Executive Summary

The Discount Pharmacy's main goal is to provide prescription medications for our
customers at the lowest prices on the market. We will be able to sell prescriptions at
reduced prices by carefully maintaining efficiencies in our operations and by targeting a
specific segment of the market - those customers who pay for their prescription
medications themselves. By focusing on this segment it gives us additional efficiencies
- we avoid disruptions in cash flow often associated with insurance payments and we can
eliminate unnecessary services for the type of knowledgeable, repeat customer taking
maintenance-type medication.

The Discount Pharmacy will operate from one store that will serve both mail order
customers and those who visit in person. We will thrive by employing friendly and
knowledgeable personnel, which, along with our great prices, will drive the repeat
business that we will rely upon. We only expect that as the price of medication continues
to skyrocket, The Discount Pharmacy will appeal more and more to the customer's sense
of value and convenience.

Our advertising, mainly through ads in magazines targeted at the over-55 crowd, will be
targeted at those who are looking to save money on a pricey but necessary and
regular expense.

The Discount Pharmacy will be led by John Reeleaf, an MBA with experience in the
pharmaceutical industry. Costs will be minimized by maintaining only one pharmacist
and filling the void with pharmaceutical techs. We expect to reach profitability by our
second year and will generate substantial sales by year three.
 1.1 Objectives
The objectives for the first three years include:

1. Exceed customer expectations with superior pricing

2. Increase the number of customers by more than 30% per year

3. Develop a business that survives off its own cash flow

1.2 Mission

The Discount Pharmacy's mission is to provide our customers with the best prices for
their prescription medications. Our convenience and services will exceed the expectations
of our customers.

1.3 Keys to Success

The keys to success are:

 Satisfy our customers so they will return again and again

 Maintain low overhead and operating costs

 Provide better prices than all our competitors

Company Summary
The Discount Pharmacy is located in Portland, OR and offers prescription medications at
discount prices to our customers by mail order or at the store front.

2.1 Company Ownership

The Discount Pharmacy is an Oregon limited liability corporation. The majority stock
holder is John Reeleaf.

2.2 Start-up Summary

The Discount Pharmacy will incur the following start-up equipment costs:

 Office equipment including chairs, file cabinets, and desks.

 Front counter, storage bins, cash register.

 Three computer terminals.

 Main computer server with a laser printer, and back-up system.

 Software: Microsoft Office, QuickBooks Pro, drug interaction software, Physician

Desk Reference software detailing side effects and other information pertinent to the
customer.

 Assorted bottles, boxes, envelopes, etc. for dispensing and shipment.

 Scales for shipping.

 Telecom system.

 Storefront build-out.

 Start-up inventory.
 Rent, utilities, insurance.

Please note that these items will be used for more than one year and will therefore be
labeled long-term assets, depreciated using G.A.A.P. approved straight-line depreciation.

START-UP REQUIREMENTS

Start-up Expenses

Legal $1,000

Rent $2,000

Utilities $400

Telecom System $400

Insurance $300

Storefront Build-out $15,000

Expensed Equipment $4,000

Website development $1,000

TOTAL START-UP EXPENSES $24,100

Start-up Assets

Cash Required $140,500

Start-up Inventory $10,000

Other Current Assets $0

Long-term Assets $8,500

TOTAL ASSETS $159,000

Total Requirements $183,100

Need real financials?

 
We recommend using LivePlan as the easiest way to create automatic financials for
your own business plan.

START-UP FUNDING

Start-up Expenses to Fund $24,100

Start-up Assets to Fund $159,000

TOTAL FUNDING REQUIRED $183,100

Assets

Non-cash Assets from Start-up $18,500

Cash Requirements from Start-up $140,500

Additional Cash Raised $0

Cash Balance on Starting Date $140,500

TOTAL ASSETS $159,000

Liabilities and Capital

Liabilities

Current Borrowing $0

Long-term Liabilities $0

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

TOTAL LIABILITIES $0

Capital

Planned Investment

Seed Funding $50,000

John $51,000

Friends and Family $50,000

 Additional Investment Requirement $32,100

TOTAL PLANNED INVESTMENT $183,100

Loss at Start-up (Start-up Expenses) ($24,100)

TOTAL CAPITAL $159,000

TOTAL CAPITAL AND LIABILITIES $159,000

Total Funding $183,100

Products
The Discount Pharmacy offers a wide range of prescription drugs to patients based
in Oregon or nationally. Both generics and name brands are offered.

