Coffee Kiosk Business Plan

The Daily Perc

Plan Outline
 1.0 Executive Summary
o Objectives
o Mission
o Keys to Success
 2.0 Company Summary
 3.0 Products
 4.0 Market Analysis Summary
 5.0 Strategy and Implementation Summary
 6.0 Management Summary
 7.0 Financial Plan
 Appendix

Executive Summary
The Daily Perc (TDP) is a specialty beverage retailer. TDP uses a system that is new to the beverage and
food service industry to provide hot and cold beverages in a convenient and time-efficient way. TDP
provides its customers the ability to drive up and order (from a trained Barista) their choice of a custom-
blended espresso drink, freshly brewed coffee, or other beverage. TDP is offering a high-quality option to
the fast-food, gas station, or institutional coffee.

The Daily Perc offers its patrons the finest hot and cold beverages, specializing in specialty coffees,
blended teas, and other custom drinks. In addition, TDP will offer soft drinks, fresh-baked pastries and
other confections. Seasonally, TDP will add beverages such as hot apple cider, hot chocolate, frozen
coffees, and more.

The Daily Perc will focus on two markets:

The Daily Commuter- someone traveling to/from work, out shopping, delivering goods or services, or just
out for a drive.
The Captive Consumer- someone who is in a restricted environment that does not allow convenient
departure and return while searching for refreshments, or where refreshments stands are an integral part
of the environment.

The Daily Perc will penetrate the commuter and captive consumer markets by deploying Drive-thru
facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thru facilities are
designed to handle two-sided traffic and dispense customer-designed, specially ordered cups of premium
coffees in less time than required for a visit to the locally owned cafe or one of the national chains.
In addition to providing a quality product and an extensive menu of delicious items, to ensure customer
awareness and loyalty, as well as good publicity coverage and media support, we will be donating up to
7.5% of revenue to local charities based upon customer choices.

The Daily Perc's financial picture is quite promising. Since TDP is operating a cash business, the initial
cost is significantly less than many start-ups these days. The process is labor intensive and TDP
recognizes that a higher level of talent is required. The financial investment in its employees will be one of
the greatest differentiators between it and TDP's competition. For the purpose of this pro-forma plan, the
capital expenditures of facilities and equipment are financed. There will be minimum inventory on hand so
as to keep the product fresh and to take advantage of price drops, when and if they should occur.

The Daily Perc anticipates the initial combination of investments and long term financing of $425,000 to
carry it without the need for any additional equity or debt investment, beyond the purchase of equipment
or facilities. This will mean growing a bit more slowly than might be otherwise possible, but it will be a
solid, financially-sound growth based on customer request and product demand.

The Daily Perc chooses to become the Drive-thru version of Starbucks between the mountains, obtaining
several million dollars through an initial public or private offering that would allow the company to open
twenty to thirty facilities per year in all metropolitan communities in the North, Midwest, and South with a
population of over 150,000. This is the preferred Exit Strategy of the Management Team. The danger in
this is that competitors would rise up and establish a foothold on a community before--or in the midst of--
the arrival of The Daily Perc, causing a potential for a drain on revenues and a dramatic increase in
advertising expenditures to maintain market share. Knowing these risks--and planning for them--gives
TDP the edge needed to make this scenario work.

The balance sheet estimates a Net Worth of $1,075,969 for the third year, cash balances of $773,623 and
earnings of $860,428, based on 13 Drive-thrus and four Mobile Cafes, it is not unrealistic to put a market
value of between $4 and $9 million on the company. At present, such companies are trading in multiples
of four to 10 times earnings, and it is simple mathematics to multiply the success of TDP by the number of
major and smaller metropolitan areas between the mountain ranges of the United States.

1.1 Objectives

The Daily Perc has established three firm objectives it wishes to achieve in the next three years:

1. Thirteen Drive-thru locations and four fully booked Mobile Cafes by the end of the third year.
2. Gross Margin of 45% or more.
3. Net After-tax Profit above 15% of Sales.
1.2 Mission

The Daily Perc Mission is three-fold, with each being as integral to our success as the next.

 Product Mission - Provide customers the finest quality beverage in the most efficient time.
 Community Mission - Provide community support through customer involvement.
 Economic Mission - Operate and grow at a profitable rate through sound economic decisions.
1.3 Keys to Success

There are four keys to success in this business, three of which are virtually the same as any food service
business. It is our fourth key--the Community Mission--that will give us that extra measure of respect in
the public eye.

1. The greatest locations - visibility, high traffic pattern, convenient access.

2. The best products - freshest coffee beans, cleanest equipment, premium serving containers,
consistent flavor.
3. The friendliest servers - cheerful, skilled, professional, articulate.
4. The finest reputation - word-of-mouth advertising, promotion of our community mission of
charitable giving.

Company Summary
The Daily Perc is a specialty beverage retailer. TDP uses a system that is new to the beverage and food
service industry to provide hot and cold beverages in a convenient and time-efficient way. TDP provides
its customers the ability to drive up and order from a trained Barista their choice of a custom blended
espresso drink, freshly brewed coffee, or other beverage. TDP is offering a high quality option to the fast-
food, gas station, and institutional coffee.

2.1 Company Ownership

The Daily Perc is a Limited Liability Corporation. All membership shares are currently owned by Bart and
Teresa Fisher, with the intent of using a portion of the shares to raise capital.

The plan calls for the sale of 100 membership units in the company to family members, friends, and Angel
Investors. Each membership unit in the company is priced at $4,250, with a minimum of five units per
membership certificate, or a minimum investment of $21,250 per investor.

If all funds are raised, based on the pricing established in the financial section of this plan, Bart and Terri
Fisher will maintain ownership of no less than 51% of the company.
2.2 Start-up Summary

The Daily Perc's start-up expenses and funding are shown in the tables and chart below. The majority of
these funds will be used to build the first facility, pay deposits, and provide capital for six months of
operating expenses, initial inventory and other one-time expenses. The Daily Perc anticipates the need
for operating capital for the first few months of operation.

Start-up

Requirements

Start-up Expenses

Legal $3,500

Office Equipment $4,950

Drive-thru Labor (6 months) $65,000

Drive-thru Finance Payment (6 months) $12,300

Drive-thru expenses (6 months) $8,520

Land Lease (6 months) $7,200

Vehicle Finance (6 months) $3,700

Administration Labor (6 months) $54,000

Website Development & Hosting $5,600

Identity/Logos/Stationary $4,000

Other $5,000
Total Start-up Expenses $173,770

Start-up Assets

Cash Required $25,500

Start-up Inventory $35,000

Other Current Assets $0

Long-term Assets $131,400

Total Assets $191,900

Total Requirements $365,670

Start-up Funding

Start-up Expenses to Fund $173,770

Start-up Assets to Fund $191,900

Total Funding Required $365,670

Assets

Non-cash Assets from Start-up $166,400

Cash Requirements from Start-up $25,500

Additional Cash Raised $0

Cash Balance on Starting Date $25,500

Total Assets $191,900

Liabilities and Capital

Liabilities

Current Borrowing $9,000

Long-term Liabilities $131,400

Accounts Payable (Outstanding Bills) $0

Other Current Liabilities (interest-free) $0

Total Liabilities $140,400

Capital

Planned Investment

Partner 1 $10,000

Partner 2 $10,000

Partner 3 $10,000
Partner 4 $10,000

Partner 5 $11,500

Partner 6 $10,000

Partner 7 $11,500

Partner 8 $10,000

Partner 9 $11,500

Partner 10 $10,000

Partner 11 $11,500

Partner 12 $11,500

Other $97,770

Additional Investment Requirement $0

Total Planned Investment $225,270

Loss at Start-up (Start-up Expenses) ($173,770)

Total Capital $51,500

Total Capital and Liabilities $191,900

Total Funding $365,670

2.3 Company Locations and Facilities

The Daily Perc will open its first drive-thru facility on Manchester Road in the Colonial Square Shopping
Center. Twelve more drive-thru facilities will be placed throughout the metropolitan area over the next
three years. The drive-thru in the Colonial Square Shopping Center will serve as the commissary for the
first mobile unit.

The demographic and physical requirements for a Drive-thru location are:

 Traffic of 40,000+ on store side.

 Visible from roadway.
 Easy entry with light if less than 30,000 cars.
 Established retail shops in area.

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Products
The Daily Perc provides its patrons the finest hot and cold beverages, specializing in specialty coffees
and custom blended teas. In addition, TDP will offer select domestic soft drinks, Italian sodas, fresh-
baked pastries, and other confections. Seasonally, TDP will add beverages such as hot apple cider, hot
chocolate, frozen coffees, and more.

3.1 Product Description

TDP provides its customers, whether at a Drive-thru facility or one of the Mobile Cafes, the ability to
custom order a coffee beverage that will be blended to their exact specifications. Each of TDP's Baristas
will be trained in the fine art of brewing, blending, and serving the highest quality hot and cold beverages,
with exceptional attention to detail.

Besides coffees, The Daily Perc will offer teas, domestic and Italian sodas, frozen coffee beverages,
seasonal specialty drinks, pastries, and other baked goods. Through the website and certain locations,
TDP will market premium items such as coffee mugs, T-shirts and sweatshirts, ball caps, and more.

3.2 Competitive Comparison

The Daily Perc considers itself to be a player in the retail coffee house industry. However, it knows that
competition for its products range from soft drinks to milk shakes to adult beverages.

The Daily Perc's primary competition will come from three sources:

1. National coffee houses such as Starbucks and Panera.

2. Locally owned and operated cafes.
3. Fast food chains and convenience stores.

Two things will make The Daily Perc stand out from all its competitors:

The Daily Perc will be providing products in the most convenient and efficient way available--either at one
of the two-sided Drive-thru shops, or at one of the Mobile Cafes. This separates TDP from the competition
in that its customers won't need to find a parking place, wait in a long line, jockey for a seat, and clean up
the mess left by a previous patron. TDP customers can drive or walk up, order their beverage, receive
and pay for the beverage, and drive off.

