What is an Entrepreneur

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					 Youth Aboriginal Business Plan Competition
 Dream it. Plan it. Start it.
 It all starts with YOUth!




Youth Business Plan Workbook
Business Plan Category




Materials used in the preparation of this document provided by:
Table of Contents


WHAT ARE THE CHARACTERISTICS OF AN ENTREPRENEUR?........................... 2
   Other Qualities of Successful Entrepreneurs Are:......................................................2
BEFORE YOU BEGIN ..................................................................................... 2
BUSINESS DESCRIPTION............................................................................... 3
   What type of business will you run? ........................................................................4
   Human Resources ..................................................................................................5
MARKETING ................................................................................................. 6
   Customers/Target Market .......................................................................................6
   Pricing Your Product/Service ...................................................................................7
   Advertising & Promotion .........................................................................................8
   Location ................................................................................................................8
   Competition ...........................................................................................................9
FINANCIAL PLAN ........................................................................................ 10
   Start Up Costs...................................................................................................... 10
   Financing............................................................................................................. 11
   Loan Payment Chart............................................................................................. 12
   Monthly Sales ...................................................................................................... 13
   Monthly Expenses ................................................................................................ 15
WHY IS THIS YOUR DREAM BUSINESS? ....................................................... 17
ADDITIONAL MATERIALS ............................................................................ 17
WRITING YOUR BUSINESS PLAN ................................................................. 18
APPENDIX .................................................................................................. 19
   Resources To Help You Gather Information & Write Your Business Plan .................. 19
   Common Marketing Terms.................................................................................... 19
   Promotional Ideas ................................................................................................ 20
Youth Business Plan Workbook                                   Dream it. Plan it. Start it.

Dream it. Plan it. Start it. It all starts with YOUth!
If you could start any type of business, what would it be? Take a minute to dream
about owning your own business… about being your own boss… about becoming an
entrepreneur!


WHAT ARE THE CHARACTERISTICS OF AN ENTREPRENEUR?
Entrepreneurs are individuals who:
• See opportunities and have the courage to go after them
• Are willing to learn
• Learn from their mistakes and are not afraid to try again
• Enjoy challenges
• Find creative solutions to problems

There are many rewards to being a successful entrepreneur. You can run your business
according to your values and belief systems. You can also make things happen in your
community.

Other Qualities of Successful Entrepreneurs Are:
•   Drive: energy, commitment, willingness to work hard
•   Personality: confidence, leadership, optimism, comfort with risk, ability to make
    decisions
•   Skills: planning and organization, ability to innovate, communication


BEFORE YOU BEGIN
Please remember that there are no right or wrong answers. A business plan first and
foremost, should be written by YOU! It is your road map that outlines how you will
manage and operate your business.
A well thought out business plan can be the difference between your business’s success
or failure.
The business plan is a formal presentation of your business idea. It contains all the
steps you will take to develop it now and in the future.
The business plan has two functions:
    1. Personal – You will get a real sense of what you will do and how you will do it.
    2. External - For lenders, suppliers, advisors, investors and others who may assist
       you with start-up.
This is a business planning guide created in a workbook format. Remember that not all
businesses will need all the information requested in this guide. No one business plan
will work for every business – cookie cutters are for cookies, not for business plans.

Once you have completed the workbook (you can use point form in the workbook
if you want), you will be ready to write your own business plan!




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BUSINESS DESCRIPTION

Business Name: ________________________________________________________

What is your business idea? Describe your product or service in detail.




Will this be a seasonal business (such as landscaping or snow clearing) or a
year-round business?



When will you be open for business? E.g.. Monday to Friday, 9:00 AM to 6:00 PM.



How is your business different from what is out there (How is it unique)?
Describe the key features of your product or service. Think about why customers will
choose to buy your product and/or service instead of another company’s.




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What need or want does your product or service satisfy?




What type of business will you run?
An early decision you need to make is the form of business you will use. The choices are
sole proprietorship, partnership and incorporation. Each type of business has pros and
cons (see definitions of highlighted words on the following page).


