Market Analysis Summary

The concept and management of the Nightclub has been well received, and has been offered key placement at the
center of Your City's new First & Main Town Center development. This commercial center spans 138 acres and
promises an immediate primary trade population of 332,000 people with a secondary population of 164,000 people.
The Boulevard at the Avenue average daily traffic counts are currently 53,000, and will increase to 72,000 by 2003
following the Boulevard's connection northward to I-25 in 2001. At the center of the complex will be a 16-screen
Cinemark and IMAX theater opening March, 2000. The Center's planners having met the Nightclub's management
and have reviewed the concept. They have indicated that the Nightclub is "exactly" what they were looking for and
wish to place it directly in front of the theater. The annual projected traffic for what Cinemark is calling their 'flagship'
location is 1.4 million people, which exceeds their current Tinseltown location at the arena.

The Nightclub will be a 10,000 square foot unit, which will also house the company's corporate business office. The
dance club and bar will accommodate 750 people. With Your City's rapidly growing population, the variety of
the Nightclub from across the country would create mass appeal for all of the Nightclub's customers. The store will be
equipped with state-of-the-art audio and video systems like none other found in Your City. It will serve the need for a
true nightclub in Your City. The general appearance will be clean, open, and pleasing to the customer. The
demographics are favorable, with minimal competition from other dance-themed venues and bars.

4.1 Market Segmentation

We see the Nightclub as appealing to three major market segments. Fortunately, the long, late night hours of
operation help the Nightclub lend itself to multiple segment appeal. Our market segmentation scheme allows some
room for estimates and nonspecific definitions.

1. Childless Young Professionals--Due to our proximity to the IMAX and Cinemark theaters, we must appeal
to single adults and young couples. Whether it is a group of friends or a couple out to see a movie together,
these people need a place to eat/drink either before and/or after their movie. These customers will range in age
from 27 to 40. The Nightclub will appeal to this category by switching the tempo and entertainment to be more
appealing to adults as it gets later into the evening. We also anticipate a 15% annual growth rate in tandem with
the growth rate of Your City and through increased popularity.
2. College Students--By creating an environment that is appealing to college students, we secure a natural
progression between the high school student and the young professional. Through word of mouth, the Nightclub
expects realize an increase of five percent annually from this segment.
3. Tourists and Business Travelers--More and more business and travelers and tourists are finding
themselves in Your City every year as is made evident by the increased demand and subsequent expansion of
the local airport. We plan to reach these people through direct marketing to local hotel patrons. We anticipate a
20% annual growth rate in this segment. As our relationships grow with the local hotels, so too will the word of
mouth recommendations from the hotel staff as well as the patronizing of our restaurant by their families. Our
future plan is to publish a simple website in order to create awareness to any traveler who wants to take an
advanced look at the club before their visit.

The following chart and table outline the target market segments for the Nightclub, and include annual growth
projections.
Market Analysis

Year 1 Year 2 Year 3 Year 4 Year 5

Potential Customers Growth CAGR

Childless Young
15% 132,000 151,800 174,570 200,756 230,869 15.00%
Professionals

College Students 5% 100,000 105,000 110,250 115,763 121,551 5.00%

Tourists/Business Travelers 20% 100,000 120,000 144,000 172,800 207,360 20.00%

Total 13.95% 332,000 376,800 428,820 489,319 559,780 13.95%

4.2 Target Market Segment Strategy

Our strategy is based on serving our niche markets exceptionally well. The nightclub enthusiast, the tourist and
business traveler, the local nightclub crowd, the local service industry as well as groups going out together, can all
enjoy the Nightclub experience.

The marketing strategy is essential to the main strategy:

 Emphasize exceptional service.

 Create awareness of the Nightclub's unique features.
 Focus on our target markets.

We must charge appropriately for the high-end, high-quality service and food that we offer. Our revenue structure has
to match our cost structure, so the wages we pay and the training we provide to assure superior quality and service
must be balanced by the fees we charge.
Part of the superior experience we offer is the simplicity o the menu items. While being unique, they are relatively
inexpensive and easy to prepare. While a premium is appropriate for the experience, the pricing has to be balanced
in accordance with what we are serving.

All menu items will be moderately priced. We expect an average guest expenditure of $12.50 for beverages and
$7.50 for the percentage of our guests who choose to take advantage of our food menu. Our target customer spends
more than the industry average for moderately priced establishments. This is due to our creating an atmosphere that
encourages longer stays and more spending, while still allowing adequate table turns due to extended hours of
appeal.

4.3 Service Business Analysis

High energy and dance themed venues have significantly impacted cities from coast to coast in the nineties. Los
Angeles' Hollywood, New York's Times Square, and Seattle's Pioneer Square are just a few examples. Entrancing
their audiences with high-powered lights, sound, music, and interactive entertainment, these venues are still one of
the highest cash flow businesses in the world. Our localized studies have shown that the average person will spend
three to four hours per weekend in this type of an environment and will spend an average of twenty to fifty dollars in
that time frame. As we approach the new millennium, this trend shows no signs of declining.

