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 Table of Contents

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

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

Chart: Break-even Analysis.......................................................................13

7.3 Projected Profit and Loss........................................................................14
Table: Profit and Loss................................................................................14
Chart: Profit Monthly................................................................................15
Chart: Profit Yearly....................................................................................15
Chart: Gross Margin Monthly....................................................................16
Chart: Gross Margin Yearly.......................................................................16
7.4 Projected Cash Flow...............................................................................17
Table: Cash Flow.......................................................................................17
Chart: Cash................................................................................................18
7.5 Projected Balance Sheet..........................................................................19
Table: Balance Sheet..................................................................................19
7.6 Business Ratios.......................................................................................20
7.6 Business Ratios.......................................................................................20
Table: Ratios..............................................................................................21
Table: Sales Forecast.........................................................................................1
Table: Personnel.................................................................................................2
Table: Personnel.................................................................................................2
Table: General Assumptions..............................................................................3
Table: General Assumptions..............................................................................3
Table: Profit and Loss........................................................................................4
Table: Profit and Loss........................................................................................4
Table: Cash Flow...............................................................................................5
Table: Cash Flow...............................................................................................5
Table: Balance Sheet..........................................................................................6
Table: Balance Sheet..........................................................................................6

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 MillenniumMart Inc.

1.0 Executive Summary

Introduction
MillenniumMart is the convenience store of the 21st Century future,
fulfilling a need that will continue to exist into the future - the need for
speed. MillenniumMart will be the first fully automated, 24-hour
convenience store that is more like an enormous dispensing machine than
the traditional store.

The company expects to capture market share by becoming the low cost
leader in the convenience store industry by significantly reducing one of
the primary expenses, which is labor. Through our completely automated
shopping experience, customers will have the chance to shop for everyday
items at reduced prices, thus undercutting competition such as 7-11,
AmPm, Circle K, and other local convenience store chains. The
possibilities for expansion are excellent not only in the local area, but in
neighboring communities as well.

The Company
The company is a joint venture start-up company between the principals,
Mr. Bean and his associates, and the management of Martin-Bower, one of
the country's largest and most successful food distributors. The company
will be incorporated as a class C corporation in the state of Delaware with
all shares held by private investors.

Martin-Bower will own 29% of MillenniumMart's initial private shares

with an option to acquire a further 11% shares based on growth and
profitability after the first five years. MillenniumMart is expected to open
its first store in downtown Manhattan in March of Year 1.

The company will be set up with a board of directors. Mr. James Bean, a
former senior manager of Martin-Bower is slated for the position of CEO.
Mrs. Linda Tuck has accepted the position of CFO.

The Products/Services
MillenniumMart will sell the same products as other convenience stores in
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 MillenniumMart Inc.

the same packaging sizes, quality, and quantity as other stores. This
includes newspapers, magazines, soft drinks, fruit juices, sport drinks, hot
and cold snacks, a limited number of grocery items such as canned soups,
microwaveable meals, condiments, bread, auto products such as fuel
additives and cleaning supplies, pet supplies, paper products, toothpaste,
etc.

All products will be locally or nationally branded such as Frito-Lay, Coca-

Cola, Jolly Green Giant, Charmin, Stouffer's, etc. In addition, each
computerized transaction machine can dispense cash, stamps, Lotto and
phone cards and other coupons and will have the ability to create personal
accounts that can display preferred items, retain shopping lists and other
services. An automated, interactive "customer service rep" will be able to
answer questions and pass on comments to the company's management.

In addition, the company is looking into ways to sell restricted items such
as beer, wine and cigarettes and to set up a separate Internet area for remote
access to the Web and email for its customers.

The Market
Our market is booming. Convenience store industry sales rose 8.6% last
year. Overall U.S. retail sales grew by only 6.3%, and grocery sales
followed with 2.4% growth, proving once again that the convenience store
industry has become a powerful force in U.S. retailing.

Convenience stores serve the entire purchasing population of its

geographical area but focuses on customers who need to purchase items
outside of normal working hours such as swing shift employees and quick
shoppers looking for snacks and related items. Therefore, we have
segmented our market into night shoppers, quick shoppers, and others.
Growth rates for these three segments match the population growth for the
surrounding area.

Our main competitor is 7-11 which holds approximately 30% of the

industry. Other competitors include Circle K, Fast rip, and any of the 85
grocery establishments on the east coast.
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 MillenniumMart Inc.

Financial Considerations
Our start-up requirements come to $453,000, which are largely single time
fees associated with opening the store. These costs are financed by both
private investors and the investment of Martin-Bower. It should be noted
that we expect to be operating at a loss for the first six months before
advertising begins to take effect and draw in customers.

