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 Table of Contents

1.0 Executive Summary...............................................................................................................................1

Chart: Highlights..................................................................................................................................1
1.1 Objectives..........................................................................................................................................2
1.2 Mission...............................................................................................................................................2
2.0 Company Summary...............................................................................................................................2
2.1 Start-up Summary..............................................................................................................................2
Chart: Start-up......................................................................................................................................3
Table: Start-up.....................................................................................................................................3

..............................................................................................................................................................3

2.2 Company Ownership.........................................................................................................................4

3.0 Services..................................................................................................................................................4
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................6
Table: Market Analysis........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................7
4.2 Target Market Segment Strategy.......................................................................................................7
4.3 Service Business Analysis.................................................................................................................8
4.3.1 Competition and Buying Patterns...............................................................................................8
5.0 Strategy and Implementation Summary.................................................................................................9
5.1 Competitive Edge...............................................................................................................................9
5.2 Marketing Strategy.............................................................................................................................9
5.3 Sales Strategy...................................................................................................................................10
5.3.1 Sales Forecast............................................................................................................................10
Table: Sales Forecast.....................................................................................................................12
Chart: Sales Monthly.....................................................................................................................12
Chart: Sales by Year......................................................................................................................13
5.4 Milestones........................................................................................................................................14
Chart: Milestones...............................................................................................................................14
Table: Milestones...............................................................................................................................14

6.0 Web Plan Summary.............................................................................................................................15

6.1 Website Marketing Strategy............................................................................................................15
6.2 Development Requirements.............................................................................................................15
7.0 Management Summary........................................................................................................................15
7.1 Personnel Plan..................................................................................................................................16
Table: Personnel.................................................................................................................................16

....................................................................................................................................................................16
8.0 Financial Plan.......................................................................................................................................17
8.1 Important Assumptions....................................................................................................................17
Table: General Assumptions..............................................................................................................17

................................................................................................................................................................17
8.2 Break-even Analysis........................................................................................................................18
Table: Break-even Analysis...............................................................................................................18
Page 1
 Table of Contents

Chart: Break-even Analysis...............................................................................................................18

8.3 Projected Profit and Loss.................................................................................................................19
Chart: Profit Monthly.........................................................................................................................19
Chart: Gross Margin Monthly............................................................................................................20
Chart: Gross Margin Yearly...............................................................................................................20
Table: Profit and Loss........................................................................................................................21

................................................................................................................................................................21
8.4 Projected Cash Flow........................................................................................................................22
Chart: Cash.........................................................................................................................................22
Table: Cash Flow...............................................................................................................................23

................................................................................................................................................................23
8.5 Projected Balance Sheet...................................................................................................................24
Table: Balance Sheet..........................................................................................................................24

................................................................................................................................................................24
8.6 Business Ratios................................................................................................................................25
Table: Ratios......................................................................................................................................25
Table: Personnel...........................................................................................................................................1

......................................................................................................................................................................1
Table: General Assumptions........................................................................................................................2

......................................................................................................................................................................2
Table: Profit and Loss..................................................................................................................................3

......................................................................................................................................................................3
Table: Cash Flow.........................................................................................................................................4

Table: Balance Sheet....................................................................................................................................5

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 U&ME Dance

1.0 Executive Summary

Dancing is a historical tradition. Ballroom dancing has been alive at social functions for
centuries, and Swing and Latin are the Waltz and Foxtrot of days gone by. In recent years,
social dance has proved it's long lasting presence in our lives. It is in our media, our music and
day to day social functions. It isn't usually taught parent-to-child so people are seeking schools
where they can learn. With Dancesport being considered as a medal sport in the next Olympics,
more people will be exposed to Social and Ballroom dance.

U&ME Dance is dedicated to bringing quality and affordable dance instruction to Bellingham.
There is a very active and dedicated ballroom dance community already located in Bellingham.
However, there has never been an actual dance studio, where these people can expand their
knowledge of dance and enjoy being with other people of like interests. It is our plan to
incorporate the existing dance community into our studio to begin with a strong base of
supporters. From there we will be able to spread the word that dancing is a fun and exciting
way to spend time. There are many benefits to dancing that will attract people from many
backgrounds and interests.

Toni Simler and Mary Evans, a mother/daughter team, are the founders and owners of U&ME
Dance. They have both been very involved in ballroom and social dancing since 1995. Mary has
worked in dance studios in the Seattle area, where she was a dance instructor and supervisor.
In the last three years, she taught private dance instruction as an independent contractor. Toni
recently retired from Lucent Technologies, where she worked for thirty years as a manager in
customer service, business management and contract management. She and her husband have
been students of dance, taking lessons for many years. They continue to dance socially.
Together, Toni and Mary will provide a strong team to make U&ME Dance a successful venture.

Chart: Highlights

Highlights
$400,000

$360,000

$320,000

$280,000
Sales
$240,000

$200,000 Gross Margin

$160,000 Net Profit

$120,000

$80,000

$40,000

$0
Year 1 Year 2 Year 3

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 U&ME Dance

1.1 Objectives

The following are goals and objectives of U&ME Dance for Year 1 through Year 3 :

• Create a dance studio with a warm, supportive atmosphere, which is based on satisfying
customers.
• Provide a social and entertainment forum for people with diverse interests, backgrounds and
ages.
• Provide dance training for students at all levels of dance, from beginner to advanced.
• Provide continual training, benefits and incentives for staff to encourage a long-term
commitment of employees.
• Increase sales to reach $300K by end of Year 1 and maintain an annual growth of 15% per
year.

1.2 Mission

U&ME Dance offers a place where people can learn to dance, meet new people, have fun and
feel comfortable. We offer a varied dance program with price options for all levels of interest,
with greater emphasis on group classes and small package sessions to reach dance
skill objectives. Our instructors have access to continual training with some of the area's top
professional coaches. This provides our students with up-to-date steps and technique and
access to the latest dance trends. U&ME Dance welcomes a diversity of people and maintains a
non-smoking and alcohol free environment.

