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Cover Page

Arz al-Lubnan Hookah Bar

(Cedars of Lebanon)

This sample business plan has been made available to users of Business Plan Pro, business
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Legal Page
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This is a business plan. It does not imply an offering of securities.

Table of Contents

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

Chart: Highlights..................................................................................................................................1
1.1 Objectives..........................................................................................................................................1
1.2 Mission...............................................................................................................................................2
1.3 Keys to Success..................................................................................................................................2
2.0 Company Summary...............................................................................................................................2
2.1 Company Ownership.........................................................................................................................2
2.2 Start-up Summary..............................................................................................................................3
Table: Start-up.....................................................................................................................................3
Chart: Start-up......................................................................................................................................4
3.0 Products and Services............................................................................................................................4
4.0 Market Analysis Summary....................................................................................................................5
4.1 Market Segmentation.........................................................................................................................5
Table: Market Analysis........................................................................................................................6
Chart: Market Analysis (Pie)...............................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................................6
4.3 Service Business Analysis.................................................................................................................7
4.3.1 Competition and Buying Patterns...............................................................................................7
5.0 Web Plan Summary...............................................................................................................................8
5.1 Website Marketing Strategy..............................................................................................................8
5.2 Development Requirements...............................................................................................................8
6.0 Strategy and Implementation Summary.................................................................................................9
6.1 Competitive Edge...............................................................................................................................9
6.2 Marketing Strategy.............................................................................................................................9
6.3 Sales Strategy...................................................................................................................................10
6.3.1 Sales Forecast............................................................................................................................10
Table: Sales Forecast.....................................................................................................................11
Chart: Sales Monthly.....................................................................................................................12
Chart: Sales by Year......................................................................................................................12
6.4 Milestones........................................................................................................................................13
Table: Milestones...............................................................................................................................13
Chart: Milestones...............................................................................................................................13
7.0 Management Summary........................................................................................................................14
7.1 Personnel Plan..................................................................................................................................14
Table: Personnel.................................................................................................................................14
....................................................................................................................................................................14
8.0 Financial Plan.......................................................................................................................................15
8.1 Start-up Funding..............................................................................................................................15
Table: Start-up Funding.....................................................................................................................15
8.2 Important Assumptions....................................................................................................................16
8.3 Break-even Analysis........................................................................................................................16
Table: Break-even Analysis...............................................................................................................16
Chart: Break-even Analysis...............................................................................................................16
8.4 Projected Profit and Loss.................................................................................................................17
Table: Profit and Loss........................................................................................................................17
Page 1

Table of Contents

Chart: Profit Monthly.........................................................................................................................18

Chart: Profit Yearly............................................................................................................................18
Chart: Gross Margin Monthly............................................................................................................19
Chart: Gross Margin Yearly...............................................................................................................19
8.5 Projected Cash Flow........................................................................................................................20
Table: Cash Flow...............................................................................................................................20
Chart: Cash.........................................................................................................................................21
8.6 Projected Balance Sheet...................................................................................................................22
Table: Balance Sheet..........................................................................................................................22
8.7 Business Ratios................................................................................................................................22
Table: Ratios......................................................................................................................................23
................................................................................................................................................................23
8.8 Valuation..........................................................................................................................................24
Table: Investment Analysis................................................................................................................24
Table: Sales Forecast...................................................................................................................................1
......................................................................................................................................................................1
Table: Personnel...........................................................................................................................................2
......................................................................................................................................................................2
Table: Profit and Loss..................................................................................................................................3
......................................................................................................................................................................3
Table: Cash Flow.........................................................................................................................................4
Table: Balance Sheet....................................................................................................................................5

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Arz al-Lubnan Hookah Bar

1.0 Executive Summary

Arz al-Lubnan Hookah Bar (Cedars of Lebanon) is a new hookah bar concept which will focus on
a combination of Middle Eastern customers and customers over 22 years in age to offer a more
adult alternative to hookah bars frequented by college-age customers. The first bar will be
established in Trendytown, and managed by the business founders, Sayed and Yasmine
Batroun. The business will generate revenues through the sale of flavored tobaccos, nonalcoholic drinks, and appetizers. The business seeks angel investor funding to launch its first
bar.
The business projects to become profitable in its first year with good profit from strong sales in
the first year. Sales will triple by the third year of operation. Net profit of sales will be
respectable due to the high margin on the products sold. Exit for investors is possible from sale
of the franchise to a chain of bars looking to expand their market.

Chart: Highlights

1.1 Objectives
Arz al-Lubnan Hookah Bar seeks to achieve the following objectives with the launch of its first
hookah lounge:
1. To establish a community of hookah smokers who contribute programming, events, and
culture ideas to Arz al-Lubnan Hookah Bar resulting in 50 events or programs held in its
third year of operation.
2. To maintain a Facebook Fan page of 5,000 individuals by the end of its third year as a sign
of its community.
3. To become profitable in its second year through the sale of tobacco, food and drinks.

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Arz al-Lubnan Hookah Bar

4. To establish a franchisable model for hookah bars and initiate fundraising and planning for
franchising by its fifth year of operation.
1.2 Mission
The mission of Arz al-Lubnan Hookah Bar is to provide a comfortable environment, sometimes
relaxing and sometimes energetic and stimulating, around which those who love hookah
smoking, as well as new converts, can come together. The environment will draw on elements
of Middle Eastern culture as well as the culture of the local environment.
1.3 Keys to Success
The keys to success for Arz al-Lubnan Hookah Bar are:
1.
2.
3.
4.
5.

