Hotel Bussiness Plan

7/30/2019 Hotel Bussiness Plan

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Lowland Heights Roadhouse

Executive Summary

Introduction

The long-term goal of Lowland Heights Roadhouse for temporary lodging, restaurant, bar

and RV Park by creating a differentiated experience capitalizing on personal service, the

historical nature of the Roadhouse buildings, and its unique location in one of the most

attractive parts of South Central india . We plan to be more than a great lodging, restaurant,

bar and RV Park. We plan to create an environment of pampered luxury that surpasses the

standard. Expanding our exposure via the Internet and introducing the Greenhorn Valley to

people that have not yet discovered this year-round paradise will allow us to maintain a

higher than average occupancy rate and above average profits.

Location

The Lowland Heights Roadhouse is located in Agra



The Lowland Heights Roadhouse is located in Agra


desk service. The buildings have undergone a number of restorations and we plan more,

possibly adding 10 more motel units next spring.

As the Roadhouse becomes established through the peak season, we plan to expand our

services to the residents of Dusty Corners and surrounding cities in time for the off-season.

The large dance floor area is ideal for formal or informal gatherings (e.g. wedding

receptions, club meetings, Christmas parties, family reunions, etc.).

The Market

Lowland Heights Roadhouse's target market strategy is based on becoming a destination

choice for the people in the Greenhorn Valley who are looking for a place to relax or

recharge. The target markets that we are going to pursue are people or families looking for a

vacation destination, honeymooners, family reunions, hunters, and drop-in customers. Our

setting and facility is a natural for people or families to visit, what with the Greenhorn

Valley having so many outdoor things to do A modest projection for increased unit rental is




Our three major customer segments are tourists, hunters from all over the United States since

this area is known for great hunting of elk and deer, and local patrons who need the facilities

for various events. Subscriptions to various Web services will provide international exposure

to potential customers for nominal annual fees, plus we have a website

http//www.lodgeatlowlandheights.com. The Roadhouse would like to see a 10% increase in

customers on a yearly basis.

Financial Considerations

Golden Cholla Enterprises LLC dba the Lowland Heights Roadhouse will be acquired via a

Small Business Administration (SBA) loan with the buyers supplying 20% down. We are

assuming an initial capital start-up, as shown in the Start-up table, for operating expenses

which we have already contributed.

We estimate average monthly fixed costs, including operating expenses and mortgage

payment as presented in the Financial Plan chapter below Peak and off-season will have




Chart: Highlights

1.1 Objectives

The objective of the Lowland Heights Roadhouse for the first three years of operation

include:




• Through incentives and increased exposure on the Internet, we hope to increase off-

season occupancy by 30% the first year.

• Increase off-season use by expanding into other uses for property (cater parties,

receptions, weddings, etc.).

1.2 Keys to Success

The primary keys to success for the Lowland Heights Roadhouse will be based on the

following factors:

• Provide a facility that is first class with attention to detail.

• Give each guest a sense that he or she is our top priority.

• Provide quality meals.

• Retain our guests to ensure repeat bookings and referrals.




1.3 Mission

The mission of Lowland Heights Roadhouse is to become the best choice in Prickly Pear

County for temporary lodging by expanding our exposure via the Internet (with multiple

networks and links), and introducing the area to market segments that have not yet

discovered this year-round hunter's dream. We plan to be more than a great Roadhouse. We

plan to create an environment of conveniences that surpasses the standard fare for Dusty

Corners.

The Roadhouse guests will have every need met to ensure his/her comfort. For special

occasions, catered meals, chilled wine, etc. can be provided for an additional fee. During the

weekends, guests will return to the Roadhouse in the evening and find a fine restaurant to

dine at before turning in.

As the Lowland Heights Roadhouse becomes established through the peak season, we plan




2.0 Company Summary

The Lowland Heights Roadhouse is located in Agra at the northern end of the Greenhorn

Valley and is surrounded by the Ombligo de Dios mountain range on the east and the Lost

Pony Hills on the west. The Roadhouse is located on a main thoroughfare Route 173, located

approximately 52 miles north of Silver Gulch and 47 miles southwest of Friday Falls.

2.1 Company Ownership

Lowland Heights Roadhouse is a dba of Golden Cholla Enterprises LLC, a Weststate

Corporation owned and operated by Tory Britts and assisted by her husband Gisli

Njerdginsyn.

