Womens Shoe Store Business Plan 1q5d50

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This sample business plan has been made available to s of Business Plan Pro®, business planning software published by Palo Alto Software, Inc. Names, locations and numbers may have been changed, and substantial portions of the original plan text may have been omitted to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to resell, reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at [email protected]. For product information visit our website: www.paloalto.com or call: 1-800-229-7526. Copyright © Palo Alto Software, Inc., 1995-2009 All rights reserved.

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

Table of Contents

1.0 Executive Summary....................................................................................................................................1 Chart: Highlights.......................................................................................................................................1 1.1 Keys to Success.......................................................................................................................................2 1.2 Objectives................................................................................................................................................2 1.3 Mission....................................................................................................................................................2 2.0 Company Summary.....................................................................................................................................2 2.1 Company Ownership..............................................................................................................................2 2.2 Start-up Summary...................................................................................................................................3 Table: Start-up Funding............................................................................................................................3 Table: Start-up...........................................................................................................................................4 3.0 Products.......................................................................................................................................................4 4.0 Market Analysis Summary.........................................................................................................................4 4.1 Market Segmentation..............................................................................................................................5 Table: Market Analysis.............................................................................................................................5 Chart: Market Analysis (Pie)....................................................................................................................5 4.2 Target Market Segment Strategy............................................................................................................5 4.3 Industry Analysis....................................................................................................................................6 4.3.1 Competition and Buying Patterns....................................................................................................6 5.0 Strategy and Implementation Summary.....................................................................................................6 5.1 Sales Strategy..........................................................................................................................................7 5.1.1 Sales Forecast...................................................................................................................................7 Table: Sales Forecast............................................................................................................................7 Chart: Sales Monthly............................................................................................................................8 5.2 Milestones...............................................................................................................................................8 Table: Milestones......................................................................................................................................8 5.3 Competitive Edge....................................................................................................................................8 6.0 Management Summary...............................................................................................................................9 6.1 Personnel Plan.........................................................................................................................................9 Table: Personnel........................................................................................................................................9 ...........................................................................................................................................................................9 7.1 Important Assumptions.........................................................................................................................10 Table: General Assumptions...................................................................................................................10 .....................................................................................................................................................................10 7.2 Break-even Analysis.............................................................................................................................11 Chart: Break-even Analysis....................................................................................................................11 Table: Break-even Analysis....................................................................................................................11 .....................................................................................................................................................................11 7.3 Projected Profit and Loss......................................................................................................................12 Table: Profit and Loss.............................................................................................................................12 Chart: Profit Monthly..............................................................................................................................13 Page 1

Table of Contents

.....................................................................................................................................................................13 Table: Cash Flow....................................................................................................................................14 Chart: Cash..............................................................................................................................................15 7.5 Projected Balance Sheet........................................................................................................................16 Table: Balance Sheet...............................................................................................................................16 .....................................................................................................................................................................16 Table: Ratios...........................................................................................................................................17 Table: Sales Forecast.........................................................................................................................................1 ...........................................................................................................................................................................1 Table: Personnel................................................................................................................................................2 ...........................................................................................................................................................................2 Table: General Assumptions.............................................................................................................................3 ...........................................................................................................................................................................3 Table: Profit and Loss.......................................................................................................................................4 ...........................................................................................................................................................................4 Table: Cash Flow..............................................................................................................................................5 Table: Balance Sheet.........................................................................................................................................6

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ion Soles

1.0 Executive Summary ion Soles is a women-only shoe store in Eugene, OR. Eugene badly needs an upscale shoe store for women because the current stores have an inadequate selection. Currently, women that need a special pair of shoes often must travel up to Portland to find the right shoes. ion Soles will have an unmatched, extensive selection of different shoes. Generally, the size of ion Soles' selection is cost prohibitive due to all the different sizes that must be stocked per style. ion Soles has a unique business model that allows them to have an extensive selection at the cost of only stocking one size per style. This is accomplished through a special relationship with the wholesaler so ion Soles can receive a customer's needed size within two days. Rush overnight shipping is available at additional cost. ion Soles will leverage Holly Heels' extensive knowledge of the women's retail shoe industry to quickly gain market share. Profitability will be reached by month ten and $284,000 will be generated in revenue in year three.

