Table of Contents

Executive Summary ...................................................................................................................... 2

Objectives.......................................................................................................................................... 2
Mission ................................................................................................................................................ 2
Keys to Success .............................................................................................................................. 3
Company Summary ........................................................................................................................... 3
Company Ownership ..................................................................................................................... 3
Start-up Summary ......................................................................................................................... 4
Products and Services ................................................................................................................. 7
Market Analysis Summary .............................................................................................................. 8
Market Segmentation ................................................................................................................... 9
Target Market Segment Strategy .......................................................................................... 11
Service Business Analysis ......................................................................................................... 12
Competition and Buying Patterns .......................................................................................... 12
Strategy and Implementation Summary ................................................................................ 13
Competitive Edge ......................................................................................................................... 13
Marketing Strategy ...................................................................................................................... 14
Sales Strategy ............................................................................................................................... 15
Sales Forecast................................................................................................................................ 15
Management Summary .................................................................................................................. 15
Personnel Plan ............................................................................................................................... 16
Financial Plan ..................................................................................................................................... 17
Start-up Funding .......................................................................................................................... 17
Important Assumptions ............................................................................................................. 20
Break-even Analysis .................................................................................................................... 20
Projected Profit and Loss ........................................................................................................... 22
Appendix .............................................................................................................................................. 22
Executive Summary
Alkhaima lounge (Cedars of Lebanon) is a new lounge concept which will focus on a
combination of Middle Eastern customers and customers over 22 years in age to offer a
more adult alternative to lounge frequented by college-age customers. The first lounge
will be established in Mississauga, and managed by the business founders, Param Mangat
and Sourav Kalia. The business will generate revenues through the sale of flavored
tobaccos, non-alcoholic drinks, food and appetizers. The business seeks investor funding
to launch its first lounge

The business projects to become profitable in its first year with good profit from strong
sales in the first year. Sales will triple by the third year of operation. Net profit of sales
will be respectable due to the high margin on the products sold. Exit for investors is
possible from sale of the franchise to a chain of lounge looking to expand their market.

Objectives

Alkhaima lounge seeks to achieve the following objectives with the launch of its first
cafe lounge:

1. To maintain a instagram page of 5,000 individuals by the end of its third year as a
sign of its community.

2. To become profitable in its second year through the sale of tobacco, food and
drinks.

3. To establish a franchisable model for lounges and initiate fundraising and planning
for franchising by its fifth year of operation.

Mission

The mission of Alkhaima lounge is to provide a comfortable environment, sometimes

relaxing and sometimes energetic and stimulating, around which those who love hookah
smoking, as well as new converts, can come together. The environment will draw on
elements of Middle Eastern culture as well as the culture of the local environment.

Keys to Success

The keys to success for Alkhaima Lounge are:

1. Create a comfortable environment

2. Provide high quality tobacco, food, drinks, and hookah equipment

3. Establish a loyal core following

4. Expand the market of hookah smokers in the mississauga area

5. Energize the customer base to generate their own culture and events at Alkhaima
lounge

Company Summary
Alkhaima Lounge is a new concept for a hookah lounge which centers around the
community aspect of smoking hookah pipes. The business will launch its first hookah
lounge in Trendytown within six months and endeavor to create a scalable model which
can be franchised in additional urban locations. The business will earn revenues through
the sale of tobacco (multiple flavors), drinks (coffee, tea, and juices) and food (Middle
Eastern and American snacks and appetizers requiring light preparation). The customers
are expected to be those of Middle Eastern descent and their friends, those interested in
Middle Eastern and hookah culture, and young (22-35 year old) urbanites interested in a
community-oriented experience that is an alternative to bars serving alcohol and coffee
shops.

Company Ownership

Alkhaima Lounge is owned and established by the husband and wife team of Sayed and
Yasmine Batroun, Lebanese-American residents of Trendytown who have developed the
concept for the store after working in hookah lounges while overseas. The business is
established as an S Corporation to allow for additional investors to join. Sayed currently
owns 51% of stock and Yasmine owns 49%. 40% of shares will be provided to investors
in the initial round of funding, diluting the founders' shares to 60% between the two of
them.

