Executive Summary

Overview
De Kliek Style Studio is an upscale women's clothing boutique that will open in July this year.
De Kliek, which means "the clique" or "circle of friends" in Dutch, defines the boutique and its
essence of inclusion. De Kliek's clothing selections and exclusive personal style services, which
include a detailed Style Assessment, will ensure that our customers are well dressed. De Kliek is
a woman-owned business currently organized as a Sole Proprietorship.

Clothing for stylish women

De Kliek will carry Ready-to-Wear (RTW) designer and casual/contemporary apparel &
accessories for women, and will be the exclusive U.S. home of the German line, Herr Frau. In
addition to the fabulous Herr Frau line, De Kliek will feature other choice selections by
American and European designers such as Hocken, Weekend MaxMini, Tosca and Catherine the
Great. The De Kliek customer is a busy professional woman who lives in Los Angeles with a
household income over $100K. She enjoys the boutique fashions and wants a place where she
can go to get services that meet her busy lifestyle.

Unique & innovative

De Kliek will provide services such as Style Assessments, alterations, personal shopping, and
special ordering to customers during store hours and by personal appointments. Style Concierges
who are trained within the image industry will be available to customers on a daily basis. De
Kliek's innovative Style Assessments and educational emphasis in helping women develop their
personal styles will enhance our reputation as a truly unique boutique.

Getting the word out

De Kliek will generate awareness and sales by utilizing PR tactics and the referral networks of
personal stylists. Additionally, De Kliek will meet our customers where they are, focusing on
how women approach shopping by obtaining mentions and reviews in the top fashion
publications, travel guides and local papers.

Management
With over 12 years experience in marketing and retail, owner Vrootje Magen has gathered the
expertise to complement and grow the business. Our advisory team holds expertise in retail
accounting, retail merchandising, legal contracts, fashion and design. A detailed project plan has
been created and all tasks are on schedule. Buying for the Fall/Winter season was completed in
April, and store design and marketing elements are currently being finalized.

Finance

• Start-up costs include inventory for the first month, and are estimated at $132,700 of
which the owner will inject 31.4%. Current owner investments are documented at
approximately $41,700, of which $12,700 is in savings and checking. An additional
injection of approximately $8,700 will occur by July 15 of Year 1.
 • Annual gross sales are projected to grow from $513,000 in the first year to over $600,000
by Year 3, with approximately 10% from customer special orders. These Sales
forecasts are approximately three-quarters the average of benchmarked Los Angeles
boutiques. Net profits are expected at approximately 6% through 2007, with reinvestment
of 5% for growth initiatives.

• De Kliek will hold Cost of Goods Sold at roughly 39% of sales revenues; we intend to
maintain this approximately 61% markup throughout the next five years.

• Due to the demand for up-to-date fashions, inventory turns are projected at 5, which
is higher than the industry average of 4.

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1.1 Mission

• To provide women with a boutique that offers a comfortable and approachable

environment

• To showcase quality, well-constructed fashions from prominent and cutting-edge

designers

• To offer a variety of beautiful and high-end fashion accessories

• To help women learn what clothing and styles go best with their unique personalities

• To generate buzz and sales through top-notch exclusive services

1.2 Keys to Success

1. Having a good location in a high-shopping area

2. Quality product and good relationships with vendors

3. Outstanding customer service

1.3 Objectives

• To turn inventory five times and generate $800 in sales per square foot

• To maintain profit margins at 15-20% through close attention to expenses and cost of
goods sold
 • To drive awareness and build sales through mentions in both local print and the nation's
top fashion magazines

Company Summary
De Kliek Style Studio is an upscale women's clothing boutique that intends to open in Noe
Valley in July. De Kliek means "clique or circle of friends" in Dutch; this defines the boutique
and its essence of inclusion. De Kliek carries beautiful designer labels for professional women,
such as the sophisticated silhouettes of Herr Frau and luxurious Jamin Puech handbags. De
Kliek's clothing selections and exclusive personal style services, which include a detailed Style
Assessment that features nine different style personalities, will ensure that our customers are
always well dressed.

2.1 Start-up Summary

This business plan will be used for three purposes:

• To map out all the necessary components to create a successful and well-run boutique
• To provide management with a blueprint to follow
• To secure financing through private institutions and investors

The Start-up Table which follows details the Start-up Requirements, including Start-up Inventory
and Long-term Assets in the form of Fixtures and POS Equipment. Start-up Funding will consist
largely of owner investment and a long-term loan from the Small Business Administration. The
Start-up Period for this plan runs from January through July. De Kliek will open on July 15, and
we project real sales beginning in August of Year 1.
Start-up Funding
Start-up Expenses to Fund $45,108
Start-up Assets to Fund $87,599
Total Funding Required $132,707
Assets
Non-cash Assets from Start-up $80,099
Cash Requirements from Start-up $7,500
Additional Cash Raised $0
Cash Balance on Starting Date $7,500
Total Assets $87,599
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $90,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-
$0
free)
Total Liabilities $90,000
Capital
Planned Investment
Owner Injection $41,707
Investor $1,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $42,707
Loss at Start-up (Start-up Expenses) ($45,108)
Total Capital ($2,401)
Total Capital and Liabilities $87,599
Total Funding $132,707

Start-up

Requirements

Start-up Expenses

Initial Deposit $0

Leasehold Improvements $20,000

Rent for Mo. of Improvements $3,000

Inventory Analyst $1,800

Professional Fees $1,050

Insurance $1,008

General Startup Costs $6,900

Marketing: Packaging, PR,

$11,350
Design

Total Start-up Expenses $45,108

Start-up Assets

Cash Required $7,500

Start-up Inventory $55,500

Other Current Assets $0

Long-term Assets $24,599

Total Assets $87,599

Total Requirements $132,707

2.2 Company Ownership

De Kliek has been established as a Sole Proprietorship due to the ease of formation, and
simplicity of the structure and tax record keeping. In the future, De Kliek will look at forming an
S Corporation when another location is opened. The following legal protections, permits or
licensing are required:

• LA County Business Tax Registration Certificate (Complete)

• LA City Fictitious Business Name Statement (Complete)

• LA Payroll Expense Tax Statement CA State Seller's Permit (Complete)

• LA Fire Department Permit

Products and Services

De Kliek will carry Ready-to-Wear (RTW) designer diffusion lines and casual/contemporary
apparel & accessories for women. De Kliek will carry three main RTW lines (Herr Frau, Hocken
& Weekend MaxMini) along with various American & European labels such as Catherine the
Great, Language, Vince, James Perse and James Jeans. De Kliek will also carry designer fashion
accessories such as Jamin Puech handbags, Achoo Panto scarves and wardrobe accessories such
as Tosca Delicate, sachets, lint brushes and various De Kliek branded items.

APPAREL LINES

• Herr Frau PF Line

• Weekend MaxMini
 • Hocken
• Catherine the Great
• Tosca
• Goat
• Twelfth Street
• James Jeans
• AG Jeans
• Vince
• Trina Turk
• Philosophy di Alberta Ferretti

ACCESSORIES

• Wardrobe Accessories:
o Lint Brushes
o Tosca Laundry Soap
o Stylist-in-a-box
o Sachets
o Hangers
• Fashion Accessories:
o Local designer jewelry
o Jamin Puech Handbags
o Belts, Scarves, Gloves, Hats
o Ilux and Tanjane Lingerie

Some of the key lines are detailed below:

Herr Frau - DD - Antwerp | Herr Frau

Not found in the U.S., this Dutch designer has a couture line (Herr Frau) a diffusion line (PDD)
and a better/contemporary line, Antwerp. Launched in the mid-80's, Herr Frau won the "Best
Newcomer" award at AlteModa in 1987 and has continued to deliver "French style with Dutch
seams" to her loyal customers. She currently has three boutiques worldwide (in Paris, Tokyo &
Antwerp, where Headquarters are located) and very soon will be sold on the West Coast
exclusively at De Kliek. Since the early Nineties, the Herr Frau label has shown at Milano
Collezioni, where De Kliek has viewed and exclusively purchased their line for Fall 2004, for
Los Angeles and the West Coast.

Weekend MaxMini & SportMax

MaxMini is the epitome of Italian fashion: good quality and cut in classic styles. Lawyer-turned-
dressmaker Achoo Marmet founded MaxMini in 1951, and it is now one of Italy's largest fashion
houses. MaxMini has a large U.S. presence through their boutiques and within selected upscale
department stores. Weekend MaxMini's goal for 2004 is to gain presence in smaller boutiques
and they are very excited about De Kliek. Their designs are changing with a new designer on
board, and their last collection was sexy yet still professional. De Kliek has viewed their line and
will be carrying their Fall 2004 collection.

Catherine the Great

Catherine the Great's designs are considered feminine and elegant. Born in Russia, the Great
began her career in Paris, working in the houses of Emanuel Untidy, Louis Fraud, and at Et
Tubrute. In 1998 she came to the U.S. as Danae Van Feurbach's head designer. Since starting her
own label, Catherine the Great has created cutting-edge clothing that enhances a woman's natural
femininity. Her attention to individualism explains why icons such as Madonna, Sarah Jessica
Parker, Halle Berry, and Nicole Kidman are among her many enthusiasts. De Kliek will be
carrying her Fall 2004 collection, exclusively in LA.