The typical venue of our style is open from 8:00 P.M. to 2:00 A.M., and within this time frame, the venue can achieve
gross revenues anywhere from $3,500 to $25,000, nightly. The primary sources of revenue in a venue of this type are
high volume traffic, coupled with comparably nominal spending. In addition to alcohol revenues, we will also generate
substantial revenues from food sales that can typically range from seven to ten dollars per person, and admission
fees that range between five and ten dollars per admit.

Entertainment venues in the late 1980's and 1990's focused on high-energy light and sound, multiple source video
screens, and participative events. This relatively simple concept is still quite popular today. However, these concepts
have greatly evolved with society. In recent years this industry has become more sophisticated with the availability of
new technology. Larger metropolitan areas have taken this technology to new heights with sound, lighting, video and
interactive designs that create an exciting and memorable experience. Fortunately, no one in Your State area has
been a pioneer in this specific segment of the industry as of the date of this report.

Additionally, the nightclub and bar industry is shifting towards a more entertainment-oriented concept. Guests of
these venues are not only offered a dynamic place to gather and mingle, but also a place to participate in the
entertainment through interactive contests, theme nights, and other events. We intend to heavily utilize
entertainment-oriented marketing in an effort to withstand the perpetual shift in trends and cater to as large a client
base as possible.

Nightclubs and other drinking establishments rely heavily on their primary suppliers. The primary suppliers are the
various beverage distributors that provide the establishment with both alcoholic and non-alcoholic beverages. The
alcoholic beverages (beer, wine, and liquor) are the primary sources of income in this industry. Other beverage
suppliers also play a crucial role by providing non-alcoholic beverages. These are either served alone or mixed with
alcohol.

In the area, all major brands of alcoholic beverages are available, in addition to several regional brands of beer. Initial
research shows that the major distributors in the market have a high rating in both product availability and delivery.

4.3.1 Main Competitors

The Nightclub competition lies mainly with other casual facilities and less with conventional and chain entertainment
establishments. We need to effectively compete with the widely held idea that you can't get good service anymore,
while maintaining the idea that being out can be a lot of fun. Our polling has indicated that consumers think of
atmosphere, price, and quality respectively. Additionally, price was frequently mentioned by pointing out that if the
former concerns are present then they are willing to pay more for the experience.

Our review of the market concludes that there are four entertainment venues that can be considered direct
competition to the proposed new venue. We do realize that the proposed venue will also compete indirectly for every
entertainment dollar spent in the Anytown area.
The main competitors of the Nightclub will be:

Club A
Hours of Operation: 5:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 300  
Wednesday College Night ($1 beers)
-This nightclub appeals to a college crowd seeking cheap drinks.
-The club is known for being dingy and dirty.

Bar B
Hours of Operation: 10:00 A.M.- 2:00 A.M.
Monday through Sunday
Capacity: 400
Thursday College/Ladies Nights
-This club appeals to 25-35 year olds.
-Pool and video games are central focus.
-Dancing is pushed to the back of the club.

Grill C
Hours of Operation: 6:00 P.M.-2:00 A.M.
Wednesday through Saturday
Capacity: 250
-This club's target customer is 25 to 45 years old / middle class or above.
-This club is known for its older, dressed up crowd and cramped space.

Club D
Hours of Operation: 11:00 A.M.-2:00 A.M.
Monday through Sunday
Capacity: 350 
-This club's target customer is 25 to 45 years old.
-This club is known for live jazz and blues entertainment and their draught beers.

4.3.2 Business Participants

The Nightclub will be part of the restaurant and bar industry, which includes several kinds of businesses:

 Locally Operated Bars and Nightclubs - This genre usually appeals to the local neighborhood clientele.
This same client base dictates that the average price structure be drastically scaled down in order to create
"regulars."
 Nightclub Entertainment Complexes - This type of complex represents the concept we will most closely
compete with. They are typically placed in high traffic locations and are normally treated as destination
entertainment. An admission charge is usually in place and the associated price structure is also most like our
proposed structure. Thankfully there is not an abundance if this type of entertainment within our region.
 Conventional Dining - Primarily owned by large national chains, usually less than 10,000 square feet,
focused on serving good quality food in a reasonable amount of time in a dining room setting. The service and
food quality are superior to that of a fast food establishment. People go there to eat and leave when they're
done eating since there's rarely a reason to stay.
 Formal Dining - Similar to conventional dining yet offering a higher quality of food and service for the added
expense. As with the conventional dining facilities, there is little interaction and when people are done eating,
they leave.
  Casual Dining - Commonly building upon conventional dining with the addition of a bar, playing of music
and sporting events on numerous televisions. Some establishments offer their own brand of beer made on the
premises. The food quality and service are at best, similar to that found in a conventional dining experience.
 Chain Entertainment - Typically manifested in each market through the Hard Rock Cafes, The Planet
Hollywoods, etc. We expect to create an atmosphere that thrives on its trendy feel. These chain entertainment
venues can not hope to draw the same "hip" clientele.

