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Business Plan
(C&C)
Owners: Cloris Tian, Chirag Lala
Address:
2 Saint Vincent Circle,
Little Rock, AR, 72205
Telephone: 573-559-4990
E-Mail:
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Table of Contents
I. Executive Summary .......................................................................................................3
II. Company Overview .......................................................................................................4
III. Products or Services .......................................................................................................5
IV. Market and Competitive Analysis .................................................................................6
V. Management Team.........................................................................................................9
VI. Operating Strategies .....................................................................................................10
VII. Critical Risks ................................................................................................................14
VIII. Cash Flow Statement ...................................................................................................16
IX. Income Statement.........................................................................................................19
X. Balance Sheet ...............................................................................................................22
XI. Funds Required/Used ...................................................................................................27
XII. Offering ........................................................................................................................27
XIII. Appendix ......................................................................................................................28
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I. Executive Summary
1.0 Executive Summary
Purchasing a dress for a fancy event, particularly proms or weddings, can be an incredible hassle, especially
considering that the dress is something fairly expensive that will only be worn once or twice at most. 15,837,000
individuals between the ages of 14-19 are enrolled in high school in the United States.1 Prom spending is expected
to rise this spring to an average of $1,139 per student, and much of these expenditures are on the dresses
themselves.2 Additionally, there are 2.5 million weddings in the U.S.
3 each year and the average wedding dress itself
costs $1,2114. Additionally, after only wearing their dresses a scant few times, many people sell them for 40-50% of
their original market prices. This is a market waiting to be tapped by a low-cost rental firm for dresses. The nature of
purchasing dresses, the purchased dress’s lifespan and the cost of the dresses themselves indicates that there is
significant potential for a business that could answer the demand for apparel that is only needed in short, temporary
bursts.
C&C is a start-up rental company for dresses that provides an online venue as well as a retail location in Little
Rock, Arkansas. C&C offers its own inventory up for rental but also provides a space where individuals can lease
out their dresses to prospective buyers (with C&C taking a commission from the lease). C&C will clean the dresses,
pay for shipping and handling, and send them off to any location within Arkansas. The first key to C&C’s success
will be its affordable prices - C&C is targeted at middle and working class families who do not have as much leeway
to spend large amounts of money on dresses for special occasions. The second and third keys are credibility and
reputation, respectively. C&C’s success relies on people knowing it exists and viewing it as a legitimate venue for
acquiring their dresses. To gain that legitimacy, C&C intends to base its marketing strategy around acquiring
customers who will return as second, third, or fourth-time shoppers. It will target its advertisements online, network
heavily, hire student publicists, and rely on the good reviews from customers to create a low-cost advertising
strategy. Where there are gaps, a local advertising agency will be hired to fill them in.
1 http://www.census.gov/prod/2013pubs/p20-571.pdf
2 http://www.usatoday.com/story/money/business/2013/04/24/prom-spending-on-rise-again/2110537/
3 http://en.wikipedia.org/wiki/Wedding_industry_in_the_United_States
4 http://www.xogroupinc.com/press-releases-home/2014-press-releases/2014-03-27-real-weddings-study-average-
cost-of-wedding.aspx
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A sophisticated team of professionals has been hired to see this project through: Cloris Tian (CFO), Chirag Lala
(CEO), and Ryan Rose (IT Manager). They will ensure that C&C operates in a prudent fashion that utilizes its
limited startup capital in a manner that will eventually allow C&C to expand its locations within two years. Upon
expansion, C&C hopes to further expand its inventory beyond women’s dresses and include things like men’s
apparel, shoes, bags, etc.
1.1 Mission Statement
C&C’s mission is to be the go-to business when someone needs a dress for a special occasion. By offering
an easily accessible, low-cost market for rentals, C&C’s goal is to ensure that no family needs to break the bank for
a special dress that will only be used a few times. By doing so, C&C will ensure that choosing the right dress will be
a bigger concern than picking the right price.
II. Company Overview
2.0 Vision
C&C’s vision is to be the monopoly renting Fancy Dresses Service Company across the U.S. We will
provide the best service and highest quality of renting information to earn our customers’ trust.
2.1 Current Status
C&C is currently a start-up for renting prom and wedding dresses. The business is hoping to emerge onto
the market and make headway in its first locations. In the future, C&C hopes to expand by renting out other articles
like handbags, accessories, suits, shoes, or casual wear.
2.2 Goals and Objectives
The immediate goal is to establish C&C in the regional market. C&C will have a first-mover advantage in
the dress rental market in the sense that the first couple of businesses to start up will be able to capitalize on the lack
of competition. But that can only happen if the business establishes itself in at least one or two locations in the
beginning. Therefore, the goal for the first four years or so is to establish profitability in the initial locations. This
would be accomplished by investing in local networks, establishing contacts, and focusing heavily on advertising in
key rental seasons. Startup expenses would have to be paid back in full. Afterwards, the long-term objectives shift to
expansion whereby these strategies are turned to new cities and states. If, after six years, the business has established
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profitability in at least two or three new locations covering different states, a new objective would be added:
expanding into new merchandise such as male suits, bags, shoes, and accessories.