2.0 Company Summary

U&ME Dance, soon to be located in Bellingham, Washington, will provide the community with a
comfortable, friendly environment in which to learn the art of partnership dancing. U&ME Dance
will offer private dance instruction, group classes, social dance parties and rental facilities for
local events.

Ballroom dance, as a sport, as well as an art, has become increasingly popular worldwide. As a
result, the studio can expect to attract a wide cross section of customers from Bellingham and
Whatcom County. U&Me Dance will appeal to people of all ages, abilities and backgrounds,
looking for creative self expression, exercise and/or social opportunities through dance.

2.1 Start-up Summary

U&ME Dance's start-up costs are based on an assumption that it will lease space at the
Majestic. This space is ready for occupancy but will need a few minor renovations. The
renovations include building out an office on the main floor and a caterer kitchen.

The other category includes items such as memberships to the Chamber of Commerce, Visitor
and Convention Bureau, and anything else that we may have forgotten or underestimated.

The current assets include the deposit of $12,000. Long-term assets include items which will
need to be purchased for the business. See the attached table for more details.

We are not currently requesting a loan, but may need to for operating costs if the sales forecast
is less that anticipated. The owners are investing $50,000 initially.

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 U&ME Dance

Chart: Start-up

Start-up

$50,000

$45,000

$40,000

$35,000
$30,000

$25,000

$20,000

$15,000

$10,000

$5,000

$0
Expenses Assets Investment Loans

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $1,000
Accountant $300
Office Supplies, Stationary $500
Brochures $250
Grand Opening $5,000
Signage $500
Other $2,000
Total Start-up Expenses $9,550

Start-up Assets
Cash Required $10,750
Other Current Assets $12,000
Long-term Assets $17,700
Total Assets $40,450

Total Requirements $50,000

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 U&ME Dance

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $9,550
Start-up Assets to Fund $40,450
Total Funding Required $50,000

Assets
Non-cash Assets from Start-up $29,700
Cash Requirements from Start-up $10,750
Additional Cash Raised $0
Cash Balance on Starting Date $10,750
Total Assets $40,450

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $0
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $0

Capital

Planned Investment
Owner Loan/Investment $50,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $50,000

Loss at Start-up (Start-up Expenses) ($9,550)

Total Capital $40,450

Total Capital and Liabilities $40,450

Total Funding $50,000

2.2 Company Ownership

U&ME Dance is a Limited Liability Company owned and operated by Mary Evans and Toni
Simler.

3.0 Services

U&ME Dance is dedicated to bringing the fun and challenge of dancing to Bellingham and
Whatcom County at an affordable cost. We will offer private and group dance instruction for
social through competitive level dancers. U&ME Dance will also provide a place for dancers to
use the skills they have learned, by having weekly dance parties and seasonal/holiday dances.

U&ME Dance will offer its students a variety of instructional choices. By offering them several
options, we can best serve their individual needs and financial limitations.

Private Lessons offer students the best value for their investment. With a private lesson, the
students will work one-on-one with an instructor, receiving personalized instruction and

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 U&ME Dance

immediate correction. Through experiencing the physical sensation of connected movement,

the student is able to confidently replicate that movement in order to provide a pleasant and
comfortable experience to other partners. In learning the best methods, one-on-one, both
beginning and advanced students will find they progress faster and more easily, as they enjoy
the sensation of partner dancing.

Group Classes are both an introduction to the experience of dancing with different partners,
and a chance for the students to become familiar with a variety of step patterns. Rotation of
partners, throughout the class allows dancers to practice steps with different partners. This
format promotes comfort in dancing with several partners, as well as the comraderie that goes
along with sharing a learned experience. Group lessons will be available every week in the
traditional styles and latest club trends. Classes will be offered at every level, from basic
beginner through advanced competitive styling. In addition, specialty classes will be offered for
children and teens.

Practice Dances will be held once a week to allow students an opportunity to practice the
dances learned, in an environment with other students learning the same thing. Instructors will
circulate on the dance floor, assisting with questions or demonstration of steps, as well as to
dance with students.

Facility Rental will be another service offering. The Majestic is currently a very popular place
in Bellingham for weddings, receptions, musical events, etc. We hope to expand the use of the
building by including additional options of use (church services on Sunday, exercise/yoga
classes in the morning).

In addition to these main staples, U&ME Dance will go out into the community to offer specialty
dancing to schools, nursing homes and anyone wanting a specialized program. U&ME Dance is
very closely linked to the dance studios in the Seattle area and as such, can offer exchange
programs, which will give our students additional opportunities.

4.0 Market Analysis Summary

Ballroom Dancing is a multi-billion dollar industry that will only continue to grow, especially now
that the International Olympic Committee (IOC) has awarded provisional recognition to
Ballroom Dancing and Dancesport. According to a recent press release by WGBH-Television,
more than one million people enroll in ballroom dance classes each year. Since 1985, the
number of amateur ballroom dancers has increased by 25% each year.

The timeless popularity of social dancing, combined with the growing interest in the trendy
dances, has proven to be a winning combination around the world. We are confident it will
produce the same results in Bellingham.

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 U&ME Dance

4.1 Market Segmentation

According to the information published by the Bellingham/Whatcom Chamber of Commerce,

Whatcom County had a total population of 166,814 for the year 2000 and is estimated to grow
approximately 5% per year to 212,000 by the year 2010. The city of Bellingham had a total
population of 68,890 in the year 2001. This figure has grown 30%, since 1990. Bellingham is
surrounded by the smaller towns of Ferndale, Blaine, Lynden, Sumas, Everson, and Nooksak.

