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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . 1
1.1 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2

2.0 Company Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . 2
2.1 Start-up Summary. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Company Locations and Facilities ................................... 4

3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . . . . . . . . . . . . . . 4
3.1 Competitive Comparison ......................................... 4

4.0 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . . 4

5.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . . . . . . . . . 5
5.1 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Personnel Plan ................................................ 5

6.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. . . . 6
6.1 Break-even Analysis ............................................ 7
6. 2 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
6. 3 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
6.4 Projected Balance Sheet. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
6. 5 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
 Trend Setters Hair Studio -Sample Plan

1.0 Executive Summary

Trend Setters is a full-service beauty salon dedicated to consistently providing high customer
satisfaction by rendering excellent service,quality products, and furnishing an enjoyable
atmosphere at an acceptable price/value relationship. We will also maintain a friendly,fair,
and creative work environment, which respects diversity, ideas, and hard work.

Our Mission: To supply services and products that enhance our clients' physical appearance
and mental relaxation.

Our Motto: "The Trend Begins Here!"

The timing is right for starting this new venture. Patiently searching for six months for the
perfect location, one was finally found. The demand from the owner's clients,as well as the
ambitions of the owner to one day start her own salon,and the procurement of highly
professional and qualified beauticians to support the salon, has made this business one of
great potential.

Stacey Spinale, co-owner with Frank Spinale,Jr., her husband, has worked in a prestigious,
upscale salon in Houston, Texas for the past two years. Stacey has created a large client
following through hard work and dedication. Stacey,and her talented team of beauticians,
has what it takes to make this venture an extremely successful one. We expect our growing
reputation to lead to new clients and beauticians to support our anticipated growth.

To achieve our objectives,Trend Setters is seeking $27,495 in additional loan financing. This
loan will be paid from the cash flow from the business, and will be collateralized by the assets
of the company,and backed by the character,experience, and personal guarantees of the
owners.

Highlights

$300,000

$250,000

$200,000
•Sales
$150,000 •Gross Margin
• Net Profit
$100,000

$50,000

Pg 1
1 .1 Keys to Success

The keys to success in our business are:

• Location: providing an easily accessible location for customers.
• Environment: providing an environment conducive to giving relaxing
and professional service.
• Convenience: offering clients a wide range of services in one setting, and extended
business hours.
• Reputation: reputation of the o wner and other "beauticians" as providing superior
personal service.

2.0 Company Summary

Trend Setters will, upon commencement of operations, sell a wide range of beauty services
and products. We will provide quality hair, nail, and skin services, along with top lines of
beauty products. What will set Trend Setters apart from the competition is our commitment
to providing all of these services in one convenient location.

2.1 Start-up Summary

After spending several months searching for a salon to purchase, the owners decided to start a
salon from the ground up. The start-up capital will be used for the design, leasehold
improvements, and equipment of the salon.

Leasehold improvements will amount to approximately $32,500, and salon equipment will
cost about $27,000.
Table: Start-up

Start-u

Requirements

Start-up Expenses
Rent deposit $1,817
Other $0
Total Start-up Expenses $1,817

Start-up Assets Needed

Cash Balance on Starting Date $0
Other Current Assets $600
Total Current Assets $600

Long-term Assets $59,500

Total Assets $60,100
Total Requirements $61, 917

Fundin

Investment
Investor 1 $0
Other $0
Other $0
Total Investment $0

Current Liabilities
Accounts Payable $0
Current Borrowing $0
Other Current Liabilities $0
Current Liabilities $0

Long-term Liabilities $61, 917

Total Liabilities $61,917

Loss at Start-up ($1,817)

Total Capital ($1,817)
Total Capital and Liabilities $60,100

Start-up

$70,000

$60, 000

$50,000

$40, 000

$30,000

$20, 000

$10,000

$0
2.2 Company Locations and Facilities

The salon will be located in a retail strip mall at 1234A Westwood Road, Houston, Texas. The
salon will utilize 1,540 square feet. The location is strategically situated on one of the busiest
streets in Houston. It is a high profile area, with easy access from all parts of town.

