Executive Summary

Your T-Shirt! is an exciting new business that allows people to custom design a shirt
(specifically the design on the front or back) any way that they would like. By intelligently
leveraging cutting edge technology, Your T-Shirt! will harness the power of computer
sublimation to allow custom shirt printing in production runs as small as one unit. The company
was founded by David Inkler. The company is set up as a Washington L.L.C. Your T-Shirt! will
have a storefront in Seattle as well as a comprehensive website that allows ordering to occur
anywhere.

Imagine the ability to create a totally custom shirt. You choose the material and style of the shirt,
and then the image or graphic you want on the front and/or back. This is the ultimate form of
expression. There are no limits to what you can communicate. Some people might show their
fanaticism for a particular sports team, others a musician. Or you might have a social message or
cause on your shirt. Whatever you may decide, you can print any image on your shirt. 

Products

Your T-Shirt! will offer customers a variety of options for creating their own custom shirts.
The majority of orders will be for t-shirts, however other style shirts will be available. Your T-
Shirt! has developed a strategic relationship with Hewlett-Packard (HP) printer division. We
will use their printer sublimation technology that allows a computer image to be applied to a shirt
in a high quality, high resolution, economically feasible manner. This technology creates an
image durable enough to withstand thousands of washings. Its photo-like quality, due to
significantly higher printer resolution than anything on the market, will show off any image. The
technology is cost effective enough to offer customers the ability to order just one unit. Most
other competitors' costs prohibit printing custom shirts in one-off production runs. Finally, the
customer may choose from an extensive library of existing images, supply their own image, or
have an artist create an image for them.

Competitive Edge

Your T-Shirt! has two sustainable competitive edges to assist them in market penetration. The
first edge is a enormous catalog of graphic images. By establishing strategic partnerships with
companies that have existing graphic image libraries, Your T-Shirt! is able to offer an
unprecedented number of options. Their second edge is the high quality of sublimation offered.
From previous work experience, David has established close business and personal ties with
HP's printer division and will exclusively be using prototype technology that offers an
unprecedented high resolution sublimation process for shirts.

Management

Your T-Shirt! will be led by David Inkler and is not his first t-shirt venture. While in college
David produced and sold tie-dye shirts. This early business experience gave David valuable
insight into the market, the products, and the customer's needs and desires. Since leaving college
David worked in Hewlett-Packard's printer division, and it was this experience that provided
useful business and professional contacts within the shirt sublimation technology industry that he
is currently leveraging. After three years in marketing at HP, David went back to school to earn
his MBA. David will use his educational skills, his technological business contacts, and his
previous shirt industry experience to make Your T-Shirt! profitable. Sales forecasts indicate that
Your T-Shirt! will achieve sterling sales for years two and three respectively. Net profit will
correspondingly be untarnished.

1.1 Objectives

 To become known as the premier custom shirt sublimation service. 

 Achieve profitability within 12 months.
 Design and implement strict financial controls to help ensure success.

1.2 Mission

Your T-Shirt!'s mission is to offer the finest in custom shirt sublimation production. Your T-
Shirt! will offer customers the best product at the best price. Customer's expectations will always
be exceeded.

1.3 Keys to Success

 Leverage cutting edge technology as a competitive advantage.

 Exceed customer expectations by offering high quality products at reasonable prices with
quick turnaround times.
 Employ careful financial and accounting analysis to ensure efficiency and proper
controls.

Company Summary
Your T-Shirt! is a start-up organization. It has been formed as a Washington registered L.L.C. by
David Inkler. The L.L.C. formation was chosen as a way to minimize personal liability issues for
the owner and avoiding the double taxation found in traditional corporations. 

2.1 Company Ownership

David Inkler is the Founder and President of Your T-Shirt!

2.2 Start-up Summary

 Your T-Shirt! will incur the following expenses for start up:

 Two Apple Macintosh computers -- These will be high end models and utilize the
following software: Microsoft Office, Adobe Photoshop and Illustrator, Macromedia
FreeHand, and QuickBooks Pro.
 HP XX Laser Printer -- This is a prototype printer not available to the public.
 In-store computer kiosk -- This allows customers to view options for shirts and existing
imagery.
 Website -- This will be used for information disbursement as well as ordering.
 Shelving display unit -- To display assorted graphic images on paper for easier viewing.
 Broadband Internet connection.
 Two desk/chair/office supplies sets.
 Small shirt inventory -- Inventory will be kept small to lower overhead. This will be
accomplished by using a shirt vendor who is one shipping day away, effectively using
a just-in-time (JIT) system for managing inventory. 
 Heat application unit -- To make the sublimation transfer.

