Scientific research is systematic, controlled, empirical, and critical investigation of natural

phenomena guided by theory and hypotheses about the presumed relations among such
phenomena (Kerlinger, 1986).
Objectives: Create your own scent The purpose of the research is to conduct specific
approach of consumers towards individuals creations.
Design: The program has been designed through scientific research methodology considering
diversity, social responsibility and ethics, management, staffing, local demand and other
forces which could be affected to design the future model. The number of questions will be
designed to involve practice in public place which may help us to find the lacking of
customer expectations and the competitive advantages. There will be basic a few open
questions which will be considering randomly in public to identify customer needs.
Have you ever thought of customizing your own scent?
What will you consider if you prepare your own fragrance?
What type of products do you like?
What is your budget when making purchases?
Why customize perfumes have own identification?
Do you prefer visiting shop or online?
Do you prefer filling out your preferences and consult with one of the perfumer specialists?
There are a number of things to consider while a business model is planned ahead. First of
all, almost 23.8 million people live in Australia and diversity is one of the notable factors
when business plans are undertaken. Everyone loves perfume and has their own signature
therefore diversity helps to boost business since people bring their choice and culture with
them wherever they live.

According to Daily life magazine, the new venture of Chanel's head designer Karl
Lagerfeld two eponymous perfumes: one for women and one for men are expected to
be very successful. The fragrances which launched May 18 in Australia are already being
estimated by industry experts to generate between $AU75.1 million and $AU90.2 million in
its first year of retail sales worldwide. Karl Lagerfeld Eau De Parfum (from $99; available at
Myer and David Jones)

Karl Lagerfeld Pour Homme Eau De Toilette (from $90; available at Myer and David
Jones).

The market research has been undertaken considering people, earnings, gender and other
factors which will lead to the positive outcomes. The fragrance industry is a $25- to $30billion-dollar-a-year market. Fragrance products include perfume, cologne, soaps, lotions and
candles.
Product safety priority
It is no surprise that cosmetics are big business in this country. We use any number of a vast
range of products every day. They are a big part of our daily routines whether we are men,
women or children. The standard works to maintain consumer confidence and prevent
injuries. It helps consumers identify the presence of cosmetic ingredients that they may be
allergic or sensitive to, or otherwise concerned about, and it allows comparison of different
products at the point of sale.
An inaccurate list of ingredients, or a product without an ingredient list could see consumers
with allergies exposed to harm. The cosmetics labelling standard was developed so everyone
buying and using the products knows what is in them. Compliance with the cosmetic standard
is important for the ACCC as a product safety regulator and consumer watchdog.
Cosmetics were the source of approximately 30 per cent of total injury reports received by
the ACCC in the past year (Source ACCA). Therefore it is mandatory to product regulatory
by authority and compliance with Australian consumer law which states product and service
must be according to:

Have been accurately described and match any sample or model

Match descriptions made by the salesperson, on packaging and labels, and promises
/claims made in promotions or advertising

Satisfy any express warranty; and

Meet any extra promises made about performance, condition and quality, including
life time guarantees and money back offers

PESTEL analysis
The political factors affecting business are often given a lot of importance. Several aspects of
government policy can affect business. All firms must follow the law. Managers must find
how upcoming legislations can affect their activities.
The political environment can impact business organizations in many ways. It could add a
risk factor and lead to a major loss. Managers should understand that the political factors
have the power to change results. It can also affect government policies at local to federal
level. Companies should be ready to deal with the local and international outcomes of
politics. Increase or decrease in tax could be an example of a political element.
Australia has produced a multicultural society through a policy of social inclusion and mutual
respect, in contrast to European policies which produce separate community development.
Australia has a particular demographic that features multiple substantial minority religious
communities living in ways that promote daily encounters among people of different
backgrounds.
Technology helps to boost business. Customers can be updated with our new products by
using technology and innovation. Customers can choose their individuals consultation events
time by visiting our websites and would become familiar with our products. Although there
are pros and cons of technology, it can be considered as useful strategy to spread our products
and services.
There are no other competitors in Sydney CBD who directly offer as same as our products.
However, Priceline and Chemist retailers may have some products which can be similar
especially a few perfume lines namely Channel, Gorgio Armani, Chole, Calvin Klein,
Research design and methodology
In order to collect proper information there are few basic rules when framing survey
questions. The collection of data will be acquired based on Qualitative and Quantitative with
combination of both approaches.
Phone interviews, online surveys, door to door surveys.
Multiple-choice questions.
Statistical inference by prediction, decision and Sampling.
On the basis of the present statement Interviews and questionnaire will be conducted
randomly for online survey, mail and other communication.
Generating primary data through survey, experiments, case studies, programmed
evaluations.
Analyzing existing data through Numeric and Text data.
The data will be based on excel, spreadsheet, word documents and in quick notes. As soon as
the survey is accomplished then the further technique and components will analysis data

