Vertigo Gallery

(Venue Name still in the works)

Executive Summary
Vertigo Gallery is seeking funding for a multi-purpose venue in the Los Angeles area with the intent of serving and propelling the aims and goals of the ever growing libertarian community. We will seek to become a beacon to the community by offering entertainment, educational services and community activism. We will primarily serve as a coffee shop and bookstore during the day and a music venue / event space at night. Thought this we shall hope to enrich the highly influential cultural fabric of Los Angeles. Vertigo Gallery will maintain a minimalistic dcor with a small staff and inviting atmosphere. We will cater to young business professionals, idealistic students and artistic types by providing a quality selection of books, influential guest speakers, a wide variety of entertainment with impeccable sound quality, start of the art lighting, a warm inviting dcor and by providing local artist with a venue to showcase their work. We plan to reach this market via four primary means: direct promotion aimed at the Libertarian community as well as other political activist groups, booking only talented artist and speakers with active fan bases, thru maintaining a strong social media campaign and direct marketing via posting flyers around the local community, near by businesses and collage campuses. Vertigo Gallery will be owned and operated (at least in part) by James Schumacher who has many years experience in both the music and entertainment industries as well as years of managerial experience. James has over the years acquired a large roster of talented acts and contacts that can be drawn upon to help make Vertigo Gallery a success.

Company Summary
The key elements to the Vertigo Gallery concept are as follows: Vertigo Gallery will focus on attracting a wide variety of cliental. During the day we will primarily serve as a coffee shop and bookstore but will also be available for booking events, book signings and musical acts. This aspect of the business will seek in attracting two types of people: locals looking for coffee and a bite to eat as well as people actively involved in various political activist groups that we support. Vertigo would like to become a place for people in the latter category to get together and plan for future events, campaigns, and other forms of activism. At night we will serve as a music venue / event space with live music, guest speakers and other forums on entertainment. This aspect of Vertigo will seek to attract local artist, musicians and their fanbase. This conglomerate of art and philosophy will serve two purposes: to further the Libertarian philosophy to people whom other wise may never be exposed to these ideas and to provide a unique experience so as to stand out in the minds of our customers and clients. We are looking to have a fairly minimalistic approach so that we can focus on providing an inviting atmosphere and quality entertainment. This will allow us to keep cost to the consumer low while still making a good profit. The front of the establishment will be outfitted with bookshelves, merchandise racks and a lounge area. Further back will be the bar area and tables. A stage will be built and outfitted with quality sound and lighting equipment and an open floor will be kept for people to gather. A creative and warm lightning theme will be perused in order to give the place an inviting and relaxing atmosphere. We are planning on obtaining a beer and wine license and would like to become known for our beer selection as we plan to offer a wide variety of domestic, import and microbrewery beer. We would like to acquire a full liquor license in the future but do not see this as being paramount to our initial success. During the day we will serve coffee and the usually coffee shop food such as bagels and sandwiches.

Company Ownership
We are currently seeking investors and potentially partners. James Schumacher, owner and manager, has years of experience in the music and entertainment industries as well as years of managerial experience. In 2005 James acquired a degree in audio engineering and production from The Conservatory of Recording Arts and Sciences and has since went on to work at and manage several recording studios in the Los Angeles area. In 2009 James went on to manage the pro audio department of Sam Ash Music stores in Hollywood and begin focusing on live production work via booking artist, mixing live shows, organizing artist showcases, and renting out stage lighting and sound equipment. This business hopes to bring together all areas of Jamess expertise and fulfill his entrepreneur passion.

Start-up Summary
We are currently seeking investors and/or partners with capital assets in order to contribute a minimum of $50,000 of needed funds. This capital in conjunction with our existing capital will be used primarily on construction, permits, inventory, equipment, dcor, advertising and a grand opening event. In addition to my capital investment I currently own an entire high quality stage sound and lighting system that will be in use at the club. Current Assets Capital - $20,000 Equipment - $13,000 Use of Funds Renovations Dcor Audio Equipment Lighting Caf / Bar Equipment Grand Opening / Marketing First Months Lease Inventory Permits Miscellaneous Expenditures Total

