Pasta De' Italiano Business Plan

Business Plan
Pasta De' Italiano
Sir Arbab Naseebullah Kasi
Rabia Iftikahr, MBA 6th
B, CMSID 12285
December 15, 2014

ACKNOWLEDGEMENTS:
Praise and thanks to “ALLAH” Almighty, the one testing us all at all times and making decisions
about what we don’t know and can’t know. The business plan being submitted today is a result of my
great effort. There are innumerous helping hands behind who have guided me on my way. Writing this
plan appeared to be a great experience to me. It added a lot to my knowledge. This project is one of my
memorable experiences in student life. Though words are inadequate in offering thanks to my teacher
but I owe my profound gratitude to Sir Arbab Naseebullah Kasi for stimulating my creative abilities by
assigning this business plan to our class and for his able guidance and useful suggestions, which helped
me in completing the project in time. Whatever I have learnt from him and this project report has put
indelible impression on my mind and it is my conviction that this learning experience will always be a
source of help in my practical life and professional career. Finally, yet importantly, I would like to
express our heartfelt thanks to my beloved parents, for cooperation, help, kindness and blessings, my
family and friends for their help and wishes for the successful completion of the work.

Legal Page
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by Rabia Iftikhar in this business
plan is confidential; therefore, reader agrees not to disclose it without the express written permission of
Rabia Iftikhar.
It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means and
that any disclosure or use of same by reader may cause serious harm or damage to the business owner.
Upon request, this document is to be immediately returned to the respective person.
___________________
Signature
Rabia Iftikhar
January 1st
2014

Table of Contents
1. Executive Summary............................................................................................................................ 1
Chart: Highlights................................................................................................................................. 1
1.1. Objectives..................................................................................................................................... 1
1.2. Mission......................................................................................................................................... 1
2. Company Summary ............................................................................................................................ 2
2.1. Company Ownership.................................................................................................................... 2
2.2. Start-up Summary ........................................................................................................................ 2
Table: Start-up Funding...................................................................................................................... 2
Table: Start-up .................................................................................................................................... 3
3. Services............................................................................................................................................... 3
4. Market Analysis Summary ................................................................................................................. 4
Table: Market Analysis....................................................................................................................... 5
4.2.1. Competition and Buying Patterns......................................................................................... 5
5. Strategy and Implementation Summary.............................................................................................. 6
Table: Milestones................................................................................................................................ 6
5.3. Marketing Strategy....................................................................................................................... 7
5.4.1. Sales Forecast........................................................................................................................ 7
6. Management Summary....................................................................................................................... 8
6.1. Personnel Plan.............................................................................................................................. 9
7. Financial Plan...................................................................................................................................... 9
The following sections will outline important financial information. ........................................................ 9
7.1. Important Assumptions................................................................................................................... 9
Table: General Assumptions............................................................................................................. 10
7.2. Break-even Analysis .................................................................................................................. 10
Table: Break-even Analysis.............................................................................................................. 10
7.3. Projected Profit and Loss ........................................................................................................... 11
Chart: Profit Monthly........................................................................................................................ 11
Chart: Profit Yearly........................................................................................................................... 11
Chart: Gross Margin Yearly.............................................................................................................. 12
Table: Profit and Loss....................................................................................................................... 12
7.4. Projected Cash Flow............................................................................................................... 12
Table: Cash Flow .............................................................................................................................. 13
Chart: Cash........................................................................................................................................ 13
7.5. Projected Balance Sheet............................................................................................................. 14
Table: Balance Sheet......................................................................................................................... 14
7.6. Business Ratios .......................................................................................................................... 14
Table: Ratios..................................................................................................................................... 15
Table: Sales Forecast .................................................................................................................................. 1
Table: Personnel.......................................................................................................................................... 2
Table: General Assumptions....................................................................................................................... 3
Table: Profit and Loss................................................................................................................................. 4
Table: Cash Flow........................................................................................................................................ 6
Table: Balance Sheet................................................................................................................................... 9