2.2 Start-up Summary

Tory Britts (owner) and husband Gisli Njerdginsyn will invest heavily in the




Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $63,175Start-up Assets to Fund $43,033Total Funding Required $106,208

Assets Non-cash Assets from Start-up $25,033Cash Requirements from Start-up $18,000Additional Cash Raised $205,582Cash Balance on Starting Date $223,582Total Assets $248,616

Liabilities and Capital

LiabilitiesCurrent Borrowing $0Long-term Liabilities $232,000Accounts Payable (Outstanding Bills) $1,047Other Current Liabilities (interest-free) $744Total Liabilities $233 791




Total Funding $311,791

Chart: Start-up

Table: Start-up




Direct - TV $200Insurance $500Total Start-up Expenses $63,175

Start-up AssetsCash Required $18,000Start-up Inventory $0Other Current Assets $9,827Long-term Assets $15,206Total Assets $43,033

Total Requirements $106,208




3.0 Services

Lowland Heights Roadhouse will offer customers eight 1-bedroom units and two 2-bedroom

units. Two units have a kitchenette and 2 units can be used together as a suite. Each unit is

equipped with two double beds or a queen bed.

We have a full-service restaurant, a bar with a dance floor that provides live entertainment,

and eight RV sites with hook-ups. Next spring we will be putting in full-service coin-

operated laundry facilities (washing, drying, and optional folding) along with a four bay self-

serve car wash.

4.0 Market Analysis Summary

The Lowland Heights Roadhouse's target market strategy is based on becoming a destination

choice for families and hunters in the greater Greenhorn Valley region who are looking for a

place to relax or hunt or recharge. The target markets that we are going to pursue are people




4.1 Market Segmentation

Our target market strategy is based on becoming a destination for people who are looking to

get away for a vacation or an area to hunt in. Our marketing strategy is based on superior

performance in the following areas:

• Quality facilities

• Beautiful location

• Customer service

The target markets are separated into three segments; "Vacationers," "Hunters," and "Drop-

ins." The primary marketing opportunity is selling to these accessible target market

segments by focusing on their vacation and recreational needs.

Vacationers




to stay for the night. Our sign can be seen from Route 173, a main thoroughfare, and we

expect to get quite a few drop-ins.




Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5Potential

Customers

Growth CAGR

Hunters 15% 90,000 103,500 119,025 136,879 157,411 15.00%Drop-ins 10% 20,000 22,000 24,200 26,620 29,282 10.00%Spring &

Summer Visitors

15% 60,000 69,000 79,350 91,253 104,941 15.00%

Total 14.45% 170,000 194,500 222,575 254,752 291,634 14.45%

Chart: Market Analysis (Pie)




4.2 Service Business Analysis

The Lowland Heights Roadhouse is a 10 room facility, restaurant, bar and RV Park that has

full hook-ups that provides overnight lodging, and lunch, dinner and spirits in a country

setting in the Greenhorn Valley. There is only one other restaurant and motel in the

area. Most people who need lodging in the area make reservations in advance to assure room

availability.

4.3 Competition and Buying Patterns

The Lowland Heights Roadhouse offers a unique country environment, which caters to an

ever increasing group of travelers. Our Lodge creates a climate of home, where guests

become temporary members of a larger family. The Roadhouse's homey feel opens itself to

guests, allowing them to participate and share in the richness of a community, while still

allowing whatever degree of privacy is preferred. Meals or drinks can be shared with the




5.0 Strategy and Implementation Summary

The primary sales and marketing strategy for the Lowland Heights Roadhouse includes these

factors:

• To offer a motel, restaurant and RV Park facility that will appeal to the vacationer or

hunter.

• To provide unmatched customer service to our guests.

• To concentrate our marketing in the greater Greenhorn Valley area.

5.1 Competitive Edge

The Lowland Heights Roadhouse sets itself apart from similar competition in the following

ways.

• Location: Having a motel, restaurant, bar, and RV Park all at one facility is a huge plus,




Another significant advantage for the Lowland Heights Roadhouse is its location. Being

located in the Greenhorn Valley area, the Roadhouse is uniquely positioned, centrally

located to hunting areas, a national park, and historical places.

