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 Table of Contents

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

Chart: Highlights...........................................................................................................................2
1.1 Mission...........................................................................................................................................2
1.2 Goals and Objectives...............................................................................................................2
1.3 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................3
2.1 Start-up Summary....................................................................................................................3
Table: Start-up..............................................................................................................................4
Table: Start-up Funding.............................................................................................................5
Chart: Start-up..............................................................................................................................6
2.2 Company Ownership................................................................................................................6
3.0 Products and Services.................................................................................................................6
3.1 Competitive Comparison........................................................................................................7
3.2 Future Products and Services...............................................................................................8
3.3 Product and Service Description.........................................................................................8
4.0 Market Analysis Summary.......................................................................................................10
4.1 Market Segmentation............................................................................................................10
Table: Market Analysis..............................................................................................................10
Chart: Market Analysis (Pie)...................................................................................................11
4.2 Target Market Segment Strategy.....................................................................................11
4.2.1 Market Needs....................................................................................................................11
4.2.2 Market Growth..................................................................................................................12
4.2.3 Market Trends...................................................................................................................13
4.3 Service Business Analysis....................................................................................................14
4.3.1 Competition and Buying Patterns.............................................................................14
5.0 Strategy and Implementation Summary...........................................................................15
5.1 Competitive Edge....................................................................................................................15
5.2 Marketing Strategy.................................................................................................................16
5.3 Sales Strategy..........................................................................................................................16
5.4 Strategic Alliances..................................................................................................................16
5.5 Sales Forecast..........................................................................................................................17
Chart: Sales by Year..................................................................................................................17
Table: Sales Forecast................................................................................................................18
Chart: Sales Monthly.................................................................................................................18
5.6 Milestones..................................................................................................................................19
Table: Milestones........................................................................................................................19
Chart: Milestones........................................................................................................................19
6.0 Web Plan Summary....................................................................................................................20
6.1 Website Marketing Strategy...............................................................................................20
6.2 Development Requirements................................................................................................20
7.0 Management Summary.............................................................................................................20
7.1 Personnel Plan..........................................................................................................................21
Table: Personnel..........................................................................................................................21
8.0 Financial Plan................................................................................................................................21

Page
 Table of Contents

8.1 Break-even Analysis...............................................................................................................22

Chart: Break-even Analysis....................................................................................................22
Table: Break-even Analysis....................................................................................................22
8.2 Projected Profit and Loss.....................................................................................................23
8.2 Projected Profit and Loss.....................................................................................................23
Chart: Profit Monthly.................................................................................................................23
Chart: Profit Yearly.....................................................................................................................23
Chart: Gross Margin Monthly.................................................................................................24
Chart: Gross Margin Yearly.....................................................................................................24
Table: Profit and Loss................................................................................................................25
8.3 Projected Cash Flow...............................................................................................................26
8.3 Projected Cash Flow...............................................................................................................26
Table: Cash Flow.........................................................................................................................26
Chart: Cash...................................................................................................................................27
8.4 Projected Balance Sheet......................................................................................................28
Table: Balance Sheet.................................................................................................................28
8.5 Business Ratios........................................................................................................................28
8.5 Business Ratios........................................................................................................................28
Table: Ratios.................................................................................................................................29
9.0 Exit Strategy.................................................................................................................................30
Table: Sales Forecast..........................................................................................................................1
Table: Personnel....................................................................................................................................2
Table: Personnel....................................................................................................................................2
Table: Profit and Loss..........................................................................................................................3
Table: Profit and Loss..........................................................................................................................3
Table: Cash Flow...................................................................................................................................4
Table: Cash Flow...................................................................................................................................4
Table: Balance Sheet...........................................................................................................................5
Table: Balance Sheet...........................................................................................................................5

Page
 Sarrica's Market

1.0 Executive Summary

Sarrica's Market is a new business located in downtown Moab, Utah. The store is an upscale

international grocery and delicatessen with a distinct menu that includes authentic, hard to find
ingredients from around the country and the world. The facility will include a sixteen person
capacity eating area, deli/kitchen with counter and check out area, grocery/gift area, and a
public restroom.

The mission of Sarrica's Market is to provide Moab, Utah's residents and visitors with a

combination of quality, authentic, hard to find, grocery items and prepared foods, with good
service and a pleasant atmosphere with the warm feel of an Old-World outdoor
market. Our store motto is, "eat and enjoy."

The deli will serve sandwiches, salads, specialty drinks, and picnic lunches. Gift items will
complement the international theme of the store and include a limited selection of kitchen
wares, cookbooks, picnic items, and original hand-sewn items and jewelry. Gift baskets will also
be available in the store and over the internet.  All the recipes used in the deli will highlight the
grocery items sold in the market. 

The gourmet and specialty foods market is booming across the country. Consumers are looking
for quality food coupled with a quality shopping experience. Many large cities have have entire
sections dedicated to ethnic foods and culture. As rural America moves away from agriculture
and natural resources, and towards tourism as its main economy source, more and more people
are flocking to areas such as Moab. These new populations are starved for the fine ingredients
they were able to purchase in big cities and are looking for a rural solution to this problem.
Moab's residents and many visitors have expressed the desire for a local gourmet food store.

By making alliances with local farmers and restaurants, as well as international distributors,
Sarrica's Market will give customers a combination of "shopping local" and wide gourmet
selection previously unavailable in this highly visited rural area. For residents, Sarrica's offers a
more convenient and appealing option than ordering online or lugging fancy groceries back
from infrequent trips to the nearest cities (several hours away), especially in winter.

Sarrica's projects net profits increasing over the first three years. The increasing profitability is
partly based on expectations that wide seasonal differences in sales levels in the first year will
moderate as we strengthen our local clientele base. These forecasts are based on the recent
performance of similar cross-market upscale stores in Moab, and general trends in the gourmet
food stores industry.

To achieve our objectives, the owners of Sarrica's Market are contributing $24,000 and seeking
a $100,000 small business loan. These loans will be used for start-up costs and will be paid
back from the cash flow of the business within five years. 

Page 1
 Sarrica's Market

Chart: Highlights

Highlights

$500,000

$450,000

$400,000

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

$200,000 Net Profit

$150,000

$100,000

$50,000

$0
Year 1 Year 2 Year 3

1.1 Mission

The mission of Sarrica's Market is to provide Moab, Utah's residents and visitors with an upscale
grocery store, gift shop, and delicatessen specializing in a combination of quality, authentic,
hard to find, grocery items from around the world.

1.2 Goals and Objectives

Sarrica's Market has the following goals and objectives:

1. Obtain necessary funding ($24,000 in investor/personal loans and $100,000 in small

business administration loans).
2. Create a service-based company that exceeds customers' expectations, and increases the
number of repeat clients serviced by at least 20% per year, through superior performance
and word-of-mouth referrals.
3. Become an established community destination with a customer satisfaction rate of 90% by
the end of the first year.
4. Achieve cash flow self-sufficiency by the end of the first year.
5. Sales of $461,900 in the first year, with sales increasing to $484,735 in the second year
and $508,000 in the third year.
6. Provide an income for the founders by the end of the second year with income growth
possibilities.
7. Repay debt from original financing by the end of the fifth year.