MillenniumMart will be receiving periodic influxes of cash in order to

cover operating expenses during the first two years as it strives toward
sustainable profitability. Almost all of this funding has been arranged
through lending institutions and private investors already. We do not
anticipate any cash flow problems during the next three years.

Chart: Highlights

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 MillenniumMart Inc.

1.1 Objectives

These are the goals for the next three years for MillenniumMart:

 Achieve profitability by July Year 1;

 Earn approximately $200,000 in sales by Year 3;
 Start paying dividends by Year 3;
 Start up second store by Year 4.

1.2 Mission

MillenniumMart's primary objective is to create a new and revolutionary

distribution outlet that will significantly reduce prices for its customers and
provide greater services with an equal level of quality. The company seeks
to be first to market with this daring new idea so as to capture market share
and create greater than average profits.

1.3 Keys to Success

In order to survive and expand, MillenniumMart must keep the following

issues in mind:

 We must attain a high level of visibility through the media, billboards,

and other advertising.
 We must establish rigid procedures for cost control and incentives for
maintaining tight control.
 We must expend a significant amount on R&D in order to constantly be
able to offer better and greater products and services.

2.0 Company Summary

Automated stores such as MillenniumMart are not new, they have existed
in Asia, especially in Japan for a number of years now and have been quite
successful there. Mr. James Bean, MillenniumMart's founder and the
driving force behind the joint venture, has been intrigued with the idea of
bringing this new type of store to the U.S. since it can significantly reduce
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 MillenniumMart Inc.

costs and the ability of an automated store to provide products and services
is only limited to the imagination of management.

The company is a joint venture start-up company between the principals,

Mr. Bean and his associates, and the management of Martin-Bower, one of
the country's largest and most successful food distributors. The company
will be incorporated in the state of Delaware with all shares held by private
investors.

2.1 Company Ownership

We will be structured as a C-Corporation which operates as a standard

corporation. This form was chosen by the Board of Directors because of
various tax advantages. Retained earnings will not be distributed as
dividends for at least five years, thus enabling the early retirement of the
debt. Additionally, the corporate structure offers limited personal liability.

The company is a joint venture start-up between the principals, Mr. Bean
and his associates, and the management of Martin-Bower, one of the
country's largest and most successful food distributors. The company will
be incorporated in the state of Delaware with all shares held by private
investors.

Martin-Bower will own 29% of MillenniumMart's initial private shares

with an option to acquire a further 11% shares based on growth and
profitability after the first five years. MillenniumMart is expected to open
its first store in downtown Manhattan in March of 2003. The company will
be set up with a board of directors. Mr. James Bean, a former senior
manager of Martin-Bower is slated for the position of CEO. Mrs. Linda
Tuck has accepted the position of CFO.

2.2 Start-up Summary

Our start-up expenses come to $453,000, which are largely single time fees
associated with opening the store. These costs are financed by both private
investors and the investment of Martin-Bower.

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 MillenniumMart Inc.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $2,400
Pre-sale advertising/marketing $8,000
Land location and finders fee $8,000
Consultants $4,000
Insurance $1,780
Rent $12,000
Research and Development $10,000
Expensed Equipment $50,000
Initial store facilities $150,000
Other $3,000
Total Start-up Expenses $249,180

Start-up Assets
Cash Required $113,820
Start-up Inventory $10,000
Other Current Assets $8,000
Long-term Assets $72,000
Total Assets $203,820

Total Requirements $453,000

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 MillenniumMart Inc.

Table: Start-up Funding

Start-up Funding
Start-up Expenses to Fund $249,180
Start-up Assets to Fund $203,820
Total Funding Required $453,000

Assets
Non-cash Assets from Start-up $90,000
Cash Requirements from Start-up $113,820
Additional Cash Raised $0
Cash Balance on Starting Date $113,820
Total Assets $203,820

Liabilities and Capital

Liabilities
Current Borrowing $15,000
Long-term Liabilities $100,000
Accounts Payable (Outstanding Bills) $8,000
Other Current Liabilities (interest- $10,000
free)
Total Liabilities $133,000

Capital

Planned Investment
Private Investors $150,000
Martin-Bower management $110,000
Other $60,000
Additional Investment Requirement $0
Total Planned Investment $320,000

Loss at Start-up (Start-up Expenses) ($249,180)

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 MillenniumMart Inc.

Total Capital $70,820

Total Capital and Liabilities $203,820

Total Funding $453,000

Chart: Start-up

3.0 Products

As the most progressive company in the industry, MillenniumMart plans to

offer a greater number of products and services in the future so as to create
another dimension of competitive advantage. So that our customers will
feel secure, we will subscribe to the security services offered by the
shopping center of which we are a part. This will cut down on graffiti and
loitering and insure the safety of both employees and customers.

