Thanks for downloading a sample plan from Bplans.com

A sample plan is a great way to get started, but you can’t just print this plan out and turn it into the bank. You’re still going to have to put in all your own information and do all of your own financial forecasts.

With LivePlan, you can easily use this sample as inspiration and create your own plan, complete with financial tables and graphs. You’ll also be able to:

• Save time with linked financial tables (the formulas are built in, so you don’t have to do the calculations!)• Benefit from tons of help, advice, and resources.• Present your plan with confidence, with automatic charts and graphs corresponding to your financial data.• Work on your plan anywhere, on any computer.

“For 20 dollars I ended up getting a quarter of a million dollars of funding. That’s worth it!” – Todd C. Tablegate

Click here to save 50% off the first month of LivePlan!

Cover Page

 

 

This sample business plan has been made available to users 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 marketing@paloalto.com. 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.

Legal Page

Confidentiality Agreement

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

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

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

___________________ Signature

___________________Name (typed or printed)

___________________Date

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

Table of Contents

1.0 Executive Summary......................................................................................................................1Chart: Highlights............................................................................................................................1

1.1 Keys to Success..........................................................................................................................21.2 Objectives.....................................................................................................................................21.3 Mission...........................................................................................................................................2

2.0 Company Summary......................................................................................................................22.1 Company Ownership................................................................................................................22.2 Start-up Summary.....................................................................................................................3

Table: Start-up Funding..............................................................................................................3Table: Start-up...............................................................................................................................4

3.0 Products............................................................................................................................................44.0 Market Analysis Summary.........................................................................................................4

4.1 Market Segmentation..............................................................................................................5Table: Market Analysis................................................................................................................5Chart: Market Analysis (Pie)......................................................................................................5

4.2 Target Market Segment Strategy........................................................................................54.3 Industry Analysis........................................................................................................................6

4.3.1 Competition and Buying Patterns................................................................................65.0 Strategy and Implementation Summary..............................................................................6

5.1 Sales Strategy.............................................................................................................................75.1.1 Sales Forecast.....................................................................................................................8

Table: Sales Forecast...............................................................................................................8Chart: Sales Monthly................................................................................................................8

5.2 Milestones....................................................................................................................................9Table: Milestones..........................................................................................................................9

5.3 Competitive Edge......................................................................................................................96.0 Management Summary...............................................................................................................9

6.1 Personnel Plan..........................................................................................................................11Table: Personnel..........................................................................................................................11

7.0 Financial Plan................................................................................................................................117.1 Important Assumptions.........................................................................................................11

Table: General Assumptions...................................................................................................117.2 Break-even Analysis...............................................................................................................127.2 Break-even Analysis...............................................................................................................12

Chart: Break-even Analysis.....................................................................................................12Table: Break-even Analysis.....................................................................................................12

7.3 Projected Profit and Loss......................................................................................................137.3 Projected Profit and Loss......................................................................................................13

Chart: Profit Monthly..................................................................................................................13Table: Profit and Loss................................................................................................................13

7.4 Projected Cash Flow...............................................................................................................14Table: Cash Flow.........................................................................................................................14Chart: Cash....................................................................................................................................15

7.5 Projected Balance Sheet.......................................................................................................15Table: Balance Sheet.................................................................................................................15

7.6 Business Ratios........................................................................................................................16

Page 1

Table of Contents

Table: Ratios.................................................................................................................................16Table: Sales Forecast...........................................................................................................................1Table: Personnel....................................................................................................................................2Table: Personnel....................................................................................................................................2Table: General Assumptions.............................................................................................................3Table: General Assumptions.............................................................................................................3Table: Profit and Loss..........................................................................................................................4Table: Profit and Loss..........................................................................................................................4Table: Cash Flow...................................................................................................................................5Table: Cash Flow...................................................................................................................................5Table: Balance Sheet...........................................................................................................................7Table: Balance Sheet...........................................................................................................................7

Page 2

Passion Soles

1.0 Executive Summary

Passion 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.

Passion Soles will have an unmatched, extensive selection of different shoes. Generally, the size of Passion Soles' selection is cost prohibitive due to all the different sizes that must be stocked per style. Passion 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 Passion Soles can receive a customer's needed size within two days. Rush overnight shipping is available at additional cost.

