Executive Summary

The concept Terima kasih terutama untuk Starbucks, kedai kopi 20 tahun terakhir telah menjadi fitur akrab dari kehidupan di Amerika. Setiap hari, jutaan orang Amerika untuk berhenti untuk minum secangkir kopi berbasis espresso . Orang yang tidak akan bermimpi menghabiskan lebih dari 50 sen untuk secangkir kopi, beberapa tahun lalu sekarang dengan senang hati membayar $ 3 sampai $ 5 untuk mereka cappuccino, moka late atau vanila dicampur es. Bisnis kopi khusus berkembang dengan kecepatan yang sehat. Selama 20 tahun terakhir ,namun ada satu tahun,meskipun perang dan resesi, penjualan khusus kopi tidak meningkat. Selama bertahun-tahun, peningkatan berada di dua digit. In addition, no coffeehouse chains have failed during this time, although the list of casualties in other industries is quite long. Starbucks, The Coffee Bean, Peet's, Diedrich's and other major chains serve average quality drinks in establishments that have the same generic design appearance. Indeed, Starbucks and The Coffee Bean are often referred to as "fast food" coffeehouses due to their "cookie cutter" design. Now that Americans' coffee preferences have broadened and matured, many are asking for more from their coffeehouse. A niche exists that has yet to be filled for a high-volume, upscale, quality-driven coffeehouse with a warm, inviting atmosphere. Dark Roast Java meets this need and fills this niche. We offer high-quality products in an upscale environment. Furthermore, our highprofile location in Pleasantville provides a mixed customer base that will maintain high levels of business in every season, at all times of the day, every day of the week. Founders Ned Powers-Sebastiane, founder of Dark Roast Java, has a long career as an entrepreneur and marketing executive. He is the founder of Powers-Sebastiane Advertising & Public Relations and Pan National Motor Tours. Co-owner Curt Yamaguchi has an intuitive understanding of the real estate market. As a highly successful real estate broker and investor he brings several key capabilities to the Dark Roast Java team, not the least of which is his ability to procure highly desirable locations for future stores. Financials The company anticipates rapid acceptance of the Dark Roast Java concept in Pleasantville, with revenues of $600,000+ in the first fiscal year, rising to more than $1,000,000+ in year three. Net profit is projected to be approximately $99,000 in year one, growing to an estimated $265,000 by year three. An advanced and expandable point-of-sale system After carefully tracking the performance of the Pleasantville store through an expandable and highly detailed point-of-sale system, we will use this as a "blueprint" for expansion. For example, daily sales are tracked and analyzed by item, time period and cost of goods. Labor requirements are matched to projected in-store sales based upon past performance for maximum efficiency. Even after paying higher than average wages, we expect to allocate no more than 25% to labor costs.

This Business Plan only provides data on the Pleasantville coffeehouse. Sources: US Census Bureau, Pleasantville Chamber of Commerce, Specialty Coffee Association of America.

1.1 Mission
Our goal is to be the coffeehouse of choice for the local Pleasantville community, downtown business workers, tourists who visit the city, and students, by providing a higher quality experience than any competitor. As a result, we intend to create coffeehouses that quickly achieve profitability and sustain an attractive rate of return (20% or more annually) for our investors. We also want to make our contribution to the welfare of the local community by supporting charitable and civic activities. We will support the farmers who grow our coffee by using Fair Trade, Sustainable Production and Organic products whenever possible. Dark Roast Java also awards its business to as many local suppliers as possible, keeping the business in the community or, at the least, in the state.

1.2 Objectives

Make Dark Roast Java the number one destination for coffee in Pleasantville

Sales of $600,000+ the first fiscal year, $750,000+ the second fiscal year and $1 million the third fiscal year

Achieve a 15% net profit margin within the first year and 30% by FY3

Achieve a total net profit of $150,000+ in FY1 and $200,000+ by FY3

Be an active and vocal member of the community, and provide continual reinvestment through participation in community activities such as the Chamber of Commerce and financial contributions to local charities and youth organizations

Create a solid concept in the industry and track performance in order to begin expanding to other markets within six months

1.3 Keys to Success

The keys to our success will be:

A superior-tasting product backed by a unique quality store

A relaxing, upscale interior design

Prime site selection with an upscale affluent population, year-round tourist activity, heavy pedestrian traffic by the site, a dynamic student population and a concentration of local businesses

A market that exposes Dark Roast Java to high-profile "trend-setters" and "key influencers"

Ongoing, aggressive marketing

Highly trained and friendly staff

Multiple revenue streams including gift items, gift baskets and coffee gift/frequency cards in addition to coffee, pastry, chocolates, tea, juice, water and soft drinks

A dynamic website with online sales capability

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Company Summary
Dark Roast Java launches with its first coffeehouse located in downtown Pleasantville. Dark Roast Java will offer residents and visitors a totally new style of coffeehouse - one offering a uniquely flavorful coffee drink and a comfortable, upscale environment at which to socialize, relax or work.

Variety: No other coffeehouse in the area will provide the range of coffee drinks, tea, cocoa, juice, smoothies and other products that Dark Roast Java does. Location: Dark Roast Java will be located in the prime section of downtown Pleasantville in the heart of the shopping and entertainment district. Dark Roast Java locations are designed for high volume year round, with revenues and profits to match. Expansion: Assuming this store is successful, it will be the first of a chain of Dark Roast Java coffeehouses located in markets that have similar demographic profiles, significant traffic by the store, year-round tourist activity and a sizeable student population.

The Dark Roast Java Concept At one time Cadillac was the acknowledged quality automobile in America. Then came Mercedes-Benz. And then Lexus, with its superb product and service approach. Dark Roast Java will be the first "Lexus" of the coffeehouse chain industry, offering a higher quality product and better quality service in an exceptional environment. The only coffeehouse that comes close to being as upscale as our concept in the Pacific Northwest is Torrefazione, with its high style Italian decor (they were recently part of a $72 million dollar buy-out by Starbucks).

The first Dark Roast Java is located in Pleasantville. Other Dark Roast Java coffeehouses will eventually be located in select affluent markets that support the business model (e.g. Mount Hill, Newburg, Springfield, Bayview, Orchard Valley, Beachey Head, Capital City). Dark Roast Java offers a superior coffee product, delicious pastries, fresh juices, the finest tea drinks, Ghirardelli cocoa, gourmet chocolates and gift items. The Dark Roast Java staff members who prepare the coffee (baristas) are highly trained and experienced. They know how to prepare an excellent espresso-based drink and brew tasty coffee. We use the highest quality equipment and ingredients to deliver a noticeably superior product. Our design style is different from all other coffeehouses, an upscale "Cote d'Azur" look. It features stained glass decorations, art glasswork, Mediterranean Riviera style furnishings and outdoor dining.

2.1 Company Ownership

Dark Roast Java is a privately held corporation. It is registered as a state LLC Corporation, with ownership shared by Ned Powers-Sebastiane, Victor Lubitsch, Curt Yamaguchi and other outside investors.

2.2 Start-up Summary

Start-up expenses are in line with those of other coffeehouse chains. For example, Starbucks spends approximately $380,000 on average to build-out a new store location. Our costs are an estimated $225,000 and $25,000 for opening inventory and operating capital. Future stores should cost no more than $175,000 to build out since many of the costs incurred here will not have to be repeated later. The Start-up requirements, below, include $77,000 of short and long-term assets. Long term assets: $62,000 Undercounter Refrigerators Service/Prep Counter Ice Machine Large Refrigerator Milk Coolers (3) Cash register (2) Point of Sale System Espresso Machine Fetco Coffee Brewer Counters/Condiment bar/shelving $5,000 $12,000 $3,500 $1,000 $1,000 $14,000 $11,000 $2,500 $12,000

Short-term assets: $15,000

Tables, Chairs, Furnishings Persian Carpet Lighting Fixtures

$12,000 $1,000 $2,000

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Start-up Requirements Start-up Expenses CONSTRUCTION Site design, architectural plan Demolition/Construction Electrical, Lighting Electrical, Other Flooring/installation Bathroom Construction Plumbing Fireplace Construction Painting City permits/licenses/fees Inserted Row LEGAL Accounting Legal Insurance Inserted Row MARKETING Opening marketing/advertising Graphic design for signage, menu boards Outside Signage

$0 $10,000 $25,000 $12,000 $10,000 $5,000 $4,000 $10,000 $5,000 $2,500 $6,500 $0 $0 $2,000 $4,000 $2,500 $0 $0 $3,000 $2,000 $1,500

Frequency Cards, Brochures Inserted Row OFFICE Office equipment Computer, scanner, printer Telephones/Fax/DSL Stationery etc. Gift item displays (3) Inserted Row APPLIANCES, ETC Preparation equipment Dishwasher Blenders (3) Microwave Panini maker Storage racks Music system Food display case Storage room shelving Bulk bean grinder Sinks (2), prep counters Menu board construction Cups/Lids (50,000) Total Start-up Expenses Start-up Assets Cash Required Start-up Inventory Other Current Assets Long-term Assets Total Assets Total Requirements

$1,500 $0 $0 $600 $2,000 $500 $1,000 $1,500 $0 $0 $1,000 $3,500 $2,000 $500 $700 $1,000 $800 $6,000 $1,000 $700 $1,200 $2,500 $14,000 $147,000 $1,500 $25,000 $15,000 $62,000 $103,500 $250,500

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Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets

$147,000 $103,500 $250,500 $102,000 $1,500 $0 $1,500 $103,500

Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Investors Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital Total Capital and Liabilities Total Funding

$0 $0 $0 $0 $0

$250,000 $500 $0 $250,500 ($147,000) $103,500 $103,500 $250,500

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Products
Dark Roast Java sells high-quality specialty coffee beverages, tea, juice, water, soft drinks, pastries, chocolates and gift items. Despite being an upscale coffeehouse, our prices are in line with the leading national chains.

