wedding consultant business plan

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Table of Contents

1.0 Executive Summary......................................................................................................................11.1 Mission...........................................................................................................................................11.2 Objectives.....................................................................................................................................11.3 Keys to Success..........................................................................................................................1

2.0 Company Summary......................................................................................................................12.1 Company Ownership................................................................................................................22.2 Start-up Summary.....................................................................................................................2

Table: Start-up...............................................................................................................................2Table: Start-up Funding..............................................................................................................3Chart: Start-up...............................................................................................................................4

2.3 Company Locations and Facilities.......................................................................................43.0 Services.............................................................................................................................................44.0 Market Analysis Summary.........................................................................................................4

4.1 Market Segmentation..............................................................................................................4Table: Market Analysis................................................................................................................5Chart: Market Analysis (Pie)......................................................................................................5

4.2 Target Market Segment Strategy........................................................................................64.2.1 Market Needs......................................................................................................................6

4.3 Service Business Analysis......................................................................................................64.3.1 Competition and Buying Patterns................................................................................6

5.0 Strategy and Implementation Summary..............................................................................75.1 Competitive Edge......................................................................................................................75.2 Sales Strategy.............................................................................................................................7

Chart: Sales by Year.....................................................................................................................7Table: Sales Forecast...................................................................................................................8Chart: Sales Monthly....................................................................................................................8

6.0 Management Summary...............................................................................................................96.1 Personnel Plan............................................................................................................................9

Table: Personnel............................................................................................................................97.0 Financial Plan..................................................................................................................................9

7.1 Break-even Analysis...............................................................................................................10Table: Break-even Analysis.....................................................................................................10Chart: Break-even Analysis.....................................................................................................10

7.2 Projected Profit and Loss......................................................................................................11Table: Profit and Loss................................................................................................................11Chart: Profit Monthly..................................................................................................................12Chart: Profit Yearly.....................................................................................................................12Chart: Gross Margin Monthly..................................................................................................13Chart: Gross Margin Yearly......................................................................................................13

7.3 Projected Cash Flow...............................................................................................................14Chart: Cash....................................................................................................................................14Table: Cash Flow.........................................................................................................................15Table: General Assumptions...................................................................................................15

7.4 Projected Balance Sheet.......................................................................................................167.4 Projected Balance Sheet.......................................................................................................16

Table: Balance Sheet.................................................................................................................16

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Table of Contents

7.5 Business Ratios........................................................................................................................17Table: Ratios.................................................................................................................................17

Table: Sales Forecast...........................................................................................................................1Table: Personnel....................................................................................................................................2Table: Personnel....................................................................................................................................2Table: General Assumptions.............................................................................................................3Table: General Assumptions.............................................................................................................3Table: Profit and Loss..........................................................................................................................4Table: Profit and Loss..........................................................................................................................4Table: Cash Flow...................................................................................................................................5Table: Cash Flow...................................................................................................................................5Table: Balance Sheet...........................................................................................................................6Table: Balance Sheet...........................................................................................................................6

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TLC Wedding Consultants

1.0 Executive Summary

TLC Wedding Consultants is a full service company that provides complete consulting services for weddings, holy unions and anniversaries. Our consultants are experienced and dedicated professionals with many years of event planning experience. TLC is unique in that we give our clients our undivided attention. We listen to their needs and work with them to create the event of their dreams. Our clients' wishes become our commands. So whether our client wants a Western, Tropical, Las Vegas or more traditional wedding, we can help. Our services include weddings, honeymoons, receptions, anniversary consultations, budget planning, answers to etiquette questions, as well as full-service referrals to florists, hair stylists, entertainers, musicians, etc.

1.1 Mission

TLC Wedding Consultants is a full service company that provides complete consulting services for weddings, holy unions and anniversaries. Our consultants are experienced and dedicated professionals with many years of event planning experience. TLC is unique in that we give our clients our undivided attention. We listen to their needs and work with them to create the event of their dreams. Our clients' wishes become our commands. So whether our client wants a Western, Tropical, Las Vegas or more traditional wedding or anniversary party, we can help. Our services include weddings, honeymoons, receptions, anniversary consultations, budget planning, answers to etiquette questions, as well as full-service referrals to florists, hair stylists, entertainers, musicians, etc.

