This sample business plan has been made available to users of Bplans.

com, published
by Palo Alto Software. Our sample plans were developed by existing companies and
new business start-ups as research instruments to determine market viability, or
funding availability. Names, locations and numbers may have been changed, and
substantial portions of text may have been omitted to preserve
confidentiality and proprietary information.

You are welcome to use this plan as a starting point to create your own, but you do not
have permission to reproduce, resell, publish, distribute
or even copy this plan as it exists here.

Requests for reprints, academic use, and other dissemination of this sample plan should
be emailed to the marketing department of Palo Alto Software at
[email protected].

Copyright Palo Alto Software, Inc., 2020 All rights reserved.

Legal Page

Confidentiality Agreement

The undersigned reader acknowledges that the information provided by

_________________________ in this business plan is confidential; therefore, reader agrees not to
disclose it without the express written permission of _________________________.

It is acknowledged by reader that information to be furnished in this business plan is in all respects
confidential in nature, other than information which is in the public domain through other means
and that any disclosure or use of same by reader, may cause serious harm or damage to
_________________________.

Upon request, this document is to be immediately returned to _________________________.

___________________
Signature

___________________
Name (typed or printed)

___________________
Date
 Table of Contents

This is a business plan. It does not imply an offering of securities.

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

Chart: Highlights...........................................................................................................................1
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Start-up Summary....................................................................................................................2
Table: Start-up..............................................................................................................................3
Table: Start-up Funding.............................................................................................................3
Chart: Start-up..............................................................................................................................4
2.2 Company Ownership................................................................................................................4
3.0 Products............................................................................................................................................4
4.0 Market Analysis Summary.........................................................................................................4
4.1 Market Segmentation..............................................................................................................5
Table: Market Analysis................................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................6
4.2 Target Market Segment Strategy.......................................................................................6
4.3 Industry Analysis.......................................................................................................................7
4.3.1 Competition and Buying Patterns...............................................................................7
5.0 Strategy and Implementation Summary.............................................................................7
5.1 Sales Strategy............................................................................................................................8
5.1.1 Sales Forecast....................................................................................................................8
Chart: Sales Monthly...............................................................................................................8
Chart: Sales by Year................................................................................................................9
Table: Sales Forecast..............................................................................................................9
5.2 Milestones....................................................................................................................................9
Table: Milestones..........................................................................................................................9
Chart: Milestones........................................................................................................................10
5.3 Marketing Strategy.................................................................................................................10
5.4 Competitive Edge....................................................................................................................10
6.0 Management Summary.............................................................................................................10
6.1 Personnel Plan..........................................................................................................................11
Table: Personnel..........................................................................................................................11
7.0 Financial Plan................................................................................................................................11
7.1 Important Assumptions........................................................................................................11
Table: General Assumptions...................................................................................................11
7.2 Break-even Analysis...............................................................................................................12
Table: Break-even Analysis....................................................................................................12
Chart: Break-even Analysis....................................................................................................12
7.3 Projected Profit and Loss.....................................................................................................12
Chart: Profit Monthly.................................................................................................................13
Chart: Profit Yearly.....................................................................................................................13
Chart: Gross Margin Monthly.................................................................................................14
Page
 Table of Contents

Chart: Gross Margin Yearly.....................................................................................................14

Table: Profit and Loss................................................................................................................15
7.4 Projected Cash Flow...............................................................................................................16
Table: Cash Flow.........................................................................................................................16
Chart: Cash...................................................................................................................................17
7.5 Projected Balance Sheet......................................................................................................18
Table: Balance Sheet.................................................................................................................18
7.6 Business Ratios........................................................................................................................18
Table: Ratios.................................................................................................................................19
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: General Assumptions.............................................................................................................3
Table: General Assumptions.............................................................................................................3
Table: Profit and Loss..........................................................................................................................4
Table: Profit and Loss..........................................................................................................................4
Table: Cash Flow...................................................................................................................................5
Table: Cash Flow...................................................................................................................................5
Table: Balance Sheet...........................................................................................................................6
Table: Balance Sheet...........................................................................................................................6

Page
 Rose Petal Nursery

1.0 Executive Summary

Rose Petal Nursery is dedicated to providing a quality choice for people looking for plant and
garden supplies, as well as serving contractors who need a reliable source of products. Our
start-up expenses come to $41,500 which includes the cost of the greenhouses ($38,000) and
the cost of rent for the land ($1,000). The start-up costs will be financed entirely by Jim and
Dan Forester.