using virtual statistics methods. This research will need the following tools for the recording
of the observation that will be used in the analysis; laptops, notebooks and other electronic
devices.
LA ROSE is the specialist for individual perfume and cologne. Our service offers you the
possibility to create your own custom fragrance. We have different fragrant notes for you to
select as Candles, soap, freshener, body butter. Of course, we help you creating and advising
what you best from the information you give us. Our customers can also create their
personalized flacon, for example with special note. You can leave the scent development to
our experts. They develop a perfume based on your disclosures, preferences and wishes.
Today, most perfume is used to scent bar soaps. Many natural man-made materials have been
used to make perfume to apply to the skin and clothing, to put in cleaners and cosmetics.
The innovative fragrance system of LA ROSE allows every person to create her or his own
perfume. Making custom perfumes is not easy. One does not require any knowledge of
fragrances and interaction with them as the fragrances blend well with one another. LA ROSE
fragrance has been developed in such a way that with new creation top, middle and base
notes are always balanced ensuring perfect blend. That means you can find your perfect
perfume. After selecting your gender, you can first decide the characters of you fragrance. For
each gender, you can choose different characters.
Strategy
LA ROSE is to combine all of its marketing goals into one comprehensive plan. It focuses on
the right product mix in order to achieve the maximum profit potential and sustain the
business and foundation of a marketing plan. Increasing awareness of our products and
services make our customer happy satisfy.
Once you've developed our marketing strategy, there is a "Seven P Formula" we should use to
continually evaluate and re-evaluate our business activities. These seven are:
Product
Product is a good, idea, method, information, object or service created as a result of
a process and serves a need or satisfies a want. Design, quality and packaging are the three
aspects that the product relaying on.
People
The
definition
of
people
is
referring
the entire body of persons who constitute a community, tribe, nation,
or
other group by virtue of a common culture, history, religion. It contains three
management, employees and customer.

to
any
aspects:

Promotion
Promotions refer to the entire set of activities, which communicate the product, brand or
service to the user. The idea is to make people aware, attract and induce to buy the product, in
preference over others. The most effective three methods are advertisements, specials offers
and user trails.
Physical evidence

It refers to customers however they tend to rely on physical cues to help them evaluate
the product before they buy it.

Place
Place in the marketing mix refers to the channel, or the route, through which goods move
from the source to the final user. The main sales channels are retails, wholesales and online
shopping.
Price
Price is defined as a value that will purchase a finite quantity, weight, or other measure of
goods and service, the amount of money given or set as consideration for the sale of a
specified thing. It is based on discount, value based and payment methods.
Process
A series of actions or steps taken in order to achieve a particular end. It is also define as
taking a time in making whole product with procedure.
Service delivery
Customer focus
Feedback
As products, markets, customers and needs change rapidly, we, continually revisit these seven
Ps to make sure we are on track and achieving the maximum results possible for us in today's
marketplace.
Business swot analysis
What make SWOT particularly powerful is that, with a little thought, it can help us uncover
opportunities that we are well-placed to exploit. And by understanding the weakness of our
business, we can manage and eliminate threats that otherwise catch we unawares.