5.2 Marketing Strategy

Our marketing strategy is based on becoming a destination for vacationers and hunters who

are looking for truly beautiful and unique lodgings. With the greater Greenhorn Valley area

our main target market the Lowland Heights Roadhouse will use several different

approaches to advertise our facility. We will use the Yellow Pages to advertise, as well as

develop a Web page that will show our Lodge with our motel, restaurant, bar and RV Park.

On Route 173 we will have an eye catching sign that will alert potential drop-ins of our

existence. The Roadhouse is confident that it will not take long, with word-of-mouth

recommendations from past customers, to build up to full capacity.




WorldRes provides a free connection to the SABRE travel agent system, providing access to

over 100,000 agents worldwide, as well as to users of Travelocity, one of the most popular

online travel sites.

All of this visibility is free, with the exception of a five to ten percent transaction fee for any

booking made directly via the service and online; much less expensive, yet more

comprehensive than traditional advertising. However, not all lodging patrons are computer

savvy. Therefore, we will be placing seasonal specific advertisements in regional

newspapers and major city magazines.

5.3 Sales Strategy

The Lowland Heights Roadhouse will rent its rooms directly to repeat customers, as well as

via traditional travel agents and through the Internet. All reservations will be handled

by Tory or Gisli. Repeat customers will have the privilege of priority reservations during the




spite of the economic unpredictability we are experiencing, these projections appear

attainable and take the increasing base into consideration. Growth rates for the years 2005

and 2006 are based on percentage increases as follows:

• Reservations: 10% growth rate per year.

• Drop-ins: 10% growth rate per year.

Table: Sales Forecast

Sales Forecast

Year 1 Year 2 Year 3SalesRooms $58,838 $560,000 $600,000Food $36,556 $140,000 $180,000RV Park $10,147 $145,000 $160,000

Bar $45,854 $70,000 $82,000Total Sales $151,394 $915,000 $1,022,000




Chart: Sales Monthly

Chart: Sales by Year




6.0 Web Plan Summary

The Lowland Heights Roadhouse website will focus on the features the Roadhouse has to

offer. Each room with its different options will be on the site as well as pictures of the

Roadhouse and the facilities that it has to offer. The lunch/dinner menu will be

displayed. Room rates will be given, with maps on how to get to here. Attractions within 30

miles will be on the site and other local color will be shown. Reservations can be made

online if the consumer wishes to do so.

6.1 Website Marketing Strategy

Our website marketing strategy will focus on Vacationers & Hunters who are looking for a

vacation or hunting destination that is both close and comfortabley homelike. The Weststate

area will be our main focal point. The Lowland Heights Roadhouse will promote through

our website by using:




with websites. Every aspect of the site will be handled by Tory (owner) and Gisli including

company logo, Web page format, and maintenance of the site. Website Pros will host the

site.

7.0 Management Summary

The Lowland Heights Roadhouse will operate as an owner-occupied business. A small staff

will be hired early next year consisting of a cook and maid along with a maintenance man.

The rest of the tasks will be done by Tory and Gisli.

Gisli right now is responsible for the outside maintenance of the grounds and cleaning of the

motel rooms, and website activities.

Tory will be the general manger, organize and decide on any management idea's on the day-

to-day operations on the inside. She will order product and food from the vendors, and both

will handle reservations. Both Tory and Gisli will promote the Lowland Heights




7.1 Personnel Plan

The personnel needed for the Lowland Heights Roadhouse are the following:

• Manager

• Assistant manager

• Cook - to be hired in 2005

• Maintenance person - to be hired in 2005

• Cleaning person - to be hired in 2005

The Britts/Njerdginsyn family has outside income of $4,500 per month and will not be

taking a salary for the first year of the business.

Table: Personnel




7.2 Management Information Systems

Tory Britts will be maintaining financial and accounting controls in its motel, restaurant and

RV Park through the use of a sophisticated point-of-sale Royal cash register system and

personal computer network using a computerized reservation system that is accessible

for booking rooms on the Internet. The Royal and the personal computer network provides

the Roadhouse management with daily and weekly information regarding sales, cash

receipts, inventory, food and beverage costs, and other controllable operating expenses. We

use Quickbooks for tracking and doing all our financial reports that are required to operate a

business.