Start-up Funding
Start-up Expenses to Fund $17,100
Start-up Assets to Fund $62,900
Total Funding Required $80,000
Assets
Non-cash Assets from Start-up $6,500
Cash Requirements from Start-up $56,400
Additional Cash Raised $0
Cash Balance on Starting Date $56,400
Total Assets $62,900
Liabilities and Capital
Liabilities
Current Borrowing $0
Long-term Liabilities $65,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $65,000
Capital
Planned Investment
D. Inkler $15,000
Investor 2 $0
Other $0
Additional Investment Requirement $0
Total Planned Investment $15,000
Loss at Start-up (Start-up Expenses) ($17,100)
Total Capital ($2,100)
Total Capital and Liabilities $62,900
Total Funding $80,000

Start-up
Requirements
Start-up Expenses
Legal $1,200
Stationery etc. $200
Brochures $0
Computer equipment $6,200
Rent $0
Insurance $0
Office furniture $1,000
Sublimation heat transfer unit $2,000
Wesite development $6,500
Total Start-up Expenses $17,100
Start-up Assets
Cash Required $56,400
Start-up Inventory $0
Other Current Assets $1,500
Long-term Assets $5,000
Total Assets $62,900
Total Requirements $80,000

Products and Services

Your T-Shirt! is a custom T-shirt sublimation company that offering customers a choice of
imagery (outs or theirs) to apply to the front or back of a shirt.
Sublimation is a process using heat to transfer (embed) ink into a fabric surface such as a shirt.
The alternative method of creating custom shirt designs is called silk-screening, a process in
which a screen is made with an image and that image is transferred onto a shirt. Because set-up
costs are high silk-screening is not cost effective for small number production runs. Another
disadvantage is that silk-screening applies a thin layer of ink to the surface the shirt inhibiting
breathability. The sublimation process avoids this problem since the ink is not coating the
fabric's surface, but rather, is embedded in the fabric. Only with recent technological advances
has sublimation become cost effective in small production runs.

While other vendors are able to offer sublimation in single production runs, their computer based
sublimation process produces lower image quality. Your T-Shirt! takes sublimation one step
further by producing the graphic images at a higher resolution than other existing technologies.
Through a strategic relationship with David's former employer, Hewlett-Packard, Your T-Shirt!
has access to their new prototype sublimation high resolution printer giving Your T-Shirt!
a significant advantage.

Your T-Shirt! will offer custom sublimation mainly on T-shirts, but will have other shirt styles
available. Customers can choose from traditional cotton-blend shirts or all natural fiber cotton
shirts.

Customers can then choose from pre-existing graphics or custom artwork. The pre-existing
graphics are chosen from an extensive catalog. Your T-Shirt! has developed strategic
relationships with several companies that offer a wide range of graphic images. The relationships
allow Your T-Shirt! to list the other company's graphics within their catalog thereby
significantly options. These images can be viewed and ordered online, providing customers with
flexibility and convenience. Your T-Shirt! will have a comprehensive Website that will allow
ordering a customer's home, or where ever they may be. Additionally, Your T-Shirt! will have a
computer kiosk in the store front as an in-store catalog.

Your T-Shirt! will also offer custom artwork or graphic options for sublimation. The customer
may bring in a graphic or may use Your T-Shirt!'s sub-contracted artist to realize their vision.
Your T-Shirt!'s artist can take a customer's pencil drawing or even articulated thoughts and turn
them into a new design.

Your T-Shirt! will offer a range of different shirt options. As indicated by the name, there will be
an emphasis on T-shirts. Short sleeves, long sleeves, organic fabrics, and a variety of polo, rugby
and other styles will also be offered.

Market Analysis Summary

Your T-Shirt! has segmented the market into two groups, organized by the type of product that
they purchase. The first group is customers that desire an already created graphic image to be
placed on the their shirt. The second group are those that prefer custom artwork to be placed on
their shirt. Your T-Shirt! has decided to divide the market by the products that they purchase
because it offers an intuitive, easy method of targeting the two different groups. An additional
reason for segmenting the market based on the two products is because the demographics for the
buyers of the two products are distinct enough to group them separately.

4.1 Market Segmentation

Your T-Shirt! has segmented their market into two distinct groups. As mentioned previously, the
two segments are grouped by the type of product they chose. Although Your T-Shirt! is dividing
the market by product type, it is effectively dividing the market by age as well since the
customers who purchase the custom artwork shirts tend to be older than the group preferring the
ready-made graphics. While this is not a hard and fast rule, it is a fairly accurate generalization.

Graphics -- This is group purchases a shirt and has an existing graphic placed on the shirt. This
is the less expensive option and lends itself to low production numbers, as low as one, since there
is not the inherent expense of artwork creation.

 Ages 14-25
 69% are students
 Median individual income is $26,000
 Go out to eat 3.4 times a week
 Listen to 3.6 hours of music a week

Artwork -- This segment prefers having custom artwork created and placed on their shirt. They
generally have the image or style in mind and will direct the artist to create it. Occassionally
when the customer will not have an exact image in mind but will rely on the artist's skills to help
shape the work. Some of these customers will use Your T-Shirt!'s partner artist, others will have
a friend or other service provider develop the art.

 Ages 24-43
 Median individual income is $42,000
 Go out to eat 2.7 times a week
 Listen to 3.3 hours of music a week
 18% are using the shirt as a form of communication for a cause or a message
Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Graphics 7% 7,879,664 8,431,240 9,021,427 9,652,927 10,328,632 7.00%
Artwork 8% 5,969,854 6,447,442 6,963,237 7,520,296 8,121,920 8.00%
Total 7.43% 13,849,518 14,878,682 15,984,664 17,173,223 18,450,552 7.43%

4.2 Target Market Segment Strategy

Your T-Shirt! has chosen these two market segments because their demographics (reasonably
young) have the highest likelihood of purchasing a custom shirt. Both of these segments are
reasonably young. This is important because most of Your T-Shirt!'s products are T-shirts and
younger people tend to wear them frequently.