We
our
out
are
it at
and

use
SWOT
analysis to get an
understanding of
competitors.
When carrying
our analysis, we
realistic
and
rigorous. We apply
the right level,
supplement
it
with
other
optiongeneration tools
where
appropriate.

More than this, by looking at our self and our competitors using the SWOT framework, we
can start to craft a strategy that helps us to distinguish from competitors, so that we can
compete successfully in the market.
Staff training
Salespeople need to understand product details to enable their confidence when selling,
especially new employees. La Rose will provide salespeople with sufficient product training
from nose to notes if they are completely new to perfume.
The training will start from smell things around themselves; including most often used smells
in fragrance such as flowers, fruits and herbs. Hone their nose on Classics is the next stage,
since smell the classics to learn about perfumes that are considered great and the quality is
often impressive.
Consultants will be available to them if they need any help in regarding the ingredients of the
fragrance. Since it could be hard for to salespeople retain a huge amount of information and
scents at one time, our company will keep training short but consistent.
When completing training process, the salespersons should be able to familiar with most
scents. Then understand our fragrance products will be much easier for them. They can
identify specific client requirements and understand products details well enough to position
them as the perfect solution.
Finally, field train and detailed feedback will be provided. Only through field train, can
salespeople refine and sharp their communication skills and customers service skills, such as
how to provide suggestions and satisfied customers diversified needs.
Since it could be hard to get the entire team physically gathered in one meeting room due to
travel costs and time-consuming, online learning will be launched. With online video and
module, they can keep tracking on any new products and grasp an understanding of their
details. Also, online training enable manager to track progress to ensure that everyone has
viewed the necessary material.
Sales and promotions

In order to achieving our sales goals, 20% sales commission of their daily sales will be
endorsed to salespeople as an incentive.
In addition to that, La Rose will initiated seasonal sales promotions to boost our sales,
especially during Christmas and at end of the financial year.
In our opinion, the first line for creating an audience for perfume is to build a knowledgeable
perfume sales force, which could be achieved from the staff training.
Next, stores need to offer samples freely. How can people buy a perfume that you want to live
with if you haven't been able to try it a while?
We also think perfume companies should slow down their releases to one or two carefully
selected scents a year so that consumers can catch up. Instead, they should spend more time
presenting the classic scents in their lines to new consumers. Too many fragrance releases a
year means that that many more can be ignored.
Online Marketing
Many brands advertise fragrance collections through one-dimensional campaigns that simply
show an image of the product. Brands that take a multi-layered approach to social promotions
are likely to generate more interest.
Brands are able to create multi-faceted campaigns to display fragrances through social media.
By including video, interactive features and in depth content a consumer is likely to be
interested in experiencing the fragrance without ever smelling it.
Fragrance marketers benefit from social media-driven advertising campaigns that allow
consumers to explore a fragrances elements and essence before coming into a store.
A trend in fragrance promotions is creating social videos. Apparel and accessory brands such
as Givenchy, Burberry, Michael Kors have promoted fragrances through social videos that
display the lifestyle associated with a scent.
Operating Plan
Business organizational structure.
Choosing a business structure is an important decision before you start a business. We choose
partnership business structure for many advantages from splitting income to simplicity and
tax benefits.
As we believe in free flow of information in our organization we will have Matrix
Organizational Structure. A matrix Structure provides for reporting levels both horizontally as
well vertically.
The advantages of a matrix organizational structure are that employees have responsibility
not only for their department but for organizational projects.
Employee will be given training and workshop to understand the organizational structure, so
that every employee understands the duties and responsibilities.
Human Resources (Staffing)

The Business is required to have 6 employees in order for the business operations to run
efficiently and for the business to meet goals. Apart from this the business would also require
a finance/accounts specialist and an IT Specialty. It is Important to check candidates
qualifications or skills.

Store Manager (Full Time)-1

Overall Authority of the Store

Holds Managerial and financial Power
Handle the costumer complain and big orders.
And other as directed by the Director of the company.