3.1 Vendors

Coffee roasting is provided by Grizzly Mountain Coffee Company, Pleasantville. Tea is primarily supplied by Harney & Sons Tea, Connecticut. Our water vendor is Crystal Geyser, St. Helena, CA Juices are provided by Longhorn Orchards, Corpus Cristi, TX (fresh orange juice and lemonade) and Genesis Juice, Eugene, OR Pastries are provided by local Pleasantville companies such as D'Angelo's Bakery, Pleasantville Biscotti and Pleasantville Cheesecake. Chocolates and cocoa are from Ghirardelli Chocolate Company, San Francisco, Bellagio, Los Angeles and Black Forest Chocolates, Arnold, CA Gift items are from various vendors Soft drinks are provided by Sprecher's Brewery, Milwaukee, WI, and Thomas Kemper Soda, Seattle, WA

3.2 The Dark Roast Java Menu

The Dark Roast Java menu sets us apart from other coffeehouses, giving us a competitive edge.

We offer six groups of drinkscoffee, tea, Italian sodas, smoothies, juice and cocoawith several choices within each group. This enables us to provide more variety than our competitors while keeping the preparation of the drinks easy to execute.

We are taking advantage of the immense popularity of flavored drinks and Chai tea by offering a product mix that includes items the other coffeehouses don't carry as well as more familiar drinks.

We are the only coffeehouse to have a wide range of gourmet hot cocoa.

Dark Roast Java offers several smoothie drinks and Italian sodas.

We carry the highest quality fresh juices.

Prices have been determined after a thorough analysis of all food costs for every item in each drink. In some cases, an average price has been calculated and applied to all similar drinks in order to keep the menu from confusing the customer.

3.2.1 Coffee and Espresso Drinks

COFFEE Coffees of the day: Dark Roast Java Blend, Riviera Roast, and Molokai Swiss water process DeCaf. $1.60 Regular $1.85 Large ESPRESSO Name Espresso Caffe Americano Cappuccino Caffe Latte Caffe Mocha Description A double shot of straight espresso. Espresso combined with hot water, a gourmet brewed coffee. Espresso with a smooth topping of milk foam. Espresso combined with steamed milk, topped with a small amount of velvety milk foam. A Caffe Latte combined with Ghirardelli chocolate, topped with whipped cream and chocolate shavings. Regular $1.75 Double $1.85 $2.50 $2.75 $3.00 Large

$2.25 $3.50 $3.25 $3.75

Espresso Macchiato Espresso Con Panna Espresso Latte Breve Espresso "Red Eye"

A straight shot of espresso topped with a spoonful of rich milk foam. A straight shot of espresso topped with a generous dollop of whipped cream. Our famous latte made even more creamy with half and half. Espresso combined with our gourmet coffee of the day to get your day going.

$1.75 $1.75 $2.50 $2.00

$2.50 $2.50 $3.50 $2.75

COFFEE DRINKS Name The Banana Nut Java The Cafe Milano Description Coffee. Warm milk. Banana, macadamia nut and vanilla syrups. Topped with whipped cream and cinnamon dusting. Coffee. Warm milk. Amaretto and vanilla syrups topped with whipped cream and almonds. Small Large $2.75 $3.75 $2.75 $3.75

FLAVORED ESPRESSO DRINKS All flavored drinks feature quality Monin and Ghirardelli syrups. Name Vanilla Cappuccino Vanilla Latte White Chocolate Latte The 50/50 Latte The Raspberry Mocha Latte Chai Latte Description Cappuccino made with vanilla flavored milk foam. A Caffe Latte with vanilla essence added. Espresso, white chocolate flavoring and steamed milk topped with velvety foam and white chocolate shavings. Espresso. Vanilla and orange syrups, steamed milk and whipped cream topping. Coffee. Raspberry and chocolate syrups. Half and half. Whipped cream topping. Espresso. Chai. Steamed milk and whipped cream. Regular Large $2.50 $3.00 $3.00 $3.00 $3.25 $3.00 $3.50 $4.25 $4.25 $4.25 $4.50 $4.25

HOT COCOA DRINKS All hot cocoa drinks are $2.75 Name French Vanilla Cocoa White Chocolate Cocoa Chocolate Truffle Cocoa Holiday Spice Cocoa Peppermint Cocoa Ovaltine Description Hot cocoa with vanilla and whipped cream. Hot cocoa with white chocolate and whipped cream. Rich dark hot cocoa with whipped cream topping. Rich hot cocoa and holiday spices. Topped with whipped cream. Rich chocolate and refreshing peppermint. Topped with whipped cream. Ovaltine Chocolate Malt and milk.

SMOOTHIES All smoothies are $3.75 Name The Espresso Chocolate Malt The Double Dutch Chocolate Smoothie The Mocha Smoothie The Vanilla Smoothie 50/50 Smoothie (Orange and Vanilla) Description A chocolate malt for grownups. Very chocolatey! An all-time favorite. Rich natural vanilla flavor. A 50's favorite.

3.2.2 Teas
ICED TEAS Classic American Iced Tea, just like you remember as a kid. $1.50 Small, $1.75 Medium, $2.00 Large HOT TEA $1.50 Regular

Earl Grey English Breakfast Peppermint Herb Apricot Earl Grey Lavender Darjeeling Formosa Oolong Golden Flowers Herbal Herbal Lemon Tropical Green

CHAI TEAS (hot or ice blended) Chai Original (regular or decaf): Vanilla Chai: $2.00 Regular $3.00 Large

$2.00 Small $2.50 Medium $3.00 Large

3.2.3 Juices
Name Fresh squeezed orange juice Old-fashioned Lemonade Genesis Juice Description Exclusively from Longhorn Orchards, Corpus Cristi, TX Made fresh daily from Pleasant County lemons. Protein Boost, Green Machine, Mango and Guava. Regular Large $1.50 $1.50 $2.95 $2.75 $2.75

Martinelli's Apple Juice (regular and sparkling) Crystal Geyser Juice Squeeze

A San Francisco favorite.

$2.00 $2.50

3.2.4 Italian Sodas

ICED ITALIAN SODAS Sparkling spring water, flavoring and ice. Blended or on the rocks. Medium $1.50, $2.25 Large

Orange Soda Strawberry Soda Lemon Soda Cherry Soda Raspberry Soda Cream Soda (made with half & half) Peach Soda Kiwi Soda Melon Apple

SPECIALTY ITALIAN SODAS All $1.75 Regular, $2.50 Large Name The Dreamsicle Soda Cherry Vanilla Soda The Chocolate Soda Description Sparkling spring water, ice, half and half, vanilla and mandarin orange syrups. Sprite, ice, cherry and vanilla syrups. Our version of an egg cream.

3.2.5 Other Drinks

Name Geyser Peak Natural Spring Water Soft drinks from Sprecher's, Stewart's and Thomas Kemper. Crystal Geyser Tejava Tea RockStar Energy Drink Orangina Citrus Drink Description Price From Northern California mountain springs. $1.25 Root beer, Orange Cream, Ginger Ale, $1.50 Vanilla Cream and Key Lime. $2.50 $2.00 $2.00

3.2.6 Snacks and Pastries

Item Pleasantville Cheesecake, made just for us by Pleasantville Cheesecake Company. Fresh scones, hot from the oven. Bagels Brownies Blueberry Muffins Croissants Black Forest chocolate-covered espresso beans Best Ever Bakery Fancy Cookies

Price $2.00 $1.75 $1.00 $2.00 $2.00 $2.00 $4.00 $1.75

3.2.7 Deli Items

Item Sandwiches: Turkey, Roast Beef, Ham and Salami. Soup Quiche Price $6.75 $3.50 $4.50

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Market Analysis Summary

Dark Roast Java launches with an exciting new coffeehouse concept in a receptive and steadily growing market segmentthe specialty coffee retail business. Despite economic downturns in recent years the specialty coffee business has been a bright spot. While literally hundreds of businesses in many categories are facing poor sales, negative balance sheets and even bankruptcy, coffee chains continue to show strong growth. It's clear that America's love for good coffee continues during good times and bad. Pleasantville: The Perfect Launch Market By launching Dark Roast Java in the Pleasantville market we maximize our potential for success due to several factors:

The highly affluent local population Year-round tourist activity Ever-changing upscale student population Excellent auto and pedestrian traffic by our location Low media costs High number of local special events Prime site location

Dark Roast Java is located at what is arguably one of the best locations for a coffeehouse in Pleasantvillein the heart of the tourist and business district, adjacent to fine dining and shopping, next to the historic Egyptian Theatre and just steps from the busiest intersection in town. Dark Roast Java Coffee has all the ingredients necessary for immediate success.

4.1 Market Segmentation

Dark Roast Java's customer base in Pleasantville is comprised of five target groups. 1. 2. 3. 4. 5. Affluent local residents Tourists Local business people Students Travelers passing through

These groups are all potentially strong customer segments. The benefit of this mix of customers is that it helps maintain consistent business throughout the year. For example, while tourism is strong all year long in Pleasantville, it peaks during the summer months. Conversely, the student population is not as strong during the summer as it is from September through June of each year. The other customer segments (local residents, local business and pass-through traffic on US 66) provide a consistent foundation all year long. Also, by appealing to several market segments, Dark Roast Java does not become overly dependent on any single consumer group. For example, several local coffeehouses with primarily student customers do poorly during the non-school months. They must also market themselves anew each year to the incoming students. Dark Roast Java will avoid these peaks and valleys in business with a mix of customers.

Affluent locals. Within five miles of Dark Roast Java are 200,000 of the most affluent people in America. Homes in adjacent Niceburg sell for $1 million to $50 million. Key influencers, trendsetters, artists, writers and celebrities have homes in Pleasantville.

