Convenience Store Business Plan

Executive Summary
Introduction
MillenniumMart is the convenience store of the 21st Century future, fulfilling a need
that will continue to exist into the future - the need for speed. MillenniumMart will be
the first fully automated, 24 hour convenience store that is more like an enormous
dispensing machine than the traditional store.

The company expects to capture market share by becoming the low cost leader in the
convenience store industry by significantly reducing one of the primary expenses,
which is labor. Through our completely automated shopping experience, customers
will have the chance to shop for everyday items at reduced prices, thus undercutting
competition such as 7-11, AmPm, Circle K, and other local convenience store chains.
The possibilities for expansion are excellent not only in the local area, but in
neighboring communities as well.

The Company
The company is a joint venture start-up company between the principals, Mr. Bean
and his associates, and the management of Martin-Bower, one of the country's largest
and most successful food distributors. The company will be incorporated as a class C
corporation in the state of Delaware with all shares held by private investors.

Martin-Bower will own 29% of MillenniumMart's initial private shares with an option
to acquire a further 11% shares based on growth and profitability after the first five
years. MillenniumMart is expected to open its first store in downtown Manhattan in
March of Year 1.

The company will be set up with a board of directors. Mr. James Bean, a former
senior manager of Martin-Bower is slated for the position of CEO. Mrs. Linda Tuck
has accepted the position of CFO.

The Products/Services
MillenniumMart will sell the same products as other convenience stores in the same
packaging sizes, quality, and quantity as other stores. This includes newspapers,
magazines, soft drinks, fruit juices, sport drinks, hot and cold snacks, a limited
number of grocery items such as canned soups, microwaveable meals, condiments,
bread, auto products such as fuel additives and cleaning supplies, pet supplies, paper
products, toothpaste, etc.

All products will be locally or nationally branded such as Frito-Lay, Coca-Cola, Jolly
Green Giant, Charmin, Stouffer's, etc. In addition each computerized transaction
machine can dispense cash, stamps, Lotto and phone cards and other coupons and will
have the ability to create personal accounts that can display preferred items, retain
shopping lists and other services. An automated, interactive "customer service rep"
will be able to answer questions and pass on comments to the company's
management.
In addition, the company is looking into ways to sell restricted items such as beer,
wine and cigarettes and to set up a separate Internet area for remote access to the Web
and email for its customers.

The Market
Our market is booming. Convenience store industry sales rose 8.6% last year. Overall
U.S. retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth,
proving once again that the convenience store industry has become a powerful force
in U.S. retailing.

Convenience stores serve the entire purchasing population of its geographical area but
focuses on customers who need to purchase items outside of normal working hours
such as swing shift employees and quick shoppers looking for snacks and related
items. Therefore we have segmented our market into night shoppers, quick shoppers,
and others. Growth rates for these three segments match the population growth for the
surrounding area.

Our main competitor is 7-11 which holds approximately 30% of the industry. Other
competitors include Circle K, Fastrip, and any of the 85 grocery establishments on the
east coast.

Financial Considerations
Our start-up requirements come to $453,000, which are largely single time fees
associated with opening the store. These costs are financed by both private investors
and the investment of Martin-Bower. It should be noted that we expect to be operating
at a loss for the first six months before advertising begins to take effect and draw in
customers.

MillenniumMart will be receiving periodic influxes of cash in order to cover

operating expenses during the first two years as it strives toward sustainable
profitability. Almost all of this funding has been arranged through lending institutions
and private investors already. We do not anticipate any cash flow problems during the
next three years.
1.1 Objectives

These are the goals for the next three years for MillenniumMart:

• Achieve profitability by July Year 1;

• Earn approximately $200,000 in sales by Year 3;
• Start paying dividends by Year 3;
• Start up second store by Year 4.

1.2 Mission

MillenniumMart's primary objective is to create a new and revolutionary distribution

outlet that will significantly reduce prices for its customers and provide greater
services with an equal level of quality. The company seeks to be first to market with
this daring new idea so as to capture market share and create greater than average
profits.

1.3 Keys to Success

In order to survive and expand, MillenniumMart must keep the following issues in
mind:

• We must attain a high level of visibility through the media, billboards, and
other advertising.
• We must establish rigid procedures for cost control and incentives for
maintaining tight control.
• We must expend a significant amount on R&D in order to constantly be able
to offer better and greater products and services.

Company Summary
Automated stores such as MillenniumMart are not new, they have existed in Asia,
especially in Japan for a number of years now and have been quite successful there.
Mr. James Bean, MillenniumMart's founder and the driving force behind the joint
venture, has been intrigued with the idea of bringing this new type of store to the U.S.
since it can significantly reduce costs and the ability of an automated store to provide
products and services is only limited to the imagination of management.