Customer Service Executive (Full Time) -2

Daily invoicing if any, and its services, sorting and handing out mail, answering
incoming calls on multi-line telephones setting appointments, filing, records keeping,
keyboarding/data entry and performing a variety of other office tasks, such as faxing
or emailing.
Helping to develop a customer service policy for an entire organization; managing
and leading a team of customer services staff; handling face-to-face enquiries from
customers, will also be responsible to taking the students to the property and showing
them the rooms etc. Interact with businesses overseas to get students to use your
services.
Handling all the accounts with MYOB software.
All maintenance (cleaning inspection)
Take feedback from customers.
And, other as directed by the store manager.

Sales Person (Full Time) -2

Customizing the Fragrance according to the need of the of the customer.

Approach customer face to face and serve their need
Maintain the Health and Safety practice of the mixing the fragrance.
And other as directed by store manager or customer service representative.

Staff training and Presentation

An initial training program can be conducted to acquaint the new employees with their
services and the organization policy and procedures. However, no formal training sessions
will be help to teach the staff members. They shall be required to work 5 days a week. 38
hours full time and maximum of 20 hours for students (in case international students 20
hours only).
Staff Uniforms and Dress Code
Store staff is required to have come to office dressed in sleek professional attire. Having a
professional dress code provides a positive image of the business while interacting with

clients (students) and suppliers. The dresses would include button up shirts and smart
trousers/skirts (for ladies), blazers and formal shoes
HR Policies
The HR policies for your business need to be consistent with the goals and objectives of
business. It will also coordinate and communicate among your employees.
Probationary Period: A new full time employee will be under probationary period of first 3
months.
Benefits: employee who will pass three months probationary period will get the following
benefits: Holidays, Vacation Benefits, and Sick Leave
Termination
The employee can be terminated for any fraudulent activities. These include:

Falsification of timekeeping records, the application form, or any other business

records

Theft or inappropriate removal or possession of company property

Working under the influence of alcohol or illegal drugs

Fighting or threatening violence in the workplace

Sexual or other unlawful harassment

Excessive absenteeism or any absence without notice

Unauthorized disclosure of business "secrets" or confidential information

Unsatisfactory performance or conduct

Misuse of business funds/money/equipment/property

Market Analysis:
Fragrance and Perfume industry is a very competitive Industry. From small neighbor retail
shop to big multi- billion company could be competitors. We dont have a real competitor for
our business but chemist warehouse, David jones, and many other online and offline retail
shops can be the competitors. Our business will target consumer market initially followed by
local and national market after few years. Your business target all the consumers range from
men to women, all age group and religion. Basically, we want to reach the consumer who are
more deeply into perfume and fragrances, who are love to costume their own perfume so our
major target will be to attract the young age group between 18 to 50.
Competitive Advantages:
Based on market survey following are the competitive advantages:

The prices of our product and services are the most competitive with its related
competitors.
Central location gives a competitive advantage.
Innovative idea to costume the fragrance can create unique position for your business.

Strategy to approach the Target Market.

We will inject our advertisement budget on national level newspaper, magazine,

Radio.
We will sponsor many events and discount cards and many more.

Positioning strategy Mapand goals.

Financial
Perspecti
ve

Enhance customer value

Improve cost structure

Customer
Perspecti
ve

Increase customer satisfaction

Inspire loyality
Product
Price
Quality
Availability
Uniqueness
Innovation
Develop Web site

Internal
Perspecti
ve
Learning
and
Growth
for
making
an
contract

Perfume industry is a very competitive and location based industry, in which decisions are
made keeping in mind about the past, present and future value of assets. In order to develop
an effective business strategy for any business, there are 2 questions that needed to be asked:

How is the industry?

Whats your market position?

At this stage there is minimal competition in this industry but, we assume a lot of new
businesses of similar concept will be entering the market in the coming years. Therefore, our

job in this industry is not only to compete to increase the profitability, but also how you will
position yourself on the superior front.