1.3 Keys to Success

The keys to success for Sarrica's Market include:

Page 2
 Sarrica's Market

 Reputation: Every customer visiting our store will want to return and will recommend us to
their friends and family. Word of mouth marketing will be a powerful ally for our business.
 Superior Customer Service: Knowledgeable, friendly service will be of the utmost
importance.
 Location: Provide an easily accessible location for customer convenience, including walk-by
and drive-by traffic. 
 Product/Environment: Offer a variety of high quality foods with domestic and international
themes, sold at a fair price in a clean, authentic, comfortable environment.
 Convenience: Our customers will know that they can get what they need at our market for a
fair price. This will reduce their need to travel to get desired items or order them online.

2.0 Company Summary

Sarrica's Market is a new business located in downtown Moab, Utah on Main Street. The store is
an upscale international grocery and delicatessen, with a distinct menu that includes authentic,
hard-to-find ingredients from around the country and the world. The facility will include
a sixteen person capacity eating area, deli/kitchen with counter & check out area, grocery/gift
area, and a unisex public restroom.

The mission of Sarrica's Market is to provide Moab, Utah's residents and visitors with an upscale
grocery store, gift shop, and delicatessen specializing in a combination of quality, authentic,
hard-to-find grocery items from around the world. Our store motto is, "eat and enjoy," and our
decor depicts the warm feel of an old world outdoor market.

The deli will serve sandwiches, salads, speciality drinks, and picnic lunches.  Gift items will
complement the international theme of the store and include a limited selection of kitchen
wares, cookbooks, picnic items, and original sewn items and jewelry.  Gift baskets will also be
available in the store and over the internet.  All the recipes used in the deli will highlight the
grocery items sold in the market.

2.1 Start-up Summary

Start-up costs and initial financing are shown in the following table. The founders are seeking a
small business loan in the amount of $100,000 to supplement owner investment in
covering these costs. The estimated start-up costs may be lower than projected here if the
owners are able to purchase used equipment and do the renovation labor themselves.

We plan on a three month start-up period. Expenses are broken down as follows:

 Insurance @$300/month
 Rent @$2,500/month
 Initial Loan Repayment @$1,000/month
 Utilities @ $1,000/month
 Salaries: 2 managers @$2,000/month each

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 Sarrica's Market

Long-term Assets:

 Refrigeration Units
 Display Cabinets
 Kitchen Equipment

Short-term Assets:

 Tables and Chairs

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $500
Books/Accounting $600
Marketing/Website $5,000
Licenses/Permits $1,000
Delivery/Transportation $1,500
Insurance $900
Rent $7,500
Loan Payment $3,000
Utilities $3,000
Deposits $500
Expensed Equipment $5,000
Building Renovatons $20,000
Salaries $12,000
Payroll Taxes $1,800
Other $1,000
Total Start-up Expenses $63,300

Start-up Assets
Cash Required $15,700
Start-up Inventory $20,000
Other Current Assets $5,000
Long-term Assets $20,000
Total Assets $60,700

Total Requirements $124,000

Page 4
 Sarrica's Market

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $63,300
Start-up Assets to Fund $60,700
Total Funding Required $124,000

Assets
Non-cash Assets from Start-up $45,000
Cash Requirements from Start-up $15,700
Additional Cash Raised $0
Cash Balance on Starting Date $15,700
Total Assets $60,700

Liabilities and Capital

Liabilities
Current Borrowing $0
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $0
Other Current Liabilities (interest-free) $0
Total Liabilities $100,000

Capital

Planned Investment
Andy and Cathy $12,000
Rosie and Kenny $12,000
Other $0
Additional Investment Requirement $0
Total Planned Investment $24,000

Loss at Start-up (Start-up Expenses) ($63,300)

Total Capital ($39,300)

Total Capital and Liabilities $60,700

Total Funding $124,000

Page 5
 Sarrica's Market

Chart: Start-up

Start-up

$100,000

$90,000

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
Expenses Assets Investment Loans

2.2 Company Ownership

Sarrica's Market is a Limited Liability Company owned and operated by the founders Andy
Boone, Cathy O'Connor, Rosie O'Connor, and Kenny VanStone.  It will be registered with the
country as Sarrica's Market.

3.0 Products and Services

Sarrica's Market offers the following products and services:

Groceries
We will offer high quality groceries from Italy, the Mediterranean, Mexico, Asia, Europe,
Australia, and the United States (Wisconsin, the Southwest, and locally).  Groceries will include
items that represent the best known and desired foods from these areas. Items will include but
will not be limited to: sauces, oils, spices, spreads, peppers, cheese, meats, pasta, rice, canned
goods, drinks, chocolates, and hard-to-find desserts and candies.  A selection of frozen meals
(made in the store)will be available for home cooking, and will include items such as homemade
Italian meatballs & sausage, pizza, and "holiday" tamales.

Gifts
Gift items will complement the international theme of the store and include a limited selection
of kitchen wares, cookbooks, picnic items, and original sewn items and jewelry. Gift baskets will
also be available in the store and over the internet.

Delicatessen
Sarrica's Market will offer unique cuisine with an international flair.  The deli will offer a
limited menu for breakfast, lunch, and dinner. The rotating menu will feature sandwiches,
soups, salads, drinks, and desserts. All menu items will be prepared fresh each morning and

Page 6
 Sarrica's Market

displayed for easy pick-up. We will offer picnic lunches and frozen meals as well as cheese,
meats, and ethnic deli salads by the pound.

The breakfast menu will include items such as quiche, scones, and biscotti, and the
lunch/dinner menu will consist of sandwiches, salads, homemade breads, frozen meals, and
daily specials. 

We will serve high quality coffee, tea, juice, and soda from around the world through out the
day.

Picnic lunches will be made available to visitors, specially packed to be carried into the
numerous national parks and outdoor venues surrounding Moab. We will also make this service
available to the many outdoor guiding services in Moab. These businesses include climbing,
hiking, mountain biking, river rafting, and jeep touring companies.

3.1 Competitive Comparison

According to the Utah State Tax Commission, taxable sales in Grand County for "Food
Stores/Eating & Drinking Establishments" was $47.9 million in 2002. We believe we can gain a
portion of the current market share and capture a new market that has been largely ignored in
rural America. 

Moab is not a typical rural community, in that it has a tremendous number of domestic and
international travelers vacationing throughout the year: 787,578 visitors to Arches National
Park in 2003 alone. Moab's recreational activities, pleasant climate, and natural and cultural
treasures attract people from all over the United States and world to populate its
boundaries. The population in Moab in 2000 was 4,779 and of those residents, 47.5 % were
born in Utah, 48.7% were born in another state, and 3.8% were foreign born, or not U.S.
citizens. The diverse make-up of this community and its rural location make Moab prime for this
type of market and deli. Sarrica's Market will provide this rural, isolated community and popular
travel destination with a grocery that supplies its customers with cuisine other than what is
offered by its established competitors.

The competition facing Sarrica's Market includes all the grocery stores, coffee shops, and some
of the eating establishments in the Moab area. Moab has two chain grocery stores (Citi Market
and Moab Grocery) that carry many healthy food choices and some ethnic choices, but do not
have an expanded ethnic food selection. The Moonflower Market Co-op carries health food but
does not have an expanded ethnic food selection either. The Meat Shop carries local meats and
some cheese, but does not carry international varieties of meats and cheese. 

