December 2004

December 2004
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Table of Contents
1.0
Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.1
Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.2
Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1.3
Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
2
2
3
2.0
Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.1
Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.2
Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.0
Products and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.0
Location . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.1
Space and Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.2
Facility Design and Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4.3
Renovation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
7
7
8
5.0
Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.1
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.2
President's Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.3
Employee Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
5.4
Equipment Repair . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9
9
9
9
10
6.0
Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.1
Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.2
Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.3
Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
6.4
Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
11
12
13
13
7.0
Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.1
Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.2
Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.3
Web Plan Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.4
Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7.5
Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
14
14
14
15
16
16
8.0
Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
8.1
Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
9.0
Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.1
Start-up Funding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.2
Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.3
Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.4
Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.5
Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.6
Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
9.7
Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
20
21
21
22
23
26
27
28
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Laser Tag
1.0 Executive Summary
Laser Tag will be located in the Big Mall shopping center, which serves many of the 115,000
people who live in the MyTown metropolitan area. Big Mall shopping center is well located at
415 North West Birch Road, a road that carries well over 30,000 vehicles per day.
Laser Tag is a state-of-the-art "laser" tag game played in a darkened 4,500 square foot
arena in which the players seek to capture the opponents’ base. Smoke swirls around your
feet. Lights flash. Music pounds. You fire your "laser" through the din to strike your
opponents and capture their base while trying to avoid being shot. Laser Tag is a heartpounding, adrenalin-pumping game, in which strategy and luck are joined to defeat your
opponents.
After playing, the players collect their score sheets in the lobby that is elaborately decorated
with a theme that will create a "WOW" effect. While in the lobby, they can also choose, for
two tokens (50 cents) each, among the 20 leading video games. If they are members of
corporate groups recognizing achievements, or individuals celebrating birthday parties, they
may be renting one of three party rooms, at 90 minutes for $119.
The Zone Systems Company will provide the laser tag gaming equipment that has been
featured on one of MTV’s Battle of The Sexes TV episodes, and by Walt Disney World. Zone
Systems provides 24-hour operational assistance for the state-of-the-art laser tag
equipment, and software system that Zone Systems manufactures and is used by facilities
centers around the world. Zone Systems has been in business for over 16 years and is the
leading manufacturer of laser tag equipment worldwide. Zone Systems provides the turn-key
Zone Systems software, along with a companion point-of-sale system; these will be used to
manage all aspects of the facilities operation.
Laser Tag will be an Ohio subchapter S corporation. John Smith will own 100% of the
Corporation and will be the manager. John Smith is a self-employed entrepreneur who has
previously opened two successful businesses. John Smith is a successful 20-year business
veteran with experience in marketing, accountability, management, training, and
supervision.
There is a demand in this area for high-quality, state-of-the-art, electronic entertainment.
The principals will have the necessary skills and training in order to operate the laser tag
complex. At this point in time, the necessary start-up costs have been identified. They are
either exact figures or estimates based on preliminary conversations with potential suppliers.
Having put this plan together, the principals have every reason to believe the business will
be successful. It is a proven franchise operation. The management team has a proven record
of business skills and an ability to work with people. The principals are confident that the
loan will be repaid back in a timely manner, within 7 years, at an assumed annual interest
rate of 11%.
The Highlights chart below is based on a worst case projections - 35% of full capacity.
Page 1
Laser Tag
Highlights
$450,000
$400,000
$350,000
$300,000
Sales
$250,000
Gross Margin
$200,000
Net Profit
$150,000
$100,000
$50,000
$0
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
1.1 Objectives
Laser Tag will create a "stand-alone" Laser Tag facility that will provide a unique form of
entertainment to Prosperous County/MyTown, Ohio and other surrounding communities.
Laser tag games will generate the majority of the revenue with the remaining revenue
coming from video games and other peripherial devices. Within one year, the company will
reinvest 60% of its anticipated Return on Investment to make state-of-the-art
improvements, enabling Laser Tag to "lead from the front" in an ever-changing and enticing
laser tag market. In the second year, Laser Tag will expand its food and beverage capability
and build upon the top-quality video games, while also providing souvenir shirts, sweats,
caps, mugs, and posters to its members and patrons.
1.2 Mission
Laser tag players will enjoy playing the exciting game in a safe, low-light, 4,500 square feet
arena that is enhanced with flashing lights, theatrical haze, pounding music, and surprising
special effects. Laser Tag will offer an enjoyable, pleasant atmosphere while being
committed to maintaining an environment enticing to not only teens and young adults, but
also to the entire family. Our trained staff will welcome our patrons as special guests and
assist with various group functions such as birthday parties or scout recognition and
achievement events, ensuring that everyone has a fun, enjoyable experience.
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Laser Tag
1.3 Keys to Success
The key success factors are themed environments, staff training, customer satisfaction,
marketing and the equipment.
Themed Environments include the WOW! factor in a facility. Zone Systems is a company that
truly understands the WOW! factor. The concepts that Zone Systems promotes tend to be
visually stimulating and on-the-edge, topics which today’s teen males relate to very easily.
Staff Training is critical to the goal of excellent customer service. An improperly trained staff
member can destroy the chances of booking a several hundred dollar corporate event or a
$150 birthday party.
Customer Satisfaction is critical for the long-term success of the facility. The ability to be
polite, ensure the guests' safety and satisfaction, and take pride in providing a pleasant
experience are all vital to achieving long-term profit and converting this from a fad into a
business.
Marketing is one of the greatest issues in the industry. Too many people think that they are
Kevin Costner in the "Field of Dreams:" Build It And They Will Come! People spend
thousands of dollars on their facility and not a dime on marketing and wonder why they are
closing down.
Equipment is the touchy, feely part of this business. Your customers will be handling and
wearing the gear for 10 minutes and longer. Their entire experience will rely on the gear's
ability to enhance their enjoyment of the event.
2.0 Company Summary
Laser Tag is a start-up company that will be located in the Big Mall shopping center, which
serves many of the 115,000 people who live in the MyTown metropolitan area.
Laser Tag will purchase laser tag equipment from Zone System, and become a member of
the North American branch of the "Zone" group; a fast-growing, international network of
laser game companies utilizing the futuristic technology designed by P&C Micros of
Melbourne, Australia. Pioneers of arena laser games, P&C principals, Patrick and Catherine
Holms, have maintained a relentless focus on technical innovation. They are avid laser game
players and their immersion in the game has given them insight into what keeps players
coming back for more. As a result, they have developed dozens of game enhancements and
a menu of practically thousands of customizing options, making Zone hardware and software
the most reliable and advanced in the industry.
P&C Micros currently licenses and operates Zone 3 laser arena sites in every major city in
Australia. In just over six years, with 29 sites, Zone 3 has captured over 95% of the
Australian marketplace. In fact, several of Zone 3’s current sites have converted from other
game systems in order to take advantage of the superior "Zone" technology, equipment and
game features. In addition, new "Zone" sites are either planned or are currently under
construction in Singapore, China, the Philippines, South Africa, Canada, Mexico and South
America. MEGAZONE, the company holding the master license for "Zone" products in Europe,
is the fastest growing Laser Company in Europe. Megazone now has 18 sites operating
throughout the United Kingdom, as well as Italy, Norway, Holland, Finland, Sweden and
Spain.
Zone System is now in position to take the U.S. market by storm. As a member of the
international group of Zone companies, Zone System draws on a history of success in Europe
Page 3
Laser Tag
and Australia, as well as truly outstanding entry in the U.S. market.
Zone System’s focus is on technology, because innovation and flexibility are the cornerstones
of tomorrow’s success. Superior technology provides it with staying power. It keeps the
game interesting and challenging no matter how many times a "Zonehead" has played.
Software upgrades can be installed in minutes and are often available over the phone by
modem. Thousands of game enhancements and options can be activated through a simple
menu selection. Zone System provides its members with a full set of manuals detailing
everything necessary to operate the franchise successfully. The manuals include:
•
•
•
•
•
Pre-Opening Manual
Personnel Manual
Game Operations Manual
Business Operations Manual
Marketing Manual Accounting Manual
The manuals cover all aspects of operations from site selection, facility design, ordering
equipment, staffing, Grand Opening planning, game operations, equipment maintenance,
troubleshooting, bookkeeping, monthly accounting reports, customer service,
merchandising, promotional events . . . These manuals are the result of years of compilation
from existing site locations throughout the world.
Perhaps the most important aspect of Zone System’s support for its members is in the area
of technical support. Electronics and computers make the game real. They must be durable.
The game pack is made of polycarbonate (bullet proof glass). Hand pieces are designed to
military specifications. Over five years of experience with the hardware has shown it has the
ability to endure abuse. In the event of an equipment problem, the unique game system and
its modular components, with built-in diagnostic testing routines, minimize down time.
Failed components can be replaced without special tools. Zone System’s software experience
indicates that it is extremely reliable and operates virtually trouble-free. In the event a
problem arises, Zone System’s corporate headquarters provides technical support by
modem. Corrections can be downloaded in a matter of minutes in most situations, thereby
minimizing any downtime in the "Zone". Zone System has addressed obsolescence. The
game is software driven. Enhancements to the game can be implemented with software
updates. The hardware operates off of the software. This assures a long life for the
equipment.