Tourists. More than 5,000,000 tourists visit Pleasantville every year. Most will pass by the Dark Roast Java location. Tourist come to "America's Riviera" for the beaches, shopping, dining and nearby vineyards.

Local business people. Dark Roast Java is located on the corner of 'A' Street and First Avenue in the heart of the prime downtown business district. It's across from the exclusive, chic, Descarte (I Spend, Therefore I Am) department store, and one block from the number one shopping destination in Pleasantville, Lucre

Galerie. 'A' Street and Frist Avenue are the two most heavily traveled streets in Pleasantville.

Students. Pleasantville is home to a major branch of the State University as well as dozens of other schools, including many prestigious private schools and academies. Pleasantville High School is less than a mile from Dark Roast Java.

Travelers on US 66. One of the state's two major north/south routes passes through Pleasantville. According to Dept of Transportation, more than 35 million auto trips will pass through the city. Many of these travelers will stop for a meal, to refuel and have a cup of coffee. US 66 is also a heavily traveled commuter route to Shorewood and Beachey Head to the south.

Sources: Department of Transforation, State University, Pleasantville Chamber of Commerce.

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Market Analysis Year 1 Potential Customers Growth Year 2 Year 3 Year 4 Year 5 CAGR

Local residents Tourists Travelers on US 66 Students Local businesses Total

2% 5% 5% 1% 1% 3.22%

75,000 100,000 20,000 40,000 20,000 255,000

76,500 105,000 21,000 40,400 20,200 263,100

78,030 110,250 22,050 40,804 20,402 271,536

79,590 115,763 23,153 41,212 20,606 280,324

81,181 121,551 24,311 41,624 20,812 289,479

2.00% 5.00% 5.00% 1.00% 1.00% 3.22%

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4.2 Target Market Segment Strategy

Overall, our strategy is to maintain a constantly high customer count by leveraging our appeal to five groups of potential customers. Local Residents. Approximately 200,000 people live within five miles of our Dark Roast Java location. The most affluent of these live even closer, within three miles. It is a short 5 minute drive to Dark Roast Java for most of our potential local customers. Excellent public parking is available within 100 yards. Local customers form the loyal core of our business. We will reach out to them through local marketing, involvement in the Chamber of Commerce, support of local charitable organizations and sponsorship of events and youth sports teams. Tourists. Pleasantville has excellent year-round tourist activity. About 5 million people will visit the area during the next year. While hotels are virtually sold out during the summer months, tourism all year is exceptionally strong. This is due in large part to the temperate climate, weekend or day-trip visitors from the greater Ontopolis area and an unusually large number of special events (e.g. film festivals, concerts, art shows) scheduled throughout the year. With a troubled economy and fears of terrorism, more people are opting for the relatively inexpensive, easy and safe short trip to Pleasantville for recreation. And, according to the Chamber of Commerce, 90% of all tourists visiting Pleasantville will pass by the Dark Roast Java location. We will target these potential customers with ads in local tourism guides. Local businesses. Many local businesses, both private and government, are within two blocks of Dark Roast Java. Lucre Galerie, the prime shopping center of Pleasantville, is one block away. The county courthouse is two blocks away. Dark Roast Java is in the heart of the shopping and dining area. Because much of the employee parking is out of the immediate area with shuttle service to downtown, most people stay near their place of employment during breakfast, lunch and for

after-work relaxing. A significant number of these local business people find Dark Roast Java an inviting and convenient destination. We also offer coffee service to local restaurants, night spots and businesses. Coffee service brings in additional revenue and promotes Dark Roast Java among employees at these businesses. We will also reach business customers through Chamber of Commerce activities and by personally visiting the shops and businesses to distribute discount coupons and menus. Students. The area has more than 30,000 students in several schools, including nearby City College and State University. Students, most of whom are under the drinking age, have few places they can go to meet their friends. Coffeehouses have proven to be very popular with studentseven high school studentsas an "in" place to go that's also affordable. To reach students we offer special student discount cards, pass out free coffee coupons at student events and offer entertainment on weekends. Students represent an excellent customer segment for several reasons:

Students bring an energy and youth to the coffeehouse By attracting students we generate excellent word-of-mouth Students represent a large base of potential part-time employees Often under the drinking age, students need an affordable place to hang out with their friends

Travelers on US 66. The Dept of Transportation estimates that there will be 35 million auto trips through Pleasantville this year, a number that is increasing every year. US 66 is one of two major freeways in the state and the one favored by travelers who want to take a bit more time and make a few stops during their trip. It's also a major commuter route to the cities to the south in Sunshine County. Our primary method of reaching this target customer group will be our participation as a AAA member, offering a 20% discount on all coffee and tea drinks when AAA members show their membership card. We also conduct PR activities in media outside the local market to expose the Dark Roast Java name to a wider state and national audience. Source: Dept of Transportation, Pleasantville Chamber of Commerce, US Census Bureau.

4.3 Industry Analysis

The specialty retail coffee business as we know it today began in 1982 after Howard Schultz purchased the Starbucks name and began the expansion of the modern Starbucks chain. Prior to his transformation of the business, Starbucks sold only whole bean coffee. Coffeehouses in America have existed since the 1600's, and the coffeehouse concept is more than 400 years old. In the United States, even as recently as the 1970's, coffeehouses have been primarily independent businesses, typically with an eclectic Bohemian style.

Cafe Trieste in San Francisco is typical. It was once a gathering place for "Beats" and "Hippies." Poetry readings were held weekly. It still retains much of its original flavor. Many of these independent coffeehouses continue to enjoy a loyal following. Starbucks' success has encouraged others to enter this potentially lucrative business. Today there are more than 13,000 coffeehouses in the U.S. However, compared with Italy, which has 200,000 espresso bars and coffeehouses, there is still much room for growth. The Specialty Coffee Retailers Association believes the market has not approached maturity and, as yet, no coffee chain has differentiated itself significantly from the others. While overall coffee sales have not grown significantly in recent years, the specialty coffeehouse segment is growing steadily at a healthy pace every year. The low food cost of coffee drinks, relatively modest investment capital requirements, and low overhead, lead to high profit margins in the coffeehouse industry. There are 108 million coffee drinkers in the United States, according to the National Coffee Association's report "2000 Coffee Drinking Trends." 77% of coffee drinkers consume coffee daily. Coffee drinkers spend an average of $164.71 on coffee annually, and drink an average 3.1 cups daily. It's easy to see why coffee is second only to oil as the largest commodity in the world. Twenty-five years ago, almost nobody consumed espresso or espresso-based drinks in the United States. Now they account, for more than half of all specialty coffee consumed. Obviously, America's coffee-drinking habits are changing. In the past five years the number of "gourmet" coffee drinkers has increased from 7 million to 27 million. In 2001 53% of all adults in the U.S. drank specialty coffee. By 2002 the percentage had grown to 62%. Year after year, the growth continues at sizeable rates. Starbucks, once known for quality and customer service, has recently come under attack by customers and business commentators for becoming too big. Their size (6,300 stores worldwide) is the reason why Starbucks is now often called the "McDonald's" of coffee chains. If Starbucks' image becomes one of a "fast food" purveyor of coffee, it leaves the market open for a smaller, more nimble competitor like Dark Roast Java, where quality and service are paramount. As the graph below showing Year 2000 per capita coffee consumption illustrates, the United States is not presently one of the stronger markets for coffee drinking. It's easy to see there is significant room for growth in consumption. The coffeehouse chains of America are leading this growth.

Coffee drinking per capita by country.

4.3.1 Competitive Comparison

"Until everybody can walk to a coffeehouse and get a properly prepared espresso drink, we're not even approaching market saturation." -- Mike Ferguson, Marketing & Communications Director Specialty Coffee Association, Long Beach. 2002. Leaders in the specialty coffee chain category in the United States include: Starbucks (6,300 stores). Started the specialty coffee chain phenomena in America in 1982. 99% are company owned. Revenues exceeded $6 billion in 2002. Average store gross revenue is $805,000. Now in 30 countries. Same store sales increased by 10% in 2002. Caribou Coffee (260 stores). Second largest all company-owned chain. Founded in 1992 in Minneapolis. Tully's (103 stores). The third largest company-owned chain. Another Seattle-born company. The only coffeehouse chain that has not experienced excellent growth every year; business.com cites poor management as as the reason. New management seems to leading a turnaround. Coffee Bean & Tea Leaf (210 stores). Oldest privately held specialty coffee retailer in the U.S. (founded 1963). 90% of stores are franchises. Peet's (58 stores) One of the few successful IPO's in 2001. 58% of revenues come from sales of whole coffee beans. Gross profit last year was 49.5%. Gloria Jean's (291 stores, 195 in U.S.). Only 19 stores are company owned. Seattle's Best (150 stores). Owned by AFC, which also owns Popeye's Chicken, Church's, Cinnabon and Torrefazione Italia Coffee (21 stores). Seattle's Best is also distributed at 7,000 locations such as grocery stores and office buildings.