In order for a customer to purchase medications mail order, they must first contact The
Discount Pharmacy over the phone. The customer then needs to either mail in the
prescription, fax it, or email it. Once it is received and payment arrangements are
complete, the medicines will be sent out to the customer via U.S.P.S. or U.P.S. Local
customers may stop by the store front to pick up the medications.

The Discount Pharmacy will only service customers who self pay. The self pay customers
will be attracted to The Discount Pharmacy because of its superior prices. For many
Americans that do not have drug plans, including the vast majority of Americans over 65,
a discount on drugs is very welcome on today's increasingly tight monthly budgets.

The Discount Pharmacy will be able to survive on lower margins due to operating
efficiencies gained through national mail order operations and not accepting insurance
policy drug plans which hampers cash flow. The Discount Pharmacy will also save
money by not paying for customer's unlimited access to a pharmacist. If a customer has a
question regarding a drug, the pharmaceutical technician will attempt to answer it. As a
last resort the pharmacist will provide the answer. Generally, the technician or the
accompanying printed literature will answer the question.

This model of saving costs by not providing unlimited access to the pharmacist will be
successful because the majority of customers will be customers who have been taking
said drug for awhile, as opposed to a new prescription, and will not require their hand to
be held during the transaction. They are interested in The Pharmacy as an inexpensive
source for their medication.

With each order a printout will accompany the medications providing directions on how
to take the medications, other drugs that should be avoided concurrently, and other useful
information. The Discount Pharmacy will be using computer print outs from industry
software to reduce the cost of providing this information.

Note--while the term "self pay" is typically associated with the notion that the customer is
paying for the medication out of pocket without insurance, it is used in this context as the
customer paying for the medications up front regardless if they have insurance. They may
be paying out of pocket, or they may be paying up front and then submitting to their
insurance company's drug plan to reimburse them later.
Market Analysis Summary
The Discount Pharmacy's target market consists of two different groups, local customers
or walk-ins, and mail order customers. 

The Discount Pharmacy will employ two different strategies to reach these two diverse
market segments.

4.1 Market Segmentation

The Discount Pharmacy's customers can be broken down into two different groups, mail
order customers and walk-in customers:

 Mail order customers. This group of customers orders their medication through
the mail in an effort to save money. Generally, the mail order customers are older in
age, typically over 50. In general, elderly customers consume more medication
relative to younger people. The mail order customer will typically purchase
maintenance medications - prescriptions for an ongoing ailment that requires
regular treatment. This group of customers will also be more likely to purchase
several months of medication at once.

 Walk-in customers. This group of customers are also looking for the lowest prices
for their medication. However, they tend to purchase medications monthly at their
local pharmacy, often at a higher price. There is not a common demographic for this
group of people, other than living in the Portland metropolitan area. Some of these
customers will pay for the medications out of pocket and some will submit a claim
to their insurance company for reimbursement at a later date.
 MARKET ANALYSIS

YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5

Potential Growt CAGR

Customer h
s

Walk-in 8% 345,887 373,558 403,443 435,718 470,575 8.00

customer %
s

Mail 9% 54,876,34 59,815,21 65,198,58 71,066,45 77,462,43 9.00

order 5 6 5 8 9 %
customer
s

Total 8.99% 55,222,23 60,188,77 65,602,02 71,502,17 77,933,01 8.99

2 4 8 6 4 %

Need real financials?

 

We recommend using LivePlan as the easiest way to create automatic financials for
your own business plan.

4.2 Target Market Segment Strategy

The Discount Pharmacy will seek to attract two different groups of customers and will
thus have two strategies to attract them.

