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Retail Store
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Home Fashion Statement
“Inspiration for your Home”

CONFIDENTIAL BUSINESS PLAN

Contact
Robert Mathes
Home Fashion Statement, LLC
(602) 555-5555
rmathes@homefs.biz
www.homefs.biz

The information set forth in this document includes confidential business information of Home Fashion
Statement, LLC ("the Company”) and is provided in connection with a potential transaction between the
Company and one or more accredited investors or lenders, within the meaning of applicable securities laws.
This document does not constitute an offer, or a solicitation of an offer, for the sale of securities. Any such offer,
solicitation, or sale shall only be pursuant to definitive documentation, acceptable to the parties of the
transaction in their respective discretion. Included herein are certain internal projections of possible future
financial results for the Company. The Company does not warrant the accuracy or completeness of the
projections or the reasonableness of the assumptions underlying such projections, although the Company
believes such assumptions to be reasonable. Any potential investors in the Company are advised to conduct
their own investigations, to their satisfaction, with respect to the business and affairs of the Company.
Home Fashion Statement Business Plan

Table of Contents

Section Page

Business Description 3

Store Description 5

Products & Services 6

Store Location 8

Market Overview 9

Marketing & Competition 10

Management & Organization 11

Financial Assumptions 13

Financial Projections 14

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Home Fashion Statement Business Plan

Business Description
BUSINESS OVERVIEW
Home Fashion Statement, LLC (“the
“Company”) is an early stage company that
will own and operate the soon to be opened
Home Fashion Statement (“the store”) in
Scottsdale, Arizona. The store’s intention is to
be a special, high quality, retail store; offering
stylish, unique, yet affordable home
accessories, furnishings, fashion bedding, and
gifts to consumers interested in making their
homes an extension of their individual
personalities and a refuge from the outside
world.

Home Fashion Statement will cater to upper

and upper middle class consumers who are
disappointed with the big box and mass
retailers of home accessories and furnishings. Robert Mathes, President and co-owner, is a career retailer
who brings over 20 years of experience in management, merchandising, marketing, and store operations to
Home Fashion Statement. Mr. Mathes will be joined by his wife and co-owner, Meg who has enjoyed a
successful business career.

MISSION STATEMENT
Through the unique merchandising of its products, Home Fashion Statement will inspire customers and show
them how to create a unique home environment that reflects their own individual style.

KEYS TO SUCCESS
The founders believe that they have the right combination of experience, skill and vision to quickly put the
Company on a rapid track for growth and profits. The following factors will contribute to the success of Home
Fashion Statement:

• Home Fashion Statement will offer unique items that are not carried by its competitors
• Home Fashion Statement will present merchandise by lifestyle in a consistent, dramatic, and exciting
way
• Home Fashion Statement will sell products that provide quality and value to customers while meeting
their needs to express their personal style
• Home Fashion Statement will have a cozy and relaxed atmosphere with a staff of professionals who
will provide an unpretentious experience for those who come through its doors
• No sales pressure will be applied to customers because staff will not work off commission

SHORT TERM GOALS

The company has established the following goals for its first twelve months of operation:

• Develop and position the Home Fashion Statement brand

• Launch an informational web site (www.homefs.biz)
• Compile an in-house mailing list and develop a customer loyalty program
• Continue to build strong partnerships with members of the interior design trade
• Identify and expand best selling merchandise categories to increase inventory turn and gross margin
• By the end of year one, the Company will achieve gross revenues of $445,000

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Home Fashion Statement Business Plan

Business Description
LONG TERM STRATEGIES
During years 2 through 5 of the planning period, Home Fashion Statement intends to implement the following
strategies:

• Toward the later part of year 2 produce the first Home Fashion Statement catalog
• In year 3 in-home design services will be introduced
• During year 3 expand the store size and introduce new merchandise categories including tabletop
items and larger furniture
• Add an e-commerce component to the Company’s website