The company is a joint venture start-up company between the principals, Mr. Bean
and his associates, and the management of Martin-Bower, one of the country's largest
and most successful food distributors. The company will be incorporated in the state
of Delaware with all shares held by private investors.

2.1 Company Ownership

We will be structured as a C-Corporation which operates as a standard corporation.

This form was chosen by the Board of Directors because of various tax advantages.
Retained earnings will not be distributed as dividends for at least five years, thus
enabling the early retirement of the debt. Additionally, the corporate structure offers
limited personal liability.

The company is a joint venture start-up between the principals, Mr. Bean and his
associates, and the management of Martin-Bower, one of the country's largest and
most successful food distributors. The company will be incorporated in the state of
Delaware with all shares held by private investors.

Martin-Bower will own 29% of MillenniumMart's initial private shares with an option
to acquire a further 11% shares based on growth and profitability after the first five
years. MillenniumMart is expected to open its first store in downtown Manhattan in
March of 2003. The company will be set up with a board of directors. Mr. James
Bean, a former senior manager of Martin-Bower is slated for the position of CEO.
Mrs. Linda Tuck has accepted the position of CFO.

2.2 Start-up Summary

Our start-up expenses come to $453,000, which are largely single time fees associated
with opening the store. These costs are financed by both private investors and the
investment of Martin-Bower.

Start-up

Requirements

Start-up Expenses
Legal $2,400
Pre-sale advertising/marketing $8,000
Land location and finders fee $8,000
Consultants $4,000
Insurance $1,780
Rent $12,000
Research and Development $10,000
Expensed Equipment $50,000
Initial store facilities $150,000
Other $3,000
Total Start-up Expenses $249,180
Start-up Assets
Cash Required $113,820
Start-up Inventory $10,000
Other Current Assets $8,000
Long-term Assets $72,000
Total Assets $203,820

Total Requirements $453,000

Start-up Funding

Start-up Expenses to Fund $249,180

Start-up Assets to Fund $203,820
Total Funding Required $453,000

Assets
Non-cash Assets from Start-up $90,000
Cash Requirements from Start-up $113,820
Additional Cash Raised $0
Cash Balance on Starting Date $113,820
Total Assets $203,820

Liabilities and Capital

Liabilities
Current Borrowing $15,000
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $8,000
Other Current Liabilities (interest-free) $10,000
Total Liabilities $133,000

Capital

Planned Investment
Private Investors $150,000
Martin-Bower management $110,000
Other $60,000
Additional Investment Requirement $0
Total Planned Investment $320,000

Loss at Start-up (Start-up Expenses) ($249,180)

Total Capital $70,820

Total Capital and Liabilities $203,820

Total Funding $453,000

Products
As the most progressive company in the industry, MillenniumMart plans to offer a
greater number of products and services in the future so as to create another
dimension of competitive advantage. So that our customers will feel secure, we will
subscribe to the security services offered by the shopping center of which we are a
part. This will cut down on graffiti and loitering and insure the safety of both
employees and customers.

MillenniumMart will sell the same products as other convenience stores in the same
packaging sizes, quality, and quantity as other stores. This includes newspapers,
magazines, soft drinks, fruit juices, sport drinks, hot and cold snacks, a limited
number of grocery items such as canned soups, microwaveable meals, condiments,
bread, auto products such as fuel additives and cleaning supplies, pet supplies, paper
products, toothpaste, etc.

All products will be locally or nationally branded such as Frito-Lay, Coca-Cola, Jolly
Green Giant, Charmin, Stouffer's, etc. In addition each computerized transaction
machine can dispense cash, stamps, Lotto and phone cards and other coupons and will
have the ability to create personal accounts that can display preferred items, retain
shopping lists and other services. An automated, interactive "customer service rep"
will be able to answer questions and pass on comments to the company's
management.

Market Analysis Summary

Our market is booming. Convenience store industry sales rose 8.6% for 2002. Overall
U.S. retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth,
proving once again that the convenience store industry has become a powerful force
in U.S. retailing.

Convenience stores serve the entire purchasing population of its geographical area but
focuses on customers who need to purchase items outside of normal working hours
such as swing shift employees and quick shoppers looking for snacks and related
items. Therefore we have segmented our market into night shoppers, quick shoppers,
and others. Growth rates for these three segments match the population growth for the
surrounding area.

Our main competitor is 7-11 which holds approximately 30% of the industry. Other
competitors include Circle K, Fastrip, and any of the 85 grocery establishments on the
east coast.