3.1 Exclusive Personal Services

Personality Style Assessment

The Style Assessment (in Appendix A) is a one-page quiz, developed by Lise Bakke and De
Kliek owner Vrootje Magen, based on the highly regarded Ennegram that helps a woman
determine the appropriate styles for her personality. The assessment helps a customer define her
personality by providing her style words (e.g. engaging, romantic, modern) to choose from along
with tips on what clothing works well for her style personality. Style Icons are also provided to
help her visualize the appropriate look. There is normally a small fee for the assessment,
but customers are able to take the Style Assessment for free at the Style Studio when they make
cumulative purchases of $250. After each customer completes the quiz in the studio section of
the boutique, she will receive a laminated De Kliek wallet card to carry around as a shopping
reminder that lists her style personality type, style words, style icons and clothing styles
appropriate for her.

Full and Self-Service

• "What's New" Bulletin. Behind the cash wrap area there will be a bulletin board that is
frequently updated and that lists and displays the following details:

o Featured Designer - This will show a profile of one of the designers

o How to Wear - This will show how to wear a particular item for work, weekend
and going out
 o Coming Soon - This will feature items coming into the boutique soon

o Services - This will list all the additional style services that De Kliek offers

• Coterie Clothing Tags. Each clothing tag will have the corresponding Style Personality
numbers listed to help customers determine which pieces are best for them

• Style Concierges. De Kliek believes in bringing the best service to our customers. As
such, all sales associates are called Style Concierges. Our Style Concierges will be
trained and participating members of the Association of Image Consultants International.
They will be available to assist customers with their Style Assessments, wardrobe
planning, special orders and personal shopping. If a customer is pressed for time, she
simply calls De Kliek to set up an appointment and there will be someone there to greet
and assist her beyond normal business hours.

Market Analysis Summary

There are various economic forces that affect apparel retailers. Consumer confidence is the most
important; people don't shop when they are not feeling good. Unemployment also has an
effect, in that fewer women out in the workforce means less disposable income for high-end
quality clothing. Thus, the large discounters (Target, Sears and Wal*Mart) are now working with
top designers to bring designer apparel to the masses. Although they can't compete on quality,
their continued development of the trend could have a direct impact on retailers who sell
designer clothing during tough economic times.

Fortunately, the luxury goods market, of which De Kliek is a part due to the high-end brands it
will carry, has remained recession-proof, as clearly indicated by the successful 2003 results for
Coach, Tiffany and Saks. According to Women's Wear Daily, luxury firms forecast a strong
2004, particularly for accessories and footwear. However, the strong Euro and slowdown in
wealth creation are big concerns and managing a balanced quality-price ratio is the key to
success for luxury retailers.

"Fashion is a requirement for those who are high in their success." -Luxury Consumer

In the luxury market, luxury consumers (defined as "affluents" who have household incomes of
over $100K) spent more in 2003 than 2002. [1] Based on focus groups, United Marketing
believes luxury consumers see apparel and accessories as more of a necessity than a luxury. This
is good news to boutique retailers. There are over 800 clothing boutiques in the LA Area;
approximately 19 percent of these generate over $500K in sales.[2] In fact, women's clothing
stores in Los Angeles have a 62% higher sales growth rate than the national average; this can be
attributed to the fact that the average household in Los Angeles is considered affluent.

______________________________________________

1) Luxury Market Report, Unity Marketing, 2003

2) Local Marketing Research Profile of LA, Bizminer, Jan. 2004.

4.1 Market Segmentation

Market Needs
If you were to overhear women talking in a dressing room, you would more than likely hear
them comment on something they've tried on and question how they should wear it or what it
will go with in their closet. Research has shown that women are stressed, have little time to shop,
and would generally like help in determining the right clothes and styles to wear. With over 61
million U.S. women between the ages of 25-54 spending over $34 billion in apparel each year,
there are sure to be some mistakes made in clothing choices. Television shows such as BBC's
"What Not to Wear" and Style's "Fashion Emergency" clearly speak to a woman's confusion
about what looks best on her. Even women who can afford a professional stylist feel helpless and
often jokingly request that their stylist come to their home every morning to help them get
dressed.

"Within a decade, the companies that do the best job of marketing to women will dominate every
significant product and service category." -Faith Popcorn

One gender in particular influences the majority of the retail marketplace: women. Women
comprise 51% (145 million) of the U.S. population [1] and control or influence 81% of all
household purchase decisions. [2] Women are now earning more college and master's degrees
than men, which translates into more senior positions & higher pay. [3] Overall, women
represent 47% of the total U.S. civilian workforce and as that continues to grow, demands for
their time also increase. Balancing work and family are the #1 concerns for women and almost
half "hardly ever" take care of their personal needs; one out of five women would like to have
time to do a little shopping! [4]

Research indicates that women approach retail shopping uniquely by evaluating purchases based
on product and company information derived from both personal and expert sources.
Additionally, surveys consistently reveal that women buy based on the relationship they forge
with a brand. [5], [6] Statistics, studies, and our own personal experiences show us again and
again that excellent customer service lowers customer attrition rates, fosters excellent word of
mouth and most importantly, increases sales. The table below shows that out of the ten
characteristics consumers find important in deciding where to shop, four were attributed to
customer service.

Top Ten Factors in Deciding Where to Shop: [7]

Reason 2000 2002 Change

 1. Has reasonable prices 78% 85% +7
2. Treats customers with respect 66 74 +8
3. Carries quality merchandise 66 72 +6
4. Doesn't pressure me to buy anything 61 70 +9
5. Convenient store hours 61 68 +7
6. Handles merchandise returns fairly 60 66 +6
7. I can always find what I want 61 65 +4
8. Carries a wide variety of items (e.g. 57 64 +7
colors, sizes)
9. Has outstanding customer service 55 63 +8
10. Makes it quick and easy to shop 53 61 +8

_______________________________________________

Sources:

[1] Statistical Abstract of the U.S., 2002; Bureau of Labor Statistics, June 2003
[2] BusinessWeek "The New Gender Gap," May 2003
[3] Northeastern University Center for Labor Market Studies
[4] Jones NY Sponsored Survey of FT Working Women, Self, May 2003
[5] Kim T Gordon, "Chick Magnet," Entrepreneur Magazine, March 2, 2002
[6] Connie Myers, "What Do Women Want? Marketing," Utah Business, Sept 2002
[7] Yankelovich Monitor, "Getting the Goods," May 2003

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
High-Income Women, 30+, in this
5% 2,400 2,520 2,646 2,778 2,917 5.00%
area
Personal Stylist Customers 30% 10 13 17 22 29 30.50%
Total 5.15% 2,410 2,533 2,663 2,800 2,946 5.15%

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4.2 Target Market Segment Strategy

Los Angeles is rated amongst the top U.S. markets in economic and educational achievements.
At an average age of 40, the Los Angeles professional is highly affluent, with an average family
household income of $180,903 and a median home value of $622,170. Close to 50% have a
bachelor's degree and 40% of these professionals hold a postgraduate degree.

De Kliek customers will learn about the boutique through the following sources:
 • LA Neighborhood Storefront
• Friends & Customers (word of mouth and email)
• Personal shoppers and stylists
• Women's Fashion Magazines articles and reviews such as W, Lucky, Marie Claire and
Vogue
• Local press mentions & ads
• Travel and shopping books and websites

The Primary Customer [1]

The primary De Kliek customer is a professional woman with a household income over $100K.
Her main characteristics are listed below:

Demographics

• Professional woman (ages 30-55)

• Household income over $100,00
• College-educated
• Lives in a higher-income LA neighborhood

Psychographics

• Looks for bargains (seasonal fashion) but willing to spend money on

quality, core items
• Would like more time or help in understanding what clothing is right for
her
• She wants to look her best because she wants to feel good about herself as
well as make a good impression at her job

Leisure Activities

• Listens to NPR
• Supports the Arts
• Reads Vogue, New Yorker, Bon Apetit, Lucky
• Watches Bravo, BBC, HBO
• Internet savvy
• Travels, owns a passport
• She enjoys eating out as well as taking time for herself at the spa or
getting a mani-pedi

Clothes Shopping Behaviors

• Spends over $2,500 for clothes each year

• Shops at Boutiques, Nordstroms, and Banana Republic
• Wears a size 6, 8, or 10
• Buys mostly tops and pants
 • Looks for classic, basic items each season, with 1-2 trendy items
• She cares about how she presents herself, enjoys fashion, and looks for
quality over quantity

Customer needs, expectations and buying patterns [2]

The De Kliek customer loves to shop and enjoys going to boutiques. She is knowledgeable about
designer fashions and tends to shop for seasonal wardrobes twice a year plus picks up various
fashion and basic pieces throughout the year. Many times she shops to "browse." By offering
fashionable accessories and wardrobe organization items, De Kliek will be able to grab a larger
share of her wardrobe budget. She is used to coming into the store and browsing through the
clothing items and trying on what interests her. She expects a warm and comfortable
environment and nice dressing rooms. She enjoys being left alone but also enjoys the special
touches of personal shopping assistance and having the ability to special order items. She wants
fun and catered shopping events in the evening and also enjoys receiving special notices on sales
and participating in trunk shows to garner more savings. She is also at a Director to CEO-level
job and could potentially be reached through her office for personal shopping services or through
her own personal stylist who is a member of AICI.

_____________________________________________

[1] "Why People Buy," Pam Danziger, 2003

[2] Valley profiles; De Kliek Shopping Behavior Research of LA Women, Oct 2003

4.3 Service Business Analysis

De Kliek is considered a luxury boutique within the Women's Clothing Store Industry (NAICS
448120 or SIC code 5621). Women's Clothing Store sales represent 20% of the Clothing Store
Industry Group, which translates to $27.2 billion during 1997, and $34.4 billion in 2002.