U&ME Dance feels that the population of Bellingham, as well as these smaller towns, are all
potential customers. We have divided these potential customers into the following groups:

• Children/Teens (19 yrs. and under): There are 36,965 children and teens in Whatcom
County, according to the 2000 census information. Our plan is to have special classes
designed specifically for the younger people.
• College Students/Young Adults (20-24 yrs): There are 16,776 people who fall in this
category, according to the Whatcom County 2000 census information.
• Single and Married Adults (25-55 yrs): This will include single and married couples. The
Whatcom County 2000 census information showed there were 69,865 people in this age
group.
• Seniors/Retired (56+ yrs): The people in this group will be a combination of retired and
working people. The Whatcom County 2000 census information showed 32,998 people in
this age group.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Children/Teens (5-19) 5% 36,965 38,813 40,754 42,792 44,932 5.00%
College Students/Young 5% 16,776 17,615 18,496 19,421 20,392 5.00%
Adults (20-24)
Single and Married Adults (25- 5% 69,865 73,358 77,026 80,877 84,921 5.00%
55)
Seniors and Retired (56+) 5% 32,998 34,648 36,380 38,199 40,109 5.00%
Total 5.00% 156,604 164,434 172,656 181,289 190,354 5.00%

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 U&ME Dance

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Children/Teens (5-19)

College Students/Young Adults (20-24)

Single and Married Adults (25-55)

Seniors and Retired (56+)

4.2 Target Market Segment Strategy

As indicated in the previous table and illustration, our market is limitless. Everyone who has the
ability to walk can learn to dance. It is our job to present dance to these people and introduce
and develop interest in the community for ballroom and social dance.

For children and teens it is important to show the fun in dance. We can introduce Ballroom
Dance through Junior and Senior High School dance and drill teams. The United States
Amateur Ballroom Dance Association (USABDA) has made generous efforts across the country
to develop dance in younger generations. There is a USABDA chapter in Bellingham, which will
assist in getting dance introduced to this age group. We will also look to affiliate our studio
with the local Jazz and Ballet studios for mutual advertising benefits.

Colleges across the country have been adding Ballroom dance classes to their curriculum and
have been closely involved in Dancesport competitions whose sell-out crowds rival those of
football and basketball games. Western Washington University does not currently have a
Ballroom Dance curriculum, however, there is a swing club, Western Washington University
Swing Kids. We would like to start by including the swing kids in our studio events and
assisting their efforts to spread the popularity of swing. We hope to work with the University to
offer classes to their students for credit.

Single and married adults between the ages of 25 and 55 have traditionally been the biggest
supporters of the ballroom dance studio community. This group is generally looking for new
things to try and do. For singles we offer another way to meet people, and date. We will also
have special wedding packages, which offer the new couple options for learning their first
dance. For married couples dance is something new to learn together and provides a great
social outlet. By working with the local clubs, we can be sure there are places for people to use
the dance they are learning and in turn spread dance further into the community.

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 U&ME Dance

Retired people and seniors (ages 55 and up) represent a small section of our market. However
these people usually turn into long-term dancers. Dance is a wonderful hobby, and low impact
exercise that benefits the mind, the body, and social aspects of life. For this age group learning
to dance is done for reasons such as something they have always wanted to do, something they
used to do and would like to do again, for use on vacations, or an exercise to keep their bodies
healthy. We plan to offer our services to local nursing homes, as well as to those who come in
to the studio for lessons.

4.3 Service Business Analysis

The ballroom dance industry has experienced substantial growth at the rate of 25% each year
since 1985. There are two key factors for the rise in demand for dance instruction and places
to partnership dance:

• In order to gain recognition by the IOC as a sport, the International DanceSport Federation
(IDSF) signed an 11 year agreement with a major sports promoter, International
Management Group (IMG/TWI), which began in 1998. IMG/TWI are IDSF's commercial
representatives, handling all television, sponsorship, and implementing its medium and
long-term marketing strategies worldwide. The industry, as a whole, has benefited directly
through the increase in public interest this campaign has achieved.
• The popularity of trendy dances like Lindy Hop, Argentine Tango, and Salsa have also made
an impact on the number of people wanting to learn how to dance.

The popularity of partnership dancing has grown immensely in the last decade. Those who are
familiar with dance are well aware of how fun and addicting an evening of dancing can be.
Those who have not yet experienced the thrill of moving gracefully around the dance floor with
a partner, need a convenient, relaxed atmosphere, where they can feel comfortable learning
and utilizing current popular dances. U&ME Dance seeks to provide its customers with
affordable quality instruction in a fun and supportive environment.

4.3.1 Competition and Buying Patterns

There are currently no other ballroom or social dance studios in Bellingham or Whatcom
County. However, there are a few independent dance teachers, who teach classes at Whatcom
Community College, at local bars, or rent floor space. There is also a local group, Dance
Connection, that holds dances on Friday nights at the local Eagles Hall. This group does not
have a studio and its main purpose is to find places for people to dance and enjoy themselves.
The founder and administrator of Dance Connection has recently moved out of town and asked
U&ME Dance to take over the newsletter, and Friday night dances effective in July 2002.

This leaves the independent teachers as our only competition. U&ME Dance plans to work in
concert with these instructors and will offer a place for teachers to rent space to continue
teaching on their own, and a place to go out dancing. Our affordable pricing, elegant facility and
quality instruction will be a much needed bonus to Bellingham.

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 U&ME Dance

5.0 Strategy and Implementation Summary

U&ME Dance marketing strategy will target people who wish to get more for their investment in
dancing. A large variety of dance lesson packages and programs will be offered in an effort to
make dancing affordable to any budget. Teachers will be highly skilled and professional,
keeping with the image of the studio. The ballroom will be an elegant place to come, where
customer service is number one. Marketing venues will include placement advertisement, direct
mail, Internet Web page and include partnerships with community businesses.

U&ME Dance sales strategy will be based on a consultative style where the customers and
teachers work together to identify and plan a course of action to satisfy the customer. Teachers
will participate in continuous consultative sales training and receive regular sales coaching
where the identification of customer buying criteria will be paramount. Sales closes will be
based on demonstration of satisfying the customer criteria.

5.1 Competitive Edge

As previously mentioned, there is currently no other ballroom or social dance studio in

Bellingham or Whatcom County. This automatically gives U&ME Dance a competitive edge on
the market. However, we do not plan to sit back and think that people will come to us if we
wait. Because Bellingham is not used to having a dance studio, this gives us the challenge of
introducing the benefits of having a dance studio. One advantage to us, is that there is a strong
dance community, including a local chapter of United States Amateur Ballroom Dance
Association (USABDA) in the area.