7.3 Key Management

Tory Britts is President and principal owner of Golden Cholla Enterprises LLC which owns




Prior to buying the Lowland Heights Roadhouse, I owned and operated an Internet business

(ZooperDooper Deals). I purchased truck loads of clearance or discontinued items and sold

them on Ebay. ZooperDooper Deals was started in August of 2000, operated until June

2004, and was a very successful business. I have not continued with the business since we

moved to Weststate.

Prior to that in 1997-2004 I was on contract with Family Care Providers in Otherstate.

Position: Behavior Management Specialist and Therapeutic Provider

Duties:

• Management of highest level of difficulty in juvenile clients

• Scheduling and heading up weekly case management meetings between clients and team

members

• Determining and soliciting all special needs of clients involving specialists/psychiatric




• Also cared for medically fragile infants on occasion: close monitoring and management

of medication, specialist appointments, breathing machines, breathing treatments etc.

1990-1997 Ten-Galloon Saloon

Position: Shift Manager

Duties:

• Management of bartenders, cocktail waitresses, kitchen help and janitorial service

• Other duties included inventory, sales projections, promotions

• Hiring, mentoring employees

• Menu design, supply/vendor ordering, vendor contacts

• Locating and auditioning bands/entertainment, employee scheduling

• Ability to fill in for all positions when needed




• Certified in alcohol awareness

• Attended and passed food handling and safety course in Lost Wages

• Documented 80 hours per year in therapeutic management for the past 7 years

• Certified in infant child and adult CPR and First Aid

• Completed 2 online self directed small business courses to aid in my knowledge and

abilities.




College:

•

Attended 1-1/2 years at State College

• One year at Pleasantville Community College prenursing, chemistry, economics,

accounting, business, anatomy & physiology.

All this past experience provides me with experience in leadership for management,

developing operational and financial reports, implementing action plans to achieve those

goals, and providing overall strategic direction to operate and manage and implement

business goals for overall strategic direction for the business.

I plan on incorporating my past experiences into the operation of the Lowland Heights

Roadhouse, becoming a very successful business in the Greenhorn Valley.

8.0 Financial Plan




8.1 Break-even Analysis

We estimate average monthly fixed costs shown below. Peak and off-season will have

significant impact on the monthly earnings. For the first year, on-season revenues will offset

off-season losses. As Lowland Heights Roadhouse builds its market position among the

local patrons, we anticipate that off-season revenues will be enough to break even during

that season. Further, a rate increase may be considered in Fiscal Year 2005.

Chart: Break-even Analysis




Break-even Analysis

Monthly Revenue Break-even $4,103

Assumptions:Average Percent Variable Cost 7%

Estimated Monthly Fixed Cost $3,797




8.2 Projected Profit and Loss

Below is the Lowland Heights Roadhouse projected income statement for the next three

years. As mentioned above, earnings are subject to seasonal fluctuations. The new owners

will, however, strengthen the Lowland Heights Roadhouse's market position among the local

communities who will patronize the establishment during the low season, and thus offset the

negative impact of the season.

Chart: Profit Monthly




Chart: Profit Yearly

Chart: Gross Margin Monthly




Chart: Gross Margin Yearly




Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3Sales $151,394 $915,000 $1,022,000Direct Cost of Sales $11,271 $34,850 $44,150

Other Production Expenses $0 $0 $0Total Cost of Sales $11,271 $34,850 $44,150

Gross Margin $140,123 $880,150 $977,850Gross Margin % 92.56% 96.19% 95.68%

ExpensesPayroll $2,400 $251,000 $266,000Sales and Marketing and Other

Expenses

$1,160 $80,000 $100,000

Depreciation $14,280 $14,280 $14,280Leased Equipment $0 $0 $0

Utilities $3,725 $26,000 $26,000Insurance $2,700 $24,000 $24,000Lease $7 300 $0 $0







8.3 Projected Cash Flow

The Cash Flow projections are outlined below. Again, these projections are based on our

basic assumptions with revenue generation factors carrying the most significant weight

regarding the outcome. We are anticipating that we will not need to invest any additional

capital into the business with a healthy cash flow in place.