2.3 Legal Form
C&C will function as a general partnership. Cloris Tian and Chirag Lala will be the owners and will
represent C&C in all of its legal and business affairs.
2.4 Keys to Success
Affordability. The target audience includes the mass of consumers from working class, middle-class backgrounds
that do not necessarily have the money to spend for buying high-end dresses. Therefore, a key to success is charging
prices that appeal to a sense of frugality among this target population especially because these are dresses that will
likely only be worn once.
Credibility. This type of business model is built on trust. It can only function if C&C establishes itself as a credible
medium between those willing to loan out the dresses and those wishing to rent them.
Reputation. Credibility is nothing without sales. Acquiring name recognition and a reputation for good service will
be critical to ensure that customers keep reappearing through more than one renting season.
III. Products or Services
The full product listing online navigation is in Appendix I. $34,300 will be used to purchase an initial
inventory of dresses online. Dress owners will be able to lease their dress to C&C. The renter must pay 10% of the
dress’s original price (as determined by an online purchase history and mutual consultation with the dress owner)
every three days. If the renting period lasts more than three days, the cost of renting will increase ten dollars per day.
Once the dress is rented out, the dress owner will receive 30% of the total rental fee. C&C will keep the remaining
70% and will take responsibility for cleaning and shipping the dress. If the dress has not been rented out, the owner
may reserve the right to take back their dress whenever they choose.
The consumers must present a credit card in order to ensure that they have the proper credit and to ensure
that they can be charged in the event a dress is damaged or not returned on time.
The store will have a website with pictures of the dresses (pictures will include ones in which the dress is
worn by a model and ones in which it is just the dress itself). Customers will be able to rate the dress and comment
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on it. If a dress is leased out, the owner of the dress can use the website to advertise their dress and give others
fashion advice pertaining to it. They may also use the website to reach out to potential renters.
Competitive Comparison
The most obvious competition to C&C comes from any other rental stores for dresses. Competition also
comes from online sellers (both official businesses and individual sellers on sites like Amazon or eBay) and retail
stores. C&C is a rental store but there is still a significant percentage of the consumer population who will want to
buy their dresses, particularly if they see themselves wearing a dress more than once or if they have a desire to buy a
brand new dress.
We will offer all kinds of dresses for a myriad of events: school dances, formal events and even weddings.
Most dresses would range from $150 to $500. Wedding dresses would range from $300-$2,000. Under normal
circumstances, $200-$350 dresses would make up most of the inventory for school dances; $500-$1000 dresses
would make up most of the inventory for wedding dresses. C&C is not going to store the dresses for more than
three years to maintain a modern inventory.
Future Products
Future products include new lines of rental material. The potential includes handbags, accessories, suits,
shoes, or casual wear.
IV. Market and Competitive Analysis
With 2,330 private high school students and an additional 37,877 public high school students between 11th
and
12th
grade in Arkansas, there is a significant potential market for prom dresses.5 Presuming roughly half the total
number are girls that presents nearly 20,000 potential customers. Additionally, 31,435 weddings were held in
Arkansas in 2010.6 This further bolsters the number of customers who are looking to find dresses. Since dresses are
commonly wore once, or simply a few times, renting remains a financially attractive option for acquiring high-end
dresses without breaking the bank.
For the first four years, C&C will focus its efforts on renting out dresses to women and girls in Arkansas.
Provided the business proves profitable, C&C will begin its gradual expansion after the first four years. However,
5 http://arkansas.educationbug.org/public-schools/
6 http://www.arkansasbride.com/blog/post/22697/what-it-costs-to-get-married-in-arkansas
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the website will be open to customers from all over the country. The starting presumption is that C&C will acquire a
20% market share. The other half of consumers will likely buy their dresses online or from retailers. Others might be
able to borrow their dresses directly from people they know. Additionally, what with the recent pressures on the
economy, some consumers might not be willing to spend money on dresses at all (either to rent or buy them).
Typically, men rent tuxedos, but ladies rarely rent dresses. Therefore, C&C may have to become involved in
changing attitudes towards the market when spreading its message. To do so, C&C faces a number of barriers. High
advertising costs are one such barrier. There are numerous local advertising firms that offer their services to small
businesses and local entities that could address this problem since it would not involve acquiring preset packages
from large advertising agencies. Additionally, gaining consumer acceptance and brand recognition will be difficult
even with a burst of advertising up front. But due to lower investment in inventory (as a result of clients being able
to lease their dresses), C&C can devote a larger percentage of its budget to advertising while also offering
promotions and special deals.
Additionally, anyone can come to the store itself to try on dresses. This, combined with customer reviews, will
function as a form of extremely low-cost advertising for the business since it will involve communications between
customers.
Among Hendrix College students in particular, many girls have shown interest in renting their old dresses to
earn a small profit since many of the dresses just sit in closets and collect dust. If other families recognize this
approach, they too will likely consider doing the same. C&C’s job is to step in and ensure that they can connect
customers with dresses that fit them, suit their taste, and can be readied and shipped quickly.
This chart below is a comparison of C&C and two potential competitors in a range of categories relating to
business quality.