Music is also an important interest for the target markets since both segments listen to and watch
more than average amount of music. T-shirts are particularly popular at music events. This
phenomenon may be explained in part by the expressive nature of both music and T-shirt
graphics. Your T-Shirt! will provide a form of expression, allowing each customer to choose
what aesthetic or idea they want to communicate.

Lastly, the business will be located in Seattle which has a young, hip scene. There are many
music and other venues that cater to Your T-Shirt!'s demographic and these will be useful in
developing awareness of Your T-Shirt!

4.3 Service Business Analysis

The T-shirt design industry is a primarily brick and mortar based industry. Most companies offer
either silk-screening or sublimation services to typically local customers. While most of the
products are T-shirts, there is a niche of companies that offer these printing services for
uniforms, team jerseys, etc. Most of the participants in the industry fall into two categories, those
that sell to individuals and those that sell in multi-unit production runs. The companies that sell
to individuals are almost always silk-screeners who have a limited number of silk-screens
already developed. The customer chooses which one they want and a T-shirt is made. This type
of vendor is often the typical T-shirt maker that you see at fairs. The second type of sells most of
their products in larger production lots. This can be explained by the fact that for custom work,
whether silk-screens or sublimations, it is not cost effective to produce in small lots.

Recently, a number of companies began offering computer-based sublimation enabling them to

offer low production runs. The technology the various companies are using, with Your T-Shirt!
being an exception, are is in its infancy an is of low resolution. While the new technology allow
companies to offer sublimation using computers, the image quality is average at best. Your T-
Shirt! is able to leverage proprietary technology as a competitive edge to produce a much higher
quality computer sublimation.

4.3.1 Competition and Buying Patterns

Your T-Shirt! has identified three competitors, two are local companies, the third is an Internet-
based shirt designer.

 T-shirt World -- This local competitor specializes in silk-screening. 70% of their

business is silk-screening with the remaining 30% sublimation. They require a minimum
order of 10 with a 2-3 week lead time. This company only uses pre-existing designs for
their silk-screening and for sublimations you must use their artist.
 Shirt Shack -- This local retailer is geared toward organizations or teams with
production runs of 20 or more. They do fairly good work but are rigid regarding custom
work.
 Design House -- This is an Internet-based retailer that primarily offers computer
sublimations. Design House has a catalog of approximately 200 images for the
customer to choose from. They do allow customers to use their own graphic. The quality
of the sublimations is mediocre at best because they can only use off the shelf
technology.

Another minor source of competition comes from home kits that turn your ink jet printer into a
T-shirt making machine. While these kits do offer some competition, the image quality is not
good, therefore this will only appeal to children or the home hobbyist, someone not very
concerned with image quality. 

Strategy and Implementation Summary

Your T-Shirt! will leverage their two competitive edges to quickly gain market share. The
competitive edges are an unprecedented catalog of graphic images and the quality of their
computer generated sublimations, a function of using prototype HP sublimation technology. The
marketing campaign will emphasize the ability to completely customize a shirt. Youth events and
student groups will be targeted. The sales campaign will emphasize making the experience as
easy and pleasing as possible to encourage repeat customers and word of mouth referrals.   

5.1 Competitive Edge

Your T-Shirt! has two competitive edges that they will use to their advantage to achieve market
penetration.

 Large catalog of graphics -- Your T-Shirt! is developing several strategic relationships

with existing graphics companies that have an extensive images catalogs. It would be
difficult and expensive for Your T-Shirt! to create their own library of graphics but by
developing relationships with companies who own existing libraries, Your T-Shirt! is
able to offer its customers an expansive array of imagery. Your T-Shirt! pays a royalty
for use of these graphics.
 Quality of the sublimation -- Due to its networking contacts at Hewlett-Packard, and the
use of prototype technology, Your T-Shirt! will be able to produce sublimations of much
higher quality than any of their competitors. This gives Your T-Shirt! a fantastic
competitive edge. At some point within the next two years this technology may be
available to the public, however because of the close contacts Mr. Inkler shares with HP,
Your T-Shirt! will always have cutting edge technology available, well in advance of any
public release.

5.2 Sales Strategy

The sales strategy will emphasize the fact that ordering a shirt from Your T-Shirt! is a very easy
and pleasing experience. The sales effort will work on the continual development of the website,
the main tool used for ordering. It will be quite important to have a friendly, easy to use web
interface for two main reasons. One, there are so many choices available that it could become
daunting to the customer. The second reason is that a large portion of sales will be placed on the
website. It is imperative to make it so easy that people don't stop part way through ordering due
to cumbersome or difficult instructions. The website embraces the philosophy of making the
experience so easy and pleasing that the customer comes back to buy more.

Your T-Shirt! will also rely on three other factors to help boost sales. The first is exemplary
customer service. Having excellent service will provide the customer with the feeling that the
business is looking out for the customer's interest. Second, when a customer places an order, they
will probably be excited to see the finished product, so Your T-Shirt! will ensure the fastest
turnaround time possible. Lastly, sales will be boosted by offering customers a high quality
product. We will use high grade cotton shirts and state-of-the-art sublimation printing materials.

