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					                 O.PIZZA
                BUSINESS PLAN

                 Prepared by

Andrew Batchelor, Omar Ghadry, Natasha Gopaul,
   Fawzi Kronfol, Brett Peeling, Richard Storey




               Entrepreneurship

             Professor James Hunt

               October 20, 2009



                       0
O.PIZZA                                                            Business Plan




I.    EXECUTIVE SUMMARY

Based on comprehensive market research, Washington, D.C. residents are
seeking a high-quality pizza that is convenient and affordable. They want an
establishment that delivers a great-tasting pizza without long waits or pricey
menus. O.Pizza is ready to address this need. The ―O‖ stands for organic but
represents a deeper holistic appreciation this management team has for good
food, good service, and a sustainable future for all of us. In this business plan
we will outline how O.Pizza will become Capitol Hill’s premier high-quality pizza
delivery service while remaining true to our environmental and holistic vision.
We promise that O.Pizza will offer a great tasting pie, made from the best
organic and natural ingredients, with the convenience of delivery.

Our target market is robust and growing. Capitol Hill boasts one of the fastest
growing, young professional and family communities in Washington, D.C.
National and regional market research has shown that pizza delivery and pizza
quality demands are trending upwards, with young professionals and young
families consuming the largest quantities of delivery pizza. Our own research of
183 young professionals in the D.C. area has found that over 67% would prefer
to order an organic and natural pizza from ―O.Pizza‖ then from our lower-quality
pizza delivery competition.

Our base of operations in Capitol Hill will also provide cost advantages that our
competition has yet to exploit. The neighborhood’s geographic isolation from the
rest of D.C. will limit delivery range improving delivery times and efficiency while
saving on fuel costs. Furthermore, its proximity to the largest farmers’ market
in Washington, D.C. (Eastern Market) will allow us to hedge against supply
bottlenecks with our primary suppliers.

Competition in the pizza market will always be fierce. The low start-up and
ingredient cost means that anyone can start a pizza delivery service. What will
set us apart from our competition is our commitment to building a better-quality,
better-tasting pizza pie. We will use organic and natural ingredients to provide
the freshest, healthiest, and best-tasting pizza pie in the city. Furthermore, our
management team’s belief in environmental sustainability, evidenced by our
choice in organic and natural ingredients and recyclable packaging, will be seen
as a value-added proposition for many like-minded consumers. More
importantly, we have spared no expense to ensure that the best product can be
delivered. We have budgeted significant capital costs to furnish a world-class
wood-burning oven that will provide the only Neapolitan-style pizza pie in the
neighborhood. As we all know, the best tasting pizzas in the world are cooked at
high temperatures using the freshest ingredients, and our restaurant will be the

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O.PIZZA                                                             Business Plan

only one that can achieve those goals. Furthermore, with a one-minute cook
time and multiple pizza capacity, our pizza oven will be able to compete on scale
and cost with conventional rolling convection ovens that our competition uses.

Our financial models predict that O.Pizza will be profitable within the first six
months of operation. Based on our estimates of insurance, renovation and
construction costs, and employee salaries we are able to breakeven without even
encroaching on the demand that our competitors are currently supplying in the
Washington, D.C. and Capitol Hill areas. Furthermore, we anticipate aggressive
growth spurred by a guerilla-marketing plan that targets the Capitol Hill’s very
successful local network of free newsletters, newspapers, and email groups. Our
location at the hub of one of the most visited parts of the city will help spread
the reputation of our good pizza and our brand to the rest of D.C. and beyond,
growing our customer base.

II.    BUSINESS NAME

O.Pizza

III.   BUSINESS MISSION

O.Pizza will become Capitol Hill’s premier high-quality pizza delivery service while
remaining true to our environmental and holistic vision. We promise that O.Pizza
will offer a great-tasting pie, made from the best organic and natural ingredients,
with the convenience of delivery.

IV.    KEY INVESTMENT CONSIDERATIONS

Value Proposition

O.Pizza offers three value propositions that are easily identified by our target
market: convenience, high quality, and organic and natural ingredients. For
residents and commuters in the Capitol Hill region, purchasing a great-tasting,
high-quality pizza is simply not an option unless they travel outside the
neighborhood or are willing to wait over an hour for a pizza. By locating O.Pizza
within our target market, we will be able to quickly deliver a fresh, delicious pizza
anywhere in Capitol Hill from 11AM to 12AM from Sunday to Thursday, and from
11AM to 2AM on Fridays and Saturdays. Moreover, our organic and natural
ingredients will serve as key differentiating factor for our target market,
emphasizing our founding team’s principles of healthy offerings and
environmental sustainability. We will provide our base pizza for $15 and deliver
to anywhere in Capitol Hill with an average estimated delivery time of 30 minutes
from customer order to delivery.


                                         2
O.PIZZA                                                             Business Plan

Market Advantage

Capitol Hill’s current pizza vendors do not offer a comparable value proposition.
O.Pizza will capitalize on the neighborhood’s lack of high-quality, convenient
pizza. Match-Box pizzeria sells higher quality pizza, but does not deliver. Zpizza,
which offers a comparable quality pizza, delivers to Capitol Hill. However, the
chain’s closest location is in Arlington, and by its own admission, requires at least
50 minutes to well over an hour to deliver to Capitol Hill. Moreover, O.Pizza’s
status as an independent, local pizza parlor will be an appealing proposition to
the local population that prides itself on the Capitol Hill neighborhood. We will
also provide convenient access for those seeking takeout pizza in the area.

Supplier Advantages

O.Pizza’s close proximity to local farms, as well as vendors and suppliers in
Eastern Market, will permit frequent delivery of ingredients, particularly our
organic and natural toppings. Frequent deliveries will allow O.Pizza to use
ingredients that are fresher than our competitors’ ingredients and lower
inventory and overhead costs.

Oven

We have budgeted significant resources to acquire a world-class wood-burning
oven that will cook multiple Neapolitan-style pizzas in about one minute. The
extremely hot temperatures and wood fuel create a more delicious, crispy pizza
and minimize cooking time. Our oven will allow O.Pizza to not only compete on
taste and quality, but on scale and cost.

V.     COMPANY OVERVIEW

O.Pizza will use organic and natural ingredients to provide a wide range of the
freshest, healthiest, and best-tasting Neapolitan-style pizza options available for
delivery in the Capitol Hill area of Washington, D.C. Developed through
extensive research on the traditional methods of making Neapolitan-style pizzas,
the family know-how of one of O.Pizza’s founders, and the skills and advice of a
young, successful chef on O.Pizza’s advisory board, the original menu will reflect
the tastes of young professionals and families that are interested in both quality
and novelty.

O.Pizza will possess similar quality to some local options, while its convenience
will be comparable to others. No other single option, however, will offer the
combined levels of both quality and convenience that O.Pizza will offer. For
example, Zpizza is a regional operation that prepares organic pizza and offers


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O.PIZZA                                                                                 Business Plan

delivery service to customers. O.Pizza’s advantage against this comparable
competitor lies in quicker delivery service. At the same time, other pizza
vendors, such as Domino’s may provide quicker delivery, but the quality of their
offerings will never approach that of O.Pizza. Only O.Pizza will offer delivery
service that will allow customers to enjoy the integration of high quality with
convenience.

The physical layout of O.Pizza will be designed to optimize efficiency. While foot
traffic will be encouraged, walk-up customers will only have the option of being
served take-out orders. There will be no dining area, as the true focus of
O.Pizza will be to develop the optimal pizza delivery business in the Capitol Hill
area. This will minimize space requirements to an estimated 700 ft2, an area
that will accommodate the refrigerator, pizza oven, and sufficient space for
personnel to work. While effectively keeping the focus on the core delivery
service, the O.Pizza model will also have the benefit of reducing costs such as
insurance and rent.

VI.        MARKET OPPORTUNITY

O.Pizza will be based in Washington, D.C. The city exhibits many appealing
qualities for our business and service offerings. In particular, Washington, D.C.
suffers from a surplus of low-quality pizza vendors and a dearth of high-quality
pizza vendors. Of the establishments that do offer higher-quality pizza, many do
not deliver or only deliver to a small geographic area. We hope to fill the void
left by these establishments.

Washington, D.C.’s demographic characteristics also align well with our value
proposition. The city’s 592,000 residents are densely populated, with
approximately 9,600 residents per square mile, and many businesses and
government offices clustered around the downtown area.1 This high-
concentration of people and businesses makes delivery especially suitable for the
area. Many of the city’s neighborhoods also tend to have higher incomes and a
younger age distribution, both of which are correlated with higher rates of pizza
purchases and preference for independent, local pizza vendors, according to
market research firm, Mintel.2

Our own research complements these findings. After conducting a survey of 183
individuals living in Washington, D.C. we found that only 32% of respondents
consider organic food vendors to be conveniently located. Similarly, only 27% of
respondents find the purchase of pre-prepared organic food to be convenient,
and only 16% of respondents considered the price of organic products to be

1
    Source: City-data.com
2
    Mintel, 2008. Pizza Restaurants (US - September 2008), Infusing Life into “America’s Food”.

                                                      4
O.PIZZA                                                           Business Plan

convenient. These findings align well with our value-proposition: the option for
delivery to consumers’ homes and offices provides a convenient location to
purchase organic food, cooked organic pizza provides easy access to a prepared
organic meal, and pizza offers value as a meal. When asked if they would be
interested in purchasing in high-quality, organic pizza delivery 67% of
respondents responded, ―Yes.‖

VII.   BUSINESS STRATEGY

O.Pizza’s Vision

O.Pizza will seek to create a pizza delivery business where customers realize they
are not forced to forsake quality for convenience or vice-versa.

