Sample Business Plan

My Quilt Shop Business Plan

Prepared by: Jean SmithDate: January 1, 2006

My Quilt Shop100 Quilting Street

Quilt City, ST. 123451-800-IAM-QUILT

Table of Contents

Confidentiality Agreement.....................................................................................3

I. Loan Request.......................................................................................................4

II. EXECUTIVE Summary....................................................................................5

III. Company Summary.........................................................................................6

IV. Products and Services......................................................................................8

V. Market Analysis Summary...............................................................................9

VI. Strategy and Implementation Summary......................................................16

VII. Website Plan Summary................................................................................18

VIII. Management Summary..............................................................................20

IX. FINANCIAL Plan...........................................................................................21

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Confidentiality Agreement

The undersigned acknowledges that the information provided by _______________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _______________.

It is acknowledged that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _______________.

Upon execution, this document is to be immediately returned to _______________.

___________________ Signature

___________________Name (typed or printed)

___________________Date

This is a business plan. It does not imply an offering of securities.

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I. Loan Request

Loan (investment) request ..............................................$ 100,000

Total start-up requirements ...........................................$ 151,000

General Use of Funds

This is a start-up business. The funds will be used to cover the costs of equipment, inventory, remodeling, installation, and start-up expenses. This includes purchasing inventory, inventory displays, furnishings, computer equipment, a telephone system and a quilting machine. The balance of the funding beyond this loan request will come from personal savings.

Funding Sources

Bank loan ..........................................................................$ 100,000Business owner .................................................................$ 51,000Total funding required.....................................................$ 151,000

Collateral Package

Inventory...........................................................................$ 61,000Equipment, furniture, and fixtures (wholesale value). .$ 15,000Savings accounts ..............................................................$ 15,000Stock, bonds and other securities ...................................$ 80,000Collateral package value .................................................$ 171,000

Guarantors

Jean Smith ........................................................................100 percentRoger Smith (spouse) ......................................................100 percent

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II. EXECUTIVE Summary

A. Goals and Objectives

1. Achieve first year gross sales of $468,300. This represents sales of 145 percent of inventory with an inventory turn of four times per year.

2. Generate $68,355 in net profit. This is 14.5 percent of gross sales.

3. Capture a 4.6 percent share of the local quilting market.

B. Mission

It is the mission of My Quilt Shop to help the quilters in this community complete more quilts and achieve greater satisfaction from quilting. This will be accomplished by offering a broad selection of quilting supplies, materials and services of the highest possible quality. We believe that by helping our customers become more successful quilters, we are creating a more valuable pastime for them and greater value for our quilting shop.

C. Keys to Success

1. Provide VIP “million dollar” service, treating each customer as if she or he was spending a million dollars with us, regardless the actual size of the sale.

2. Offer the highest quality, 100 percent cotton, quilting fabrics in the colors and patterns with the greatest appeal to the quilters of this community.

3. Develop a marketing strategy that clearly communicates to customers and potential customers how My Quilting Shop can help them become more successful quilters.

4. Identify local quilting groups and clubs. Make contact with each of these groups and introduce services by providing a free newsletter of patterns and designs. Offer a block of the month promotion to these groups.

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III. Company Summary

A. Company Ownership

My Quilt Shop is a legal partnership with Jean Smith and Roger Smith as equal partners. An Employer Identification Number has been applied for and received from the Internal Revenue Service. That number is 37-XXXXXXXX

The company was started on January 1, 2006. The company serves the local quilting market in two distinct areas.

1. My Quilt Shop provides high quality quilting fabrics, accessories and sewing supplies to the market area.

2. My Quilt Shop provides a number of services to area quilters, including instructional classes, seminars, and quilting machine services.

My Quilting Shop will be operated from the store front location at 100 Quilt St. This is a location in a strip mall. It is a high traffic area with a number of specialty shops, including a specialty coffee shop, gift shops, and a framing shop. These are viewed as complementary businesses in that they will attract the customers viewed as prime prospects for My Quilt Shop.