SUMMARY
A capable management team has been assembled. Mr. Smith has the necessary
entrepreneurship skills to make the project successful. Mr. Smith's philosophy includes the
belief that the complex should provide cutting-edge family entertainment at an attractive
price. His objective is to have the finest facility of its kind.
2.1 Company Ownership
Laser Tag will be an Ohio subchapter S corporation that will incorporate in this year of 2004.
John Smith will own 100% of the corporation.
Page 4
Laser Tag
2.2 Start-up Summary
Our start-up costs will be $138,844, of which the owner plans to invest $27,000 . The funds
will be used for:
•
•
•
•
General Expenses (Insurance, rent during renovations, etc.): $12,097
Initial Renovation: $38,000
Furnishings and Fixtures (Assets): $51,747
Cash for Start-up: $10,000
The start-up funding will be financed by loans arranged through a lending agency that Small
Business Administration has qualified as a guarantor. Start-up assumptions are shown in the
following table and chart.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Insurance
Rent
Renovation
CPA
Marketing
Utilities
Phone
Total Start-up Expenses
$250
$1,000
$4,617
$38,000
$75
$5,000
$845
$310
$50,097
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$10,000
$4,480
$47,267
$61,747
Total Requirements
$111,844
Start-up
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Expenses
Assets
Investment
Loans
Page 5
Laser Tag
3.0 Products and Services
This chapter describes Zone System's laser tag game. The description cannot properly instill
an appreciation of the adrenalin-pumping thrill a participant gets from the game. This can
only be understood by playing the game. Consistent with the principals’ philosophy and
objective, the complex will also offer the area’s finest selection of video games to its
customers for their amusement before and after they play laser tag. Modest food and
beverage offerings are also planned. Another important feature of the complex will be its
party room, available for rent. Finally, some thought has been given to offering a "Makoto,"
a unique new form of interactive technology, which challenges participants physically and
mentally! Today’s consumer is always looking for the newest, hottest product and by
combining challenge with entertainment "Makoto" exceeds the desires of consumers! That
customers can also use for their enjoyment. "Makoto" is not anticipated to be part of the
initial complex.
LASER TAG
A qualified staff member will give a briefing to the players in a ready room prior to donning
the game’s gear. After the players have been briefed about the game, they will enter into the
arena.
Stepping into the laser tag arena is like walking through a life-size video screen into a
futuristic labyrinth filled with unfriendly forces. Your senses are bombarded by pulsating
music, sirens and intermittent flashes of light and color breaking through the foggy
darkness. Enemies crouch in shadows, intent on your destruction. For an instant you
consider retreat -- then you remind yourself this is just a game. The object of the game is to
score points while defending yourself and your team’s base from attack. Players are grouped
into three teams of up to 10 members, identified by the color of the flashing lights on their
electronic vests--green, red or yellow. A typical play experience is 30 minutes, including a
briefing on rules and strategy, a stop in the vesting room to pick up a laser and vest
displaying targets on the shoulders, chest and back, and 15 minutes of intense competition
in the arena. Points are scored by hitting the opposing teams’ targets and deactivating their
base stations, while avoiding being hit by an opponent or a beam from an electronic sentinel,
programmed to shoot randomly. Reload stations for replenishing ammunition make it
possible for all players to stay in the game for the entire session. The Zone Systems lasers
and vests are the most technologically advanced equipment available in the industry. Players
always know if they’ve been hit or scored points because, when a target is hit, the chest pack
in the vest vibrates, sounds a "power down" alarm and emits a flash of white light. The
scoring player’s ID number and team are displayed on the chest pack, and scores are stored
instantly for automatic downloading to the main computer. When the game is over, players
receive personalized score sheets detailing all aspects of their performance.
PERIPHERALS
Peripheral entertainment and services include video games, vending machines and souvenir
shirts, sweats, caps and mugs. One upcoming innovative entertainment venue machine is
called "Makoto." Constructed of three arena towers with 10 square lighted panels, which
illuminate various colors and emit audible tones, "Makoto" is sure to engage and thrill while
bringing physical, mental and spiritual benefits. Armed with a staff and a desire to dominate,
participants tap the panels as they light up randomly around them. As one becomes more
proficient, they can choose different levels and degrees of difficulty, making the machine
move faster, which shortens the players’ response time between taps. Engaging all the
senses, "Makoto" promises to deliver a rounded and rewarding opportunity for the whole
being: body, mind and spirit.
PARTY ROOM
Part of the exceptional success that a Zone systems laser tag center has had worldwide is
attributed to its party room. The room is available for groups. Typical groups include
birthday parties, office parties and activities such as Boy Scouts and Girl Scouts outings. The
room will normally be rented for two hours at a time. It will include snacks (pizza and softPage 6
Laser Tag
drinks) and a game in the "Zone." This has proven to be exceptionally successful in Family
Entertainment Centers. The management team believes it will be instrumental in achieving
the target revenues projected in this plan.
4.0 Location
Laser Tag will be located in Big Mall shopping center, in a space between Reaction Fitness
center and Big Mall. The address is 4415 Suite B, North West Birch Road, MyTown, Ohio.
This is an excellent location to serve our target market. The shopping center is centrally
located and easy to reach from anywhere in the metropolitan area. Traffic at this location is
one of the highest in the MyTown area, with a count of over 37,000 cars passing by east and
over 34,000 passing by west daily. Laser Tag will have over 3,300 potential patrons between
the age of 10-24, and a total population of 55,302 within only 3 square miles. The Big Mall
shopping center is centrally located on Birch Road between the few entertainment venues
available and within less than 2 miles of MyTown ’s premier restaurant facilities, such as
Applebee’s and Chili’s. The Big Mall shopping center is well known to our market and will be
easy to identify
in our advertisements. The shopping center is located at the corner of Birch
th
Road and 44 Street, both of which are high-traffic thoroughfares. Locating on these streets
makes it easy for our customers to reach us by car. There are over 5 entrances to the
shopping center parking lot from these streets. Parking is ample around the shopping center
and more than 30 spaces are available immediately in front of the Laser Tag entrance. The
MyTown Area Transit bus line also serves the Big Mall Shopping center.
4.1 Space and Access
11,080 square feet is available for development. Access to the main lobby is from the main
entrance at the front of the building, with a separate entrance to the party room venue from
the front parking area for event patrons.
4.2 Facility Design and Development
The concept of the laser tag arena is that players are inside a starship of the future, engaged
in combat with alien invaders.
To enhance its entertainment value, the entire facility will be laid out and decorated in a
manner consistent with this concept. Similar to a Disney amusement park theme, such as
Tomorrowland, everything in the facility will present visitors with a look and feel that is
consistent with the starship concept. The entertainment goal is to invite patrons to suspend
belief and imagine that while in the facility they are actually inside a starship.
The design for the facility’s layout is provided by Zone Systems, the supplier of the turnkey
laser tag game system.
Patrons first enter the spacious starship-themed lobby that is populated with the video
games and filled with the sounds of teen music and games. The lobby also contains the
counter, computer, cash register, and an overhead video screen.
Three rooms are dedicated to the laser tag experience. The first room (briefing room) is
where the customers get a dramatic briefing on their preparations to do battle with the
invading aliens. The second room (armory) is where players put on their Zone Systems gear
Page 7
Laser Tag
(vests and phasers). The third room is the combat zone (arena). When the game ends,
customers return to the armory to hang up their gear, and then return to the lobby. As they
pass through the armory, the next group of players is being briefed. Three additional rooms
are for special events, such as birthday parties.
3,500 square feet of the 11,080 available will be used for the lobby, ticket counter ("Mission
Control Center"), and arcade (video games). 219 square feet will be used for the briefing
room. The armory will be a 275 square feet room. 4,600 square feet will be used for the
combat zone arena.
The 3 special event rooms will total approximately 1,080 square feet each and another 1,406
square feet will be used for employee, business use, and restrooms.
4.3 Renovation
After consulting with 3 local firms, the Dan Schwartz Construction Company was selected to
remodel the interior. For $38,000, the walls and doors will be built to create the rooms
needed. The construction includes preparing the walls and ceilings for their final covering,
laying carpeting throughout, and installing the counter and restrooms.
Zone Systems, the leading laser tag equipment and services firm provided the basic design
for the facility and arena. That company is also supplying its internationally-recognized
game system and equipment. The walls, ceilings, and doors will be decorated with the
Hollywood-quality special effects; the ideas for the effects come from Zone Systems and
other Laser Tag companies observed. These special effects give game players the feeling that
they are on a futuristic starship.
The counter and display area will be built large enough to house the "Mission Control Center"
of the laser tag on one side and have the same capacity for soft drink fountains, pizza
menu’s, and condiments for dine-in-only delivery by a local pizza company on the other. A
portion of the pizza menu side of the counter will also be built to display ticket redemption
items for the young party patrons as they receive tickets from the machines.