$10,000 $7000 $2000 $4000 $15,000 $2000 $8000 $7000 $10,000 $7000 $70,000

Services Offered
Merchandise Sales Vertigo will be involved in the selling of a wide variety of products related to both the Libertarian philosophy as well as the culture of Los Angeles. We will be selling a selection of both classic and contemporary literature exploring the philosophic, political, and economic aspects of Libertarianism. We will rely heavily on publications from the Ludwig Von Mises Institute, as they are the primary source of libertarian literature. We will also seek to stock the store with clothing, stickers and other merchandise from the likes of the Mises Institute, and other such suppliers with contemporary Libertarian appeal. We would also like to produce our own merchandise such as clothing, posters and activist related material. We would like to turn Vertigo into the primary place in Los Angeles for contemporary Libertarian writers to visit, speak at, and perform book singings when they release new material. In our effort to become a part of the culture fabric of Los Angeles we will seek to support local artist and musicians by providing a place to market and sell local music, movies, and other artwork. The coffee shop walls will be open for displaying local artwork and will periodically host artist showcases. We will especially seek to support local musical artist in offering a section to stock a wide variety of local music. We would like to have all music available for previewing and provide space to market and advertise. We will be set up for live recording from the stage and can promote recording and selling of live albums all in one place.

Live Entertainment The nature of the live entertainment will vary from night to night and will include: Live Bands, Comedy, Hip Hop, Electronic DJs, Performing Arts, and movie premiers. The club will be booking and promoting shows several nights a week and will have outside promoters handling the other nights. We will have a worked out schedule so that people know what to expect on a nightly basis. The door fee will vary between $5 and $10 dollars, potentially more, depending on the deal made between the club, acts, and promoter. Example weekly schedule Monday - Acoustic night hosted by the club Tuesday - Comedy Night hosted by The Weekend Pilots Wednesday - Hip Hop night hosted by JS Global Entertainment. Thursdays - Rock Night hosted by the club Friday - Rock night hosted by the club Saturday - Rock and/or Electro night hosted by the club Sunday - Burlesque/Electro/Rock night hosted by the club Example schedule includes promoters interested in hosting shows at the club. No promoters are confirmed but they have expressed interest. Deals will be made between promoters and club once the venue is complete. Bar We will focus on providing a large selection of local, import and microbrewery beer and wine. We will be serving beer between $4 and $8 per bottle. We will also carry a selection of non-alcohol beverages such as: soda, energy drinks, vitamin water, and other drinks. Non-alcohol drinks will vary between $2 and $5 dollars. We will have your usual free bar snacks such as chips and pretzels. A beer and wine license is all that we are seeking to open the business. We would like to obtain a full liquor license in the future but we do not feel this is instrumental to out initial success. Caf The Caf will be open during the day and will serve coffee, specialty drinks, breakfast and lunch food. The food served will be basic coffee shop style food like bagels, pastries, sandwiches and soup. Recording Artist often like the opportunity to obtain a recording of their show and are willing to pay for it. I plan to charge $50 for basic recording of a live show and will offer professional mixing and mastering of the show for an extra $100. I currently own all the equipment needed to do a 16-track recording so no start up cost will be required. The equipment will always be set up and available at a moments notice. Our 16-track recording differs from most clubs that only offer a stereo feed form the mixing board. This feed is generally adequate for the live show but not adequate if the artist hopes to use the recording for an album or video release. With 16 tracks we can record all the parts of the music separately so it can be mixed to perfection later. This advantage over most clubs should help us become know as a great venue for bands to obtain quality live recordings that they can release and/or sell to there fans.

Market Analysis Summary

Market Segmentation Our market segmentation is divided into the three leading target markets we are looking to attract. The first market would be people involved in the liberty movement. The second market will include artist and their fans. The third market will include local residents and employees of nearby businesses. Liberty Movement - We will have a lot to offer to local liberty minded people. First of all the bookstore and merchandise will be primarily directed toward these individuals. I know of no other please in the greater Los Angeles area that specializes in such work. Our book selection will serve as a reading list for anybody looking to further their understanding of the cause of liberty and sound economics. We will seek that have authors and political speakers unitize our venue to

promote their books and political ambitions. As word spreads we would like to serve as a meeting place for the LA liberty movement. A little promotion with local organizations and collage campuses will help in furthering our reach and bring in young idealistic people looking to understand what Liberty is all about. Artist and their fanbase - As an entertainment venue we will seek to book a wide variety of acts. I have spent years in the recording and live sound business and I have built up a reputation as a highly skilled sound engineer. I have contacts with a wide variety of artist and promoters who I believe would be happy to work with my. Entertainment can vary from local rock music to electronic music all the way to traditional jazz and Celtic music. We can have comedy nights and even movie screenings and art exhibits. These artists, for the most part, will be promoting to their fan base and will bring a crowd with them. The unique mix of art and music with philosophy will offer an unique and memorable experience and will hopefully result in many repeat bookings by artist and visits by artist fan base. Residents of the community - Local patrons are a must for the survival of any business. The size and scope of this mark segmentation will depend on the yet to be decided location. An idea location would include these two factors: a moderately affluent local community of young business professionals and local businesses in the area, such as shops and restaurants, that could provide both customers and foot traffic. Market Research Can be completed when a location is choose Total Population Male Population Female Population Percent Increase 1990 Percent Increase 2000 Median Age White Collar Blue Collar Total Households Family Households Non Family Households Average Household Income Median Household Income