Start-up Summary

The start-up expenses for Alkhaima Lounge include legal consultation and permit fees as
a retail and food service establishment, as well as a special permit for the lounge to allow
smoking within. Stationery includes business cards, letterhead, and business brochures.

Insurance includes initial general and product liability premiums as well as renter's and
key-employee insurance. Rent covers one month's security and two month's rent for the
initial location to allow for build out of the space before opening. Start-up marketing
covers the marketing campaign before launch, as described in the marketing plan. The
website is a significant expense. It offers basic information on the business as well as a
scalable social networking component to allow for the organizing of hookah groups and
the planning of events.

The cash required will see the business through until cash flow break even is achieved.
Current assets includes lounge furniture ($10,000), tables ($10,000), kitchen supplies and
tools ($10,000), silverware, plates, glassware, and hookahs ($10,000). Long-term assets
include basic improvements to the space ($30,000 for additional plumbing, electrical
work, taking down and putting up walls where needed, painting, refinishing floors),
lighting fixtures ($10,000), sound system ($10,000), POS sales system and wireless
devices ($20,000), kitchen equipment ($20,000 for stoves, refrigerator, and warming
units), office equipment ($5,000 for computer, printer, fax, telephones).
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START-UP REQUIREMENTS

Start-up Expenses

Legal Help and Permits $5,000

Stationery etc. $2,000

Insurance $2,000

Rent $6,000

Start-up Marketing $15,000

Website $50,000

TOTAL START-UP EXPENSES $80,000

Start-up Assets

Cash Required $40,000

Other Current Assets $40,000

Long-term Assets $95,000

TOTAL ASSETS $175,000

Total Requirements $255,000

Products and Services
Alkhaima Lounge will specialize in non-alcoholic, organic drinks, and healthy appetizers
and snacks of both Middle Eastern and American origin. The initial menu includes:

 Assortment of organic teas

 Assortment of organic coffees

 Fruit juices and juice blends

 "Mocktails" featuring fruit juices and fresh fruit

 Salads

 Crudite and dips

 Pita or pita chips and hummus/other dips

 Falafel

 Spinach fatayer

 Onion rings

 Fried fava beans

Prices for drinks will range from $3 for simple teas or small coffees to $12 for certain
mocktails. Prices for appetizers will range from $5 to $8 for single servings and $12 to
$25 for group dishes (serving 4-6 people).

Flavored tobacco for hookah pipes will be sold as well for $15 for the first round and $12
for subsequent rounds. flavors include:

 Cherry

 Strawberry

 Blackberry

 Mixed Fruit
 Apple

 Licorice

 Candy

 Jasmine

 Banana

 Rose

 Grape

 Lebanese Blend

 Pistachio

 Lemon

 Cola

 Mint

 Orange

 Peach

 Vanilla

 Mango

The facility will include a stage area where performances, talks, and films can be
presented. These will be organized by customer groups who will book the space free of
charge for events that are acceptable to Alkhaima Lounge management.

Market Analysis Summary

The market for lounges in the United States has grown significantly in the past decade.
Hookah-bars.com reports that, as of October 2008, there were at least 470 lounges in the
U.S. and an average of five new lounges were opening every month. From these
numbers, it can be estimated that between 2-5 million current hookah smokers live in the
United States. Of these hookah smokers, approximately 10% are of Middle Eastern origin
and the remaining groups are of American origin but have grown to embrace hookah
culture.

In Trendytown, Alkhaima Lounge will focus on locals in the greater Trendytown area of
Middle Eastern origin and young professionals.

Market Segmentation

Alkhaima Lounge has determined the following market segmentation for potential
customers:

Middle Eastern Americans: Area residents who have either immigrated from the
Middle East or have family origins in the Middle East. They value the connection that
lounges provide with their culture and traditional elements. As many Muslims do not
drink alcohol, they do not feel alienated in lounges, which they sometimes do in bars
which focus on liquor. They appreciate being able to meet other Middle Eastern
Americans at lounges, both for friendship and for dating. While this is a small market
segment in Trendytown, they use lounges more frequently than other groups.

College Age Residents: College students who seek an alternative to bars and parties on
their campuses seek out different experiences. Lounges provide such an experience
because of their exotic ambiance, colorful atmosphere, focus on group dynamics, and the
element of danger/risk provided by smoking. Furthermore, those between the ages of 18
and 21 can frequent lounges while they cannot go to many bars that serve alcohol.

