Generic/Sample Business Plan

Business Plan Prepared By Miguel Castanza Chef/Owner La Verja 555 Bankwell Avenue Hillsdale, StateA 123-456-6780 laverja@earthworks.com Date Prepared January 200A Table of Contents EXECUTIVE SUMMARY ..............................................................................................................4 MANAGEMENT AND ORGANIZATION PLAN ........................................................................5 Legal Form of Business .............................................................................................................5 Management Team ....................................................................................................................5 Board of Directors/Advisory Board .........................................................................................5 Recruitment and Selection of Employees ................................................................................5 Compensation and Ownership .................................................................................................5 Employee Reward and Incentive Plan......................................................................................5 Communication.........................................................................................................................6 Infrastructure.............................................................................................................................6 PRODUCT/SERVICE PLAN .......................................................................................................7 Purpose of Product/Service......................................................................................................7 Features and Benefits ................................................................................................................7 Stage of Development ...............................................................................................................7 Product/Service Limitations.....................................................................................................7 Product/Service Liability ..........................................................................................................7 Production .................................................................................................................................7 Facilities......................................................................................................................................8 Suppliers.....................................................................................................................................8 Related Products/Services and Spin-Offs ................................................................................8 Trademarks, Patents, Copyrights, Licenses, Royalties .............................................................8 Governmental Approvals...........................................................................................................8 MARKETING PLAN .......................................................................................................................9 Industry Profile ........................................................................................................................9 Current Size .........................................................................................................................9 Growth Potential .................................................................................................................9 Industry Trends ...................................................................................................................9 Other Characteristics ..........................................................................................................9 Distribution Channels.........................................................................................................9 Competitive Analysis ..............................................................................................................10 Direct Competition ...........................................................................................................10 Indirect Competition .......................................................................................................10 Future Competition .........................................................................................................10 Competitive Analysis ........................................................................................................10 Market Analysis ......................................................................................................................11 Target Market Profile ........................................................................................................11 Customer Profile ...............................................................................................................12 Future Markets ..................................................................................................................12 2 Table of Contents Market Penetration .................................................................................................................13 Company Image ................................................................................................................13 Customer Service...............................................................................................................13 Location .............................................................................................................................13 Direct-Sales Force ..............................................................................................................13 Sales Representatives.........................................................................................................13 Licensing or Distributors ..................................................................................................13 Advertising and Promotion ..............................................................................................13 Publicity .............................................................................................................................14 Telemarketing/Direct Mail...............................................................................................14 Internet ..............................................................................................................................14 Trade Shows.......................................................................................................................14 Market Penetration Effectiveness.....................................................................................14 Pricing ....................................................................................................................................15 Pricing Strategy..................................................................................................................15 Price List ............................................................................................................................15 Pricing Policies ..................................................................................................................15 Break-Even Analysis...........................................................................................................15 FINANCIAL PLAN ......................................................................................................................16 Start-up Costs ...........................................................................................................................16 Sales Projections ......................................................................................................................16 Income Projections..................................................................................................................16 Cash Requirements..................................................................................................................16 Sources of Financing ...............................................................................................................16 Exit Strategy .............................................................................................................................16 Projected Financial Statements Attached - Start-up Funding and Expenditures - Monthly Cash Flow Statement - Year-End Income Statement - Year-End Balance Sheet - Financial Analysis/Ratios APPENDIX Sales Projections Inventory Projections Operating Expense Projections Depreciation Schedules Capital Budget Projections 3 Executive Summary Venture Description LaVerja is a fresh food casual dining Hispanic restaurant. The interior will include seating for 50 and a carry-out counter. The lunch menu will be simple, made-to-order items. Dinner will vary nightly according to seasonal availability of fresh produce (standard menu items will also be available). Management and Organization Plan La Verja will be operated as a sole proprietorship and managed by Miguel and Dora Castanza. The Castanzas have a combined 45 years in restaurant management. A solid team of business advisors is in place including attorney Annette Brady, a well-respected leader in the community and an experienced advisor to numerous restaurants. Marketing Plan Ongoing marketing efforts will include newspaper ads, coupons, and brochures available to hotel patrons. Hillsdale is a small community, and word-of-mouth is a very effective tool—news travels fast. The restaurant’s location is highly visible, and the community has been waiting to see what business will fill the empty space. Financial Plan The Castanzas will invest start-up funds of $75,000. These monies will cover minimal remodeling, upgrading equipment, new chairs, dishes, and pre-opening marketing. Sales are conservatively projected to reach almost $600,000 by Year 3 of the plan. A line of credit is being arranged at FirstStar Bank in case of cash flow issues. Ideally, the exit plan will be to sell the restaurant to one of the Castanza’s children. 4 Management and Organization plan Legal Form of Business The business will be a sole proprietorship owned by Miguel Castanza. Management Team Dora Castanza will act as general manager of the restaurant. After starting her career in the industry as a bartender, Dora entered the management training program of the Holten Restaurant Group. She has 20 years of increasing responsibilities as a restaurant manager and most recently acted as Holten’s opening manager for three new locations. Miguel Castanza will serve as head chef. Miguel has served as a sous chef and line cook in several restaurants over the last 25 years. For the last five years, Miguel has catered private parties offering well-received Hispanic fare using his own recipes based on his grandmother’s cooking. Board of Directors/Advisory Board Two local professionals have agreed to serve as informal advisors to the business. Sharon Stein, a business professor at the local community college, and Matt Kalich, a successful downtown retailer, will meet with the Castanzas on a quarterly basis to provide feedback and brainstorming. Recruitment and Selection of Employees Dora is experienced at hiring restaurant staff. A bartender from her most recent Holten assignment has already been hired. Wait staff, busboys, dishwashers, and cooks will be part-time employees. Recruiting has begun at the local community college and in newspaper ads. In Year 2 of the business, Maria Castanza will be hired as assistant manager. Ms. Castanza is completing her twoyear program in hospitality management at the local community college. Compensation and Ownership Miguel will take an owner’s draw as cash flow allows. In Year 3, he projects a draw of $48,000 per year. Dora will be paid a salary equal to Miguel’s draws. An assistant manager will be hired in Year 2 at $20,000. A full-time bartender will also be paid $20,000. Both employees will be able to supplement their income through tips. Wait staff, bus staff, dishwashers, and counter personnel will be paid minimum wage plus tips. Part-time cooks will be paid $7.00 per hour to start. These wages are in line with area restaurants. Employee Reward and Incentive Plan The incentive for wait staff and bartenders is tips. The better they serve the customer—the better wage they receive. Turnover is high in the industry, and the owners know that with part-time personnel, they will face turnover issues. College students should respond to flexible scheduling and free meals while at work. Profit sharing for the assistant manager will be explored as projections are met. 5 Management and Organization plan Communication Business values will be communicated by example as both Miguel and Dora will work in the restaurant full time. Personnel will be trained extensively by Dora before the opening and on a ”shadow” basis as new people are added. Daily staff meetings will be held before each shift to discuss production issues and explain menu items. Monthly full staff meetings will be held to address employee concerns and operational changes. Infrastructure The following professionals round out the management team: Hal Willis—Banker ........................................................................................................Free consultation Annette Brady—Attorney....................................................................................................... Hourly Fee Morris Hatcher—CPA..........................................................................................................Monthly Fee Additional management support is available through consultation with representatives from RESTTECH concerning use of their inventory control software. Sales Reps from the major food and beverage suppliers also offer valuable insight and ideas. 