Passion 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

Sales

Gross Margin

Net Profit

$0

$30,000

$60,000

$90,000

$120,000

$150,000

$180,000

$210,000

$240,000

Year 1 Year 2 Year 3

Highlights

Page 1

Passion 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

Passion 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

Passion 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. Passion 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

Passion Soles is a sole proprietorship owned by Holly Heels.

Page 2

Passion Soles

2.2 Start-up Summary

Passion Soles will incur the following start-up costs:

Computer system with CD-RW, printer, Microsoft Office, QuickBooks Pro, and POS software. POS terminal/cash register. 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 $600 Start-up Assets to Fund $29,400 Total Funding Required $30,000

Assets Non-cash Assets from Start-up $9,368 Cash Requirements from Start-up $20,032 Additional Cash Raised $0 Cash Balance on Starting Date $20,032 Total Assets $29,400

Liabilities and Capital

LiabilitiesCurrent Borrowing $0 Long-term Liabilities $0 Accounts Payable (Outstanding Bills) $0 Other Current Liabilities (interest-free) $0 Total Liabilities $0

Capital

Planned InvestmentHolly $30,000 Other $0 Additional Investment Requirement $0 Total Planned Investment $30,000

Loss at Start-up (Start-up Expenses) ($600)Total Capital $29,400

Total Capital and Liabilities $29,400

Total Funding $30,000

Page 3

Passion Soles

Table: Start-up

Start-up

Requirements

Start-up ExpensesLegal $500 Stationery etc. $100 Other $0 Total Start-up Expenses $600

Start-up AssetsCash Required $20,032 Other Current Assets $0 Long-term Assets $9,368 Total Assets $29,400

Total Requirements $30,000

3.0 Products

Passion 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

Passion Soles will strive to have one of the largest selection of shoes in Oregon, barring the larger stores in Portland. Passion Soles will accomplish this by having one size per style in stock as a demonstration model. Passion 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 Passion Soles was able to secure an exclusive arrangement with a its wholesaler to meet this need.

4.0 Market Analysis Summary

Passion 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.

Page 4

Passion Soles

4.1 Market Segmentation

Passion 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

Year 1 Year 2 Year 3 Year 4 Year 5Potential Customers Growth CAGRProfessionals 9% 12,457 13,578 14,800 16,132 17,584 9.00% Housewives 8% 14,544 15,708 16,965 18,322 19,788 8.00% Other 0% 0 0 0 0 0 0.00% Total 8.47% 27,001 29,286 31,765 34,454 37,372 8.47%

Chart: Market Analysis (Pie)

Professionals

Housewives

Other

Market Analysis (Pie)

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, Passion Soles will receive walk-through customers.

Page 5

Passion 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 shoe-only 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

Passion 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

Passion 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 a selection that Passion Soles will offer. Because of a unique business model, Passion Soles is able to leverage their financial resources and offer an unmatched selection. This is done by

Page 6

Passion Soles

carrying a large selection of styles by only stocking one size per style. Once the customer has chosen the style, Passion Soles will have the customer's shoes in one to two days.

5.1 Sales Strategy

Passion 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 Passion 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 3SalesProfessionals $84,402 $118,745 $135,454 Housewives $54,861 $89,184 $102,095 Total Sales $139,263 $207,929 $237,549

Direct Cost of Sales Year 1 Year 2 Year 3Professionals $33,761 $47,498 $54,182 Housewives $21,945 $35,674 $40,838 Subtotal Direct Cost of Sales $55,705 $83,172 $95,020

Page 7

Passion Soles

Chart: Sales Monthly

Professionals

Housewives

$0

$2,000

$4,000

$6,000

$8,000

$10,000

$12,000

$14,000

$16,000

$18,000

$20,000

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Sales Monthly

5.2 Milestones

Passion 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 Start Date End Date Budget Manager DepartmentBusiness plan completion 1/1/2001 2/1/2001 $0 ABC MarketingSet up the store front 1/1/2001 2/1/2001 $0 ABC DepartmentRevenues exceeding $75,000 1/1/2001 9/31/2001 $0 ABC DepartmentProfitability 1/1/2001 10/31/2001 $0 ABC DepartmentTotals $0

5.3 Competitive Edge

Passion 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. Passion 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.

