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CONFIDENTIAL

University Cycle Works

Business Plan

Prepared April 2012

Contact Information

Josh Cochranejoshpcochrane@abc.com

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Table of Contents

Executive Summary .....................................................................................................................1Who We Are..........................................................................................................................1What We Sell ........................................................................................................................1Who We Sell To ...................................................................................................................2Financial History .................................................................................................................2Company Chapter........................................................................................................................3Company Overview ............................................................................................................3Management Team..............................................................................................................3Products and Services .................................................................................................................5Products and Services .........................................................................................................5

Competitors ..........................................................................................................................6Target Market ...............................................................................................................................8Market Review.....................................................................................................................8Market Needs .......................................................................................................................8Key Customers .....................................................................................................................8Market Trends......................................................................................................................9Market Growth ..................................................................

................................................10Strategy and Implementation.....................................................

.............................................11Marketing Plan ..................................................................................................................11Milestones...........................................................................................................................13

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Table of Contents

Competitive Edge ..............................................................................................................13Strategic Alliances.............................................................................................................14Financial Plan .............................................................................................................................15Personnel Plan....................................................................................................................15Sales Forecast......................................................................................................................16Budget..................................................................................................................................19Cash Flow Assumptions...................................................................................................21Loans and Investments.....................................................................................................22Projected Profit and Loss Statement..............................................................................23Projected Balance Sheet ...................................................................................................26

Projected Cash Flow Statement ......................................................................................27Appendix .....................................................................................................................................30Monthly Financial Details ...............................................................................................30

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University Cycle Works

Executive Summary

Who We Are

UniversityCycleWorksisanestablishedbicyclespecialtystore,offeringretailsalesofnewbicycles,partsand

accessories,clothing,andmaintenanceandrepairservice.Itislocatedinaheavily

trafficked,university-focusedarea.

UniversityCycleWorksisasubchapterScorporation,

andiscurrentlyownedbyHanDelbar.HubertWheeler,current

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assistantmanagerofUniversityCycleWorks,ispurchasingUniversityCycleWorksfromDelbar,acquiringexistinginventory,andassumingoutstandingaccountspayableanddatingprogram

debtstosuppliers,locationlease,customerbaseandinformation,andUniversityCycleWorks'

businessnameandgoodwill.ThebusinesswillcontinuetobeasubchapterS

corporation.ExchangeofownershipwilloccuronJuly1,of

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thisyear.

WheelerhasbeentheassistantmanagerofUniversityCycleWorksforfiveyears,withanadditionalsevenyearsofbicycle

industryretailsalesandserviceexperience.Hefirstbeganinvestigatingtheownershipof

abikebusinesstwoyearsago,however,thelocalMetroburgmarketseemedsaturated

withshops.Realizingthatamorepracticaloptionwouldbe

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tobuyanexistingshop,heapproachedhiscurrentboss.TheresultoftwoyearsofnegotiationswillbethesaleofUniversityCycle

WorkstoWheeler,takingeffectJuly1st.Thegoalwillbeaseamless

transferofownership,withstaff,bikelines,location,andoperationsunchanged.

What We Sell

Bicycles.Wesellnewbicycles,predominantlyinthe

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mountainbikestyle,retro-cruiserisaclosesecond,andsport/touring/racingroadbikesadistantthird.Wealsosellsomeusedbikeswhichwetake

inontradeasaservicetoourcustomerswhoarebuyingnew

bikes.

Accessories.Weofferawidevarietyofaccessories.Locks,computer

speedometers,fenders,cargoracks,comfortableseats,headlights,helmets,waterbottles,

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University Cycle Works

panniers/backpacks/messengerbags,childseatsandtrailers,bikestorageracks,andautoroofracksystemsallfallinthiscategory.

Clothing.Werotateourclothingbasedontheseason.Forexample,in

Autumn,westockjacketsandGore-Tex.InWinter,weofferhelmetcoversand

liners,insulatedjerseysandpants,gloves,andshoecovers.In

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theSpring,westartdisplayingsummerjerseys,andracingshorts

Parts.Partsgenerallyreferstopiecesormaterialsnecessarytothebasic

functioningofthebicycle.Generally,partsareinstalledduringserviceandarean

additionalchargebeyondtheservicefees.

Who We Sell To

Theprimarymarket

forUniversityCycleWorksistheuniversitystudentpopulation,which

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normallyhasaturnover/growthofapproximately25%eachyear.Thesecondarymarketistheuniversityfacultyandstaff,andthetertiarymarketisthe

greaterMetroburgcommunity.

Financial Summary

Thisfinancialplanwasdevelopedbased

uponpreviousyears'datafortheexistingstore,trackingtrendsinrevenuesand

expenses.Afive-monthtrackofsales,accountsreceivablesandpayables,

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andinventoryfromayear-endbenchmarkwasmade.Thecurrentowner,HanDelbar,hassoldthebusinesstoHubertWheelerfor$140,000.Theseller,

buyer,andtheaccountantworkedtogetherontheplantobalanceoptimismwith

reality.Anattorneywasconsultedonspecificsofthesalecontract.

Salesforthefirstyearofnewownershipareprojected

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above$500,000,withagrossmarginofalmost65%.Profitabilityisexpectedatthemid-waypointofthefiscalyear,inMarch.

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University Cycle Works

Company

Company Overview

UniversityCycleWorksisasubchapterScorporation,andiscurrentlyownedbyHanDelbar.HubertWheeler,

currentassistantmanagerofUniversityCycleWorks,ispurchasingUniversityCycleWorksfrom

Delbar,acquiringexistinginventory,andassumingoutstandingaccountspayableanddatingprogramdebts

tosuppliers,locationlease,customerbaseandinformation,andUniversity

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CycleWorks'businessnameandgoodwill.ThebusinesswillcontinuetobeasubchapterScorporation.ExchangeofownershipwilloccuronJuly1st.

Toestablishanaccurateaccountingofexistinginventoryandoutstandingdebts,

theprioryear'sclosinginventoryandyearendfinancialstatementasreviewedby

thebusiness'CPAwereusedasbenchmarks.Thesales,orders

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placed,deliveriesreceived,andaccountspayablepaymentsmadehavebeentrackedeachmonth,andatrialbalanceofthesewillberunJune15

toestablishthefinalpurchasepriceforinventoryonhand,andtheamount

ofAccountsPayableassumed.Thefigurespresentedhereareconservative,realisticestimatesused

forplanningpurposes.