We plan to keep our prices in line with the lower cost of living expenses of the Bellingham area.
We will offer a wide variety of very competitive packages. Our teachers will be trained in the
latest trends and with up-to-date styling of today's dances. We plan to partner with many of
the studios in the Seattle area so that we can keep up with the trends of the big city and offer
more variety to our students.

5.2 Marketing Strategy

Our marketing plan will be very simple. Satisfy our customers and provide them with the desire
to continue dancing. A happy customer will not only keep coming back, but they will tell other
people about U&ME Dance. We will offer discount awards as an incentive to people who provide
us with referrals.

We will market fun! What better product could we possibly have than that?! Our biggest
challenge will be getting people who have never been in a dance studio before to come and try
us out. Many people have never considered taking dance lessons before. Our marketing
message will emphasize the opportunity to meet people, to enhance the quality of leisure time,
to gain health benefits and gain life-long skills that will give them respect from their peers.

We will advertise in the yellow pages, local newspapers, flyers, coupons, discount books, radio,
and signs around town.

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 U&ME Dance

5.3 Sales Strategy

One of our marketing strategies is to advertise discount specials or introductory offers. These
are designed to introduce people to the different dances our studio offers, and the dances our
customers want to learn. Our instructors will work with the customer on these specials to
discover what it is they are looking for in dance, and to outline a course that suits the
customer's wants and needs. When a course outline is agreed upon by customer and instructor
they will meet with a manager for a brief consultation to make sure the customer is satisfied
with the lesson outline and that the course will meet the expectations of the customer. The
customer will then sign up for the lessons by contract and commit to a series of appointments;
the studio also commits to these appointments.

We will offer a variety of courses, all mixed with combinations of private lessons, group lessons,
and practice parties. Our course outlines will follow industry standards of recognized
progression in dance, referred to as program dancing. The different levels of dance are
recognized as Social Foundation, Bronze, Silver, and Gold, which is consistent with the dance
industry. Although our instructors will be designing course outlines according to the specific
needs of our customers, there are basic packages that we can offer in these different levels.
Also, because of the size and amount of time required for those levels after Social Foundation,
we have divided them into Bronze I, and Bronze II, Silver I, and Silver II, and Gold or our
Showcase Level.

U&ME Dance also offers the ability for customers to take group class packages. These may be
more affordable, and although take longer for advancement, might be more preferable to some
of our customers.

In addition U&ME Dance offers something unique from other dance studios, which is a
membership card.

There are three different memberships offered:

1. The Basic, which allows unlimited admission to dance parties as well as discounts to special
events.
2. The Gold, which allows limited access to group classes, unlimited admission to dance
parties, five party guest passes, and discounts on special events.
3. The Platinum, which allows unlimited access to group classes, unlimited admission to
parties, ten party guest passes, and discounts to special events. These memberships will
last one year.

U&ME Dance will offer discounts for larger dance packages. All payments for dance lessons will
be collected at time of purchase. Customers may be given 30 days to pay with a down
payment of 50%. We will accept payment in the form of cash, check, or credit card.

5.3.1 Sales Forecast

This sales forecast is an estimation on the number of customers we acquire while open, and an
average cost of lesson outlines. The Social Basics Introductory special is averaged at $50,
but this may vary depending on the special running that month. The special is not an accurate
count for the cost of lessons, and is used primarily to bring people who may be interested to
our studio so that they may continue with more lessons. We are forecasting that we will sell 20

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 U&ME Dance

Introductory packages in our first month, and 30 each month there after, as this is what we can
handle with the hours we have available.

The Social Foundation average package price is $720. It is an average price based on the
assumption that students would buy a package containing 12 private lessons and 12 group
lessons. We offer a 20% for paying in cash, and have therefore shown $600 for our package
price to show the discount. We are forecasting to sell a social foundation dance package to
25% of the people who come to take the introductory special.

Bronze I is priced at $1,200, and is based on the assumption that students would buy this
package with 19 privates and 25 groups. We offer a 20% discount to people who pay cash for
their lesson, and show this in our forecast by making this package show at $1,000. We are
forecasting to sell a bronze dance package to 50% of the people who bought the social
foundation package.

Bronze II is priced at $1,440, and based on the assumption that students would buy a
package containing 24 privates and 24 groups. We offer a 20% discount for paying in cash,
and show this in our forecast by showing this package price at $1,200. We do not expect to
sell any Bronze II packages the first couple of months. Starting on the third month we are
forecasting to sell 50% of those that were in Bronze I.

Silver I and Silver II $1,620. These are both based on the assumption that the student buys
a package of 27 privates and 27 groups. We offer a 20% discount for students who pay in
cash, and have shown this in our forecast with our package being $1,350. Starting in the fifth
month we are forecasting to sell at least two Silver I dance package per month. We have
estimated that we will not sell any Silver II packages until the end of the first year of business.

We have kept our estimates low, knowing that we are not only a new business but a new type
of business in this community, trying to break through with our marketing. Therefore, we are
showing a 25% closing ratio for new students. That is saying that 25% of the customers who
come in for the introductory special will buy the next level of dance, Social Foundation
package. We then show a 50% closing ratio for existing student, 50% of Social Foundation
customers will move on to Bronze I, etc. Mary's previous sales results were 70% (out of every
ten potential customers she sold a dance package to seven).

Memberships were forecasted to show that people would buy the Gold at $600 each. We
forecast to sell an average of five memberships per month, with that average increasing to 10
during the peak months of November-February.

Miscellaneous sales include series group classes and kids group classes averaged at 10 people
per class.

Weekly dances will be held each Friday night. We will charge $5.00 per person plus $3.00 if
they come for the pre-dance lesson.

The Majestic is currently reported as bringing in about $30 to $40K per year in space rentals.
We will continue to rent out this space and increase the advertising.