Chart: Highlights

Highlights $240,000 $210,000 $180,000 $150,000

Sales

$120,000

Gross Margin Net Profit

$90,000 $60,000 $30,000 $0 Year 1

Year 2

Year 3

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ion Soles

1.1 Keys to Success The key to success is to meet the demand for an upscale women's shoe store with a wide selection and focused customer attention. 1.2 Objectives The objectives for the first three years of operation include: 1. To create a product-based retail store whose primary goal is to exceed customer's expectations. 2. To increase the number of clients served by 20% per year by serving an unmet need with outstanding selection and customer service. 3. To develop a start-up business, surviving off of its own cash flow. 1.3 Mission ion Soles' mission is to provide Eugene with an upscale selection of women's shoes and outstanding customer service. We exist to attract and maintain customers. When we adhere to this maxim, everything else will fall into place. Our services will exceed the expectations of our customers. 2.0 Company Summary ion Soles is an upscale women's shoe store located in Eugene, OR., an un-serviced niche. Customers looking for these shoes must travel up to Portland. ion Soles will be able to offer a wide selection because they will typically only have one size available per style. This one size is used as a demonstrative model. All other sizes are available within two days. 2.1 Company Ownership ion Soles is a sole proprietorship owned by Holly Heels.

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2.2 Start-up Summary ion Soles will incur the following start-up costs: • • • • • • • •

Computer system with CD-RW, printer, Microsoft Office, QuickBooks Pro, and POS software. POS terminal/cash . Back office desk and chair. Front of store counter. Shelving racks. Display racks. Chairs, mirrors. Assorted halogen track lighting.

Please note that the following items which are considered assets to be used for more than a year will labeled long-term assets and will be depreciated using G.A.A.P. approved straight-line depreciation method. Table: Start-up Funding

Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required

$600 $29,400 $30,000

Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets

$9,368 $20,032 $0 $20,032 $29,400

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities s Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities

$0 $0 $0 $0 $0

Capital Planned Investment Holly Other Additional Investment Requirement Total Planned Investment

$30,000 $0 $0 $30,000

Loss at Start-up (Start-up Expenses) Total Capital

($600) $29,400

Total Capital and Liabilities

$29,400

Total Funding

$30,000

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ion Soles

Table: Start-up

Start-up Requirements Start-up Expenses Legal Stationery etc. Other Total Start-up Expenses

$500 $100 $0 $600

Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets

$20,032 $0 $9,368 $29,400

Total Requirements

$30,000

3.0 Products ion Soles will sell upscale women's shoes. The general categories of shoes that will be sold are: • • • • •

Sandals Stylish work shoes Loafers Dress shoes Canvas athletic/stylish shoes

ion Soles will strive to have one of the largest selection of shoes in Oregon, barring the larger stores in Portland. ion Soles will accomplish this by having one size per style in stock as a demonstration model. ion Soles will then order the style in the needed size and it will arrive within two days (rush one day service is available). This will be accomplished through a special relationship with the wholesaler who is able to send out the right size in the right style on demand. Often a wholesaler will be unwilling to ship out individual shoes, but ion Soles was able to secure an exclusive arrangement with a its wholesaler to meet this need. 4.0 Market Analysis Summary ion Soles will be targeting two distinct groups of fashion-concious female shoppers-professional workers and housewives. While both groups are interested in dress shoes, the professionals will also be looking for fashionable shoes they are able to wear with their business attire. The housewives might be looking for fasionable but more casual shoes.

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ion Soles

4.1 Market Segmentation ion Soles is targeting two different population segments within the broad category of the fashion-conscious female with disposable income. • •

Professionals: these are full-time working professional women. They typically earn more than $45,000. They will purchase shoes for the workplace, as well as for leisure time. Housewives: The household income of this group is $60k-$120k, generally toward the higher end of this range.