5.2.1 Sales Forecast

The sales forecast is reasonably conservative so that goals will be achievable. Sales will be slow
initially, a function of the fact that Your T-Shirt! is a start up organization and it will take time to
build a sufficient foundation. The following table and chart show sales forecasts by both month
and year.

The sales forecast is broken down by product, graphics or artwork. "Graphics" indicates the
customer will be using a pre-existing graphic, either one that they are bringing in or one that they
are purchasing a license to use from Your T-Shirt!  "Artwork" denotes that the customer is using
a graphic that is being created specifically for them. All customers will purchase their shirt from
Your T-Shirt!

Sales Forecast
Year 1 Year 2 Year 3
Sales
Graphics $98,235 $242,151 $278,454
Artwork $19,647 $48,430 $55,691
Total Sales $117,882 $290,581 $334,145
Direct Cost of Sales Year 1 Year 2 Year 3
Graphics $49,118 $121,076 $139,227
Artwork $9,824 $24,215 $27,845
Subtotal Direct Cost of Sales $58,941 $145,291 $167,072

5.3 Marketing Strategy

The marketing campaign will seek to increase visibility for Your T-Shirt!, emphasizing the
ability of the customer to completely customize their design. Your T-Shirt! will use several
different venues to communicate this message.

 Advertising -- Your T-Shirt! will run ads in several teen/young adult magazines whose
readership demographics are similar to Your T-Shirt!'s.
 Youth events -- Many different events will be sponsored as a means of increasing
visibility. These include but are not limited to music festivals and sporting events along
with the new genre of extreme sporting events.
 Student groups -- Your T-Shirt! will attempt to gain awareness of the different student
groups who actively purchase shirts for their members. Awareness will be achieved
through a combination of sponsorship of student organization events as well as
advertisements in magazines that specifically target this demographic. 

5.4 Milestones

Your T-Shirt! has identified several milestones that are tangible and achievable. The milestones
will serve as goals that the organization must reach to be successful. Please review the following
section for details.

Milestones
Milestone Start Date End Date Budget Manager Department
Store build-out 1/1/2003 2/15/2003 $0 David Construction
Web
Website completion 1/1/2003 2/28/2003 $0 David
Development
First quantity order 4/1/2003 4/15/2003 $0 David Sales
$50K in sales 9/1/2003 9/15/2003 $0 David Sales
Profitability 12/1/2003 12/31/2003 $0 David Accounting
Totals $0
Web Plan Summary
Your T-Shirt! will have a website developed that is based on the philosophy that the site must be
user-friendly. Your T-Shirt!'s entire product catalog will be available on the site for customers to
place orders. Because of the large volume of graphic image choices, it will be imperative that the
site is easy to navigate through all the different options.

The store will have a computer kiosk for customers to access the graphics catalog. The customer
can then place the order online or take the information to an employee to place the order.

The initial cost of the website will be the largest. Monthly maintenance costs will be marginal
relative to the development and design costs.

6.1 Website Marketing Strategy

The website will be integral in Your T-Shirt!'s marketing effort as the site is a key sales tool for
both local and distant customers. The URL address will always be used in promotional material,
encouraging people to check out the company, concept, and the products. In additional to
inclusion in the traditional marketing campaigns, Your T-Shirt! will submit their website to a
variety of search engines, significantly increasing the number of inquiries from people searching
out custom shirts.

6.2 Development Requirements

A computer programmer/designer has been identified as a candidate to manage the design,

implementation, and maintenance of the website. The majority of the tasks will be completed by
him, a few tasks that are outside of his skill set will be subcontracted to his associates.

Management Summary
Your T-Shirt! has been founded and will be led by David Inkler. David received his
undergraduate degree in accounting/marketing from Seattle University. Upon graduation David
moved down to Corvallis, Oregon and worked with Hewlett-Packard in their printer division.
David spent three years with HP as a product marketing specialist, providing marketing
assistance at a national level as well as being responsible for more grass roots, event specific
marketing.

Recognizing that he did not want to spend the rest of his life working for someone else and
recognizing that he did not have a sufficient skill set to start his own company yet, David
enrolled in the University of Washington's MBA program. David did a cost benefit analysis and
determined that it would be wise to take on debt and forgo two years of wages to be able to
pursue his dream of opening his own business.
The completion of the MBA program forced David to then make some significant decisions
regarding what business he wanted to start. While in college David had a few years of experience
with t-shirts making and selling tie-dyed shirts to friends and at various music events. Within that
niche, David quickly got a sense of what his customers wanted in tie-dyed t-shirts. Making the
tie-dyes also gave David an outlet for his creativity.

When working for HP David became quite good friends with several of the unit leaders. It was
these relationships that provided David with the opportunity to use cutting edge technology for
his t-shirts. HP had been working on sublimation technology for several years, continually trying
to increase the resolution quality. HP saw David's business idea as an excellent marketing project
to test the technology and the business model. David and HP entered into an agreement where
David would receive HP's latest equipment and in return David would provide HP with a wealth
of product and marketing feedback. This appeared to be a win-win situation.

David's idea of developing a custom t-shirt printing business was a marriage of his business
skills, his previous t-shirt experience, the leveraging of exclusive cutting-edge technology and
his creativity. The more he thought about it the more he was convinced that this idea would
satisfy his need for a challenging yet enjoyable job/business.