                  Who                  Pros                       Cons
Sole              Only you             • Any profits are          • You carry all risks
Proprietor                             yours                      • You and your business are
                  Often very small     • Easiest to set up        one and the same. You are
                  businesses with      • Not very expensive       responsible for all debts–the
                  few or no            • Possible tax benefit     bank can seize personal
                  employees (lawn                                 assets (your house, car, etc.)
                  cutting, massage                                in case of default.
                  therapist)
Partnership       You and one or       • Easy to set up           • Disagreements with partner
                  more people          • Very flexible            = problems
                                       • Partners contribute      • All partners share
                                       knowledge and              responsibility for debts similar
                                       assets                     to a sole proprietorship. So if
                                                                  one person makes a bad
                                                                  decision, all the partners pay
                                                                  for it.
Incorporation     You are separate     • May reduce taxes         • More expensive and
                  from your business   • You and your             complicated to set up
                                       business are separate      • More paperwork and
                  Often businesses     - you will only be         regulations to be met
                  with a lot of        personally
                  assets and/or        responsible for the
                  debt (restaurants,   personal assets you
                  gyms).               pledge as security
                                       for your business.
                                       The business will be
                                       responsible for the
                                       rest.




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Definitions:

Asset – Things of value that you or your company owns. Examples include vehicles,
houses, equipment, money and term deposits.

Debt – Something owed, such as money, goods, or services. It is an obligation to pay
or render something to someone else.

Default – When you or your company is behind in monthly payments. When your
company does not make some or all of its payments it is said to be in default.

Security – When you or your company gets a loan, you will often be required to pledge
assets as security on the loan to protect the person lending you the money in case you
can’t make all of your payments. Examples include buildings/land, your house,
equipment (if you are getting a loan to buy a fork lift, the fork lift will often be pledged
as security), etc.

Seize – If you don’t make your payments, the bank can take (seize) your assets
pledged as security.


The form of business that is best for my business is ________________________
because _______________________________________________________________
_______________________________________________________________________.


Human Resources
Describe the strengths and weaknesses of the owner(s). Will you need hire
employees? For example, will you need to hire a bookkeeper, a graphic designer,
counter staff, etc? What role will you, as the owner, play in the business?
For example, if you are starting a pet grooming business, you may do the grooming and
be the bookkeeper. You may hire an employee to take appointments and do other
tasks.




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MARKETING

Customers/Target Market
Describe your typical customer.
Think about their age range, gender, hobbies, lifestyle, recreation activities, home
location and income bracket (if they are relevant). For example, your typical customer
for an upscale hair salon may be females between the ages of 25 and 50, making over
$30,000/year, and the daughters of mothers making over $30,000/year, living within
50km of Town X, etc.




Where will your customers come from?
Even though your business may be located in town X, your typical customers may be
from town X and from the surrounding towns of Y and Z. If you are selling products or
services on the Internet, your customers may be from different parts of the world. This
is called the trading area. List all the towns and/or major centres within your trading
area. For example, if the salon from the previous example was located in Selkirk,
customers may come from Selkirk, Petersfield, St. Andrews, Stonewall, Gimli, and
Teulon.




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Pricing Your Product/Service
When setting the price for your product or service there are a few things you should
consider:
•   How much are your customers willing to pay for your product or service?
    For example, you have determined that you need to charge $30 per lawn cut to
    make a profit. Are your customers willing to pay $30?

•   How much is the competition charging for the same/similar product or
    service?
    For example, the other video store in town rents movies for $5/day. If you are
    selling the same product and want to charge $4/day will you still make a profit? If
    you charge $6/day will people rent movies from you?

•   Is your product or service unique? Is it low, mid or high quality?
    The price often reflects the quality and/or uniqueness of the product.
    For example, a cheeseburger from a fast food restaurant such as McDonalds may
    sell for under $2 while a cheeseburger from a fine dining restaurant may sell for $5
    or more. If you were selling cheeseburgers, what would make your different from a
    McDonald’s cheeseburger?