FINANCING OVERVIEW
Home Fashion Statement is currently seeking $100,000 in SBA
guaranteed bank financing to be structured as a 1 year,
annually renewable, senior secured, revolving line of credit.
The facilities will be secured by a blanket lien on the
Company’s assets as well as a personal guarantee of Mr. and
Mrs. Robert Mathes, the Company’s owners. In addition to the
capital from the bank facility, the owners have already
committed $30,000 in fixed assets and will provide an
additional $20,000 in cash simultaneous with receipt of a
commitment letter from the bank. These funds and the cash
flow generated from operations will fund the business for the
foreseeable future. The capital provided by the bank and the
owners will be utilized as follows:

Amount Application of Proceeds

$100,000 Inventory

$20,000 Working Capital

$30,000 Store Fixtures

Financial projections of the Company’s performance for the 3 years of the planning period are as follows:

Year 1 Year 2 Year 3

Revenue $445,500 $525,000 $600,000
Gross Profit $222,750 $262,500 $300,000
Net Income $13,902 $26,466 $30,443
Cash Balance $26,902 $46,368 $69,811

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Home Fashion Statement Business Plan

Store Description
STORE OVERVIEW
Home Fashion Statement will be an approximately 1,900 square foot home furnishings and decorative
accessories store located in Scottsdale, Arizona. The store will offer local residents, visitors, and designers a
unique, high quality presentation of furnishings and gift items for the 21st century southwest home. The store
will incorporate the owner’s definition of the Arizona lifestyle by offering merchandise that marries western
and contemporary design. All merchandise will be displayed in a dramatic and upscale presentation. Open 7
days a week, the store will be known as a fun, comfortable, warm place for shoppers to browse and buy.
Many of the store’s customers will be people who appreciate the right combination of fine things and a good
value.

Operating Philosophies
As a family owned and operated establishment, the owners have developed operating philosophies that will
ensure satisfied customers and encourage patrons to return to Home Fashion Statement time and time again.
These philosophies include:

• Providing a sophisticated yet relaxed and friendly atmosphere

• Professional, knowledgeable, and caring staff but no pressure to buy
• Unique and special items not seen elsewhere

Operating Details
The store will be open daily from 10:00 am to 9:00 pm Monday through Saturday and 11:00 am to 5:00 pm
on Sundays. It is expected that hours will be extended during the holiday season. In addition to the owners,
the store will have one part-time sales assistant depending upon time of day and day of week. In addition to
providing designer discounts, the store will offer its customers special orders, shipping, exchanges, and
returns. Home Fashion Statement will accept cash, check, travelers check, Visa, Master Card, Discover, and
American Express.

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Home Fashion Statement Business Plan

Products & Services

PRODUCTS OVERVIEW
Home Fashion Statement is focused on selling high quality, stylish home accessories, furnishings, fashion
bedding, and gifts to active, middle and upper class homeowners and interior designers. The store’s product
mix will be presented in five distinct lifestyle categories:

• Origins: primitive, tribal, ethnic, faux fur

• Western/Southwestern: rustic, earth tones, neutral, natural, suede, and leather
• Sophisticated: contemporary, modern, minimal, crisp
• Old World: elegant, opulent, embellished, crushed velvet
• Casual Classics: simple, casual, denim, cotton

To support continued business expansion and growth Home Fashion Statement will firmly establish its product
identity with customers through a focused product assortment during its first year. Additional product
offerings will be expanded and enhanced by broadening the most profitable merchandise categories. This
approach will establish a brand identity while also allowing the store to tailor its assortment to meet the needs
of customers and changing design trends.

