BUSINESS PLAN

Running header: DI’S COMMUNITY ATTIC, LLC
Di’s Community Attic, LLC
Dianna L. James
Independence University
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MBA Capstone Project
Dianna L. James
Independence University
George Smith, M.S.
Katie Doseck, PhD aka Dr. D.
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Table of Contents
Table of Contents................................................................................................................................... 3
Executive Summary............................................................................................................................... 6
Mission Statement........................................................................................................................................ 10
Vision Statement........................................................................................................................................... 10
Company Summary...................................................................................................................................... 11
Company Ownership................................................................................................................................... 12
Company Location........................................................................................................................................ 13
Exit Strategy.......................................................................................................................................... 15
Ownership Length........................................................................................................................................ 15
Motivation to Sell.......................................................................................................................................... 15
Industry Analysis................................................................................................................................. 15
Industry Review............................................................................................................................................ 17
Laws & Regulations...................................................................................................................................... 18
4.Dianna is liable under the Federal Unemployment Tax Act...................................19
6.Business License(s)......................................................................................................20
Tennessee Gross Receipts Tax:................................................................................................................ 21
Responsible of Hiring One or More Employees.........................................................................22
State of Tennessee Requirements........................................................................................................... 22
The Federal Government Reporting Requirements..........................................................................23
The Tennessee Government Reporting Requirements....................................................................23
Federal Taxes................................................................................................................................................ 24
Competition.................................................................................................................................................... 24
Consumer Analysis....................................................................................................................................... 25
Customer Base............................................................................................................................................... 25
Demographics....................................................................................................................................... 26
Age.................................................................................................................................................................... 26
Figure 1: Gibson County, TN and Area 2014 Population Data........................................................26
Figure 3: Gibson County, TN Population Change 2010 to 2014......................................................26
Figure 4: Gibson County, TN 2010 to 2014 Population Percent Change.....................................26
Figure 5: Gibson County, TN People per Sq. Mile................................................................................27
Figure 6: Median Age in Gibson County, TN.........................................................................................27
Figure 7: Median Age by Gender in Gibson County, TN.....................................................................27
Figure 8: Gibson County, TN and Area Age by Generation...............................................................27
Figure 9: Gibson County, TN and Area Racial Makeup......................................................................27
Figure 10: Gibson County, TN Hispanic Population...........................................................................28
Figure 11: Male vs. Female Population..................................................................................................28
Household Salary.......................................................................................................................................... 28
SWOT Analysis...................................................................................................................................... 29
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Product/Service Concept..................................................................................................................30
Marketing............................................................................................................................................... 31
Labor Force.................................................................................................................................................... 32
Unique Selling Proposition (USP)............................................................................................................ 34
Pricing Strategy............................................................................................................................................. 34
Promotion Strategies.................................................................................................................................. 35
Organizational & Operations ..........................................................................................................37
Organizational Chart................................................................................................................................... 37
Supply & Inventory Management...................................................................................................39
Sample of Di’s Community Attic Contract.............................................................................................40
Production and Distribution Management.................................................................................47
Employment Application..................................................................................................................50
Financials............................................................................................................................................... 52
Startup funding (Financial Chart)........................................................................................................... 52
Sales forecast................................................................................................................................................. 55
Sales 3 Year Forecast................................................................................................................................... 56
Cash flow......................................................................................................................................................... 57
Cash Flow Statement......................................................................................................58
Balance sheet................................................................................................................................................. 59
Income statement......................................................................................................................................... 60
Pro Forma Income Statement.......................................................................................61
Break-Even Analysis.................................................................................................................................... 61
Business Ratios............................................................................................................................................. 63
RATIO ANALYSIS SPREADSHEET.........................................................................64
Five (5) Year Valuation............................................................................................................................... 65
References............................................................................................................................................. 67
APPENDIXES.......................................................................................................................................... 70
Appendix A: Cover Letter for Success Center.......................................................................................70
Appendix C: Cover Letter for Career Services......................................................................................74
Appendix D: Resume for Career Services..............................................................................................75
Appendix F: Resume for Instructor......................................................................................................... 79
Appendix G: References for Success Center, Career Services Advisor, and Instructor...........81
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Running header: DI’S COMMUNITY ATTIC, LLC 5