MillenniumMart will sell the same products as other convenience stores in

the same packaging sizes, quality, and quantity as other stores. This
Page 8
 MillenniumMart Inc.

includes newspapers, magazines, soft drinks, fruit juices, sport drinks, hot
and cold snacks, a limited number of grocery items such as canned soups,
microwaveable meals, condiments, bread, auto products such as fuel
additives and cleaning supplies, pet supplies, paper products, toothpaste,
etc.

All products will be locally or nationally branded such as Frito-Lay, Coca-

Cola, Jolly Green Giant, Charmin, Stouffer's, etc. In addition each
computerized transaction machine can dispense cash, stamps, Lotto and
phone cards and other coupons and will have the ability to create personal
accounts that can display preferred items, retain shopping lists and other
services. An automated, interactive "customer service rep" will be able to
answer questions and pass on comments to the company's management.

4.0 Market Analysis Summary

Our market is booming. Convenience store industry sales rose 8.6% for
2002. Overall U.S. retail sales grew by only 6.3%, and grocery sales
followed with 2.4% growth, proving once again that the convenience store
industry has become a powerful force in U.S. retailing.

Convenience stores serve the entire purchasing population of its

geographical area but focuses on customers who need to purchase items
outside of normal working hours such as swing shift employees and quick
shoppers looking for snacks and related items. Therefore we have
segmented our market into night shoppers, quick shoppers, and others.
Growth rates for these three segments match the population growth for the
surrounding area.

Our main competitor is 7-11 which holds approximately 30% of the

industry. Other competitors include Circle K, Fastrip, and any of the 85
grocery establishments on the east coast.

4.1 Market Segmentation

Our target market for our test store encompasses a five mile radius in which
the approximate population is 150,000 (based on census information).
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 MillenniumMart Inc.

The majority of the residents in this area are Caucasian (58.8%) Black
(23.6%) and Hispanic (19%) with occupations classified as
professional/technical, homemaker, or retired. The majority of household
incomes range from $20,000 - $30,000 (50.3%), yet there are also affluent
household incomes ranging from $50,000 - $100,000 (15.4%).

The median income in this area is $48,096, compared to the whole New
York area which is $34,248. The typical "head of household" age is 25 - 34
(22.4%) or age 34 - 44 (23.1%) with a median age of 44.4 years old and an
average age of 32 years old.

Target market segments

Convenience stores serve the entire purchasing population of its
geographical area but focuses on customers who need to purchase items
outside of normal working hours such as swing shift employees and quick
shoppers looking for snacks and related items.

Table: Market Analysis

Market
Analysis
Year 1 Year 2 Year 3 Year 4 Year 5
Potential Growth CAGR
Customers
Late night 3% 78,000 80,340 82,750 85,233 87,790 3.00%
shoppers
Quick 2% 42,000 42,840 43,697 44,571 45,462 2.00%
shoppers
Other 3% 30,000 30,840 31,704 32,592 33,505 2.80%
Total 2.68% 150,000 154,020 158,151 162,396 166,757 2.68%

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 MillenniumMart Inc.

Chart: Market Analysis (Pie)

4.2 Industry Analysis

Convenience store industry sales rose 8.6% to $86.3 billion for 2002.
Overall U.S. retail sales grew by only 6.3%, and grocery sales followed
with 2.4% growth, proving once again that the convenience store industry
has become a powerful force in U.S. retailing.

Pre-tax profit margin in the convenience store industry was the highest
since 1988 (1.8%). The 2002 results confirm that a new, upward trend is
emerging. This upward trend is based on several factors, and occurred
along with a slow rebound in the general economy.

Merchandise sales per customer increased 7.4% in 2000 suggesting that

convenience stores are placing higher priority in filling the customers'
needs. Companies that align themselves properly to fill those needs will be
successful in the future.

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 MillenniumMart Inc.

4.2.1 Competition and Buying Patterns

7-11 holds approximately 30% of the industry market, and in 1999 their net
income was $160 million. Other competitors include Circle K, Fastrip, and
any of the 85 chain grocery establishments on the east coast.

5.0 Strategy and Implementation Summary

MillenniumMart's competitive edge will be the lower prices we will charge

our customers and the novel purchasing experience that will draw shoppers.

The most critical element of MillenniumMart's success will be its

marketing and advertising. In order to capture attention and sales
MillenniumMart will use prominent signs at the store locations, billboards,
media bites on local news, and radio advertisements to capture customers.

Many of the initial customers will be drawn to the unique nature of the
store and will then have the opportunity to realize the cost savings of
MillenniumMart. We expect an average 27% increase in sales from year to
year. This may seem very high, but considering the level of initial sales and
the growth possibilities, management actually considers this to be
conservative.