We anticipate that by far our largest group of customers will be those who order through
the mail. These customers will be targeted through an advertising campaign in magazines
and newsletters that have an older (>55) audience who regularly need medication and are
aware in advance of their needs. For example, one of the main advertising vehicles will
be the A.A.R.P monthly newsletter.

Walk-in customers will be targeted through advertisements in the local paper, "The
Oregonian."  Ads will raise awareness for the The Discount Pharmacy and our low prices.

4.3 Competition and Buying Patterns

Competition takes many different forms in the pharmacy industry.

 Chain pharmacies. These are state or national chains such as Rite-Aid.  The

advantage to these chains are better prices through economies of scale, as well as
personalized service.  The personalized service takes the form of the chain having a
record of your medication purchases as well as any allergies that you have disclosed
to them.

 Local pharmacies.  These are the pharmacies where you typically know the
pharmacist and they know your medical history.  This option is high in personalized
service and convenience, and high in price.
 Mail order and Internet pharmacies. These are similar to The Discount
Pharmacy.

 Canadian pharmacies. These pharmacies are located in Canada where the cost of

drugs is lower than in the U.S.  These pharmacies can be accessed through mail
order, the Internet, or via travel.  Recently there has been the trend for trips
arranged for senior citizens in Northern States to travel up to Canada for the day to
pick up their medicines.

Strategy and Implementation Summary

The Discount Pharmacy will use their website to develop visibility and disseminate
information.

5.1 Competitive Edge

The Discount Pharmacy's competitive edge is superior pricing. To do that we must

maintain our position as the low cost provider by painstakingly ensuring that costs are
kept low through operating efficiencies.

We will be able to do that by eliminating some of the services traditionally offered by

pharmacies. For example, we will employ only one pharmacist and use pharmaceutical
technicians to fill the void. As long as a pharmacist is on site during the hours of
operation, we can use the pharmaceutical techs for all other capacities where other
pharmacies use pharmacists. Other efficiencies are created by having only a small store
front and conducting most of our business through mail order.

Finally, The Discount Pharmacy is not designed to hold the patient's hand during their
purchase. We expect that the vast majority of our customers will already be informed of
how to take the medication, and any side effects or drug interactions that should be
avoided. We will simply provide each patient with a print out of all the relevant
information for consumption of the medication.

To develop good business strategies, perform a SWOT analysis of your business. It's
easy with our free guide and template. Learn how to perform a SWOT analysis

5.2 Marketing Strategy

The marketing strategy will be based on targeted advertisements, appealing to the

customer's sense of value. The marketing campaign's goal will to be increase awareness
of The Discount Pharmacy with their target market.

5.3 Sales Strategy

The sales strategy will be based on generating long-term relationships with customers. To
facilitate that, we will provide medications at superior prices, have medicines in stock for
both quick shipment and store front pick up, and provide superior customer service. All
sales agents will be trained to provide friendly, knowledgeable customer service. By
keeping to these simple, yet effective, business practices, we expect that our customers
will make The Discount Pharmacy their exclusive source for medications. For some,
medications are an integral part of their lives, so establishing long-term relationships will
ensure a large, loyal customer base.

5.3.1 Sales Forecast

During the first month we will focus on setting up the store front and generating both
local and national visibility. Sales activity will begin in month two. Sales during months
three through five there will mainly consist of local business through the store front. In
month six we expect to see a jump in sales from mail order. Sales will grow steadily from
month six on.
SALES FORECAST

YEAR 1 YEAR 2 YEAR 3

 Sales

Walk-in customers $209,600 $399,833 $431,334

Mail order customers $232,222 $567,432 $640,543

TOTAL SALES $441,822 $967,265 $1,071,877

Direct Cost of Sales Year 1 Year 2 Year 3

Walk-in customers $83,840 $159,933 $172,534

Mail order customers $92,889 $226,973 $256,217

Subtotal Direct Cost of Sales $176,729 $386,906 $428,751

Need real financials?

We recommend using LivePlan as the easiest way to create automatic financials for
your own business plan.

5.4 Milestones

The Discount Pharmacy will have several milestones early on:

 Office/business set up.