Executive Summary
Dianna will have a profitable consignment store in the City of Humboldt. Dianna will be
known as the store that cares about people in the community, as well as surrounding municipalities.
The mission is to empower and assist residents that reside in City of Humboldt and the surrounding
municipalities. An additional goal that Dianna has is to have a profitable business and to enable
those that live in the City of Humboldt and the surrounding municipalities to earn extra money for
items that are no longer needed or wanted. Dianna’s further goal is to join forces at Christmas with
the local Police Department in supplying food and gifts for families that are less fortunate. Future
expansion will include other stores and a food pantry. This assist in reaching out to more people, this
will help with the employment issues that Gibson County currently exhibits.
Di’s Community Attic will be a newly formed business in financially assisting those that live
in the City of Humboldt and surrounding communities. Dianna’s goal is to open the store with as
little debt as possible. The best situation would be to have no debt, however, that is impossible due
to rent and equipment necessary to open. Additionally, Dianna will not need to purchase
merchandise as that is expected to come from individuals in the City of Humboldt, and surrounding
communities. Money will be exchanged for merchandise sold on consignment in the form of a check
cut on a weekly basis. The only merchandise that will be accepted is toys with all parts, electronics
that are in working order and clothing without stains. Store hours will be Monday – Saturday from
10:00 am thru 6:00 pm and closed on Sunday. Dianna will accept new merchandise on Wednesday
and Saturday from 8:00 am thru 10:00 am at a deliver door in the back of the store. Clients will be
given the opportunity to pick up their items that did not sell or to donate to a charitable organization.
Charitable organization that Dianna will work with are the Veteran’s Organization, and Goodwill.
The resale industry in the United States are on the rebound due to the economic decline of
2008. What caused the rebound is people needed a way to supplement their income as it was
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possible due to selling of new or slightly used items on consignment. It is noted that the larger the
store the better revenue turn around, because of the ability to offer a larger selection of merchandise.
Consignment stores derive their net income by subtracting their overhead and cost of sales
from the total beginning revenue. Overhead consist of the cost of running the store.
Dianna will be required to obtain a Federal and State EIN, Federal Unemployment Tax, Sales
and Use Tax Number, Business License, Tennessee Gross Receipts Tax Number. Additionally,
Tennessee requires every employee to fill out a W-4. Dianna is required by law to pay FUTA and
SUTA. Dianna must provide every employee with a W-2 at the end of each year.
Dianna will obtain merchandise from other sources such as auctions, and garage sales. The
first week of May each year Dianna will seek merchandise through advertising that will coincide
with the Annual Strawberry Festival in the City of Humboldt. The type of merchandise can be
anything that is associated with Strawberries.
Dianna’s customer base is not just from the municipalities within Gibson Counties, the other
municipalities come from Crockett and Madison Counties. The number of people employed within
these three counties are 72,761.
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Population by Races for Crockett County
Race Population
% of
Total
Total
Population
14,586 100
White 11,478 78
Black or
African
American
1,843 12
Hispanic or
Latino
1,274 8
Some Other
Race
1,002 6
Two or
More Races
215 1
Source: (Suburbanstats.org, 2016)
Gibson County has a population of 49,632 and Madison County is 98,354.
Dianna will split the profits with her clients 50/50 of the sales minus taxes. Taxes for
Tennessee and Gibson County is 9.75 percent.
Dianna will promote the business through means of newspapers, radio and television. When
opening the business there will be several rounds of advertising, first being to promote the need to
items to consign, second, date that the store will open, third is to announce the grand opening.
Upon opening Dianna will have three Department Mangers. They consist of her three
daughters all in various departments. Dianna’s husband will be there to assist in the electronics
department and help with the health care corner.
Di’s Community Attic has been a life-long dream of Dianna. Dianna retired from her job in
2011 and is going to invest $28,985.91 into the business. Dianna will obtain the funding through
angel/seed funding in the amount of $42,427. The person that is investing into Dianna’s business
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requires that the money be paid back in sixty months with a monthly payment of $707.11 until paid
in full. Additionally, funding in the amount of $15,000 from a Government Grant that was awarded
to Dianna. The benefit to Dianna is that Government Grants are not required to be paid back.
The total money will be combined into an account for the consignment store. The bank that
the business will use is Regions Bank in Humboldt. The money then will be used to purchase such
items as: clothing racks, shelving units, cash register, display cases, UPC barcoding printer,
software, and lighting, etc. that are necessary in running the store. There is a complete breakdown of
the monies and how it is being used along with price of each item under the Use of Funds section.
Dianna forecast that the business will increase by 95 percent per year. This will be possible due to
the various advertising campaigns that will be done through various publications, radio and
television stations that are out of Jackson, Tennessee. Dianna is also aware as more customers flow
in and out of the store, word of mouth advertising will begin to increase and there will be an increase
in clients that bring items in to sell. Additionally, customer base will increase from word of mouth
advertising. There is a breakdown of all the financial picture as stated in the following
reports/graphs:
Sales 3 Year Forecast Spreadsheet and Graph
Cash Flow Statement
Balance Sheet
Pro Forma Income Statement
Breakeven Analysis
Ratio Analysis Spreadsheet
Five (5) Year Valuation
The exit strategy that Dianna is to turn the business over to the children since they are
already part of the business. This decision is made because the children all have the same passion for
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business ventures and being an active part in the business.
However, Dianna has looked at the other side of the coin. What if the children do not want to
be part of the business? Dianna has covered that by contacting her clients that the store will officially
close on a given day. The clients will be asked if they would like to pick up the remaining items in
the store and/or if they would be willing to take less for liquation sale. Finally, the client will be
asked if they wish to donate the remainder of their items after the liquidation sale to a charitable
organization.
Mission Statement
Di’s Community Attic wants to empower the citizens that reside in the City of Humboldt and
the respective surrounding communities. The store is created to help those in the City of Humboldt
and those that reside in neighboring communities. This store is possible through items that are
delivered to the store for resale on consignment. Sales of these items will enhance client’s/customers
income. At the holidays Dianna (proprietor) will team up with the City of Humboldt Police
Department to assist with the purchase of items for those less fortunate families that would go
without Christmas and give them the things that make a wonderful Christmas.
Vision Statement
Di’s Community Attic is here to empower people of the community and surrounding
communities. A budget for the store so the needed resources to join forces at Christmas time with the
City of Humboldt Police Department at purchasing gift items for every age, and food to put on the
table for those that would go without due to circumstances that are out of their control. Di’s
Community Attic is here to help people succeed in life through the ability to earn a little more
money for the home. The owner wants to empower people through an opportunity to work within the
store in some facet. If not through a paid position, the door is open for volunteering in the store. The
goal of the owner is to help people become employable. Those that volunteer have a chance of
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becoming a paid employee if a job were to open up.
Company Summary
Di’s Community Attic will be a newly formed business that was created to assist citizens of
the City of Humboldt and the surrounding communities. It is intended to open the Consignment
Store with as little debt as possible. Ideally, would be no debt, however, that is not possible due to
the need to rent space for the store and equipment. Therefore, the debt that will be incurred is needed
to rent space and equipment needed such as clothing racks, cash register, tags for pricing items,
shelfing units, and cases for jewelry displays. Those cases can be used for the cash register until
something more can be purchased. Additionally, plastic bags and bag holders.
This store exists through merchandise that is delivered to the store on designated days by
citizens in the City of Humboldt and its surrounding communities. The merchandise is sold on
consignment and checks are cut on a weekly basis to those that had items they brought in to be sold.
Items that are acceptable for sale are items that work and/or are stain free. Items accepted for sale on
consignment are clothing for men, women and children in all sizes, shoes, jewelry, books, purses,
electronics (computers, printers, coffee makers, televisions, other kitchen appliances), craft items.
The only clothing item that will not be accept are panties and hair care products, unless new and still
in package). The store hours of operations are 10:00 am to 6:00 pm Monday – Saturday, Sunday the
store will be closed. Delivery will be on Wednesday all day starting at 8:00 am and Saturday 8:00
am – 10:00 am. At the back of the store will be a door where people that just want to donate
merchandise can leave items. Dianna will allow flexibility for delivery by arrangements being made
ahead of time so a date and time is mutually acceptable.
Each year is to enhance the City of Humboldt Police Department to help families at
Christmas that are less fortunate. More families are reached through joining forces with the police
department. These respective families will have gifts under the tree, children have gift from Santa,
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and a good meal on the table. If it were not for this program families would never be able to
celebrate Christmas, because they would be unable to purchase gifts or food. This program enables
them to put gifts under the tree and food on their tables to celebrate just as many families that are
more fortunate manage to celebrate with all the goodies.
Di’s Community Attic will offer you one half of the price that is listed on any tagged
merchandise, and shows that it had not been worn. Additionally, offered to clients/customers is the
ability to bring in items for cash, the cash value is given as a store credit allowing the
client/customer the ability to make purchases. The other option is leaving your item for sale so you
can receive payment for the merchandise that is sold on your behalf. If one chooses this option,
he/she would earn 40 percent of the asking price that was deemed by Dianna and Roger. Items are
kept on shelves for three months. Items are marked down 20 percent after the first month, 30 percent
after the second month, and thirty-five percent in the third month. Items that have not sold after this
time frame, the client/customer is given the opportunity to pick it up or arrangements will be made
for the unsold items to be given to the Veterans of America Donations or Goodwill.
Di’s Community Attic will hire one additional employee at the opening of the newly opened
store. As more customers become established and business grows there is room to hire additional
employees. The only day that conceivably more staff would be necessary would be the day that
merchandise is dropped off. Ideally, would be to have two people work the back for drop off of
merchandise. That way merchandise could be delivered on a daily basis, and rotation of merchandise
would be much faster and more acceptable hours being accepted.
Company Ownership
Di’s Community Attic is solely owned by Dianna L. James and registered as a Limited
Liability Company, (LLC) business. The reason for making the business venture a LLC is to secure
the personal assets that are registered to Dianna, such as home, car, computers, etc. Dianna is the
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sole investor in the creation of this consignment store. Roger James (husband) will assist in the store,
however, Roger holds no financial interest in the business. Roger will work on a daily basis and his
responsibilities include but are not limited to receiving merchandise, pricing merchandise to go out
on the sales floor, stocking, and doing minor repairs as needed.
All of the books are done by Dianna due to having an Associate’s Degree in Accounting.
Additionally, the owner during years of work did accounting in which the owner held for almost 21
years. Additionally, the owner holds two degrees in Business Administration a Bachelor’s and
Master’s. Furthermore, this owner was responsible for a membership of 34,000 members, which lead
the owner to the conclusion of keeping track of clients that bring in items by entering information
into a database created in Access. Roger will be an asset to the business, because of previously
owning a store in Dubuque, Iowa. The owners husband at the time of their marriage owned a
business as he was a contractor.
Company Location
Di’s Community Attic will be located in Humboldt, Tennessee (Gibson County). The best
location to establish the opening of a new store is in a small strip mall at the corner of Central
Avenue and Highway 45. Dianna chose this location because of the ability to compete against other
stores and ability to sell products at a lower price tag than those of the surrounding stores.
Furthermore, this is a central location for people that are coming through on highway 45 toward
Bells, Brownsville, and Trenton. There is a lot of traffic that passes through that location as they are
coming and going from surrounding communities and Humboldt in general. The strip mall has a
great deal of patrons that shop at this location and any one of these stores Rent-A-Center, hair supply
store, Dollar General, grocery store, Cash Master (pay day loan establishment), Sporting Goods,
Goodies (clothing and shoes), and Auto Zone. However, there are number of other businesses within
this location. They are as follows: on the corner where the strip mall is located a Hardees, however,
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located across the street is McDonalds, Subway, Fred’s Department Store, another payday loan
establishment, Chinese Buffet, Exxon gas station, and Central Avenue Cigarettes. Finally, along
Central Avenue is a Family Dollar, Dollar Tree, Walgreens, Save-a-Lot, and Super Center Walmart.
The goal for Di’s Community Attic is to expand to a larger location after being in business
for five or six years. It would be nice to purchase the vacant lot by Walmart and build a store at the
other end of the Walmart parking lot. This location would be ideal because of the customer traffic
that potentially could be established from those that patronize Walmart. Additionally, in ten years to
open a store in Trenton, fifteen years open a store in Milan, and eighteen years in Jackson. These
dates are subject to change if profits are high and the communities show interest in the opening of
such a store. The opening of these stores is possible by increased profits each year, and by opening
new stores it will enhance and reduce the unemployment within each community due to employment
opportunities at each location. With all of the expansions will create more revenue for Di’s
Community Attic, and from each increase in the profits from each store, Dianna will be able to travel
more between each store to make sure that they are being run in the way that aligns with Dianna’s
vision for each store. Additionally, Dianna will have more time to maintain all the financial records
for these stores. Finally, Dianna will have time to listen to the customers wants and needs within
each location.
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Exit Strategy
Ownership Length
Dianna plans on owning the business as long as time/age permits. Dianna is going into the
business venture at the age of 60 therefore it is predicted that the business will be in operation until
she reaches the age of 80 as long as health continues as it is at the time the business was opened.
Motivation to Sell
Dianna’s exit strategy is turning the business over to her children and to see it go to their
children. The business has been a work from all family members and Dianna’s children share the
same interest in the business as she has had through the process for making it a viable business
venture. Since her children are already part of the business turning over the reins to them will not be
difficult, as they have been part of the success of the business.
On the other side of the coin, what if her children decide that they do not want to keep the
business going. Dianna has prepared another option if that were to occur. She would put the business
up for sale. However, if there were no interested parties that would like to venture in such a viable
business, she would liquidate everything in the store. As for merchandise, she would contact clients
to let them know that the store will close and clients can come pick up the rest of inventory that
belongs to him/her, or give approval to mark the merchandise down and liquidate.
Industry Analysis
In the United States the resale industry is rebounding due to the economic downturn in 2008.
“The resale, consignment and thrift store industry reported in April 2011 that the boom ‘mirrored the
aftermath of the 1990’s recession,’ according to an article in the Omaha World Herald” (Sandiland,
2016, Para. 1). According to The National Association of Resale Professionals stated that the resale
industry increased because people needed to find a way to supplement their income to make ends
meet. Therefore, they would sell unused to slightly used items in order to earn extra cash.
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Thrift stores/consignment stores/resale stores all need capital in order to start up the business.
The capital is for paying rent, and display shelving/racks. Additionally, the plus that consignment
stores have is that they do not need to pay for the merchandise that is in the store, until the
merchandise is sold. There are consignment stores that specialize in certain items such as furniture,
clothing (children’s, women’s, men’s, and/or brand names. Additionally, there are consignment
stores that carry any and every thing that a person could possibly be looking for.
The revenue is deemed from the size of the store, larger stores can carry more merchandise,
therefore, has the ability to earn more in revenue.
“…according to statistics provided by the National Association of Resale
Professionals, Goodwill Industries generate retail sales of $2.69 billion during 2011
from more than 2,500 stores. This calculated to average sales of $107,600 per store,
The Buffalo Exchange, also a member of the association, generated revenue of $64.4
million in 2010, which equates to average revenue of $1.4 million for each of its 43
stores, and California’s Crossroads Trading generated an average $740,000 per store”
(Sandiland, 2016, Heading 2, para 1).
The average net income for a consignment store is derived by subtracting the overhead and
cost of sales from the total beginning revenue. The overhead consists of rent, utilities, telephone,
email, internet, payroll, and taxes. Based on what the Bureau of Labor Statistics Buffalo Exchange
has in their employment 700 people. The general merchandise stores on a national average pay their
non-supervisory employees $10.73 per hour. Additionally, the payroll on an annual basis for
employees that work thirty-five hours per week incur the cost of $13.6 million. Furthermore,
consignment stores have to pay for merchandise that was not donated. Sales make up about forty
percent of the sales made in a month and for outright purchases it can be slightly less.
“The average net profit for the clothing industry is 7.98 percent and furniture is 4.58 percent,
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according to the free industry statistics available from Financial-Projections.com” (Sandliland, 2016,
Heading 4, para 1). Those are the two categories that best represent the consignment industry. They
are the two that make up most of the revenue for the business. Once again if we look at Buffalo
Exchange’s stores average profit in 2010 was six and one-half percent, which makes their net
income was ninety-five thousand dollars per store.
Industry Review
There are many positive things that a consignment stores can accomplish within a
community. According to First Research the consignment industry continues to grow. Throughout
the United States consignment and re-sale stores are twenty thousand stores strong. Additionally, the
consignment and re-sale industry have a combined revenue of sixteen billion dollars annually. The
demand is driven through demographics, income and taste of consumers. “Large companies have
advantages in marketing and finance. Small companies can compete effectively by offering specialty
products, serving a local market or providing superior customer service” (firstresearch.com, 2016,
Heading 2, para 1).In the United States the consignment industry is fragmented as the fifty largest
companies make up twenty five percent of the sales made annually.
Consignment stores are in competition is larger retailers, such as many of the big box stores
such as Walmart, Target and K-Mart. They are also in competition with various on-line merchants
such as Craigslist, eBay, and swapping sites such as Freecycle.
The main products that are sold in consignment stores equate to the following:
Clothing – twenty-five percent of sales
Antiques – thirteen percent of sales
Furniture and Collectibles – ten percent of sales
Used books – three and one-half percent sales
Jewelry – three and one-half percent of sales (firstresearch.com, 2016, Heading 3, para 1)
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Laws & Regulations
The laws and regulations for a start-up business are as follows:
1. Federal Employer Identification Number (EIN)
It is a requirement for businesses to obtain an EIN. The EIN is free as there is no fee
attached to this. “You can apply on-line to get your EIN from the IRS at this web address:
http://www.irs.gov/businesses/small/article/0,,id=102767,00.html” (Williams, 2015, heading
1, para. 1) The EIN application can be retrieved from:
https://www.irs.gov/Businesses/Small-Business-&-Self-Employed/Apply-for-an-
Employer-Identification-Number-(EIN)-Online
The only punctuation and special characters that are permitted is the “hyphen (-) and
ampersand (&). (NOTE for LLC EIN applicants)” (Williams, 2015, heading 1, para. 1).
2. Other methods that Dianna can use to apply for the EIN.
The application forms can to obtained through these methods:
• “Complete Form SS-4, available by downloading on line at this IRS address:
http://www.irs.gov/pub/irs-pdf/fss4.pdf. Download the instructions for this form
here: http://www.irs.gov/pub/irs-pdf/iss4.pdf. The form is also available from any
Internal Revenue Service office, Social Security Administration office or SCORE
offices (part of the IRS Business Tax Kit)” (Williams, 2015, heading 1, sub
heading 2. bullet 1).
Additionally, Dianna can download the form and fill it out manually then mail it to
the IRS, Stop 8143, Memphis, Tennessee, 37501. If you have access to a fax machine,
between three am thru eleven pm Central Standard Time the form can be faxed to this
number (901) 546-3916. Tennessee Employer Number (SUTA)
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3. Tennessee Employer Identification Number
It is mandatory that every business obtains a Tennessee Employer Identification
Number if you hire one or more employees to work at least twenty different weeks in any
calendar year. Additionally, if you pay at least $1,500 gross wages in any calendar quarter.
The form is obtainable from https://www.einnumber.net/tennessee/.
4. Dianna is liable under the Federal Unemployment Tax Act
Dianna must obtain and complete a “Report to Determine Status – Application for
Employer Number”: http://tn.gov/labor-wfd/es/Employers/forms/LB-0441.pdf (Williams,
2015, heading 2, para. 2)
Dianna is liable under the Federal Unemployment Tax Act to carry insurance through
premiums that are paid to the State of Tennessee. In order to obtain the form, it can be done
by calling the Employer Accounts Office in Knoxville at (865)594-5380 or personally go
into the office at “Employer Accounts Office, 2700 Middlebrook Pk, Ste 100, Knoxville, TN
37901” (Williams, 2015, heading 3, para. 3). Additionally, Dianna can write into Employer
Accounts Office, at PO Box 2031, Knoxville, Tennessee, 37091-2031.
Dianna is liable for paying unemployment premiums and there are steps to take in
order to obtain an account number. The number once the forms are received and accepted
Dianna will receive an eight-digit employer account number that is needed every time the
unemployment taxes are paid. There is no fee associated with obtaining the unemployment
premium account number.
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5. Sales & Use Tax Certificate (Sales Tax Number)
Dianna will be responsible for collecting and paying the State of Tennessee for Sales
and Use Taxes. Dianna can obtain the forms via mail or writing the Tennessee Department of
Revenue, located at 531 Hanley Street, Knoxville, Tennessee 37902. Dianna can call
(865)594-6100 to request the form. The fastest route that Dianna can take is to go online at
http://tn.gov/revenue/forms/general/f13005_1.pdf. Within a week to ten days after Dianna
places the application a certificate should arrive in the mail. There is no cost associated for
the Sales Tax Number.
The certificate is useful to Dianna because of the ability to use it to make purchases
on items to sell in the store without paying taxes for those specific items. Many vendors
prefer an original certificate that has the state seal appended to the document. Dianna should
call the revenue office at (615)253-0600 and request extra certified copies. When Dianna
requests the copies the sales tax number is needed. Additionally, vendors can verify Dianna’s
account by visiting this website https://tdordt.tn.gov/resaleaccountverification/1024.aspx and
input the information as indicated:
6. Business License(s)
Dianna must obtain a business license from the Gibson County Court Clerk and/or the
City Tax Collection Authority. The business license is $15.00 annually. Depending on the
business there could be additional costs associated with obtaining a business license. Dianna
can obtain the form that she needs by visiting this webpage:
http://tennessee.gov/revenue/forms/business/appbuztaxlic.pdf. “As of January 1, 2014, the
amount is increased to $10,000 or more in gross sales” (Williams, 2015, heading 3, para. 1).
Dianna in the first year of business by find that the sales are between three thousand and ten
20