O.Pizza will create a loyal customer base as a result of its commitment to
offering a fresh and tasty organic pizza at a competitive price and accompanied
by the most convenient delivery service in town.

At this time, O.Pizza will grow organically by perfecting its business model and
evaluate market expansion possibilities after five years.

O. Pizza’s Five-Year Goals
    Secure O. Pizza funding to cover start-up costs and initial wage expenses
    Pre-Opening (3 months): Obtain all legal licenses/permits, renovate
      building, install oven, hire chefs and delivery specialists, perfect pizza
      recipes.
    Opening: Begin operations, aim to sell 75 to 100 pizzas per day
    Q3-Year 1: Hire additional delivery specialist
    Q1-Year 2: Breakeven, hire 2 additional chefs, reach approx. 200 pizza
      sales per day
    Q2-Year 2: Hire 1 additional delivery specialist
    Q1-Year 3: Hire 3 additional delivery specialists, reach approx. 330 pizza
      sales per day
    Q1-Year 4: reach approx. 450 pizza sales per day, and attain industry
      gross margin average of 20%
    Q1-Year 5: reach approx. 575 pizza sales per day
    Q4-Year 5: Evaluate potential expansion opportunities in the DC Metro
      Area




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O.PIZZA                                                                           Business Plan

VIII. PRODUCT OFFERING

O.Pizza Product

Modern incarnations of pizza have distanced themselves from their Italian roots.
Current offerings are loaded with high fat cheeses and fatty meats and yeast, a
high intake of which can contribute to obesity.

Our product is a healthy alternative to satisfying customers’ pizza cravings. It
allows customers to return to the true roots of pizza by enjoying selected
Neapolitan-style pizza (i.e., healthy pizza) in moderation as part of a balanced
diet that includes plenty of vegetables and fruit. O.Pizza will offer what is best
described as the traditional Neapolitan-style pizza presented in its original form
but conceived with the use of the freshest local organic ingredients available in
the Washington, D.C. area. O.Pizza offers quality and convenience right at your
doorstep. It can offer a freshly made, warm, and succulent Neapolitan-style
pizza made to order with all the most flavorful organic toppings you could
imagine within 30 minutes.

Neapolitan Pizza3

―Pizza Napoletana‖ is a traditional Italian pizza made from a base of risen dough
and cooked in an oak wood fire oven. It is characterized by a raised crust of
golden color – a definite product of the wood oven, soft to the touch and to the
mouth. The consistency is soft and flexible. The product is presented with the
characteristic flavors: a crust that presents the flavors of well-prepared baked
bread, the mixed flavors of the tomatoes, the aromas of the oregano, the garlic
and the basil, and the flavors of the cooked mozzarella. The pizza, as it emerges
from the oven, delivers its unique aroma – perfumed and fragrant.

Ingredients4

The products that provide the base for the Neapolitan pizza include wheat flour
type "00" with the addition of flour type "0" yeast, San Marzano tomatoes, which
grow on the volcanic plains to the south of Mount Vesuvius, mozzarella, natural
water, marine salt, and extra virgin olive oil. Other added ingredients can
include, garlic and oregano for "Pizza Napoletana Marinara" buffalo milk
mozzarella, fresh basil and fresh tomatoes for "Pizza Napoletana Margherita
Extra" and mozzarella STG or Fior di Latte Appennino and fresh basil for "Pizza
Napoletana Margherita."
3
  Source: http://www.fornobravo.com/vera_pizza_napoletana/VPN_spec.html and Chef Chris Dodge (see
Advisory Board).
4
  Source: http://www.fornobravo.com/vera_pizza_napoletana/VPN_spec.html and Chef Chris Dodge (see
Advisory Board).

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O.PIZZA                                                                          Business Plan


Preparation5

The dough must be kneaded by hand. After the rising process, the dough must
be formed by hand without the help of a rolling pin or other mechanical device,
and may be no more than 3 mm thick. The pizza must be baked for 60 to 90
seconds in a 485 °C (905 °F) stone oven with an oak-wood fire. When cooked,
it should be crispy, tender and fragrant. See Appendix A for more detailed
information on preparation of ―Pizza Napoletana.‖

O.Pizza’s menu

O.Pizza will provide a wide variety of pizzas to its customers. There will be a set
menu of pizzas, with traditional pizza options, including the classic margarita, an
all-time favorite. However, customers will also be able to customize their own
pizzas and make their own culinary creations. There will be an array of organic
ingredients available from which our clients can choose from, these will include:
vegetables, hot peppers, ground meat, fruits, prosciutto, pepperoni and a
selection of cheeses. O.Pizza will also put a twist on the standard pizza and offer
a dessert pizza. We will be offering a nutella-like pizza, using Rapunzel
Choconut, a certified organic chocolate hazelnut butter, a healthier alternative to
the popular Nutella.

Labeling and Advertising of O.Pizza

Retail food establishments are exempt from organic certification. However, there
are many restaurants, such as Nora in Washington, D.C. and Pizza Fusion in Ft.
Lauderdale (franchise), which have received third-party certifications. We have
yet to determine whether O.Pizza will ultimately pursue this certification,
however, in the meantime we do wish to comply with standards that would be
required for such certification. Our labels on our pizza boxes and menus will
therefore comply with USDA standards. O.Pizza will be described on our menu,
our delivery boxes and during any marketing efforts as ―pizzas made with
organic and natural ingredients.‖ Each pizza will be comprised of at least 70%
organic ingredients. Any ingredients that are not organic will be natural
products. See Appendix B for details on USDA legal standards.




5
 Source: http://www.fornobravo.com/vera_pizza_napoletana/VPN_spec.html and Chef Chris Dodge (see
Advisory Board).

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O.PIZZA                                                                                 Business Plan

IX.        SALES AND MARKETING

Sales Pitch

We do not accept the premise that pizza is all the same. We do not think that
consumers should be confined to the idea that the best pizza parlor is the closest
one. Our product will be a better-quality, better-tasting pizza. This will be in
part due to the superior ingredients, and in part a result of the wide range of
designer pizza options that will be available to customers both off the menu and
made-to-order. In the end, we are confident that customers will quickly discern
the difference between O.Pizza and other alternatives, and they would be
justified if they chose to travel a greater distance to purchase it than they would
for an ordinary pizza.

Our delivery service, however, will make it unnecessary for many customers to
travel at all. While we anticipate significant volume to come from walk-in
customers, the bulk of our sales will be in delivered pizza. Especially as our
company is making a name for itself, the appeal of good pizza conveniently
obtained will provide us with an advantage among customers that our closest
competitors cannot match. While the taste will make them want a pizza from
O.Pizza, we believe that the delivery service removes one more obstacle to
obtaining a high-quality, tasty pizza.

Target Market

Geographic Target Market

We believe the best entry market into Washington, D.C. is the Capitol Hill area.
With a rapidly gentrifying population, a population density of approximately
8,400, a median income of $52,831, median family size greater than two, 20%
of households having children, and median age of 37, it is a market that hits our
target demographics (discussed below) and represents one of the District’s
higher income neighborhoods6. As our research has shown, families are trending
toward ordering pizza for delivery more7 and this suburban neighborhood is ideal
for delivery to young families and couples who don’t want to venture all the way
to NW D.C. for quality pizza or wait over an hour for a higher-quality delivery
offering. In addition, the Nationals baseball stadium and its surrounding
condominium high rises have drawn in the young, professional demographic that
order delivery in higher quantities.




    Source: Zillow.com and OnBoard, LLC.
6
7
    Mintel, 2008. Pizza Restaurants (US - September 2008), Infusing Life into “America’s Food”.

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O.PIZZA                                                                        Business Plan

The neighborhood is geographically centered along the Anacostia to the east and
south, the Potomac to the West, and Union Station and its network of tracks to
the north. The geographic isolation from the rest of the city will minimize our
delivery range, saving on costs and improving our delivery efficiency.

Our competition in the area is minimal. There are three Italian pizzerias spread
out throughout the neighborhood but only one has delivery. There is a Chicago
style pizzeria by Union Station, a Pizza Boli’s (lower quality walk-up), and a
higher-end Match-Box pizzeria, both on 8th Street. COSI is located in our target
area but they serve flat-bread pizza and not Neapolitan style. Only the Match-
Box pizzeria will offer comparable quality pizza but they do not deliver. Only the
Chicago-style pizzeria and one of the Italian-style pick-up services is within a
reasonable walking distance of the Capitol. Zpizza, a franchise pizzeria that
offers a similar quality pizza delivers to the Capitol Hill area. But, Zpizza’s closest
location is in Arlington and delivery to Capitol Hill requires at least 50 minutes to
well over an hour, depending on time of order and traffic conditions.

An added bonus is that the neighborhood swells in population during the day and
summer months due to its proximity to the Capitol. As part of our location
selection, we want to be able to supplement our delivery income with an over-
the-counter takeaway service that requires a high volume of foot traffic. The
Capitol South and Eastern Markets are ideally located within walking distance to
the Congressional Offices, the Capitol Building, Library of Congress, and Supreme
Court. We believe we can capture a large volume of lunch customers who
frequently traffic the neighborhood but don’t have a viable pizza option other
than COSI. If we ever choose to expand to a sit-down service the location is
accessible by the D.C. Metro system by both bus and rail.

From a supply and logistic side, the neighborhood is ideally located next to the
city’s largest farmers’ market, Eastern Market. The neighborhood also boasts
several natural food stores, organic groceries and organic bakeries. When we
establish wholesale supply contracts with the organic suppliers who travel to the
market every week we will shave costs and improve margins.

Consumer Target 8

Our target consumers are young professionals and students between the ages of
18 to 34, households with children, and individuals that are conscious of organic
food.