Other category includes one time privates lessons, special services (i.e. DJ service, lesson
packages for special events, wedding packages, etc.).

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 U&ME Dance

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Introductory Specials-Social Basics $18,000 $20,700 $23,805
Social Foundation Syllabus $57,600 $66,240 $76,176
Bronze 1 Syllabus $48,000 $55,200 $63,480
Bronze 2 Syllabus $48,000 $55,200 $63,480
Silver 1 Syllabus $21,600 $24,840 $28,566
Silver 2 Syllabus $2,700 $3,105 $3,571
Memberships $48,000 $55,200 $63,480
Miscellaneous Packages $9,330 $10,730 $12,339
Weekly Dances $12,000 $13,800 $15,870
Space Rental $33,860 $38,939 $44,780
Other $2,900 $3,335 $3,835
Total Sales $301,990 $347,289 $399,382

Direct Cost of Sales Year 1 Year 2 Year 3

Introductory Specials-Social Basics $0 $0 $0
Social Foundation Syllabus $9,792 $11,261 $12,950
Bronze 1 Syllabus $8,160 $9,384 $10,792
Bronze 2 Syllabus $8,160 $9,384 $10,792
Silver 1 Syllabus $3,672 $4,223 $4,856
Silver 2 Syllabus $460 $528 $607
Memberships $0 $0 $0
Miscellaneous Packages $0 $0 $0
Weekly Dances $0 $0 $0
Space Rental $0 $0 $0
Other $0 $0 $0
Subtotal Direct Cost of Sales $30,244 $34,780 $39,997

Chart: Sales Monthly

Sales Monthly
$30,000
Introductory Specials-Social Basics
$27,000
$24,000 Social Foundation Syllabus

$21,000 Bronze 1 Syllabus

$18,000
Bronze 2 Syllabus
$15,000
Silver 1 Syllabus
$12,000
$9,000 Silver 2 Syllabus

$6,000 Memberships
$3,000
Miscellaneous Packages
$0
Month 1
Month 2
Month 3

Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12

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 U&ME Dance

Chart: Sales by Year

Sales by Year

$400,000 Introductory Specials-Social Basics

$360,000 Social Foundation Syllabus
$320,000
Bronze 1 Syllabus
$280,000
Bronze 2 Syllabus
$240,000
Silver 1 Syllabus
$200,000

$160,000
Silver 2 Syllabus

$120,000 Memberships

$80,000 Miscellaneous Packages

$40,000 Weekly Dances
$0
Year 1 Year 2 Year 3

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 U&ME Dance

5.4 Milestones

The following milestones reflect an approximate timeframe and cost for beginning and
completing actions that will be needed to get U&ME Dance up and running. Our goal is to open
our doors to customers and begin teaching dance by September 1st, 2002. We realize this date
is subject to the timeframe for renovation completion, permits, etc. and may need to be
adjusted.

Chart: Milestones

Milestones

Legal

Train New Teachers

File for City Permits

Order Tables and Chairs

Renovate Space

Create Calendar of Events

Begin Advertising

Apr `02 May Jun Jul Aug Sep Oct

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Meet with SBDC 4/16/2002 9/1/2002 $0 Both Marketing
Legal 6/1/2002 9/1/2002 $750 Both Marketing
Develop Web Site 4/1/2002 4/5/2002 $90 Mary Evans Marketing
Train New Teachers 4/15/2002 9/1/2002 $0 Mary Evans Marketing
File for State Business License 6/1/2002 7/1/2002 $0 Toni Simler Marketing
File for City Permits 6/1/2002 7/1/2002 $0 Toni Simler Marketing
Negotiate Lease 6/1/2002 9/1/2002 $0 Both Marketing
Order Tables and Chairs 7/1/2002 8/1/2002 $3,750 Both Web
Purchase Sound System 8/1/2002 9/1/2002 $2,000 Both Web
Renovate Space 7/1/2002 9/1/2002 $0 Both Department
Acquire Insurance 6/1/2002 8/1/2002 $2,000 Toni Simler Department
Create Calendar of Events 7/1/2002 9/1/2002 $100 Mary Evans Department
Open Doors for Business 9/1/2002 9/1/2002 $0 Both Department
Begin Advertising 7/1/2002 9/1/2002 $2,000 Toni Simler Department
Grand Opening 11/2/2002 11/2/2002 $3,000 Both Department
Totals $13,690

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 U&ME Dance

6.0 Web Plan Summary

U&ME Dance has a Web page, www.uandmedance.com, that is designed to provide a

convenient way for people to discover our studio. For marketing purposes the Web page will be
linked to other dance Web sites and, since it has dance in the title, it will show up on different
search engines. Our students will be able to use the Web site to look up group class schedules,
upcoming events, studio news, and lesson prices. Students and prospective students will also
be able to contact teachers via e-mail. Teachers will have the Web site on their business cards,
and it will appear on our ads to offer people a chance to look at the space, meet the teachers
and check prices, and ask questions before they enter the studio.

6.1 Website Marketing Strategy

We plan to link our Web site with some prominent Seattle area dance Web sites as well as the
city Web sites, and local recreational sites. We will also link with some national Web sites in
order to increase the possibility of people reaching us on the Web. By having the word dance in
our title we should show up easily on different search engines, which will increase our potential
to be seen by our own market.

Our Web site has been designed to offer looks into our prices, lesson outlines and definitions,
our staff and pictures of the studio. We will provide pages that explore upcoming events at the
studio as well as community dance events. We will keep people posted on the national news of
dance as well as local. We will always have a current calendar of events for the convenience of
our students. We will also have a showboard to show off different pictures of events from our
studio.

U&ME Dance will also have a link page for other studios in Washington and national, places to
dance, and national dance organizations.

6.2 Development Requirements

We have created and maintained our Web page ourselves. We will continue to do so in the
future.

7.0 Management Summary

U&ME Dance will be a very small company with the two owners, Mary Evans and Toni
Simler, responsible for managing and directing all activities.