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1. Executive Summary
Taste De' Italiano will be the leading pasta restaurant in Quetta with a rapidly developing consumer
brand and growing customer base. The signature line of innovative, premium, pasta dishes include pesto
with smoked salmon, pancetta in an Alfredo sauce, and fresh mussels and clams in a marinara sauce.
Taste De' Italiano also serves distinctive salads, desserts, and beverages.
Taste De' Italiano will reinvent the pasta experience for individuals, families, and take-away
customers with discretionary income by selling high quality, innovative products at a reasonable price,
designing tasteful, convenient locations, and providing industry benchmark customer service.
Taste De' Italiano's first restaurant will be financed through a combination of direct owner
investment and long-term loans, guaranteed by the owner's collateral.
Chart: Highlights
1.1.Objectives
Taste De' Italiano's objectives are to build brand awareness and customer service, while growing
sales by opening new stores. It intends to utilize the following strategies to achieve these objectives:
 Offer high quality, innovative menu items, utilizing premium vegetables, meats and cheeses.
 Provide an excellent dining value.
 Build brand awareness through inexpensive, guerrilla marketing tactics.
 Pursue disciplined restaurant growth.
 Provide superior customer service.
 Leverage the experience, intelligence, and skills of our sophisticated advisory board.
1.2.Mission
Taste De' Italiano Gourmet Pasta's mission is to provide the customer the finest pasta meal and
dining 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.

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2. Company Summary
Taste De' Italiano is a restaurant started in Quetta. Taste De' Italiano serves individuals, families, and
take-away customers with fresh, creative, attractive pasta dishes, salads and desserts. It uses homemade
pasta, fresh vegetables, and premium meats and cheese.
2.1.Company Ownership
Taste De' Italiano is a privately held restaurant. The majority stock holder is Rabia Iftikhar.
2.2.Start-up Summary
Taste De' Italiano will incur the following start-up costs:
 Pasta machines.
 Commercial stove.
 Commercial refrigerators and freezers.
 Commercial dishwasher.
 Cabinets with cutting board surfaces.
 Chairs and tables.
 Beverage dispenser.
 Dishware and flatware.
 Assorted knives, mixing bowls, and other accessories needed in the production of food.
 Point-of-Sale terminal.
 Computer with Internet connection, CD-RW, and printer.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund $2,100
Start-up Assets to Fund $162,900
Total Funding Required $165,000
Assets
Non-cash Assets from Start-up $75,000
Cash Requirements from Start-up $87,900
Cash Balance on Starting Date $87,900
Total Assets $162,900
Liabilities and Capital
Liabilities
Long-term Liabilities $80,000
Total Liabilities $80,000
Capital
Planned Investment
Rabia Iftikhar $85,000
Total Planned Investment $85,000

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Loss at Start-up (Start-up Expenses) -$2,100
Total Capital $82,900
Total Capital and Liabilities $162,900
Total Funding $165,000
Chart: Start-up
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal $1,000
Stationery etc. $100
Menus $1,000
Total Start-up Expenses $2,100
Start-up Assets
Cash Required $87,900
Long-term Assets $75,000
Total Assets $162,900
Total Requirements $165,000
3. Services
Taste De' Italiano has created pastas and salads that are differentiated and superior to competitors.
Customers can taste the quality and freshness of the product in every bite. The following are some
characteristics of the product:
i. Taste De' Italiano dough is made with Italian semolina flour.
ii. Cheeses are all imported.
iii. Vegetables are organic and fresh with three shipments a week.