7.1 Personnel Plan

Your T-Shirt! will require the following personnel for operations:

 David -- Business development, finance and high level accounting, customer service,
shirt printing
 Printer -- Shirt printing
 In-store retail employee -- Help customers with placing or existing orders
 Bookkeeper -- Accounts receivable and payable
 Independent contractor -- Graphic artist

Personnel Plan
Year 1 Year 2 Year 3
David $22,000 $26,000 $30,000
In-store employee $13,000 $13,000 $13,000
In-store employee $7,200 $11,000 $11,000
Printer $16,200 $21,000 $21,000
Bookkeeper $10,000 $12,000 $12,000
Total People 5 5 5
Total Payroll $68,400 $83,000 $87,000

Financial Plan
The following sections outline important financial information.

8.1 Important Assumptions

The following table details important financial 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

8.2 Break-even Analysis

The Break-even Analysis indicates what will be needed in monthly revenue to reach the break-
even point.

Break-even Analysis
Monthly Revenue Break-even $16,826
Assumptions:
Average Percent Variable Cost 50%
Estimated Monthly Fixed Cost $8,413

8.3 Projected Profit and Loss

The following table presents projected profit and loss.

Pro Forma Profit and Loss
Year 1 Year 2 Year 3
Sales $117,882 $290,581 $334,145
Direct Cost of Sales $58,941 $145,291 $167,072
Other Costs of Goods $0 $0 $0
Total Cost of Sales $58,941 $145,291 $167,072
Gross Margin $58,941 $145,291 $167,072
Gross Margin % 50.00% 50.00% 50.00%
Expenses
Payroll $68,400 $83,000 $87,000
Sales and Marketing and Other Expenses $2,500 $3,000 $3,000
Depreciation $996 $996 $996
Rent $11,000 $12,000 $12,000
Utilities $3,300 $3,600 $3,600
Insurance $3,000 $3,600 $3,600
Payroll Taxes $10,260 $12,450 $13,050
Other $1,500 $1,800 $1,800
Total Operating Expenses $100,956 $120,446 $125,046
Profit Before Interest and Taxes ($42,015) $24,845 $42,026
EBITDA ($41,019) $25,841 $43,022
Interest Expense $6,045 $5,700 $5,120
Taxes Incurred $0 $5,743 $11,072
Net Profit ($48,060) $13,401 $25,834
Net Profit/Sales -40.77% 4.61% 7.73%

8.4 Projected Cash Flow

The following chart and table display projected cash flow.

Pro Forma Cash Flow
Year 1 Year 2 Year 3
Cash Received
Cash from Operations
Cash Sales $117,882 $290,581 $334,145
Subtotal Cash from Operations $117,882 $290,581 $334,145
Additional Cash Received
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $10,000 $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 $117,882 $300,581 $334,145
Expenditures Year 1 Year 2 Year 3
Expenditures from Operations
Cash Spending $68,400 $83,000 $87,000
Bill Payments $80,550 $194,234 $218,664
Subtotal Spent on Operations $148,950 $277,234 $305,664
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $200 $2,400
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $8,400 $9,000 $10,000
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $157,350 $286,434 $318,064
Net Cash Flow ($39,468) $14,147 $16,081
Cash Balance $16,932 $31,079 $47,160

8.5 Projected Balance Sheet

The following table shows the projected balance sheet.

Pro Forma Balance Sheet
Year 1 Year 2 Year 3
Assets
Current Assets
Cash $16,932 $31,079 $47,160
Inventory $2,702 $6,659 $7,658
Other Current Assets $1,500 $1,500 $1,500
Total Current Assets $21,133 $39,238 $56,317
Long-term Assets
Long-term Assets $5,000 $5,000 $5,000
Accumulated Depreciation $996 $1,992 $2,988
Total Long-term Assets $4,004 $3,008 $2,012
Total Assets $25,137 $42,246 $58,329
Liabilities and Capital Year 1 Year 2 Year 3
Current Liabilities
Accounts Payable $18,697 $21,605 $24,253
Current Borrowing $0 $9,800 $7,400
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $18,697 $31,405 $31,653
Long-term Liabilities $56,600 $47,600 $37,600
Total Liabilities $75,297 $79,005 $69,253
Paid-in Capital $15,000 $15,000 $15,000
Retained Earnings ($17,100) ($65,160) ($51,759)
Earnings ($48,060) $13,401 $25,834
Total Capital ($50,160) ($36,759) ($10,924)
Total Liabilities and Capital $25,137 $42,246 $58,329
Net Worth ($50,160) ($36,759) ($10,924)

8.6 Business Ratios

The following table displays many business ratios specific to Your T-Shirt! as well as industry
ratios. Our SIC industry class is currently T-shirts, custom printed - 5699.0406. The following
ratios are in variance to the industry ratios, please review the following explanations detailing the
nature of the variance:

 Accounts receivable -- Your T-Shirt! does not extend credit

 Inventory -- Your T-Shirt! uses just-in-time (JIT) inventory management significantly
lowering overhead
 Liabilities -- This business is being financed by debt, a long term bank loan
 Gross margin --  By leveraging the power of computer technology, labor costs are
significantly decreased boosting the gross margin
 Sales/administrative expenses -- These expenses are higher due to the national reach of
this organization and its target market