4.1 Market Segmentation

Our target market for our test store encompasses a five mile radius in which the
approximate population is 150,000 (based on census information).

The majority of the residents in this area are Caucasian (58.8%) Black (23.6%) and
Hispanic (19%) with occupations classified as professional/technical, homemaker, or
retired. The majority of household incomes range from $20,000 - $30,000 (50.3%),
yet there are also affluent household incomes ranging from $50,000 - $100,000
(15.4%).
The median income in this area is $48,096, compared to the whole New York area
which is $34,248. The typical "head of household" age is 25 - 34 (22.4%) or age 34 -
44 (23.1%) with a median age of 44.4 years old and an average age of 32 years old.

Target market segments

Convenience stores serve the entire purchasing population of its geographical area but
focuses on customers who need to purchase items outside of normal working hours
such as swing shift employees and quick shoppers looking for snacks and related
items.

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Late night shoppers 3% 78,000 80,340 82,750 85,233 87,790 3.00%
Quick shoppers 2% 42,000 42,840 43,697 44,571 45,462 2.00%
Other 3% 30,000 30,840 31,704 32,592 33,505 2.80%
Total 2.68% 150,000 154,020 158,151 162,396 166,757 2.68%

4.2 Industry Analysis

Convenience store industry sales rose 8.6% to $86.3 billion for 2002. Overall U.S.
retail sales grew by only 6.3%, and grocery sales followed with 2.4% growth, proving
once again that the convenience store industry has become a powerful force in U.S.
retailing.

Pre-tax profit margin in the convenience store industry was the highest since 1988
(1.8%). The 2002 results confirm that a new, upward trend is emerging. This upward
trend is based on several factors, and occurred along with a slow rebound in the
general economy.

Merchandise sales per customer increased 7.4% in 2000 suggesting that convenience
stores are placing higher priority in filling the customers' needs. Companies that align
themselves properly to fill those needs will be successful in the future.
4.2.1 Competition and Buying Patterns

7-11 holds approximately 30% of the industry market, and in 1999 their net income
was $160 million. Other competitors include Circle K, Fastrip, and any of the 85
chain grocery establishments on the east coast.

Strategy and Implementation Summary

MillenniumMart's competitive edge will be the lower prices we will charge our
customers and the novel purchasing experience that will draw shoppers.

The most critical element of MillenniumMart's success will be its marketing and
advertising. In order to capture attention and sales MillenniumMart will use
prominent signs at the store locations, billboards, media bites on local news, and radio
advertisements to capture customers.

Many of the initial customers will be drawn to the unique nature of the store and will
then have the opportunity to realize the cost savings of MillenniumMart. We expect
an average 27% increase in sales from year to year. This may seem very high, but
considering the level of initial sales and the growth possibilities, management actually
considers this to be conservative.

5.1 Competitive Edge

MillenniumMart's competitive edge will be the lower prices we will charge our
customers and the novel purchasing experience that will draw shoppers. In the
convenience store industry, low cost and availability are the two success criteria. We
plan to create these advantages in a new, high-tech environment that will retain
customers.

5.2 Marketing Strategy

The most critical element of MillenniumMart's success will be its marketing and
advertising. Convenience stores serve the entire purchasing population of its
geographical area but focuses on customers who need to purchase items outside of
normal working hours such as swing shift employees and quick shoppers looking for
snacks and related items. In order to capture attention and sales MillenniumMart will
use prominent signs at the store locations, billboards, media bites on local news, and
radio advertisements to capture customers. Many of the initial customers will be
drawn to the unique nature of the store and will then have the opportunity to realize
the cost savings of MillenniumMart. Since automated shopping is still in its infancy,
the firm expects to invest a great deal of its available cash and revenues in marketing
efforts.

5.3 Sales Strategy

Since our store will be a stand-alone, remote facility, there is little in the way being
able to directly influence how we close the sales other than to have an attractive
storefront with our low prices and easy-to-use system. We believe that this in itself is
its own seller. One critical procedure to ensure top customer service and reliability
will be establishing a method for keeping enough inventory of all our products. We
will be using industry data on inventory for other convenience store chains to assist
us.

5.3.1 Sales Forecast

Based on a 20% mark-up, our forecasted sales for years one, two, and three
respectively are: $2,480,106; $3,149,735; $4,000,163. This gives us an average 27%
increase from year to year. This may seem very high, but considering the level of
initial sales and the growth possibilities, management actually considers this to be
conservative.