Young Professionals: 22-35 year-old professionals who are tired with bar culture
sometimes react against it by looking for other activities. They seek locations where they
can congregate with friends, talk, and share a new experience. However, they are turned
off by lounges with a high percentage of college age customers.
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MARKET ANALYSIS

YEAR YEAR YEAR YEAR YEAR

1 2 3 4 5

Potential Growth CAGR

Customers
 Middle-Eastern 3% 500 515 530 546 562 2.97%
Americans

College Age 3% 15,000 15,450 15,914 16,391 16,883 3.00%

Residents

Young 3% 30,000 30,900 31,827 32,782 33,765 3.00%

Professionals

Total 3.00% 45,500 46,865 48,271 49,719 51,210 3.00%

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Target Market Segment Strategy

Alkhaima Lounge will target Middle Eastern Americans and young professionals, and not
college age residents. By seeking the target market segments described here, Alkhaima
Lounge intends to establish a base of Middle Eastern devotees who will serve to give the
bar credibility and authenticity. These devotees will feel comfortable bringing their non-
Middle Eastern friends to Alkhaima Lounge. These additional customers must be sought
to prove Alkhaima Lounge as a franchisable model for American consumers. Therefore,
Alkhaima Lounge will be positioned for young professionals as an alternative to bars
where community can be developed, as well as a non-threatening fusion of American and
Middle Eastern cultural aspects, rather than a total immersion in Middle Eastern culture.
These markets exist throughout the United States and the Trendytown location will serve
as a proving ground for the Alkhaima Lounge model.

Service Business Analysis

Over 470 lounges are in existence in the United States, spread throughout the country
with some concentration in cities. From 2000 to 2004, at least 200-300 new lounges
opened for business, according to the journal Smokeshop. Generally, as long as 80% of
sales are derived from tobacco, smoking within hookah establishments can be permitted
by law.

The lounge industry is highly fragmented, with most bars being independent
establishments. A small percentage open a second or third location. There are currently
no national lounge franchises.

Indirect competitors to lounges are coffee shops, bars that serve liquor, and cigar
stores/tobacconists.

Typically, hookah tobacco is sold and pipes are provided to customers in lounges.
Tobacco is sold in rounds which serves a group of four to six for about an hour. Food and
drinks are sold via waiter or bar service while customers sit in groups and smoke. While
some attend lounges alone, customers typically attend with groups and sit at round
tables with their group.

Competition and Buying Patterns

Lounge customers in the United States judge between establishments based on location
(they will not be willing to travel too far out of their way for a lounge) the variety of
flavors served, the atmosphere, and the additional food and drink options served.

Specific competitors for Alkhaima Lounge include Ali Baba Lounge, Babylon Hookah
Lounge, Desert Cafe, and Zee's Smoking Corner.
Ali Baba Lounge: With DJs and dance parties on weekends, Ali Baba's serves a younger
crowd who enjoy meeting others.

Babylon Hookah Lounge: Also has DJs and tends toward a young consumer base. Older
customers complain that the lounge is loud, much like a rave concert.

Desert Cafe: Loved by regulars for its owner and its atmosphere, Desert Cafe has plasma
TVs, outdoor seating in summer and atmospheric lighting. The location is faulted for its
low quality tobacco and lack of upkeep on their hookahs.

Zee's Smoking Corner: With an extensive list of flavors, Zee's also focuses on college
age residents and drives away others with its loud music and party atmosphere.

Strategy and Implementation Summary

The focus for implementation will be on establishing the quality of the offering, its
suitability for the 22+ target market, and the infrastructure to allow for community-driven
culture. The fostering of the Alkhaima Lounge community will be important to the
growth of the business and its proof as a franchisable model.

Competitive Edge

Alkhaima Lounge's competitive edge will be established through its community

organizing ability via its website. This website will present an interface for users to:

 Connect with each other and Alkhaima Lounge after they have left the
establishment

 Organize groups to attend Alkhaima Lounge together

 Plan events to propose for the Alkhaima Lounge calendar

 Send out invites for these events

The party-like atmosphere at other lounges does not allow for easy conversation and for
performances and events of the type expected at Alkhaima Lounge.