Strategy and Implementation Summary

In order to place emphasis on exceptional service, our main tactics are bi-monthly service training, employee
recognition, and higher service employee to customer ratios. Our specific programs for training include employee for
life training for management, customer for life training for employees, and the sharing of success stories among
employees and management. Our specific employee recognition programs include employee of the month with a
personal parking space, service excellence recognition awards of specific employees attached to advertising. To
achieve higher service employee to customer ratios, we include separate beverage servers and bussing personnel,
as well as maintaining a comfortable table count for the wait staff.

Our second strategy is emphasizing entertainment. The tactics are interactive entertainment, constant sensory
appeal, and unique event viewing. Our specific programs for interactive entertainment and constant sensory appeal
are frequent contests, games, music, and karaoke all hosted by an in-house dj who is also in charge of event
programming for the main room and lounge. A billiard room will overlook the main area. Billiards was selected due to
its widespread popularity (fifth most popular sport in the world, according to CNN). A limited number of video and
pinball games, as well as computer dart boards, will compliment the billiard tables in order to offer a less interactive
entertainment option. With an adjoining bar and plenty of seating, yet another unique experience could be carved out
of a visit to the Nightclub.

Our promise fulfillment strategy may be our most important. The necessary tactics are ongoing value-based training,
maintenance, and attention to detail, especially after popularity has been established. Through empowerment of
service employees to solve problems without making a customer wait for management consultation we create a win-
win situation for the customer and the restaurant. Continuous and never-ending improvement is the order of the day
through our regular training sessions and meetings. Since value is equal to service rendered minus the price
charged, it is crucial to go beyond the mere serving of food in a room full of lights and sound, you have to create a
long-lasting impression.

 Emphasize exceptional service -- We MUST prove to guests that exceptional service is still available and
should be expected as part of a dining experience. We need to differentiate ourselves from the mediocre
service venues.
 Emphasize an entertaining experience -- By assuring that all guests will enjoy themselves, we would be
securing market share through repeat business.
 Focus on target markets -- Our marketing and themes of mass appeal and music based entertainment will
attract our target market segments.
 Differentiate and fulfill the above promises.

We can't just market and sell another dance club, we must actually deliver on our promise of quality, service and a
unique guest experience. We need to make sure we have the fun and service intensive staff that we claim to have.
5.1 Marketing Strategy
A high growth area, such as Your City, has an annual influx of new residents from many other parts of the country.
This trend is true of Your State in general.

Many new residents, as well as many existing ones, are members of clubs in other markets. The Nightclub is a place
for all. The enabling technology will be an inherent part of the Nightclub's image.

Advertising budgets and event promotion are ongoing processes of management geared to promote the brand name
and keep the Nightclub at the forefront of the dance theme establishments in Your City's marketing area.

We depend on radio advertising as our main way to reach new customers. Our strategies and practices will remain
constant, as will the way we promote ourselves:

 Advertising -- We'll be developing a core positioning message.

 Grand Opening -- We will concentrate a substantial portion of our early advertising budget towards the
'Grand Opening Event.'
 Direct Marketing -- We'll directly market to local hotels surrounding the powers and the local airport.

The Nightclub will create an identity-oriented marketing strategy with executions particularly in radio media, alongside
print ads, and in-store promotions.

A grand opening event will be held to launch the Nightclub in the summer of 2001. A radio advertising blitz will
precede the event for three weeks, with ambiguous teasers about an "event like no other" in the city's history and the
forthcoming opening date. Contests will be held on the target radio stations giving away V.I.P. passes (coupons) to
the event while at the same time, creating excitement about the opening. We will leverage our relationship with the
Dallas Cowboy Cheerleaders to be present on the night of the grand opening. The opening date is tentative at this
point and dependent upon construction completion. The budget for the event will be $10,000, and the milestone date
will parallel the available opening date, currently June of 2001.

Achievement of the following campaigns will be measured by the polling of customers as to how they heard of the
Nightclub for the first ninety days of operation. Budget adjustments will be made as the results dictate.

We will be running regular local radio and newspaper ads to create brand awareness. Our radio ads will be
concentrated strongly on Magic FM, the city's top radio station among our target market segments. Through
commercial repetition, a teaser campaign, and the use of catchy phrases, we hope to obtain intellectual ownership of
our target market segments: when they think dance club and bar they'll have to think the Nightclub. Drink specials will
also be staples of our radio advertising in order to bring people in. HK will be responsible for ongoing radio ads with a
monthly budget of $12,000 per month for the first ninety days, followed by an ongoing budget of $6500 per month.

We will advertise directly to local hotel guests in the local airport and surrounding the Boulevard areas to attract
business travelers and tourists with no knowledge of where to go in the evening. Through the use of fliers and table
tents to place in hotel rooms, we hope to create visitor awareness of our location and event promotion. Promos such
as 'show your room key and get a free drink' in conjunction with the room ads would be relatively inexpensive from an
advertising standpoint and requires limited ongoing maintenance and expense. BK will be responsible for direct
advertising with a start-up budget of $3,000 and a maintenance budget of $1,000 per month. The milestone date will
be thirty days after the grand opening event.