Frontier Music of MyTown will provide the sound and light systems for the arena and a
separated system for the arcade and party rooms.
MyTown Novelty will provide the Arcade machines and will ensure that electrical supply by
the contractor is adequate.
Renovation will commence one week from approval of the loan and will finish within 30 days.
The special effects and game system will then be installed, with a planned finish date of 1
weeks of remodeling. Games will be run daily for the first week to confirm that all systems
are operational, and to train employees. The grand opening is scheduled for no more than 60
days from the beginning.
Page 8
Laser Tag
5.0 Operations
The hours of operation during the months of September to May will be from 4:30 PM to 9:00
PM Monday through Thursday, 4:30 PM to 12:00 PM Friday, 9:00 AM to 12:00 PM Saturday,
and 12:00PM to 7:00 PM on Sunday. In the months of June through August, the hours will
change to 2:00 PM to 10:00 PM from Monday through Thursday, and 2:00 to 12:00 on
Friday. The president or day manager will enter the business one hour before opening to
begin the startup procedures. Daily operating procedures and cash handling will conform to
the checklists identified in Appendix D – Operations. The prime hours of operation will be
6:00 PM to midnight on Friday and all day Saturday and Sunday, about 156 hours a month.
5.1 Board of Directors
Establishing policies, directing the company, and approving budgets is the role of the board
of directors. Submitting the budget at the first board meeting, the president will use the
financial projections contained in this document as the basis for the budget.
The board of directors will meet every quarter, following the closing of the quarter’s books.
The president will make a report to the board about the accomplishments of the previous
quarter and propose any changes in budget or direction. Board members will be paid $250
for attending each meeting. The president will be responsible for arranging the meetings.
5.2 President's Duties
The president will supervise daily operations and is expected to reach the financial objectives
set by the board. The president will recruit, hire and train all employees necessary to operate
the business.
Each month, the president will establish marketing objectives and assure that appropriate
steps are taken to reach those objectives. Opportunities to incorporate seasonal and holiday
promotions, such as Halloween, will be sought. Local news reports will be monitored to
discover promotional tie-in opportunities or to offer special event packages, such as winning
season party packages for sports teams.
Each quarter, the president will review the status of agreements with vendors, suppliers, and
insurers.
5.3 Employee Relations
Laser Tag will be an equal employment employer. Solicitations for employees will not refer to
any prohibited categories and copies of all ads will be kept on file. Even though we expect
that most employees will be young, between the ages of 16 and 22, no recruiting advertising
or information will express a preference for younger people. All responses to employment
ads will receive a reply. Applications must be completed by all prospective employees on
forms approved by the Company's attorney. Interviews will be fully documented and
interviewer notes will be kept. Offers of employment must be in writing in an approved
format. The employment contract will contain non-compete and non-disclosure provisions
and will make no reference to probationary periods or suggest that employment is anything
but "at will." The company will develop and maintain an employees’ guide that will describe
the company's employment policies and practices. The guide, which will include all
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Laser Tag
employment forms, will describe the Company's sexual harassment prohibitions and
complaint handling procedure.
Recruiting for employees will begin at the same time as construction. The president will use
a word-of-mouth campaign among his network of friends and associates to solicit applicants.
A more mature employee will be selected to serve as a shift manager, to help manage the
operation with, or in substitution of, the president. This individual will help with such tasks
as opening, closing, operations, and supervision of part-time workers.
Most of the part-time workers will be "on call." This means that they will agree to respond
within an hour to a call to report for duty. This gives the business the flexibility to staff-up in
real-time so, as more patrons appear, more workers will be on duty. Operators of other
video games centers report that this approach works well.
Finding employees for a video games business is relatively easy because so many of the
people who are enamored of the game want to work in this environment. This means that
the business usually will have a good number of applicants from which to choose. This also
means that wages can be kept low and, due to their part-time status, few employee benefits
are required. Most of the workers will be pleased to have the opportunity to play the video
games as a supplement to their compensation.
5.4 Equipment Repair
Any equipment failures will be recorded on the Work Order Form. Authorized employees can
attempt repairs if the failure appears to be routine. The manager will be trained in basic
level repairs. If the manager cannot complete the repair, the designated repair service for
the failed equipment will be notified. The form will be kept in the pending Work Order Form
file until repairs are completed and approved by the authorized manager. Upon approval,
payment to the repair service will be made. Spare equipment will be kept on-hand for quick
substitution if needed.
6.0 Market Analysis Summary
Laser Tag will be well located on Birch Road, a road that carries well over 30,000 vehicles
per day. The College's average student between the ages of 18-20 will provide Laser Tag
with one of its prime customers. These students have a steady income and are lacking in
entertainment venues in the MyTown area.
Size of Market
According to the MyTown Chamber of Commerce and Industry, 114,996 people reside within
58 square miles of the Big Mall shopping center. Based on the 2000 Census averages,
25,000 of these residents are ages 10 to 25, the age range for the typical individual
customers. The typical laser tag customer is a 15-year-old boy who visits the video games
center twice a month. Spending $20 during each visit, this teenager, who serves as the
primary target market, accounts for about 60% of the center’s video games income and 50%
of its video game income. Other customers include: young male video game players
spending $20 a month and accounting for about 10% of the center’s video game revenue;
corporate event coordinators who will generate 10% of total video games and video game th
revenue in their
team building visits; mothers of the 6,682 area youths who celebrate their 9
th
through 14 birthday each month, who contribute 20% of the center’s laser tag revenue and
10% of its video game revenue; and the 6,459 18 to 21-year-old male walk-in customer who
will spend enough to account for 10% of the center’s video games revenue and 20% of its
video game revenue. Drawing on a base of 25,000 residents aged 10 to 25, the center needs
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Laser Tag
fewer than 4% of these potential patrons in order to produce excellent profits.
Target Market
Laser tag Patron. While this plan identifies the laser tag customer as a typical 15-year-old,
we know that younger people are the primary consumers of sports activities, including video
games. There will be an aggressive plan to target the young adults between 16 to 20-yearsold that are able to drive themselves to the facility. The MyTown community has an
abundance of alcohol-related facilities that caters to the young students of the College. It is
our belief that these young adults, and students would also become a typical laser tag
patron.
6.1 Market Segmentation
Laser tag Patrons. Younger people are the primary consumers of sports activities, including
laser tag. The typical customer is a 15-year-old boy who visits the laser tag center twice a
month. This customer lives within 5 miles of the laser tag center, in a household with an
income over $30,000 per year, and is driven to the site by his parents.
The teen spends $20 during each visit, which represents about 10% of the teen’s monthly
disposable income. According to a survey conducted for the U.S. Bureau of Labor Statistics,
American teenagers receive an average of $50 a week from their parents.
When the 15-year-old visits, he plays 2 laser tag games (at $5.75 each) and 17 video games
(at 50 cents each), spending his entire $20.
This teenager, who serves as the primary target market, accounts for about 60% of the
center’s laser tag income and 50% of its video game income. The remaining revenue is
generated by a combination of video game patrons, party attendees, group participants, and
the public (walk-ins).
Video Game Patron. The average video game patron, also 15 years old, visits the center 2
times per month, spending a total of $20 on 40 video game plays. This customer accounts
for about 10% of video game revenue.
Party Patron. The typical party customer is a mother who reserves a birthday party room
for her 10 year old son and 9 of his friends. The party attendees generate about 50% of the
center’s laser tag revenue and 40% of its video game revenue. Other party prospects to be
approached are people who are celebrating anniversaries, winning seasons, personal
achievements, and other accomplishments.
Group Patron. The representative group patron is an event coordinator for a sales
organization involved in team building. The members of this group account for nearly 10% of
the center’s laser tag revenue and 10% of its video game revenue. Activity directors who are
always looking for a site that provides their members with a place to meet and have fun will
be regularly contacted. One of the key objectives of marketing to groups is to arrange group
business during non-peak hours.
Public Patron. The usual walk-in is a 19 year old, who lives in an apartment with 2
roommates, who is taking advantage of a promotional coupon. These walk-ins generate
about 10% of the center’s laser tag revenue and 20% of its video game revenue.
Each of these typical customers can be reached through marketing targeted at them. There
are enough members of these market segments in MyTown to support the laser tag center.