Create a comfortable environment

Provide high quality tobacco, food, drinks, and hookah equipment
Establish a loyal core following
Expand the market of hookah smokers in the Trendytown area
Energize the customer base to generate their own culture and events at Arz al-Lubnan
Hookah Bar

2.0 Company Summary

Arz al-Lubnan Hookah Bar is a new concept for a hookah lounge which centers around the
community aspect of smoking hookah pipes. The business will launch its first hookah lounge in
Trendytown within six months and endeavor to create a scalable model which can be franchised
in additional urban locations. The business will earn revenues through the sale of tobacco
(multiple flavors), drinks (coffee, tea, and juices) and food (Middle Eastern and American
snacks and appetizers requiring light preparation). The customers are expected to be those of
Middle Eastern descent and their friends, those interested in Middle Eastern and hookah culture,
and young (22-35 year old) urbanites interested in a community-oriented experience that is an
alternative to bars serving alcohol and coffee shops.
2.1 Company Ownership
Arz al-Lubnan Hookah Bar is owned and established by the husband and wife team of Sayed
and Yasmine Batroun, Lebanese-American residents of Trendytown who have developed the
concept for the store after working in hookah lounges while overseas. The business is
established as an S Corporation to allow for additional investors to join. Sayed currently owns
51% of stock and Yasmine owns 49%. 40% of shares will be provided to investors in the initial
round of funding, diluting the founders' shares to 60% between the two of them.

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Arz al-Lubnan Hookah Bar

2.2 Start-up Summary

The start-up expenses for Arz al-Lubnan Hookah Bar include legal consultation and permit fees
as a retail and food service establishment, as well as a special permit for the lounge to allow
smoking within. Stationery includes business cards, letterhead, and business brochures.
Insurance includes initial general and product liability premiums as well as renter's and keyemployee insurance. Rent covers one month's security and two month's rent for the initial
location to allow for build out of the space before opening. Start-up marketing covers the
marketing campaign before launch, as described in the marketing plan. The website is a
significant expense. It offers basic information on the business as well as a scalable social
networking component to allow for the organizing of hookah groups and the planning of events.
The cash required will see the business through until cash flow break even is achieved. Current
assets includes lounge furniture ($10,000), tables ($10,000), kitchen supplies and tools
($10,000), silverware, plates, glassware, and hookahs ($10,000). Long-term assets include
basic improvements to the space ($30,000 for additional plumbing, electrical work, taking down
and putting up walls where needed, painting, refinishing floors), lighting fixtures ($10,000),
sound system ($10,000), POS sales system and wireless devices ($20,000), kitchen equipment
($20,000 for stoves, refrigerator, and warming units), office equipment ($5,000 for computer,
printer, fax, telephones).
Table: Start-up

Start-up
Requirements
Start-up Expenses
Legal Help and Permits
Stationery etc.
Insurance
Rent
Start-up Marketing
Website
Total Start-up Expenses

$5,000
$2,000
$2,000
$6,000
$15,000
$50,000
$80,000

Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

$40,000
$40,000
$95,000
$175,000

Total Requirements

$255,000

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Arz al-Lubnan Hookah Bar

Chart: Start-up

3.0 Products and Services

Arz al-Lubnan Hookah Bar will specialize in non-alcoholic, organic drinks, and healthy appetizers
and snacks of both Middle Eastern and American origin. The initial menu includes:

Assortment of organic teas

Assortment of organic coffees
Fruit juices and juice blends
"Mocktails" featuring fruit juices and fresh fruit
Salads
Crudite and dips
Pita or pita chips and hummus/other dips
Falafel
Spinach fatayer
Onion rings
Fried fava beans

Prices for drinks will range from $3 for simple teas or small coffees to $12 for certain mocktails.
Prices for appetizers will range from $5 to $8 for single servings and $12 to $25 for group
dishes (serving 4-6 people).

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Arz al-Lubnan Hookah Bar

Flavored tobacco for hookah pipes will be sold as well for $15 for the first round and $12 for
subsequent rounds. flavors include:

Cherry
Strawberry
Blackberry
Mixed Fruit
Apple
Licorice
Candy
Jasmine
Banana
Rose
Grape
Lebanese Blend
Pistachio
Lemon
Cola
Mint
Orange
Peach
Vanilla
Mango

The facility will include a stage area where performances, talks, and films can be presented.
These will be organized by customer groups who will book the space free of charge for events
that are acceptable to Arz al-Lubnan Hookah Bar management.
4.0 Market Analysis Summary
The market for hookah bars in the United States has grown significantly in the past decade.
Hookah-bars.com reports that, as of October 2008, there were at least 470 hookah bars in the
U.S. and an average of five new hookah bars were opening every month. From these numbers,
it can be estimated that between 2-5 million current hookah smokers live in the United States.
Of these hookah smokers, approximately 10% are of Middle Eastern origin and the remaining
groups are of American origin but have grown to embrace hookah culture.
In Trendytown, Arz al-Lubnan Hookah Bar will focus on locals in the greater Trendytown area of
Middle Eastern origin and young professionals.
4.1 Market Segmentation
Arz al-Lubnan Hookah Bar has determined the following market segmentation for potential
customers:
Middle Eastern Americans: Area residents who have either immigrated from the Middle East
or have family origins in the Middle East. They value the connection that hookah bars provide
with their culture and traditional elements. As many Muslims do not drink alcohol, they do not
feel alienated in hookah bars, which they sometimes do in bars which focus on liquor. They
appreciate being able to meet other Middle Eastern Americans at hookah bars, both for

