,500
$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 Current Assets
$14,200

93. $13,914
$12,584
$11,283
$11,781
$10,168
$8,049
$6,245
$5,780
$10,181
$9,197
$10,039
$10,383
Long-term Assets

94. Long-term 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
Accumulated Depreciation
$0
$1,667
$3,334
$5,001
$6,668
$8,335
$10,002
$11,669
$13,336
$15,003
$16,670
$18,337
$20,004
Total Long-term Assets
$200,000
$198,333
$196,666

95. $194,999
$193,332
$191,665
$189,998
$188,331
$186,664
$184,997
$183,330
$181,663
$179,996
Total Assets
$214,200
$212,247
$209,250
$206,282
$205,113
$201,833
$198,047
$194,576
$192,444
$195,178
$192,527
$191,702
$190,379

96. 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

97. Accounts Payable
$0
$1,045
$1,016
$1,016
$1,982
$2,319
$2,297
$2,525
$3,604
$4,933
$4,451
$5,314
$4,001
Current Borrowing
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$2,400
$4,400

98. Other Current Liabilities
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$2,000
$5,800
$5,800
$5,800
$5,800
Subtotal Current Liabilities
$4,400
$5,445
$5,416
$5,416
$6,382
$6,719
$6,697
$6,925
$8,004
$13,133
$12,651
$13,514
$14,201

99. Long-term Liabilities
$10,000
$10,000
$10,000
$10,000
$9,917
$9,833
$9,750
$9,667
$9,583
$9,500
$9,417
$9,333
$9,250
Total Liabilities
$14,400
$15,445
$15,416
$15,416
$16,298
$16,552
$16,447
$16,592
$17,587
$22,633
$22,067
$22,847
$23,451

100. Paid-in Capital
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
$201,600
Retained Earnings
($1,800)
($1,800)
($1,800)
($1,800)
($1,800)
($1,800)
($1,800)
($1,800)
($1,800)

101. ($1,800)
($1,800)
($1,800)
($1,800)
Earnings
$0
($2,998)
($5,966)
($8,934)
($10,986)
($14,519)
($18,200)
($21,816)
($24,943)
($27,254)
($29,341)
($30,945)
($32,873)
Total Capital
$199,800
$196,802
$193,834
$190,867
$188,814
$185,281
$181,600
$177,984
$174,857
$172,546
$170,459
$168,855
$166,927
Total Liabilities and Capital
$214,200
$212,247
$209,250

102. $206,282
$205,113
$201,833
$198,047
$194,576
$192,444
$195,178
$192,527
$191,702
$190,379
Net Worth
$199,800
$196,802
$193,834
$190,867
$188,814
$185,281
$181,600
$177,984
$174,857
$172,546
$170,459

103. $168,855
$166,927