•   What does it cost you to sell your product or service?
    You need to also consider your costs to ensure there will be a profit after all
    expenses have been paid. This is called cost per unit plus mark-up.
    For example, if it costs you $1.50 for all the ingredients to make a cheeseburger you
    might consider selling it for $4.50 ($1.50 x 3). This difference between the price you
    are selling the cheeseburger for and the cost of the ingredients should cover all
    other expenses (wages, rent, etc.) and leave you with a profit.


Take some time to think about your pricing strategy. Describe how you will
price your product or service and why.




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Advertising & Promotion
Promotional techniques include advertising, sales promotions, personal selling or
publicity. Please see the appendix located at the back of this booklet for a list of
common marketing terms and promotional ideas.


How will you advertise and promote your business?
Can you think of inexpensive ways to advertise your business?




How often will you advertise?
Are there times of the year when you should do extra advertising?




How much do you plan to spend on advertising and promotions per month?
Your 1st few months may be higher, as you build recognition for your business.




Location
Where will your business be located?
Is it important that you be close to customers? Competition? Suppliers?




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Competition
Describe your competitors. Who is your competition? Consider the length of time they
have been in business, location, price, hours of operation and services/products offered.
                                                                                *Direct
Competitor’s
                  Location     Description      Strengths     Weaknesses           or
  Name
                                                                                Indirect




*Direct Competitors are the businesses in your market area that offer the same or
similar products or services. Indirect competitors are different types of business that
compete for the same or similar customers. For example, a video store has other video
stores as direct competitors. Indirect competitors are cable/satellite TV, movie theatres,
live events or anything that may fulfill the customer’s need to be entertained.




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Now that you have analyzed the competition, how will you compete with
them? Why will you be successful?




FINANCIAL PLAN

Start Up Costs
Estimate what will it cost you to get started in the business. Do you have to buy a
building, land, equipment, initial inventory, do renovations, etc.? For example, if you
are starting a restaurant and you are buying the land and building your start-up costs
might look like this:
Land & Building -                                 $50,000
Equipment (stoves, deep fryers, tables etc.) - $50,000
Renovations (painting, new flooring) -             $4,000
Initial Inventory (food) -                         $1,000
Total Start-Up -                                $105,000

List your start up costs and calculate the total amount you need to start your
business.




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Financing
How will you finance your business?
Some options include personal savings, loans from banks and credit unions and private
loans from family and friends.




Complete the following exercise:


Step 1: Calculate Amount of Loan

A) Total Start-up Costs (from previous page)   $______________
B) Amount from personal savings & family       $______________
  (can be zero)

Amount of loan (A minus B)                     $______________




Step 2: Calculate Loan Payment

Instructions:
1. Determine how much you need to borrow (amount of loan from Step 1).

2. Referring to the Loan Payment Chart on the next page, look for the amount
closest to the amount you need to borrow in the column called Amount of Loan.

3. The corresponding monthly payment is how much you will enter in the monthly
expenses table on page 16 for your loan payment.

Examples:
If the amount of your loan is $12,500, your loan payment will be $875 per month.
If the amount of your loan is $7,000, your loan payment will be $525 per month.