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth 0.00% 146.50% 14.99% 3.13%
Percent of Total Assets
Inventory 10.75% 15.76% 13.13% 51.22%
Other Current Assets 5.97% 3.55% 2.57% 19.48%
Total Current Assets 84.07% 92.88% 96.55% 81.29%
Long-term Assets 15.93% 7.12% 3.45% 18.71%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Liabilities 74.38% 74.34% 54.27% 34.98%
Long-term Liabilities 225.16% 112.67% 64.46% 14.42%
Total Liabilities 299.54% 187.01% 118.73% 49.40%
Net Worth -199.54% -87.01% -18.73% 50.60%
Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 38.96%
Selling, General & Administrative Expenses 90.68% 45.20% 42.02% 20.47%
Advertising Expenses 0.00% 0.00% 0.00% 2.95%
Profit Before Interest and Taxes -35.64% 8.55% 12.58% 2.20%
Main Ratios
Current 1.13 1.25 1.78 2.11
Quick 0.99 1.04 1.54 0.57
Total Debt to Total Assets 299.54% 187.01% 118.73% 4.52%
Pre-tax Return on Net Worth 95.81% -52.08% -337.84% 53.69%
Pre-tax Return on Assets -191.19% 45.32% 63.27% 9.75%
Additional Ratios Year 1 Year 2 Year 3
Net Profit Margin -40.77% 4.61% 7.73% n.a
Return on Equity 0.00% 0.00% 0.00% n.a
Activity Ratios
Inventory Turnover 48.00 31.04 23.34 n.a
Accounts Payable Turnover 5.31 9.12 9.12 n.a
Payment Days 35 37 38 n.a
Total Asset Turnover 4.69 6.88 5.73 n.a
Debt Ratios
Debt to Net Worth 0.00 0.00 0.00 n.a
Current Liab. to Liab. 0.25 0.40 0.46 n.a
Liquidity Ratios
Net Working Capital $2,436 $7,833 $24,664 n.a
Interest Coverage -6.95 4.36 8.21 n.a
Additional Ratios
Assets to Sales 0.21 0.15 0.17 n.a
Current Debt/Total Assets 74% 74% 54% n.a
Acid Test 0.99 1.04 1.54 n.a
Sales/Net Worth 0.00 0.00 0.00 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Appendix

Sales Forecast
Mont Mont Mont Mont Mont Mont Mont Month Month Month Month Month
h1 h2 h3 h4 h5 h6 h7 8 9 10 11 12
Sales
Graphic 0 $2,50 $4,65 $5,68 $6,98 $7,98 $11,45 $14,54 $16,85 $18,01
$0 $0 $9,545
s % 0 8 9 7 9 4 5 8 0
Artwor 0 $1,13 $1,39 $1,59
$0 $0 $500 $932 $1,909 $2,291 $2,909 $3,372 $3,602
k % 8 7 8
Total $0 $0 $3,00 $5,59 $6,82 $8,38 $9,58 $11,45 $13,74 $17,45 $20,23 $21,61
Sales 0 0 7 4 7 4 5 4 0 2
Direct
Mont Mont Mont Mont Mont Mont Mont Month Month Month Month Month
Cost of
h1 h2 h3 h4 h5 h6 h7 8 9 10 11 12
Sales
Graphic $1,25 $2,32 $2,84 $3,49 $3,99
$0 $0 $4,773 $5,727 $7,273 $8,429 $9,005
s 0 9 5 4 5
Artwor
$0 $0 $250 $466 $569 $699 $799 $955 $1,145 $1,455 $1,686 $1,801
k
Subtotal
Direct $1,50 $2,79 $3,41 $4,19 $4,79 $10,11 $10,80
$0 $0 $5,727 $6,872 $8,727
Cost of 0 5 3 2 3 5 6
Sales

Personnel Plan
Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
h1 h2 h3 h4 h5 h6 h7 h8 h 9 h 10 h 11 12
$2,00 $2,00 $2,00 $2,00 $2,00 $2,00 $2,00 $2,00 $2,00 $2,00 $2,00
David 0% $0
0 0 0 0 0 0 0 0 0 0 0
In-store $1,30 $1,30 $1,30 $1,30 $1,30 $1,30 $1,30 $1,30 $1,30 $1,30
0% $0 $0
employee 0 0 0 0 0 0 0 0 0 0
In-store
0% $0 $0 $0 $0 $900 $900 $900 $900 $900 $900 $900 $900
employee
$1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,80 $1,80 $1,80 $1,80
Printer 0% $0 $0
0 0 0 0 0 0 0 0 0 0
Bookkeepe $1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00
0% $0 $0
r 0 0 0 0 0 0 0 0 0 0
Total
0 1 4 4 5 5 5 5 5 5 5 5
People
Total $2,00 $5,80 $5,80 $6,70 $6,70 $6,70 $6,70 $7,00 $7,00 $7,00 $7,00
$0
Payroll 0 0 0 0 0 0 0 0 0 0 0