3.0 Services

Trend Setters is considered an upscale full-service beauty salon. We will offer a wide range of
services that include:
• Hair: cuts, relaxers, perms, colors, shampoo, conditioning, curling, reconstructing,
weaving, waving.
• Nails: manicures, pedicures, polish, sculptured nails.
• Skin Care: European facials, body waxing, massage.

3.1 Competitive Comparison

Trend Setters wants to set itself apart from other beauty salons that may offer only one or
two types of services. Having come from such a salon, Stacey has realized, from talking with
her clients, that they desire all of the services that we are proposing, but they remain
frustrated because they must get their hair done at one place, and nails done at another.
Although the focus of Trend Setters is hair services, we do wish to offer our clients the
convenience of these other services in one location.

There are a number of salons like ours, but they are mainly in the very high income parts of
Houston and surrounding areas. We do not intend to compete with these so called "Day
Spas." We wish to offer a middle ground for those clients who can't quite afford those high
end luxury salons.

Our business atmosphere will be a relaxing one where clients can kick back and be
pampered. Soft drinks will be offered to clients as they enter for service. Televisions will be
located in the waiting and hair-drying area area.

4.0 Marketing Strategy

Our marketing strategy is a simple one: satisfied clients are our best marketing tool. When a
client leaves our business with a new look, he or she is broadcasting our name and quality
to the public. Most of our clients will be referrals from existing clients.

No major advertising campaigns are anticipated. Our research has shown that word of mouth
is the best advertising for this type of business. We will, however, run specials throughout
the week. We will also ask clients for referrals, and reward them with discounted or free
services depending on the number of clients they bring. We will also offer discounts to the
new clients who have been referred. There are plans for a lottery that will offer a free trip to,
say,
Cancun. A client would simply refer new clients to us, and we will place a card in a box for
each client he or she brings. The more they bring, the more chances they have of winning
the trip.
5.0 Management Summary

Trend Setters will be organized and managed in a creative and innovative fashion to generate
very high levels of customer satisfaction, and to create a working climate conducive to a high
degree of personal development and economic satisfaction for employees.

Training classes to help improve employee product knowledge and skills will be conducted on
a regular basis. As the business grows, the company will consider offering an employee
benefit package to include health and vacation benefits for everyone.

5.1 Management Team

Stacey T. Spinale: Owner. Stacey has been a beautician for two years. A graduate of Bellaire
Beauty College in 1994, she has quickly developed the trade skills that have led to her
success. She loves dealing with people, and has the drive, ambition, and discipline to
manage the business and its employees. This career is her life -- her calling.

Frank D. Spinale, Jr.: Owner. Frank has a Bachelor's degree in Finance from the University of
Houston. He has extensive experience managing people and businesses. He has worked as a
business consultant for Office Organizers, Inc., and he is the owner of Guardian Financial
Group, a financial services company with over 120 clients and over $1.2 million under
management.

5.2 Personnel Plan

The personnel plan calls for a receptionist who will greet customers and receive payments for
services and products. There will be five hair stylists, one barber, one nail technician, one
facialist, and a massage therapist. Everyone but the receptionist will be contract workers,
and will be paid a sliding commission scale based on the amount of revenue created. Future
plans include the hiring of a shampoo technician as the business expands.

In the first year, assumptions are that there will only be three hair stylists, a barber, and
part time nail, facial, and massage technician until the business can build a reputation that
will attract others to work there.

Table: Personnel

Personnel Plan
1997 1998 1999
Receptionist $14.400 $15.120 $15.876
Shampoo Tech. $8.000 $12.400 $13.000
Other $64.400 $80.000 $95.000
Total People 0 0 0
Total Payroll $86.800 $107.520 $123.876
6.0 Financial Plan

Our goal is to be a profitable business beginning in the first month. The business will not have
to wait long for clients to learn about it since the stylists will already have an existing client
base.

