FINAL EDITION Business Plan

PAGE 1

Business Plan

(C&C)

Owners: Cloris Tian, Chirag Lala

Address:

2 Saint Vincent Circle,

Little Rock, AR, 72205

Telephone: 573-559-4990

E-Mail:

[email protected]

[email protected]

mailto:[email protected]

mailto:[email protected]

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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

http://www.census.gov/prod/2013pubs/p20-571.pdf

http://www.usatoday.com/story/money/business/2013/04/24/prom-spending-on-rise-again/2110537/

http://en.wikipedia.org/wiki/Wedding_industry_in_the_United_States

http://www.xogroupinc.com/press-releases-home/2014-press-releases/2014-03-27-real-weddings-study-average-cost-of-wedding.aspx

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

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/

http://en.wikipedia.org/wiki/Little_Rock,_Arkansas

http://en.wikipedia.org/wiki/Little_Rock,_Arkansas

http://en.wikipedia.org/wiki/Fort_Smith,_Arkansas

http://en.wikipedia.org/wiki/Springdale,_Arkansas

http://en.wikipedia.org/wiki/Jonesboro,_Arkansas

http://en.wikipedia.org/wiki/North_Little_Rock,_Arkansas

http://en.wikipedia.org/wiki/Rogers,_Arkansas

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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.


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)


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 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 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)

PAGE 18

C&C Rental Inc.


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)


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 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 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)
















Income Tax Payable $3,968.66






Total Liabilities




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)


Less: Allowance for Doubtful Accounts $3,628.00 $62,988.00




















Total Liabilities





PAGE 25

C&C Rental Inc.

Balance Sheet

As the Year of 2018

Assets

Current Assets:

Cash $3,517.89








Accumulated Depreciation, Equipment $20,000.00 $0.00

Total Property, Plant and Equipment $0.00













Total Liabilities





PAGE 26

C&C Rental Inc.

Balance Sheet

As the Year of 2019

Assets

Current Assets:

Cash $78,592.83




















Notes Payable $0.00

Total Long-Term Liabilities $0.00

Total Liabilities





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

Documents

FINAL EDITION Business Plan