  All data not described as our own research was sourced from: Mintel, 2008. Pizza Restaurants (US
8

- September 2008), Infusing Life into “America’s Food”.

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O.PIZZA                                                            Business Plan

O.Pizza will target young professionals and students between 18 and 34 years of
age because a greater percentage of this population segment eats pizza
compared to other age demographics (approximately 82% compared to 73%,
respectively). Moreover, the younger demographic of 18 to 34 year-olds orders
pizza for delivery almost twice as frequently as other age groups (1.7 versus 0.9
deliveries per month, respectively).

Households with children also present an attractive market, as they are more
likely to order pizza for delivery (60%) than households without children (40%).
Households with children also order pizza for delivery more frequently: 38% of
households with children ordered delivery pizza two or more times per month,
compared to only 20% of households without children. Finally, households with
children tend to eat more pizza than households without children. The mean
number of pizzas consumed by households with children was 1.8 pizzas per
month, versus 0.8 pizzas per month for households with no children.

Finally, O.Pizza will target individuals that are conscious about organic food.
These individuals are a natural target market, as O.Pizza will feature not only the
taste and quality of its pizza, but its organic and natural ingredients. Our survey
results show that almost one in three (approximately 30%) of respondents
associated organic food with the term ―healthy.‖ We consider ―healthy‖ in this
context to mean the absence of chemical products and highly processed
ingredients. Thus we will focus some of our marketing efforts on emphasizing
the organic and natural qualities of our pizzas.

Marketing Tactics

We envision building a client base for O.Pizza through the following marketing
techniques, supported by a $1,000 monthly budget:

For a short duration after our initial opening we will make free samples available
at local farmers’ markets. There are multiple farmers’ markets in the area. We
will target those closest to our location, such as Eastern Market and the Market
Poultry farmers’ market, to maximize the number of local customers that we will
potentially attract for future business. Our research indicates that people who
buy their food from farmers’ markets would also be likely to have interest in
organic pizza. For this reason we will ensure that these individuals are exposed
to our product and given information about our location and delivery service,
including our address and phone number, to enable them to purchase our pizza.

We will also make free samples available at local universities. Institutions such
as the Georgetown University Law School could provide a reliable source of
customers, as students often purchase take-out food to accommodate their busy
and irregular schedules.

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O.PIZZA                                                             Business Plan


O.Pizza will limit marketing expenditures by tapping into Capitol Hill’s organic
print and online media associations. The Hill boasts its own newsletter, The
Capitol Hill Rag. Advertising in the publication would require minimal investment
($14 per issue) and would greatly increase our brand exposure in the local
community and readership. Similarly, Capitol Hill boasts its own online forums
and discussion groups within the social networking environment. We will heavily
promote our brand and product offerings at Yelp.Com, Urbanspoon.com, and
Facebook’s Sustainable Capitol Hill networking group. Finally, we will utilize
Eastern Market’s farmers’ market to take our product to the visitors who come
from all over the city. The costs to set-up at the market ($50) would be far
outweighed by the great brand building and product awareness the site
provides.

X.     SUPPLIERS

Primary Suppliers

Adherence to a policy of providing pizza from only the freshest ingredients will
necessitate frequent deliveries to O.Pizza. This will limit the operation to source
ingredients from local suppliers. Below is a list of potential suppliers, whose
prices and locations would suit the business plan.

Item Distributor Location

INGREDIENT                                 POTENTIAL SUPPLIER
Flour                                      McGeary Organics (Lancaster, PA)
Meats                                      Ayrshire Farms (Upperville, VA)
Olive Oil                                  San-J International, Inc.
                                           (Richmond, VA)
Sauce                                      Demeter’s Pantry (Silver Spring, MD)
Cheese                                     Applegate Farms (Bridgewater, NJ)
Vegetables                                 Procacci Brothers (Philadelphia, PA)
                                                                              



This is a preliminary list and is subject to change. O.Pizza will avoid entering into
exclusive agreements with any distributor whenever possible and will continue to
review opportunities to ensure that the freshest ingredients will always be
sourced at the lowest prices. Eastern Market will be a good source of potential
suppliers as our business expands.




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O.PIZZA                                                           Business Plan

XI.   COMPETITORS

Competition in Capitol Hill

For a description of the direct competition in Capitol Hill, please see Geographic
Target Market.

Competition in Washington, D.C.

We have identified three main types of competitors in the Washington, D.C.
area: ―The Domino’s Delivery,‖ the ―Mom and Pop Pizza, and the ―Sit-down
Gourmet.‖ We have also included general competitor analysis based on our
competitor interviews.   Each of these competitors demonstrates different
strengths and weaknesses.

A. Competitor Type: “The Domino’s Delivery”
Franchised, Low-Cost, Low-Quality
E.g. Domino’s, Papa John’s, Pizza Hut, Manny & Olga’s, Bertucci’s, CPK, Ledo’s,
Pizza Boli’s, Armand’s, Jumbo Slice, Mama Ilardo’s, Jerry’s Subs and Pizza, Uno
Chicago Grill

Within this segment there are differing levels of quality, but ultimately not a
large price range.
Ledo’s Large Pizza: $13.24
Domino’s Large Pizza: $12.00
Armand’s Large Pizza: $13.49

Eg. Ledo’s Pizza
Cook time: 8-10min
Pizzas/day: approx. 150-200 (per franchise)
Delivery Radius: 2 miles
Orders: online, by phone, walk-in
Delivery method: First-come first-serve by car
Type of oven: electric convection

Strength: Brand recognition, convenience, affordability, scale, delivery range (on
aggregate), order timeliness
Weakness: Low-quality ingredients/pizza, unhealthy, many direct competitors

B. Competitor Type: “Mom and Pop Pizza”
Single store, Low-cost, Low-quality, Local, Diverse Product Offering (non-pizza)
E.g. Radius Pizza, Washington Deli Pizza, Pizza Movers, Listranis Pizza Delivery,
Pizza Mart, NY Pizza inc., Sento Alberto’s Pizza, Homemade Pizza Co., Café
Romeo’s

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O.PIZZA                                                            Business Plan


Within this segment, the range of quality and price increases.
Pizza Mover’s Large Pizza: $12.54
Café Romeo’s Large Pizza: $10.00 (regular) and $17.00 (gourmet)
Radius Pizza Large Pizza: $12.00 (regular) and $16.00 (gourmet)

Eg. Café Romeo’s
Cook time: 10min maximum
Pizzas/day: approx. 500
Delivery radius: 5 miles (depends on delivery value)
Orders: online, by phone, walk-in
Delivery method: Cars and mopeds
Type of oven: electric convention

Strength: Affordability, convenience, ―local‖ experience/personable, local brand,
wide product range
Weakness: Inconsistent quality/delivery timeliness, lack of scale, limited range,
many direct competitors

C. Competitor Type: “Sit-down Gourmet Pies”
High-quality, High-cost, Local, Reputable, Specialized
E.g. 2 Amy’s, Pizza Paradiso, Comet Pizza, MatchBox, Ella’s Wood-Fired Pizza

Within this segment, the quality of ingredients and pizza are high, but the price
range is wide.
2 Amy’s Pizza: $12.00
Pizza Paradiso Pizza: $16.00
MatchBox Pizza: $17.00

Eg. 2Amy’s
Cook time: 3min
Pizza/day: approx. 1500 (includes take-out orders)
Orders: by phone, walk-in
Type of oven: oak-wood burning oven (700˚)

Strength: Brand recognition (name and chef), high-quality, local convenience,
few direct competitors
Weakness: No delivery, price per size

Market Share Opportunities

O.Pizza represents the crossroads of delivery convenience and high-quality. We
believe this value proposition allows us the flexibility of taking market share from
each existing vendor segment highlighted above, while also growing the high-

                                        13
O.PIZZA                                                            Business Plan

quality pizza market. Customers who want a better-quality pizza delivered to
them will think twice about ordering from a ―Domino’s‖ or a ―Pizza Mart‖.
Alternatively, those customers who don’t have the time to travel to places like
2Amy’s have the convenience of a high-quality pizza delivered to their door. We
strongly believe that customers in the middle to high-income range who buy
from these various vendor segments will be attracted to the combination of
quality and convenience offered by O.Pizza.

XII.   OPERATIONS PLAN/EXPANSION STRATEGY

Initially, O.Pizza will be staffed by four chefs, two delivery specialists, and one
cashier/phone specialist. Cashier/phone specialist duties will be divided among
the founders. These workers will cover the complete hours required of all
positions for the business to prepare and deliver pizzas while remaining open for
business from 11AM to 12AM from Sunday to Thursday, and from 11AM to 2AM
on Fridays and Saturdays. After six months in business, staffing levels will be
increased by one delivery specialist, and after the first year two additional chefs
will be added. Further increases in staffing levels have been budgeted into the
second year of operations, and may be adjusted as necessary if actual sales
diverge from projected levels.

Drivers will be insured by O.Pizza under a standard commercial insurance policy.
Drivers will provide their own means of transportation and cover all associated
costs. To defray fuel expenses, O.Pizza will augment their pay with an allowance
of $1 per hour worked.

Growth of the business will be concentrated on the development of a customer
base for the single Capitol Hill location. This will involve local promotions,
advertising, and efforts to retain current customers. Expansion into additional
sites will depend on the success of the first location. In the event management
decided to open new locations, additional market analysis would be needed to
determine the most lucrative opportunities. New locations would ideally be
concentrated to maximize established economies in advertising and delivery
practices, but far enough apart to minimize service area overlap.

The launch of O.Pizza will be funded by the personal financial resources of its
founders. If expansion into other areas of Washington, D.C. is pursued, portions
of the initial expenditures may require the support of outside backers such as
angel investors.