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Arz al-Lubnan Hookah Bar

friendship and for dating. While this is a small market segment in Trendytown, they use hookah
bars more frequently than other groups.
College Age Residents: College students who seek an alternative to bars and parties on their
campuses seek out different experiences. Hookah bars provide such an experience because of
their exotic ambiance, colorful atmosphere, focus on group dynamics, and the element of
danger/risk provided by smoking. Furthermore, those between the ages of 18 and 21 can
frequent hookah bars while they cannot go to many bars that serve alcohol.
Young Professionals: 22-35 year-old professionals who are tired with bar culture sometimes
react against it by looking for other activities. They seek locations where they can congregate
with friends, talk, and share a new experience. However, they are turned off by hookah bars
with a high percentage of college age customers.
Table: Market Analysis

Market Analysis
Potential Customers

Growth

Middle-Eastern Americans
College Age Residents
Young Professionals
Total

3%
3%
3%
3.00%

Year 1

Year 2

Year 3

Year 4

Year 5

500
15,000
30,000
45,500

515
15,450
30,900
46,865

530
15,914
31,827
48,271

546
16,391
32,782
49,719

562
16,883
33,765
51,210

CAGR
2.97%
3.00%
3.00%
3.00%

Chart: Market Analysis (Pie)

4.2 Target Market Segment Strategy

Arz al-Lubnan Hookah Bar will target Middle Eastern Americans and young professionals, and
not college age residents. By seeking the target market segments described here, Arz al-

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Arz al-Lubnan Hookah Bar

Lubnan Hookah Bar intends to establish a base of Middle Eastern devotees who will serve to
give the bar credibility and authenticity. These devotees will feel comfortable bringing their
non-Middle Eastern friends to Arz al-Lubnan Hookah Bar. These additional customers must be
sought to prove Arz al-Lubnan Hookah Bar as a franchisable model for American consumers.
Therefore, Arz al-Lubnan Hookah Bar will be positioned for young professionals as an
alternative to bars where community can be developed, as well as a non-threatening fusion of
American and Middle Eastern cultural aspects, rather than a total immersion in Middle Eastern
culture.
These markets exist throughout the United States and the Trendytown location will serve as a
proving ground for the Arz al-Lubnan Hookah Bar model.
4.3 Service Business Analysis
Over 470 hookah bars are in existence in the United States, spread throughout the country with
some concentration in cities. From 2000 to 2004, at least 200-300 new hookah bars opened for
business, according to the journal Smokeshop. Generally, as long as 80% of sales are derived
from tobacco, smoking within hookah establishments can be permitted by law.
The hookah bar industry is highly fragmented, with most bars being independent
establishments. A small percentage open a second or third location. There are currently no
national hookah bar franchises.
Indirect competitors to hookah bars are coffee shops, bars that serve liquor, and cigar
stores/tobacconists.
Typically, hookah tobacco is sold and pipes are provided to customers in hookah bars. Tobacco
is sold in rounds which serves a group of four to six for about an hour. Food and drinks are sold
via waiter or bar service while customers sit in groups and smoke. While some attend hookah
bars alone, customers typically attend with groups and sit at round tables with their group.
4.3.1 Competition and Buying Patterns
Hookah bar customers in the United States judge between establishments based on location
(they will not be willing to travel too far out of their way for a hookah bar) the variety of flavors
served, the atmosphere, and the additional food and drink options served.
Specific competitors for Arz al-Lubnan Hookah Bar include Ali Baba Hookah Bar, Babylon
Hookah Lounge, Desert Cafe, and Zee's Smoking Corner.
Ali Baba Hookah Bar: With DJs and dance parties on weekends, Ali Baba's serves a younger
crowd who enjoy meeting others.
Babylon Hookah Lounge: Also has DJs and tends toward a young consumer base. Older
customers complain that the lounge is loud, much like a rave concert.
Desert Cafe: Loved by regulars for its owner and its atmosphere, Desert Cafe has plasma TVs,
outdoor seating in summer and atmospheric lighting. The location is faulted for its low quality
tobacco and lack of upkeep on their hookahs.
Zee's Smoking Corner: With an extensive list of flavors, Zee's also focuses on college age
residents and drives away others with its loud music and party atmosphere.

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Arz al-Lubnan Hookah Bar

5.0 Web Plan Summary

The website for Arz al-Lubnan Hookah Bar will offer a standard "brochure-style" presentation
with details on the products, services, location, and concept of the bar, as well as an extended
social community component, tied in to Facebook. The website will serve casual customers
interested in the bar as well as fans who become involved in creating cultural events and
groups at Arz al-Lubnan Hookah Bar through the social portal, which will include a basic
calendar visible to all users and extended features reserved for members who log-in.
5.1 Website Marketing Strategy
The website for Arz al-Lubnan Hookah Bar will be promoted through PR, direct advertising,
search engine optimization, and the growing community of customers.

PR efforts will include promotion to blog writers for the Trendytown area and hookah
bars/Middle Eastern culture and guest posts by the owners to these blogs. PR will also focus
on the notable social media component of the website as it ties in to developing
programming for Arz al-Lubnan Hookah Bar
Direct advertising will include Google ads, Facebook ads, and targeted ads on a few area
websites. $1,000 a month will be devoted to this type of advertising in the first year
Search engine optimization will begin during the development of the website through its
initial design and will continue with an outsourced firm retained to continue SEO work for
$1,000 a month
The community of customers will generate word-of-mouth and online referrals by inviting
friends to the Arz al-Lubnan Hookah Bar website through Facebook or Arz al-Lubnan Hookah
Bar's social network component

5.2 Development Requirements

Development of the website requires an experienced Web development firm with past success
in developing social networking components for businesses. The website will include the
following in its basic, front end:

About Us - background on the business and its concept and mission

FAQs about hookah smoking and Arz al-Lubnan Hookah Bar
Menu of food, drinks, and tobacco
Photo gallery
Contact page
Location and Directions page with connection to maps from Google Maps or MapQuest