We will offer a wide variety of plants, trees, vegetable plants, along with a selection of garden
supplies. Most of the plants we sell will be grown in our greenhouses. With a convenient
location Rose Petal Nursery intends to successfully market to the residential customer, as well
as contractors and renters.

We would like to see a five to ten percent increase in our customer base each year. Our
marketing strategy includes providing a knowledgeable staff, affordable prices, a great location,
and top notch customer service.

Rose Petal Nursery has been the dream of owners Jim and Dan Forester for many years, and
has been a project in the making for the last five years. Jim and Dan will manage all aspects of
operations at Rose Petal Nursery. Dan will oversee the staff and be involved with the ordering
of merchandise, while Jim will be responsible for the ordering of the garden supplies and tree
stock, as well as the maintenance of the greenhouses.

Rose Petal aims to experience a growth rate of 20% in sales for the second year of operation
and build upon that as the company grows. With creative marketing, and a quality choice of
plants and garden supplies for our customers Rose Petal Nursery intends to make its presence
known in the nursery community.

Chart: Highlights

Highlights

$500,000

$450,000

$400,000

$350,000
Sales
$300,000
Gross Margin
$250,000

$200,000 Net Profit

$150,000

$100,000

$50,000

$0
Year 1 Year 2 Year 3

Page 1
 Rose Petal Nursery

1.1 Objectives

1. Maintain an average gross margin at or above 50%.

2. Generate an average of $1,000 of sales each business day of each month.
3. Realize an annual growth rate of 10% in Year 2.

1.2 Mission

Rose Petal Nursery is dedicated to providing a wide variety of plants and trees in an aesthetic
setting. Customer service is extremely important. We want each customer to have a pleasant
shopping experience, and it is the intention of our staff to answer questions with expertise and
to offer advice when we feel it is needed.

1.3 Keys to Success

The primary keys to success for the company will be based on the following factors:

 Sell products of the highest quality with excellent customer service and support.
 Retain customers to generate repeat purchases and make referrals.
 Continue to expand daily sales by adding to the variety of plants we sell.
 Communicate with our customers through creative advertising.

2.0 Company Summary

Rose Petal Nursery is the dream of brothers Jim and Dan Forester, and has been a project in
the making for five years. With an opening date of April of this year, Jim and Dan are seeing
the dream of operating a nursery come to fruition. Located on the outskirts of Eugene at 35571
Brookside Rd. Rose Petal Nursery will focus on providing quality bedding, hanging,and
vegetable plants, along with a variety of potted trees. Our aim is to serve both residential
customers and landscaping contractors. We will also have a variety of garden accessories such
as ponds, statues, potting soils, fertilizers, and garden tools. Our start-up requirements will be
$100,000.

2.1 Start-up Summary

Our start-up requirements come to $100,000 which includes the first month's rent of the land
for our nursery. The regular rental fee is $1,000 a month. The start-up costs will be financed
entirely by Jim and Dan Forester.

Page 2
 Rose Petal Nursery

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $500
Brochures $1,500
Insurance $500
Rent $1,000
Expensed Equipment $38,000
Total Start-up Expenses $41,500

Start-up Assets
Cash Required $20,000
Start-up Inventory $26,500
Other Current Assets $0
Long-term Assets $12,000
Total Assets $58,500

Total Requirements $100,000

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $41,500
Start-up Assets to Fund $58,500
Total Funding Required $100,000

Assets
Non-cash Assets from Start-up $38,500
Cash Requirements from Start-up $20,000
Additional Cash Raised $0
Cash Balance on Starting Date $20,000
Total Assets $58,500

Liabilities and Capital

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

Capital

Planned Investment
Jim Forester $50,000
Dan Forester $50,000
Additional Investment Requirement $0
Total Planned Investment $100,000

Loss at Start-up (Start-up Expenses) ($41,500)

Total Capital $58,500

Total Capital and Liabilities $58,500

Page 3
 Rose Petal Nursery

Total Funding $100,000

Chart: Start-up

Start-up

$100,000

$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
Expenses Assets Investment Loans

2.2 Company Ownership

Jim and Dan Forester are the owners and operators of Rose Petal Nursery. Jim has worked in
the nursery industry for over twenty years (with 10 years managing Stoneybrook Nursery). Dan
has a degree from Washington State University in agronomy and has worked for the Lane
County Extension Agency as a plant specialist advising the local population on the purchase and
care of a wide range of plants.