Management Team

Thecurrentassistant

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manager,HubertWheeler,isbuyingUniversityCycleWorks,andwillmanagethebusiness.HehasaB.S.degreeinEconomicsandanM.A.in

ComparativeLiterature.Hispassionhoweverhasalwaysbeencycling.Heoriginallyworkedat

hislocalbikeshopwhenhewasincollege.Afterseveralyearstrying

tofindsuitableworkinhisdegreefield,hegave

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upchasingthechimeraofthesefieldsanddecidedtoworkwithsomethingsubstantial,andreturnedtohisyouthfulenjoymentofbicycles.

Heattendedtwoofthemajorbicyclemechanictrainingprograms,atNewEngland

BicycleAcademyandtheUnitedBicycleInstitute.Thesecoursescoveredmechanicalserviceand

maintenance,framebuildingandrepair,wheelbuilding,andshop

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University Cycle Works

organization,sales,andmanagement.Hehas12yearsofprogressivelyresponsibleexperienceinbicycleshopswiththelastfiveatUniversity

CycleWorks.

Oneoftheotherfull-timeemployees,ValeriePedehas

expressedinterestinlearningmoreaboutthebikeindustryandshewillbe

promotedtobethenewassistantmanager.Valhasbeen

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withusforthreeyears.ShegraduatedfromStateUniversityatMetroburgwithtandemB.S.degreesinExercisePhysiologyandRecreationManagement.Sheloves

tocycle,andhaskepthercontactsattheuniversityactive.Herknowledge

andexpertisedrawsmanywomenbicycliststoourstorewheretheyknowthey

willgetthecareandattentionwhichisusuallymissing

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fromtraditionallymalestaffedshops.

Thecurrentowner,HanDelbarwillbeavailableasaresource.

Additionalresourcesare:

OrderOutofChaos,ourfull-cyclebookkeepingservice.ContinentalShelf

Bank.NewtRia,apartneratWeasel,Stoat,Muskratwhoadvisedon

thesale/purchasearrangements.4

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third parties without the express written consent of the plan author.

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University Cycle Works

Products and Services

Products and Services

RetailSales

1.Bicycles.Wesellnewbicycles,predominantlyinthemountainbikestyle,retro-cruiser

isaclosesecond,andsport/touring/racingroadbikesadistantthird.Wealso

sellsomeusedbikeswhichwetakeinontradeasaservice

toourcustomerswhoarebuyingnewbikes.2.Accessories.

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Weofferawidevarietyofaccessories.Locks,computerspeedometers,fenders,cargoracks,comfortableseats,headlights,helmets,waterbottles,panniers/backpacks/messengerbags,childseats

andtrailers,bikestorageracks,andautoroofracksystemsallfallin

thiscategory.Itisnotpossibletocarryeverypossibleaccessory,sowe

trytocarefullychosethosewhichwillbemostuseful

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ordesiredbyourtargetmarkets.Whenwereceivespecialrequestsforanewitem,we'lloftenorderseveraltotestthelocaldemand,

andifadequate,willaddittoourregularstock.3.Clothing.Clothing

appealstoallcyclists,whetheritisalogoemblazonedT-shirtora

pieceofwaterproofrainwear.AtUniversityCycleWorks,werotate

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ourclothingbasedontheseason.JustbeforetheautumnrainswestockjacketsandGore-Tex.Comewinterweofferhelmetcoversandliners,

insulatedjerseysandpants,gloves,andshoecovers.Andwhenspringarrivesand

thefirstcrocusappearsthroughthemeltingsnow,westartdisplayingsummerjerseys,

andracingshorts.4.Parts.Partsgenerallyreferstopieces

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ormaterialsnecessarytothebasicfunctioningofthebicycle.Generally,partsareinstalledduringservice[seebelow]andareanadditionalchargebeyond

theservicefees.Some,likecranksets,pedals,tires,derailleursorbrakes,areboth

integralpartsandupgradeaccessories.Others,suchasheadsets,bottombrackets,spokes,chains,

cables,andcablehousingsarestrictlymaintenance,thoughsomewill

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besoldtocyclistswhoprefertoworkontheirbikesthemselves.5

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University Cycle Works

Service

UniversityCycleWorksisafull-servicespecializedbicycleshop.Ourserviceofferingincludes,butisnotlimitedto:

Free30-day/100-miletuneupwitheverynewbikesold.

Quickrepairsforflattires,brokenchains,brakecables,etc.Scheduledtune-ups,

replacementofallbearingsurfaces,repackingoflubricants,andadjustments

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ofderailleursandbrakesystems.Installationofallaccessories.Authorizedwarrantyrepairsonthebikes.Customwheelbuilding.Framesetrepairs

byoutsourcingtoViaPorcocustomframebuilders.Competitors

Settingasidethe

discountdepartmentstores,UniversityCycleWorkshasthefollowingdirectcompetitors.

Onelocalmulti-sportstoreatthelocalmegamall

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OnestatewidechainofbicycleshopswhichstartedoutasSchwinn-onlyshops,buthashadtotakeonotherbrandsandproducts.One

usedbikestorethathasmadeafinebusinessreputationforitself,dealing

strictlyinusedbikes.Threelocal,includingtheoldestshopintown.

Onelocalmulti-locationchain,thathasspecializedinopening

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shopsinsmalllocalmallsinareasofnewhousingdevelopment.Severalgaragemechanicsofferingserviceonly.Noneofthesecompetitorsiswithin

twomilesoftheuniversity,andso,forthepresent,wehavefirst

accesstoourchosenmarketsegments.Oneofthelocalshopshaschosen

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University Cycle Works

totargettheburgeoningyoungroadracersegment,anotherisfocusingonrecumbentsandfoldingtravelcycles.

Thetwo

strongestcompetitorsaretheOldestShopinTownwhichcarriesthecacheof

beingthemoststable,andmostwellknown--aMetroburginstitution.TheMountain

BikeSpecialisttargetsthesameathletic,young,performanceandimage

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consciousriderthatwetargetintheuniversitystudentpopulation.Thesecyclistsareparticularabouttheirbikeandwillgowherethenamebrand

theywantissold,orwilltryeverybikeandthenbuythe

onethatfitsbest,regardlessofstoreloyalty.

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University Cycle Works

Target Market

Market Overview

ThepredominantmarketsegmentforUniversityCycleWorksistheuniversitystudentpopulation.Wealsocaterto

theuniversitystaff,localbusinessemployees,and,alongwitheveryotherbicycleshop

intown,thegreaterMetroburgpopulation.

Inpartthelocalmarket

isdrivenbythelackofparking.Bicycletransportationis

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moreeconomical,aswellastimeandspaceefficientintheuniversityneighborhood.Partofthemarketispriceconstrainedandanotherpartis

hookedonthelatestfad,beitframestyle,numberofgears,or

portrayedimage.Aslongasnewstudentsarriveeachyear,ourmarketsegment

growthisassured.