PRODUCT CATEGORIES
Home Fashion Statement will include merchandise in the following product categories:

Decorative Accessories
This broad category provides many decorative elements to personalize a home. Price points in this group will
range from $10 to $400 and include:

• Wall Art (pictures, mirrors, sculptures) • Vases and pots

• Candles and candle holders • Statuary and sculpture
• Lamps (table top and floor lamps) • Greenery (trees, plants, cacti)

Accent Furniture
Smaller, more unique furniture items used as accents along with special order bed frames comprise the Accent
Furniture merchandise category. Price points in this category range from $50 to $1,100 and include:

• Special order bed frames

• Trunks, tables, and plant stands
• Room dividers and screens
• Easels
• Ottomans and benches
• Bath furniture

Home Textiles
This category will be focused on fast turning styles that represent the colors and textures most desired in the
Arizona lifestyle. Price points in this category will range from $5 to $500 and include:

• Fashion bedding
• Fashion bath towels and co-ordinates
• Decorative pillows
• Throw blankets
• Accent rugs
• Place mats, napkins, and napkin rings

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Home Fashion Statement Business Plan

Products & Services

PRODUCT CATEGORIES (cont)

Special Occasion Gifts

For unique gift giving occasions, Home Fashion
Statement’s selection of gift items will allow customers
to express their individuality and the individuality of
their gift recipients. Price points will range from $10 to
$100 and include:

• Housewarming gifts
• Hostess gifts
• Executive gifts
• Men’s gifts
• Pet gifts
• Candy and gourmet
• Games
• Personal care
• Bath and body products

Seasonal Décor
Home Fashion Statement’s unique seasonal assortment will inspire customers to create an exciting and fun
environment in their homes for entertaining friends and family. Seasonal offerings will focus on key holidays.
Price points in this group will range from $5 to $300 and include:

• Special order Christmas trees

• Christmas ornaments, trim, and décor
• Fall harvest décor
• Valentines Day gifts

SERVICES
To differentiate Home Fashion Statement from other retailers in the area; the store will offer a variety of
personalized services to enhance the shopping experience, build customer loyalty, and generate business
within the design trade. Services will include:

• Corporate Gift Program – Discounts for corporate customers and employees

• Designer Discount Program – Actively pursue the interior design trade offering a 20% designer
discount
• Preferred Customer Shopping Events – Reward preferred customers with special shopping days and
discount purchases on those days
• Gift Registry – For weddings and other occasions
• Holiday Gift Wrapping – To be offered in association with local charity

Future Services
In the third year of business, Home Fashion Statement will introduce in-home design services. This additional
channel will allow the store to reach a broader customer base as well as expand the level of customer service
and design assistance offered to each customer.

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Home Fashion Statement Business Plan

Store Location
LOCATION OVERVIEW
Home Fashion Statement will be located in Scottsdale, Arizona in the Scottsdale Shea
East Plaza next to the Harkins Shea 14 Theatres. The plaza has easy access and
good visibility from the major cross streets of Scottsdale Road and Shea Boulevard
and is an active urban lifestyle strip center offering well established foot traffic.
Surrounding tenants include a movie complex, a health and fitness center, a
coffeehouse, a shoe store, a children’s furniture store, a learning store and several
restaurants, all of which will enhance the number of visitors to Home Fashion
Statement. Shopping at Home Fashion Statement will be easy and convenient due
to the following factors:

• High visibility from main streets

• Lighted exterior signage
• Easy and multiple ingress and egress
• Large and well lighted parking

Scottsdale, Arizona calls itself “The West’s Most Western Town.” The city has a population of over 215,000
according to the City’s website (www.ci.scottsdale.az.us) and covers an area of more than 184 square miles
stretching 31 miles from north to south. Scottsdale is Arizona’s fifth most populous city with a median age of
42.1 years and a median household income of almost $62,000. There are 90,669 occupied living units in
Scottsdale according to the 2000 census, of which 70% are owned and 30% are rented. Housing prices range
from $60,000 to $6+ million with $228,000 being the median price.