Table: Cash Flow

Pro Forma Cash FlowYear 1 Year 2 Year 3

Cash Received

Cash from OperationsCash Sales $151,394 $915,000 $1,022,000Subtotal Cash from Operations $151,394 $915,000 $1,022,000

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $0 $0 $0




Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0Principal Repayment of Current Borrowing $0 $0 $0Other Liabilities Principal Repayment $0 $0 $0Long-term Liabilities Principal Repayment $12,000 $30,000 $30,000Purchase Other Current Assets $0 $18,000 $21,000Purchase Long-term Assets $0 $20,000 $60,000Dividends $0 $0 $0Subtotal Cash Spent $93,349 $676,192 $784,641

Net Cash Flow $58,044 $238,808 $237,359Cash Balance $281,627 $520,435 $757,794

Chart: Cash




8.4 Projected Balance Sheet

The following is a projected Balance Sheet showing sufficient growth and a very acceptable

financial position.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3Assets

Current AssetsCash $281,627 $520,435 $757,794Inventory $1,199 $13,733 $7,128Other Current Assets $9,827 $27,827 $48,827Total Current Assets $292,653 $561,994 $813,749

Long-term AssetsLong-term Assets $15,206 $35,206 $95,206Accumulated Depreciation $14,280 $28,560 $42,840




Retained Earnings ($63,175) ($12,980) $268,609Earnings $50,195 $281,589 $325,059Total Capital $65,020 $346,609 $671,668Total Liabilities and Capital $293,579 $568,641 $866,116

Net Worth $65,020 $346,609 $671,668




8.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on

the Standard Industrial Classification (SIC) code 7011, Hotels and Motels, are shown for

comparison.

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry

ProfileSales Growth n.a. 504.38% 11.69% 0.21%

Percent of Total AssetsInventory 0.41% 2.41% 0.82% 1.31%

Other Current Assets 3.35% 4.89% 5.64% 28.59%Total Current Assets 99.68% 98.83% 93.95% 33.99%Long-term Assets 0.32% 1.17% 6.05% 66.01%




Main RatiosCurrent 34.19 17.55 23.62 1.68Quick 34.05 17.12 23.42 1.29Total Debt to Total Assets 77.85% 39.05% 22.45% 50.04%Pre-tax Return on Net Worth 110.28% 116.06% 69.14% 0.88%Pre-tax Return on Assets 24.43% 70.74% 53.62% 1.76%

Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin 33.16% 30.77% 31.81% n.a

Return on Equity 77.20% 81.24% 48.40% n.a

Activity RatiosInventory Turnover 7.85 4.67 4.23 n.aAccounts Payable Turnover 10.97 12.17 12.17 n.aPayment Days 27 19 29 n.aTotal Asset Turnover 0.52 1.61 1.18 n.a

Debt RatiosDebt to Net Worth 3.52 0.64 0.29 n.aCurrent Liab. to Liab. 0.04 0.14 0.18 n.a

Liquidity Ratios Net Working Capital $284,094 $529,963 $779,302 n.aInterest Coverage 4.14 20.62 27.54 n.a

Additional Ratios

Appendix



Appendix

Table: Sales Forecast

Sales

Forecast

Mont

h 1

Mont

h 2

Mont

h 3

Month

4

Month

5

Month

6

Mont

h 7

Mont

h 8

Mont

h 9

Month

10

Month

11

Month

12SalesRooms 0% $2,04

2

$3,35

4

$4,68

2

$16,50

0

$8,250 $3,245 $2,56

5

$2,65

0

$2,65

0

$3,850 $4,200 $4,850

Food 0% $278 $838 $1,54

0

$5,350 $4,950 $2,850 $2,85

0

$2,85

0

$3,15

0

$3,250 $3,250 $5,400

RV Park 0% $163 $142 $492 $3,250 $2,250 $1,675 $850 $500 $300 $175 $100 $250Bar 0% $3,50

1

$2,84

9

$2,80

8

$6,250 $5,245 $3,450 $3,40

0

$3,40

0

$3,40

0

$3,400 $3,400 $4,750

Total

Sales

$5,98

4

$7,18

3

$9,52

2

$31,35

0

$20,69

5

$11,22

0

$9,66

5

$9,40

0

$9,50

0

$10,67

5

$10,95

0

$15,25

0

Direct

Cost of

Mont

h 1

Mont

h 2

Mont

h 3

Month

4

Month

5

Month

6

Mont

h 7

Mont

h 8

Mont

h 9

Month

10

Month

11

Month

12

Page 1

Appendix



Appendix

SalesRooms $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25 $25Food $75 $65 $125 $1,050 $900 $625 $625 $625 $675 $675 $675 $750RV Park $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15 $15Bar $1,25