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Laser Tag
Table: Market Analysis
Market Analysis
Potential Customers
10-14 year old
15-17 year old
18-21 year old
22-34 year old
Total
Growth
7%
6%
5%
6%
6.10%
2004
2005
2006
2007
2008
5,813
3,325
3,339
12,781
25,258
6,220
3,525
3,506
13,548
26,799
6,655
3,737
3,681
14,361
28,434
7,121
3,961
3,865
15,223
30,170
7,619
4,199
4,058
16,136
32,012
CAGR
7.00%
6.01%
5.00%
6.00%
6.10%
Market Analysis (Pie)
10-14 year old
15-17 year old
18-21 year old
22-34 year old
6.2 Target Market Segment Strategy
Laser Tag will be promoted in such a way as to maximize the efficiency of its advertising
dollar. Laser Tag provides customer-tracking software to monitor key demographics. This
enables a more efficient targeting of the local market. The computerized tracking will enable
management to generate mailing lists to its customer base or any part -- for example,
customers who play an average of 6 or more times a month. Direct mail to these customers
will prove to be extremely efficient revenue generators. Customer loyalty will be developed
through Laser Tag’s unique Membership Programs. In addition to saving on daily rates,
annual members get a membership card with a special coded button device containing a
computer chip. The "button" gives them access to statistics on their personal performance
history.
For hard-core "Zoneheads," Laser Tag has the elite, Role-Playing Membership with
programmable buttons. These buttons entitle the player to special game enhancements and
records a code name of their choice such as Ultraman, Nemesis, etc… Laser Tag will be
promoted as a facility to host birthday parties, office parties and events for groups such as
the Boy Scouts and Girl Scouts. It is anticipated that groups will reserve the party room for
two hours at a time. This will include snacks (pizza and soft-drinks, for example) and a game
in the "Zone." The management team has tentatively set the party room at a price of $ 1015 per person, depending on the snacks and number of games to be played in the "Zone."
Other aspects of promotion, including Grand Opening strategies and league play are
discussed in detail in Chapter V.
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Laser Tag
6.3 Service Business Analysis
There are few entertainment venues that will compete for the same target market as Laser
Tag. Among the entertainment choices for youths are 1 roller-skating rink, 3 bowling
centers, 5 movie theaters, a water park, and an outdoor paintball park.
6.4 Competition and Buying Patterns
The closest laser tag facility to MyTown is LaserTrek, a 45 minute one way drive. Other
facilities closest to MyTown are LaserQuest and LazerXtreme, close to a 1 hour travel time
one way. The laser tag centers charge $7.00 a game. There is little to no competition from
these laser tag companies, due to the price and distance of their facilities from MyTown.
None of the bowling centers or the skating rink attempts to deliver an exciting entertainment
experience to their youthful customers. The facilities and staff alike have a "here it is, take it
or leave it" attitude. Laser Tag will easily compete with these businesses, with both
competition and video games. Teens will find the Laser Tag environment more enticing and
the staff trained to serve them as guests entitled to expect and enjoy a good entertainment
value.
The movie theaters are likely the strongest competition for the youth dollar, throughout the
year. Films are more popular than ever since Hollywood has become more capable of
segmenting and serving its movie-going markets. The typical 15-year old male customer of
Laser Tag is interested in action, sci-fi, comedies, high school, and coming of age movies,
but avoids the dramas, love stories, and adult themes. The current film production schedule
seems to be putting 3 movies a month onto the MyTown theater screens that appeal to the
15-year old males. Two of the theaters offer a video game arcade, one of which has old
machines while the other is small in size.
One Water Park provides an alternative choice during the summer months, but it is little
competition for the night-time entertainment.
The Arena Paintball Park could be a competitor for laser tag, but the focus by this business is
on adult players. The owners' market segments include present and former military
personnel, along with avid gun enthusiasts. Few teens are seen at the Arena Paintball Park
paintball events. It is an outdoor venue and business is dictated by the seasons. Another
downfall to paintball is the fact that it stings when hit.
In the Hallowe'en season, a number of organizations offer haunted houses, as Laser Tag
plans to do. Most of these facilities are temporary, makeshift presentations that appeal to a
wide range of young people. The Laser Tag haunted house will incorporate the existing,
professionally-built arena with its safe lighting, sound, fog, and special effects systems and
continue to appeal to its primary male teen market. Parents can be assured that the Laser
Tag "house" is safe and well maintained. The Big Mall shopping center location is also more
convenient than most of the competing houses.
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Laser Tag
7.0 Strategy and Implementation Summary
Customer service is paramount in the laser tag business. The starting point to accomplishing
this is to have a trained and motivated staff that enjoys working directly with the public. It is
always easier to please your customers when the facility is spotless and all of the equipment
is in proper working order. The center will establish community involvement to demonstrate
how the business will contribute to a better quality of life. Community projects using the
Laser Tag facility will be developed to help civic groups obtain their financial goals. School,
church, and other groups will be welcomed for tours of Laser Tag.
7.1 Competitive Edge
Our competitive edge is that Laser Tag will be the ONLY laser tag facility within 50 miles.
Makoto will also offer the community a unique new form of entertainment that will also only
be found at Laser Tag. The fact that there are no Family Entertainment Centers in MyTown
will give us the unparalleled ability to draw on the overall family entertainment and not just
birthday party events.
7.2 Marketing Strategy
Grand Opening
Prior to actually opening for business, the principals will invite the local media (print, radio
and television) to assemble their own teams to enter a competition of King of Laser Tag. This
competition will serve several purposes. The media will naturally cover the event. Their
enthusiasm for the game will carry over into advertising done on radio, especially when tied
to a live remote broadcast. In order to assure that the actual Grand Opening gathers the
desired attention of the community, the plan calls for $5,000 to be spent on advertising for a
two-week period before the Grand Opening. Laser Tag will work with the radio stations to be
sure that it has live remotes going on during the Grand Opening. We will seek promotional
trade consideration with the radio stations, whereby patrons will receive gifts for playing. For
example, the first 25 players will receive tickets to see the movie of their choice. The next 25
will receive a free 6" sub from Subway. These types of promotional trades are routinely done
in the local market. Laser Tag will take advantage of these inexpensive ways to get its name
out in the community.
Laser Tag will also take advantage of a marketing package that is provided by Zone
Systems, the supplier of the laser tag equipment. This package describes the steps to take to
assure that a well-executed grand opening program will leverage publicity to obtain
extensive free advertising. The approach is to exploit the media’s interest in new and novel
businesses. A key objective is arranging live coverage by a TV news show in which
representative targeted customers are interviewed while they are enjoying the excitement.
Ongoing Marketing
Word of mouth (WOM) spreads fast in the youth market. The grand opening will launch WOM
within this market. Managing the ongoing word-of-mouth advertising campaign will involve
rewarding players for bringing in friends (with coupons), but the most effective approach is
to keep the game exciting and the staff responsive to the patrons. Keeping the games
interesting requires that the arena be regularly rearranged so that players discover new
features (and hiding places). Keeping the staff responsive requires ongoing staff reminder
training that emphasizes their key role in the customer’s entertainment experience.
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Laser Tag
$5,000 a month is budgeted for ongoing marketing activities that are aimed at the target
market. In addition to the dozens of various printing forms (coupons, passes, flyers)
available on CD-ROM from Zone Systems, this equipment supplier also provides access to
low-cost mail and e-mail lists than can be used to reach the identified target markets.
Marketing Creations, Inc., of MyTown will assist with "guerrilla marketing" strategies
provided by Zone Systems that are aimed at generating business such as –
• Birthday and other parties in the planned party room followed by reserved playing
times in the "Zone".
• Enlisting the support and cross promotion of popular fast food outlets.
• Engaging the business community in endorsing competitive events.
• Building leagues and growing tournament excitement.
• Winning the cooperation of schools, charities, and other organizations.
• Building Corporate sponsorships.
• Donating games and time to special groups such as children with terminal illnesses
and persons with disabilities.
By maintaining a constant presence in the community through league play and parties in the
party room, the complex will assure itself of establishing a loyal following. Games and time
donated to terminally ill children and others is part of the principals’ belief in their social
responsibility. The donation of the party room and game time to disabled children and other
worthy groups is not being done with any ulterior motive. The principals believe that people
in the community will recognize their actions and be quick to tell others about the good
deeds. The kind words said about Laser Tag will help establish itself as a positive force in the
community.
Group Patron. Direct mail and broadcast faxes are the preferred means to reach the typical
corporate event coordinator. The usual offer is to host team-building parties during which
the attendees play laser tag games together. Sports, schools, and other organizations will
join the corporate groups to participate with Laser Tag each month.
Public Patron. The "pizza pass" promotion works well to attract the walk-in patron.
Arrangements are made with local pizza outlets to attach the Laser Tag coupon to the
outside of pizza delivery boxes. When redeemed, a portion of the discounted price is shared
with the pizza firm.
The advertising and promotional efforts are projected to draw over 750 people a month from
outside the MyTown metropolitan area, drawing on the population of over 56,000 in the
eight-county Retail Trade Area.
7.3 Web Plan Summary
Laser Tag's website will be a resource/information-only area to help build our professional
legitimacy.
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Laser Tag
7.4 Sales Strategy
Laser Tag will provide a venue in which the entire family can enjoy their leisure time,
participating in a competitive sport that requires minimum strength and athletic ability. The
light exercise will help improve their health, and they will experience a clean facility where
the service is the best in the industry, at a fair price.