The second differentiator is The Daily Perc's focus on providing a significant benefit to the community
through a possible 7.5% contribution to customer-identified charities, schools, or other institutions.

3.3 Sourcing

The Daily Perc purchases its coffees from PJ's Coffee. TDP also has wholesale purchasing agreements
for other products with Major Brands, Coca-Cola, Big Train, Al's Famous Filled Bagels, L&N Products,
and Royal Distribution.

The Drive-thru facilities are manufactured by City Stations and the Mobile Cafes are manufactured by
Tow Tech Industries.

Fulfillment equipment suppliers include PJ's Coffee, City Stations, Talbert Ford, and Retail Image
Programs. The Daily Perc's computer equipment and Internet connectivity is provided by NSI
Communications.
3.4 Technology

The Daily Perc's delivery system is based on its technology. TDP is using state-of-the-art, two-sided,
Drive-thru facilities to provide convenience and efficiency for its clientele. An architectural exterior
diagram of the Drive Thru building can be found on the following page (removed from this sample plan).

The Daily Perc has also designed state-of-the-art Mobile Cafes that will be deployed from time to time on
high school and college campuses, corporate campuses, and at special events.

3.5 Future Products

As seasons change, The Daily Perc will be offering products that will enhance sales and satisfy its
customers' desires. During summer months, TDP will subsidize lower hot beverage sales with frozen
coffee drinks, as well as soft drinks, and other cold beverages. TDP will also have special beverages
during holiday seasons, such as Egg Nog during the Christmas season and Hot Apple Cider in the Fall.

The Daily Perc's primary desire will be to listen to its customers to ascertain what they are looking for
most, and provide it.

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Market Analysis Summary

The Daily Perc will focus on two markets:

1. The Daily Commuter - someone traveling to or from work, out shopping, delivering goods or
services, or just out for a drive.
2. The Captive Consumer - someone who is in a restricted environment that does not allow
convenient departure and return while searching for refreshments, or where refreshments stands
are an integral part of the environment.
4.1 Market Segmentation

The Daily Perc will focus on two different market segments: Commuters and Captive Consumers. To
access both of these markets, TDP has two different delivery systems. For the commuters, TDP has the
Drive-thru coffee house. For the captive consumer, TDP has the Mobile Cafe.

Commuters are defined as any one or more individuals in a motorized vehicle traveling from point "A" to
point "B." The Daily Perc's greatest concentration will be on commuters heading to or from work, or those
out on their lunch break.

Captive Consumers would include those who are tethered to a campus environment, or in a restricted
entry environment that does not allow free movement to and from. Examples would include high school
and college campuses, where there is limited time between classes, and corporate campuses where the
same time constraints are involved, but regarding meetings and project deadlines, and special events--
such as carnivals, fairs or festivals--where there is an admission price to enter the gate, but exiting would
mean another admission fee, or where refreshments are an integral part of the festivities.

The following chart and table reflect the potential numbers of venues available for the Mobile Cafes and
what growth could be expected in those markets over the next five years. For a conservative estimate of
the number of Captive Consumers this represents, multiply the total number of venues in the year by
1,000. As an example, in the first year, The Daily Perc is showing that there are a total of 2,582 venues at
which we might position a Mobile Cafe. That would equate to a Captive Consumer potential of 2,582,000.

Similarly, there are well over 2,500,000 commuters in the metropolitan area, as well as visitors,
vacationers, and others. It can also be assumed that these commuters do not make only one purchase in
a day, but in many cases, two and even three beverage purchases.

The chart reflects college and high school campuses, special events, hospital campuses, and various
charitable organizations. A segment that is not reflected in the chart (since it would skew the chart so
greatly) is the number of corporate campuses in the metropolitan area. There are over 1,700 corporate
facilities that house more than 500 employees, giving us an additional 1,700,000 prospective customers,
or total of 2,582 locations at which we could place a Mobile Cafe.

Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Public High School

1% 80 81 82 83 84 1.23%
Campuses

Private High Schools 0% 88 88 88 88 88 0.00%

College Campuses 0% 77 77 77 77 77 0.00%

Golf Courses 0% 99 99 99 99 99 0.00%

Special Events 3% 43 44 45 46 47 2.25%

Non-Profits w/$500K+
2% 362 369 376 384 392 2.01%
Budgets

Hospital Campuses 0% 100 100 100 100 100 0.00%

Total 1.10% 849 858 867 877 887 1.10%

4.2 Target Market Segment Strategy

TDP's target market is the mobile individual who has more money than time, and excellent taste in a
choice of beverage, but no time to linger in a cafe. By locating the Drive-Thrus in high traffic/high visibility
areas, this unique--and abundant--consumer will seek The Daily Perc out and become a regular guest.

To penetrate the target market for the Mobile Cafes, these units will do what they were designed to do.
The Daily Perc will take the cafe to the customer! By using the community support program TDP is
instituting, arrangements will be made to visit a high school, college campus, or a corporate campus once
or twice a month (Even visit these facilities for special games, tournaments, recruiting events, or
corporate open houses). And, for every cup or baked good sold, a portion is returned to the high school or
college. It becomes a tremendous, painless way for the institution to gain a financial reward while
providing a pleasant and fulfilling benefit to their students or employees.

4.2.1 Market Trends

Nearly twenty years ago, a trend towards more unique coffees began to develop in the U.S. There had
always been specialty coffee stores, such as Gloria Jeans and others, but people began to buy espresso
machines for their homes and offices, and people began to have coffee tastings. Then espresso bars
began to appear and, inevitably, along came Starbucks ... the quintessential bastion of the upwardly
mobile professional who wanted to take control over how their beverage would taste and smell.

However, we have also become more rushed for time during that same period. Those same consumers
who helped push Starbucks to $2.2 billion in global sales are now rushing kids to soccer and basketball
games, running to the grocery and trying to get to work on time and back home in time for dinner ... or to
get to the next soccer game. Yet, they still have the desire for that refreshing, specially blended coffee
each morning.

Lately, we've seen the introduction of beverage dispensers at convenience stores that spit out overly-
sweet, poorly blended cappuccinos in flavors such as french vanilla or mocha, and consumers are paying
as much as $3.00 for these sub-standard beverages.

The market is primed for the introduction of a company that offers a superior quality, specially blended
product in a convenient, drive-thru environment at a price that is competitive to the national coffee
houses.

4.2.2 Market Growth

According to industry statistics, the consumption of coffee and flavored coffee products is growing rapidly.
The largest national brand for retail coffee outlets achieved $2.2 billion in sales in 2000 with 3,000 retail
outlets. They are anticipating opening 7,000 more outlets in the next five years and increasing revenues
to over $6 billion.

That is the coffee consumer market. The segment of that market we are targeting is the commuter and
that number is increasing. In the metropolitan area, as with many metropolitan areas in the country, there
is a migration away from the cities.
It is estimated that there are well over 2.5 million commuters driving to and from work each day in our
market. Statistically, at least 50% of those are coffee drinkers. That gives The Daily Perc a significant
daily target for its products. Those numbers are growing by 6% per year.

4.2.3 Market Needs

The United States is a very mobile society. With the introduction of the automobile, we became a nation
that thrived on the further freedom of going where we wanted when we wanted. It has only gotten worse.
There are over 250 million men, women and children in America, half of whom are too old, too young, or
too poor to drive an automobile. Yet, there are more licensed vehicles in the country than people. And
that mobility has created a unique need in our society.

Our market is made up of consumers who have busy schedules, a desire for quality, and disposable
income. As much as they would like the opportunity to sit in an upscale coffee house and sip a uniquely
blended coffee beverage and read the morning paper, they don't have the time. However, they still have
the desire for the uniquely blended beverage as they hurry through their busy lives.

4.3 Industry Analysis

The coffee industry has grown by tremendous amounts in the U.S. over the past five years. Starbucks,
the national leader, had revenues in fiscal 2000 of $2.2 billion. That is an increase of 32% over Fiscal
1999. Starbucks plans to increase revenues to over $6.6 billion from 10,000 retail outlets by 2005.

Even general coffee sales have increased with international brands such as Folgers, Maxwell House, and
Safari coffee reporting higher sales and greater profits.

America is definitely a coffee drinking country and the coffee industry is reaping the rewards.

4.3.1 Distribution Patterns

The cafe experience comes from the Italian origins of espresso. The customer comes in to a beautifully
decorated facility, surrounded by wondrous aromas and finds himself involved in a sensory experience
that, more often than not, masks an average product at a premium price. However, the proliferation of
cafes in the United States proves the viability of the market. It is a duplication of the same delivery
process as currently exists in Europe.

4.3.2 Competition and Buying Patterns

There are four general competitors in The Daily Perc's drive-thru market. They are the national specialty
beverage chains, such as Starbucks and Panera, local coffee houses--or cafes--with an established
clientele and a quality product, fast food restaurants, and convenience stores. There is a dramatic
distinction among the patrons of each of these outlets.

Patrons to a Starbucks, or to one of the local cafes, are looking for the "experience" of the coffee house.
They want the ability to "design" their coffee, smell the fresh pastry, listen to the soothing Italian music,
and read the local paper or visit with an acquaintance. It is a relaxing, slow paced environment.