0

$150 $175 $476 $375 $200 $200 $200 $200 $200 $200 $300

Subtotal

Direct

Cost of

Sales

$1,36

5

$255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,090

Page 2

Appendix



pp

Table: Personnel

Personnel PlanMont

h 1

Mont

h 2

Mont

h 3

Mont

h 4

Mont

h 5

Mont

h 6

Mont

h 7

Mont

h 8

Mont

h 9

Mont

h 10

Mont

h 11

Mont

h 12Manager 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Assistant

Manager

0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Cook 0% $0 $0 $0 $0 $0 $0 $0 $0 $300 $300 $300 $300Maintenance Staff 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Cleaning Staff 0% $0 $0 $0 $0 $0 $0 $0 $0 $300 $300 $300 $300Total People 2 2 2 2 2 2 2 2 5 5 50 5

Total Payroll $0 $0 $0 $0 $0 $0 $0 $0 $600 $600 $600 $600

Page 3

Appendix



pp

Table: Profit and Loss

Pro Forma

Profit and

Loss

Month

1

Month

2

Month

3

Month

4

Month

5

Month

6

Month

7

Month

8

Month

9

Month

10

Month

11

Mo

Sales $5,984 $7,183 $9,522 $31,35

0

$20,69

5

$11,22

0

$9,665 $9,400 $9,500 $10,67

5

$10,95

0

$15,

Direct Cost

of Sales

$1,365 $255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,0

Other

Production

Expenses

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost

of Sales

$1,365 $255 $340 $1,566 $1,315 $865 $865 $865 $915 $915 $915 $1,0

Gross $4,619 $6,928 $9,182 $29,78 $19,38 $10,35 $8,800 $8,535 $8,585 $9,760 $10,03 $14,

Page 4

Appendix



pp

Margin 4 0 5 5Gross

Margin %

77.19% 96.45% 96.43% 95.00% 93.65% 92.29% 91.05% 90.80% 90.37% 91.43% 91.64% 92.8

ExpensesPayroll $0 $0 $0 $0 $0 $0 $0 $0 $600 $600 $600 $6Sales and

Marketing

and Other

Expenses

$0 $0 $0 $210 $85 $100 $100 $100 $125 $145 $145 $1

Depreciatio

n

$1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,190 $1,1

Leased

Equipment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $187 $168 $410 $260 $250 $350 $350 $350 $350 $350 $350 $3Insurance $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $225 $2

Lease $1,300 $1,500 $1,500 $1,500 $1,500 $0 $0 $0 $0 $0 $0Mortgage

Payment

15% $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,0

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

Total $2,902 $3,083 $3,325 $3,385 $3,250 $3,865 $3,865 $3,865 $4,490 $4,510 $4,510 $4,5

Page 5

Appendix



Operating

Expenses

Profit

Before

Interest and

Taxes

$1,717 $3,845 $5,857 $26,39

9

$16,13

0

$6,490 $4,935 $4,670 $4,095 $5,250 $5,525 $9,6

EBITDA $2,907 $5,035 $7,047 $27,58

9

$17,32

0

$7,680 $6,125 $5,860 $5,285 $6,440 $6,715 $10,

Interest

Expense

$1,933 $1,933 $1,933 $1,933 $1,933 $1,933 $1,917 $1,900 $1,883 $1,867 $1,850 $1,8

Taxes

Incurred

($65) $574 $1,177 $7,340 $4,259 $1,367 $905 $831 $664 $1,015 $1,103 $2,3

Net Profit ($152) $1,338 $2,746 $17,12

6

$9,938 $3,190 $2,113 $1,939 $1,548 $2,368 $2,573 $5,4

Net

Profit/Sales

-2.53% 18.63% 28.84% 54.63% 48.02% 28.43% 21.86% 20.63% 16.30% 22.19% 23.49% 35.8

Page 6

Appendix



Table: Cash Flow

Pro Forma

Cash Flow

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month

10Cash

Received

Cash from

OperationsCash Sales $5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675Subtotal