1.2 Objectives

Whether this is our client's first wedding, a renewal of their vows or their anniversary, we want every detail of their event to be both a pleasurable and a memorable experience. Therefore we offer a host of packages and services specifically tailored to the needs of each couple. We are confident that this business venture will be a success and we estimate that our net income will increase modestly by the second year.

1.3 Keys to Success

The keys to our success are as follows:

1. Service our clients' needs promptly and efficiently. 2. Maintain an excellent working relationships with vendors such as florists, hair salons and

bridal shops. 3. Maintain a professional image at all times.

2.0 Company Summary

TLC Wedding Consultants is a start-up company that provides wedding, holy union, and anniversary consulting services to brides, grooms and other family members. We are a full-service bridal consulting group and our goal is to put the "fun" back into planning a wedding, holy union or anniversary party. Too many people become overly stressed and frustrated when planning these wonderful events. We are experienced and professional consultants and will use our expertise to help create memorable and stress free events for our customers. By doing this, our clients can sit back and enjoy their event. The result? We create events suited to the couple's unique style--a true expression of their relationship and individuality as a couple.

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2.1 Company Ownership

This business will start out as a simple proprietorship, owned by its founders, Darla and Micah Johnson. As the operation grows, the owners will consider re-registering as a limited liability company or as a corporation, whichever will better suite the future business needs.

2.2 Start-up Summary

The company founders, Darla and Micah Johnson, will handle day-to-day operations of the plan and will work collaboratively to ensure that this business venture is a success.

We estimate that our start-up costs will be $3,000 (including legal costs, logo design, advertising, direct mail, and related expenses). An additional $5,000 will be required in the bank account as an operating capital for the first two months of operation. The start-up costs are to be financed in equal portions by the owners' personal funds (i.e., Darla and Micah Johnson are investing $4,000 each).

Table: Start-up

Start-up

Requirements

Start-up Expenses

Legal $200 Stationery etc. $450 Brochures $450 Insurance $300 Research and development $200 Expensed equipment $900 Other $500 Total Start-up Expenses $3,000

Start-up Assets

Cash Required $5,000 Other Current Assets $0 Long-term Assets $0 Total Assets $5,000

Total Requirements $8,000

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Table: Start-up Funding

Start-up Funding

Start-up Expenses to Fund $3,000 Start-up Assets to Fund $5,000 Total Funding Required $8,000

Assets

Non-cash Assets from Start-up $0 Cash Requirements from Start-up $5,000 Additional Cash Raised $0 Cash Balance on Starting Date $5,000 Total Assets $5,000

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

Darla Johnson $4,000 Micah Johnson $4,000 Additional Investment Requirement $0 Total Planned Investment $8,000

Loss at Start-up (Start-up Expenses) ($3,000)Total Capital $5,000

Total Capital and Liabilities $5,000

Total Funding $8,000

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Chart: Start-up

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Expenses Assets Investment Loans

Start-up

2.3 Company Locations and Facilities

Initially this will be a home-based business; however, by Year 5, we intend to expand our facilities into a well-equipped and operational office.

3.0 Services

We are a full-service wedding consultant group and provide the following services: etiquette advice, event scheduling, discounted invitations and products, vendor confirmation, rehearsal attendance, supervision of both ceremony and reception setup and budget planning.

4.0 Market Analysis Summary

Nearly $35 billion are spent every year on weddings and receptions. Therefore, professional wedding consultants are a commodity, not a calamity. TLC Wedding Consultants are full-service wedding consultants that offer a variety of services to our clients. We pride ourselves on being professional and courteous at all times and we have packages to suit everyone's needs.