Ads will also go into the college newspapers for the local campuses of Your State College and the University of Your
State. HK will be responsible for this program. The monthly budget for these ads will be $300. The event date will be
in tandem with the grand opening.

Shirts, ball caps, and bumper stickers bearing the Nightclub's logo will be marketed, as well as given away as prizes,
in order to further spread brand awareness. Artistic design will be HK's responsibility and merchandising will be
headed by DD. A start-up budget of $1800 will be in place and a monthly promotional (giveaway) budget will also
exist.
5.2 Sales Strategy
Sales projections for this plan are presented in the following topics.

5.2.1 Sales Forecast

This chart represents our forecast for Income on a monthly basis. The table presents yearly expected sales.
Complete monthly forecast figures for the first year are presented in the appendix.

Sales Forecast

Year 1 Year 2 Year 3

Sales

Beverage Sales $1,346,100 $1,480,710 $1,628,781

Food Sales $93,500 $102,850 $113,135

Admission Sales $836,740 $920,414 $1,012,455

Total Sales $2,276,340 $2,503,974 $2,754,371

Direct Cost of Sales Year 1 Year 2 Year 3

Beverage Sales $336,525 $370,178 $407,196

Food Sales $30,855 $33,941 $37,335

Admission Sales $0 $0 $0

Subtotal Direct Cost of Sales $367,380 $404,119 $444,531

5.2.2 Daily Revenue Forcast

This table illustrates our daily revenue forecast for X,xxx total square feet.

We are assuming a seating capacity for said space of XXX guests. In addition, we expect just less than one complete
rotation of this space for food and beverage guests alike.

Daily Revenue Breakdown ** Mon Tue Wed Thu Fri Sat Sun Weekly

Total Guests Charged Admission 0 0 325 475 675 775 0 2,250

Average Admission Fee $7 $7 $7 $10 $10 $10 $7 $9.57
Total Admission Sales $0 $0 $2,275 $4,750 $6,750 $7,750 $0 $21,525
Total Bar Guests 0 0 350 550 775 1,100 0 2,775
Average Drinks per Person 0 3 3 3 3 3 3 3.25
Average Beverage Sales per Guest $12.50 $12.50 $10.00 $12.50 $12.50 $12.50 $12.50 $12.18
Average Price per Drink $0 $3.75 $3.75 $3.75 $3.75 $3.75 $3.75 $3.75
Total Beverage Sales $0 $0 $3,500 $6,875 $9,688 $13,750 $0 $33,812
Total Admission and Beverage Sales $0 $0 $5,775 $11,625 $16,438 $21,500 $0 $55,337
Total Food Guests 0 0 30 50 70 100 0 250
Average Food Sales per Guest $5.00 $5.00 $7.50 $7.50 $7.50 $7.50 $5.00 $45.00
Total Food Sales $0 $0 $225 $375 $525 $750 $0 $1,875
Misc. Sales (10% of Gross Sales) $0 $0 $578 $1,163 $1,644 $2,150 $0 $5,533
Total Revenue $0 $0 $6,578 $13,163 $18,606 $24,400 $0 $62,746

**based on 750-person capacity

Management Summary
The management team is an especially close one. One of the presidents has been married to the vice president for
seven years. The two co-presidents have worked directly together for three and a half years at four positions. One of
the presidents has worked with the bar manager in the past and has known him for nearly ten years. Together we
share a single vision: to provide a unique and entertaining experience through exceptional service.

The company will have six managers, including the two presidents, and three managers who have yet to be recruited.

6.1 Management Team

DD, Co-President. D has a bachelors degree in business management, five years management in the restaurant/bar
business, consultative experience opening other bars, six subsequent years management in the car industry ending
currently with his current position as department manager. D's specific responsibilities will lie primarily with the
coordination of events and oversight of the operations and evening activities of the restaurant and bar.

BK, Co-President. B is pursuing a life-long ambition of restaurant/nightclub ownership. Three years of restaurant
kitchen experience and nearly eight years of experience managing people ending with three and a half years of
finance management. B is committed to not only creating a successful business but also successfully running it. Even
though his hands-on experience in business management is extensive through the finance business, he has spent
the last year and a half researching business and business ownership in his spare time. B's specific responsibilities
will be administrative management to include inventory management, accounts payable, purchasing, payroll, and
public relations with limited marketing involvement (mostly direct) to other companies.

HK, Vice President. H has a bachelor's degree in industrial media management. Her experience ranges from radio
marketing sales to three years as a financial analyst for L3 Communications. H is a born leader to whom people of all
levels flock. H's responsibilities will be limited to marketing with local radio and newspaper and her day-to-day role in
the restaurant will be a mostly silent one.

MC, Bar Manager. M has more than fifteen years bartending and bar management experience. M is eagerly awaiting
the opportunity to work at a restaurant/bar where things are done correctly and the customer is put first. In addition to
managing the bar, its personnel, and the djs, M will also be third in command under the two co-presidents.