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iv. Meats are all top-shelf varieties, organic when possible.
At Taste De' Italiano, food is not the only product. Taste De' Italiano prides themselves on providing
service that is on par with fine dining. This is accomplished through an extensive training program and
only hiring experienced employees.
At A Glance--The Taste De' Italiano Store:
 Location: an upscale mall, suburban neighborhood, or urban retail district.
 Design: Bright and clean.
 Size: 1,200-1,700 square feet.
 Employees: Eight to ten full time.
 Seating: 45-50.
 Types of transactions: 80% dine in, 20% take away.
4. Market Analysis Summary
The market can be divided into three target markets, individuals, families and take-away business.
Taste De' Italiano expansion strategy is to further penetrate the existing markets by opening an
additional store (or stores) in Quetta in 2015. This clustering approach enables Taste De' Italiano to
increase brand awareness and improve operating and marketing efficiencies. For example:
 Clustering allows Taste De' Italiano to negotiate a fixed percentage contract with the food
wholesalers.
 Marketing expenditures can be spread over multiple revenue centers. This strategy reduces risks
involved with opening new restaurants given that Taste De' Italiano better understands the
competitive conditions, consumer tastes, and spending patterns in the market. When the Quetta
market is saturated with one or two additional stores, then Taste De' Italiano intends to look at
new markets.
4.1. Market Segmentation
The market can be segmented into three target populations:
 Individuals: People that dine in by themselves.
 Families: A group of people, either friends or a group of relatives dining together.
 Take away: People that prefer to eat Taste De' Italiano food at another location.
Age is not the most defined demographic of this customer base; all age groups enjoy pasta. The most
defined characteristic of the target market is income. Taste De' Italiano pasta has been very successful in
Cantt and Jinnah road. These areas have a large day and night population consisting of business people
and families who have household disposable incomes over $40,000. Combining several key
demographic factors, Taste De' Italiano arrives at a profile of the primary customer as follows:
 Sophisticated families who live nearby.
 Young professionals who work close to the location.
 Shoppers who patronize the high rent stores.

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Table: Market Analysis
Market Analysis
2014 2015 2016 Year 4 Year 5
Potential
Customers
Growth CAGR
Individuals 8% 12,457 13,454 14,530 15,692 16,947 8.00%
Families 9% 8,974 9,782 10,662 11,622 12,668 9.00%
Take away 10% 24,574 27,031 29,734 32,707 35,978 10.00%
Total 9.27% 46,005 50,267 54,926 60,021 65,593 9.27%
Chart: Market Analysis (Pie)
4.2. Service Business Analysis
In 1999, global pasta sales reached $8 billion. Pasta sales are estimated to grow by at least 10% for
the next five years. The big four, Pizza & Pasta Co., Yum Pasta, Hot Spot, and Café 76contribute $2
billion in combined 2000 revenues. The rest of the market is primarily made up of independent
restaurants. The barriers to entry into the pasta market are low, due to insufficient capitalization, most
entrants fail within their first six months.
4.2.1. Competition and Buying Patterns
 National Competition
a) Pizza & Pasta Co.: This restaurant offers consumers their choice of noodles, sauces, and
ingredients, allowing the customer to assemble their dish as they wish. Food quality is average.
b) Yum Pasta: This Company has a limited selection but the dishes are assembled with high-
quality ingredients. The price point is high, but the food is quite good.
c) Hot Spot: This company offers pasta that is reasonably fresh, reasonably innovative and at a
lower price point. The company was sold a few years ago, and consequently the direction of
management has been stagnant lately and has resulted in excessive employee turnover.
d) Café 76: This Company had medium-priced pasta dishes that use average ingredients, no
creativity, and less than average store atmosphere. Taste De' Italiano is not sure how this
company has been able to grow in size as their whole product is mediocre at best.
 Local Competition