 Establishment of the first strategic relationship.

 Profitability.

MILESTONES

Milestone Start End Date Budget Manager Department

Date

Office/business set 1/1/2001 5/1/2001 $0 John Executive

up

Establishment of 1/1/2001 7/1/2001 $0 John Business

the first stategic Development
relationship

Profitability 1/1/2001 11/1/200 $0 Everyone Finance

2

Totals $0

Web Plan Summary

The website will be used for the dissemination of information as well as a mechanism for
email communication. Initially there will be no ordering through our website since we do
not expect that method to be widely used and trusted by our target customers.

6.1 Development Requirements

The Discount Pharmacy will hire a recent college graduate with a major in computer
science to complete and maintain our simple website. This will keep costs down.
Management Summary
John Reeleaf has experience working with a major drug manufacturer, Eli Lilly, as a drug
representative. He was able to see first hand the profitability associated with the
prescription drug industry, as well as the inefficiencies with which most companies are
plagued.

John graduated with an MBA from the University of Oregon's innovative

entrepreneurship program. While there he was awarded a $50,000 no interest loan
through a business plan competition. That seed money will be parlayed, along with some
other investments, into start up expenses for The Discount Pharmacy. John received an
undergraduate degree in chemistry from the University of Oregon.

7.1 Personnel Plan

The Discount Pharmacy will employ the following people:

 Sales agents/phone representatives: two at month three, an additional person at

month sixth.

 Pharmaceutical technicians: two at month two, a third at month six.

 Pharmacists: month two.

 Order fulfillment agents: two for month five, a third for month eight.

 Counter person/phone representative: one at month three.

PERSONNEL PLAN

YEAR 1 YEAR 2 YEAR 3

CEO (John) $48,000 $52,000 $60,000

Pharmacist $55,000 $60,000 $60,000

Pharmacist technician $27,500 $30,000 $30,000

Pharmacist technician $27,500 $30,000 $30,000

Pharmacist technician $17,500 $30,000 $30,000

Sales agent $19,200 $23,040 $23,040

Sales agent $19,200 $23,040 $23,040

Sales agent $11,520 $23,040 $23,040

Counter person/phone rep. $14,400 $17,280 $17,280

Counter person/phone rep. $14,400 $17,280 $17,280

 Order fulfillment $14,400 $17,280 $17,280

TOTAL PEOPLE 11 11 11

Total Payroll $268,620 $322,960 $330,960

Financial Plan
The following sections will outline important financial information.

8.1 Break-even Analysis

The Break-even Analysis calculates what will be needed in monthly revenue to reach the
break-even point.

BREAK-EVEN ANALYSIS
 Monthly Revenue Break-even $48,808

Assumptions:

Average Percent Variable Cost 40%

Estimated Monthly Fixed Cost $29,285

Need real financials?

Create your own business plan

8.2 Projected Profit and Loss

The following table and charts present projected profit and loss.
PRO FORMA PROFIT AND LOSS

YEAR 1 YEAR 2 YEAR 3

Sales $441,822 $967,265 $1,071,877

Direct Cost of Sales $176,729 $386,906 $428,751

Other Production Expenses $0 $0 $0

TOTAL COST OF SALES $176,729 $386,906 $428,751

Gross Margin $265,093 $580,359 $643,126

Gross Margin % 60.00% 60.00% 60.00%

Expenses

Payroll $268,620 $322,960 $330,960

Sales and Marketing and Other $8,400 $8,400 $8,400
Expenses

Depreciation $1,704 $1,704 $1,704

Leased Equipment $0 $0 $0

Utilities $4,800 $4,800 $4,800

Insurance $3,600 $3,600 $3,600

Rent $24,000 $24,000 $24,000

Payroll Taxes $40,293 $48,444 $49,644

Other $0 $0 $0

Total Operating Expenses $351,417 $413,908 $423,108

Profit Before Interest and Taxes ($86,324) $166,451 $220,018

EBITDA ($84,620) $168,155 $221,722

 Interest Expense $0 $0 $0

Taxes Incurred $0 $49,935 $66,005

Net Profit ($86,324) $116,516 $154,013

Net Profit/Sales -19.54% 12.05% 14.37%

8.5 Projected Balance Sheet

The following table shows the projected balance sheet.