As previously stated, marriage is a billion dollar industry, therefore, just about everyone we meet is a potential client. However, we mostly advertise to brides, grooms, and family members.

4.1 Market Segmentation

Although the flash and excitement of impending nuptials can be intoxicating, it can also be overwhelming. Therefore, we primarily market our services to the people who need them most--brides and grooms. In 1997, 2.4 million marriages took place in the United States. According to the Encarta Encyclopedia, the current US marriage rate of nine marriages per 1,000 people is still the highest rate among the industrialized countries. This marriage rate is expected to remain at the same level in the near future. In the Eugene, OR area where TLC Wedding

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Consultants plans to operate their business, over 1,500 marriages are registered each year, which creates a sizable market potential for this line of business.

Another customer segment is represented by the numerous family members and guests attending weddings, anniversaries, and similar events. This segment requires event preparation services like gift ideas, etiquette tips, etc.

Besides the wedding arrangements, which TLC Wedding Consultants believe to be their major client assignments, other events the company will provide services to include corporate retreats, etiquette training, etc. This customer segment is estimated to have the annual volume of 1,000 orders in the Eugene, OR area.

Table: Market Analysis

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Brides & Grooms 5% 1,500 1,575 1,654 1,737 1,824 5.01% Family Members 5% 5,000 5,250 5,513 5,789 6,078 5.00% Other 5% 1,000 1,050 1,103 1,158 1,216 5.01% Total 5.00% 7,500 7,875 8,270 8,684 9,118 5.00%

Chart: Market Analysis (Pie)

Brides & Grooms

Family Members

Other

Market Analysis (Pie)

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4.2 Target Market Segment Strategy

TLC Wedding Consultants will offer its services mostly to the brides and grooms, as well as to the family members. The company will position itself as an experienced provider of wedding planning services. Unlike most of its competitors, TLC will be offering a full range of services and thus provide the convenience of one-stop shopping for its clients. This will significantly reduce the customers' time and efforts preparing for such an important event as a wedding. Moreover, by utilizing numerous supplier contacts that the company owners have established and economies of scale, TLC Wedding Consultants will be able to pass on to its customers sizable cost savings.

4.2.1 Market Needs

The market needs for wedding planning services are strongly shaped by the customers' desire to have a perfectly planned and executed wedding ceremony. Although both major customer segments, brides and grooms and family members, plan and budget for the wedding ceremony as far as a year or more in advance, they often realize that they cannot make all the necessary preparations by themselves in a cost effective manner. Strongly affected by the established social values, such customers seek professional advice to ensure that all the important aspects of the wedding ceremony meet or exceed perceived expectations.

4.3 Service Business Analysis

The wedding services market is fragmented with the overwhelming majority of the incumbents offering only a limited line of services. There are numerous florists, hair stylists, and caterers to choose from. However, there are almost no companies that will provide the full range of services associated with the wedding planning and execution.

4.3.1 Competition and Buying Patterns

Competitive analysis conducted by the company owners has shown that there are 20 companies currently offering some sort of wedding planning services in the Eugene area. However, the majority of the incumbent competitors offer only a limited line of services like catering, flower arrangements or gifts. In fact, of these 25 competitors only three offered a range of services comparable with what TLC Wedding Consultants plan to offer to its customers. The following is the list of the major competitors with a brief description of their services:

Rent-An-Action offers ceremony preparation, rehearsing and execution services. Cross & Reeves provide flower and catering arrangements and wedding consulting services. Lafayette Wedding offers its clients entertaining, catering, floral design and hair styling

services.

The market research has also shown that customers anticipate the complete wedding consulting services to be expensive and they budget accordingly. In fact, lower prices are very often associated with poor service quality. By aggregating a complete range of wedding services under one roof, TLC Wedding Consultants will offer its customers the ease of one-stop shopping.

5.0 Strategy and Implementation Summary

Our strategy is simple: we intend to provide our customers with a wide range of services custom tailored to their individual needs. Therefore, whether they require a complete package, or simply consulting on a particular service, we can help.