Table: Market Analysis

Market Analysis Potential Customers

Growth

Professionals Housewives Other Total

9% 8% 0% 8.47%

Year 1

Year 2

Year 3

Year 4

Year 5

12,457 14,544 0 27,001

13,578 15,708 0 29,286

14,800 16,965 0 31,765

16,132 18,322 0 34,454

17,584 19,788 0 37,372

CAGR 9.00% 8.00% 0.00% 8.47%

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Professionals Housewives Other

4.2 Target Market Segment Strategy These markets will be targeted through an attractive, eye-catching storefront in a popular mall. Most women within the target market shop at malls. Malls allow them to visit many different stores within the same vicinity. By just having a visible storefront in a well traveled mall, ion Soles will receive walk-through customers.

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ion Soles

While the leased space in a mall is expensive, one of the benefits that you pay for is the mall association which spends money on marketing the mall and the stores within the mall. 4.3 Industry Analysis Women's shoe retail industry is made up of several different types of companies:

• • •

Shoe-only stores: As the name implies, these stores only sell shoes. Generally the shoeonly stores will either sell athletic shoes for men and women, or dress shoes for only one sex. Large department stores: these types of stores sell everything, including shoes. Small women's retail stores: these types of stores cater to women by only selling women's clothing and shoes.

4.3.1 Competition and Buying Patterns ion Soles has three direct competitors in Eugene: • • •

(name omitted). This is a women's only clothing and shoe store. They have a nice selection of clothing but a poor selection of shoes. The shoe styles are not cutting edge. The price point for the shoes is $30-$120. (name omitted). This is a large, complete, department store. The store however, suffers from cluttered displays and a general sense of disorganization. Shoes here are $30-$120. (name omitted). This is a national franchise that only sells shoes, for both men and women. This company will sell knock-offs, shoes just like name brands, but with their name on it. While this store has a huge selection, the quality of the shoes leaves a lot to be desired. This is somewhat understandable as the shoes typically sell for $13-$50. While the shoes are often good copies of famous brands, the execution is sometimes off. Many of the shoes are made out of pleather and look like they were dipped in wax, giving them a tacky appearance.

An indirect competitor is a shoe smith that will dye shoes. The shoes are typically dyed to match a specific dress. Not all colors can be dyed, and dying in general is not the ideal situation. Dying shoes creates a new shoe color that is acceptable only 20% of the time. The two major competitors in Portland are:

• •

Nordstroms: mid- to high-end department store known for their outstanding customer service. The shoe price point is $60-$300. Saks: this department store caters to the high class, older crowd. Shoes range from $75$400.

The buying habits for fashion-conscious women consist of typically buying at least one pair of shoes per month. Women generally purchase a pair of shoes to go with a specific dress. Once the woman purchases the dress she will then begin the sometimes long search for the perfect pair of shoes. 5.0 Strategy and Implementation Summary ion Soles will leverage their competitive edge of extensive selection to drive sales. This is indeed a competitive edge because it is typically cost prohibitive for a store to have as much of

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ion Soles

a selection that ion Soles will offer. Because of a unique business model, ion Soles is able to leverage their financial resources and offer an unmatched selection. This is done by carrying a large selection of styles by only stocking one size per style. Once the customer has chosen the style, ion Soles will have the customer's shoes in one to two days. 5.1 Sales Strategy ion Soles' sales strategy will be based on display and visibility. A highly visible store with attractive product displays located in the mall will get a high percentage of foot traffic. This is especially the case for a women's shoe store. Women love to shop for shoes. Some women even use shoe shopping as a form of therapy, similar to eating chocolate. These activities can make them feel better. The sales strategy will simply be, have the most complete selection of shoes. Assuming the prices are reasonable, having an extensive selection will drive sales because we believe our target markets of fashion-conscious females are always looking for the perfect pair of shoes to coordinate with their fashion style. 5.1.1 Sales Forecast The first month will be used to set up the store front. The first employee will be hired and display inventory will be purchased. There will be no sales activity during the first month. The second month will begin to see sales activity, and it is forecasted that around month four sales will really begin to pick up. The reason for this is that word will get out about ion Soles and more and more people will be coming in to check out the extensive selection. A third employee will be hired in December for the holiday season. Table: Sales Forecast