These sales figures are based on a conglomerate of commuter and walk-by traffic with
an average $3.00 purchase amount conforming to industry averages. The target profit
margin was defined as an average net profit of all merchandise.

Sales Forecast
Year 1 Year 2 Year 3
Sales
Drinks $978,070 $1,242,149 $1,577,529
Snacks $873,277 $1,109,061 $1,408,508
Magazines/newspapers $209,586 $266,175 $338,042
General grocery items $279,449 $354,900 $450,723
Other $139,724 $177,450 $225,361
Total Sales $2,480,106 $3,149,735 $4,000,163

Direct Cost of Sales Year 1 Year 2 Year 3

Drinks $753,114 $956,455 $1,214,697
Snacks $672,423 $853,977 $1,084,551
Magazines/newspapers $161,382 $204,955 $260,292
General grocery items $215,175 $273,273 $347,056
Other $107,588 $136,636 $173,528
Subtotal Direct Cost of Sales $1,909,682 $2,425,296 $3,080,125

Management Summary
As stated earlier, MillenniumMart will be a joint venture between Mr. Wallace Bean
and his associates and the management of Martin-Bower, a large food distribution
company. The company officers will include Mr. Bean as CEO, Mrs. Linda Tuck as
CFO, plus Mr. Minoru Takeda, who will be operations manager. Since the firm is a
start-up, there will be little in the way of formal structure at first. The company also
plans to hire three technicians who will service the automated store and a office
manager. Additional personnel will be added once more stores are set up.

Mr. Wallace Bean is a graduate of the University of Texas, Austin's school of

business. He has worked for more than twelve years in the food distribution and
grocery store industry, including positions as vice president of marketing for Fry's
Food and Drug, director of special projects for Giant Foods and more recently, senior
vice president for Martin-Bower.

Mrs. Linda Tuck has a graduate degree in finance from Kansas State University and
has eight years experience working for various companies. Her last job was as a
financial analyst for Circle K corporation.

Mr Minoru Takeda is an MBA graduate from the University of Osaka. He has been
operational manager for Kiyama Inc. for the past six years which operates
approximately six hundred automated convenience stores throughout Japan. Mr.
Takeda has moved to the United States for the express purpose of bringing this new
type of store to this country.

6.1 Personnel Plan

Initially the company will only have a small staff including upper management,
an operations technician and office manager. All other services, such as bookkeeping,
will be outsourced.

Personnel Plan
Year 1 Year 2 Year 3
Mr. Bean $42,000 $48,000 $52,000
Mrs. Tuck $42,000 $48,000 $52,000
Mr. Takeda $30,000 $40,000 $48,000
Office manager $20,400 $22,000 $28,000
Technicians $33,000 $56,000 $58,000
Total People 7 7 7

Total Payroll $167,400 $214,000 $238,000

Financial Plan
The following tables illustrate our financial projections over the next three years.
Please note that we expect to be operating at a loss for the first six months before
advertising begins to take effect and draw in customers.

As retained earnings increase, a debt retirement fund will be established to encourage

early repayment, thus relieving interest expense. Also, a 30-day payment period for
purchases will be used to avoid incurring liabilities.

7.1 Important Assumptions

MillenniumMart is basing its assumptions on a stable growth market using average

interest rates over the past ten years.

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

7.2 Break-even Analysis

The following table and chart show our Break-even Analysis. Although our break-
even point seems quite high, we are expecting to have higher than average fixed costs
during the period of this plan due to customer "creation costs," R&D costs, higher rent
in a premier spot, higher percentage of payroll costs to overall fixed costs with a small
company, and the need to import and pay for the store facilities. We expect to have a
more reasonable positive retained earnings point around year 5.
Break-even Analysis

Monthly Revenue Break-even $165,326

Assumptions:
Average Percent Variable Cost 77%
Estimated Monthly Fixed Cost $38,025

7.3 Projected Profit and Loss

The following table explains our itemized costs and determines gross and net margin.
Please note that these predictions are weighted toward having higher costs in
comparison to revenues in case unexpected hidden costs arise. The charts give a
visual representation of the data.
Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $2,480,106 $3,149,735 $4,000,163
Direct Cost of Sales $1,909,682 $2,425,296 $3,080,125
Other Costs of Goods $0 $0 $0
Total Cost of Sales $1,909,682 $2,425,296 $3,080,125
Gross Margin $570,424 $724,439 $920,037
Gross Margin % 23.00% 23.00% 23.00%