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Home Fashion Statement Business Plan

Market Overview
TARGET MARKET
The owners believe that the store’s primary target market consists of active, female buyers in the 30 to 45
age bracket who believe that the family home is their principle center of influence. Other characteristics that
describe Home Fashion Statement’s target customers include:

• A sense of style
• Believes in good value
• Requires professional design assistance but does not wish to hire a designer
• College educated, married, children
• Employed full-time or part-time
• Enjoys entertaining at home
• Family is important

MARKET OVERVIEW
Home Fashion Statement will draw its customers from the
Phoenix, Arizona metropolitan area which can be best described
using Maricopa County as a reference. The area is well populated,
affluent, and growing.

More than half of the State of Arizona’s population resides in

Maricopa County, which includes the cities of Phoenix, Mesa,
Glendale, Scottsdale, Tempe, Chandler, Peoria and Gilbert. This
metropolitan area is the state’s major center of political and
economic activity. In addition to housing the state capital, the
county is home to a growing high-tech industry; manufacturing
and agricultural industries; 15 institutions of higher learning,
including Arizona State University and the American Graduate
School of International management; various cultural attractions;
major league sports; and Phoenix Sky Harbor International Airport
(the fifth busiest in the world with over 1,300 daily flights).

Today the County measures 9,222 square miles. Individuals or corporations own 29 percent of the land, 5
percent is Indian reservation land, and the balance is owned by various federal, state, county and city
governments and agencies.

Scottsdale Statistics

• 2002 Population = 3,296,250

• 2002 Labor Force = 1,670,583
• Unemployment Rate = 5.3%
• Major Industries = Services, retail trade, manufacturing

Age Distribution Population Composition

0-14 22.9% White 77.4%
15-24 14.3% African American 3.7%
25-44 31.4% Native American 1.8%
45-64 19.8% Asian 2.3%
65+ 11.7% Other 14.8%

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Home Fashion Statement Business Plan

Marketing & Competition

MARKETING & ADVERTISING CAMPAIGN
Home Fashion Statement will position itself as the home furnishings, accessories, and gift store for people who
enjoy the good life and enjoy acquiring things that are distinctive and unique. The Home Fashion Statement
brand will be unpretentious, yet represent the highest quality in the products it offers as well as in the service
it provides. The brand will always represent a warm, friendly place where customers are always welcome to
just stop by and browse. Additionally, the brand will stand for fashion forward, upscale, great selection,
value, and a knowledgeable, helpful staff. Home Fashion Statement will define its brand and create
awareness for the store through the following marketing initiatives:

• Regional advertising in magazines such as Phoenix Home & Garden, Scottsdale Life, and others
• Limited direct mail to Scottsdale and Paradise Valley zip codes
• Yellow pages advertising in Scottsdale and Paradise Valley
• www.homefs.biz will be an informational website that will provide visitors with a variety of information
including store address, telephone number, email address, map, directions, new items, and articles of
interest
• The owners will use the store and signage to create brand awareness
• Home Fashion Statement will create customer evangelists through its great selection and service
• The store will receive a significant amount of traffic due to its retail location
• Home Fashion Statement will market to the Valley interior design community through contacts and
networking

LOCAL COMPETITIVE ESTABLISHMENTS

In the broadest terms any furniture store, big box store, interior design store, or furnishings and accessories
store in the Phoenix, Maricopa County metropolitan area is a potential competitor for Home Fashion
Statement. That notwithstanding, management believes that the store’s unique product offerings combined
with its location practically limits competition to the east side of the Valley. Stores with a similar inventory
include:

Competitor Description

Z Gallerie is a unique lifestyle retailer specializing in furnishings

and accessories for the home and office. From the exclusive to the
unusual, Z Gallerie is the place to find an eclectic mix of fun and
fashion. There are three stores in metropolitan Phoenix.

The Great Indoors intends to become more than the leader in

home decorating and remodeling — they want to become the place
where people find true convenience, unexpected inspiration, and
genuine affordability. There are two stores in Arizona - Scottsdale
and Chandler.