Mary Evans, owner and dance director, will primarily be responsible for the following:

• Teaching advanced students.

• Hiring, training and supervision of new instructors.
• Scheduling and planning the dance group lessons and special events.
• Creating dance lesson programs and packages.
• Studio events.

Mary Evans brings with her seven years of experience as a dance instructor, as well as
certification as a dance instructor from the National Dance Teachers Council of America
(NDTCA). She has knowledge of the operation of dance studios from her training with previous
studio managers, and experience of management herself. She also brings with her, knowledge
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 U&ME Dance

of the dance industry, the champions, the styles, and experience with previous students. Her
six years of teaching have brought her many connections that can benefit U&ME Dance.

Toni Simler, Owner and Business Director, will primarily be responsible for the following:

• Teach social foundation/bronze students

• Managing the accounting/financial aspect of the company
• Bookkeeping/payroll
• Design and develop advertising and marketing strategies
• Contract negotiation/vendor relations

Toni brings thirty years of working in corporate business, where she was most recently a
business manager, contract manager and call center manager for Lucent Technologies and
AT&T. Most of her career in telecommunications centered around customer service. She will be
able to put this knowledge and experience to good use at U&ME Dance. In addition, Toni with
her husband have been dance students since 1995. She knows firsthand how it feels to be a
student and brings with her the knowledge she learned while taking dance lessons for five
years.

7.1 Personnel Plan

A teacher training class began in April to train two teachers. These teachers will be given the
training for free with an understanding that they are neither hired nor paid during this time. In
exchange for this training, they will be offered a job, once U&ME Dance gets enough customers.
Our goal is to have five part time/full time instructors by the end of 2002, which includes the
two owners.

At some point in the future, we will see about hiring a receptionist.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Owners Salary/Distribution $65,000 $72,000 $84,000
Instructors Compensation $33,150 $40,000 $40,000
Other $0 $0 $0
Total People 5 5 5

Total Payroll $98,150 $112,000 $124,000

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 U&ME Dance

8.0 Financial Plan

• We plan to use our own start-up cash to finance the business. The Majestic is a turn key
building for this type of business, requiring very limited contract work for us to bring in. A
kitchen space and office window are to be negotiated with the building owner. Our start-up
requirements are business assets, teaching supplies, and advertising.
• We want to finance growth mainly through cash flow.

8.1 Important Assumptions

The financial plan depends on important assumptions, most of which are shown in the following
table as annual assumptions. The monthly assumptions are included in the appendix. From the
beginning, we recognize that collection of payments for dance lesson packages is critical,
however, not a factor we can influence easily. Interest rates, tax rates, and personnel burden
are based on conservative assumptions.

Three of the more important underlying assumptions are:

1. We assume that people in Whatcom County and more importantly, Bellingham, will be
interested in learning to dance and will give us a try.
2. We assume that the area will continue to grow, as in the past, and at the projected rate of
5% per year.
3. We assume that the Majestic will continue to be rented for events as in the past.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

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 U&ME Dance

8.2 Break-even Analysis

We will need an average of thirty new students each month taking the introductory classes. Of
these thirty students, we are anticipating that 25% will stay to take additional classes (i.e.
Social Foundation, Bronze, etc.). We realize that we may have a slow start, until the word gets
out about our business, and therefore, will take a few months to "ramp up" to thirty new
students.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $22,393

Assumptions:
Average Percent Variable Cost 10%
Estimated Monthly Fixed Cost $20,150

Chart: Break-even Analysis

Break-even Analysis
$20,000

$16,000

$12,000

$8,000

$4,000

$0

($4,000)

($8,000)

($12,000)

($16,000)

($20,000)
$0 $8,000 $16,000 $24,000 $32,000 $40,000
$4,000 $12,000 $20,000 $28,000 $36,000 $44,000

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 U&ME Dance

8.3 Projected Profit and Loss

Our projected profit and loss is shown on the following table, with sales increasing at a rate of
15% year over year. If we are able to meet our sales forecast, we will begin making a profit
almost immediately. Traditionally in the dance business the slower months are in the mid-
summer. However, the facility rental is higher in the Summer and should, therefore,
supplement the slower teaching months.

The detailed monthly projections are included in the appendix.

Chart: Profit Monthly

Profit Monthly

$3,200

$2,800

$2,400

$2,000

$1,600

$1,200

$800

$400

$0

Month 1 Month 3 Month 5 Month 7 Month 9 Month 11

Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 U&ME Dance

Chart: Gross Margin Monthly

Gross Margin Monthly

$24,000

$21,000

$18,000

$15,000

$12,000

$9,000

$6,000

$3,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

Chart: Gross Margin Yearly

Gross Margin Yearly

$360,000

$320,000

$280,000

$240,000

$200,000

$160,000

$120,000

$80,000

$40,000

$0
Year 1 Year 2 Year 3

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 U&ME Dance

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $301,990 $347,289 $399,382
Direct Cost of Sales $30,244 $34,780 $39,997
Other Production Expenses $0 $0 $0
Total Cost of Sales $30,244 $34,780 $39,997

Gross Margin $271,746 $312,509 $359,385

Gross Margin % 89.99% 89.99% 89.99%

Expenses
Payroll $98,150 $112,000 $124,000
Sales and Marketing and Other Expenses $45,100 $45,800 $52,500
Depreciation $3,540 $3,540 $3,540
Utilities $9,000 $10,000 $11,000
Telephone $2,400 $2,400 $2,400
Insurance $1,800 $1,800 $1,800
Rent $72,000 $72,000 $74,712
Payroll Taxes $9,815 $11,200 $12,400
Other $0 $0 $0

Total Operating Expenses $241,805 $258,740 $282,352

Profit Before Interest and Taxes $29,941 $53,769 $77,033

EBITDA $33,481 $57,309 $80,573
Interest Expense ($550) ($1,700) ($2,900)
Taxes Incurred $9,147 $16,641 $23,980

Net Profit $21,344 $38,828 $55,953

Net Profit/Sales 7.07% 11.18% 14.01%

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 U&ME Dance

8.4 Projected Cash Flow

Cash flow projections are critical to our success. The annual cash flow figures are included here
and the more important detailed monthly numbers are included in the appendix. The business
will generate more than enough cash flow to cover all of its expenses. The monthly cash flow is
shown in the following chart, with one bar representing the cash flow per month, and the other
the monthly cash balance.