Sales Forecast Year 1

Year 2

Year 3

$84,402 $54,861 $139,263

$118,745 $89,184 $207,929

$135,454 $102,095 $237,549

Year 1 $33,761 $21,945 $55,705

Year 2 $47,498 $35,674 $83,172

Year 3 $54,182 $40,838 $95,020

Sales Professionals Housewives Total Sales Direct Cost of Sales Professionals Housewives Subtotal Direct Cost of Sales

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ion Soles

Chart: Sales Monthly

Sales Monthly $20,000 $18,000 $16,000 $14,000 $12,000

Professionals

$10,000

Housewives

$8,000 $6,000 $4,000 $2,000 $0 Month 1 Month 3 Month 5 Month 7 Month 9 Month 11 Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

5.2 Milestones ion Soles will have several milestones early on: • • • •

Business plan completion. This will be done as a road map for the organization. This will be an indispensable tool for the ongoing performance and improvement of the company. Set up the store front. Revenues exceeding $75,000. Profitability.

Table: Milestones

Milestones Milestone Business plan completion Set up the store front Revenues exceeding $75,000 Profitability Totals

Start Date 1/1/2001 1/1/2001 1/1/2001 1/1/2001

End Date 2/1/2001 2/1/2001 9/31/2001 10/31/2001

Budget $0 $0 $0 $0 $0

Manager ABC ABC ABC ABC

Department Marketing Department Department Department

5.3 Competitive Edge ion Soles' competitive edge is an unmatched selection in Eugene. This selection will be achieved in two ways. The first way is a very specific effort to carry as many styles of shoes as possible. ion Soles recognizes that Eugene currently does not have a single store that offers a wide selection of decent quality shoes for the fashion conscious female consumer. The competitive edge is the recognition of this unserved niche and the serving of this demand.

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ion Soles

ion Soles will be able to offer a large selection through a unique inventory model that stocks only one size per style. The advantage is that for the same amount of money that ion Soles invests in overhead, they can offer far more styles. This model is effective because women are willing to order a pair of shoes sight seen but not fitted. ion Soles offers two day delivery with an additional expense rush overnight option. 6.0 Management Summary Holly Heels, the founder and owner received her Bachelor of Arts in marketing from the University of Portland. Throughout college, and full time after graduation, Holly worked at Nordstroms. She started out as a sales person in the Nordstroms outerwear department, where Holly was named employee of the month five times. This caught the attention of her supervisors and after one year of full-time work at Nordstroms, she was offered a position as the assistant manager of the women's shoe department. Holly worked as the assistant manager for one and a half years before receiving a promotion to manager of the department, a huge responsibility and honor. Holly learned all of the "ins and outs" of the Nordstroms retail shoe industry in this job. After three years, Holly decided to leave and seek another job. She had always wanted to live in a smaller town and, upon visiting a friend in Eugene, began to do some market research about the women's shoe industry in Eugene. She realized that there was an unmet demand for fashionable shoes and she began to write a business plan to serve this need. She was confident that she would be able to leverage all of her industry knowledge and create a store in Eugene serving fashion-conscious women. 6.1 Personnel Plan Holly will be working full time at ion Soles. She will be in charge of all istrative details, hiring, inventory management, etc. Beginning with month two, Holly will hire a full-time sales clerk to help her at the store. By December, she will hire an additional full-time employee in time for the holiday season. Table: Personnel

Personnel Plan Year 1

Year 2

Year 3

Holly Full-time employee Full-time employee Total People

$36,000 $17,600 $1,600 3

$40,000 $19,200 $19,200 3

$42,000 $19,200 $19,200 3

Total Payroll

$55,200

$78,400

$80,400

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ion Soles

7.0 Financial Plan The following sections will outline important financial information.

7.1 Important Assumptions The following table details important financial assumptions.

Table: General Assumptions

General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other

Year 1

Year 2

Year 3

1 10.00% 10.00% 30.00% 0

2 10.00% 10.00% 30.00% 0

3 10.00% 10.00% 30.00% 0

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ion Soles

7.2 Break-even Analysis The Break-even Analysis indicates that approximately $13,000 is needed in monthly revenue to reach the break-even point.