Diedrich Coffee Company Originally founded in 1916 when the owners inherited a coffee plantation. Headquartered in Southern California. First coffeehouse in 1982. Owns the Gloria Jean and Coffee People chain. 386 outlets total and 370 wholesale accounts. Although they serve an excellent product they have operated "below the radar." Bucks County Coffee A Mid-Atlantic chain of 40 stores founded in 1982. Has a very good reputation. PJ's Coffee & Tea (22 stores). This New Orleans-area chain owns four of their stores. Java Dave's (14 stores). Mostly in the Oklahoma area, 12 are franchises and two are company owned. Quikava (68 locations). A unit of the Massachusetts-based Chock Full O'Nuts organization. Many are kiosks. All but three are franchises. New World Coffee (33 stores). Mostly concentrated in the New Jersey/New York area. All but three are franchises. A division of Manhattan Bagel. Bad Ass Coffee Company (29 stores). Begun in Hawaii, this company has grown rapidly by offering a Hawaiian-grown coffee and a milder, mellower brew. It's a Grind (86 stores). Fast-growing chain that began in Long Beach, California seven years ago. Most locations are franchises. Concentrated in Southern California and Las Vegas. Company reported $12 million in revenue in 2002. Its stores average more than $500,000 gross revenue. Dunkin' Donuts More than 800 outlets serving a surprisingly good coffee. Many people think it's the best. Specialty coffee chains in Canada: Blenz (27 stores). Second Cup (401 stores) Tim Horton's (2,100 stores/150 in U.S.). This store is very close to being a Dunkin' Donuts style operation where baked goods are the primary products. Although the specialty coffee industry is successful and expanding rapidly, there is still much room for growthespecially in niche market segments, according to The Specialty Coffee Association of America. Market maturity is not expected to be reached until at least 2019. Sources: Business.com, Yahoo Business, Dun & Bradstreet, Hoover's Business Data, Starbucks Corporation, Specialty Coffee Association, National Coffee Association. 2002. Local Competition Surprisingly, the leading coffeehouse chain, Starbucks, has only mediocre stores in the Pleasantville area (eight locations). Its highest volume store (1,150 customers daily) is at an

excellent location on 'A' Street, the main thoroughfare in town, but the store is unattractive, small and lacks outside seating. The other high-volume Starbucks is located at the end of a shopping mall in Mount Hill and averages 952 customers daily. It is not a particularly attractive store, although it does have a sizeable lounge area and some outside seating. Other Starbucks locations in the Pleasantville area are even less memorable, with small facilities and mediocre locations. Photos of some of these locations are shown in the appendix. Coffee Bean also has an excellent location directly across the street from Starbucks on 'A' Street in downtown Pleasantville. This busy coffeehouse is very small. A counter inside and a couple of tables outside are the only areas for customers to sit down. A second Coffee Bean opened in 2002 on the northern end of 'A' Street, about three miles from downtown. Another location in Mount Hill is scheduled to open in Summer 2004. Other competitors include three independent coffeehouses. Paradiseo is located on State Street in a good location. They serve good coffee but have a limited menu and a very "funky" decor. It is a big hangout for the "Goth" and "punk" crowd. A second Paradiseo is located in Shorewood. New managers are trying to improve the store but without success so far. Another independent is Grounds for Action, located in a residential neighborhood but on a busy street in what was once a gas station. This coffeehouse is also very "collegiate" in its decor, and a favored haunt of the law school students, but manages to average more than 250 customers per day. They have a second location in Springfield. Ambrosia Kaffe is primarily a student hangout located about three blocks off First Avenue in the northern end of the business district. Its business is modest. The business has undergone changes in management during recent years. Both Barnes & Noble and Borders Books have integrated cafes that serves espresso drinks into their store plans. Both of these are within two blocks of the Dark Roast Java site. The Barnes & Noble coffee cafe is very small, located in the rear of the store, and not very busy despite serving Starbucks coffee. The Borders Books cafe is larger, about 1,000 square feet, and does a good business. They are in a good location, adjacent to the same major parking garage as Dark Roast Java and they also draw from book shoppers and drop-ins from 'A' Street. The quality of their coffee and pastries does not compare with ours, and the service can often be quite slow. The Pleasantville Roastery is a bean roaster and coffeehouse with brick walls and a "San Francisco" style. The coffee is roasted on site. They do much of their business by mail order. They suffer from a very poor location in a difficult to find (or even see) shopping mall off lower 'C' Street. A second, small outlet opened in 2003 in Lucre Galerie. Despite their poor location, this is probably the most formidable competitor in town. They make a quality cup of coffee and have a loyal following.

4.3.2 Competition and Buying Patterns

Competition is dominated by the presence of Starbucks, fast becoming the "McDonalds" of the specialty coffee industry. Other major chains are Caribou Coffee, Peet's Coffee & Tea, Coffee Bean & Tea Leaf, Seattle's Best, Gloria Jeans and Diedrich Coffee. All of these chains are considered "clones" of Starbucks. Few vary much from what is perceived as a proven formula for success. FACT: The coffeehouse business has grown every year since 1982. FACT: Not a single coffeehouse chain has failed during the past 20 years. Despite major economic recessions, terrorist attacks and two wars over the past two decades, the specialty coffee industry has grown every year. One industry observer said, "When times are good the coffeehouse industry is great. And when times are bad the coffeehouse industry is great." America's love for good coffee is stronger than ever and increasing in size faster than any other industry. Lifestyle factors converge to make the coffee industry strong at all times. The stimulant effect of coffee is an important reason why many hard-working, fast-paced Americans consider a stop at their local coffeehouse a necessary part of their day. Conversely, coffeehouses provide a calm, inviting environment for people to socialize, relax or catch up on work. Young people under the legal drinking age are one of the fastest-growing segments of the coffee drinking market. Coffeehouses provide them with a much-needed place to meet with their friends. Entertainment on weekend nights draws a young group of enthusiastic customers. The surge in interest in coffee drinking among young people assures a diverse, receptive, sophisticated customer base now and in the future. Older adults also enjoy the fact that for the relatively modest price of a cup of coffee and snack, they can meet with their friends, relax or work. Instead of going to a bar and paying for an alcoholic drink or a restaurant where a meal usually comes with a hefty price tag, the coffeehouse is an intimate yet inexpensive venue. Quality is deteriorating even as the industry is growing. Coffeehouses need to produce a quality product to back up the perceived "little luxury" image. Currently, most of the largest chains are bowing to the pressures of growth and are cutting corners on quality by introducing fully automatic espresso machines, mass bean buying and other efficiency measures. Coffee drinking is now an all-day activity. Once concentrated in the early morning hours or mid-afternoon, in recent years coffee drinking has become an all-day activity. Even late at night, many coffeehouses are packed with patrons. It's not unusual for a well located coffeehouse to exceed a daily average of 900 customers. Customer guest check averages are rising.

As pastries, chocolates, tea, pre-packaged sandwiches, snacks, juice drinks and gift items are added to the menu, the average customer expenditure has risen. Many popular coffeehouses report averages in the $4 - $6 range. Dark Roast Java expects that guest checks will average about $4.50.

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Strategy and Implementation Summary

The Dark Roast Java coffeehouse uses a strategy of total qualityin product and service. Our promise is in our location, the products we sell, the people we attract and the atmosphere we create. Strategic Assumptions:

People want a better-tasting coffee drink Coffee drinkers want a more inviting coffeehouse environment Coffee drinks are considered an affordable luxury The coffeehouse industry is largely unaffected by the economy and world events Dark Roast Java offers several unique advantages over all other coffeehouses

5.1 Competitive Edge

Our competitive edge, compared to the other coffeehouses in the greater Pleasantville area includes the following:

A significantly higher quality, better tasting coffee product. Our current location can arguably be considered the best in the marketin the heart of the downtown shopping, dining, entertainment and cultural district in Pleasantville and adjacent to the historic Egyptian Theatre. An ambiance superior to all other coffeehouses in the area with upscale "Cote d'Azur" look. It features stained glass decorations, art glasswork, Mediterranean Riviera style furnishings and outdoor dining. The only coffeehouse downtown to provide regular weekend evening entertainment. A wider variety of popular drinks than our competitors, including flavored coffee drinks, tea, chai, cocoa, juice and Italian sodas. We have several drink options for people who don't drink coffee: tea, cocoa, juice and smoothies. Our Internet website will include sales of whole coffee beans, tea, chocolates, gift items and gift baskets.

5.2 Marketing Strategy

Other coffeehouses rely almost entirely on word-of-mouth marketing to generate business. We will engage in an ongoing aggressive marketing program that will help us establish profitability quickly and set the stage for continual growth. Our strategy will be to position Dark Roast Java as the "Lexus" of coffeehouses, offering a high quality product and superb service in a superior environment.

5.2.1 Launch Marketing

Most coffeehouse chains do little or no marketing and advertising. For example, Starbucks' philosophy is that their ubiquity in the marketplace is all they need to sustain and grow their customer base. They spend less than 1% of gross revenues on advertising, and when they do spend, it is usually to introduce a new product. The retail coffee industry is a sales-oriented business with historically very little experience in marketing and advertising. This is likely why little is done. As yet, the major players have not been taken over by sophisticated companies like Pepsico, where marketing is viewed as essential to gaining market share. An element of our differentiation from other coffeehouse chains will be our use of advertising and marketing to gain awareness, build customer traffic and establish a strong brand image. We intend to create immediate customer awareness and not wait for word-of-mouth. We are also building customer traffic immediately with an aggressive Launch Marketing Plan. Launch Marketing Launch marketing will promote awareness, build immediate traffic and establish our brand image via several methods:

Public relations/publicity Direct mail Local print and broadcast media Design and packaging Community involvement Sampling Superior location Desirable store ambiance

Public Relations A strong public relations/publicity program uses as its primary "hook" these three main points: 1. Dark Roast Java is Pleasantville's first true gourmet coffeehouse 2. Our unique quality products 3. Our distinctive latte "art"

The goal of the PR/publicity is to achieve local market awareness and establish the brand on a wider scale to set the stage for future expansion. Local market awareness is vital because more than 50% of sales will come from people living within a 5-mile radius of the store. National awareness will help drive the expansion by generating opportunities created by the media buzz and familiarizing people with our brand name. It will help set the stage for future brand identification. Local Media

The Pleasantville Gazette Pleasantville Magazine The Mount Hill Journal The Pleasantville Weekly Mount Hill Magazine Pleasantville Dining Pleasantville Seasons ABC-TV (KTBO) KATF radio KEZI radio KWAS radio KSNZ radio KOBR radio KPML radio KKMN radiO KJBU radio KSEC radio KION radio