The positions of office, kitchen and dining room managers have yet to be filled at this time. These positions will be
openly sought along with the remainder of the staff.

6.2 Management Team Gaps

We believe we have a solid team constructed in order to cover the main points of the business plan. Management
growth through training will be an ongoing component of the Nightclub's priorities.

However, we do realize that we may not have the hands on specific knowledge that may be required to execute pre-
opening and opening phases of the venture. We also realize that we may benefit greatly from the retention of a
hospitality industry consultant to guide us through the aforementioned time frames, as well as to consult with us
through the first two years of our operation.

To this end we have contracted with a hospitality industry specialist consultant. His involvement will exist in several
facets, most notably, through providing assistance in launching this venue. This consultant has over 12 years of
experience in the hospitality industry and has assisted many first-time operators in getting their proposed venues
launched successfully. They will assist in the development of the design, concept, and strategies of the new
business. In addition, they will assist in the hiring process of the management staff, djs, bartenders, waitresses, and
security staff. They will also provide educational services for management-level personnel who will be responsible for
the day-to-day operations of the club.
Interviews for a general manager, operations manager, and all other personnel will be conducted with the assistance
of the consultant. The co-presidents, Mr. D and Mr. K, will make final decisions for each position.

These gaps will be filled as the opening date draws closer.

6.3 Personnel Plan

The Personnel Plan reflects the objective of providing an ample amount of service personnel. Our headcount will
remain at thirty unless any unforeseen demands dictate otherwise. Assume a burden rate of 17%.

DAILY STAFFING (750-person capacity)

Hourly Employees

Day Position Quantity Rate Avg Hrs Sub-total Burden Total

Monday Staff Cost/Mon. 0 $0 0 $0 $0 $0

- - -- - - - - -

Tuesday Staff Cost/Tues. - - - $0 $0 $0

- - -- - - - - -

Wednesday Waitress 2 $5.00 7.5 $75 - -

- Security 4 $7.00 6.5 $195 - -

- Bartender 2 $5.00 7.5 $75 - -

- Barback 1 $4.50 7 $31 - -

- Police Detail 1 $15.00 0 $0 - -

- Misc. - $8.00 0 $0 - -

- Staff Cost/Wed. - - - $376 $64 $441

- - - - - - - -

Thursday Waitress 3 $5.00 7.5 $113 - -

- Security 5 $7.50 6.5 $244 - -

- Bartender 3 $5.00 7.5 $113 - -

- Barback 1.5 $4.50 7 $47 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -
 - Staff Cost/Thur. - - - $516 $88 $604

- - - - - - - -

Friday Waitress 4 $5.00 7.5 $150 - -

- Security 7 $7.50 6.5 $341 - -

- Bartender 4 $5.00 7.5 $150 - -

- Barback 2 $4.50 7 $63 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -

- Staff Cost/Fri. - - - $704 $120 $824

- - - - - - - -

Saturday Waitress 4 $5.00 7.5 $150 - -

- Security 9 $7.50 6.5 $439 - -

- Bartender 5 $5.00 7.5 $188 - -

- Barback 2 $4.50 7 $63 - -

- Police Detail 0 $15.00 0 $0 - -

- Misc. 0 $15.00 0 $0 - -

- Staff Cost/Sat. - - - $839 $143 $982

- - - - - - - -

Sunday Staff Cost/Sun. 0 $0 0 $0 $0 $0

Ttl Wkly/Hrly - - - - $2,436 $414 $2,850

Salaried Staff

Position Salary Yearly Weekly Burden Total

Manager #1 Oper Prtnr $55,000 $877 $179 -

Manager #2 Oper Prtnr $55,000 $877 $179 -

 Manager #3 General Mgr $50,000 $798 $163 -

Manager #4 PR Mgr $45,000 $718 $147 -

Manager #5 Bar Mgr $35,000 $558 $114 -

Manager #6 Asst. $25,000 $399 $81 -

Entertainmnt DJ $65,000 - - -

Ttl Salaried - - $5,480 $866 $6,346

Ttl Weekly Staff - - - - $9,196

Personnel Plan

Year 1 Year 2 Year 3

Salaried Staff $284,736 $298,968 $313,916

Hourly Staff $107,200 $112,560 $118,188

Total People 0 0 0

Total Payroll $391,936 $411,528 $432,104

Financial Plan
The financial projections for this plan are presented in the tables and charts of the following subtopics.

7.1 Important Assumptions

The financial plan depends on important assumptions, most of which are illustrated in the following table.

The key underlying assumptions are:

 We assume a slow-growth economy of five percent the first year, and three percent thereafter, without major
recession.
 We assume that we will grow as managers during the process, this growth will manifest itself as flat line
expense growth over the five-year period, leading to increased annual cash flow.
 We assume access to equity capital and financing sufficient to maintain our financial plan as shown in the
tables.
 We assume continued popularity of nightclubs in America and the growing demand for high-energy themed
and casual dining venues.