The retail sector is the second-largest industry in the United States, both in number of
establishments and number of employees. It is also one of the largest industries worldwide. The
retail sector employs over 23 million Americans and generates more than $3 trillion in retail
sales annually. Retail sales usually see a 2-5% growth each quarter. Although 2003 was difficult,
sales have slowly grown from 1.4% in Q1, to 3.1% in Q2 to an estimated 5.8% in Q3 according
to the NRF. Overall retail sales account for two-thirds of the nation's economic activity, and the
holiday season accounts for 20-40 percent of total retail sales. [1]

The Clothing & Accessories Stores subsector of Retail has seen sales growth of 19% over the
last five years from $137.6 billion in 1997 [2] to $171.8 billion in 2002 [3]. Businesses in the
Clothing and Clothing Accessories Stores subsector sell new clothing and clothing accessories
merchandise from fixed point-of-sale locations. Establishments in this subsector have similar
display equipment and staff that is knowledgeable regarding fashion trends and the proper match
of styles, colors, and combinations of clothing and accessories to the characteristics and tastes of
the customer.
Although the holiday season is the key indicator of retail health, according to the National Retail
Federation, the holiday season accounts for only 15% of total apparel sales. A good holiday
season is typically followed by a good economic year and analysts predict retail sales will rise a
total of 4 percent in 2004. Total sales for 2003 were up 3.2 percent. Additionally, online holiday
shoppers spent a record $18.5 billion during the holiday season [4] -- a 35 percent increase over
the $13.7 billion spent in 2002. Luxury retailers and upscale department stores were the
unexpected market leaders during the 2003 holidays with Nov-Dec sales up 15 percent. Analysts
state that as consumers see their investments increase, they spend more.

Women's Clothing Store

U.S. Retail Industry
Industry
Key Facts
la Area Facts [5]
The 2002 average for shrinkage is
There are 888 women's clothing
1.1%, with .7% being attributed to
store establishments in the Los
employee theft and .4% attributed to
Angeles area
shoplifting. [6]
One out of every three small
Highly fragmented
business clothing retailers fail
Many have highly seasonal sales and Average small business sales:
therefore seasonal inventory levels $245,378
Average retailer has one store with
25% of women's clothing retailers
less than $1 million in annual
generate sales over $500K
revenue
May operate stand-alone stores in
Small business clothing stores
urban locations or from leased space
employ on average, 3 employees
in shopping centers
Retailers often have high gross Clothing store startups in LA are 5
margins, close to 40 percent in many percentage points below the industry
businesses average
Average annual inventory turn for
Wages are relatively low
boutiques is five times
LA Clothing Stores have a higher
Employee turnover in the
than average growth rate with a
retail/wholesale industry is very
sales index of 1.62 - 62% higher
high, as much as 30 percent
than the industry norm
Merchandising - buying goods that
will sell - is the main preoccupation -
of most retailers

2004 Outlook
The outlook for sales and earnings in 2004 is bright, with especially strong results expected in
the first quarter [7]. Two trends should dominate retail fundamentals in 2004: Strong first quarter
sales due to an estimated $60 billion in tax refunds and lower taxes hitting consumers' pockets in
March and April, and a potential slowing of sales in the final three quarters of 2004 against the
tougher comparison of 2003. Additionally, industry experts predict growth in the specialty store
segment of which De Kliek is a part.

Current Trends

• People are shopping online for convenience & value; growth of sales on the Internet
• Continued decline of the mom-and-pop store
• Overbuilding by specialty stores and other chains
• Repositioning of full-price/multi-line department stores
• Supremacy of the discount store chains
• Category-killer superstores
• Continuous changes in demographics, tastes and fashions
• Easy availability of consumer credit
• Dwindling appeal of the major mall

Economic, Cultural and Environmental Conditions

Weather, seasonal events, holiday shopping, competitor marketing, LA tourism, the Bay Area
economy and the strength of the dollar can all affect the performance of De Kliek. On a macro-
economic level, consumer confidence, interest rates and inflation rates all have an effect. Rising
unemployment, political concerns and deflation also pose risks.

Positive Factors:

Clothing Industry Impact on De Kliek

Very low interest rates Cost of financing low
Higher ticket sizes on
Easy availability of consumer credit
credit card purchases
Relatively low unemployment, and very low Stable employees &
inflation businesses
Increased consumer
A relatively low personal savings rate
spending
(Positive side of:) Significant continued layoffs Higher-educated
at larger corporations require job migration employees

Negative Factors:
Clothing Industry Impact on De Kliek
Weakening consumer confidence (influenced by
Decreased sales
global terrorism, tension & uncertainty)
Strong Euro Lower margins
Slowly increasing unemployment Value and sale
 shopping (can also be
positive impact)
Decreasing levels of consumer household wealth
Continued "cocooning"
due to stock portfolios and 401(k) plans that have
by customers
seen huge losses
Consumers with record high debt levels are
defaulting on credit card balances, home Increase in returns
mortgages & loans at an alarming rate
(Negative side of:) Significant continued layoffs
Reduction in working
at larger corporations require job migration and
women who can buy
lead to large numbers of consumers employed as
luxury items
temp workers

_____________________________________________

[1] National Retail Federation trade group, Women's Wear Daily, 9/17/03
[2] U.S. Economic Census, 1997
[3] 2003 Holiday Survival Kit, NRF
[4] eSpending Report from Goldman, Sachs & Co., Harris Interactive and Nielsen/NetRatings,
Jan 2004
[5] BizMiner, December 203, Bay Area Women's Clothing Store Data, 2001-2003
[6] 2003 National Retail Security Survey, NRF
[7] Daniel Barry, Merrill Lynch Senior Retail Analyst/Broadlines

4.3.1 Competition and Buying Patterns

De Kliek has stiff local competition with the many wonderful boutiques in Los Angeles. Direct
competitors include those boutiques that carry some of the brands that De Kliek plans on
carrying or could move easily into carrying, and are located in the Valley. Indirect competitors
are those boutiques in LA that focus on a different target market or do not carry lines that De
Kliek will carry, in addition to well-known boutiques in other metropolitan areas.

De Kliek's own comparative analysis of 15 boutiques in Los Angeles reveals that very few are
successful in delivering high-quality customer service, as browsers are routinely ignored. It
appears that if you don't look a certain way or show that you have money when you walk in, you
are immediately disregarded. Dressing rooms are typically small and have curtains that don't
guarantee 100% privacy. Clothing sizes tend to run small and items tend to be overpriced. Even
with a lot of focus in the media and among fashion retailers on what to wear, not one boutique
in town is a member of the Association of Image Consultants - a very prestigious professional
organization whose members work with and train clients in developing their image. There are
some retailers who do get it right - they have strong customer relationships, carry the right mix of
merchandise, are knowledgeable in fashion - and the profits show.

Direct Competition:
 • Fish
• Fred Segal
• Girl and Her Dog
• Margaret O'Leary
• Dress
• Rabat
• Riki
• Susan of Burlingame
• The Grocery Store

Indirect Competition:

• Abigail Morgan
• Ambiance
• eLuxury.com
• Her
• The Designer's Club
• Yoya Boutique
• All other LA Boutique Retailers

Main Competition:
From a "look & feel" perspective, as well as consideration of designer lines that De Kliek will
carry, Dish in Hayes Valley is considered the main competition. The following is a
comparative analysis of Fish and De Kliek:

Location:

Fish De Kliek
Open Mon-Fri 11-7, Sat 10-6, Sun
Open Mon-Sat 11-6, Sun 12-5
11-5
Plenty of places in Los Angeles cater
The location for De Kliek has not
to the well-heeled, but this area also
been confirmed but top targets are
reaches out to the adventurously
areas in which the target market
heeled -- and dressed.
lives and/or shops.

Products:

Fish De Kliek
Fish's collections largely come De Kliek will carry sophisticated, quality
from American designers such lines from European and American
as Nanette Lepore, Lauren designers such as Herr Frau, Weekend
Moffat, Vince and Katayone MaxMini, Hocken, Vince and Catherine
Adeli the Great.
Customer Service

Fish De Kliek
The owner of Fish is fashionable and De Kliek will provide quality
knowledgeable. She is considerate of customer service including
her customers and allows them the alterations, gift wrapping, Style
space to shop on their own (a very Assessments, trunk shows and
important aspect for women!) special workshops.

Features/Atmosphere

Fish De Kliek
Sleek and modern interior De Kliek's interior will reflect a minimalist
with a warehouse feel. There look, yet be accommodating and warm so
are three dressing rooms with that all products are featured appropriately.
linen curtains that pull a bit The dressing rooms will have wood
from the walls so privacy is louvered doors to maintain privacy and will
not 100% guaranteed. have chairs outside for friends to sit down.

Competitive Benchmarks [1]

The competition in the Valley does provide some good benchmarks for projecting sales and
understanding customer expectations. In the Valley, Ambivalence, a junior/contemporary
boutique, averages sales that top $1,300 per square foot which totals more than $900,000 in sales
annually. Nearby, Ennui generates annual sales of $1.3 million with approximately 800 square
feet of selling space; that translates to more than $1,600 per square foot. However, it is important
to note that not all of Ennui sales are generated from the selling floor; a considerable amount of
sales come from special orders. With these successful Los Angeles retailers as benchmarks, De
Kliek will continue to monitor them for best practices. Additionally, there are a few very
successful boutiques in San Francisco, New York and Florida that are worth mentioning as
benchmarks for successful retailing and merchandising.