Regional/National Print Media

BusinessWeek The Ontopolis Business Journal Time Newsweek US News Entrepreneur Wall Street Journal Fortune Forbes Robb Report Newspapers in top 50 US markets

National Broadcast Media

Feature programming (e.g. Oprah, Good Morning America) 1,500 radio stations nationwide

Direct Mail

Ongoing direct mail generated from our website data Visa or MasterCard local direct mail program

Website Our website is fully e-commerce functional and could easily become a significant revenue source. We will eventually sell the following items online:

Whole coffee beans, tea Gift baskets Gift items Furnishings

And in a first for any coffeehouse in the world, we will also sell a catalog of glass artwork representative of our store decor. We will act as the sales agent for a number of participating stained glass, and art glass artisans. The website also markets Dark Roast Java with:

A monthly newsletter Interesting information about the coffee industry A map to our store Store hours Special events Coffee recipes

Most of these functions are already up and running. Trend-setters Pleasantville and the southern part of the state are home to thousands of individuals who can be important to the successful positioning of Dark Roast Java. One mention on a TV talk program or in a 'lifestyle' magazine can (and has) launched many successful careers and businesses. With literally hundreds of celebrities and wealthy business people as local residents, the word-of-mouth recommendations from these people can drive significant business to us as well as generate favorable publicity. Many celebrities visit Pleasantville or have second homes here. The wife of the billionaire owner of Nationwide Communications owns the Pleasantville newspaper. A former actor owns a local vineyard and is a major hotel developer. Politicians and entertainers have interests in several restaurants. Our Mount Hill location will be in a building owned by a clothing brand multi-millionaire. Celebrities in Pleasantville are also actively involved in the community, many supporting several local charities. Our involvement in the community will enable us to garner exposure for Dark Roast Java among an important group of local residents.

Key individuals will be targeted with gift baskets from Dark Roast Java containing samples of our products to entice them to visit Dark Roast Java and talk about us with their friends. Design style The interior design of Dark Roast Java is unlike any other coffeehouse chain. While there are some upscale designs, they are all of the modern Italian or Starbucks look. Our upscale stylized "Cote d'Azur" Mediterranean Riviera design, featuring stained glass decorations, art glasswork, differentiates us from all others. Gift Items We carry a wide variety of quality gift items, including gift baskets. Gift basket business could eventually grow to be substantial. However, since it is difficult to project at this time we have not included it in the financial computations. We also offer sales of stained glass and glass artwork by the artisans who produced our decor furnishings. Community Involvement We will make ourselves an integral part of the local and world community. This will generate goodwill, create opportunities to forge important contacts with key people and live up to our company Mission Statement. Some of these community involvement goals include:

Take an active role in the Chamber of Commerce Supply complementary product to local charities for fund-raising activities Sponsor local sports teams Create and sponsor a Pleasantville to La Pine cross-mountain foot race following the old Stone Canyon stage route Purchase fair trade coffee whenever possible Support Fair Trade, organic, sustainable farming

Location The location of the first Dark Roast Java in Pleasantville is a prototype of future sites. Our second site on busy Shoreline Road in Mount Hill will feature our flagship store. It will be located just off the Oak Patch Road and Highway 66 exit, across from the Mount Hill Inn and The Junction Restaurant. It is by far the best location in Mount Hillone of America's most affluent cities. We will build Dark Roast Java coffeehouses in the best locations possible, as this is the key element in a successful operation. Site selection criteria include:

High traffic location Small or mid-size affluent market Year-round tourist activity Nearby (within 5 miles) student population

Outside dining

Other sites that meet these criteria include Newburg, Springfield, Bayview, Shorewood, Orchard Valley, Beachey Head, and Capital City. Exceptions will be made for some sites if they are deemed to be potentially very profitable. Sites in other states might include Utah, New Mexico, Oregon, Washington, Montana, Idaho, Colorado, etc. Plans are to locate Dark Roast Java coffeehouses in the Western states for efficiency of supply and management. Outside Dining The coffeehouse/cafe experience is indelibly linked to its European origins, where al fresco dining is a way of life. Americans have embraced sidewalk dining. It is one of the fastest growing additions to the American dining scene. Sidewalk dining also provides an excellent way for prospective customers to see and "check out" the coffeehouse for the first time. Sampling We will engage in several sampling activities to introduce potential customers (and current customers) to Dark Roast Java's range of drink options.

Samples will be distributed at the coffeehouse Samples will be given to passers-by on the street Discount coupons will be distributed on the street, via direct mail and at special events Complementary coffee will be served at charitable and civic events Free coffee service will be provided to the Chamber of Commerce, a radio station, the newspaper and at select government offices (e.g. the Planning and Zoning Department)

Portable Kiosk Within 6 to 8 months we will create a portable Dark Roast Java kiosk to sell and market our products at special events and community activities. Pleasantville has more than 130 such events every year. It will be an excellent way to publicize Dark Roast Java coffee. The kiosk will be highly visible and fun. It will also potentially be very profitable, although it's hard to determine how profitable with any accuracy until the local response is measured. We believe it could generate $75,000 - $100,000 annual revenue. Pre-paid, re-loadable, frequency and discount cards We will promote our program of gift cards and customer frequency cards to drive business and stimulate cash flow. Industry records indicate that 25% - 40% of all gift card amounts go unused. Also, gift cards have proven to be a popular holiday item accounting for more than 5% of total sales during December.

Pre-paid and re-loadable cards have also proven to be very popular with the major chain coffeehouses, again accounting for a significant percentage of sales. These cards promote customer loyalty as well. Frequency cards rewarding the repeat customer with a free drink after a specified number of visits are popular and proven methods to forge customer loyalty. Discount cards are used to build goodwill among specific groups such as the Chamber of Commerce members and college students. By tying in with our computerized sales and inventory system we will be able to track usage and allocate the expense to marketing. The Future The number of Dark Roast Java locations could easily reach 20 - 25 within five years. While the financials in this Business Plan only address the Pleasantville location, we can extrapolate from the store's performance (which will be carefully monitored and tracked) to get a general idea of the chain's projected profitability. With ten coffeehouses the gross revenues, when fully realized, would be more than $10 million using the third year performance figures. Even factoring in the cost of additional staff and other resources, a 10-store chain would likely generate a minimum of $1 million in profits annually, while building significant valuation. A 25-store chain would easily top $2.5 million in annual profits. Dark Roast Java's start-up, implementation and operation in Pleasantville will be the "blueprint" for future efficient expansion. Our new Mount Hill location will incorporate the knowledge we gain with our first store as well as new creative ideas, and become our "flagship" operation. Sources: SRDS, Interep Radio, Scarborough Market Data Survey.

5.3 Sales Strategy

Our sales strategy includes:

Staff salaries that are 10% above the industry average in order to attract the best people

Hiring for attitude so that we always have a friendly, enthusiastic staff to make customers feel welcome and appreciated; constant staff training to assure the best quality possible

State-of-the-art sales/inventory system to (A) reduce customer waiting time, and (B) create efficient product ordering

Create a mobile kiosk to take Dark Roast Java into the community at special events, farmer's markets, art shows, etc.

Sell coffee, gift baskets and glass artwork on our website

Establish coffee service at local businesses

Sell gift cards, frequency cards, pre-paid cards, and offer discounts to key groups

Create an ongoing sampling program

Conduct a consistent, aggressive marketing program

Be an active member of the community; be visible at charitable functions

Solicit customer feedback to constantly improve and streamline our operation

Key Strategy: an advanced and expandable point-of-sales system After carefully tracking the performance of the Pleasantville store through an expandable and highly detailed point-of-sale system, we will use this as a "blueprint" for expansion. For example, daily sales are tracked and analyzed by item, time period and cost of goods. Labor requirements are matched to projected in-store sales based upon past performance for maximum efficiency. Even after paying higher than average wages we expect to allocate no more than 25% to labor costs. Sales are linked to inventory to both streamline the efficiency of ordering and reduce "shrinkage" by instantly alerting us to unusual shortages compared with revenues. Scheduling can be done online and easily revised to accommodate changesall while projecting weekly, monthly, quarterly or annual labor costs. Schedules can be sent via email to staff members.

Cost of goods can be monitored for increased efficiency too. As we continually research methods of delivering a high quality but cost-efficient product, and by making small incremental improvements in the costs of items we expect to increase overall COG by a minimum of 5% during the first year of operation. As expansion occurs, the POS system can be adapted to each individual location and allow the central office to monitor the stores remotely as well as the overall combined operation. Close monitoring will allow us to achieve a high level of communication between stores as well as spot problems immediately and take corrective action.

5.3.1 Sales Forecast

Conservatively, we are forecasting an average of 300 customers per day during the first year with an average guest check expenditure for all items of $4.10. This figure was arrived at by surveying the customer traffic at the nearest competing coffeehouses which have a range of 150 - 500 customers per day and an average customer expenditure of $4.10. We have estimated our customer expenditure to be slightly higher (2.5%) due to the premium price we will charge for some of our items. Total cost of sales is approximately 25%. We expect growth to occur across all categories at about 10% annually as the business becomes more established and well-known, reaching 400+ customers per day within a year and more than 500+ within three years. These estimates are likely conservative. However, it is possible we could attain a 1,000-per-day customer count within three years.