thousand dollars. The second year in business may be higher as word of mouth travels and
more customers patronize the store. Once Dianna’s sales increase to ten thousand dollar or
more is when Dianna may find the business license being $30.00 per year.
There are some forms of business that are exempt from taxes, however, that would
not be the case for Dianna as she is not a non-profit organization/business. This would apply
to some organizations but not all. Some organizations are listed as a non-profit which means
they operate off of money made from members/clients. Whereas, those that are for-profit are
in business to make money and provide things that meet their customer’s specific wants and
needs. Dianna’s information will be forwarded to the Licensing Office at the Tennessee State
Department of Revenue as they are the ones that Dianna’s will pay her taxes to.
Tennessee Gross Receipts Tax:
Tennessee Gross Receipt Tax Dianna will be responsible for paying due to the fact that the
business is retail. Because Dianna’s business is considered retail there are annual taxes due to the
State of Tennessee. The State of Tennessee is the one that mandates tax rate and when you pay the
fiscal year taxes. They are as follows:
• “CLASS 1: Fiscal year January 1 to December 31 – Due before March 1. Includes
gasoline service stations, grocery stores, food wholesalers, hardware stores, building
materials, feed stores, food brokers, beer package stores, beer wholesalers, wholesale
gasoline, and diesel fuel.
• CLASS 2: Fiscal year April 1 to March 31 – Due before June 1 (sic) Includes
advertising specialties, automobile & motorcycle dealers, boat & camper dealers,
department stores, florists & plant stores, home furnishings, appliance & electronics
retailers, restaurants, liquor store, liquor wholesalers, all businesses not listed
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elsewhere.
• CLASS 3: fiscal year July 1 to June 30. Due before September 1. Includes antique
dealers, delicatessens, jewelry stores, card shops & book stores, pawn shops, beauty
& barber shops & schools, architectural & artist supply sales, hearing aids, razors,
luggage, optical & ophthalmological supplies, typewriter, sporting goods, sales of
services or furnishing/rendering services.
• CLASS 4: Fiscal year October 1 to September 30. Due before December 1. Includes
general contractors, subcontractors, produce dealers” (Williams, 2015, heading 4,
sub-heading 1, bullets 1-4).
Tennessee Department of Revenue Municipal Business Tax Return can be obtained for filing
the current taxes rates in all four of the classes at this website:
http://www.tn/gov/revenue/forms/business/bus416_1d.pdf and download it once open. Additionally,
you can download the county business tax return through this website:
http://www.tn.gov/revenue/forms/business/bus415_4.pdf. Depending on where Dianna opens her
business will depend if she is responsible for paying one or both of the gross receipt taxes.
Responsible of Hiring One or More Employees
State of Tennessee Requirements.
Dianna is responsible for the following for each employee that is hired to work at the
consignment store. The following are requirements according to employment laws set forth by the
State government.
• Every employee must fill out a W-4 in order to know how much to withhold for taxes from
each employee paycheck.
• Social Security, Medicare, and income taxes must be deducted for every employee’s wages.
22