General Assumptions

Year 1 Year 2 Year 3

Plan Month 1 2 3

Current Interest Rate 10.00% 10.00% 10.00%

Long-term Interest Rate 10.00% 10.00% 10.00%

Tax Rate 25.42% 25.00% 25.42%

Other 0 0 0

7.2 Break-even Analysis

Example Break-Even Analysis formulas are presented in the text below. Business Plan Pro's interactive table and
chart are still linked to the program spreadsheets.

Fixed Costs $X,xxx,xxx

Variable Costs $Xxx,xxx
Revenue (Estimated)$X,xxx,xxx

*S = Gross Sales

S = $ + [($Xxx,xxx/ $X,xxx,xxx) x S]

S = $X,xxx,xxx + [(.xxxx) x S]

S = $X,xxx,xxx

Break Even Point = $X,xxx,xxx

Average Nightly Break Even Revenues – approximately $ X,xxx

Minimum Nightly Required Spending Per Person - $8.75 + $9.75 = $18.50
Minimum Nightly Required Incoming Traffic – Xxx
Break-even Analysis

Monthly Revenue Break-even $140,703

Assumptions:

Average Percent Variable Cost 16%

Estimated Monthly Fixed Cost $117,995

7.3 Projected Profit and Loss

Projected profit and loss statement for the nightclub follows. Three years' annual totals are shown below. Monthly
breakdown for year one appears in the appendix. 
Pro Forma Profit and Loss

Year 1 Year 2 Year 3

Sales $2,276,340 $2,503,974 $2,754,371

Direct Cost of Sales $367,380 $404,119 $444,531

Other Production Expenses $0 $0 $0

Total Cost of Sales $367,380 $404,119 $444,531

Gross Margin $1,908,960 $2,099,855 $2,309,840

Gross Margin % 83.86% 83.86% 83.86%

Expenses

Payroll $391,936 $411,528 $432,104

Sales and Marketing and Other Expenses $411,576 $430,574 $451,284

Depreciation $0 $0 $0

Fees--Credit Card $10,764 $10,982 $11,202

Fees--Professional $7,500 $7,650 $7,803

Taxes--Admission $0 $0 $0

Taxes--Excise $391,536 $399,368 $407,355

Taxes--Property $0 $0 $0

Leased Equipment $2,496 $2,550 $2,601

Utilities $36,000 $36,720 $37,454

Insurance $22,500 $22,950 $23,409

Rent $75,000 $75,000 $76,500

Payroll Taxes $66,629 $69,960 $73,458

Other $0 $0 $0

Total Operating Expenses $1,415,937 $1,467,282 $1,523,170

Profit Before Interest and Taxes $493,023 $632,573 $786,670

EBITDA $493,023 $632,573 $786,670

Interest Expense $0 $0 $0

Taxes Incurred $121,122 $158,143 $199,945

Net Profit $371,901 $474,430 $586,725

Net Profit/Sales 16.34% 18.95% 21.30%

7.4 Projected Cash Flow

The following chart illustrates our monthly cash flow for year one. The table shows three years of annual totals. First
year monthly figures as presented in the appendix. The months are weighted according to the amount of weeks in
that month in a typical calendar year.
Pro Forma Cash Flow

Year 1 Year 2 Year 3

Cash Received

Cash from Operations

Cash Sales $2,048,706 $2,253,577 $2,478,934

Cash from Receivables $205,193 $248,153 $272,969

Subtotal Cash from Operations $2,253,899 $2,501,730 $2,751,903

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 $0 $0 $0

Subtotal Cash Received $2,253,899 $2,501,730 $2,751,903

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $391,936 $411,528 $432,104

Bill Payments $1,445,416 $1,558,429 $1,727,264

Subtotal Spent on Operations $1,837,352 $1,969,957 $2,159,368

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 $1,837,352 $1,969,957 $2,159,368

Net Cash Flow $416,547 $531,773 $592,535

Cash Balance $491,547 $1,023,320 $1,615,854

7.5 Projected Balance Sheet

The following Balance Sheet indicates healthy growth of net worth and a strong financial position. The monthly
estimates are included in the appendix.

Pro Forma Balance Sheet

Year 1 Year 2 Year 3

Assets

Current Assets
Cash $491,547 $1,023,320 $1,615,854

Accounts Receivable $22,441 $24,685 $27,153

Inventory $12,653 $13,918 $15,310

Other Current Assets $0 $0 $0

Total Current Assets $526,640 $1,061,923 $1,658,318

Long-term Assets

Long-term Assets $0 $0 $0

Accumulated Depreciation $0 $0 $0

Total Long-term Assets $0 $0 $0

Total Assets $526,640 $1,061,923 $1,658,318

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities

Accounts Payable $72,239 $133,092 $142,762

Current Borrowing $0 $0 $0

Other Current Liabilities $0 $0 $0

Subtotal Current Liabilities $72,239 $133,092 $142,762

Long-term Liabilities $0 $0 $0

Total Liabilities $72,239 $133,092 $142,762

Paid-in Capital $567,750 $567,750 $567,750

Retained Earnings ($485,250) ($113,349) $361,081

Earnings $371,901 $474,430 $586,725

Total Capital $454,401 $928,831 $1,515,556

Total Liabilities and Capital $526,640 $1,061,923 $1,658,318

Net Worth $454,401 $928,831 $1,515,556

7.6 Business Ratios

The Ratios table below outlines important ratios for this Nightclub. The last column, Industry Profile, is derived
from the Standard Industrial Classification (SIC) Index code 5813, for Drinking Places.