The financials that are enclosed have a number of assumptions:

Revenues will grow at an annual rate of 15%, increasing 20% in November and
December due to a historical jump in revenues at this time of year. We anticipate this
increase to stay steady throughout the following year to account for the normal flow of
new clients coming into the salon. Estimates for sales revenue and growth are
intentionally low, while anticipated expenses are exaggerated to the high side to
illustrate a worst case scenario.

We did not use cost of goods sold in our calculations of net sales because most sales
are coming from services. We included all costs, however, in the operating expenses
area of the profit and loss table. Product sales are a minimal part of our market. We
are not quite sure how much revenue will be derived from products so we took a low
ball approach and estimated sales of $800 a month. This figure is included under the
title "Other" on the profit and loss table. Also under "Other" in the sales projections
table are services such as nails and massages. We are not quite sure how much
revenue these two services will generate. We are certain that in time these services
will be a large part of our revenue, but to err on the conservative side, we estimate
revenues from these services to be only $1,500 a month for the first year.

To assure the start-up funds lender that the owners are financially stable, a
personal financial statement is enclosed illustrating other sources of income that
include interest and dividend income from investments ($2,840), salary income
($29,658), and commission income ($15,000).
6.1 Break-even Analysis

The break-even analysis shows that Trend Setters has a good balance of fixed costs and
sufficient sales strength to remain healthy. Our break-even point is only 126 clients a month.
This was derived by using an average revenue of $45 per client, and fixed costs of $5,691.
Products sales were not included in this figure, but it does include an owner withdrawal of
$2,000 a month.

Break-even Analysis

$6,000

$4,000

$2,000
_.,.,...,.,..-
$0
""""""
"""
($2,000)

($4,000)

($6,000)

$0 $2,000 $4,000 $5,000 $7,000 $9,000

Monthly break-even point

Break-even point =where line intersects with 0

Table: Break-even Analysis

Break-even Analysis: Monthly

Units Break-even Monthly 126
Revenue Break-even $5,691

Assumptions:
Average Per-Unit Revenue $45.00
Average Per-Unit Variable Cost $0.00
Estimated Monthly Fixed Cost $5,691
6.2 Projected Profit and Loss

We expect income to hit $172,800 at the end of the first year of business. It should
increase to more than $262,340 by the third year, as the reputation of the salon, its stylists
and services become apparent to the general public. Second year revenues also anticipate
the addition of one new stylist.

Table: Profit and Loss

Pro Forma Profit and Loss

1997 1998 1999
Sales $172.800 $228.122 $262.340
Direct Cost of Sales $0 $0 $0
Production Payroll $0 $0 $0
Other $0 $0 $0
-------- --------- ---------
Total Cost of Sales $0 $0 $0
Gross Margin $172.800 $228.122 $262.340
Gross Margin% 100.00% 100.00% 100.00%
Expenses:
Payroll $86.800 $107.520 $123.876
Sales and Marketing and Other Expenses $36.440 $49.840 $55.240
Depreciation $8.146 $8.146 $8.146
Leased Equipment $0 $0 $0
Utilities $4.200 $4.200 $4.200
Insurance $1.200 $1.200 $1.200
Rent $22.740 $22.740 $22.740
Other $0 $0 $0
Payroll Taxes $8.680 $10.752 $12.388
Other $0 $0 $0
-------- -------- ---------
Total Operating Expenses $168.206 $204.398 $227.790
Profit Before Interest and Taxes $4.594 $23.724 $34.550
Interest Expense $0 $0 $0
Taxes Incurred $1.286 $6.643 $9.674
Net Profit $3.308 $17.081 $24.876
Net ProfiVSales 1.91% 7.49% 9.48%
Include Negative Taxes TRUE TRUE TRUE
6.3 Projected Cash Flow

We expect to manage cash flow over the next three years simply by the growth of the cash
flow of the business. The business will generate more than enough cash flow to cover all of its
expenses.