Patrons of the fast food restaurants or the convenience stores are just the opposite. They have no time
for idle chatter and are willing to over-pay for whatever beverage the machine can spit out, as long as it's
quick. They pay for their gas and they are back on the road to work. Although they have the desire and
good taste to know good from bad, time is more valuable to them.
Competitors to the Mobile Cafes on campuses would include fast food restaurants--assuming they are
close enough to the consumer that they can get there and back in the minimal allotted time, vending
machines, and company or school cafeterias. The consumers in this environment are looking for a quick,
convenient, fairly priced, quality refreshment that will allow them to purchase the product and return to
work, class, or other activity.

Competitors to the Mobile Cafes at events such as festivals and fairs would include all the other vendors
who are licensed to sell refreshments. Attendees to such events expect to pay a premium price for a
quality product.

4.3.3 Main Competitors

When measuring head-to-head, direct competitors, we have found that there are none in the metropolitan
area. The Daily Perc will be the first double-sided, drive-thru coffee house in the metropolitan area.
However, there is still significant competition from traditional coffee houses and other retailers.

National Chains:
Starbucks, the national leader, had revenues in fiscal year 2000 of $2.2 billion. That is an increase of 32%
over fiscal year 1999. Starbucks plans to increase revenues to over $6.6 billion from 10,000 retail outlets
by 2005.

Panera had revenues of $151 million from corporate owned stores and $350 million from franchised
locations in fiscal year 2000. This fiscal year revenue was an increase in 28.9% on a per store basis
versus fiscal year 1999.

The Daily Perc believes it has a significant competitive advantage over these chains because of the
following benefits:

 Drive-thru Service
 More Substantial Customer Service
 Community Benefit
 Mobile Cafes
 Selection
 Higher Product Quality
Local Cafes:
The toughest competitor for The Daily Perc is the established locally owned cafe. TDP knows the quality
and pride that the local cafe has in the product purchase by their customers. Any local cafe has a
customer base that is dedicated and highly educated. The quality of beverages served at an established
cafe will surpass any of the regional or national chains.

The competitive edge The Daily Perc has on the local cafes is based on the attributes of:

 Drive-thru Service
 Supply Discounts
 Mobile Cafe
 Consistent Menu
 Community Benefit
 Quality Product
Drive-thru Coffee Houses:
There is not a drive-thru specialty beverage retailer with significant market presence in the central United
States. The only company with similar depth to that of The Daily Perc is Quikava, a wholly owned
subsidiary of Chock Full 'o Nuts. However, Quikava has limited its corporate footprint to the East Coast
and the Great Lakes Region.

In the drive-thru specialty beverage market, The Daily Perc has a competitive edge over the smaller
retailers, and even Quikava, due to:

 Mobile Cafes
 Consistent Menu
 Community Benefit
 Quality Product
 Supply Discounts
 Valued Image
 Greater Product Selection
Fast Food and Convenience Stores:
These are two industries where The Daily Perc will experience a certain level of competition. The national
fast food chains and national convenience store chains already serve coffee, soda, and some breakfast
foods. The national fast food chains obviously know the benefits and value to customers of drive-thru.
TDP knows that within the specialty coffee and tea market, the quality of the products sold will be much
greater than what can currently be purchased at fast food and convenience stores. The addition of
domestic soda sales for these stores is a large part of revenue. TDP knows the quality of our products,
along with the addition of domestic soda and the ease of drive-thru, gives it a competitive edge over fast
food and convenience stores.
Other competition:
The Daily Perc knows that once it has entered the market and established a presence, others will try to
follow. However, TDP believes that the corporate missions and even the organizational design will be
imitated, but never duplicated. TDP will constantly evaluate its products, locations, service, and corporate
missions to ensure that it remains a leader in the specialty beverage industry.
4.3.4 Industry Participants

There is only one national Drive-thru coffee franchise operation in the U.S. with any legs, and that is a
subsidiary of Chock Full 'o Nuts called Quikava. Quikava operates predominantly on the East Coast and
in the Upper Great Lakes. The East and West coasts, and even some Mountain and Midwest states, have
smaller local drive-thru chains such as Caffino, Java Espress, Crane Coffee, Java Drive, Sunrise Coffee,
and Caffe Diva. However, other players in the premium coffee service industry would include Starbucks,
Gloria Jean's, Caribou Coffee, Panera and locally owned and operated coffee shops or "cafes."

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Strategy and Implementation Summary

The Daily Perc will penetrate the commuter and captive consumer markets by deploying Drive-thru
facilities and Mobile Cafes in the most logical and accessible locations. The Drive-thrus are designed to
handle two-sided traffic and dispense customer-designed, specially ordered cups of specialty beverages
in less time than required for a visit to the locally owned cafe or one of the national chains.

The Daily Perc has identified its market as busy, mobile people whose time is already at a premium, but
desire a refreshing, high quality beverage or baked item while commuting to or from work or school.
In addition to providing a quality product and an extensive menu of delicious items, to ensure customer
awareness and loyalty, as well as positive public and media support, The Daily Perc could be donating up
to 7.5% of revenue from each cup sold in individual Drive-thrus to the charities of the customers' choice.

5.1 Strategy Pyramid

The Daily Perc's strategy is to show people that TDP has an excellent product, convenient accessibility,
and with a community benefit. To execute on this strategy, TDP is placing the Drive-thrus and Mobile
Cafes at easily accessible locations throughout the metropolitan area. TDP is pricing its product
competitively and training the production staff to be among the best Baristas in the country. Then, through
coupons and display ads at the locations, TDP will involve the customers in community support efforts by
explaining that a portion of their purchase price will be donated to a charity of their choosing.

In so doing, TDP has:

1. Provided a customer with a quality product at a competitive price.

2. Provided the customer with a more convenient method for obtaining their desired product.
3. Demonstrated how TDP appreciates their loyalty and patronage by donating money to their
personal cause.
5.2 Value Proposition

The Drive-thru facilities provide a substantial value proposition in that the customer does not have to find
a parking place, exit the vehicle, stand in line to order, wait for the beverages ahead of him to be
produced, pay a premium price for average product, find a place to sit, clean up the previous patron's
mess, then enjoy their coffee ... assuming they have sufficient time to linger over the cup.

The Daily Perc concept is that the customer drives up, places the order, receives a high quality product at
a competitive price, and drives away, having wasted little time in the process.

The Daily Perc is also providing a significant community value to patronizing TDP. For every purchase a
customer makes from us, TDP will donate up to 7.5% of the sale to the local charity selected by the
customer.

5.3 Competitive Edge

The Daily Perc's competitive edge is simple. TDP provides a high quality product at a competitive price in
a Drive-thru environment that saves time.

5.4 Marketing Strategy

First and foremost, The Daily Perc will be placing its Drive-thru facilities in locations of very high visibility
and great ease of access. They will be located on high traffic commuter routes and close to shopping
facilities in order to catch customers going to or from work, or while they are out for lunch, or on a
shopping expedition. The Drive-thrus are very unique and eye-catching, which will be a branding feature
of its own.

The Daily Perc will be implementing a low cost advertising/promotion campaign which could involve drive-
time radio, but not much more.

The Daily Perc will rely on building relationships with schools, charities and corporations to provide
significant free publicity because of its community support program. By giving charitable contributions to
these institutions, they will get the word out to their students/faculty/employees/partners about TDP. Word
of mouth has always proven to be the greatest advertising program a company can instill. In addition, the
media will be more than willing to promote the charitable aspects of TDP and provide the opportunity for
more exposure every time TDP writes a check to another organization.

5.4.1 Promotion Strategy

The long-range goal is to gain enough visibility to leverage the product line into other regions and
generate inquiries from potential inventors. To do that, The Daily Perc needs:

 Public relations services at $1,000 per month for the next year intended to generate awareness of
editors and product information insertions, reviews, etc. It is anticipated that the school fundraising
program will generate a fair amount of publicity on its own and will, perhaps, minimize--or even
eliminate--the need for a publicist.

 Advertising at $1,000 per month concentrating on drive time radio. The Daily Perc will experiment
with different stations, keeping careful track of results. As with the school fundraising program, TDP
expects the facilities and signage to be a substantial portion of our advertising. However, in the
start-up phase, TDP needs to let people know where to look for the facilities.
5.4.2 Distribution Strategy

The Daily Perc will locate Drive-thru facilities in high traffic areas of the city where it knows working
commuters will be passing.

The Daily Perc will also make arrangements for the Mobile Cafes to be at as many schools, businesses,
and events as possible every year, so that new customers, those who come in from areas where TDP
may not have a Drive-thru facility, can be reached and those who didn't have the time to stop off that
morning at their favorite Daily Perc.

5.4.3 Marketing Programs

Distinctive Logo:
"Papo" is a very happy and conspicuous sun. The sun is one of infinite mental pictures. The sun touches
every human being every day. Obviously, TDP wants to touch every customer every day. That is why the
use of the sun lends itself to being the corporate identifier. Papo is already an awarding winning logo.
Papo won in the New Artist Category of the 2001 Not Just Another Art Director's Club (NJAADC).
Distinctive Buildings:
TDP is using diner style buildings for its Drive-thru facilities. TDP has worked closely with the
manufacturer to make the building distinctive, so that it is easy to recognize, and functional.
The Fund-raising and Catering Trailer:
The Mobile Cafe will be a key marketing tool. The similarities between the Mobile Cafes and the Drive-
thru facilities will be unmistakable. The exposure these units will provide cannot be measured in dollars.
The Daily Perc will negotiate visits with the Mobile Units at schools, hospitals, corporations and other
entities. In the case of schools and certain corporations, a portion of all sales made while on their campus
could go to a program of their choice. The organization would promote its presence to their constituency
and encourage them to frequent the Drive-thru establishments so that their charitable cause is nurtured.
This will give those patrons an opportunity to taste the products and become a regular customer of the
Drive-thru facilities. The Mobile Cafes will also be appearing at community events such as fairs, festivals,
and other charitable events.
Advertising and Promotion:
In the first year, The Daily Perc plans to spend moderately on advertising and promotion, with the
program beginning in September, after the opening of the first Drive-thru. This would not be considered a
serious advertising budget for any business, but TDP feels the exposure will come from publicity and
promotion, so most of the funds will be spent on a good publicist who will get the word out about the
charitable contribution program and how it works in conjunction with the website. TDP also believes that
word-of-mouth advertising and free beverage coupons will be better ways to drive people to the first and
second locations.