Market Needs

Ourmarketniche

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hasseveralneedswhichwestrivetomeet:

Qualitybikesatseveralpricepoints.Variousstylesandsizesofbikes,

leaningheavilytowardthestylesmostpopularwiththestudentpopulation.Range

ofaccessoriesmostpracticalinthelocalsetting,suchaslocks,fenders,lights,

tires,seats,rainwear,etc.Plentyofreplacementcomponentsand

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serviceparts.Friendlypersonalrelationshipsbetweencyclistsandshopstaff.Promptandconvenientservicefromon-the-spotflattirefix,todropin

repairs,toscheduledmajormaintenance,wheretheridercandroptheirbikeoff,

headtoclassorwork,andbeassuredthattheirbikewillbe

readyfortheridehome.Key Customers

Theuniversitystudents

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areourmaintargetmarket.

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University Cycle Works

1.Theyaremostlyundergraduates,sothereisa25%annualturnover.2.Thelackofparkingintheuniversityarea

andthegeneraleaseofbikemobilitythroughoutMetroburgmotivatesthemtouse

bicyclesasinexpensivetransport.Athleticpursuitsdrawthem,andthenearbyareasfor

useofmountainandtrailbikesprovidesagreatplace

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toride.3.ThereisanewenthusiasmforretroCruiserbikes,andhighertechcruiser-stylebikeswithmultiplegears,goodbrakes,etc.among

thecollegeagepopulation.4.Also,mainmarketforracks,locks,throughout,pannier/bags,

fenders,rainwear,etc.5.Theywantconvenienceforsalesandservice.Universityemployees

areanotherprimemarketsegment.

1.Smallgrowth

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andturnover,butonthewhole,thegroupisprettystable.2.Arewillingtocommutebybicycletowork.3.Theywanta

stable,comfortablebikeandafullrangeofaccessories.4.Whentheirbikes

needserviceandmaintenance,localdropoff/pickupconvenienceisimportant.5.Theyhave

familieswhoridebicyclesalso,andwillpatronizeashop

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thatgivespersonalservice.GreaterMetroburgpopulation.

Thissegmenthasachoiceofgoingtoanybikeshopinthearea,and

willprobablychooseashoplocatedclosertotheirhome.Theyarenot

themaintargetmarketsegmentofUniversityCycleWorks,andwemarketto

themcasually,onlyasacollateraleffecttoouruniversity-oriented

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efforts.

Market Trends

Trendsinthebicycleindustryusuallylastforatime.Someofthemhavebeen:

1960s

-Bigrushon10speeds.1970s-Touringbikesbecamepopular.1980s

and1990s-Hugegrowthofmountainbikes9

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s contents or ideas withthird parties without the express written consent of the plan author.

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University Cycle Works

1990s-Therumoredbutexaggerateddeathof"roadbikes"andtheunfulfilledprophesyofaboominthetandemmarket.

2000s-Popularityofretro'cruisers.'Market Growth

ThebulkofUniversityCycle

Works'marketgrowthistheregularmatriculationofstudentsfromtheStateUniversity

inMetroburg.Whiletheoverallmarketnumberschangeinsmall

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increments,usuallylessthan10%,themarkethasaturnoverof22-26%yearly.Inalongertimeframethenumberofstudentsandthe

numberofuniversityemployeesgrowsandshrinkswitheconomicchanges,andwithpopulation

demographics.

Forthenextthreeyearsweforeseeasteadygrowth

intheoveralluniversitypopulationaswellascontinuedgrowth

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ofMetroburgasadesirableplacetolive.

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University Cycle Works

Strategy and Implementation

Marketing Plan

Overview

Ourmarketingstrategyseekstooptimizeouradvantageofprimelocation.Wewanttheuniversity

populationtoseeusastheirbikeshop,evenournamesaysso,

UniversityCycleWorks.Wewantthemtoseeusaspartoftheir

dailyexperience,andashoptheycandependonfor

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quickrepairandmaintenanceservice.

Positioning

WeareUniversityCycleWorks,andwearepassionateaboutbicycles.

Pricing

Retail

Pricingofbicyclesisverytightwithamarkupof

between30%and40%dependinguponthebrandandmodel.Manypeoplebelieve

thatbicyclesarepricedlikeautomobilesandareopenfor

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negotiation,andmakealmostinsultingoffers.Theshopshavelittleleewayhere.

Partsandaccessoriesaregenerallykeystonepriced.Somesmallitems

costmoreinhandlingandsalesthantheydotobuyfromsuppliers.

Thesecanbedoubleandtriplekeystoned,becausecustomerswon'tbuythemif

theydon'thaveaminimumperceivedvalue.Ontheplus

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side,thesearegreat"throw-in"itemsusedtoclosethesaleofabike.Whennewtechnologyarrivesinbicycles,andifthesupply

islimited,almostanypricecanbedemanded.Thiswasthecasein

themid-1990swhenRockShoxintroducedsuspensionforksformountainbikes.Thebikenobs

wouldpaywhateverwasaskedjusttogetthoseforks.

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Ofcourse,inthistypeofsituationtheprice,bothwholesaleandretail,lowers.

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University Cycle Works

Otheraccessories,suchasstep-inpedals,pannierracks,helmets,orheadlightsaresometimesheavilymarketedbythemanufacturers.Whilethisdrives

demandandbringspeopleintotheshoptogettheseitems,thesuggested

manufacturer'sretailpricemaylimitmarkup.

Themarkuponclothes,shoes,

jackets,glovescanvaryfromkeystonetotriplekeystone,depending

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uponproduct,manufacturer,countryoforigin,andcustomerperceptionofvalue.PearlIzumiandBurleyDesignrainwearcandemandpremiumpricesastop-ofthe-linegarments,

butmanybudget-consciousstudentscanonlyafforda$35nylonwindbreaker.Ithas

beenandalwayswillbeademandingjobforustoadequatelystock

garmentsatthevariouspricepoints.

Service

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Wetrytomaintainabasic"Hourlyshoprate"at$45/hour.Standardrepairsarethenpricedbaseduponanaveragetimeforcompletion.

Somerepairs,suchasaflattire,arelimitedbycustomerperceptionof

difficulty.Examples:

FlatTire--$7.50InstallFenders--$10.00

BrakeAdjustment--$25.00Tune-up--$65.00Overhaul--$100.00All

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partsusedinrepairsarepricedatkeystone,andaddedtothelaborservicecharge.

Withseveralotherbicycleshopsinthe

city,therearesomepriceconstraintsbasedoncompetition.Couponsandspecialscan

balancepriceceilingsbydrawingincustomers.