The social portal of the site will include:

Membership sign-up and log-in pages

Social calendar for Arz al-Lubnan Hookah Bar
Step-by-step instructions for creating an event, discussion group, or throwing a party at Arz
al-Lubnan Hookah Bar
Individual pages for user-created events
Account page for each user showing events they are signed up for or have created
Sharing buttons to make it easy for users to send event information via Facebook, MySpace,
Twitter

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Arz al-Lubnan Hookah Bar

Automated tie-ins between the site and the Facebook Fan Page to minimize changes that
must be made in two places

Furthermore, the developer will create a Facebook Fan Page, and a back end for the site
including:

Form to allow management to make changes to menu offerings and prices without the need
to use HTML
Approval area for management to approve, reject, or request additional information on
events
Ability for management to add or remove photos from photo gallery and to organize them
into albums

Development of the website will occur over a three month period. The first two months will
produce a beta version which will be tested by management, with revisions given to developers,
for one month after that. It is expected that additional changes will extend over the first few
months of operation and $500/month of the marketing budget is devoted to ongoing
maintenance and development in the first year.
6.0 Strategy and Implementation Summary
The focus for implementation will be on establishing the quality of the offering, its suitability for
the 22+ target market, and the infrastructure to allow for community-driven culture. The
fostering of the Arz al-Lubnan Hookah Bar community will be important to the growth of the
business and its proof as a franchisable model.
6.1 Competitive Edge
Arz al-Lubnan Hookah Bar's competitive edge will be established through its community
organizing ability via its website. This website will present an interface for users to:

Connect with each other and Arz al-Lubnan Hookah Bar after they have left the
establishment
Organize groups to attend Arz al-Lubnan Hookah Bar together
Plan events to propose for the Arz al-Lubnan Hookah Bar calendar
Send out invites for these events

The party-like atmosphere at other hookah bars does not allow for easy conversation and for
performances and events of the type expected at Arz al-Lubnan Hookah Bar.
6.2 Marketing Strategy
The marketing strategy of Arz al-Lubnan Hookah Bar will be to establish a base of Middle
Eastern American customers first, and using these customers to bring in other young
professional as friends. To that end, the following tactics will be employed:

Seeking mention in blogs for the local area

Pitching the story of its concept and opening to Middle Eastern cultural and language
publications specifically, and area newspapers and magazines in general
Advertising with posters and flyers in the downtown Trendytown area

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Arz al-Lubnan Hookah Bar

The bar's grand opening will be marked by an event featuring live music, free food and drink
offers, and door prizes.
After the launch, promotional incentives for customers will be advertised in newspaper
advertisements, on the website, and in the store for:

Group discounts
Free prizes for winners of business card drawing (to encourage target market of young
professionals)
Incentives to organize the first events via the website (such as free rounds of tobacco for
the organizers at a later date)

These expenses are included in the Profit and Loss statement for Arz al-Lubnan Hookah Bar as
marketing expense.
6.3 Sales Strategy
Arz al-Lubnan Hookah Bar will sell its products through attentive wait staff and bar counter
staff. They will be compensated through base hourly wages and tips and will work to provide
the best customer service possible. Wait staff will use wireless tablets to place orders which are
sent over the bar's wireless network to kitchen staff and bar staff to prepare dishes and drinks.
6.3.1 Sales Forecast
Sales will be predominantly through tobacco revenues, which also has a relatively low cost of
sales. Secondary revenue streams are food and drinks which will be sold to some, but not all,
customers who order tobacco. Sharp growth is expected over the first three years of operation
as the community aspect of Arz al-Lubnan Hookah Bar is developed and customer-directed
programming begins to take place.
It is expected that a customer will return to Arz al-Lubnan Hookah Bar on average 15 times a
year, taking part in 20 rounds of tobacco in that time. Therefore, this projection represents
1,000 customer groups in the first year, 2,500 customer groups in the second year and 3,500
customer groups in the third year.

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Arz al-Lubnan Hookah Bar

Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Tobacco
Drinks
Food
Total Unit Sales

19,791
23,749
15,831
59,371

50,000
60,000
30,000
140,000

70,000
80,000
50,000
200,000

Unit Prices
Tobacco
Drinks
Food

Year 1
$14.00
$6.00
$5.00

Year 2
$14.00
$6.00
$5.00

Year 3
$14.00
$6.00
$5.00

$277,074
$142,494
$79,155
$498,723

$700,000
$360,000
$150,000
$1,210,000

$980,000
$480,000
$250,000
$1,710,000

Year 1
$4.20
$1.20
$1.50

Year 2
$4.20
$1.20
$1.50

Year 3
$4.20
$1.20
$1.50

$83,122
$28,499
$23,747
$135,368

$210,000
$72,000
$45,000
$327,000

$294,000
$96,000
$75,000
$465,000

Unit Sales

Sales
Tobacco
Drinks
Food
Total Sales
Direct Unit Costs
Tobacco
Drinks
Food
Direct Cost of Sales
Tobacco
Drinks
Food
Subtotal Direct Cost of Sales

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Arz al-Lubnan Hookah Bar

Chart: Sales Monthly

Chart: Sales by Year

Page 12

Arz al-Lubnan Hookah Bar

6.4 Milestones
The $15,000 in start-up marketing will be spent on the downtown ad campaign (design and
production of posters and flyers, as well as purchasing ad space), PR campaign (creation and
mailing of press kit), and the grand opening event (live music, door prizes, decorations, free
food and drink offers).
After the launch, the business will hold a series of promotions - first the business card drawing
and then event incentives - to initiate programming at Arz al-Lubnan Hookah Bar.
Table: Milestones

