Project 2 - Final Deck

Date: November 15th, 2015
To: Lori Marchese
Tom Marchese
Luke McElfresh
Tammy Rapp
From: Philip Croft
Natalie Clark
Jessi Crosby
Gregory Couch
Subject: Project 2: Environmental Analysis, Business Concept, Competition, Operations, Human Resources,
Marketing, Advertising, Information Systems Strategy, Demand Forecasts, and Financials
The attached report, requested by the Copeland Associates Management Team dated October 13th, was
written to determine the best business concept with the greatest growth potential in a desired location. We
feel that you will find this report beneficial in evaluating future projects with the research methods and
calculations that we generated.
This study was designed to examine the following criteria:
The external environment of the overall specialty retail industry
The external environment of the athletic apparel industry
Planning, organization, and strategies for the following business areas
Business Concept
Target Market
Local Competition
Operations
Human Resources
Marketing
Information Systems
Revenue Generation
Sales Projections
For the immediate first year of sales
For four additional years of operations
Financial Results
Our team thanks you for the opportunity to conduct this research through various methods. We would be
happy to discuss any questions and concerns regarding our thought processes and conclusions. It would be
our pleasure to conduct any further research for any additional projects.
Memo of Transmittal

Prepared for:
Senior Partners
Copeland & Associates
College of Business
Prepared by:
Team 2 – Philip Croft, Natalie Clark, Jessi Crosby, and Gregory Couch
Mid Cohort 107
College of Business
Ohio University

The city of Chapel Hill would greatly benefit from the development of a new athletic apparel store,
especially for the busy lifestyle that many working women face. Altai is a retail store that provides a large
amount of reliable products that are fashionable and functional for everyday tasks, including yoga in the
morning, grocery shopping in the afternoon, and cocktails in the evening.
Copeland Associates utilized various research methods for analyzing the current state of the macro-
environment of the specialty retail industry. Through this, the growth potential for athletic apparel stores
was very prevalent, resulting in the further research of the micro-environment of the athletic apparel
industry. This research gave Copeland Associates the inspiration to create a business plan for Altai, which is
located in Chapel Hill, North Carolina. The creation would create several benefits for the Chapel Hill area,
and this company would result in the satisfaction of many potential customers within the area.
Altai is the premier destination for athletic apparel for women and their busy schedules, which is why the
store is equipped with some of the best equipment to maximize efficiency while minimizing shopping stress
with long lines. Altai’s business plan includes the following:
• A clear and direct business mission and objective as well as a very strong target market
• A location with a large amount of foot traffic and college-student populations
• A small amount of similar stores in the area, but not direct competitors
• A highly organized business operations plan as well as a very simplistic shopping/returns process
• A small, but dedicated group of employees, who can monitor their progress with advanced
technology systems
• A strong product mix of reliable products
• A strategic and diversified marketing plan, including the following platforms
• Free classes taught by local instructors to attract customers into the store
• Social Media Platforms specified to customers in the target market
• Special events at the neighboring college campuses
• A highly sophisticated and efficient shopping experience through RFID technology that is
compatible with all of Altai’s shopping technology
• Accurate sales projections using primary and secondary data based on forecasted demand
• Strong financials that will result in:
• A start-up capital requirement of $210,000
• A positive Net Present Value and strong Internal Rate of Return
• Growing financial ratios after Year 2
Based on these findings, Altai would be a very successful business in the foreseeable future and would be
very beneficial for the Chapel Hill community overall. This business would revolutionize the way that
customers shop, almost completely eliminating lines. This process will also innovate the way that
companies utilize inventory control, making employees happier and more capable of focusing on the
customer experience instead of tracking items.
Executive Summary

Table of Contents
Introduction 1
Specialty Retail Apparel Industry: 2
Industry Overview and Drivers 2
Millennial Consumers Will Drive the Industry 2
Passage of the Trans-Atlantic Partnership Will Lower Clothes Prices 2
Athletic Apparel Segment: 3
Imported Products are a Threat to Domestic Manufacturers 3
Buyer Power Outweighs Supplier Power 3
Competitive Landscape 3
Business Concept: 4
Who Altai Is 4
Name and Logo 4
Value 4
Altai’s Market: 5
Target Market 5
Chapel Hill Demographics 5
Location 5
Local Competition: 6
Operations: 7
Inventory Control and Supply Chain 7
Human Resources 7
Marketing: 8
Marketing to Millennials 8
What Altai Means to Customers 8
Customer Reviews as a Form of Marketing 8
Inventory Bought and Pricing 9
Products and Services 9
Place 10
Promotion 10
Marketing in the ‘Research Triangle’ 10

Table of Contents
Advertising: 11
Billboard 11
Facebook 11
Twitter 11
Instagram 11
Loyalty Program 11
Information Systems Strategy: 12
Using Information Systems to Add Customer Value 12
Inventory Management with RFID Technology 12
Managing the Stock Room with RFID Technology 13
POS Transaction Processing 13
Reaching Customers Cross-Platform 14
Disaster Recovery and Security 14
Demand Forecast #1: 15
Potential Sales Based on Number of Customers per Day and Average Ticket Price 15
Step 1: Expected Potential Customers per Day 15
Step 2: Average Ticket Price 15
Demand Forecast #2: 16
Potential Sales Based on Market Size 16
Step 1: Forecasting Obtainable Millennials 16
Step 2: Average Ticket Price 16
Financials: 17
Weighting of Demand Forecasts 17
Fiscally-Impacting Risks 17
Revenue Generation Plan 17
Pro Forma Statement Overview 18
Sales Growth, Profit Margin, ROE, and ROA 18
Free Cash Flows 18
Details on Key Ratios 18
Conclusion 19

Table of Contents
References 20
Appendices: 27
Appendix A: Financials 27
Appendix B: Depreciation Schedule 33
Appendix C: Amortization Schedule 40
Appendix D: Cash Flow for Year 1 41
Appendix E: Inventory Mix and Average Ticket Price 43
Appendix F: Technology Equipment 44
Appendix G: PESTLE Analysis 46
Appendix H: Porter’s Five Forces 48
Appendix I: Facebook Page 50
Appendix J: Twitter Page 51
Appendix K: Instagram Page 52
Appendix L: Billboard, T-Shirt, and Flyer 53
Appendix M: Desktop Website Mockup 54
Appendix N: Perceptual Map 55
Appendix O: Positioning Pyramid 56
Appendix P: Aaker Model 57
Appendix Q: Customer Order and Inventory Processing 58
Appendix R: Processing New Inventory and Returns 59
Appendix S: System Security and Inventory Management 60
Appendix T: Dashboards 62
Appendix U: Interviews 64
Appendix V: Financial Calculations 70
Appendix W: Store Front 71

List of Figures
Figure 1: Demand Forecast 1
Figure 2: Financial Predictions 1
Figure 3: U.S. Population Growth by Age 2
Figure 4: Industry Drivers 2
Figure 5: Supplier/Buyer Weighing 3
Figure 6: Favorite Brands for Women’s Sportswear 3
Figure 7: Nile Running Look 4
Figure 8: Store Blueprints 5
Figure 9: Local Competition Chart 6
Figure 10: Manager and Employee Qualities 7
Figure 11: Employee Logistics 7
Figure 12: Brand Mix 8
Figure 13: Products Mix 9
Figure 14: Map of ‘Research Triangle’ 10
Figure 15: Females in ‘Research Triangle’ 10
Figure 16: Membership Card 11
Figure 17: On-Shelf Availability 12
Figure 18: RFID vs Barcode 12
Figure 19: RFID Tag 13
Figure 20: Inventory Tagging & Management 13
Figure 21: POS Software Comparison 13
Figure 22: Cost of Web Development 14
Figure 23: Causes of Data Loss 14
Figure 24: Customer Expectancy 15
Figure 25: Customer per Day Forecast 15
Figure 26: Sales Forecast 15
Figure 27: Percent of Market Size in Locations 16
Figure 28: Breakdown of Potential First Year Sales 16
Figure 29: Weighing of Demand Forecast 17

List of Figures
Figure 30: Sales Growth 18
Figure 31: Profit Margin 18
Figure 32: ROE & ROA 18
Figure 33: Free Cash Flows 18
Figure 34: Projected Net Income 19

Introduction
1
In this business plan, we explore the different aspects that would follow the creation of the specialty
apparel store, Altai, that specializes in athleisure clothing. The first topic that is focused on is the
specialty retail apparel industry as a whole, then the sports apparel industry and local competitors
within Altai’s market to illustrate the current and future growth. The business itself has a target
market of millennial females in and around Chapel Hill, North Carolina. Compared to other businesses
within the area, Altai would be one of few with this specific target market. The surrounding area
proves valuable as well, due to that fact that Duke University and North Carolina State University are
both within 25 miles of the University of North Carolina, which is located in Chapel Hill. The largest
segment of the target market will come from these college students. In order to reach these students
and other female millennials within the community, our marketing efforts will primarily revolve
around being visible on each campus and in the town. Advertising will consist of a billboard located
between Chapel Hill and Durham, 300 flyers spread throughout each campus, 600 free t-shirts, a
Facebook ad, and Twitter sponsored tweets.
Altai differentiates itself from its competitors through its superior customer experience that deviates
from its advanced technology, and in-store yoga and Pilates sessions . The store will implement RFID
tags for each product, so that customers can just walk through a terminal and the prices automatically
be added up for them instead of having to wait in long lines. Touch screen displays above each unit
provide the customers with information on how much is in stock, and if it has a specific size in the
back. Once an item is sold, an extra replica from the back will be brought up so customers shouldn’t
have to spend time trying to find a particular size. In terms of the yoga and Pilates sessions, there will
be various ones throughout the day during the slow hours of the store. This will create a sense of
serenity within the store, and incentivize more customers to enter. Since customers are the top
priority, an option to provide feedback and customer reviews for others to see are located almost
anywhere in correlation to the store. Based on the facts further provided within this business plan and
projected net present value, internal rate of return, and payback period, Altai would be a positive
venture to pursue and capitalize on.
Net Present
Value
Internal
Rate of
Return
Payback
Period
$25,622
26.62%
(WACC =
25.73%)
4.22
Figure 1: Demand Forecast
Demand
Forecast #1
Demand
Forecast #2
Forecast: $930,355.52 $722,848.45
Weighing: 10% 90%
Estimated
Total Cost of
Start-Up:
$210,000
Figure 2: Financial Predictions