Expenses
Payroll $167,400 $214,000 $238,000
Sales and Marketing and Other Expenses $60,000 $130,000 $130,000
Depreciation $7,200 $7,200 $7,200
Leased equipment $50,000 $60,000 $60,000
Rent $84,000 $84,000 $84,000
Utilities $28,800 $30,000 $30,000
Accounting/bookeeping $6,500 $9,000 $9,000
Insurance $14,400 $14,400 $14,400
Payroll Taxes $0 $0 $0
Other $38,000 $45,000 $45,000

Total Operating Expenses $456,300 $593,600 $617,600

Profit Before Interest and Taxes $114,124 $130,839 $302,437

EBITDA $121,324 $138,039 $309,637
Interest Expense $16,250 $16,400 $14,650
Taxes Incurred $29,362 $34,332 $86,336

Net Profit $68,512 $80,107 $201,451

Net Profit/Sales 2.76% 2.54% 5.04%

7.4 Projected Cash Flow

MillenniumMart will be receiving periodic influxes of cash in order to cover

operating expenses during the first two years as it strives toward sustainable
profitability. Almost all of this funding has been arranged through lending institutions
and private investors already. We do not anticipate any cash flow problems during the
next three years.

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $2,480,106 $3,149,735 $4,000,163
Subtotal Cash from Operations $2,480,106 $3,149,735 $4,000,163

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $5,000 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $50,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $54,000 $78,000 $0
Subtotal Cash Received $2,589,106 $3,227,735 $4,000,163

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $167,400 $214,000 $238,000
Bill Payments $2,177,877 $3,134,865 $3,620,688
Subtotal Spent on Operations $2,345,277 $3,348,865 $3,858,688

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $7,000 $13,000
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $5,000 $10,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $30,000
Dividends $0 $0 $50,000
Subtotal Cash Spent $2,345,277 $3,360,865 $3,961,688

Net Cash Flow $243,829 ($133,130) $38,475

Cash Balance $357,649 $224,519 $262,994

7.5 Projected Balance Sheet

The following table shows the Projected Balance Sheet for MillenniumMart.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $357,649 $224,519 $262,994
Inventory $371,402 $471,680 $599,034
Other Current Assets $8,000 $8,000 $8,000
Total Current Assets $737,050 $704,199 $870,027

Long-term Assets
Long-term Assets $72,000 $72,000 $102,000
Accumulated Depreciation $7,200 $14,400 $21,600
Total Long-term Assets $64,800 $57,600 $80,400
Total Assets $801,850 $761,799 $950,427

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $428,518 $242,359 $302,537
Current Borrowing $20,000 $13,000 $0
Other Current Liabilities $10,000 $10,000 $10,000
Subtotal Current Liabilities $458,518 $265,359 $312,537
Long-term Liabilities $150,000 $145,000 $135,000
Total Liabilities $608,518 $410,359 $447,537

Paid-in Capital $374,000 $452,000 $452,000

Retained Earnings ($249,180) ($180,668) ($150,561)
Earnings $68,512 $80,107 $201,451
Total Capital $193,332 $351,439 $502,891
Total Liabilities and Capital $801,850 $761,799 $950,427

Net Worth $193,332 $351,439 $502,891

7.6 Business Ratios

We are using the industry standard business ratios for independent convenience store
chains as a comparison to our own. There are some significant differences between
the two since we have a completely different storefront than our competitors. First of
all our accounts receivable are very different as we expect to have higher sales using
credit cards than other stores, due to the convenience of using credit cards and cash
cards at our facility. There is generally a three day waiting period to receive funds
from the credit card company. This is a short period of time compared to a normal
collection day period of 30 days, but it is still something we need to factor for.

In addition, we expect higher percentages in inventory as we will be operating only

one store initially and even many independent convenience store owners often have
two or more facilities. Our long-term assets are low since we are only renting our
facilities.

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 27.00% 27.00% 2.27%

Percent of Total Assets

Inventory 46.32% 61.92% 63.03% 22.18%
Other Current Assets 1.00% 1.05% 0.84% 26.81%
Total Current Assets 91.92% 92.44% 91.54% 56.12%
Long-term Assets 8.08% 7.56% 8.46% 43.88%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 57.18% 34.83% 32.88% 26.39%

Long-term Liabilities 18.71% 19.03% 14.20% 24.87%
Total Liabilities 75.89% 53.87% 47.09% 51.26%
Net Worth 24.11% 46.13% 52.91% 48.74%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 23.00% 23.00% 23.00% 23.55%
Selling, General & Administrative Expenses 20.26% 20.10% 17.78% 16.21%
Advertising Expenses 0.00% 0.00% 0.00% 0.85%
Profit Before Interest and Taxes 4.60% 4.15% 7.56% 1.02%