5.1 Competitive Edge

MillenniumMart's competitive edge will be the lower prices we will charge

our customers and the novel purchasing experience that will draw shoppers.
In the convenience store industry, low cost and availability are the two
success criteria. We plan to create these advantages in a new, high-tech
environment that will retain customers.

5.2 Marketing Strategy

The most critical element of MillenniumMart's success will be its

marketing and advertising. Convenience stores serve the entire purchasing
population of its geographical area but focuses on customers who need to
purchase items outside of normal working hours such as swing shift
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 MillenniumMart Inc.

employees and quick shoppers looking for snacks and related items. In
order to capture attention and sales MillenniumMart will use prominent
signs at the store locations, billboards, media bites on local news, and radio
advertisements to capture customers. Many of the initial customers will be
drawn to the unique nature of the store and will then have the opportunity
to realize the cost savings of MillenniumMart. Since automated shopping is
still in its infancy, the firm expects to invest a great deal of its available
cash and revenues in marketing efforts.

5.3 Sales Strategy

Since our store will be a stand-alone, remote facility, there is little in the
way being able to directly influence how we close the sales other than to
have an attractive storefront with our low prices and easy-to-use system.
We believe that this in itself is its own seller. One critical procedure to
ensure top customer service and reliability will be establishing a method
for keeping enough inventory of all our products. We will be using industry
data on inventory for other convenience store chains to assist us.

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 MillenniumMart Inc.

5.3.1 Sales Forecast

Based on a 20% mark-up, our forecasted sales for years one, two, and three
respectively are: $2,480,106; $3,149,735; $4,000,163. This gives us an
average 27% increase from year to year. This may seem very high, but
considering the level of initial sales and the growth possibilities,
management actually considers this to be conservative.

These sales figures are based on a conglomerate of commuter and walk-by

traffic with an average $3.00 purchase amount conforming to industry
averages. The target profit margin was defined as an average net profit of
all merchandise.

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Drinks $978,070 $1,242,149 $1,577,529
Snacks $873,277 $1,109,061 $1,408,508
Magazines/newspapers $209,586 $266,175 $338,042
General grocery items $279,449 $354,900 $450,723
Other $139,724 $177,450 $225,361
Total Sales $2,480,106 $3,149,735 $4,000,163

Direct Cost of Sales Year 1 Year 2 Year 3

Drinks $753,114 $956,455 $1,214,697
Snacks $672,423 $853,977 $1,084,551
Magazines/newspapers $161,382 $204,955 $260,292
General grocery items $215,175 $273,273 $347,056
Other $107,588 $136,636 $173,528
Subtotal Direct Cost of Sales $1,909,682 $2,425,296 $3,080,125

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 MillenniumMart Inc.

Chart: Sales Monthly

Chart: Sales by Year

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 MillenniumMart Inc.

6.0 Management Summary

As stated earlier, MillenniumMart will be a joint venture between Mr.

Wallace Bean and his associates and the management of Martin-Bower, a
large food distribution company. The company officers will include Mr.
Bean as CEO, Mrs. Linda Tuck as CFO, plus Mr. Minoru Takeda, who will
be operations manager. Since the firm is a start-up, there will be little in the
way of formal structure at first. The company also plans to hire three
technicians who will service the automated store and a office manager.
Additional personnel will be added once more stores are set up.

Mr. Wallace Bean is a graduate of the University of Texas, Austin's school

of business. He has worked for more than twelve years in the food
distribution and grocery store industry, including positions as vice president
of marketing for Fry's Food and Drug, director of special projects for Giant
Foods and more recently, senior vice president for Martin-Bower.

Mrs. Linda Tuck has a graduate degree in finance from Kansas State
University and has eight years experience working for various companies.
Her last job was as a financial analyst for Circle K corporation.

Mr Minoru Takeda is an MBA graduate from the University of Osaka. He

has been operational manager for Kiyama Inc. for the past six years which
operates approximately six hundred automated convenience stores
throughout Japan. Mr. Takeda has moved to the United States for the
express purpose of bringing this new type of store to this country.

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 MillenniumMart Inc.

6.1 Personnel Plan

Initially the company will only have a small staff including upper
management, an operations technician and office manager. All other
services, such as bookkeeping, will be outsourced.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Mr. Bean $42,000 $48,000 $52,000
Mrs. Tuck $42,000 $48,000 $52,000
Mr. Takeda $30,000 $40,000 $48,000
Office manager $20,400 $22,000 $28,000
Technicians $33,000 $56,000 $58,000
Total People 7 7 7

Total Payroll $167,400 $214,000 $238,000

7.0 Financial Plan

The following tables illustrate our financial projections over the next three
years. Please note that we expect to be operating at a loss for the first six
months before advertising begins to take effect and draw in customers.

As retained earnings increase, a debt retirement fund will be established to

encourage early repayment, thus relieving interest expense. Also, a 30-day
payment period for purchases will be used to avoid incurring liabilities.