Analysis of Specialty Retail Apparel Industry
2
Industry Overview and Drivers
The specialty retail apparel industry is composed of the manufacturing, or distribution, of clothing, accessories,
and footwear for consumers that focuses on a specific range or type of product. This excludes department
stores that sell non-apparel items as well (i.e. Target, Walmart, etc.).
Passage of the Trans-Atlantic Partnership Will
Lower Clothing Prices
The Trans-Pacific Partnership is a negotiation
between the United States and 11 other countries
which will create a free trade zone to nearly 40%
of all the world's gross domestic products (Ellis,
2015). With tariffs on clothing reaching up to 32%,
the U.S. Government collected $13.5 billion in
tariffs on imported clothing and shoes in 2014
(Lamar, 2015). These tariffs must be compensated
when pricing clothing, raising the retail value.
With 97% of all US clothing imported (Michael,
2015), the passage of the Trans-Pacific
Partnership will help make clothing more
affordable to individuals with lower disposable
income without affecting the manufacturer’s
income.
Millennial Consumers Will Drive the Industry
Millennials are defined as, “those born in 1982
and approximately the 20 years after” (Bump,
2014). This age group’s purchasing power is
estimated to be nearly $170 billion per year and
growing (Honigman, 2013). However, millennials
are cautious with their spending, often turning to
others’ reviews and advice for further information
before purchasing a product. For example, more
than 50% use a smart phone to research products
while shopping (Honigman, 2013). Also, 51% claim
customer reviews have a greater impact on their
purchase decision than direct recommendations
from family and friends. In order to attract this
powerful segment, it is important for companies
to have easily accessible product information that
reflects positively on the company.
-10%
-5%
0%
5%
10%
15%
20%
<25 25-34 35-44 45-54 55-64 65+
U.S Population Growth
by Age
2015 - 2020 2020 - 2025
Consumer Confidence
0.9% forecasted compound growth (IBISWorld, 2015)
Per Capita Disposable Income
2.5% forecasted compound growth (IBISWorld, 2015)
Average Household Income
2.6% of income is spent on apparel (Bureau of Labor
Statistics, 2015)
Industry Drivers
Figure 3: U.S. Population Growth by Age
Figure 4: Industry Drivers

Analysis of the Athletic Apparel Segment
3
Buyer Power Outweighs Supplier Power
What gives purchaser’s power strength is the high
level of choices they have; with a plethora of
styles, brands and even colors buyer’s can freely
chose between them with little consequence
(Mintel, 2015). Furthermore, due to relaters’
position at the end of the supply chain, companies
are forced to follow customer demand. Buyer
strength is further purchased due to shortfalls in
supplier power.
Due to the relative fragmentation of retailers,
supplier power is weakened due to the retailer’s
ability to buy inventory from multiple sources.
Intense competition from low-wage, foreign
manufacturers create large incentives for retailers
to import clothing, further weakening a supplier’s
power.
Imported Products Are A Threat to Domestic
Manufacturers
Competitive Landscape
The athletic apparel segment is highly
competitive, both internationally and locally.
Nike is currently the largest athletic retailer in the
US with a 21% market share, followed by VF Corp
with 6% and Adidas America with 5% (Passport,
2015). These large companies compete amongst
themselves and with large department stores who
have begun to diversify their product mix into
athletic apparel.
Threat of New Entry is high due to the relatively
low capital investment required to make market
entry. However, imported apparel prove the
highest threat; foreign child labor and low working
conditions allow for cheaper products. With the
passage of the Trans-Atlantic Partnership, these
products will continue to lower in price. While this
seems cost effective, a company’s reputation for
using such manufacturing practices can greatly
impact its sales, causing companies to avoid this
method.
0%
10%
20%
30%
40%
50%
60%
Favorite Brands for
Women’s Sportswear
Statista, 2015
Figure 6: Favorite Brands for Women’s Sportswear
Small, independent operators compete on the
local level, usually targeting niche markets to
obtain a market share (IBISWorld 2015). Due to
improving economic conditions, the number of
these retailers is expected to increase, further
creating competition. In order to compete, the
ability to create a strong brand awareness is
crucial to separating a retailer from its
competitors, causing many companies to invest
heavily in marketing and public relations.
Supplier Buyer
Figure 5: Supplier/Buyer Weighing

Business Concept
4
“Altai’s vision is to be the premier destination for women who want a balance
between fitness and fashion.” - Company Vision Statement
Value
Altai’s products are for more than just exercise.
Using simple, practical patterns and designs, its
clothing easily match with almost any outfit,
allowing for complete seasonality and long-term
use.
The company believes that customer experience is
the key to a successful retailer, which is why it
incorporates radio-frequency identification
technology (RFID) to solve common customer
complaints such as lack of product information
and long check out lines. This in turn leads to a
more positive shopping experience, increasing the
likelihood for repeat shopping. However, the
benefits of RFID aren’t limited to the customers.
Using modern inventory practices, RFID allows for
detailed inventory tracking and data collection.
Not only does this allow for more accurate
inventory replacement, but it provides critical
information on popular product lines, sizes, and
seasons. This simplifies company planning and
procedures, freeing management and employees
to handle other tasks.
Figure 7: Nike Running Look
Who Altai Is
Altai sells fashionable, practical athleisure wear to
progressive women who want the convenience of
a whole day's wear from a single outfit. The
company values simplicity, functionality and
personality, which is reflected through its
extensive selection of clothing and superior
customer experience. To foster its family of
customers, the company offers in-store programs
such as yoga and Pilates in order to make each
individual feel like part of the Altai community.
Name and Logo
Altai’s name stems from the mountain range in
Central Asia. The point where Russia, China,
Mongolia, and Kazakhstan come together, the
company wanted a name that aligned with its
vision as the intersection of fitness and fashion.
The colors of Altai’s logo reflect a sense of peace
and balance. The stretching woman in its design
creates an image of activity but tranquility. The
combination of color and design express the
balance and functionality of its products.

Altai’s Market
5
Altai’s store is located on 109 East Franklin Street
in the heart of downtown Chapel Hill, North
Carolina. Just a few minutes walk from the
University of North Carolina's campus, it rents an
ADA compliant, 2,380 sq. ft. retail space with a
glass storefront and exposed brick walls. Refer to
Appendix W for a picture of the store.
Location
Chapel Hill Demographics
Chapel Hill has a total population of 60,138,
including the 29,153 students at the University of
North Carolina. Of this population, 53.4% are
female and 24% are females between the ages of
18-34. Furthermore, with an average household
income of $106,337 (SimplyMap, 2015) Chapel
Hill is about 26% higher than the U.S average.
Retail sales from women’s clothing stores in
Chapel Hill totaled $4,425,050 in 2014.
Sportswear accounted for $728,200 of this, or
roughly 16% of total sales. This is more than 2.5
times higher than the portion sportswear
accounted for in the US total (IBISWorld, 2015).
With a larger demographic within the target
market that has a high spending on sportswear,
Chapel Hill is the perfect location for Altai.
Target Market
Altai's primary customers are women between the
ages of 18-34. Women's apparel is the largest
segment in global apparel with 49.4% market
share or a $121 billion value (MarketLine). This is
expected to increase 14% to $139 billion by 2019
(Mintel, 2015). Within this segment, 20-30 year
olds represent a key demographic (IBISWorld,
2015). The millennial age group is projected to
reach 75.3 million in number by the end of 2015
(Fry, 2015), with 50% of millennial females
shopping more than twice a month compared to
36% of older females (Honigman, 2013). With the
female population between the ages of 25-34
expected to increase, targeting this growing and
spending segment will prove a successful market.
Figure 8: Store Blueprints

Local Competition
6
Local Competition
Company
Miles from
Altai
Target Market Strengths Weaknesses
Dragonwing
GirlGear:
- - - Young females
High quality,
affordable products
at a niche, targeted
market.
Young market leaves
out large potential
from older
customers.
Chapel Hill
Sportswear: 0.5
University of North Carolina
students and fans
Large selection of
UNC apparel.
Only UNC apparel
targets very small
market.
Great Outdoor
Provision: 2.5 Casual outdoorsman
High quality, name
brand products
lines.
Focuses on
functionality rather
than fashion.
Fleet Feet
Sports:
0.9 Runners
Well respected,
recognizable name
in running market
with high quality
products and
services.
Niche targeting
creates niche brand
association with
runners.
Durham/Raleigh
stores: 11-28 Women
Established brands
with large customer
bases.
Distance from
Chapel Hill
customers.
Chapel Hill has four major competitors: Dragonwing Girlgear, Chapel Hill Sportswear, Great Outdoor Provision,
and Fleet Feet Sports. While all of these companies provide competition to Altai, Altai has a major advantage
over these companies: Altai is the only women’s sportswear store to target millennial women in the Chapel Hill
area. While there are multiple vendors of women’s sportswear, none of these companies market themselves
as women’s clothing wear. For example, while Fleet Feet Sports carries many similar products to Altai, it has a
strong brand association with runners rather than the broader female market. By actively marketing as a
women’s sportswear, Altai will be the only store in Chapel Hill associated with women’s sportswear.
The most immediate competition within Altai’s target market is from the nearby cities of Raleigh and Durham.
Large, well established companies such as Dick’s Sporting Goods, Omega Sports, Athleta, and Lululemon draw
customers out of Chapel Hill to these stores mainly due to their strong brand recognition. However, Altai has a
large factor in its favor over these competitors: location. Altai is a more convenient location for Chapel Hill
residents, translating to a large portion of them coming to Altai rather than traveling to a neighboring city.
Furthermore, these large retailers are about equal distance from Durham as Chapel Hill is. By actively
marketing in Durham, women will be more likely to visit Altai before these other competitors.
Figure 9: Local Competition Chart

Operations
7
Inventory Control and Supply Chain
In order to guarantee acquisition of top trending
products, Atlai places its orders 6 months in
advance of season (fall wear ordered in February-
March, spring wear in September-October, etc).
Altai will hold 2-3 months worth of inventory and
re-purchase as necessary. The company offers to
purchase inventory from distributors at a 55%
discount with payment due 90 days from
purchase.
As products arrive to the store, they are moved
into the stock room for processing. Using Seagull
RFID tagging software, tags for individual items in
the shipment are printed in-house. The apparel is
then unpacked and tagged before being placed
onto pre-determined racks and shelves. As
inventory is purchased from the floor, the Point of
Sales (POS) System sends a notification to the
stock room. A message showing the item to be
restocked and its locations in the stock room is
displayed on a monitor located near the shelving
units. The stock room attendant then locates the
item and brings it to the floor. An antenna above
the door between the floor and stock room senses
the article of clothing leaving the stock room,
notifying the system that the item has been
restocked and clears it from the stock room
display.
Customers place their items in a shopping bag as
they go through the store. When a customer has
finished their shopping, they move to the back of
the store where two RFID equipped POS terminal
are located. The items are read within seconds
and totaled. A store clerk will be waiting on the
other side of the scanner in order to collect
payment. Once payment is complete, the POS
system updates the central database that
inventory has been sold and numbers are
reduced. If the database detects low inventory for
an item, an alert is sent to the store manager with
the option to automatically reorder. Management
will make the final decision to place the order.
Human Resources
Altai believes that having a positive customer
experience is not only composed of its advanced
technological equipment, but also with the
employees that are on the floor and in the
stockroom.
The store has one manager during each shift and
three part-time employees. These employees are
held to the standard of being the most customer-
centric in the industry. This includes product
knowledge and customer interaction. Altai’s highly
efficient inventory control system through RFID
allows employees to avoid the monotonous
scanning of products, freeing the sales associates
to improve customer experiences. Using the
business dashboards in Appendix T, employees
will be able to track their own progress.
Position:
# of
Employees:
Salary:
Total
Expense:
Manager 2 $42,000 $92,000
Sales
associate:
11 $11/hour $110,352
Instructor: New one
each week
$100 per
session
$5,200
Managers
Hiring, firing, and
leading of sales
associates
Purchasing and
tracking of inventory
Collection and
counting of end-day
cash
Employees
Customer greeting
Organizing and
arranging of store
Product information
and suggestions
Completing retail
transactions
Figure 10: Manager and Employee Qualities
Figure 11: Employee Logistics