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a) Musketeers: This is an upscale Italian restaurant that has a limited selection of pasta dishes.
Although the selection is limited and pricey, the dishes are quite good.
b) RV Pizza: An Italian restaurant with a decent pasta selection, however quality is inconsistent.
c) Serena: An upscale restaurant with a large wine selection and good salads. Everything else is
mediocre at best and over-priced. Service can often be poor.
5. Strategy and Implementation Summary
Taste De' Italiano will leverage their two competitive advantages, superior product and industry
benchmarked customer service to build a loyal customer base.
5.1. Competitive Edge
Taste De' Italiano competitive edge is quite simple - superior product and superior service.
 Product: the product will have the freshest ingredients including homemade pasta, imported
cheeses, organic vegetables and top-shelf meats. The product will also be developed to enhance
presentation, everything will be aesthetically pleasing.
 Service: customer service will be the priority. All employees will ensure that the customers are
having the most pleasant dining experience. All employees will go through an extensive training
program and only experienced people will be hired.
5.2. Milestones
Taste De' Italiano will have several milestones:
1. Business plan completion. This will be done as a roadmap for the organization. This will be an
indispensable tool for the ongoing performance and improvement of the company. The business
plan will be also used for raising capital.
2. Set up of the restaurant.
3. Opening of the second store.
4. Profitability.
Table: Milestones
Milestones
Milestone Start Date End Date Budget Manager Department
Business plan
completion
6/12/2013 8/12/2013 - Ramshah Marketing
Set up of the
restaurant
6/12/2013 4/5/2014 $162,900 All Department
Profitability 16/12/2013 31/11/2014 - Ramshah Department
Opening of the
second store
6/1/2015 6/30/2015 $100,000 Ramshah,
Sidra and
Zarqa
Department
Totals $262,900

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5.3. Marketing Strategy
Taste De' Italiano Gourmet Pasta's advertising budget is very limited, so the advertising program is
simple. Taste De' Italiano will do direct mail, banner ads, and inserts, with inserts in the Register-Guard
likely to be the most successful of the campaigns.
Lastly, Taste De' Italiano will leverage personal relationships to get an article about the opening of
Taste De' Italiano in the Register-Guard business section. Previously, friends who have had their
restaurant featured in the Register-Guard have seen a dramatic increase of sales immediately after the
article was published.
5.4. Sales Strategy
The sales strategy will be to allow people to try the superior product and service for themselves. In
essence, the product will speak for itself. The marketing campaign will attract people into Taste De'
Italiano and the sales strategy will be to let people experience Taste De' Italiano, this will be sufficient to
turn the person into a long-term customer.
5.4.1. Sales Forecast
The first two months will be used to get the restaurant up and running. By month three things will
get a bit busier. Sales will gradually increase, and by the end of the first year we will be running at 2/3
capacity. We will approach full capacity in year two (full capacity for a restaurant being 90% full), and
the introduction of new, higher price-point items in the third year accounts for that year's increase.
Table: Sales Forecast
Sales Forecast
2014 2015 2016
Sales
Individuals $103,710 $262,527 $286,024
Families $150,304 $380,474 $414,528
Take away $25,401 $64,300 $70,055
Total Sales $279,415 $707,301 $770,608
Direct Cost of Sales 2014 2015 2016
Individuals $46,669 $118,137 $128,711
Families $67,637 $171,213 $186,538
Take away $11,431 $28,935 $31,525
Subtotal Direct Cost of Sales $125,737 $318,286 $346,773

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Chart: Sales Monthly
Chart: Sales by Year
6. Management Summary
Rabia Iftikhar, President
 Duties: strategic development, back-office administration, financial analysis, internal control,
server, and line cook.
 Education: B.Com and MBA, BUITEMS.
 Restaurant experience: two years as a server and busser.
Chef Ramshah Hassan, Executive Chef
 Duties: Manages the back of the house, product development, kitchen hiring, kitchen training,
and inventory management.
 Education: Western Culinary Institute.
 Restaurant Experience: Fifteen years of restaurant experience at Harrah's & JQ Hammonds. At
JQ Hammonds ran an opening crew for new properties, also the executive sous chef managing
20 and plated 800 meals a day.