Promotion

Ourmarketing

programsarelocallyfocused,wherewecaneffectourmain

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targetmarket.

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University Cycle Works

Backtoschoolspecials,atthebeginningofeachterm,includingperhapsafreeKryptonitelockwithanewbikepurchase.

Wewilltrytohaveaspecialpurchaseofaneconomyvaluebike

foreachterm.

Springspecial.Thiscoincideswiththebeginningof

springterm,butwewilldirectsomeofouradvertising

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atthewiderpopulationaspeoplehanguptheirskisandtuneuptheirbikes.

Coupons.Onceeveryothermonthwewill

runacouponforaservicespecialintheuniversitynewspaper,theDaily

Hyperbole.WealsorunthiscouponasabanneradintheDaily

HyperboleOnline.

Website.Ourcontentsitewillalso

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serveasamarketingmedium.Weofferdownloadablemapsofthecitybikeroutes,mapsofridesoutsidethecityarea,giveinformationabout

thestore,andannouncesales.Webelievethatcyclistswillregularlyaccessour

siteforthevaluableinformationwewillprovide,andthiswillreinforcetheir

ofawarenessofUniversityCycleWorks,andwewillbecome

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theirbikeshopofchoice.

Printadvertising.Inadditiontoourcoupons,wewillkeepasmall3columninchadappearing

onarecurringscheduleintheDailyHyperbole.Toboostcitywideawarenessof

oursalesspecialswewillalsorunslightlylargeradsintheMetroburg

Bombast-Obfuscatorduringtheweekendspriortothesale.

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Competitive Edge

TheforemostcompetitiveadvantageofUniversityCycleWorksisouruniversitylocation.Theuniversityisover100yearsoldandasit

hasgrown,Metroburghasgrownaroundit.Parkingisalmostnonexistent,withall

campusparkingpermitormetercontrolled,andlocalstreetsfilledtocapacitywith

thevehiclesofresidents.Bicyclesareanobviousandpopular

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transportationsolution.

Ourlocation,inthefirstblockoffcampusinacommercialareafeaturingtheuniversitybookstore,aprivatebookstore,bank,

cafes,coffeeshopsandpopularwateringholesisideal.Wegetconstant,daily

visualexposure.Studentsandstaffthrongthesidewalkoutsideourdoor,andwe

reapthebenefits.Ournearestcompetitorisalmostamile

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University Cycle Works

away.Forthestudentcustomer,onfoot,inahurry,UniversityCycleWorksistheimmediatesolutiontotheirneeds.

Afterthatfirstparkingticket,wearethefirstbikeshopthe

newpedestriansees.Weareconvenientlylocatedwhenacyclistgetsaflat

tireonthewaytoclass.Thefirsttimea

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ridergetstoclasswithawetbacktheycomeinatlunchforasetoffendersandarainjacket.

Thenegotiationsofthepasttwoyearsalsobringstheadvantageofcontinued

financialagreementswithmajorsuppliers.Thisisanadvantageoverastart-upbicycle

shop,but,ismorealevelingofthebikepath

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whencomparedtootherestablishedshopinMetroburg.Traditionallyastart-upstorewillbeplacedonaCashOnDelivery(COD)statusbybicycle

manufacturersandparts/accessoriessuppliers.TheCODstatusstaysineffectuntilthenew

shopdemonstratesitsabilitytomanageitsordersandcashflow.Thisalso

meansthenewshopmusthavemorefundingtobe

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abletowritechecksonamomentsnotice,forlargeamounts.

UniversityCycleWorkswillbecontinuinganestablishedsystemofdating

programs,ordering,delivery,andinvoicing/accountspayable,stabilizingourfundingneedsandmonthlycash

flow.

Strategic Alliances

Bicyclemanufacturers-continuationofdatingprogramsand

financialagreements.Accessorysuppliers-continuationoffinancialagreements.

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MetroburgParksDept.-wesponsorprintedmapofcitybikepathstopublishonourwebsite.UniversitySecurityOffice-maintenance,supplyservicecontract

forcyclesecurity.HooDaThunkIt-websitedesignandmaintenance,searchengineplacement.14

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University Cycle Works

Financial PlanSales ForecastSales Forecast Table

FY2013 FY2014 FY2015

SalesNew Bicycles $116,000 $133,400 $153,410Accessories and Parts $150,000 $172,500 $198,375Clothing $68,000 $78,200 $89,930Repair and Service $166,000 $190,900 $219,535University Patrol Service Contract $1,200 $1,380 $1,587Total Sales $501,200 $576,380 $662,837

Direct CostNew Bicycles $78,880 $90,712 $104,319Accessories and Parts $75,000 $86,250 $99,187Clothing $23,800 $27,370 $31,475Repair and Service $0 $0 $0University Patrol Service Contract $0 $0 $0Total Direct Cost $177,680 $204,332 $234,981

Gross Margin $323,520 $372,048 $427,856

Gross Margin % 65% 65% 65%

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University Cycle Works

Sales by Month

About the Sales Forecast

Salesvaryseasontoseasonandwiththeacademicschoolyear.Surprisingly,summeristhe

slowestseasonbecausetherearefewerstudentsintown.Businesspicksupin

Augustwiththereturnofthestudentsandstaff,andflourishesinSeptember.

Accessoriesandrainwearsalesincreaseintheautumnandearly

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winter.Repairsandmaintenancearesteady.Holidaysalesarebrisk,thoughgenerallyleaningagaintoaccessories,parts,rainwear,gloves,helmets,headlights,etc.Wintersales

aremoderate,andthenpickupinspringtimeaspeopleputawaytheir

skiesandlookforwardtolocaloutdooractivities,longerdaylighthours,anddrier

weather.

Wehavethreelargesalespromotionseach

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year.

1.BacktoschoolinAugust/September.Thisisourbiggestsaleoftheyear.Newbicycles,locks,helmets,racks,fenders,backpacks.

Wealwayssearchforaspecialpurchaseofgoodquality,butvaluepriced

bikesforthissalesuchasyearendmodels,slowsellers,newline

lookstobreakintothemarket.Thesebikeswillalmost

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alwayssellouttostudentsseekinggreatvalues.16

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University Cycle Works

2.Year-endholidays.ThisalsooverlapsthebeginningofWinterterm.Theretailmarketdemandssomeparticipationinthisannualbuying

frenzy,yet,thissaleproduceslowerrevenuethanourothertwoevents.We

sellfewerbikes,andmoreaccessoriesandclothing.3.Spring.Thiscoincideswith

boththereturnofniceweather,andbeginningofSpring

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term.Wefeaturenewbicycles,andrepair/maintenance/tune-upspecials.Itisimportanttoustohaveagoodselectiononhandatthistime.When

peopledecidetheywantthatnewbike,theywantitnow.Ifwe

don'thavethebikethen,andmakethesaleimmediately,manyriderswill

decidethattheyreallycangetanotherseasonoutof

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theiroldbike,andwillspendtheirdiscretionaryincomeonsomeotherpurchase.Additionally,wehavesomespecialbuysavailableforJunegraduation.