In the second year, The Daily Perc is increasing the budget, since it will need to promote several
locations, with particular emphasis on announcing these openings and all the other locations. TDP will
continue to use publicity as a key component of the marketing program, since TDP could be contributing
over $70,000 to local schools and charities.

In the third year, The Daily Perc will double its advertising and promotion budget, with the majority of the
advertising budget being spent on drive time radio. As in the previous years, TDP will get substantial
publicity from the donation of nearly $200,000 to local schools and charities.

5.4.4 Positioning Statement

For busy, mobile people whose time is already at a premium, but desire a refreshing, high quality
beverage or baked item while commuting to or from work or school.

5.4.5 Pricing Strategy

The Daily Perc pricing will be comparable to the competition, but with the value-added feature of
immediate, drive-thru service and convenience.

5.5 Sales Strategy

There will be several sales strategies put into place, including posting specials on high-profit items at the
drive-up window. The Baristas will also hand out free drink coupons to those who have purchased a
certain number of cups or something similar. TDP will also develop window sales techniques such as the
Baristas asking if the customer would like a fresh-baked item with their coffee.

5.5.1 Sales Forecast

In the first year, The Daily Perc anticipates having two Drive-thru locations in operation. The first location
will open in the third month of this plan and be fully operational beginning on the 1st day of September.
The second Drive-thru will open six months later. TDP is building in a certain amount of ramp-up for each
facility while commuters become familiar with its presence. The Drive-thrus will generate 288,000 tickets
in the first year of operation.

In the second year, The Daily Perc will add two more Drive-thrus and, in the third year, TDP will add an
additional nine Drive-thru facilities. The addition of these facilities will increase the revenue from Drive-
thrus with a total of over 1,000,000 tickets in the second year and 2,675,000 tickets in the third.

In addition to the Drive-thrus, The Daily Perc will deploy one mobile unit in the fourth quarter of the first
fiscal year. TDP expects  this mobile unit to generate 10,000 tickets each, at an average ticket price of
$2.45.
In the second quarter of the second fiscal year, The Daily Perc will deploy a second and third mobile unit.
TDP expects all three mobile units to generate 150,000 tickets in the second year. In the third fiscal year,
with an additional fourth mobile unit deployed, TDP expects to see 264,000 mobile unit tickets.

The Daily Perc is also showing revenue from the commerce portion of our website, where it will sell "The
Daily Perc" t-shirts, sweatshirts, insulated coffee mugs, pre-packaged coffee beans, and other premium
items. TDP is not expecting this to be a significant profit center, but it is an integral part of the marketing
plan -- as a function of developing our brand and building product awareness. TDP expects revenues
from this portion, to begin in the second fiscal year, to reach as much as $3,000 per month in the third
fiscal year.

Total first year unit sales should reach 298,402. The second year will see unit sales increase to
1,177,400. The third year, with the addition of such a significant number of outlets, we will see unit sales
increase to 2,992,000.
Sales Forecast

Year 1 Year 2 Year 3

Unit Sales

Drive-thru #1 202,913 300,000 325,000

Drive-thru #2 85,489 300,000 325,000

Drive-thru #3 0 275,000 325,000

Drive-thru #4 0 150,000 325,000

Drive-thru #5 0 0 300,000

Drive-thrus #6 & #7 0 0 450,000

Drive-thrus #8, #9, & #10 0 0 450,000

Drive-thrus #11, #12, & #13 0 0 225,000

Mobile Cafe #1 10,000 60,000 66,000

Mobile Cafe #2 0 45,000 66,000

Mobile Cafe #3 0 45,000 66,000

Mobile Cafe #4 0 0 66,000

Website Sales/Premium Items 0 2,400 3,000

Total Unit Sales 298,402 1,177,400 2,992,000

Unit Prices Year 1 Year 2 Year 3

Drive-thru #1 $1.85 $1.90 $1.95

Drive-thru #2 $1.85 $1.90 $1.95

Drive-thru #3 $0.00 $1.90 $1.95

Drive-thru #4 $0.00 $1.90 $1.95

Drive-thru #5 $0.00 $1.90 $1.95

Drive-thrus #6 & #7 $0.00 $1.90 $1.95

Drive-thrus #8, #9, & #10 $0.00 $1.90 $1.95

Drive-thrus #11, #12, & #13 $0.00 $1.90 $1.95

Mobile Cafe #1 $2.45 $2.50 $2.55

Mobile Cafe #2 $0.00 $2.50 $2.55

Mobile Cafe #3 $0.00 $2.50 $2.55

Mobile Cafe #4 $0.00 $2.50 $2.55

Website Sales/Premium Items $0.00 $11.00 $12.00

Sales

Drive-thru #1 $375,389 $570,000 $633,750

Drive-thru #2 $158,154 $570,000 $633,750

Drive-thru #3 $0 $522,500 $633,750

Drive-thru #4 $0 $285,000 $633,750

Drive-thru #5 $0 $0 $585,000

Drive-thrus #6 & #7 $0 $0 $877,500

Drive-thrus #8, #9, & #10 $0 $0 $877,500

Drive-thrus #11, #12, & #13 $0 $0 $438,750

Mobile Cafe #1 $24,500 $150,000 $168,300

Mobile Cafe #2 $0 $112,500 $168,300

Mobile Cafe #3 $0 $112,500 $168,300

Mobile Cafe #4 $0 $0 $168,300

Website Sales/Premium Items $0 $26,400 $36,000

Total Sales $558,043 $2,348,900 $6,022,950

Direct Unit Costs Year 1 Year 2 Year 3

Drive-thru #1 $0.64 $0.61 $0.59

Drive-thru #2 $0.64 $0.61 $0.59

Drive-thru #3 $0.00 $0.61 $0.59

Drive-thru #4 $0.00 $0.61 $0.59

Drive-thru #5 $0.00 $0.61 $0.59

Drive-thrus #6 & #7 $0.00 $0.61 $0.59

Drive-thrus #8, #9, & #10 $0.00 $0.61 $0.59

Drive-thrus #11, #12, & #13 $0.00 $0.61 $0.59

Mobile Cafe #1 $0.64 $0.61 $0.59

Mobile Cafe #2 $0.00 $0.61 $0.59

Mobile Cafe #3 $0.00 $0.61 $0.59

Mobile Cafe #4 $0.00 $0.61 $0.59

Website Sales/Premium Items $0.00 $6.50 $6.50

Direct Cost of Sales

Drive-thru #1 $129,864 $183,000 $191,750

Drive-thru #2 $54,713 $183,000 $191,750

Drive-thru #3 $0 $167,750 $191,750

Drive-thru #4 $0 $91,500 $191,750

Drive-thru #5 $0 $0 $177,000

Drive-thrus #6 & #7 $0 $0 $265,500

Drive-thrus #8, #9, & #10 $0 $0 $265,500

Drive-thrus #11, #12, & #13 $0 $0 $132,750

Mobile Cafe #1 $6,400 $36,600 $38,940

Mobile Cafe #2 $0 $27,450 $38,940

Mobile Cafe #3 $0 $27,450 $38,940

Mobile Cafe #4 $0 $0 $38,940

Website Sales/Premium Items $0 $15,600 $19,500

Subtotal Direct Cost of Sales $190,977 $732,350 $1,783,010

5.5.2 Sales Programs

Corporate Tasting Events - TDP plans to host tasting events for customers on a quarterly basis. Each
quarter, at the introduction of each season, TDP will be adjusting its menu to reflect the changes in the
flavors served.
Drink Coupons - At fundraising events for schools and corporate events, we will be giving away drink
coupons as door prizes or awards. This encourages the person to come in for their free beverage and
bring a friend or buy a baked item or a package of our premium coffee. The Drive Thru units will also be
distributing coupons for special menu items or new product introductions.
Chamber of Commerce and Professional Memberships - Because of the need to sell the Mobile Cafe
services, TDP will be an active participant in the Regional Chamber, local Chambers of Commerce, Food
Service Associations, and Specialty Beverage Associations. The exposure and education that these
organizations provide is outstanding, but equally important are the contacts and opportunities made
available for deploying a Mobile Cafe--or even two--at a special event.
5.6 Strategic Alliances

The Daily Perc has and will continue to depend heavily on our alliance with PJ's Coffees, as well as our
alliances with the Mobile Cafe and Drive-thru facility manufacturers and consumable products providers.
However, we will always be looking for better quality products, more favorable pricing, or more timely
delivery from other potential alliances.

We also consider the schools, non-profit organizations, and even corporations who host one of our Mobile
Cafes as a strategic alliances, since they are providing exposure to our products and we are providing
them a financial benefit.
5.7 Milestones

The Milestone table reflects critical dates for occupying headquarters, launching the first Drive-thru and
subsequent Drive-thrus, as well as deployment of the mobile units. The Daily Perc also defines our break-
even month, our website launch and subsequent visitor interaction function, and other key markers that
will help us measure our success in time and accomplishment.

Milestones

Milestone Start Date End Date Budget Manager Department

Light Website 6/1/2001 8/15/2001 $5,600 COO Mktg.

Open First Drive-thru 7/15/2001 8/31/2001 $105,400 COO Admin.

First Break-even Month 12/1/2001 12/31/2001 $0 COO Finance

Open Second Drive-thru 12/15/2001 2/1/2002 $105,400 COO Admin.