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B. Start-up Summary

Start-up ExpensesItem CostAdvertising for business opening $5,000Building construction/remodeling $7,400Beginning cash $1,000Computer expenses (Internet, e-mail, DSL, ISP expenses) $4,000Initial inventory $60,638Insurance (business liability insurance, etc.) $500Installation $2,500Lease or rent $2,250Licenses and permits (business licenses) $250Professional feels (legal, CPA, engineering fees, etc.) $1,000Salaries and payroll $6,000Other $0Total Start-up Expenses $90,538

Start-up AssetsCash required $30,000 Other current assets $0

Long term assets Quilting machine $15,000 Computer, furniture & fixtures $15,000 Total Start-up Assets $60,000

Total Start-up Funding Requirements $150,538

1. Advertising. Advertising dollars will be spent for the following items. a. Local community magazine targeted towards older womenb. Yellow Pages advertisingc. Business cards.

2. Cash. Starting cash for the cash register.

3. Computer Expenses. This money will be spent for Internet and e-mail service through the local ISP, and for website building.

4. Installation. This is the money to be spent on equipment installation and set-up.

5. Insurance. This is the initial business liability insurance premium.

6. Licenses. This is the annual business license fee owed to the county.

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IV. Products and Services

1. Products . The primary product of My Quilt Shop will be high quality, 100 percent cotton quilting fabrics. In addition to an initial inventory of 750 bolts of fabric, My Quilt Shop will also offer an array of quilting books, patterns, and an extensive selection of sewing supplies that will include threads, needles, thimbles, scissors, cloth tape measures and more.

2. Services . My Quilt Shop will provide a number of services to our customers. These will include classroom instruction, one-on-one assistance and machine quilting. The business will conduct regular quilting classes for beginners, intermediate and advanced quilters. The machine quilting business will be available as an additional service for customers.

3. Consignment sale of artistic quilts . My Quilt Shop will display and offer for sale quilts made by our customers. A nominal consignment fee will be charged for each quilt sold. The term of the consignment agreement will be for 90 days. After the expiration of the agreement, any quilts not sold will be removed from the display. This will ensure a fresh display at all times.

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V. Market Analysis Summary

My Quilt Shop will serve quilters in the suburban Anywhere, USA market area. This is a geographic area covering 100 square miles. The population in this area is 110,000 people. There are 37,000 households in this area according to the 2000 Census. The population is 48 percent male and 52 percent female. The age of the adult population (>18 years), comprised of 72,270 is as follows: 18 - 34 = 15,900; 35 - 54 = 26,740; 55 - 74 = 23,850; 75 years and over = 5780. According to the National Survey of Quilting In America 2003, 15 percent of households have at least one quilter in them. Ninety-nine percent of all quilters are women and the mean age of this group is 57.6 years. These women are well educated with 76 percent having at least some college education. They live in affluent homes with an average annual income of $90,397. They spend 11.5 hours per week quilting and $1,935 in the past year on quilting materials and supplies.

More than half of all quilters, regardless of skill level, have visited quilting websites in the past 30 days.

In our market area there are 50,590 people in the target age groups from 35 - 75 years. Fifty-two percent, or 26,300 of these people are women. If 15 percent of them are active quilters, our target market is comprised of 3,946 women who spend, on average, $1,935 each year on quilting materials and supplies. This is a total of $7,635,500.

Projected sales of $350,800 for My Quilt Shop represents 4.6 percent of this total.

Nationwide, there are 21.31 million quilters. The net value of the quilting industry is $2.27 billion. Regional differences in quilting participation are slight with the Central and Western states showing slightly more quilting activity.

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A. Market Segmentation

According to The National Survey of Quilting in America 2003, quilters identified themselves as one of three distinct groups. These groups were identified as: a) beginning quilters, b) intermediate quilters, and c) advanced/expert quilters. Each of these groups has distinct buying patterns and motivations for their quilting.

Beginning quilters tend to be occasional quilters. They are more likely to appreciate quilts than they are to actually make them. Seventy-two percent of them plan to spend more time quilting in the future. These women spend $1,135 annually on quilting materials, supplies, books and patterns.

Intermediate quilters are divided almost equally between occasional quilters and enthusiastic quilters. Most have attended quilting classes. They use both machine and hand quilting techniques. They spend $1,782 annually on quilting materials, equipment and supplies.

Advanced/expert quilters are generally artisans or professional quilt makers. Seventy-eight percent of these women report they spend most of their free time making quilts. Many of them attend guilds and quilt shows. They spend $2,467 annually on quilting materials, equipment and supplies.

It is estimated that the number of quilters, in all categories, is increasing at the rate of seven percent per year. This is supported by The National Survey of Quilting In America 2003.

