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Table of Contents

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


Chart: Highlights.......................................................................................................................................1
1.1 Solution...................................................................................................................................................1
1.2 Market.....................................................................................................................................................2
1.3 Opportunity.............................................................................................................................................2
1.4 Financial & Capital Requirements..........................................................................................................2
1.5 Objectives................................................................................................................................................2
2.0 Company Overview....................................................................................................................................2
2.1 Company Locations and Facilities..........................................................................................................3
2.2 Mission....................................................................................................................................................3
2.3 Ownership...............................................................................................................................................3
2.4 Keys to Success.......................................................................................................................................3
2.5 Management Summary...........................................................................................................................3
2.6 Management Team..................................................................................................................................4
2.7 Start-up Summary...................................................................................................................................5
Table: Start-up...........................................................................................................................................5
Chart: Start-up...........................................................................................................................................6
3.0 Product Summary........................................................................................................................................6
3.1 Textbook Exchange.................................................................................................................................6
3.2 Auctions..................................................................................................................................................7
3.3 Classifieds...............................................................................................................................................7
3.4 Retail.......................................................................................................................................................7
3.5 Teacher Evaluations................................................................................................................................8
3.6 Bloggers..................................................................................................................................................8
3.7 Future Products.......................................................................................................................................8
4.0 Market Analysis Summary.........................................................................................................................9
4.1 Market Growth........................................................................................................................................9
4.2 Market Trends.......................................................................................................................................10
4.3 Market Segmentation............................................................................................................................12
Table: Market Analysis...........................................................................................................................12
Chart: Market Analysis (Pie)..................................................................................................................12
4.4 Target Market Segment Strategy..........................................................................................................13
4.5 Competitive Anaylsis............................................................................................................................13
4.5.1 University Bookstores...................................................................................................................13
4.5.2 Online Bookstores & Retail Websites...........................................................................................14
5.0 Marketing Strategy....................................................................................................................................15
5.1 Strategic Alliances................................................................................................................................16
5.2 Promotion Strategy...............................................................................................................................16
5.3 Marketing Programs..............................................................................................................................16
6.0 Sourcing.....................................................................................................................................................17
7.0 Technology................................................................................................................................................17
8.0 Milestones.................................................................................................................................................18
Table: Milestones....................................................................................................................................18
Chart: Milestones....................................................................................................................................18
9.0 Financial Plan............................................................................................................................................19
9.1 Important Assumptions.........................................................................................................................19
Table: General Assumptions...................................................................................................................19
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Table of Contents

.....................................................................................................................................................................19
Table: Start-up Funding..........................................................................................................................20
9.3 Use of Funds.........................................................................................................................................21
9.4 Exit Strategy..........................................................................................................................................21
9.5 Key Financial Indicators.......................................................................................................................21
Chart: Benchmarks..................................................................................................................................21
9.6 Break-even Analysis.............................................................................................................................22
Table: Break-even Analysis....................................................................................................................22
Chart: Break-even Analysis....................................................................................................................22
9.7 Sales Forecast........................................................................................................................................23
Table: Sales Forecast..............................................................................................................................23
Chart: Sales Monthly..............................................................................................................................24
Chart: Sales by Year...............................................................................................................................24
9.8 Personnel Plan.......................................................................................................................................25
Table: Personnel......................................................................................................................................25
.....................................................................................................................................................................25
9.9 Projected Profit and Loss......................................................................................................................26
Table: Profit and Loss.............................................................................................................................26
Chart: Profit Monthly..............................................................................................................................27
Chart: Profit Yearly.................................................................................................................................27
Chart: Gross Margin Yearly...................................................................................................................28
.................................................................................................................................................................28
Chart: Gross Margin Monthly................................................................................................................28
9.10 Projected Cash Flow...........................................................................................................................29
Table: Cash Flow....................................................................................................................................29
Chart: Cash..............................................................................................................................................30
9.11 Projected Balance Sheet......................................................................................................................31
Table: Balance Sheet...............................................................................................................................31
9.12 Business Ratios...................................................................................................................................31
Table: Ratios...........................................................................................................................................32
Table: Sales Forecast.........................................................................................................................................1
...........................................................................................................................................................................1
Table: Personnel................................................................................................................................................2
...........................................................................................................................................................................2
Table: General Assumptions.............................................................................................................................3
...........................................................................................................................................................................3
Table: Profit and Loss.......................................................................................................................................4
...........................................................................................................................................................................5
Table: Cash Flow..............................................................................................................................................6
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Table: Balance Sheet.........................................................................................................................................7

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The College Cafe - www.thecollegecafe.com

1.0 Executive Summary


The College Cafe is a student-to-student Internet marketplace providing college students with
the opportunity to buy, sell and trade college textbooks, participate in auctions, post classified
ads, provide teacher evaluations, and buy products for college. The College Cafe's target
market consists of over 15.8 million college students who spend $200 billion annually. The
College Cafe was founded in July and is presently in its start-up stage.

Chart: Highlights

Highlights
$3,600,000
$3,200,000
$2,800,000
$2,400,000

Sales

$2,000,000

Gross Margin

$1,600,000

Net Profit

$1,200,000
$800,000
$400,000
$0
Year 1

Year 2

Year 3

1.1 Solution
The College Cafe will enable students to buy, sell, and trade used textbooks directly to other
students, by-passing the university bookstores. By selling textbooks to other students, the
seller can receive more money than the bookstore will pay and the buyer can pay less than the
bookstore charges. In addition to textbooks, students will be able to sell class notes, old tests,
computers, dorm accessories, used CDs, tutoring services or anything students wish to sell via
an online student-to-student marketplace. In addition, the College Cafe will offer other services
such as classifieds, teacher evaluations, weblogs (bloggers), specialized content and retail.
The College Cafe will establish itself as the leading online student-to-student marketplace
by combining extensive market-specific expertise with Internet technologies to generate
revenue while creating a win-win solution for students. The College Cafe will achieve market
dominance by utilizing extensive domain experience, a local grass roots marketing strategy, an
exceptional management team, superior software, and the formation of strategic alliances,
memberships and partnerships with companies within the college market.

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1.2 Market
The U.S. college student market is a growing yet underserved niche market. The
U.S. Department of Education expects the U.S. college student market to grow from 15.8
million students to 17.2 million in the next five years. According to Harris Interactive college
students are expected to spend over $200 billion this year.
1.3 Opportunity
College students are eager to find ways to get "quick cash" at the end of every semester. One
method college students use is to sell their old textbooks at the end of every semester,
however the re-sell market is controlled by the local university bookstore. Because university
bookstores monopolize the market, students receive only a fraction of the value paid for the
book, typically 75% or less of the purchase prices. The bookstores then re-sell the books back
to other students, receiving over 125% profit. The current situation creates a lose-lose
situation for students and a win-win situation for bookstores. Students are looking for
convenient, money saving ways to purchase textbooks and to receive more value when reselling textbooks at the end of each semester.
1.4 Financial & Capital Requirements
According to the opportunities and requirements for The College Cafe described in this business
plan, we have determined the following financial projections:

Generate exceptional revenues by the end of year one.


Report profits during the 9th month of operation.
Exceed a 1.5x increase in sales and profits by the end of year three.