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5.1 Competitive Edge

By aggregating a complete range of wedding services under one roof, TLC Wedding Consultants will offer its customers the ease of one-stop shopping. The company will leverage its owners' expertise in planning such events to competitively position itself as a premier provider of wedding services. Both owners have very strong communication skills that will help develop the 'buzz' about the high quality of the services offered by TLC Wedding Consultants.

5.2 Sales Strategy

The company's sales strategy will be based on the following elements:

Advertising in the Yellow Pages - two inch by three inch ads describing the services will be placed in the local Yellow Pages.

Placing advertisements in the local press, including The Register Guard, Eugene Weekly, The Oregon Daily Emerald.

Developing affiliate relationships with other service providers (florists, hair stylists, caterers) that would receive a percentage of sales to the referred customers.

Word of mouth referrals - generating sales leads in the local community through customer referrals.

Chart: Sales by Year

Brides & Grooms

Family Members

Other

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

Year 1 Year 2 Year 3

Sales by Year

Table: Sales Forecast

Sales Forecast


Sales

Brides & Grooms $54,200 $65,040 $71,544 Family Members $25,800 $30,960 $34,056

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Other $15,300 $18,360 $20,196 Total Sales $95,300 $114,360 $125,796

Direct Cost of Sales Year 1 Year 2 Year 3Row 1 $0 $0 $0 Row 1 $0 $0 $0 Other $0 $0 $0 Subtotal Direct Cost of Sales $0 $0 $0

Chart: Sales Monthly

Brides & Grooms

Family Members

Other

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6.0 Management Summary

Our wedding consultants are Darla and Micah Johnson. Collaboratively they have planned and serviced over 150 weddings and receptions. They are knowledgeable about all areas of planning, decorating, as well as budgeting. Darla has a BS in Communications and a minor in Interior Decorating. She has been a wedding consultant for five years and became interested in providing consultant services when she successfully planned her first five weddings for family and friends. Since then, Darla has received extensive training in wedding planning and her certification from the National Association of Wedding Consultants and Professional Wedding Planners. Micah has an Associates Degree in Fashion Design, and, like Darla, she became interested in becoming a consultant when she successfully planned her first three weddings. Micah received her certification from the National Association of Wedding Consultants and has been a wedding planner for three years. Micah enjoys all aspects of planning traditional and nontraditional weddings.

6.1 Personnel Plan

Initially, TLC Wedding Consultants' personnel will include only the two owners, both of whom will be working full time. As the personnel plan shows, we expect to hire an additional wedding consultant in the next year This person will work full time, but will not be included in the management decisions.

Table: Personnel

Personnel Plan


Owner $53,100 $76,200 $85,800 Other $0 $0 $0 Total People 0 0 0

Total Payroll $53,100 $76,200 $85,800

7.0 Financial Plan

The following subtopics represent the financial plan of TLC Wedding Consultants.

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7.1 Break-even Analysis

The following table and chart summarize our break-even analysis.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $4,804

Assumptions:

Average Percent Variable Cost 0% Estimated Monthly Fixed Cost $4,804

Chart: Break-even Analysis

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Break-even Analysis

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7.2 Projected Profit and Loss

Our projected profit and loss is shown in the following table.

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $95,300 $114,360 $125,796 Direct Cost of Sales $0 $0 $0 Other $0 $0 $0 Total Cost of Sales $0 $0 $0

Gross Margin $95,300 $114,360 $125,796 Gross Margin % 100.00% 100.00% 100.00%

Expenses

Payroll $53,100 $76,200 $85,800 Sales and Marketing and Other Expenses $4,550 $1,000 $2,000 Depreciation $0 $0 $0 Leased Equipment $0 $0 $0 Utilities $0 $0 $0 Insurance $0 $0 $0 Rent $0 $0 $0 Payroll Taxes $0 $0 $0 Other $0 $0 $0