Main Ratios
Current 1.61 2.65 2.78 1.68
Quick 0.80 0.88 0.87 0.71
Total Debt to Total Assets 75.89% 53.87% 47.09% 4.63%
Pre-tax Return on Net Worth 50.63% 32.56% 57.23% 57.28%
Pre-tax Return on Assets 12.21% 15.02% 30.28% 10.83%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin 2.76% 2.54% 5.04% n.a
Return on Equity 35.44% 22.79% 40.06% n.a

Activity Ratios
Inventory Turnover 10.91 5.75 5.75 n.a
Accounts Payable Turnover 6.06 12.17 12.17 n.a
Payment Days 27 42 27 n.a
Total Asset Turnover 3.09 4.13 4.21 n.a

Debt Ratios
Debt to Net Worth 3.15 1.17 0.89 n.a
Current Liab. to Liab. 0.75 0.65 0.70 n.a

Liquidity Ratios
Net Working Capital $278,532 $438,839 $557,491 n.a
Interest Coverage 7.02 7.98 20.64 n.a

Additional Ratios
Assets to Sales 0.32 0.24 0.24 n.a
Current Debt/Total Assets 57% 35% 33% n.a
Acid Test 0.80 0.88 0.87 n.a
Sales/Net Worth 12.83 8.96 7.95 n.a
Dividend Payout 0.00 0.00 0.25 n.a

Appendix

Sales Forecast
Month Month Month Month Month Month
Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
1 2 3 10 11 12
Sales
$28,00 $33,04 $38,98 $105,24 $124,19 $146,54 $172,92
Drinks 0% $46,005 $54,286 $64,057 $75,588 $89,193
0 0 7 8 3 7 6
$25,00 $29,50 $34,81 $110,88 $130,84 $154,39
Snacks 0% $41,076 $48,469 $57,194 $67,489 $79,637 $93,971
0 0 0 6 6 8
Magazines/newspap
0% $6,000 $7,080 $8,354 $9,858 $11,633 $13,727 $16,197 $19,113 $22,553 $26,613 $31,403 $37,056
ers
General grocery $11,13
0% $8,000 $9,440 $13,144 $15,510 $18,302 $21,596 $25,484 $30,071 $35,484 $41,871 $49,407
items 9
Other 0% $4,000 $4,720 $5,570 $6,572 $7,755 $9,151 $10,798 $12,742 $15,035 $17,742 $20,935 $24,704
$71,00 $83,78 $98,86 $116,65 $137,65 $162,43 $191,66 $226,16 $266,87 $314,91 $371,60 $438,49
Total Sales
0 0 0 5 3 1 8 9 9 7 2 1

Month Month Month Month Month Month

Direct Cost of Sales Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
1 2 3 10 11 12
$21,56 $25,44 $30,02 $112,84 $133,15
Drinks $35,424 $41,800 $49,324 $58,202 $68,679 $81,041 $95,628
0 1 0 1 3
$19,25 $22,71 $26,80 $100,75 $118,88
Snacks $31,628 $37,321 $44,039 $51,966 $61,320 $72,358 $85,382
0 5 4 1 7
Magazines/newspap
$4,620 $5,452 $6,433 $7,591 $8,957 $10,569 $12,472 $14,717 $17,366 $20,492 $24,180 $28,533
ers
General grocery
$6,160 $7,269 $8,577 $10,121 $11,943 $14,093 $16,629 $19,623 $23,155 $27,322 $32,240 $38,044
items
Other $3,080 $3,634 $4,289 $5,061 $5,971 $7,046 $8,315 $9,811 $11,577 $13,661 $16,120 $19,022
Subtotal Direct Cost $54,67 $64,51 $76,12 $105,99 $125,07 $147,58 $174,15 $205,49 $242,48 $286,13 $337,63
$89,825
of Sales 0 1 3 3 2 5 0 7 6 4 8

Personnel Plan
Month Month Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Mr. Bean 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Mrs. Tuck 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Mr. Takeda 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Office manager 0% $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700
Technicians 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $3,000 $3,000 $4,500 $4,500 $4,500 $4,500
Total People 5 5 5 5 5 5 6 6 7 7 7 7

Total Payroll $12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,200 $15,700 $15,700 $15,700 $15,700

General Assumptions
Month Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate
Long-term
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest Rate
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Pro Forma Profit and Loss