Cash

$6,000

$5,000
r'"

$4,000 I-- I-- - I-- - - I-- - I-- I--

-

$3,000
r--- t----- - r--- - - t----- - t----- t----- -
• Net Cash Flow
$2,000 • Cash Balance
I-- I-- - I-- - - I-- - I-- I--
-
$1,000

$0
r--- t----- - r--- - - t----- - t----- t----- -

'- -=- l.. .,... -=-

($1,000)

Jul I Aug I Sep I Oct I Nov I Dec I Jan I Feb I Mar I Apr I May I Jun I
Table: Cash Flow

Pro Forma Cash Flow 1997 1998 1999

Cash Received
Cash from 0 erations:
Cash Sales $172,800 $228,122 $262,340
Cash from Receivables $0 $0 $0
Subtotal Cash from Operations $172,800 $228,122 $262,340

Additional Cash Received

Non Operating (Other) Income $0 $0 $0
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $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 $172,800 $228,122 $262,340

Expenditures 1997 1998 1999

Expenditures from Operations:
Cash Spending $0 $0 $0
Payment of Accounts Payable $155,834 $201,325 $228,612
Subtotal Spent on Operations $155,834 $201,325 $228,612

Additional Cash S ent

Non Operating (Other) Expense $0 $0 $0
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $12,000 $12,000 $12,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $167,834 $213,325 $240,612

Net Cash Flow $4,966 $14,797 $21,728

Cash Balance $4,966 $19,763 $41,491
6.4 Projected Balance Sheet

As shown in the balance sheet, we expect a healthy growth in net worth, from approximately
$1,491 in year one to $43,448 by the end of year three.

Table: Balance Sheet

Pro Forma Balance Sheet

Assets
Current Assets 1997 1998 1999
Cash $4,966 $19,763 $41,491
Other Current Assets $600 $600 $600
Total Current Assets $5,566 $20,363 $42,091
Lon -term Assets
Long-term Assets $59,500 $59,500 $59,500
Accumulated Depreciation $8,146 $16,292 $24,438
Total Long-term Assets $51,354 $43,208 $35,062
Total Assets $56,920 $63,571 $77,153

Liabilities and Capital

1997 1998 1999
Accounts Payable $5,512 $7,082 $7,788
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $5,512 $7,082 $7,788

Long-term Liabilities $49,917 $37,917 $25,917

Total Liabilities $55,429 $44,999 $33,705

Paid-in Capital $0 $0 $0
Retained Earnings ($1,817) $1,491 $18,572
Earnings $3,308 $17,081 $24,876
Total Capital $1,491 $18,572 $43,448
Total Liabilities and Capital $56,920 $63,571 $77,153
Net Worth $1,491 $18,572 $43,448

6.5 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on
the Standard Industrial Classification (SIC) Index code 7231, Beauty Shops, are shown for
comparison.
Table: Ratios

Ratio Analysis
1997 1998 1999 Industry Profile
Sales Growth 0.00% 32.02% 15.00% 7.50%

Percent of Total Assets

Accounts Receivable 0.00% 0.00% 0.00% 11.60%
Inventory 0.00% 0.00% 0.00% 4.70%
Other Current Assets 1.05% 0.94% 0.78% 36.10%
Total Current Assets 9.78% 32.03% 54.56% 52.40%
Long-term Assets 90.22% 67.97% 45.44% 47.60%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 0.00% 0.00% 0.00% 31.90%

Long-term Liabilities 87.70% 59.65% 33.59% 26.80%
Total Liabilities 87.70% 59.65% 33.59% 58.70%
Net Worth 12.30% 40.35% 66.41% 41.30%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 100.00% 100.00% 100.00% 0.00%
Selling, General & Administrative Expenses 98.09% 92.51% 90.52% 73.40%
Advertising Expenses 2.08% 1.67% 1.60% 2.50%
Profit Before Interest and Taxes 2.66% 10.40% 13.17% 3.20%