Wegetsomesmallmonthlyrevenuefromthesesources:

Saleofusedbicyclestakeninontrade.Repairclassestaughtat

theUniversityOutdoorCenter,onceaterm.Monthlyservice

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contractforrepairsandpartswiththeUniversitySecurityOffice.Personnel Plan

Personnel Table

FY2013 FY2014 FY2015

Hubert Wheeler $34,800 $36,540 $60,000Valerie Pede $27,000 $28,350 $30,000Dee Ray $23,400 $24,570 $25,799Jean-Baptiste Kape $19,800 $20,790 $21,830Part-time Employees $18,900 $25,200 $25,200Total $123,900 $135,450 $162,829

17

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University Cycle Works

About the Personnel Plan

ThestaffwillconsistofHubertWheeler,thenewowner,ValeriePede,andtwootherfull-timeemployeesDeeRay,

andJean-BaptisteKape.

Tomeettheneedforadditionalhelpduring

theyear,UniversityCycleWorkshirestwotofourpart-timeemployeesfromthe

universitypopulation.Welookforpeoplewhoareenthusiasticabout

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cycling,andwhohaveamechanicalaptitude.Someofthesefolkshaveworkedforusthroughouttheirentirecollegesojourn.Theirhoursvarydepending

onthestore'sneedsandtheirclassschedules.

Budget

Budget Table

FY2013 FY2014 FY2015

ExpensesSalary $123,900 $135,450 $162,829Employee Related Expenses $30,993 $33,864 $40,708Marketing & Promotion $24,866 $27,420 $30,521Rent $88,000 $88,000 $88,000Utilities $3,600 $3,600 $3,600Leased Equipment $1,800 $1,800 $1,800Insurance $4,200 $4,500 $4,725Starting Expenses $13,300 $0 $0Total Expenses $290,659 $294,634 $332,183

Major PurchasesLong-term asset $1,200 $0 $0Total Major Purchases $1,200 $0 $0

18

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information and is shared only with the understanding that you will not share its contents or ideas withthird parties without the express written consent of the plan author.

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University Cycle Works

Expenses by Month

About the Budget

Oursalarytotals,employeebenefitsandmonthlyexpenseprojectionsareincludedintheBudget.A

rentdepositwasmadetothelandlordasasecurityduringthetransfer

ofthebusinesstothenewowner,inordertokeepthecurrent

leaseagreement.If,attheendofthefirstyear,

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thebusinessisstillsolvent,thedepositwillbeappliedtothetwelfthmonth'srent.

Startup Costs

Ourestimatedstartingexpensestotal

$13,300.Theyinclude,legalandaccountingcoststotransferownershipofthebusiness,

stationery,etc.,promotionalmaterials,insurance,andthedownpaymenttowardthepurchaseof

thebusiness.

19

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s contents or ideas withthird parties without the express written consent of the plan author.

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University Cycle Works

Cash Flow Assumptions

Cash Flow Assumptions

Cash Inflow

% of Sales on Credit 0%

Cash Outflow% of Purchases on Credit 100%Avg Payment Delay (Days) 45

InventoryMonths to Keep on Hand 1Minimum Inventory Purchase $1,000

About the Cash Flow Assumptions

Wehaveaccounts

payablesetat45days.Wealsokeepapproximatelyonemonth'sworthof

inventoryonhand,withaminimumpurchaseof$1,000,onaverage.Wehad

astartinginventorybalanceforthisplanat$17,000from

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thepreviousowner,whichcarriedforwardwiththebusinesstransfer.

Wedonotselloncredit.

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e-secretinformation and is shared only with the understanding that you will not share its contents or ideas withthird parties without the express written consent of the plan author.

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University Cycle Works

Loans and Investments

Loans and Investments Table

FY2013 FY2014 FY2015

Family investment (interest free)Financing at 0% interest $10,000 $0 $0Current BorrowingFinancing at 10% interest $2,000 $0 $0Business purchase priceLoan at 7% interest for 72 mos. $130,000 $0 $0Total Amount Received $142,000 $0 $0

Sources of Funds

Thecurrentowner,HanDelbar,

hassoldthebusinesstoHubertWheelerfor$140,000.Thevalueofthe

existingcompany,itsreputation,assumptionofthebusinessname,existingclientbase,etc.

isrecognizedaspartofthepurchase.Itappearsas

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astart-upexpenseinthefollowingtableasDownPayment.Thebalanceappearsasalong-termliability.

Wheelerisinvestingsomeof

hisownmoney,partiallyahomeequityloan,inthecompany.Anadditional

amountisbeinginvested,asshort-terminterestfreeloans,byfamilymembers.This

plancallsfortheseloanstoberepaidinthe

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firstyear.

21

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University Cycle Works

Use of Funds

Projected Profit and Loss Statement

Projected Profit and Loss Statement

FY2013 FY2014 FY2015

Income $501,200 $576,380 $662,837Direct Cost $177,680 $204,332 $234,981Gross Margin $323,520 $372,048 $427,856Gross Margin % 65% 65% 65%ExpensesSalary $123,900 $135,450 $162,829Employee Related Expenses $30,993 $33,864 $40,708Marketing & Promotion $24,866 $27,420 $30,521Rent $88,000 $88,000 $88,000Utilities $3,600 $3,600 $3,600Leased Equipment $1,800 $1,800 $1,800Insurance $4,200 $4,500 $4,725Starting Expenses $13,300 $0 $0

Total Expenses $290,659 $294,634 $332,183Operating Income $32,861 $77,414 $95,673Interest Incurred $7,966 $7,354 $5,942Depreciation and Amortization $12,320 $12,540 $12,540Income Taxes $3,144 $14,380 $19,298Net Profit $9,431 $43,140 $57,893Net Profit/Sales 2% 7% 9%

22

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University Cycle Works

Gross Margin by Year

Net Profit (or Loss) by Year

23

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University Cycle Works

About the Projected Profit and Loss Statement

Innegotiatingthesmoothtransitioninownership,thelandlordagreedtocontinuethecurrentleaseunchanged.Assurety,one

month'srentwasrequiredasadepositatthetimeofsale.This

isshowninthestartingexpenses.Further,thelandlordagreedthatif,after

11monthsoperationthenewcompanywassolventandcurrent

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inleasepayments,thatthedepositcouldbeappliedtothetwelfthmonth'srent.