Factors C&C First Impressions
The Bridal
Cottage
Importance to
Customer
Products 3 5 5 5
Price 5 2 2 5
Quality 4 4 4 5
Selection 3 5 4 4
Service 4 4 4 3
Reliability 3 4 5 3
Stability 2 5 5 1
Expertise 3 4 5 3
Company Reputation 3 5 5 3
Location 4 3 4 3
Appearance 4 4 4 5
Sales Method 5 3 3 2
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Credit Policies 4 5 5 5
Advertising 4 4 4 3
Image 4 4 4 4
Note: 1 = low, 5= high
Promotion
For promotion, C&C will reach out to small-time advertising agencies like the Griffey Agency for its
advertising needs. C&C will set up a website, social media accounts, and print flyers and pamphlets for distribution
in schools, community centers, and local shopping centers. C&C will work with graphic design specialists to design
a logo, a letterhead, and other stationary materials.
Market forecasts show a growing industry in Formal Wear & Costume Rental. The five-year forecast below
was taken from Anything Research Economic Analysis. Growth in the industry indicates that this is a promising
field to invest in considering the increase in the five years from 2014 that this analysis was conducted in.
U.S. Geographic Distribution: Revenue Statistics by State
Market Size by State ($ millions) indicates how the industry's competition is distributed throughout the country.
State-level information can identify areas with higher and lower market share than average.
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Source from: AnythingResearch Economic Analysis 7
As is evident above, Arkansas is a promising state for formal renting. It has an above- average market size
for renting industry. In the future, C&C expansions could spread to Texas, which offers an even more promising
market as indicated above. The first location that C&C would aim for in Texas would be Dallas in 2019.
V. Management Team
Chirag Lala will be the Chief Executive Officer (CEO) and will develop business strategy, conduct legal
affairs, and execute business ventures. Cloris Tian will be the Chief Financial Officer (CFO) and will supervise
financial affairs, the finance and accounting department, and the marketing manager. The management team will
also contain an IT Department Manager, Ryan Rose, to operate the website and handle any technological needs
C&C may require such as database management. Total annual compensation will amount to $35,000. Important
officers have their resumes attached in the appendix III. There will be a sales agent to serve the customers within the
store’s site. The salary will be $10 per hour. After two years of operation, all the employees will earn a bonus equal
to 10% of their original salaries.
7 http://www.anythingresearch.com/industry/Formal-Wear-Costume-Rental.htm
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There will be a Management and Advisory Board (MAB) consisting of the investors in C&C. They will
offer their advice and work with the CEO on any extrinsic requirements or agreements might have been attached
with their investments.
Promotions will be managed on a case-by-case basis for the time being as C&C is a small enough firm. The
CEO will handle employee affairs including hiring, firing, promotions, and compensation in consultation with the
owners of C&C (in this case the CEO being one of the owners, Chirag Lala and the co-owner being Cloris Tian, the
CFO). Promotions and compensation changes will factor in an employee’s number of years at the firm, competency,
loyalty, dependability and commitment.
Table 1: Personnel
Personnel Plan 2015 2016 2017
CEO $30,000 $30,000 $33,000
CFO $30,000 $30,000 $33,000
IT Manager $28,000 $28,000 $30,800
Sales Agent $24,000 $24,000 $26,400
Shipping Personnel $22,000 $22,000 $24,200
Total Payroll $134,000 $134,000 $147,400
VI. Operating strategies
6.0 Marketing and Promotion Strategies
Price
$34,300 will be used to purchase an initial inventory of dresses online. Dress owners will be able to lease
their dress to C&C. The renter must pay 10% of the dress’s original price (as determined by an online purchase
history and mutual consultation with the dress owner) every three days. If the renting period lasts more than three
days, the cost of renting will increase ten dollars per day. Once the dress is rented out, the dress owner will receive
30% of the total rental fee. C&C will keep the remaining 70% and will take responsibility for cleaning and shipping
the dress. If the dress has not been rented out, the owner may reserve the right to take back their dress whenever they
choose. There will be depreciation price applied to the dress; a 5% reduction in its original renting price will occur
after each rental.
There will also be services available in case the owner wishes to sell the dress outright. C&C will charge a
15% commission for handling a sale between the owner and a third party. Additionally, under certain circumstances,
C&C will discuss selling a dress to a client outright with prices set on a case-by-case basis. This price mechanism is
only in place because C&C’s primary business aims do not include selling dresses.
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For a rental agreement, there is a sample in appendix II to serve for that purpose.
Proposed Location
The Midtowne Shopping Center in Little Rock is an excellent location. It has numerous stores for
consumers to browse, several restaurants, and an IMAX movie theater. Additionally, the location is devoid of
competitors for this particular business model. The location also offers legitimacy to the store because of its prestige.
Renting costs for a 3,200 square foot location in Midtowne are $25 per square foot per year.8 That totals to $80,000
per year.