Market Segment Analysis Table

Potential Customers Growth % 2006 2007 2008Beginning quilter 7% 395 423 453Intermediate quilter 7% 2,170 2,322 2,485Advanced/Expert quilter 7% 1,381 1,478 1,581Total 7% 3,946 4,223 4,519

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B. Target Market Segment Strategy

My Quilt Shop will focus its efforts on the beginning and intermediate segments of the market. These groups are looking for support and assistance in achieving quilting success. While they may not initially be spending the same amount of money on quilting supplies and equipment as advanced and expert quilters, a high percentage of these people will move into the advanced and expert stages in time. My Quilt Shop will work to develop a high level of customer loyalty in these segments. As they become more involved and more proficient as quilters, they will spend more time and money quilting. As this occurs, this will provide a substantial part of My Quilt Shop’s future growth.

C. Quilting Industry Analysis

Quilting has been a part of households for at least 2,000 years. The first known quilt is a silk funerary rug found in a Siberian cave tomb dating to some point before the first century.

The popularity of quilting has waxed and waned over the years. The popularity of quilting in the U.S. really begins in the 1840s. It was at this time the textile industry became well enough developed that fabrics were generally available to everyone.

In recent years quilting has become extremely popular all across the U.S. There are books, magazines, TV programs, videos and websites devoted to this functional and artistic activity. It is a $2.27 billion dollar industry with more than 21 million participants.

Quilting is a needlework technique that fastens two or more layers of cloth together, usually with padding sandwiched in between. The layers are stitched together in a decorative pattern.

Quilted products can be hand stitched, and some are. Hand quilting is an extremely tedious and time-consuming process. A century ago it was common for women of a neighborhood or community to get together on a regular basis and share this task.

Today, a woman or a group of women will stitch together the top layer of a quilt. This is often a collection of fabric pieces sewn together in interesting and attractive designs or patterns. These quilters will often take this top layer and have the actual quilting done by a person or company with a quilting machine.

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The quilting machine stitches the quilt together in a tight and consistent stitch. The stitching can be done in a variety of patterns or styles to add interest to the quilt.

The industry has developed along the following lines:

The retail outlet offers fabrics and supplies. This store may specialize in a particular type of quilting supply such as concentrating on fabrics, threads and patterns. The store may offer equipment, such as sewing machines, along with quilting supplies. Or, the store may specialize in only equipment, offering sewing machines, quilting machines and other big-ticket items. This outlet may or may not also have one or more quilting machines performing custom quilting services.

Quilting machine enterprises do the actual stitching of the top, padding and back layers of the quilt together. The same woman and group of women who pieced together the top of the quilt once did this. The development of the quilting machine has revolutionized quilting. More and more quilters are taking their quilt tops to a person or business that has a quilting machine and offers custom quilting services.

Quilters are the people who actually make the quilt. In earlier times women often gathered in a group, guild or circle to make quilts. Each woman in the group worked on the same quilt. In recent years the trend has been for quilting to become an individual activity. A quilter will piece together the top of the quilt in her own home using her own sewing machine. Many of these women then take the layers to a custom machine quilting business to have the layers sewn together. The quilter selects the pattern or design of the quilting and the machine operator performs this service.

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D. Competitive Analysis

ABC Sewing And Quilting Center is a retail specialty sewing and quilting store selling fabrics, threads, sewing and quilting supplies and sewing machines. The store also maintains two quilting machines and does custom quilting.

Service Quality. The store has been in business for more than 25 years. It is well established and is the only such business in the market area. The store's founders were well regarded in the community and provided excellent customer service. In the past few years, the founders have semi-retired. Management has been turned over to a daughter. There have been a number of personnel changes. The quality of customer service has deteriorated.

Advertising. Because the store is well established and the only store of its kind, they do very little advertising. Nearly all promotion is by word of mouth. In fact, local media sales people have been told "the store has too much business and does not need to advertise."

Staff. The staff consists of the store manager (the daughter of the founders), a full time salesperson, two part-time quilting machine operators and two part-time salespeople. The founders also work in the store on a very limited basis.

Strengths1. The ABC store dominates the market. It is established and well-known

within the local sewing and quilting community. 2. The store carries a selection of popular sewing machines and a good

selection of sewing and quilting supplies and fabrics.

Weaknesses1. Management has recently changed. The new management and staff are

not perceived as "friendly and knowledgeable" as was the original management and staff.