Page 8

Passion Soles

Passion 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 Passion 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. Passion 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 Passion Soles. She will be in charge of all administrative 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 3Holly $36,000 $40,000 $42,000 Full-time employee $17,600 $19,200 $19,200 Full-time employee $1,600 $19,200 $19,200 Total People 3 3 3

Total Payroll $55,200 $78,400 $80,400

Page 9

Passion Soles

7.0 Financial PlanThe following sections will outline important financial information.

7.1 Important Assumptions

The following table details important financial assumptions.

Table: General Assumptions

General Assumptions

Year 1 Year 2 Year 3Plan Month 1 2 3Current 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

Page 10

Passion 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

$0

$2,000

$4,000

$6,000

($2,000)

($4,000)

($6,000)

$0$2,000

$4,000$6,000

$8,000$10,000

$12,000$14,000

$16,000$18,000

$20,000$22,000

Break-even Analysis

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $12,369

Assumptions:Average Percent Variable Cost 40% Estimated Monthly Fixed Cost $7,421

Page 11

Passion 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 3Sales $139,263 $207,929 $237,549 Direct Cost of Sales $55,705 $83,172 $95,020 Other Production Expenses $0 $0 $0 Total Cost of Sales $55,705 $83,172 $95,020

Gross Margin $83,558 $124,757 $142,529 Gross Margin % 60.00% 60.00% 60.00%

ExpensesPayroll $55,200 $78,400 $80,400 Sales and Marketing and Other Expenses $1,200 $1,200 $1,200 Depreciation $1,056 $1,056 $1,056 Shoe Display Inventory $7,000 $5,000 $5,000 Utilities $1,200 $1,200 $1,200 Insurance $1,800 $1,800 $1,800 Rent $21,600 $21,600 $21,600 Payroll Taxes $0 $0 $0 Other $0 $0 $0

Total Operating Expenses $89,056 $110,256 $112,256

Profit Before Interest and Taxes ($5,498) $14,501 $30,273 EBITDA ($4,442) $15,557 $31,329 Interest Expense $255 $224 $37 Taxes Incurred $0 $4,283 $9,071

Net Profit ($5,753) $9,994 $21,165 Net Profit/Sales -4.13% 4.81% 8.91%

Page 12

Passion Soles

Chart: Profit Monthly

$0

$2,000

$4,000

($2,000)

($4,000)

($6,000)

($8,000)

($10,000)

Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

Month 7 Month 8

Month 9 Month 10

Month 11 Month 12

Profit Monthly

Page 13

Passion Soles

7.4 Projected Cash FlowThe 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 3Cash Received

Cash from OperationsCash Sales $139,263 $207,929 $237,549 Subtotal Cash from Operations $139,263 $207,929 $237,549

Additional Cash ReceivedSales 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 $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $144,263 $207,929 $237,549

Expenditures Year 1 Year 2 Year 3

Expenditures from OperationsCash Spending $55,200 $78,400 $80,400 Bill Payments $78,704 $118,797 $133,576 Subtotal Spent on Operations $133,904 $197,197 $213,976

Additional Cash SpentSales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $1,260 $3,000 $740 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $135,164 $200,197 $214,716

Net Cash Flow $9,099 $7,732 $22,833 Cash Balance $29,131 $36,863 $59,697

Page 14

Passion Soles

Chart: Cash

Net Cash Flow

Cash Balance

$0

$4,000

$8,000

$12,000

$16,000

$20,000

$24,000

$28,000

($4,000)

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

Page 15

Passion 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 3Assets

Current AssetsCash $29,131 $36,863 $59,697 Other Current Assets $0 $0 $0 Total Current Assets $29,131 $36,863 $59,697

Long-term AssetsLong-term Assets $9,368 $9,368 $9,368 Accumulated Depreciation $1,056 $2,112 $3,168 Total Long-term Assets $8,312 $7,256 $6,200 Total Assets $37,443 $44,119 $65,897