Receive First Mobile Unit 3/1/2002 3/30/2002 $86,450 COO Admin.

Launch Website Voting 5/1/2002 6/1/2002 $12,500 COO Mktg.

Open Third Drive-thru 4/15/2002 6/1/2002 $105,400 COO Admin.

Receive Second and Third

7/15/2002 9/1/2002 $172,900 COO Admin.
Mobile Units

Open Fourth Drive-thru 12/15/2002 2/1/2003 $105,400 COO Admin.

Install Point-of-Sale System 12/1/2002 2/1/2003 $21,000 CIO MIS

Occupy Headquarters 4/1/2003 5/15/2003 $45,000 COO Admin.

Open Fifth Drive-thru 4/15/2003 6/1/2003 $105,400 COO Admin.

Receive Fourth Mobile Unit 4/15/2003 6/1/2003 $86,450 Equip. Admin.

Open Drive-thrus 6 and 7 7/15/2003 9/15/2003 $210,800 COO/Dir. Mgnt.

Open Drive-thrus 8, 9 and

10/15/2003 12/15/2003 $316,200 COO/Dir. Mgnt.
10

Open Drive-thrus 11, 12,

1/15/2004 3/1/2004 $316,200 COO Admin.
and 13

Expand to Kansas City 1/15/2004 6/1/2004 $176,943 COO Mgnt.

Open First Franchise 10/31/2003 9/1/2004 $45,000 CFO Finance

Initiate Exit Strategy 10/1/2004 1/1/2005 $100,000 CFO Mgnt.

Totals $2,122,043

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Management Summary
The Daily Perc is a relatively flat organization. Overhead for management will be kept to a minimum and
all senior managers will be "hands-on" workers. There is no intention of having a top-heavy organization
that drains profits and complicates decisions.

At the zenith of this three-year plan, there will be four "Executive" positions: chief operating officer, chief
financial officer, chief information officer, and director of marketing. There will be other mid-management
positions, such as district managers for every four Drive-thrus, and a facilities manager to oversee the
maintenance and stocking of the Mobile Cafes, as well as overseeing the maintenance and replacement
of equipment in the Drive-thru facilities.

6.1 Management Team

The Daily Perc has selected Mr. Barton Fisher to perform the duties of chief operating officer. Bart has a
highly entrepreneurial spirit and has already started a company from scratch (NetCom Services, Inc.) that
ran in the black within three months of inception, and paid off all initial debt within six months. Upon
leaving NSI in April 2001, the company had again paid off all debt and was running a profit monthly.
Combine his experience, leadership, and desire with three years of research in speciality drinks and
drive-thru service, and TDP knows that Bart is the individual who will get the company out of the gate and
up to full speed for a long time to come.

Ms. Mary Jamison has been selected to fulfill the position of bookkeeper and office manager. Mary has
been the business administrator of Jones International, Inc. for the past four years. Jones is a $4 million
company that retails vitamins and other betterment products. Over those four years, Mary has written
numerous corporate policies and directed the financial reporting and reconciliation. The Daily Perc
considers Mary to be a great addition to the team when she becomes available in November of 2001.
Until that time, she will be working with Mr. Fisher on a part-time basis to help establish the corporate
accounts and policies.
Mr. Tony Guy has been selected to perform the duties of corporate events coordinator on a part time
basis. Mr. Guy has over five years in the business-to-business sales realm. Last year he was responsible
for over $250,000 in sales of promotional material to corporate and educational clients.

Mr. Chuck McNulty has been selected to fulfill the position of warehouse/trailer manager. Chuck has been
working for Nabisco, Inc. as a service representative for over ten years. His experience in account
services, merchandising, and inventory control is a welcome addition to The Daily Perc team. Chuck will
use his knowledge in conjunction with the rest of the team to establish inventory and warehouse policies.
The warehouse manager is responsible for inventory of all products sold by The Daily Perc. Some
merchandising experience is a welcome addition. Training in the First In First Out (FIFO) style of
inventory control is a requirement. Also, knowledge of ergonomics and health issues would be important.
Chuck's domain will be the headquarters, the trailers, and the drive-thrus--ensuring that minimum and
maximum inventories are maintained. Working with the mobile and drive-thru Baristas will be integral to
his task as well.

6.2 Management Team Gaps

The Daily Perc knows that it is going to require several quality management team members over the next
three years, beginning with a district manager for every four Drive-thrus. This person will oversee the
quality of product, the training of the Baristas, the inventory management, and customer satisfaction.
Ideally, as The Daily Perc grows, it will be able to promote from within for this position. This individual will
be responsible for the operation of up to four drive-thrus under his/her management. They will be required
to visit between locations and possibly even join administrative personnel on training or marketing travel.
Clearly, as the need arises, these individuals will ideally be selected from the Mobile Cafe or Drive-Thru
team.

By the beginning of the third year, The Daily Perc will hire three key senior managers. They are: a chief
financial officer, a chief information officer, and a director of marketing. The role of each of these
individuals will be discussed in subsequent sections of this plan.

6.3 Organizational Structure

The organization will be a relatively flat one, since the majority of personnel are involved in production
and there will be a relatively low headcount in management.

There are three functioning groups within the company: Production, Sales and Marketing, and General
and Administrative. For purposes of this plan--and to show the details of adding senior level
management--The Daily Perc has broken management down as a separate segment, but it is an integral
part of the General and Administrative function.

Production involves the Baristas, or Customer Service Specialists, who will be manning the Drive-thrus
and Mobile Cafes and blending the beverages for the customers. Sales and Marketing will handle the
promotion and scheduling of the Mobile Cafes, as well as the promotion of the Drive-thrus and the
Community Contribution program. General and Administrative manage the facilities, equipment,
inventory, payroll, and other basic, operational processes.

6.4 Personnel Plan

The Daily Perc expects the first year to be rather lean, since there will only be two locations and one
mobile unit--none of which will be deployed for the entire year. The total headcount for the first year,
including management, administrative support, and customer service (production), will be 15, with a
payroll and payroll burden total expenditure as shown in the following table and in the monthly
breakdowns appendices.

The second year, with the addition of two Drive-thrus and two mobile units, The Daily Perc will add
customer service personnel, as well as a district manager and some additional support staff at
headquarters, including an Inventory Clerk, Equipment Technician, and administrative support. The
headcount will increase by nearly 100% in the second year to 29, with a proportionale increase in payroll
of and payroll burden.

The third year will see the most dramatic growth in headcount, due to the addition of nine Drive-thrus and
another mobile unit. In the third year, there will also be an increase of 180% over the previous year. Total
payroll and payroll burden for the third year will reflect this, as well as the significant increase in the senior
management team, with the addition of a chief financial officer, a chief information officer, and a director
of marketing. There will also be a second and third district manager, and a corporate events sales
executive. Total personnel will reach 81.

The chief financial officer will be brought on to oversee the increase in numbers of retail outlets and to
manage a dramatically more detailed P&L statement and to manage the Balance Sheet. The chief
information officer will be brought in to help us with the deployment of a Point-of-Sale computerized cash
register system that will make tracking and managing receipts and charitable contributions more robust.
Ideally, this individual will have a large amount of point of sale and Internet experience. Specifically, how
to tie in POS systems to the Internet and inventory controls. Also, knowledge in establishing technology
guidelines for the company and franchisees in the future. This individual will also be added in fiscal year
three.

The director of marketing will be charged with managing the relationships with advertising agencies,
public relations firms, the media, and our website.

Personnel Plan

Year 1 Year 2 Year 3

Production Personnel

Drive-thru Team $135,474 $439,250 $1,098,650

Mobile Cafe Team $9,400 $172,800 $225,600

Equipment Care Specialist (Headquarters) $0 $22,000 $77,000

Other $0 $12,000 $24,000

Subtotal $144,874 $646,050 $1,425,250

Sales and Marketing Personnel

District Manager (Four Drive-thrus) $0 $22,000 $77,000

Corporate Events Sales Exec $0 $0 $36,000

Director of Marketing $0 $0 $72,000

Other $0 $0 $0
Subtotal $0 $22,000 $185,000

General and Administrative Personnel

Bookkeeper/Office Administrator $24,500 $46,000 $54,000

Warehouse/Site Manager $7,000 $42,000 $48,000

Inventory Clerk $0 $12,000 $42,000

Other $0 $6,000 $12,000

Subtotal $31,500 $106,000 $156,000

Other Personnel

Chief Operating Officer $66,000 $72,000 $78,000

Chief Financial Officer $0 $0 $96,000

Chief Information Officer $0 $0 $84,000

Other $0 $0 $0

Subtotal $66,000 $72,000 $258,000

Total People 15 29 81

Total Payroll $242,374 $846,050 $2,024,250

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Financial Plan
The Daily Perc's financial picture is quite promising. Since TDP is operating a cash business, the initial
cost is significantly less than many start-ups these days. The process is labor intensive and TDP
recognizes that a higher level of talent is required. The financial investment in its employees will be one of
the greatest differentiators between it and TDP's competition. For the purpose of this pro-forma plan, the
facilities and equipment are financed. These items are capital expenditures and will be available
for financing. There will be a minimum of inventory on hand so as to keep the product fresh and to take
advantage of price drops, when and if they should occur.

The Daily Perc anticipates the initial combination of investments and long-term financing to carry it without
the need for any additional equity or debt investment, beyond the purchase of equipment or facilities. This
will mean growing a bit more slowly than might be otherwise possible, but it will be a solid, financially
sound growth based on customer request and product demand.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following table.
The key underlying assumptions are:

 The Daily Perc assumes a slow-growth economy, without major recession.