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Marketing Strategy

The marketing strategy of Alkhaima Lounge will be to establish a base of Middle Eastern
American customers first, and using these customers to bring in other young professional
as friends. To that end, the following tactics will be employed:

 Seeking mention in blogs for the local area

 Pitching the story of its concept and opening to Middle Eastern cultural and
language publications specifically, and area newspapers and magazines in general

 Advertising with posters and flyers in the downtown Trendytown area

The bar's grand opening will be marked by an event featuring live music, free food and
drink offers, and door prizes.

After the launch, promotional incentives for customers will be advertised in newspaper
advertisements, on the website, and in the store for:

 Group discounts

 Free prizes for winners of business card drawing (to encourage target market of
young professionals)

 Incentives to organize the first events via the website (such as free rounds of
tobacco for the organizers at a later date)

These expenses are included in the Profit and Loss statement for Alkhaima Lounge as
marketing expense.
Sales Strategy

Alkhaima Lounge will sell its products through attentive wait staff and bar counter staff.
They will be compensated through base hourly wages and tips and will work to provide
the best customer service possible. Wait staff will use wireless tablets to place orders
which are sent over the bar's wireless network to kitchen staff and bar staff to prepare
dishes and drinks.

Sales Forecast

Sales will be predominantly through tobacco revenues, which also has a relatively low
cost of sales. Secondary revenue streams are food and drinks which will be sold to some,
but not all, customers who order tobacco. Sharp growth is expected over the first three
years of operation as the community aspect of Alkhaima Lounge is developed and
customer-directed programming begins to take place.

It is expected that a customer will return to Alkhaima Lounge on average 15 times a year,
taking part in 20 rounds of tobacco in that time. Therefore, this projection represents
1,000 customer groups in the first year, 2,500 customer groups in the second year and
3,500 customer groups in the third year.

Management Summary
Alkhaima Lounge is managed by the husband and wife team of Sayed and Yasmine
Batroun, Lebanese-American residents of Trendytown who have developed the concept
for the store after working in hookah lounges while overseas.

Sayed Batroun will manage store operations and train wait and kitchen staff. He has
culinary experience with ten years as a cook. He will handle procurement and inventory
management. He will also work as head cook during initial operations.

Yasmine Batroun will manage marketing, business development, and finance. She has an
MBA and corporate experience as a marketing associate for a Fortune 500 business. She
will oversee accounting and bookkeeping. She will provide general management in the
restaurant as needed, including management of events.

In the second year of operation a general manager will be hired to take over staff
supervision, staff training, procurement and inventory management. Sayed Batroun will
continue to serve as head cook but will work on a more strategic level in other areas.

Additional staff will include kitchen staff and wait staff.

Personnel Plan

Staff will include two bartenders, two wait staff, and one kitchen staff initially. This will
grow to four bartenders, six wait staff and three kitchen staff. Wages for bartenders and
wait staff are lower as they are significantly augmented by tips. These personnel
assumptions are based on the bar being open 80 hours per week.

PERSONNEL PLAN

YEAR 1 YEAR 2 YEAR 3

Sayed Batroun $36,000 $36,000 $36,000

Yamine Batroun $36,000 $36,000 $36,000

Bar Staff $48,000 $75,000 $110,000

 Wait Staff $33,600 $70,000 $120,000

Kitchen Staff $30,000 $70,000 $120,000

General Manager $0 $50,000 $60,000

TOTAL PEOPLE 7 11 15

Total Payroll $183,600 $337,000 $482,000

Financial Plan
The business is expected to grow significantly in its first three years as it meets the
market need for an alternative to local youth-oriented lounges. Growth to a
second location will occur in the fourth year, financed by the cash reserves of the
business.

Start-up Funding

While the owners will invest substantially in the company, the bulk of the start-up
funding will be provided primarily by outside investors, with an additional long-term
loan against the assets of the bar. Credit card debt will make up the remainder.