• Brown-Eyed Girl, San Francisco

• Heidi Says, San Francisco

• Marissa Collections, Florida

 • Language, New York

Strategy and Implementation Summary

Based on extensive research conducted on women's shopping behaviors as well as De Kliek's
own research among Los Angeles women, the following marketing strategies will be employed:

• Develop strong relationships with customers by utilizing Style Assessment and offering
services to help each woman determine the right clothes for her.

• Provide educational materials and programs that enable customers greater decision-
making confidence.

• Build awareness of brand and services to exemplify strong store reputation.

• Provide customers with a sense of access to "inside information" and harness the power
of a woman's personal network by leveraging marketing collateral designed for sharing
and encouraging referrals.

• Utilize personal referrals and stylists to build traffic.

5.1 Sales Strategy

Product/Service Selection
To overcome seasonality concerns, De Kliek will carry 20 percent of merchandise in fashion and
wardrobe accessories. Additionally, De Kliek will provide alterations, personal shopping
services and special ordering for our customers. Special Orders are a huge benefit as De Kliek
obtains full-price sell-through and there is no floor space needed to sell the article.

Pricing
42% of households with a $75K income agree, "When I really want something, price is no
object." [1]
At De Kliek, we are very committed to bringing high quality clothing to women and the prices
will reflect a range of mid-to-high pricing. Average price points will be around $200. To
maintain profit margins of 20%, De Kliek will negotiate and focus on obtaining an average 61%
retail markup for all merchandise classifications.

Location
De Kliek will be located in an upscale neighborhood in Los Angeles. A significant proportion of
the target market lives in this area. De Kliek will work with the local merchants association as
well as local publications to generate PR and shopping in the neighborhood. De Kliek will also
attract women from throughout other Los Angeles neighborhoods as well as the few women who
come to LA from out of town to shop.

De Kliek will launch in July 2004 and have a website presence where fashionable customers
throughout the country can go to learn more about the boutique, the Style Assessment, how to
wear certain items for day, evening and weekend, and make personal shopping appointments.

Style Concierges
Most women are intimidated by upscale fashion boutiques, as many sales associates can come
across rude and snobby. Additionally, the sales pressure from an associate can be a huge turn-off
to a potential customer as it doesn't allow a woman to browse and get to know the store's
products at her own pace.

De Kliek will have three store associates, or "style concierges:" myself, an assistant manager,
and a PT employee (both still to be hired).

5.1.1 Sales Forecast

The appropriate merchandise -- and the right amount of merchandise-- are critical in building a
successful clothing boutique. De Kliek will carry 15 merchandise classifications in addition to
the Style Assessment. Each month, the sales forecast and open-to-buy (OTB) plan will be
reviewed with De Kliek's inventory service provider, Retail Merchandising Service Automation
(RMSA), against the previous month's sales to ascertain any adjustments and make the
appropriate changes. As Open-to-Buy is planned, the percentage of merchandise that is new (i.e.,
Fresh ratio) will also be considered to ensure that the inventory is, on average, around 40-50%
fresh.

Fall/Winter sales are forecasted at $272,141 for the rest of 2004 and $513,500 for FY2005,
with an average monthly sales goal of $46,600. The summarized forecast for the Fall season is
listed below:

Sales Highlights, Fall/Winter Season FY2005

- Aug Sept Oct Nov Dec Jan

Sales $36,450 $43,740 $50,301 $46,780 $60,814 $34,056
% Increase - 20% 15% -7% 30% -44%
Weeks/ Month 4 5 4 4 5 4
Sales/ Week $9,113 $8,748 $12,575 $11,695 $12,163 $8,514
Sales/ Day $1,302 $1,250 $1,796 $1,671 $1,738 $1,216

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Sales Forecast
Year 1 Year 2 Year 3 Year 4 Year 5
Sales
Casual Tops $47,880 $55,288 $55,841 $56,400 $56,964
Blouses $41,356 $48,039 $48,519 $49,736 $50,482
Sweaters $37,343 $43,721 $44,377 $45,043 $45,718
Knits $39,160 $45,622 $46,534 $47,465 $48,414
Pants $43,707 $50,972 $51,737 $52,513 $53,301
Skirts $33,839 $39,904 $40,703 $41,517 $42,347
Dresses $26,110 $30,710 $31,017 $31,327 $31,641
Denim $29,974 $35,737 $36,451 $37,180 $37,924
Separates $20,024 $23,824 $24,301 $24,787 $25,282
Jackets/Blazers $25,450 $30,679 $31,292 $31,918 $32,556
Coats/Outerwear $22,211 $26,520 $27,050 $27,591 $28,143
Fashion Accessories $53,372 $62,243 $63,799 $65,394 $67,029
Jewelry $22,850 $26,836 $27,238 $27,647 $28,061
Personal Care $11,983 $14,164 $14,306 $14,449 $14,593
Wardrobe Accessories $17,737 $21,032 $21,243 $21,455 $21,670
Style Assessments $2,767 $2,976 $3,036 $3,097 $3,159
Special Orders $36,250 $39,525 $40,316 $41,122 $41,944
Alterations $1,490 $1,611 $1,643 $1,676 $1,709
Total Sales $513,503 $599,403 $609,402 $620,315 $630,937
Direct Cost of Sales Year 1 Year 2 Year 3 Year 4 Year 5
Casual Tops $20,588 $23,774 $24,012 $24,614 $24,983
Blouses $17,370 $20,176 $20,378 $20,889 $21,202
Sweaters $15,684 $18,272 $18,455 $18,918 $19,202
Knits $16,447 $18,973 $19,163 $19,643 $19,938
Pants $17,483 $20,288 $20,491 $21,005 $21,320
Skirts $13,874 $16,200 $16,362 $16,773 $17,024
Dresses $9,922 $11,670 $11,787 $12,082 $12,263
Denim $11,990 $14,155 $14,296 $14,655 $14,874
Separates $8,010 $9,436 $9,531 $9,770 $9,916
Jackets/Blazers $10,689 $12,759 $12,886 $13,209 $13,408
Coats/Outerwear $7,996 $9,454 $9,548 $9,788 $9,934
Fashion Accessories $18,680 $21,466 $21,681 $22,225 $22,558
Jewelry $7,998 $9,346 $9,440 $9,676 $9,821
Personal Care $4,793 $5,666 $5,722 $5,866 $5,954
Wardrobe Accessories $7,095 $8,413 $8,497 $8,710 $8,841
Style Assessment $1,107 $1,179 $1,191 $1,221 $1,239
Special Orders $14,500 $15,655 $15,812 $16,208 $16,451
Alterations $596 $638 $644 $660 $670
Subtotal Direct Cost of Sales $204,820 $237,520 $239,896 $245,911 $249,600

5.1.2 Year One Sales Plan

Objective #1 - Sell $600,000 of merchandise in Year 1

Build awareness of brand and services to exemplify strong

store reputation

Provide customers with a sense of access to "inside

Strategies:
information" and harness the power of a woman's personal
network

Utilize personal referrals and stylists to build traffic

Tactics: -
Strengthen the customer relationship via events and special
communications
Promotion:
Hold two large sales a year: winter and summer
Web: Promote key merchandise & events on the website
Direct: Send out monthly email newsletter to customers
Develop working relationships with 2-3 personal stylists

Become an active member of AICI

Personal
Selling: Provide personal appointments

Train Style Concierges to provide exceptional service and

exhibit patience in the selling process with women
Hold Launch event/party - Invite VIPs and LA Socialites

Hold unique after-hours shopping events (Mother-

Events:
Daughter night, Travel Planning, Girls Night Out, etc.)

Hold Fall & Spring events

Get voted as one of best places to shop on Citysearch and
in Lucky magazine

PR: Get featured in Los Angeles travel & shopping guides

Send press kits to, and hold interviews with, top

publications

Objective #2 - Generate 10% of Sales from Special Orders

 Provide educational materials and programs that enable
customers greater decision-making confidence
Strategies:
Provide customers with a sense of access to "inside
information" and harness the power of a woman's personal
network
Tactics: -
Provide overview of how a special order works on the
Web:
website
Direct: Announce events through postcard to best customers
Personal Have Style Concierges communicate the opportunity with
Selling: their best customers
Hold four trunk shows a year

Events: Hold "Bring Your Man" night and sell clothing from lines
that carry men's lines (Ensure men know about gift
assistance!)

Objective #3 - Garner In-Depth Understanding of Customers

Develop strong relationships with customers by utilizing

Style Assessment and offering services to help them
determine the right clothes for them
Strategies:
Provide educational materials and programs that enable
customers greater decision making confidence
Tactics: -
Promote gift giving during key holidays (Christmas,
Promotion: Valentine's & Mother's Day) and utilize assessments to assist
gift givers in purchasing the appropriate gift
Web: Offer the assessment on www.dekliekstylestudio.com
Integrate style personalities and other key information into
customer database and develop customer segments
Direct:
Create awareness of assessment through emails to customers
In-Store: List the style personality numbers on each merchandise tag to
generate interest and awareness of the Style Assessment
 Provide overview of Style Assessment in dressing rooms

Tailor merchandise offerings to specific Style personalities

Events: Hold monthly Style Assessment workshops

5.2 Competitive Edge

Although De Kliek will bring high-quality clothing and value to Los Angeles women, the most
significant competitive advantage De Kliek will have over all competitors is dedication to
providing an approachable retail atmosphere with top-notch customer service. De Kliek's unique
selling proposition is the integrated concept of personal style services: from events and bios that
educate shoppers on designers, to personalized Style Assessments, on-site alterations, and our
own unique Style Concierges and wardrobe accessories. In contrast to many other boutiques, De
Kliek will become a corporate member of the Association of Image Consultants so that our Style
Concierges learn from the nation's best on image consulting.