                                        14
O.PIZZA                                                           Business Plan

XIII. FINANCIAL INFORMATION

Assumptions

We begin our assumptions by gauging (based on our market analysis) that our
business can make and sell about 75 to 100 pizzas daily in Year 1. Our
competitor analysis shows this to be reasonable for a fledgling pizza business,
especially considering the lack of brand recognition and our entry into a mature
market. In Year 2, we expect to double the number of pizzas sold, which we
also believe to be reasonable considering the relative weakness of competition
on Capitol Hill. We show sales increasing each year through Year 5 as we ramp-
up our operations to full capacity, adding employees and delivery routes and
expanding the volume of take-out orders. Pizzas sold in Year 5 reach about 575
daily. Other assumptions relevant to our financials are described in the sections
below.

Start-Up Costs

Our estimation of costs to start O.Pizza are straight-forward. We expect to
spend on all of those items related to owning and operating a restaurant,
including license, insurance, interior and exterior renovations, and equipment.
We assume that within three months of our initial cash investment
(approximately $140k), O.Pizza will be up and running. $88k of these initial
costs includes PP&E, renovation and IT-related expenses. From then on, our
expenses (outside of wages and input costs) will be limited to leasing, utilities,
insurance, marketing and advertising. Leasing and utilities grow at 3% annually
to match the expected pace of economic growth.

Staffing

Staffing O.Pizza is not any different from the typical pizza franchise model (e.g.
Domino’s), whose majority of business comes from delivery. Initially we
anticipate 7% of our sales being take-out with a growth rate of 2% per annum
up to 15% in Year 5. Our retail storefront accounts for that by removing sit-
down space such that only one cashier is needed for takeout orders. We will
have 4 chefs at the outset working shorter (6 hr) shifts, supported by two
delivery specialists. Our research on the number of deliveries possible in one
day served as the foundation for our increase in employees from 7 in Year 1 to
14 in Year 5. Staffing costs account for 44% of Year 1 revenues, but by Year 5
only account for 14%.




                                       15
O.PIZZA                                                                          Business Plan

Revenues

Based on our competitor research and pizza industry average sales prices for a
large pizza, we have set our base Margherita pizza price at $15.00, and our
topping prices at an additional $1.25 each. These numbers account for the
quality of our ingredients and pizza-baking process, and therefore include a slight
premium above our franchised and mom-and-pop competitors. So a 2-topping
pizza costs our customer $17.50, not including a delivery fee of $1.00, taxes or
tip paid to our drivers.

If we add our assumption for quantity of pizzas sold throughout our 5 years of
projected financials, Year 1 sales are approximately $677k. As we gain
popularity and build our brand, we think that a factor increase of 2 in pizza sales
is not unreasonable for Year 2, which pushes sales up to $1.43mm. By Year 5,
we see sales increase to $3.78mm given our assumption that one retail store can
make and sell 575 pizzas every day and that no plan for expansion is in place.


                                               Revenue
                4,000,000              112%                               3,777,750   120%

                3,500,000
                                                                                      100%
                                                              2,969,640
                3,000,000




                                                                                             Annual % Change
                                                  2,187,810
                                                                                      80%
  Revenue ($)




                2,500,000

                2,000,000                                                             60%
                                      1,432,260
                1,500,000                          53%           36%
                                                                                      40%
                                                                           27%
                1,000,000   677,109

                                                                                      20%
                 500,000
                             0%
                       0                                                              0%
                             F2010     F2011       F2012       F2013       F2014



Cost of Revenue

Based on our supplier research, we identified an estimated wholesale cost for
base pizza and toppings of $7.58 and $2.31, respectively. This total cost of
$9.98 per 2 topping pizza does not reflect bulk orders or long-term supplier
contracts which we believe we can negotiate for an even better gross margin in
later years. So even with this conservative estimate of input costs, we still see
O.Pizza operating margin climb from a negative 84% in Year 1, Q1 (this includes
                                                  16
O.PIZZA                                                                                  Business Plan

all operating expenses) to a very healthy 10% in Year 2, and 17%, 24% and
28% in Years 3-5 respectively. While we believe that our cost of revenue in the
current financial model is quite high, even by industry standards, we must also
account for the increased costliness of higher quality ingredients. A sensitivity
analysis was conducted on our COGS and revenue assumptions. The results can
be found in Appendix C.


                                               Cost Of Revenue
                         3,000,000                                                              90%
                                                     84%                            2,655,861
                                                                                                80%
                         2,500,000
                                                                        2,202,434               70%




                                                                                                      Annual % Change
   Cost Of Revenue ($)




                         2,000,000                                                              60%
                                                            1,763,752
                                                                                                50%
                         1,500,000                              44%
                                               1,223,438                                        40%

                         1,000,000                                         25%                  30%
                                     666,706                                          21%
                                                                                                20%
                          500,000
                                                                                                10%
                                          0%
                                -                                                               0%
                                      F2010     F2011       F2012        F2013       F2014



Gross Profit

O.Pizza’s Gross Profit is positive in all five projected years. Year 1 is only slightly
positive at $10k, but this grows to $424k by Year 3 and $1.12mm in Year 5. We
attribute this to accuracy in estimating revenues and costs of revenues, and the
underlying assumption of sales growth in Years 2 to 5, which showcases the
significant margin between revenues and costs O.Pizza can command once
operational capacity is reached. We built a sensitivity analysis to map out the
change in gross profit should our assumption on input costs decrease; at just
$.90 less per pizza our gross margin in Year 1 increases to $46k and in Year 5 to
$1.36mm (or 12%).




                                                           17
O.PIZZA                                                                                                Business Plan


                                                              Gross Profit
                      1,200,000                                                            1,121,889     2500%


                      1,000,000                            1907%
                                                                                                         2000%
  Gross Profit ($)




                                                                                 767,206
                        800,000




                                                                                                                  Annual % Change
                                                                                                         1500%
                        600,000
                                                                    424,058                              1000%
                        400,000

                                                          208,822
                                                                                                         500%
                        200,000
                                                                          103%    81%
                                                                                            46%
                                         0%   10,404
                                -                                                                        0%
                                         F2010            F2011     F2012        F2013      F2014



Net Income

Based on our financial model, we earn a net income in Year 2 of $98k after
seeing a net loss in Year 1 of $131k. With steady growth in profitability, we
reach about $700k in net income by Year 5, with the assumption that all of our
profits will be reinvested each year O.Pizza earns income.


                                                               Net Income
                      800,000                                                                            2500%
                                                                                            690,206
                      700,000
                                                       1907%
                      600,000                                                                            2000%

                      500,000                                                    460,386
                                                                                                                 Annual % Change
     Net Income ($)




                      400,000                                                                            1500%

                      300,000                                       238,043

                      200,000                                                                            1000%
                                                          98,823
                      100,000

                            -                                                                            500%
                                         F2010            F2011     F2012        F2013      F2014
                      (100,000)

                      (200,000)     0%        (131,704)                                                  0%
                                                                    103%         81%         46%


                                                                     18
O.PIZZA                                                        Business Plan




FINANCIAL ANALYSIS

Refer to Appendix D: Financial Statements (attached excel document) to
review the following financial analyses:

      Financial assumptions used in modeling

      Start-Up Costs

      Staffing Costs/Breakdown

      Cost of Revenues

      Projections

      Break-Even Analysis

      Income Statement - Fiscal years 2010 – 2015 (annual)

      Balance Sheet for Fiscal Year 2010

      Statement of Cash Flows – Fiscal Years 2010 – 2015 (annual)



XIV. EXECUTIVE MANAGEMENT TEAM

Chief Executive Officer – Richard C. Storey

Richard brings more than five years of management experience as an officer in
the United States Navy. As a Reactor Controls Division Officer, Richard managed
132 personnel in his division and oversaw safe operation of eight nuclear
reactors aboard the USS Enterprise. Richard recently worked for CSC
Consulting’s Federal Consulting Practice-Strategy Group, leading several HR
organizational change initiatives for the Department of Homeland Security. He
will receive his MBA from Georgetown University in May 2010.




                                       19
O.PIZZA                                                            Business Plan

Chief Operating Officer – Brett M. Peeling

Over a nine-year period, Brett has accumulated a wealth of operational
experience from a diverse set of industries. As a location manager, Brett
oversaw all operations and 35 employees at a manufacturing and rental site for
Barker Steel Co. Serving as an operations supervisor with Airborne Express,
Brett managed 28 employees and vastly improved shipment efficiency.
Additionally, as an officer in the United States Navy, Brett coordinated air
operations on a deployed aircraft carrier. He will receive his MBA from
Georgetown University in May 2010.

Chief Financial Officer – Fawzi M. Kronfol

Fawzi initially developed his financial acumen while serving as a senior custody
fund accountant for Boston Investor’s Bank Trust, where he oversaw 12 multi-
million dollar accounts. More recently, as an investment operations associate for
Panagora Asset Management, Fawzi excelled at identifying and reducing market,
security, and cash risks. He will receive his MBA from Georgetown University in
May 2010.

Chief Marketing Officer – Andrew L. Batchelor

Andrew brings analytical rigor and business development experience to O.Pizza’s
marketing efforts. He worked with FINCA International’s New Business
Development unit to assist with customer satisfaction metrics, and recently
developed a strategic marketing plan for a start-up non-profit group in the D.C.
region. Andrew also served as an economist for USAID’s Economic Analysis and
Data Services project and as a researcher assistant at the Federal Reserve
Board. He has an MA in Economics from NYU and will receive his MBA from
Georgetown University in May 2010.