3.0 Products

Rose Petal Nursery will offer a wide variety of bedding plants, shrubs, trees, and vegetable
plants along with many garden accessories such as fountains, stepping stones, garden tools,
fertilizers, and potting soils. Most of the plants will be grown on-site in state-of-the-art
greenhouses. Initially though, we will buy full grown plants for our first few months of
inventory.

4.0 Market Analysis Summary

Rose Petal Nursery target market strategy is based on becoming an attractive choice for
homeowners and landscape contractors in the greater Eugene/Springfield region. The target
markets we are going to pursue are the residential consumers looking for a wide variety of
plants and trees to beautify their residences. Landscape contractors will be attracted
by competitive prices and a diverse inventory. People will want to shop at our location because
of the superior customer service we will provide. Rose Petal Nursery would like to see a five to
ten percent increase in customers annually.

Page 4
 Rose Petal Nursery

4.1 Market Segmentation

The profile of our customer consists of the following geographic and demographic information:

Geographics

 Our immediate geographic market is the greater Eugene/Springfield metropolitan area with
a population of 200,000 people.
 A 100 mile geographic area would want our services, as we become a well known nursery.
 The total target market is estimated at 500,000 people.

Demographics

 Male and Female.

 Married and Single.
 Combined annual income in excess of $50,000.
 Age range of 25 to 80 years, with a median age of 40.
 Own their own houses or townhouses valued at over $150,000.
 Most work out of the home by choice in a variety of work environments.

We know the following regarding the profile of the typical resident of the greater
Eugene/Springfield area:

 50% have lived in the area for 10 or more years.

 30% are between the ages of 30 and 45 years of age.
 40% have completed some college.
 30% are professionals and/or business owners, or managers.
 60% have children living at home.
 50% own their own residence.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Residential, Homeowners 5% 50,000 52,500 55,125 57,881 60,775 5.00%
Commercial Contractors 7% 100 107 114 122 131 6.98%
Renters 5% 30,000 31,500 33,075 34,729 36,465 5.00%
Total 5.00% 80,100 84,107 88,314 92,732 97,371 5.00%

Page 5
 Rose Petal Nursery

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Residential, Homeowners

Commercial Contractors

Renters

4.2 Target Market Segment Strategy

Our target market is based on becoming a resource for people looking to buy flowers, trees,
and garden supplies. Our marketing strategy centers around superior performance in the
following areas.

 Customer service
 Large selection and fair pricing
 Quality products

The target markets are separated into three segments; "Residential, Homeowners,"
"Commercial Contractors," and "Renters". The primary marketing opportunity is selling to these
accessible target market segments that focus on the beautification of peoples' homes and
places of business.

Residential, Homeowners -- Rose Petal Nursery would like to be an attractive choice for
homeowners purchasing plants and garden supplies. With our large and varied selection of
plants, trees, and garden supplies it is our aim to give individual attention to every customer
and to serve their planting needs. The residential sector has a wide range of income levels, but
on average the annual household income of our customers is $50,000.

Commercial Contractors -- Commercial contractors are important Rose Petal Nursery

customers. A consistent inventory, and providing the large quantities contractors need, is
important. With prompt and affordable service, contractors will know that they can count on us
to meet their needs in a professional manner. Most of the contracting businesses we will service
have an annual revenue of at least $50,000 to over $100,000.

Renters -- People who do not own their own homes but need flowers and plants to beautify
their living spaces make up an important segment of our target market. Many rentals and even

Page 6
 Rose Petal Nursery

apartment complexes have spaces that renters can use to plant gardens. Household income for
this group would be in the range of $20,000 to $50,000.

4.3 Industry Analysis

The nursery business is highly competitive, and it is important to maintain a high level of

customer service, offer quality products, and give the consumer a wide variety of choices when
shopping for plants and trees. Our approach will be to offer a diverse selection of plants, trees,
and garden supplies. Exceptional customer service will be important in meeting the needs of
our target markets. Healthy plants will be a top priority, and we will display the plants
artistically. Plants are a commodity that will always have a market as people consider them to
be very important to have around their residences. There are four other nurseries around the
greater Lane County area, and we will have to provide top quality service to be succeed.