As mentioned previously, advertising will be heavily focused online to avoid the overhead costs of
traditional modes of advertising. Constant usage of social media, utilizing the website’s commenting services and
online shopping venues, and reaching out to returning customers will allow for significant promotion without too
much excess cost. In a business like this, word-of-mouth strategies are incredibly important because C&C depends
on its reputation. Accordingly, C&C will keep track of large events in towns (weddings, galas, functions, school
events) at which its promotion efforts can be targeted. Promotion strategies will largely be event-specific but could
easily include gift card deals for local partner business when the customers rent dresses from C&C, such as
restaurants, bowling alleys, gaming centers, etc. Information on deals would be spread through fliers at such key
locations as well. Buying advertisements online, particularly on local and regional websites will be incredibly
effective as will online ordering capability; C&C counts on its customers having ready access to its services as a
hallmark of its marketing strategy. The idea is to market and induce a purchase simultaneously.
There is a publicity test that C&C will employ upon its inauguration. C&C will hire ten girls from ten
different public schools in Arkansas to function as public relations assistants in their local area, particularly their
own school and school districts. Based on the 2010 census, the top ten cities to aim for are as follows: Little
Rock, Fort Smith, Fayetteville, Springdale, Jonesboro, North Little Rock, Conway, Rogers, Pine Bluff, and
Bentonville.9 Compensation for these publicists will include the ability to freely rent a prom dress or wedding dress
twice; additionally, the girls will be able to list their involvement as “Interns” or “Publicists” for their own
professional development and gain valuable experience in retail promotion. In extraordinary cases, C&C may offer
8 http://www.loopnet.com/New-Jersey/Midtown_Shopping-Centers-For-Lease/
9 http://www.arkansasonline.com/news/2011/feb/10/arkansas-population-city/
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stipends or other rewards for miscellaneous situations. We will also develop a logo for C&C. The IT manager will
design it.
A long-term strategy for gaining customers includes establishing a sense of “brand loyalty.” C&C does not
offer its own brand of dresses of course. But what it does offer is a unique approach to acquiring dresses that it
hopes customers will take a shine to, especially during the extravagance events that will happen in their lives. The
ease of doing business, particularly online, connections between buyers and sellers, the swift service and delivery,
etc. are all things to ensure that customers return and recommend the business far and wide. Factor in prices
alongside C&C’s ability to redirect customers to another retailer if they truly do not see anything within our
inventory worth their time, and there begins the development of a brand loyalty built upon the three critical
characteristics mentioned earlier for C&C: Affordability, Credibility, and Reputation.
6.1 Research and Development
The CEO and CFO will take charge of keeping up-to-date on the latest trends and inventory. Additionally,
the marketing interns mentioned previously will be required to provide periodic updates on trends and the demands
for those trends in each of their respective ten cities.
6.2 Administrative and Financial Strategies
The guiding philosophy to C&C’s financial strategy consists of two key factors: frugality and prudence.
Extravagant expenses will be avoided where and when possible and the goal will be to ensure that each dollar spent
goes as far as it possibly can. Therefore, wherever negotiations can be had on inventory acquisitions, outside deals,
contracting jobs, etc. they will be had. Partnerships with other businesses will be pursued wherever they can offer
advantageous deals.
6.3 Sales Forecast
Due to the difficulty in forecasting the number of new customers at C&C, the following sales forecast in
Table 2 is based on survey results. A personal interview was conducted of 1,300 high school girls in Conway High
School and 50 brides in Conway, Arkansas. 920 out of the 1,300 high school girls and 27 out of the 50 brides would
be willing to try C&C as their avenue for acquiring a dress. Those numbers amount to 71% of high school girls and
54% of brides who could be counted as potential customers. C&C expects that revenues will increase as the years go
by, but the forecast still needs to be conservative; the percentage of brides in particular means that C&C will have a
more difficult time gaining a foothold in the market even if it may dominate rentals. Therefore, C&C will always
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forecast sales 10% less than the market projections. The hope then is that effective advertising and customer service
will boost the number of customers by 10% the following year, and 15% for the third year.
Table 2: Sales Forecast
Sales Forecast 2015 2016 2017
Sales
Prom - lending $60,000 $66,000 $72,600
Wedding - lending $220,045 $242,050 $266,255
Prom, wedding- sales $85,000 $93,500 $102,850
Total Sales $365,045 $401,550 $441,705
Direct Cost
Shipping $20,000 $22,000 $24,200
Cost of dresses sold $84,014 $92,415 $101,656
Subtotal Direct Cost of Sales $104,014 $114,415 $125,856
Chart 1: Sales by Year
6.4 Strategic Alliances
C&C will ally with credit-card companies such as Visa, Master Card, and American Express to increase the
number of payment avenues for customers.
$0.00
$50,000.00
$100,000.00
$150,000.00
$200,000.00
$250,000.00
$300,000.00
$350,000.00
$400,000.00
$450,000.00
2015 2016 2017
Sales by Year
Prom, wedding- sales
Wedding - lending
Prom - lending
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6.5 Milestones
Table 3 details the milestones for C&C’s future expansion in several categories. The employee responsible
for each metric is listed alongside the start and end dates for the expansion period, the budget, and the department.