 The Daily Perc assumes of course that there are no unforeseen changes in public health
perceptions of its general products.
 The Daily Perc assumes access to equity capital and financing sufficient to maintain its financial
plan as shown in the tables.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 9.00% 9.00% 9.00%

Tax Rate 0.00% 0.00% 0.00%

Other 0 0 0

7.2 Key Financial Indicators

The following chart shows changes in key financial indicators: sales, gross margin, operating expenses,
collection days, and inventory turnover. The growth in sales exceeds 250% each year. TDP expects to
keep gross margin above the 38% projected for the first year, but it doesn't anticipate anything higher
than 46%, since our payroll expenses will increase substantially as it grows into new areas and faces new
competition.

The projections for inventory turnover show that TDP will maintain a relatively stable amount of inventory
in its headquarters warehouse so that it has no less than two weeks of inventory on hand, but no more
than three weeks, in order to keep products fresh. The only time it would consider holding larger stores of
inventory is if there was some catastrophic event that could cause a dramatic rise in the price of its
coffees or teas.
7.3 Break-even Analysis

To arrive at the average monthly fixed costs, The Daily Perc calculated the fixed costs for the Drive-thru.
Using the average price per unit, less the average cost per unit, divided into the fixed costs of operation,
TDP concludes that we will need to sell at least the number of units shown in the following table and
chart to reach break-even each month.

Break-even Analysis

Monthly Units Break-even 15,817

Monthly Revenue Break-even $29,580

Assumptions:

Average Per-Unit Revenue $1.87

Average Per-Unit Variable Cost $0.64

Estimated Monthly Fixed Cost $19,457

7.4 Projected Profit and Loss

The Daily Perc is expecting some dramatic growth in the next three years, reaching healthy sales and
Gross Profit Margin by the end of the first year. Expenses during the first year will, however leave a Net
After-tax loss. This loss will provide TDP with a tax loss carry-forward for the second year.

Aside from production costs of 60%, which include actual production of product and commissions for
sales efforts, the single largest expenditures in the first year are in the general and administrative
(G&A) area, totaling 23% of sales. G&A includes expenses for rents, equipment leases, utilities, and the
payroll burden for all employees.
Sales increase by nearly 400% in the second year, due to the addition of two more Drive-thrus and two
more Mobile Cafes. Although operating expenses double in the second year, The Daily Perc will be able
to realize a Net After-tax profit. In that same year, TDP will make substantial charitable contributions.

The third year is when The Daily Perc has the opportunity to break into markets outside the metropolitan
area. TDP will see nine additional Drive-thru facilities open in the third year, which will drive sales,
increase in production costs, and help improve Gross Profit Margin. Several expenses take substantial
jumps this year--advertising increases and donations increase as well--and TDP will be adding several
key management team members. These increases, as well as those for increased equipment leases and
rents, raise our operating expenses, leaving a respectable Net After-tax profit. The single largest expense
sector in the third year, outside of production, is still G&A costs, but it is down from 23% in the first year
and 18.5% in the second year to just 15.02%.
Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $558,043 $2,348,900 $6,022,950

Direct Cost of Sales $190,977 $732,350 $1,783,010

Production Payroll $144,874 $646,050 $1,425,250

Sales Commissions $1,416 $35,234 $90,344

Total Cost of Sales $337,267 $1,413,634 $3,298,604

Gross Margin $220,776 $935,267 $2,724,346

Gross Margin % 39.56% 39.82% 45.23%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $0 $22,000 $185,000

Advertising/Promotion $18,000 $36,000 $72,000

Website $1,000 $15,000 $22,000

Travel $4,000 $7,500 $15,000

Donations $3,332 $70,467 $180,689

Total Sales and Marketing Expenses $26,332 $150,967 $474,689

Sales and Marketing % 4.72% 6.43% 7.88%

General and Administrative Expenses

General and Administrative Payroll $31,500 $106,000 $156,000

Sales and Marketing and Other Expenses $0 $0 $0

Depreciation $21,785 $92,910 $196,095

Leased Offices and Equipment $0 $6,000 $18,000

Utilities $9,640 $19,800 $41,100

Insurance $12,570 $32,620 $63,910

Rent $16,800 $50,400 $126,000

Payroll Taxes $36,356 $126,908 $303,638

Other General and Administrative Expenses $0 $0 $0

Total General and Administrative Expenses $128,651 $434,638 $904,743

General and Administrative % 23.05% 18.50% 15.02%

Other Expenses:

Other Payroll $66,000 $72,000 $258,000

Consultants $0 $0 $0

Legal/Accounting/Consultants $12,500 $24,000 $36,000

Total Other Expenses $78,500 $96,000 $294,000

Other % 14.07% 4.09% 4.88%

Total Operating Expenses $233,483 $681,605 $1,673,431

Profit Before Interest and Taxes ($12,707) $253,662 $1,050,915

EBITDA $9,078 $346,572 $1,247,010

Interest Expense $16,165 $36,639 $77,102

Taxes Incurred $0 $0 $0

Net Profit ($28,872) $217,023 $973,812

Net Profit/Sales -5.17% 9.24% 16.17%

7.5 Projected Cash Flow

Cash flow will have to be carefully monitored, as in any business, but The Daily Perc is also the
beneficiary of operating a cash business. After the initial investment and start-up costs are covered, the
business will become relatively self-sustaining. With the exception of seasonal dips, which TDP
has attempted to account for, through changes in the menu items.

Assuming an initial investment and financing, which would include operating capital, The Daily Perc
anticipates no cash flow shortfalls for the first year or beyond.  March and May are the greatest cash
drains, since TDP will be experiencing the cost of second drive thru and mobile unit start-up. Again, TDP
sees heavier than normal drains of cash in December and January, as there will be certain accounts
payable coming due.

Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $558,043 $2,348,900 $6,022,950

Subtotal Cash from Operations $558,043 $2,348,900 $6,022,950

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 $181,463 $253,970 $729,992

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 $739,506 $2,602,870 $6,752,942

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $242,374 $846,050 $2,024,250

Bill Payments $273,191 $1,236,069 $2,880,058

Subtotal Spent on Operations $515,565 $2,082,119 $4,904,308

Additional Cash Spent

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

Principal Repayment of Current Borrowing $1,500 $2,000 $5,000

Other Liabilities Principal Repayment $0 $0 $0

Long-term Liabilities Principal Repayment $26,469 $27,000 $50,000

Purchase Other Current Assets $0 $0 $0

Purchase Long-term Assets $191,850 $429,700 $1,356,993

Dividends $0 $0 $0

Subtotal Cash Spent $735,384 $2,540,819 $6,316,301

Net Cash Flow $4,122 $62,051 $436,641

Cash Balance $29,622 $91,674 $528,315

7.6 Projected Balance Sheet

The Daily Perc's projected balance sheet shows an increase in net worth in 2004, at which point it
expects to be making 11.96% after-tax profit on sales. With the present financial projections, TDP expects
to build a company with strong profit potential, and a solid balance sheet that will be asset heavy and
flush with cash at the end of the third year. The Daily Perc has no intention of paying out dividends before
the end of the third year, using the excess cash for continued growth.
Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets

Cash $29,622 $91,674 $528,315

Inventory $35,159 $134,826 $328,252

Other Current Assets $0 $0 $0

Total Current Assets $64,781 $226,499 $856,567

Long-term Assets

Long-term Assets $323,250 $752,950 $2,109,943

Accumulated Depreciation $21,785 $114,695 $310,790

Total Long-term Assets $301,465 $638,255 $1,799,153

Total Assets $366,246 $864,754 $2,655,720

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $49,724 $106,240 $248,402

Current Borrowing $7,500 $5,500 $500

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $57,224 $111,740 $248,902

Long-term Liabilities $286,394 $513,364 $1,193,356

Total Liabilities $343,618 $625,104 $1,442,258

Paid-in Capital $225,270 $225,270 $225,270

Retained Earnings ($173,770) ($202,642) $14,381

Earnings ($28,872) $217,023 $973,812

Total Capital $22,628 $239,651 $1,213,463

Total Liabilities and Capital $366,246 $864,754 $2,655,720

Net Worth $22,628 $239,651 $1,213,463

7.7 Business Ratios

Standard business ratios are included in the following table. The ratios show a plan for balanced, healthy
growth. The Daily Perc's position within the industry is typical for a heavy growth startup company.
Industry profile ratios based on the Standard Industrial Classification (SIC) code 5812, Eating Places, are
shown for comparison. Comparing the ratios in the third year with the industry, this pro-forma plan
appears to be within an acceptable difference margin.

TDP's return on net worth and net worth number differ from the Industry Profile due to the lack of
overhead when compared to a typical walk-in cafe. The Drive Thru and Mobile business model is lean
thus allowing for increase return ratio and providing a lower Net Worth.