7.1 Important Assumptions

MillenniumMart is basing its assumptions on a stable growth market using

average interest rates over the past ten years.

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 MillenniumMart Inc.

Table: General Assumptions

General Assumptions
Year 1 Year 2 Year 3
Plan Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 30.00% 30.00% 30.00%
Other 0 0 0

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 MillenniumMart Inc.

7.2 Break-even Analysis

The following table and chart show our Break-even Analysis. Although our
break-even point seems quite high, we are expecting to have higher than
average fixed costs during the period of this plan due to customer "creation
costs," R&D costs, higher rent in a premier spot, higher percentage of
payroll costs to overall fixed costs with a small company, and the need to
import and pay for the store facilities. We expect to have a more reasonable
positive retained earnings point around year 5.

Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $165,326

Assumptions:
Average Percent Variable Cost 77%
Estimated Monthly Fixed $38,025
Cost

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 MillenniumMart Inc.

Chart: Break-even Analysis

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 MillenniumMart Inc.

7.3 Projected Profit and Loss

The following table explains our itemized costs and determines gross and
net margin. Please note that these predictions are weighted toward having
higher costs in comparison to revenues in case unexpected hidden costs
arise. The charts give a visual representation of the data.

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $2,480,106 $3,149,735 $4,000,163
Direct Cost of Sales $1,909,682 $2,425,296 $3,080,125
Other Costs of Goods $0 $0 $0
Total Cost of Sales $1,909,682 $2,425,296 $3,080,125

Gross Margin $570,424 $724,439 $920,037

Gross Margin % 23.00% 23.00% 23.00%

Expenses
Payroll $167,400 $214,000 $238,000
Sales and Marketing and $60,000 $130,000 $130,000
Other Expenses
Depreciation $7,200 $7,200 $7,200
Leased equipment $50,000 $60,000 $60,000
Rent $84,000 $84,000 $84,000
Utilities $28,800 $30,000 $30,000
Accounting/bookeeping $6,500 $9,000 $9,000
Insurance $14,400 $14,400 $14,400
Payroll Taxes $0 $0 $0
Other $38,000 $45,000 $45,000

Total Operating Expenses $456,300 $593,600 $617,600

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 MillenniumMart Inc.

Profit Before Interest and $114,124 $130,839 $302,437

Taxes
EBITDA $121,324 $138,039 $309,637
Interest Expense $16,250 $16,400 $14,650
Taxes Incurred $29,362 $34,332 $86,336

Net Profit $68,512 $80,107 $201,451

Net Profit/Sales 2.76% 2.54% 5.04%

Chart: Profit Monthly

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 MillenniumMart Inc.

Chart: Profit Yearly

Chart: Gross Margin Monthly

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 MillenniumMart Inc.

Chart: Gross Margin Yearly

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 MillenniumMart Inc.

7.4 Projected Cash Flow

MillenniumMart will be receiving periodic influxes of cash in order to

cover operating expenses during the first two years as it strives toward
sustainable profitability. Almost all of this funding has been arranged
through lending institutions and private investors already. We do not
anticipate any cash flow problems during the next three years.

Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $2,480,106 $3,149,735 $4,000,163
Subtotal Cash from Operations $2,480,106 $3,149,735 $4,000,163

Additional Cash Received

Sales Tax, VAT, HST/GST $0 $0 $0
Received
New Current Borrowing $5,000 $0 $0
New Other Liabilities (interest- $0 $0 $0
free)
New Long-term Liabilities $50,000 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $54,000 $78,000 $0
Subtotal Cash Received $2,589,106 $3,227,735 $4,000,163

Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $167,400 $214,000 $238,000
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 MillenniumMart Inc.

Bill Payments $2,177,877 $2,961,091 $3,558,207

Subtotal Spent on Operations $2,345,277 $3,175,091 $3,796,207

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid $0 $0 $0
Out
Principal Repayment of Current $0 $7,000 $13,000
Borrowing
Other Liabilities Principal $0 $0 $0
Repayment
Long-term Liabilities Principal $0 $5,000 $10,000
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $30,000
Dividends $0 $0 $50,000
Subtotal Cash Spent $2,345,277 $3,187,091 $3,899,207

Net Cash Flow $243,829 $40,643 $100,956

Cash Balance $357,649 $398,292 $499,248

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 MillenniumMart Inc.

Chart: Cash

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 MillenniumMart Inc.

7.5 Projected Balance Sheet

The following table shows the Projected Balance Sheet for

MillenniumMart.