Chart: Break-even Analysis

Break-even Analysis $6,000 $4,000 $2,000 $0 ($2,000) ($4,000) ($6,000)

$0

$4,000 $2,000

$8,000 $6,000

$12,000 $16,000 $20,000 $10,000 $14,000 $18,000 $22,000

Table: Break-even Analysis

Break-even Analysis Monthly Revenue Break-even

$12,369

Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost

40% $7,421

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ion Soles

7.3 Projected Profit and Loss The following table will indicate projected profit and loss. We estimate purchase of new shoe display inventory, primarily for the seasonal changes in styles. Because these are displays, we are tracking them as expenses. It is estimated that new styles (especially around the change in seasons) will require regular purchase of shoe displays as part of the normal course of business. Table: Profit and Loss

Pro Forma Profit and Loss Year 1

Year 2

Year 3

$139,263 $55,705 $0 $55,705

$207,929 $83,172 $0 $83,172

$237,549 $95,020 $0 $95,020

$83,558 60.00%

$124,757 60.00%

$142,529 60.00%

Payroll Sales and Marketing and Other Expenses Depreciation Shoe Display Inventory Utilities Insurance Rent Payroll Taxes Other

$55,200 $1,200 $1,056 $7,000 $1,200 $1,800 $21,600 $0 $0

$78,400 $1,200 $1,056 $5,000 $1,200 $1,800 $21,600 $0 $0

$80,400 $1,200 $1,056 $5,000 $1,200 $1,800 $21,600 $0 $0

Total Operating Expenses

$89,056

$110,256

$112,256

Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred

($5,498) ($4,442) $255 $0

$14,501 $15,557 $224 $4,283

$30,273 $31,329 $37 $9,071

Net Profit Net Profit/Sales

($5,753) -4.13%

$9,994 4.81%

$21,165 8.91%

Sales Direct Cost of Sales Other Production Expenses Total Cost of Sales Gross Margin Gross Margin %

Expenses

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ion Soles

Chart: Profit Monthly

Profit Monthly $4,000 $2,000 $0 ($2,000) ($4,000) ($6,000) ($8,000) ($10,000) Month 1 Month 3 Month 5 Month 7 Month 9 Month 11 Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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ion Soles

7.4 Projected Cash Flow The following chart and table will indicate projected cash flow. We anticipate borrowing $5,000 in June to cover shoe display inventory purchases and other expenses. Table: Cash Flow

Pro Forma Cash Flow Year 1

Year 2

Year 3

$139,263 $139,263

$207,929 $207,929

$237,549 $237,549

$0 $5,000 $0 $0 $0 $0 $0 $144,263

$0 $0 $0 $0 $0 $0 $0 $207,929

$0 $0 $0 $0 $0 $0 $0 $237,549

Year 1

Year 2

Year 3

$55,200 $78,704 $133,904

$78,400 $118,797 $197,197

$80,400 $133,576 $213,976

$0 $1,260 $0 $0 $0 $0 $0 $135,164

$0 $3,000 $0 $0 $0 $0 $0 $200,197

$0 $740 $0 $0 $0 $0 $0 $214,716

$9,099 $29,131

$7,732 $36,863

$22,833 $59,697

Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

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ion Soles

Chart: Cash

Cash $28,000 $24,000 $20,000 $16,000

Net Cash Flow

$12,000

Cash Balance $8,000 $4,000 $0 ($4,000) Month 1 Month 3 Month 5 Month 7 Month 9 Month 11 Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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ion Soles