The College Cafe will require an initial seed investment as well as later rounds of investment.
The initial seed capital will be used for marketing and customer acquisition, software and
website development.
1.5 Objectives
The College Cafe will strive to achieve the following objectives:

Become the leading Internet student-to-student marketplace


Attract 500,000 registered users in the first year
Achieve 50,000 visits per month
Establish sustainable profitability within the first year

2.0 Company Overview


The College Cafe was founded in July and is presently in its start-up stage. The College Cafe
website has been in operation with limited functionality since August of last year. The College
Cafe is currently being test marketed at Georgia State University.

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The College Cafe - www.thecollegecafe.com

2.1 Company Locations and Facilities


800 Peachtree Street - Unit 8429
Atlanta, GA 30308
United States
www.thecollegeCafe .com
www.thecollegeCafe .net
The College Cafe's data center is hosted and maintained by Atl-Connect Internet Services. AtlConnect is located in Atlanta, Georgia.
2.2 Mission
The College Cafe's mission is to provide college students a valuable and unique source for
products, services and information. In order to achieve our mission, The College Cafe commits
to the following philosophies:

It's all about the product.


Our customers are our employers.
Don't be greedy.
Keep our employees happy.

2.3 Ownership
The College Cafe is a Limited Liability Company and is solely owned by its founder, Gerald
Owens.
2.4 Keys to Success
Our key to success will lie in our ability to execute our business model. In order to achieve
success, we need to focus on the following areas to establish The College Cafe as a successful
and profitable enterprise. They are:

Recruit an exceptional management and marketing team with extensive domain experience
in the college market.
Create and maintain a "Grass Roots" marketing campaign.
Offer innovative and unique products and services.
Form strategic alliances and partnerships with companies suppling products to the college
market.

2.5 Management Summary


The strength of The College Cafe's management team stems from the combined expertise in
both management and technical areas. The College Cafe recognizes that additional staff is
required to properly support marketing, sales, research, and support functions. Currently, The
College Cafe is supported by three people with experience in e-commerce strategy, website
architecture and design and graphic design. Additional employees may be required in the areas
of senior level management, Web development, marketing, sales, human resources/recruiting,
administration, customer support and other critical operational positions.

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The College Cafe - www.thecollegecafe.com

The College Cafe will utilize current college students to fill positions in the areas of regional
campus marketing, local advertisement sales, administration, customer support other noncritical operational positions. These positions will be full-time, part-time and intern positions
depending on the local market. Using current college students will enable The College Cafe to
receive inexpensive local employment and valuable market feedback from The College Cafe's
target market while also providing real world work experience to college students.
The College Cafe will utilize consultants and contractors during website enhancements and
development efforts.
Board of Directors
At this time The College Cafe is seeking individuals for a Board of Directors. These individuals
will include highly qualified business and industry professionals/experts along with members of
the investment team. These individuals will assist our management team in making
appropriate decisions, forming strategic alliances and taking the most effective action to be the
industry leader.
2.6 Management Team
Our management team consists of three dedicated employees and two technical advisors.
Their backgrounds consist of more than 30 years of experience in e-commerce, marketing and
the Internet technology. In addition to their professional experience, the management team
has over 30 years of college domain experience.
Gerald Owens, Founder, Chief Technical Officer/Web Development
Mr. Owens has over 12 years of work experience including engineering, programming and
sales. He was successful in founding the start-up company, DCSi-Online, an online
intermediary serving the building automation industry. Mr. Owens has a Bachelor of Science
degree in Electrical Engineering form North Carolina State University and a MBA with a
concentration in E-commerce and Computer Information Systems from Georgia State
University. He is an active member of the Technology Association of Georgia (TAG) and the
Southeastern Regional Internet Society (SERIS).
Kelly Mitchell - Online User Experience and Marketing
Ms. Mitchell has 7 years' experience in the interactive space, specializing in online branding,
marketing, and user experience design. Her most recent position involves leading a user
experience team for a Fortune-50 company. Ms. Mitchell has a Bachelor of Science degree
from the University of Georgia and has received art direction training from the Woodruff School
of Art in Atlanta. She is an active member of the Atlanta Interactive Marketing Association.
Andra Powers - Marketing and Communications
Ms. Powers has 10 years marketing and communications experience. She has worked for two
major corporations headquartered in Atlanta, Georgia and has experience in sales, employee
communications, public relations, interactive communications and technology marketing. Ms.
Powers has a wealth of knowledge regarding interactive web management, project
management, account/vendor management, customer needs analysis, concept strategy, and
building quality strategic interpersonal relationships. She has a Bachelor of Science degree in
Communications from Florida State University.

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The College Cafe - www.thecollegecafe.com

Chris Durant - Advisor


Mr. Durant has 10 years technology and business experience in system integration. He has
worked for both large corporations, such as Georgia Pacific Corporation, and small start-up
firms. Mr. Durant has a Bachelor Business Administration in Management Science and
Computer Information Systems from the University of Georgia as well as an MBA and graduated
top of the MS/CIS program from Georgia State University with a concentration in electronic
Commerce. He also holds extensive network design experience and is an industry certified
Network Engineer.
Brian Dupree - Advisor
Mr. Dupree has 20 years experience in the technology industry. He has extensive experience
managing and developing mission critical software systems for business applications. Recently,
he has worked as a senior consultant for an e-business consulting company where he has
participated in advanced web application projects. Mr. Dupree holds a Masters Degree in
Mathematics and Computer Science and a MBA with a concentration in e-commerce from
Georgia State University.
2.7 Start-up Summary
Our start-up costs assumptions are shown in the following table and chart, and include Web
hosting, software, development and marketing expenses. The start-up costs were financed by
direct owner investment.
Table: Start-up

Start-up
Requirements
Start-up Expenses
Domain Name Registration
SSL Encrynption
GeoTrust True Site Certificate
Auction & Classified Software (Xcent)
Legal Fees
Utilitizes
Merchant Account Fees
Computers (2 @ $2000)
Programming & Site Development
Site Hosting (1st 3 months)
Miscellance Expenses
Beta Launch Promotions
Search Engine Registration
Total Start-up Expenses

$15
$100
$100
$800
$150
$100
$200
$4,000
$50,000
$120
$1,000
$1,000
$100
$57,685

Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets

$2,315
$5,000
$150,000
$157,315

Total Requirements

$215,000

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Chart: Start-up

Start-up
$210,000
$180,000
$150,000
$120,000
$90,000
$60,000
$30,000
$0
Expenses

Assets

Investment

Loans

3.0 Product Summary


The College Cafe will offer college students a unique blend of products, services, and content
that is not offered by any single company on the Internet. The College Cafe will aggregate
participants, products, services and content to create a student-to-student marketplace and
retail website targeting 15.8 million college students. The following describe The College Cafe's
revenue models:
3.1 Textbook Exchange
The College Cafe will offer functionality to allow students to buy, sell and trade their used
textbooks with other students. Specifically, the Textbook Exchange functionality allows
students to post their textbooks online for sale or trade, upload images, and indicate the
condition of the book. Students looking for used textbooks will be able to search for used
textbooks for sale or trade in their local area or nationwide. A fee will be charge for posting
textbooks. The fee may vary based on the asking price of the textbook. Sample textbook
categories include:

Accounting
Business
Computer Science
Engineering
Marketing
History
Law
Physics
Political Science

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The College Cafe - www.thecollegecafe.com

3.2 Auctions
The College Cafe will offer a powerful auction package. The Auction functionality will have
many features such as Standard, Reverse, Multi Item, Dutch and Blind auctions; Flash Buy and
Proxy Bidding. A fee will be charged for posting items to be auctioned. The posting fee
structure will be similar to eBay's. Sample auctions categories include:

Textbooks
Class Notes
Old Tests
Used CDs & DVDs
Computer Equipment
Tickets
Electronics
Games
Dorm Furnishing

3.3 Classifieds
The College Cafe will offer fee based, student targeted, classifieds ads. Here many features
such as image upload, Web links and nested categories will be offered. A fee will be charged
for posting a classified. The amount charged will be based on the length of time the classified
will be posted. Sample classified categories include:

Textbooks
Class Notes
Tutors
Room Wanted
For Rent
For Sale
Tickets
Rides
Help Wanted
For Hire

3.4 Retail
The College Cafe will sell products targeted to college students. Margins will range from 10%
to 50% depending on the product. Sample product categories include:

Textbooks
CDs & DVDs
Computer Equipment
Electronics
Games
Appliances
Dorm Furnishings
University Merchandise
Clothes
General Merchandise

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The College Cafe - www.thecollegecafe.com

3.5 Teacher Evaluations


The College Cafe will enable students to post and review teacher evaluations. The teacher
evaluation functionality will be a value added service encouraging students to visit the site each
semester. Revenue for teacher evaluations will be generated from the sale of banner ad
space located within the teacher evaluation pages. Banner ad sales will be targeted toward
local businesses on or around campus. The fee for banner ad space will be determined by the
length of posting, number of users for teacher evaluations and demand.
3.6 Bloggers
The College Cafe will offer Weblogs (Bloggers) services with topics tailored toward students.
Weblog functionality will be a value added service to encourage students to return to the site.
Revenue for the Weblog will be generated from the sale of banner ad space located within the
Weblog pages. Depending on the Weblog topic, banner ad sales will be targeted toward either
local businesses in or around campus or national companies. The fees for banner ad space will
be determined by the length of posting, number of users for the Weblog and demand. Weblog
topics will include:

College Sports
Politics
Entertainment
Technology
News

3.7 Future Products


Overall, we conclude that our current products, services and banner ad strategy will ensure a
strong market presence and continued revenue growth. However as part of our growth model,
we will regularly examine new services, products, categories and content to support demand.
Brick & Mortar Locations - The College Cafe will evaluate opening retail outlets in proximity to
college campuses to support and complement the online presences. Franchise rights may also
be available.
Employment Opportunities - The College Cafe will offer a local and national job posting
service so that students may search for new opportunities within the local community and
nationwide. A fee will be charged for posting jobs.
Apartment Finder - The College Cafe will offer a local and national apartment finder service so
that students may search for apartments within the local community and nationwide. A fee will
be charged for postings.
Club & Organization Finder - The College Cafe will offer a local and national club and
organization finder service so that students may search for clubs and organization within the
local community and nationwide. A fee will be charged for posting.

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Targeted Content - The College Cafe will offer content. Sample topics will include:

News
Wine & Dine
Weather
What's Happening
Best Of

4.0 Market Analysis Summary


The U.S. college student market is a growing yet under-served niche market. The
U.S. Department of Education expects the U.S. college student market to grow from 15.8
million students in 2003 to 17.2 million in 2008. According to a Harris Interactive study
conducted in the spring of 2002, college students spend an estimated $200 billion dollars per
year. As of 2003, it is estimated that college students were spending $1.4 billion online.
John Geraci, Vice President of Youth Research at Harris Interactive concludes: "The college
consumer is easily overlooked since most information sources that marketers rely on for
tracking consumer behavior tend to under-represent college students. However, it is a
consumer group that marketers should recognize as offering substantial opportunity.
Connecting with consumers during the college years can pay great dividends, both now and
well into the future."
4.1 Market Growth
According to the findings from the 360 Youth/Harris Interactive College Explorer Study
estimated the U.S. college market will spend nearly $200 billion dollars a year.
University Bookstores
The National Association of College Stores estimated U.S./Canadian university bookstore sales
to be $11.12 billion for the 2001-2002 academic year and online textbooks sales to be an
estimated $1.8 billion. University bookstores sell a variety of items, ranging from textbooks to
toothpaste. The following table display the estimate of average product sales in the entire
university bookstore market, from largest to smallest segments[1].
Course materials

70.67%

$7.858 billion

General/trade books

3.40%

$.378 billion

Student supplies

5.49%

$.611 billion

Computer products

7.63%

$.849 billion

Insignia merchandise

7.85%

$.872 billion

Other merchandise

4.96%

$.552 billion

Total

100%

$11.12 billion

Textbooks
The total textbook/course materials market is estimated to be $7.8 billion based on sales data
for the 2001-2002 academic year. The textbook market is made up of three segments - new
texts, used texts, and custom-published materials(or course packs). The percent of total store
sales and estimated market size of each segment is provided below.

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New texts

54.71%

$6.1 billion

Used texts

14.86%

$1.6 billion

1.10%

$0.1 billion

70.67%

$7.8 billion

Course packs
Total Course Materials

Online Retail
Jupiter forecasts that online retail spending in the will grow by 28 percent in 2003 to $52
billion. The research company estimates that by 2007, online retail spending will reach $105
billion and account for five percent of all retail spending. Jupiter estimates that the online retail
will grow at an average annual growth rate of 21 percent between 2002 and 2007.
[1] National Association of College Stores (2000-2001)
4.2 Market Trends
The follow statistics indicate that college students are receptive to the Internet channel for the
products, services and content offered by the College Cafe. The following U.S. college student
statistics were based on a report by the Student Monitor and the Harris Interactive Explorer
Study.

99% of college students use the Internet


93% of college students use the Internet every month
72% of college students access the Internet at least daily
92% of college students own a computer
13% of college students plan on buying a computer in the next year
15% of college students indicated they are the first to buy a new tech gadget or device
Students average 9 hours per week online
Students average 9 hours per week watching TV
Students average 10 hours per week listening to the radio

According to the Harris Interactive Study, college students spend an average of $287 per
month on discretionary items (which is defined as spending on anything other than tuition,
room/board, rent/mortgage, books/school fees).

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Participation/Spending by College Students on Entertainment and Leisure Activities


Projected Yearly
Spending (in
millions)*

% Students
Participating in Past
Year

Purchase Videos/DVDs
(not including equipment)

$2,754

70%

Purchase Music CDs,


Tapes, etc.

$2,746

76%

Purchase Video Games


(not including equipment)

$2,284

37%

Vacation Travel

$4,607

61%

Purchase reading material


(not for use in school)

$1,009

83%

Going to Movies

$887

91%

Attending Music Concerts

$791

49%

Going to an Amusement
Park

$456

41%

Spending Category

Projections based on Spring 2002 360 Youth/Harris Interactive College Explorer Study; this
represents a partial list of categories for entertainment and leisure activities.
The National Association of College Stores estimates U.S. college store sales to be $11.12
billion for the 2001-2002 academic year. College stores sell a variety of items, ranging from
textbooks to toothpaste.