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Sales Forecast Year 1 Sales Coffee drinks Tea, soft drinks, water, juice Pastries, food items Coffee beans Events/mobile kiosk Coffee service to businesses Internet sales Gift items Total Sales Direct Cost of Sales Coffee drinks Tea, soft drinks, water, juice Pastries, food items Coffee beans Events, mobile kiosk coffee service to businesses Internet sales Gift items Subtotal Direct Cost of Sales $265,101 $167,007 $154,126 $2,105 $0 $3,300 $8,500 $6,440 $606,579 Year 1 $43,828 $26,054 $55,241 $1,280 $0 $760 $3,925 $10,109 $141,197 Year 2 $344,631 $217,109 $200,364 $2,526 $0 $3,630 $10,625 $7,728 $786,613 Year 2 $44,266 $26,315 $55,793 $1,293 $0 $768 $3,964 $10,210 $142,609 Year 3 $448,021 $282,241 $260,473 $3,031 $0 $3,993 $13,281 $9,274 $1,020,314 Year 3 $44,709 $26,578 $56,351 $1,306 $0 $775 $4,004 $10,312 $144,035

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5.4 Milestones
The accompanying table lists important program milestones, with dates and managers in charge, and budgets for each. The milestone schedule indicates our emphasis on planning for implementation. A similar milestone development program will be developed for our Mount Hill location to insure its timely execution. What the table doesn't show is the commitment behind it. Our business plan includes complete provisions for plan-vs-actual analysis, and we will hold follow-up meetings every month to discuss the variance and course corrections.
Milestones Milestone Business/Marketing Plan Secure Funding Secure lease Secure name licensing Marketing plan Structure company type Develop investor program Attend Coffee Fest Health Dept. Select and order furnishings Site plans Select construction contractor Join Spec. Coffee Retailers Select and order lighting Create employee manual Alliance with water company Join Chamber of Commerce Select cash register system Business license, etc. Select paint contractor Choose paint palette Select and order flooring Gift items, suppliers, order Select pastry supplier Select equipment supplier Graphics/brochure design Select confection suppliers Select juice suppliers Credit card companies Create training program Select music system Install wireless Internet Hire manager, baristas Select business insurance

Start Date 2/1/2003 2/1/2003 2/10/2003 2/10/2003 2/10/2003 2/15/2003 2/15/2003 2/27/2003 3/1/2003 5/1/2003 3/1/2003 3/15/2003 3/15/2003 4/1/2003 4/1/2003 4/1/2003 4/1/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/15/2003 4/30/2003 4/30/2003 5/1/2003 5/1/2003 7/1/2003 7/1/2003

End Date 4/30/2003 4/30/2003 4/30/2003 4/30/2003 4/30/2003 4/30/2003 4/30/2003 3/1/2003 5/15/2003 6/15/2003 4/30/2003 4/15/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/30/2003 5/15/2003 5/30/2003 5/15/2003 5/30/2003 5/30/2003 5/30/2003 6/15/2003 6/15/2003 6/15/2003 6/15/2003 9/15/2003 7/20/2003

Budget $500 $500 TBD TBD $0 $0 $0 $500 TBD TBD TBD $150 $250 TBD $0 $0 $250 $0 $300 $0 $0 TBD TBD $0 $0 $0 $0 $0 $0 $0 $2,500 TBD TBD TBD

Manager N. P-S N. P-S N. P-S N. P-S N. P-S N. P-S N. P-S N. P-S/V. L N. P-S/V. L N. P-S/V. L N. P-S N. P-S N. P-S/V. L N. P-S/V. L N. P-S N. P-S N. P-S/V. L N. P-S N. P-S/V. L V. L N. P-S/V. L N. P-S/V. L V. L V. L N. P-S N. P-S N. P-S/V. L N. P-S N. P-S V. L N. P-S/V. L N. P-S/V. L N. P-S/V. L N. P-S

Department Marketing Marketing Admin Marketing Marketing Marketing Marketing Marketing Admin Admin Admin Admin Marketing Marketing Personnel Admin Admin Admin Admin Admin Admin Marketing Marketing Admin Admin Marketing Admin Admin Admin Personnel Admin Admin Personnel Admin

Design, print stationery Pre-opening parties GRAND OPENING Acheive 700+ daily customers Totals

7/15/2003 9/1/2003 9/15/2003 12/12/2003

7/31/2003 9/15/2003 9/30/2003 1/31/2004

$1,000 $1,000 $1,000 $0 $7,950

N. P-S Admin V. L Marketing N. P-S/V. L Admin/Marketing N. P-S/V. L Admin/Marketing

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Web Plan Summary

We plan to expand the functionality of our website so that it becomes a substantial revenue stream for Dark Roast Java. Although we've projected modest sales because of the difficulty in predicting online sales activity, we believe the potential exists for Internet sales to become a substantial percentage of our revenue. We will sell a number of items at our website, including:

Whole beans Tea Cocoa mixes Chocolates Gift baskets Gift items Art glass

We will sell a variety of high design stained glass, glass artwork and accessories featured in our coffeehouses by establishing ourselves as an agent for the artist/manufacturers. We will process the order and the artist will fulfill it. In this way we provide exposure and additional sales activity for the artists, and Dark Roast Java creates an additional revenue stream that could become substantial over time. Special downloadable offers good at the retail stores will be posted from time to time on the website. Eventually, customers will be able to reload their Dark Roast Java Card online so they can use it in lieu of cash or credit when they make purchases. The website will also function as an online "brochure" for both the Dark Roast Java quality story as well as enable visitors to "see" our retail store, get directions and maps, see our menu and find out about special events.

6.1 Website Marketing Strategy

Semua bahan komunikasi akan menyertakan alamat website Dark Roast Java. Bagi media, sebuah press kit online akan tersedia yang akan mencakup foto-download, rilis PR, cerita menarik, testimonial, bios manajemen kunci dan logo reproduceable. PR khusus akan mempromosikan bisnis hadiah keranjang kami dan menjual desain karya seni kaca kelas kami. Kami akan menjadi tuan rumah online "peristiwa" bagi pelanggan kami. Sebagai contoh, penulis dapat online untuk chatting dengan pengunjung ke website kami. Atau kita dapat mendukung kegiatan amal 'penggalangan dana. Ini akan memberi kita kesempatan untuk liputan media. Akhirnya, sebagai toko lebih terbuka, website akan berfungsi sebagai sarana komunikasi internal melalui daerah yang dilindungi sandi. Di sini, peraturan perusahaan, peraturan departemen kesehatan, berita, chat, "hidup" pengumuman internal dan pertemuan virtual akan berlangsung. In-store Internet computing An appealing customer feature at Dark Roast Java will be two Internet access stations with Internet 17 "monitor. Hal ini akan memungkinkan orang untuk mengakses Internet, sementara di toko Harga. Untuk akses ini belum ditentukan namun akan sekitar $ 15 per jam dengan struktur beberapa fraksi divisi-level dengan interval 15-menit (mungkin $ 5 untuk setiap jam triwulan). The Dark Roast Java website home page akan selalu-di halaman monitor. Stasiun internet memungkinkan pelanggan untuk mengecek email mereka atau situs web akses untuk bisnis, belajar atau informasi perjalanan. akses internet disediakan lebih sebagai layanan pelanggan daripada sumber pendapatan. Sementara itu akan kembali laba, jumlah yang sulit untuk menentukan sekarang sehingga belum diperhitungkan dalam P & L. perkiraan kami yang terbaik adalah bahwa kedua stasiun akan dilakukan selama total empat jam sehari, menghasilkan $ 1.800 per bulan pendapatan kotor ($ 21,600 per tahun minus sekitar $ 1.000 untuk biaya barang ditambah persentase penjualan).

6.2 Development Requirements

Dark Roast Java berencana untuk menyewa seorang desainer grafis dan back-end pengembang antarmuka pengguna teknis untuk membuat sederhana kami, berkelas, website belum terfokus. Pemeliharaan situs akan dilakukan oleh konsultan eksternal dikontrak. Sebagai website ini diperluas dan ditingkatkan, perkembangan masa depan bisa mencakup item seperti pelacakan, newsletter, dimuat down menu, ruang chat dan halaman pengguna web. Sebuah sumber daya teknis yang mungkin perlu dikontrak untuk membangun sebuah download bisa dilacak dan kemampuan newsletter.

7.1 Personnel Plan

Personil rencana termasuk dalam tabel berikut. Hal ini menunjukkan gaji pemilik ', gaji tahunan waktu manajer penuh, delapan paruh waktu gaji untuk espresso dan pembukuan server paruh waktu dan / atau supervisor situs.
Personnel Plan Ned Powers-Sebastiane Victor Lubitsch Manager Manager Barista #1 Barista #2 Barista #3 Barista #4 Barista #5 Barista #6 Barista #7 Barista #8 Bookkeeper Website Supervisor Total People Total Payroll Year 1 $39,000 $39,000 $34,000 $0 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $2,800 $3,000 $8,000 $0 10 $183,400 Year 2 $80,000 $80,000 $35,000 $30,000 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $7,200 $7,200 $15,000 $25,000 11 $337,000 Year 3 $80,000 $80,000 $35,000 $30,000 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $9,600 $7,200 $15,000 $25,000 12 $339,400

Financial Plan
Pertumbuhan penjualan akan setidaknya 15% per tahun, margin yang sangat baik, keuntungan sekitar 20% - 25%, arus kas yang cukup. Marketing akan tetap di bawah 5% dari penjualan. Perusahaan akan menginvestasikan keuntungan yang tersisa untuk pasar keuangan atau real estat. investasi masa depan akan menggunakan NPV proyeksi kas untuk mencapai hasil yang maksimal dengan risiko yang terbatas.

8.1 Important Assumptions

Pertumbuhan Rekam positif 20-tahun untuk minum kopi khusus akan berlanjut pada tingkat yang sehat. The Specialty Coffee Association mengatakan bahwa pasar jauh dari kejenuhan dan tidak akan mencapai kematangan sampai setidaknya 2019.