Total Operating Expenses $57,650 $77,200 $87,800

Profit Before Interest and Taxes $37,650 $37,160 $37,996 EBITDA $37,650 $37,160 $37,996 Interest Expense $0 $0 $0 Taxes Incurred $9,443 $9,290 $9,657

Net Profit $28,208 $27,870 $28,339 Net Profit/Sales 29.60% 24.37% 22.53%

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Chart: Profit Monthly

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Profit Monthly

Chart: Profit Yearly

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Chart: Gross Margin Monthly

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Gross Margin Monthly

Chart: Gross Margin Yearly

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Gross Margin Yearly

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7.3 Projected Cash Flow

The following chart and table show our cash flow projections.

Chart: Cash

Net Cash Flow

Cash Balance

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$3,000

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Month 1 Month 2

Month 3 Month 4

Month 5 Month 6

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Cash

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Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $38,120 $45,744 $50,318 Cash from Receivables $45,494 $66,279 $74,075 Subtotal Cash from Operations $83,614 $112,023 $124,394

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0 New Current Borrowing $0 $0 $0 New Other Liabilities (interest-free) $0 $0 $0 New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 Subtotal Cash Received $83,614 $112,023 $124,394

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $53,100 $76,200 $85,800 Bill Payments $12,748 $10,689 $11,545 Subtotal Spent on Operations $65,848 $86,889 $97,345

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 Principal Repayment of Current Borrowing $0 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 Long-term Liabilities Principal Repayment $0 $0 $0 Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $0 $0 Dividends $0 $0 $0 Subtotal Cash Spent $65,848 $86,889 $97,345

Net Cash Flow $17,766 $25,134 $27,049 Cash Balance $22,766 $47,900 $74,949

Table: General Assumptions

General Assumptions


Plan Month 1 2 3Current Interest Rate 10.00% 10.00% 10.00% Long-term Interest Rate 10.00% 10.00% 10.00% Tax Rate 25.42% 25.00% 25.42% Other 0 0 0

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7.4 Projected Balance Sheet

Three years of annual totals are presented in the Projected Balance Sheet below. First year monthly figures are included in the appendix.

Table: Balance Sheet

Pro Forma Balance Sheet


Assets

Current Assets

Cash $22,766 $47,900 $74,949 Accounts Receivable $11,686 $14,023 $15,426 Other Current Assets $0 $0 $0 Total Current Assets $34,452 $61,923 $90,374

Long-term Assets

Long-term Assets $0 $0 $0 Accumulated Depreciation $0 $0 $0 Total Long-term Assets $0 $0 $0 Total Assets $34,452 $61,923 $90,374

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $1,245 $846 $958 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 Subtotal Current Liabilities $1,245 $846 $958

Long-term Liabilities $0 $0 $0 Total Liabilities $1,245 $846 $958

Paid-in Capital $8,000 $8,000 $8,000 Retained Earnings ($3,000) $25,208 $53,078 Earnings $28,208 $27,870 $28,339 Total Capital $33,208 $61,078 $89,416 Total Liabilities and Capital $34,452 $61,923 $90,374

Net Worth $33,207 $61,078 $89,416

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7.5 Business RatiosThe following table outlines some of the more important ratios from the Personal Services industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7299.

Table: Ratios

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth n.a. 20.00% 10.00% 17.90%

Percent of Total Assets

Accounts Receivable 33.92% 22.65% 17.07% 11.10% Other Current Assets 0.00% 0.00% 0.00% 37.10% Total Current Assets 100.00% 100.00% 100.00% 52.80% Long-term Assets 0.00% 0.00% 0.00% 47.20% Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 3.61% 1.37% 1.06% 33.90% Long-term Liabilities 0.00% 0.00% 0.00% 28.00% Total Liabilities 3.61% 1.37% 1.06% 61.90% Net Worth 96.39% 98.63% 98.94% 38.10%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00% Gross Margin 100.00% 100.00% 100.00% 0.00% Selling, General & Administrative Expenses 70.37% 75.63% 77.35% 72.70% Advertising Expenses 3.52% 0.87% 1.59% 2.20% Profit Before Interest and Taxes 39.51% 32.49% 30.20% 4.00%