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4.3 Market Segmentation


The following table illustrates the future growth of rate of college students by age group and
sex.
SOURCE: U.S. Department of Commerce, Bureau of the Census, Current Population Reports,
Series P-25, Nos. 1092, 1095, and "National Population Estimates," December 2001, and
"Annual Projections of the Total Resident Population: 1999 to 2100," January 2000
Table: Market Analysis

Market Analysis

Potential Customers

Growth

18-24 years of age


25-29 years of age
Male
Female
Total

1%
2%
2%
2%
1.55%

Year 1

Year 2

Year 3

Year 4

Year 5

28,400,000
17,900,000
6,900,000
9,000,000
62,200,000

28,684,000
18,258,000
7,038,000
9,180,000
63,160,000

28,970,840
18,623,160
7,178,760
9,363,600
64,136,360

29,260,548
18,995,623
7,322,335
9,550,872
65,129,378

29,553,153
19,375,535
7,468,782
9,741,889
66,139,359

CAGR
1.00%
2.00%
2.00%
2.00%
1.55%

Chart: Market Analysis (Pie)

Market Analysis (Pie)

18-24 years of age


25-29 years of age
Male
Female

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The College Cafe - www.thecollegecafe.com

4.4 Target Market Segment Strategy


The potential market for The College Cafe consists of 15.8 million college students enrolled in
over 4,180 institutions. For the Phase 1 launch of The College Cafe, we plan to focus our
marketing effort on a subset market located in the Southeastern U.S. We plan to expand to
new markets with a phased approach focusing on a new region of the country each semester.
The Phase 1 target market segment will consist of the following universities:
University/College

Enrollment

Auburn University

21,505

Clemson University

16,396

East Carolina University

18,271

Emory University

11,300

Florida State University

30,401

Georgia State University

23,000

Georgia Tech

13,800

Miami-Dade Community College

46,834

Mississippi State University

15,628

North Carolina State

28,281

Tulane University

10,921

University of Alabama

18,342

University of Florida

45,114

University of Georgia

31,280

University of Kentucky

23,540

University of Miami

13,651

University of North Carolina

24,368

University of South Carolina

25,447

University of Tennessee

25,401

Total

419,940

Phase 2 will focus on additional colleges and universities located in the southeast with the
addition of colleges and universities in the Northeast.
4.5 Competitive Anaylsis
Competitors of The College Cafe includes traditional university bookstores, online textbook
retailers, textbook exchange sites, textbook price comparison sites, online auction sites and
online content specific sites targeting the college student market.
4.5.1 University Bookstores
The major objective and strategy of university bookstores is to maintain competitive pricing and
customer service. The strengths of the traditional university bookstores are current customer

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relationships and location to the University. The major weaknesses of university bookstores are
the limited product selection and lack of value added services that can be offered online.
The National Association of College Stores estimates U.S./Canadian university bookstore sales
to be $11.12 billion for the 2001-2002 academic year.
There are approximately 4,840 college bookstores serving 4,182 institutions in the United
States and 170 college stores in Canada. Larger universities will often have several stores to
serve students, smaller schools in a local area may be served by a single store, and several
schools in an urban community may share multiple retail outlets. While many college stores
share a common mission, they vary widely in size, location, ownership, and customer base.
The majority of stores are owned or operated by the university they serve. On-campus stores
are mostly institutional, but they may also be contract managed, cooperatives, or student
associations. Off-campus stores are typically privately owned.
Sales volume in college stores is determined by many factors, but the major influence on sales
seems most closely tied to the size of the institution served. According to the NACS College
Store Industry Financial Report 2003, average sales per college store were $6,320,556 while
the median was $3,303,062. The majority of college stores have less than $1 million in sales
each year.
According to the NACS College Store Industry Financial Report 2003, college stores returned a
median net income of 7.3% of net sales to their institutions.
NACS Membership by Sales Volume

Sales Volume in $$

Member Stores

Under $1 million

57.0%

$1 to $3 million

27.5 %

$3 to $7 million

9.8%

Over $7 million

5.8%

4.5.2 Online Bookstores & Retail Websites


The major objective and strategy of online competitors is to maintain brand awareness, offer
value added services, product selection/availability, order fulfillment and customer service. The
strengths of existing online bookstores and retail sites are current customer relationships and
brand awareness. The major weaknesses of online competitors is barriers to entry, concern
about security & fraud, shipping charges, on-time fulfillment and returns processing.
Based on the 2003 College Store Industry Financial Report, total online sales at university
bookstores for 2001-2002 are estimated to be $150 million or 1.41% of total college store
sales. With a "click and mortar" strategy, the university bookstore can offer the convenience of
web ordering, paired with:

Ease of returns
The ability to pick up items for immediate use
One-stop shopping

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The College Cafe - www.thecollegecafe.com

Accurate information on what textbooks students need for their courses


The trust and security of buying from a well-known source with an on-campus location

The following table lists some of the major independent online retailers not associated with a
university bookstore:
Company

Business Model

Amazon.com

Online retailer

Barnes & Noble.com

Online retailer

Bigwords.com

Allows student to buy and sell textbooks

Collegebooksdirect.com Buys and sells new and used textbooks


Collegeclub.com

Integrated media and ecommerce


Online retail

Ebay.com

Online Auction

Ecampus.com

Discount college textbooks


Merchandise
Limited content

Efollett.com

Online textbook retailer


Network of university bookstore for brick and
mortar presences

Half.com

Online Auction

JourneyEd.com

Online student discounts on software

Lazystudents.com

Online retail various college market merchandise


Online research papers assistance

Studentmarket.com

Online retail various college market merchandise

TextbooksDirect.com

Textbook price comparison engine

Textbooksource.net

Buys and sells used textbooks


Offline buy-back
Online sales

TextbooksX.com

Buys and sells new and used textbooks

Varsitybooks.com

Buys and sells new and used textbooks

5.0 Marketing Strategy


The College Cafe's customers will be the 15.8 million college students in the United States.
This segment is a niche market that has no single business entity accounting for any significant
percentage of total aggregated college student purchases.
The main business model for The College Cafe relies on college students providing textbooks,
auctions, classifieds and teacher evaluations available on the website. Therefore, our focus will
be on the marketing strategy to increase student traffic and usage. In turn, visitor volume and
transactions will maintain the inventory of products and services offered.
The College Cafe recognizes the key to success as an extensive promotion strategy to attract
users. Once additional funding is secured the advertising and promotion plan will be
implemented.

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The College Cafe - www.thecollegecafe.com

5.1 Strategic Alliances


The College Cafe is looking to form relationships with major companies in the college student
market. Companies that we will approach included university merchandise manufacturers or
resellers, specialized content suppliers, new and used textbook wholesalers and local
businesses.
5.2 Promotion Strategy
The College Cafe's overall advertising and promotional objectives are to:

Acquire customers and generate sales.


Position The College Cafe as the market leader.
Increase company awareness and brand name recognition among college students.
Collect market research to create immediate and long-term marketing plans.