Table: Balance Sheet

Pro Forma Balance Sheet

Year 1 Year 2 Year 3
Assets

Current Assets
Cash $357,649 $398,292 $499,248
Inventory $371,402 $282,345 $358,578
Other Current Assets $8,000 $8,000 $8,000
Total Current Assets $737,050 $688,637 $865,826

Long-term Assets
Long-term Assets $72,000 $72,000 $102,000
Accumulated Depreciation $7,200 $14,400 $21,600
Total Long-term Assets $64,800 $57,600 $80,400
Total Assets $801,850 $746,237 $946,226

Liabilities and Capital Year 1 Year 2 Year 3

Current Liabilities
Accounts Payable $428,518 $226,798 $298,335
Current Borrowing $20,000 $13,000 $0
Other Current Liabilities $10,000 $10,000 $10,000
Subtotal Current Liabilities $458,518 $249,798 $308,335

Long-term Liabilities $150,000 $145,000 $135,000

Total Liabilities $608,518 $394,798 $443,335

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 MillenniumMart Inc.

Paid-in Capital $374,000 $452,000 $452,000

Retained Earnings ($249,180) ($180,668) ($150,561)
Earnings $68,512 $80,107 $201,451
Total Capital $193,332 $351,439 $502,891
Total Liabilities and Capital $801,850 $746,237 $946,226

Net Worth $193,332 $351,439 $502,891

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 MillenniumMart Inc.

7.6 Business Ratios

We are using the industry standard business ratios for independent

convenience store chains as a comparison to our own. There are some
significant differences between the two since we have a completely
different storefront than our competitors. First of all our accounts
receivable are very different as we expect to have higher sales using
credit cards than other stores, due to the convenience of using credit cards
and cash cards at our facility. There is generally a three day waiting period
to receive funds from the credit card company. This is a short period of
time compared to a normal collection day period of 30 days, but it is still
something we need to factor for.

In addition, we expect higher percentages in inventory as we will be

operating only one store initially and even many independent convenience
store owners often have two or more facilities. Our long-term assets are
low since we are only renting our facilities.

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 MillenniumMart Inc.

Table: Ratios

Ratio Analysis
Year 1 Year 2 Year 3 Industry
Profile
Sales Growth n.a. 27.00% 27.00% 2.27%

Percent of Total Assets

Inventory 46.32% 37.84% 37.90% 22.18%
Other Current Assets 1.00% 1.07% 0.85% 26.81%
Total Current Assets 91.92% 92.28% 91.50% 56.12%
Long-term Assets 8.08% 7.72% 8.50% 43.88%
Total Assets 100.00% 100.00% 100.00% 100.00%

Current Liabilities 57.18% 33.47% 32.59% 26.39%

Long-term Liabilities 18.71% 19.43% 14.27% 24.87%
Total Liabilities 75.89% 52.91% 46.85% 51.26%
Net Worth 24.11% 47.09% 53.15% 48.74%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 23.00% 23.00% 23.00% 23.55%
Selling, General & 20.26% 20.10% 17.78% 16.21%
Administrative Expenses
Advertising Expenses 0.00% 0.00% 0.00% 0.85%
Profit Before Interest and 4.60% 4.15% 7.56% 1.02%
Taxes

Main Ratios
Current 1.61 2.76 2.81 1.68
Quick 0.80 1.63 1.65 0.71
Total Debt to Total Assets 75.89% 52.91% 46.85% 4.63%
Pre-tax Return on Net 50.63% 32.56% 57.23% 57.28%
Worth
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 MillenniumMart Inc.

Pre-tax Return on Assets 12.21% 15.34% 30.41% 10.83%

Additional Ratios Year 1 Year 2 Year 3

Net Profit Margin 2.76% 2.54% 5.04% n.a
Return on Equity 35.44% 22.79% 40.06% n.a

Activity Ratios
Inventory Turnover 10.91 7.42 9.61 n.a
Accounts Payable 6.06 12.17 12.17 n.a
Turnover
Payment Days 27 43 26 n.a
Total Asset Turnover 3.09 4.22 4.23 n.a

Debt Ratios
Debt to Net Worth 3.15 1.12 0.88 n.a
Current Liab. to Liab. 0.75 0.63 0.70 n.a

Liquidity Ratios
Net Working Capital $278,532 $438,839 $557,491 n.a
Interest Coverage 7.02 7.98 20.64 n.a

Additional Ratios
Assets to Sales 0.32 0.24 0.24 n.a
Current Debt/Total Assets 57% 33% 33% n.a
Acid Test 0.80 1.63 1.65 n.a
Sales/Net Worth 12.83 8.96 7.95 n.a
Dividend Payout 0.00 0.00 0.25 n.a