PRO FORMA BALANCE SHEET

YEAR 1 YEAR 2 YEAR 3

Assets

Current Assets

Cash $69,525 $167,024 $318,513

Inventory $28,838 $63,135 $69,963

Other Current Assets $0 $0 $0

TOTAL CURRENT ASSETS $98,364 $230,159 $388,477

Long-term Assets

Long-term Assets $8,500 $8,500 $8,500

Accumulated Depreciation $1,704 $3,408 $5,112

TOTAL LONG-TERM ASSETS $6,796 $5,092 $3,388

TOTAL ASSETS $105,160 $235,251 $391,865

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $32,484 $46,059 $48,660

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

SUBTOTAL CURRENT LIABILITIES $32,484 $46,059 $48,660

Long-term Liabilities $0 $0 $0

TOTAL LIABILITIES $32,484 $46,059 $48,660

Paid-in Capital $183,100 $183,100 $183,100

Retained Earnings ($24,100) ($110,424) $6,092

Earnings ($86,324) $116,516 $154,013

TOTAL CAPITAL $72,676 $189,192 $343,205

TOTAL LIABILITIES AND CAPITAL $105,160 $235,251 $391,865

Net Worth $72,676 $189,192 $343,205

 Appendix
SALES FORECAST

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Sales

Walk-in 40% $0 $8,765 $10,987 $12,554 $16,776 $18,443 $20,001 $21,332 $22,343 $25,311 $26,544 $26,544
customer
s

Mail order 40% $0 $2,245 $5,543 $6,543 $12,344 $15,454 $19,877 $26,765 $31,223 $34,232 $38,998 $38,998
customer
s

TOTAL $0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542
SALES

Direct Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
Cost of 10 11 12
Sales

Walk-in $0 $3,506 $4,395 $5,022 $6,710 $7,377 $8,000 $8,533 $8,937 $10,124 $10,618 $10,618
customer
s

Mail order $0 $898 $2,217 $2,617 $4,938 $6,182 $7,951 $10,706 $12,489 $13,693 $15,599 $15,599
customer
s

Subtotal $0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951 $19,239 $21,426 $ $26,217 $26,217
Direct
Cost of
23,817
Sales
 PERSONNEL PLAN

MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT
H1 H2 H3 H4 H5 H6 H7 H8 H9 H 10 H 11 H 12

CEO (John) 0 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
%

Pharmacist 0 $0 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
%

Pharmacist 0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
technician %

Pharmacist 0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
technician %

Pharmacist 0 $0 $0 $0 $0 $0 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500

technician %

Sales agent 0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
%

Sales agent 0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920
%

Sales agent 0 $0 $0 $0 $0 $0 $0 $1,920 $1,920 $1,920 $1,920 $1,920 $1,920

%

Counter 0 $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
person/phon %
e rep.

Counter 0 $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
person/phon %
e rep.

Order 0 $0 $0 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440 $1,440
 fulfillment %

TOTAL 1 4 9 9 9 10 11 11 11 11 11 11
PEOPLE

Total Payroll $4,000 $14,00 $22,16 $22,16 $22,16 $24,66 $26,58 $26,58 $26,58 $26,58 $26,58 $26,58
0 0 0 0 0 0 0 0 0 0 0

GENERAL ASSUMPTIONS

MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONT MONTH
H1 H2 H3 H4 H5 H6 H7 H8 H9 H 10 H 11 12

Plan 1 2 3 4 5 6 7 8 9 10 11 12
Month

Current 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest
Rate

Long- 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
term
Interest
Rate

Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%

Other 0 0 0 0 0 0 0 0 0 0 0 0

PRO FORMA PROFIT AND LOSS

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Sales $0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542
Direct Cost $0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951 $19,239 $21,426 $23,817 $26,217 $26,217
of Sales