Ratio Analysis

Year 1 Year 2 Year 3 Industry Profile

Sales Growth 0.00% 10.00% 10.00% 1.90%

Percent of Total Assets

Accounts Receivable 4.26% 2.32% 1.64% 4.60%

Inventory 2.40% 1.31% 0.92% 3.10%

Other Current Assets 0.00% 0.00% 0.00% 44.60%

Total Current Assets 100.00% 100.00% 100.00% 52.30%

Long-term Assets 0.00% 0.00% 0.00% 47.70%

Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 13.72% 12.53% 8.61% 28.20%

Long-term Liabilities 0.00% 0.00% 0.00% 23.10%

Total Liabilities 13.72% 12.53% 8.61% 51.30%

Net Worth 86.28% 87.47% 91.39% 48.70%

Percent of Sales

Sales 100.00% 100.00% 100.00% 100.00%

Gross Margin 83.86% 83.86% 83.86% 42.30%

Selling, General & Administrative Expenses 67.36% 64.67% 62.20% 23.40%

Advertising Expenses 8.79% 8.39% 8.01% 2.40%

Profit Before Interest and Taxes 21.66% 25.26% 28.56% 2.80%

Main Ratios

Current 7.29 7.98 11.62 1.14

Quick 7.12 7.87 11.51 0.74

Total Debt to Total Assets 13.72% 12.53% 8.61% 51.30%

Pre-tax Return on Net Worth 108.50% 68.10% 51.91% 5.20%

Pre-tax Return on Assets 93.62% 59.57% 47.44% 10.60%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 16.34% 18.95% 21.30% n.a

Return on Equity 81.84% 51.08% 38.71% n.a

Activity Ratios

Accounts Receivable Turnover 10.14 10.14 10.14 n.a

Collection Days 59 34 34 n.a

Inventory Turnover 10.89 30.42 30.42 n.a

Accounts Payable Turnover 21.01 12.17 12.17 n.a

Payment Days 27 23 29 n.a

Total Asset Turnover 4.32 2.36 1.66 n.a

Debt Ratios

Debt to Net Worth 0.16 0.14 0.09 n.a

Current Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios

Net Working Capital $454,401 $928,831 $1,515,556 n.a

Interest Coverage 0.00 0.00 0.00 n.a

Additional Ratios

Assets to Sales 0.23 0.42 0.60 n.a

Current Debt/Total Assets 14% 13% 9% n.a

Acid Test 6.80 7.69 11.32 n.a

Sales/Net Worth 5.01 2.70 1.82 n.a

Dividend Payout 0.00 0.00 0.00 n.a

Appendix
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

Beverage Sales 0% $44,600 $77,100 $96,300 $131,700 $152,800 $167,100 $165,700 $155,200 $134,900 $108,500 $76,800 $35,400

Food Sales 0% $4,900 $6,300 $7,100 $7,900 $9,100 $9,900 $10,000 $9,400 $8,700 $7,500 $6,600 $6,100

Admission Sales 0% $34,100 $56,800 $74,600 $76,900 $75,100 $82,900 $88,440 $87,000 $82,400 $74,200 $60,400 $43,900

Total Sales $83,600 $140,200 $178,000 $216,500 $237,000 $259,900 $264,140 $251,600 $226,000 $190,200 $143,800 $85,400

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

Beverage Sales 25% $11,150 $19,275 $24,075 $32,925 $38,200 $41,775 $41,425 $38,800 $33,725 $27,125 $19,200 $8,850

Food Sales 33% $1,617 $2,079 $2,343 $2,607 $3,003 $3,267 $3,300 $3,102 $2,871 $2,475 $2,178 $2,013

Admission Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Direct Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

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

Salaried Staff 0% $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728 $23,728

Hourly Staff 0% $5,100 $8,700 $9,400 $9,500 $9,900 $10,600 $10,900 $10,700 $9,500 $8,500 $7,600 $6,800

Total People 0 0 0 0 0 0 0 0 0 0 0 0

Total Payroll $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

General Assumptions

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

Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%

Long-term Interest
10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Rate

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

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 $83,600 $140,200 $178,000 $216,500 $237,000 $259,900 $264,140 $251,600 $226,000 $190,200 $143,800 $85,400

Direct Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

Other Production Expenses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Cost of Sales $12,767 $21,354 $26,418 $35,532 $41,203 $45,042 $44,725 $41,902 $36,596 $29,600 $21,378 $10,863

Gross Margin $70,833 $118,846 $151,582 $180,968 $195,797 $214,858 $219,415 $209,698 $189,404 $160,600 $122,422 $74,537

Gross Margin % 84.73% 84.77% 85.16% 83.59% 82.61% 82.67% 83.07% 83.35% 83.81% 84.44% 85.13% 87.28%