7.5 Projected Balance Sheet The following table will indicate the projected balance sheet. Table: Balance Sheet

Pro Forma Balance Sheet Year 1

Year 2

Year 3

$29,131 $0 $29,131

$36,863 $0 $36,863

$59,697 $0 $59,697

$9,368 $1,056 $8,312 $37,443

$9,368 $2,112 $7,256 $44,119

$9,368 $3,168 $6,200 $65,897

Year 1

Year 2

Year 3

s Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities

$10,056 $3,740 $0 $13,796

$9,738 $740 $0 $10,478

$11,090 $0 $0 $11,090

Long-term Liabilities Total Liabilities

$0 $13,796

$0 $10,478

$0 $11,090

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital

$30,000 ($600) ($5,753) $23,647 $37,443

$30,000 ($6,353) $9,994 $33,641 $44,119

$30,000 $3,641 $21,165 $54,807 $65,897

Net Worth

$23,647

$33,641

$54,807

Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities

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ion Soles

7.6 Business Ratios The following table compares our ratios to Standard Industry Code #3144 (Women's footwear, except athletic). Table: Ratios

Ratio Analysis Year 1

Year 2

Year 3

Industry Profile

n.a.

49.31%

14.25%

10.45%

Other Current Assets Total Current Assets Long-term Assets Total Assets

0.00% 77.80% 22.20% 100.00%

0.00% 83.55% 16.45% 100.00%

0.00% 90.59% 9.41% 100.00%

33.22% 85.17% 14.83% 100.00%

Current Liabilities Long-term Liabilities Total Liabilities Net Worth

36.85% 0.00% 36.85% 63.15%

23.75% 0.00% 23.75% 76.25%

16.83% 0.00% 16.83% 83.17%

26.82% 25.97% 52.79% 47.21%

100.00% 60.00% 74.12% 0.43% -3.95%

100.00% 60.00% 49.27% 0.23% 6.97%

100.00% 60.00% 48.20% 0.21% 12.74%

100.00% 22.01% 10.93% 1.05% 2.49%

2.11 2.11 36.85% -24.33% -15.36%

3.52 3.52 23.75% 42.44% 32.36%

5.38 5.38 16.83% 55.17% 45.88%

2.58 1.37 57.34% 6.10% 14.29%

Sales Growth Percent of Total Assets

Percent of Sales Sales Gross Margin Selling, General & istrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin Return on Equity

-4.13% -24.33%

4.81% 29.71%

8.91% 38.62%

n.a n.a

8.83 27 3.72

12.17 30 4.71

12.17 28 3.60

n.a n.a n.a

0.58 1.00

0.31 1.00

0.20 1.00

n.a n.a

$15,335 -21.57

$26,385 64.74

$48,607 818.20

n.a n.a

0.27 37% 2.11 5.89 0.00

0.21 24% 3.52 6.18 0.00

0.28 17% 5.38 4.33 0.00

n.a n.a n.a n.a n.a

Activity Ratios s Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout

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Appendix Table: Sales Forecast

Sales Forecast Month 1

Month 2

Month 3

Month 4

$3,245 $2,109 $5,354

$4,114 $2,674 $6,788

$5,678 $3,691 $9,369

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$9,956 $6,471 $16,427

$11,454 $7,445 $18,899

$12,457 $8,097 $20,554

Sales Professionals Housewives Total Sales Direct Cost of Sales

0% 0%

$0 $0 $0 Month 1

$6,545 $4,254 $10,799

$6,985 $4,540 $11,525

$7,454 $4,845 $12,299

$7,945 $5,164 $13,109

$8,569 $5,570 $14,139

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Professionals

$0

$1,298

$1,646

$2,271

$2,618

$2,794

$2,982

$3,178

$3,428

$3,982

$4,582

$4,983

Housewives

$0

$844

$1,070

$1,476

$1,702

$1,816

$1,938

$2,066

$2,228

$2,589

$2,978

$3,239

Subtotal Direct Cost of Sales

$0

$2,142

$2,715

$3,747

$4,320

$4,610

$4,920

$5,244

$5,656

$6,571

$7,560

$8,222

Page 1

Appendix Table: Personnel

Personnel Plan Holly Full-time employee Full-time employee Total People Total Payroll