6 Product / Service plan Purpose of Product/Service The purpose of any food service is to provide nutrition while offering the added benefit of tasting good. At La Verja, customers will eat traditional favorites without the guilt of consuming unhealthy and heavy fast food. They will also have the opportunity to sample authentic, adventurous fare and increase their awareness of ethnic flavors. Features and Benefits The food at La Verja offers several unique benefits to the consumer. It will satisfy customers’ craving for a tasty and fast meal while meeting rising expectations for healthy alternatives. The food will be fresh, made to order, and low fat. Fresh fruits and vegetables increase flavor while lowering calories. LaVerja will offer wraps that are just as easy to eat on the go as fast-food hamburgers with less than half the fat. Stage of Development La Verja is in the start-up stage of business; however, the Hispanic food industry is in the growth stage. The recipes offered at the restaurant have been developed and tested over the last several years and have been enthusiastically received. Product/Service Limitations Perishability of inventory is the major product limitation. Care must be taken to order proper amounts and use fresh foods immediately. The format of three to five changing entrees per evening will help mitigate this liability. Menus can be adjusted based on ingredient availability. Product/Service Liability La Verja faces two major areas of costly liability. Food poisoning is a real threat. The resulting medical costs and possible punitive damages can significantly affect the bottom line. Worse yet is the bad word of mouth resulting from such an incident. Safe food handling and employee sanitation must be constantly monitored. Proper training is essential. Liquor liability laws are another area of concern. Beverage purveyors are being held responsible for over-serving patrons and for the well being of third parties an inebriated patron might injure. Again, proper training and controlled pouring will be necessary. Along with proper training and systems, adequate insurance will be purchased. Production In keeping with its promotions tied to fresh food, most LaVerja menu items will be prepared in house. Simple items such as tortillas and taco shells will be purchased from a major produce supplier. 7 Product / Service plan Facilities An existing restaurant-equipped building with adequate parking is being leased. Few modifications are necessary and most are cosmetic in nature. The building is 1,200 square feet with a dining area of 700 square feet—enough to comfortably seat 50 patrons. Suppliers All the major food distributors in the region make regular deliveries to local grocers and restaurants. Negotiations are well under way with GROCO to deliver staples and seasonal produce. Specialty items will be purchased from National Foods at least twice a week. Numerous other suppliers can be used if delivery issues arise. Local farmers’ markets will also be a source for fresh ingredients. Related Products/Services and Spin-offs Miguel’s proprietary salsas will be available for sale in the restaurant. In time, production of the salsas could be outsourced and distributed through specialty grocers. As the general public becomes more aware of specialty dishes, new menu items can be easily added. Trademarks, Patents, Copyrights, Licenses, Royalties Recipes are copyrighted. The logo will be trademarked and registered to allow for the possibility of future licensing or franchising opportunities. Governmental Approvals A liquor license is already attached to the property and will transfer with the lease. The city will issue a business license (zoning is in place). The Health Department permit is in place and will be contingent on periodic inspections. 8 Marketing plan Industry Profile Current Size The restaurant industry is projected to hit sales of $40.1 billion in 200A. Over 12 million employees work in the restaurant industry making it the largest employer in our economy other than the government. The restaurantindustry share of the food dollar is estimated at 46.4 percent (National Restaurant Association). State A counts 6,674 establishments with revenues totaling close to $3 billion and projects an annual growth rate of 4.2 percent (National Restaurant Association). Growth Potential The restaurant industry has continued sustainable growth even during recent times of economic downturns. In the last three years the industry added 373,000 jobs. Overall sales are expected to grow by 4.4 percent over the next year. An overall economic impact of over $1.2 trillion is forecast this year when related industries such as agriculture and manufacturing are factored in (National Restaurant Association). Industry Trends The Hispanic market is the fastest growing segment of the food service industry. Demand for Mexican frozen foods grew by over 20 percent in one year this past decade. Hispanics spend close to 27 percent more on fast food than other segments of the population, and forecasts call for that rate to grow by almost 8 percent over the next ten years (El Restaurante Mexicano). The Hispanic culture is closely attuned to food and the rest of the population is quickly becoming more sophisticated in their appreciation of Hispanic flavors. The Hispanic population is growing around the country and already comprises almost 30 percent of Hillsdale, State A (Hillsdale, State A, economic census). Ingredients that used to be hard to find (or even unheard of) are now readily accessible through major food distributors and specialty grocers. Produce previously thought of as “exotic” is becoming well known and commonplace, and lower prices are reflecting the change. Other Characteristics Restaurants flourish in all regions of the country and enjoy steady sales year round. Average profits range from 4 percent to 10 percent depending on the type of establishment and form of ownership (BizStats.com, National Restaurant Association). Distribution Channels Distribution Channels in the industry are well established. Customers frequent restaurants for sit-down service and are now accustomed to the availability of carry out from neighborhood restaurants. 9 Marketing plan Competitive Analysis Direct Competition Hillsdale boasts close to sixty restaurants including fast food establishments. The town enjoys a variety of ethnic choices including Chinese, Italian, Mexican, and American. Within this mix, five restaurants offer “Hispanic” fare. Two of those are fast food, drive-through operations and three are traditional Mexican restaurants. Indirect Competition Consumers have many choices when it comes to meal selection. Grocery stores offer a variety of prepared foods, including traditional Mexican fare, such as burritos. Fresh ingredients to satisfy ethnic palates are also becoming more readily available making home cooking a less difficult and more tasty option. Future Competition As the Hispanic population continues to grow and the demand for authentic ethnic food grows among all segments of the population, the expectation is that more Hispanic (and other ethnic) restaurants will open in viable locations. Competitive Analysis La Verja will compete with the freshest ingredients and proprietary recipes and sauces. A simple menu with standard items can be easily expanded and adjusted as diner preference is established. The evening meals will be posted on a “blackboard” and will take advantage of trends and available fresh produce. Special requests will be accommodated based on in-stock ingredients. Other Hispanic choices in the area don’t offer any of the newer style offerings being seen in bigger cities. The fast food choices offer what is expected. La Verja will be able to offer items such as tacos and burritos at competitive prices with far better flavor and healthier ingredients. Hillsdale’s three dine-in Hispanic restaurants include only one that is truly family friendly. La