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Zarqa Qamar, General Manager
 Duties: Manages the front of the house, human resources, server hiring, server training, and
quality control.
 Education: BS sociology, University of Oregon.
 Business experience: Office and facilities manager, Cube Inc., managed a staff of five, managed
system implementation and construction projects and negotiated satellite office lease.
Advisory Board
 John Stevens, VP Food Starbucks Coffee Co., Inc.
 Arthur Johnson, Former VP Real Estate Starbucks Coffee Co., Inc.
 Donald Davis, franchise owner of Sheraton Hotel and Tony Roma's.
 Jerry Slippery, CPA, Partner, Arthur Anderson.
6.1. Personnel Plan
Ramshah, Zarqa, and Sidra will all be working full time. In addition to this management team, there
will be four other full-time employees brought on board during the end of the third month for the first
store. The second store will see the hiring of five additional employees.
Table: Personnel
Personnel Plan
2014 2015 2016
Ramshah $30,000 $37,800 $39,690
Sidra $30,000 $37,800 $39,690
Zarqa $62,000 $75,600 $79,380
Full time employee $11,480 $13,440 $13,440
Full time employee - $13,440 $13,440
Total People 7 12 12
Total Payroll $166,912 $272,160 $279,720
7. Financial Plan
The following sections will outline important financial information.
7.1. Important Assumptions
The following table details important financial assumptions.

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Table: General Assumptions
General Assumptions
2014 2015 2016
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0
7.2. Break-even Analysis
The following topic and table shows our Break-even Analysis.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even $31,017
Assumptions:
Average Percent Variable Cost 45%
Estimated Monthly Fixed Cost $17,059
Chart: Break-even Analysis

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7.3. Projected Profit and Loss
The following table will indicate projected profit and loss.
Chart: Profit Monthly
Chart: Profit Yearly
Chart: Gross Margin Monthly

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Chart: Gross Margin Yearly
Table: Profit and Loss
Pro Forma Profit and Loss
2014 2015 2016
Sales $279,415 $707,301 $770,608
Direct Cost of Sales $125,737 $318,286 $346,773
Other Production Expenses - - -
Total Cost of Sales $125,737 $318,286 $346,773
Gross Margin $153,678 $389,016 $423,834
Gross Margin % 55.00% 55.00% 55.00%
Expenses
Payroll $166,912 $272,160 $279,720
Sales and Marketing and Other
Expenses $2,400 $2,400 $2,400
Depreciation $15,000 $15,000 $15,000
Insurance $2,400 $3,600 $3,600
Rent $18,000 $36,000 $36,000
Total Operating Expenses $204,712 $329,160 $336,720
Profit Before Interest and Taxes -$51,034 $59,856 $87,114
EBITDA -$36,034 $74,856 $102,114
Interest Expense $8,000 $8,000 $8,000
Taxes Incurred - $15,557 $23,734
Net Profit -$59,034 $36,299 $55,380
Net Profit/Sales -21.13% 5.13% 7.19%
7.4. Projected Cash Flow
The following chart and table will indicate projected cash flow.

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Table: Cash Flow
Pro Forma Cash Flow
2014 2015 2016
Cash Received
Cash from Operations
Cash Sales $279,415 $707,301 $770,608
Subtotal Cash from Operations $279,415 $707,301 $770,608
Expenditures 2014 2015 2016
Expenditures from Operations
Cash Spending $166,912 $272,160 $279,720
Bill Payments $136,690 $372,140 $417,494
Subtotal Spent on Operations $303,602 $644,300 $697,214
Net Cash Flow -$24,187 $63,001 $73,394
Cash Balance $63,713 $126,714 $200,107
Chart: Cash