Themid-summermonthsofJulyandAugustare

slowmonthswhenalargepartoftheuniversitypopulationisgoneon

summerbreak.Themid-wintermonthsaretraditionallylossmonths.Theweatheristhe

mostinclementanddiscretionaryincomeisatitslowestafter

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theholidaybinges.However,wetrytokeepourentirestaffonboardtoworkonourowninventory,storerefurbishing,andstafftraining.

24

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University Cycle Works

Projected Balance Sheet

Projected Balance Sheet

As of Period's End Starting Balances FY2013 FY2014 FY2015

Cash $0 $142,440 $183,550 $233,747Accounts Receivable $0 $0 $0 $0Inventory $17,000 $17,026 $19,580 $19,583Total CurrentAssets $17,000 $159,466 $203,130 $253,330

Long-Term Assets $61,500 $62,700 $62,700 $62,700AccumulatedDepreciation $0 ($12,320) ($24,860) ($37,400)Total Long-TermAssets $61,500 $50,380 $37,840 $25,300

Total Assets $78,500 $209,846 $240,970 $278,630

Accounts Payable $27,800 $36,025 $43,467 $43,884

Sales Taxes Payable $0 $0 $0 $0Short-Term Debt $0 $200 $0 $0Total CurrentLiabilities $27,800 $36,225 $43,467 $43,884

Long-Term Debt $0 $113,490 $94,232 $73,582

Total Liabilities $27,800 $149,715 $137,699 $117,466

Paid-In Capital $25,000 $25,000 $25,000 $25,000Retained Earnings $0 $0 $9,431 $52,571Earnings $0 $9,431 $43,140 $57,893Total Owner's

Equity $25,000 $34,431 $77,571 $135,464

Total Liabilities &Equity $52,800 $184,146 $215,270 $252,930

25

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third parties without the express written consent of the plan author.

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University Cycle Works

About the Projected Balance Sheet

Ourgoalistorepaytheloansfromourfamilywithinthefirstyear,andweprojectpayingHan

Delbarhisentirepurchasepricewithinfiveyears.Otherbalancesheet

informationisshowninthetable.

Projected Cash Flow Statement

Projected Cash Flow Statement

FY2013 FY2014 FY2015

OperationsNet Profit $9,431 $43,140 $57,893Depreciation and Amortization $12,320 $12,540 $12,540Decrease in Accounts Receivable $0 $0 $0Decrease in Inventory ($26) ($2,554) ($3)Increase in Accounts Payable $8,225 $7,442 $417Increase in Sales Taxes Payable $0 $0 $0Net Cash Flow from Operations $29,950 $60,568 $70,847

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Investing & FinancingAssets Purchased ($1,200) $0 $0Investments Received $0 $0 $0Increase in Short-Term Debt $200 ($200) $0Increase in Long-Term Debt $113,490 ($19,258) ($20,650)Net Cash Flow from Investing & Financing $112,490 ($19,458) ($20,650)

Cash at Beginning of Period $0 $142,440 $183,550Net Increase in Cash $142,440 $41,110 $50,197Cash at End of Period $142,440 $183,550 $233,747

26

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University Cycle Works

Projected Cash Flow by Month

Projected Cash Flow by Year

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University Cycle Works

About the Projected Cash Flow Statement

Thecashflowreflectstheseasonalityofbicyclesalesandthevaryingpaymentprograms.Attimes,thebusinessis

inventoryheavy,stockingupforthebeginningofschoolrush,orspecificsales.

Atothertimes,thereisnegativecashflowaslong-termaccountspayable,net

90,net60paymentscoincidewithregularnet30invoices.

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Starting BalancesSalesSales Last Month $0Sales 2 Months Ago $0Sales 3 Months Ago $0Sales 4 Months Ago $0Sales 5 Months Ago $0Sales 6 Months Ago $0

ExpensesExpenses Last Month $0Expenses 2 Months Ago $0Expenses 3 Months Ago $0Expenses 4 Months Ago $0Expenses 5 Months Ago $0Expenses 6 Months Ago $0

AssetsCash $0Accounts Receivable $0Inventory $17,000

Long-Term Assets $61,500Accumulated Depreciation $0

LiabilitiesAccounts Payable $27,800Sales Taxes Payable $0

Capital

Paid-In Capital $25,000

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University Cycle Works

Retained Earnings $0

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University Cycle Works

AppendixMonthly Financial DetailsSales Forecast Table (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

SalesNew Bicycles $9,500 $14,000 $14,000 $9,500 $6,500 $10,000 $7,500 $6,500 $8,000 $9,500 $11,000 $10,000Accessoriesand Parts $11,000 $17,500 $16,000 $11,000 $10,000 $15,000 $9,500 $8,000 $13,000$15,000 $11,000 $13,000Clothing $3,500 $3,500 $4,500 $6,500 $10,500 $7,500 $4,500 $3,500 $4,500 $6,500$7,500 $5,500Repair andService $11,000 $11,000 $13,000 $14,000 $12,000 $11,000 $12,000 $14,000 $16,000$18,000 $18,000 $16,000UniversityPatrol ServiceContract $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Total Sales $35,100 $46,100 $47,600 $41,100 $39,100 $43,600 $33,600 $32,100 $41,600 $49,100 $47,600 $44,600

Direct CostNew Bicycles $6,460 $9,520 $9,520 $6,460 $4,420 $6,800 $5,100 $4,420 $5,440 $6,460 $7,480 $6,800Accessoriesand Parts $5,500 $8,750 $8,000 $5,500 $5,000 $7,500 $4,750 $4,000 $6,500 $7,500$5,500 $6,500Clothing $1,225 $1,225 $1,575 $2,275 $3,675 $2,625 $1,575 $1,225 $1,575 $2,275 $2,625 $1,925Repair andService $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

UniversityPatrol ServiceContract $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total DirectCost $13,185 $19,495 $19,095 $14,235 $13,095 $16,925 $11,425 $9,645 $13,515 $16,235 $15,605 $15,225

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Gross Margin $21,915 $26,605 $28,505 $26,865 $26,005 $26,675 $22,175 $22,455 $28,085 $32,865 $31,995 $29,375

Gross Margin % 62% 58% 60% 65% 67% 61% 66% 70% 68% 67% 67% 66%

FY2013 FY2014 FY2015

SalesNew Bicycles $116,000 $133,400 $153,410Accessories and Parts $150,000 $172,500 $198,375Clothing $68,000 $78,200 $89,930Repair and Service $166,000 $190,900 $219,535University Patrol Service Contract $1,200 $1,380 $1,587Total Sales $501,200 $576,380 $662,837