Chief Information & Technology Officer – Omar F. Ghadry

Omar’s diverse experiences with Lockheed Martin Corporation have provided him
with expertise in business information and information dissemination. As chief
billing specialist, Omar delivered time-sensitive billing and accounting services to
80 heritage programs, and processed over $500 million dollars in revenue. This
experience is complemented by Omar’s time spearheading the development,
implementation, and dissemination of a new-hire training regimen for the firm.
Finally, Omar brings entrepreneurial experience as founder and CEO of Potomac
Billiards. He will receive his MBA from Georgetown University in May 2010.




                                        20
O.PIZZA                                                            Business Plan

Chief Compliance Officer – Natasha K. Gopaul

Natasha brings a unique perspective to O.Pizza through her legal knowledge and
corporate legal experience. Within the Corporate and Litigation Department at
Weil, Gotshal & Manges, Natasha performed legal research and provided advice
to clients regarding liability issues. As a summer associate with Lehman
Brothers, Natasha supported members of the Legal Regulatory team and helped
the firm prepare for regulatory examinations. She will receive her JD from
Georgetown University in May 2010.

XV.   ADVISORY BOARD

Chef Chris Dodge

Chef Dodge is the Head Chef and founder of PharmaChef, a Tulsa catering
service dedicated to providing high quality, great tasting food to pharmaceutical
industry firms. Chef Dodge was trained at the Okmulgee Tech Culinary Institute
and has years of Head Chef experience in the Tulsa and New York City
restaurant markets.

William Lewis Batchelor, Jr. CPA, MBA (retired)

Mr. Batchelor has over 30 years of experience as an accountant and business
consultant. As founder and partner of Batchelor & Co., Mr. Batchelor provided
strategic, managerial, tax, and finance consulting advice and services to small
firms operating in and around Reading, PA, including numerous restaurants and
catering operations.

Steven Galagarza

Mr. Galagarza is a LEED Accredited project manager with more than eight years
of experience in commercial construction. He has headed more than $120
million in commercial projects and managed up to 40 subcontractors and
material suppliers per project. Mr. Galagarza has generously offered to provide
his expertise during building renovation and installation of O.Pizza’s pizza ovens.




                                        21
O.PIZZA                                                                         Business Plan




XVI. APPENDIX A: PREPARING A NEAPOLITAN PIZZA9

The preparation of "Pizza Napoletana" includes exclusively the following method
of production used in a continuous cycle.

1) Preparation of the dough

Blend flour, water, salt and yeast. Pour a liter of water into a mixer, dissolve
between the 50 and the 55g of salt, add 10% of the total amount of flour, and
then add 3g of hydrated yeast. Start the mixer, and then gradually add 1800 g of
flour until you achievement of the desired dough consistency. Combining the
ingredients should take 10 minutes.

Next, mix the dough at low speed for 20 minutes, until the dough forms a single
ball. To obtain the optimal dough consistency, it is very important to control the
quantity of water, such that the flour is able to absorb it all. The mixture should
be sticky, soft and elastic to the touch.

The characteristic "merceologiche" of the flour used for "Pizza Napoletana" allow
it to absorb from 50 to 55% of its weight in water to reach the optimal "point of
pasta." The resulting dough can be individualized by the abilities of the individual
pizzaiolo.

The preparation of the dough in the mixer should be done without causing the
dough to become warm.

2) Dough Rising

First phase: remove the dough from the mixer, and place it on a surface in the
pizzeria where it can be left to rest for 2 hours, covered from a damp cloth. In
this manner the dough's surface cannot become hardened, nor can it form a
crust from the evaporation of the moisture released from the dough. The dough
is left in the form of a ball for the 2 hour rising, which must be made by the
pizzaiolo exclusively by hand.

With the aid of a spatula, cut from the mixture into smaller portions, which are
then shaped into a ball. For "Pizza Napoletana" the dough balls must weigh
between the 180 and the 250g.



9
 Source for all of Appendix A: http://www.fornobravo.com/vera_pizza_napoletana/VPN_spec.html, Chef
Chris Dodge, and Fawzi’s Grandmother

                                                22
O.PIZZA                                                            Business Plan

Second phase of the dough rising: Once the individual dough balls are formed,
they are left in "rising boxes" for a second rising, which lasts from 4 to 6 hours.
By controlling storage temperature, these dough balls can then be used at any
time within the following 6 hours.

No other type of preparation is acceptable for the preparation of the "Pizza
Napoletana." Specifically excluded is the use of a rolling pin and mechanical
presses.

3) Forming the pizza base

Following the second rising, the dough ball can be removed from the rising box
using a spatula and placed on the cooking of the pizzeria, on a light layer of flour
to keep the dough from sticking to the work bench. With a motion from the
center to the outside, and with the pressure of the fingers of both the hands on
the dough ball, which is turned over and around multiple times, the pizzaiolo
forms a disk of dough that to the center the thickness is not more than 0.3 cm
(.11 inch), and a border that is not greater than 1-2 cm (.4-.8 inch), forming a
frame, or crust.

4) Method: Assembling a pizza

Pizza Napoletana Marinara:
Using a spoon place 80g of pressed, peeled tomatoes in to the center of the
pizza base, then using a spiraling motion, cover the entire surface of the base
with the sauce;
Using a spiraling motion, add salt on the surface of the tomato sauce;
In the same manner, scatter a pinch of oregano;
Chop a thin slice of peeled garlic, and add it to the tomato;
Using an oil canister and a spiraling motion starting from the center and moving
out, pour 4-5g of Extra Virgin Olive Oil.

Pizza Napoletana Margherita Extra:
Using a spoon place 60-80g of pressed, peeled tomatoes, or chopped fresh
cherry tomatoes in to the center of the pizza base, then using a spiraling motion,
cover the entire surface of the base with the sauce;
Using a spiraling motion, add salt on the surface of the tomato sauce;
Spread 80-100g of sliced Mozzarella di Bufala DOP so that it forms a connect lath
pattern on the surface of the tomato sauce;
Spread on the fresh basil leaves;
Using an oil canister and a spiraling motion starting from the center and moving
out, pour 4-5g of Extra Virgin Olive Oil.



                                        23
O.PIZZA                                                            Business Plan

Pizza Napoletana Margherita:
Using a spoon place 60-80g of pressed, peeled tomatoes, or chopped fresh
cherry tomatoes in to the center of the pizza base, then using a spiraling motion,
cover the entire surface of the base with the sauce;
Using a spiraling motion, add salt on the surface of the tomato sauce;
Spread 80-100g of sliced Mozzarella STG, or Fior di Latte Appennino to that it
forms a connect lath pattern on the surface of the tomato sauce;
Spread on the fresh basil leaves;
Using an oil canister and a spiraling motion starting from the center and moving
out, pour 4-5g of Extra Virgin Olive Oil.

5) Cooking

Using a wood or aluminum peel, and a little flour, the pizzaiolo transfers, the
pizza using a rotary movement and a quick shake, on to the cooking surface of
the oven without disturbing the prepared pizza. The cooking of the pizza must be
done exclusively in a wood fire oven which has reached the cooking temperature
of 485C, (905F), which is essential to cook the Pizza Napoletana.

The pizzaiolo should monitor the cooking of the pizza by lifting up its edge. Using
a metal peel, the pizzaiolo rotates the pizza, changing the edge that is facing the
fire, and taking care to always replace the pizza on the same spot on the cooking
surface, to ensure that the pizza does not burn because it is exposed to different
temperatures.

It is important that the pizza is cooked in uniform manner across its entire
circumference.
At the conclusion of the cooking, the pizzaiolo removes the pizza from the oven
with a metallic peel, and places it on a flat, dry work surface.
Cooking time should not surpass 60-90 seconds.
After the cooking, the pizza should have the following characteristics:
The tomato should have lost all excess water, and should be dense and
consistent;
The mozzarella di Bufala DOP or the mozzarella STG should be melted on the
surface of the pizza;
The basil, garlic and the oregano will develop an intense aroma, and will appear
brown, but not burned.
The following temperature guidelines should be followed:
Cooking surface temperature: 800ºF about.
Oven dome temperature: 800ºF about.
Cooking time: 60-90 seconds.
Temperature reached by the dough: 60-65C.
Temperature reached by the tomatoes: 75-80C.
Temperature reached by the oil: 75-85C.

                                        24
O.PIZZA                                                            Business Plan

Temperature reached from the mozzarella: 65-7C.

6) Presenting the Product

"Pizza Napoletana" is presented as a product from the oven, round in shape, with
a variable diameter than it should not surpass 35 cm, (14 inches), with the edge
raised (crust), and with the central covered by the ingredients. The central of the
pizza base will be 0.3 cm, (.11 inch thick), with crust 1-2 cm (.4-.8 inch). The
pizza will deliver the aroma and taste of the freshest local and organic
ingredients as it makes it journey from our oven to the customer’s mouth.




                                        25
O.PIZZA                                                            Business Plan




XVII. APPENDIX B: ORGANIC and NATURAL DEFINITIONS

USDA legal definition for “made with organic ingredients”

Title 7: Agriculture PART 205—NATIONAL ORGANIC PROGRAM
                    

Subpart D—Labels, Labeling, and Market Information
§ 205.301 Product composition.
(c) Products sold, labeled, or represented as ―made with organic (specified
ingredients or food group(s)).‖ Multiingredient agricultural product sold, labeled,
or represented as ―made with organic (specified ingredients or food group(s))‖
must contain (by weight or fluid volume, excluding water and salt) at least 70
percent organically produced ingredients which are produced and handled
pursuant to requirements in subpart C of this part. No ingredients may be
produced using prohibited practices specified in paragraphs (f)(1), (2), and (3) of
§205.301. Nonorganic ingredients may be produced without regard to
paragraphs (f)(4), (5), (6), and (7) of §205.301. If labeled as containing
organically produced ingredients or food groups, such product must be labeled
pursuant to §205.304.

