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XYZ COMICS, LLC

BUSINESS PLAN

JANUARY 2018

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TABLE OF CONTENTS

1. Executive Summary ................................................................................................................. 4

2. Company Overview ................................................................................................................. 5

2.1. Mission Statement ............................................................................................................. 5

2.2. The Business Opportunity ............................................................................................... 5

2.2.1. Company Description & History ............................................................................. 5

2.2.2. Store Design & Layout .............................................................................................. 6

2.2.3. Site Description .......................................................................................................... 6

2.2.4. Industry Background ................................................................................................ 6

2.3. Capital Requirements ....................................................................................................... 7

2.4. Growth Strategy ................................................................................................................ 8

3. Products & Services .................................................................................................................. 9

3.1. Overview ............................................................................................................................ 9

3.2. The Products ...................................................................................................................... 9

3.2.1. Comic Books ............................................................................................................... 9

3.2.2. Magic The Gathering ................................................................................................. 9

3.2.3. Pokemon.................................................................................................................... 10

3.2.4. Dungeon & Dragons ................................................................................................ 10

3.2.5. Entertainment Memorabilia ................................................................................... 10

3.2.6. Collectible Toys & Games ....................................................................................... 11

3.3. The Services ...................................................................................................................... 11

3.3.1. 3-D Printing .............................................................................................................. 11

3.3.2. Home Delivery Service ........................................................................................... 11

3.3.3. Community Event Hosting .................................................................................... 11

3.4. Pricing Strategy ............................................................................................................... 11

4. The Market .............................................................................................................................. 12

4.1. Target Market Analysis .................................................................................................. 12

4.1.1. Target Consumer Profile ......................................................................................... 12

4.2. Demographics .................................................................................................................. 12

4.2.1. ABC, ABC Demographic Stats ............................................................................... 12

4.2.2. ABC, ABC Demographic Stats ............................................................................... 13

4.3. U.S. Comic Book Market Analysis ................................................................................ 13

4.3.1. Figures ....................................................................................................................... 13

4.3.2. Trends ........................................................................................................................ 14

4.3.3. Industry Analysis ..................................................................................................... 15

4.4. Profile of Direct Competitors ......................................................................................... 15

4.4.1. XYZ Games & Comics ............................................................................................. 15

4.4.2. XYZ Comics .............................................................................................................. 16

4.4.3. XYZ Comic Book Coffee Bar .................................................................................. 16

4.4.4. XYZ Comics .............................................................................................................. 16

4.5. Competitive Analysis ..................................................................................................... 17

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5. Marketing Plan .......................................................................................................................... 18

5.1. Marketing Overview & Strategy .................................................................................... 18

5.2. Branding Strategy............................................................................................................. 18

5.3. Signage ............................................................................................................................... 18

5.4. Sales .................................................................................................................................... 18

5.5. Internet Marketing ........................................................................................................... 19

5.6. Print Advertising .............................................................................................................. 19

5.7. Public Relations ................................................................................................................ 19

5.8. Promotions ........................................................................................................................ 196. Operational Plan ........................................................................................................................ 20

6.1. Operational Overview .................................................................................................... 206.1.1. Hours of Operation ................................................................................................... 206.1.2. Legal Structure .......................................................................................................... 206.1.3. Operational Growth Plan........................................................................................ 20

6.3. Inventory Management.................................................................................................. 206.4. Computer Hardware & Software ................................................................................. 216.5. Legal & Insurance ......................................................................................................... 216.6. Accounting ..................................................................................................................... 21

7. Management & Staff ................................................................................................................ 227.1. Executive Management .................................................................................................. 22

7.1.1 John Doe, Chief Operating Officer ......................................................................... 227.1.2 Jane Doe, Chief Financial Officer ............................................................................ 22

8. Financing & Growth Strategy ................................................................................................ 238.1. Capital Requirements ..................................................................................................... 238.2 Risk Analysis..................................................................................................................... 23

9. Financials .................................................................................................................................. 249.1. Revenue Model ................................................................................................................ 24

9.1.1. Sales Assumptions ................................................................................................... 249.1.2. Sales Forecast ............................................................................................................ 24

9.2. Operating Expenses ........................................................................................................ 259.2.1. G & A Expenses ........................................................................................................ 259.2.2. Marketing Expenses ................................................................................................ 259.2.3. Staff Headcount & Salaries ..................................................................................... 25

9.3. Pro-Forma Financial Statment Summaries .................................................................. 269.3.1. Pro-Forma Income Statement ................................................................................. 269.3.2. Pro-Forma Statement of Cash Flows ..................................................................... 279.3.3. Pro-Forma Balance Sheet ........................................................................................ 27

6.2. Product Procurement ...................................................................................................... 20

6.7. Licenses & Permits........................................................................................................ 22

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1. EXECUTIVE SUMMARY

XYZ Comics, LLC’s mission is to

become the leading comic and games

store in ABC and eventually expand

throughout ABC and beyond.