Table 3: Milestones
Milestone Start Date End Date Budget Employee
Responsible
Department
Website Redesign 11/30/2015 2/10/2016 $1,000 Ryan Rose IT
Annual Marketing Program 11/16/2015 1/24/2016 $36,000 Cloris Tian Marketing
Revamp Logo Design 11/20/2015 12/29/2015 $500 Ryan Rose IT
Establish Alliance With Internet
Vendors
12/31/2015 3/7/2016 $1,500 Chirag Lala Business
Department
Upgrade Existing Warehouse 11/3/2015 3/1/2016 $20,000 Cloris Tian Business
Department
Totals $59,000
Chart 2: Milestones
VII. Critical Risks
As noted by the survey results, the potential market for wedding dresses seems to show that only fifty
percent of women would be interested in renting dresses. Competition from online sellers and retailers will also be a
notable risk. Additionally, renting dresses is a fairly new and untested business model. Particularly innovative is the
10/13/2015 12/2/2015 1/21/2016 3/11/2016
Website Redesign
Annual Marketing Porgram
Revamp Logo Design
Establish Alliance With Internet…
Upgrade Existing Warehouse
Milestones
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idea of connecting leasers and renters. That may cause difficulty in acquiring funds from potential investors who are
looking to invest their money in tested, conservative business models. Additionally, there is the risk that advertising
might fail to attract a sufficient number of customers for sustaining the required cash flow.
But more so than financing, there is one final risk that will become relevant if the business is a major
success. The initial investment in inventory is low because of the reliance on outside lessors. If a particular renting
season involves far higher demand for dresses, there is a chance that C&C could be caught off guard with a rapidly
shrinking inventory if too many renters step forward at once. The flip side to that problem is that not enough lessors
might step forward, either in the opening of the store, or later on in a particularly busy season.
Managing these threats involve several coping mechanisms and contingency plans. If advertising fails to
attract a sufficient number of renters, C&C will lean heavily on a strategy often applied in non-retail firms. It will
begin reaching out to clients personally and tapping contacts and business networks far more extensively. Leaning
on advertising as a crutch is often required in businesses like this and if a customer quantity at any one time requires
more hands-on involvement from the management staff, then so be it. Promotion will be stepped up in such periods.
As for the problem with inventory, C&C will handle it by giving leasers sufficient leeway to adjust their
prices to accommodate market demand and supply. This should eliminate any shortages in the market. C&C would
be able to step in and tilt the market if it sees the opportunity to increase inventory or sales. Additionally, C&C will
make periodic purchases of dresses to increase its inventory such that there would be a sufficient cushion in the
event leasers cannot make up the difference.
The investment issue will be addressed by constantly seeking out additional sources of capital. Once a
reasonable stock of investors has been gained, they will be kept informed and involved in the business through the
Management Advisory Board. New investors will constantly be welcomed and sought after. In beginning, C&C has
enough operating cash to carry out its operations through bank loans and cash reserves so if investors do not show
up in the beginning, C&C will have a time window to produce results and attract more in the future.
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VIII. Cash Flow Statement
C&C Rental Inc.
Statement of Cash Flow
For Quarter Ended in 2015
3/31/2015 6/30/2015 9/30/2015 12/31/2015
Cash Flow from Operating Activities:
Cash Received from Customers $87,023.00 $95,273.00 $89,396.00 $93,353.00
Deduct: Cash Paid for Merchandise ($3,500.00) ($5,000.00) ($4,000.00) ($4,650.00)
Cash Paid for Operating Expenses ($93,321.00) ($62,666.00) ($61,644.00) ($61,428.00)
Cash Paid for Interest Expenses ($1,436.25) ($1,436.25) ($1,436.25) ($1,436.25)
Cash Paid to the Investors (Dress-
Owners) ($27,987.00) ($33,879.60) ($31,500.60) ($30,222.00)
Net Cash Flow from Operating Activities ($39,221.25) ($7,708.85) ($9,184.85) ($4,383.25)
Cash Flow from Investing Activities:
Cash Paid for the Equipment ($20,000.00) $0.00 $0.00 $0.00
Net Cash Flow from Investing Activities ($20,000.00) $0.00 $0.00 $0.00
Cash Flow from Financing Activities:
Cash Received from Bank Loan $150,000.00 $0.00 $0.00 $0.00
Cash Paid for Principle Payment on Loan ($8,294.13) ($8,294.13) ($8,294.13) ($8,294.13)
Net Cash Flow from Financing Activities $141,705.87 ($8,294.13) ($8,294.13) ($8,294.13)
Net Increase (decrease) in Cash $82,484.62 ($16,002.98) ($17,478.98) ($12,677.38)
Beginning Cash Balance $0.00 $82,484.62 $66,481.64 $49,002.66
Ending Cash Balance $82,484.62 $66,481.64 $49,002.66 $36,325.28
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C&C Rental Inc.