Milestones
Milestone
PR Campaign
Downtown Ad Campaign
Bar Grand Opening
Business Card Drawing
Event Incentives
Totals

Start Date
1/1/2010
2/1/2010
3/1/2010
5/1/2010
6/1/2010

End Date
2/28/2010
2/28/2010
3/1/2010
5/30/2010
8/1/2010

Budget
$1,000
$5,000
$9,000
$5,000
$5,000
$25,000

Manager
YB
YB
SB
YB
WG

Department
Marketing
Marketing
Operations
Marketing
Marketing

Chart: Milestones

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Arz al-Lubnan Hookah Bar

7.0 Management Summary

Arz al-Lubnan Hookah Bar is managed by the husband and wife team of Sayed and Yasmine
Batroun, Lebanese-American residents of Trendytown who have developed the concept for the
store after working in hookah lounges while overseas.
Sayed Batroun will manage store operations and train wait and kitchen staff. He has culinary
experience with ten years as a cook. He will handle procurement and inventory management.
He will also work as head cook during initial operations.
Yasmine Batroun will manage marketing, business development, and finance. She has an MBA
and corporate experience as a marketing associate for a Fortune 500 business. She will oversee
accounting and bookkeeping. She will provide general management in the restaurant as
needed, including management of events.
In the second year of operation a general manager will be hired to take over staff supervision,
staff training, procurement and inventory management. Sayed Batroun will continue to serve as
head cook but will work on a more strategic level in other areas.
Additional staff will include kitchen staff and wait staff.
7.1 Personnel Plan
Staff will include two bartenders, two wait staff, and one kitchen staff initially. This will grow
to four bartenders, six wait staff and three kitchen staff. Wages for bartenders and wait staff
are lower as they are significantly augmented by tips. These personnel assumptions are based
on the bar being open 80 hours per week.
Table: Personnel

Personnel Plan
Sayed Batroun
Yamine Batroun
Bar Staff
Wait Staff
Kitchen Staff
General Manager
Total People
Total Payroll

Year 1

Year 2

Year 3

$36,000
$36,000
$48,000
$33,600
$30,000
$0
7

$36,000
$36,000
$75,000
$70,000
$70,000
$50,000
11

$36,000
$36,000
$110,000
$120,000
$120,000
$60,000
15

$183,600

$337,000

$482,000

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Arz al-Lubnan Hookah Bar

8.0 Financial Plan

The business is expected to grow significantly in its first three years as it meets the market
need for an alternative to local youth-oriented hookah bars. Growth to a second location will
occur in the fourth year, financed by the cash reserves of the business.
8.1 Start-up Funding
While the owners will invest substantially in the company, the bulk of the start-up funding will
be provided primarily by outside investors, with an additional long-term loan against the assets
of the bar. Credit card debt will make up the remainder.
Investors will be provided with 40% of shares for their investment, as the current partners are
contributing considerable sweat and financial equity of their own, as well as their specific
expertise and credibility as Lebanese-Americans.
Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$80,000
$175,000
$255,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$135,000
$40,000
$0
$40,000
$175,000

Liabilities and Capital

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

$8,000
$50,000
$0
$0
$58,000

Capital
Planned Investment
Sivrihisar Geobekli
Willusa Geobekli
Other Investors
Additional Investment Requirement
Total Planned Investment

$35,000
$35,000
$127,000
$0
$197,000

Loss at Start-up (Start-up Expenses)

Total Capital

($80,000)
$117,000

Total Capital and Liabilities

$175,000

Total Funding

$255,000

Page 15

Arz al-Lubnan Hookah Bar

8.2 Important Assumptions

We assume that the growth in hookah bar popularity will continue and that the country is ready
for a national chain. We assume that anti-smoking lobbyists and anti-Middle Eastern sentiment
in the Unites States will not damage the reputation and image of hookah bars.
8.3 Break-even Analysis
A projected monthly fixed operating cost is shown in the table below. With this level of fixed
cost, break even is expected in the sixth month of operation.
Table: Break-even Analysis

Break-even Analysis
Monthly Units Break-even
Monthly Revenue Break-even

4,200
$35,279

Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost

$8.40
$2.28
$25,703

Chart: Break-even Analysis

Page 16

Arz al-Lubnan Hookah Bar

8.4 Projected Profit and Loss

Key expenses will include the cost of sales attributed to supplies and raw materials, payroll for
the growing staff, marketing to promote the bar in the community, and the bar's rent and
depreciation. The bar will show a profit in the first year which will continue to grow. This is
expected due to the high gross margins of selling tobacco through hookahs and the type of food
and drinks sold.
Table: Profit and Loss

Pro Forma Profit and Loss

Year 1

Year 2

Year 3

Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales

$498,723
$135,368
$15,914
$151,282

$1,210,000
$327,000
$48,400
$375,400

$1,710,000
$465,000
$51,300
$516,300

Gross Margin
Gross Margin %

$347,442
69.67%

$834,600
68.98%

$1,193,700
69.81%

Payroll
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Permit Renewals
Supplies