Investors will be provided with 40% of shares for their investment, as the current partners
are contributing considerable sweat and financial equity of their own, as well as their
specific expertise and credibility as Lebanese-Americans.
START-UP FUNDING

Start-up Expenses to Fund $80,000

Start-up Assets to Fund $175,000

TOTAL FUNDING REQUIRED $255,000

Assets

Non-cash Assets from Start-up $135,000

Cash Requirements from Start-up $40,000

Additional Cash Raised $0

Cash Balance on Starting Date $40,000

TOTAL ASSETS $175,000

Liabilities and Capital

Liabilities
Current Borrowing $8,000

Long-term Liabilities $50,000

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

TOTAL LIABILITIES $58,000

Capital

Planned Investment

Sivrihisar Geobekli $35,000

Willusa Geobekli $35,000

Other Investors $127,000

Additional Investment Requirement $0

TOTAL PLANNED INVESTMENT $197,000

 Loss at Start-up (Start-up Expenses) ($80,000)

TOTAL CAPITAL $117,000

TOTAL CAPITAL AND LIABILITIES $175,000

Total Funding $255,000

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Important Assumptions

We assume that the growth in lounge popularity will continue and that the country is
ready for a national chain. We assume that anti-smoking lobbyists and anti-Middle
Eastern sentiment in the Unites States will not damage the reputation and image of
lounges.

Break-even Analysis

A projected monthly fixed operating cost is shown in the table below. With this level of
fixed cost, break even is expected in the sixth month of operation.
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BREAK-EVEN ANALYSIS

Monthly Units Break-even 4,200

Monthly Revenue Break-even $35,279

Assumptions:
 Average Per-Unit Revenue $8.40

Average Per-Unit Variable Cost $2.28

Estimated Monthly Fixed Cost $25,703

Projected Profit and Loss

Key expenses will include the cost of sales attributed to supplies and raw materials,
payroll for the growing staff, marketing to promote the bar in the community, and the
bar's rent and depreciation. The bar will show a profit in the first year which will continue
to grow. This is expected due to the high gross margins of selling tobacco through
hookahs and the type of food and drinks sold.

Appendix

SALES FORECAST

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MO
1 2 3 4 5 6 7 8 9 10 11

Unit
Sales

Tobacco 500 600 720 864 1,037 1,244 1,493 1,792 2,150 2,580 3,096 3

Drinks 600 720 864 1,037 1,244 1,493 1,792 2,150 2,580 3,096 3,715 4

Food 400 480 576 691 829 995 1,194 1,433 1,720 2,064 2,477 2
TOTAL 1,500 1,800 2,160 2,592 3,110 3,732 4,479 5,375 6,450 7,740 9,288 11
UNIT
SALES

Unit Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month M
Prices 10 11

Tobacco $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $14.00 $1

Drinks $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $6.00 $

Food $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $5.00 $

Sales

Tobacco $7,000 $8,400 $10,080 $12,096 $14,518 $17,416 $20,902 $25,088 $30,100 $36,120 $43,344 $52

Drinks $3,600 $4,320 $5,184 $6,222 $7,464 $8,958 $10,752 $12,900 $15,480 $18,576 $22,290 $26

Food $2,000 $2,400 $2,880 $3,455 $4,145 $4,975 $5,970 $7,165 $8,600 $10,320 $12,385 $14

TOTAL $12,600 $15,120 $18,144 $21,773 $26,127 $31,349 $37,624 $45,153 $54,180 $65,016 $78,019 $93
SALES

Direct Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month M
Unit 10 11
Costs

Tobacco 30.00% $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $4.20 $

Drinks 20.00% $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $1.20 $

Food 30.00% $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $1.50 $

Direct
Cost of
Sales
Tobacco $2,100 $2,520 $3,024 $3,629 $4,355 $5,225 $6,271 $7,526 $9,030 $10,836 $13,003 $15

Drinks $720 $864 $1,037 $1,244 $1,493 $1,792 $2,150 $2,580 $3,096 $3,715 $4,458 $5

Food $600 $720 $864 $1,037 $1,244 $1,493 $1,791 $2,150 $2,580 $3,096 $3,716 $4

Subtotal $3,420 $4,104 $4,925 $5,910 $7,092 $8,509 $10,212 $12,256 $14,706 $17,647 $21,177 $25
Direct
Cost of
Sales

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PERSONNEL PLAN

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

Sayed $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Batroun

Yamine $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Batroun

Bar Staff $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000

Wait Staff $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800 $2,800
Kitchen $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Staff