Pottery Barn is founded on the idea that home furnishings should

be exceptional in comfort, style, and quality. In-house designers
draw their inspiration from time-honored models in America and
around the world to create unique collections at an excellent value.
All of Pottery Barn's products are exclusive in its catalogs, web site
and stores. The chain has 6 locations in the Valley.

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Home Fashion Statement Business Plan

Management & Organization

MANAGEMENT OVERVIEW
Home Fashion Statement’s founding management team consists of two experienced executives with a
complementary mix of backgrounds, experiences and skills. This is the right team to build the Company now,
and guide it profitably into the future. Relevant skills among management that benefit the Company include:

• Extensive knowledge of the retail business

• Experienced business people with an in-depth understanding of successful business operations
• Multi-task orientated; able to take on heavy workload
• Flexible; able to adapt to different circumstances
• Understand the importance of consistent, high quality customer service

Robert Mathes – President, Co-Founder & CEO

Robert Mathes is an experienced retail business manager with over 20 years experience in department and
specialty store operations, who has consistently proven his ability to effect sales growth. As a department
manager at the Steinmart Department stores he grew annual sales volume over 100% at the Concord,
Metrotown, and Southpark stores. During that time he was recognized as the Department Manager of the
Year on three different occasions. While managing the domestics area at the Scottsdale Southwest store,
annual sales increased by 100% over a three-year period. Mr. Mathes has an uncompromising focus on
customer service. His ability to recognize sales trends and fully exploit merchandise opportunities has
consistently produced increased sales, increased profits, and customer loyalty. Mr. Mathes led a team which
fixtured, merchandised, trained associates, and opened 7 new stores throughout the country while with
Homegoods Stores of America. As the store manager of Smith Stores in Paradise Valley he developed
successful relationships with many area interior designers and he will call upon that list of hundreds of
designers to launch The Home Fashion Statement's designer program.

In his capacity of President and CEO, Mr. Mathes will be responsible for all aspects of the store’s day-to-day
operations including purchasing, merchandising, marketing, and customer service.

Meg Mathes – Co-Founder

Meg Mathes is Robert Mathes’s spouse. She is a graduate of the University of Arizona, Tucson, Arizona where
she earned a business associates degree with emphasis on marketing and merchandising. Mrs. Mathes brings
tremendous organizational and management skills to Home Fashion Statement. Currently, she is the office
manager for Dr. James Johnson in Phoenix. Her responsibilities include all operational aspects of running a
successful business, accounts payable, accounts receivable, insurance billing, risk management, and human
resources. She implemented operational controls that resulted in a 30 percent reduction in operating expenses
and has significantly improved cash flow. Mrs. Mathes demonstrates superior customer service skills when
dealing with suppliers, insurance providers, employees, and patients.

At Home Fashion Statement Mrs. Mathes will be responsible for overseeing financial operations, human
resource administration, and risk management. She will spearhead the effort to contact businesses in the
community to develop sales of gifts for their clients and employees. As an active member of the community
Mrs. Mathes will reach out to clubs and organizations to promote awareness of the store. She will organize
events that will benefit the community and result in sales and exposure for Home Fashion Statement. Her
strong customer service skills will also be utilized in the daily sales activities at Home Fashion Statement.

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Management & Organization

ADDITIONAL STAFFING REQUIREMENTS
In addition to the owners, the store will employ 1 part-time sales assistant who will work 25 hours per week.
It is important to note that this employee is an “adult” with design, fashion and retail experience. The sales
assistant will help customers, answer telephones, gift wrap and handle all credit card and cash transactions.
The assistant will be paid an hourly rate of $10 and receive no benefits.

COMPENSATION PROGRAMS
Mr. and Mrs. Mathes will be full-time employees of the store and in addition to annual salaries will have
Company paid health insurance and other benefits commensurate with their positions.