5.3 Marketing Programs


The College Cafe will attract customers by using a mixture of traditional and online advertising
strategies to create a grassroots marketing campaign.
Since the majority of The College Cafe's customer acquisition will result from direct promotion
local to universities, The College Cafe will recruit current college students to fill positions in the
areas of campus marketing, local advertisement sales and implementation of a "grassroots"
marketing campaign.
The following is a list of advertising and promotional channels The College Cafe will utilize:
1. Posting Flyer in and around campuses
2. Direct Mailings
3. University and local newspaper advertising and inserts
4. Promotional item distribution
5. Advertisements at on-campus kiosk
6. "Welcome Back to School" registration booths
7. "Welcome Back to School" care-package inserts
8. Sponsorship of recreational/intermural team sports
9. Sponsorships of campus or community events
10. University and local newspaper advertising
11. Indoor/outdoor billboard advertisements at college sporting events
12. Banner ads on select related sites with a significant level of traffic
13. Links on related web sites
14. Traditional media including direct mailings, magazines, radio and TV
15. Registration with all the major search engines

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The College Cafe - www.thecollegecafe.com

6.0 Sourcing
The main business model for The College Cafe relies on college students providing the
textbooks, auctions, classifieds and teacher evaluations that are posted on the website.
Therefore, our focus relies heavily on the marketing strategy that will increase traffic and usage
and, in turn, maintain our inventory of products and services.
For the retail business component we will establish relationships with manufacturers or
distributors that offer drop-shipments direct to the customer. This will allow The College Cafe
to keep expenses associated with inventory and distribution to a minimum.
We will be contracting students as subject matter experts to provide the content in the
weblogs. The use of students as weblog content experts will help keep costs to a minium yet
still providing interesting and relevant content.
For content and other value added service we will establish relationships with 3rd party
vendors. This will enable The College Cafe to offer a wide variety of products and services
online yet allow The College Cafe to focus on the key business elements; textbooks, auctions,
classifieds and teacher evaluations.
7.0 Technology
The website is designed with the needs of the college student as the focus. The College Cafe is
built using Microsoft technologies which will provide the flexibility to easily expand products and
service offerings in the future. The College Cafe will initially host the website with an external
web-hosting vendor thus reducing initial start-up cost. At a later date, The College Cafe may
elect to bring hosting in-house for better support and maintenance.
The Textbook Exchange, Auction, Classified, and User Administration software was purchased
from Xcent Software, Inc and modified to support The College Cafe's business needs. The
rights to the source code of the Xcent's software were included in the purchase price of
the software. This will enable our programmers to customize the software to support The
College Cafe's growing business needs.
The College Cafe website and databases are hosted by Atl-Connect Internet Services which
guarantees 99.99% uptime. In addition to Web hosting, Atl-Connects provides site monitoring
and statistical performance metrics that include uptime, page views, unique users, banner
impressions, search keywords stats and link stats from other sites.

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The College Cafe - www.thecollegecafe.com

8.0 Milestones
The accompanying table lists important milestones with dates and managers in charge. The
milestone schedule also indicates our initial beta launch of the website at Georgia State
University.
Table: Milestones

Milestones
Milestone
Business Concept & Planning
Beta Site Development
Beta Site Launch
Beta Site Promotional Campaign
Beta Site Analysis
Secure Funding for Phase 1 Launch
Phase 1 - Site Development
Phase 1 - Launch
Phase 1 - Promotional Campaign
Secure Funding for Phase 2

Start Date
6/1/2003
7/1/2003
10/1/2003
10/1/2003
10/15/2003
7/1/2004
2/1/2004
8/15/2004
8/15/2004
10/1/2004

End Date
7/15/2003
10/1/2003
10/2/2003
2/15/2004
2/28/2004
7/30/2004
8/15/2004
8/17/2004
10/1/2004
10/30/2004

Budget
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0

Totals

Manager
GLO, KM, AP
GLO, KM
GLO
GLO, KM, AP
GLO, KM, AP
GLO
GLO, KM
GLO
GLO, KM, AP
GLO

Department
Management
Web
Web
Marketing
Web & Marketing
Management
Web
Web
Marketing
Management

$0

Chart: Milestones

Milestones
Business Concept & Planning
Beta Site Development
Beta Site Launch
Beta Site Promotional Campaign
Beta Site Analysis
Secure Funding for Phase 1 Launch
Phase 1 - Site Development
Phase 1 - Launch
Phase 1 - Promotional Campaign
Secure Funding for Phase 2
Q3

Q4

Q1 `04

Q2

Q3

Q4

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The College Cafe - www.thecollegecafe.com

9.0 Financial Plan


The following are the summarized points from The College Cafe's financial plan. All charts and
tables supporting these results are included in the appendix at the end of the business plan:

The College Cafe will generate assertive revenues by the end of year one.
The College Cafe will start reporting sustained profits during the 9th month of the 1st year.
Sales and profits by year three will top 1.5x that of year one.
The College Cafe will require an initial investment in capital to finance the marketing
campaign and launch strategy.
The College Cafe will require additional investment to fund additional Web development,
sales and marketing efforts and general operating expenses.

The College Cafe will provide a complete student-to-student marketplace. Investment contacts
have already been approached and their expressions of satisfaction and encouragement are
numerous. We intend to continue our advances with more unique and effective business
solutions for the the college market. Based on the attached financial projections, we believe
that this venture represents a sound business investment.
9.1 Important Assumptions
The financial projections are based on the following assumptions and facts for the industry as
outlined in our market analysis:

As of 2003, college students spend and estimated $200 billion annually.


There are over 15.8 million college students.
The founders have contributed significant capital.
The fee for posting textbooks will equal $3 per textbook.
The fee for posting classifieds will equal $5 per classified.
The sales margin for products sold will average 15% and vary based on product.

Table: General Assumptions

General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other

Year 1

Year 2

Year 3

1
9.00%
5.00%
27.00%
0

2
9.00%
5.00%
27.00%
0

3
9.00%
5.00%
27.00%
0

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The College Cafe - www.thecollegecafe.com

9.2 Start-up Funding


In order to implement The College Cafe Phase 1 marketing campaign and launch strategy, we
are seeking an initial seed investment of $150,000. An additional investment of $1 million will
be required for operational expenses, continuing marketing campaigns, additional website
enhancements, maintenance and support as necessary to establish and maintain The College
Cafe as the leading online student-to-student market place.
As detailed in the Cash Balance chart for one year, The College Cafe will be able to begin and
sustain its operations with the above mentioned investments. We are confident the
opportunities in the market place are so compelling that with year one cash flows, The College
Cafe will grow and take advantage of the growth in the college market.
Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$57,685
$157,315
$215,000

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$155,000
$2,315
$0
$2,315
$157,315

Liabilities and Capital

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

$5,000
$0
$0
$0
$5,000

Capital

Planned Investment
Gerald Owens
Andrea Powers
Kelley Mitchell
Allison Elliott
Additional Investment Requested
Additional Investment Requirement
Total Planned Investment

$50,000
$5,000
$2,500
$2,500
$150,000
$0
$210,000

Loss at Start-up (Start-up Expenses)


Total Capital

($57,685)
$152,315

Total Capital and Liabilities

$157,315

Total Funding

$215,000

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The College Cafe - www.thecollegecafe.com

9.3 Use of Funds


Initial funding proceeds will be used primarily for marketing, additional website development
and maintenance. All the equipment needed will be leased or purchased, and included in the
operational expenses. The rest of the funds will be used as working capital to maintain the
operations until revenues generated by The College Cafe will be at the point where we can
sustain operational expenses.
9.4 Exit Strategy
The financial projections indicate that The College Cafe will have generated enough cash in the
next five years to permit the exit of the outside investors if so desired. It is the founders'
choice to continue with the company's profitable operations until The College Cafe is presented
with a viable offer for acquisition or the opportunity of an IPO is contemplated.
9.5 Key Financial Indicators
The following chart shows changes in key financial indicators: sales, gross margin, and
operating expenses.