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7.5. Projected Balance Sheet
The following table will indicate the projected balance sheet.
Table: Balance Sheet
Pro Forma Balance Sheet
2014 2015 2016
Assets
Current Assets
Cash $63,713 $126,714 $200,107
Other Current Assets $0 $0 $0
Total Current Assets $63,713 $126,714 $200,107
Long-term Assets
Long-term Assets $75,000 $75,000 $75,000
Accumulated Depreciation $15,000 $30,000 $45,000
Total Long-term Assets $60,000 $45,000 $30,000
Total Assets $123,713 $171,714 $230,107
Liabilities and Capital 2014 2015 2016
Current Liabilities
Accounts Payable $19,846 $31,549 $34,562
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $19,846 $31,549 $34,562
Long-term Liabilities $80,000 $80,000 $80,000
Total Liabilities $99,846 $111,549 $114,562
Paid-in Capital $85,000 $85,000 $85,000
Retained Earnings ($2,100) ($61,134) ($24,835)
Earnings ($59,034) $36,299 $55,380
Total Capital $23,866 $60,165 $115,545
Total Liabilities and Capital $123,713 $171,714 $230,107
Net Worth $23,866 $60,165 $115,545
7.6. Business Ratios
The following table outlines some of the more important ratios from the restaurant industry. The
final column, Industry Profile, details specific ratios based on the industry as it is classified by the
Standard Industry Classification (SIC) code, 5812, Eating Places.

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Table: Ratios
Ratio Analysis
2014 2015 2016 Industry
Profile
Sales Growth N/A 153.14% 8.95% 7.60%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 35.60%
Total Current Assets 51.50% 73.79% 86.96% 43.70%
Long-term Assets 48.50% 26.21% 13.04% 56.30%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 16.04% 18.37% 15.02% 32.70%
Long-term Liabilities 64.67% 46.59% 34.77% 28.50%
Total Liabilities 80.71% 64.96% 49.79% 61.20%
Net Worth 19.29% 35.04% 50.21% 38.80%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 55.00% 55.00% 55.00% 60.50%
Selling, General & Administrative
Expenses
91.28% 55.14% 51.74% 39.80%
Advertising Expenses 0.43% 0.17% 0.16% 3.20%
Profit Before Interest and Taxes -18.26% 8.46% 11.30% 0.70%
Main Ratios
Current 3.21 4.02 5.79 0.98
Quick 3.21 4.02 5.79 0.65
Total Debt to Total Assets 80.71% 64.96% 49.79% 61.20%
Pre-tax Return on Net Worth -247.35% 86.19% 68.47% 1.70%
Pre-tax Return on Assets -47.72% 30.20% 34.38% 4.30%
Additional Ratios 2014 2015 2016
Net Profit Margin -21.13% 5.13% 7.19% N/A
Return on Equity -247.35% 60.33% 47.93% N/A
Activity Ratios
Accounts Payable Turnover 7.89 12.17 12.17 N/A
Payment Days 27 24 29 N/A
Total Asset Turnover 2.26 4.12 3.35 N/A
Debt Ratios
Debt to Net Worth 4.18 1.85 0.99 N/A
Current Liab. to Liab. 0.20 0.28 0.30 N/A
Liquidity Ratios
Net Working Capital $43,866 $95,165 $165,545 N/A

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Interest Coverage -6.38 7.48 10.89 N/A
Additional Ratios
Assets to Sales 0.44 0.24 0.30 N/A
Current Debt/Total Assets 16% 18% 15% N/A
Acid Test 3.21 4.02 5.79 N/A
Sales/Net Worth 11.71 11.76 6.67 N/A
Dividend Payout 0.00 0.00 0.00 N/A

Appendix
Page 1
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Sales
Individuals - - $3,895 $6,813 $7,906 $9,286 $10,057 $10,664 $12,044 $13,424 $14,804 $14,817
Families - - $5,645 $9,874 $11,458 $13,458 $14,575 $15,455 $17,455 $19,455 $21,455 $21,474
Take away - - $954 $1,669 $1,936 $2,274 $2,463 $2,612 $2,950 $3,288 $3,626 $3,629
Total Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920
Direct Cost of
Sales
Individuals - - $1,753 $3,066 $3,558 $4,179 $4,526 $4,799 $5,420 $6,041 $6,662 $6,668
Families - - $2,540 $4,443 $5,156 $6,056 $6,559 $6,955 $7,855 $8,755 $9,655 $9,663
Take away - - $429 $751 $871 $1,023 $1,108 $1,175 $1,327 $1,480 $1,632 $1,633
Subtotal Direct
Cost of Sales
- - $4,722 $8,260 $9,585 $11,258 $12,193 $12,929 $14,602 $16,275 $17,948 $17,964