XYZ Comics, LLC will provide a

wide selection of new and vintage

comic books, graphic novels, board

games, and card role playing gaming.

In addition, XYZ Comics, LLC will

host tournaments related to pop

culture for fans and curious

customers in its target market.

XYZ Comics, LLC will function not

only as a product retail store, but

provide a variety of community

services, such as Notary Public

signatures, Community Event

planning, and Business enhancement

through artistic consultation and

collaborations.

The store is approximately 2,000

square feet and will be divided into

sections based on product placement.

Part of the store will display new

comics, vintage comics, and store

memorabilia. The owner has a

private collection of rare and high

value comics that will be on display

in a separate glass case. The store will

have a section dedicated to trading

cards and trading card memorabilia

as well. There will be Pokemon,

Dungeons and Dragons, and Magic

the Gathering section in the store.

Combined graphic novel and comics

sales in North America grew 5% to

$1.085 billion in 2016, a $55 million

increase over the $1.03 billion

reported last year, according to a joint

estimate by industry news

sites Comichron and ICv2.com.

Led by the continuing sales growth of

book-format graphic novels (which

rose to $590 million, from $350

million in 2015), the $1.085 billion

figure represents the combined sales

of book-format graphic novels,

traditional comics periodicals ($405

million), and digital download-to-

own comics ($90 million).

XYZ Comics, LLC will launch a

robust B2C marketing campaign that

includes professionally developed

marketing materials integrating

signage, Internet marketing, print

advertising, public relations,

and promotions to complement

sales efforts.

XYZ Comics, LLC seeks to raise

$350,000 in debt capital. Table 1

provides the breakdown of capital

requirements which includes an

estimated $150,000 for capital

expenditures and $200,000 for

working capital to support general

administration expenses, marketing

expenses, and inventory.

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2. COMPANY OVERVIEW

2.1. MISSION STATEMENT

XYZ Comics’ mission is to become the leading comic and games store in ABC and

eventually expand throughout ABC and beyond.

2.2. THE BUSINESS OPPORTUNITY

2.2.1. COMPANY DESCRIPTION & HISTORY

XYZ Comics, LLC (herein also

referred to as “XYZ Comics” or “the

Company”) has been established as a

limited liability company in ABC.

The Company will eventually

become an S-Corporation. The

Company is acquiring XYZ Comics,

which is currently thriving and a

popular destination in the area. The

Company will provide a wide

selection of new and vintage comic

books, graphic novels, board games, and card role playing gaming. In addition,

the Company will host tournaments related to pop culture for fans and curious

customers in its target market.

XYZ Comics by its store design and functional flow will be the future blue print

and business model of Comic Books stores. XYZ Comics will function not only as

a product retail store, but provide a variety of community services, such as Notary

Public signatures, Community Event planning, and Business enhancement

through artistic consultation and collaborations.

John Doe and Jane Doe founded the Company. John is currently a XYZ Engineer

employed at the XYZ Administration.

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2.2.2. STORE DESIGN & LAYOUT

The store is approximately 2,000 square feet and will

be divided into sections based on product placement.

Part of the store will display new comics, vintage

comics, and store memorabilia. The owner has a

private collection of rare and high value comics that

will be on display in a separate glass case. The store

will have a section dedicated to trading cards and

trading card memorabilia as well. There will be

Pokemon, Dungeons and Dragons, and Magic the Gathering section in the store.

The store will have a gaming and lounge area. There will be several tables that

customers can use to play card games, board games, and read comics.

2.2.3. SITE DESCRIPTION

The store will be located directly off of the I-12

freeway in ABC, CA. The address is 12345 XYZ

Ave., ABC, ABC 12345.

I-12 experiences high volumes of traffic around

ABC with approximately xxx,xxx vehicles traveling

in each direction daily. The store is near the ABC

Plaza, ABC Center, and ABC Family Fun Center.

2.2.4. INDUSTRY BACKGROUND1

2.2.4.1. THE BEGINNING

The history of American comics started in 1842 with the translation of Rodolphe

Töpffer's work: The Adventures of Obadiah Oldbuck. Local artists took over this

new medium and created the first American comics. But it is not until the

development of daily newspapers that an important readership is reached

through comic strips. The first years corresponded to the establishment of

canonical codes (recurring character, speech balloons, etc.) and first genres (family

strips, adventure tales). Characters acquired national celebrity and were subject to

cross-media adaptation while newspapers were locked in a fierce battle for the

most popular authors.

1 “History of American Comics”; Wikipedia; 2017

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2.2.4.2. THE GOLD AGE

The second major evolution came in 1934 with the comic book, which allowed the

dissemination of comics (first reprints of comic strips) in dedicated media. In 1938,

when Superman appeared in one of those comic books, began what is commonly

called the Golden Age of Comic Books. During World War

II, superheroes and funny animals were the most popular genres. Following the

decline of the superheroes, new genres developed (i.e., western, romance, and

science fiction) and reached an increasingly important readership.