Chart: Benchmarks

Benchmarks

Year 1

1.0

Year 2
Year 3

0.0
Sales

Gross Margin%

Operating Expenses

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The College Cafe - www.thecollegecafe.com

9.6 Break-even Analysis


A break-even analysis table has been completed on the basis of average costs/prices.
Table: Break-even Analysis

Break-even Analysis
Monthly Revenue Break-even

$133,362

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

56%
$58,648

Chart: Break-even Analysis

Break-even Analysis
$40,000
$30,000
$20,000
$10,000
$0
($10,000)
($20,000)
($30,000)
($40,000)
($50,000)
$0

$40,000
$80,000
$120,000
$160,000
$200,000
$20,000
$60,000
$100,000
$140,000
$180,000
$220,000

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The College Cafe - www.thecollegecafe.com

9.7 Sales Forecast


The table and charts below show our forecasts for sales and costs of sales. Annual figures for
three years are shown. Monthly estimates for the first year are included in the appendix.
Table: Sales Forecast

Sales Forecast
Year 1

Year 2

Year 3

Textbook Exchange
Classifieds
Auctions
Retail
Advertisement
Total Sales

$741,000
$596,000
$291,000
$206,000
$278,500
$2,112,500

$963,300
$774,800
$378,300
$267,800
$362,050
$2,746,250

$1,252,290
$1,007,240
$491,790
$348,140
$470,665
$3,570,125

Direct Cost of Sales


Textbook Exchange
Classifieds
Auction
Retail
Advertisement
Subtotal Direct Cost of Sales

Year 1
$391,000
$258,000
$170,500
$193,500
$170,500
$1,183,500

Year 2
$430,100
$283,800
$187,550
$212,850
$187,550
$1,301,850

Year 3
$473,110
$312,180
$206,305
$234,135
$206,305
$1,432,035

Sales

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The College Cafe - www.thecollegecafe.com

Chart: Sales Monthly

Sales Monthly
$400,000
$360,000
$320,000

Textbook Exchange

$280,000

Classifieds

$240,000
$200,000

Auctions

$160,000

Retail

$120,000

Advertisement

$80,000
$40,000
Month 12

Month 11

Month 10

Month 9

Month 8

Month 7

Month 6

Month 5

Month 4

Month 3

Month 2

Month 1

$0

Chart: Sales by Year

Sales by Year
$3,600,000
$3,200,000
$2,800,000

Textbook Exchange

$2,400,000

Classifieds

$2,000,000

Auctions

$1,600,000

Retail

$1,200,000

Advertisement

$800,000
$400,000
$0
Year 1

Year 2

Year 3

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The College Cafe - www.thecollegecafe.com

9.8 Personnel Plan


The table below shows our forecasts for personnel. Annual figures for three years are shown.
Monthly estimates for the first year are included in the appendix.
Table: Personnel

Personnel Plan
Year 1

Year 2

Year 3

Gerald Owens
Kelley Mitchell
Andrea Powers
College Reps (1 at each College for phase 1)
Students Interns
Total People

$66,000
$60,000
$57,000
$228,000
$0
22

$70,000
$65,000
$60,000
$250,000
$0
0

$75,000
$70,000
$65,000
$300,000
$0
0

Total Payroll

$411,000

$445,000

$510,000

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The College Cafe - www.thecollegecafe.com

9.9 Projected Profit and Loss


The table and charts below present our forecasted for profit and loss. Annual figures for three
years are shown. Monthly estimates for the first year are included in the appendix.

Table: Profit and Loss

Pro Forma Profit and Loss


Year 1

Year 2

Year 3

$2,112,500
$1,183,500
$0
$1,183,500

$2,746,250
$1,301,850
$0
$1,301,850

$3,570,125
$1,432,035
$0
$1,432,035

$929,000
43.98%

$1,444,400
52.60%

$2,138,090
59.89%

Payroll
Sales and Marketing and Other Expenses
Depreciation
Web Hosting
Utilities
Website Enhancement Projects
Insurance
Payroll Taxes
Other General and Administrative Expenses

$411,000
$0
$0
$720
$1,200
$225,000
$1,200
$59,850
$4,800

$445,000
$0
$0
$1,000
$1,500
$200,000
$15,000
$64,650
$7,500

$510,000
$0
$0
$1,250
$2,000
$200,000
$17,500
$74,250
$10,000

Total Operating Expenses

$703,770

$734,650

$815,000

Profit Before Interest and Taxes


EBITDA
Interest Expense
Taxes Incurred

$225,230
$225,230
$275
$60,738

$709,750
$709,750
$63
$191,615

$1,323,090
$1,323,090
$0
$357,234

Net Profit
Net Profit/Sales

$164,218
7.77%

$518,072
18.86%

$965,856
27.05%

Sales
Direct Cost of Sales
Other Costs of Goods
Total Cost of Sales
Gross Margin
Gross Margin %

Expenses

Page 26

The College Cafe - www.thecollegecafe.com

Chart: Profit Monthly

Profit Monthly
$80,000
$60,000
$40,000
$20,000
$0
($20,000)
($40,000)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12

Chart: Profit Yearly

Profit Yearly

$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
Year 1

Year 2

Year 3

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The College Cafe - www.thecollegecafe.com

Chart: Gross Margin Yearly

Gross Margin Yearly

$2,100,000
$1,800,000
$1,500,000
$1,200,000
$900,000
$600,000
$300,000
$0
Year 1

Year 2

Year 3

Chart: Gross Margin Monthly

Gross Margin Monthly


$160,000
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$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

Page 28

The College Cafe - www.thecollegecafe.com

9.10 Projected Cash Flow


The table and chart below show our cash flow predictions. Annual figures for three years are
shown. Monthly estimates for the first year are included in the appendix.
Table: Cash Flow

Pro Forma Cash Flow


Year 1

Year 2

Year 3

$2,112,500
$2,112,500

$2,746,250
$2,746,250

$3,570,125
$3,570,125

$0
$0
$0
$0
$0
$0
$150,000
$2,262,500

$0
$0
$0
$0
$0
$0
$0
$2,746,250

$0
$0
$0
$0
$0
$0
$0
$3,570,125

Year 1

Year 2

Year 3

$411,000
$1,290,342
$1,701,342

$445,000
$1,883,557
$2,328,557

$510,000
$2,068,700
$2,578,700

$0
$3,600
$0
$0
$0
$0
$0
$1,704,942

$0
$1,400
$0
$0
$0
$0
$0
$2,329,957

$0
$0
$0
$0
$0
$0
$0
$2,578,700

$557,558
$559,873

$416,293
$976,167

$991,425
$1,967,591

Cash Received

Cash from Operations


Cash Sales
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment
Purchase Other Current Assets
Purchase Long-term Assets
Dividends
Subtotal Cash Spent
Net Cash Flow
Cash Balance