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

Pro Forma Profit and Loss

Mon Month Month Month Month Month Month Month Month Month Mont Month
th 1 2 3 4 5 6 7 8 9 10 h 11 12
$8,38 $9,58 $11,4 $13,7 $17,4 $20,2 $21,6
Sales $0 $0 $3,000 $5,590 $6,827
4 7 54 45 54 30 12
Direct
$4,19 $4,79 $5,72 $6,87 $8,72 $10,1 $10,8
Cost of $0 $0 $1,500 $2,795 $3,413
2 3 7 2 7 15 06
Sales
Other
Costs of $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Goods
Total
$4,19 $4,79 $5,72 $6,87 $8,72 $10,1 $10,8
Cost of $0 $0 $1,500 $2,795 $3,413
2 3 7 2 7 15 06
Sales
Gross $4,19 $4,79 $5,72 $6,87 $8,72 $10,1 $10,8
$0 $0 $1,500 $2,795 $3,413
Margin 2 3 7 2 7 15 06
Gross 0.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00 50.00
0.00%
Margin % % % % % % % % % % % %
Expenses
$2,00 $6,70 $6,70 $6,70 $7,00 $7,00 $7,00 $7,00
Payroll $0 $5,800 $5,800 $6,700
0 0 0 0 0 0 0 0
Sales and
Marketin
g and $0 $0 $250 $250 $250 $250 $250 $250 $250 $250 $250 $250
Other
Expenses
Depreciat
$83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83 $83
ion
$1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00 $1,00
Rent $0 $1,000 $1,000 $1,000
0 0 0 0 0 0 0 0
Utilities $0 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Insurance $0 $0 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Payroll 15 $1,00 $1,00 $1,00 $1,05 $1,05 $1,05 $1,05
$0 $300 $870 $870 $1,005
Taxes % 5 5 5 0 0 0 0
Other $0 $0 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150
Total
$3,68 $9,78 $9,78 $9,78 $10,1 $10,1 $10,1 $10,1
Operating $83 $8,753 $8,753 $9,788
3 8 8 8 33 33 33 33
Expenses
Profit ($83 ($3,68 ($7,25 ($5,95 ($6,37 ($5,59 ($4,99 ($4,06 ($3,26 ($1,40 ($18) $673
Before ) 3) 3) 8) 5) 6) 5) 1) 1) 6)
Interest
and Taxes
($3,60 ($7,17 ($5,87 ($6,29 ($5,51 ($4,91 ($3,97 ($3,17 ($1,32
EBITDA $0 $65 $756
0) 0) 5) 2) 3) 2) 8) 8) 3)
Interest
$536 $530 $524 $518 $513 $507 $501 $495 $489 $483 $478 $472
Expense
Taxes
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Incurred
($61 ($4,21 ($7,77 ($6,47 ($6,88 ($6,10 ($5,49 ($4,55 ($3,75 ($1,88 ($496
Net Profit $201
9) 3) 7) 7) 7) 2) 5) 6) 0) 9) )
Net - - - - - - - - -
0.00
Profit/Sal 0.00% 259.24 115.87 100.88 72.78 57.32 39.78 27.28 10.82 2.45 0.93%
%
es % % % % % % % % %

Pro Forma Cash Flow

Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont
h1 h2 h3 h4 h5 h6 h7 h8 h 9 h 10 h 11 h 12
Cash
Received
Cash
from
Operation
s
Cash $3,00 $5,59 $6,82 $8,38 $9,58 $11,4 $13,7 $17,4 $20,2 $21,6
$0 $0
Sales 0 0 7 4 7 54 45 54 30 12
Subtotal
Cash
$3,00 $5,59 $6,82 $8,38 $9,58 $11,4 $13,7 $17,4 $20,2 $21,6
from $0 $0
0 0 7 4 7 54 45 54 30 12
Operation
s
Additiona
l Cash
Received
Sales
Tax,
0.00
VAT, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
%
HST/GST
Received
New
Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Borrowin
g
New $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other
Liabilities
(interest-
free)
New
Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term
Liabilities
Sales of
Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets
Sales of
Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term
Assets
New
Investme
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
nt
Received
Subtotal
$3,00 $5,59 $6,82 $8,38 $9,58 $11,4 $13,7 $17,4 $20,2 $21,6
Cash $0 $0
0 0 7 4 7 54 45 54 30 12
Received
Expendit Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont
ures h1 h2 h3 h4 h5 h6 h7 h8 h 9 h 10 h 11 h 12
Expendit
ures from
Operation
s
Cash $2,00 $5,80 $5,80 $6,70 $6,70 $6,70 $6,70 $7,00 $7,00 $7,00 $7,00
$0
Spending 0 0 0 0 0 0 0 0 0 0 0
Bill $1,65 $4,32 $6,13 $6,91 $7,65 $8,28 $9,15 $10,3 $12,1 $13,6
$0 $375
Payments 2 7 6 2 5 4 7 27 16 10
Subtotal
Spent on $2,37 $7,45 $10,1 $12,8 $13,6 $14,3 $14,9 $16,1 $17,3 $19,1 $20,6
$0
Operation 5 2 27 36 12 55 84 57 27 16 10
s
Additiona
l Cash
Spent
Sales
Tax,
VAT, $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
HST/GST
Paid Out
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayme
nt of
Current
Borrowin
g
Other
Liabilities
Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Repayme
nt
Long-
term
Liabilities
$700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700 $700
Principal
Repayme
nt
Purchase
Other
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Current
Assets
Purchase
Long-
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
term
Assets
Dividend
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
s
Subtotal
$3,07 $8,15 $10,8 $13,5 $14,3 $15,0 $15,6 $16,8 $18,0 $19,8 $21,3
Cash $700
5 2 27 36 12 55 84 57 27 16 10
Spent
Net Cash ($700 ($3,07 ($5,15 ($5,23 ($6,70 ($5,92 ($5,46 ($4,23 ($3,11 ($573
$413 $302
Flow ) 5) 2) 8) 9) 8) 8) 0) 2) )
Cash $55,7 $52,6 $47,4 $42,2 $35,5 $29,5 $24,1 $19,9 $16,7 $16,2 $16,6 $16,9
Balance 00 25 73 35 27 99 31 01 89 16 29 32