2.2.4.3. THE SILVER AGE

In 1956, began the Silver Age of Comic Books with the return of the preference for

superheroes, such as Flash and Green Lantern by DC Comics. If Dell Comics and

its comics for children remained the leading publisher of comic books, genres

other than superheroes started to decline and many publishers closed. Very

popular superheroes, mainly created by Stan Lee and Jack Kirby, appeared

in Marvel Comics.

2.2.4.4. THE BRONZE AGE

This turned into the leading publisher of comics in the next period known as

the Bronze Age of Comic Books (from the early 1970s to 1985) during which the

stories became less manichean while superhero comics maintained their

hegemony.

2.2.4.5. THE MODERN AGE

The Modern Age initially seemed to be a new golden age when writers and artists

recreated classic characters or launched new series that attracted millions of

readers. However, it was then marked by a series of crises that threaten the

financial stability of many agents. Alternative comics, successors of underground

comics, develop in line with Art Spiegelman and his Maus. On the other hand,

the comic strip experienced a crisis more pronounced in the 2000s and linked to

that of the press as a whole, while at the same time a new American product,

the web comics, appeared.

2.3. CAPITAL REQUIREMENTS

XYZ Comics, LLC seeks to raise $350,000 in debt capital. Table 1 provides the

breakdown of capital requirements which includes an estimated $150,000 for

capital expenditures and $200,000 for working capital to support general

administration expenses, marketing expenses, and inventory.

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2.4. GROWTH STRATEGY

XYZ Comics has carefully developed its growth strategy as follows:

Phase 1 (Month 1 to 12):

▪ Raise $350,000 in financing

▪ Update and enhance the online website

▪ Develop and launch the online store

▪ Launch a comprehensive marketing campaign


▪ Increase the number of customers in the poll list

▪ Establish a product delivery service

▪ Develop an efficient operations system

▪ Increase and expand marketing efforts


▪ Identify an approximately 4000 sq. ft. space to lease

▪ Implement leasehold improvements

▪ Move operations to the new site

▪ Hire additional management and staff

▪ Increase marketing efforts

▪ Increase inventory of additional rare, high-value comics

▪ Improving operational efficiency

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3. PRODUCTS & SERVICES

3.1. OVERVIEW

XYZ Comics is a business that specializes in the retailing

of comic books including new comic books, vintage comic

books, and extremely rare comic books. The Company

will sell comic books from the Gold, Silver, Bronze, and

Modern age. Also gaming products such as custom board

games and pieces, Role Playing Gaming featuring highly

collectible cards and exclusives related to the growing Gaming market exclusively

sold at XYZ Comics LLC. The Company’s wide array of products and services

will include:

▪ Comic books

▪ Magic the Gathering

▪ Pokemon

▪ Entertainment memorabilia

▪ Dungeons & Dragons

▪ Collectible toys & games

▪ 3-D printing

▪ Home delivery service

▪ Community event hosting

3.2. THE PRODUCTS

3.2.1. COMIC BOOKS

A comic book is

a publication

that consists

of comic art in

the form of

sequential

juxtaposed panels that represent

individual scenes. The Company will

offer new comic books, vintage comic

books, and rare comic books that will

be displayed and sold separately. The

owner also has an exclusively rare

personal collection of comics that

have been collected over the past 35

years that will be sold at the store.

3.2.2. MAGIC THE GATHERING

Magic the Gathering

is a trading card

game and digital

collectible card

game, which can be

played by two or

more players in

various formats and two categories:

constructed or limited. Limited

formats involve players building a

deck spontaneously out of a pool of

random cards with a minimum deck

size of 40 cards.

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Constructed formats involve players

created decks from cards they own,

usually 60 cards with no more than 4

of any given card. Magic is played in

person with printed cards or using a

deck of virtual cards through the

Internet. The Company will sell

Magic the Gathering trading cards,

clothing, action figures, and reading

materials.

3.2.3. POKEMON

The Pokemon

Trading Card Game

is a collectible card

game based on the

Pokemon video game

series. Players

assume the role of a

Pokémon trainer and use their

Pokémon to battle their opponents'.

Players play Pokémon to the field and

attack their opponent's Pokémon. A

Pokémon that has sustained enough

damage is knocked out, and the

player who knocked it out draws a

Prize card. There are usually six Prize

cards, and the primary win condition

is to draw all of them. Other ways to

win are by knocking out all the

Pokémon the opponent has on the

field such that the opponent has none

left, or if at the beginning of their

opponent's turn there are no cards left

to draw in the opponent's deck. The

Company will sell Pokemon trading

cards, clothing, action figures, and

reading materials.

3.2.4. DUNGEON & DRAGONS

Dungeons

and

Dragons is

a fantasy tabletop role-playing game.