2. The store is also not keeping current with trends in quilting patterns, fabrics and supplies.

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W's Discount Store. This large chain department store has a sewing and quilting department. The store sells an assortment of low and medium quality fabrics, threads and other supplies as well as a large assortment of patterns. Service quality. This store's service quality is poor. The clerks are not generally knowledgeable about sewing and quilting.

Advertising. The store does only a small amount of advertising of its sewing and quilting products.

Staff. The staff members are part-time sales clerks who also work in other departments. For the most part, they are not knowledgeable about needs of customers for products in this department.

Strengths1. W's offers discount store pricing that is often below that a smaller retailer

can afford to offer.

Weaknesses

1. The store is regarded as a last resort for low quality merchandise.

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Alice’s Quilt Shop. This small quilt shop is a sole proprietorship shop owned by Alice Smith. Alice has operated this business for more than 30 years. Alice may be nearing retirement age. She has an established clientele of women near her own age who have been customers for a number of years.

Service quality. Alice apparently provides excellent service to these women, but new customers and younger women find it difficult to obtain high quality service. Ms. Smith can be quite abrupt and brusque in her manner, especially to beginning quilters. The fabrics offered are high quality but are limited to perhaps 100 different colors/patterns. These are the same fabrics she has offered for years with little change in her inventory.

Advertising. Alice does not advertise, claiming that she has as much business as she can handle.

Staff. Alice is pretty much a one-woman show, with some seasonal staffing. She does not offer quilting classes or special promotions. She does provide one-on-one assistance and she is generally well-liked. Her business has matured and is in an apparent holding pattern.

Strengths:1. Established business with established clientele.2. Well-liked and well known within the community.3. Offers quality fabrics and sewing supplies.

Weaknesses: 1. Does not advertise or seek new business.2. Does not offer classes or organized quilter support.3. Offers only a limited number of fabric choices.4. Offers few sewing supplies.5. Offers only a few patterns and books.6. Does not offer machine quilting service. 7. Has not kept current with recent quilting trends.

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VI. Strategy and Implementation Summary

A. Competitive Edge

My Quilt Shop will have a competitive advantage in that it will have 750 fresh, popular high quality fabrics in stocks. It will also have a wide assortment of quilting and sewing supplies. It will have a new longarm quilting machine and an extremely wide assortment of quilting patterns from which to choose. The real competitive advantage will the service and treatment given to our customers.

B. Marketing Strategy

The marketing strategy of My Quilt Shop is summarized as follows.

Product – The business will deliver high quality, 100 percent cotton fabrics, a wide array of accessories and supplies and services to include classes and quilting machine work.

Price – The business will be priced competitively near the high end of the market. The company chooses not to be a low-end provider.

Promotion – The business will promote itself through its website, local community magazines, and Yellow Pages. It will also conduct informative seminars for interested quilters and exhibit at local quilting and craft shows.

Place of business – will be in a high traffic strip mall with complementary shops that will help attract customers in our target market group.

The marketing strategy of the My Quilt Shop is to provide high quality products and supplies. These retail items will be supported by an unbelievably high level of service to everyone entering the store.

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B. Sales Strategy and Forecast

Sales strategy.The sales strategy of My Quilt Shop is outlined as follows.

Seminars – The seminars will be used to develop qualified leads as they will be offered to local quilters. These leads will be pursued with a telephone call and a telephone sales presentation.

Website – The website will be used to develop leads that will be subsequently called with a sales presentation.

Quilting and Craft Shows – Leads will be developed at the quilting and craft shows. These leads will be telephoned and presented with a sales presentation.

Projected Sales Forecast.

Unit Sales Year 1 Year 2 Year 3Fabric (bolts – 15 yards of fabric) 3000 3300 3630Sewing supply items 16000 17600 19360Books and patterns 1000 1100 1210Classes 540 594 654Consignment quilts 40 45 50Machine quilting services 60 66 73

Unit PricesFabric $110 $121 $133Sewing supply items $6 $7 $8Books and patterns $15 $17 $18Classes $25 $30 $35Consignment Quilts (15% fee) $45 $53 $60Machine Quilting Services $200 $220 $242

SalesFabric $330,000 $399,300 $482,790Sewing supply items $96,000 $123,200 $154,880Books and patterns $15,000 $18,700 $21,780Classes $13,500 $17,820 $22,890Consignment Quilts $1,800 $2,363 $3,000Machine Quilting Services $12,000 $14,520 $17,666Total Sales $468,300 $575,903 $703,006

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VII. Website Plan Summary

My website – www.myquiltshop.com – is an informational and e-commerce web site that will serve as a promotional tool and revenue center. The purpose of the website will be to both promote the store and to sell products and services as an online store. There will be listings of all of the fabrics and other items for sale in the online store. There will also be announcements of special promotions that are happening at the physical store. There will be a calendar of quilting shows and events. An important feature of the website will be the forum allowing quilters to ask one another questions and discuss quilting issues amongst themselves.