Statement of Cash Flow
For Quarter Ended in 2016
3/31/2016 6/30/2016 9/30/2016 12/31/2016
Cash Flow from Operating Activities:
Cash Received from Customers $95,725.30 $104,800.30 $98,335.60 $102,688.30
Deduct: Cash Paid for Merchandise ($1,500.00) ($3,000.00) ($1,350.00) ($2,000.00)
Cash Paid for Operating Expenses ($74,806.50) ($62,577.00) ($62,030.60) ($61,693.90)
Cash Paid for Interest Expenses ($1,436.25) ($1,436.25) ($1,436.25) ($1,436.25)
Cash Paid to the Investors (Dress-
Owners) ($30,785.70) ($37,267.56) ($34,650.66) ($33,244.20)
Net Cash Flow from Operating Activities ($12,803.15) $519.49 ($1,131.91) $4,313.95
Cash Flow from Investing Activities:
Cash Paid for the Equipment $0.00 $0.00 $0.00 $0.00
Net Cash Flow from Investing Activities $0.00 $0.00 $0.00 $0.00
Cash Flow from Financing Activities:
Cash Received from Bank Loan $0.00 $0.00 $0.00 $0.00
Cash Paid for Principle Payment on Loan ($8,294.13) ($8,294.13) ($8,294.13) ($8,294.13)
Net Cash Flow from Financing Activities ($8,294.13) ($8,294.13) ($8,294.13) ($8,294.13)
Net Increase (decrease) in Cash ($21,097.28) ($7,774.64) ($9,426.04) ($3,980.18)
Beginning Cash Balance $36,325.28 $15,228.00 $7,453.36 ($1,972.68)
Ending Cash Balance $15,228.00 $7,453.36 ($1,972.68) ($5,952.86)
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C&C Rental Inc.
Statement of Cash Flow
For Year Ended in 2017,2018,2019
Cash Flow from Operating Activities: 12/31/2017 12/31/2018 12/31/2019
Cash Received from Customers $461,781.93 $554,138.31 $1,208,276.00
Deduct: Cash Paid for Merchandise ($5,000.00) ($7,500.00) ($50,000.00)
Cash Paid for Operating Expenses ($276,080.20) ($287,436.24) ($602,258.00)
Cash Paid for Interest Expenses ($5,745.00) ($5,745.00) ($5,745.00)
Cash Paid for Income Taxes ($5,987.62) ($10,470.66) ($21,489.54)
Cash Paid to the Investors (Dress-
Owners) ($156,340.34) ($179,791.39) ($360,532.00)
Net Cash Flow from Operating Activities $12,628.77 $63,195.02 $168,251.46
Cash Flow from Investing Activities:
Cash Paid for the Equipment $0.00 $0.00 ($60,000.00)
Net Cash Flow from Investing Activities $0.00 $0.00 ($60,000.00)
Cash Flow from Financing Activities:
Cash Received from Bank Loan $0.00 $0.00 $0.00
Cash Paid for Principle Payment on Loan ($33,176.52) ($33,176.52) ($33,176.52)
Net Cash Flow from Financing Activities ($33,176.52) ($33,176.52) ($33,176.52)
Net Increase (decrease) in Cash ($20,547.75) $30,018.50 $75,074.94
Beginning Cash Balance ($5,952.86) ($26,500.61) $3,517.89
Ending Cash Balance ($26,500.61) $3,517.89 $78,592.83
PAGE 19
IX. Income Statement
C&C Rental Inc.
Income Statement
For Quarter ended 2015
3/31/2015 6/30/2015 9/30/2015 12/31/2015
Revenue from Renting $74,839.00 $89,365.00 $82,365.00 $80,395.00
Revenue from sales $18,451.00 $23,567.00 $22,637.00 $20,345.00
Cost of Service ($27,987.00) ($33,879.60) ($31,500.60) ($30,222.00)
Gross Profit $65,303.00 $79,052.40 $73,501.40 $70,518.00
Operating Expenses:
Wages Expense ($33,500.00) ($33,500.00) ($33,500.00) ($33,500.00)
Rent Expense ($20,000.00) ($20,000.00) ($20,000.00) ($20,000.00)
Shipping Expense ($4,725.00) ($5,360.00) ($5,156.00) ($4,759.00)
Utility Expense ($1,536.00) ($1,826.00) ($1,632.00) ($1,746.00)
Miscellaneous Expense ($3,560.00) ($1,980.00) ($1,356.00) ($1,423.00)
Web-sale Expense ($30,000.00) $0.00 $0.00 $0.00
Total Operating Expenses ($93,321.00) ($62,666.00) ($61,644.00) ($61,428.00)
Income from Operations ($28,018.00) $16,386.40 $11,857.40 $9,090.00
Interest Expense ($794.14) ($794.14) ($794.14) ($794.14)
Income Before Income Tax ($28,812.14) $15,592.26 $11,063.26 $8,295.86
Income Tax Expense $0.00 $155.92 $110.63 $82.96
Net Income ($28,812.14) $15,748.18 $11,173.89 $8,378.82
PAGE 20
C&C Rental Inc.