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 320.92% 156.42% 7.60%

Percent of Total Assets

Inventory 9.60% 15.59% 12.36% 3.60%

Other Current Assets 0.00% 0.00% 0.00% 35.60%

Total Current Assets 17.69% 26.19% 32.25% 43.70%

Long-term Assets 82.31% 73.81% 67.75% 56.30%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 15.62% 12.92% 9.37% 32.70%

Long-term Liabilities 78.20% 59.37% 44.94% 28.50%

Total Liabilities 93.82% 72.29% 54.31% 61.20%

Net Worth 6.18% 27.71% 45.69% 38.80%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 39.56% 39.82% 45.23% 60.50%

Selling, General & Administrative Expenses 44.74% 30.63% 29.15% 39.80%

Advertising Expenses 3.23% 1.53% 1.20% 3.20%

Profit Before Interest and Taxes -2.28% 10.80% 17.45% 0.70%

Main Ratios

Current 1.13 2.03 3.44 0.98

Quick 0.52 0.82 2.12 0.65

Total Debt to Total Assets 93.82% 72.29% 54.31% 61.20%

Pre-tax Return on Net Worth -127.60% 90.56% 80.25% 1.70%

Pre-tax Return on Assets -7.88% 25.10% 36.67% 4.30%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -5.17% 9.24% 16.17% n.a

Return on Equity -127.60% 90.56% 80.25% n.a

Activity Ratios

Inventory Turnover 7.02 8.62 7.70 n.a

Accounts Payable Turnover 6.49 12.17 12.17 n.a

Payment Days 27 22 21 n.a

Total Asset Turnover 1.52 2.72 2.27 n.a

Debt Ratios

Debt to Net Worth 15.19 2.61 1.19 n.a

Current Liab. to Liab. 0.17 0.18 0.17 n.a

Liquidity Ratios

Net Working Capital $7,557 $114,760 $607,666 n.a

Interest Coverage -0.79 6.92 13.63 n.a

Additional Ratios

Assets to Sales 0.66 0.37 0.44 n.a

Current Debt/Total Assets 16% 13% 9% n.a

Acid Test 0.52 0.82 2.12 n.a

Sales/Net Worth 24.66 9.80 4.96 n.a

Dividend Payout 0.00 0.00 0.00 n.a

7.8 Exit Strategy

There are three scenarios for the investors and management to recover their investment--two with
significant returns on each dollar invested.

Scenario One:
The Daily Perc becomes extremely successful and has requests from other communities for Daily Perc
operations to be opened there. This opens the door for franchising opportunity. When one looks at the
wealth that has been created by the likes of McDonald's, Wendy's, Kentucky Fried Chicken, Burger King,
and Taco Bell, the value of franchising a great idea cannot be dismissed. However, developing a
franchise can be extremely costly, take years to develop, and be destroyed by one or two franchisees
who fail to deliver the consistency or value on which the founding company had built its reputation.
Scenario Two:
The Daily Perc chooses to become the Drive-thru version of Starbucks, obtaining several million dollars
through an initial public or private offering that would allow the company to open twenty to thirty facilities
per year in the region of the country between the mountain ranges, in both major and small metropolitan
communities. This is the preferred Exit Strategy of the Management Team. The danger in this is that
competitors would rise up and establish a foothold on a community before--or in the midst of--the arrival
of The Daily Perc, causing a potential for a drain on revenues and a dramatic increase in advertising
expenditures to maintain market share.  Knowing these risks--and planning for them--gives TDP the edge
needed to make this scenario work.
Scenario Three:
By the third year, the growth and community support for The Daily Perc will have made the news in more
than just the metropolitan area. It can be assumed that competitors, such as Starbucks or Quikava, will
have seen the press and realized the value proposition in The Daily Perc's business plan. This will make
TDP an attractive target for buyout. The company could be purchased by a much larger competitive
concern by the end of the third year.

Taking a conservative approach to valuation and estimating that The Daily Perc would be valued at $7.5
million, and assuming that all 250 units of ownership in TDP are distributed to investors, a cash purchase
of TDP would net each unit $30,000. With each unit selling at $4,250, that constitutes a Return on
Investment of 705% over the three years. However, any buyout will most likely involve a cash/stock
combination. A cash/stock buyout would be favorable, since the buying company would pay a higher price
and the transaction would not have such severe tax consequences to the sellers.

Conclusion:
Of the three scenarios, the management team prefers Scenario #2. The same numbers would relate to a
public or private offering as are used in Scenario #3, but to make an offering available, there would be a
dilution of shares that would provide additional shares for sale to the new investors.

Assuming the capital acquisition described in this plan is completed, there will be 250 units of the
company in the hands of investors, constituting 100% of the authorized and issued units. For purposes on
future fundraising, it will be necessary to authorize a stock split of, perhaps 5,000 to one, turning the
current 250 units into 1,250,000 units.

Using the balance sheet for the third year, which estimates Net Worth, Cash Balances and Earnings,
based on 13 Drive-thrus and four Mobile Cafes, it is not unrealistic to put a market value of $15 million to
$25 million on the company. At present, such companies are trading in multiples of 20 to 30 times
earnings, and it is simple mathematics to multiply the success of TDP by the number of commuter heavy
metropolitan areas in the United States.

With a corporate valuation of $7,500,000, each of the new units would have a market value of $6/unit. By
authorizing an additional 750,000 units, there would be a total of 2,000,000 units with a market value of
$3.75 per share. By offering the 750,000 shares at the price of $3.75 per unit, TDP would raise an
additional $2,812,500 in expansion capital, which would be sufficient to open locations in an
additional three to five cities.

Read more: http://www.bplans.com/coffee_kiosk_business_plan/financial_plan_fc.cfm#ixzz1FdW33bk7

Appendix

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

Unit Sales

Drive-thru #1 0% 0 0 0 17,500 23,047 24,199 22,989 23,047 24,199 22,989 23,047 21,895

Drive-thru #2 0% 0 0 0 0 0 0 0 0 17,500 23,047 21,895 23,047

Drive-thru #3 0% 0 0 0 0 0 0 0 0 0 0 0 0

Drive-thru #4 0% 0 0 0 0 0 0 0 0 0 0 0 0

Drive-thru #5 0% 0 0 0 0 0 0 0 0 0 0 0 0

Drive-thrus #6 & #7 0% 0 0 0 0 0 0 0 0 0 0 0 0

Drive-thrus #8, #9, & #10 0% 0 0 0 0 0 0 0 0 0 0 0 0

Drive-thrus #11, #12, &

0% 0 0 0 0 0 0 0 0 0 0 0 0
#13

Mobile Cafe #1 0% 0 0 0 0 0 0 0 0 0 0 5,000 5,000

Mobile Cafe #2 0% 0 0 0 0 0 0 0 0 0 0 0 0

Mobile Cafe #3 0% 0 0 0 0 0 0 0 0 0 0 0 0

Mobile Cafe #4 0% 0 0 0 0 0 0 0 0 0 0 0 0

Website Sales/Premium
0% 0 0 0 0 0 0 0 0 0 0 0 0
Items

Total Unit Sales 0 0 0 17,500 23,047 24,199 22,989 23,047 41,699 46,036 49,942 49,942

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

Drive-thru #1 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thru #2 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thru #3 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thru #4 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thru #5 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thrus #6 & #7 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thrus #8, #9, & #10 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85

Drive-thrus #11, #12, &

$1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85 $1.85
#13

Mobile Cafe #1 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45

Mobile Cafe #2 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45

Mobile Cafe #3 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45

Mobile Cafe #4 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45 $2.45

Website Sales/Premium
$10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00 $10.00
Items

Sales

Drive-thru #1 $0 $0 $0 $32,375 $42,637 $44,769 $42,530 $42,637 $44,769 $42,530 $42,637 $40,505

Drive-thru #2 $0 $0 $0 $0 $0 $0 $0 $0 $32,375 $42,637 $40,505 $42,637

Drive-thru #3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thru #4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Drive-thru #5 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #6 & #7 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #8, #9, & #10 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #11, #12, &

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
#13

Mobile Cafe #1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $12,250 $12,250

Mobile Cafe #2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Mobile Cafe #3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Mobile Cafe #4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Website Sales/Premium
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Items

Total Sales $0 $0 $0 $32,375 $42,637 $44,769 $42,530 $42,637 $77,144 $85,167 $95,392 $95,392

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

Drive-thru #1 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thru #2 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thru #3 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thru #4 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thru #5 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thrus #6 & #7 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thrus #8, #9, & #10 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Drive-thrus #11, #12, &

0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64
#13

Mobile Cafe #1 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Mobile Cafe #2 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Mobile Cafe #3 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Mobile Cafe #4 0.00% $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64 $0.64

Website Sales/Premium
0.00% $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50 $6.50
Items

Direct Cost of Sales

Drive-thru #1 $0 $0 $0 $11,200 $14,750 $15,488 $14,713 $14,750 $15,488 $14,713 $14,750 $14,013

Drive-thru #2 $0 $0 $0 $0 $0 $0 $0 $0 $11,200 $14,750 $14,013 $14,750

Drive-thru #3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thru #4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thru #5 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #6 & #7 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #8, #9, & #10 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Drive-thrus #11, #12, &

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
#13

Mobile Cafe #1 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,200 $3,200

Mobile Cafe #2 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Mobile Cafe #3 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Mobile Cafe #4 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Website Sales/Premium
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Items

Subtotal Direct Cost of

$0 $0 $0 $11,200 $14,750 $15,488 $14,713 $14,750 $26,688 $29,463 $31,963 $31,963
Sales

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

Production Personnel

Drive-thru Team $0 $0 $0 $10,500 $10,850 $9,800 $9,800 $10,500 $19,624 $21,700 $21,000 $21,700

Mobile Cafe Team $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $4,700 $4,700

Equipment Care Specialist

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
(Headquarters)

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

Subtotal $0 $0 $0 $10,500 $10,850 $9,800 $9,800 $10,500 $19,624 $21,700 $25,700 $26,400

Sales and Marketing

Personnel

District Manager (Four

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Drive-thrus)

Corporate Events Sales Exec $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Director of Marketing $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 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

General and Administrative

Personnel

Bookkeeper/Office
$0 $0 $0 $0 $1,750 $1,750 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500
Administrator

Warehouse/Site Manager $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,500 $3,500

Inventory Clerk $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 $0 $0 $0 $0 $1,750 $1,750 $3,500 $3,500 $3,500 $3,500 $7,000 $7,000

Other Personnel

Chief Operating Officer $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500

Chief Financial Officer $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Chief Information Officer $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 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500

Total People 1 1 1 5 6 6 6 6 11 11 15 15
Total Payroll $5,500 $5,500 $5,500 $16,000 $18,100 $17,050 $18,800 $19,500 $28,624 $30,700 $38,200 $38,900