Appendix
Page 2
Table: Personnel
Personnel Plan
Ramshah $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Sidra $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Zarqa $3,500 $3,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500
Full time employee - $280 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120
Full time employee - $280 $112 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120 $1,120
Full time employee - - - - - - - - - - - -
Total People 3 7 7 7 7 7 7 7 7 7 7 7
Total Payroll $8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980

Appendix
Page 3
Table: General Assumptions
General
Assumptions
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current 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%
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 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Appendix
Page 4
Table: Profit and Loss
Pro Forma
Profit and
Loss
Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920
Direct Cost
of Sales
- - $4,722 $8,260 $9,585 $11,258 $12,193 $12,929 $14,602 $16,275 $17,948 $17,964
Other
Production
Expenses
- - - - - - - - - - - -
Total Cost
of Sales
- - $4,722 $8,260 $9,585 $11,258 $12,193 $12,929 $14,602 $16,275 $17,948 $17,964
Gross
Margin
- - $5,772 $10,096 $11,715 $13,760 $14,902 $15,802 $17,847 $19,892 $21,937 $21,956
Gross
Margin %
00% 00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00% 55.00%
Expenses
Payroll $8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980
Sales and
Marketing
and Other
Expenses
$200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Depreciation $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250
Leased
Equipment
- - - - - - - - - - - -
Utilities - - - - - - - - - - - -
Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Rent $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Payroll
Taxes
15% - - - - - - - - - - - -
Other - - - - - - - - - - - -

Appendix
Page 5
Total
Operating
Expenses
$11,650 $12,770 $17,122 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130 $18,130
Profit
Before
Interest and
Taxes
($11,650) ($12,770) ($11,350) ($8,034) ($6,415) ($4,370) ($3,228) ($2,328) ($283) $1,762 $3,807 $3,826
EBITDA ($10,400) ($11,520) ($10,100) ($6,784) ($5,165) ($3,120) ($1,978) ($1,078) $967 $3,012 $5,057 $5,076
Interest
Expense
$667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667 $667
Taxes
Incurred
- - - - - - - - - - - -
Net Profit ($12,317) ($13,437) ($12,017) ($8,701) ($7,081) ($5,037) ($3,894) ($2,995) ($950) $1,095 $3,140 $3,159
Net
Profit/Sales
00% 00% -114.51% -47.40% -33.25% -20.13% -14.37% -10.42% -2.93% 3.03% 7.87% 7.91%

Appendix
Page 6
Table: Cash Flow
Pro Forma
Cash Flow
Cash
Received
Cash from
Operations
Cash Sales - - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920
Subtotal Cash
from
Operations
- - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920
Additional
Cash
Received
Sales Tax,
VAT,
HST/GST
Received
- - - - - - - - - - - -
New Current
Borrowing
- - - - - - - - - - - -
New Other
Liabilities
(interest-free)
- - - - - - - - - - - -
New Long-
term
Liabilities
- - - - - - - - - - - -
Sales of Other
Current
Assets
- - - - - - - - - - - -
Sales of
Long-term
Assets
- - - - - - - - - - - -

Appendix
Page 7
New
Investment
Received
- - - - - - - - - - - -
Subtotal Cash
Received
- - $10,494 $18,356 $21,300 $25,018 $27,095 $28,731 $32,449 $36,167 $39,885 $39,920
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sept Oct Nov Dec
Expenditures
from
Operations
Cash
Spending
$8,500 $9,620 $13,972 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980 $14,980
Bill Payments $86 $2,567 $2,724 $7,407 $10,871 $12,208 $13,856 $14,784 $15,551 $17,224 $18,898 $20,515
Subtotal
Spent on
Operations
$8,586 $12,187 $16,696 $22,387 $25,851 $27,188 $28,836 $29,764 $30,531 $32,204 $33,878 $35,495
Additional
Cash Spent
Sales Tax,
VAT,
HST/GST
Paid Out
- - - - - - - - - - - -
Principal
Repayment of
Current
Borrowing
- - - - - - - - - - - -
Other
Liabilities
Principal
Repayment
- - - - - - - - - - - -
Long-term
Liabilities
Principal
Repayment
- - - - - - - - - - - -