My loan payment is       $______________ per month




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Loan Payment Chart

                  Monthly                         Monthly
Amount of loan    Payment       Amount of loan    Payment
$    1,000.00            $70   $    77,500.00         $5,427
$    2,500.00           $175   $    80,000.00         $5,602
$    5,000.00           $350   $    82,500.00         $5,777
$    7,500.00           $525   $    85,000.00         $5,952
$   10,000.00           $700   $    87,500.00         $6,127
$   12,500.00           $875   $    90,000.00         $6,302
$   15,000.00         $1,050   $    92,500.00         $6,477
$   17,500.00         $1,225   $    95,000.00         $6,652
$   20,000.00         $1,400   $    97,500.00         $6,827
$   22,500.00         $1,575   $   100,000.00         $7,002
$   25,000.00         $1,751   $   102,500.00         $7,177
$   27,500.00         $1,926   $   105,000.00         $7,352
$   30,000.00         $2,101   $   107,500.00         $7,527
$   32,500.00         $2,276   $   110,000.00         $7,702
$   35,000.00         $2,451   $   112,500.00         $7,877
$   37,500.00         $2,626   $   115,000.00         $8,052
$   40,000.00         $2,801   $   117,500.00         $8,227
$   42,500.00         $2,976   $   120,000.00         $8,403
$   45,000.00         $3,151   $   122,500.00         $8,578
$   47,500.00         $3,326   $   125,000.00         $8,753
$   50,000.00         $3,501   $   127,500.00         $8,928
$   52,500.00         $3,676   $   130,000.00         $9,103
$   55,000.00         $3,851   $   132,500.00         $9,278
$   57,500.00         $4,026   $   135,000.00         $9,453
$   60,000.00         $4,201   $   137,500.00         $9,628
$   62,500.00         $4,376   $   140,000.00         $9,803
$   65,000.00         $4,551   $   142,500.00         $9,978
$   67,500.00         $4,726   $   145,000.00        $10,153
$   70,000.00         $4,901   $   147,500.00        $10,328
$   72,500.00         $5,077   $   150,000.00        $10,503
$   75,000.00         $5,252




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Monthly Sales
There are several methods of forecasting (predicting) what your sales will be. In this
workbook, the Bottom Up method is used. The Bottom Up method is based on how
much you can produce or sell in one day.

If you sell a single product or service, answer the following questions to
determine your monthly sales:

1. Calculate the number of hours you will work per day:
2. How many days per month?
3. Calculate the amount of product or service that can be produced:
4. What will you charge the customer?


Example: Yard Buddy wants to work 7.5 hours/day. He takes weekends off so he only
works 21 days out of every month.

Total hours per day = 7.5
Number of hours per yard = 2.5
Total yards/day = 3 (7.5/2.5)
The charge per yard is $30

The calculation is 3 yards @ $30/yard = $90.00/day
$90/day x 21 days/month = $1,890/month

Based on the amount of work this Yard Buddy can do, we see he can earn
$1,890/month.




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If you sell more than one product or service, you may want to use the chart
below to calculate your monthly sales.

Breakdown of Business                               Daily Sales   Multiplied by    Equals Monthly
Sales/Services by Item                               of Item      days business        Sales
                                                                    open per
(e.g. lawns cut/fertilized; haircuts/perms; meals
served- Breakfast, Dinner, Supper, coffee; floral                    month
arrangements and gifts; loaves of bread, cakes
etc.)




Total Estimated Sales (sum of monthly sales)


For example, Hayley’s Hair Salon may have the following monthly sales:

Hayley’s Salon plans to do 10 hair cuts/day @ $30 each = $300, 3 manicures/pedicures
@ $25 and that 5 customers per day will spend at least $10 on products = $50.

Breakdown of Business                               Daily Sales   Multiplied by    Equals Monthly
Sales/Services by Item                               of Item      days business        Sales
                                                                    open per
(e.g. lawns cut/fertilized; haircuts/perms; meals
served- Breakfast, Dinner, Supper, coffee; floral                    month
arrangements and gifts; loaves of bread, cakes
etc.)

Haircuts/perms                                      $300          21               $6300
Manicure/pedicure                                   $75           21               $1575
Make-up/Nail Polish                                 $50           21               $1050
Total Estimated Sales (sum of monthly sales)                                       $8925


Based on this, we see that Hayley’s Hair Salon can earn $8925/month.




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Monthly Expenses
This workbook looks at two types of expenses, Cost of Sales (often referred to as Cost
of Goods Sold) and Operating Expenses.

Cost of sales are the direct costs of buying and/or producing an item for sale. It is a
percentage of sales. Remember the cheeseburger example on page 7; the cost to
produce the cheeseburger was $1.50 with a selling price or $4.50. Therefore, the cost
of sales is 33% ($1.50/$4.50). The more you sell, the more your cost of sales will be.
If sales are $100 the Cost of Sales is $33, if sales are $200 the Cost of Sales is $66.