Income Statement
For Quarter ended 2016
3/31/2016 6/30/2016 9/30/2016 12/31/2016
Revenue from Renting $82,322.90 $98,301.50 $90,601.50 $88,434.50
Revenue from sales $20,296.10 $25,923.70 $24,900.70 $22,379.50
Cost of Service ($30,785.70) ($37,267.56) ($34,650.66) ($33,244.20)
Gross Profit $71,833.30 $86,957.64 $80,851.54 $77,569.80
Operating Expenses:
Wages Expense ($33,500.00) ($33,500.00) ($33,500.00) ($33,500.00)
Rent Expense ($20,000.00) ($20,000.00) ($20,000.00) ($20,000.00)
Shipping Expense ($5,197.50) ($5,896.00) ($5,671.60) ($5,234.90)
Utility Expense ($1,429.00) ($1,756.00) ($1,596.00) ($1,623.00)
Miscellaneous Expense ($3,120.00) ($1,425.00) ($1,263.00) ($1,336.00)
Web-sale Expense ($11,560.00) $0.00 $0.00 $0.00
Total Operating Expenses ($74,806.50) ($62,577.00) ($62,030.60) ($61,693.90)
Income from Operations ($2,973.20) $24,380.64 $18,820.94 $15,875.90
Interest Expense ($794.14) ($794.14) ($794.14) ($794.14)
Income Before Income Tax ($3,767.34) $23,586.50 $18,026.80 $15,081.76
Income Tax Expense $0.00 ($1,651.06) ($1,261.88) ($1,055.72)
Net Income ($3,767.34) $45,521.95 $34,791.72 $29,107.80
PAGE 21
C&C Rental Inc.
Income Statement
For Years ended 2017, 2018, 2019
12/31/2017 12/31/2018 12/31/2019
Revenue from Renting $413,609.46 $496,331.35 $1,023,654.00
Revenue from sales $107,525.00 $123,653.75 $249,306.00
Cost of Service ($156,340.34) ($179,791.39) ($360,532.00)
Gross Profit $364,794.12 $440,193.71 $912,428.00
Operating Expenses:
Wages Expense ($147,400.00) ($147,400.00) ($296,800.00)
Rent Expense ($80,000.00) ($80,000.00) ($200,000.00)
Shipping Expense ($24,200.00) ($29,040.00) ($52,396.00)
Utility Expense ($7,364.60) ($8,837.52) ($17,026.00)
Miscellaneous Expense ($8,215.60) ($9,858.72) ($25,136.00)
Web-sale Expense ($8,900.00) ($12,300.00) ($10,900.00)
Total Operating Expenses ($276,080.20) ($287,436.24) ($602,258.00)
Income from Operations $88,713.92 $152,757.47 $310,170.00
Interest Expense ($3,176.56) ($3,176.56) ($3,176.56)
Income Before Income Tax $85,537.36 $149,580.91 $306,993.44
Income Tax Expense ($5,987.62) ($10,470.66) ($21,489.54)
Net Income $79,549.75 $139,110.25 $285,503.90
PAGE 22
X. Balance Sheet
C&C Rental Inc.
Balance Sheet
As the Year of 2015
Assets
Current Assets:
Cash $36,325.28
Accounts Receivable $34,809.00
Less: Allowance for Doubtful Accounts ($3,208.00) $31,601.00
Merchandise Inventory $17,150.00
Prepaid Expense $60,000.00
Total Current Assets $145,076.28
Property, Plant and Equipment:
Equipment $20,000.00
Accumulated Depreciation, Equipment ($5,000.00) $15,000.00
Total Property, Plant and Equipment $15,000.00
Intangible Assets $5,000.00
Total Assets $165,076.28
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $7,928.00
Wages Payable $11,167.00
Income Tax Payable $349.51
Deposits Received From Customers $2,513.00
Total Current Liabilities $21,957.51
Long-Term Liabilities:
Notes Payable $132,706.08
Total Long-Term Liabilities $132,706.08
Total Liabilities
Stockholders' Equity:
Retained Earnings $10,412.69
Total Stockholders' Equity $10,412.69
Total Liabilities and Stockerholders' Equity $165,076.28
PAGE 23
C&C Rental Inc.
Balance Sheet
As the Year of 2016
Assets
Current Assets:
Cash ($5,952.86)
Accounts Receivable $46,325.00
Less: Allowance for Doubtful Accounts ($3,528.80) $42,796.20
Merchandise Inventory $7,850.00
Prepaid Expense $68,000.00
Total Current Assets $112,693.34
Property, Plant and Equipment:
Equipment $20,000.00
Accumulated Depreciation, Equipment ($10,000.00) $10,000.00
Total Property, Plant and Equipment $10,000.00
Intangible Assets $5,000.00
Total Assets $127,693.34
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $8,193.00
Wages Payable $11,167.00
Income Tax Payable $3,968.66
Deposits Received From Customers $1,253.00
Total Current Liabilities $24,581.66
Long-Term Liabilities:
Notes Payable $99,529.56
Total Long-Term Liabilities $99,529.56
Total Liabilities
Stockholders' Equity:
Retained Earnings $3,582.12
Total Stockholders' Equity $3,582.12
Total Liabilities and Stockholders' Equity $127,693.34
PAGE 24
C&C Rental Inc.