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The College Cafe - www.thecollegecafe.com

Chart: Cash

Cash
$600,000
$500,000
$400,000

Net Cash Flow


$300,000

Cash Balance

$200,000
$100,000

Month 12

Month 11

Month 10

Month 9

Month 8

Month 7

Month 6

Month 5

Month 4

Month 3

Month 2

Month 1

$0

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The College Cafe - www.thecollegecafe.com

9.11 Projected Balance Sheet


The table below details our projected balance sheet. Annual figures for three years are shown.
Monthly estimates for the first year are included in the appendix.
Table: Balance Sheet

Pro Forma Balance Sheet


Year 1

Year 2

Year 3

$559,873
$5,000
$564,873

$976,167
$5,000
$981,167

$1,967,591
$5,000
$1,972,591

$150,000
$0
$150,000
$714,873

$150,000
$0
$150,000
$1,131,167

$150,000
$0
$150,000
$2,122,591

Year 1

Year 2

Year 3

Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$246,941
$1,400
$0
$248,341

$146,563
$0
$0
$146,563

$172,132
$0
$0
$172,132

Long-term Liabilities
Total Liabilities

$0
$248,341

$0
$146,563

$0
$172,132

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$360,000
($57,685)
$164,218
$466,533
$714,873

$360,000
$106,533
$518,072
$984,604
$1,131,167

$360,000
$624,604
$965,856
$1,950,460
$2,122,591

Net Worth

$466,533

$984,604

$1,950,460

Assets

Current Assets
Cash
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities

9.12 Business Ratios


Business ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 5942.9904, College book stores, are shown for
comparison.

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Table: Ratios

Ratio Analysis
Year 1

Year 2

Year 3

Industry Profile

n.a.

30.00%

30.00%

4.01%

Other Current Assets


Total Current Assets
Long-term Assets
Total Assets

0.70%
79.02%
20.98%
100.00%

0.44%
86.74%
13.26%
100.00%

0.24%
92.93%
7.07%
100.00%

26.25%
81.30%
18.70%
100.00%

Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth

34.74%
0.00%
34.74%
65.26%

12.96%
0.00%
12.96%
87.04%

8.11%
0.00%
8.11%
91.89%

39.21%
14.66%
53.87%
46.13%

100.00%
43.98%
39.49%
13.37%
10.66%

100.00%
52.60%
33.69%
8.19%
25.84%

100.00%
59.89%
33.21%
7.00%
37.06%

100.00%
32.36%
20.70%
1.71%
1.42%

2.27
2.27
34.74%
48.22%
31.47%

6.69
6.69
12.96%
72.08%
62.74%

11.46
11.46
8.11%
67.83%
62.33%

1.85
0.71
3.32%
58.10%
7.93%

Sales Growth
Percent of Total Assets

Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin


Return on Equity

7.77%
35.20%

18.86%
52.62%

27.05%
49.52%

n.a
n.a

6.23
27
2.96

12.17
40
2.43

12.17
28
1.68

n.a
n.a
n.a

0.53
1.00

0.15
1.00

0.09
1.00

n.a
n.a

$316,533
820.51

$834,604
11,265.87

$1,800,460
0.00

n.a
n.a

0.34
35%
2.27
4.53
0.00

0.41
13%
6.69
2.79
0.00

0.59
8%
11.46
1.83
0.00

n.a
n.a
n.a
n.a
n.a

Activity Ratios
Accounts Payable Turnover
Payment Days
Total Asset Turnover
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout

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The College Cafe - www.thecollegecafe.com

Page 33

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
Textbook Exchange
Classifieds
Auctions
Retail
Advertisement

0%
0%
0%
0%
0%

$1,000
$1,000
$1,000
$1,000
$1,000

$25,000
$20,000
$10,000
$2,500
$2,500

$35,000
$25,000
$20,000
$5,000
$5,000

$50,000
$40,000
$25,000
$10,000
$10,000

$35,000
$30,000
$20,000
$10,000
$15,000

$50,000
$45,000
$25,000
$12,500
$20,000

$60,000
$50,000
$30,000
$15,000
$25,000

$75,000
$60,000
$30,000
$20,000
$25,000

$80,000
$75,000
$25,000
$20,000
$30,000

$90,000
$70,000
$30,000
$25,000
$40,000

$115,000
$80,000
$35,000
$35,000
$50,000

$125,000
$100,000
$40,000
$50,000
$55,000

Total Sales

$5,000

$60,000

$90,000

$135,000

$110,000

$152,500

$180,000

$210,000

$230,000

$255,000

$315,000

$370,000

Direct Cost of Sales

Month 1

Month 2

Month 10

Month 11

Month 12

Textbook Exchange

$1,000

$5,000

$10,000

$15,000

$20,000

$30,000

$40,000

$45,000

$40,000

$50,000

$60,000

$75,000

Classifieds

$1,000

$2,000

$5,000

$10,000

$15,000

$20,000

$25,000

$27,000

$30,000

$33,000

$40,000

$50,000

Auction

$1,000

$2,500

$5,000

$7,500

$10,000

$15,000

$17,500

$20,000

$20,000

$22,000

$25,000

$25,000

Retail

$1,000

$1,500

$5,000

$10,000

$12,000

$15,000

$20,000

$22,000

$25,000

$25,000

$27,000

$30,000

Advertisement

$1,000

$2,500

$5,000

$5,000

$10,000

$10,000

$15,000

$20,000

$20,000

$25,000

$27,000

$30,000

Subtotal Direct Cost of Sales

$5,000

$13,500

$30,000

$47,500

$67,000

$90,000

$117,500

$134,000

$135,000

$155,000

$179,000

$210,000

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Page 1

Appendix
Table: Personnel

Personnel Plan

Gerald Owens
Kelley Mitchell
Andrea Powers
College Reps (1 at each College for
phase 1)
Students Interns
Total People

Total Payroll

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

0%
0%
0%

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

$5,500
$5,000
$4,750

0%

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

$19,000

0%

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

22

22

22

22

22

22

22

22

22

22

22

22

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

Page 2

Appendix
Table: General Assumptions

General Assumptions
Month 1
Plan Month

Month 2
2

Month 3
3

Month 4
4

Month 5
5

Month 6
6

Month 7
7

Month 8
8

Month 9
9

Month 10
10

Month 11
11

Month 12
12

Current Interest Rate

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

9.00%

Long-term Interest Rate

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

5.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

27.00%

Tax Rate
Other

Page 3

Appendix
Table: Profit and Loss

Pro Forma Profit and Loss


Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Sales

$5,000

$60,000

$90,000

$135,000

$110,000

$152,500

$180,000

$210,000

$230,000

$255,000

$315,000

$370,000

Direct Cost of Sales

$5,000

$13,500

$30,000

$47,500

$67,000

$90,000

$117,500

$134,000

$135,000

$155,000

$179,000

$210,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$5,000

$13,500

$30,000

$47,500

$67,000

$90,000

$117,500

$134,000

$135,000

$155,000

$179,000

$210,000

Other Costs of Goods


Total Cost of Sales

Gross Margin
Gross Margin %

$0

$46,500

$60,000

$87,500

$43,000

$62,500

$62,500

$76,000

$95,000

$100,000

$136,000

$160,000

0.00%

77.50%

66.67%

64.81%

39.09%

40.98%

34.72%

36.19%

41.30%

39.22%

43.17%

43.24%

Expenses
Payroll

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

Sales and Marketing and


Other Expenses

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Depreciation

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Web Hosting
Utilities
Website Enhancement
Projects
Insurance