Operating expenses are the costs of running your business. Your operating expenses
will include some or all of the following in the table below, plus other related costs.
Typical ranges are given but you must determine usage based on the nature and size of
your operation, number of employees, etc.

Using the example above, Hayley’s Hair Salon may have the following expenses:
 Type or Expense                    Typical Range                        Monthly Costs
 A) Cost of Sales

 Perms, Shampoo, Product that       *usually 20%-40% of sales            $2231
 is resold (make-up, nail polish)    Sales of $8925 x 25%
 B) Operating Expenses

 Loan Payment                       $2500 loan = $175 monthly            $175
                                    payment
                                    If you don’t own your own
 Rent                               building, you will have to pay       $325
                                    rent
 Utilities – Gas, Hydro, Water      $100 to $250/month                   $250
 Vehicle, Travel                    $50 to $200/month                    $50
 Bank charges                       $20/month                            $20
 Insurance, licences                $50 to $100/month                    $100
 Telephone, fax, internet           $50 to $100/month                    $100
 Advertising & Promotion            $50 to $750/month                    $250
 Office (supplies, postage, etc.)   $25/month                            $25
 Wages (2 employees @$12/hr,
                                    $8.00 to $14/hour                    $4160
 40 hrs/week)
 Professional services              Accounting - $2,000/year
                                                                         $200
 (accountant, lawyer)               Legal - $1,000/year

 Maintenance/Repairs                $100/month                           $100

 Total Operating Expenses                                                $5755

 Total Expenses (A + B)             $2231 + 5755 = $7986                 $7986



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Use the table to calculate your company’s monthly expenses:

 Type or Expense                     Typical Range                         Monthly Costs

 A) Cost of Sales
                                     *usually 20%-40% of sales


 B) Operating Expenses

 Loan Payment                        *Monthly payment you calculated on
                                     page 11

                                     If you don’t own your own building,
 Rent
                                     you will have to pay rent

 Utilities – Gas, Hydro, Water       $100 to $250/month
 Vehicle, Travel                     $50 to $200/month
 Bank charges                        $20/month
 Insurance, licences                 $50 to $100/month
 Telephone, fax, internet            $50 to $100/month

 Advertising & Promotion             $50 to $750/month

 Office (supplies, postage, etc.)    $25/month
 Wages (2 employees @$12/hr,
                                     $8.00 to $10/hour
 40 hrs/week)
 Professional services               Accounting - $2,000/year
 (accountant, lawyer)                Legal - $1,000/year
 Maintenance/Repairs                 $100/month
 Other -
 Other -
 Total Operating Expenses
                                     Total Operating Expenses +
 Total Expenses (A + B)
                                     Cost of Sales


Financial Summary
What are your total monthly sales?                             $_____________
What are your total monthly expenses?                          $_____________
What is your profit/loss per month (sales less expenses)       $_____________
What is your profit/loss per year                         $_____________
(Profit/loss per month times number of months your business is open per year)




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In the example above, Hayley’s Hair Salon has sales of $8925 per month and
expenses of $7986. Per month the company makes $939. Hayley’s Hair Salon is open
year round and makes a profit of $11,268 per year.


WHY IS THIS YOUR DREAM BUSINESS?
In a paragraph, please explain why this is your dream business.




ADDITIONAL MATERIALS
Please feel free to attach materials that describe your business. Examples may include
brochures, flyers, posters, business card, menu (restaurant), your company logo,
pictures of your product, etc. BE CREATIVE… this is YOUR business dream!




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WRITING YOUR BUSINESS PLAN
Congratulations, you are ready to write your business plan! Use the information you
have put into this workbook to write your business plan.

Here’s a checklist of what you need to include:

       Title Page – Include the name of your business, your logo (if you created one),
       the list of members in your group that created the plan, the name of the school
       you come from, the grade your are in and the date you submitted it.