Month Month Month Month Month Month Month Month Month
Month 1 Month 2 Month 3
4 5 6 7 8 9 10 11 12
$116,65 $137,65 $162,43 $191,66 $226,16 $266,87 $314,91 $371,60 $438,49
Sales $71,000 $83,780 $98,860
5 3 1 8 9 9 7 2 1
$105,99 $125,07 $147,58 $174,15 $205,49 $242,48 $286,13 $337,63
Direct Cost of Sales $54,670 $64,511 $76,123 $89,825
3 2 5 0 7 6 4 8
Other Costs of
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Goods
$105,99 $125,07 $147,58 $174,15 $205,49 $242,48 $286,13 $337,63
Total Cost of Sales $54,670 $64,511 $76,123 $89,825
3 2 5 0 7 6 4 8

$100,85
Gross Margin $16,330 $19,269 $22,738 $26,831 $31,660 $37,359 $44,084 $52,019 $61,382 $72,431 $85,469
3
Gross Margin % 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00%

Expenses
Payroll $12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,200 $15,700 $15,700 $15,700 $15,700
Sales and
Marketing and $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Other Expenses
Depreciation $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Leased equipment $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $6,000
Rent $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Utilities $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400
Accounting/bookee
$500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $750 $750
ping
Insurance $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
15
Payroll Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
%
Other $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $3,000 $4,000 $5,000 $10,000

Total Operating
$35,400 $35,400 $35,400 $35,400 $35,400 $35,400 $36,900 $36,900 $39,400 $40,400 $41,650 $48,650
Expenses

Profit Before ($19,07 ($16,13 ($12,66($8,569 ($3,740

$1,959 $7,184 $15,119 $21,982 $32,031 $43,819 $52,203
Interest and Taxes 0) 1) 2) ) )
($18,47 ($15,53 ($12,06($7,969 ($3,140
EBITDA $2,559 $7,784 $15,719 $22,582 $32,631 $44,419 $52,803
0) 1) 2) ) )
Interest Expense $958 $1,375 $1,375 $1,375 $1,375 $1,375 $1,375 $1,375 $1,417 $1,417 $1,417 $1,417
($2,983 ($1,534
Taxes Incurred ($6,008) ($5,252) ($4,211) $175 $1,743 $4,123 $6,170 $9,184 $12,721 $15,236
) )

($14,02 ($12,25 ($6,961 ($3,580

Net Profit ($9,826) $409 $4,066 $9,621 $14,396 $21,430 $29,681 $35,550
0) 4) ) )
Net Profit/Sales -19.75% -14.63% -9.94% -5.97% -2.60% 0.25% 2.12% 4.25% 5.39% 6.80% 7.99% 8.11%
Pro Forma Cash Flow
Month Month Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Cash
Received

Cash from
Operations
$116,65 $137,65 $162,43 $191,66 $226,16 $266,87 $314,91 $371,60 $438,49
Cash Sales $71,000 $83,780 $98,860
5 3 1 8 9 9 7 2 1
Subtotal
$116,65 $137,65 $162,43 $191,66 $226,16 $266,87 $314,91 $371,60 $438,49
Cash from $71,000 $83,780 $98,860
5 3 1 8 9 9 7 2 1
Operations

Additional
Cash
Received
Sales Tax,
VAT, 0.00
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
HST/GST %
Received
New
Current $0 $0 $0 $0 $0 $0 $0 $0 $5,000 $0 $0 $0
Borrowing
New Other
Liabilities
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
(interest-
free)
New Long-
term $0 $50,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Sales of
Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets
Sales of
Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
New
Investment $0 $0 $0 $0 $50,000 $0 $0 $0 $0 $0 $0 $4,000
Received
Subtotal
$133,78 $116,65 $187,65 $162,43 $191,66 $226,16 $271,87 $314,91 $371,60 $442,49
Cash $71,000 $98,860
0 5 3 1 8 9 9 7 2 1
Received

Expenditure Month Month Month

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
s 10 11 12

Expenditure
s from
Operations
Cash
$12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,200 $15,700 $15,700 $15,700 $15,700
Spending
Bill $120,91 $108,73 $126,06 $146,51 $170,63 $198,68 $232,29 $272,23 $319,73 $375,95
$12,062 $94,045
Payments 4 4 6 8 7 0 3 9 4 5
Subtotal
$133,61 $106,74 $121,43 $138,76 $159,21 $184,83 $212,88 $247,99 $287,93 $335,43 $391,65
Spent on $24,762
4 5 4 6 8 7 0 3 9 4 5
Operations

Additional
Cash Spent
Sales Tax,
VAT,
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
HST/GST
Paid Out
Principal
Repayment
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
of Current
Borrowing
Other
Liabilities
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal
Repayment
Long-term
Liabilities
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal
Repayment
Purchase
Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets
Purchase
Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal $133,61 $106,74 $121,43 $138,76 $159,21 $184,83 $212,88 $247,99 $287,93 $335,43 $391,65
$24,762
Cash Spent 4 5 4 6 8 7 0 3 9 4 5