Balance Sheet
As the Year of 2017
Assets
Current Assets:
Cash ($26,500.61)
Accounts Receivable $59,360.00
Less: Allowance for Doubtful Accounts $3,628.00 $62,988.00
Merchandise Inventory $5,000.00
Prepaid Expense $60,000.00
Total Current Assets $101,487.39
Property, Plant and Equipment:
Equipment $20,000.00
Accumulated Depreciation, Equipment ($15,000.00) $5,000.00
Total Property, Plant and Equipment $5,000.00
Intangible Assets $6,500.00
Total Assets $112,987.39
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $9,945.05
Wages Payable $11,167.00
Income Tax Payable $5,987.62
Deposits Received From Customers $3,658.00
Total Current Liabilities $30,757.67
Long-Term Liabilities:
Notes Payable $66,353.04
Total Long-Term Liabilities $66,353.04
Total Liabilities
Stockholders' Equity:
Retained Earnings $15,876.68
Total Stockholders' Equity $15,876.68
Total Liabilities and Stockholders' Equity $112,987.39
PAGE 25
C&C Rental Inc.
Balance Sheet
As the Year of 2018
Assets
Current Assets:
Cash $3,517.89
Accounts Receivable $63,256.00
Less: Allowance for Doubtful Accounts ($38,269.00) $24,987.00
Merchandise Inventory $7,500.00
Prepaid Expense $60,000.00
Total Current Assets $96,004.89
Property, Plant and Equipment:
Equipment $20,000.00
Accumulated Depreciation, Equipment $20,000.00 $0.00
Total Property, Plant and Equipment $0.00
Intangible Assets $7,500.00
Total Assets $103,504.89
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $11,934.06
Wages Payable $11,167.00
Income Tax Payable $10,470.66
Deposits Received From Customers $6,300.00
Total Current Liabilities $39,871.72
Long-Term Liabilities:
Notes Payable $33,176.52
Total Long-Term Liabilities $33,176.52
Total Liabilities
Stockholders' Equity:
Retained Earnings $30,456.65
Total Stockholders' Equity $30,456.65
Total Liabilities and Stockholders' Equity $103,504.89
PAGE 26
C&C Rental Inc.
Balance Sheet
As the Year of 2019
Assets
Current Assets:
Cash $78,592.83
Accounts Receivable $136,256.00
Less: Allowance for Doubtful Accounts ($75,236.00) $61,020.00
Merchandise Inventory $50,000.00
Prepaid Expense $130,000.00
Total Current Assets $319,612.83
Property, Plant and Equipment:
Equipment $60,000.00
Accumulated Depreciation, Equipment ($7,500.00) $52,500.00
Total Property, Plant and Equipment $52,500.00
Intangible Assets $9,800.00
Total Assets $381,912.83
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts Payable $35,626.00
Wages Payable $23,613.00
Income Tax Payable $21,489.54
Deposits Received From Customers $26,583.00
Total Current Liabilities $107,311.54
Long-Term Liabilities:
Notes Payable $0.00
Total Long-Term Liabilities $0.00
Total Liabilities
Stockholders' Equity:
Retained Earnings $274,601.29
Total Stockholders' Equity $274,601.29
Total Liabilities and Stockholders' Equity $381,912.83
PAGE 27
XI. Funds Required/Used
To acquire initial funds, $150,000 will be borrowed from the bank for five years at an interest rate of
4.033%.10
The loan will begin on 1/1/2015 and the monthly payment will be $2,764.71. C&C will also have a
$50,000 cash reserve acquired from Cloris Tian’s personal finances. The initial funding will be used immediately to
rent space, pay employees, buy inventory, and for marketing and promotion.
Startup budget
The startup budget will be gained via a $150,000 bank loan. The loan will be for three years with an
interest rate of 3.83% thereby necessitating a monthly payment of $4417.26. 11
Notable startup costs will include $20,000 for a Columbia Hydrocarbon Dry Cleaning Machine.12
$34,300 will be spent on buying an initial inventory of dresses. $80,000 will be spent on renting the location in the
first year. Website development would be $30,000 for the first year. Every two years, C&C will spend decent money
around $15,000 to $25,000 for website development.
XII. Offering
To acquire initial funds, $150,000 will be borrowed from the bank for three years at an interest rate of
4.033%. The loan will begin on 1/1/2015 and the monthly payment will be $2,764.71. C&C will also have a $50,000
cash reserve acquired from Cloris Tian’s personal finances. Any investors who contribute will be given equity in
return for their investment in the form of 30% of the rental fee.
The exit strategy should the business begin to fail is to sell all the equipment as well as the inventory to pay
off investors and the bank. The website will be shut off, employment will be terminated and C&C will file for
bankruptcy.
10
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx 11
http://www.bankrate.com/calculators/mortgages/loan-calculator.aspx
12 http://www.ebay.com/itm/Columbia-Hydrocarbon-50lbs-Dry-Clean-machine-
/161549831579?pt=LH_DefaultDomain_0&hash=item259d1ecd9b
PAGE 28
I. Appendix
APPENDIX I
Web Navigation Sample
FEMALE
Shop Dresses
Long Dresses
Short Dresses
Plus Size Dresses
Wedding Dresses
Bridal
Bridesmaid
Mother of Bride/Groom
School Dance
After Prom Styles
Formal Dance
Homecoming
Party Dresses
Long Prom Dresses
Short Prom Dresses
Graduation
Winter Formal & Balls
Other celebration
Cocktail Dresses
Family Celebration
Holiday Dresses
Pageant Dresses
Reception
Rehearsal Dinner
Semi Formal
Sweet 16