Marketing
8
Marketing to Millennials
Marketing to millennials is different from traditional strategies. This is mainly due to their daily use of technology
and its integration within their lifestyles. For example, because of their close online interactions, millennials want
to be the first to receive updates and coupons (Newman, 2015). 85% of ages 15 to 35 own a smartphone, making
optimization for mobile marketing and usage a must. (Kaplan, 2015). Finally, millennials expect to be rewarded
for their loyalty and want to be included in a brand’s communication efforts (Newman, 2015). In order to reach
the entire target market of millennial women, the store must connect with the consumers primarily through
social media, loyalty programs, an effective website, and promotional materials.
Customer Reviews as a Form of Marketing
64% of millennials feel that companies should
offer more ways to share their opinions online
(Honigman, 2013). In order to maximize
customer’s ability to share product information,
Altai incorporates the ability to share and read
product reviews both online and in-store. Online
review platforms include the company website
and app. These reviews collect both customer
input as well as social media posts regarding the
products. For example, Instagram pictures where
products are used can be viewed so customers
can see real applications of products.
For customers who do not want to use their
smartphone to access reviews, in-store kiosks
can be used; scanning the barcode of the
product, product reviews and information will
immediately be displayed. Not only will this help
keep the consumer more involved and
interactive, but it will also provide valuable
insight to those looking to purchase a product.
This is important because 51% of millennials say
consumer opinions found on a company’s
website have a greater impact on purchase
decisions than recommendations from
acquaintances (Honigman, 2013).
What Altai Means to Customers
When customers think of Altai, it should be
associated with its superior customer experience
and quality line of products . These products
that are fashionable, functional, practical,
comfortable, and most importantly, versatile.
These come from trusted, quality brands,
making Altai’s product mix very reliable.
Selection of brands was based on favorite
clothing brands for women’s sportswear (Figure
6, page 3). For more information on the brand
mix, refer to Figure 10 below. Through the
classes that Altai provides to its customers, it is
also recognized as a community-involving
through athletics and healthier lifestyles.
Brand % of Inventory Mix
Nike 30%
Adidas 20%
Under Armour 20%
Reebok 15%
North Face 15%
Figure 12: Brand Mix

Marketing
9
Products
Clothing
Type
Spring/Summer Fall/Winter
T-Shirts 15% 15%
Tank 20% 5%
Sports Bra 15% 5%
Hoodie 5% 20%
Shorts 20% 5%
Leggings 15% 20%
Sweat Pants 5% 10%
Jacket 5% 20%
Altai’s product mix represents what percent of the
inventory is a certain type of clothing, such as t-
shirts, leggings, and jackets. Figure 13 is a table
showing a breakdown of the product mix.
These products will come from specific brands,
such as Nike, Adidas, Under Armour, Reebok, and
North Face. These brands make up the inventory
at 30%, 20%, 20%, 15%, and 15% respectively.
Inventory Bought and Pricing
Figure 13: Product Mix
In order to compete with the increasing competition of online sales, Altai provides in-store fitness sessions.
Offered once a week, these sessions bring customers in to the store for half-hour long group classes. These
will be primarily scheduled around the slow times of the store in order to maximize store efficiency. For
those who have signed up to be Altai members, they can find short clips of the daily sessions online. These
videos allow new customers to see a session before deciding if they want to participate and for novice’s to
practice in case they would feel uncomfortable coming to a class without having done the activity before. In
order to incentivize customers to attend sessions, frequent attendance rewards are distributed; if a
customer comes to ten sessions, they will receive 10% off their next purchase. These sessions not only
provide Altai with more customers, but also offer two major benefits.
First, research has found that sitting down in a store can cause a customer to spend about 40% more
(Byron, 2015). These in-store sessions surround participants with products in a casual environment,
increasing their likelihood to make a purchase without feeling pressured or overwhelmed.
Second, these sessions build a sense of belonging. Altai creates a peaceful, supportive environment for its
customers to participate in, creating a sense of community rather than an feeling like an individual. This
feeling of place is key to maintaining loyal customers and separating ourselves from competitors .
Altai will purchase inventory from a wholesale
distributor at a 55% discount with three months
payable. Inventory will then be marked up by 45%.
After year 3, inventory will be purchased at a 50%
discount with immediate payment. It will then be
marked up 50%, increasing gross margin. Product
prices range from $25 to $100 due to the variety
of brands and styles. For more information on
pricing, please refer to Appendix E.
Services

Marketing
10
Marketing in the ‘Research Triangle’
Promotion
Place
Altai is located within the ‘Research Triangle’, or
the region within North Carolina between the
three major colleges: University of North Carolina
(UNC) in Chapel Hill, Duke University in Durham,
and North Carolina State (NC State) in Raleigh.
Colleges. With UNC only a five minute walk, Duke
15 miles away, and NC State only 20 miles away,
many of the potential female consumers will come
from these schools . Businesses in the area who
sell athleisure clothing only target one of these
schools, usually through selling affiliated apparel.
By marketing to all three, Altai has a competitive
advantage over these companies .
Promotional items will include free t-shirts and
flyers at each of the three colleges to help
incentivize consumers to stop in. There will also be
advertising on the social media sites, which include
Facebook, Twitter, and Instagram, and a digital
billboard between Chapel Hill and Durham will be
used as well. More information on advertising will
be discussed on page 11.
The first method of campus advertisement is
through on-campus flyers. 300 informational
flyers will be distributed and posted in and
around major campus locations, such as
sororities and libraries. To highlight this
potential, this method reaches 1,809 potential
customers from sororities at UNC alone.
Before its grand-opening, Altai will also set up
a tent on the campus in order to help promote
the store. This includes the distribution of 200
t-shirts with Altai’s logo and holding a free
outdoor yoga sessions to raise brand
awareness. At the tent students can see
samples of products offered and learn more
about session offerings. This method will also
be implemented at Duke and North Carolina
State University.
Figure 13 below represents the total
undergraduate female population at all three
colleges, as well as the number of sororities
and approximate number of females within
them. This represents the fewest number of
potential views from the flyers being posted
amongst the sororities. This number also does
not include graduate females, so that is
something to take into consideration as well.
UNC Duke NC State
Female
Population
10,643 3,313 10,768
Females in
Sororities
1,809 1,325 1,077
Number of
Sororities
23 18 15
Figure 15: Females in ‘Research Triangle’
Google Maps, 2015Figure 14: Map of ‘Research Triangle’

Advertising
11
Billboard
Instagram
Twitter
Facebook
Located between Chapel Hill and Durham off
US – 15 and 501, an ad for Altai will be on a
10” by 40” billboard that is facing the Chapel
Hill area. This will reach approximately
138,700 potential consumers within a four
week span, and will remain up for the next
five years. This will be beneficial to the
business because most people travel the
same road on a daily basis and will easily
memorize what the ad is about
(Wombrose,2015).
Altai’s Facebook page will primarily focus on
informing the consumers of when sales will
begin and end, as well as the Pilates and
yoga schedule. There will also be pictures of
items posted with a direct link to the item on
the website. According to Teen Vogue's
"Seeing Social" survey, which consisted of
1,074 millennial women, 85% purchased a
product after viewing it on a social media
network (Cohen, 2014). Altai will also budget
for the use of Facebook ads to help draw in
customers in the area.
The purpose of Altai’s Instagram will be to
post pictures of actual consumers wearing
the clothes bought at Altai. The account will
be linked with Facebook, so the pictures will
be posted on both sites. Many consumers
are now heavily impacted by customer
reviews, so the option to post a comment
with the submitted picture will be provided
as well. By physically seeing how the product
fits on “real” people and creating additional
outfit options, Altai hopes to connect with
the visual consumers.
With the 140-character limit, there isn’t
much that can be said on Twitter. However,
it provides an excellence source of direct
communication. Altai’s Twitter account
would be primarily used for giving “shout-
outs” to consumers. If a customer would
direct message the account, or simply type
‘Altai’ in her tweet, Altai would be able to
see it and comment back. This would be a
positive interaction with the consumers, and
help create a positive brand image for the
store. The use of sponsored tweets will also
be implemented in the hopes of consumers
retweeting it to further spread the message
of the store.
Figure 16: Membership Card
Loyalty Program
Name
Membership
Card
3765 5342 8268 7253
In order to help the customers feel more
connected with Altai, there will be a
membership card (see Figure 14, below)
available. When signing up, the customer
will receive 15% off her next purchase, and
will accumulate points per how much is
spent. Another included feature will be that
members can use their card number on the
website to access yoga videos in case they
aren’t able to make it to the instore session.
The purpose of the card is to incentivize
customers to buy more in order to receive
discounts and extra exclusives.

