Business Plan Financials 8a) There Business Plan

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Inability to generate profits almost immediately from the retail side will impact our ability to grow on the board side, as we will then be supporting the store with the board sales. Our plan expects the opposite.

8c) Assumptions to Income Statement.

We assumed seasonality of retail/servicing revenues and calculated them on a per day basis around off/on/front shoulder/back shoulder seasons. We assumed custom board revenue will average over the year. Cost of goods sold was assumed to be 50% of revenue. We feel this is conservative, since the servicing side of the operation is typically greater than that. Rent will increase in the second and third years as we take on industrial space to expand our manufacturing capability. Salaries are based on store salaries that vary by season and manufacturing salaries. They were calculated on the basis of man-hours.

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The manufacturing salaries scale up with our production.

General administration was assumed to be 5% of revenue. We assumed that $200,000 worth of equipment would be required for manufacturing. This amount of equipment will be able to meet our needs for the first three years of operations. It was paid for by a loan, assumed to be 8% per year. Depreciation expense was based on 7-year MACRS. The tax rate was assumed to be 25% in the years in which we turned a profit.

SHAPE

Q2

Q3

Q4

Revenue

COGS

Net Profit

Rent

Salaries

General Admin

Depreciation Expense

Operating Income

Interest Expense

Net Income Before Taxes

Tax Expense

Net Income

Y3

Revenue

COGS

Net Profit

Rent

Salaries

General Admin

Depreciation Expense

Operating Income

Interest Expense

Net Income Before Taxes

Tax Expense

Net Income.....

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