Critical Success Factor (CSR)

PEOPLE

PLANET

CS
R

PRODUC
T

COMUNI
TY

Based on our reaserch these several CSF can help you a lot to have a successful business. We
highly recommended to follow these CSFs in your small business:

Rise of mobile e commerce

Shipping
Use social media
Driving traffic to the site
Customer feedback
Thank your customers
Go global

Following are the forces of competition in the industry:

Industry Rivalry: At this stage there isnt many competitors for your business in the
market, yourself being a new business has to settle and position yourself in the market
to face future competition.
Threat of new entrants into the industry: By looking at the number of students
coming to Australia there is a high probability of lot more entrepreneurs entering the
market.

Bargaining power of the suppliers: Suppliers from whom you purchase critical
inputs, since you will have major utilities suppliers there is a probability of no bargain
from your end.
Bargaining power of the buyers: Buyers in your case will be clients to whom you
are trying to sell your service. With Regards to clients or students they will sign a
contract and would be bound to be within the same.
Threats of substitutes: This seems to a strong threat to the business as well as the
industry. The substitutes are many in number and forms. It could be people sharing
accommodation. Or people running cheaper substitutes of similar services

Operating Plan
1. Staff
As an employer, it is important to understand the obligations towards the people who work
and contribute to the business. The responsibilities of La Rose are to comply with Work
Health and Safety Regulation to keep staff morale high and reduce staff turnover. Keeping the
employees happy and safe can also serve to improve the overall image of the business.
As the businesss operation is based on providing product and service to customer, the
process of hiring qualified people in technology and customer service is a main key. In
attempt to run the business in an effective way, there are few steps involved in management
process:
1.
2.
3.
4.
5.
6.
7.

Recruitment
Selection
Orientation and Placement
Training and Development
Performance Evaluation
Remuneration
Promotion

The Business also provides award conditions for staff. In Australia, the award conditions are
followed under Private Sector Award 2010, aims to cover the employers in many sectors with
respect to the employees. The business will have commission policy in accordance with the
increase in the number of sales. In this stage, sale staffs salary is based on how much sales
they generated. The commission rate is 20% of sale price, while other staffs such as customer
service and store manager,their salary is based on the usage time. We also provide annual
award on high season and public holiday based on staffs performance. According to the
secondary research on Australian Government Fair Work Ombudsman, La Rose plans to set
salary as shown below.

Position

Type

Salary

Store Manager

Full-time

$28/hour

Customer service

Full-time

$22/hour

Customer service

Part-time

$19/hour

Sales person

Contractor

Based on commission, 20% sale price

La rose Pty Ltd will also pay staffs compensation if they are injured at work or become sick
due to their work. It includes payments to employees to cover their wages while they are not
fit for work and medical expense.
2. Equipment
At the first stage of business, there are several equipment need to be considered to meet the
demand of employees:
1.
2.
3.
4.
5.
6.
7.
8.
9.

Two desktop computers

Four large shelves
One laser printer
One counter
One table
Four chairs for customers
Two telephone sets for customer services
5 perfume mixing tools/machines
One fridge, one kettle, one toaster and one microwave for kitchen area

The utilities expenses for the business include electricity, gas, telephone and internet.
3. Risk Management
Based on Risk management guide for small business, Department of State and Regional
Development, there are various types of risk that may happen to small business. For each
type of risk, the manager will establish appropriate strategy to minimize the impacts of those
risks to the business. There are some common risk types, including:

Customers
Business premises
Competitors
Suppliers
Technology
Natural disasters
Finance
Compliance
Employees

According to Risk Management Guide for small and medium businesses of CPA, a manager
needs to select appropriate actions to response to these risks by set up a risk management
plan. Besides, one of the most efficient ways to mitigate negative impacts of risks is to
participate in an insurance contract. The most feasible provider is AAMI as it offers
reasonable prices. It will cover those areas mentioned as under:

1. The business package costs $183.29 per month, including: Public & Products
Liability, Theft, Money, Fire & defined events, back in business, Portable and
valuable items
2. The car insurance costs $1000 per year
3. Workers compensation costs $5000 per year.