Marketing and Promotion

Online / Social Media - Our primarily marketing strategy will be focused on online and social media promotion as this tends to be the primary means for spreading information to the young tech savvy crowd we hope to attract. We will keep and regularly update a Facebook, and web page as well maintain a tweeter stream. We will have the ability to live stream events via the Internet if we feel such an action would be beneficial. We will update on daily basis with upcoming show info as well as pictures and videos of past events. Direct Marketing - We will directly market to the local community via passing out flyers and hanging signs and posters at local businesses that permit us to. We will reach out to local collage based libertarian

groups in hopes that they will help us promote on collage campuses in the area. We can as well serve as a meeting and events space for such groups. Direct mail can also be used on occasion. Direct mailing effects would be aimed both at the local community as well as a wider base of libertarians. Grand Opening Event - We are planning quite an extravagant grand opening event that is likely to attract local attention and possibly press. We are going to have a red carpet set up just outside complete with photographers and interviewers for the first two days. The event will be catered with free food and drink specials for our entire guest. We will have a number of door prizes that will be handed out through out the night. Word of Mouth - Nothing can compete with word of mouth marketing. A direct recommendation from a friend carries more weight then any marketing strategy we could conceive. But on the other hand a direct criticism can do a lot of damage. This is why we must focus on keeping a fun and entertaining atmosphere with exceptional attractions. Whatever reviews spread across the community and Los Angeles area in general will make or break the club. So we much make sure and keep it positive.

Financial Plan
We are currently seeking investors and/or partners with capital assets in order to contribute a minimum of $50k of needed funds. This capital in conjunction with our existing capital will be used primarily on construction, permits, inventory, equipment, dcor, advertising and a grand opening event. In addition to my capital investment of $20k I currently own an entire high quality stage sound and lighting system that will be in use at the club. Breakdown of Opening Expenditures Building Stage Building Bar Renovations (paint, floors) Refrigeration Coffee Maker Espresso Maker Toaster Oven Oven Sink Prep Counter Bar Stools Tables and Chairs Couches Chairs Lighting Bookshelfs / Merchandise Racks Stage Curtin Subwoffer Stage Snake System Processer Merchandise (books, clothing, drinks) First Months Lease Legal Fees Grand Opening Marketing

$4000 $4000 $2000 $3500 $500 $1500 $500 $800 $300 $300 $1000 $1500 $1500 $600 $4000 $500 $600 $700 $200 $400 $7000 $8000 $10,000 $2000

Vertigo Gallery will require a minimum of only four employees to operate per day. I will be acting as owner, manager as well as sound engineer. I will have two bartenders, two security guards and two cafe staff on payroll but only require one per day.

Personal Plan
Sound Engineer Caf Staff Bartenders Security Guard Total People Year 1 $26,880 $26,880 $26,880 $26,880 4 Year 2 $32,256 $26,880 $26,880 $32,256 4 Year 3 $32,256 $26,880 $26,880 $32,256 4

Total Payroll $107,520 $118,272 $118,272 Attendance and Income Breakdown as Music Venue / Event Space For my attendance assumptions I have broken the week into 2 busy, 3 average, and 2 slow days. For the first month I estimate drawing 80 people on busy days, 40 people on average days, and 20 people on slow days. I estimate selling an average of 3 drinks per person. After the first month I estimate a 5% growth rate through out the first year. Attendance and Sales for Month 1 as Music Venue / Event Space Cover - $5 Drinks - $5 x 3 per person Slow Day 20 people $100 $300 Slow Day 20 people $100 $300 Average Day 40 people $200 $600 Average Day 40 people $200 $600 Average Day 40 people $200 $600 Busy Day 80 people $400 $1200 Busy Day 80 people $400 $1200 1 Week 320 people $1600 $4800 1 Month 1280 people $6400 $19,200

Attendance Breakdown - Year 1

2 Days Busy 3 Days Average 2 Days Slow 1 Week 1 Month Month 1 160 120 40 320 1280 Month 2 168 126 42 336 1344 Month 3 176 132 44 352 1408 Month 4 184 138 46 368 1472 Month 5 193 144 48 385 1540 Month 6 202 151 50 403 1612 Month 7 212 158 52 422 1688 Month 8 222 165 54 441 1764 Month 9 233 173 56 462 1848 Month 10 244 181 58 483 1932 Month 11 256 190 61 507 2028 Month 12 268 199 64 531 2124