5.3 Marketing Strategy

Positioning Statement
De Kliek provides professional women with upscale designer clothing and exclusive personal
services. Our main competitive advantage is the unique Style Assessment and education
emphasis in helping women develop their personal style.

Brand Positioning
'De Kliek' is Dutch for a grouping or circle of friends, a "clique." Building on the meaning of
"kliek," circles are part of the logo, which defines the boutique, and its essence of inclusion.
Style Studio is added to the overall name to suggest that women can come to the boutique to
learn about themselves and experiment with their personal style. By combining these two
meanings, De Kliek Style Studio looks to be the leader in providing exceptional service and
assistance for women's fashion needs. The elegance of the name suggests the types of clothing
and accessories that will be featured.

BRAND PERSONALITY

Innovative | Stylish | Contemporary | Modern | Fresh | Approachable | Elegant

The overall brand personality of De Kliek aspires to be fashionable, customer-oriented,

innovative, refreshing, stylish and educational. The boutique is a place where women can go to
transform themselves with beautiful clothes and take advantage of the Style Assessment and
other services that help them determine the right clothes for their unique selves. We are a shop
that educates. We help women learn about the designers, gather with their friends, and have fun
during the process. We not only carry items that help them look good, but we also help our
customers maintain these items. Owner Vrootje Magen will work with her top design advisors to
create the atmosphere, colors and wording that encapsulates these thoughts.
Promotion
The following promotional tactics for generating buzz and awareness about De Kliek will be
implemented:

• Personal selling and word of mouth via networks of friends, stylists and customers
• Unique visual displays in storefront on a weekly basis
• PR (local and national)
• Boutique email newsletters
• Direct mail such as postcard notices that are targeted specifically to the customer
• Sales Promotion such as store events and bi-annual sales
• De Kliek Web Site
• Advertising will be at a minimum with regular ad placements in the Valley Voice

Other important marketing strategies, such as developing strong customer relationships

(retention), will utilize a different mix of marketing programs.

5.4 Milestones

Fall season Marketing calendar:

Date and Tactic

• June-July -- PR Media Kits and Local/National PR outreach to Paper City, LA Chronicle,

LA neighborhood paper, W, Vogue, Lucky and Marie Claire
• July 15 -- Launch Party and Event
• July 17 -- Grand Opening
• August -- Fall Fashion Show at AICI Meeting (300-500 people)
• September -- Style Assessment Workshop
• October -- Mother-Daughter Night; Style Assessment Workshop
• November -- Holiday Hair Workshop; Style Assessment Workshop

Management Summary
Management Expertise

Vrootje Magen | Owner

Vrootje Magen has 20 years of work experience that is directly relevant to managing and
operating a successful clothing boutique. The first eight years of her professional work
experience were spent in retail sales and banking, and the last 12 years have been dedicated to a
professional career in marketing. The sum of these experiences truly integrates the key
disciplines for running a successful business: sales, finance, and management.

Ms. Magen's initial experiences in retail and business sales were formative insofar as they helped
her early on to understand how to best work with all types of personalities, meet individual needs
through listening, and develop strong creative problem-solving skills. Much of this experience
was spent "in the trenches," developing practical skills on the floor at retailers including
JCPenney, Gottshchalks and Ann's Boutique. She has an understanding of what it takes to work
in a retail environment, from stocking the sales floor and utilizing loss prevention skills, to
ringing up a sale and counting back cash, and most importantly, reading a customer. Her five
years as a Financial Service Representative at two banks directly benefit the day-to-day
operations of the boutique.

With a successful and award-winning career in corporate marketing for the last 12 years,
Ms. Magen understands how to create successful communications and marketing strategies and
have experience marketing fashion for top retailers, such as Levi Strauss and Gap Inc. Much of
this work involved developing and maintaining high profile campaigns that were structured
around generating increased customer sales within the store environment and through sales
associate training. She has led successful teams, which involved qualified and thoughtful
selection of employees and consultants to help ensure the success of a project.

Her current efforts toward opening De Kliek Style Studio have heavily depended on all the skills
and abilities that she has developed in her past professional lives. Her combined skills and
knowledge of the right types of clothing a woman should wear based on her body type and
personality are enhanced by her retail experience, and her current training within the Association
of Image Consultants International for the last two years has solidified her expertise.

Ms. Magen is extremely dedicated and motivated to creating a thriving clothing boutique and
feels confident in succeeding based on her well-rounded experience, established sound vendor
and customer relationships, and strong work ethic.

Team of Advisors

Lisa Bakke, Certified Image Professional

As a personal stylist, Lisa Bakke has helped people look and feel great for fifteen years. Known
as the Shopping Sherpa, she is dedicated to leading people to their style destination. Lisa was
born with a remarkable, discerning "eye" for beauty and detail and started winning national art
awards at age twelve.

Lisa graduated from Colorado College in 1979 with a bachelor's degree in art and education. By
1989, Lisa played a key role in launching a women's ready-to-wear line by designing, marketing
and selling it via hugely successful trunk shows. It was then that she recognized women wanted
one-on-one attention in helping them determine their optimal clothing designs and colors. In
2000-2001, Lisa served as president of a prestigious international organization for image
consultants. She is also the editor of a 12-page publication for image consultants. Today, Lisa
regularly shops for clients in Paris.

Rilke Szanku, Creative Director & Principal, Blue42

Throughout her 15 years of experience in the design industry, Rilke Szanku has found that her
best work has harnessed the power of striking visuals grounded in solid strategy to meet client
objectives. She founded Blue42 to provide cutting edge print and web design. Prior to founding
Blue42, Rilke was the Creative Director at COmpany X. Her work for top clients has been
widely acclaimed.
Nicco Q. Smore, Architecture & Design
Nicco Smore received his B.A. from Florida State University in 1991 and his Masters in
Architecture from the University of Florida in 1997. Since 1998 he has worked for Big
Architecture in California and has been involved in the design and construction of diverse project
types, including educational, civic, and religious facilities, as well as several residential projects.
Much of his current work includes design and construction administration of renovation, and
modernization of existing secondary educational facilities.

Schulden F. Kopff, CPA

Schulden Kopff has been a CPA for more than ten years and is certified in two states (California
& Missouri). [Private information removed for confidentiality.] Mr. Kopff currently operates his
own tax practice in Los Angeles.

Fanny Packer, Attorney

Fanny Packer, J.D., M.B.A., C.P.A., is an attorney in independent practice who provides
business law counseling and transactional support to entrepreneurs and growing business
organizations. Fanny is an experienced professional who has worked in the legal profession since
1998, and has been heavily involved in sophisticated business transactions and major business
contract negotiations in various roles for over 20 years. Her core legal competencies are in
corporate, contracts, intellectual property, and commercial real estate law.

Gordon Grido, VP Merchandising Analyst, RMSA

De Kliek is working with Merchandising Analyst Gordon Grido to develop a specific plan that
will guide the company through making purchasing decisions, as well as planning and inventory
management. Gordon has been with Retail Merchandising Service Automation (RMSA) for 17
years, working with LA Area retailers similar to De Kliek. His focus is to enable merchants to
make merchandising decisions that keep a healthy cash flow with maximum profitability as the
main goal of business operations.

RMSA has maintained its status as the leading provider of inventory management and
forecasting tools for retail businesses nationwide. RMSA Forecasting is a merchandise planning
service that combines information from a retailer's sales and inventory with RMSA's
extraordinary retail database to help retailers forecast and improve the performance of their retail
operations.

Hugh Enmity, Fashion & Merchandising Instructor, Academy of Art

Mr. Enmity has spent over 20 years in retail as an executive with a leading traditional department
store (Macy's), off-price chain (Ross Stores) and mall-based chain store (Footlocker). His
background is primarily in Menswear with extensive experience in tailored clothing, shoes,
sportswear, activewear, dress furnishings and basic furnishings.

Astrix Komma, Copywriter/Creative Consultant

With nearly 20 years of solid direct response, advertising and Web experience for agency
powerhouses up and down the West Coast, Astrix Komma has been a lead creator on high profile
marketing campaigns. Her creative work has won numerous industry awards including a Clio
and Communication Arts award and a host of direct marketing accolades, including multiple
John Caples awards.

7.1 Personnel Plan

34% of Americans in 2002 cite having "neat and attractive salespeople" as a reason they decide
to shop where they do, compared to 29% in 2000. [Yankelovich Monitor, "Getting the Goods,"
May 2003]

The personnel plan is included in the table, below. In addition to the owner, there will be one
part-time (30 hours/week) Assistant Manager and two part-time Style Concierges by the end of
the first year. The Assistant Manager will be paid at a rate of $20.00 per hour and the part-time
Style Concierges will be paid at a rate of $15.00 per hour, plus benefits.