Direct CostNew Bicycles $78,880 $90,712 $104,319Accessories and Parts $75,000 $86,250 $99,187Clothing $23,800 $27,370 $31,475Repair and Service $0 $0 $0University Patrol Service Contract $0 $0 $0

Total Direct Cost $177,680 $204,332 $234,981

Gross Margin $323,520 $372,048 $427,856

Gross Margin % 65% 65% 65%

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Personnel Table (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

Hubert Wheeler $1,800 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000Valerie Pede $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250 $2,250Dee Ray $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950 $1,950Jean-BaptisteKape $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650 $1,650Part-timeEmployees $0 $700 $1,400 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $2,100 $1,400$700Total $7,650 $9,550 $10,250 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,250 $9,550

FY2013 FY2014 FY2015

Hubert Wheeler $34,800 $36,540 $60,000Valerie Pede $27,000 $28,350 $30,000Dee Ray $23,400 $24,570 $25,799Jean-Baptiste Kape $19,800 $20,790 $21,830Part-time Employees $18,900 $25,200 $25,200Total $123,900 $135,450 $162,829

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University Cycle Works

Budget Table (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

ExpensesSalary $7,650 $9,550 $10,250 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,250 $9,550EmployeeRelatedExpenses $1,914 $2,389 $2,564 $2,739 $2,739 $2,739 $2,739 $2,739 $2,739 $2,739 $2,564 $2,389Marketing &Promotion $1,618 $2,073 $4,268 $1,798 $1,738 $1,998 $1,698 $1,528 $1,813 $2,313$1,993 $2,028Rent $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $0Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300LeasedEquipment $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150Insurance $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350

StartingExpenses $13,300 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0TotalExpenses $33,282 $22,812 $25,882 $24,287 $24,227 $24,487 $24,187 $24,017 $24,302$24,802 $23,607 $14,767

MajorPurchasesLong-termasset $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,200Total MajorPurchases $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,200

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FY2013 FY2014 FY2015

ExpensesSalary $123,900 $135,450 $162,829Employee Related Expenses $30,993 $33,864 $40,708Marketing & Promotion $24,866 $27,420 $30,521Rent $88,000 $88,000 $88,000Utilities $3,600 $3,600 $3,600Leased Equipment $1,800 $1,800 $1,800Insurance $4,200 $4,500 $4,725Starting Expenses $13,300 $0 $0Total Expenses $290,659 $294,634 $332,183

Major PurchasesLong-term asset $1,200 $0 $0Total Major Purchases $1,200 $0 $0

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Loans and Investments Table (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

Familyinvestment(interest free)Financing at 0%interest $10,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0CurrentBorrowingFinancing at 10%interest $2,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Businesspurchase priceLoan at 7%interest for 72mos. $130,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Total AmountReceived $142,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

FY2013 FY2014 FY2015

Family investment (interest free)Financing at 0% interest $10,000 $0 $0Current BorrowingFinancing at 10% interest $2,000 $0 $0Business purchase priceLoan at 7% interest for 72 mos. $130,000 $0 $0Total Amount Received $142,000 $0 $0

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Projected Profit and Loss Statement (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

Income $35,100 $46,100 $47,600 $41,100 $39,100 $43,600 $33,600 $32,100 $41,600 $49,100 $47,600 $44,600Direct Cost $13,185 $19,495 $19,095 $14,235 $13,095 $16,925 $11,425 $9,645 $13,515 $16,235 $15,605 $15,225Gross Margin $21,915 $26,605 $28,505 $26,865 $26,005 $26,675 $22,175 $22,455 $28,085 $32,865 $31,995 $29,375Gross Margin % 62% 58% 60% 65% 67% 61% 66% 70% 68% 67% 67% 66%ExpensesSalary $7,650 $9,550 $10,250 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,950 $10,250 $9,550EmployeeRelatedExpenses $1,914 $2,389 $2,564 $2,739 $2,739 $2,739 $2,739 $2,739 $2,739 $2,739 $2,564 $2,389Marketing &Promotion $1,618 $2,073 $4,268 $1,798 $1,738 $1,998 $1,698 $1,528 $1,813 $2,313

$1,993 $2,028Rent $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $0Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300LeasedEquipment $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150Insurance $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350 $350StartingExpenses $13,300 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0TotalExpenses $33,282 $22,812 $25,882 $24,287 $24,227 $24,487 $24,187 $24,017 $24,302$24,802 $23,607 $14,767Operating

Income ($11,367) $3,793 $2,623 $2,578 $1,778 $2,188 ($2,012) ($1,562) $3,783 $8,063 $8,388 $14,608Interest Incurred $0 $773 $764 $754 $745 $734 $724 $715 $705 $694 $684 $674Depreciation andAmortization $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,045Income Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,144

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Net Profit ($12,392) $1,995 $834 $799 $8 $429 ($3,761) ($3,302) $2,053 $6,344 $6,679 $9,745NetProfit/Sales (35%) 4% 2% 2% 0% 1% (11%) (10%) 5% 13% 14% 22%

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FY2013 FY2014 FY2015

Income $501,200 $576,380 $662,837Direct Cost $177,680 $204,332 $234,981Gross Margin $323,520 $372,048 $427,856Gross Margin % 65% 65% 65%ExpensesSalary $123,900 $135,450 $162,829Employee Related Expenses $30,993 $33,864 $40,708Marketing & Promotion $24,866 $27,420 $30,521Rent $88,000 $88,000 $88,000Utilities $3,600 $3,600 $3,600Leased Equipment $1,800 $1,800 $1,800Insurance $4,200 $4,500 $4,725Starting Expenses $13,300 $0 $0Total Expenses $290,659 $294,634 $332,183Operating Income $32,861 $77,414 $95,673Interest Incurred $7,966 $7,354 $5,942Depreciation and Amortization $12,320 $12,540 $12,540Income Taxes $3,144 $14,380 $19,298Net Profit $9,431 $43,140 $57,893

Net Profit/Sales 2% 7% 9%

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Projected Balance Sheet (With Monthly Detail)

As of StartingPeriod's End Balances Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

Cash $0 $151,706 $152,532 $153,407 $152,374 $145,149 $148,191 $144,414 $136,288$135,178 $142,143 $145,971 $142,440AccountsReceivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Inventory $17,000 $19,495 $19,095 $14,235 $13,095 $16,925 $11,425 $9,645 $13,515$16,235 $15,605 $15,225 $17,026TotalCurrentAssets $17,000 $171,201 $171,627 $167,642 $165,469 $162,074 $159,616 $154,059 $149,803 $151,413 $157,748 $161,196 $159,466

Long-TermAssets $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $61,500 $62,700Accumulated