The game assigns each player a

specific character to play instead of

a military formation. These

characters embark upon imaginary

adventures within a fantasy setting.

A Dungeon Master serves as the

game's referee and storyteller while

maintaining the setting in which the

adventures occur and playing the

role of the inhabitants. The characters

form a party that interacts with the

setting's inhabitants, and each other.

Together they solve dilemmas,

engage in battles, and gather treasure

and knowledge. The Company will

sell Dungeon and Dragon trading

cards, clothing, action figures, and

reading materials.

3.2.5. ENTERTAINMENT

MEMORABILIA

The Company

will sell apparel

and memorabilia

based on music,

movies and

television shows

that relate to its

target consumer

demographic profile. Memorabilia

will include t-shirts, action figures,

movie and show posters, vintage

posters, and concert posters.

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3.2.6. COLLECTIBLE TOYS &

GAMES

The Company

will offer an

array of new

and used toys

and video games. The toys will

include modern collectible American

and Japanese toys and collectible

figures, as well as antique, collectible

toys that have appreciated in value as

they aged due to their classic appeal

and rarity. In addition, the Company

will offer video games, console

games, and console systems that will

range from new games to antique

systems and games (e.g. Nintendo,

Super Nintendo, Genesis, Play Station,

Coleco Vision Atari).

3.3. THE SERVICES

3.3.1. 3-D PRINTING

XYZ Comics’s

customers will

be able to use 3D

printing to build

custom miniature figurines, coins,

and models for games.

3.3.2. HOME DELIVERY SERVICE

XYZ Comics will also

offer personal home

delivery options to

subscribed customers

that live within 15

miles of the store, to meet the needs

of working individuals who read and

collect comics but don’t always have

the time to go to the storefront each

week.

3.3.3. COMMUNITY EVENT

HOSTING

The Company

will also function

as an event

hosting and artist

hub, cultivating the artistic qualities

within the ABC community by

hosting events on a weekly basis

ranging from card gaming

tournaments to book clubs and art

classes. The storefront will also be

used as a lounge where members of

the community can come together.

3.4. PRICING STRATEGY

The Company will offer competitive pricing and will feature certain items that it

has purchased in bulk and/or have a large quantity of at discounted pricing and

feature promotions on purchases as well as offer rewards for tournaments.

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4. THE MARKET

4.1. TARGET MARKET ANALYSIS

4.1.1. TARGET CONSUMER PROFILE

The Company’s average client will be middle to upper middle-class families,

military members, and young adults living in the Company’s target market.

Common traits among clients will include:

▪ Annual household income exceeding $50,000

▪ Lives or works no more than 15 miles from the Company’s location.

▪ Will spend $25 per visit to the Comic Book Store.

4.2. DEMOGRAPHICS2

4.2.1. ABC, ABC DEMOGRAPHIC STATS

2 “Demographics”; Neighborhood Scout; 2017

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4.2.2. ABC, ABC DEMOGRAPHIC STATS

4.3. U.S. COMIC BOOK MARKET ANALYSIS

4.3.1. FIGURES3

Combined graphic novel and comics

sales in North America grew 5% to $1.085

billion in 2016, a $55 million increase over

the $1.03 billion reported last year,

according to a joint estimate by industry

news sites Comichron and ICv2.com.

3 “Comics and graphic novel sales up 5% in 2016”; Comichron; 2017

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Led by the continuing sales growth

of book-format graphic novels

(which rose to $590 million, from

$350 million in 2015), the $1.085

billion figure represents the

combined sales of book-format

graphic novels, traditional comics

periodicals ($405 million), and

digital download-to-own comics

($90 million). Physical sales of

graphic novels sold through the

book trade rose 16%, to $405 million. While total sales of both comics and books

through the comics shop channel were about $570 million, the increase was driven

by periodical sales. Sales of graphic novels in the comics shop market were flat in

2016, according to the joint report.

4.3.2. TRENDS4

Digital disruption has upended virtually every corner of publishing, but in the

world of comic books, something curious is happening: Print sales are thriving

alongside the rise of their digital counterparts.

Print comic book revenues have been on the rise in recent years, even as digital

comics' sales boom. Print receipts have held up at a time when publishers have

introduced all-you-can-download subscriptions that offer thousands of comics for

a flat monthly or annual fee.

In 2014, digital comics revenues excluding unlimited subscriptions reached $100

million, according to ICv2, an online trade magazine that tracks comic sales and

other trends. That was up from just $1 million seven years ago, when ICv2 started

collecting data.

Meanwhile, the North American market for print comics grew from an estimated

range of $650 to $700 million in 2009 to $835 million in 2014, according to ICv2 and

the Comics Chronicle. That includes sales of single issues at comic shops and

newsstands, as well as book channel sales of trade paperbacks, or collected

volumes of comics.