Employees of De Kliek will be paid competitively and will receive in-depth store training and
membership into the Association of Image Consultants International (AICI). Additionally,
employees will receive special store benefits including:

• 30% Store Discount

• One free outfit a month (an outfit is defined as a top and bottom or dress)
• Special monthly bonuses as sales goals are met
• Paid Holidays
• Paid Time Off (PTO) based on # of hours worked

As De Kliek grows, medical insurance will be provided to full-time employees.

My philosophy is to empower my staff to do the best they can and give them the freedom to do
so. Inevitably, they will make mistakes and if they don't make mistakes, they don't learn. I will
lead by delegation but I won't let them "hang themselves." As a manager, I will provide
appropriate objectives, guide them throughout the process (utilizing Management by Objectives)
and help them make decisions based on the company philosophy. I believe in recognizing good
work and letting my staff know that I value and appreciate them when a job is well done. I have
confidence my philosophy will not only attract smart and loyal employees, but also develop
strong mutual respect, as they will feel that their ideas are valued and that they are respected.

De Kliek will provide in-depth training to new staff, which will include education on the
designers, products & services offered, and systems and procedures to follow. There will also be
employee manuals provided to support the training as well as examples set by the owner and
assistant store manager on customer service. Special awards will be given for great customer
service and knowledge imparted.

Personnel Plan
Year 1 Year 2 Year 3 Year 4 Year 5
Owner $73,000 $76,000 $90,000 $90,000 $95,000
Assistant Manager $39,600 $42,000 $43,500 $44,500 $46,000
Style Concierge $18,400 $4,000 $4,000 $5,000 $5,000
Total People 3 4 4 4 4
Total Payroll $131,000 $122,000 $137,500 $139,500 $146,000

Financial Plan
De Kliek looks to bring in annual sales of $600,000 with an operating profit margin of 20%.
Gross margins are at 51%, which is 6 percentage points higher than the retail industry average
but in line with retail boutique averages. Overall, De Kliek projects to reinvest net profits of 5%
into the company for service enhancements and growth initiatives.

First-year cash flows are positive due to the cash-based business of De Kliek. De Kliek remains
very liquid with no Current Liabilities forecasted for the year ending June 30, 2005. Startup costs
are estimated at $132,700 with almost half of these costs going to startup inventory. See the
Start-up Table, above, for details.

8.1 Important Assumptions

Payroll burden is calculated at 12.65% made up of 7.65% social security, 2% unemployment,

and 3% worker's compensation. Payables are assumed to reach levels equal to one month's
operating expenses. Long-term interest rates have been based on current SBA loan rates.

General Assumptions
Year 1 Year 2 Year 3 Year 4 Year 5
Plan Month 1 2 3 4 5
Current Interest Rate 7.96% 10.26% 7.96% 10.26% 7.96%
Long-term Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00%
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0

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8.2 Break-even Analysis

Cost of goods for the break-even are based on line sheets from the vendors that De Kliek plans to
carry. In addition, De Kliek plans to maintain an average 60% retail markup. De Kliek plans to
maintain sales revenues well above the break-even level noted below.
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Break-even Analysis
Monthly Revenue Break-even $34,501
Assumptions:
Average Percent Variable Cost 40%
Estimated Monthly Fixed Cost $20,740

8.3 Projected Profit and Loss

The projected Profit and Loss for five years is detailed in the table and charts following. Some
assumptions and inclusions to be noted are included in the Appendix.
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Pro Forma Profit and Loss

Year 1 Year 2 Year 3 Year 4 Year 5
Sales $513,503 $599,403 $609,402 $620,315 $630,937
Direct Cost of Sales $204,820 $237,520 $239,896 $245,911 $249,600
Other Costs of Goods $0 $0 $0 $0 $0
Total Cost of Sales $204,820 $237,520 $239,896 $245,911 $249,600
Gross Margin $308,683 $361,883 $369,507 $374,404 $381,337
Gross Margin % 60.11% 60.37% 60.63% 60.36% 60.44%
Expenses
Payroll $131,000 $122,000 $137,500 $139,500 $146,000
Advertising $4,800 $4,800 $4,800 $4,800 $4,800
Depreciation $4,889 $4,889 $4,889 $4,889 $4,889
Amortization - Startup Costs $5,500 $5,500 $5,500 $5,500 $5,500
Bank Service Charges $480 $480 $480 $480 $480
Dues & Subscriptions $600 $600 $600 $600 $600
Education & Training $1,200 $1,500 $2,000 $2,000 $2,000
Insurance - Workman's Comp $3,372 $3,500 $3,600 $3,800 $4,000
Insurance - property & liability $6,204 $6,200 $6,300 $6,500 $6,500
Interest Expense - LT Loan $4,716 $4,716 $4,716 $4,716 $4,716
License & Permits $110 $0 $0 $0 $0
Maintenance - Office $2,400 $2,400 $2,400 $2,400 $2,400
Marketing and PR $9,600 $10,000 $10,000 $10,000 $10,000
Miscellaneous $3,600 $3,600 $3,600 $3,600 $3,600
Payroll - Charges $797 $800 $800 $800 $800
Postage & Delivery $600 $600 $600 $600 $600
Printing & reproduction $1,200 $1,200 $1,200 $1,200 $1,200
Prof Fees - Accounting $1,500 $1,500 $1,500 $1,500 $1,500
Prof Fees - Legal $1,000 $500 $500 $500 $500
Rent $36,000 $36,000 $36,000 $40,000 $40,000
Repairs $600 $600 $600 $600 $600
Security $348 $350 $350 $350 $350
Supplies - Office & Store $4,200 $4,200 $4,200 $4,200 $4,200
Travel & Entertainment $8,500 $10,000 $10,000 $10,000 $10,000
Telephone / Internet Access $1,440 $1,440 $1,440 $1,440 $1,440
Utilities $2,100 $2,100 $2,100 $2,100 $2,100
Payroll Taxes $720 $10,515 $10,890 $11,490 $12,015
Employee Benefits $9,000 $9,100 $9,100 $10,100 $10,100
Other $2,400 $2,400 $2,400 $2,400 $2,400
Total Operating Expenses $248,876 $251,490 $268,065 $276,065 $283,290
Profit Before Interest and Taxes $59,806 $110,393 $101,442 $98,339 $98,047
EBITDA $64,696 $115,282 $106,331 $103,228 $102,936
Interest Expense $6,753 $5,963 $5,138 $4,314 $3,489
Taxes Incurred $15,916 $31,329 $28,891 $28,208 $28,367
Net Profit $37,137 $73,101 $67,412 $65,818 $66,191
Net Profit/Sales 7.23% 12.20% 11.06% 10.61% 10.49%

8.4 Projected Cash Flow

The projected Cash Flow for five years is detailed in the table and chart following. In addition, it
should be noted that De Kliek will establish relationships with vendors and/or representatives to
determine the following to maintain cash flow:
 • Average price points – this will help ensure that a good mix of prices are maintained.

• Delivery time frame & reliability – this will be crucial to ensure maximization of profits
during the key shopping time frames. For Italian designers who may live up to the Italian
notoriety for being late in deliveries, De Kliek will request the earliest possible delivery
from them and also ensure they will be open to discounts if deliveries are late.

• Shipping and transportation policies.

• Market demand and turn rates – typically the vendor should know their end customer and
be able to share that information so it aligns with my target market as well as helps me
determine how much is appropriate to buy.

• Payment terms and agreements –The goal is to be at Net 30 but I expect vendors to
understand that De Kliek is a new boutique and will work with De Kliek to get the store
at Net 30 terms with them within one season.

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Pro Forma Cash Flow

Year 1 Year 2 Year 3 Year 4 Year 5
Cash Received
Cash from Operations
Cash Sales $513,503 $599,403 $609,402 $620,315 $630,937
Subtotal Cash from Operations $513,503 $599,403 $609,402 $620,315 $630,937
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0
Subtotal Cash Received $513,503 $599,403 $609,402 $620,315 $630,937
Expenditures Year 1 Year 2 Year 3 Year 4 Year 5
Expenditures from Operations
Cash Spending $131,000 $122,000 $137,500 $139,500 $146,000
Bill Payments $275,075 $404,006 $400,156 $409,729 $414,040
Subtotal Spent on Operations $406,075 $526,006 $537,656 $549,229 $560,040
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $10,308 $10,308 $10,308 $10,308 $10,308
Purchase Other Current Assets $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0
Dividends $1,000 $1,000 $1,500 $1,500 $1,000
Subtotal Cash Spent $417,383 $537,314 $549,464 $561,037 $571,348
Net Cash Flow $96,120 $62,089 $59,938 $59,277 $59,589
Cash Balance $103,620 $165,709 $225,647 $284,924 $344,513