• Dianna must pay the Federal Unemployment (FUTA) Tax every pay period.
• Dianna must pay the State Unemployment (SUTA) Tax every pay period.
• Compile a W-2 form at the end of each year for every employee, including those that are no
longer employed but were during that given year.
The Federal Government Reporting Requirements.
It is stated that for every employee Dianna hired the Employment Eligibility Verification,
Form I-9 as it is associated with the United States Department of Homeland Security, United States
Citizenship and Immigration Services. This form can be obtained the employment eligibility
verification page of this website: http://www/uscis/gov/portal/site/uscis. Additionally, you can
download the instructions for the Form I-9.
The Tennessee Government Reporting Requirements.
Tennessee required all businesses that hire or re-hire any given employee that the business
report each employee within twenty days of being hired. It is preferred that the reporting is done
online at http://www.tnnewhire.com/. However, there are other methods of reporting new employees
or rehired employees and it as follows:
• “Faxing a copy of the state reporting form found at
https://www.tnnewhire.com/PDFs/Reporting.pdf
• Faxing a copy of the employee’s Form W-4 (obtainable from any IRS office or online at
http://www.irs.gov/pub/irs-pdf/fw4.pdf) to Tennessee New Hire at fax (877)-505-4761.
• Mail to Tennessee New Hire Reporting, PO Box 17367, Nashville, TN 37217, or by phone
at: 1-888-715-2280 FREE” (Williams, 2015, heading 6, sub-heading 2, bullet 1-3).
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Federal Taxes.
In order to report the Federal Taxes Dianna will report on Form 940 and 941 to the Internal
Revenue Service (IRS). Dianna can find that necessary information by downloading the instructions
from http://www.irs.gov/pub/p15.pdf. Additionally, the forms and instructions can be obtained that
the “IRS office located in the John Duncan Building, 710 Locust Street, Knoxville, Tennessee or the
SCORE office” (Williams, 2015, heading 5, sub-heading 3, para. 1)
In Tennessee there is no payroll taxes, therefore, Dianna will only have to focus on paying
the Federal Payroll Taxes.
Additional information is for the County of Gibson they will charge you $49.00 for a
Business License, the State Identification Number is $79.00 and to search the business name is
$19.00. It is noted that if you create a business other than your own name, Dianna has to file a DBA
which is $119.00, but the business name search is included in that price. Additionally, Dianna is a
LLC, and Di’s Community Attic has to be registered with the Federal Government.
Competition.
There is only one other consignment store in the City of Humboldt. It is located at the other
end of the City from where Di’s Community Attic is located. The hours between these two stores is
like night and day. The consignment store located on 22nd
Avenue is only open three days per week,
from 10:00 am thru 5:00 pm. Whereas Di’s Community Attic will be open six days a week, from
10:00 am thru 7:00 pm. First thing that Dianna has above the other consignment store in the city is
her location being on a busy intersection as well as stores surrounding the establishment. Second, her
store hours are more flexible for the working class people to come in and shop.
However, in Jackson Tennessee, there are several consignment stores. There is one
consignment store in Jackson that stands out from the rest. “M and M Consignment” (Moore. 2016)
store has hours about the same as Dianna has, open six days a week and closed on Sunday. They are
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open 10:00 am thru 7:00 pm. They are known for carrying high end designer clothing, shoes, and
purses. They do carry children’s clothing, however, it has to be certain brand names. They are very
selective as to what they accept in their store, whereas, Dianna, will accept any brand name that has
no stains, good working condition and all parts are there. M and M’s prices for the most part start at
$15.00 and goes up, which is not bad for designer products. However, Dianna will mark hers
accordingly to what type of merchandise it is and condition. Dianna’s price range can be anywhere
from twenty-five cents and sky is the limit depending on product.
Consumer Analysis.
The customer base will patronize Di’s Community Attic from the surrounding communities
such as Bell, Trenton, Milan, Melon, Humboldt, Jackson, Gibson, and Three Way. These
communities are all financially similar to Humboldt, Therefore, a consignment store that meets their
income base will bring success to Di’s Community Attic. Not only will they save money, they will
make money.
Customer Base
The customers base is women that are in lower to middle class income bracket. They are also
between the ages of 35 – 55. The primary item that she will shop for is clothing for herself and the
family as well as household items and decorations. The target market for men will be between the
ages of 40 – 60, however, the only items that they would be looking for is tools, men’s pants and
shirts. Additionally, they will look for electronics such as televisions, DVD players, etc.
As a demand for a certain item surfaces, for example, dresses and hats for women become
more popular as the store grows and sales grow, it may be important to do weekly advertising in the
Jackson Sun asking for those items. The advertising would enable the demand to be met more often.
What the customers are looking for will be sought out to get on the shelves. It is important to keep
the customers happy by fulfilling their wants and needs. The largest part of inventory will be women
25

and children’s, because seldom do men donate, men for the most part wear clothing until it is worn
out, or their significant other/wife cleans out the closet.
Demographics
Dianna will open Di’s Community Attic store in the City of Humboldt. Humboldt from the
2013 census has a population of 8,402 people with the majority living within the city limits. The
market that is more likely to have the pleasure of visiting the store will be women. However, the
statistical data is Men being 3,604 and Women being 4,798.
Age
Below is demographic information regarding age, gender, and ethnic groups. This data was
obtained through townscharts.com.
Figure 1: Gibson County, TN and Area 2014 Population Data
Place Population 2014
Crockett County 14,599
Gibson County 49,632
Madison County 98,364
Figure 3: Gibson County, TN Population Change
2010 to 2014
Figure 4: Gibson County, TN 2010 to 2014
Population Percent Change
Place Population 2010 Population 2014
Crockett
County
14,586 14,599
Gibson County 49,683 49,632
Madison
County
98,294 98,364
Place Population Change
Gibson County -0.1%
Crockett County 0.1%
Madison County 0.1%
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Figure 5: Gibson County, TN People per Sq. Mile
Figure 6: Median Age in Gibson County,
TN
Place Population Density
Crockett County 55
Gibson County 82
Madison County 177
Place Median Age
Madison County 37.3
Crockett County 39.9
Gibson County 39.9
Figure 7: Median Age by Gender in Gibson County, TN
Place Male Age Female Age
Madison County 35.9 38.9
Crockett County 38.6 41.2
Gibson County 38.7 41.2
Figure 8: Gibson County, TN and Area Age by Generation
Place <20 20s 30s 40s 50s 60s 70+
Gibson County 27% 10.8% 12.3% 13.1% 13.6% 10.8% 12.4%
Crockett County 27.1% 11.1% 11.8% 14% 12.5% 12% 11.4%
Madison County 27.1% 14% 11.7% 13.1% 14.5% 10.1% 9.3%
Figure 9: Gibson County, TN and Area Racial Makeup
Place White Black or African American Asian Other Race
Madison County 60% 37% 1.1% 0
Gibson County 79% 18.7% 0.3% 0
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Figure 9: Gibson County, TN and Area Racial Makeup
Place White Black or African American Asian Other Race
Crockett County 80.3% 13.4% 0.2% 0
Figure 10: Gibson County, TN Hispanic Population
Place Hispanic or Latino
Gibson County 2.3%
Madison County 3.5%
Crockett County 9.2%
Figure 11: Male vs. Female Population
Place Female Male
Gibson County 53% 47%
Madison County 52% 48%
Crockett County 52% 48%
Household Salary.
In 2013, the average income per household was $26,735 and was not much on an increase
since 2000 census. Per capita income in 2013 was $18,060 and that went up just a little over $4,000
from 2000. Because of the income base, a consignment store is a perfect place to enable them to
obtain a better stretch the income in the household. Additionally, will supplement income per
household. Finally, it is known that the cost of living in Humboldt is lower than that of the national
average. The cost of living index is for Humboldt is 80.9 percent, and average of the United States as
a whole is 100 percent.
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SWOT Analysis
Strengths
• Accounting
• Computer knowledge
• Good customer relations
• People person
• Crafts (knitting, reading, crocheting, needlepoint, and wood working)
• Enjoy thinking of ways to do displays from previous retail work.
Weaknesses
• Short patients at getting things accomplished on a timely manner
• When I want something done it should have been done yesterday not today.
Opportunities
• Hire on more people in the future of the business
• Can sit back
• Still responsible to the daily deposits and taking care of all the daily paperwork
• Expand to a larger location in the future of the business and own the property.
Threats
• Following the government regulations and staying on top of any changes that are made
• The economy
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Product/Service Concept
Di’s Community Attic will obtain merchandise from different sources. To list a few,
auctions, garage sales, and the citizen’s that live in the City of Humboldt and surrounding
municipalities. The products that the store will accept and sell are women’s dresses, pants, shirts,
necklaces, earrings, shoes, and purses. Whereas, for men’s the store will accept for sale dress pants,
blue jeans, shoes, dress shirts, suits, t-shirts, ties and tie tacks, cuff links. Additionally, clothing for
newborns to young-adults. Items for children that will be accepted for sale are sleepers for infants,
cloth diapers, outfits for infants, burp rags, and infant shoes. However, for the children that are of
school age items for sale are as follows: blue jeans, dress pants (boy and girl) school uniforms for all
ages, shoes, and dress’s, etc. Children’s toys for all ages as long as all pieces are included and it
works if electronic. Kitchen items such as toasters, frying pans, pots, dishes, glasses, silverware, etc.
Household items, sheets, curtains, blankets, and outdoor lawn furniture. Seasonal items that will be
accepted are Christmas ornaments, trees, as long as these items work they will be accepted (tree
lights, outdoor lights, and decorations), grills, lawn mowers, televisions, radios, alarm clocks, weed
eaters, and other garden tools, etc. In August, when school begins the consignment store will have
school supplies for sale. Additionally, Dianna will assist families with school supplies that are
unable to purchase the necessary items.
The first week of May each year, the City of Humboldt has a Strawberry Festival. The
festival is a week-long event that bring people in from all over the United States. Beginning the end
of March Dianna will place an advertisement asking for merchandise that is relevant to The West
Tennessee Strawberry Festival. Dianna is going to purchase and/or make items to carry in the store.
The items that are relevant to the festival are anything that has strawberries on them.
The history of Strawberry Festival was 79 years ago the very first festival was designed. It
30

was designed as a way to market to the community and all of the Western Tennessee communities as
a way to challenge the economy.
“Organizers went to state officials for support and came up with a celebration that
included bringing the town and the surrounding community together. Along with
instruction for growing and marketing the strawberry, those who attend are
entertained, and contests and events are planned simply for enjoyment and
fellowship” (humboldttnchamber.org, n.d., para. 2).
During the week-long event there is a carnival, golf tournament, horse show, recipe
contest, parades that have floats and bands. Additionally, there is a 5K and 10K run, pet
parade, and many great food vendors and many more attraction’s.
Marketing
Di’s Community Attic’s customer base is not only for the City of Humboldt, but the
surrounding communities such as (Trenton, Milan, Bell’s, Medina, Jackson, Gibson, Alamo and
Three Way. Employment for those municipalities are as follows in the table below:
Example 1.
Covered Employment and Wages 1st
Quarter 2015
Employment Employment March 15 Average Weekly Wages
Crockett County 3,573 682
Gibson County 13,377 620
Madison County 55,811 739
Source: (bls.gov, 2015, Table 2)
31