Restaurant/Coffee Shop competitors consist of Arches Book Company, Banditos Grill, Bob &
Shelly's Moab Deli, Breakfast at Tiffany's, Buck's Grillhouse, Center Cafe, Desert Bistro,
Eklecticafe, Isabella's Pizzeria, Knave of Hearts Bakery, La Hacienda, Miguel's Baja Grill, Moab
Brewery, Mondo Cafe, Paco's, Pasta Jay's, Poplar Place Pub & Eatery, Red Rock Bakery & Cafe,
Red Cliffs Lodge, Rio Colorado, River Grill, Slickrock Cafe, Sunset Grill, Szechwan Restaurant,
and Zax Wood Fired Pizza. 

Moab has an abundance of convenience stores (Dave's Corner Market, Jimbo's Country Market,
and numerous gas stations containing convenience marts) as well as many established fast
food chain restaurants (Burger King, Denny's, Hoagie Yogi, McDonalds, Pizza Hut, Subway,
Teriyaki Stix, and Wendy's). 

Page 7
 Sarrica's Market

We consider the majority of the above establishments to be indirect competition, due to the
vast differences between us in quality of product and combination of services.  Our direct
competitors are Arches Book Company, Bob & Shelly's Moab Deli, Center Cafe, Citi Market,
Eklecticafe, Knave of Hearts Bakery, the Meat Shop, Moab Grocery, Moonflower Market Coop,
Mondo Cafe, Paco's, and Red Rock Bakery & Cafe.  Each one of these competitors has a
component similar to what Sarrica's Market is proposing, but does not offer
the same combination of services with international amenities. 

We believe our mix of gourmet products and high-quality services, combined with our pleasant
atmosphere, will help us compete with the existing small businesses. As for the larger grocery
store chains, we will compete by providing a more intimate and educational shopping
experience with quality products they do not carry.

3.2 Future Products and Services

Sarrica's Market will introduce new menu items as time and profitability permit.  We will also
monitor where our profits are coming from and enhance those areas of the store quarterly.

3.3 Product and Service Description

The starting menu will include items such as:

Breakfast:

 Quiche - Made with fresh ingredients and cheese featured in the market
 Fresh Bread - Crusty Italian, wheat, and pumpernickel
 Scones/Muffins/Biscotti - International recipes
 Coffee, Tea, and Juice - From around the world

Lunch/Dinner:

 Roast Beef - With sharp provolone cheese, red onion, lettuce, & tomato on dark rye bread
 Corned Beef/Pastrami - With Wisconsin swiss cheese, red onion, shredded red cabbage
and Russian dressing on rye bread
 Turkey - With sharp Wisconsin cheddar cheese, lettuce & tomato on French bread
 Smoked Turkey - With Havarti cheese, avocado, sprouts, cucumber, lettuce & tomato on
multi grain bread
 The Boonero -  Daily Special
 The Day After Thanksgiving - Turkey, herb stuffing, lettuce & cranberries on a potato bread
roll
 The O'Connor - Turkey, Genoa salami, bacon, sharp Wisconsin cheddar cheese, lettuce &
tomato on Italian bread
 The BLT - Bacon, sharp provolone cheese, lettuce & tomato on Italian bread
 Veggie Deluxe - Avocado, cucumber, sprouts, lettuce, tomato, red
onion & sharp Wisconsin cheddar cheese served on multi grain bread
 Italian Veggie Deluxe - Marinated Italian vegetables, artichoke hearts, olives, red onion, &
fresh mozzarella cheese on Italian bread
 Tomato with Fresh Mozzarella & Basil - On focaccia bread
 Grandma Sarrica's Market Pizza - Made fresh and sold by the slice
 Bruschetta - Topped with ripe tomatoes, fresh basil, olives, & grated Italian cheese)
 Fresh Gazpacho - Ripe tomatoes, sweet white onions, jicama, cilantro, fresh jalapenos, and
lime juice chopped and mixed for a truly refreshing taste.

Page 8
 Sarrica's Market

 Eggplant Chickpea Pesto - A delicious combination of baba ganoush and hummus served
with pita wedges
 Seven Layer Bean Dip - Refried black beans, tomatoes, corn, onion, mixed fresh, cilantro,
and authentic mexican cheese.  Served with sour cream, your choice of hot sauce, and corn
chips for dipping
 Organic Soups - Made fresh
 Chili - Homemade using only the best ingredients
 Chips - A wide variety of speciality flavors

* Giardiniera is always available as a side dish to add a little spice to your sandwich.

Salads:

 Caesar Salad - Homemade dressing with bacon, croutons, and imported parmesan cheese.
 Greek Salad - Light airy and zesty Rotelo pasta tossed with tomatoes, spinach, cucumbers,
red onion, feta cheese, and Greek olives.
 Italian Salad - Ripe tomatoes, cucumbers, fresh basil, and balsamic vinegar mixed to
perfection. 
 Tomato, Basil, & Fresh Mozzarella Salad - Tossed in a light olive oil and balsamic vinegar
dressing.
 Fresh Herb Salad - Spring greens mixed with dill, cilantro, basil and Italian parsley for a
delightfully fresh taste.
 Pasta Salad of the Day - Always fresh and tasty.

Drinks/Ice:

 Juice - High quality flavors from around the world

 Soft Drinks - All natural
 Coffee - International & organic choices
 Tea - High quality flavors from around the world

Frozen Dinners: 

Sarrica's Market will carry a variety of hard to find frozen food items.  Many of our frozen meals
will be prepared at Sarrica's Market and follow recipes that highlight items we sell in the
grocery and deli. 

 Grandma Sarrica's Market Pizza

 Meatballs & Sausage with Marinara Sauce
 Stuffed Shells
 Manicotti
 Baked Ziti
 Chicken Parmesan
 Italian Beef
 Holiday Tamales
 Ready to Bake Bagles
 Ice Cream/Deserts                                                                                

Page 9
 Sarrica's Market

4.0 Market Analysis Summary

Our main target markets are: 

 People who live and work in Moab, who are looking for quality ingredients needed to
prepare their favorite international cuisine.
 Surrounding businesses looking for a tasty meal for their customers and staff.
 International and domestic travelers visiting Moab.
 Families looking for quality, affordable, home cooked meals to take home and prepare for
their families with ease.
 People looking for a comfortable environment in which to enjoy a cup of coffee, read a book,
or just shop.
 People looking for high quality, unique gifts and kitchen supplies.

Each market segment consists of people who either live, work, or vacation in the Moab, Utah
area.  Each market will be seeking an establishment that will meet their desire for authentic,
healthy food, quality service, and a pleasant atmosphere.

4.1 Market Segmentation

The total potential market in units is shown in the following table and chart. 

 There are approximately 175 business in Moab that could potentially be our customers.  We
used 20% as a starting point with 10% growth per year.
 There are 8,485 residents in Moab, according to the 2000 U.S. Census, with 3% projected
growth over the next ten years.
 Visitors were estimated using Arches National Park visitation report. From 1999-2003, an
average of  787,578 people visited the park annually. We did not include projected growth,
because we used an average number, and believe that visitation will remain similar over the
next five years.

Even though the visitor population appears to be the largest the market segment, it is possible
that much of our sales could come from local businesses, due to the fact that these companies
make purchases for the visitors using their services. The local population is extremely
important, because they can carry us through the four low visitation months, and will determine
whether we become an established community destination.