Appendix
Page 8
Purchase
Other Current
Assets
- - - - - - - - - - - -
Purchase
Long-term
Assets
- - - - - - - - - - - -
Dividends - - - - - - - - - - - -
Subtotal Cash
Spent
$8,586 $12,187 $16,696 $22,387 $25,851 $27,188 $28,836 $29,764 $30,531 $32,204 $33,878 $35,495
Net Cash
Flow
($8,586) ($12,187) ($6,202) ($4,031) ($4,551) ($2,169) ($1,741) ($1,033) $1,918 $3,962 $6,007 $4,425
Cash
Balance
$79,314 $67,128 $60,926 $56,895 $52,344 $50,175 $48,434 $47,401 $49,318 $53,281 $59,288 $63,713

Appendix
Page 9
Table: Balance Sheet
Pro
Forma
Balance
Sheet
Assets Starting
Balances
Current
Assets
Cash $87,900 $79,314 $67,128 $60,926 $56,895 $52,344 $50,175 $48,434 $47,401 $49,318 $53,281 $59,288 $63,713
Other
Current
Assets
- - - - - - - - - - - - -
Total
Current
Assets
$87,900 $79,314 $67,128 $60,926 $56,895 $52,344 $50,175 $48,434 $47,401 $49,318 $53,281 $59,288 $63,713
Long-
term
Assets
Long-
term
Assets
$75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000 $75,000
Accumul
ated
Depreciat
ion
- $1,250 $2,500 $3,750 $5,000 $6,250 $7,500 $8,750 $10,000 $11,250 $12,500 $13,750 $15,000
Total
Long-
term
Assets
$75,000 $73,750 $72,500 $71,250 $70,000 $68,750 $67,500 $66,250 $65,000 $63,750 $62,500 $61,250 $60,000
Total
Assets
$162,900 $153,064 $139,628 $132,176 $126,895 $121,094 $117,675 $114,684 $112,401 $113,068 $115,781 $120,538 $123,713

Appendix
Page 10
Liabilitie
s and
Capital
Current
Liabilitie
s
Accounts
Payable
- $2,481 $2,481 $7,046 $10,466 $11,747 $13,364 $14,267 $14,979 $16,596 $18,214 $19,831 $19,846
Current
Borrowin
g
- - - - - - - - - - - - -
Other
Current
Liabilitie
s
- - - - - - - - - - - - -
Subtotal
Current
Liabilitie
s
- $2,481 $2,481 $7,046 $10,466 $11,747 $13,364 $14,267 $14,979 $16,596 $18,214 $19,831 $19,846
Long-
term
Liabilitie
s
$80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000
Total
Liabilitie
s
$80,000 $82,481 $82,481 $87,046 $90,466 $91,747 $93,364 $94,267 $94,979 $96,596 $98,214 $99,831 $99,846
Paid-in
Capital
$85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000 $85,000
Retained
Earnings
($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100) ($2,100)
Earnings - ($12,317 ($25,753 ($37,770 ($46,471 ($53,553 ($58,589 ($62,484 ($65,478 ($66,428 ($65,333 ($62,193 ($59,034)
Total
Capital
$82,900 $70,583 $57,147 $45,130 $36,429 $29,347 $24,311 $20,416 $17,422 $16,472 $17,567 $20,707 $23,866

Appendix
Page 11
Total
Liabilitie
s and
Capital
$162,900 $153,064 $139,628 $132,176 $126,895 $121,094 $117,675 $114,684 $112,401 $113,068 $115,781 $120,538 $123,713
Net
Worth
$82,900 $70,583 $57,147 $45,130 $36,429 $29,347 $24,311 $20,416 $17,422 $16,472 $17,567 $20,707 $23,866

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