Depreciation $0 ($1,025) ($2,050) ($3,075) ($4,100) ($5,125) ($6,150) ($7,175) ($8,200) ($9,225) ($10,250) ($11,275) ($12,320)Total Long-Term Assets $61,500 $60,475 $59,450 $58,425 $57,400 $56,375 $55,350 $54,325 $53,300 $52,275 $51,250 $50,225 $50,380

Total Assets $78,500 $231,676 $231,077 $226,067 $222,869 $218,449 $214,966 $208,384 $203,103 $203,688 $208,998 $211,421 $209,846

AccountsPayable $27,800 $51,518 $50,532 $46,304 $44,932 $43,637 $43,867 $43,697 $43,377$43,577 $44,220 $44,150 $36,025Sales Taxes

Payable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Short-TermDebt $0 $11,850 $11,700 $11,550 $10,400 $8,750 $6,100 $4,950 $4,800 $4,650 $4,500 $1,850 $200TotalCurrentLiabilities $27,800 $63,368 $62,232 $57,854 $55,332 $52,387 $49,967 $48,647 $48,177 $48,227 $48,720 $46,000 $36,225

Long-TermDebt $0 $130,000 $128,542 $127,076 $125,601 $124,118 $122,626 $121,125 $119,616$118,098 $116,571 $115,035 $113,490Total

Liabilities $27,800 $193,368 $190,774 $184,930 $180,933 $176,505 $172,593 $169,772 $167,793 $166,325 $165,291 $161,035 $149,715

Paid-In Capital $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000 $25,000$25,000 $25,000 $25,000 $25,000 $25,000

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RetainedEarnings $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Earnings $0 ($12,392) ($10,397) ($9,563) ($8,764) ($8,756) ($8,327) ($12,088) ($15,390) ($13,337) ($6,993) ($314) $9,431TotalOwner'sEquity $25,000 $12,608 $14,603 $15,437 $16,236 $16,244 $16,673 $12,912 $9,610 $11,663 $18,007 $24,686 $34,431

TotalLiabilities &Equity $52,800 $205,976 $205,377 $200,367 $197,169 $192,749 $189,266 $182,684 $177,403 $177,988 $183,298 $185,721 $184,146

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As of Period's End Starting Balances FY2013 FY2014 FY2015

Cash $0 $142,440 $183,550 $233,747Accounts Receivable $0 $0 $0 $0Inventory $17,000 $17,026 $19,580 $19,583Total Current Assets $17,000 $159,466 $203,130 $253,330

Long-Term Assets $61,500 $62,700 $62,700 $62,700Accumulated Depreciation $0 ($12,320) ($24,860) ($37,400)Total Long-Term Assets $61,500 $50,380 $37,840 $25,300

Total Assets $78,500 $209,846 $240,970 $278,630

Accounts Payable $27,800 $36,025 $43,467 $43,884Sales Taxes Payable $0 $0 $0 $0Short-Term Debt $0 $200 $0 $0Total Current Liabilities $27,800 $36,225 $43,467 $43,884

Long-Term Debt $0 $113,490 $94,232 $73,582

Total Liabilities $27,800 $149,715 $137,699 $117,466

Paid-In Capital $25,000 $25,000 $25,000 $25,000Retained Earnings $0 $0 $9,431 $52,571Earnings $0 $9,431 $43,140 $57,893Total Owner's Equity $25,000 $34,431 $77,571 $135,464

Total Liabilities & Equity $52,800 $184,146 $215,270 $252,930

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Projected Cash Flow Statement (With Monthly Detail)

FY2013 Jul '12 Aug '12 Sep '12 Oct '12 Nov '12 Dec '12 Jan '13 Feb '13 Mar '13 Apr '13 May '13 Jun '13

OperationsNet Profit ($12,392) $1,995 $834 $799 $8 $429 ($3,761) ($3,302) $2,053 $6,344 $6,679 $9,745DepreciationandAmortization $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,025 $1,045Decrease inAccountsReceivable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Decrease inInventory ($2,495) $400 $4,860 $1,140 ($3,830) $5,500 $1,780 ($3,870) ($2,720) $630 $380 ($1,801)Increase inAccountsPayable $23,718 ($986) ($4,228) ($1,372) ($1,295) $230 ($170) ($320) $200 $643 (

$70) ($8,125)Increase inSales TaxesPayable $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Net Cash FlowfromOperations $9,856 $2,434 $2,491 $1,592 ($4,092) $7,184 ($1,126) ($6,467) $558 $8,642 $8,014 $864

Investing &FinancingAssetsPurchased $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ($1,200)

InvestmentsReceived $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0Increase inShort-TermDebt $11,850 ($150) ($150) ($1,150) ($1,650) ($2,650) ($1,150) ($150) ($150) ($150) ($2,650) ($1,650)Increase inLong-TermDebt $130,000 ($1,458) ($1,466) ($1,475) ($1,483) ($1,492) ($1,501) ($1,509) ($1,518) ($1,527) ($1,536) ($1,545)Net Cash Flowfrom Investing& Financing $141,850 ($1,608) ($1,616) ($2,625) ($3,133) ($4,142) ($2,651) ($1,6

59) ($1,668) ($1,677) ($4,186) ($4,395)

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Cash at Beginningof Period $0 $151,706 $152,532 $153,407 $152,374 $145,149 $148,191 $144,414 $136,288 $135,178 $142,143 $145,971Net Increase inCash $151,706 $826 $875 ($1,033) ($7,225) $3,042 ($3,777) ($8,126) ($1,110) $6,965 $3,828 ($3,531)Cash at End ofPeriod $151,706 $152,532 $153,407 $152,374 $145,149 $148,191 $144,414 $136,288 $135,178 $142,143 $145,971 $142,440

FY2013 FY2014 FY2015

OperationsNet Profit $9,431 $43,140 $57,893Depreciation and Amortization $12,320 $12,540 $12,540Decrease in Accounts Receivable $0 $0 $0Decrease in Inventory ($26) ($2,554) ($3)Increase in Accounts Payable $8,225 $7,442 $417Increase in Sales Taxes Payable $0 $0 $0Net Cash Flow from Operations $29,950 $60,568 $70,847

Investing & FinancingAssets Purchased ($1,200) $0 $0Investments Received $0 $0 $0Increase in Short-Term Debt $200 ($200) $0Increase in Long-Term Debt $113,490 ($19,258) ($20,650)Net Cash Flow from Investing & Financing $112,490 ($19,458) ($20,650)

Cash at Beginning of Period $0 $142,440 $183,550Net Increase in Cash $142,440 $41,110 $50,197Cash at End of Period $142,440 $183,550 $233,747

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