Pro Forma Balance Sheet

Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
h 1 h 2 h 3 h 4 h 5 h 6 h 7 h 8 h 9 h 10 h 11 12
Starti
ng
Assets
Balan
ces
Current
Assets
$56,4 $55,7 $52,6 $47,4 $42,2 $35,5 $29,5 $24,1 $19,9 $16,7 $16,2 $16,6 $16,9
Cash
00 00 25 73 35 27 99 31 01 89 16 29 32
Inventor $0 $0 $0 $375 $699 $853 $1,04 $1,19 $1,43 $1,71 $2,18 $2,52 $2,70
y 8 8 2 8 2 9 2
Other
$1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50 $1,50
Current
0 0 0 0 0 0 0 0 0 0 0 0 0
Assets
Total
$57,9 $57,2 $54,1 $49,3 $44,4 $37,8 $32,1 $26,8 $22,8 $20,0 $19,8 $20,6 $21,1
Current
00 00 25 48 34 80 47 30 33 07 98 58 33
Assets
Long-
term
Assets
Long-
$5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00 $5,00
term
0 0 0 0 0 0 0 0 0 0 0 0 0
Assets
Accumu
lated
$0 $83 $166 $249 $332 $415 $498 $581 $664 $747 $830 $913 $996
Depreci
ation
Total
Long- $5,00 $4,91 $4,83 $4,75 $4,66 $4,58 $4,50 $4,41 $4,33 $4,25 $4,17 $4,08 $4,00
term 0 7 4 1 8 5 2 9 6 3 0 7 4
Assets
Total $62,9 $62,1 $58,9 $54,0 $49,1 $42,4 $36,6 $31,2 $27,1 $24,2 $24,0 $24,7 $25,1
Assets 00 17 59 99 02 65 49 49 69 60 68 45 37
Liabiliti
Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Mont Month
es and
h 1 h 2 h 3 h 4 h 5 h 6 h 7 h 8 h 9 h 10 h 11 12
Capital
Current
Liabiliti
es
Account
$2,29 $5,90 $8,08 $9,03 $10,0 $10,8 $11,9 $13,5 $15,9 $17,8 $18,6
s $0 $536
1 8 8 8 24 19 95 36 33 06 97
Payable
Current
Borrowi $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
ng
Other
Current
$0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Liabiliti
es
Subtotal
Current $2,29 $5,90 $8,08 $9,03 $10,0 $10,8 $11,9 $13,5 $15,9 $17,8 $18,6
$0 $536
Liabiliti 1 8 8 8 24 19 95 36 33 06 97
es
Long- $65,0 $64,3 $63,6 $62,9 $62,2 $61,5 $60,8 $60,1 $59,4 $58,7 $58,0 $57,3 $56,6
term 00 00 00 00 00 00 00 00 00 00 00 00 00
Liabiliti
es
Total
$65,0 $64,8 $65,8 $68,8 $70,2 $70,5 $70,8 $70,9 $71,3 $72,2 $73,9 $75,1 $75,2
Liabiliti
00 36 91 08 88 38 24 19 95 36 33 06 97
es
Paid-in $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0 $15,0
Capital 00 00 00 00 00 00 00 00 00 00 00 00 00
Retained ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1 ($17,1
Earnings 00) 00) 00) 00) 00) 00) 00) 00) 00) 00) 00) 00) 00)
($619 ($4,83 ($12,6 ($19,0 ($25,9 ($32,0 ($37,5 ($42,1 ($45,8 ($47,7 ($48,2 ($48,0
Earnings $0
) 2) 09) 86) 73) 75) 71) 27) 76) 66) 61) 60)
Total ($2,10 ($2,71 ($6,93 ($14,7 ($21,1 ($28,0 ($34,1 ($39,6 ($44,2 ($47,9 ($49,8 ($50,3 ($50,1
Capital 0) 9) 2) 09) 86) 73) 75) 71) 27) 76) 66) 61) 60)
Total
Liabiliti $62,9 $62,1 $58,9 $54,0 $49,1 $42,4 $36,6 $31,2 $27,1 $24,2 $24,0 $24,7 $25,1
es and 00 17 59 99 02 65 49 49 69 60 68 45 37
Capital
Net ($2,10 ($2,71 ($6,93 ($14,7 ($21,1 ($28,0 ($34,1
Worth 0) 9) 2) 09) 86) 73) 75)

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shirts_business_plan/appendix_fc.cfm#ixzz0y0JuYuAB