Table: Market Analysis

Market Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Customers Growth CAGR
Local Businesses 10% 35 39 43 47 52 10.40%
Residents 3% 8,485 8,740 9,002 9,272 9,550 3.00%
Visitors 0% 787,578 787,578 787,578 787,578 787,578 0.00%
Total 0.03% 796,098 796,357 796,623 796,897 797,180 0.03%

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 Sarrica's Market

Chart: Market Analysis (Pie)

Market Analysis (Pie)

Local Businesses

Residents

Visitors

4.2 Target Market Segment Strategy

The last ten years have seen an increase in American's explorations of foreign and gourmet
foods. Whether this can be attributed to celebrity chefs, travel to foreign countries, new health
diets, or the increasing accessibility of once-obscure ingredients, it seems that gourmet and
adventurous palates are here to stay.

The proliferation of visitors has forced this once-isolated community to learn about and offer a
greater variety of foods and experiences than they would have sought out on their own, and
many residents are now just as sophisticated in their food tastes as our tourists. In Moab,
residents often use travel to larger cities as occasions to stock up on luxury and gourmet items
not available locally. However, they prefer to shop locally whenever possible, and would
welcome a store that offers this combination.

Moab is growing at 3% a year, allowing for increased business opportunities without

diminishing the small-town feel. Our natural attractions are in no danger of becoming polluted
or otherwise less accessible, and so we expect continued market growth for the foreseeable
future.

Our marketing programs towards different target market segments will utilize different
publications and media, but all will emphasize our good value, high quality, unique and varied
selections, and great service.

4.2.1 Market Needs

Moab and Southeastern Utah are in need of a quality international market that sells items that
are currently only available in large cities or over the internet.  Many residents tell stories
of traveling to large cities with empty luggage so that they can fill their suitcase with speciality
food they can not find in Moab.  The residents of Moab are dedicated to protecting its "small
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 Sarrica's Market

town" feel and make a point to shop locally whenever possible. The residents of Moab and its
surrounding communities would be thrilled to be able to shop for the food they want at home. 

Moab, Utah is a rural community. The closest city is Grand Junction, Colorado, located 80 miles
away, with a population of 42,000.  Salt Lake City, Denver, Albuquerque and Las Vegas are the
closest big cities, all located 250-600 miles away. Moab is fortunate to be a popular domestic
and international travel destination because of its proximity to national parks, ancient cultural
sites, unique red rock landscapes, and world class recreational opportunities. 

Local and visiting customers desire high quality, healthy food that will appeal to their
aesthetics. In addition, they desire a pleasant shopping and dining experience that allows them
to learn about and purchase the grocery items they want in a comfortable, friendly, hassle-free
environment.  Customers will also enjoy the delicious home cooked take-home meals available
to them when they do not have time to prepare quality meals at home. 

4.2.2 Market Growth

We believe there is a market for our products and services in Moab and that the market has
potential for growth.  Grand County's population in the year 2000 was 8,485 and is expected to
grow at a rate of 3% over the next ten years.  Moab is dedicated to remaining a travel
destination "hot spot" without loosing its "small town" feel.  Because of its unique appeal it is
likely to attract many vacationers for years to come. Our business will grow as customers
become familiar with our products and services. 

U.S. Retail Sales of Gourmet Foods & Beverages  1998-2007 (in millions of dollars)

Compound Compound Compound

Product
1998 2002 Annual Growth 2007 Annual Growth Annual Growth
Classification
Rate 1998-2002 Rate 2002-2007 Rate 1998-2007
Beverages &
$9,904 $14,700 10.4% $22,701 9.1% 9.6%
Confectionary
Gourmet Foods &
Ready-to-eat $8,000 $10,100 6.0% $13,516 6.0% 6.0%
Meals
Condiments &
$4,230 $5,435 6.5% $7,252 5.9% 6.2%
Cheese
Total $22,134 $30,235 8.1% $43,469 7.5% 7.8%

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4.2.3 Market Trends

Market and market growth according to Tree of Life, The U.S. Market for Gourmet/Speciality
Foods include the following profiles, trends, and outlooks (see attached information for more
details). 

U.S. Retail sales of Gourmet Foods & Beverages 1998-2003

Year Sales (in millions of dollars) Compound Annual Growth Rate (CAGR)
1998 $22,134 7.9%
1999 $23,887 8.3%
2000 $25,858 8.1%
2001 $27,948 8.2%
2002 $30,235 8.0%
2003 $32,688 8.1%
Share of the U.S. Retail sales of Gourmet Foods & Beverages by Outlet 2002

Outlet Type Percentage of Sales

Supermarkets & Grocery Stores 44.6%
Gourmet/Specialty Stores 34.3%
Warehouse Club 4.9%
All Other Outlets* 16.2%
*Includes continent stores, natural food supermarkets, ethnic stores, mass merchandisers,

drug stores, mail-order & internet sales, and alternative channels.

Americans are developing a bigger appetite for more upscale foods. There are reasons behind
this, starting with higher discretionary incomes, better educations, more frequent travel, more
fine dining, endless celebrity chefs on TV, and more exposure to ethnic foods. As a
consequence, average American families--not just the affluent ones-- are becoming increasingly
adventurous in their diets.

A growing number of consumers also perceive gourmet foods as an affordable treat--not

something limited to the very rich. As Andrea Kelly, group brand manager for Ferrero Rocher
Chocolate, told the press, "People across all economic strata have at least a couple dollars to
buy something that will be a treat for them." This is borne out by the proliferation of Starbucks
cafes, and translated into the retail success of products like Starbucks frappuccino bottled
beverages. Likewise, Simmons Market Research Bureau demographics data show that although
gourmet foods and beverages generally hold the highest appeal to the highest-income groups,
there are also strong pockets of interested consumers in more moderate income brackets.

According to Simmons, ethnic/foreign foods are definitely popular among Americans. More than
41% of those surveyed agree that they "enjoy eating authentic foreign foods" and over 20%
say they enjoy eating them "a lot". By comparison, 18% of consumers agree with the
statement that they "try to eat gourmet food whenever I can" and less than 6% agree a lot. A
bit further down the list is "prefer food presented as an art form," with just 15% agreeing and
less than 5% agreeing a lot.

There has long been a synergy between the natural foods industry and the gourmet foods
industry.  From the early days of the health food movement and the organic food movement,
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 Sarrica's Market

Baby Boomers have been in the forefront of demanding healthy foods. Now, with the aging of
the Baby Boomer generation, says John Roberts, president of the NASFT, "health concerns will
make products that carry the words 'natural,' 'organic,' 'healthy,' and 'fresh'  more saleable." 
Marketers are also appealing to consumers' social consciences by offering products that are
good for the environment and the workers who produce them, such as sustainable, shade-
grown, and fair-trade coffees. 

More and more health and natural foods stores are carrying upscale, gourmet food items that
meet their quality standards. For example, large natural food chains such as Whole Foods
Market feature a wide assortment of upscale products ranging from organic produce, fresh
baked goods, and cheeses produced from hormone-free milk, to a huge variety of packaged dry
groceries. Their broad product mix and focus on high-quality foods draw consumers seeking
gourmet foods as well as traditional health foods.

Sarrica's Market realizes that there is a growing demand for speciality food items and a
significant percentage of visitors and locals demanding naturally grown, organic specialty
foods. We plan to pay attention to these trends and provide our customers with these
products. 

4.3 Service Business Analysis

We are part of the retail grocery and prepared food industry, as well as the small-scale deli
industry. In particular, our portion of the industry is "gourmet food stores." This encompasses a
wide range of specialty import shops, high-end delicatessans and cafes, and natural foods
stores.

Gourmet food stores typically have relations with a number of far-flung distributors around the
world, and access to direct sellers for major foreign brands. Large gourmet chains, like Bread
and Circus, can benefit from economies of scale and obtaining more hard-to-find items in bulk.
Smaller, owner-operated stores such as ours pay higher prices and have less space to store
overstock or seasonal items.