Chart: Cash

Cash
$40,000

$36,000

$32,000

$28,000

$24,000
Net Cash Flow
$20,000
Cash Balance
$16,000

$12,000

$8,000

$4,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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 U&ME Dance

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $301,990 $347,289 $399,382
Subtotal Cash from Operations $301,990 $347,289 $399,382

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $301,990 $347,289 $399,382

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $98,150 $112,000 $124,000
Bill Payments $163,661 $192,360 $214,001
Subtotal Spent on Operations $261,811 $304,360 $338,001

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $11,000 $12,000 $12,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $272,811 $316,360 $350,001

Net Cash Flow $29,179 $30,929 $49,381

Cash Balance $39,929 $70,858 $120,239

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 U&ME Dance

8.5 Projected Balance Sheet

The balance sheet in the following table shows managed but sufficient growth of net worth, and
a sufficiently healthy financial position. The monthly estimates are included in the appendix.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $39,929 $70,858 $120,239
Other Current Assets $12,000 $12,000 $12,000
Total Current Assets $51,929 $82,858 $132,239

Long-term Assets
Long-term Assets $17,700 $17,700 $17,700
Accumulated Depreciation $3,540 $7,080 $10,620
Total Long-term Assets $14,160 $10,620 $7,080
Total Assets $66,089 $93,478 $139,319

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $15,296 $15,856 $17,744
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $15,296 $15,856 $17,744

Long-term Liabilities ($11,000) ($23,000) ($35,000)

Total Liabilities $4,296 ($7,144) ($17,256)

Paid-in Capital $50,000 $50,000 $50,000

Retained Earnings ($9,550) $11,794 $50,622
Earnings $21,344 $38,828 $55,953
Total Capital $61,794 $100,622 $156,575
Total Liabilities and Capital $66,089 $93,478 $139,319

Net Worth $61,794 $100,622 $156,575

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 U&ME Dance

8.6 Business Ratios

The following table outlines some of the more important ratios from the Fine Art
Schools industry. The final column, Industry Profile, details specific ratios based on the industry
as it is classified by the Standard Industry Classification (SIC) code, 7911.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 15.00% 15.00% 16.60%

Percent of Total Assets

Other Current Assets 18.16% 12.84% 8.61% 33.90%
Total Current Assets 78.57% 88.64% 94.92% 43.80%
Long-term Assets 21.43% 11.36% 5.08% 56.20%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 23.14% 16.96% 12.74% 36.40%

Long-term Liabilities -16.64% -24.60% -25.12% 22.60%
Total Liabilities 6.50% -7.64% -12.39% 59.00%
Net Worth 93.50% 107.64% 112.39% 41.00%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 89.99% 89.99% 89.99% 0.00%
Selling, General & Administrative Expenses 82.92% 78.80% 75.98% 70.60%
Advertising Expenses 7.95% 6.91% 7.51% 3.60%
Profit Before Interest and Taxes 9.91% 15.48% 19.29% 3.90%

Main Ratios
Current 3.40 5.23 7.45 1.40
Quick 3.40 5.23 7.45 1.01
Total Debt to Total Assets 6.50% -7.64% -12.39% 59.00%
Pre-tax Return on Net Worth 49.34% 55.13% 51.05% 3.70%
Pre-tax Return on Assets 46.14% 59.34% 57.37% 8.90%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 7.07% 11.18% 14.01% n.a
Return on Equity 34.54% 38.59% 35.74% n.a

Activity Ratios
Accounts Payable Turnover 11.70 12.17 12.17 n.a
Payment Days 27 29 28 n.a
Total Asset Turnover 4.57 3.72 2.87 n.a

Debt Ratios
Debt to Net Worth 0.07 -0.07 -0.11 n.a
Current Liab. to Liab. 3.56 0.00 0.00 n.a

Liquidity Ratios
Net Working Capital $36,634 $67,002 $114,495 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.22 0.27 0.35 n.a
Current Debt/Total Assets 23% 17% 13% n.a
Acid Test 3.40 5.23 7.45 n.a
Sales/Net Worth 4.89 3.45 2.55 n.a
Dividend Payout 0.00 0.00 0.00 n.a

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U&ME Dance

Page 26
 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month Month Month
10 11 12
Owners Salary/Distribution 0% $2,000 $3,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Instructors Compensation 0% $1,250 $1,250 $1,250 $2,500 $2,500 $2,800 $2,800 $2,800 $4,000 $4,000 $4,000 $4,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 5 5 5 5 5 5 5 5 5 5 5 5

Total Payroll $3,250 $4,250 $7,250 $8,500 $8,500 $8,800 $8,800 $8,800 $10,000 $10,000 $10,000 $10,000

Page 1
 Appendix

Table: General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-term Interest 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate
Tax Rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Page 2
 Appendix

Table: Profit and Loss

Pro Forma Profit and

Loss
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $15,600 $17,100 $23,740 $25,950 $27,000 $28,200 $26,500 $26,100 $28,100 $26,800 $27,950 $28,950
Direct Cost of Sales $1,496 $1,496 $2,312 $2,312 $2,771 $2,771 $2,771 $2,771 $2,771 $2,771 $3,001 $3,001
Other Production $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Expenses
Total Cost of Sales $1,496 $1,496 $2,312 $2,312 $2,771 $2,771 $2,771 $2,771 $2,771 $2,771 $3,001 $3,001

Gross Margin $14,104 $15,604 $21,428 $23,638 $24,229 $25,429 $23,729 $23,329 $25,329 $24,029 $24,949 $25,949
Gross Margin % 90.41% 91.25% 90.26% 91.09% 89.74% 90.17% 89.54% 89.38% 90.14% 89.66% 89.26% 89.63%