4.3.1 Competition and Buying Patterns

Current local competition includes the following:

 Lone Pine Nursery -- Locally owned, and selling a limited variety of plants, shrubs, trees,
and garden products to the general public. This nursery is seasonal focusing on spring and
summer flowers. They have a very pleasant facility in which to shop, but prices are a little
more on average than Rose Petal's with not a very good selection of trees and shrubs.
 McKenzie Nursery -- Locally owned, offers a limited selection of plants and shrubs with
the main emphasis on providing fresh produce in the summer months. Seasonal "U-pick"
strawberries, blueberries, and apples are available on the property. Their prices are
competitive but the location is not convenient for a lot of people, as it is 25 miles out of
town.
 Green Thumb Nursery -- Locally owned, offering a variety of plants and trees, as well as,
a large selection of garden supplies. Green Thumb most closely matches what we have to
offer when talking about plants and shrubs, but they do not have a large enough inventory
to service some of the large contractors in the area.

Rose Petal Nursery will provide competitive pricing for its products, and will guarantee to match
competitors' prices, but exceptional customer service and product knowledge will make us
stand out to our target markets. The size of our inventory and the variety of choices our
customers will have when choosing flowers, trees, and shrubs will make Rose Petal Nursery an
attractive choice. Our location is very convenient, only 5 minutes outside the city limits.

5.0 Strategy and Implementation Summary

Our strategy is based on serving our customers with expert service and product knowledge.

Also:

 We are building our marketing plan to reach homeowners, renters, and contractors.
 We focus on satisfying the needs of our customers.
 We focus on providing quality plants at affordable prices.

Page 7
 Rose Petal Nursery

10 Month
11 12
5.1 Sales Strategy

9 Month
The primary sales strategy includes these factors:

8 Month
Month
 Exceptional customer service
 Exceptional product knowledge

Month
 Large and varied inventory

Month 7
 Convenient location.

Month 6
5.1.1 Sales Forecast

Month 5
The sales forecast is broken down into two main revenue streams: the general public, and

Month 4
contractors. The sales forecast for the upcoming year is based on a modest growth rate for
sales. Being a start-up business we are projecting a growth rate of 20%, hoping our advertising

Month 3
will bring in new customers daily.

MonthMonth
1 2

Chart: Sales Monthly

Sales Monthly

$40,000

$35,000

$30,000

$25,000 General Public

$20,000 Contractors

$15,000

$10,000

$5,000

$0

Page 8
 Rose Petal Nursery

Chart: Sales by Year

Sales by Year

$500,000

$450,000

$400,000

$350,000
General Public
$300,000
Contractors
$250,000

$200,000

$150,000

$100,000

$50,000

$0
Year 1 Year 2 Year 3

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
General Public $135,000 $162,000 $194,400
Contractors $181,000 $217,200 $260,640
Total Sales $316,000 $379,200 $455,040

Direct Cost of Sales Year 1 Year 2 Year 3

Flowers, Trees, Shrubs $94,800 $113,760 $136,512
Garden Supplies $63,200 $75,840 $91,008
Subtotal Direct Cost of Sales $158,000 $189,600 $227,520

5.2 Milestones

The milestones chart is accompanied by a table outlining key activities critical to our success.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Business Plan 1/22/2003 3/20/2003 $1,000 Jim Forester Management
Accounting plan 2/2/2003 2/24/2003 $500 Todd Cramer Accountant
Marketing and Advertising 4/15/2003 7/21/2003 $3,000 Dan Forester Management
Totals $4,500

Page 9
 Rose Petal Nursery

Chart: Milestones

Milestones

Business Plan

Accounting plan

Marketing and Advertising

Feb Mar Apr May Jun Jul

5.3 Marketing Strategy

Our marketing strategy is based on becoming an option for contractors and the general public
to fill their plant and shrubbery needs. Our marketing strategy is based on superior
performance in the following areas:

 Customer service
 Knowledgeable staff
 Affordable prices
 Great location.

5.4 Competitive Edge

Rose Petal Nursery will have one of the most extensive and affordable plant and flower
selections in the greater Eugene/Springfield area, and a very knowledgeable staff ready
to provide unparallel customer service. Contractors looking for a reliable nursery will find Rose
Petal very supportive and easy to work with. The ease and convenience of our location is a very
big plus.