PROFESSIONAL & CONSULTING SERVICE PROVIDERS

The owners have engaged or intend to engage the following professional service providers:

• Legal – Smith and Buckeye Legal Associates – Phoenix, AZ

• Accounting – Al and Bruce Accounting Associates – Phoenix, AZ
• Financial Advice & Planning – James Lewin, BizPlanIt Companies LLC – Scottsdale, AZ

EXTERNAL ISSUES
There are no regulatory issues related to EPA, OSHA, IRS, or other governmental agencies. There are no
unions represented at the Company and there is no pending or anticipated litigation.

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Home Fashion Statement Business Plan

Financial Assumptions
REVENUE ASSUMPTIONS
Revenue assumptions are based on the owner’s projection of revenue growth based on 20 years of home
furnishing retail experience. Revenues are scaled during year one and then flat-lined in subsequent years.

EXPENSE ASSUMPTIONS

Cost of Goods Sold

Cost of Goods Sold is based on the assumption that products will be marked up on an average of 110% and
that after discounts, returns, etc., average cost of goods will be 50 percent of revenues.

Merchant Card Charges

Merchant card fees assume that 85% of all purchases will be made by credit card and that the Company will
pay a 2 percent discount fee.

Compensation Assumptions
Founders Salaries Michael Meg
Year One $50,000 $30,000
Year Two $60,000 $36,000
Year Three $72,000 $43,200
Year Four $86,400 $51,840
Year Five $103,680 $62,208

Other Staff # of Employees Salary/Emp

Year One 1 $12,500
Year Two 1 $13,125
Year Three 1 $13,781
Year Four 1 $14,470
Year Five 1 $15,194

BALANCE SHEET ASSUMPTIONS

Accounts Receivable
Accounts Receivable assumes that 100 percent of all collections occur in the month of the sale.

Inventory
Management has determined that it will carry an average of $100,000 of inventory.

Accounts Payable
Accounts Payable assumes that 100 percent of payables are made in the month they are incurred.

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Financial Projections
BALANCE SHEET – 3 YEARS

Year One Year Two Year Three

ASSETS

Current Assets
Cash 26,902 46,368 69,811
Accounts Receivable 0 0 0
Inventory 100,000 100,000 100,000

Total Current Assets $126,902 $146,368 $169,811

Prop., Systems & Equipment (net) $30,000 $30,000 $30,000

TOTAL ASSETS $156,902 $176,368 $199,811

LIABILITIES AND EQUITY

Current Liabilities
Accounts Payable 0 0 0
Line of Credit 100,000 100,000 100,000

Total Current Liabilities $100,000 $100,000 $100,000

Term Loan $0 $0 $0

Total Liabilities $100,000 $100,000 $100,000

Stockholders' Equity
Common Stock 50,000 50,000 50,000
Retained Earnings 6,902 26,368 49,811

Total Stockholders' Equity $56,902 $76,368 $99,811

TOTAL LIABILITIES AND EQUITY $156,902 $176,368 $199,811

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Financial Projections
INCOME STATEMENT – 3 YEARS

Year One Year Two Year Three

REVENUE
Retail Store 445,500 525,000 600,000

Total Revenues $445,500 $525,000 $600,000

COST OF GOODS SOLD $222,750 $262,500 $300,000

GROSS PROFIT $222,750 $262,500 $300,000

Operating Expenses
Wages, Taxes and Benefits 106,375 125,494 148,328
Credit Card Charges 7,574 8,925 10,200
Rent 55,100 55,100 55,100
Professional Services 2,400 2,520 2,646
Marketing 10,500 15,750 23,625
Insurance 3,000 3,150 3,308
Travel and Entertainment 5,000 5,250 5,513
Utilities 5,700 5,985 6,284
Automobile 7,200 7,560 7,938
Miscellaneous Expenses 6,000 6,300 6,615