General $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Manager

TOTAL 7 7 7 7 7 7 7 7 7 7 7 7
PEOPLE

Total $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Payroll

PRO FORMA PROFIT AND LOSS

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

Sales $12,600 $15,120 $18,144 $21,773 $26,127 $31,349 $37,624 $45,153 $54,180 $65,016 $78,019 $93,618

Direct Cost of Sales $3,420 $4,104 $4,925 $5,910 $7,092 $8,509 $10,212 $12,256 $14,706 $17,647 $21,177 $25,411

Other Costs of Sales $1,000 $1,050 $1,102 $1,157 $1,215 $1,276 $1,340 $1,407 $1,477 $1,551 $1,629 $1,710

TOTAL COST OF $4,420 $5,154 $6,027 $7,067 $8,307 $9,785 $11,552 $13,663 $16,183 $19,198 $22,806 $27,121
SALES

Gross Margin $8,180 $9,966 $12,117 $14,706 $17,820 $21,564 $26,072 $31,490 $37,997 $45,818 $55,213 $66,497

Gross Margin % 64.92% 65.91% 66.78% 67.54% 68.21% 68.79% 69.30% 69.74% 70.13% 70.47% 70.77% 71.03%

Expenses

Payroll $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300

Marketing/Promotion $5,000 $5,000 $5,000 $5,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Depreciation $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400 $1,400
Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Insurance $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200

Payroll Taxes 15% $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295 $2,295

Permit Renewals 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $500 $0 $0

Supplies $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500

Total Operating $26,995 $26,995 $26,995 $26,995 $24,995 $24,995 $24,995 $24,995 $24,995 $25,495 $24,995 $24,995
Expenses

Profit Before ($18,815) ($17,029) ($14,878) ($12,289) ($7,175) ($3,431) $1,077 $6,495 $13,002 $20,323 $30,218 $41,502
Interest and Taxes

EBITDA ($17,415) ($15,629) ($13,478) ($10,889) ($5,775) ($2,031) $2,477 $7,895 $14,402 $21,723 $31,618 $42,902

Interest Expense $513 $509 $505 $495 $485 $475 $453 $428 $403 $378 $354 $342

Taxes Incurred ($5,798) ($5,261) ($4,615) ($3,835) ($2,298) ($1,172) $187 $1,820 $3,780 $5,983 $8,959 $12,348

Net Profit ($13,530) ($12,277) ($10,768) ($8,949) ($5,362) ($2,734) $437 $4,247 $8,819 $13,961 $20,905 $28,813

Net Profit/Sales -107.38% -81.20% -59.35% -41.10% -20.52% -8.72% 1.16% 9.41% 16.28% 21.47% 26.79% 30.78%

PRO FORMA CASH FLOW

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

Cash Received

Cash from
Operations
Cash Sales $12,600 $15,120 $18,144 $21,773 $26,127 $31,349 $37,624 $45,153 $54,180 $65,016 $78,019 $93,618

SUBTOTAL $12,600 $15,120 $18,144 $21,773 $26,127 $31,349 $37,624 $45,153 $54,180 $65,016 $78,019 $93,618
CASH FROM
OPERATIONS

Additional
Cash Received

Sales Tax, 9.00% $1,134 $1,361 $1,633 $1,960 $2,351 $2,821 $3,386 $4,064 $4,876 $5,851 $7,022 $8,426
VAT, HST/GST
Received

New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing

New Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
(interest-free)

New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Liabilities

Sales of Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current Assets

Sales of Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets

New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Investment
Received

SUBTOTAL $13,734 $16,481 $19,777 $23,733 $28,478 $34,170 $41,010 $49,217 $59,056 $70,867 $85,041 $102,044
CASH
RECEIVED

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

Cash $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300 $15,300
Spending

Bill Payments $314 $9,472 $10,747 $12,273 $14,047 $14,876 $17,487 $20,611 $24,354 $28,850 $34,557 $40,670

SUBTOTAL $15,614 $24,772 $26,047 $27,573 $29,347 $30,176 $32,787 $35,911 $39,654 $44,150 $49,857 $55,970
SPENT ON
OPERATIONS