The management team has determined that the average price being charged for a game at
existing laser tag locations is $6.30 per player. In addition, a day’s membership costs an
additional $2.33, on average. We will initially set our game prices at $5.50 per player; the
average price will be $5 a game, after coupons and specials. This will be a competitive price
for the MyTown, Ohio community. Annual membership fees will be $48.00. A $1.00-off
discount coupons will be offered through Laser Tag for player members. The average
membership fee is the result of an anticipated repeat play by the customers on any given
day. The basis for this number was the history of existing laser tag locations in the country.
Peripherals. Video game prices will be set so as to be consistent with the competition. Their
range will generally be $0.50 per game. Soft drinks and snacks will be offered behind the
counter. Their price will be consistent with area prices and will generally range from $0.50 to
$0.75 per item. Laser Tag souvenirs will include t-shirts, sweatshirts, caps, mugs . . . All will
include the Laser Tag logo. These are expected to range in price from $7.95 to $29.95.
Makoto will be $1.00 for a 2 minute period of play.
7.5 Sales Forecast
The chart and table below show Laser Tag's projected Sales Forecast. Annual projections for
five years are shown here, with first year monthly figures in the appendices.
Laser Tag Revenue Assumptions: Each paid admission or price per game is $5.50. This
amount will be occasionally reduced through the use of promotional coupons, quantity
discounts, and party package offers. The average price of $5.00 is used in the forecast of
sales and revenue.
20 players can plan in the arena at a time. The game, called a mission, lasts for 12 minutes.
Allowing time for players to exit the arena, a new mission is possible every 15 minutes. This
means that, ideally, maximum revenue per hour could reach $440.
We assume that on an average day, 14 missions will be run with an average of 12 players
each. In fact, the weekends will produce the greatest activity and the number of games and
players will regularly exceed this average.
Peripherial Revenue Assumptions: 20 video games and pinball machines will be
obtained. An average of 10% of capacity at 2 plays an hour are used to estimate potential
revenue. $.50 per play is used for sales forecasting, although some machines cost more than
$.50 to play. Assuming that each game lasts 3 minutes, 20 games per hour could be played,
generating $10.00 in revenue per machine. The maximum revenue for the 20 machines
would be $200. A revenue-sharing arrangement will be worked out with a video game
distributor who will provide the games. A typical arrangement of 50% for the laser tag
center and 50% for the game owner is assumed for these projections. A 5% increase in sales
is used for annual projections.
Makoto will generate a separate customer base interested in a new form of entertainment.
We assume that Makoto will run at 30% capacity. At $1.00 for 2 minutes, this will average to
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Laser Tag
15 minutes of play time per day. Maximum potential for Makoto is $177 a day. A 20%
increase in sales is used for annual projections due to the uniqueness of this venue.
Soft drinks and snacks were calculated at 10% of total laser tag sales with purchases at
$0.75. A 5% increase in sales is used for annual projections.
The following laser tag industry statistics have been compiled by the International Laser Tag
Association (ILTA). Laser tag games have been broken down to an overall average and
reduced to single months. Increases in sales by approximately 20% from the previous
month generally occur for the months of March, August, and December. Decreases in sales
by approximately 20% from the previous month generally occur for the months of January,
May, and September.
These averages were compiled based on various sources including hundreds of interviews
with site operators, surveys by VCI, surveys by the ILTA, and information provided by the
manufacturers. All information is believed to be accurate and factual; however, there is no
independent way to either confirm or deny the validity to the average plays provided. All
numbers should be valid for the purpose of this business plan though variations are quite
probable.
On the Second Year Income Statement, all numbers are reduced by at least 10% based on
an Industry Trend. The first year sales are always the best sales of the facility due in part to
the higher percentage of casual non-discounted customers, the second year sales are
"respectable," and the third year sales drop to approximately 80% of the first year sales.
The change in revenues can be attributed to a variety of factors including:
• In the first year, a new facility enjoys a significantly higher customer base of nondiscounted games. The customers are more willing to pay full price once just to try
the event if there are no discounts available.
• During the first year most operators have not developed or acquired a customer list
for birthday parties, churches, or youth groups. Those groups often have a lower per
game price.
• By Year 2, the facility operator has started to market to the Core Market and the
casual walk-in traffic slightly diminishes.
The averages plays per month are as follows:
Stand-Along Laser Tag
Centers
Family Entertainment Centers
Skating Centers
Bowling Centers
5,300 Plays
4,100 Plays
2,600 Plays
200 Plays
Based on this industry data, we assume that the first year will show higher than average
laser tag plays due to the uniqueness of laser tag to the MyTown area, and will settle to
normal levels once party patrons and members are established.
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Laser Tag
Table: Sales Forecast
Sales Forecast
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Unit Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Total Unit Sales
71,534
89,280
19,227
7,086
60
187,187
64,380
93,744
23,072
7,440
63
188,699
60,088
98,431
27,687
7,812
66
194,084
63,092
103,352
33,224
8,202
70
207,940
66,247
108,520
39,869
8,613
73
223,322
Unit Prices
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
FY 2005
$5.00
$0.50
$1.00
$0.75
$9.50
FY 2006
$5.00
$0.50
$1.00
$0.75
$9.50
FY 2007
$5.00
$0.50
$1.00
$0.75
$9.50
FY 2008
$5.00
$0.50
$1.00
$0.75
$9.50
FY 2009
$5.00
$0.50
$1.00
$0.75
$9.50
Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Total Sales
$357,670
$44,640
$19,227
$5,315
$570
$427,422
$321,900
$46,872
$23,072
$5,580
$599
$398,023
$300,440
$49,216
$27,687
$5,859
$627
$383,829
$315,460
$51,676
$33,224
$6,152
$665
$407,177
$331,235
$54,260
$39,869
$6,460
$694
$432,517
Direct Unit Costs
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
FY 2005
$0.50
$0.25
$0.10
$0.10
$7.13
FY 2006
$0.50
$0.25
$0.10
$0.38
$7.13
FY 2007
$0.50
$0.25
$0.10
$0.38
$7.13
FY 2008
$0.50
$0.25
$0.10
$0.38
$7.13
FY 2009
$0.50
$0.25
$0.10
$0.38
$7.13
Direct Cost of Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Subtotal Direct Cost of Sales
$35,767
$22,320
$1,923
$728
$428
$61,165
$32,190
$23,436
$2,307
$2,790
$449
$61,172
$30,044
$24,608
$2,769
$2,930
$470
$60,820
FY 2008
$31,546
$25,838
$3,322
$3,076
$499
$64,281
FY 2009
$33,124
$27,130
$3,987
$3,230
$520
$67,990
Sales Monthly
$45,000
$40,000
$35,000
$30,000
Lasertag
$25,000
Video Games
$20,000
Makoto
Soft Drinks and Snacks
$15,000
Souvenirs
$10,000
$5,000
$0
Dec Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov
Page 18
Laser Tag
Sales by Year
$450,000
$400,000
$350,000
$300,000
Lasertag
$250,000
Video Games
Makoto
$200,000
Soft Drinks and Snacks
$150,000
Souvenirs
$100,000
$50,000
$0
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
8.0 Management Summary
Management Team
John Smith, who will serve as the chairman and president of the Laser Tag board of directors
and will manage the company’s daily operations. Mr. Smith is also a member of the
International Laser Tag Association, a nonprofit group developed by experienced industry
personnel that is dedicated to assisting with the successful operations of separate facilities
world wide.
Board of Directors
In addition to John Smith, one other person has agreed to serve on the Laser Tag board of
directors: Barry Stir. Barry Stir is an Attorney at law and has a background in accounting.
His office is located on "D" Ave in MyTown. He is also a co-owner in an Internet company in
MyTown.
Chairman
John Smith is a 20-year U.S. Army veteran with excellent management skills, who is wellqualified to run the Laser Tag. He has held a number of management positions and has been
responsible for the professional development of numerous personnel and accountable for in
excess of $11 million in military equipment. He served in the plans and operations section
while in the military and has put together and executed various training and evaluation
outlines. Mr. Smith has significant experience working with patrons and employees of
entertainment businesses while opening and operating two low point beverage
entertainment facilities in Small Town and Rural Town, Ohio. In addition to the
entertainment experience, he has extensive experience with laser-based systems with the
U.S. Army’s combat training, Military Integrated Laser Engagement System (MILES). MILES
is a system the Army uses for war games.
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Laser Tag
Employees
Laser Tag will employ 7 people. The president will be the only full-time employee and 6
others will be part-time. One part-time worker will serve as a shift manager. All employees
will be selected on the basis of their ability to work with young patrons. All employees will be
expected to sign a non-disclosure and non-compete agreement.
8.1 Personnel Plan
The personnel plan will be as follows:
• One general manager to oversee shift manager and fill-in for all areas. The president
of the corporation will fill the general manager position.
• One shift manager/leader to conduct opening, closing, operations, greet customers,
receive payments for services/products, event planning, equipment checks, and
schedule arena events.
Five part time employees will attend to arena supervision, and keep area clean. All three will
work part time to ensure the facility has a full staff in case of an unanticipated event.