4 “Comic books buck trend as print and digital sales flourish”; CNBC; June 2016

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There are signs digital comics are butting up against the law of large numbers.

Sales growth slowed in 2014 to 11 percent, down from 29 percent in 2013 and 180

percent in 2012. In the coming years, it could be more difficult to keep growing the

readership.

Taken together, however, it suggests the internet age hasn't wreaked the same type

of havoc on comics that it has on sectors like music and print media.

Milton Griepp, CEO of pop culture new site ICv2.com, cited the ongoing growth

of graphic novels as key to the increase: "This represents growth in the broadest

part of the market, where increased variety of content is being found by new

audiences for comics, including kids and women.”

4.3.3. INDUSTRY ANALYSIS

There are approximately 2,306 comic book stores in North America.5

4.4. PROFILE OF DIRECT COMPETITORS

4.4.1. XYZ GAMES & COMICS

▪ Year Founded – 2014

▪ Store Address – 12345 ABC Rd., ABC, ABC

12345

▪ Distance from XYZ Comics – x miles

▪ Products & Services – Comic books, trading cards, tv/movie memorabilia,

gaming events, online store, DeckBuilder.

5 "How many comic book stores are there in North America"; Quora; 2016

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4.4.2. XYZ COMICS


▪ Store Address – XYZ, XYZ 12345


▪ Products & Services – Comic books, online store

4.4.3. XYZ COMIC BOOK COFFEE BAR


▪ Store Address – 123 XYZ Ave.

ABC, ABC 12345


▪ Products & Services – Comic books, coffee

4.4.4. XYZ COMICS


▪ Store Address – 123 XYZ Rd., ABC, ABC

12345


▪ Products & Services - Comic books, trading cards, tv/movie memorabilia,

gaming events, online store, DeckBuilder

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4.5. COMPETITIVE ANALYSIS

XYZ Games & Comics is located in ABC, ABC and sell comics, trading cards, and

TV/movie memorabilia. XYZ Comics has a very detailed website that promotes

new comic books and trading cards that the store has in stock. Their website also

has a DeckBuilder, which is a tool that helps gamers build their card decks. The

Company will have a competitive advantage over XYZ Games & Comics, due to

the Company’s community presence, 3-D printing services, toys, video games, and

extremely rare comic books.

XYZ Comics is an online comic book store based in ABC, ABC and is a top-rated

seller on Ebay with a large collection of vintage, hard to find comics. XYZ Comics

solely focuses on comics and they do not have a storefront. The Company’s wide

range of products and services including trading cards, action figures, toys, video

games, tv/movie memorabilia along with the storefront lounge will give the

Company a definitive competitive advantage over XYZ Comics.

XYZ Comic Book Coffee Bar is a coffee shop that sells comic books in ABC, ABC.

XYZ Comic Book Coffee Bar is a new business that recently opened up in 2017 and

they have developed a great social media presence and following. In comparison

to the Company, XYZ Comic Book Coffee Bar only sells comic books and coffee.

Their website does not show any particular comic books but rather focuses on

current promotions. The Company will have a competitive advantage over XYZ

due to their wider selection of products, detailed website, online store, and

management experience.

XYZ Comics is a comic book and games store in ABC, ABC that sells comics,

trading cards, apparel, and TV/movie memorabilia. XYZ Comic’s website has a

DeckBuilder and Buylist builder option that facilitates the trading card purchasing

process for customers. XYZ Comics also interacts with customers and supporters

through podcasts and video content. XYZ Comics will conduct weekly podcasts

and produce original comic strips and their collection of extremely rare comics and

community presence will differentiate the Company from XYZ Comics.

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5. MARKETING PLAN

5.1. MARKETING OVERVIEW & STRATEGY

XYZ Comics will implement a dynamic marketing campaign to drive business

growth and maximize branding within the comic book and games industry. The

ultimate goal of the marketing campaign will be to promote visibility of XYZ

Comics’ products and services in the comic book and games industry. The

Company plans to initially establish brand visibility within the local town of ABC,

ABC and the surrounding communities, and concurrently expand into other

regional markets.

The Company will implement robust B2C marketing campaign that

includes professionally developed marketing materials integrating

signage, Internet marketing, print advertising, public relations, and

promotions to complement sales efforts.

5.2. BRANDING STRATEGY

The branding objectives for XYZ Comics, LLC will focus on building credibility in

comic book and related sales through a wide range of products and services,

excellent customer service, professional affiliations, and superior management

skills.

5.3. SIGNAGE

XYZ Comics will use signs to display information of its products and services. This

will help prospective customers and affiliate partners learn of the Company’s

presence.

5.4. SALES

The Company will hire an experienced store clerk to assist with storefront sales.

The company will have an online store through which customers could browse all

inventory. There will be a delivery service available to customers that live within

15 miles of the store.