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 Appendix

Table: Sales Forecast

Sales Forecast
Month Month Month Month 4 Month 5 Month 6 Month 7 Month 8 Mo
1 2 3
Sales
Drinks 0% $28,000 $33,040 $38,987 $46,005 $54,286 $64,057 $75,588 $89,193 $10
Snacks 0% $25,000 $29,500 $34,810 $41,076 $48,469 $57,194 $67,489 $79,637 $93
Magazines/newspapers 0% $6,000 $7,080 $8,354 $9,858 $11,633 $13,727 $16,197 $19,113 $22
General grocery items 0% $8,000 $9,440 $11,139 $13,144 $15,510 $18,302 $21,596 $25,484 $30
Other 0% $4,000 $4,720 $5,570 $6,572 $7,755 $9,151 $10,798 $12,742 $15
Total Sales $71,000 $83,780 $98,860 $116,655 $137,653 $162,431 $191,668 $226,169 $26

Direct Cost of Sales Month Month Month Month 4 Month 5 Month 6 Month 7 Month 8 Mo
1 2 3
Drinks $21,560 $25,441 $30,020 $35,424 $41,800 $49,324 $58,202 $68,679 $81
Snacks $19,250 $22,715 $26,804 $31,628 $37,321 $44,039 $51,966 $61,320 $72
Magazines/newspapers $4,620 $5,452 $6,433 $7,591 $8,957 $10,569 $12,472 $14,717 $17
General grocery items $6,160 $7,269 $8,577 $10,121 $11,943 $14,093 $16,629 $19,623 $23
Other $3,080 $3,634 $4,289 $5,061 $5,971 $7,046 $8,315 $9,811 $11
Subtotal Direct Cost $54,670 $64,511 $76,123 $89,825 $105,993 $125,072 $147,585 $174,150 $20
of Sales

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 Appendix

Table: Personnel

Personnel
Plan
Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10
Mr. Bean 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $
Mrs. Tuck 0% $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $3,500 $
Mr. Takeda 0% $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $2,500 $
Office 0% $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $1,700 $
manager
Technicians 0% $1,500 $1,500 $1,500 $1,500 $1,500 $1,500 $3,000 $3,000 $4,500 $4,500 $
Total 5 5 5 5 5 5 6 6 7 7
People

Total $12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,200 $15,700 $15,700 $
Payroll

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 Appendix

Table: General Assumptions

General
Assumption
s
Month Month Month Month Month Month Month Month Month Month Month
1 2 3 4 5 6 7 8 9 10 11
Plan Month 1 2 3 4 5 6 7 8 9 10 11
Current 10.00 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest %
Rate
Long-term 10.00 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Interest %
Rate
Tax Rate 30.00 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
%
Other 0 0 0 0 0 0 0 0 0 0 0

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 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

Sales $71,000 $83,780 $98,860 $116,655 $137,653 $162,431 $191,668 $226,16

Direct Cost of Sales $54,670 $64,511 $76,123 $89,825 $105,993 $125,072 $147,585 $174,15
Other Costs of Goods $0 $0 $0 $0 $0 $0 $0 $
Total Cost of Sales $54,670 $64,511 $76,123 $89,825 $105,993 $125,072 $147,585 $174,15

Gross Margin $16,330 $19,269 $22,738 $26,831 $31,660 $37,359 $44,084 $52,01
Gross Margin % 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00% 23.00%

Expenses
Payroll $12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,20
Sales and Marketing $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,00
and Other Expenses
Depreciation $600 $600 $600 $600 $600 $600 $600 $60
Leased equipment $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,000 $4,00
Rent $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,000 $7,00
Utilities $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,400 $2,40
Accounting/bookeeping $500 $500 $500 $500 $500 $500 $500 $50
Insurance $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,200 $1,20
Page 4
 Appendix

Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $

Other $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,00

Total Operating $35,400 $35,400 $35,400 $35,400 $35,400 $35,400 $36,900 $36,90
Expenses

Profit Before Interest ($19,070) ($16,131) ($12,662) ($8,569) ($3,740) $1,959 $7,184 $15,11
and Taxes
EBITDA ($18,470) ($15,531) ($12,062) ($7,969) ($3,140) $2,559 $7,784 $15,71
Interest Expense $958 $1,375 $1,375 $1,375 $1,375 $1,375 $1,375 $1,37
Taxes Incurred ($6,008) ($5,252) ($4,211) ($2,983) ($1,534) $175 $1,743 $4,12

Net Profit ($14,020) ($12,254) ($9,826) ($6,961) ($3,580) $409 $4,066 $9,62
Net Profit/Sales -19.75% -14.63% -9.94% -5.97% -2.60% 0.25% 2.12% 4.25%

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 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

Cash
Received

Cash from
Operations
Cash Sales $71,000 $83,780 $98,860 $116,655 $137,653 $162,431 $191,668 $226,169 $266,8
Subtotal $71,000 $83,780 $98,860 $116,655 $137,653 $162,431 $191,668 $226,169 $266,8
Cash from
Operations