$183,600
$44,000
$16,800
$24,000
$3,600
$2,400
$27,540
$500
$6,000

$337,000
$55,000
$20,000
$2,500
$4,000
$2,700
$50,550
$2,000
$15,000

$482,000
$75,000
$24,000
$26,500
$4,500
$3,000
$72,300
$800
$25,000

Total Operating Expenses

$308,440

$488,750

$713,100

Profit Before Interest and Taxes

EBITDA
Interest Expense
Taxes Incurred

$39,002
$55,802
$5,341
$10,098

$345,850
$365,850
$3,200
$102,795

$480,600
$504,600
$1,400
$143,760

Net Profit
Net Profit/Sales

$23,562
4.72%

$239,855
19.82%

$335,440
19.62%

Expenses

Page 17

Arz al-Lubnan Hookah Bar

Chart: Profit Monthly

Chart: Profit Yearly

Page 18

Arz al-Lubnan Hookah Bar

Chart: Gross Margin Monthly

Chart: Gross Margin Yearly

Page 19

Arz al-Lubnan Hookah Bar

8.5 Projected Cash Flow

The cash flow table and chart show the business becoming cash flow positive within six months
of operation. Cash will be retained in the business and invested in short-term holdings in
preparation for expansion of the franchise after the third year of operation.
Long-term debt will be paid over the first three years of operation with a grace period for the
first six months. Short-term borrowings will be paid over the first year of operations.
Some current assets must be replenished each year, and long-term assets must be replaced
beginning in the second year as some equipment ages.
Table: Cash Flow

Pro Forma Cash Flow

Year 1

Year 2

Year 3

$498,723
$498,723

$1,210,000
$1,210,000

$1,710,000
$1,710,000

$44,885
$0
$0
$0
$0
$0
$0
$543,608

$108,900
$0
$0
$0
$0
$0
$0
$1,318,900

$153,900
$0
$0
$0
$0
$0
$0
$1,863,900

Year 1

Year 2

Year 3

$183,600
$228,259
$411,859

$337,000
$609,251
$946,251

$482,000
$847,567
$1,329,567

Sales Tax, VAT, HST/GST Paid Out

Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent

$44,885
$8,000
$0
$9,000
$2,400
$0
$0
$476,144

$108,900
$0
$0
$18,000
$3,000
$10,000
$0
$1,086,151

$153,900
$0
$0
$18,000
$3,500
$10,000
$0
$1,514,967

Net Cash Flow

Cash Balance

$67,464
$107,464

$232,749
$340,213

$348,933
$689,146

Cash Received
Cash from Operations
Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent

Page 20

Arz al-Lubnan Hookah Bar

Chart: Cash

Page 21

Arz al-Lubnan Hookah Bar

8.6 Projected Balance Sheet

The net worth of Arz al-Lubnan Hookah Bar will grow significantly due to relatively low liabilities
and high cash reserves as the business prepares for future self-financed expansion.
Table: Balance Sheet

Pro Forma Balance Sheet

Year 1

Year 2

Year 3

$107,464
$42,400
$149,864

$340,213
$45,400
$385,613

$689,146
$48,900
$738,046

$95,000
$16,800
$78,200
$228,064

$105,000
$36,800
$68,200
$453,813

$115,000
$60,800
$54,200
$792,246

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$46,502
$0
$0
$46,502

$50,395
$0
$0
$50,395

$71,388
$0
$0
$71,388

Long-term Liabilities
Total Liabilities

$41,000
$87,502

$23,000
$73,395

$5,000
$76,388

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$197,000
($80,000)
$23,562
$140,562
$228,064

$197,000
($56,438)
$239,855
$380,417
$453,813

$197,000
$183,417
$335,440
$715,857
$792,246

Net Worth

$140,562

$380,417

$715,857

Assets
Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

8.7 Business Ratios

The business is compared here against Snack and Nonalcoholic Beverage Bars, industry SIC
code 5812, NAICS code 722213, with over $1 million in annual revenue. Gross margin is
expected to be higher than average due to the premium that can be earned from tobacco sales.

Page 22

Arz al-Lubnan Hookah Bar

Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

142.62%

41.32%

-3.07%

Other Current Assets

Total Current Assets
Long-term Assets
Total Assets

18.59%
65.71%
34.29%
100.00%

10.00%
84.97%
15.03%
100.00%

6.17%
93.16%
6.84%
100.00%

42.36%
50.54%
49.46%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

20.39%
17.98%
38.37%
61.63%

11.10%
5.07%
16.17%
83.83%

9.01%
0.63%
9.64%
90.36%

24.20%
52.11%
76.31%
23.69%

100.00%
69.67%
64.94%
8.82%
7.82%

100.00%
68.98%
49.15%
4.55%
28.58%

100.00%
69.81%
50.19%
4.39%
28.11%

100.00%
59.90%
24.02%
3.24%
7.73%

3.22
3.22
38.37%
23.95%
14.76%

7.65
7.65
16.17%
90.07%
75.50%

10.34
10.34
9.64%
66.94%
60.49%

1.10
0.98
76.31%
76.30%
18.08%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin

Return on Equity

4.72%
16.76%

19.82%
63.05%

19.62%
46.86%

n.a
n.a

5.91
27
2.19

12.17
29
2.67

12.17
26
2.16

n.a
n.a
n.a

0.62
0.53

0.19
0.69

0.11
0.93

n.a
n.a

$103,362
7.30

$335,217
108.08

$666,657
343.29

n.a
n.a

0.46
20%
3.22
3.55
0.00

0.38
11%
7.65
3.18
0.00

0.46
9%
10.34
2.39
0.00

n.a
n.a
n.a
n.a
n.a

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

Page 23

Arz al-Lubnan Hookah Bar

8.8 Valuation
40% of equity will be awarded to investors for their cash contribution, 22% to founders for their
cash contribution, and the remaining 38% to owners for their sweat equity. This values the
company at $317,500 initially.
Assuming valuations at either a multiple of earnings (10 is reasonable for this industry), or a
multiple of sales (2 is reasonable for this industry), the valuation at the end of year 3 of the
entire company is around $3.385 million (an average of the two methods of valuation). This
yields a significant, 121% internal rate of return for investors. An exit event will be possible
when the company raises money for franchising or sells to an existing franchisor at the point of
expansion.
Table: Investment Analysis