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5.5. INTERNET MARKETING

The Company's Internet marketing will include display advertising, social media advertising, search engine optimization, and search engine marketing

in order to promote the Company’s comic books, trading cards, and store

memorabilia to potential and existing customers. The Company already has

a website but it will be redeveloped to be more visually appealing and

highly functional. The Company will utilize search engine optimization,

increasing the Company’s visibility within search results. This strategy

will include link building, blog commenting, social network marketing,

and article marketing. The Company will also consider implementing PPC

advertising, display advertising, and video marketing. The Company

maintains a presence on Google, Bing, and Yelp. The Company will continue to maintain and promote its pages on Facebook, Instagram, and Twitter. The Company will register with online comics directories and databases.

The Company will advertise in local and regional newspapers and magazines

that appeal to its demographic. Examples of newspapers and magazines

in ABC that the Company can advertise in are XYZ, XYZ, XYZ, and XYZ.

The Company will become valued members of the local community by hosting

weekly events and by allowing customers to use the storefront location as a

lounge where they can spend their time.

The Company will offer discount sales, promotional discounts on select merchandise, and offer promotional giveaways and contests.

5.6. PRINT ADVERTISING

5.7. PUBLIC RELATIONS

5.8. PROMOTIONS

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6. OPERATIONAL PLAN

6.1. OPERATIONAL OVERVIEW

6.1.1. HOURS OF OPERATION

The Company will conduct normal business operations from 10:30AM to 7:00 PM

seven days a week as well as having information available online 24/7.

6.1.2. LEGAL STRUCTURE

The Company has been established as a limited liability corporation in the state of

ABC. The Company will eventually become an S-Corporation registered in the

state of ABC.

6.1.3. OPERATIONAL GROWTH PLAN

The Company will purchase x% of the existing comic book and games store, XYZ

Comics, and rename it XYZ Comics. Initially the Company will update and

enhance the current website, then develop and launch the online store. The owner

will bring his personal collection of rare and high value comics to the store and

place them on display for sale. Along with the online store, the Company will

develop and establish a product delivery service that will deliver within 15 miles

of the storefront. The Company will then launch a comprehensive marketing

campaign that will bring in potential customers and add additional current

customers to the poll list.

Upon growth, the Company will identify a larger store to lease and implement

leasehold improvements. Upon growth the Company will hire additional staff to

help maintain and improve the efficiency of operations and lower operational

costs. The Company will increase inventory with additional rare, high-value

comics and increase marketing efforts to target all of Southern ABC.

6.2. PRODUCT PROCUREMENT

The majority of the Company’s inventory comes from two sources. XYZ

Distribution will supply most of the Company’s comic books. The owner also

has a large personal collection of rare, high value comics that were gathered over

the past 35 years that will be for sale.

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The Company’s administrative staff and executive team will manage and control

all inventory to maintain a sufficient and reasonable stock of supplies to conduct

day-to- day business. The Company’s logistics program will keep and track

inventory at the Company’s storefront as well as location and status of orders

being shipped for delivery.

6.4. COMPUTER HARDWARE & SOFTWARE

The Company will obtain the essential computer hardware and software systems

to support operations including inventory management systems, payroll

administration programs, sales management tools, managerial accounting, and

financial analysis and reporting, as well as performance management.

The Company will also provide the necessary business software to support the

Company’s business strategy and to help with business optimization. A crucial

element of the overall enterprise management system will be how the hardware

and software will be setup.

6.5. LEGAL & INSURANCE

The Company will retain the services of corporate attorney to handle all legal

matters related to the launch and operation of the business. This includes

providing legal counsel on matters such as contract administration, employment,

and corporate business issues.

The Company will obtain the required insurance and permits to manage the risks

are associated with this type of business operation and assure operations to be

within the guidelines of national and state-wide regulations.

6.6. ACCOUNTING

The Company has a business license from the city of ABC and a Seller's permit from the ABC Board of Equalization.

The Company outsources all accounting responsibilities to a full-time

accountant and CPA, who produce monthly reports for accounts payable,

accounts receivable, and payroll.

6.7. LICENSES & PERMITS

6.3. INVENTORY MANAGEMENT

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7. MANAGEMENT & STAFF

7.1. EXECUTIVE MANAGEMENT

7.1.1 JOHN DOE, CHIEF OPERATING OFFICER

John Doe is a 20-year retired military veteran and has 35 years of comic book and

retail experience. John is the creator and owner of his own fictional character that

he has rights to produce, write, and print. He is a pop culture expert at predicting

trends and translating that into market capital. He managed massive inventories

and coordinated and led 10+ personnel in the execution of Preventive Maintenance

of 15k pieces of Medical Dental Equipment for Hospitals items worth $x million.

John has vast knowledge of Microsoft office word, excel, and power point

programs. He is also a data management expert and adept at accurate reporting.