Financial Plan
1. Start-up capital requirement
The start-up cost is calculated out of $500,000. And the following table summarized the
possible cost that would occur when starting the business
Item
Utilities Cost
Desktop Computers
Designed Shelfs
Laser Printer
Counter
Telephone Set
Tables
Chairs
Perfume
mixing
tools
IT Expense
Website registration
(monthly)
Other expenses
Start-up Inventory
Provision
Investment
Legal
Consultant
(monthly rate)
Store Design
Total

Quantity

Unit Price

Total

2
2
1
1
1
1
4
5

1400
1500
45
2000
75
299
29.99
1500

2800
3000
45
2000
75
299
119.96
7500

12

227

2724

10400
40000
12

220

2640
6000
$77602.96

After calculation the possible cost that may occur in starting of the business, the total
expenditure is $77602.96 which left over $422397 for future usage. The $500,000 start-up
capital covered all expense for starting the business, as a result, there would be no additional
capitals needed under this business plan.
2. Budgeted Profit and Loss Statement
The following figures show the standardized budgeted profit & loss statement of the business
for the first three years.

Profit and Loss Statement for 1st year

Sales

502588.63

Direct Cost of Sales

-219677.78

Discount to the Customers

-10051.77

Other (Commissions to Sales)

-20103.55

Total Cost of Sales

-249833.10

Gross Margin

252755.52

Gross Margin %

50.29%

Expenses
Payroll

125000.00

Payroll Tax

26347.85

Superannuation Expense

17685.20

Marketing Expenses

22000.00

Depreciation

1361.48

Legal Consultant Expense

2640.00

Rent Expense

144000.00

Accountant Service Expense

6600.00

Electricity Expense

1200.00

Other Expenses

17637.15

Total Operation Expenses

278322.63

Profit before Interest and Tax

-25567.11

Interest Income

3851.23

Net Profit/(Loss)

(21715.88)

As can be seen, it is predicted that the business would possibly make a loss from the first year
of operation. The loss would be normal for every newly started business and I could suggest
that the loss is more than acceptable. As long as we manage the cash flow carefully, the
money left from starting up capital is enough to keep the business over the first year
difficulties.
The following table demonstrates the budgeted P&L for the second year:

Profit and Loss Statement for the 2nd year

Sales

763812.50

Direct Cost of Sales

-311706.25

Discount to the Customers

-45828.75

Other (Commissions to Sales)

-30552.50

Total Cost of Sales

-388087.50

Gross Margin

375725.00

Gross Margin %

49.19%

Expenses
Payroll

-125000.00

Payroll Tax

-28399.35

Superannuation Expense

-18376.80

Marketing Expenses

-31000.00

Depreciation

-1361.48

Legal Consultant Expense

-2640.00

Rent Expenses

-144000.00

Accountant Service Expense

-6600.00

Electricity Expense

-1200.00

Other Expenses

-25212.64

Total Operation Expenses

-313178.12

Profit before Interest and Tax

62546.88

Interest Income

11917.27

Net Profit

74464.15

Profit and Loss Statement for 3rd Year

Sales

1527625.00

Direct Cost of Sales

-623412.50

Discount to the Customers

-91657.50

Other (Commissions to Sales)

-61105.00

Total Cost of Sales

-776175.00

Gross Margin

751450.00

Gross Margin %

49.19%

Expenses
Payroll

-130212.74

Payroll Tax

-30450.86

Superannuation Expense

-19068.40

Marketing Expenses

-45000.00

Depreciation

-1361.48

Legal Consultant Expense

-2640.00

Rent Expenses

-144000.00

Accountant Service Expense

-6600.00

Electricity Expense

-1200.00

Other Expenses

-47363.205

Total Operation Expenses

-382608.69

Profit before Interest and Tax

368841.32

Interest Income

11917.27

Net Profit

380758.59

As is illustrated, the business starts making profit from the 2nd year and running in a positive
track.
3. Projected Balance Sheet
Balance Sheet for 1st Year
Asset
Current Asset
Cash