Expenses
Payroll $3,250 $4,250 $7,250 $8,500 $8,500 $8,800 $8,800 $8,800 $10,000 $10,000 $10,000 $10,000
Sales and Marketing and $3,500 $3,600 $3,600 $5,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600 $3,600
Other Expenses
Depreciation $295 $295 $295 $295 $295 $295 $295 $295 $295 $295 $295 $295
Utilities $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750 $750
Telephone $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Rent $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000
Payroll Taxes 10% $325 $425 $725 $850 $850 $880 $880 $880 $1,000 $1,000 $1,000 $1,000
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating $14,470 $15,670 $18,970 $22,345 $20,345 $20,675 $20,675 $20,675 $21,995 $21,995 $21,995 $21,995
Expenses

Profit Before Interest and ($366) ($66) $2,458 $1,293 $3,884 $4,754 $3,054 $2,654 $3,334 $2,034 $2,954 $3,954
Taxes
EBITDA ($71) $229 $2,753 $1,588 $4,179 $5,049 $3,349 $2,949 $3,629 $2,329 $3,249 $4,249
Interest Expense $0 ($8) ($17) ($25) ($33) ($42) ($50) ($58) ($67) ($75) ($83) ($92)
Taxes Incurred ($110) ($17) $742 $395 $1,175 $1,439 $931 $814 $1,020 $633 $911 $1,214

Net Profit ($256) ($40) $1,732 $923 $2,742 $3,357 $2,173 $1,899 $2,380 $1,476 $2,126 $2,832
Net Profit/Sales -1.64% -0.24% 7.30% 3.56% 10.16% 11.90% 8.20% 7.27% 8.47% 5.51% 7.61% 9.78%

Page 3
 Appendix

Table: Cash Flow

Pro Forma Cash Flow

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

Cash from Operations

Cash Sales $15,600 $17,100 $23,740 $25,950 $27,000 $28,200 $26,500 $26,100 $28,100 $26,800 $27,950 $28,950
Subtotal Cash from Operations $15,600 $17,100 $23,740 $25,950 $27,000 $28,200 $26,500 $26,100 $28,100 $26,800 $27,950 $28,950

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest- $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
free)
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $15,600 $17,100 $23,740 $25,950 $27,000 $28,200 $26,500 $26,100 $28,100 $26,800 $27,950 $28,950

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

Expenditures from Operations

Cash Spending $3,250 $4,250 $7,250 $8,500 $8,500 $8,800 $8,800 $8,800 $10,000 $10,000 $10,000 $10,000
Bill Payments $410 $12,321 $12,658 $14,522 $16,207 $15,472 $15,731 $15,228 $15,117 $15,411 $15,045 $15,539
Subtotal Spent on Operations $3,660 $16,571 $19,908 $23,022 $24,707 $24,272 $24,531 $24,028 $25,117 $25,411 $25,045 $25,539

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowing
Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayment
Long-term Liabilities Principal $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Repayment
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $3,660 $17,571 $20,908 $24,022 $25,707 $25,272 $25,531 $25,028 $26,117 $26,411 $26,045 $26,539

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Net Cash Flow $11,940 ($471) $2,832 $1,928 $1,293 $2,928 $969 $1,072 $1,983 $389 $1,905 $2,411
Cash Balance $22,690 $22,219 $25,051 $26,980 $28,273 $31,200 $32,170 $33,242 $35,225 $35,613 $37,518 $39,929

Table: Balance Sheet

Pro Forma Balance Sheet

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

Current Assets
Cash $10,750 $22,690 $22,219 $25,051 $26,980 $28,273 $31,200 $32,170 $33,242 $35,225 $35,613 $37,518 $39,929
Other Current Assets $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Total Current Assets $22,750 $34,690 $34,219 $37,051 $38,980 $40,273 $43,200 $44,170 $45,242 $47,225 $47,613 $49,518 $51,929

Long-term Assets
Long-term Assets $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700 $17,700
Accumulated Depreciation $0 $295 $590 $885 $1,180 $1,475 $1,770 $2,065 $2,360 $2,655 $2,950 $3,245 $3,540
Total Long-term Assets $17,700 $17,405 $17,110 $16,815 $16,520 $16,225 $15,930 $15,635 $15,340 $15,045 $14,750 $14,455 $14,160
Total Assets $40,450 $52,095 $51,329 $53,866 $55,500 $56,498 $59,130 $59,805 $60,582 $62,270 $62,363 $63,973 $66,089

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

Current Liabilities
Accounts Payable $0 $11,901 $12,176 $13,981 $15,691 $14,947 $15,223 $14,724 $14,603 $14,910 $14,528 $15,011 $15,296
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $11,901 $12,176 $13,981 $15,691 $14,947 $15,223 $14,724 $14,603 $14,910 $14,528 $15,011 $15,296

Long-term Liabilities $0 $0 ($1,000) ($2,000) ($3,000) ($4,000) ($5,000) ($6,000) ($7,000) ($8,000) ($9,000) ($10,000) ($11,000)
Total Liabilities $0 $11,901 $11,176 $11,981 $12,691 $10,947 $10,223 $8,724 $7,603 $6,910 $5,528 $5,011 $4,296

Paid-in Capital $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000 $50,000
Retained Earnings ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550) ($9,550)
Earnings $0 ($256) ($297) $1,436 $2,358 $5,100 $8,457 $10,630 $12,529 $14,909 $16,386 $18,512 $21,344
Total Capital $40,450 $40,194 $40,153 $41,886 $42,808 $45,550 $48,907 $51,080 $52,979 $55,359 $56,836 $58,962 $61,794
Total Liabilities and Capital $40,450 $52,095 $51,329 $53,866 $55,500 $56,498 $59,130 $59,805 $60,582 $62,270 $62,363 $63,973 $66,089

Net Worth $40,450 $40,194 $40,153 $41,886 $42,808 $45,550 $48,907 $51,080 $52,979 $55,359 $56,836 $58,962 $61,794

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