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

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

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

Long-term
9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Interest Rate

Tax Rate 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%

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

Pro Forma Profit and Loss

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 $0 $0 $0 $32,375 $42,637 $44,769 $42,530 $42,637 $77,144 $85,167 $95,392 $95,392

Direct Cost of Sales $0 $0 $0 $11,200 $14,750 $15,488 $14,713 $14,750 $26,688 $29,463 $31,963 $31,963

Production Payroll $0 $0 $0 $10,500 $10,850 $9,800 $9,800 $10,500 $19,624 $21,700 $25,700 $26,400

Sales Commissions $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $708 $708

Total Cost of Sales $0 $0 $0 $21,700 $25,600 $25,288 $24,513 $25,250 $46,312 $51,163 $58,371 $59,071

Gross Margin $0 $0 $0 $10,675 $17,037 $19,481 $18,017 $17,387 $30,832 $34,004 $37,021 $36,321

Gross Margin % 0.00% 0.00% 0.00% 32.97% 39.96% 43.52% 42.36% 40.78% 39.97% 39.93% 38.81% 38.08%

Operating Expenses

Sales and Marketing Expenses

Sales and Marketing Payroll $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Advertising/Promotion $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000

Website $0 $0 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Travel $0 $0 $1,000 $0 $0 $1,000 $0 $0 $1,000 $0 $0 $1,000

Donations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $1,416 $1,916

Total Sales and Marketing Expenses $0 $0 $1,100 $2,100 $2,100 $3,100 $2,100 $2,100 $3,100 $2,100 $3,516 $5,016

Sales and Marketing % 0.00% 0.00% 0.00% 6.49% 4.93% 6.92% 4.94% 4.93% 4.02% 2.47% 3.69% 5.26%

General and Administrative

Expenses

General and Administrative Payroll $0 $0 $0 $0 $1,750 $1,750 $3,500 $3,500 $3,500 $3,500 $7,000 $7,000

Sales and Marketing and Other

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses

Depreciation $0 $310 $310 $1,565 $1,565 $1,565 $1,565 $1,565 $2,820 $2,820 $3,850 $3,850

Leased Offices and Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Utilities $0 $0 $700 $800 $920 $920 $1,050 $1,050 $1,050 $1,050 $1,050 $1,050

Insurance $0 $0 $1,257 $1,257 $1,257 $1,257 $1,257 $1,257 $1,257 $1,257 $1,257 $1,257

Rent $0 $0 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $2,400 $2,400 $2,400 $2,400

Payroll Taxes 15% $825 $825 $825 $2,400 $2,715 $2,558 $2,820 $2,925 $4,294 $4,605 $5,730 $5,835
Other General and Administrative
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses

Total General and Administrative

$825 $1,135 $4,292 $7,222 $9,407 $9,250 $11,392 $11,497 $15,321 $15,632 $21,287 $21,392
Expenses

General and Administrative % 0.00% 0.00% 0.00% 22.31% 22.06% 20.66% 26.79% 26.96% 19.86% 18.35% 22.32% 22.43%

Other Expenses:

Other Payroll $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500 $5,500

Consultants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Legal/Accounting/Consultants $1,500 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000

Total Other Expenses $7,000 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500 $6,500

Other % 0.00% 0.00% 0.00% 20.08% 15.24% 14.52% 15.28% 15.24% 8.43% 7.63% 6.81% 6.81%

Total Operating Expenses $7,825 $7,635 $11,892 $15,822 $18,007 $18,850 $19,992 $20,097 $24,921 $24,232 $31,303 $32,908

Profit Before Interest and Taxes ($7,825) ($7,635) ($11,892) ($5,147) ($970) $632 ($1,975) ($2,710) $5,912 $9,772 $5,718 $3,413

EBITDA ($7,825) ($7,325) ($11,582) ($3,582) $595 $2,197 ($410) ($1,145) $8,732 $12,592 $9,568 $7,263

Interest Expense $1,042 $1,018 $1,058 $1,019 $1,019 $1,019 $1,019 $1,019 $1,756 $1,702 $2,282 $2,210

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

Net Profit ($8,867) ($8,653) ($12,950) ($6,166) ($1,990) ($388) ($2,994) ($3,730) $4,156 $8,070 $3,436 $1,203

Net Profit/Sales 0.00% 0.00% 0.00% -19.05% -4.67% -0.87% -7.04% -8.75% 5.39% 9.48% 3.60% 1.26%

Pro Forma Cash Flow

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

Cash Received

Cash from Operations

Cash Sales $0 $0 $0 $32,375 $42,637 $44,769 $42,530 $42,637 $77,144 $85,167 $95,392 $95,392

Subtotal Cash from

$0 $0 $0 $32,375 $42,637 $44,769 $42,530 $42,637 $77,144 $85,167 $95,392 $95,392
Operations

Additional Cash
Received

Sales Tax, VAT, HST/GST

0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Received

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

New Other Liabilities

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
(interest-free)

New Long-term
$0 $0 $5,300 $0 $0 $0 $0 $0 $98,184 $0 $77,979 $0
Liabilities

Sales of Other Current

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets

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

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

Subtotal Cash Received $0 $0 $5,300 $32,375 $42,637 $44,769 $42,530 $42,637 $175,328 $85,167 $173,371 $95,392

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

Cash Spending $5,500 $5,500 $5,500 $16,000 $18,100 $17,050 $18,800 $19,500 $28,624 $30,700 $38,200 $38,900

Bill Payments $112 $3,349 $2,987 $7,228 $10,030 $17,719 $27,251 $24,342 $26,320 $54,407 $46,831 $52,615

Subtotal Spent on
$5,612 $8,849 $8,487 $23,228 $28,130 $34,769 $46,051 $43,842 $54,944 $85,107 $85,031 $91,515
Operations

Additional Cash Spent

Sales Tax, VAT, HST/GST

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Paid Out

Principal Repayment of
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $500 $1,000
Current Borrowing

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

Long-term Liabilities
$2,500 $3,116 $0 $5,166 $0 $0 $0 $0 $0 $7,216 $0 $8,471
Principal Repayment

Purchase Other Current

$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Assets

Purchase Long-term
$0 $0 $0 $0 $0 $0 $0 $0 $105,400 $0 $86,450 $0
Assets

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

Subtotal Cash Spent $8,112 $11,965 $8,487 $28,394 $28,130 $34,769 $46,051 $43,842 $160,344 $92,323 $171,981 $100,986

Net Cash Flow ($8,112) ($11,965) ($3,187) $3,981 $14,507 $10,000 ($3,521) ($1,205) $14,984 ($7,156) $1,390 ($5,594)

Cash Balance $17,388 $5,422 $2,236 $6,217 $20,724 $30,724 $27,203 $25,998 $40,982 $33,826 $35,216 $29,622

Pro Forma Balance Sheet

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

Assets Starting Balances

Current Assets

Cash $25,500 $17,388 $5,422 $2,236 $6,217 $20,724 $30,724 $27,203 $25,998 $40,982 $33,826 $35,216 $29,622

Inventory $35,000 $35,000 $35,000 $35,000 $23,800 $16,225 $17,036 $16,185 $16,225 $29,356 $32,410 $35,159 $35,159

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

Total Current Assets $60,500 $52,388 $40,422 $37,236 $30,017 $36,949 $47,760 $43,387 $42,223 $70,338 $66,236 $70,375 $64,781

Long-term Assets

Long-term Assets $131,400 $131,400 $131,400 $131,400 $131,400 $131,400 $131,400 $131,400 $131,400 $236,800 $236,800 $323,250 $323,250

Accumulated Depreciation $0 $0 $310 $620 $2,185 $3,750 $5,315 $6,880 $8,445 $11,265 $14,085 $17,935 $21,785

Total Long-term Assets $131,400 $131,400 $131,090 $130,780 $129,215 $127,650 $126,085 $124,520 $122,955 $225,535 $222,715 $305,315 $301,465

Total Assets $191,900 $183,788 $171,512 $168,016 $159,232 $164,599 $173,845 $167,907 $165,178 $295,873 $288,951 $375,690 $366,246

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 $3,255 $2,749 $6,902 $9,451 $16,807 $26,441 $23,498 $24,497 $52,853 $45,076 $50,900 $49,724

Current Borrowing $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $8,500 $7,500

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

Subtotal Current Liabilities $9,000 $12,255 $11,749 $15,902 $18,451 $25,807 $35,441 $32,498 $33,497 $61,853 $54,076 $59,400 $57,224
Long-term Liabilities $131,400 $128,900 $125,784 $131,084 $125,918 $125,918 $125,918 $125,918 $125,918 $224,102 $216,886 $294,865 $286,394

Total Liabilities $140,400 $141,155 $137,533 $146,986 $144,369 $151,725 $161,359 $158,416 $159,415 $285,955 $270,962 $354,265 $343,618

Paid-in Capital $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270 $225,270

Retained Earnings ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770) ($173,770)

Earnings $0 ($8,867) ($17,520) ($30,470) ($36,637) ($38,626) ($39,014) ($42,008) ($45,738) ($41,582) ($33,511) ($30,075) ($28,872)

Total Capital $51,500 $42,633 $33,980 $21,030 $14,863 $12,874 $12,486 $9,492 $5,762 $9,918 $17,989 $21,425 $22,628

Total Liabilities and Capital $191,900 $183,788 $171,512 $168,016 $159,232 $164,599 $173,845 $167,907 $165,178 $295,873 $288,951 $375,690 $366,246

Net Worth $51,500 $42,633 $33,980 $21,030 $14,863 $12,874 $12,486 $9,492 $5,762 $9,918 $17,989 $21,425 $22,628

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