8.5 Projected Balance Sheet

All financials will be updated monthly to reflect past performance and future assumptions.
Future assumptions will be based on our inventory plans from Retail Merchandising Service
Automation (RMSA), economic cycle activity, regional retail indicators, apparel trends, and
future cash flow. De Kliek works with both an Accountant and CPA whom both have personal
and professional experience in retail operations. We expect solid growth in net worth beyond the
first fiscal year of operation.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3 Year 4 Year 5
Assets
Current Assets
Cash $103,620 $165,709 $225,647 $284,924 $344,513
Inventory $24,003 $27,835 $28,113 $28,616 $29,106
Other Current Assets $0 $0 $0 $0 $0
Total Current Assets $127,622 $193,544 $253,760 $313,541 $373,620
Long-term Assets
Long-term Assets $24,599 $24,599 $24,599 $24,599 $24,599
Accumulated Depreciation $4,889 $9,778 $14,667 $19,556 $24,445
Total Long-term Assets $19,710 $14,821 $9,932 $5,043 $154
Total Assets $147,332 $208,364 $263,692 $318,583 $373,773
Liabilities and Capital Year 1 Year 2 Year 3 Year 4 Year 5
Current Liabilities
Accounts Payable $33,904 $33,143 $32,867 $33,749 $34,056
Current Borrowing $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0
Subtotal Current Liabilities $33,904 $33,143 $32,867 $33,749 $34,056
Long-term Liabilities $79,692 $69,384 $59,076 $48,768 $38,460
Total Liabilities $113,596 $102,527 $91,943 $82,517 $72,516
Paid-in Capital $42,707 $42,707 $42,707 $42,707 $42,707
Retained Earnings ($46,108) ($9,971) $61,630 $127,542 $192,360
Earnings $37,137 $73,101 $67,412 $65,818 $66,191
Total Capital $33,736 $105,837 $171,749 $236,067 $301,257
Total Liabilities and Capital $147,332 $208,364 $263,692 $318,583 $373,773
Net Worth $33,736 $105,837 $171,749 $236,067 $301,257

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8.6 Business Ratios

Standard business ratios are included in the following table. The ratios show a plan for balanced,
healthy growth. Industry profile ratios based on the Standard Industrial Classification (SIC) code
5621, Women's Clothing Stores, are shown for comparison.

Ratio Analysis
Year 1 Year 2 Year 3 Year 4 Year 5 Industry Profile
Sales Growth 0.00% 16.73% 1.67% 1.79% 1.71% 2.95%
Percent of Total Assets
Inventory 16.29% 13.36% 10.66% 8.98% 7.79% 55.38%
Other Current Assets 0.00% 0.00% 0.00% 0.00% 0.00% 25.29%
Total Current Assets 86.62% 92.89% 96.23% 98.42% 99.96% 88.70%
Long-term Assets 13.38% 7.11% 3.77% 1.58% 0.04% 11.30%
Total Assets 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Current Liabilities 23.01% 15.91% 12.46% 10.59% 9.11% 24.77%
Long-term Liabilities 54.09% 33.30% 22.40% 15.31% 10.29% 5.35%
Total Liabilities 77.10% 49.21% 34.87% 25.90% 19.40% 30.12%
Net Worth 22.90% 50.79% 65.13% 74.10% 80.60% 69.88%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Gross Margin 60.11% 60.37% 60.63% 60.36% 60.44% 41.89%
Selling, General & Administrative Expenses 40.82% 41.05% 41.07% 41.51% 41.52% 21.02%
Advertising Expenses 0.00% 0.00% 0.00% 0.00% 0.00% 3.78%
Profit Before Interest and Taxes 11.65% 18.42% 16.65% 15.85% 15.54% 3.15%
Main Ratios
Current 3.76 5.84 7.72 9.29 10.97 3.37
Quick 3.06 5.00 6.87 8.44 10.12 0.87
Total Debt to Total Assets 77.10% 49.21% 34.87% 25.90% 19.40% 40.19%
Pre-tax Return on Net Worth 157.26% 98.67% 56.07% 39.83% 31.39% 7.14%
Pre-tax Return on Assets 36.01% 50.12% 36.52% 29.51% 25.30% 11.93%
Additional Ratios Year 1 Year 2 Year 3 Year 4 Year 5
Net Profit Margin 7.23% 12.20% 11.06% 10.61% 10.49% n.a
Return on Equity 110.08% 69.07% 39.25% 27.88% 21.97% n.a
Activity Ratios
Inventory Turnover 7.93 9.16 8.58 8.67 8.65 400.00%
Accounts Payable Turnover 9.11 12.17 12.17 12.17 12.17 n.a
Payment Days 27 30 30 30 30 n.a
Total Asset Turnover 3.49 2.88 2.31 1.95 1.69 n.a
Debt Ratios
Debt to Net Worth 3.37 0.97 0.54 0.35 0.24 100.00%
Current Liab. to Liab. 0.30 0.32 0.36 0.41 0.47 n.a
Liquidity Ratios
Net Working Capital $93,718 $160,400 $220,893 $279,792 $339,564 n.a
Interest Coverage 8.86 18.51 19.74 22.80 28.10 n.a
Additional Ratios
Assets to Sales 0.29 0.35 0.43 0.51 0.59 n.a
Current Debt/Total Assets 23% 16% 12% 11% 9% n.a
Acid Test 3.06 5.00 6.87 8.44 10.12 n.a
Sales/Net Worth 15.22 5.66 3.55 2.63 2.09 n.a
Dividend Payout 0.03 0.01 0.02 0.02 0.02 n.a

Appendix
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
Casual Tops 0% $0 $3,360 $4,150 $4,650 $4,400 $5,132 $3,600 $3,650 $4,300 $4,800 $4,888 $4,950
Blouses 0% $0 $2,915 $3,570 $4,035 $3,700 $4,449 $3,000 $3,150 $3,700 $4,300 $4,237 $4,300
Sweaters 0% $0 $2,650 $3,220 $3,670 $3,400 $4,300 $2,600 $2,800 $3,350 $3,600 $3,853 $3,900
Knits 0% $0 $2,750 $3,350 $3,810 $3,500 $4,600 $2,800 $2,950 $3,500 $3,800 $4,000 $4,100
Pants 0% $0 $3,090 $3,800 $4,275 $4,100 $5,100 $3,000 $3,100 $3,900 $4,300 $4,492 $4,550
Skirts 0% $0 $2,405 $3,000 $3,300 $3,150 $4,000 $2,300 $2,350 $3,000 $3,285 $3,499 $3,550
Dresses 0% $0 $1,875 $2,200 $2,590 $2,300 $3,200 $1,700 $1,800 $2,400 $2,550 $2,720 $2,775
Denim 0% $0 $2,155 $2,500 $2,980 $2,730 $3,600 $1,900 $2,025 $2,750 $3,000 $3,134 $3,200
Separates 0% $0 $1,445 $1,650 $1,990 $1,800 $2,500 $1,200 $1,350 $1,800 $2,000 $2,089 $2,200
Jackets/Blazers 0% $0 $1,850 $2,200 $2,560 $2,300 $3,300 $1,400 $1,600 $2,300 $2,500 $2,690 $2,750
Coats/Outerwear 0% $0 $1,600 $1,800 $2,211 $1,900 $2,700 $1,500 $1,600 $2,000 $2,200 $2,325 $2,375
Fashion Accessories 0% $0 $3,740 $4,600 $5,170 $5,100 $6,000 $3,800 $3,950 $4,800 $5,300 $5,432 $5,480
Jewelry 0% $0 $1,635 $2,000 $2,250 $1,950 $3,500 $1,200 $1,350 $2,000 $2,200 $2,365 $2,400
Personal Care 0% $0 $900 $950 $1,180 $900 $1,600 $700 $900 $1,100 $1,150 $1,253 $1,350
Wardrobe Accessories 0% $0 $1,275 $1,450 $1,750 $1,500 $2,400 $1,100 $1,200 $1,600 $1,700 $1,862 $1,900
Style Assessments 0% $0 $205 $230 $250 $264 $290 $226 $282 $230 $264 $261 $265
Special Orders 0% $0 $2,500 $2,950 $3,500 $3,650 $4,000 $1,900 $2,000 $3,950 $3,300 $4,000 $4,500
Alterations 0% $0 $100 $120 $130 $136 $143 $130 $151 $145 $144 $136 $155
Total Sales $0 $36,450 $43,740 $50,301 $46,780 $60,814 $34,056 $36,208 $46,825 $50,393 $53,236 $54,700
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
Casual Tops $0 $1,445 $1,785 $2,000 $1,892 $2,207 $1,548 $1,570 $1,849 $2,064 $2,102 $2,129
Blouses $0 $1,224 $1,499 $1,695 $1,554 $1,869 $1,260 $1,323 $1,554 $1,806 $1,780 $1,806
Sweaters $0 $1,113 $1,352 $1,541 $1,428 $1,806 $1,092 $1,176 $1,407 $1,512 $1,618 $1,638
Knits $0 $1,155 $1,407 $1,600 $1,470 $1,932 $1,176 $1,239 $1,470 $1,596 $1,680 $1,722
Pants $0 $1,236 $1,520 $1,710 $1,640 $2,040 $1,200 $1,240 $1,560 $1,720 $1,797 $1,820
Skirts $0 $986 $1,230 $1,353 $1,292 $1,640 $943 $964 $1,230 $1,347 $1,435 $1,456
Dresses $0 $713 $836 $984 $874 $1,216 $646 $684 $912 $969 $1,034 $1,055
Denim $0 $862 $1,000 $1,192 $1,092 $1,440 $760 $810 $1,100 $1,200 $1,254 $1,280
Separates $0 $578 $660 $796 $720 $1,000 $480 $540 $720 $800 $836 $880
Jackets/Blazers $0 $777 $924 $1,075 $966 $1,386 $588 $672 $966 $1,050 $1,130 $1,155
Coats/Outerwear $0 $576 $648 $796 $684 $972 $540 $576 $720 $792 $837 $855
Fashion Accessories $0 $1,309 $1,610 $1,809 $1,785 $2,100 $1,330 $1,383 $1,680 $1,855 $1,901 $1,918
Jewelry $0 $572 $700 $788 $683 $1,225 $420 $472 $700 $770 $828 $840
Personal Care $0 $360 $380 $472 $360 $640 $280 $360 $440 $460 $501 $540
Wardrobe Accessories $0 $510 $580 $700 $600 $960 $440 $480 $640 $680 $745 $760
Style Assessment $0 $82 $92 $100 $106 $116 $90 $113 $92 $106 $104 $106
Special Orders $0 $1,000 $1,180 $1,400 $1,460 $1,600 $760 $800 $1,580 $1,320 $1,600 $1,800
Alterations $0 $40 $48 $52 $54 $57 $52 $60 $58 $58 $54 $62
Subtotal Direct Cost of Sales $0 $14,538 $17,451 $20,063 $18,659 $24,206 $13,605 $14,461 $18,678 $20,104 $21,234 $21,821