Information Systems Strategy
12
Using Information Systems to Add Customer Value
Information systems provide insight into some of the most important aspects of the business process through
in-depth analytics of data collected from everyday business activities. By implementing strong inventory
management, Customer Relationship Management (CRM), a powerful website, and innovative technology in
store, Altai aims to provide a customer experience like no other. Online sales and a modern website with up to
date product information enhances customer interaction with Altai. Through a comprehensive information
systems strategy, Altai seeks to keep its costs low, its consumers informed, and provide a level of service
greater than any other stores in the area.
Inventory Management with RFID Technology
Mismanagement of inventory is one of the
leading causes of failure in a retail business
(Roggio, 2014). In order to accurately track in
store inventory, Altai uses the industry changing
technology of Radio Frequency Identification
(RFID) tracking to manage its stock. RFID
technology allows unparalelled accuracy when
inventorying store merchandise, and its ease of
use enables frequent inventory counting. Unlike
barcodes, RFID tags can never be scanned twice
by accident while counting inventory. Rather
than counting inventory twice a year with
barcodes and limited accuracy, RFID technology
allows large retailers like Macy’s to inventory its
shelves up to 24 times a year (O’Connor, 2014).
IMPINJ, 2012Figure 17: On-Shelf Availability
Figure 18: RFID vs Barcode
Radio Frequency
Identification (RFID)
Barcode
Inventory
Accuracy
95%+ 65%
Price Per
Tag
20¢ 3¢
Throughput > 100 Tags Can Be Read
at Once
User
Dependent
Line of Sight None Needed Direct
(Optical)
Read
Distance
Up to 35 Feet Inches
Source: Jovix 2015, inLogic 2014, IMPINJ 2012
Another benefit of RFID technology is that no
direct line of sight is needed to read RFID tags.
An employee equipped with a hand-held RFID
gun can scan an entire rack of clothes in seconds
without having to physically locate each item’s
price tag. Since a direct line of sight is not
needed, a customer does not need to remove
their items from their shopping bag when
checking out. A single stationary reader can
register the contents of the shopping bag in
seconds and allow the cashier to complete the
transaction quickly. The cost per RFID tag is
slightly higher than a barcode system, but
provides more benefits which justify this cost.
Speed in all aspects of the inventory handling
process is increased with the use of RFID
technology, which benefits both Altai and its
customers.

Criteria WASP
QuickStore
Microsoft
RMS
QuickBooks
POS v12
Automatic
Product
Reorders
No No Yes
Employee
Timekeeping
Yes Requires
Microsoft
Dynamics
Yes
Gift Card
Processing
Yes Yes Yes
Rewards
Program
Tracking
Yes No Yes
Electronic &
Online Payment
Processing
Yes Requires
Third
Party
Software
Yes
Automatic
Inventory
Tracking
No Yes Yes
Price $2,065.50 $2,070.00 $1,999.95
13
Managing The Stock Room With RFID Technology
Inventory
is
Delivered
RFID Tags
Printed
Tagged
Inventory
is Shelved
Customer
Purchases
Item
System Alerts
Stock Room for
Replacement
Inventory accuracy and management is one of the main factors that will drive Altai’s success.
Customers can be assured that items shown on the website can be found that same day in
store and in the size they need. As new inventory is delivered, it is moved to the back of the
store for processing. Seagull BT-3 software prints labels similar to that of Figure 19 for all
items in the shipment, which are then affixed to the clothing.
Figure 19: RFID Tag
Figure 20: Inventory Tagging & Management
Figure 21: POS Software Comparison
Completing The Transaction: Point of Sale (POS) Transaction Processing
Altai employs Point of Sale (POS) Software in
store to provide inventory tracking, sales
management, and transaction processing.
Various POS software solutions were vetted
to find the best balance of features and
functionality. All of the solutions shown in
Figure 21 provide for integration with
QuickBooks accounting software, which Altai
uses to process transactions and generate
financial reports . iPad based solutions were
not considered due to their inability to
interface with the store’s RFID antennas.
QuickBooks POS Software is the best fit for
Altai, as it meets all the critical criteria
outlined in Figure 21. Its ability to seamlessly
integrate with QuickBooks for Business and
process online transactions placed it above
and beyond the competition. QuickBooks
Accounting software generates accounting
and inventory reports in conjunction with
QuickBooks POS Software. A detailed
breakdown of the customer checkout
process with QuickBooks POS can be found in
Appendix Q, while total system costs are
outlined in Appendix F.
Once it is shelved in the stock room, it remains there until a customer purchases the same item from the store
floor. An employee is alerted by the POS system to replace the item on the floor. Immediate replacement
ensures the customer can always find the exact item, in the size they need, at all times on the store floor. A
detailed breakdown of this process can be found in Appendix R.

14
Disaster Recovery and Security
Altai relies heavily on data produced by its POS
terminals and its inventory management system in
its day-to-day business. As such, precautions have
been taken to minimize the risk to consumer data
and the systems they are stored on. According to
Figure 23, hardware failure accounts for 40% of all
business data loss. To minimize this risk, Altai’s
server is cloned twice daily to protect against
hardware failure in a disaster proof hard drive
enclosure. APC battery backup protects the entire
store’s IT system, providing 30 min of uptime in
the event of power loss. More information on
Altai’s data security can be found in Appendix S.
Hardware
Failure
40%
Human Error
29%
Software
Corruption
13%
Computer
Viruses
6%
Theft
9%
Hardware
Distruction
3%
Causes of Data Loss
Figure 23: Causes of Data Loss Source: Smith 2003
Reaching Customers Cross-Platform
A modern website and mobile browser design
add to the premium look and feel that Altai
strives to achieve. Online, customers can browse
everything Altai has to offer in store. Thanks to
the RFID tagging of inventory, customers can
know exactly what sizes and items are in stock.
They have the option to order online, reserve to
try on in store, or order for in store pickup.
Though Altai does not plan to allow online
orders upon opening, the functionality of an
online storefront it calculated into the
development costs below in Figure 22. Visitors of
Altai’s site can preview upcoming classes held on
a weekly basis and connect with the company
via social media integration.
$- $20,000 $40,000 $60,000
Desktop Site
Mobile Site
iOS App
Android App
Cost of Web
Development
A fully functional mobile site compliments the
desktop site, with added functionality for in
store use. Customers can use this mobile site to
scan QR codes on items in store, which directs
them to product information such as sizes in
stock, price, and photos of the item. Developing
a mobile site over a fully functional app will save
Altai money in its infancy. Fully developing a
mobile app for Android and iOS alongside a
mobile site and desktop site would cost nearly
double that of just developing the two browser-
based sites. The estimated cost of development
was $89,100 (Otreva, 2015). As the business
grows, Altai plans to develop its own apps to
further enhance the customer experience.
Website mockups can be found in Appendix M.
Figure 22: Cost of Web Development

Demand Forecast #1
15
Potential Sales Based on Number of Customers Per Day and Average Ticket Price
The potential sales per year will be calculated by finding the expected number of customers per day and
multiplying that by the average ticket price for purchases from Altai. This number will then be multiplied by
the number of days the store is open to find the yearly sales potential.
Step 1: Expected Potential Customers Per Day
Store
Name:
Location: Number of
Visitors
Per Day:
Purchasing
Customers:
Great
Outdoor
Provision
Chapel
Hill
160 80
Omega
Sports
Durham,
NC
75 55
Athleta Durham,
NC
120 65
Average
Total:
= 118 per
day
= 67
Customers
In order to determine the number of customers to
expect per day, primary research was gathered
from sportswear and sporting goods stores in
Chapel Hill and nearby cities. Averaging the
number of customers from similar stores, the
expected number of customers per day is roughly
67.
Figure 24: Customer Expectancy
Figure 26: Sales Forecast
46 customers per day
$66.53 ticket price
$3,060.38 sales per day
Open 304 days a year
$930,355.52 first year sales
The average price for apparel from Altai was
calculated by finding the average price per type of
apparel (t-shirts, shorts, jackets, etc.) for each
brand Altai carries. The average price for each
type of apparel per brand was then totaled and
averaged to find the average price per type of
apparel. All types of apparel were then averaged
to find the average item price for Altai. For a
breakdown of average pricing, refer to Appendix
E.
Step 2: Average Ticket Price
However, this is an expected potential after
multiple years of establishment. Assuming an
average yearly growth rate of 15%, or the rate at
which a company would need to grow to double
its size within 5 years (Nagel, 2013), this 67
customers can be scaled back to approximately 45
customers for the first year.
Year 1 Year 2 Year 3 Year 4 Year 5
46 51 56 61 67
Figure 25: Customers Per Day Forecast

Demand Forecast #2
16
Potential Sales Based on the Market Size
Step 1: Forecasting Obtainable Millennials
The potential sales per year will be calculated by finding the potential number of female customers within
Chapel Hill and multiplying it by the average price per item for Altai.
In order to determine the portion of the
company’s target market who will purchase
clothing from Altai, the national percent for
women within this age range who purchased
women’s sports clothing within the past 12
months is taken, or 19.5% (MRI+).
Next, this percentage is multiplied by the female
population in Chapel Hill, Durham, Clay and
Raleigh (the areas of advertisement and nearby
cities) to determine the number of potential
customers from each location. Adjustments were
estimated based external factors such as number
of competitors in the area and distance from Altai.
For example, Durham has a similar women’s
athletic apparel market to Chapel Hill, but due to
the fact that it’s almost 30 miles away, this
number was adjusted to fit the number that the
company believes would shop at Altai compared
to other competitors.
Location: Target
Market
Size:
%
Adjustment:
Total
Market
Potential:
Chapel
Hill:
2,818 95% 2,677
Durham: 8,325 80% 6,660
Clay 3,011 30% 903
Raleigh: 12,501 5% 625
Total: 10,865
Step 2: Average Ticket Price
The average price for apparel from Altai was
calculated by finding the average price per type of
apparel (t-shirts, shorts, jackets, etc.) for each
brand Altai carries. The average price for each
type of apparel per brand was then totaled and
averaged to find the average price per type of
apparel. All types of apparel were then averaged
to find the average item price for Altai. For a
breakdown of average pricing, refer to Appendix
E.
10,865 potential
customers per
year
$66.53 average
item price
$722,848.45
potential first
year sales
Figure 27: Percent of Market Size in Locations Figure 28: Breakdown of Potential First Year Sales

17
Weighing of Demand Forecasts
Based on the demand forecasts, Altai has decided to use an initial customer base of 36 customers per day, or
12,464 customers per year. This weighing was made based on Chapel Hill’s demographics: high average income
and above average spending on sportswear. However, Altai believes first year sales of over $900,000 are
unrealistic. Using financial formulas, one of the lowest numbers of customers per day while still growing at 15%
per year rate and maintaining a positive net present value was 36. This yields first year sales of $727,995,
which aligns closer with Demand Forecast #2. However, Altai believes Demand Forecast #1 depicts future sales
potential, granting it a 10% weighing.
Fiscally-Impacting Risks
A Highly Competitive Industry
This risk could affect the company and its sales
based on a possibly lower penetration rate than
projected. However, with the location that the
store is in, it is predicted to attract a heavy
amount of foot traffic and campus students. The
free fitness classes will also heavily involve the
community and give a personalized shopping
environment.
A Highly Cyclical Industry
This risk can definitely impact sales and the
major parts of business operations. Entering the
market during a time of expected growth in the
economy will allow the company to establish
personal connections with customers.
Dependence on Quality of Wholesaler’s
Products
Based on other companies’ issues with
manufacturing errors, the company is very
vulnerable to these problems as well. To combat
this possibility for error, the company chooses
very reputable brands that create high-quality,
pairing with customer experience.
Heavy Technology Involvement
High involvement in technology poses for large
investments and can have large amounts of
difficulties. Personal dedication to technology
has been tested by various major companies and
has shown large amounts of return on
investment.
Revenue Generation Plan
Altai’s majority of revenue will come from the
selling of various athletic apparel through the
brick-and-mortar store in Chapel Hill, North
Carolina. Coupons and free fitness classes for
customers are offer to come try new items in the
store . Altai offers an excellent customer
shopping experience, which increases customer
retention rates.
Altai estimates that for the first year, it will
average 36 customers per day with a $66.53
average ticket price. By year 5, it is estimated
that Altai will have 63 customers per day, which
is similar to the pre-calculated average for
established companies.
Financials
Figure 27: Projected Customers Per Day
Demand
Forecast
#1
Demand
Forecast
#2
Estimated
Total
Start-Up
Cost:
10% 90% $210,000
Figure 29: Demand Forecast Weighing