Investment Analysis
Start

Year 1

Year 2

Year 3

$197,000
$0
$0
($197,000)
62%

$0
$0
$0
$0

$0
$0
$0
$0

$0
$0
$2,120,400
$2,120,400

10

10

10

$0
$0

$0
$0

$0
$0

Initial Investment
Investment
Dividends
Ending Valuation
Combination as Income Stream
Percent Equity Acquired
Net Present Value (NPV)
Internal Rate of Return (IRR)

$1,269,171
121%

Assumptions
Discount Rate

10.00%

Valuation Earnings Multiple

Valuation Sales Multiple
Investment (calculated)
Dividends
Calculated Earnings-based Valuation
Calculated Sales-based Valuation
Calculated Average Valuation

$197,000

$240,000

$2,400,000

$3,350,000

$1,000,000

$2,420,000

$3,420,000

$620,000

$2,410,000

$3,385,000

Page 24

Appendix
Table: Sales Forecast

Sales Forecast
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Tobacco

500

600

Drinks

600

720

720

864

1,037

1,244

1,493

1,792

2,150

2,580

3,096

3,715

864

1,037

1,244

1,493

1,792

2,150

2,580

3,096

3,715

Food

400

4,458

480

576

691

829

995

1,194

1,433

1,720

2,064

2,477

2,972

1,500

1,800

2,160

2,592

3,110

3,732

4,479

5,375

6,450

7,740

9,288

11,145

Unit Prices

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Tobacco

Unit Sales

Total Unit Sales

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

$14.00

Drinks

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

$6.00

Food

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

$5.00

Tobacco

$7,000

$8,400

$10,080

$12,096

$14,518

$17,416

$20,902

$25,088

$30,100

$36,120

$43,344

$52,010

Drinks

$3,600

$4,320

$5,184

$6,222

$7,464

$8,958

$10,752

$12,900

$15,480

$18,576

$22,290

$26,748

Food

$2,000

$2,400

$2,880

$3,455

$4,145

$4,975

$5,970

$7,165

$8,600

$10,320

$12,385

$14,860

$12,600

$15,120

$18,144

$21,773

$26,127

$31,349

$37,624

$45,153

$54,180

$65,016

$78,019

$93,618

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

$4.20
$1.20
$1.50

Sales

Total Sales
Direct Unit Costs
Tobacco
Drinks
Food

30.00%
20.00%
30.00%

Direct Cost of Sales

Tobacco

$2,100

$2,520

$3,024

$3,629

$4,355

$5,225

$6,271

$7,526

$9,030

$10,836

$13,003

$15,603

Drinks

$720

$864

$1,037

$1,244

$1,493

$1,792

$2,150

$2,580

$3,096

$3,715

$4,458

$5,350

Food

$600

$720

$864

$1,037

$1,244

$1,493

$1,791

$2,150

$2,580

$3,096

$3,716

$4,458

$3,420

$4,104

$4,925

$5,910

$7,092

$8,509

$10,212

$12,256

$14,706

$17,647

$21,177

$25,411

Subtotal Direct Cost of Sales

Page 1

Appendix
Table: Personnel

Personnel Plan
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sayed Batroun

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Yamine Batroun

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Bar Staff

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

$4,000

Wait Staff

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

$2,800

Kitchen Staff

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$2,500

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

General Manager
Total People
Total Payroll

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

$12,600

$15,120

$18,144

$21,773

$26,127

$31,349

$37,624

$45,153

$54,180

$65,016

$78,019

$93,618

Direct Cost of Sales

$3,420

$4,104

$4,925

$5,910

$7,092

$8,509

$10,212

$12,256

$14,706

$17,647

$21,177

$25,411

Other Costs of Sales

$1,000

$1,050

$1,102

$1,157

$1,215

$1,276

$1,340

$1,407

$1,477

$1,551

$1,629

$1,710

Total Cost of Sales

$4,420

$5,154

$6,027

$7,067

$8,307

$9,785

$11,552

$13,663

$16,183

$19,198

$22,806

$27,121

Sales

Gross Margin

$8,180

$9,966

$12,117

$14,706

$17,820

$21,564

$26,072

$31,490

$37,997

$45,818

$55,213

$66,497

Gross Margin %

64.92%

65.91%

66.78%

67.54%

68.21%

68.79%

69.30%

69.74%

70.13%

70.47%

70.77%

71.03%

Expenses
Payroll

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

Marketing/Promotion

$5,000

$5,000

$5,000

$5,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

$3,000

Depreciation

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

$1,400

Rent

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

Utilities

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

Insurance

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$0
$500

$2,295
$500
$500

$2,295
$0
$500

$2,295
$0
$500

$26,995

$26,995

$26,995

$26,995

$24,995

$24,995

$24,995

$24,995

$24,995

$25,495

$24,995

$24,995

Profit Before Interest and Taxes

($18,815)

($17,029)

($14,878)

($12,289)

($7,175)

($3,431)

$1,077

$6,495

$13,002

$20,323

$30,218

$41,502

EBITDA

($17,415)

($15,629)

($13,478)

($10,889)

($5,775)

($2,031)

$2,477

$7,895

$14,402

$21,723

$31,618

$42,902

$513

$509

$505

$495

$485

$475

$453

$428

$403

$378

$354

$342

($5,798)

($5,261)

($4,615)

($3,835)

($2,298)

($1,172)

$187

$1,820

$3,780

$5,983

$8,959

$12,348

Net Profit

($13,530)

($12,277)

($10,768)

($8,949)

($5,362)

($2,734)