6.0 Management Summary

Owners Jim and Dan Forester will oversee and manage all aspects of operation at Rose Petal
Nursery. Jim will be responsible for the ordering of garden supplies and tree stock as well as
the maintenance of the greenhouses. Dan will be responsible for overseeing staff and working
with contractors as well as doing some of the ordering of merchandise.

Page 10
 Rose Petal Nursery

6.1 Personnel Plan

The personnel plan contains two full-time employees and two part-time employees in addition
to Jim and Dan Forester. Jim and Dan will both draw $3,500 per month. The two full-time
employees will be paid $2,000 per month to begin with and the two part-time employees will
make $1,000 a month. Employees will help customers and care for plants as part of their jobs.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Owners $84,000 $88,000 $92,000
Full-time Employees $32,000 $44,000 $48,000
Part-time Employees $20,000 $25,000 $29,000
Total People 4 5 5

Total Payroll $136,000 $157,000 $169,000

7.0 Financial Plan

The financial plan contains these essential factors:

 A growth rate of 20% in sales for the year 2005, to total in excess of $379,000 in total
revenues.
 Average in sales per business day (305 days per year) in excess of $900.00.

Difficulties and Risks

 Slow sales resulting in less-than projected cash flow.

 Overly aggressive and debilitating actions by competitors.
 A parallel entry by a new competitor.
 Sluggish economic conditions.

7.1 Important Assumptions

The following critical assumptions will determine the potential for future success.

 A healthy economy that supports moderate growth in our market.

 Low operating expenses, particularly in the area of buying plants that could be grown on-
site.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 9.00% 9.00% 9.00%
Long-term Interest Rate 7.00% 7.00% 7.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0

Page 11
 Rose Petal Nursery

7.2 Break-even Analysis

The following chart and table summarize our break-even analysis. Our fixed costs will be
approximately $14,800 per month at the onset and we expect to reach the break-even point in
the third year of operation.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $29,767

Assumptions:
Average Percent Variable Cost 50%
Estimated Monthly Fixed Cost $14,883

Chart: Break-even Analysis

Break-even Analysis

$12,000

$9,000

$6,000

$3,000

$0

($3,000)

($6,000)

($9,000)

($12,000)

$0 $10,000 $20,000 $30,000 $40,000 $50,000

$5,000 $15,000 $25,000 $35,000 $45,000 $55,000

7.3 Projected Profit and Loss

The following represents the projected profit and loss for Rose Petal Nursery based, on sales
and expenses, for 2004 and beyond. We are anticipating a steady increase in sales through
July. Business is expected to slow during the autumn and winter.

Page 12
 Rose Petal Nursery

Chart: Profit Monthly

Profit Monthly

$6,000

$4,000

$2,000

$0

($2,000)

($4,000)

($6,000)

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

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

Chart: Profit Yearly

Profit Yearly

$20,000

$15,000

$10,000

$5,000

$0

($5,000)

($10,000)

($15,000)

($20,000)
Year 1 Year 2 Year 3

Page 13
 Rose Petal Nursery

Chart: Gross Margin Monthly

Gross Margin Monthly

$20,000

$18,000

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

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

Chart: Gross Margin Yearly

Gross Margin Yearly

$210,000

$180,000

$150,000

$120,000

$90,000

$60,000

$30,000

$0
Year 1 Year 2 Year 3

Page 14
 Rose Petal Nursery

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $316,000 $379,200 $455,040
Direct Cost of Sales $158,000 $189,600 $227,520
Other Costs of Goods $0 $0 $0
Total Cost of Sales $158,000 $189,600 $227,520

Gross Margin $158,000 $189,600 $227,520

Gross Margin % 50.00% 50.00% 50.00%

Expenses
Payroll $136,000 $157,000 $169,000
Sales and Marketing and Other Expenses $6,000 $5,000 $5,000
Depreciation $0 $0 $0
Rent $12,000 $0 $0
Utilities $3,600 $4,000 $4,000
Insurance $600 $700 $800
Payroll Taxes $20,400 $23,550 $25,350

Total Operating Expenses $178,600 $190,250 $204,150

Profit Before Interest and Taxes ($20,600) ($650) $23,370

EBITDA ($20,600) ($650) $23,370
Interest Expense $0 $0 $0
Taxes Incurred $0 $0 $5,940