Liabilities and Capital Year 1 Year 2 Year 3

Current LiabilitiesAccounts Payable $10,056 $9,738 $11,090 Current Borrowing $3,740 $740 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $13,796 $10,478 $11,090

Long-term Liabilities $0 $0 $0 Total Liabilities $13,796 $10,478 $11,090

Paid-in Capital $30,000 $30,000 $30,000 Retained Earnings ($600) ($6,353) $3,641 Earnings ($5,753) $9,994 $21,165 Total Capital $23,647 $33,641 $54,807 Total Liabilities and Capital $37,443 $44,119 $65,897

Net Worth $23,647 $33,641 $54,807

Page 16

Passion Soles

7.6 Business RatiosThe 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 ProfileSales Growth n.a. 49.31% 14.25% 10.45%

Percent of Total AssetsOther Current Assets 0.00% 0.00% 0.00% 33.22% Total Current Assets 77.80% 83.55% 90.59% 85.17% Long-term Assets 22.20% 16.45% 9.41% 14.83% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 36.85% 23.75% 16.83% 26.82% Long-term Liabilities 0.00% 0.00% 0.00% 25.97% Total Liabilities 36.85% 23.75% 16.83% 52.79% Net Worth 63.15% 76.25% 83.17% 47.21%

Percent of SalesSales 100.00% 100.00% 100.00% 100.00% Gross Margin 60.00% 60.00% 60.00% 22.01% Selling, General & Administrative Expenses 74.12% 49.27% 48.20% 10.93% Advertising Expenses 0.43% 0.23% 0.21% 1.05% Profit Before Interest and Taxes -3.95% 6.97% 12.74% 2.49%

Main RatiosCurrent 2.11 3.52 5.38 2.58 Quick 2.11 3.52 5.38 1.37 Total Debt to Total Assets 36.85% 23.75% 16.83% 57.34% Pre-tax Return on Net Worth -24.33% 42.44% 55.17% 6.10% Pre-tax Return on Assets -15.36% 32.36% 45.88% 14.29%

Additional Ratios Year 1 Year 2 Year 3Net Profit Margin -4.13% 4.81% 8.91% n.aReturn on Equity -24.33% 29.71% 38.62% n.a

Activity RatiosAccounts Payable Turnover 8.83 12.17 12.17 n.aPayment Days 27 30 28 n.aTotal Asset Turnover 3.72 4.71 3.60 n.a

Debt RatiosDebt to Net Worth 0.58 0.31 0.20 n.aCurrent Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity RatiosNet Working Capital $15,335 $26,385 $48,607 n.aInterest Coverage -21.57 64.74 818.20 n.a

Additional RatiosAssets to Sales 0.27 0.21 0.28 n.aCurrent Debt/Total Assets 37% 24% 17% n.aAcid Test 2.11 3.52 5.38 n.aSales/Net Worth 5.89 6.18 4.33 n.aDividend Payout 0.00 0.00 0.00 n.a

Page 17

Appendix

Table: Sales Forecast

Sales Forecast

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

Sales

Professionals 0% $0 $3,245 $4,114 $5,678 $6,545 $6,985 $7,454 $7,945 $8,569 $9,956 $11,454 $12,457 Housewives 0% $0 $2,109 $2,674 $3,691 $4,254 $4,540 $4,845 $5,164 $5,570 $6,471 $7,445 $8,097 Total Sales $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 Month 1 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

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

Holly 0% $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 Full-time employee 0% $0 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 $1,600 Full-time employee 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,600 Total People 1 2 2 2 2 2 2 2 2 2 2 3

Total Payroll $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

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

Plan Month 1 2 3 4 5 6 7 8 9 10 11 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 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

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

Page 3

Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

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

Sales $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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total 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

Gross Margin $0 $3,213 $4,073 $5,621 $6,480 $6,915 $7,379 $7,866 $8,483 $9,856 $11,339 $12,332

Gross Margin % 0.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%

Expenses

Payroll $3,000 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $6,200

Sales and Marketing and Other Expenses

$100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Depreciation $88 $88 $88 $88 $88 $88 $88 $88 $88 $88 $88 $88