18
Pro Forma Statement Overview
Altai’s business operations and various projections give it a good position fiscally. Altai plans to take a start-up
loan for $63,000, with a financing plan of 8% interest for 7 years and issuing $147,000 worth of common stock .
Altai projects that even with its initial investment in technology, that it will be compensated for these costs by
the fourth year, provided that the revenue growth model is followed or exceeded. To begin this business
venture, Altai’s Net Present Value (NPV) is a positive $25,622 and its Internal Rate of Return is 26.62%, 1.53%
greater than the Weighted Average Cost of Capital. With its financial standings and various investment
decisions, Altai will be able to finance its debt and keep investors happy, creating an overall healthy business.
Sales Growth Details on Key Ratios
Using Altai’s estimated expenses and sales
forecasts, various quantitative ratios support the
initiation of the project. WACC was generated
through the terms of the loan and the cost of
equity. The equity’s cost of capital for was
calculated through the Capital Assets Pricing
Model (CAPM). Using Economist Peter
Bernstein’s analysis that the stock market
provides a 10% annual return for the Market
return (Investing Answers) and 2.14% for the
risk-free rate (Bloomberg, L.P.), the risk premium
for this investment is 7.86%. A beta of 4 was
used due to Altai’s very cyclical industry and
startup risks. Figure 31 illustrates the free cash
flows and the horizon value of $1,022,970 was
omitted. For additional information, please see
Appendix A. Additional calculation details can be
found in Appendix V. Investors can predict to see
a return on investments within Year 2, where
sales growth, profit margin, return on equity
(ROE), and return on assets (ROA) are positive.
Financials
Profit Margin
ROE & ROA
Free Cash Flows
14%
17%
13%
15%
10%
12%
14%
16%
18%
20%
Year 1 Year 2 Year 3 Year 4
5%
39%
35% 34%
-12%
1%
12%
16%
25%
-50%
-35%
-20%
-5%
10%
25%
40%
ROE ROA
-0.07
0.01
0.07 0.08
0.1
-0.1
-0.05
0
0.05
0.1
0.15
Figure 30: Sales Growth
Figure 31: Profit Margin
Figure 32: ROE & ROA Figure 33: Free Cash Flows
$(600,000.00)
$(400,000.00)
$(200,000.00)
$-
$200,000.00
Year0
Year1
Year2
Year3
Year4
Year5

Conclusion
19
By following this business plan, Altai will reach its financial goals and become a successful specialty retail
business. Analyzing industry drivers, Chapel Hill, North Carolina has above average statistics, making it the
perfect location to open our store . With the inclusion of the ‘Research Triangle’, Altai will have a large pool of
potential customers who will help the company grow an average of 15% per year, doubling our size within 5
years.
Through consistent, targeted marketing to millennial females across a range of social media and physical
channels, these potential customers are expected to translate to 63 customers per day by year five. Our
superior customer experience, implementation of cutting-edge technology, and addition of yoga and Pilates
sessions offer more to the customer than the average retailer. Through these incentives we believe the
company will develop a strong, loyal customer base.
Based upon the data produced from demand forecasts and financial projectionssuch as a positive NPV , a
1.53% larger Internal Rate of Return than the Weighted Average Cost of Capital, and a manageable payback
period, Copeland Associates would accept this project and would recommend to move forward with the
creation of this business. The company is in a very favorable position and with its commitment to
incorporating technology into its customers’ shopping experience, it will be able to counteract the various risks
that companies in this industry face with the changing economy.
As seen in Figure 32, Altai is poised to succeed in the specialty apparel industry .
$(100,000)
$(50,000)
$-
$50,000
$100,000
$150,000
Projected Net Income
Figure 34: Projected Net Income

20
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References

27
Appendix A: Financials
Altai Pro Forma Statements of Financial Position
Start-Up Year 1 Year 2 Year 3 Year 4 Year 5
Cash $210,000 $137,189 $200,191 $213,308 $217,204 $180,816
Accounts Receivables
Inventory $300,000 300,000 350,000 350,000 350,000 360,000
RFID Labels $445
Thermal Print Paper $75
Total current assets $510,519 437,189 550,191 563,308 567,204 540,816
Property and equipment, net (a) $145,645 (8,791) (14,065) (8,439) (5,063) (5,063)
Intangible assets, net $- - - - - -
Total assets $656,165 $428,398 $536,126 $554,869 $562,141 $535,753
Accounts payable
Accrued expenses $446,165 268,671 377,569 339,800 265,898 115,284
Current portion of long-term debt $7,008 $7,586 $8,211 $8,888 $9,621
Total current liabilities $446,165 275,679 385,155 348,011 274,786 124,905
Long-term debt $63,000 55,992 48,984 40,772 31,884 22,264
Total liabilities $509,165 331,671 434,139 388,784 306,670 147,168
Paid-in equity capital $147,000 147,000 147,000 147,000 147,000 147,000
Retained earnings (b) (50,273) (45,012) 19,085 108,470 241,584
Total equity $147,000 96,727 101,988 166,085 255,470 388,584
Total liabilities and equity $656,165 $428,398 $536,126 $554,869 $562,141 $535,753

28
Altai Pro Forma Statements of Financial Position
(a) Property and equipment, net:
Leasehold improvements
Fixtures and equipment 13,000
Computer hardware and software
RFID Hardware
4 Port Fixed RFID Terminal $2,929.80
RFID Antenna $524.40
Large RFID Antenna $2,315.20
RFID Gun $2,846.00
RFID Capable Printer $4,613.00
Total RFID Hardware $13,228.40
Networking
APC UPS Battery Backup $239.99
Cisco 8 Port Gigabit Network Switch $59.96
Cisco Modem $70.00
Cisco Small Business Router $65.28
Total Networking Equipment $435.23
Intercom System
PylePro 8 Ohm 300 Watt Amplifier $170.00
3.5 mm to RCA Cable $10.00
Wired through speaker selector $2,120.00
Coper L/R Channel Speaker Wire CL 3 14
Guage $179.99
Stereo 4 Channel Splitter $232.00
Total Intercom System $2,711.99
IT Equipment
Seagull ET-Pro Label Printing Software $495.00
Panasonic Link2Cell KX-TG9581B Cordless Phone $149.95
Screens for Back Office $389.30
Inventory & POS LED Backlit LCD $185.15
VERSA Mount $13.50
Verifone M132-409-01-R Payment Terminal $1,158.20
Quickbooks Pro V12 POS Software $2,000.00
ThinkCentre M73 Small Form Factor Desktop $1,197.60
POS Keyboard $239.60
Quickbooks Accounting $199.95
ThinkServer Server with Windows Server 2012 $2,827.80
ioSafe 1515+ Waterproof & Fireproof NAS
Storage $1,899.99
WD Enterprise 6TB 7200 RPM Drives $1,744.00
Software Development Fee $89,100.00
Thermal Reciept Printer $509.98
Total IT Equipment $102,110.02
Cabling
CAT 6e Patch Cable $486.54
CAT 6e Crimp Connectors $78.90
CAT Crimpers $10.72
Total Cabling $576.16
Total Computer Hardware and Software $119,061.80
Furniture
Back Room Shelves (48 x 18 x 72) $2,239.65
Back Room Table $406.00
Clothing Bins $400.00
Office Desk $439.00
Custom Checkout Counter $450.00
Alta Large Display Table $1,625.00
Alta Medium Display Table $555.00
Alta Small Display Table $185.00
Alta Island $2,634.00
Alta Wall Module $1,890.00
Alta 4 Way Tree $1,710.00
Custom Wall Mount Racks $400.00
Window & In-Store Displays $500.00
Desk Chair $149.99
Total Furniture $13,583.64
Less: Accumulated depr and amort 8,791 14,065 8,439 5,063 5,063
Property and equipment, net $145,645.44 $(8,791) $(14,065) $(8,439) $(5,063) $(5,063)
(b) Retained earnings:
Balance, beginning of year $- $- $(50,273) $(45,012) $19,085 $108,470
Net income - (50,273) 5,260 64,098 89,385 133,114
Balance, end of year $- $(50,273) $(45,012) $19,085 $108,470 $241,584

29
Altai Pro Forma Statements of Operations
Income Tax Expense for Year 7% 22% 46% 46% 46%
Sales (a) $727,995 $829,105 $970,660 $1,112,214 $1,273,991
Cost of goods sold and occupany costs (b) 476,175 531,785 561,107 631,885 712,773
Gross profit 251,820 297,320 409,552 480,330 561,218
Direct store expenses (c) 209,291 190,252 190,252 218,539 218,539
General and administrative expenses* 92,000 92,000 92,000 92,000 92,000
Pre-opening expenses
Operating income (49,471) 15,068 127,301 169,791 250,679
Interest expense $4,833.22 4,256 3,630 2,953 2,221
Income before income taxes (54,304) 6,781 119,639 166,837 248,458
Provision for income taxes (4,032) 1,521 55,541.11 77,453 115,344
Net income $(50,273) $5,260 $64,098 $89,385 $133,114
(a) Sales:
Number of customers per day 36 41 48.00 55 63.00
x Average transaction value 66.52 66.52 66.52 66.52 66.52
Sales per day 2,395 2,727 3,193 3,659 4,191
x Number of days open per year 304 304 304 304 304
Sales $727,995 $829,105 $970,660 $1,112,214 $1,273,991
(b) Cost of goods sold and occupancy costs:
Cost of goods sold $400,397 $456,008 $485,330 $556,107 $636,996
Rent 72,000 72,000 72,000 72,000 72,000
Utilities 3,777 3,777 3,777 3,777 3,777
Cost of goods sold and occupancy costs $476,175 $531,785 $561,107 $631,885 $712,773
(c) Direct store expenses:
Store payroll, payroll taxes, and benefits
Store Payroll $101,006 $101,006 $101,006 $135,616 $135,616
Payroll Taxes $11,580 $11,580 $11,580 $13,657 $13,657
Store supplies
TWC Internet $1,188.00 1,188 1,188 1,188 1,188
TWC Phone $300.00 300 300 300 300
Quickbooks Payroll $301.00 301 301 301 301
RFID Labels $444.80
Printer Paper $75
Shopping Software $229.00 229 229 229 229
Adobe Creative Suite for Business $11,088.00 11,088 11,088 11,088 11,088
Webhosting $1,440.00 1,440 1,440 1,440 1,440
Advertising $81,640.00 63,120 63,120 54,720 54,720
Direct store expenses $209,291 $190,252 $190,252 $218,539 $218,539
*General and Administrative Expenses include Manager Salaries