Our success will depend on knowing our clientele, and what they want. Our challenges are to
keep enough popular items in stock for repeat customers, while introducing new and seasonal
items and specials frequently enough to keep buyers intrigued.

Many gourmet food stores offer meals or individual dishes prepared in the store. In addition to
our frozen pre-made selections, Sarrica's Market will have a deli, open for breakfast, lunch and
dinner, and an in-store seating area. This part of our business competes with local
restaurants and grocery stores. Our deli must offer foods that are familiar enough not to
intimidate customers, but interesting, with new combinations or unique ingredients, to provide
them with a sense of adventure and indulgence. The deli and the store offerings should
complement each other.

4.3.1 Competition and Buying Patterns

In the gourmet food store industry, businesses must distinguish themselves from competitors
(grocery stores, restaurants, cafes) by offering unique, hard-to-find groceries, and/or
interesting, difficult-to-make prepared foods. They must convince customers that the special
quality of their products and service is worth the price premium they pay.

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 Sarrica's Market

In Moab, customers shop for groceries based on convenience, selection, and price. Sarrica's
market does not intend to compete with regular grocery stores on standard items - toilet paper,
dog food, canned tuna, etc. Instead, we will exploit a previously unoccupied grocery niche: the
gourmet food store, offering items otherwise unobtainable locally. Moab residents looking for
gourmet foods are also looking for convenience, selection and price, and our competitors for
their business (stores in larger towns, online, etc) are less convenient (farther away or longer
waits for delivery), although they offer similar selections and prices. Visitors to Moab are
looking for treats and meals that match their definitions of their trips: adventures, indulgent
holidays, or experiencing new and interesting sights and sensations. Sarrica's will offer foods
that fit all of these desires.

Moab residents are used to long winters with frequent snowfall, making roads between here
and the major cities obstacles. Our convenience factor in the winter for these residents is thus
much higher than our competitors. For visitors, we offer a convenient alternative to bringing
gourmet foods with them from home, and a more interesting shopping and dining experience
than can be found in other local stores and restaurants.

5.0 Strategy and Implementation Summary

Our strategy will exploit our advantages over the competition (location, convenience, and high
quality) with carefully-tracked milestones for growth.

Marketing
Initial marketing efforts for opening will be geared towards generating name recognition and
making a clear distinction between Sarrica's and other local competitors. Follow-up marketing
programs will encourage repeat visits and assist customers in the understanding,
appreciation, and preparation of our products.

Sales and Pricing

We will gear prices towards our competitors in the nearest cities and online, with a small
"convenience" increase for offering them locally. This will offset our distribution costs. Local
discounts, daily specials, and new products will satisfy customers they are getting a good value,
while keeping them intrigued. Our emphasis on consistently good service, from special orders
to recipe help, will make new customers repeat customers.

Alliances
Sarrica's Market will aggressively pursue relations with local sporting goods outfitters (picnic
lunches for hikers), restaurants (featured gourmet ingredient of the week), and local farmers
and artisans (fresh local foods and souvenirs).

5.1 Competitive Edge

 Location is critical to success.  Our store needs to be on Main Street or just off Main Street
so we can take advantage of walk-by and drive-by traffic. We also need adequate parking to
make shopping at our store convenient for drivers.

 Convenience. Moab residents and visitors are willing to pay a little bit more for good food
and the convenience of being able to get what they want without having to travel out of
town or order over the internet.  Our customers will purchase our food because it is
authentic and delicious.

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 Sarrica's Market

 High quality.  Focusing on high quality international food will draw customers from the
competition, as well as create a local market that has not existed before in Moab. If the
prices are reasonable and the food is good, we will have growth through repeat business.

5.2 Marketing Strategy

Our marketing strategy consists of promotional advertisements in local newspapers, the yellow
pages, and at local businesses, postcards & flyers sent through the mail, and promotional
coffee mugs given to local customers that can be filled and refilled at a discount.  We also plan
on supporting the community radio station in exchange for mentioning us as an underwriter;
giving free product samples to our customers; and offering cooking classes and recipes that
introduce customers to our products.

5.3 Sales Strategy

Sarrica's Market most important sales strategy is developing an environment in which

customers will return time-after-time because our market provides knowledgeable, friendly
staff, quality products, and a comfortable atmosphere that fills their needs. 

When customers visit our store, they will know they are entering a clean facility with the best
service in the industry. Our pricing strategy will focus on providing high quality, hard to find
international products and services at a fair price.  Because our closest competition is far
away, we will be able to charge a little more for some products, but must be careful not to price
our items too high or customers will continue to stock up on specialty foods when they visit
large cities or will buy over the internet.

We will make use of local discounts, daily specials, and new products to keep customers
interested and to help them feel they are getting a good value. Sarrica's Market intends to
listen to its customers and collect their feedback through surveys and friendly conversation, in
order to determine areas where we can expand and/or improve.  We want Sarrica's Market to
become a staple in the local community, as well as a "must stop shop" to vacationers visiting
Moab.

5.4 Strategic Alliances

Sarrica's Market will work to form strategic alliances with local businesses, including: outfitters,
hotels, and restaurants.  We will also form relationships with local produce growers and artists
to customize the food/gift items we sell and enhance our presence in the community.

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5.5 Sales Forecast

The following assumptions, table and chart illustrate our conservative sales forecast.

Assumptions:

 The average item sold in the market will cost $4.50

 $20.00/average sale x 40 people/day x # of days in January, February, November, and
December (slow season).
 $30.00/average sale x 75 people/day x # of days in each month from March-October (busy
season).

Chart: Sales by Year

Sales by Year

$500,000

$450,000
Grocery Items
$400,000
Delicatessen - Cheese, meat, produce
$350,000

$300,000 Drinks

$250,000 Frozen
$200,000 Gift Merchandise
$150,000
Other
$100,000

$50,000

$0
Year 1 Year 2 Year 3

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 Sarrica's Market

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Grocery Items $175,600 $184,380 $193,599

11 12
Delicatessen - Cheese, meat, produce $126,000 $132,300 $138,915

10Month
Drinks $87,000 $91,350 $95,918

9Month
Frozen $38,100 $40,005 $42,005
Gift Merchandise $30,000 $31,500 $33,075

8Month
Other $5,200 $5,200 $5,200

7 Month
Total Sales $461,900 $484,735 $508,712

6 Month
Direct Cost of Sales Year 1 Year 2 Year 3

5 Month
Grocery Items $105,360 $107,467 $109,617
Delicatessen - cheese, meat, produce $75,600 $77,112 $78,654

4 Month
Drinks $52,200 $53,244 $54,309
Frozen 3 Month $22,860 $23,317 $23,784
Gift Merchandise $18,000 $18,360 $18,727
2 Month

Other $3,120 $3,120 $3,120

1 Month

Subtotal Direct Cost of Sales $277,140 $282,620 $288,210

Month
Month

Chart: Sales Monthly

Sales Monthly
$50,000
$45,000
Grocery Items
$40,000
$35,000 Delicatessen - Cheese, meat, produce
$30,000 Drinks
$25,000
Frozen
$20,000
$15,000 Gift Merchandise

$10,000 Other
$5,000

$0

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 Sarrica's Market

5.6 Milestones

The following table presents important events, their scheduled start and ending dates,and the
person(s) who will accomplish the task.