$60

$60

$60

$60

$60

$60

$60

$60

$60

$60

$60

$60

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$25,000

$10,000

$10,000

$10,000

$25,000

$25,000

$25,000

$25,000

$25,000

$25,000

$10,000

$10,000

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$100

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$4,988

$100

$100

$100

$500

$500

$500

$500

$500

$500

$500

$500

$500

Total Operating Expenses

$64,598

$49,598

$49,598

$49,998

$64,998

$64,998

$64,998

$64,998

$64,998

$64,998

$49,998

$49,998

Profit Before Interest and


Taxes

($64,598)

($3,098)

$10,403

$37,503

($21,998)

($2,498)

($2,498)

$11,003

$30,003

$35,003

$86,003

$110,003

EBITDA

($64,598)

($3,098)

$10,403

$37,503

($21,998)

($2,498)

($2,498)

$11,003

$30,003

$35,003

$86,003

$110,003

Payroll Taxes
Other General and
Administrative Expenses

Interest Expense

15%

$35

$33

$31

$29

$26

$24

$20

$17

$15

$13

$11

($17,451)

($845)

$2,800

$10,118

($5,946)

($681)

($680)

$2,965

$8,096

$9,447

$23,217

$29,698

Net Profit

($47,182)

($2,285)

$7,571

$27,356

($16,077)

($1,841)

($1,839)

$8,018

$21,889

$25,541

$62,773

$80,294

Net Profit/Sales

-943.64%

-3.81%

8.41%

20.26%

-14.62%

-1.21%

-1.02%

3.82%

9.52%

10.02%

19.93%

21.70%

Taxes Incurred

$22

Page 4

Appendix

Page 5

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

$5,000

$60,000

$90,000

$135,000

$110,000

$152,500

$180,000

$210,000

$230,000

$255,000

$315,000

$370,000

Subtotal Cash from Operations

$5,000

$60,000

$90,000

$135,000

$110,000

$152,500

$180,000

$210,000

$230,000

$255,000

$315,000

$370,000

Additional Cash Received


Sales Tax, VAT, HST/GST Received

$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

$125,000

$25,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Subtotal Cash Received

$130,000

$85,000

$90,000

$135,000

$110,000

$152,500

$180,000

$210,000

$230,000

$255,000

$315,000

$370,000

Expenditures

0.00%

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
Bill Payments
Subtotal Spent on Operations

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$34,250

$598

$18,269

$28,707

$49,019

$74,008

$92,769

$121,007

$148,260

$167,937

$174,572

$195,968

$219,227

$34,848

$52,519

$62,957

$83,269

$108,258

$127,019

$155,257

$182,510

$202,187

$208,822

$230,218

$253,477

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current
Borrowing
Other Liabilities Principal Repayment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$300

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Long-term Liabilities Principal


Repayment
Purchase Other Current Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$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

$35,148

$52,819

$63,257

$83,569

$108,558

$127,319

$155,557

$182,810

$202,487

$209,122

$230,518

$253,777

Net Cash Flow

$94,852

$32,181

$26,743

$51,431

$1,442

$25,181

$24,443

$27,190

$27,513

$45,878

$84,482

$116,223

Cash Balance

$97,167

$129,349

$156,092

$207,523

$208,964

$234,145

$258,588

$285,777

$313,290

$359,168

$443,650

$559,873

Page 6

Appendix
Table: Balance Sheet

Pro Forma Balance Sheet


Month 1
Assets

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Other Current Assets
Total Current Assets

$2,315
$5,000
$7,315

$97,167
$5,000
$102,167

$129,349
$5,000
$134,349

$156,092
$5,000
$161,092

$207,523
$5,000
$212,523

$208,964
$5,000
$213,964

$234,145
$5,000
$239,145

$258,588
$5,000
$263,588

$285,777
$5,000
$290,777

$313,290
$5,000
$318,290

$359,168
$5,000
$364,168

$443,650
$5,000
$448,650

$559,873
$5,000
$564,873

$150,000
$0
$150,000
$157,315

$150,000
$0
$150,000
$252,167

$150,000
$0
$150,000
$284,349

$150,000
$0
$150,000
$311,092

$150,000
$0
$150,000
$362,523

$150,000
$0
$150,000
$363,964

$150,000
$0
$150,000
$389,145

$150,000
$0
$150,000
$413,588

$150,000
$0
$150,000
$440,777

$150,000
$0
$150,000
$468,290

$150,000
$0
$150,000
$514,168

$150,000
$0
$150,000
$598,650

$150,000
$0
$150,000
$714,873

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
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
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities

$0
$5,000
$0
$5,000

$17,334
$4,700
$0
$22,034

$27,101
$4,400
$0
$31,501

$46,573
$4,100
$0
$50,673

$70,948
$3,800
$0
$74,748

$88,766
$3,500
$0
$92,266

$116,088
$3,200
$0
$119,288

$142,669
$2,900
$0
$145,569

$162,141
$2,600
$0
$164,741

$168,065
$2,300
$0
$170,365

$188,702
$2,000
$0
$190,702

$210,712
$1,700
$0
$212,412

$246,941
$1,400
$0
$248,341

Long-term Liabilities
Total Liabilities

$0
$5,000

$0
$22,034

$0
$31,501

$0
$50,673

$0
$74,748

$0
$92,266

$0
$119,288

$0
$145,569

$0
$164,741

$0
$170,365

$0
$190,702

$0
$212,412

$0
$248,341

Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital

$210,000
($57,685)
$0
$152,315
$157,315

$335,000
($57,685)
($47,182)
$230,133
$252,167

$360,000
($57,685)
($49,467)
$252,848
$284,349

$360,000
($57,685)
($41,896)
$260,419
$311,092

$360,000
($57,685)
($14,540)
$287,775
$362,523

$360,000
($57,685)
($30,617)
$271,698
$363,964

$360,000
($57,685)
($32,458)
$269,857
$389,145

$360,000
($57,685)
($34,297)
$268,018
$413,588

$360,000
($57,685)
($26,279)
$276,036
$440,777

$360,000
($57,685)
($4,390)
$297,925
$468,290

$360,000
($57,685)
$21,151
$323,466
$514,168

$360,000
($57,685)
$83,923
$386,238
$598,650

$360,000
($57,685)
$164,218
$466,533
$714,873

Net Worth

$152,315

$230,133

$252,848

$260,419

$287,775

$271,698

$269,857

$268,018

$276,036

$297,925

$323,466

$386,238

$466,533

Page 7