A. Website Marketing Strategy

The purpose of the website is to promote My Quilt Shop as a convenient and superior service alternative to the other sources of quilting supplies and materials in this market area. The target market for this website will be local quilters who use the Internet regularly. This is believed to be younger quilters who have more experience with computers, e-mail, and the Internet. This fits perfectly with our approach targeting Beginning Quilters and Intermediate Quilters.

B. Website Development

The business will purchase web site publishing software. The web site will be hosted by a local ISP, which will also provide our email service. A local college student will build the web site and teach us how to maintain the web site.

The home page of the web site will be divided into two sections. The smaller left column will feature navigation buttons which link to other pages on the site. These other pages will include the online store, a photo gallery of client quilts, a gallery of consignment quilts we have for sale, a calendar of quilting classes, a page of local quilting links (guilds and complementary businesses), a calendar of local and national quilting events, and our quilting forum. There will also be a contact page with address and an email contact form. Directions to the shop will also be displayed.

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The larger right column will feature our newest updates and specials at the shop. In addition, we will feature some of the consignment quilts we have for sale. In addition, we will feature testimonials we collect from happy clients.

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VIII. Management Summary

Owners/Managers. Jean and Robert are joint owners of this business and will share management responsibilities. Jean will be responsible for sales activities for managing the sales force and will conduct classes and seminars. Roger will perform bookkeeping activities, website maintenance and some sales and marketing activities.

A. Personnel Plan

The sales force will consist of Jean and Robert (part time) and part-time people as necessary.

Machine quilting services will be performed by one to two part-time machine operators as dictated by the workload.

Accounting, payroll, and tax preparation will be performed by a local accounting service.

It is anticipated that additional sales people will be needed as the business grows into its second and third years.

Personnel Plan Year 1 Year 2 Year 3Jean Smith $45,000 $49,500 $54,450Roger Smith $20,000 $22,000 $24,200Sales Person 1 $0 $0 $9,000Part-time machine quilters $6,000 $6,600 $7,260Part-time employees $10,000 $11,000 $6,000Total Payroll $81,000 $89,100 $100,910

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IX. FINANCIAL Plan

Jean Smith and Roger Smith will provide half of the money to start this business. The balance of the start up money will come from a bank operating loan that is secured by inventory, receivables, the personal guarantees of the principles and marketable securities.

Start-up ExpensesItem CostAdvertising for business opening $5,000Building construction/remodeling $7,400Beginning cash $1,000Computer expenses (Internet, e-mail, DSL, ISP expenses) $4,000Initial inventory $60,638Insurance (business liability insurance, etc.) $500Installation $2,500Lease or rent $2,250Licenses and permits (business licenses) $250Professional feels (legal, CPA, engineering fees, etc.) $1,000Salaries and payroll $6,000Other $0Total Start-up Expenses $90,538

Start-up AssetsCash required $30,000 Other current assets $0

Long term assets Quilting machine $15,000 Computer, furniture & fixtures $15,000 Total Start-up Assets $60,000

Total Start-up Funding Requirements $150,538

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B. Important Assumptions

The national economy is projected to continue its course of steady growth. The local economy remains strong with a low level of unemployment and a strong real estate market. The target market consists primarily of people who have established incomes and are in their peak income years. Temporary economic fluctuations will have little effect on their buying patterns and hobbies.

The target market is generally regarded as middle class to upper middle class people and are sufficiently affluent that they can pursue hobbies such as quilting without considering the costs.