Cover and Drink Sales Breakdown - Year 1

Total Drinks Total Cover Total Income $19,200 $6400 $25,600 $20,160 $6720 $26,880 $21,120 $7040 $28,160 $22,080 $7360 $29,440 $23,100 $7700 $30,800 $24,180 $8060 $32,240 $25,320 $8440 $33,760 $26,460 $8820 $35,280 $27,720 $9240 $36,960 $28,980 $9660 $38,640 $30,420 $10,140 $40,560 $31,860 $10,620 $42,480

First year revenue and expense analysis

(Estimates are fairly conservative / strong potential for higher growth rate)
Month Revenue Cover Charge Drinks Recording Merchandise Caf Gross Income Cost of Goods Drinks Merchandise Caf Goods Gross Profit Expenses Lease Utilities Entertainment Payroll Marketing Insurance Total Expenses Net Profit $8000 $2500 $2000 $8960 $200 $500 $22,160 $4240 $8000 $2500 $3000 $8960 $200 $500 $23,160 $4620 $8000 $2500 $3500 $8960 $200 $500 $23,660 $5500 $8000 $2500 $4000 $8960 $200 $500 $24,160 $6396 $8000 $2500 $4000 $8960 $200 $500 $24,160 $7841 $8000 $2500 $4000 $8960 $200 $500 $24,160 $9116 $8000 $2500 $4000 $8960 $200 $500 $24,160 $10,462 $8000 $2500 $4000 $8960 $200 $500 $24,160 $11,811 $8000 $2500 $4000 $8960 $200 $500 $24,160 $13,299 $8000 $2500 $4000 $8960 $200 $500 $24,160 $14,788 $8000 $2500 $4000 $8960 $200 $500 $24,160 $16,486 $8000 $2500 $4000 $8960 $200 $500 $24,160 $18,084 $3840 $1960 $3000 $26,400 $4032 $2058 $3250 $27,780 $4224 $2161 $3500 $29,162 $4416 $2269 $3750 $30,556 $4620 $2382 $4000 $32,001 $4836 $2501 $4000 $33,276 $5064 $2626 $4000 $34,622 $5292 $2757 $4000 $35,971 $5544 $2894 $4000 $37,459 $5797 $3039 $4000 $38,948 $6084 $3191 $4000 $40,646 $6372 $3351 $4000 $42,244 $6400 $19,200 $800 $2800 $6000 $35,200 $6720 $20,160 $800 $2940 $6500 $37,120 $7040 $21,120 $800 $3087 $7000 $39,047 $7360 $22,080 $800 $3241 $7500 $40,991 $7700 $23,100 $800 $3403 $8000 $43,003 $8060 $24,180 $800 $3573 $8000 $44,613 $8440 $25,320 $800 $3752 $8000 $46,312 $8820 $26,460 $800 $3940 $8000 $48,020 $9240 $27,720 $800 $4137 $8000 $49,897 $9660 $28,980 $800 $4344 $8000 $51,784 $10,140 $30,420 $800 $4561 $8000 $53,921 $10,620 $31,860 $800 $4789 $8000 $55,967

Cover charge and Drink Sales based on chart above Recording based on min. of 4 recordings a week @ $50 each Merchandise sales based on $100 in sales a day @ 30% gross profit Caf sales research average sales of 24k @ 70% gross cut by 2/3 @ 50% gross 5% growth projected for cover, drink, and merch sales Recording sales stay consistent / Caf sales raise to $8000 then stay consistent
1 2 3 4 5 6 7 8 9 10 11 12

Three-year revenue and expense projections

Three year projections are based upon 5% growth from each proceeding year 12 month 5% growth variations from the first year are keep intact All sectors of the business are projected to grow by 5% from year to year.

YEAR Revenue Cover Charge Drinks Recording Merchandise Cafe Gross Income Cost of Goods Drinks Merchandise Caf Goods Gross Profit Expenses Lease Utilities Entertainment Payroll Marketing Insurance Total Expenses Net Profit

1 $100,208 $300,600 $9600 $44,567 $91,000 $545,975

2 $105,218 $315,630 $10,080 $46,795 $95,550 $573,274

3 $110,479 $331,412 $10,584 $49,135 $100,328 $601,938

$60,120 $31,189 $45,500 $409,166

$63,126 $32,748 $47,775 $429,624

$66,282 $34,385 $50,164 $451,105

$96,000 $30,000 $44,500 $107,502 $2400 $6000 $286,420 $121,746

$96,000 $30,000 $44,500 $107,502 $2400 $6000 $286,420 $127,833

$96,000 $30,000 $44,500 $107,502 $2400 $6000 $286,420 $134,225