Main Ratios

Current 27.68 73.22 94.32 1.81 Quick 27.68 73.22 94.32 1.33 Total Debt to Total Assets 3.61% 1.37% 1.06% 61.90% Pre-tax Return on Net Worth 113.38% 60.84% 42.49% 6.30% Pre-tax Return on Assets 109.28% 60.01% 42.04% 16.60%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 29.60% 24.37% 22.53% n.aReturn on Equity 84.94% 45.63% 31.69% n.a

Activity Ratios

Accounts Receivable Turnover 4.89 4.89 4.89 n.aCollection Days 57 68 71 n.aAccounts Payable Turnover 11.24 12.17 12.17 n.aPayment Days 27 37 28 n.aTotal Asset Turnover 2.77 1.85 1.39 n.a

Debt Ratios

Debt to Net Worth 0.04 0.01 0.01 n.aCurrent Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital $33,207 $61,078 $89,416 n.aInterest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.36 0.54 0.72 n.aCurrent Debt/Total Assets 4% 1% 1% n.aAcid Test 18.29 56.64 78.22 n.aSales/Net Worth 2.87 1.87 1.41 n.aDividend Payout 0.00 0.00 0.00 n.a

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Appendix

Table: Sales Forecast

Sales Forecast

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

Sales

Brides & Grooms 0% $2,900 $3,100 $3,300 $3,500 $4,000 $5,400 $4,600 $5,000 $5,200 $5,500 $5,700 $6,000 Family Members 0% $1,600 $1,700 $1,800 $1,900 $2,000 $2,100 $2,200 $2,300 $2,400 $2,500 $2,600 $2,700 Other 0% $1,200 $1,200 $1,200 $1,200 $1,200 $1,300 $1,300 $1,300 $1,300 $1,300 $1,400 $1,400 Total Sales $5,700 $6,000 $6,300 $6,600 $7,200 $8,800 $8,100 $8,600 $8,900 $9,300 $9,700 $10,100

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

Row 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Row 1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Page 1

Appendix

Table: Personnel

Personnel Plan


Owner 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $5,700 $5,700 $5,700 Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $5,700 $5,700 $5,700

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Appendix

Table: General Assumptions

General Assumptions


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

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

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

Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%

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

Page 3

Appendix

Table: Profit and Loss

Pro Forma Profit and Loss


Sales $5,700 $6,000 $6,300 $6,600 $7,200 $8,800 $8,100 $8,600 $8,900 $9,300 $9,700 $10,100

Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Gross Margin $5,700 $6,000 $6,300 $6,600 $7,200 $8,800 $8,100 $8,600 $8,900 $9,300 $9,700 $10,100

Gross Margin % 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

Expenses

Payroll $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $5,700 $5,700 $5,700

Sales and Marketing and Other Expenses

$1,100 $250 $250 $250 $600 $250 $250 $250 $600 $250 $250 $250

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

Utilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $5,100 $4,250 $4,250 $4,250 $4,600 $4,250 $4,250 $4,250 $4,600 $5,950 $5,950 $5,950

Profit Before Interest and Taxes $600 $1,750 $2,050 $2,350 $2,600 $4,550 $3,850 $4,350 $4,300 $3,350 $3,750 $4,150

EBITDA $600 $1,750 $2,050 $2,350 $2,600 $4,550 $3,850 $4,350 $4,300 $3,350 $3,750 $4,150

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

Taxes Incurred $180 $438 $513 $588 $650 $1,138 $963 $1,088 $1,075 $838 $938 $1,038

Net Profit $420 $1,313 $1,538 $1,763 $1,950 $3,413 $2,888 $3,263 $3,225 $2,513 $2,813 $3,113

Net Profit/Sales 7.37% 21.88% 24.40% 26.70% 27.08% 38.78% 35.65% 37.94% 36.24% 27.02% 28.99% 30.82%