Table: Milestones

Milestones

Milestone Start Date End Date Budget Manager Department

Do Start-up Marketing 1/1/2004 1/15/2004 $4,000 Rosie Marketing
Enter Business Plan Competiton 3/1/2004 5/31/2004 $0 Rosie Owners
Secure Loans 9/1/2004 9/15/2004 $120,000 Rosie Admin
Secure Building 10/1/2004 11/1/2004 $0 Rosie Admin
Renovate Building 11/1/2004 12/1/2004 $14,000 Andy, Cathy, Rosie Admin
Purchase Equipment/Supplies 4/1/2004 12/15/2004 $30,000 Andy, Cathy, Rosie Mgmt Team
Order Start-up Inventory 11/1/2004 12/15/2004 $20,000 Andy, Cathy, Rosie Mgmt Team
Create Website 12/1/2004 12/15/2004 $1,000 Rosie Web Designer
Open Doors 1/1/2005 1/1/2005 $0 Andy,Cathy, Rosie All
Achieve sales of at least $45,000 3/1/2005 3/31/2005 $0 All All
Evaluate/Revise Plan 1/1/2005 12/31/2005 $0 Andy, Cathy, Rosie Admin
Off Season losses below $3,200 11/1/2005 11/31/05 $0 Andy, Cathy, Rosie Admin
Totals $189,000

Chart: Milestones

Milestones

Do Start-up Marketing

Secure Loans

Renovate Building

Order Start-up Inventory

Open Doors

Evaluate/Revise Plan

Q1 `04 Q2 Q3 Q4 Q1 `05 Q2 Q3 Q4

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 Sarrica's Market

6.0 Web Plan Summary

Sarrica's Market's website is intended to be an enjoyable virtual shopping experience for our
customers. Our website will be simple, elegant, and well designed.  It is important that
our website is kept current and provides a format in which customers can easily preview gift
baskets and other groceries.

6.1 Website Marketing Strategy

Sarrica's Market website will grow in popularity as we inform our customers about it.  We will
let customers know about our gift basket service and online shopping options when ever it
seems appropriate. We will display our web address in the store and print our it on our
promotional materials, including advertisements, bags, and mugs.

6.2 Development Requirements

We will hire a company to design our initial web site and will require access to the template so
that our staff can make additions or changes to it at will.

7.0 Management Summary

Sarrica's Market is a small, family-run business with four owners.  Two of the owners (Andy and
Cathy) will be the managers for the store until it is determined we need to hire additional staff. 
The other two owners will maintain outside jobs, help out when needed in the store, and do the
administrative tasks.

Owner/Manager (Andy Boone):  Deli Manager

 Manages deli
 Works with Merchandise Manager
 Does hiring
 Order deli items

Owner/Manager (Cathy O'Connor):  Merchandise Manager

 Makes merchandise decisions
 Works with Deli Manager
 Orders Merchandise
 Does marketing/promotions

Owner/Manager (Rosie O'Connor):  Book Keeper/Administrator

 Keeps books
 Pays taxes
 Does payroll
 Helps with store operations when necessary

Owner/Manager (Kenny VanStone):  Web Master/Support

 Manages website

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 Sarrica's Market

 Helps with store operations when necessary

7.1 Personnel Plan

The personnel plan is illustrated in the table below:

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Owners: Managers (2) $48,000 $48,000 $52,000
Clerks (1-2) $25,600 $25,600 $25,600
Accounting/Books (1) $2,400 $5,000 $5,000
Cooks/Kitchen (1) $10,240 $10,240 $10,240
Other $0 $0 $0
Total People 4 6 6

Total Payroll $86,240 $88,840 $92,840

8.0 Financial Plan

As our Sales Forecast made clear, profits will initially be seasonal. We expect to sustain small
losses in the winter months for the first year, until our local clientele is fully established.
Summer sales increases are based on the much larger number of potential customers in Moab
then, and the trend for visitors to spend more per purchase than the locals.

We have planned for this seasonal variance, and the funding we are requesting will help to
maintain a positive  cash balance throughout the first three years, until we become fully
profitable. The owners are receiving no dividends, and have some margin to reduce their own
salaries from what is projected to cushion any unexpected short-term shortfalls.

Our partnership agreement includes an exit plan (see topic 9.0, below), with clear agreements
on what constitutes "success" or "failure" in each timeframe. If the businesses sustains larger
than acceptable losses, our chief priority will be repaying our creditors, with recouping of
owner investments as the last item on the payback list.

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8.1 Break-even Analysis

Our estimated monthly revenue break-even point includes payroll, rent, utilities, cost of goods,
and other operating costs.  We expect summer sales to make up for the slow winter months.

Being a family-run business will be an asset, because we will have the flexibility to adjust our
expenses each month in order to maintain a positive cash flow.

Chart: Break-even Analysis

Break-even Analysis
$9,000

$6,000

$3,000

$0

($3,000)

($6,000)

($9,000)

($12,000)

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

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

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $32,425

Assumptions:
Average Percent Variable Cost 60%
Estimated Monthly Fixed Cost $12,970

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8.2 Projected Profit and Loss

Projected profit and loss illustrated in the following table and charts. Sarrica's Market will be
profitable early in the first year, with net profit rising over the next two years.

Chart: Profit Monthly

Profit Monthly
$3,000

$2,500

$2,000

$1,500

$1,000

$500

$0

($500)

($1,000)

($1,500)

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

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

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 Sarrica's Market

Chart: Profit Yearly

Profit Yearly

$40,000

$36,000

$32,000
$28,000

$24,000

$20,000

$16,000

$12,000
$8,000

$4,000

$0
Year 1 Year 2 Year 3

Chart: Gross Margin Monthly

Gross Margin Monthly

$20,000

$18,000

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

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

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 Sarrica's Market

Chart: Gross Margin Yearly

Gross Margin Yearly

$210,000

$180,000

$150,000

$120,000

$90,000

$60,000

$30,000

$0
Year 1 Year 2 Year 3

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 Sarrica's Market

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $461,900 $484,735 $508,712
Direct Cost of Sales $277,140 $282,620 $288,210
Hidden Row $0 $0 $0
Total Cost of Sales $277,140 $282,620 $288,210

Gross Margin $184,760 $202,115 $220,501

Gross Margin % 40.00% 41.70% 43.35%

Expenses
Payroll $86,240 $88,840 $92,840
Marketing/Postage/Other $6,000 $6,000 $6,000
Depreciation $2,500 $2,500 $2,500
Legal $1,200 $1,200 $1,200
Books/Accounting $1,200 $2,400 $2,400
Licenses/Permits/Memberships $900 $900 $900
Delivery/Transportation $4,800 $4,800 $4,800
Insurance $3,600 $3,600 $3,600
Rent $30,000 $30,000 $30,000
Utilities $12,000 $12,000 $12,000
Equipment/Supplies $4,800 $4,800 $4,800
Building/Equipment Maintenence $1,200 $1,200 $1,200
Payroll Taxes $0 $0 $0
Other $1,200 $1,200 $1,200

Total Operating Expenses $155,640 $159,440 $163,440

Profit Before Interest and Taxes $29,120 $42,675 $57,061

EBITDA $31,620 $45,175 $59,561
Interest Expense $5,997 $5,107 $4,179
Taxes Incurred $6,937 $11,270 $15,865