Para ketahanan industri warung kopi ke event nasional dan dunia yang negatif akan terus berlanjut. Meskipun resesi dan industri perang kedai kopi telah menunjukkan pertumbuhan yang kuat setiap tahun selama dua dekade terakhir. Kualitas rantai nasional akan tetap sama atau sedikit penurunan daripada meningkatkan standar mereka ketika mereka toko, otomatisasi peningkatan minuman espresso dan massa-menghasilkan proses pemanggangan.

minum kopi akan terus dianggap sebagai kemewahan yang terjangkau

tingkat minimum 15% dari pertumbuhan penjualan selama tiga tahun ke depan sebagai Dark Roast Java menjadi terkenal.

General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Year 1 1 3.00% 3.00% 20.00% 0 Year 2 2 3.00% 3.00% 20.00% 0 Year 3 3 3.00% 3.00% 20.00% 0

8.2 Break-even Analysis

Sebuah meja analisis impas telah diselesaikan berdasarkan biaya rata-rata / harga. Dengan biaya tetap sebesar $ 26.400 dan $ 4,50 dengan penjualan rata-rata, kita membutuhkan sekitar $ 35.000 per bulan untuk mencapai titik impas.

Break-even Analysis Monthly Revenue Break-even $34,422 Assumptions: Average Percent Variable Cost 23% Estimated Monthly Fixed Cost $26,409

8.3 Projected Profit and Loss

Kami proyek laba bersih yang lebih tinggi mulai pada tahun pertama. laju pertumbuhan kami didasarkan pada rata-rata industri, anjak dalam kondisi lokal. Kami berharap pertumbuhan 15% per tahun untuk tiga tahun pertama sebelum meratakan turun di 800-900 pelanggan per hari pada tingkat lalu lintas rata-rata. Pendapatan tahun pertama fiskal bruto diperkirakan akan melebihi $ 600.000 dan laba bersih setelah pajak sekitar $ 99.000, meningkat menjadi lebih dari $ 260.000 pada akhir tahun fiskal ketiga. Pertunbuhan kami sangat baik.karena sebagian besar biaya langsung penjualan rendah dan biaya operasional yang rendah secara umum untuk sebuah warung kopi. gaji staf yang lebih tinggi, gaji pemilik operator, pemasaran dan biaya sewa untuk mendorong manfaat dari lokasi premium tapi, sebaliknya, mereka juga akhirnya memberikan kontribusi terhadap pendapatan yang lebih tinggi dan keuntungan.

Pro Forma Profit and Loss Year 1 Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Sales and Marketing Depreciation Rent $606,579 $141,197 $24,000 $165,197 $441,382 72.77% $183,400 $12,500 $6,000 $45,900 $786,613 $142,609 $28,000 $170,609 $616,004 78.31% $337,000 $8,000 $4,000 $55,000 Year 2 Year 3 $1,020,314 $144,035 $32,000 $176,035 $844,279 82.75% $339,400 $8,000 $4,000 $60,000

Utilities Insurance Legal/accounting Payroll Taxes Mobile Kiosk Misc - maintenance, cleaning, training, fees Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales

$9,200 $2,400 $6,000 $27,510 $0 $24,000 $316,910 $124,472 $130,472 $0 $24,894 $99,577 16.42%

$14,000 $2,400 $6,000 $50,550 $0 $25,000 $501,950 $114,054 $118,054 $0 $22,811 $91,243 11.60%

$16,000 $2,500 $6,000 $50,910 $0 $25,000 $511,810 $332,469 $336,469 $0 $66,494 $265,975 26.07%

8.4 Projected Cash Flow

Kami memposisikan diri di pasar sebagai risiko rendah perhatian-sampai sedang dengan arus kas yang relatif stabil. Hutang dibayar pada akhir setiap bulan, sedangkan penjualan secara tunai, memberikan Dark Java Panggang struktur kas yang sangat baik. Lima puluh persen dari kas di atas $ 20.000 akan diinvestasikan ke dalam portofolio saham semi-cair untuk mengurangi biaya kesempatan dari kas. Kontribusi asli kami dirancang untuk memberikan para investor kami dengan posisi kas yang kuat setiap saat.

Pro Forma Cash Flow Year 1 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received Year 2 Year 3

$606,579 $606,579 $0

$786,613 $786,613 $0

$1,020,314 $1,020,314 $0

New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance

$0 $0 $0 $0 $0 $0 $606,579 Year 1 $183,400 $275,940 $459,340 $0 $0 $0 $0 $0 $0 $17,600 $476,940 $129,639 $131,139

$0 $0 $0 $0 $0 $0 $786,613 Year 2 $337,000 $358,649 $695,649 $0 $0 $0 $0 $0 $0 $26,400 $722,049 $64,564 $195,703

$0 $0 $0 $0 $0 $0 $1,020,314 Year 3 $339,400 $406,457 $745,857 $0 $0 $0 $0 $0 $0 $26,400 $772,257 $248,057 $443,761

8.5 Projected Balance Sheet

Semua tabel kita akan diperbarui setiap bulan untuk mencerminkan kinerja masa lalu dan asumsi masa depan. Dengan asumsi masa depan tidak akan didasarkan pada kinerja masa lalu, tapi lebih pada kegiatan siklus ekonomi, kekuatan industri regional, dan kemungkinan arus kas masa depan. Kami berharap pertumbuhan yang solid dalam kekayaan bersih di luar tahun 2003.
Pro Forma Balance Sheet Year 1 Assets Current Assets Cash Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Year 2 Year 3

$131,139 $16,591 $15,000 $162,730 $62,000 $6,000 $56,000 $218,730 Year 1 $33,253 $0

$195,703 $16,757 $15,000 $227,461 $62,000 $10,000 $52,000 $279,461 Year 2 $29,140 $0

$443,761 $16,925 $15,000 $475,685 $62,000 $14,000 $48,000 $523,685 Year 3 $33,790 $0

Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth

$0 $33,253 $0 $33,253 $250,500 ($164,600) $99,577 $185,477 $218,730 $185,477

$0 $29,140 $0 $29,140 $250,500 ($91,423) $91,243 $250,321 $279,461 $250,321

$0 $33,790 $0 $33,790 $250,500 ($26,579) $265,975 $489,896 $523,685 $489,896

8.6 Business Ratios

Kami mengharapkan margin laba bersih, marjin laba kotor, dan Return on Asset meningkat terus selama tiga tahun. Imbal hasil ekuitas akan menurun karena persyaratan modal yang lebih rendah dan penerimaan kas yang lebih tinggi. modal kerja bersih yang dihasilkan oleh bisnis akan terus meningkat setiap tahunnya, membuktikan bahwa kita memiliki arus kas untuk tetap bertahan hidup independen dari suntikan modal dari luar. Sementara rasio kita tidak semua selaras dengan orang-orang dari industri, karena sifat unik dari bisnis kami, penting untuk menunjukkan bahwa di daerah kunci yang jumlah yang sangat bagus. Rasio kategori industri hanya saat ini tersedia, SIC Kode 5812.0304, termasuk kafe, restoran dan usaha lainnya melayani kopi. Usaha ini sangat berbeda dari konsep rumah kopi Dark Roast Java.
Ratio Analysis Year 1 Sales Growth Percent of Total Assets Inventory Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth 0.00% 7.59% 6.86% 74.40% 25.60% 100.00% 15.20% 0.00% 15.20% 84.80% 100.00% 72.77% 56.32% 0.00% 20.52% 4.89 4.39 15.20% 67.11% 29.68% 6.00% 5.37% 81.39% 18.61% 100.00% 10.43% 0.00% 10.43% 89.57% 100.00% 78.31% 66.62% 0.00% 14.50% 7.81 7.23 10.43% 45.56% Year 2 Year 3 Industry Profile 29.71% 5.24% 3.23% 2.86% 90.83% 9.17% 100.00% 6.45% 0.00% 6.45% 93.55% 100.00% 82.75% 56.54% 0.00% 32.58% 14.08 13.58 6.45% 67.87% 4.34% 35.11% 43.74% 56.26% 100.00% 18.93% 25.48% 44.41% 55.59% 100.00% 61.91% 39.08% 2.55% 1.38% 1.14 0.79 49.97% 3.97%

Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout

56.91% Year 1 16.42% 53.69% 10.10 9.30 27 2.77 0.18 1.00 $129,477 0.00 0.36 15% 4.39 3.27 0.18

40.81% Year 2 11.60% 36.45% 8.55 12.17 32 2.81 0.12 1.00 $198,321 0.00 0.36 10% 7.23 3.14 0.29

63.49% Year 3 26.07% 54.29% 8.55 12.17 28 1.95 0.07 1.00 $441,896 0.00 0.51 6% 13.58 2.08 0.10