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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
Owner 0% $0 $2,500 $3,500 $7,000 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Assistant Manager 0% $3,200 $3,200 $3,200 $3,200 $3,200 $3,200 $3,400 $3,400 $3,400 $3,400 $3,400 $3,400
Style Concierge 0% $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $2,000 $2,000
Total People 2 2 2 2 2 2 2 2 2 2 3 3
Total Payroll $4,640 $7,140 $8,140 $11,640 $12,140 $12,140 $12,340 $12,340 $12,340 $12,340 $12,900 $12,900

General Assumptions
Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11
12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 6.00% 6.30% 6.62% 6.95% 7.29% 7.66% 8.04% 8.44% 8.86% 9.31% 9.77% 10.26%
Long-term Interest Rate 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00% 8.00%
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

Pro Forma Profit and Loss

Month
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11
12
Sales $0 $36,450 $43,740 $50,301 $46,780 $60,814 $34,056 $36,208 $46,825 $50,393 $53,236 $54,700
Direct Cost of Sales $0 $14,538 $17,451 $20,063 $18,659 $24,206 $13,605 $14,461 $18,678 $20,104 $21,234 $21,821
Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $14,538 $17,451 $20,063 $18,659 $24,206 $13,605 $14,461 $18,678 $20,104 $21,234 $21,821
Gross Margin $0 $21,912 $26,289 $30,238 $28,121 $36,608 $20,451 $21,747 $28,147 $30,289 $32,002 $32,880
Gross Margin % 0.00% 60.12% 60.10% 60.11% 60.11% 60.20% 60.05% 60.06% 60.11% 60.11% 60.11% 60.11%
Expenses
Payroll $4,640 $7,140 $8,140 $11,640 $12,140 $12,140 $12,340 $12,340 $12,340 $12,340 $12,900 $12,900
Advertising $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Depreciation $407 $407 $407 $407 $407 $407 $407 $407 $407 $407 $407 $407
Amortization - Startup Costs $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458 $458
Bank Service Charges $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40 $40
Dues & Subscriptions $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Education & Training $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Insurance - Workman's Comp $281 $281 $281 $281 $281 $281 $281 $281 $281 $281 $281 $281
Insurance - property & liability $517 $517 $517 $517 $517 $517 $517 $517 $517 $517 $517 $517
Interest Expense - LT Loan $417 $413 $408 $404 $400 $395 $391 $386 $382 $377 $373 $370
License & Permits $110 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Maintenance - Office $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Marketing and PR $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800 $800
Miscellaneous $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Payroll - Charges $66 $66 $66 $66 $66 $66 $66 $66 $66 $66 $66 $66
Postage & Delivery $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Printing & reproduction $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Prof Fees - Accounting $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Prof Fees - Legal $500 $0 $0 $0 $0 $500 $0 $0 $0 $0 $0 $0
Rent $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000
Repairs $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50 $50
Security $29 $29 $29 $29 $29 $29 $29 $29 $29 $29 $29 $29
Supplies - Office & Store $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350
Travel & Entertainment $500 $2,500 $500 $0 $500 $0 $500 $500 $500 $2,000 $500 $500
Telephone / Internet Access $120 $120 $120 $120 $120 $120 $120 $120 $120 $120 $120 $120
Utilities $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175 $175
Payroll Taxes 15% $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60 $60
Employee Benefits 15% $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Other $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Total Operating Expenses $14,796 $18,682 $17,677 $20,673 $21,669 $21,664 $21,860 $21,855 $21,851 $23,346 $22,402 $22,399
Profit Before Interest and Taxes ($14,796) $3,230 $8,611 $9,565 $6,452 $14,944 ($1,410) ($108) $6,296 $6,943 $9,599 $10,480
EBITDA ($14,389) $3,638 $9,019 $9,972 $6,859 $15,352 ($1,002) $299 $6,703 $7,350 $10,007 $10,888
Interest Expense $594 $589 $583 $577 $571 $566 $560 $554 $548 $543 $537 $531
Taxes Incurred ($4,617) $793 $2,409 $2,696 $1,764 $4,314 ($591) ($199) $1,724 $1,920 $2,719 $2,985
Net Profit ($10,773) $1,849 $5,620 $6,291 $4,116 $10,065 ($1,379) ($464) $4,023 $4,480 $6,344 $6,964
Net Profit/Sales 0.00% 5.07% 12.85% 12.51% 8.80% 16.55% -4.05% -1.28% 8.59% 8.89% 11.92% 12.73%

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 $36,450 $43,740 $50,301 $46,780 $60,814 $34,056 $36,208 $46,825 $50,393 $53,236 $54,700
Subtotal Cash from Operations $0 $36,450 $43,740 $50,301 $46,780 $60,814 $34,056 $36,208 $46,825 $50,393 $53,236 $54,700
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 $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 $0 $36,450 $43,740 $50,301 $46,780 $60,814 $34,056 $36,208 $46,825 $50,393 $53,236 $54,700
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 $4,640 $7,140 $8,140 $11,640 $12,140 $12,140 $12,340 $12,340 $12,340 $12,340 $12,900 $12,900
Bill Payments $191 $5,952 $12,502 $12,735 $30,456 $29,096 $43,194 $11,488 $25,193 $34,694 $34,737 $34,836
Subtotal Spent on Operations $4,831 $13,092 $20,642 $24,375 $42,596 $41,236 $55,534 $23,828 $37,533 $47,034 $47,637 $47,736
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
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal
$859 $859 $859 $859 $859 $859 $859 $859 $859 $859 $859 $859
Repayment
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 $1,000
Subtotal Cash Spent $5,690 $13,951 $21,501 $25,234 $43,455 $42,095 $56,393 $24,687 $38,392 $47,893 $48,496 $49,595
Net Cash Flow ($5,690) $22,499 $22,239 $25,067 $3,325 $18,719 ($22,337) $11,521 $8,433 $2,500 $4,740 $5,105
Cash Balance $1,810 $24,309 $46,548 $71,615 $74,940 $93,659 $71,323 $82,843 $91,276 $93,776 $98,515 $103,620

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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 $7,500 $1,810 $24,309 $46,548 $71,615 $74,940 $93,659 $71,323 $82,843 $91,276 $93,776 $98,515 $103,620
Inventory $55,500 $55,500 $40,962 $23,511 $22,069 $20,525 $26,626 $14,966 $15,907 $20,546 $22,114 $23,358 $24,003
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $63,000 $57,310 $65,271 $70,058 $93,685 $95,465 $120,285 $86,288 $98,750 $111,822 $115,890 $121,873 $127,622
Long-term Assets
Long-term Assets $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599 $24,599
Accumulated Depreciation $0 $407 $815 $1,222 $1,630 $2,037 $2,445 $2,852 $3,260 $3,667 $4,074 $4,482 $4,889
Total Long-term Assets $24,599 $24,192 $23,784 $23,377 $22,969 $22,562 $22,154 $21,747 $21,339 $20,932 $20,525 $20,117 $19,710
Total Assets $87,599 $81,502 $89,055 $93,435 $116,654 $118,027 $142,439 $108,035 $120,090 $132,754 $136,415 $141,990 $147,332
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 $5,535 $12,098 $11,717 $29,504 $27,619 $42,826 $10,660 $24,037 $33,536 $33,576 $33,667 $33,904
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $5,535 $12,098 $11,717 $29,504 $27,619 $42,826 $10,660 $24,037 $33,536 $33,576 $33,667 $33,904
Long-term Liabilities $90,000 $89,141 $88,282 $87,423 $86,564 $85,705 $84,846 $83,987 $83,128 $82,269 $81,410 $80,551 $79,692
Total Liabilities $90,000 $94,676 $100,380 $99,140 $116,068 $113,324 $127,672 $94,647 $107,165 $115,805 $114,986 $114,218 $113,596
Paid-in Capital $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707 $42,707
Retained Earnings ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($45,108) ($46,108)
Earnings $0 ($10,773) ($8,924) ($3,304) $2,987 $7,103 $17,169 $15,790 $15,326 $19,349 $23,829 $30,173 $37,137
Total Capital ($2,401) ($13,174) ($11,325) ($5,705) $586 $4,702 $14,768 $13,389 $12,925 $16,948 $21,428 $27,772 $33,736
Total Liabilities and Capital $87,599 $81,502 $89,055 $93,435 $116,654 $118,027 $142,439 $108,035 $120,090 $132,754 $136,415 $141,990 $147,332
Net Worth ($2,401) ($13,174) ($11,325) ($5,705) $586 $4,702 $14,768 $13,389 $12,925 $16,948 $21,428 $27,772 $33,736