The following professionals have agreed to help Laser Tag:
[Proprietary and confidential information removed.]
Table: Personnel
Personnel Plan
General Manager
Shift Manager
Laser Tag attendants
Arcade attendants
Total People
FY 2005
$18,000
$17,316
$21,460
$19,195
7
FY 2006
$20,000
$18,500
$19,314
$20,155
7
FY 2007
$25,000
$19,500
$18,026
$21,163
7
FY 2008
$30,000
$20,500
$18,928
$22,221
7
FY 2009
$35,000
$21,500
$19,874
$23,332
7
Total Payroll
$75,971
$77,969
$83,689
$91,648
$99,706
9.0 Financial Plan
The premier element in our financial plan is initiating, maintaining, and improving the
factors that create, stabilize, and increase our cash flow:
1.
2.
3.
We must create visibility so as to create customer flow.
We must ensure the theme creates a "WOW" effect to bolster attendance.
We must maintain a dependable, cheerful employee force so as to minimize turnover.
Page 20
Laser Tag
9.1 Start-up Funding
Total start-up requirements come to $111,844. The start-up costs are to be financed
partially by the direct owner investment of $27,000 and financing in the amount of $84,844.
The details are included in the following table.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
Assets
Non-cash Assets from Start-up
Cash Requirementsfrom Start-up
AdditionalCash Raised
Cash Balance on Starting Date
Total Assets
$50,097
$61,747
$111,844
$51,747
$10,000
$0
$10,000
$61,747
Liabilitiesand Capital
Liabilities
Current Borrowing
Long-term Liabilities
Other Current Liabilities
Total Liabilities
$0
$84,844
$0
$84,844
Capital
Planned Investment
Owner
Investor
AdditionalInvestment Requirement
Total Planned Investment
Loss at Start-up (Start-up Expenses)
Total Capital
Total Capital and Liabilities
Total Funding
$27,000
$0
$0
$27,000
($50,097)
($23,097)
$61,747
$111,844
9.2 Important Assumptions
The key underlying assumptions of our financial plan shown in the following general
assumption table are:
1.
2.
3.
We assume access to equity capital and financing to support our financial plan.
We assume our financial progress based on realistic sales to minimum sales against
highest expenses.
We assume there will not be an economic crash that would greatly hinder our target
market's access to their personal luxury finds.
Page 21
Laser Tag
Table: General Assumptions
General Assumptions
FY 2005
1
10.00%
11.00%
30.00%
0
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
FY 2006
2
10.00%
11.00%
30.00%
0
FY 2007
3
10.00%
11.00%
30.00%
0
FY 2008
4
10.00%
11.00%
30.00%
0
FY 2009
5
10.00%
11.00%
30.00%
0
9.3 Break-even Analysis
Our break-even analysis is based on estimated monthly fixed costs of $19,324, with low
variable costs. We need monthly revenue of $22,551 to break even. We should far surpass
the break-even point even in our first month, even at these conservative sales estimates.
Table: Break-even Analysis
Break-even Analysis
Monthly Units Break-even
Monthly Revenue Break-even
9,876
$22,551
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
EstimatedMonthly Fixed Cost
$2.28
$0.33
$19,324
Break-even Analysis
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
0
4000
8000
12000
16000
20000
Monthly break-even point
Break-even point = where line intersects with 0
Page 22
Laser Tag
9.4 Projected Profit and Loss
The company will make a profit in the first month of operation. There are two important
assumptions with our Projected Profit and Loss statement:
1.
2.
Our revenue is based on minimum estimated averages against highest expense
expectations.
Our major expense of rent and utilities is fixed for the next five years.
The yearly analysis is indicated in the table below; monthly analyses can be found in the
appendix.
Table: Profit and Loss
Pro Forma Profit and Loss
Cost of Goods Sold
FY 2005
$427,422
$61,165
$0
-----------$61,165
FY 2006
$398,023
$61,172
$0
-----------$61,172
FY 2007
$383,829
$60,820
$0
-----------$60,820
FY 2008
$407,177
$64,281
$0
-----------$64,281
FY 2009
$432,517
$67,990
$0
-----------$67,990
Gross Margin
Gross Margin %
$366,256
85.69%
$336,850
84.63%
$323,008
84.15%
$342,896
84.21%
$364,527
84.28%
Total OperatingExpenses
$75,971
$60,000
$5,875
$57,600
$7,340
$10,944
$2,400
$2,040
$4,800
$1,320
$0
$3,600
-----------$231,890
$77,969
$62,000
$5,875
$57,600
$8,000
$10,944
$2,400
$2,100
$4,800
$1,320
$10,000
$3,600
-----------$246,608
$83,689
$63,000
$5,875
$57,600
$8,200
$10,944
$2,400
$2,150
$4,800
$1,320
$15,000
$3,600
-----------$258,578
$91,648
$65,000
$5,875
$57,600
$8,400
$10,944
$2,400
$2,200
$4,800
$1,320
$10,000
$3,600
-----------$263,787
$99,706
$66,000
$5,875
$57,600
$8,600
$10,944
$2,400
$2,250
$4,800
$1,320
$0
$3,600
-----------$263,095
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
$134,366
$8,611
$37,726
$90,242
$7,333
$24,873
$64,430
$6,000
$17,529
$79,108
$4,667
$22,333
$101,432
$3,333
$29,430
$88,028
20.60%
$58,037
14.58%
$40,901
10.66%
$52,109
12.80%
$68,669
15.88%
Sales
Direct Costs of Goods
Other Costs of Goods
Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Professional Fees
Telephone
Supplies
Bank & Credit Card Fees
New Game Software
Miscellaneous
Net Profit
Net Profit/Sales
Page 23
Laser Tag
Profit Monthly
$12,000
$10,000
$8,000
$6,000
$4,000
$2,000
$0
Dec Jan Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov
Profit Yearly
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Page 24
Laser Tag
Gross Margin Monthly
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Dec Jan Feb Mar Apr May Jun
Jul
Aug Sep Oct Nov
Gross Margin Yearly
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Page 25
Laser Tag
9.5 Projected Cash Flow
The company's estimated cash flow analysis is outlined in the following table. Laser Tag's
popularity will instantly show profitability, which will ensure positive cash balance. The Cash
Flow table also shows planned sales tax received and paid out, and the estimated repayment
for the requested loan.
Cash
$120,000
$100,000
$80,000
Net Cash Flow
$60,000
Cash Balance
$40,000
$20,000
$0
Dec Jan Feb Mar Apr May Jun
Jul Aug Sep Oct Nov
Page 26
Laser Tag
Table: Cash Flow
Pro Forma Cash Flow
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
$320,566
$96,929
$417,495
$298,517
$100,188
$398,705
$287,871
$96,287
$384,158
$305,382
$101,252
$406,634
$324,388
$107,541
$431,929
AdditionalCash 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
$35,262
$0
$0
$0
$0
$0
$0
$452,757
$32,837
$0
$0
$0
$0
$0
$0
$431,542
$31,666
$0
$0
$0
$0
$0
$0
$415,824
$33,592
$0
$0
$0
$0
$0
$0
$440,226
$35,683
$0
$0
$0
$0
$0
$0
$467,611
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
$75,971
$237,732
$313,703
$77,969
$259,399
$337,368
$83,689
$249,948
$333,637
$91,648
$251,028
$342,676
$99,706
$260,919
$360,625
$35,262
$32,837
$31,666
$33,592
$35,683
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Cash Received
Expenditures
Expendituresfrom Operations
Cash spending
Bill Payments
Subtotal Spent on Operations
AdditionalCash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current
Borrowing
Other LiabilitiesPrincipal Repayment
Long-term Liabilities Principal
Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
$12,120
$12,120
$12,120
$12,120
$12,120
$0
$0
$0
$361,085
$0
$0
$0
$382,324
$0
$0
$0
$377,423
$0
$0
$0
$388,388
$0
$0
$0
$408,428
Net Cash Flow
Cash Balance
$91,672
$101,672
$49,218
$150,890
$38,401
$189,291
$51,838
$241,129
$59,184
$300,313
9.6 Projected Balance Sheet
The table below presents the balance sheet for Laser Tag. This table reflects a positive cash
position throughout the period of this financial plan and dramatic growth in net worth.