30
Altai Pro Forma Statements of Operations
Income Tax Expense for Quarter 7%
Q1 Q2 Q3 Q4
Sales (a) $196,899 $179,604 $184,393 $181,999
Cost of goods sold and occupany costs (b) 127,239 117,727 120,361 119,044
Gross profit 69,660 61,877 64,033 62,955
Direct store expenses (c) 55,995 51,915 55,475 51,915
General and administrative expenses 23,000 23,000 23,000 23,000
Pre-opening expenses -
Operating income (9,334) (13,038) (14,442) (11,960)
Interest expense $1,260.00 1,226 1,191 1,156
Income before income taxes (10,594) (14,264) (15,634) (13,116)
Provision for income taxes (787) (1,059) (1,161) (974)
Net income $(9,808) $(13,205) $(14,473) $(12,142)
(a) Sales:
Number of customers per day 37 36 36 38
x Average transaction value 66.52 66.52 66.52 66.52
Sales per day 2,461 2,395 2,395 2,528
x Number of days open per year 80 75 77 72
Sales $196,899 $179,604 $184,393 $181,999
(b) Cost of goods sold and occupancy costs:
Cost of goods sold 108,294.6 98,782.2 101,416.4 100,099.3
Rent 18,000.0 18,000.0 18,000.0 18,000.0
Utilities 944 944 944 944
Cost of goods sold and occupancy costs $127,239 $117,727 $120,361 $119,044
(c) Direct store expenses:
Store payroll, payroll taxes, and benefits
Store Payroll $25,251.40 $25,251.40 $25,251.40 $25,251.40
Payroll Taxes $2,895.08 $2,895.08 $2,895.08 $2,895.08
Store supplies
TWC Internet $297.00 $297.00 $297.00 $297.00
TWC Phone $75.00 $75.00 $75.00 $75.00
Quickbooks Payroll $75.25 $75.25 $75.25 $75.25
RFID Labels $444.80
Printer Paper $74.69
Shopping Software $57.25 $57.25 $57.25 $57.25
Adobe Creative Suite for Business $2,772.00 $2,772.00 $2,772.00 $2,772.00
Webhosting $360.00 $360.00 $360.00 $360.00
Depreciation and amortization $1,502.23 $1,502.00 $1,502.00 $1,502.00
Advertising* $22,190.00 $18,630.00 $22,190.00 $18,630.00
Direct store expenses $55,995 $51,915 $55,475 $51,915
*Advertising Expense Includes:
• Billboard
• Facebook
• Twitter
• T-Shirts (Year 1)
• Flyers (Year 1)

31
Altai Capital Budgeting Analysis
Project Cash Flows
0 1 2 3 4 5
EBIT $ (49,471) $ 15,068 $ 127,301 $ 169,791 $ 250,679
x (1 - tax rate) 93% 78% 54% 54% 54%
Operating profit after tax (45,798) 11,689 68,203 90,967 134,304
+ Depreciation and amortization 8,791 14,065 8,439 5,063 5,063
Operating cash flow $ - $ (37,008) $ 25,754 $ 76,641 $ 96,030 $ 139,367
- Change in net working capital 300,000
- Capital spending 119,062
Free cash flow $ (419,062) $ (37,008) $ 25,754 $ 76,641 $ 96,030 $ 139,367
+ Horizon value (end of year 5) 1,022,970
Project cash flow $ (419,062) $ (37,008) $ 25,754 $ 76,641 $ 96,030 $ 1,162,337
EBITDA (year 5) $ 255,742
x Market multiple 4.0
Horizon value (end of year 5) $ 1,022,970
Required Rate of Return
Weighted average cost of capital (WACC):
Capital
x
Cost of
x
After-Tax
= WACC
Structure Capital Adjustment
Debt 30% x 8% x 66% = 1.59%
Equity 70% x 33.58% = 23.51%
+
25.09%
CAPM
Ra= Rf + Beta(Rm-Rf) Rf Beta Rm-Rf Ra
2.14% 4 7.86% 0.3358
Decision-Making Criteria
Net present value = 25,622
Internal rate of return = 26.62%
Payback period = 4.22
Project Cash Flows:
Year 0 $(419,062)
Year 1 $(37,008)
Year 2 $25,754
Year 3 $76,641
Year 4 $96,030
Year 5 $1,162,337

32
Year One Cash
Flows
Q1 Q2 Q3 Q4
Tax Rate: 0.07
EBIT (10,033) (13,736) (15,141) (12,659)
x (1 - tax rate) 93% 93% 93% 93%
Operating profit after tax (9,331) (12,775) (14,081) (11,773)
+
Depreciation and
amortization 2,201 2,201 2,201 2,201
Operating cash flow $ (7,130) $ (10,574) $ (11,880) $ (9,572)
- Change in Net Working Capital
- Capital Spending
Free cash flow $ (7,130) $ (10,574) $ (11,880) $ (9,572)

Appendix B : Depreciation Schedule
33
Audio Equipment and Networking
PylePro 8 Ohm 300 Watt Amplifier
Year % Depreciation Beginning Amount Amount Depreciated Ending Year Amount
Year 1 20.00% $170.00 $34.00 $136.00
Year 2 32.00% $136.00 $54.40 $81.60
Year 3 19.20% $81.60 $32.64 $48.96
Year 4 11.52% $48.96 $19.58 $29.38
Year 5 11.52% $29.38 $19.58 $9.79
Year 6 5.76% $9.79 $9.79 $-
3.5 mm to RCA Cable
Year 1 20.00% $10.00 $2.00 $8.00
Year 2 32.00% $8.00 $3.20 $4.80
Year 3 19.20% $4.80 $1.92 $2.88
Year 4 11.52% $2.88 $1.15 $1.73
Year 5 11.52% $1.73 $1.15 $0.58
Year 6 5.76% $0.58 $0.58 $-
JBL Control HST Speakers (wired through speaker selector)
Year 1 20.00% $2,120.00 $424.00 $1,696.00
Year 2 32.00% $1,696.00 $678.40 $1,017.60
Year 3 19.20% $1,017.60 $407.04 $610.56
Year 4 11.52% $610.56 $244.22 $366.34
Year 5 11.52% $366.34 $244.22 $122.11
Year 6 5.76% $122.11 $122.11 $-
Copper L/R Channel Speaker Wire CL 3 14 Guage
Year 1 20.00% $179.99 $36.00 $143.99
Year 2 32.00% $143.99 $57.60 $86.40
Year 3 19.20% $86.40 $34.56 $51.84
Year 4 11.52% $51.84 $20.73 $31.10
Year 5 11.52% $31.10 $20.73 $10.37
Year 6 5.76% $10.37 $10.37 $0.00
Stereo 4 Channel Splitter
Year 1 20.00% $232.00 $46.40 $185.60
Year 2 32.00% $185.60 $74.24 $111.36
Year 3 19.20% $111.36 $44.54 $66.82
Year 4 11.52% $66.82 $26.73 $40.09
Year 5 11.52% $40.09 $26.73 $13.36
Year 6 5.76% $13.36 $13.36 $-
APC UPS Battery Backup
Year 1 20.00% $239.99 $48.00 $191.99
Year 2 32.00% $191.99 $76.80 $115.20
Year 3 19.20% $115.20 $46.08 $69.12
Year 4 11.52% $69.12 $27.65 $41.47
Year 5 11.52% $41.47 $27.65 $13.82
Year 6 5.76% $13.82 $13.82 $0.00
Cisco 8 Port Gigabit Network Switch
Year 1 20.00% $59.96 $11.99 $47.97
Year 2 32.00% $47.97 $19.19 $28.78
Year 3 19.20% $28.78 $11.51 $17.27
Year 4 11.52% $17.27 $6.91 $10.36
Year 5 11.52% $10.36 $6.91 $3.45
Year 6 5.76% $3.45 $3.45 $0.00
Cisco Modem
Year 1 20.00% $70.00 $14.00 $56.00
Year 2 32.00% $56.00 $22.40 $33.60
Year 3 19.20% $33.60 $13.44 $20.16
Year 4 11.52% $20.16 $8.06 $12.10
Year 5 11.52% $12.10 $8.06 $4.03
Year 6 5.76% $4.03 $4.03 $-
Cisco Small Business Router
Year 1 20.00% $65.28 $13.06 $52.22
Year 2 32.00% $52.22 $20.89 $31.33
Year 3 19.20% $31.33 $12.53 $18.80
Year 4 11.52% $18.80 $7.52 $11.28
Year 5 11.52% $11.28 $7.52 $3.76
Year 6 5.76% $3.76 $3.76 $-

Appendix B: Depreciation Schedule
34
RFID and Cabling
4 Port Fixed RFID Terminal
Year 1 20.00% $2,929.80 $585.96 $2,343.84
Year 2 32.00% $2,343.84 $937.54 $1,406.30
Year 3 19.20% $1,406.30 $562.52 $843.78
Year 4 11.52% $843.78 $337.51 $506.27
Year 5 11.52% $506.27 $337.51 $168.76
Year 6 5.76% $168.76 $168.76 $-
RFID Antenna
Year 1 20.00% $524.40 $104.88 $419.52
Year 2 32.00% $419.52 $167.81 $251.71
Year 3 19.20% $251.71 $100.68 $151.03
Year 4 11.52% $151.03 $60.41 $90.62
Year 5 11.52% $90.62 $60.41 $30.21
Year 6 5.76% $30.21 $30.21 $-
Large RFID Antenna
Year 1 20.00% $2,315.20 $463.04 $1,852.16
Year 2 32.00% $1,852.16 $740.86 $1,111.30
Year 3 19.20% $1,111.30 $444.52 $666.78
Year 4 11.52% $666.78 $266.71 $400.07
Year 5 11.52% $400.07 $266.71 $133.36
Year 6 5.76% $133.36 $133.36 $-
RFID Gun
Year 1 20.00% $2,846.00 $569.20 $2,276.80
Year 2 32.00% $2,276.80 $910.72 $1,366.08
Year 3 19.20% $1,366.08 $546.43 $819.65
Year 4 11.52% $819.65 $327.86 $491.79
Year 5 11.52% $491.79 $327.86 $163.93
Year 6 5.76% $163.93 $163.93 $-
RFID Capable Printer
Year 1 20.00% $4,613.00 $922.60 $3,690.40
Year 2 32.00% $3,690.40 $1,476.16 $2,214.24
Year 3 19.20% $2,214.24 $885.70 $1,328.54
Year 4 11.52% $1,328.54 $531.42 $797.13
Year 5 11.52% $797.13 $531.42 $265.71
Year 6 5.76% $265.71 $265.71 $-
CAT 6e Patch Cable
Year 1 20.00% $243.27 $48.65 $194.62
Year 2 32.00% $194.62 $77.85 $116.77
Year 3 19.20% $116.77 $46.71 $70.06
Year 4 11.52% $70.06 $28.02 $42.04
Year 5 11.52% $42.04 $28.02 $14.01
Year 6 5.76% $14.01 $14.01 $-
CAT 6e Crimp Connectors
Year 1 20.00% $39.45 $7.89 $31.56
Year 2 32.00% $31.56 $12.62 $18.94
Year 3 19.20% $18.94 $7.57 $11.36
Year 4 11.52% $11.36 $4.54 $6.82
Year 5 11.52% $6.82 $4.54 $2.27
Year 6 5.76% $2.27 $2.27 $-
CAT Crimpers
Year 1 20.00% $10.72 $2.14 $8.58
Year 2 32.00% $8.58 $3.43 $5.15
Year 3 19.20% $5.15 $2.06 $3.09
Year 4 11.52% $3.09 $1.23 $1.85
Year 5 11.52% $1.85 $1.23 $0.62
Year 6 5.76% $0.62 $0.62 $-