       Completed Registration Form

       Table of Contents

       Business Description – This is a one page summary of your business. It is the
       first section of a business plan but it should be written last. The purpose of
       the business description of the business plan is to provide your readers with an
       overview of the business plan. Think of it as an introduction to your business. It
       is often referred to as the Executive Summary.

   Write a paragraph and/or insert a table for each of the sections below:

       Marketing Plan
         o Customers/Target Market
         o Pricing
         o Advertising & Promotion
         o Location
         o Competition

       Financial Plan
          o Start Up Costs
          o Financing
          o Monthly Sales
          o Monthly Expenses
          o Summary – write a paragraph summarizing your financial plan

       Why This is My Dream Business

       Appendix – If you have created additional materials, include them in your
       appendix.




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APPENDIX

Resources To Help You Gather Information & Write Your Business Plan

Aboriginal Canada Portal
www.aboriginalcanada.gc.ca

Aboriginal Youth Mean Business
A directory of support services dedicated to assisting Aboriginal Youth.
www.aymb.ca

Canada/Manitoba Business Service Centre
A one-stop shop for starting a business. The Canada/Manitoba Business Service Centre
has information about programs, services and regulations, an extensive research library,
and business information officers that you can talk to about your business idea.
Phone: 204-984-2272 or 1-800-665-2019
www.CanadaBusiness.ca/manitoba

Community Futures Program
Offers business planning assistance and general business counseling.
Visit www.cfmanitoba.ca to find one near you (rural Manitoba)

Statistics Canada
Demographic Information (population, etc.)
www.statcan.ca

Strategis
Canada’s Business and Consumer Site
www.strategis.ic.gc.ca

Don’t forget about:
Business Owners, Teachers, Parents and Friends – ask anyone who will listen!

Common Marketing Terms
Definitions:
Advertising: Advertising is bringing a product (or service) to the attention
of potential and current customers. Advertising is typically done with signs, brochures,
commercials, direct mailings or e-mail messages, personal contact, etc.
Publicity: Publicity is free. An example is when the media writes an article about you
in the newspaper. Organizations usually have little control over the message in the
media, at least, not as they do in advertising because reporters and writers decide on
the content.
Promotions: Promotion keeps the product in the minds of the customer and helps
stimulate demand for the product. For example, having a sale in your store or offering a
coupon.




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Promotional Ideas
•   Balloons                     •   Newsletters
•   Billboards                   •   Newspaper Inserts
•   Brochures and Pamphlets      •   Package Inserts
•   Bumper Stickers              •   Personal Letters
•   Bus and Taxi Signs           •   Place
•   Business Card                •   Point-Of-Purchase Signs
•   Business Lunches             •   Postcards
•   Business Networking          •   Print on the Box/Container
•   Buttons                      •   Program and Yearbook Ads
•   Calendars                    •   Proposals
•   Charitable Events            •   Referral Incentives
•   Classified Ads               •   Sales Calls
•   Community Involvement        •   Sampling
•   Contests                     •   Sidewalk Signs
•   Co-Op Advertising            •   Signs at Sporting Events
•   Decals                       •   Signs Draped on the Building
•   Demonstrations               •   Skywriting
•   Direct Mail – Coupon Co-Op   •   Special Events
    Advertising                  •   Special Sales
•   Discount Coupons             •   Sponsorships
•   Discount Premium Books       •   Statement Stuffers
•   Door Hangers                 •   Stickers
•   Emails                       •   Take One Racks
•   Employee Events              •   Talks and Presentations
•   Envelopes                    •   Tape or Ribbon
•   Exterior Building Signs      •   Telephone Hold Messages
•   Fliers or Circulars          •   Television
•   Folders and Binders          •   Tours
•   Free Information             •   T-Shirts
•   Free Trials                  •   Two-For-One Offers
•   Home Parties                 •   Vehicle Signs
•   Internet                     •   Video Commercials at Checkout
•   Letterhead                       Counters
•   Magazine Ads                 •   Video Tapes
•   Multiple Purchase Offers     •   Window Signs
•   News Releases




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