270219.98

Account Receivable

2368.97

Inventory

10738.00

Total Current Asset

283326.95

Non-current Asset
Equipment

3312.70

Total Non-current Assets

3312.70

Total Assets

286639.65

Liabilities
Current Liabilities

Accounts Payable to Staffs

70912.25

Accounts Payable to Suppliers

18050

GST Payable

11609.95

Tax Liability

7783.33

Total Current Liabilities

108355.53

Non-current Liabilities
Total Non-current Liabilities

Total Liabilities

108355.53

Net Assets

178284.12

Owners Equity

178284.12

Balance Sheet for 2nd Year

Asset
Current Asset
Cash

419557.09

Account Receivable

8401.94

Inventory

21138.00

Total Current Asset

449097.03

Non-current Asset
Equipment

1951.22

Total Non-current Assets

1951.22

Total Assets

451048.25

Liabilities
Current Liabilities
Accounts Payable to Staffs

178681.62

Accounts Payable to Suppliers

26125.00

GST Payable

16803.875

Tax Liability

6689.48

Total Current Liabilities

228299.98

Non-current Liabilities
Total Non-current Liabilities
Total Liabilities

228299.9788

Net Assets

222748.27

Owners Equity

222748.26

Balance Sheet for 5th Year

Asset
Current Asset
Cash

1059684.77

Account Receivable

12221

Inventory

2080

Total Current Asset

1073985.77

Non-current Asset
Equipment

589.74

Total Non-current Assets

589.74

Total Assets

1074575.51

Liabilities
Current Liabilities
Accounts Payable to Staffs

394220.37

Accounts Payable to Suppliers

38000

GST Payable

24442

Tax Liability

14406.29

Total Current Liabilities

471068.6638

Non-current Liabilities
Total Non-current Liabilities
Total Liabilities

471068.6638

Net Assets

603506.85

Owners Equity

603506.85

From the above table, after first year operation, the equity would be $178284.12 and for the
second year of operation, the budgeted accumulate cash asset would increase to over $400000
with the payable to staffs $178681.62 which take about nearly half of the cash holding on
hand. And in this year, the inventory left on hand would worth about $21000 is the
preparation for next year sales. After three years of operation, the cash holding on hand

would reach over a million with accumulated payable to designers nearly $400,000. And the
equity would reach over $600,000.
4. Cash flow Statements
Cash Flow 1st Quarter
Cash Flow From Operating Activities
Net Profit

-35514.04

Increase in Account Receivable

-3024.70

Increase in Account Payable to Staffs

8535.33

Increase in Account Payable to Suppliers

9405.00

Increase in GST Payable

6049.40

Increase in Inventory

-7311.20

Interest Income

523.42

Net Cash used in Operations

-21336.78

Cash Flows from Investing Activities

Purchase of Equipment

-4674.18

Net Cash Used in Investing Activities

-4674.18

Cash Flows from Financing Activities

Owners Investment

200000.00

Net Cash from Financing Activities

200000.00

Net Increase in Cash

173989.04

As can be seen, the first quarter operation cash flow is negative, that because the loss for the
first quarter would be $35,514.04, and business has to use cash left after initial investment to
fill up the hole. As for the whole business the net cash increase would be $173,989.04 due to
the initial investment.

Cash Flow for 5th Year

Cash Flow from Operating Activities
Net Income

337829.71

Depreciation Expense

1361.48

Increase in Account Receivable

6110.50

Increase in Inventory

10400.00

Decrease in Account Payable to Suppliers

-33250.00

Increase in Account Payable to Staffs

215538.75

Interest Income

11917.27

Net Cash from Operating Activities

549907.71

Cash Flow from Investing Activities

Net Cash from Investing Activities
Cash Flow from Financing Activities
Owners Withdraw Manager

-90000.00

Owners Withdraw Supplier

-90000.00

Net Cash Used in Financing Activities

-180000.00

Net Increase in Cash

369907.71