Example 2.
Covered employment and wages by state, first quarter 2015
State
Employment Average Weekly Wage
March 2015
(thousands)
Percentage
Change,
March
2014-15
Average
Weekly
Wage
National
Ranking
by Level
Percent
Change,
First
Quarter
2014-15
National
Ranking
by
Percent
Change
Tennessee 2,772.7 2.1 886 27 1.9 38
Source: (bls.gov, 2015, Table 3)
Labor Force.
Below is data that show various number with the labor force in Jackson Tennessee. Jackson
is in Madison County a neighboring county to Crockett and Gibson.
Jackson, TN
Data Series
Back
Data
Oct
2015
Nov
2015
Dec
2015
Jan
201
6
Feb
2016
Mar
2016
Labor Force Data
Civilian Labor Force (1) (R) 61.6 (R) 61.6 (R) 61.5 60.9 (P) 61.9
Employment (1) (R) 58.1 (R) 58.1 (R) 58.0 57.6 (P) 59.0
Unemployment (1) (R) 3.5 (R) 3.5 (R) 3.5 3.3 (P) 2.9
Unemployment Rate (2) (R) 5.6 (R) 5.7 (R) 5.7 5.4 (P) 4.7
Nonfarm Wage and Salary Employment
Total Nonfarm (3) 67.4 67.4 67.7 65.6 66.2 (P) 66.9
12-month % change 2.1 1.2 1.8 2.3 2.2 (P) 2.1
Mining, Logging, and
Construction (3)
2.8 2.8 2.7 2.7 2.7 (P) 2.7
12-month % change -6.7 -6.7 -6.9 3.8 3.8 (P) 8.0
Manufacturing (3) 10.2 10.1 10.2 10.1 10.0 (P) 10.1
12-month % change 3.0 2.0 3.0 4.1 3.1 (P) 4.1
Trade, Transportation, and
Utilities (3)
12.6 12.8 12.8 12.3 12.2 (P) 12.3
12-month % change -0.8 -1.5 -1.5 -0.8 -1.6 (P) -1.6
Information (3) 0.6 0.6 0.6 0.6 0.6 (P) 0.6
12-month % change 0.0 0.0 0.0 0.0 0.0 (P) 0.0
Financial Activities (3) 2.1 2.1 2.2 2.1 2.1 (P) 2.2
12-month % change 10.5 10.5 10.0 5.0 5.0 (P) 10.0
Professional and Business
Services (3)
6.8 6.8 6.9 6.5 6.6 (P) 6.7
12-month % change 6.3 3.0 4.5 4.8 4.8 (P) 4.7
Education and Health Services (3) 10.6 10.6 10.7 10.1 10.5 (P) 10.6
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12-month % change 0.0 0.0 0.9 -2.9 0.0 (P) -1.9
Leisure and Hospitality (3) 6.3 6.2 6.2 6.0 6.1 (P) 6.2
12-month % change 10.5 6.9 8.8 9.1 8.9 (P) 8.8
Other Services (3) 1.7 1.7 1.7 1.7 1.7 (P) 1.7
12-month % change 0.0 0.0 0.0 6.3 0.0 (P) 0.0
Government (3) 13.7 13.7 13.7 13.5 13.7 (P) 13.8
12-month % change 1.5 1.5 1.5 3.1 2.2 (P) 1.5
Footnotes
(1) Number of persons, in thousands, not seasonally adjusted.
(2) In percent, not seasonally adjusted.
(3) Number of jobs, in thousands, not seasonally adjusted. See About the data.
(R) Revised
(P) Preliminary
Data extracted on: April 15, 2016
Source: U.S. Bureau of Labor Statistics
Note: More data series, including additional geographic areas, are available through the "Databases
& Tables" tab at the top of this page.
The target market will change some when The West Tennessee Strawberry Festival is going
in full force. According to the Chamber of Commerce for Humboldt, it is stated “The West
Tennessee Strawberry Festival is a 78-year tradition in Humboldt” (Humboldttnchamber.org. n.d.
para. 1), and many from across the country come to enjoy the southern hospitality. Additionally,
people come to enjoy shopping in at any and all of our small mom and pop stores, vendors set up
with food and beverages, and to enjoy the good country music that is provided from one or more of
the many country musicians that live in Nashville Tennessee, as well as some of the talented
musicians that live in our city or surrounding communities. Therefore, this target market will be
made up of people 21 to 100 men and woman alike.
33

Unique Selling Proposition (USP).
Citizens that live within the City of Humboldt and the surrounding communities are putting
their trust in Dianna to sell their items and pay them for the merchandise that was sold on their
behalf. Payment for items that were sold will be dispersed on a weekly basis, that being at the end of
each week. At first Dianna and Roger will be working and running the store. Over time Dianna will
employer one or two more employees to assist with putting merchandise out on the floor. Projecting
in five years to have a Store Manager and Assistant Store Manager to run operations to free Dianna
and Roger up a little more.
Pricing Strategy.
Di’s Community Attic is a low-end business, and only profits that are made are derived from
merchandise that is delivered from citizens within the local community and the surrounding
communities. It is realized that profits will be low in the first year of business, however, as the word
of mouth begins to spreads around the tri county area, profits will begin to grow. Dianna knows that
word of mouth is one of the best methods to gain new clients/customers, therefore, it is important to
price merchandise accordingly. Because Dianna is catering to a customer/client base from the
community, Dianna must keep the pricing below the big box stores and stay with the competition.
The process for pricing depends on the item being priced. Items that still have a price tag in place it
will be marked down twenty percent from the price on the tag. An example of this is a client brings
in a pair of blue jeans that has never been wore and price tag still intact with a price of ten dollars.
Therefore, Dianna will do the math by taking ten dollars and multiplying it by twenty percent which
is equal to two dollars, thus making the new price eight dollars.
Pricing will be determined by Dianna, and the client will be aware of how the pricing of their
products work due to the contract that is agreed on by both Dianna and the client. The contract will
state that the client total sales minus taxes will be split 50/50. Additionally, taxes 9.75 percent will
34

be obtained by Dianna to report the appropriate taxes to the State and County. The contract will state
that Dianna will mail an inventory of what they contributed toward merchandise and the price in
which was priced on the individual piece(s). It will also so what the gross amount if all were to sell,
clients potential profit and Dianna’s profit from the sale. Every week the client will get a new
printout that shows what has sold and what was earned for that week, this report is accompanied
with their check.
Dianna will have a Microsoft Access database with all her clients, first and last name,
address, phone number (landline and cell), email address. In Microsoft Excel the customer’s number
and name will be put in one cell, following cells will be merchandise that was donated and priced for
resale.
The store will have a cash register that is programed as point of sale. The client number that
is generated in Access is used to track what clients have brought in to sell. Using a bar code printer
each piece of merchandise will have a code that is unique to that individual client and merchandise.
Through the point of sale Dianna will be able to accurately generate a report of inventory at any
given time and which client has merchandise on the shelf, how long it has been there. This is the
report that will be furnished every week to the client with their respective check.
Promotion Strategies.
Dianna for the first six months will run advertisements in the monthly Shopper Stopper and
the weekly edition of the Humboldt Cronical. Additionally, Dianna will run an advertisement on a
weekly basis in the Sunday edition of the Jackson Sun. As time progresses, Dianna will run
advertisements in the Jackson Sun a couple times per week. Dianna will also run advertisement in
surrounding communities’ papers. Furthermore, she will run an advertisement on WBBJ television
station, and Froggy 103.1 FM radio station out of Jackson, Tennessee.
Dianna will advertise with the local newspaper (Humboldt Chronical) that is printed every
35

Wednesday. Additionally, advertising will be through the monthly Shopper Stopper and the Sunday
edition by the Jackson Sun. The initial advertisement will be announcing that a new store will be
opening on July 1, 2016, and if anyone has anything laying around that they would like to get rid of
and make some extra money to come and see Dianna and/or Roger to learn how they can make
money selling things around the house that he/she no longer uses. This advertisement would be place
at the very least one month in advance, six weeks would be best.
The second round of advertisements will let consumers know that we will be opening on July
1, 2016 and to come and see what the store has to offer. In that advertisement it will have the
address, phone number, days and hours of operation that the store is open.
The third advertisement will have a grand opening special (coupon for five dollars off of any
sale of twenty dollars or more). Additionally, will mention that there will be cake and non-alcoholic
beverage served until they run out, so hurry in and see what is new.
Within the first year in business Dianna intends to create a webpage or have one created by
an outside source. The website will show the promotional item for the month, for instance clothing
for May, Pots and Pans for June, and televisions for July. Featured items will be determined from
items that are in abundance and/or have been on the shelves for some time without selling. Other
items that will be listed on the website is a little history of Dianna, the mission of the business and
what the vision is for the future of the consignment store. Additionally, will be pictures of new
merchandise, address, map of location, phone number, store hours and email (to contact Dianna).
Lastly, will be days of the week that Dianna accepts drop off of potential merchandise.
36

Organizational & Operations
Organizational Chart.
[Grab your reader’s attention with a great quote from the document or use this space to
emphasize a key point. To place this text box anywhere on the page, just drag it.]
Di’s Community Attic is managed primarily by family members with the exception of the
following six employees that work in the back storage area. It consists of one that sorts merchandise
by department, three employees that mark merchandise (one for each department), and two that takes
merchandise out to the floor for sale. Below is the list of those that make up the management team
starting at the top of the ladder.
37
Employees
for pricing
merchandise

Dianna James is the Owner and Store Manager of the Attic store. Dianna is responsible for
the hiring and firing of employees. In her absence Serena is the Store Manager. Dianna has several
business degrees with her most recent being her MBA. Dianna loves aligning herself with people
and she is noticeable during business hours helping customers locate what they need. She is a good
and fair leader. Dianna can be reached at (731)420-6672 during business hours and/or through email
at discommunityattic2016@yahoo.com.
Dianna’s husband (Roger) spends his days helping Dianna with the business and he can be
reached at (731)420-6673. Roger works in the Electronics Department testing merchandise to make
sure that they do work, if a minor fix (not too costly) he will make the necessary repairs. Roger also
takes care of our health care corner, where we let people borrow bedside commodes, wheelchairs,
walkers, bath benches, and crutches.
The Assistant Store Manager and jewelry and fashion accessories manager is Serena Kapple.
In Dianna’s absence Serena resumes the role of Store Manager. Serena comes to the store with a
Degree in Forensic Science and Management. Serena is the second oldest daughter of Dianna.
Serena has a passion for helping customers in accessories to accompany the outfit that the customer
is buying. Serena can be reached at (731)420-6674 or serenacommunityattic2016@yahoo.com.
The Clothing Manager is Crystal Trammell. Crystal is the oldest daughter of Dianna’s.
Crystal comes to the store with a background in management. Crystal has a talent for fashion and
pricing. With that she assists now working with the stock people in pricing merchandise and seeing
that it makes it to the floor for sale. Crystal can be reached during store hours at (731)420-6675 or at
crystalcommunityattic2016@yahoo.com.
The Manager for the Kitchen Department is Emily Rush. Emily is the youngest daughter of
Dianna’s. The Kitchen Department is a good fit for Emily as she has a passion for cooking. She has
the ability to sell kitchen products with ease, and provide cooking tips to boot. Emily is reachable at
38