Verja will offer entrees in a wide price range to satisfy both children wanting a traditional taco and adults looking for a more enticing meal. 10 Marketing plan Competitive Matrix Restaurant La Verja Price $– $$$ Production/ Quality Fresh to order/ High Frozen/ Low Unique Features Variety — Changing menu Carry-out Fast Distribution System Eat-in Carry-out Marketing/ Advertising Hotel Spanish language Franchise Strengths/ Weaknesses Location/ Start-up Market Share ?? Competitor A $ Drive-thru Fast/ Poor Food 25% Competitor B $ Frozen/ Low Fast Drive-thru Franchise Fast/ Poor Food 23% Competitor C $$ Pre-prepared/ Medium Bar — Live music Eat-in Entertainment listings Established clientele/ Loud — not for families Price for quantity/ Location Décor/ Intimidating 27% Competitor D $$ Some fresh/ Medium Buffet Lunch Eat-In Coupons 15% Competitor E $$$ Fresh to order/ Medium to High Special Occasion Destination Eat-in Word of Mouth 10% Market Analysis Target Market Profile Restaurants are frequented by most members of any community. Hispanic flavors are well known and accepted by all segments of the population. The Hispanic diner knows what traditional Hispanic meals can taste like and appreciates an authentic approach. Hillsdale is the centerpiece of an agricultural community with a population of over 40,000. Over 30 percent of residents are Hispanic with the rest predominantly Caucasian. The area includes a community college with almost 5,000 students, 2,000 of them traditional college age (Hillsdale Chamber of Commerce). The median age is 27 years old, so this community is full of young, vibrant families. 11 Marketing plan Hillsdale supports many professionals. Employment opportunities are plentiful with three major corporate employers, a substantial regional hospital, a large school district, several area community colleges, and county and city governments. Hillsdale also gets its share of tourists and business travelers. It provides close to 1,000 hotel rooms in town and 500 more rooms in neighboring communities. Regional governmental and business conferences take place regularly, and the city hosts several well-attended summer festivals. Customer Profile La Verja’s customer profile includes a cross-section of the residents of Hillsdale. Customers can be classified in several major categories. Weekday lunches—Working professionals and students ranging in age from 16 to 70. Carryout is expected to account for over half of the lunch business as word of mouth spreads. The restaurant is close to the local hospital and several major employers. Weekday dinners—Carryout business will continue as working couples look for variety in their take-home options. Family business should dominate dine-in clientele, especially among the Hispanic population looking for authentic flavors and Spanish-speaking staff. Weekend business—Friday and Saturday will be a combination of students looking for good food at a reasonable price and families looking for a meal out where children are welcome and happy. Other—Tourists and business travelers will supplement the business. Tourists tend to be families attending festivals or the zoo while the business traveler is single and looking for good flavor in a nice atmosphere. Future Markets Some products may be offered in local grocery stores as brand awareness builds. The Castanzas have been catering parties for the Hispanic market over the last five years. Once the restaurant is well established, that market may be re-explored. 12 Marketing plan Market Penetration Company Image La Verja will offer an authentic Hispanic atmosphere where people of all ages are welcome. The outside of the building is well maintained and attractive with ample parking. The décor will be subtle and comfortable and Latino music will be played in the background. Customer Service Service will be efficient and friendly. The staff will be conversant in both Spanish and English. Staff will be well trained and able to discuss the menu choices and alternatives with diners. Location The restaurant is located at 1345 Bankwell Avenue. Bankwell is a major artery through town. The local hospital and several major businesses are within three blocks. The two neighboring residential areas are predominantly Hispanic with median household incomes of $37,752 (Hillsdale Chamber of Commerce). Direct-Sales Force The sales force will consist of the restaurant employees. Sales Representatives Sales representative will not be needed at this time. In the future, if grocery store distribution is viable for proprietary recipes, this option may be explored. Licensing or Distributors For the three years this plan encompasses, no licensing or distributorship arrangements are contemplated. Advertising and Promotion Word of mouth will be the major promotional tool as the business grows. The Castanzas are well-known in the Hispanic community and people are already asking when the doors will be open. The location will also serve as a promotional tool. It is highly visible on a busy thouroughfare and attractive signage is being designed. Brochures are being designed explaining the concept and menu. These brochures will be distributed to all the hotels in the area as well as area employers and the Chamber of Commerce. Coupons will be issued to students at the local community college through a cooperative agreement with a local ice-cream vendor close to the campus. Newspaper advertising will be used prior to opening and small ads will be placed in the monthly entertainment special highlighting featured menu options. 13 Marketing plan Publicity LaVerja will host a pre-opening party at the restaurant for invited guests. The guest list will include Hispanic community leaders and members of the Castanzas’ church. It will be held in the restaurant and will utilize the parking lot for a “fair” atmosphere. Permits have already been granted by the city and parking is being borrowed from a nearby church. The local newspaper will cover the party and write an article for both the English and Spanish versions. Telemarketing/Direct mail Direct mail is not being considered at this time. Internet A Web site is under development. It will display the menu and give basic location and hours information. As the carry-out business builds, corporate clients may want to be able to order by e-mail. This option will be explored after the first year of operations. Trade Shows Trade shows may be attended in the future if the sales of proprietary sauces are successful in the local market. Market Penetration Effectiveness Miguel and Dora will handle marketing activities. Arrangements have already been made with local hotels for inclusion in their “to do” packets. Coupons for college students will be distributed in the school “commons” area. 14 Marketing plan Pricing Pricing Strategy Prices will be in the low range for lunches in order to stay competitive with fast food and diner options in town. Dinner prices will be offered at a wide range in order to offer value for families yet choices for adults looking for interesting, flavorful fare. Price List The average ticket price for carry-out will be $6.50. This price is a little higher than a take-out Mexican meal but still offers good value. In-house dining for lunch will average $8.00 (including beverage). Dinner prices will vary from $8.00 to $15.00. Average ticket prices will be aided by the sales of alcohol to include beer, wine, and liquor with specialty drinks like Margueritas. Lower-priced lunch items will also be available at night to satisfy the need of families accompanied by children and trying to stay in a reasonable meal budget. Pricing Policies No volume price discounts will be offered. In the future, catering prices will be based on a per-head basis. Break-Even Analysis Sales of approximately $35,000 per month will cover basic operating expenses. La Verja should be at break-even in June of Year 1. 