Total Operating Expenses $208,849 $236,034 $269,557

NET OPERATING INCOME $13,902 $26,466 $30,443

3.12% 5.04% 5.07%

Interest Expense 7,000 7,000 7,000

Depreciation 0 0 0

Net Income (Loss) $6,902 $19,466 $23,443

Net Income (Loss) % 1.5% 3.7% 3.9%

Retained Earnings, Beg $0 $6,902 $26,368

Retained Earnings, End $6,902 $26,368 $49,811

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Financial Projections
CASH FLOW STATEMENT – 3 YEARS

Year One Year Two Year Three

CASH INFLOWS
Collection of accounts receivable 445,500 525,000 600,000
Proceeds from Sale of Stock 20,000 0 0
Proceeds from Term Loan 0 0 0
Line of Credit - Advances 100,000 0 0

TOTAL CASH INFLOWS $565,500 $525,000 $600,000

CASH OUTFLOWS
Payments on accounts payable 208,849 236,034 269,557
Payments to purchase equipment 0 0 0
Payments to purchase inventory 322,750 262,500 300,000
Term Loan - Repayment 0 0 0
Line of Credit - Repayment 0 0 0
Bank Financing - Interest Payments 7,000 7,000 7,000

TOTAL CASH OUTFLOWS $538,599 $505,534 $576,557

NET CASH FLOWS $26,902 $19,466 $23,443

CASH, BEGINNING OF PERIOD $0 $26,902 $46,368

CASH, END OF PERIOD $26,902 $46,368 $69,811

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 Financial Projections
BALANCE SHEET – YEAR ONE

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

Current Assets
Cash 2,644 4,125 5,750 7,521 9,436 11,497 13,702 16,052 18,547 21,187 23,972 26,902
Accounts Receivable 0 0 0 0 0 0 0 0 0 0 0 0
Inventory 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000

Total Current Assets $102,644 $104,125 $105,750 $107,521 $109,436 $111,497 $113,702 $116,052 $118,547 $121,187 $123,972 $126,902

Prop., Systems & Equipment (net) $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000

TOTAL ASSETS $132,644 $134,125 $135,750 $137,521 $139,436 $141,497 $143,702 $146,052 $148,547 $151,187 $153,972 $156,902

LIABILITIES AND EQUITY

Current Liabilities
Accounts Payable 0 0 0 0 0 0 0 0 0 0 0 0
Line of Credit 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000 100,000

Total Current Liabilities $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000

Term Loan $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Liabilities $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000

Stockholders' Equity
Common Stock 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000 50,000
Retained Earnings (17,356) (15,876) (14,250) (12,479) (10,564) (8,504) (6,298) (3,948) (1,453) 1,187 3,972 6,902

Total Stockholders' Equity $32,644 $34,125 $35,750 $37,521 $39,436 $41,497 $43,702 $46,052 $48,547 $51,187 $53,972 $56,902

TOTAL LIABILITIES AND EQUITY $132,644 $134,125 $135,750 $137,521 $139,436 $141,497 $143,702 $146,052 $148,547 $151,187 $153,972 $156,902
 Financial Projections
INCOME STATEMENT – YEAR ONE

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

REVENUE
Retail Store 0 39,000 39,300 39,600 39,900 40,200 40,500 40,800 41,100 41,400 41,700 42,000

Total Revenues $0 $39,000 $39,300 $39,600 $39,900 $40,200 $40,500 $40,800 $41,100 $41,400 $41,700 $42,000

COST OF GOODS SOLD $0 $19,500 $19,650 $19,800 $19,950 $20,100 $20,250 $20,400 $20,550 $20,700 $20,850 $21,000

GROSS PROFIT $0 $19,500 $19,650 $19,800 $19,950 $20,100 $20,250 $20,400 $20,550 $20,700 $20,850 $21,000

Operating Expenses
Wages, Taxes and Benefits 8,865 8,865 8,865 8,865 8,865 8,865 8,865 8,865 8,865 8,865 8,865 8,865
Credit Card Charges 0 663 668 673 678 683 689 694 699 704 709 714
Rent 4,592 4,592 4,592 4,592 4,592 4,592 4,592 4,592 4,592 4,592 4,592 4,592
Professional Services 200 200 200 200 200 200 200 200 200 200 200 200
Marketing 875 875 875 875 875 875 875 875 875 875 875 875
Insurance 250 250 250 250 250 250 250 250 250 250 250 250
Travel and Entertainment 417 417 417 417 417 417 417 417 417 417 417 417
Utilities 475 475 475 475 475 475 475 475 475 475 475 475
Automobile 600 600 600 600 600 600 600 600 600 600 600 600
Miscellaneous Expenses 500 500 500 500 500 500 500 500 500 500 500 500