Net Profit ($20,600) ($650) $17,430

Net Profit/Sales -6.52% -0.17% 3.83%

Page 15
 Rose Petal Nursery

7.4 Projected Cash Flow

The cash flow projections are outlined below. These projections are based on our basic
assumptions with revenue generation factors carrying the most significant weight regarding the
outcome. We are anticipating that we will have a steadily increasing cash flow as the business
continues to grow.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $79,000 $94,800 $113,760
Cash from Receivables $217,825 $280,565 $336,678
Subtotal Cash from Operations $296,825 $375,365 $450,438

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $5,000 $0 $0
Subtotal Cash Received $301,825 $375,365 $450,438

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $136,000 $157,000 $169,000
Bill Payments $171,632 $227,568 $270,046
Subtotal Spent on Operations $307,632 $384,568 $439,046

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $307,632 $384,568 $439,046

Net Cash Flow ($5,807) ($9,203) $11,392

Cash Balance $14,193 $4,990 $16,382

Page 16
 Rose Petal Nursery

Chart: Cash

Cash

$21,000

$18,000

$15,000

$12,000
Net Cash Flow
$9,000

$6,000
Cash Balance

$3,000

$0

($3,000)

($6,000)

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

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

Page 17
 Rose Petal Nursery

7.5 Projected Balance Sheet

Rose Petal Nursery's balance sheet is outlined below.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $14,193 $4,990 $16,382
Accounts Receivable $19,175 $23,010 $27,612
Inventory $7,150 $21,768 $26,122
Other Current Assets $0 $0 $0
Total Current Assets $40,518 $49,768 $70,115

Long-term Assets
Long-term Assets $12,000 $12,000 $12,000
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $12,000 $12,000 $12,000
Total Assets $52,518 $61,768 $82,115

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $9,618 $19,518 $22,435
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $9,618 $19,518 $22,435

Long-term Liabilities $0 $0 $0
Total Liabilities $9,618 $19,518 $22,435

Paid-in Capital $105,000 $105,000 $105,000

Retained Earnings ($41,500) ($62,100) ($62,750)
Earnings ($20,600) ($650) $17,430
Total Capital $42,900 $42,250 $59,680
Total Liabilities and Capital $52,518 $61,768 $82,115

Net Worth $42,900 $42,250 $59,680

7.6 Business Ratios

Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) Code 5193.02, Flowers and Nursery Stock are shown for
comparison.

The following will enable us to keep on track. If we fail in any of these areas, we will need to re-
evaluate our business model:

 Gross margins at or above 50%.

 Month-to-month annual comparisons indicate an increase of 15% or greater.
 Do not depend on a credit line to meet cash requirements.

Page 18
 Rose Petal Nursery

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 20.00% 20.00% 1.22%

Percent of Total Assets

Accounts Receivable 36.51% 37.25% 33.63% 30.27%
Inventory 13.61% 35.24% 31.81% 25.69%
Other Current Assets 0.00% 0.00% 0.00% 27.60%
Total Current Assets 77.15% 80.57% 85.39% 83.56%
Long-term Assets 22.85% 19.43% 14.61% 16.44%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 18.31% 31.60% 27.32% 44.32%

Long-term Liabilities 0.00% 0.00% 0.00% 11.33%
Total Liabilities 18.31% 31.60% 27.32% 55.65%
Net Worth 81.69% 68.40% 72.68% 44.35%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 50.00% 50.00% 50.00% 17.78%
Selling, General & Administrative Expenses 56.52% 50.17% 46.15% 9.07%
Advertising Expenses 0.00% 0.00% 0.00% 0.67%
Profit Before Interest and Taxes -6.52% -0.17% 5.14% 2.13%

Main Ratios
Current 4.21 2.55 3.13 1.66
Quick 3.47 1.43 1.96 0.99
Total Debt to Total Assets 18.31% 31.60% 27.32% 6.03%
Pre-tax Return on Net Worth -48.02% -1.54% 39.16% 58.71%
Pre-tax Return on Assets -39.22% -1.05% 28.46% 14.61%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin -6.52% -0.17% 3.83% n.a
Return on Equity -48.02% -1.54% 29.21% n.a