$437

$4,247

$8,819

$13,961

$20,905

$28,813

Net Profit/Sales

-107.38%

-81.20%

-59.35%

-41.10%

-20.52%

-8.72%

1.16%

9.41%

16.28%

21.47%

26.79%

30.78%

Payroll Taxes
Permit Renewals
Supplies
Total Operating Expenses

Interest Expense
Taxes Incurred

15%
15%

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 10

Month 11

Month 12

Cash Sales

$12,600

$15,120

$18,144

$21,773

$26,127

$31,349

$37,624

$45,153

$54,180

$65,016

$78,019

$93,618

Subtotal Cash from Operations

$12,600

$15,120

$18,144

$21,773

$26,127

$31,349

$37,624

$45,153

$54,180

$65,016

$78,019

$93,618

$1,134
$0

$1,361
$0

$1,633
$0

$1,960
$0

$2,351
$0

$2,821
$0

$3,386
$0

$4,064
$0

$4,876
$0

$5,851
$0

$7,022
$0

$8,426
$0

New Other Liabilities (interest-free)

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

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

$13,734

$16,481

$19,777

$23,733

$28,478

$34,170

$41,010

$49,217

$59,056

$70,867

$85,041

$102,044

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$15,300

$314

$9,472

$10,747

$12,273

$14,047

$14,876

$17,487

$20,611

$24,354

$28,850

$34,557

$40,670

$15,614

$24,772

$26,047

$27,573

$29,347

$30,176

$32,787

$35,911

$39,654

$44,150

$49,857

$55,970

$1,134

$1,361

$1,633

$1,960

$2,351

$2,821

$3,386

$4,064

$4,876

$5,851

$7,022

$8,426

$300

$300

$300

$800

$800

$800

$800

$1,000

$1,000

$1,000

$900

$0

Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$1,500

$1,500

$1,500

$1,500

$1,500

$1,500

Cash Received
Cash from Operations

Additional Cash Received

Sales Tax, VAT, HST/GST Received
New Current Borrowing

9.00%

Expenditures from Operations

Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing

Purchase Other Current Assets

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

$200

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

$17,248

$26,633

$28,180

$30,532

$32,699

$33,997

$38,673

$42,675

$47,231

$52,702

$59,478

$66,096

Net Cash Flow

($3,514)

($10,152)

($8,403)

($6,800)

($4,220)

$173

$2,337

$6,542

$11,826

$18,166

$25,562

$35,948

Cash Balance

$36,486

$26,334

$17,931

$11,131

$6,911

$7,084

$9,421

$15,963

$27,789

$45,954

$71,517

$107,464

Page 4

Appendix
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 10

Month 11

Month 12

$40,000
$40,000
$80,000

$36,486
$40,200
$76,686

$26,334
$40,400
$66,734

$17,931
$40,600
$58,531

$11,131
$40,800
$51,931

$6,911
$41,000
$47,911

$7,084
$41,200
$48,284

$9,421
$41,400
$50,821

$15,963
$41,600
$57,563

$27,789
$41,800
$69,589

$45,954
$42,000
$87,954

$71,517
$42,200
$113,717

$107,464
$42,400
$149,864

$95,000
$0
$95,000
$175,000

$95,000
$1,400
$93,600
$170,286

$95,000
$2,800
$92,200
$158,934

$95,000
$4,200
$90,800
$149,331

$95,000
$5,600
$89,400
$141,331

$95,000
$7,000
$88,000
$135,911

$95,000
$8,400
$86,600
$134,884

$95,000
$9,800
$85,200
$136,021

$95,000
$11,200
$83,800
$141,363

$95,000
$12,600
$82,400
$151,989

$95,000
$14,000
$81,000
$168,954

$95,000
$15,400
$79,600
$193,317

$95,000
$16,800
$78,200
$228,064

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

$0
$8,000
$0
$8,000

$9,115
$7,700
$0
$16,815

$10,340
$7,400
$0
$17,740

$11,805
$7,100
$0
$18,905

$13,554
$6,300
$0
$19,854

$14,296
$5,500
$0
$19,796

$16,804
$4,700
$0
$21,504

$19,804
$3,900
$0
$23,704

$23,399
$2,900
$0
$26,299

$27,705
$1,900
$0
$29,605

$33,209
$900
$0
$34,109

$39,067
$0
$0
$39,067

$46,502
$0
$0
$46,502

$50,000
$58,000

$50,000
$66,815

$50,000
$67,740

$50,000
$68,905

$50,000
$69,854

$50,000
$69,796

$50,000
$71,504

$48,500
$72,204

$47,000
$73,299

$45,500
$75,105

$44,000
$78,109

$42,500
$81,567

$41,000
$87,502

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$197,000
($80,000)
$0
$117,000
$175,000

$197,000
($80,000)
($13,530)
$103,470
$170,286

$197,000
($80,000)
($25,806)
$91,194
$158,934

$197,000
($80,000)
($36,575)
$80,425
$149,331

$197,000
($80,000)
($45,523)
$71,477
$141,331

$197,000
($80,000)
($50,885)
$66,115
$135,911

$197,000
($80,000)
($53,620)
$63,380
$134,884

$197,000
($80,000)
($53,183)
$63,817
$136,021

$197,000
($80,000)
($48,936)
$68,064
$141,363

$197,000
($80,000)
($40,117)
$76,883
$151,989

$197,000
($80,000)
($26,155)
$90,845
$168,954

$197,000
($80,000)
($5,250)
$111,750
$193,317

$197,000
($80,000)
$23,562
$140,562
$228,064

Net Worth

$117,000

$103,470

$91,194

$80,425

$71,477

$66,115

$63,380

$63,817

$68,064

$76,883

$90,845

$111,750

$140,562

Assets

Starting Balances

Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities

Page 5