Total Operating Expenses $16,773 $17,436 $17,441 $17,446 $17,451 $17,456 $17,461 $17,467 $17,472 $17,477 $17,482 $17,487

NET OPERATING INCOME ($16,773) $2,064 $2,209 $2,354 $2,499 $2,644 $2,789 $2,933 $3,078 $3,223 $3,368 $3,513

Interest Expense 583 583 583 583 583 583 583 583 583 583 583 583
Depreciation 0 0 0 0 0 0 0 0 0 0 0 0

Net Income (Loss) ($17,356) $1,481 $1,626 $1,771 $1,915 $2,060 $2,205 $2,350 $2,495 $2,640 $2,785 $2,930
Net Income (Loss) % N/A 4% 4% 4% 5% 5% 5% 6% 6% 6% 7% 7%

Retained Earnings, Beg $0 ($17,356) ($15,876) ($14,250) ($12,479) ($10,564) ($8,504) ($6,298) ($3,948) ($1,453) $1,187 $3,972

Retained Earnings, End ($17,356) ($15,876) ($14,250) ($12,479) ($10,564) ($8,504) ($6,298) ($3,948) ($1,453) $1,187 $3,972 $6,902
 Financial Projections
CASH FLOW STATEMENT – YEAR ONE

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 INFLOWS
Collection of accounts receivable 0 39,000 39,300 39,600 39,900 40,200 40,500 40,800 41,100 41,400 41,700 42,000
Proceeds from Sale of Stock 20,000 0 0 0 0 0 0 0 0 0 0 0
Proceeds from Term Loan 0 0 0 0 0 0 0 0 0 0 0 0
Line of Credit - Advances 100,000 0 0 0 0 0 0 0 0 0 0 0

TOTAL CASH INFLOWS $120,000 $39,000 $39,300 $39,600 $39,900 $40,200 $40,500 $40,800 $41,100 $41,400 $41,700 $42,000

CASH OUTFLOWS
Payments on accounts payable 16,773 17,436 17,441 17,446 17,451 17,456 17,461 17,467 17,472 17,477 17,482 17,487
Payments to purchase equipment 0 0 0 0 0 0 0 0 0 0 0 0
Payments to purchase inventory 100,000 19,500 19,650 19,800 19,950 20,100 20,250 20,400 20,550 20,700 20,850 21,000
Term Loan - Repayment 0 0 0 0 0 0 0 0 0 0 0 0
Line of Credit - Repayment 0 0 0 0 0 0 0 0 0 0 0 0
Bank Financing - Interest Payments 583 583 583 583 583 583 583 583 583 583 583 583

TOTAL CASH OUTFLOWS $117,356 $37,519 $37,674 $37,829 $37,985 $38,140 $38,295 $38,450 $38,605 $38,760 $38,915 $39,070

NET CASH FLOWS $2,644 $1,481 $1,626 $1,771 $1,915 $2,060 $2,205 $2,350 $2,495 $2,640 $2,785 $2,930

CASH, BEGINNING OF PERIOD $0 $2,644 $4,125 $5,750 $7,521 $9,436 $11,497 $13,702 $16,052 $18,547 $21,187 $23,972

CASH, END OF PERIOD $2,644 $4,125 $5,750 $7,521 $9,436 $11,497 $13,702 $16,052 $18,547 $21,187 $23,972 $26,902