§ 205.302 Calculating the percentage of organically produced ingredients.
(a) The percentage of all organically produced ingredients in an agricultural
product sold, labeled, or represented as ―100 percent organic,‖ ―organic,‖ or
―made with organic (specified ingredients or food group(s)),‖ or that include
organic ingredients must be calculated by:
(1) Dividing the total net weight (excluding water and salt) of combined organic
ingredients at formulation by the total weight (excluding water and salt) of the
finished product.

(2) Dividing the fluid volume of all organic ingredients (excluding water and salt)
by the fluid volume of the finished product (excluding water and salt) if the
product and ingredients are liquid. If the liquid product is identified on the
principal display panel or information panel as being reconstituted from
concentrates, the calculation should be made on the basis of single-strength
concentrations of the ingredients and finished product.

(3) For products containing organically produced ingredients in both solid and
liquid form, dividing the combined weight of the solid ingredients and the weight
of the liquid ingredients (excluding water and salt) by the total weight (excluding
water and salt) of the finished product.

(b) The percentage of all organically produced ingredients in an agricultural
product must be rounded down to the nearest whole number.

                                        26
O.PIZZA                                                          Business Plan

(c) The percentage must be determined by the handler who affixes the label on
the consumer package and verified by the certifying agent of the handler. The
handler may use information provided by the certified operation in determining
the percentage.

USDA legal definition for “natural”

The USDA has a legal definition for "natural", but it applies only to meat and
poultry; "those products carrying the ―natural‖ claim must not contain any
artificial flavoring, color ingredients, chemical preservatives, or artificial or
synthetic ingredients, and are only ―minimally processed‖ defined by USDA as a
process that does not fundamentally alter the raw product."

The USDA National Organic Program defines non-synthetic as "a substance that
is derived from mineral, plant or animal matter and does not undergo a synthetic
process". They define a synthetic as "a substance that is formulated or
manufactured by a chemical process or by a process that chemically changes a
substance extracted from naturally occurring plant, animal, or mineral sources,
except that such term shall not apply to substances created by naturally
occurring biological processes."




                                       27
O.PIZZA                                                                            Business Plan


XVIII.       APPENDIX C: SENSITIVITY ANALYSIS

                                          Revenue
                  $      14.00       $          15.00    $     16.00
          $ 8.99 $ 10,006.37         $      46,118.87    $ 82,231.37
 COGS     $ 9.89 $ (25,708.90)       $      10,403.60    $ 46,516.10
          $ 10.88 $ (61,424.16)      $     (25,311.66)   $ 10,800.84

                                Revenue
                        -6.7% $      15.00              6.7%
           -10.0%      -4%        343%                690%
 COGS     $ 9.89      -347% $ 10,403.60               347%
            10.0%     -690%      -343%                 4%


XIX. APPENDIX D: FINANCIAL STATEMENTS

Assumptions



            Take out ratio will begin at 7% and increase annually by 2%
            Average Delivery Time (hrs)                                    0.33
            Deliveries/Driver                                              24
            All costs / revenue based on 2-topping pizza
            % of pizzas ordered that have 2 toppings                       50%
            Bottled Drinks per pizza unit sale                             0.5
            Bottled Drink being sold for:                              $          1.50
            Pizza unit sold                                            $         15.00
            Per Topping revenue                                        $          1.25
            Bottled Beverage Cost                                      $          0.61
            Delivery Fee                                               $          1.00
            Number of operating days per month                             30
            % of pizzas ordered with delivery fee                          50%
            Leasing per square foot on Capitol Hill (monthly)          $          3.33
            Square footage needed                                          700
            Purchase cost of retail store (509 11th Street SE)         $ 325,000.00




                                                 28
O.PIZZA                                                                           Business Plan

             IT Maintenance years 2-5                                 $  1,000.00
             Restaurant License years 2-5                             $    350.00
             Annual lease cost growth                                   3.00%
             Utility cost growth                                        3.00%
             Life of Oven                                                 15
             Life of Cashier System (years)                               10
             Life of Refrigeration (years)                                10
             Average wood usage (kg) per 12 hour cooking cycle            25
             Average cost of 1kg of wood                              $      0.10
             Straight-line Depreciation Method
             Buy Ingredients on a Daily Basis (Inventory = 0)
             Income tax rate                                            35.0%
             Contributed Capital Per Owner                            $ 16,000.00
             SG&A will be split over the opening 3 months



                                      Renovation Assumptions
             Roof size (sq ft)                                              700
             Chimney Height (lineal feet)                                   15
             Number Of Windows                                               2
             Number Of Doors                                                 3
             Number Of Cabinets                                             12
             Number Of Pizza Preperation Counters                            2

Start-Up Costs

                  Store Renovation Breakdown                Cost Per Unit    Total Cost
          Strip and re-shingle with asphalt shingles        $        3.00   $ 2,100.00
          Chimney                                           $     200.00    $ 3,000.00
          Heating System                                    $ 3,500.00      $ 3,500.00
          Cooling System                                    $ 10,000.00     $ 10,000.00
          Ventilation System                                $ 1,000.00      $ 1,000.00
          Electrical                                        $ 2,000.00      $ 2,000.00
          Plumbing                                          $ 2,500.00      $ 2,500.00
          Ceramic Tiling                                    $       10.00   $ 7,000.00
          Window Replacement                                $     300.00    $    600.00
          Door Replacement                                  $     750.00    $ 2,250.00
          Cabinets                                          $     150.00    $ 1,800.00
          Pizza Preperation Counter                         $ 2,000.00      $ 4,000.00
          Total                                                   -         $ 39,750.00




                                                 29
O.PIZZA                                                                                   Business Plan

                            Item           Number                     Cost                Total Cost
       Golden Embers Oak Wood-Burning Oven   1    $                   10,000.00       $      10,000.00
       Oven Installation                     1    $                   20,000.00       $      20,000.00
       Store Renovation                      1    $                   39,750.00       $      39,750.00
       Refrigeration & Storage               1    $                    3,000.00       $       3,000.00
       Cashier System                        1    $                    2,500.00       $       2,500.00
       Business Process , IT & Website       1    $                   12,000.00       $      12,000.00
       Restaurant License                    1    $                      441.00       $         441.00
       Leasing                               12   $                    2,333.33       $      28,000.00
       Utilities (Electric, Gas, Water)      12   $                      500.00       $       6,000.00
       Insurance                             1    $                    6,000.00       $       6,000.00
       Marketing and Advertising             12   $                    1,000.00       $      12,000.00
       Internet and Phone                    12   $                      100.00       $       1,200.00

       Total                                                  $       97,624.33 $ 140,891.00

Staffing Costs

                                    Hours
               Staff      Shift             Hourly Rate Loaded Cost     Daily Cost    Days/Month   Monthly Cost
                                   Worked
Chef                    8AM-2PM      6      $    12.00 $      16.80 $        100.80       30       $     3,024
Chef                    2PM-8PM      6      $    12.00 $      16.80 $        100.80       30       $     3,024
Chef                    2PM-8PM      6      $    12.00 $      16.80 $        100.80       30       $     3,024
Chef                    8PM-2AM      6      $    12.00 $      16.80 $        100.80       30       $     3,024
Chef                    8PM-2AM      6      $    12.00 $      16.80 $        100.80       30       $     3,024
Chef                    10AM-4PM     6      $    12.00 $      16.80 $        100.80       30       $     3,024
Cashier/Take-out       11AM-12AM     13     $        7.25 $   10.15 $        131.95       30       $     3,959
Delivery Specialist     11AM-7PM     8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     6PM-2AM      8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     11AM-7PM     8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     6PM-2AM      8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     11AM-7PM     8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     6PM-2AM      8      $        8.25 $   11.55 $         92.40       30       $     2,772
Delivery Specialist     12PM-8PM     8      $        8.25 $   11.55 $         92.40       30       $     2,772




                                                30
O.PIZZA                                                                               Business Plan




                                                             Tax         Monthly
                      Nam e                   Bi-Weekly                               Start
                                                           Am ount     Salary + Tax

          Chef                                $    1,512   $    116    $     3,255    Q1-10
          Chef                                $    1,512   $    116    $     3,255    Q1-10
          Chef                                $    1,512   $    116    $     3,255    Q1-10
          Chef                                $    1,512   $    116    $     3,255    Q1-10
          Chef                                $    1,512   $    116    $     3,255    Q1-11
          Chef                                $    1,512   $    116    $     3,255    Q1-11
          Cashier/Take-Out                    $    1,979   $    151    $     4,261    Q1-10
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q1-10
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q1-10
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q3-10
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q2-11
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q1-12
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q1-12
          Delivery Specialist                 $    1,386   $    106    $     2,984    Q1-12
                                      Total $     20,753   $   1,588   $    44,682
                                Staff Count


Cost of Revenue

                 A 12” Pizza (that serves 2-4) can be made from the following ingredients:
                 Basic Ingredients                     Toppings (optional)
                 28 oz. of can crushed tomatoes        1 tomato
                 3 oz. of tomato paste                 1 pepper (red)
                 1 tsp Oregano                         1 pepper (green)
                 2 tbsps. minced fresh garlic          1/3 onion
                 1 tbsp. black pepper                  2 oz olives
                 3 tsps. of sugar                      2 oz mushrooms
                 2 teaspoons of dried basil            8 oz bacon
                 4 1/2 cups of all-purpose flour       8 oz ground beef
                 1 tablespoons of olive oil            8 oz ground bison
                 2 1/2 teaspoon of granulated sugar 8 oz sausage
                 2 1/2 teaspoon of salt                8 oz ham
                 1/2 teaspoon of yeast
                 1/2 cup cornmeal
                 Mozzarella