Activity Ratios
Accounts Receivable Turnover 12.36 12.36 12.36 n.a
Collection Days 59 27 27 n.a
Inventory Turnover 10.45 13.11 9.50 n.a
Accounts Payable Turnover 18.84 12.17 12.17 n.a
Payment Days 27 22 28 n.a
Total Asset Turnover 6.02 6.14 5.54 n.a

Debt Ratios
Debt to Net Worth 0.22 0.46 0.38 n.a
Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $30,900 $30,250 $47,680 n.a
Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios
Assets to Sales 0.17 0.16 0.18 n.a
Current Debt/Total Assets 18% 32% 27% n.a
Acid Test 1.48 0.26 0.73 n.a
Sales/Net Worth 7.37 8.98 7.62 n.a
Dividend Payout 0.00 0.00 0.00 n.a

Page 19
 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
Sales
General Public 0% $8,000 $11,000 $13,000 $17,000 $19,000 $18,000 $15,000 $11,000 $8,000 $5,000 $5,000 $5,000
Contractors 0% $10,000 $13,000 $15,000 $19,000 $23,000 $23,000 $23,000 $18,000 $13,000 $8,000 $8,000 $8,000
Total Sales $18,000 $24,000 $28,000 $36,000 $42,000 $41,000 $38,000 $29,000 $21,000 $13,000 $13,000 $13,000

Direct Cost of Sales Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Flowers, Trees, Shrubs $5,400 $7,200 $8,400 $10,800 $12,600 $12,300 $11,400 $8,700 $6,300 $3,900 $3,900 $3,900
Garden Supplies $3,600 $4,800 $5,600 $7,200 $8,400 $8,200 $7,600 $5,800 $4,200 $2,600 $2,600 $2,600
Subtotal Direct Cost of Sales $9,000 $12,000 $14,000 $18,000 $21,000 $20,500 $19,000 $14,500 $10,500 $6,500 $6,500 $6,500

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
Owners 0% $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000
Full-time Employees 0% $0 $0 $0 $0 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Part-time Employees 0% $2,000 $2,000 $2,000 $2,000 $2,000 $3,000 $3,000 $2,000 $2,000 $0 $0 $0
Total People 3 3 3 3 5 6 6 5 5 4 4 4

Total Payroll $9,000 $9,000 $9,000 $9,000 $13,000 $14,000 $14,000 $13,000 $13,000 $11,000 $11,000 $11,000

Page 2
 Appendix

Table: General Assumptions

General Assumptions
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00% 9.00%
Long-term Interest Rate 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00% 7.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0

Page 3
 Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $18,000 $24,000 $28,000 $36,000 $42,000 $41,000 $38,000 $29,000 $21,000 $13,000 $13,000 $13,000
Direct Cost of Sales $9,000 $12,000 $14,000 $18,000 $21,000 $20,500 $19,000 $14,500 $10,500 $6,500 $6,500 $6,500
Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $9,000 $12,000 $14,000 $18,000 $21,000 $20,500 $19,000 $14,500 $10,500 $6,500 $6,500 $6,500

Gross Margin $9,000 $12,000 $14,000 $18,000 $21,000 $20,500 $19,000 $14,500 $10,500 $6,500 $6,500 $6,500
Gross Margin % 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00% 50.00%

Expenses
Payroll $9,000 $9,000 $9,000 $9,000 $13,000 $14,000 $14,000 $13,000 $13,000 $11,000 $11,000 $11,000
Sales and Marketing and Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Expenses
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Rent $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Utilities $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Insurance 15% $300 $0 $0 $0 $0 $300 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $1,350 $1,350 $1,350 $1,350 $1,950 $2,100 $2,100 $1,950 $1,950 $1,650 $1,650 $1,650

Total Operating Expenses $12,450 $12,150 $12,150 $12,150 $16,750 $18,200 $17,900 $16,750 $16,750 $14,450 $14,450 $14,450

Profit Before Interest and Taxes ($3,450) ($150) $1,850 $5,850 $4,250 $2,300 $1,100 ($2,250) ($6,250) ($7,950) ($7,950) ($7,950)
EBITDA ($3,450) ($150) $1,850 $5,850 $4,250 $2,300 $1,100 ($2,250) ($6,250) ($7,950) ($7,950) ($7,950)
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Net Profit ($3,450) ($150) $1,850 $5,850 $4,250 $2,300 $1,100 ($2,250) ($6,250) ($7,950) ($7,950) ($7,950)
Net Profit/Sales -19.17% -0.63% 6.61% 16.25% 10.12% 5.61% 2.89% -7.76% -29.76% -61.15% -61.15% -61.15%