C. Projected Profit and LossPro Forma Profit and Loss Year 1 Year 2 Year 3Sales $468,300 $575,903 $703,006 Gross Margin $210,735 $259,156 $316,353 Gross Margin % 45.00% 45.00% 45.00%

ExpensesPayroll $81,000 $89,100 $100,910Loan Payment $12,180 $12,180 $12,180Advertising/Promotion $6,000 $6,600 $7,260Depreciation $0 $6,000 $6,000Rent (1500 sq. ft. @ $16 per) $24,000 $24,000 $24,000Utilities $6,000 $6,600 $7,260Insurance $2,400 $2,640 $2,904Payroll Taxes $8,100 $8,910 $10,091Computer Expenses $500 $1,500 $1,500Classroom Expenses $1,200 $1,320 $1,452Website Expenses $1,000 $1,200 $1,500Total Operating Expenses $142,380 $160,050 $175,057

Profit Before Interest and Taxes $68,355 $99,106 $141,296 Interest Expense $0 $0 $0 Sales Taxes (7%) $32,781 $40,313 $49,210

Net Profit $35,574 $58,793 $92,085 Net Profit/Sales 7.60% 10.21% 13.10%

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E. Projected Cash Flow

Pro Forma Cash Flow Year 1 Year 2 Year 3Beginning Cash $30,000 $68,455 $167,561

Cash Received

Cash from OperationsCash Sales $468,300 $575,903 $703,006 Subtotal Cash from Operations $468,300 $575,903 $703,006

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $32,781 $40,313 $49,210New Current Borrowing $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0New Long-term Liabilities $0 $0 $0Sales of Other Current Assets $0 $0 $0Sales of Long-term Assets $0 $0 $0New Investment Received $0 $0 $0

Subtotal Additional Cash Received $32,781 $40,313 $49,210

Subtotal Cash Received $501,081 $616,216 $752,216

Expenditures Year 1 Year 2 Year 3

Expenditures from OperationsCash spending for inventory $257,565 $316,746 $386,653 Cash spending for operations $142,380 $160,050 $175,057

Subtotal Spent on Operations $399,945 $476,796 $561,710

Additional Cash SpentStart-up Cash $29,900 $0 $0Sales Tax, VAT, HST/GST Paid Out $32,781 $40,313 $49,210Long-term Liabilities Principal Repayment $0 $0 $0Purchase Other Current Assets $0 $0 $0Purchase Long-term Assets $0 $0 $0Dividends $0 $0 $0

Subtotal Additional Cash Spent $62,681 $40,313 $49,210

Subtotal Cash Spent $462,626 $517,110 $610,921

Net Cash Flow $38,455 $99,106 $141,296 Cash Balance $68,455 $167,561 $308,857

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Pro Forma Profit & Loss Statement by Month

Pro Forma Profit and Loss Jan Feb Mar April May June July Aug Sept Oct Nov DecSales $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 Gross Margin $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 $17,561 Gross Margin % 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00% 45.00%

ExpensesPayroll $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750 $6,750Loan Payment $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015 $1,015Advertising/Promotion $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Rent (1500 sq. ft. @ $16 per) $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000Utilities $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200Payroll Taxes $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 $675 $675Computer Expenses $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42 $42Classroom Expenses $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100Website Expenses $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83Total Operating Expenses $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865

Profit Before Interest and Taxes $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales Taxes (7%) $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732

Net Profit $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 $2,965 Net Profit/Sales 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60% 7.60%

Pro Forma Cash Flow Statement

Pro Forma Cash Flow Jan Feb Mar Apr May June July Aug Sept Oct Nov DecBeginning Cash $30,000 $5,796 $11,493 $17,189 $22,885 $28,581 $34,278 $39,974 $45,670 $51,366 $57,063 $62,759

Cash Received

Cash from OperationsCash Sales $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 Subtotal Cash from Operations $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025 $39,025

Additional Cash ReceivedSales Tax, VAT, HST/GST Received $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732New Current Borrow ing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Additional Cash Received $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732

Subtotal Cash Received $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757 $41,757

Expenditures

Expenditures from OperationsCash spending for inventory $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 $21,464 Cash spending for operations $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865 $11,865

Subtotal Spent on Operations $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329 $33,329

Additional Cash SpentStart-up Cash $29,900 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Sales Tax, VAT, HST/GST Paid Out $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732Long-term Liabilities Principal Repay $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Additional Cash Spent $32,632 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732 $2,732

Subtotal Cash Spent $65,961 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061 $36,061

Net Cash Flow ($24,204) $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 $5,696 Cash Balance $5,796 $11,493 $17,189 $22,885 $28,581 $34,278 $39,974 $45,670 $51,366 $57,063 $62,759 $68,455

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