Additional
Cash
Received
Sales Tax, 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $
VAT,
HST/GST
Received
New Current $0 $0 $0 $0 $0 $0 $0 $0 $5,00
Borrowing
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 Appendix

New Other $0 $0 $0 $0 $0 $0 $0 $0 $
Liabilities
(interest-
free)
New Long- $0 $50,000 $0 $0 $0 $0 $0 $0 $
term
Liabilities
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $
Other
Current
Assets
Sales of $0 $0 $0 $0 $0 $0 $0 $0 $
Long-term
Assets
New $0 $0 $0 $0 $50,000 $0 $0 $0 $
Investment
Received
Subtotal $71,000 $133,780 $98,860 $116,655 $187,653 $162,431 $191,668 $226,169 $271,8
Cash
Received

Expenditures Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month

Expenditures
from
Operations
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 Appendix

Cash $12,700 $12,700 $12,700 $12,700 $12,700 $12,700 $14,200 $14,200 $15,70
Spending
Bill $12,062 $120,914 $94,045 $108,734 $126,066 $146,518 $170,637 $198,680 $232,2
Payments
Subtotal $24,762 $133,614 $106,745 $121,434 $138,766 $159,218 $184,837 $212,880 $247,9
Spent on
Operations

Additional
Cash Spent
Sales Tax, $0 $0 $0 $0 $0 $0 $0 $0 $
VAT,
HST/GST
Paid Out
Principal $0 $0 $0 $0 $0 $0 $0 $0 $
Repayment
of Current
Borrowing
Other $0 $0 $0 $0 $0 $0 $0 $0 $
Liabilities
Principal
Repayment
Long-term $0 $0 $0 $0 $0 $0 $0 $0 $
Liabilities
Principal
Repayment
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $
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 Appendix

Other
Current
Assets
Purchase $0 $0 $0 $0 $0 $0 $0 $0 $
Long-term
Assets
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $
Subtotal $24,762 $133,614 $106,745 $121,434 $138,766 $159,218 $184,837 $212,880 $247,9
Cash Spent

Net Cash $46,238 $166 ($7,885) ($4,779) $48,887 $3,212 $6,831 $13,289 $23,88
Flow
Cash $160,058 $160,225 $152,340 $147,561 $196,448 $199,661 $206,492 $219,780 $243,6
Balance

Table: Balance Sheet

Pro Forma
Balance
Sheet
Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7
Assets Starting
Balances

Current
Page 9
 Appendix

Assets
Cash $113,820 $160,058 $160,225 $152,340 $147,561 $196,448 $199,661 $206,492 $
Inventory $10,000 $60,137 $70,962 $83,735 $98,807 $116,592 $137,579 $162,343 $
Other $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000 $8,000
Current
Assets
Total $131,820 $228,195 $239,186 $244,074 $254,368 $321,040 $345,239 $376,835 $
Current
Assets

Long-term
Assets
Long-term $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000 $72,000
Assets
Accumulated $0 $600 $1,200 $1,800 $2,400 $3,000 $3,600 $4,200
Depreciation
Total Long- $72,000 $71,400 $70,800 $70,200 $69,600 $69,000 $68,400 $67,800
term Assets
Total Assets $203,820 $299,595 $309,986 $314,274 $323,968 $390,040 $413,639 $444,635 $

Liabilities Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7

and Capital

Current
Liabilities
Accounts $8,000 $117,795 $90,440 $104,554 $121,209 $140,862 $164,052 $190,981 $
Payable
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 Appendix

Current $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000 $15,000

Borrowing
Other $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Current
Liabilities
Subtotal $33,000 $142,795 $115,440 $129,554 $146,209 $165,862 $189,052 $215,981 $
Current
Liabilities

Long-term $100,000 $100,000 $150,000 $150,000 $150,000 $150,000 $150,000 $150,000 $

Liabilities
Total $133,000 $242,795 $265,440 $279,554 $296,209 $315,862 $339,052 $365,981 $
Liabilities

Paid-in $320,000 $320,000 $320,000 $320,000 $320,000 $370,000 $370,000 $370,000 $

Capital
Retained ($249,180) ($249,180) ($249,180) ($249,180) ($249,180) ($249,180) ($249,180) ($249,180) ($
Earnings
Earnings $0 ($14,020) ($26,274) ($36,100) ($43,061) ($46,641) ($46,232) ($42,166)
Total Capital $70,820 $56,800 $44,546 $34,720 $27,759 $74,179 $74,588 $78,654
Total $203,820 $299,595 $309,986 $314,274 $323,968 $390,040 $413,639 $444,635 $
Liabilities
and Capital

Net Worth $70,820 $56,800 $44,546 $34,720 $27,759 $74,179 $74,588 $78,654

Page 11