35
IT Equipment
Panasonic Link2Cell KX-TG9581B Cordless Phone
Year 1 20.00% $149.95 $29.99 $119.96
Year 2 32.00% $119.96 $47.98 $71.98
Year 3 19.20% $71.98 $28.79 $43.19
Year 4 11.52% $43.19 $17.27 $25.91
Year 5 11.52% $25.91 $17.27 $8.64
Year 6 5.76% $8.64 $8.64 $-
Screens for Back Office
Year 1 20.00% $389.30 $77.86 $311.44
Year 2 32.00% $311.44 $124.58 $186.86
Year 3 19.20% $186.86 $74.75 $112.12
Year 4 11.52% $112.12 $44.85 $67.27
Year 5 11.52% $67.27 $44.85 $22.42
Year 6 5.76% $22.42 $22.42 $(0.00)
ThinkVision T1714p 17-inch Square LED Backlit LCD (Inventory & POS)
Year 1 20.00% $185.15 $37.03 $148.12
Year 2 32.00% $148.12 $59.25 $88.87
Year 3 19.20% $88.87 $35.55 $53.32
Year 4 11.52% $53.32 $21.33 $31.99
Year 5 11.52% $31.99 $21.33 $10.66
Year 6 5.76% $10.66 $10.66 $-
VERSA Mount
Year 1 20.00% $13.50 $2.70 $10.80
Year 2 32.00% $10.80 $4.32 $6.48
Year 3 19.20% $6.48 $2.59 $3.89
Year 4 11.52% $3.89 $1.56 $2.33
Year 5 11.52% $2.33 $1.56 $0.78
Year 6 5.76% $0.78 $0.78 $-
Verifone M132-409-01-R Payment Terminal
Year 1 20.00% $1,158.20 $231.64 $926.56
Year 2 32.00% $926.56 $370.62 $555.94
Year 3 19.20% $555.94 $222.37 $333.56
Year 4 11.52% $333.56 $133.42 $200.14
Year 5 11.52% $200.14 $133.42 $66.71
Year 6 5.76% $66.71 $66.71 $-
Quickbooks POS V12
Year 1 20.00% $2,000.00 $400.00 $1,600.00
Year 2 32.00% $1,600.00 $640.00 $960.00
Year 3 19.20% $960.00 $384.00 $576.00
Year 4 11.52% $576.00 $230.40 $345.60
Year 5 11.52% $345.60 $230.40 $115.20
Year 6 5.76% $115.20 $115.20 $-
Seagull BT-A3 RFID Software
Year 1 20.00% $795.00 $159.00 $636.00
Year 2 32.00% $636.00 $254.40 $381.60
Year 3 19.20% $381.60 $152.64 $228.96
Year 4 11.52% $228.96 $91.58 $137.38
Year 5 11.52% $137.38 $91.58 $45.79
Year 6 5.76% $45.79 $45.79 $-

36
IT Equipment
ThinkCentre M73 Small Form Factor Desktop
Year % Depreciation Beginning Amount
Amount
Depreciated Ending Year Amount
Year 1 20.00% $1,197.60 $239.52 $958.08
Year 2 32.00% $958.08 $383.23 $574.85
Year 3 19.20% $574.85 $229.94 $344.91
Year 4 11.52% $344.91 $137.96 $206.95
Year 5 11.52% $206.95 $137.96 $68.98
Year 6 5.76% $68.98 $68.98 $-
Cherry G86-62401EUADAA POS Keyboard
Amount
Year 1 20.00% $239.60 $47.92 $191.68
Year 2 32.00% $191.68 $76.67 $115.01
Year 3 19.20% $115.01 $46.00 $69.00
Year 4 11.52% $69.00 $27.60 $41.40
Year 5 11.52% $41.40 $27.60 $13.80
Year 6 5.76% $13.80 $13.80 $0.00
Thermal Reciept Printer
Amount
Year 1 20.00% $509.98 $102.00 $407.98
Year 2 32.00% $407.98 $163.19 $244.79
Year 3 19.20% $244.79 $97.92 $146.87
Year 4 11.52% $146.87 $58.75 $88.12
Year 5 11.52% $88.12 $58.75 $29.37
Year 6 5.76% $29.37 $29.37 $0.00
Security Camera
Amount
Year 1 20.00% $389.99 $78.00 $311.99
Year 2 32.00% $311.99 $124.80 $187.20
Year 3 19.20% $187.20 $74.88 $112.32
Year 4 11.52% $112.32 $44.93 $67.39
Year 5 11.52% $67.39 $44.93 $22.46
Year 6 5.76% $22.46 $22.46 $-

37
IT Equipment
Quickbooks Accounting
Amount
Year 1 20.00% $199.95 $39.99 $159.96
Year 2 32.00% $159.96 $63.98 $95.98
Year 3 19.20% $95.98 $38.39 $57.59
Year 4 11.52% $57.59 $23.03 $34.55
Year 5 11.52% $34.55 $23.03 $11.52
Year 6 5.76% $11.52 $11.52 $-
ThinkServer TS440 6-Bay Server with Windows Server 2012
Amount
Year 1 20.00% $2,827.80 $565.56 $2,262.24
Year 2 32.00% $2,262.24 $904.90 $1,357.34
Year 3 19.20% $1,357.34 $542.94 $814.41
Year 4 11.52% $814.41 $325.76 $488.64
Year 5 11.52% $488.64 $325.76 $162.88
Year 6 5.76% $162.88 $162.88 $-
ioSafe 1515+ Waterproof & Fireproof NAS Storage
Amount
Year 1 20.00% $1,899.99 $380.00 $1,519.99
Year 2 32.00% $1,519.99 $608.00 $912.00
Year 3 19.20% $912.00 $364.80 $547.20
Year 4 11.52% $547.20 $218.88 $328.32
Year 5 11.52% $328.32 $218.88 $109.44
Year 6 5.76% $109.44 $109.44 $-
WD Enterprise 6TB 7200 RPM Drives
Amount
Year 1 20.00% $1,744.00 $348.80 $1,395.20
Year 2 32.00% $1,395.20 $558.08 $837.12
Year 3 19.20% $837.12 $334.85 $502.27
Year 4 11.52% $502.27 $200.91 $301.36
Year 5 11.52% $301.36 $200.91 $100.45
Year 6 5.76% $100.45 $100.45 $-

38
Furniture
Back Room Shelves (48 x 18 x 72)
Custom Wall Mount
Racks
Year % Depreciation Beginning Amount Amount Depreciated Ending Year Amount Year
%
Depreciation
Beginning
Amount Amount Depreciated
Ending Year
Amount
Year 1 20.00% $2,239.65 $447.93 $1,791.72 Year 1 20.00% $400.00 $80.00 $320.00
Year 2 32.00% 1791.72 $716.69 $1,075.03 Year 2 32.00% 320 $128.00 $192.00
Year 3 19.20% 1075.032 $430.01 $645.02 Year 3 19.20% 192 $76.80 $115.20
Year 4 11.52% 645.0192 $258.01 $387.01 Year 4 11.52% 115.2 $46.08 $69.12
Year 5 11.52% 387.01152 $258.01 $129.00 Year 5 11.52% 69.12 $46.08 $23.04
Year 6 5.76% 129.00384 $129.00 $- Year 6 5.76% 23.04 $23.04 $-
Back Room Table Window & In-Store Displays
%
Depreciation
Beginning
Ending Year
Amount
Year 1 20.00% $406.00 $81.20 $324.80 Year 1 20.00% $500.00 $100.00 $400.00
Year 2 32.00% 324.8 $129.92 $194.88 Year 2 32.00% 400 $160.00 $240.00
Year 3 19.20% 194.88 $77.95 $116.93 Year 3 19.20% 240 $96.00 $144.00
Year 4 11.52% 116.928 $46.77 $70.16 Year 4 11.52% 144 $57.60 $86.40
Year 5 11.52% 70.1568 $46.77 $23.39 Year 5 11.52% 86.4 $57.60 $28.80
Year 6 5.76% 23.3856 $23.39 $- Year 6 5.76% 28.8 $28.80 $-
Clothing Bins Desk Chair
%
Depreciation
Beginning
Ending Year
Amount
Year 1 20.00% $400.00 $80.00 $320.00 Year 1 20.00% $149.99 $30.00 $119.99
Year 2 32.00% 320 $128.00 $192.00 Year 2 32.00% 119.992 $48.00 $72.00
Year 3 19.20% 192 $76.80 $115.20 Year 3 19.20% 71.9952 $28.80 $43.20
Year 4 11.52% 115.2 $46.08 $69.12 Year 4 11.52% 43.19712 $17.28 $25.92
Year 5 11.52% 69.12 $46.08 $23.04 Year 5 11.52% 25.918272 $17.28 $8.64
Year 6 5.76% 23.04 $23.04 $- Year 6 5.76% 8.639424 $8.64 $-
Office Desk
Custom Checkout
Counter
%
Depreciation
Beginning
Ending Year
Amount
Year 1 20.00% $439.00 $87.80 $351.20 Year 1 20.00% $450.00 $90.00 $360.00
Year 2 32.00% 351.2 $140.48 $210.72 Year 2 32.00% 360 $144.00 $216.00
Year 3 19.20% 210.72 $84.29 $126.43 Year 3 19.20% 216 $86.40 $129.60
Year 4 11.52% 126.432 $50.57 $75.86 Year 4 11.52% 129.6 $51.84 $77.76
Year 5 11.52% 75.8592 $50.57 $25.29 Year 5 11.52% 77.76 $51.84 $25.92
Year 6 5.76% 25.2864 $25.29 $- Year 6 5.76% 25.92 $25.92 $-