Shoe Display Inventory $5,000 $0 $0 $0 $2,000 $0 $0 $0 $0 $0 $0 $0

Utilities $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Insurance $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150

Rent $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800 $1,800

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $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 ($10,238) ($3,625) ($2,765) ($1,217) ($2,358) $77 $541 $1,028 $1,645 $3,018 $4,501 $3,894

EBITDA ($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 ($10,238) ($3,625) ($2,765) ($1,217) ($2,358) $35 $502 $989 $1,609 $2,984 $4,469 $3,863

Net Profit/Sales 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

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Current Borrowing $0 $0 $0 $0 $0 $5,000 $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

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

Expenditures from Operations

Cash Spending $3,000 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $4,600 $6,200

Bill Payments $238 $7,055 $4,311 $4,900 $5,983 $8,414 $6,812 $7,120 $7,446 $7,872 $8,789 $9,765

Subtotal Spent on Operations $3,238 $11,655 $8,911 $9,500 $10,583 $13,014 $11,412 $11,720 $12,046 $12,472 $13,389 $15,965

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $210 $210 $210 $210 $210 $210

Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Purchase Other Current Assets $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

Subtotal Cash Spent $3,238 $11,655 $8,911 $9,500 $10,583 $13,014 $11,622 $11,930 $12,256 $12,682 $13,599 $16,175

Net Cash Flow ($3,238) ($6,300) ($2,123) ($131) $216 $3,511 $677 $1,179 $1,883 $3,745 $5,301 $4,379

Cash Balance $16,794 $10,493 $8,370 $8,240 $8,456 $11,967 $12,644 $13,823 $15,706 $19,451 $24,752 $29,131

Page 5

Appendix

Table: Balance Sheet

Pro Forma Balance Sheet

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 Starting Balances

Current Assets

Cash $20,032 $16,794 $10,493 $8,370 $8,240 $8,456 $11,967 $12,644 $13,823 $15,706 $19,451 $24,752 $29,131 Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets $20,032 $16,794 $10,493 $8,370 $8,240 $8,456 $11,967 $12,644 $13,823 $15,706 $19,451 $24,752 $29,131

Long-term Assets

Long-term Assets $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 $9,368 Accumulated Depreciation $0 $88 $176 $264 $352 $440 $528 $616 $704 $792 $880 $968 $1,056 Total Long-term Assets $9,368 $9,280 $9,192 $9,104 $9,016 $8,928 $8,840 $8,752 $8,664 $8,576 $8,488 $8,400 $8,312 Total Assets $29,400 $26,074 $19,685 $17,474 $17,256 $17,384 $20,807 $21,396 $22,487 $24,282 $27,939 $33,152 $37,443

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

Accounts Payable $0 $6,912 $4,149 $4,703 $5,701 $8,187 $6,575 $6,873 $7,184 $7,581 $8,464 $9,418 $10,056 Current Borrowing $0 $0 $0 $0 $0 $0 $5,000 $4,790 $4,580 $4,370 $4,160 $3,950 $3,740 Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities $0 $6,912 $4,149 $4,703 $5,701 $8,187 $11,575 $11,663 $11,764 $11,951 $12,624 $13,368 $13,796

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $0 $6,912 $4,149 $4,703 $5,701 $8,187 $11,575 $11,663 $11,764 $11,951 $12,624 $13,368 $13,796

Paid-in Capital $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Retained Earnings ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600) ($600)Earnings $0 ($10,238) ($13,863) ($16,629) ($17,845) ($20,204) ($20,168) ($19,667) ($18,677) ($17,069) ($14,085) ($9,616) ($5,753)Total Capital $29,400 $19,162 $15,537 $12,771 $11,555 $9,196 $9,232 $9,733 $10,723 $12,331 $15,315 $19,784 $23,647 Total Liabilities and Capital $29,400 $26,074 $19,685 $17,474 $17,256 $17,384 $20,807 $21,396 $22,487 $24,282 $27,939 $33,152 $37,443

Net Worth $29,400 $19,162 $15,537 $12,771 $11,555 $9,196 $9,232 $9,733 $10,723 $12,331 $15,315 $19,784 $23,647

Page 6