Net Cash
$46,238 $166 ($7,885) ($4,779) $48,887 $3,212 $6,831 $13,289 $23,886 $26,979 $36,168 $50,835
Flow
Cash $160,05 $160,22 $152,34 $147,56 $196,44 $199,66 $206,49 $219,78 $243,66 $270,64 $306,81 $357,64
Balance 8 5 0 1 8 1 2 0 7 5 3 9

Pro Forma Balance Sheet

Month Month Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Starting
Assets Balance
s

Current
Assets
$113,82 $160,05 $160,22 $152,34 $147,56 $196,44 $199,66 $206,49 $219,78 $243,66 $270,64 $306,81 $357,64
Cash
0 8 5 0 1 8 1 2 0 7 5 3 9
$116,59 $137,57 $162,34 $191,56 $226,04 $266,73 $314,74 $371,40
Inventory $10,000 $60,137 $70,962 $83,735 $98,807
2 9 3 5 7 5 7 2
Other
Current $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Assets
Total
$131,82 $228,19 $239,18 $244,07 $254,36 $321,04 $345,23 $376,83 $419,34 $477,71 $545,38 $629,56 $737,05
Current
0 5 6 4 8 0 9 5 5 3 0 1 0
Assets

Long-
term
Assets
Long-
term $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000
Assets
Accumula
ted
$0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200 $4,800 $5,400 $6,000 $6,600 $7,200
Depreciati
on
Total
Long-
$72,000 $71,400 $70,800 $70,200 $69,600 $69,000 $68,400 $67,800 $67,200 $66,600 $66,000 $65,400 $64,800
term
Assets
Total $203,82 $299,59 $309,98 $314,27 $323,96 $390,04 $413,63 $444,63 $486,54 $544,31 $611,38 $694,96 $801,85
Assets 0 5 6 4 8 0 9 5 5 3 0 1 0

Liabilities
Month Month Month
and Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9
10 11 12
Capital

Current
Liabilities
Accounts $117,79 $104,55 $121,20 $140,86 $164,05 $190,98 $223,27 $261,64 $307,28 $361,17 $428,51
$8,000 $90,440
Payable 5 4 9 2 2 1 1 3 0 9 8
Current $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $20,000 $20,000 $20,000 $20,000
Borrowin
g
Other
Current $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Liabilities
Subtotal
$142,79 $115,44 $129,55 $146,20 $165,86 $189,05 $215,98 $248,27 $291,64 $337,28 $391,17 $458,51
Current $33,000
5 0 4 9 2 2 1 1 3 0 9 8
Liabilities

Long-
$100,00 $100,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00 $150,00
term
0 0 0 0 0 0 0 0 0 0 0 0 0
Liabilities
Total $133,00 $242,79 $265,44 $279,55 $296,20 $315,86 $339,05 $365,98 $398,27 $441,64 $487,28 $541,17 $608,51
Liabilities 0 5 0 4 9 2 2 1 1 3 0 9 8

Paid-in $320,00 $320,00 $320,00 $320,00 $320,00 $370,00 $370,00 $370,00

$370,00 $370,00 $370,00 $370,00 $374,00
Capital 0 0 0 0 0 0 0 0
0 0 0 0 0
Retained ($249,1 ($249,1 ($249,1 ($249,1 ($249,1 ($249,1 ($249,1 ($249,1
($249,1 ($249,1 ($249,1 ($249,1 ($249,18
Earnings 80) 80) 80) 80) 80) 80) 80) 80)
80) 80) 80) 80) 0)
($14,02 ($26,27 ($36,10 ($43,06 ($46,64 ($46,23 ($42,16
($18,15 ($32,54
Earnings $0 $3,280 $32,962 $68,512
0) 4) 0) 1) 1) 2) 6)
0) 5)
Total $102,67 $124,10 $153,78 $193,33
$70,820 $56,800 $44,546 $34,720 $27,759 $74,179 $74,588 $78,654 $88,275
Capital 0 0 2 2
Total
Liabilities $203,82 $299,59 $309,98 $314,27 $323,96 $390,04 $413,63 $444,63 $486,54 $544,31 $611,38 $694,96 $801,85
and 0 5 6 4 8 0 9 5 5 3 0 1 0
Capital

$102,67 $124,10 $153,78 $193,33

Net Worth $70,820 $56,800 $44,546 $34,720 $27,759 $74,179 $74,588 $78,654 $88,275
0 0 2 2