                                                   31
                                                           Toppings
                               Cost per item                                          Cost per 12" Pizza     Cost per 12" Pizza
                                       Organic                Non-organic                Wholesale             70% Organic
Item                            Retail      Wholesale    Retail      Wholesale      Organic Non-organic Organic Non-organic       Total
Mozzarella (shredded)            8.66          5.20       4.99          2.99         1.95         1.12   1.37        0.34         1.70
Cottage Bacon                    5.79          3.47       3.00          1.80         1.74         0.90   1.22        0.27         1.49
Sweet Italian Sausage (Pork)     4.95          2.97       4.19          2.51         1.49         1.26   1.04        0.38         1.42
Sweet Italian Sausage (Beef)     4.95          2.97       4.19          2.51         1.49         1.26   1.04        0.38         1.42
Ham Chunks                       6.60          3.96       7.05          4.23         1.98         2.11   1.39        0.63         2.02
Chuck Beef                       10.00         6.00       4.99          2.99         3.00         1.50   2.10        0.45         2.55
Ground Bison                     4.95          2.97       5.99          3.59         1.49         1.80   1.04        0.54         1.58
Red Peppers                      4.99          2.99       2.00          1.20         1.50         1.20   1.05        0.36         1.41
Green Peppers                    3.99          2.39       1.09          0.65         1.20         0.65   0.84        0.20         1.04
Red Onions                       0.99          0.59       0.99          0.59         0.20         0.20   0.14        0.06         0.20
White Onions                     0.60          0.36       0.60          0.36         0.12         0.12   0.08        0.04         0.12
Olives                           4.99          2.99       5.99          3.59         0.75         0.90   0.53        0.27         0.80
Garlic                           3.99          2.39       2.69          1.61         0.05         0.03   0.04        0.01         0.04
Mushrooms                        2.00          1.20       1.99          1.19         0.30         0.30   0.21        0.09         0.30
Tomatoes                         4.99          2.99       3.49          2.09         1.50         0.52   1.05        0.16         1.21
                                                            Average topping          1.25         0.92   0.88        0.28         1.15
                                                        Average 2-topping (total)    2.50         1.85   1.75        0.55         2.31




                                                              32
O.PIZZA                                                                       Business Plan


                                                                Basic Ingredients
                                      Cost per item                                            Cost per 12" Pizza     Cost per 12" Pizza
                                              Organic                  Non-organic                Wholesale             70% Organic
Item                                   Retail      Wholesale      Retail       Wholesale     Organic Non-organic Organic Non-organic       Total
Mozzarella (shredded)                   8.66          5.20         4.99            2.99       3.25         1.87   2.28        0.56         2.84
Tomato Paste (6 - 7.6 oz jars/case)     8.99          5.39         0.69            0.41       0.59         0.35   0.41        0.11         0.52
Crushed Tomatoes                        2.39          1.43         1.79            1.07       2.39         1.79   1.67        0.54         2.21
Garlic                                  3.99          2.39         2.69            1.61       0.08         0.05   0.06        0.02         0.07
Basil                                                              4.82            2.89       0.12         0.12   0.08        0.04         0.12
Oregano                                                            9.58            5.75       0.12         0.12   0.08        0.04         0.12
Yeast                                                              3.19            1.91       0.10         0.10   0.07        0.03         0.10
Cornmeal                                                           1.49            0.89       0.10         0.10   0.07        0.03         0.10
Sugar                                                              3.49            2.09       0.11         0.11   0.08        0.03         0.11
Olive Oil                               12.99       7.79           8.59            5.15       0.05         0.03   0.04        0.01         0.04
Flour                                   2.99        1.79           2.29            1.37       1.70         0.52   1.19        0.16         1.35
                                                                           Total              8.61         5.16   6.03        1.55         7.58
                                                                Total cost with 2-toppings    11.11        7.01   7.78        2.10         9.88



                                                           Oven Wood Cost Estimates

                                                                                        Total Daily Total Monthly
                                                                Cost per Kg Kg per Day     Cost          Cost
                                       Wood                     $     0.10           25 $      2.50 $       75.00




                                                                       33
O.PIZZA                                                                                                                  Business Plan


Projections

                                               Jan            Feb            Mar            Apr            May              Jun              Jul              Aug              Sep            Oct             Nov               Dec
                Total Revenue              $    45,141    $    45,141    $    45,141    $   60,188    $    60,188       $   60,188      $    60,188      $    60,188       $   60,188     $   60,188      $   60,188       $    60,188
                  Base Pizza               $    36,113    $    36,113    $    36,113    $   48,150    $    48,150       $   48,150      $    48,150      $    48,150       $   48,150     $   48,150      $   48,150       $    48,150
                  Topping                  $     6,019    $     6,019    $     6,019    $    8,025    $     8,025       $    8,025      $     8,025      $      8,025      $     8,025    $    8,025      $     8,025      $     8,025
                  Drinks                   $     1,806    $     1,806    $     1,806    $    2,408    $     2,408       $    2,408      $     2,408      $      2,408      $     2,408    $    2,408      $     2,408      $     2,408
                  Delivery Fee             $     1,204    $     1,204    $     1,204    $    1,605    $     1,605       $    1,605      $     1,605      $      1,605      $     1,605    $    1,605      $     1,605      $     1,605
                Cost of Goods ($)          $    47,904    $    47,904    $    47,904    $   56,121    $    56,121       $   56,121      $    59,105      $    59,105       $   59,105     $   59,105      $   59,105       $    59,105
 YEAR 1




                  Food & Beverage          $    23,810    $    23,810    $    23,810    $   31,747    $    31,747       $   31,747      $    31,747      $    31,747       $   31,747     $   31,747      $   31,747       $    31,747
                  Packacking               $       843    $       843    $       843    $    1,124    $     1,124       $    1,124      $     1,124      $      1,124      $     1,124    $    1,124      $     1,124      $     1,124
                  Labor                    $    23,251    $    23,251    $    23,251    $   23,251    $    23,251       $   23,251      $    26,235      $    26,235       $   26,235     $   26,235      $   26,235       $    26,235
                Gross Profit ($)           $    (2,763)   $    (2,763)   $    (2,763)   $    4,066    $     4,066       $    4,066      $     1,082      $      1,082      $     1,082    $    1,082      $     1,082      $     1,082
                SG&A ($)                   $    35,164    $    35,164    $    35,164    $    3,933    $     3,933       $    3,933      $     3,933      $      3,933      $     3,933    $    3,933      $     3,933      $     3,933
                Operating Profit           $   (37,927)   $   (37,927)   $   (37,927)   $      133    $       133       $      133      $    (2,851)     $     (2,851)     $    (2,851)   $   (2,851)     $    (2,851)     $    (2,851)
                Interest                   $       -      $       -      $       -      $      -      $       -         $      -        $        -       $        -        $       -      $      -        $       -        $       -
                Depreciation               $       101    $       101    $       101    $      101    $       101       $      101      $        101     $        101      $       101    $      101      $       101      $       101
                EBT                        $   (38,028)   $   (38,028)   $   (38,028)   $        32   $         32      $        32     $    (2,952)     $     (2,952)     $    (2,952)   $   (2,952)     $    (2,952)     $    (2,952)
                Taxes                      $   (13,310)   $   (13,310)   $   (13,310)   $        11   $         11      $        11     $    (1,033)     $     (1,033)     $    (1,033)   $   (1,033)     $    (1,033)     $    (1,033)
                Net Income                 $   (38,028)   $   (38,028)   $   (38,028)   $        21   $         21      $        21     $    (2,952)     $     (2,952)     $    (2,952)   $   (2,952)     $    (2,952)     $    (2,952)


                                      YR 2 - Q1 YR 2 - Q2 YR 2 - Q3 YR 2 - Q4 YR 3- Q1 YR 3 - Q2          YR 3 - Q3    YR 3 - Q4    YR 4 - Q1    YR 4 - Q2    YR 4 - Q3    YR 4 - Q4    YR 5 - Q1    YR 5 - Q2    YR 5 - Q3    YR 5 - Q4
              Total Revenue         $ 358,065 $ 358,065 $ 358,065 $ 358,065 $ 546,953 $ 546,953           $ 546,953    $ 546,953    $ 742,410    $ 742,410    $ 742,410    $ 742,410    $ 944,438    $ 944,438    $ 944,438    $ 944,438
              Cost of Goods ($)     $ 299,145 $ 308,098 $ 308,098 $ 308,098 $ 440,938 $ 440,938           $ 440,938    $ 440,938    $ 550,608    $ 550,608    $ 550,608    $ 550,608    $ 663,965    $ 663,965    $ 663,965    $ 663,965
YEARS 2 - 5