Cash from

Operations

$5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675

Additional

Cash

Received

Page 7

Appendix



Sales Tax,

VAT,

HST/GST

Received

0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Current

Borrowing

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Other

Liabilities

(interest-

free)

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

New Long-

term

Liabilities

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of

Other

Current

Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Sales of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Page 8

Appendix



Long-term

Assets New

Investment

Received

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal

Cash

Received

$5,984 $7,183 $9,522 $31,350 $20,695 $11,220 $9,665 $9,400 $9,500 $10,675

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month

10

Expenditures

from

Operations

Cash

Spending

$0 $0 $0 $0 $0 $0 $0 $0 $600 $600

Bill

Payments

$1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $6,959 $6,494 $6,401 $6,225

Subtotal $1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $6,959 $6,494 $7,001 $6,825

Page 9

Appendix



Spent on

Operations

Additional

Cash SpentSales Tax,

VAT,

HST/GST

Paid Out

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal

Repayment

of Current

Borrowing

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other

Liabilities

Principal

Repayment

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term

Liabilities

$0 $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000

Page 10

Appendix



Principal

RepaymentPurchase

Other

Current

Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase

Long-term

Assets

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Subtotal

Cash Spent

$1,262 $6,379 $4,428 $5,532 $13,698 $9,214 $8,959 $8,494 $9,001 $8,825

Net Cash

Flow

$4,722 $805 $5,093 $25,818 $6,997 $2,006 $706 $906 $499 $1,850

Cash

Balance

$228,30

4

$229,10

9

$234,20

3

$260,02

0

$267,01

7

$269,02

3

$269,72

9

$270,63

5

$271,13

4

$272,98

4

Page 11

Appendix



Table: Balance Sheet

Pro Forma

Balance

Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Assets Starting

Balances

Current

AssetsCash $223,582 $228,304 $229,109 $234,203 $260,020 $267,017 $269,023 $269,729 $270,635 $271,134 $

Inventory $0 $1,502 $1,247 $907 $1,723 $1,447 $1,582 $1,717 $1,852 $1,937Other

Current

Assets

$9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827 $9,827

Total $233,409 $239,633 $240,183 $244,936 $271,570 $278,291 $280,432 $281,272 $282,313 $282,897 $

Page 12

Appendix



Current

Assets

Long-term

AssetsLong-term

Assets

$15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $15,206 $

Accumulate

d

Depreciation

$0 $1,190 $2,380 $3,570 $4,760 $5,950 $7,140 $8,330 $9,520 $10,710 $

Total Long-

term Assets

$15,206 $14,016 $12,826 $11,636 $10,446 $9,256 $8,066 $6,876 $5,686 $4,496

Total Assets $248,616 $253,649 $253,009 $256,572 $282,016 $287,547 $288,498 $288,149 $288,000 $287,394 $

Liabilities

and Capital

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9

Current

LiabilitiesAccounts

Payable

$1,047 $6,232 $4,253 $5,070 $13,388 $8,982 $6,743 $6,281 $6,192 $6,039

Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Page 13

Appendix



BorrowingOther

Current

Liabilities

$744 $744 $744 $744 $744 $744 $744 $744 $744 $744

Subtotal

Current

Liabilities

$1,791 $6,976 $4,997 $5,814 $14,132 $9,725 $7,487 $7,024 $6,936 $6,782

Long-term

Liabilities

$232,000 $232,000 $232,000 $232,000 $232,000 $232,000 $232,000 $230,000 $228,000 $226,000 $

Total

Liabilities

$233,791 $238,976 $236,997 $237,814 $246,132 $241,725 $239,487 $237,024 $234,936 $232,782 $

Paid-in

Capital

$78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $78,000 $

Retained

Earnings

($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($63,175) ($

Earnings $0 ($152) $1,187 $3,933 $21,059 $30,997 $34,186 $36,299 $38,238 $39,786 $Total Capital $14,825 $14,673 $16,012 $18,758 $35,884 $45,822 $49,011 $51,124 $53,063 $54,611 $Total

Liabilities

$248,616 $253,649 $253,009 $256,572 $282,016 $287,547 $288,498 $288,149 $288,000 $287,394 $

Page 14

Appendix



and Capital

Net Worth $14,825 $14,673 $16,012 $18,758 $35,884 $45,822 $49,011 $51,124 $53,063 $54,611 $

Page 15

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