Page 4
 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 Received

Cash from Operations

Cash Sales $4,500 $6,000 $7,000 $9,000 $10,500 $10,250 $9,500 $7,250 $5,250 $3,250 $3,250 $3,250
Cash from Receivables $0 $450 $13,650 $18,100 $21,200 $27,150 $31,475 $30,675 $28,275 $21,550 $15,550 $9,750
Subtotal Cash from Operations $4,500 $6,450 $20,650 $27,100 $31,700 $37,400 $40,975 $37,925 $33,525 $24,800 $18,800 $13,000

Additional Cash Received

Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-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 $5,000 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $4,500 $6,450 $20,650 $27,100 $36,700 $37,400 $40,975 $37,925 $33,525 $24,800 $18,800 $13,000

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

Expenditures from Operations

Cash Spending $9,000 $9,000 $9,000 $9,000 $13,000 $14,000 $14,000 $13,000 $13,000 $11,000 $11,000 $11,000
Bill Payments $115 $3,697 $11,133 $19,557 $25,633 $27,920 $24,053 $20,985 $13,185 $9,707 $5,697 $9,950
Subtotal Spent on Operations $9,115 $12,697 $20,133 $28,557 $38,633 $41,920 $38,053 $33,985 $26,185 $20,707 $16,697 $20,950

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $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 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $9,115 $12,697 $20,133 $28,557 $38,633 $41,920 $38,053 $33,985 $26,185 $20,707 $16,697 $20,950

Page 5
 Appendix
Net Cash Flow ($4,615) ($6,247) $517 ($1,457) ($1,933) ($4,520) $2,922 $3,940 $7,340 $4,093 $2,103 ($7,950)
Cash Balance $15,385 $9,138 $9,655 $8,198 $6,265 $1,745 $4,667 $8,607 $15,947 $20,040 $22,143 $14,193

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
Assets Starting Balances

Current Assets
Cash $20,000 $15,385 $9,138 $9,655 $8,198 $6,265 $1,745 $4,667 $8,607 $15,947 $20,040 $22,143 $14,193
Accounts Receivable $0 $13,500 $31,050 $38,400 $47,300 $57,600 $61,200 $58,225 $49,300 $36,775 $24,975 $19,175 $19,175
Inventory $26,500 $17,500 $13,200 $15,400 $19,800 $23,100 $22,550 $20,900 $15,950 $11,550 $7,150 $7,150 $7,150
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $46,500 $46,385 $53,388 $63,455 $75,298 $86,965 $85,495 $83,792 $73,857 $64,272 $52,165 $48,468 $40,518

Long-term Assets
Long-term Assets $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000
Total Assets $58,500 $58,385 $65,388 $75,455 $87,298 $98,965 $97,495 $95,792 $85,857 $76,272 $64,165 $60,468 $52,518

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

Current Liabilities
Accounts Payable $0 $3,335 $10,488 $18,705 $24,698 $27,115 $23,345 $20,542 $12,857 $9,522 $5,365 $9,618 $9,618
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $3,335 $10,488 $18,705 $24,698 $27,115 $23,345 $20,542 $12,857 $9,522 $5,365 $9,618 $9,618

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $3,335 $10,488 $18,705 $24,698 $27,115 $23,345 $20,542 $12,857 $9,522 $5,365 $9,618 $9,618

Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $105,000 $105,000 $105,000 $105,000 $105,000 $105,000 $105,000 $105,000
Retained Earnings ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500) ($41,500)
Earnings $0 ($3,450) ($3,600) ($1,750) $4,100 $8,350 $10,650 $11,750 $9,500 $3,250 ($4,700) ($12,650) ($20,600)
Total Capital $58,500 $55,050 $54,900 $56,750 $62,600 $71,850 $74,150 $75,250 $73,000 $66,750 $58,800 $50,850 $42,900
Total Liabilities and Capital $58,500 $58,385 $65,388 $75,455 $87,298 $98,965 $97,495 $95,792 $85,857 $76,272 $64,165 $60,468 $52,518

Net Worth $58,500 $55,050 $54,900 $56,750 $62,600 $71,850 $74,150 $75,250 $73,000 $66,750 $58,800 $50,850 $42,900

Page 6
Appendix

Page 1