John was a Dental Technician for the U.S. Navy from 1995 until 2005. From 2005

until 2012 he was a Hospital Corpsman for the U.S. Navy. In 2002, John finished

the Dental/Medical Repair school before completing Field Medical Service school

in 2006. In 2007, John finished the Nobel Leadership course and in 2015, John

earned his Bachelor’s Degree in Business Management.

7.1.2 JANE DOE, CHIEF FINANCIAL OFFICER

Jane Doe is a 20-year retired military veteran. Jane coordinated clinical support to

25 providers for 15,000 beneficiaries, earning $x million in Prospective Payment

System earnings. Jane assisted with the medical care of xxx prisoners, generating

$78K in Medical revenue units, accounting for 2% productivity of Navy XYZ

Region Southwest. She managed an annual OPTAR budget of $900K, including

medications, medical supplies, and equipment. Jane was also a liaison with 20

commands to maintain 98% Operational Dental Readiness for 4,000 Sailors and

Marines. Jane has a B.A. Degree in Business Management from XYZ University.

From 1995 to 2005, Jane worked in the Naval XYZ Center Southwest. There she

supervised the clinical duties and assignments of all subordinates and assisted

Dental Providers in all phases in the treatment of patients. From 2005 until 2015,

Jane worked at the XYZ Hospital Camp XYZ as a Hospital Corpsman. She

performed supervisory duties in all areas of patient care and environmental

inspections. She administered first aid, conducted physical examinations, and

made basic clinical assessments. From 2013 until 2015, Jane was also a

Correctional Custody Specialist at the Naval Consolidated Brigade where she

performed specialized correctional duties at Naval places of confinement.

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8. FINANCING & GROWTH STRATEGY

8.1. CAPITAL REQUIREMENTS

XYZ Comics, LLC seeks to raise $350,000 in debt capital. Table 1 provides the

breakdown of capital requirements which includes an estimated $100,000 for

leasehold improvements, $35,000 for equipment, $5000 for furniture, and the

remaining $200,000 for working capital including $97,500 for general

administration expenses, $60,000 for marketing expenses, and $42,500 for

inventory.

8.2 RISK ANALYSIS

The Company is a start-up company and will be managed by a group of

professional and seasoned business owners. The risks associated with this venture

are related to future uncertainties in the comics and gaming store industry and fall

within the low risk segment of the investment spectrum. Such uncertainties are

associated with competition, changing industry patterns, and shifting consumer

tastes. Management believes that given the current trends in the economy there

will be continued demand for the products that the Company seeks to deliver to

the marketplace.

While there can be no guarantees that the Company will be able to effectively

manage the business risks associated with the economic cycle, management is very

confident that it will be able to effectively increase revenues throughout time.

Capital Items: Cost:

Leasehold improvements 100,000

Equipment 35,000

Furniture 5,000

Computer hardware & software 10,000

Capital expenditures 150,000

Marketing expenses 60,000

G&A expenses 97,500

Inventory 42,500

Working Capital: 200,000

Total capital requirements 350,000

Table 1

XYZ Comics, LLCCapital Requirements

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9. FINANCIALS

9.1. REVENUE MODEL

9.1.1. SALES ASSUMPTIONS

9.1.2. SALES FORECAST

Year 1 Year 2 Year 3 Year 4 Year 5

# In-Store Purchases 2% 1% 2% 1.5% 0.75% monthly growth

In-Store Purchase Revenues 47.50$ 48.69$ 49.90$ 51.15$ 52.43$ per in-store purchase

# Monthly Subscription Fulfil lments 2% 1% 2% 1.5% 0.75% monthly growth

# Monthly Subscription Revenues 40.00$ 41.00$ 42.03$ 43.08$ 44.15$ per subscription

3-D Printing Purchases 3% 2% 1% 0.5% 0% monthly growth

3-D Printing Revenues 25.00$ 25.63$ 26.27$ 26.92$ 27.60$ per purchase

Cost of Sales: Year 1 Year 2 Year 3-5

Cost of Goods Sold - In-Store Purchases 65.0% 63.0% 62.0%

Cost of Goods Sold - Subscriptions 65.0% 63.0% 62.0%


# In-Store Purchases 8,383 9,954 11,979 14,700 16,732

In-Store Purchase Revenues 398,171 484,647 597,828 751,951 877,285

# Monthly Subscription Fulfillments 8,718 10,352 12,459 8,198 17,401

# Monthly Subscription Revenues 348,714 424,449 523,572 658,551 768,317

3-D Printing Purchases 1,419 1,894 2,249 2,452 2,520

3-D Printing Revenues 35,480 48,525 59,064 66,024 69,547

Total Revenues 782,366$ 957,622$ 1,180,464$ 1,476,527$ 1,715,148$

Cost of Sales:

Cost of Goods Sold - In-Store Purchases 258,811 305,328 370,653 466,210 543,917

Cost of Goods Sold - Subscriptions 226,664 267,403 324,614 408,302 476,356

Cost of Sales - Total 485,476$ 572,731$ 695,268$ 874,511$ 1,020,273$

Gross Margin 296,890$ 384,891$ 485,196$ 602,015$ 694,875$

Sales Forecast

Table 2

XYZ Comics, LLC

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9.2. OPERATING EXPENSES

9.2.1. G & A EXPENSES

9.2.2. MARKETING EXPENSES

9.2.3. STAFF HEADCOUNT & SALARIES


B2B sales materials 3,600 1,380 1,518 1,594 1,634

Internet marketing 48,000 55,200 60,720 63,756 65,350

Public relations 12,000 13,800 15,180 15,939 16,337

Print advertising 30,000 34,500 37,950 39,848 40,844

Total marketing & advertising $93,600 $104,880 $115,368 $121,136 $124,165

Table 4

XYZ Comics, LLC

Marketing Expenses


Chief Executive Officer 1.0 1.0 1.0 1.0 1.0

Chief Operating Officer 1.0 1.0 1.0 1.0 1.0

Chief Financial Officer 1.0 1.0 1.0 1.0 1.0

Store Clerk 1.5 2.0 3.0 3.0 3.0

Total Headcount 4.5 5.0 6.0 6.0 6.0

XYZ Comics, LLC

Staff Headcount (Year-End Totals)

Table 5


Chief Executive Officer $34,000 $40,800 $44,880 $46,002 $47,152

Chief Operating Officer $21,000 $25,200 $27,720 $28,413 $29,123

Chief Financial Officer $21,000 $25,200 $27,720 $28,413 $29,123

Store Clerk $21,000 $21,525 $22,063 $22,615 $23,180

Staff Salaries

Table 6

XYZ Comics, LLC

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9.3. PRO-FORMA FINANCIAL STATMENT SUMMARIES

9.3.1. PRO-FORMA INCOME STATEMENT


Revenues:

In-Store Purchase Revenues $398,171 $484,647 $597,828 $751,951 $877,285

# Monthly Subscription Revenues $348,714 $424,449 $523,572 $658,551 $768,317

3-D Printing Revenues $35,480 $48,525 $59,064 $65,859 $69,547

Total Sales $782,366 $957,622 $1,180,464 $1,476,361 $1,715,148

Cost of Sales:

Cost of Goods Sold - In-Store Purchases $258,811 $305,328 $370,653 $466,210 $543,917

Cost of Goods Sold - Subscriptions $226,664 $267,403 $324,614 $408,302 $476,356

Cost of Sales - Total $485,476 $572,731 $695,268 $874,511 $1,020,273

Gross Margin $296,890 $384,891 $485,196 $601,850 $694,875

Expenses:

Marketing expense 93,600 104,880 115,368 121,136 124,165

General & administrative 124,564 149,574 165,802 173,353 179,704

Expenses - Total 218,164 254,454 281,170 294,489 303,869

Net operating income: $78,726 $130,437 $204,026 $307,361 $391,007

Depreciation 5,633 8,078 49,229 56,033 63,033

Interest earned 13,716 16,939 18,672 28,518 42,059

Interest expense 5,470 15,456 13,967 12,403 10,758

Income before taxes 69,938 123,842 159,502 267,443 359,274

Income taxes 0 0 0 0 0

Net income $69,938 $123,842 $159,502 $267,443 $359,274

Schedule 1

XYZ Comics, LLC

Projected Income Statement

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9.3.2. PRO-FORMA STATEMENT OF CASH FLOWS

9.3.3. PRO-FORMA BALANCE SHEET


Assets:Current assets Cash and marketable items $372,014 $470,479 $521,833 $796,437 $1,168,765

Accounts receivable 7,270 8,359 10,707 13,115 14,757 Prepaid expenses - - - - -

Total current assets 379,284 478,838 532,539 809,551 1,183,522Net non-current assets: 25,867 22,789 100,060 59,026 10,993Total assets 405,151 501,627 632,599 868,578 1,194,515

Liabilities & Shareholders' Equity

Current liabilities Accounts payable 8,962 9,903 11,482 12,034 12,353 Accrued liabilities 3,927 4,712 5,183 5,313 5,446 Accrued taxes - - - - -

Total current liabilities 12,889 14,615 16,666 17,346 17,799

Long-term LiabilitiesLong-terrm debt (1) 324,683 293,232 262,652 230,507 196,717Total long-term liabilities 324,683 293,232 262,652 230,507 196,717

Total Liabilities 337,573 307,847 279,317 247,853 214,516

Shareholders' equity Common stock - - - - - Retained earnings 69,938 193,780 353,282 620,725 979,999

Total shareholders' equity 69,938 193,780 353,282 620,725 979,999

Total liabilities and equity 407,510 501,627 632,599 868,578 1,194,515

Schedule 3XYZ Comics, LLC

Projected Balance Sheet

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