Page 27
Laser Tag
Table: Balance Sheet
Pro Forma Balance Sheet
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
$101,672
$9,926
$2,883
$4,480
$118,961
$150,890
$9,244
$2,883
$4,480
$167,497
$189,291
$8,914
$2,867
$4,480
$205,552
$241,129
$9,456
$3,041
$4,480
$258,107
$300,313
$10,045
$3,230
$4,480
$318,068
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$47,267
$5,875
$41,392
$160,353
$47,267
$11,750
$35,517
$203,014
$47,267
$17,625
$29,642
$235,194
$47,267
$23,500
$23,767
$281,873
$47,267
$29,375
$17,892
$335,960
Liabilitiesand Capital
FY 2005
FY 2006
FY 2007
FY 2008
FY 2009
Current Liabilities
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$0
$0
$22,698
$0
$0
$19,442
$0
$0
$22,841
$0
$0
$29,531
$0
$0
$27,069
Long-term Liabilities
Total Liabilities
$72,724
$95,422
$60,604
$80,046
$48,484
$71,325
$36,364
$65,895
$24,244
$51,313
$27,000
($50,097)
$88,028
$64,931
$160,353
$27,000
$37,931
$58,037
$122,968
$203,014
$27,000
$95,968
$40,901
$163,869
$235,194
$27,000
$136,869
$52,109
$215,978
$281,873
$27,000
$188,978
$68,669
$284,647
$335,960
$64,931
$122,968
$163,869
$215,978
$284,647
Assets
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilitiesand Capital
Net Worth
9.7 Business Ratios
The company's projected business ratios are provided in the table below. The final column,
Industry Profile, shows significant ratios for the Amusement and Recreation industry for
comparison, as determined by the Standard Industry Classification (SIC) code, 7999.
Page 28
Laser Tag
Table: Ratios
Ratio Analysis
Sales Growth
FY 2005
0.00%
FY 2006
-6.88%
FY 2007
-3.57%
FY 2008
6.08%
FY 2009 Industry Profile
6.22%
2.76%
Percent of Total Assets
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
2.79%
74.19%
25.81%
100.00%
2.21%
82.51%
17.49%
100.00%
1.90%
87.40%
12.60%
100.00%
1.59%
91.57%
8.43%
100.00%
1.33%
94.67%
5.33%
100.00%
31.38%
39.96%
60.04%
100.00%
14.15%
45.35%
59.51%
40.49%
9.58%
29.85%
39.43%
60.57%
9.71%
20.61%
30.33%
69.67%
10.48%
12.90%
23.38%
76.62%
8.06%
7.22%
15.27%
84.73%
23.98%
24.53%
48.51%
51.49%
100.00%
85.69%
100.00%
84.63%
100.00%
84.15%
100.00%
84.21%
100.00%
84.28%
100.00%
100.00%
65.09%
70.05%
73.50%
71.42%
68.40%
75.54%
14.04%
31.44%
0.00%
22.67%
0.00%
16.79%
0.00%
19.43%
0.00%
23.45%
3.11%
1.52%
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
5.24
5.11
59.51%
193.67%
78.42%
8.62
8.47
39.43%
67.42%
40.84%
9.00
8.87
30.33%
35.66%
24.84%
8.74
8.64
23.38%
34.47%
26.41%
11.75
11.63
15.27%
34.46%
29.20%
1.04
0.68
64.79%
2.30%
6.54%
AdditionalRatios
Net Profit Margin
Return on Equity
FY 2005
20.60%
135.57%
FY 2006
14.58%
47.20%
FY 2007
10.66%
24.96%
FY 2008
12.80%
24.13%
FY 2009
15.88%
24.12%
n.a
n.a
11.47
2.67
13.17
1.96
11.09
1.63
8.73
1.44
9.55
1.29
n.a
n.a
1.47
0.24
0.65
0.24
0.44
0.32
0.31
0.45
0.18
0.53
n.a
n.a
$96,263
15.60
$148,055
12.31
$182,711
10.74
$228,576
16.95
$291,000
30.43
n.a
n.a
0.38
14%
4.68
6.58
0.00
0.51
10%
7.99
3.24
0.00
0.61
10%
8.48
2.34
0.00
0.69
10%
8.32
1.89
0.00
0.78
8%
11.26
1.52
0.00
n.a
n.a
n.a
n.a
n.a
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative
Expenses
Advertising Expenses
Profit Before Interest and Taxes
Activity Ratios
Accounts Payable Turnover
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
AdditionalRatios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
Page 29
Appendix
Appendix Table: Sales Forecast
Sales Forecast
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
6,400
8,345
1,393
656
5
16,799
5,319
8,973
1,625
547
6
16,470
6,054
8,076
1,858
609
7
16,604
6,693
7,806
1,858
662
8
17,027
6,134
7,537
1,672
550
7
15,900
5,194
7,178
1,533
591
5
14,501
4,837
6,550
1,393
537
3
13,320
4,962
5,832
1,161
508
2
12,465
5,815
5,832
1,161
518
2
13,328
6,535
6,999
1,625
590
3
15,752
6,715
8,076
1,858
651
5
17,305
6,876
8,076
2,090
667
7
17,716
Unit Prices
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Dec
$5.00
$0.50
$1.00
$0.75
$9.50
Jan
$5.00
$0.50
$1.00
$0.75
$9.50
Feb
$5.00
$0.50
$1.00
$0.75
$9.50
Mar
$5.00
$0.50
$1.00
$0.75
$9.50
Apr
$5.00
$0.50
$1.00
$0.75
$9.50
May
$5.00
$0.50
$1.00
$0.75
$9.50
Jun
$5.00
$0.50
$1.00
$0.75
$9.50
Jul
$5.00
$0.50
$1.00
$0.75
$9.50
Aug
$5.00
$0.50
$1.00
$0.75
$9.50
Sep
$5.00
$0.50
$1.00
$0.75
$9.50
Oct
$5.00
$0.50
$1.00
$0.75
$9.50
Nov
$5.00
$0.50
$1.00
$0.75
$9.50
Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Total Sales
$32,000
$4,173
$1,393
$492
$48
$38,105
$26,595
$4,487
$1,625
$410
$57
$33,174
$30,270
$4,038
$1,858
$457
$67
$36,689
$33,465
$3,903
$1,858
$497
$76
$39,799
$30,670
$3,769
$1,672
$413
$67
$36,590
$25,970
$3,589
$1,533
$443
$48
$31,583
$24,185
$3,275
$1,393
$403
$29
$29,284
$24,810
$2,916
$1,161
$381
$19
$29,287
$29,075
$2,916
$1,161
$389
$19
$33,560
$32,675
$3,500
$1,625
$443
$29
$38,271
$33,575
$4,038
$1,858
$488
$48
$40,007
$34,380
$4,038
$2,090
$500
$67
$41,075
Dec
$0.50
$0.25
$0.10
$0.38
$7.13
Jan
$0.50
$0.25
$0.10
$0.08
$7.13
Feb
$0.50
$0.25
$0.10
$0.08
$7.13
Mar
$0.50
$0.25
$0.10
$0.08
$7.13
Apr
$0.50
$0.25
$0.10
$0.08
$7.13
May
$0.50
$0.25
$0.10
$0.08
$7.13
Jun
$0.50
$0.25
$0.10
$0.08
$7.13
Jul
$0.50
$0.25
$0.10
$0.08
$7.13
Aug
$0.50
$0.25
$0.10
$0.08
$7.13
Sep
$0.50
$0.25
$0.10
$0.08
$7.13
Oct
$0.50
$0.25
$0.10
$0.08
$7.13
Nov
$0.50
$0.25
$0.10
$0.08
$7.13
$3,200
$2,086
$139
$246
$36
$5,707
$2,660
$2,243
$163
$41
$43
$5,149
$3,027
$2,019
$186
$46
$50
$5,327
$3,347
$1,952
$186
$50
$57
$5,590
$3,067
$1,884
$167
$41
$50
$5,210
$2,597
$1,795
$153
$44
$36
$4,625
$2,419
$1,638
$139
$40
$21
$4,257
$2,481
$1,458
$116
$38
$14
$4,107
$2,908
$1,458
$116
$39
$14
$4,535
$3,268
$1,750
$163
$44
$21
$5,245
$3,358
$2,019
$186
$49
$36
$5,647
$3,438
$2,019
$209
$50
$50
$5,766
Unit Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Total Unit Sales
Direct Unit Costs
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Direct Cost of Sales
Lasertag
Video Games
Makoto
Soft Drinks and Snacks
Souvenirs
Subtotal Direct Cost of Sales
0%
0%
0%
0%
0%
10.00%
50.00%
10.00%
50.00%
75.00%
Page 30
Appendix
Appendix Table: Personnel
Personnel Plan
General Manager
Shift Manager
Laser Tag attendants
Arcade attendants
Total People
Total Payroll
50%
0%
6%
43%
Dec
$1,500
$1,443
$1,920
$1,794
7
Jan
$1,500
$1,443
$1,596
$1,929
7
Feb
$1,500
$1,443
$1,816
$1,736
7
Mar
$1,500
$1,443
$2,008
$1,678
7
Apr
$1,500
$1,443
$1,840
$1,620
7
May
$1,500
$1,443
$1,558
$1,543
7
Jun
$1,500
$1,443
$1,451
$1,408
7
Jul
$1,500
$1,443
$1,489
$1,254
7
Aug
$1,500
$1,443
$1,745
$1,254
7
Sep
$1,500
$1,443
$1,961
$1,505
7
Oct
$1,500
$1,443
$2,015
$1,736
7
Nov
$1,500
$1,443
$2,063
$1,736
7
$6,657
$6,468
$6,496
$6,629
$6,404
$6,044
$5,802
$5,685
$5,941
$6,408
$6,694
$6,742
Page 31
Appendix