7.93% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a

Appendix
Sales Forecast Month 1 Sales Coffee drinks Tea, soft drinks, water, juice Pastries, food items Coffee beans Events/mobile kiosk Coffee service to businesses Internet sales Gift items Total Sales Direct Cost of Sales Coffee drinks Tea, soft drinks, water, juice Pastries, food items Coffee beans Events, mobile kiosk coffee service to businesses Internet sales Gift items Subtotal Direct Cost of Sales 0% 0% 0% 0% 0% 0% 0% 0% $11,915 $4,290 $4,867 $50 $0 $0 $0 $1,958 $23,080 Month 1 $2,980 $645 $1,500 $35 $0 $0 $0 $800 $5,960 $20,086 $7,778 $9,909 $25 $0 $0 $0 $282 $38,080 Month 2 $5,022 $1,168 $3,500 $15 $0 $0 $100 $1,350 $11,155 $14,600 $10,899 $12,600 $50 $0 $500 $0 $300 $38,949 Month 3 $3,650 $1,635 $4,542 $25 $0 $25 $0 $1,400 $11,277 $18,000 $11,000 $12,000 $80 $0 $0 $0 $300 $41,380 Month 4 $2,700 $1,650 $4,132 $50 $0 $0 $0 $2,500 $11,032 $18,500 $11,340 $12,500 $100 $0 $100 $0 $300 $42,840 Month 5 $2,700 $1,701 $4,525 $65 $0 $25 $0 $1,200 $10,216 $18,500 $13,000 $12,750 $100 $0 $100 $0 $300 $44,750 Month 6 $2,776 $2,950 $4,620 $65 $0 $25 $0 $1,350 $11,786 $24,500 $15,700 $13,000 $100 $0 $300 $500 $500 $54,600 Month 7 $3,450 $2,355 $4,916 $65 $0 $75 $225 $250 $11,336 $25,500 $19,500 $14,000 $300 $0 $300 $1,000 $500 $61,100 Month 8 $3,825 $2,925 $5,114 $185 $0 $75 $450 $259 $12,833 $27,500 $19,500 $15,500 $300 $0 $500 $1,000 $500 $64,800 $4,125 $2,925 $5,530 $185 $0 $125 $450 $250 $13,590 $28,000 $19,000 $15,000 $300 $0 $500 $2,000 $500 $65,300 $4,200 $2,850 $5,217 $185 $0 $125 $900 $250 $13,727 $28,500 $17,000 $15,000 $300 $0 $500 $2,000 $500 $63,800 $3,975 $2,550 $5,217 $185 $0 $125 $900 $250 $13,202 $29,500 $18,000 $17,000 $400 $0 $500 $2,000 $500 $67,900 $4,425 $2,700 $6,428 $220 $0 $160 $900 $250 $15,083 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Month 9 Month 10 Month 11 Month 12

Need real financials?

Personnel Plan Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Ned Powers-Sebastiane Victor Lubitsch Manager Manager Barista #1 Barista #2 Barista #3 Barista #4 Barista #5 Barista #6 Barista #7 Barista #8 Bookkeeper Website Supervisor Total People Total Payroll 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% $0 $0 $1,000 $0 $800 $800 $800 $800 $800 $800 $0 $0 $1,000 $0 9 $6,800 $0 $0 $3,000 $0 $800 $800 $800 $800 $800 $800 $0 $0 $1,000 $0 9 $8,800 $0 $0 $3,000 $0 $800 $800 $800 $800 $800 $800 $0 $0 $1,000 $0 9 $8,800 $0 $0 $3,000 $0 $800 $800 $800 $800 $800 $800 $0 $0 $1,000 $0 9 $8,800 $4,000 $4,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $0 $0 $500 $0 9 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $0 $500 $0 10 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10 Month 10 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10 Month 11 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10 Month 12 $5,000 $5,000 $3,000 $0 $800 $800 $800 $800 $800 $800 $400 $500 $500 $0 10

$16,300 $18,700 $19,200 $19,200 $19,200 $19,200 $19,200 $19,200

General Assumptions Month 1 Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other 3.00% 3.00% 20.00% 0 1 3.00% 3.00% 20.00% 0 Month 2 2 3.00% 3.00% 20.00% 0 Month 3 3 3.00% 3.00% 20.00% 0 Month 4 4 3.00% 3.00% 20.00% 0 Month 5 5 3.00% 3.00% 20.00% 0 Month 6 6 3.00% 3.00% 20.00% 0 Month 7 7 3.00% 3.00% 20.00% 0 Month 8 8 3.00% 3.00% 20.00% 0 Month 9 Month 10 Month 11 9 3.00% 3.00% 20.00% 0 10 3.00% 3.00% 20.00% 0 11 Month 12 12 3.00% 3.00% 20.00% 0

Pro Forma Profit and Loss Month 1 Sales Direct Cost of Sales Other Costs of Goods Total Cost of Sales Gross Margin Gross Margin % Expenses Payroll Sales and Marketing Depreciation Rent Utilities Insurance Legal/accounting Payroll Taxes Mobile Kiosk Misc - maintenance, cleaning, training, fees Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales 15% 15% $6,800 $1,000 $500 $3,800 $400 $200 $500 $1,020 $0 $2,000 $16,220 ($1,100) ($600) $0 ($220) ($880) -3.81% $8,800 $1,000 $500 $3,800 $800 $200 $500 $1,320 $0 $2,000 $18,920 $6,005 $6,505 $0 $1,201 $4,804 12.62% $8,800 $1,000 $500 $3,800 $800 $200 $500 $1,320 $0 $2,000 $18,920 $6,752 $7,252 $0 $1,350 $5,402 13.87% $8,800 $1,000 $500 $3,800 $800 $200 $500 $1,320 $0 $2,000 $18,920 $9,428 $9,928 $0 $1,886 $7,542 18.23% $16,300 $1,000 $500 $3,800 $800 $200 $500 $2,445 $0 $2,000 $27,545 $3,079 $3,579 $0 $616 $2,463 5.75% $18,700 $1,000 $500 $3,800 $800 $200 $500 $2,805 $0 $2,000 $30,305 $659 $1,159 $0 $132 $527 1.18% $19,200 $1,000 $500 $3,800 $800 $200 $500 $2,880 $0 $2,000 $30,880 $10,384 $10,884 $0 $2,077 $8,307 15.21% $19,200 $1,500 $500 $3,800 $800 $200 $500 $2,880 $0 $2,000 $31,380 $14,887 $15,387 $0 $2,977 $11,910 19.49% $19,200 $1,000 $500 $3,800 $800 $200 $500 $2,880 $0 $2,000 $30,880 $18,330 $18,830 $0 $3,666 $14,664 22.63% $19,200 $1,000 $500 $3,900 $800 $200 $500 $2,880 $0 $2,000 $30,980 $18,593 $19,093 $0 $3,719 $14,874 22.78% $19,200 $1,000 $500 $3,900 $800 $200 $500 $2,880 $0 $2,000 $30,980 $17,618 $18,118 $0 $3,524 $14,094 22.09% $19,200 $1,000 $500 $3,900 $800 $200 $500 $2,880 $0 $2,000 $30,980 $19,837 $20,337 $0 $3,967 $15,870 23.37% $23,080 $5,960 $2,000 $7,960 $15,120 65.51% Month 2 $38,080 $11,155 $2,000 $13,155 $24,925 65.45% Month 3 $38,949 $11,277 $2,000 $13,277 $25,672 65.91% Month 4 $41,380 $11,032 $2,000 $13,032 $28,348 68.51% Month 5 $42,840 $10,216 $2,000 $12,216 $30,624 71.48% Month 6 $44,750 $11,786 $2,000 $13,786 $30,964 69.19% Month 7 $54,600 $11,336 $2,000 $13,336 $41,264 75.58% Month 8 $61,100 $12,833 $2,000 $14,833 $46,267 75.72% Month 9 $64,800 $13,590 $2,000 $15,590 $49,210 75.94% Month 10 $65,300 $13,727 $2,000 $15,727 $49,573 75.92% Month 11 $63,800 $13,202 $2,000 $15,202 $48,598 76.17% Month 12 $67,900 $15,083 $2,000 $17,083 $50,817 74.84%

Pro Forma Cash Flow Month 1 Cash Received Cash from Operations Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interestfree) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 0.00%

$23,080 $23,080

$38,080 $38,080

$38,949 $38,949

$41,380 $41,380

$42,840 $42,840

$44,750 $44,750

$54,600 $54,600

$61,100 $61,100

$64,800 $64,800

$65,300 $65,300

$63,800 $63,800

$67,900 $67,900

$0 $0 $0 $0 $0 $0 $0 $23,080 Month 1 $6,800 $357 $7,157

$0 $0 $0 $0 $0 $0 $0 $38,080 Month 2 $8,800 $10,917 $19,717

$0 $0 $0 $0 $0 $0 $0 $38,949 Month 3 $8,800 $17,446 $26,246

$0 $0 $0 $0 $0 $0 $0 $41,380 Month 4 $8,800 $24,378 $33,178

$0 $0 $0 $0 $0 $0 $0 $42,840 Month 5 $16,300 $24,215 $40,515

$0 $0 $0 $0 $0 $0 $0 $44,750 Month 6 $18,700 $22,815 $41,515

$0 $0 $0 $0 $0 $0 $0 $54,600 Month 7 $19,200 $26,728 $45,928

$0 $0 $0 $0 $0 $0 $0 $61,100 Month 8 $19,200 $26,266 $45,466

$0 $0 $0 $0 $0 $0 $0 $64,800

$0 $0 $0 $0 $0 $0 $0 $65,300

$0 $0 $0 $0 $0 $0 $0 $63,800

$0 $0 $0 $0 $0 $0 $0 $67,900

Month 9 Month 10 Month 11 Month 12 $19,200 $31,141 $50,341 $19,200 $31,256 $50,456 $19,200 $30,828 $50,028 $19,200 $29,594 $48,794

$0 $0 $0 $0 $0 $0 $0 $7,157 $15,923 $17,423

$0 $0 $0 $0 $0 $0 $0 $19,717 $18,363 $35,786

$0 $0 $0 $0 $0 $0 $0 $26,246 $12,704 $48,490

$0 $0 $0 $0 $0 $0 $0 $33,178 $8,202 $56,692

$0 $0 $0 $0 $0 $0 $2,200 $42,715 $124 $56,817

$0 $0 $0 $0 $0 $0 $2,200 $43,715 $1,035 $57,852

$0 $0 $0 $0 $0 $0 $2,200 $48,128 $6,472 $64,324

$0 $0 $0 $0 $0 $0 $2,200 $47,666 $13,434 $77,758

$0 $0 $0 $0 $0 $0 $2,200 $52,541 $12,259 $90,016

$0 $0 $0 $0 $0 $0 $2,200 $52,656 $12,644 $102,661

$0 $0 $0 $0 $0 $0 $2,200 $52,228 $11,572 $114,233

$0 $0 $0 $0 $0 $0 $2,200 $50,994 $16,906 $131,139