Main Ratios
Current 1.01 2.88 5.40 1.79
Quick 1.01 2.88 5.40 1.34
Total Debt to Total Assets 97.38% 70.79% 43.69% 58.70%
Pre-tax Return on Net Worth 308.18% 127.74% 79.52% 5.20%
Pre-tax Return on Assets 8.07% 37.32% 44.78% 12.50%

Business Vitality Profile 1996 1997 1998 Industry

Sales per Employee $0 $0 $0 $105,908
Survival Rate 68.50%

Additional Ratios 1997 1998 1999

Net Profit Margin 1.91% 7.49% 9.48% n.a
Retum on Equity 221.89% 91.97% 57.25% n.a

Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 29.27 28.65 29.45 n.a
Payment Days 11 136 142
Total Asset Turnover 3.04 3.59 3.40 n.a

Debt Ratios
Debt to Net Worth 37.18 2.42 0.78 n.a
Current Liab. to Liab. 0.10 0.16 0.23 n.a

Li uidi Ratios
Net Working Capital $54 $13,281 $34,303 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.33 0.28 0.29 n.a
Current DebtfTotal Assets 10% 11% 10% n.a
Acid Test 1.01 2.88 5.40 n.a
Sales/Net Worth 115.92 12.28 6.04 n.a
Dividend Payout 0.00 0.00 0.00 n.a
 Appendix Trend Setters Hair Studio- Sample Plan

Appendix Table: Sales Forecast

Sales Forecast
Sales J"l A" Dot Nov Deo Jao Feb Mac A c Joo
Owner $3,600 $3,600 $3,600 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
Stylist #1 $3,600 $3,600 $3,600 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400 $4,400
Barber#1 $1,200 $1,200 $1,200 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500
Stylist #2 $1,700 $1,700 $1,700 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Other $2,500 $2,500 $2,500 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Total Sales $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300

Direct Cost of Sales J"l Aug Se Dot Nov Deo Jao Feb Mac Ar Ma:t Joo
Owner $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Stylist #1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Barber #1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Stylist #2 $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
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Pg 1
Appendix Table: Personnel

Personnel Plan
J"l A" Dot Nov Deo Jao Feb Mac Joo
Receptionist $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200
Shampoo Tech. $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Other $4,700 $4,700 $4,700 $5,700 $5,700 $5,700 $5,700 $5,700 $5,700
Total People 0 0 0 0 0 0 0 0 0
Total Payroll $5,900 $5,900 $5,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900
 Appendix Trend Setters Hair Studio- Sample Plan

Appendix Table: General Assumptions

General Assumptions
J"l A" Dot Nov Deo Jao Feb Mac A' Joo
Plan Month 1 2 4 5 6 7 8 9 10 12
Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Long-term Interest Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Tax Rate 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00% 28.00%
Other 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
Calculated Totals
Payroll Expense $5,900 $5,900 $5,900 $5,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900
New Accounts Payable $11,490 $11,620 $11,764 $11,908 $14,248 $14,248 $14,248 $14,248 $14,392 $14,392 $14,392 $14,392
 Appendix Trend Setters Hair Studio- Sample Plan

Appendix Table: Profit and Loss

Pro Forma Profit and Loss

J"l A" Oct Nov Deo Jao Feb Mac A' Ma Joo
Sales $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Production Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Margin $12,600 $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Expenses:
Payroll $5,900 $5,900 $5,900 $5,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900 $7,900
Sales and Marketing and Other Expenses $2,470 $2,670 $2,870 $3,070 $3,070 $3,070 $3,070 $3,070 $3,270 $3,270 $3,270 $3,270
Depreciation $633 $683 $683 $683 $683 $683 $683 $683 $683 $683 $683 $683
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
Insurance $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Rent $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895 $1,895
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 10% $590 $590 $590 $590 $790 $790 $790 $790 $790 $790 $790 $790
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $11,938 $12,188 $12,388 $12,588 $14,788 $14,788 $14,788 $14,788 $14,988 $14,988 $14,988 $14,988
Profit Before Interest and Taxes $662 $412 $212 $12 $512 $512 $512 $512 $312 $312 $312 $312
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $185 $115 $59 $3 $143 $143 $143 $143 $87 $87 $87 $87
Net Profit $477 $297 $153 $9 $369 $369 $369 $369 $225 $225 $225 $225
Net Profit/Sales 3.78% 2.35% 1.21% 0.07% 2.41% 2.41% 2.41% 2.41% 1.47% 1.47% 1.47% 1.47%
Include Negative Taxes
 Appendix Table: Cash Flow