0% 0% 0%

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$3,000 $0 $0 1

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $0 2

$3,000 $1,600 $1,600 3

$3,000

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$6,200

Page 2

Appendix Table: General Assumptions

General Assumptions Plan Month

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

1

2

3

4

5

6

7

8

9

10

11

Month 12 12

Current Interest Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

Long-term Interest Rate Tax Rate

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

10.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

30.00%

0

0

0

0

0

0

0

0

0

0

0

0

Other

Page 3

Appendix Table: Profit and Loss

Pro Forma Profit and Loss Month 2

Month 3

Month 4

Month 10

Month 11

Month 12

Sales

Month 1 $0

$5,354

$6,788

$9,369

$10,799

$11,525

$12,299

$13,109

$14,139

$16,427

$18,899

$20,554

Direct Cost of Sales

$0

$2,142

$2,715

$3,747

$4,320

$4,610

$4,920

$5,244

$5,656

$6,571

$7,560

$8,222

Other Production Expenses Total Cost of Sales

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$2,142

$2,715

$3,747

$4,320

$4,610

$4,920

$5,244

$5,656

$6,571

$7,560

$8,222

Gross Margin Gross Margin %

Month 5

Month 6

Month 7

Month 8

Month 9

$0

$3,213

$4,073

$5,621

$6,480

$6,915

$7,379

$7,866

$8,483

$9,856

$11,339

$12,332

0.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

60.00%

$3,000

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$6,200

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100 $88

Expenses Payroll Sales and Marketing and Other Expenses Depreciation Shoe Display Inventory Utilities Insurance

$88

$88

$88

$88

$88

$88

$88

$88

$88

$88

$88

$5,000

$0

$0

$0

$2,000

$0

$0

$0

$0

$0

$0

$0

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$150

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$1,800

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

Total Operating Expenses

$10,238

$6,838

$6,838

$6,838

$8,838

$6,838

$6,838

$6,838

$6,838

$6,838

$6,838

$8,438

Profit Before Interest and Taxes EBITDA

($10,238)

($3,625)

($2,765)

($1,217)

($2,358)

$77

$541

$1,028

$1,645

$3,018

$4,501

$3,894

Rent Payroll Taxes Other

15%

($10,150)

($3,537)

($2,677)

($1,129)

($2,270)

$165

$629

$1,116

$1,733

$3,106

$4,589

$3,982

Interest Expense

$0

$0

$0

$0

$0

$42

$40

$38

$36

$35

$33

$31

Taxes Incurred

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Net Profit Net Profit/Sales

($10,238)

($3,625)

($2,765)

($1,217)

($2,358)

$35

$502

$989

$1,609

$2,984

$4,469

$3,863

0.00%

-67.71%

-40.74%

-12.99%

-21.84%

0.31%

4.08%

7.55%

11.38%

18.16%

23.64%

18.80%

Page 4

Appendix Table: Cash Flow

Pro Forma Cash Flow Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Received Cash from Operations Cash Sales

$0

$5,354

$6,788

$9,369

$10,799

$11,525

$12,299

$13,109

$14,139

$16,427

$18,899

$20,554

Subtotal Cash from Operations

$0

$5,354

$6,788

$9,369

$10,799

$11,525

$12,299

$13,109

$14,139

$16,427

$18,899

$20,554

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $5,000

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

$0 $0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$0

$5,354

$6,788

$9,369

$10,799

$16,525

$12,299

$13,109

$14,139

$16,427

$18,899

$20,554

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$3,000

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$4,600

$6,200

$238

$7,055

$4,311

$4,900

$5,983

$8,414

$6,812

$7,120

$7,446

$7,872

$8,789

$9,765

$3,238

$11,655

$8,911

$9,500

$10,583

$13,014

$11,412

$11,720

$12,046

$12,472

$13,389

$15,965

Sales Tax, VAT, HST/GST Paid Out

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$210

$210

$210

$210

$210

$210

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Purchase Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Dividends