39
Furniture
Back Room Shelves (48 x 18 x 72) Custom Wall Mount Racks
Year % Depreciation Beginning Amount Amount Depreciated Ending Year Amount Year % Depreciation
Beginning
Amount Amount Depreciated Ending Year Amount
Year 1 20.00% $2,239.65 $447.93 $1,791.72 Year 1 20.00% $400.00 $80.00 $320.00
Year 2 32.00% 1791.72 $716.69 $1,075.03 Year 2 32.00% 320 $128.00 $192.00
Year 3 19.20% 1075.032 $430.01 $645.02 Year 3 19.20% 192 $76.80 $115.20
Year 4 11.52% 645.0192 $258.01 $387.01 Year 4 11.52% 115.2 $46.08 $69.12
Year 5 11.52% 387.01152 $258.01 $129.00 Year 5 11.52% 69.12 $46.08 $23.04
Year 6 5.76% 129.00384 $129.00 $- Year 6 5.76% 23.04 $23.04 $-
Back Room Table Window & In-Store Displays
Beginning
Year 1 20.00% $406.00 $81.20 $324.80 Year 1 20.00% $500.00 $100.00 $400.00
Year 2 32.00% 324.8 $129.92 $194.88 Year 2 32.00% 400 $160.00 $240.00
Year 3 19.20% 194.88 $77.95 $116.93 Year 3 19.20% 240 $96.00 $144.00
Year 4 11.52% 116.928 $46.77 $70.16 Year 4 11.52% 144 $57.60 $86.40
Year 5 11.52% 70.1568 $46.77 $23.39 Year 5 11.52% 86.4 $57.60 $28.80
Year 6 5.76% 23.3856 $23.39 $- Year 6 5.76% 28.8 $28.80 $-
Clothing Bins Desk Chair
Beginning
Year 1 20.00% $400.00 $80.00 $320.00 Year 1 20.00% $149.99 $30.00 $119.99
Year 2 32.00% 320 $128.00 $192.00 Year 2 32.00% 119.992 $48.00 $72.00
Year 3 19.20% 192 $76.80 $115.20 Year 3 19.20% 71.9952 $28.80 $43.20
Year 4 11.52% 115.2 $46.08 $69.12 Year 4 11.52% 43.19712 $17.28 $25.92
Year 5 11.52% 69.12 $46.08 $23.04 Year 5 11.52% 25.918272 $17.28 $8.64
Year 6 5.76% 23.04 $23.04 $- Year 6 5.76% 8.639424 $8.64 $-
Office Desk Alta Small Display Table
Beginning
Year 1 20.00% $439.00 $87.80 $351.20 Year 1 20.00% $185.00 $37.00 $148.00
Year 2 32.00% 351.2 $140.48 $210.72 Year 2 32.00% 148 $59.20 $88.80
Year 3 19.20% 210.72 $84.29 $126.43 Year 3 19.20% 88.8 $35.52 $53.28
Year 4 11.52% 126.432 $50.57 $75.86 Year 4 11.52% 53.28 $21.31 $31.97
Year 5 11.52% 75.8592 $50.57 $25.29 Year 5 11.52% 31.968 $21.31 $10.66
Year 6 5.76% 25.2864 $25.29 $- Year 6 5.76% 10.656 $10.66 $-
Custom Checkout Counter Alta Island
Beginning
Year 1 20.00% $450.00 $90.00 $360.00 Year 1 20.00% $2,634.00 $526.80 $2,107.20
Year 2 32.00% 360 $144.00 $216.00 Year 2 32.00% 2107.2 $842.88 $1,264.32
Year 3 19.20% 216 $86.40 $129.60 Year 3 19.20% 1264.32 $505.73 $758.59
Year 4 11.52% 129.6 $51.84 $77.76 Year 4 11.52% 758.592 $303.44 $455.16
Year 5 11.52% 77.76 $51.84 $25.92 Year 5 11.52% 455.1552 $303.44 $151.72
Year 6 5.76% 25.92 $25.92 $- Year 6 5.76% 151.7184 $151.72 $-
Alta Large Display Table Alta Wall Module
Beginning
Year 1 20.00% $1,625.00 $325.00 $1,300.00 Year 1 20.00% $1,890.00 $378.00 $1,512.00
Year 2 32.00% 1300 $520.00 $780.00 Year 2 32.00% 1512 $604.80 $907.20
Year 3 19.20% 780 $312.00 $468.00 Year 3 19.20% 907.2 $362.88 $544.32
Year 4 11.52% 468 $187.20 $280.80 Year 4 11.52% 544.32 $217.73 $326.59
Year 5 11.52% 280.8 $187.20 $93.60 Year 5 11.52% 326.592 $217.73 $108.86
Year 6 5.76% 93.6 $93.60 $- Year 6 5.76% 108.864 $108.86 $-
Alta Medium Display Table Alta 4 Way Tree
Beginning
Year 1 20.00% $555.00 $111.00 $444.00 Year 1 20.00% $1,710.00 $342.00 $1,368.00
Year 2 32.00% 444 $177.60 $266.40 Year 2 32.00% $1,368.00 $547.20 $820.80
Year 3 19.20% 266.4 $106.56 $159.84 Year 3 19.20% $820.80 $328.32 $492.48
Year 4 11.52% 159.84 $63.94 $95.90 Year 4 11.52% $492.48 $196.99 $295.49
Year 5 11.52% 95.904 $63.94 $31.97 Year 5 11.52% $295.49 $196.99 $98.50
Year 6 5.76% 31.968 $31.97 $(0.00) Year 6 5.76% $98.50 $98.50 $-

Appendix C: Amortization Schedule
40
Period Beginning Balance Payment Amount Payment on Principal Payment on Interest Ending Balance
1 $63,000.00 $2,960.35 $1,700.35 $1,260.00 $61,299.65
2 $61,299.65 $2,960.35 $1,734.36 $1,225.99 $59,565.29
3 $59,565.29 $2,960.35 $1,769.04 $1,191.31 $57,796.25
4 $57,796.25 $2,960.35 $1,804.42 $1,155.93 $55,991.83
5 $55,991.83 $2,960.35 $1,840.51 $1,119.84 $54,151.31
6 $54,151.31 $2,960.35 $1,877.32 $1,083.03 $52,273.99
7 $52,273.99 $2,960.35 $1,914.87 $1,045.48 $50,359.12
8 $50,359.12 $2,960.35 $1,953.17 $1,007.18 $48,405.95
9 $48,405.95 $2,960.35 $1,992.23 $968.12 $46,413.72
10 $46,413.72 $2,960.35 $2,032.07 $928.27 $44,381.65
11 $44,381.65 $2,960.35 $2,072.72 $887.63 $42,308.93
12 $42,308.93 $2,960.35 $2,114.17 $846.18 $40,194.76
13 $40,194.76 $2,960.35 $2,156.45 $803.90 $38,038.31
14 $38,038.31 $2,960.35 $2,199.58 $760.77 $35,838.73
15 $35,838.73 $2,960.35 $2,243.57 $716.77 $33,595.15
16 $33,595.15 $2,960.35 $2,288.45 $671.90 $31,306.70
17 $31,306.70 $2,960.35 $2,334.22 $626.13 $28,972.49
18 $28,972.49 $2,960.35 $2,380.90 $579.45 $26,591.59
19 $26,591.59 $2,960.35 $2,428.52 $531.83 $24,163.07
20 $24,163.07 $2,960.35 $2,477.09 $483.26 $21,685.98
21 $21,685.98 $2,960.35 $2,526.63 $433.72 $19,159.35
22 $19,159.35 $2,960.35 $2,577.16 $383.19 $16,582.19
23 $16,582.19 $2,960.35 $2,628.71 $331.64 $13,953.49
24 $13,953.49 $2,960.35 $2,681.28 $279.07 $11,272.21
25 $11,272.21 $2,960.35 $2,734.91 $225.44 $8,537.30
26 $8,537.30 $2,960.35 $2,789.60 $170.75 $5,747.70
27 $5,747.70 $2,960.35 $2,845.40 $114.95 $2,902.30
28 $2,902.30 $2,960.35 $2,902.30 $58.05 $0.00
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Appendix D: Cash Flow for Year 1
41
Cash Flow (12 months) Altai
Pre-Startup
EST
Jan-16 Feb-16 Mar-16 Apr-16 May-16 Jun-16
Cash on Hand (beginning of month) 210,000 52,289 1,325 43,264 83,081 41,182 95,696
CASH RECEIPTS
Cash Sales 18,115 13,586 13,586 12,393 16,524 12,393
Collections fm CR accounts 0 59,432 44,574 44,574 40,659 54,212 40,659
Loan/ other cash inj.
TOTAL CASH RECEIPTS 0 77,547 58,160 58,160 53,051 70,735 53,051
Total Cash Available (before cash
out)
210,000 129,836 59,485 101,424 136,133 111,917 148,747
CASH PAID OUT
Purchases (merchandise) 90,000 60,000
Technology/IT/RFID Purchases 32,027
Shelving and Furniture 13,584
Gross wages (exact withdrawal) 8,417 8,417 8,417 8,417 8,417 8,417
Payroll expenses (taxes, etc.) 965 965 965 965 965 965
Outside services
Supplies (office & oper.)
Repairs & maintenance
Advertising 22,190 18,630
Car, delivery & travel
Accounting & legal
Rent 6,000 6,000 6,000 6,000 6,000 6,000
Telephone and Internet 124 124 124 124 124 124
Utilities 315 315 315 315 315 315
Insurance
Taxes (real estate, etc.) -838 -1,111
Interest 1,260 1,226
Development License 89,100
Yoga Instructor 500 400 400 500 400 400
Manager Salary 23000
Miscellaneous
SUBTOTAL 157,711 128,511 16,221 16,643 94,951 16,221 16,336
Loan principal payment 1,700 1,734
Capital purchase (specify)
Other startup costs
Reserve and/or Escrow
Owners' Withdrawal
TOTAL CASH PAID OUT 157,711 128,511 16,221 18,343 94,951 16,221 18,070
Cash Position (end of month) 52,289 1,325 43,264 83,081 41,182 95,696 130,677
ESSENTIAL OPERATING DATA (non cash flow information)
Sales Volume (dollars)
Accounts Receivable
Bad Debt (end of month)
Inventory on hand (eom)
Accounts Payable (eom)
Depreciation

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