               Food & Beverage      $ 194,042 $ 194,042 $ 194,042 $ 194,042 $ 296,403 $ 296,403           $ 296,403    $ 296,403    $ 402,325    $ 402,325    $ 402,325    $ 402,325    $ 511,808    $ 511,808    $ 511,808    $ 511,808
               Packacking           $      6,867 $ 6,867 $ 6,867 $ 6,867 $ 10,490 $ 10,490                $ 10,490     $ 10,490     $ 14,238     $ 14,238     $ 14,238     $ 14,238     $ 18,113     $ 18,113     $ 18,113     $ 18,113
               Labor                $ 98,237 $ 107,189 $ 107,189 $ 107,189 $ 134,045 $ 134,045            $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045    $ 134,045
              Gross Profit ($)      $ 58,920 $ 49,967 $ 49,967 $ 49,967 $ 106,014 $ 106,014               $ 106,014    $ 106,014    $ 191,802    $ 191,802    $ 191,802    $ 191,802    $ 280,472    $ 280,472    $ 280,472    $ 280,472
              SG&A ($)              $ 13,893 $ 13,893 $ 13,893 $ 13,893 $ 14,155 $ 14,155                 $ 14,155     $ 14,155     $ 14,426     $ 14,426     $ 14,426     $ 14,426     $ 14,704     $ 14,704     $ 14,704     $ 14,704
              Operating Profit      $ 45,027 $ 36,075 $ 36,075 $ 36,075 $ 91,859 $ 91,859                 $ 91,859     $ 91,859     $ 177,376    $ 177,376    $ 177,376    $ 177,376    $ 265,768    $ 265,768    $ 265,768    $ 265,768
              Interest              $         - $      - $       -   $     -   $    -   $     -           $      -     $      -     $      -     $      -     $      -     $      -     $      -     $      -     $      -     $      -
              Depreciation          $        304 $     304 $     304 $     304 $    304 $     304         $      304   $      304   $      304   $      304   $      304   $      304   $      304   $      304   $      304   $      304
              EBT                   $ 44,723 $ 35,771 $ 35,771 $ 35,771 $ 91,555 $ 91,555                 $ 91,555     $ 91,555     $ 177,072    $ 177,072    $ 177,072    $ 177,072    $ 265,464    $ 265,464    $ 265,464    $ 265,464
              Taxes                 $ 15,653 $ 12,520 $ 12,520 $ 12,520 $ 32,044 $ 32,044                 $ 32,044     $ 32,044     $ 61,975     $ 61,975     $ 61,975     $ 61,975     $ 92,912     $ 92,912     $ 92,912     $ 92,912
              Net Income            $ 29,070 $ 23,251 $ 23,251 $ 23,251 $ 59,511 $ 59,511                 $ 59,511     $ 59,511     $ 115,097    $ 115,097    $ 115,097    $ 115,097    $ 172,551    $ 172,551    $ 172,551    $ 172,551




                                                                                                             34
O.PIZZA                                                                           Business Plan




Break-Even Analysis
                                                                                 YEAR 1
                  January February      March       April     May      June      July     August             September    October     November    December
Total Costs      $ 83,067 $ 83,067 $ 83,067 $ 60,055 $ 60,055 $ 60,055 $ 63,039 $ 63,039                      $ 63,039    $ 63,039    $ 63,039    $ 63,039
Total Revenue    $ 45,141 $ 45,141 $ 45,141 $ 60,188 $ 60,188 $ 60,188 $ 60,188 $ 60,188                      $ 60,188    $ 60,188    $ 60,188    $ 60,188
Operating Profit $ (37,927) $ (37,927) $ (37,927) $     133 $    133 $     133 $ (2,851) $ (2,851)            $ (2,851)   $ (2,851)   $ (2,851)   $ (2,851)
Employee Count            7                    8
Operating Margin    -84.02%   -84.02%    -84.02%      0.22%    0.22%     0.22%    -4.74%    -4.74%               -4.74%     -4.74%       -4.74%      -4.74%

                                  YEAR 2                                          YEAR 3
                    Q1        Q2        Q3        Q4        Q1        Q2        Q3        Q4
Total Costs      $ 313,038 $ 321,990 $ 321,990 $ 321,990 $ 455,093 $ 455,093 $ 455,093 $ 455,093
Total Revenue    $ 358,065 $ 358,065 $ 358,065 $ 358,065 $ 546,953 $ 546,953 $ 546,953 $ 546,953
Operating Profit $ 45,027 $ 36,075 $ 36,075 $ 36,075 $ 91,859 $ 91,859 $ 91,859 $ 91,859
Employee Count          10        11                            14
Operating Margin    12.58%    10.07%    10.07%    10.07%    16.79%    16.79%    16.79%    16.79%


                                  YEAR 4                                          YEAR 5
                      Q1        Q2          Q3        Q4          Q1        Q2            Q3        Q4
Total Costs        $ 565,034 $ 565,034 $   565,034 $ 565,034 $   678,670 $ 678,670 $     678,670 $ 678,670
Total Revenue      $ 742,410 $ 742,410 $   742,410 $ 742,410 $   944,438 $ 944,438 $     944,438 $ 944,438
Operating Profit   $ 177,376 $ 177,376 $   177,376 $ 177,376 $   265,768 $ 265,768 $     265,768 $ 265,768
Employee Count
Operating Margin     23.89%    23.89%       23.89%   23.89%       28.14%        28.14%     28.14%   28.14%




                                                                           35
O.PIZZA                                                                          Business Plan




Income Statement

                                                       Year 1            Year 2               Year 3           Year 4           Year 5
          Total Revenues                            $ 677,109.38     $ 1,432,260.00       $ 2,187,810.00   $ 2,969,640.00   $ 3,777,750.00

          COGS                                      $ 666,705.77     $ 1,223,437.91       $ 1,763,752.17   $ 2,202,433.77   $ 2,655,860.97

          Gross Profit                              $   10,403.60    $ 208,822.10         $ 424,057.83     $ 767,206.23     $ 1,121,889.03

          SG&A Expenses
                 Oak Wood-Burning Oven              $ 10,000.00
                 Oven Installation                  $ 20,000.00
                 Store Renovation                   $ 39,750.00
                 Refrigeration & Storage            $   3,000.00
                 Cashier System                     $   2,500.00
                 Business Process , IT & Website    $ 12,000.00      $         1,000.00   $     1,000.00   $     1,000.00   $    1,000.00
                 Restaurant License                 $     441.00     $           350.00   $       350.00   $       350.00   $      350.00
                 Leasing                            $ 28,000.00      $        28,840.00   $    29,705.20   $    30,596.36   $   31,514.25
                 Utilities (Electric, Gas, Water)   $   6,000.00     $         6,180.00   $     6,365.40   $     6,556.36   $    6,753.05
                 Insurance                          $   6,000.00     $         6,000.00   $     6,000.00   $     6,000.00   $    6,000.00
                 Marketing and Advertising          $ 12,000.00      $        12,000.00   $    12,000.00   $    12,000.00   $   12,000.00
                 Internet and Phone                 $   1,200.00     $         1,200.00   $     1,200.00   $     1,200.00   $    1,200.00
          Total SG&A Expenses                       $ 140,891.00     $        55,570.00   $    56,620.60   $    57,702.72   $   58,817.30

          Total Operating Profit                    $ (130,487.40)   $ 153,252.10         $   367,437.23   $   709,503.52   $ 1,063,071.73
          Interest                                  $         -      $        -           $          -     $          -     $          -
          Depreciation                              $    1,216.67    $   1,216.67         $     1,216.67   $     1,216.67   $     1,216.67
          EBT                                       $ (131,704.06)   $ 152,035.43         $   366,220.57   $   708,286.85   $ 1,061,855.07
          Taxes (35%)                               $ (46,096.42)    $  53,212.40         $   128,177.20   $   247,900.40   $ 371,649.27
          Net Income                                $ (131,704.06)   $  98,823.03         $   238,043.37   $   460,386.45   $ 690,205.79




                                                                         36
Balance Sheet

                           As at December 31, 2010
                                                     Year 1
                ASSETS
                CURRENT
                   Cash                        $ (34,487.40)
                   Inventory                   $        -
                Total Current Assets           $ (34,487.40)

                NONCURRENT
                   Accum. Depreciation         $     (1,216.67)
                Total Noncurrent Assets        $     (1,216.67)

                TOTAL ASSETS                   $ (35,704.06)

                LIABILITIES
                CURRENT
                   Accounts Payable            $              -
                   Other Current Liabilities   $              -
                Total Current Liabilities      $              -

                NONCURRENT
                   Capital Leases              $              -
                Total Noncurrent Liabilites    $              -

                TOTAL LIABILITIES              $              -

                EQUITY
                  Contributed Capital          $ 96,000.00
                  Retained Earnings            $ (131,704.06)

                Total Equity                   $ (35,704.06)

                TOTAL Liabilities & Equity     $ (35,704.06)




                                       37
O.PIZZA                                                                                    Business Plan

Statement of Cash Flows

                           Year 1           Year 2           Year 3           Year 4             Year 5
OPERATING ACTIVITIES
Net Income             $ (131,704.06) $ 98,823.03 $ 238,043.37 $ 460,386.45 $                    690,205.79
Depreciation           $    1,216.67 $ 1,216.67 $ 1,216.67 $ 1,216.67 $                            1,216.67
Inventories            $         -    $       -   $        -   $        -   $                           -
Accounts Payable       $         -

NET CASH FLOW: OA      $ (130,487.40) $ 100,039.70       $ 239,260.03     $ 461,603.12       $   691,422.46

INVESTING ACTIVITIES
                       $            -   $            -   $            -   $            -     $            -

NET CASH FLOW: IA      $            -   $            -   $            -   $            -     $            -

FINANCING ACTIVITIES
Contributed Capital    $   96,000.00    $            -   $            -   $            -     $            -
Long-term loan         $         -      $            -   $            -   $            -     $            -

NET CASH FLOW: FA      $   96,000.00    $            -   $            -   $            -     $            -

Net Increase in Cash   $ (34,487.40) $ 100,039.70 $ 239,260.03            $ 461,603.12       $   691,422.46
Beginning Cash         $        -    $ (34,487.40) $ 65,552.30            $ 304,812.33       $   766,415.45

Ending Cash Balance    $ (34,487.40) $ 65,552.30         $ 304,812.33     $ 766,415.45       $ 1,457,837.91




                                                38

				
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