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Production
Expenses

TOTAL $0 $4,404 $6,612 $7,639 $11,648 $13,559 $15,951 $19,23 $21,42 $23,81 $26,21 $26,217
COST OF 9 6 7 7
SALES

Gross $0 $6,606 $9,918 $11,458 $17,472 $20,338 $23,927 $28,858 $32,140 $35,726 $39,325 $39,325
Margin

Gross 0.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00% 60.00%
Margin %

Expenses

Payroll $4,000 $14,000 $22,160 $22,160 $22,160 $24,660 $26,580 $26,580 $26,580 $26,580 $26,580 $26,580

Sales and $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700
Marketing
and Other
Expenses

Depreciatio $142 $142 $142 $142 $142 $142 $142 $142 $142 $142 $142 $142
n

Leased $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Equipment

Utilities $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400

Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300

Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Payroll 15 $600 $2,100 $3,324 $3,324 $3,324 $3,699 $3,987 $3,987 $3,987 $3,987 $3,987 $3,987
Taxes %
 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total $8,142 $19,642 $29,026 $29,026 $29,026 $31,901 $34,109 $34,109 $34,109 $34,109 $34,109 $34,109
Operating
Expenses

Profit ($8,142 ($13,036 ($19,108 ($17,568 ($11,554 ($11,563 ($10,182 ($5,251) ($1,969) $1,617 $5,216 $5,216
Before ) ) ) ) ) ) )
Interest and
Taxes

EBITDA ($8,000 ($12,894 ($18,966 ($17,426 ($11,412 ($11,421 ($10,040 ($5,109) ($1,827) $1,759 $5,358 $5,358
) ) ) ) ) ) )

Interest $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expense

Taxes $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Incurred

Net Profit ($8,142 ($13,036 ($19,108 ($17,568 ($11,554 ($11,563 ($10,182 ($5,251) ($1,969) $1,617 $5,216 $5,216
) ) ) ) ) ) )

Net 0.00% - - -91.99% -39.68% -34.11% -25.53% -10.92% -3.68% 2.72% 7.96% 7.96%
Profit/Sales 118.40% 115.60%

PRO FORMA CASH FLOW

MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
1 2 3 4 5 6 7 8 9 10 11 12

Cash
Received

Cash from
Operations

Cash Sales $0 $11,010 $16,530 $19,097 $29,120 $33,897 $39,878 $48,097 $53,566 $59,543 $65,542 $65,542

SUBTOTAL $0 $11,010 $16,530 $19,097 $29,12 $33,897 $39,87 $48,09 $53,56 $59,54 $65,54 $65,54
CASH FROM
OPERATION
 S 0 8 7 6 3 2 2

Additional
Cash
Received

Sales Tax, 0.00 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

VAT, %
HST/GST
Received

New Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing

New Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
(interest-free)

New Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term
Liabilities

Sales of Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets

Sales of Long- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term Assets

New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Investment
Received

SUBTOTAL $0 $11,010 $16,530 $19,097 $29,12 $33,897 $39,87 $48,09 $53,56 $59,54 $65,54 $65,54
CASH 0 8 7 6 3 2 2
RECEIVED

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12

Expenditures
from
Operations
 Cash $4,000 $14,000 $22,160 $22,160 $22,160 $24,660 $26,580 $26,580 $26,580 $26,580 $26,580 $26,580
Spending

Bill Payments $133 $4,050 $5,817 $15,029 $15,735 $22,781 $22,867 $26,112 $30,275 $31,307 $33,914 $36,155

SUBTOTAL $4,133 $18,050 $27,977 $37,189 $37,89 $47,441 $49,44 $52,69 $56,85 $57,88 $60,49 $62,73
SPENT ON 5 7 2 5 7 4 5
OPERATION
S

Additional
Cash Spent

Sales Tax, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
VAT,
HST/GST Paid
Out

Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment of
Current
Borrowing

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Principal
Repayment

Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities
Principal
Repayment

Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current
Assets

Purchase $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term
Assets

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
 SUBTOTAL $4,133 $18,050 $27,977 $37,189 $37,89 $47,441 $49,44 $52,69 $56,85 $57,88 $60,49 $62,73
CASH SPENT 5 7 2 5 7 4 5