Pro Forma Cash Flow J"l A"9 Sep Dot Nov Deo Jao Feb Mac Ape May Joo

Cash Received
Cash from 0 erations:
Cash Sales $12,600 $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Cash from Receivables $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash from Operations $12,600 $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300

Additional Cash Received

Non Operating (Other) Income $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $12,600 $12,600 $12,600 $12,600 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300

Expenditures J"l A"9 Sep Dot Nov Deo Jao Feb Mac Ape May Joo
Ex enditures from 0 erations:
Cash Spending $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Pa:tment of Accounts Pa:table $6,657 $11,495 $11,625 $11,769 $14,113 $14,248 $14,248 $14,248 $14,253 $14,392 $14,392 $14,392
Subtotal Spent on Operations $6,657 $11,495 $11,625 $11,769 $14,113 $14,248 $14,248 $14,248 $14,253 $14,392 $14,392 $14,392

Additional Cash S ent

Non Operating (Other) Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
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 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
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 $7,657 $12,495 $12,625 $12,769 $15,113 $15,248 $15,248 $15,248 $15,253 $15,392 $15,392 $15,392

Net Cash Flow $4,943 $105 ($25) ($169) $187 $52 $52 $52 $47 ($92) ($92) ($92)
Cash Balance $4,943 $5,049 $5,023 $4,854 $5,041 $5,093 $5,145 $5,196 $5,243 $5,151 $5,058 $4,966
Appendix Table: Balance Sheet

Pro Forma Balance Sheet

Assets
Current Assets Starting Balances J"l Aug Se Oct Nov Deo Jao Feb Mac !j>c Ma:t Joo
Cash $0 $4,943 $5,049 $5,023 $4,854 $5,041 $5,093 $5,145 $5,196 $5,243 $5,151 $5,058 $4,966
Other Current Assets $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600 $600
Total Current Assets $600 $5,543 $5,649 $5,623 $5,454 $5,641 $5,693 $5,745 $5,796 $5,843 $5,751 $5,658 $5,566
Long-term Assets
Long-term Assets $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500 $59,500
Accumulated Depreciation $0 $633 $1,316 $1,999 $2,682 $3,365 $4,048 $4,731 $5,414 $6,097 $6,780 $7,463 $8,146
Total Long-term Assets $59,500 $58,867 $58,184 $57,501 $56,818 $56,135 $55,452 $54,769 $54,086 $53,403 $52,720 $52,037 $51,354
Total Assets $60,100 $64,410 $63,833 $63,124 $62,272 $61,776 $61,145 $60,514 $59,882 $59,246 $58,471 $57,695 $56,920

Liabilities and Capital

J"l A" Oct Nov Deo Jao Feb Mac Joo
Accounts Payable $0 $4,834 $4,959 $5,238 $5,373 $5,373 $5,373 $5,373 $5,512 $5,512
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $4,834 $4,959 $5,238 $5,373 $5,373 $5,373 $5,373 $5,512 $5,512

Long-term Liabilities $61,917 $60,917 $59,917 $58,917 $57,917 $56,917 $55,917 $54,917 $53,917 $52,917 $51,917 $50,917 $49,917
Total Liabilities $61,917 $65,751 $64,876 $64,016 $63,155 $62,290 $61,290 $60,290 $59,290 $58,429 $57,429 $56,429 $55,429

Paid-in Capital $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Retained Earnings

and Capital