15 Financial Plan Start-up Costs Start up costs will be around $53,000. This includes minimal remodeling, upgrading equipment, new chairs, dishes, pre-opening marketing as well as legal fees and deposits and licenses. Sales Projections First year sales are projected at $280,000. Sales are conservatively projected to reach almost $600,000 by Year 3 of the plan. Projections are based industry standards for table turns and the average ticket price. Carry-out sales should easily exceed projections as the kitchen will have excess capacity and neighboring fast-food places are doing a lot of business. These projections put La Verjia at sales in the $500.00 per square foot range, with a table turn average of 1.1—a reasonable estimate for the industry. In fact, with the small space requirement for carry-out service, it will be possible to surpass these projections. Income Projections Income is projected at $20,000 the first year. This is not really profit, as Miguel and Dora will not be taking market rate wages and draws yet. Years 2 and 3 show profits of around $90,000 and $80,000 (profits go down in year three as Dora’s wages go up). Miguel’s draw and taxes will come out of the net profit figure. Cash Requirements The financial projections show $75,000 will cover start-up and growth for the first three years. If necessary, Miguel and Dora are prepared to take smaller wages or forego wages altogether for a period of time. Sources of Financing The Castanzas will invest start-up funds of $75,000. A $50,000 line of credit is being arranged at FirstStar Bank in case of cash flow issues. Exit Strategy Ideally, the exit plan will be to sell the restaurant to one of the Castana’s children. Projected Financial Statements Start-up Funding & Expenditures Monthly Cash Flow Statement Year-End Income Statement Year-End Balance Sheet Financial Analysis/Ratios 16 Appendix START-UP FUNDING & EXPENDITURES La Verja Start-Up Cash Equity Investments Loan Proceeds Real-Estate Loans Total Start-Up Cash Start-Up Expenditures Security Deposits Rent (last month's) Telephone Deposit Utilities Deposit Other Deposits Total Security Deposits Start-Up Expenses Accounting Fees Activation Fee Corporate Fees & Taxes Federal Tax ID Fictitious Name Costs Insurance Legal & Consulting Fees Meals & Entertainment Office Supplies Payroll Expenses (training/setup) Salaries & Wages Payroll Taxes Benefits Pre-opening advertising Printing (cards, stationery, brochures) Sales Tax Permit Other Start-Up Expenses Total Start-Up Expenses Other Costs Opening Inventory Capital Expenditures Computer Equipment Equipment/Machinery Furniture & Fixtures Vehicles Leasehold Improvements Buildings Land Total Start-Up Capital Expenditures Total Start-Up Expenditures 75,000 75,000 1,000 150 200 1,350 500 150 500 1,000 750 1,000 1,500 2,000 100 7,500 - 4,000 15,000 15,000 10,000 44,000 52,850 La Verja Cash Flow Statement (Projected) 200A Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Paid on Account Non-Operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out Monthly Cash Flow (Cash In - Cash Out) Beginning Cash Balance Ending Cash Balance Pre Start-up JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL 75,000 - 75,000 75,000 22,150 21,800 21,450 17,225 17,225 33,387 17,225 17,225 30,797 22,425 22,425 31,511 42,900 42,900 48,299 42,900 42,900 56,109 34,320 34,320 56,304 34,320 34,320 57,805 34,320 34,320 61,806 34,320 34,320 65,807 279,955 75,000 354,955 377,105 1,500 500 250 2,000 750 1,000 1,500 44,000 1,350 52,850 22,150 22,150 350 350 (350) 22,150 21,800 350 350 (350) 21,800 21,450 1,938 500 1,500 1,000 350 5,288 (5,288) 21,450 16,162 1,938 5,813 86 224 172 150 8,500 638 200 1,000 150 345 250 350 19,816 (2,591) 16,162 13,572 2,523 5,813 86 224 172 150 8,500 638 200 1,000 310 150 345 250 350 1,000 21,711 (4,486) 13,572 9,086 4,826 7,568 112 292 224 150 8,500 638 200 1,000 404 150 449 250 350 1,000 26,112 (3,687) 9,086 5,399 4,826 14,479 215 558 429 150 8,500 638 200 1,716 772 150 858 250 350 1,000 35,090 7,810 5,399 13,209 3,861 14,479 215 558 429 150 8,500 638 200 1,716 772 150 858 250 350 1,000 34,125 8,775 13,209 21,984 3,861 11,583 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 2,499 1,000 32,819 1,501 21,984 23,485 3,861 11,583 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 1,000 30,319 4,001 23,485 27,486 3,861 11,583 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 1,000 30,319 4,001 27,486 31,487 3,861 11,583 172 446 343 150 8,500 638 200 3,359 1,373 618 150 686 250 350 4,466 1,000 38,145 (3,825) 31,487 27,662 35,356 94,485 3,400 4,139 1,750 5,800 2,100 77,500 5,738 3,300 3,359 11,923 4,729 1,350 5,599 2,250 4,200 44,000 6,965 8,000 1,350 327,293 27,662 27,662 La Verja Cash Flow Statement (Projected) 200B Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Paid on Account Non-Operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out Monthly Cash Flow (Cash In - Cash Out) Beginning Cash Balance Ending Cash Balance JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL 34,320 34,320 61,982 38,675 38,675 63,598 38,675 38,675 64,464 38,675 38,675 63,330 38,675 38,675 61,522 38,675 38,675 62,388 77,350 77,350 94,013 77,350 77,350 113,791 42,965 42,965 102,709 42,965 42,965 89,009 42,965 42,965 91,973 42,965 42,965 94,937 554,255 554,255 581,917 3,964 11,583 193 446 343 250 12,700 953 200 1,373 618 150 686 250 350 - 3,964 11,893 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 - 3,964 11,893 193 503 2,000 387 250 12,700 953 200 1,547 696 150 774 250 350 - 3,964 11,893 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 2,674 3,000 40,483 (1,808) 24,655 22,847 3,964 11,893 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 - 7,928 11,893 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 3,952 3,000 45,725 (7,050) 23,713 16,663 7,928 23,785 193 1,006 774 250 12,700 953 200 3,094 1,392 150 1,547 250 350 - 4,404 23,785 193 1,006 774 250 12,700 953 200 3,094 1,392 150 1,547 250 350 - 4,404 13,212 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 16,664 3,000 56,665 (13,700) 59,744 46,044 4,404 13,212 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 3,000 40,001 2,964 46,044 49,008 4,404 13,212 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 3,000 40,001 2,964 49,008 51,972 3,623 13,212 193 559 430 250 12,700 953 200 6,651 1,719 773 150 859 250 350 3,961 3,000 49,832 (6,867) 51,972 45,105 56,917 171,463 2,321 7,205 2,000 5,543 3,000 152,400 11,430 2,400 6,651 22,170 9,977 1,800 11,085 3,000 4,200 27,251 36,000 536,812 17,443 27,662 45,105 3,000 37,059 (2,739) 27,662 24,923 3,000 37,809 866 24,923 25,789 3,000 39,809 (1,134) 25,789 24,655 3,000 37,809 866 22,847 23,713 3,000 57,572 19,778 16,663 36,441 3,000 54,047 23,303 36,441 59,744 La Verja Cash Flow Statement (Projected) 200C Cash In