Expenses

Payroll $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

Sales and Marketing and Other

$34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298 $34,298
Expenses

Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Fees--Credit Card $897 $897 $897 $897 $897 $897 $897 $897 $897 $897 $897 $897

Fees--Professional $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625 $625

Taxes--Admission $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes--Excise $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628 $32,628
Taxes--Property $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Leased Equipment $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208

Utilities $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000 $3,000

Insurance $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875 $1,875

Rent $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250 $6,250

Payroll Taxes 17% $4,901 $5,513 $5,632 $5,649 $5,717 $5,836 $5,887 $5,853 $5,649 $5,479 $5,326 $5,190

Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Operating Expenses $113,510 $117,722 $118,541 $118,658 $119,126 $119,945 $120,296 $120,062 $118,658 $117,488 $116,435 $115,499

Profit Before Interest and Taxes ($42,677) $1,124 $33,041 $62,310 $76,671 $94,913 $99,119 $89,636 $70,746 $43,112 $5,987 ($40,962)

EBITDA ($42,677) $1,124 $33,041 $62,310 $76,671 $94,913 $99,119 $89,636 $70,746 $43,112 $5,987 ($40,962)

Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Taxes Incurred ($12,803) $281 $8,260 $15,578 $19,168 $23,728 $24,780 $22,409 $17,687 $10,778 $1,497 ($10,240)

Net Profit ($29,874) $843 $24,781 $46,733 $57,503 $71,185 $74,339 $67,227 $53,060 $32,334 $4,490 ($30,721)

Net Profit/Sales -35.73% 0.60% 13.92% 21.59% 24.26% 27.39% 28.14% 26.72% 23.48% 17.00% 3.12% -35.97%

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 $75,240 $126,180 $160,200 $194,850 $213,300 $233,910 $237,726 $226,440 $203,400 $171,180 $129,420 $76,860

Cash from Receivables $0 $279 $8,549 $14,146 $17,928 $21,718 $23,776 $26,004 $26,372 $25,075 $22,481 $18,865

Subtotal Cash from Operations $75,240 $126,459 $168,749 $208,996 $231,228 $255,628 $261,502 $252,444 $229,772 $196,255 $151,901 $95,725

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 $0 $0 $0 $0 $0 $0 $0 $0

Subtotal Cash Received $75,240 $126,459 $168,749 $208,996 $231,228 $255,628 $261,502 $252,444 $229,772 $196,255 $151,901 $95,725

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 $28,828 $32,428 $33,128 $33,228 $33,628 $34,328 $34,628 $34,428 $33,228 $32,228 $31,328 $30,528

Bill Payments $3,040 $92,029 $116,684 $126,358 $146,749 $152,323 $158,484 $154,558 $146,407 $133,345 $117,309 $98,130

Subtotal Spent on Operations $31,868 $124,457 $149,812 $159,586 $180,377 $186,651 $193,112 $188,986 $179,635 $165,573 $148,637 $128,658

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 $31,868 $124,457 $149,812 $159,586 $180,377 $186,651 $193,112 $188,986 $179,635 $165,573 $148,637 $128,658

Net Cash Flow $43,372 $2,002 $18,937 $49,410 $50,851 $68,977 $68,391 $63,458 $50,137 $30,682 $3,264 ($32,933)
Cash Balance $118,372 $120,374 $139,311 $188,720 $239,571 $308,548 $376,939 $440,397 $490,534 $521,216 $524,480 $491,547

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 $75,000 $118,372 $120,374 $139,311 $188,720 $239,571 $308,548 $376,939 $440,397 $490,534 $521,216 $524,480 $491,547

Accounts Receivable $0 $8,360 $22,101 $31,353 $38,857 $44,628 $48,900 $51,538 $50,694 $46,921 $40,867 $32,766 $22,441

Inventory $7,500 $14,044 $23,489 $29,060 $39,085 $45,323 $49,546 $49,198 $46,092 $40,256 $32,560 $23,516 $12,653

Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Current Assets $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

Long-term Assets

Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0

Total Assets $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

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 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

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 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $88,150 $112,495 $121,473 $141,679 $147,036 $153,323 $149,663 $141,945 $129,413 $114,011 $95,639 $72,239

Paid-in Capital $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750 $567,750

Retained Earnings ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250) ($485,250)

Earnings $0 ($29,874) ($29,031) ($4,250) $42,483 $99,986 $171,171 $245,511 $312,738 $365,798 $398,132 $402,622 $371,901

Total Capital $82,500 $52,626 $53,469 $78,250 $124,983 $182,486 $253,671 $328,011 $395,238 $448,298 $480,632 $485,122 $454,401

Total Liabilities and Capital $82,500 $140,776 $165,965 $199,723 $266,662 $329,523 $406,994 $477,674 $537,183 $577,711 $594,643 $580,762 $526,640

Net Worth $82,500 $52,626 $53,469 $78,250 $124,983 $182,486 $253,671 $328,011 $395,238 $448,298 $480,632 $485,122 $454,401