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$3,238

$11,655

$8,911

$9,500

$10,583

$13,014

$11,622

$11,930

$12,256

$12,682

$13,599

$16,175

($3,238)

($6,300)

($2,123)

$216

$3,511

$677

$1,179

$1,883

$3,745

$5,301

$4,379

Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing

Expenditures

0.00%

Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent

Subtotal Cash Spent Net Cash Flow

($131)

Page 5

Appendix Cash Balance

$16,794

$10,493

$8,370

$8,240

$8,456

Month 3

Month 4

Month 5

$11,967

$12,644

$13,823

$15,706

$19,451

$24,752

$29,131

Table: Balance Sheet

Pro Forma Balance Sheet Month 1 Assets

Month 2

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets Cash Other Current Assets Total Current Assets

$20,032 $0 $20,032

$16,794 $0 $16,794

$10,493 $0 $10,493

$8,370 $0 $8,370

$8,240 $0 $8,240

$8,456 $0 $8,456

$11,967 $0 $11,967

$12,644 $0 $12,644

$13,823 $0 $13,823

$15,706 $0 $15,706

$19,451 $0 $19,451

$24,752 $0 $24,752

$29,131 $0 $29,131

$9,368 $0 $9,368 $29,400

$9,368 $88 $9,280 $26,074

$9,368 $176 $9,192 $19,685

$9,368 $264 $9,104 $17,474

$9,368 $352 $9,016 $17,256

$9,368 $440 $8,928 $17,384

$9,368 $528 $8,840 $20,807

$9,368 $616 $8,752 $21,396

$9,368 $704 $8,664 $22,487

$9,368 $792 $8,576 $24,282

$9,368 $880 $8,488 $27,939

$9,368 $968 $8,400 $33,152

$9,368 $1,056 $8,312 $37,443

Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Current Liabilities s Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities

$0 $0 $0 $0

$6,912 $0 $0 $6,912

$4,149 $0 $0 $4,149

$4,703 $0 $0 $4,703

$5,701 $0 $0 $5,701

$8,187 $0 $0 $8,187

$6,575 $5,000 $0 $11,575

$6,873 $4,790 $0 $11,663

$7,184 $4,580 $0 $11,764

$7,581 $4,370 $0 $11,951

$8,464 $4,160 $0 $12,624

$9,418 $3,950 $0 $13,368

$10,056 $3,740 $0 $13,796

Long-term Liabilities Total Liabilities

$0 $0

$0 $6,912

$0 $4,149

$0 $4,703

$0 $5,701

$0 $8,187

$0 $11,575

$0 $11,663

$0 $11,764

$0 $11,951

$0 $12,624

$0 $13,368

$0 $13,796

$30,000 ($600) ($20,168) $9,232 $20,807

$30,000 ($600) ($19,667) $9,733 $21,396

$30,000 ($600) ($18,677) $10,723 $22,487

$30,000 ($600) ($17,069) $12,331 $24,282

$30,000 ($600) ($14,085) $15,315 $27,939

$30,000 ($600) ($9,616) $19,784 $33,152

$30,000 ($600) ($5,753) $23,647 $37,443

$10,723

$12,331

$15,315

$19,784

$23,647

Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital

$30,000 ($600) $0 $29,400 $29,400

$30,000 ($600) ($10,238) $19,162 $26,074

$30,000 ($600) ($13,863) $15,537 $19,685

$30,000 ($600) ($16,629) $12,771 $17,474

$30,000 ($600) ($17,845) $11,555 $17,256

Net Worth

$29,400

$19,162

$15,537

$12,771

$11,555

$30,000 ($600) ($20,204) $9,196 $17,384 $9,196

$9,232

$9,733

Page 6