(731)420-6676 or emilycommunityattic2016@yahoo.com.
Supply & Inventory Management
The inventory for Di’s Community Attic will come from those within the community as well
as surrounding communities. Dianna discovered an article that will help with setting up inventory
and how it works. According to McCue stated that “Attic inventory is when a merchant or a retailer
agrees to accept and display a product, but it’s still owned by the supplier. Only when an end-user
buys the product does the supplier get paid (as well as the merchant)” (McCue, 2014, para 1).
Basically the inventory is created in circles. The consignor is the person that brought it items
to become inventory for the Attic store. The consignee (merchant) is the owner on the store as they
agree to display the merchandise to the consignor. Therefore, the merchandise (inventory) comes
into the store for display and sale and once sold the consignor is paid.
Dianna has fewer risks since she does not physically own the merchandise. The owner is the
consignor that brought it in until the time money exchanges hands. However, there has to be a way
to track the inventory. The method that Dianna will use is a program that has the capabilities to print
out bar codes. Every customer will have a number and items that they bring in will be given a code
as well. Additionally, within the bar code is a time period in which an item had been on the shelf,
every day a printout of inventory will be printed out to show what has to be pulled from the shelf.
Dianna will then contact the consignor to let them know that there is merchandise that can be picked
up, discount it (less money) or ask if they are willing to donate to a charitable organization such as
St. Vincent de Paul, Clothes for Veterans, Good Will, or Salvation Army.
Dianna will have each client fill out a form with name, phone number, address, email (if
he/she has one). Every time a consignor brings in items for sale they have to fill out the same
information (if a change in any of the areas) at the very least once a year. However, there will be a
contract that is required. The contract will be concise to the policy that is established between the
39

consignor and Dianna. The consignor will be given the right to indicate if they would like their items
listed for sale on the website. Customers will be aware that the only returns are allowed in the first
sixty days, and that is for in store credit.
Sample of Di’s Community Attic Contract.
Below is a sample of what Dianna’s contract will look like.
DI’S COMMUNITY ATTIC CONTRACT
Consignor’s Name:
Address:
City: State: Zip:
Home Phone: ( ) - Cell Phone: ( ) -
“THIS AGREEMENT (the “Agreement”) made on this _________________ day of
____________________, 20__________ by and between_________________ of
________________________________ (the "Consignor") and
_____________________ of ____________________________ (the "Consignee").
WHEREAS, the Consignor desires to consign to the Consignee certain goods
set forth on the attached Exhibit A (the “Consigned Goods”), for the purpose of
facilitating a sale of the Consigned Goods by the Consignee; and
WHEREAS, the Consignee desires to accept delivery of the Consigned Goods
and to make necessary payment to the Consignor upon the use of such goods on the
terms and subject to the conditions set forth in this Agreement.
NOW THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which the parties hereto both acknowledge, the Consignor and the
Consignee hereby agree as follows:
1. Attic of Goods
The Consignor shall deliver the Consigned Goods for Attic to the
40

Consignee’s Premises. Upon delivery, the Consignee shall accept delivery of
the Consigned Goods. The Consigned Goods shall remain the sole property of
Consignor until sold. Consignee hereby acknowledges that it takes possession
of the consigned goods only on a Attic basis and it does not acquire any
property right or security interest in such Consigned Goods. The consignor’s
Attic is not a Attic intended as a security.
2. Title
The title to and property of the Consigned Goods shall remain with the
Consignor until such time as the Consigned Goods are purchased.
3. Premises
The Consignee at its own cost and expense agrees to keep and display
the Consigned Goods in the following premises
____________________________ ____________________ (the "premises").
The Consignee shall store the Consigned Goods at its premises so as to be at
all times segregated from all of the other inventory and shall clearly indicate
that the Consigned Goods are the property of the Supplier. Upon any demand
by Consignor, Consignee will be responsible to return the Consigned Goods in
good order and condition.
4. Sale of the Consigned Goods
The Consignee agrees to use its best efforts to sell the goods on behalf
of the Consignor on such terms, and at such prices as shall from time to time
be designated by the Consignor.
5. Payments
The Consignee agrees, upon sale, to receive the sale proceeds due to
41

the Consignor and to deliver the sales proceeds, after deducting of all
commission, to the Consignor together with an accounting within
__________________ days of the said sale.
6. Commissions
The Consignee agrees to accept as full payment a commission equal
to_______ % of the gross sales price exclusive of any sales tax.
7. Inspection
The Consignee agrees to permit the Consignor to enter the premises at
reasonable times to examine and inspect the goods. The Consignor or any of
its representatives may once in a month take an inventory of the Consigned
Goods in order to determine the Goods, which have been used, damaged,
destroyed or otherwise removed from the Premises.
8. Term
This Agreement shall commence on the ______ day of
__________________, 20______ and continue for a period of twelve (12)
months, with the option to extend for additional twelve (12) month period
upon mutual acceptance.
42

9. Independent Contractor
The Consignee is, and shall remain, an independent contractor selling
to third-party buyers the Consigned Goods. The Company does not appoint
the Consignee as its agent or authorize the Consignee to hold itself out as its
agent, and does not convey to the Consignee any property interest in the
Company’s corporate name, trademarks, or goods.
10. Assignment
Consignor shall not assign any of their rights under this Agreement,
or delegate the performance of any of the obligations or duties hereunder,
without the prior written consent of the Consignee and any attempt by
Consignor to so assign, transfer, or subcontract any rights, duties, or
obligations arising hereunder shall be void and of no effect.
11. Notices
Any notices, bills, invoices, or reports required by this Agreement
shall be deemed received on (a) the day of delivery if delivered by hand
during receiving party’s regular business hours or by facsimile before or
during receiving party’s regular business hours; or (b) on the second business
day following deposit in the United States mail, postage prepaid, to the
addresses heretofore below, or to such other addresses as the parties may,
from time to time, designate in writing pursuant to the provisions of this
section.
Consignee:
______________________________
______________________________
43

Consignor:
______________________________
______________________________
12. Governing Law
This Agreement is to be construed in accordance with and governed by
the internal laws of the State of Tennessee (added by Dianna), USA.
13. Dispute Resolution
All disputes under this Agreement shall be settled by arbitration in
_________________ before a single arbitrator pursuant to the commercial law
rules of the American Arbitration Association. Arbitration may be
commenced at any time by any party hereto giving written notice to the other
party to a dispute that such dispute has been referred to arbitration. Any award
rendered by the arbitrator shall be conclusive and binding upon the parties
hereto.
This provision for arbitration shall be specifically enforceable by the
parties and the decision of the arbitrator in accordance herewith shall be final
and binding without right of appeal.
14. Severability
If any provision of this Agreement shall be held to be illegal, invalid or
unenforceable under present or future laws, such provisions shall be fully
severable, this Agreement shall be construed and enforced as if such illegal,
invalid or unenforceable provision had never comprised a part of this
Agreement; and, the remaining provisions of this Agreement shall remain in
44

full force and effect.
15. Limitation of Liability
In no event shall either party be liable to the other party for any indirect,
incidental, consequential, special or exemplary damages, including without
limitation, business interruption, loss of or unauthorized access to information,
damages for loss of profits, incurred by the other party arising out of the
services provided under this agreement, even if such party has been advised of
the possibility of such damages. In no event will neither party’s liability on
any claim, loss or liability arising out of or connected with this agreement
shall exceed the amounts paid to consignor during the __________ months
period immediately preceding the event giving rise to such claim or action by
consignee.
16. Indemnification
Each party shall at its own expense indemnify and hold harmless, and
at the other party’s request defend such party its affiliates, subsidiaries,
successors and assigns officers, directors, employees, sublicensees (sic), and
agents from and against any and all claims, losses, liabilities, damages,
demand, settlements, loss, expenses and costs (including attorneys’ fees and
court costs) which arise directly or indirectly out of or relate to (a) any breach
of this Agreement, or (b) the gross negligence or willful misconduct of a
party’s employees or agents;
45

17. Entire Agreement; Amendment:
This Agreement is the final, complete and exclusive agreement of the
parties with respect to the subject matter hereof and supersedes and merges all
prior or contemporaneous representations, discussions, proposals,
negotiations, conditions, communications and agreements, whether written or
oral, between the parties relating to the subject matter hereof and all past
courses of dealing or industry custom. No modification of or amendment to
this Agreement shall be effective unless in writing and signed by each of the
parties.
18. Waiver
The waiver by either party of a breach of or a default under any
provision of this Agreement shall not be effective unless in writing and shall
not be construed as a waiver of any subsequent breach of or default under the
same or any other provision of this Agreement, nor shall any delay or
omission on the part of either party to exercise or avail itself of any right or
remedy that it has or may have hereunder operate as a waiver of any right or
remedy.
19. Captions
The headings used in this Agreement are for convenience only and
shall not be used to limit or construe the contents of any of the sections of this
Agreement.
46

IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date first set forth above.
________________________________
CONSIGNOR NAME” (Findforms.com, n.d.).
________________________________
Dianna L. James, Owner
Production and Distribution Management
Because this business in a consignment store, there really is not production as one would
think of production. In the case of a consignment store production and distribution comes from
people that live within the community and/or surrounding communities. Therefore, there has to be a
program that monitors merchandise as it enters the store room, to the final sales. PeopleSoft is a
good program that will enable Dianna to track merchandise as it enters the storeroom, to when it
walks out the door with a new owner. There are two good Attic features that PeopleSoft Inventory
provides.
“Consigned Purchases Inventory: To store vendor-owned stock in your organization's
warehouse, distribution center, manufacturing facility, or other location.
Vendor Managed Inventory: To store your inventory stock in a customer's warehouse,
distribution center, manufacturing facility, or other location” (Oracle.com, n.d. Heading two, para 2
& 3).
The Attic store has no warehouse in which merchandised is stored until it is ready to hit the
shelves within the store. Rather Dianna’s supply chain management strategy is through merchandise
that is brought in to be sold. Therefore, Dianna does not have products waiting in a back room taking
up space. Dianna works on delayed payment, where the client waits for the product to sell to be paid.
Through the use of PeopleSoft program enables Dianna to implement strategies that will track
47

inventory that is out for sale and what inventory is sold. It is important to know what is on the
shelves at all times, because without certain merchandise sales can be slow, which equates to less
profits. Additionally, Dianna will be able to pay the bills as they occur and keep track of cost
management.
PeopleSoft has the capability to define merchandise as they are designated as owned, non-
owned or consigned. Below is a table that illustrates the ownership options that are available and an
explanation for each.
Example 1.
Ownership Status Explanation
Owned The business unit owns the item. The system costs all transactions for the item.
Non-owned The business unit does not own the item, but neither is it consigned. The system
does not cost transactions involving the item.
Consigned The item is both non-owned and purchased on Attic. The system costs the item
when you consume it and creates a voucher for payment.
Note. Like other non-owned stock, consigned items are not counted as part of the
total stock owned by the business unit. Provided that status and nettable (sic) rules
are met, however, consigned items are included in the business unit's total
quantity available and quantity on hand, and you can reserve and pick them to
fulfill customer orders.
(Oracle.com, n.d. Heading two, table 1).
Oracle created a diagram that illustrates how business flows with the use of PeopleSoft
software. PeopleSoft tracks every item in Dianna’s inventory from time it was entered into the
system, until the sale is made. Once a sale is made the program will do the calculations from the sale
as to what the check will be for the consignor. Finally, the end report will show the number of items
sold, amount of payables created from daily sales, and profits made for sales.
48

Example 1.
PeopleSoft Business Flow.
(Or
acle.com, n.d. graphic of chart).
Employee Application Process
Dianna intends on hiring employees, therefore, Dianna will have basic applications on hand,
however, Dianna will accept resumes as well. Dianna would rather have potential employees
personally come into the store to inquire about job position, however, job openings will be posted on
the Facebook page and the Website for the store. Dianna is busy within the business to always take
call of job inquiries.
49

Employment Application.
Employment Application
Applicant Information
Full Name: Date:
Last First M.I.
Address:
Street Address Apartment/Unit #
City State ZIP Code
Phone: Email
Date Available:
Social Security
No.: Desired Salary:$
Position Applied for:
Are you a citizen of the United States?
YES NO If no, are you authorized to work in
the U.S.?
YES NO
Have you ever worked for this company?
YES NO If yes,
when?
Have you ever been convicted of a felony?
YES NO
If yes, explain:
Education
High School:
Address
:
From: To:
Did you
graduate?
YES NO Diploma
::
College:
Address
:
From: To:
Did you
graduate?
YES NO
Degree:
Address
50

Other: :
From: To:
Did you
graduate?
YES NO
Degree:
References
Please list three professional references.
Full Name:
Relationship
:
Company: Phone:
Address:
Full Name:
Relationship
:
Company: Phone:
Address:
Full Name:
Relationship
:
Company: Phone:
Address:
Previous Employment
Company: Phone:
Address:
Supervisor
:
Job Title:
Starting
Salary: $ Ending Salary: $
Responsibilities:
From: To:
Reason for
Leaving:
May we contact your previous supervisor for a
reference?
YES NO
Company: Phone:
Address:
Supervisor
:
Job Title:
Starting
Responsibilities:
51

From: To: Reason for Leaving:
reference?
YES NO
Company: Phone:
Address:
Supervisor
:
Job Title:
Starting
Responsibilities:
From: To:
Reason for
Leaving:
reference? YES NO
Military Service
Branch: From: To:
Rank at Discharge:
Type of
Discharge:
If other than honorable, explain:
Disclaimer and Signature
I certify that my answers are true and complete to the best of my knowledge.
If this application leads to employment, I understand that false or misleading information in
my application or interview may result in my release.
Signature: Date:
Financials
Startup funding (Financial Chart).
Example 1.
The startup funding is comprised of angel/seed funding in the amount of $42,427, with the
agreement it will be paid off in five years. The agreement is that the angel is paid monthly $707.11
for sixty months. Dianna was awarded a Government Grant in the amount of $15,000 that does not
52

have to be paid back. Lastly, Dianna contributed $28,985.91 from money she invested when she
retired and is putting it to a life-long dream of being a business owner.
Use of funds
The funds mentioned above are for everything that is mentioned in the below example.
Example 1.
Item Purchased
Vendor
Name
Quantity
Price per
unit
Total for
Units
Shipping Taxes
Total
price
Grand
Total
Beginning balance of Dianna's contribution to opening the consignment Store. $28,985.91
Beginning balance of Grant contribution to opening the consignment Store. $15,000.00
Beginning balance of Angel/Seed funding $42,426.82
Total of Dianna's contributions grant and angel/seed funding. $86,412.73
Cash to open for cash
drawer
Personal
investment
$75.00 $75.00 $86,337.73
White Plastic Bags
(Small)
Store Supply
Warehouse*
4 $34.50 $138.00 $0.00 13.46 $151.46 $86,186.28
T-Shirt Bagging Stand
Store Supply
Warehouse
2 $21.95 $43.90 $0.00 4.28 $48.18 $86,138.09
Double Rail Clothing
H Rack Pipeline
Collection
Store Supply
Warehouse
30 $165.00 $4,950.00 $0.00 482.63 $5,432.63 $80,705.47
Wire Basket Topper
for Double Rail Racks
Store Supply
Warehouse
15 $28.50 $427.50 $0.00 41.68 $469.18 $80,236.29
Children’s White
Plastic Dress
Hangers/Sloped
Shoulder
Store Supply
Warehouse
6 $30.75 $184.50 $0.00 17.99 $202.49 $80,033.80
Children’s White
Plastic Skirt and Pants
Hanger
Store Supply
Warehouse
6 $35.95 $215.70 $0.00 21.03 $236.73 $79,797.07
Black Display Case
Arrangement Set -
Ready to Assemble
Store Supply
Warehouse
1 $491.00 $491.00 $0.00 47.87 $538.87 $79,258.20
Seagull Bar Tender
Professional 2016
Barcodes
Inc**
1 $535.00 $535.00 $0.00 52.16 $587.16 $78,671.03
Zebra GK420d Bar
Code Printer
Barcodes Inc 2 $488.30 $976.60 $0.00 95.22 $1,071.82 $77,599.22
Zebra Z-Perform
1000D
Barcodes Inc 4 $353.80 $1,415.20 $0.00 137.98 $1,553.18 $76,046.03
Zebra GK420d Print-
head Replacement
Barcodes Inc 2 $107.10 $214.20 $0.00 20.88 $235.08 $75,810.95
Royal Alpha 1100
Cash Management
System Cash Register
Ace Office
Machines
1 $279.99 $279.99 $12.00 27.30 $319.29 $75,491.66
Bank Note Counter
(Bills)
Staples 1 $134.99 $134.99 $7.00 13.16 $155.15 $75,336.51
Item Purchased
Vendor
Name
Quantity
Price per
unit
Total for
Units
Shipping Taxes
Total
price
Grand
Total
53

Royal PS700-LSR Bar
Code Scanner
Calamco 1 $58.06 $58.06 $7.00 5.66 $70.72 $75,265.79
Open/Closed LED
Sign with Hours
Store Supply
Warehouse
1 $109.00 $109.00 $0.00 10.63 $119.63 $74,983.18
Dry Erase Board A-
Frame Sidewalk Sign
Store Supply
Warehouse
2 $99.50 $199.00 $0.00 19.40 $218.40 $74,764.78
Security Mirror with
Adjustable Brackets -
26" Convex - 18108
Store Supply
Warehouse
8 $69.00 $552.00 $56.00 53.82 $661.82 $74,102.96
ADT Security for
Business
ADT.com 1 $500.00 $500.00 $0.00 48.75 $548.75 $73,554.21
Ink Refill for Cash
Register
Sam's
Club***
4 $4.36 $17.44 $0.00 1.70 $19.14 $73,535.07
Counterfeit Detector
Pen 18181
Store Supply
Warehouse
4 $2.65 $10.60 $0.00 1.03 $11.63 $73,523.43
Shopping Basket Set
of 12
Store Supply
Warehouse
4 $69.50 $278.00 $28.00 27.11 $333.11 $73,190.33
Shopping Carts Alibaba.com 15 $25.00 $375.00 $105.00 36.56 $516.56 $72,673.77
Plastic Ring Size
Measuring Stick
Store Supply
Warehouse
1 $0.59 $0.59 $0.00 0.06 $0.65 $72,673.12
Finger Size Measuring
Rings
Store Supply
Warehouse
1 $0.57 $0.57 $0.00 0.06 $0.63 $72,672.49
Foam Ring Inserts
with 36 Slots - Black
Store Supply
Warehouse
2 $1.33 $2.66 $0.00 0.26 $2.92 $72,669.58
Foam Ring Inserts
with 72 Slots - Black
Store Supply
Warehouse
2 $1.38 $2.76 $0.00 0.27 $3.03 $72,666.55
Self-Adhesive Fold
overs - Black
Store Supply
Warehouse
2 $0.82 $1.64 $0.00 0.16 $1.80 $72,664.75
5" H Black Velvet
One Tier
Necklace/Bracelet
Display
Store Supply
Warehouse
4 $3.82 $15.28 $0.00 1.49 $16.77 $72,647.98
Large Tiered Jewelry
Carousel (Earrings)
Store Supply
Warehouse
1 $18.69 $18.69 $0.00 1.82 $20.51 $72,627.46
Acrylic Watch Easel
Store Supply
Warehouse
15 $0.64 $9.60 $0.00 0.94 $10.54 $72,616.93
Plastic Stackable
Trays - Black - Large
Store Supply
Warehouse
2 $1.23 $2.46 $0.00 0.24 $2.70 $72,592.28
Plastic Stackable
Trays - Black - Small
Store Supply
Warehouse
2 $1.33 $2.66 $0.00 0.26 $2.92 $72,589.36
Round Size Divider
for Hang-rails -
Generic Variety Pack
Store Supply
Warehouse
6 $8.65 $51.90 $0.00 5.06 $56.96 $72,532.40
Round Size Divider
for Hang-rails XXXL
Store Supply
Warehouse
36 $0.29 $10.44 $0.00 1.02 $11.46 $72,520.94
Round Size Divider
for Hang-rails
XXXXL
Store Supply
Warehouse
36 $0.29 $10.44 $0.00 1.02 $11.46 $72,509.48
Economy Plastic
Dress Hangers - Clear
- 17"
Store Supply
Warehouse
4 $24.95 $99.80 $0.00 9.73 $109.53 $72,399.95
Item Purchased
Vendor
Name
Quantity
Price per
unit
Total for
Units
Shipping Taxes
Total
price
Grand
Total
Economy Plastic Skirt
and Pant Hangers -
Clear 0- 14"
Store Supply
Warehouse
4 $35.95 $143.80 $0.00 14.02 $157.82 $72,242.13
Metal Shelving Starter
Wall Unit
Store Supply
Warehouse
21 $137.95 $2,896.95 $0.00 282.45 $3,179.40 $69,062.73
54