Page 4

Appendix

Table: Cash Flow

Pro Forma Cash Flow


Cash Received

Cash from Operations

Cash Sales $2,280 $2,400 $2,520 $2,640 $2,880 $3,520 $3,240 $3,440 $3,560 $3,720 $3,880 $4,040

Cash from Receivables $0 $114 $3,426 $3,606 $3,786 $3,972 $4,352 $5,266 $4,870 $5,166 $5,348 $5,588

Subtotal Cash from Operations $2,280 $2,514 $5,946 $6,246 $6,666 $7,492 $7,592 $8,706 $8,430 $8,886 $9,228 $9,628

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

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

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

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

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

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

Subtotal Cash Received $2,280 $2,514 $5,946 $6,246 $6,666 $7,492 $7,592 $8,706 $8,430 $8,886 $9,228 $9,628

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

Expenditures from Operations

Cash Spending $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $5,700 $5,700 $5,700

Bill Payments $43 $1,260 $690 $765 $851 $1,255 $1,382 $1,217 $1,349 $1,655 $1,091 $1,191

Subtotal Spent on Operations $4,043 $5,260 $4,690 $4,765 $4,851 $5,255 $5,382 $5,217 $5,349 $7,355 $6,791 $6,891

Additional Cash Spent

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

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

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

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

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

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

Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Spent $4,043 $5,260 $4,690 $4,765 $4,851 $5,255 $5,382 $5,217 $5,349 $7,355 $6,791 $6,891

Net Cash Flow ($1,763) ($2,746) $1,256 $1,481 $1,815 $2,237 $2,210 $3,489 $3,081 $1,531 $2,437 $2,737

Cash Balance $3,237 $491 $1,747 $3,228 $5,043 $7,280 $9,491 $12,980 $16,061 $17,592 $20,029 $22,766

Page 5

Appendix

Table: Balance Sheet

Pro Forma Balance Sheet


Assets Starting Balances

Current Assets

Cash $5,000 $3,237 $491 $1,747 $3,228 $5,043 $7,280 $9,491 $12,980 $16,061 $17,592 $20,029 $22,766 Accounts Receivable $0 $3,420 $6,906 $7,260 $7,614 $8,148 $9,456 $9,964 $9,858 $10,328 $10,742 $11,214 $11,686 Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Current Assets $5,000 $6,657 $7,397 $9,007 $10,842 $13,191 $16,736 $19,455 $22,838 $26,389 $28,334 $31,243 $34,452

Long-term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Assets $5,000 $6,657 $7,397 $9,007 $10,842 $13,191 $16,736 $19,455 $22,838 $26,389 $28,334 $31,243 $34,452

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

Current Liabilities

Accounts Payable $0 $1,237 $665 $737 $810 $1,208 $1,341 $1,172 $1,293 $1,619 $1,051 $1,148 $1,245 Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Subtotal Current Liabilities $0 $1,237 $665 $737 $810 $1,208 $1,341 $1,172 $1,293 $1,619 $1,051 $1,148 $1,245

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Total Liabilities $0 $1,237 $665 $737 $810 $1,208 $1,341 $1,172 $1,293 $1,619 $1,051 $1,148 $1,245

Paid-in Capital $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 Retained Earnings ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000) ($3,000)Earnings $0 $420 $1,733 $3,270 $5,033 $6,983 $10,395 $13,283 $16,545 $19,770 $22,283 $25,095 $28,208 Total Capital $5,000 $5,420 $6,733 $8,270 $10,033 $11,983 $15,395 $18,283 $21,545 $24,770 $27,283 $30,095 $33,208 Total Liabilities and Capital $5,000 $6,657 $7,397 $9,007 $10,842 $13,191 $16,736 $19,455 $22,838 $26,389 $28,334 $31,243 $34,452

Net Worth $5,000 $5,420 $6,733 $8,270 $10,033 $11,983 $15,395 $18,283 $21,545 $24,770 $27,282 $30,095 $33,207

Page 6

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