Net Profit $16,186 $26,297 $37,018

Net Profit/Sales 3.50% 5.43% 7.28%

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 Sarrica's Market

8.3 Projected Cash Flow

Below is our projected cash flow. Sarrica's will maintain a positive cash balance while covering
expenses and repaying our loan.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $461,900 $484,735 $508,712
Subtotal Cash from Operations $461,900 $484,735 $508,712

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 $461,900 $484,735 $508,712

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $86,240 $88,840 $92,840
Bill Payments $334,497 $365,192 $376,920
Subtotal Spent on Operations $420,737 $454,032 $469,760

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 $14,286 $14,285 $14,285
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $435,023 $468,317 $484,045

Net Cash Flow $26,877 $16,418 $24,666

Cash Balance $42,577 $58,996 $83,662

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 Month
2
Sarrica's Market

MonthMonth
1
Chart: Cash

Cash
$50,000

$40,000

$30,000

$20,000 Net Cash Flow

Cash Balance
$10,000

$0

($10,000)

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 Sarrica's Market

8.4 Projected Balance Sheet

Our projected Balance Sheet, based on well-researched sales and expense forecasts, shows a
steadily increasing net worth.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $42,577 $58,996 $83,662
Inventory $16,368 $26,633 $27,160
Other Current Assets $5,000 $5,000 $5,000
Total Current Assets $63,945 $90,628 $115,822

Long-term Assets
Long-term Assets $20,000 $20,000 $20,000
Accumulated Depreciation $2,500 $5,000 $7,500
Total Long-term Assets $17,500 $15,000 $12,500
Total Assets $81,445 $105,628 $128,322

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $18,845 $31,016 $30,976
Current Borrowing $0 $0 $0
Other Current Liabilities $0 $0 $0
Subtotal Current Liabilities $18,845 $31,016 $30,976

Long-term Liabilities $85,714 $71,429 $57,144

Total Liabilities $104,559 $102,445 $88,120

Paid-in Capital $24,000 $24,000 $24,000

Retained Earnings ($63,300) ($47,114) ($20,817)
Earnings $16,186 $26,297 $37,018
Total Capital ($23,114) $3,183 $40,201
Total Liabilities and Capital $81,445 $105,628 $128,322

Net Worth ($23,114) $3,183 $40,201

8.5 Business Ratios

The following table outlines some of the more important ratios from the Gourmet Food
Stores industry. The final column, Industry Profile, details specific ratios based on the industry
as it is classified by the Standard Industry Classification (SIC) code, 5499.

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 Sarrica's Market

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry Profile
Sales Growth n.a. 4.94% 4.95% 3.96%

Percent of Total Assets

Inventory 20.10% 25.21% 21.17% 19.65%
Other Current Assets 6.14% 4.73% 3.90% 37.17%
Total Current Assets 78.51% 85.80% 90.26% 65.22%
Long-term Assets 21.49% 14.20% 9.74% 34.78%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 23.14% 29.36% 24.14% 24.57%

Long-term Liabilities 105.24% 67.62% 44.53% 25.08%
Total Liabilities 128.38% 96.99% 68.67% 49.65%
Net Worth -28.38% 3.01% 31.33% 50.35%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 40.00% 41.70% 43.35% 32.20%
Selling, General & Administrative Expenses 40.11% 38.22% 35.79% 17.91%
Advertising Expenses 0.00% 0.00% 0.00% 1.57%
Profit Before Interest and Taxes 6.30% 8.80% 11.22% 0.87%

Main Ratios
Current 3.39 2.92 3.74 1.96
Quick 2.52 2.06 2.86 0.98
Total Debt to Total Assets 128.38% 96.99% 68.67% 61.35%
Pre-tax Return on Net Worth -100.04% 1180.13% 131.54% 3.41%
Pre-tax Return on Assets 28.39% 35.57% 41.21% 8.82%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 3.50% 5.43% 7.28% n.a
Return on Equity 0.00% 826.09% 92.08% n.a

Activity Ratios
Inventory Turnover 10.82 13.14 10.72 n.a
Accounts Payable Turnover 18.75 12.17 12.17 n.a
Payment Days 27 24 30 n.a
Total Asset Turnover 5.67 4.59 3.96 n.a

Debt Ratios
Debt to Net Worth 0.00 32.18 2.19 n.a
Current Liab. to Liab. 0.18 0.30 0.35 n.a

Liquidity Ratios
Net Working Capital $45,100 $59,612 $84,845 n.a
Interest Coverage 4.86 8.36 13.66 n.a

Additional Ratios
Assets to Sales 0.18 0.22 0.25 n.a
Current Debt/Total Assets 23% 29% 24% n.a
Acid Test 2.52 2.06 2.86 n.a
Sales/Net Worth 0.00 152.27 12.65 n.a

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 Sarrica's Market

Dividend Payout 0.00 0.00 0.00 n.a

9.0 Exit Strategy

The owners of Sarrica's Market will exit this endeavor after they have created a flourishing
business that could be sold for a substantial profit and/or as a franchise that could
serve rural communities across the country.  It is the owners' intention to run this business
until they are ready to retire or have decided to sell the business and start another.   

In the event the proposed plan is not successful the owners will implement necessary measures
to exit the business endeavor with minimal damage to the owners and investors. All equipment
and merchandise will be sold to cover any outstanding debts. Any remaining debt will be paid
by the owners in the form of monthly payments untill all debts are paid in full. Definitions of
"successful" and time limits for achieving milestones have been included in the owners'
partnership agreement.

The success of the business will be monitored monthly in the first year and quarterly in
subsequent years.  The owners are aware that it usually takes new businesses three years to
start turning a profit and that the business could operate at a loss during that time. The owners
will keep this in mind when evaluating the state of the business, and make adjustments when
possible to keep the business running with a positive cash flow. 

Acceptable loss has been determined; if the business exceeds this amount and is unable to
compensate the owners, we will begin the the process of closing the business and paying back
debt. 

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 Appendix

Table: Sales Forecast

Sales Forecast
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales
Grocery Items 0% $8,000 $7,800 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $18,000 $7,800 $8,000
Delicatessen - Cheese, meat, produce 0% $8,000 $7,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $12,000 $7,000 $8,000
Drinks 0% $4,000 $3,500 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $9,000 $3,500 $4,000
Frozen 0% $2,000 $1,800 $4,000 $3,500 $4,000 $3,500 $4,000 $4,000 $3,500 $4,000 $1,800 $2,000
Gift Merchandise 0% $2,500 $2,000 $3,000 $2,000 $3,000 $2,000 $3,000 $3,000 $2,000 $3,000 $2,000 $2,500
Other 0% $300 $300 $500 $500 $500 $500 $500 $500 $500 $500 $300 $300
Total Sales $24,800 $22,400 $46,500 $45,000 $46,500 $45,000 $46,500 $46,500 $45,000 $46,500 $22,400 $24,800

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
Grocery Items $4,800 $4,680 $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 $10,800 $4,680 $4,800
Delicatessen - cheese, meat, produce $4,800 $4,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $7,200 $4,200 $4,800
Drinks $2,400 $2,100 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $5,400 $2,100 $2,400
Frozen $1,200 $1,080 $2,400 $2,100 $2,400 $2,100 $2,400 $2,400 $2,100 $2,400 $1,080 $1,200
Gift Merchandise $1,500 $1,200 $1,800 $1,200 $1,800 $1,200 $1,800 $1,800 $1,200 $1,800 $1,200 $1,500
Other $180 $180 $300 $300 $300 $300 $300 $300 $300 $300 $180 $180