Upper Shelf for
Economy Metal
Shelving Units
Store Supply
Warehouse
40 $15.95 $638.00 $0.00 62.21 $700.21 $68,362.52
Chrome Shoe
Merchandiser
Store Supply
Warehouse
2 $149.50 $299.00 $14.00 29.15 $342.15 $68,020.37
Air Fresheners FSW 2 $19.29 $38.58 $14.00 3.76 $38.58 $67,981.79
Air Freshener Refills FSW 10 $49.70 $497.00 $70.00 48.46 $497.90 $67,483.89
Toilet Paper Holder
Webstaurant
Store
2 $15.70 $31.40 $14.00 3.06 $31.40 $67,452.49
Toilet Paper FSW 100 $46.19 $4,619.00 $700.00 450.35 $4,619.00 $62,833.49
Hand Soap Dispenser
Refill
FSW 99 $78.99 $7,820.01 $693.00 762.45 $7,820.01 $55,013.48
Cleaning Rags FSW 45 $24.30 $1,093.50 $315.00 106.62 $1,093.50 $53,919.98
Paper Towel Holder FSW 3 $66.19 $198.57 $21.00 19.36 $198.57 $53,721.41
Paper Towels FSW 12 $34.49 $413.88 $84.00 40.35 $430.52 $53,290.89
Monthly Dumpster
Fee
Union City
Garbage
Service
Monthly $250.00 $250.00 $250.00 $53,040.89
Rent XYZ Rental Monthly $250.00 $250.00 $250.00 $52,790.89
Utilities
(Electric/Water/Sewer
)
Humboldt
Utilities
Monthly $450.89 $450.89 $350.89 $52,440.00
Phone/Internet AT&T Monthly $250.00 $250.00 $250.00 $52,190.00
Advertising
Various
Vendors
Monthly $50,000.00
$50,000.0
0
$50,000.0
0
$2,190.00
Employees
Pay Per
Hour
Number
of
Employees
Per Hour
Total
Weekly
Gross Pay
State
Taxes
Federal
Taxes/
SS/
Medicaid/
Medicare
Net
Income
Total
Owners Salary ****
No Taxes
in TN
$2,190.00
Mangers $10.00/hour
3
$10.00 $1,200.00
No Taxes
in TN
$252.00 $948.00 $990.00
Merchandise Sorter $8.25/hour 1 $8.25 $165.00
No Taxes
in TN
$34.65 $130.35 $825.00
Department $8.25/hour 5 $8.25 $825.00
No Taxes
in TN
$173.25 $651.75 $0.00
Total $459.90
$86,412.7
3
*Store Supply Warehouse - Free Shipping on orders $500.00 or more.
**Barcodes Inc - Free Shipping on orders $500.00 or more,
***Sams Club - Pick up at store to save on shipping charges
****Owner will wait five years to be paid.
Sales forecast.
The sales forecast on average could increase by 95 percent per year. The reflected percentage
come from advertising in various newspapers, radio stations, and television station out of Jackson,
Tennessee. Dianna realizes that as people patronize the store, word of mouth advertising will boost
55

sales and help with adding new merchandise in the store for resale. As the business grows, there is a
potential for hiring new employees and possibly opening another store in a neighboring city. The
forecasted sales are projected between each department. Below is a column chart that shows the
projections for each department in a given year.
Example 1.
Sales 3 Year Forecast
Departments 2016 2017 2018
Accessories/Shoes 256,185 286,000 330,000
Books/CD's 11,654 15,000 9,000
Jewelry 95,830 93,450 93,500
Clothing 19,440 17,000 19,800
Tools 6,550 5,610 5,460
Electronics 39,150 35,350 35,445
Furniture 35,475 33,975 34,656
464,284 486,385 527,861
Example 2.
56

Cash flow.
This chart shows the projected cash flows for the first year. The cash flow statement is
broken down into three sections. The first section is the operating expenses which at the end of 2015
was $289,828. The second section is investment activities which is $8,153. The third and last section
is the financial activities which is $8,485. Please see next page for spreadsheet.
57

Example 1.
Di's Community Attic
Cash Flow Statement
For the Year Ending 12/31/2015
Cash at Beginning of Year 28,986
Operations
Cash receipts from customers
400,000
Cash paid for
Inventory purchases (1,500)
General operating and administrative expenses (112,000)
Wage expenses (2,190)
Interest -
Income taxes 5,518
Net Cash Flow from Operations 289,828
Investing Activities’s
Cash receipts from
Sale of property and equipment
Collection of principal on loans
Sale of investment securities
Cash paid for
Purchase of property and equipment (8,153)
Making loans to other entities
Purchase of investment securities
Net Cash Flow from Investing Activities (8,153)
Financing Activities
Cash receipts from
Issuance of stock
Borrowing
Cash paid for
Repurchase of stock (treasury stock)
Repayment of loans 8,485
Dividends
Net Cash Flow from Financing Activities 8,485
Net Increase in Cash 290,160
Cash at End of Year 319,146
(Wittwer, 2016)
58

Balance sheet
The purpose of the balance sheet is to show that the assets, liabilities and owner equity are in
balance. The balance sheet below shows the current assets being $173,548, fixed assets being
$26,000, with assets totaling $199,548. The current liabilities are $162,135, long term is $8,427 and
owners’ equity is $28,986.
Example 1.
Di's Community Attic Balance Sheet
Date: December 31,
2015
Assets 2015
Current Assets
Cash 28,986
Accounts receivable
Inventory 144,562
Prepaid expenses
Short-term investments
Total current assets 173,548
Fixed (Long-Term) Assets
Long-term investments -
Property, plant, and equipment 6,000
(Less accumulated depreciation)
Intangible assets 20,000
Total fixed assets 26,000
Other Assets
Deferred income tax
Other
Total Other Assets -
Total Assets 199,548
[42] Liabilities and Owner's Equity
Current Liabilities
Accounts payable 112,000
Short-term loans
Income taxes payable 5,518
Accrued salaries and wages 2,190
Unearned revenue
Current portion of long-term debt 42,427
59

Total current liabilities 162,135
Long-Term Liabilities
Long-term debt 8,427
Deferred income tax
Other
Total long-term liabilities 8,427
Owner's Equity
Owner's investment 28,986
Retained earnings -
Other
Total owner's equity 28,986
Total Liabilities and Owner's Equity 199,548
Common Financial Ratios
Debt Ratio (Total Liabilities / Total Assets) 0.85
Current Ratio (Current Assets / Current Liabilities) 1.07
Working Capital (Current Assets - Current Liabilities) 11,413
Assets-to-Equity Ratio (Total Assets / Owner's Equity) 6.88
Debt-to-Equity Ratio (Total Liabilities / Owner's Equity) 5.88
(Wittwer, 2016)
Income statement
The purpose of the income statement is to project business income over a three-year period.
Dianna tried to keep the amounts low rather than overestimate and have difficulty when a given year
is bad. It would be better if the business did better than the reflected number for upcoming years.
60

Example 1.
Pro Forma Income Statement
For the Years Ending December 31, 2015
2015 2016 2017
Net Sales $61,762 100%
$70,00
0 100% $65,000 100%
Cost of goods
sold (cost of
sales) 15,000 24% 25,000 36% 30,000 46%
Gross profit 46,762 76% 45,000 64% 35,000 54%
Operating
Expenses
(selling and
administrative) 57,000 53,000
45,
000
Operating
Income 10,238 17% 8,000 11% 10,000 15%
Other Income
or Expense 0 0% 0 0% 0 0%
Income Before
Income Taxes 10,238 17% 8,000 11% 10,000 15%
Income Taxes 6,022 10% 6,825 10% 6,338 10%
Net Income $4,216 7% $1,175 2% $3,662 6%
Break-Even Analysis
Dianna retrieved the numbers to determine the break even for the business by using figures
that are provided on the profit and loss projection. The number are expected annual fixed and
variable costs.
61

Example 1.
Breakeven Analysis
Cost Description Fixed Costs ($)
Variable Costs
(%)
Variable Costs
Cost of Goods Sold $ 15,000
15.4
%
Inventory $300,000 0.8%
Raw Materials $ 50,000 4.6%
Direct Labor (Includes Payroll Taxes) $ 4,574
50.6
%
Fixed Costs
Salaries (includes payroll
taxes)
-
Supplies $ 100
Repairs & maintenance $ -
Advertising $ 1,500
Car, delivery and travel $ -
Accounting and legal $ -
Rent $ 250
Telephone $ 65
Utilities $ 250
Insurance $ 150
Taxes (Real estate, etc.) $ -
Interest $ -
Depreciation $ -
Other (specify) $ -
Other (specify) $ -
Miscellaneous expenses $ -
Principal portion of debt
payment
$ -
Owner's draw $ -
Total Fixed Costs $ 2,315
Total Variable Costs 71%
62

Breakeven Sales level = 8108
Business Ratios
The business ratio as stated in the spreadsheet below, show that the business from the various
statements provided above that the business at this point is stable. The business should do well for
the remainder of the year.
63

BUSINESS PLAN

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