Appendix Table: Profit and Loss
Pro Forma Profit and Loss
Cost of Goods Sold
Dec
$38,105
$5,707
$0
-----------$5,707
Jan
$33,174
$5,149
$0
-----------$5,149
Feb
$36,689
$5,327
$0
-----------$5,327
Mar
$39,799
$5,590
$0
-----------$5,590
Apr
$36,590
$5,210
$0
-----------$5,210
May
$31,583
$4,625
$0
-----------$4,625
Jun
$29,284
$4,257
$0
-----------$4,257
Jul
$29,287
$4,107
$0
-----------$4,107
Aug
$33,560
$4,535
$0
-----------$4,535
Sep
$38,271
$5,245
$0
-----------$5,245
Oct
$40,007
$5,647
$0
-----------$5,647
Nov
$41,075
$5,766
$0
-----------$5,766
Gross Margin
Gross Margin %
$32,398
85.02%
$28,025
84.48%
$31,362
85.48%
$34,208
85.95%
$31,380
85.76%
$26,958
85.36%
$25,027
85.46%
$25,180
85.98%
$29,025
86.49%
$33,025
86.29%
$34,360
85.89%
$35,309
85.96%
Total Operating Expenses
$6,657
$5,000
$490
$4,800
$410
$912
$200
$170
$400
$110
$0
$300
-----------$19,449
$6,468
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,479
$6,496
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,507
$6,629
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,641
$6,404
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,415
$6,044
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,056
$5,802
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$18,814
$5,685
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$18,697
$5,941
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$18,953
$6,408
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,420
$6,694
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,705
$6,742
$5,000
$490
$4,800
$630
$912
$200
$170
$400
$110
$0
$300
-----------$19,754
Profit Before Interest and Taxes
Interest Expense
Taxes Incurred
$12,949
$768
$3,654
$8,545
$759
$2,336
$11,855
$750
$3,331
$14,567
$741
$4,148
$11,965
$731
$3,370
$7,902
$722
$2,154
$6,213
$713
$1,650
$6,482
$704
$1,734
$10,072
$694
$2,813
$13,605
$685
$3,876
$14,655
$676
$4,194
$15,555
$667
$4,467
Net Profit
Net Profit/Sales
$8,526
22.38%
$5,450
16.43%
$7,773
21.19%
$9,679
24.32%
$7,863
21.49%
$5,026
15.91%
$3,850
13.15%
$4,045
13.81%
$6,564
19.56%
$9,044
23.63%
$9,785
24.46%
$10,422
25.37%
Sales
Direct Costs of Goods
Other Costs of Goods
Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Professional Fees
Telephone
Supplies
Bank & Credit Card Fees
New Game Software
Miscellaneous
Page 32
Appendix
Appendix Table: Cash Flow
Pro Forma Cash Flow
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
$28,579
$318
$28,896
$24,880
$9,485
$34,365
$27,517
$8,323
$35,840
$29,849
$9,198
$39,047
$27,442
$9,923
$37,365
$23,687
$9,106
$32,793
$21,963
$7,877
$29,840
$21,965
$7,321
$29,286
$25,170
$7,357
$32,527
$28,703
$8,429
$37,132
$30,005
$9,582
$39,587
$30,806
$10,011
$40,817
$3,144
$0
$0
$0
$0
$0
$0
$32,040
$2,737
$0
$0
$0
$0
$0
$0
$37,102
$3,027
$0
$0
$0
$0
$0
$0
$38,867
$3,283
$0
$0
$0
$0
$0
$0
$42,330
$3,019
$0
$0
$0
$0
$0
$0
$40,384
$2,606
$0
$0
$0
$0
$0
$0
$35,398
$2,416
$0
$0
$0
$0
$0
$0
$32,256
$2,416
$0
$0
$0
$0
$0
$0
$31,703
$2,769
$0
$0
$0
$0
$0
$0
$35,296
$3,157
$0
$0
$0
$0
$0
$0
$40,289
$3,301
$0
$0
$0
$0
$0
$0
$42,888
$3,389
$0
$0
$0
$0
$0
$0
$44,205
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
$6,657
$843
$7,500
$6,468
$25,125
$31,593
$6,496
$20,538
$27,034
$6,629
$22,057
$28,686
$6,404
$23,083
$29,487
$6,044
$21,579
$27,623
$5,802
$19,705
$25,507
$5,685
$18,959
$24,645
$5,941
$19,052
$24,993
$6,408
$20,841
$27,250
$6,694
$22,702
$29,396
$6,742
$23,247
$29,989
$3,144
$2,737
$3,027
$3,283
$3,019
$2,606
$2,416
$2,416
$2,769
$3,157
$3,301
$3,389
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
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
8.25%
Additional Cash Spent
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
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$1,010
$0
$0
$0
$11,654
$0
$0
$0
$35,340
$0
$0
$0
$31,070
$0
$0
$0
$32,980
$0
$0
$0
$33,515
$0
$0
$0
$31,239
$0
$0
$0
$28,933
$0
$0
$0
$28,071
$0
$0
$0
$28,772
$0
$0
$0
$31,417
$0
$0
$0
$33,707
$0
$0
$0
$34,388
Net Cash Flow
Cash Balance
$20,386
$30,386
$1,762
$32,148
$7,796
$39,944
$9,351
$49,295
$6,868
$56,164
$4,159
$60,323
$3,323
$63,646
$3,632
$67,277
$6,524
$73,801
$8,872
$82,674
$9,181
$91,855
$9,818
$101,672
Page 33
Appendix
Appendix Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
Starting Balances
Current Assets
Cash
Accounts Receivable
Inventory
Other Current Assets
Total Current Assets
$10,000
$0
$0
$4,480
$14,480
$30,386
$9,209
$2,854
$4,480
$46,929
$32,148
$8,017
$2,575
$4,480
$47,220
$39,944
$8,867
$2,664
$4,480
$55,955
$49,295
$9,618
$2,795
$4,480
$66,189
$56,164
$8,842
$2,605
$4,480
$72,091
$60,323
$7,632
$2,312
$4,480
$74,748
$63,646
$7,077
$2,128
$4,480
$77,331
$67,277
$7,078
$2,054
$4,480
$80,889
$73,801
$8,110
$2,267
$4,480
$88,659
$82,674
$9,249
$2,623
$4,480
$99,025
$91,855
$9,668
$2,823
$4,480
$108,826
$101,672
$9,926
$2,883
$4,480
$118,961
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
$47,267
$0
$47,267
$61,747
$47,267
$490
$46,777
$93,706
$47,267
$979
$46,288
$93,508
$47,267
$1,469
$45,798
$101,753
$47,267
$1,958
$45,309
$111,497
$47,267
$2,448
$44,819
$116,910
$47,267
$2,938
$44,329
$119,077
$47,267
$3,427
$43,840
$121,171
$47,267
$3,917
$43,350
$124,239
$47,267
$4,406
$42,861
$131,520
$47,267
$4,896
$42,371
$141,396
$47,267
$5,385
$41,882
$150,708
$47,267
$5,875
$41,392
$160,353
Dec
Jan
Feb
Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov
$0
$0
$0
$0
$0
$24,443
$0
$0
$19,804
$0
$0
$21,286
$0
$0
$22,362
$0
$0
$20,921
$0
$0
$19,073
$0
$0
$18,326
$0
$0
$18,359
$0
$0
$20,085
$0
$0
$21,928
$0
$0
$22,464
$0
$0
$22,698
$84,844
$84,844
$83,834
$108,277
$82,824
$102,628
$81,814
$103,100
$80,804
$103,166
$79,794
$100,715
$78,784
$97,857
$77,774
$96,100
$76,764
$95,123
$75,754
$95,839
$74,744
$96,672
$73,734
$96,198
$72,724
$95,422
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$27,000
($50,097)
$0
($23,097)
$61,747
$27,000
($50,097)
$8,526
($14,571)
$93,706
$27,000
($50,097)
$13,977
($9,120)
$93,508
$27,000
($50,097)
$21,750
($1,347)
$101,753
$27,000
($50,097)
$31,429
$8,332
$111,497
$27,000
($50,097)
$39,292
$16,195
$116,910
$27,000
($50,097)
$44,318
$21,221
$119,077
$27,000
($50,097)
$48,168
$25,071
$121,171
$27,000
($50,097)
$52,213
$29,116
$124,239
$27,000
($50,097)
$58,777
$35,680
$131,520
$27,000
($50,097)
$67,821
$44,724
$141,396
$27,000
($50,097)
$77,606
$54,509
$150,708
$27,000
($50,097)
$88,028
$64,931
$160,353
Net Worth
($23,097)
($14,571)
($9,120)
($1,347)
$8,332
$16,195
$21,221
$25,071
$29,116
$35,680
$44,724
$54,509
$64,931
Liabilities and Capital
Current Liabilities
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities
Total Liabilities
Page 34