Cash Sales Collections from Accounts Receivables Equity Received Loans Received Other Cash In (receipts from other assets) Other Cash In (interest, royalties etc.) Total Cash In Total Cash Available Cash Out Inventory Expenditures Inventory/Raw Material (Cash) Inventory/Raw Material (Paid on Account) Production Expenses Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Paid on Account Non-Operating Costs Capital Purchases Estimated Income Tax Payments Interest Payments Loan Principal Payments Owner's Draw Other Cash Out Total Cash Out Monthly Cash Flow (Cash In - Cash Out) Beginning Cash Balance Ending Cash Balance JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL 35,350 35,350 80,454 39,835 39,835 80,920 39,835 39,835 80,084 39,835 39,835 77,247 39,835 39,835 75,055 39,835 39,835 74,218 79,671 79,671 106,699 79,671 79,671 125,541 44,254 44,254 112,420 44,254 44,254 98,418 44,254 44,254 99,764 44,254 44,254 101,111 570,883 570,883 615,987 3,884 10,870 177 460 353 300 14,200 1,065 200 1,767 636 150 707 250 350 - 3,884 11,652 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 - 3,884 11,652 199 518 2,000 398 300 14,200 1,065 200 1,992 717 150 797 250 350 - 3,884 11,652 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 1,356 4,000 42,028 (2,192) 37,412 35,220 3,884 11,652 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 - 7,768 11,652 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 2,634 4,000 47,190 (7,355) 34,383 27,029 7,768 23,304 398 1,036 797 300 14,200 1,065 200 3,984 1,434 150 1,593 250 350 - 4,315 23,304 398 1,036 797 300 14,200 1,065 200 3,984 1,434 150 1,593 250 350 - 4,315 12,944 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 15,349 4,000 58,256 (14,002) 68,166 54,164 4,315 12,944 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 4,000 42,907 1,346 54,164 55,510 4,315 12,944 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 4,000 42,907 1,346 55,510 56,857 4,315 12,944 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 4,639 4,000 47,546 (3,292) 56,857 53,565 56,529 167,513 2,854 7,421 2,000 5,709 3,600 170,400 12,780 2,400 28,544 10,276 1,800 11,418 3,000 4,200 23,978 48,000 562,423 8,460 45,105 53,565 4,000 39,369 (4,020) 45,105 41,085 4,000 40,672 (836) 41,085 40,248 4,000 42,672 (2,836) 40,248 37,412 4,000 40,672 (836) 35,220 34,383 4,000 60,828 18,842 27,029 45,871 4,000 57,375 22,295 45,871 68,166 La Verja Year-End Income Statement (Projected) Net Sales (Less Returns & Allowances) Cost of Goods Sold Gross Income Operating Expenses Advertising Bad Debt Expense Bank Charges Depreciation & Amortization Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Total Operating Expenses Operating Income Interest Expense Other Income (Interest, Royalties, etc.) Income Before Taxes Income Taxes (If C corporation) Net Income $ $ 200A 279,955 111,982 167,973 200B 554,255 210,617 343,638 200C 570,883 216,935 353,947 $ $ $ 3,400 7,619 4,139 1,750 5,800 2,100 77,500 5,738 3,300 3,359 11,923 4,729 1,350 5,599 2,250 4,200 144,756 23,217 23,217 23,217 $ $ 2,321 7,619 7,205 2,000 5,543 3,000 152,400 11,430 2,400 6,651 22,170 9,977 1,800 11,085 3,000 4,200 252,800 90,838 90,838 90,838 $ $ 2,854 7,619 7,421 2,000 5,709 3,600 170,400 12,780 2,400 28,544 10,276 1,800 11,418 3,000 4,200 274,021 79,926 79,926 79,926 $ $ $ $ $ $ La Verja Year-End Balance Sheet (Projected) 200A Assets Current Assets Cash & Equivalents Net Accounts Receivable Inventory Security Deposits Other Current Assets Total Current Assets Fixed Assets Property, Plant & Equipment Less: Accumulated Depreciation Other Non-Current Assets Total Non-Current Assets Total Assets 27,662 29,442 1,350 58,454 45,105 46,492 1,350 92,946 53,565 55,673 1,350 110,588 200B 200C $ $ $ $ $ 44,000 (7,619) 36,381 94,835 $ $ 44,000 (15,238) 28,762 121,708 $ $ 44,000 (22,857) 21,143 131,731 Liabilities Current Liabilities Accounts Payable Line of Credit Other Current Liabilities Total Current Liabilities Long-term Liabilities Loans Mortgages Other Non-Current Liabilities Total Non-Current Liabilities Total Liabilities 11,583 11,583 10,870 10,870 12,944 12,944 $ $ $ $ $ 11,583 $ $ 10,870 $ $ 12,944 Equity Equity Investments Retained Earnings Less: Owner's & Investor's Draws Total Equity 75,000 23,217 (14,965) 83,252 75,000 99,090 (63,251) 110,838 75,000 115,764 (71,978) 118,786 $ $ $ Total Liabilities and Equity $ 94,835 $ 121,708 $ 131,731 La Verja Financial Ratios 200A Profitability Ratios Gross Margin Gross Income Net Sales Operating Income Net Sales Net Income Net Sales Net Income Total Assets Net Income Total Equity 60.00% 62.00% 62.00% 200B 200C Operating Margin 8.29% 16.39% 14.00% Net Margin 8.29% 16.39% 14.00% Return on Assets (ROA) 24.48% 74.64% 60.67% Return on Equity (ROE) 27.89% 81.96% 67.29% Liquidity Ratios Current Ratio Total Current Assets Total Current Liabilities Current Assets - Inventory Current Liabilities 5.05 8.55 8.54 Quick Ratio 2.50 4.27 4.24 Risk Ratios Debt Ratio Total Liabilities Total Assets Total Liabilities Total Equity 0.12 0.09 0.10 Debt to Equity 0.14 0.10 0.11 Efficiency Ratios Inventory Turnover Cost of Goods Sold Inventory Accounts Receivable Net Sales/365 Net Sales Total Assets 3.80 4.53 3.90 Days Sales Outstanding (DSO) 0.00 0.00 0.00 Investment Turnover Ratio 2.95 4.55 4.33 Appendix 17 SALES PROJECTIONS La Verja Year 1 Sales Budget Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow Year 1 Assumptions Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow JAN FEB MAR APR 11,050 1,950 4,225 17,225 17,225 17,225 17,225 MAY 11,050 1,950 4,225 17,225 17,225 17,225 17,225 JUN 15,470 2,730 4,225 22,425 22,425 22,425 22,425 JUL 22,100 3,900 16,900 42,900 42,900 42,900 42,900 AUG 22,100 3,900 16,900 42,900 42,900 42,900 42,900 SEP 17,680 3,120 13,520 34,320 34,320 34,320 34,320 OCT 17,680 3,120 13,520 34,320 34,320 34,320 34,320 NOV 17,680 3,120 13,520 34,320 34,320 34,320 34,320 DEC 17,680 3,120 13,520 34,320 34,320 34,320 34,320 TOTAL 152,490 26,910 100,555 279,955 279,955 279,955 279,955 - YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 average ticket price of $10 (85% in food); capacity of 50 per meal, project building to 40 per meal by year-end; July & Aug are festival months average ticket price of $10 (15% in beverage) average tickedet price of $6.50; build to 80 carryout meals a day by year end Appendix SALES PROJECTIONS La Verja Year 2 Sales Budget Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow Year 2 Assumptions Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow JAN 17,680 3,120 13,520 34,320 34,320 34,320 34,320 FEB 22,100 3,900 12,675 38,675 38,675 38,675 38,675 MAR 22,100 3,900 12,675 38,675 38,675 38,675 38,675 APR 22,100 3,900 12,675 38,675 38,675 38,675 38,675 MAY 22,100 3,900 12,675 38,675 38,675 38,675 38,675 JUN 22,100 3,900 12,675 38,675 38,675 38,675 38,675 JUL 44,200 7,800 25,350 77,350 77,350 77,350 77,350 AUG 44,200 7,800 25,350 77,350 77,350 77,350 77,350 SEP 24,310 4,290 14,365 42,965 42,965 42,965 42,965 OCT 24,310 4,290 14,365 42,965 42,965 42,965 42,965 NOV 24,310 4,290 14,365 42,965 42,965 42,965 42,965 DEC 24,310 4,290 14,365 42,965 42,965 42,965 42,965 TOTAL 313,820 55,380 185,055 554,255 554,255 554,255 554,255 - YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 average ticket price of $10 (85% in food); capacity of 50 per meal, project building to 1.1 turns by y ear-end (industry avg); July & Aug are festival months average ticket price of $10 (15% in beverage) average tickedet price of $6.50; build to 85 carryout meals a day by year end Appendix SALES PROJECTIONS La Verja Year 3 Sales Budget Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Gross Sales Less: Returns & Allowances Net Sales Other Income Total Income Credit Management Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow JAN 18,210 3,214 13,926 35,350 35,350 35,350 35,350 FEB 22,763 4,017 13,055 39,835 39,835 39,835 39,835 MAR 22,763 4,017 13,055 39,835 39,835 39,835 39,835 APR 22,763 4,017 13,055 39,835 39,835 39,835 39,835 MAY 22,763 4,017 13,055 39,835 39,835 39,835 39,835 JUN 22,763 4,017 13,055 39,835 39,835 39,835 39,835 JUL 45,526 8,034 26,111 79,671 79,671 79,671 79,671 AUG 45,526 8,034 26,111 79,671 79,671 79,671 79,671 SEP 25,039 4,419 14,796 44,254 44,254 44,254 44,254 OCT 25,039 4,419 14,796 44,254 44,254 44,254 44,254 NOV 25,039 4,419 14,796 44,254 44,254 44,254 44,254 DEC 25,039 4,419 14,796 44,254 44,254 44,254 44,254 TOTAL 323,235 57,041 190,607 570,883 570,883 570,883 570,883 - YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 Year 3 Assumptions Food Beverage Carryout Product/Service Category D Product/Service Category E Product/Service Category F Product/Service Category G Less: Returns & Allowances Other Income Sales (cash) Sales (credit) Bad Debt Expense - Accrual Received on Account Bad Debt - Cash Flow industry average turns (1.1) raise prices by 3% industry average turns (1.1) raise prices by 3% raise prices by 3% Appendix INVENTORY PROJECTIONS La Verja Year 1 Inventory Management Inventory Purchases Inventory/ Raw Material Purchases (Cash) Inventory/ Raw Material Purchases (Credit) Payment on Account JAN FEB MAR 7,751 1,938 5,813 APR 7,751 1,938 5,813 5,813 MAY 10,091 2,523 7,568 5,813 JUN 19,305 4,826 14,479 7,568 JUL 19,305 4,826 14,479 14,479 AUG 15,444 3,861 11,583 14,479 SEP 15,444 3,861 11,583 11,583 OCT 15,444 3,861 11,583 11,583 NOV 15,444 3,861 11,583 11,583 DEC 15,444 3,861 11,583 11,583 TOTAL 141,424 35,356 106,068 94,485 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 Production Expenses Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses Inventory Production Expenses - - - - - - - - - - - - - Inventory Balance Beginning Inventory Balance Inventory Purchased Inventory Production (Cost of Goods Sold) Ending Inventory Balance Year 1 Assumptions Inventory/ Raw Material Purchases Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses - - 7,751 7,751 7,751 7,751 (6,890) 8,613 8,613 10,091 (6,890) 11,814 11,814 19,305 (8,970) 22,149 22,149 19,305 (17,160) 24,294 24,294 15,444 (17,160) 22,578 22,578 15,444 (13,728) 24,294 24,294 15,444 (13,728) 26,010 26,010 15,444 (13,728) 27,726 27,726 15,444 (13,728) 29,442 141,424 (111,982) 29,442 Based on industry averages against projected sales; all items purchased "just in time" Appendix INVENTORY PROJECTIONS La Verja Year 2 Inventory Management Inventory Purchases Inventory/ Raw Material Purchases (Cash) Inventory/ Raw Material Purchases (Credit) Payment on Account JAN 15,857 3,964 11,893 11,583 FEB 15,857 3,964 11,893 11,893 MAR 15,857 3,964 11,893 11,893 APR 15,857 3,964 11,893 11,893 MAY 15,857 3,964 11,893 11,893 JUN 31,714 7,928 23,785 11,893 JUL 31,714 7,928 23,785 23,785 AUG 17,616 4,404 13,212 23,785 SEP 17,616 4,404 13,212 13,212 OCT 17,616 4,404 13,212 13,212 NOV 17,616 4,404 13,212 13,212 DEC 14,493 3,623 10,870 13,212 TOTAL 227,667 56,917 170,750 171,463 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 Production Expenses Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses Inventory Production Expenses - - - - - - - - - - - - - Inventory Balance Beginning Inventory Balance Inventory Purchased Inventory Production (Cost of Goods Sold) Ending Inventory Balance Year 2 Assumptions Inventory/ Raw Material Purchases Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses 29,442 15,857 (13,042) 32,257 32,257 15,857 (14,697) 33,417 33,417 15,857 (14,697) 34,577 34,577 15,857 (14,697) 35,738 35,738 15,857 (14,697) 36,898 36,898 31,714 (14,697) 53,915 53,915 31,714 (29,393) 56,235 56,235 17,616 (29,393) 44,458 44,458 17,616 (16,327) 45,747 45,747 17,616 (16,327) 47,036 47,036 17,616 (16,327) 48,325 48,325 14,493 (16,327) 46,492 29,442 227,667 (210,617) 46,492 Based on industry averages against projected sales; all items purchased "just in time" Appendix INVENTORY PROJECTIONS La Verja Year 3 Inventory Management Inventory Purchases Inventory/ Raw Material Purchases (Cash) Inventory/ Raw Material Purchases (Credit) Payment on Account JAN 15,536 3,884 11,652 10,870 FEB 15,536 3,884 11,652 11,652 MAR 15,536 3,884 11,652 11,652 APR 15,536 3,884 11,652 11,652 MAY 15,536 3,884 11,652 11,652 JUN 31,071 7,768 23,304 11,652 JUL 31,071 7,768 23,304 23,304 AUG 17,259 4,315 12,944 23,304 SEP 17,259 4,315 12,944 12,944 OCT 17,259 4,315 12,944 12,944 NOV 17,259 4,315 12,944 12,944 DEC 17,259 4,315 12,944 12,944 TOTAL 226,117 56,529 169,588 167,513 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 Production Expenses Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses Inventory Production Expenses - - - - - - - - - - - - - Inventory Balance Beginning Inventory Balance Inventory Purchased Inventory Production (Cost of Goods Sold) Ending Inventory Balance Year 3 Assumptions Inventory/ Raw Material Purchases Freight-in & Trucking Insurance Payroll Expenses - production Salaries & Wages Employee Benefits Payroll Taxes Rent Repairs & Maintenance Rework Subcontracting Utilities Other Production Expenses 46,492 15,536 (13,433) 48,594 48,594 15,536 (15,137) 48,993 48,993 15,536 (15,137) 49,391 49,391 15,536 (15,137) 49,789 49,789 15,536 (15,137) 50,188 50,188 31,071 (15,137) 66,122 66,122 31,071 (30,275) 66,919 66,919 17,259 (30,275) 53,903 53,903 17,259 (16,817) 54,345 54,345 17,259 (16,817) 54,788 54,788 17,259 (16,817) 55,231 55,231 17,259 (16,817) 55,673 46,492 226,117 (216,935) 55,673 Based on industry averages against projected sales; all items purchased "just in time" Appendix OPERATING EXPENSE PROJECTIONS La Verja Year 1 Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Total Operating Expenses Assumptions - Year 1 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other JAN 350 350 FEB 350 350 MAR 500 1,500 1,000 350 3,350 APR 86 224 172 150 8,500 638 200 1,000 150 345 250 350 12,064 MAY 86 224 172 150 8,500 638 200 1,000 310 150 345 250 350 12,374 JUN 112 292 224 150 8,500 638 200 1,000 404 150 449 250 350 12,718 JUL 215 558 429 150 8,500 638 200 1,716 772 150 858 250 350 14,785 AUG 215 558 429 150 8,500 638 200 1,716 772 150 858 250 350 14,785 SEP 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 13,875 OCT 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 13,875 NOV 172 446 343 150 8,500 638 200 1,373 618 150 686 250 350 13,875 DEC 172 446 343 150 8,500 638 200 3,359 1,373 618 150 686 250 350 17,235 TOTAL 1,900 3,639 1,500 3,800 1,350 76,500 5,738 1,800 3,359 11,923 4,729 1,350 5,599 2,250 4,200 129,637 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 Opening newspaper ads; monthly local ad; festival coupons and ads Industry average 1.3% Liquor license Brochures for hotels; 1% for continued promotion with tourism bureau etc. (industry avg) Basic office supplies Bartender at $20,000 (plus tips); 2 part-time cooks @ $15,000; wait, bus & counter staff at minimum wage (plus tips); mgr $1000 per mo Based on 7.5% of wages Quote from accountant Accountant's estimate Base rent $1,000; 4% rent based on gross sales (includes CAM) Quote from vendor Based on utility bill of past tenant Quote from music licensor Quote from vendor Appendix OPERATING EXPENSE PROJECTIONS La Verja Year 2 Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Total Operating Expenses Assumptions - Year 2 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other JAN 193 446 343 250 12,700 953 200 1,373 618 150 686 250 350 18,512 FEB 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 18,952 MAR 193 503 2,000 387 250 12,700 953 200 1,547 696 150 774 250 350 20,952 APR 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 18,952 MAY 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 18,952 JUN 193 503 387 250 12,700 953 200 1,547 696 150 774 250 350 18,952 JUL 193 1,006 774 250 12,700 953 200 3,094 1,392 150 1,547 250 350 22,858 AUG 193 1,006 774 250 12,700 953 200 3,094 1,392 150 1,547 250 350 22,858 SEP 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 19,385 OCT 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 19,385 NOV 193 559 430 250 12,700 953 200 1,719 773 150 859 250 350 19,385 DEC 193 559 430 250 12,700 953 200 6,651 1,719 773 150 859 250 350 26,036 TOTAL 2,321 7,205 2,000 5,543 3,000 152,400 11,430 2,400 6,651 22,170 9,977 1,800 11,085 3,000 4,200 245,181 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 Monthly local ad; festival coupons and ads Industry average 1.3% Liquor license Brochures for hotels; 1% for continued promotion with tourism bureau etc. (industry avg) Basic office supplies Manager raised to $3,000 per month; add assistant manager at $20,000 per year Based on 7.5% of wages Quote from accountant Accountant's estimate Base rent $1,000; 4% rent based on gross sales (includes CAM) Quote from vendor Based on utility bill of past tenant Quote from music licensor Quote from vendor Appendix OPERATING EXPENSE PROJECTIONS La Verja Year 3 Operating Expenses Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other Total Operating Expenses Assumptions - Year 3 Advertising Bank Charges Dues & Subscriptions Insurance Licenses & Fees Marketing & Promotion Meals & Entertainment Miscellaneous Office Expense (postage) Office Supplies Outside Services Payroll Expenses Salaries & Wages Payroll Taxes Benefits Professional Fees Property Taxes Rent Repairs & Maintenance Shipping & Delivery Telephone Training & Development Travel Utilities Vehicle Music Equipment Lease Other JAN 177 460 353 300 14,200 1,065 200 1,767 636 150 707 250 350 20,616 FEB 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 21,136 MAR 199 518 2,000 398 300 14,200 1,065 200 1,992 717 150 797 250 350 23,136 APR 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 21,136 MAY 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 21,136 JUN 199 518 398 300 14,200 1,065 200 1,992 717 150 797 250 350 21,136 JUL 398 1,036 797 300 14,200 1,065 200 3,984 1,434 150 1,593 250 350 25,757 AUG 398 1,036 797 300 14,200 1,065 200 3,984 1,434 150 1,593 250 350 25,757 SEP 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 21,648 OCT 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 21,648 NOV 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 21,648 DEC 221 575 443 300 14,200 1,065 200 2,213 797 150 885 250 350 21,648 TOTAL 2,854 7,421 2,000 5,709 3,600 170,400 12,780 2,400 28,544 10,276 1,800 11,418 3,000 4,200 266,402 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 Monthly local ad; festival coupons and ads Industry average 1.3% Liquor license Brochures for hotels; 1% for continued promotion with tourism bureau etc. (industry avg) Basic office supplies Manager raised to $4,000 per month Based on 7.5% of wages Quote from accountant Accountant's estimate Base rent $1,000; 4% rent based on gross sales (includes CAM) Quote from vendor Based on utility bill of past tenant Quote from music licensor Quote from vendor Appendix DEPRECIATION SCHEDULES La Verja Year 1 Existing Assets Set-Up Assets (no detail entered) Set-Up Assets (detail entered) Start-Up Purchases Total Year 2 Existing Assets Set-Up Assets (no detail entered) Set-Up Assets (detail entered) Start-Up Purchases Total Year 3 Existing Assets Set-Up Assets (no detail entered) Set-Up Assets (detail entered) Start-Up Purchases Total JAN 635 635 635 635 635 635 FEB 635 635 635 635 635 635 MAR 635 635 635 635 635 635 APR 635 635 635 635 635 635 MAY 635 635 635 635 635 635 JUN 635 635 635 635 635 635 JUL 635 635 635 635 635 635 AUG 635 635 635 635 635 635 SEP 635 635 635 635 635 635 OCT 635 635 635 635 635 635 NOV 635 635 635 635 635 635 DEC 635 635 635 635 635 635 TOTAL 7,619 7,619 7,619 7,619 7,619 7,619 Appendix CAPITAL BUDGET PROJECTIONS La Verja Year 1 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land Assumptions - Year 1 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Vehicles Vehicle Depreciation Leasehold Improvements Leasehold Depreciation Building Building Depreciation Land JAN 635 FEB 635 MAR 635 APR 635 MAY 1,000 635 JUN 1,000 635 JUL 1,000 635 AUG 1,000 635 SEP 1,000 635 OCT 1,000 635 NOV DEC TOTAL 8,000 7,619 7,619 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 YEAR 1 1,000 1,000 635 635 Year 1 Total Depreciation Owner at $1,000 per month if available Startup purchases of computers, software, inventory control, upgrade grills and regrigeration 7 year schedule Startup New chairs, bar stools 7 year schedule Startup Paint, bar upgrade, carpet, décor 3 year schedule Appendix CAPITAL BUDGET PROJECTIONS La Verja Year 2 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land Assumptions - Year 2 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Vehicles Vehicle Depreciation Leasehold Improvements Leasehold Depreciation Building Building Depreciation Land JAN 3,000 635 FEB 3,000 635 MAR 3,000 635 APR 3,000 635 MAY 3,000 635 JUN 3,000 635 JUL 3,000 635 AUG 3,000 635 SEP 3,000 635 OCT 3,000 635 NOV DEC TOTAL 36,000 7,619 7,619 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 YEAR 2 3,000 3,000 635 635 Year 2 Total Depreciation Start-up purchases of computers, software, inventory control, upgrade grills, and refrigeration 7-year schedule Start-up: New chairs, bar stools 7-year schedule Start-up: Paint, bar upgrade, carpet, décor 3-year schedule Appendix CAPITAL BUDGET PROJECTIONS La Verja Year 3 Capital Budget Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Depreciation (existing assets) Capital Asset Purchases Depreciation (new purchases) Land Assumptions - Year 3 Owner's Draw Investor's Draw Dividends Paid Security Deposits Amortization Equipment Equipment Depreciation Furniture Furniture Depreciation Vehicles Vehicle Depreciation Leasehold Improvements Leasehold Depreciation Building Building Depreciation Land JAN 4,000 635 FEB 4,000 635 MAR 4,000 635 APR 4,000 635 MAY 4,000 635 JUN 4,000 635 JUL 4,000 635 AUG 4,000 635 SEP 4,000 635 OCT 4,000 635 NOV DEC TOTAL 48,000 7,619 7,619 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 YEAR 3 4,000 4,000 635 635 Year 3 Total Depreciation Start-up purchases of computers, software, inventory control, upgrade grills, and refrigeration 7-year schedule Start-up: New chairs, bar stools 7-year schedule Start-up: Paint, bar upgrade, carpet, décor 3-year schedule Appendix