Subtotal Direct Cost of Sales $14,880 $13,440 $27,900 $27,000 $27,900 $27,000 $27,900 $27,900 $27,000 $27,900 $13,440 $14,880

Page 1
 Appendix

Table: Personnel

Personnel Plan
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Owners: Managers (2) 0% $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000
Clerks (1-2) 0% $1,280 $1,280 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $2,560 $1,280 $1,280
Accounting/Books (1) 0% $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Cooks/Kitchen (1) 0% $0 $0 $1,280 $1,280 $1,280 $1,280 $1,280 $1,280 $1,280 $1,280 $0 $0
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 4 4 6 6 6 6 6 6 6 6 4 4

Total Payroll $5,480 $5,480 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $5,480 $5,480

Page 2
 Appendix

Table: Profit and Loss

Pro Forma Profit and Loss

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Sales $24,800 $22,400 $46,500 $45,000 $46,500 $45,000 $46,500 $46,500 $45,000 $46,500 $22,400 $24,800
Direct Cost of Sales $14,880 $13,440 $27,900 $27,000 $27,900 $27,000 $27,900 $27,900 $27,000 $27,900 $13,440 $14,880
Hidden Row $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $14,880 $13,440 $27,900 $27,000 $27,900 $27,000 $27,900 $27,900 $27,000 $27,900 $13,440 $14,880

Gross Margin $9,920 $8,960 $18,600 $18,000 $18,600 $18,000 $18,600 $18,600 $18,000 $18,600 $8,960 $9,920
Gross Margin % 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00% 40.00%

Expenses
Payroll $5,480 $5,480 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $5,480 $5,480
Marketing/Postage/Other $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500
Depreciation $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208 $208
Legal $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Books/Accounting $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Licenses/Permits/Memberships $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75 $75
Delivery/Transportation $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Insurance $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300 $300
Rent $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500
Utilities $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Equipment/Supplies $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400 $400
Building/Equipment Maintenence $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100 $100

Total Operating Expenses $11,263 $11,263 $13,823 $13,823 $13,823 $13,823 $13,823 $13,823 $13,823 $13,823 $11,263 $11,263

Profit Before Interest and Taxes ($1,343) ($2,303) $4,777 $4,177 $4,777 $4,177 $4,777 $4,777 $4,177 $4,777 ($2,303) ($1,343)
EBITDA ($1,135) ($2,095) $4,985 $4,385 $4,985 $4,385 $4,985 $4,985 $4,385 $4,985 ($2,095) ($1,135)
Interest Expense $535 $529 $522 $516 $509 $503 $497 $490 $484 $477 $471 $464
Taxes Incurred ($564) ($850) $1,276 $1,098 $1,280 $1,102 $1,284 $1,286 $1,108 $1,290 ($832) ($542)

Net Profit ($1,315) ($1,982) $2,978 $2,563 $2,987 $2,572 $2,996 $3,001 $2,585 $3,010 ($1,942) ($1,265)
Net Profit/Sales -5.30% -8.85% 6.40% 5.69% 6.42% 5.71% 6.44% 6.45% 5.74% 6.47% -8.67% -5.10%

Page 3
 Appendix

Table: Cash Flow

Pro Forma Cash Flow

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

Cash from Operations

Cash Sales $24,800 $22,400 $46,500 $45,000 $46,500 $45,000 $46,500 $46,500 $45,000 $46,500 $22,400 $24,800
Subtotal Cash from Operations $24,800 $22,400 $46,500 $45,000 $46,500 $45,000 $46,500 $46,500 $45,000 $46,500 $22,400 $24,800

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 $24,800 $22,400 $46,500 $45,000 $46,500 $45,000 $46,500 $46,500 $45,000 $46,500 $22,400 $24,800

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 $5,480 $5,480 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $8,040 $5,480 $5,480
Bill Payments $560 $16,805 $18,246 $50,580 $33,301 $36,152 $33,292 $36,212 $35,182 $33,278 $35,198 $5,690
Subtotal Spent on Operations $6,040 $22,285 $26,286 $58,620 $41,341 $44,192 $41,332 $44,252 $43,222 $41,318 $40,678 $11,170

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 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191 $1,191
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 $7,230 $23,476 $27,476 $59,811 $42,531 $45,383 $42,522 $45,443 $44,412 $42,509 $41,869 $12,360

Net Cash Flow $17,570 ($1,076) $19,024 ($14,811) $3,969 ($383) $3,978 $1,057 $588 $3,991 ($19,469) $12,440
Cash Balance $33,270 $32,194 $51,218 $36,407 $40,375 $39,993 $43,970 $45,027 $45,615 $49,606 $30,137 $42,577

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 Appendix

Table: Balance Sheet

Pro Forma Balance Sheet

Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12
Assets Starting Balances

Current Assets
Cash $15,700 $33,270 $32,194 $51,218 $36,407 $40,375 $39,993 $43,970 $45,027 $45,615 $49,606 $30,137 $42,577
Inventory $20,000 $16,368 $14,784 $30,690 $29,700 $30,690 $29,700 $30,690 $30,690 $29,700 $30,690 $17,250 $16,368
Other Current Assets $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000
Total Current Assets $40,700 $54,638 $51,978 $86,908 $71,107 $76,065 $74,693 $79,660 $80,717 $80,315 $85,296 $52,387 $63,945

Long-term Assets
Long-term Assets $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000 $20,000
Accumulated Depreciation $0 $208 $417 $625 $833 $1,042 $1,250 $1,458 $1,667 $1,875 $2,083 $2,292 $2,500
Total Long-term Assets $20,000 $19,792 $19,583 $19,375 $19,167 $18,958 $18,750 $18,542 $18,333 $18,125 $17,917 $17,708 $17,500
Total Assets $60,700 $74,429 $71,561 $106,283 $90,274 $95,024 $93,443 $98,202 $99,051 $98,440 $103,213 $70,096 $81,445

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 $16,235 $16,540 $49,474 $32,092 $35,046 $32,084 $35,037 $34,076 $32,071 $35,024 $5,040 $18,845
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 $16,235 $16,540 $49,474 $32,092 $35,046 $32,084 $35,037 $34,076 $32,071 $35,024 $5,040 $18,845

Long-term Liabilities $100,000 $98,810 $97,619 $96,429 $95,238 $94,048 $92,857 $91,667 $90,476 $89,286 $88,095 $86,905 $85,714
Total Liabilities $100,000 $115,044 $114,159 $145,902 $127,330 $129,094 $124,941 $126,704 $124,552 $121,356 $123,119 $91,944 $104,559

Paid-in Capital $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000 $24,000
Retained Earnings ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300) ($63,300)
Earnings $0 ($1,315) ($3,297) ($319) $2,243 $5,230 $7,802 $10,798 $13,799 $16,384 $19,393 $17,451 $16,186
Total Capital ($39,300) ($40,615) ($42,597) ($39,619) ($37,057) ($34,070) ($31,498) ($28,502) ($25,501) ($22,916) ($19,907) ($21,849) ($23,114)
Total Liabilities and Capital $60,700 $74,429 $71,561 $106,283 $90,274 $95,024 $93,443 $98,202 $99,051 $98,440 $103,213 $70,096 $81,445

Net Worth ($39,300) ($40,615) ($42,597) ($39,619) ($37,057) ($34,070) ($31,498) ($28,502) ($25,501) ($22,916) ($19,907) ($21,849) ($23,114)

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