Net Cash Flow ($4,133) ($7,040) ($11,447 ($18,092 ($8,775) ($13,544 ($9,569) ($4,595) ($3,289) $1,656 $5,048 $2,807
) ) )

Cash Balance $136,36 $129,32 $117,880 $99,787 $91,012 $77,468 $67,899 $63,304 $60,015 $61,671 $66,719 $69,525
7 7

PRO FORMA BALANCE SHEET

MONTH 1 MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH
2 3 4 5 6 7 8 9 10 11 12

Assets Starti
ng
Balan
ces

Current
Assets

Cash $140, $136,367 $129,32 $117,88 $99,787 $91,012 $77,468 $67,899 $63,304 $60,015 $61,671 $66,719 $69,525
500 7 0

Inventory $10,0 $10,000 $5,596 $7,273 $8,403 $12,813 $14,915 $17,546 $21,163 $23,569 $26,199 $28,838 $28,838
00

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets

TOTAL $150 $146,367 $134,9 $125,1 $108,1 $103,8 $92,38 $85,44 $84,46 $83,58 $87,87 $95,55 $98,36
CURRENT ,500 23 53 90 25 2 5 6 4 0 7 4
ASSETS

Long-term
Assets

Long-term $8,50 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500 $8,500
Assets 0
Accumulate $0 $142 $284 $426 $568 $710 $852 $994 $1,136 $1,278 $1,420 $1,562 $1,704
d
Depreciatio
n

TOTAL $8,5 $8,358 $8,216 $8,074 $7,932 $7,790 $7,648 $7,506 $7,364 $7,222 $7,080 $6,938 $6,796
LONG- 00
TERM
ASSETS

TOTAL $159 $154,725 $143,1 $133,2 $116,1 $111,6 $100,0 $92,95 $91,83 $90,80 $94,95 $102,4 $105,1
ASSETS ,000 39 27 22 15 30 1 0 6 0 95 60

Liabilities Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
and Capital 10 11 12

Current
Liabilities

Accounts $0 $3,867 $5,317 $14,513 $14,976 $22,023 $22,001 $25,104 $29,234 $30,179 $32,706 $35,035 $32,484
Payable

Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Liabilities

SUBTOTAL $0 $3,867 $5,317 $14,51 $14,97 $22,02 $22,00 $25,10 $29,23 $30,17 $32,70 $35,03 $32,48
CURRENT 3 6 3 1 4 4 9 6 5 4
LIABILITI
ES

Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabilities

TOTAL $0 $3,867 $5,317 $14,51 $14,97 $22,02 $22,00 $25,10 $29,23 $30,17 $32,70 $35,03 $32,48
LIABILITI 3 6 3 1 4 4 9 6 5 4
ES

Paid-in $183, $183,100 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10 $183,10
Capital 100 0 0 0 0 0 0 0 0 0 0 0
Retained ($24, ($24,100) ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10 ($24,10
Earnings 100) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0) 0)

Earnings $0 ($8,142) ($21,17 ($40,28 ($57,85 ($69,40 ($80,97 ($91,15 ($96,40 ($98,37 ($96,75 ($91,54 ($86,32
8) 6) 4) 8) 1) 3) 4) 3) 6) 0) 4)

TOTAL $159 $150,858 $137,8 $118,7 $101,1 $89,59 $78,02 $67,84 $62,59 $60,62 $62,24 $67,46 $72,67
CAPITAL ,000 22 14 46 2 9 7 6 7 4 0 6

TOTAL $159 $154,725 $143,1 $133,2 $116,1 $111,6 $100,0 $92,95 $91,83 $90,80 $94,95 $102,4 $105,1
LIABILITI ,000 39 27 22 15 30 1 0 6 0 95 60
ES AND
CAPITAL

Net Worth $159, $150,858 $137,82 $118,71 $101,14 $89,592 $78,029 $67,847 $62,596 $60,627 $62,244 $67,460 $72,676
000 2 4 6