Additional
Cash Spent

Sales Tax, $1,134 $1,361 $1,633 $1,960 $2,351 $2,821 $3,386 $4,064 $4,876 $5,851 $7,022 $8,426
VAT, HST/GST
Paid Out

Principal $300 $300 $300 $800 $800 $800 $800 $1,000 $1,000 $1,000 $900 $0
Repayment of
Current
Borrowing

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

Long-term $0 $0 $0 $0 $0 $0 $1,500 $1,500 $1,500 $1,500 $1,500 $1,500

Liabilities
Principal
Repayment

Purchase $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Other Current
Assets

Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term
Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

SUBTOTAL $17,248 $26,633 $28,180 $30,532 $32,699 $33,997 $38,673 $42,675 $47,231 $52,702 $59,478 $66,096
CASH SPENT

Net Cash Flow ($3,514) ($10,152) ($8,403) ($6,800) ($4,220) $173 $2,337 $6,542 $11,826 $18,166 $25,562 $35,948

Cash Balance $36,486 $26,334 $17,931 $11,131 $6,911 $7,084 $9,421 $15,963 $27,789 $45,954 $71,517 $107,464

PRO FORMA BALANCE SHEET

MONTH 1 MONTH 2 MONTH 3 MONTH 4 MONTH 5 MONTH 6 MONTH 7 MONTH 8 MONTH 9 MONTH MONTH
10 11

Assets Starting
Balances

Current
Assets

Cash $40,000 $36,486 $26,334 $17,931 $11,131 $6,911 $7,084 $9,421 $15,963 $27,789 $45,954 $71,517

Other Current $40,000 $40,200 $40,400 $40,600 $40,800 $41,000 $41,200 $41,400 $41,600 $41,800 $42,000 $42,200
Assets

TOTAL $80,000 $76,686 $66,734 $58,531 $51,931 $47,911 $48,284 $50,821 $57,563 $69,589 $87,954 $113,717 $
CURRENT
ASSETS

Long-term
Assets

Long-term $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000 $95,000
Assets

Accumulated $0 $1,400 $2,800 $4,200 $5,600 $7,000 $8,400 $9,800 $11,200 $12,600 $14,000 $15,400
Depreciation
TOTAL $95,000 $93,600 $92,200 $90,800 $89,400 $88,000 $86,600 $85,200 $83,800 $82,400 $81,000 $79,600
LONG-TERM
ASSETS

TOTAL $175,000 $170,286 $158,934 $149,331 $141,331 $135,911 $134,884 $136,021 $141,363 $151,989 $168,954 $193,317 $
ASSETS

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

Current
Liabilities

Accounts $0 $9,115 $10,340 $11,805 $13,554 $14,296 $16,804 $19,804 $23,399 $27,705 $33,209 $39,067
Payable

Current $8,000 $7,700 $7,400 $7,100 $6,300 $5,500 $4,700 $3,900 $2,900 $1,900 $900 $0
Borrowing

Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities

SUBTOTAL $8,000 $16,815 $17,740 $18,905 $19,854 $19,796 $21,504 $23,704 $26,299 $29,605 $34,109 $39,067
CURRENT
LIABILITIES

Long-term $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $48,500 $47,000 $45,500 $44,000 $42,500
Liabilities

TOTAL $58,000 $66,815 $67,740 $68,905 $69,854 $69,796 $71,504 $72,204 $73,299 $75,105 $78,109 $81,567
LIABILITIES

Paid-in $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000 $197,000
Capital

Retained ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000) ($80,000)
Earnings

Earnings $0 ($13,530) ($25,806) ($36,575) ($45,523) ($50,885) ($53,620) ($53,183) ($48,936) ($40,117) ($26,155) ($5,250)
TOTAL $117,000 $103,470 $91,194 $80,425 $71,477 $66,115 $63,380 $63,817 $68,064 $76,883 $90,845 $111,750 $
CAPITAL

TOTAL $175,000 $170,286 $158,934 $149,331 $141,331 $135,911 $134,884 $136,021 $141,363 $151,989 $168,954 $193,317 $
LIABILITIES
AND
CAPITAL

Net Worth $117,000 $103,470 $91,194 $80,425 $71,477 $66,115 $63,380 $63,817 $68,064 $76,883 $90,845 $111,750