New business plan with financials and market analysis. Some information has been changed or eliminated because of client privacy.

1. BUSINESS PLAN
PREPARED FOR
SWEET
PAPAYA
BY MELINDA SCHOENFELD

2. 1.0
Executive Summary
Sweet Papaya is a premium, gourmet, organic chocolate manufacturer that specializes in
creating a fantasy experience through succulent tastes, creative products, romantic
packaging, superior quality, and competitive prices.
The company projects annual revenues of $1.2 million within five years by aggressively
marketing our brand and vision through the Internet and various distribution channels to
service the retail market. A global presence will help to achieve stellar growth and brand
recognition.
The premium chocolate industry is one of the shining areas of the confectionery industry.
With increased attention being paid to increasing obesity rates, organic dark chocolate is
scientifically proven to have health benefits. Market studies show the more affluent
consumer prefers premium, organic chocolate and has a higher tolerance to economic
fluctuations.
The largest growing segment of the market is Baby Boomers. Even though Baby
Boomers tend to eat fewer sweets, they prefer a higher quality, premium chocolate to
other confections. The largest consumer of confections is the five – 14 year olds. This
group, however, is showing stagnant numbers in their growth projections. This group is
also less likely to consume premium chocolate in favor of non-chocolate confections.
Many opportunities exist within this growing segment of the confectionery market.
These include an expansion of the product line that uses chocolate as an ingredient
includes vitamin-enriched energy bars, Twist products, body and bath products, other
gourmet food items, cooking sauces, and specialty lines targeted at specific consumers
including women, children, and the erotic industry.
Sugar free, low carb, organic, and premium chocolates are driving up sales in this $17.8
billion industry. Unlike other industries, the premium chocolate niche market has
produced a plethora of small, independent chocolate producers that thrive by creating a
high-end product that optimizes an image of quality and superiority for the more
discerning consumer. This target market does not like the taste of low-fat or fat-free
chocolates allow themselves to enjoy a smaller amount of a premium chocolate instead of
a lower quality, lower calorie substitute.
This business plan has been prepared to forecast all financial statements for three years,
as well as to obtain initial funding of $35,000. This will cover initial start-up costs of
$22,000 as well as operating expenses for the first year of $13,000. Sweet Papaya
projects revenue of $50,000 by the end of year one, $165,000 by the end of year two, and
$332,500 by the end of year three.
2

3. Table 1.0: Highlights
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$2006
2007
Sales
1.1
Gross Profit
2008
Net Income (Loss)
Objectives
The objectives of Sweet Papaya are as follows:
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1.2
To achieve first year sales figures of $50,000.
To achieve local and regional sales of $15,000 in the second year, 2007.
To achieve national sales of $25,000 in the third year, 2008.
To achieve global sales of $45,000 in the fourth year, 2009.
To achieve $1.2 million in sales by the fifth year, 2010.
To make inroads into the entertainment industry within the first five years.
To create an unparalleled brand image of romance and euphoria.
Mission
Sweet Papaya will use the highest quality premium, organic chocolate to produce a
creamy, succulent line of gourmet chocolates using exotic flavors and smooth textures.
Our company is dedicated to providing customers a euphoric taste experience that
titillates the palette and excites the senses. Sweet Papaya will provide its pampered
customers a consistent taste experience in romantic packaging for the ultimate chocolate
adventure at a competitive price.
3

4. 1.3
Keys to Success
The keys to success for Sweet Papaya are as follow:
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Obtain Small Business Loan.
Creating the perfect packaging and color scheme.
Developing the necessary marketing materials.
Creating the fantasy advertising slogans.
Creating systems and procedures so successes are repeatable. Any success that
cannot be repeated is not really a success, it’s just a coincidence.
Developing and perfecting existing and new chocolate recipes and products.
Developing a creative web site for Internet marketing.
Implementing the business plan and updating the information.
Understanding the market and the target consumer.
Continually learning.
Creating the market instead of reacting to the market. Being a Trend Setter.
4

5. Table of Contents
1.0
Executive Summary
1.1 Objectives
1.2 Mission
1.3 Keys to Success
2
3
3
4
2.0
Company Summary
2.1 Company Ownership
2.2 Start-up Summary
2.3 Company Locations and Facilities
6
6
6
8
3.0
Products
3.1 Competitive Comparison
3.2 Sales Literature
3.3 Future Products
8
9
9
9
4.0
Market Analysis Summary
4.1 Market Segmentation
4.1.1 SWOT Analysis
4.2 Industry Analysis
4.2.1 Industry Participants
4.2.2 Distribution Patterns
4.2.3 Competition and Buying Patterns
10
11
5.0
Strategy and Implementation Summary
5.1 Marketing Strategy
5.1.1 Pricing Strategy
5.2 Sales Strategy
5.2.1 Sales Forecast
15
15
16
17
17
6.0
Management Summary
6.1
Personnel Plan
18
19
7.0
Financial Plan
7.1
Important Assumptions
7.2
Break-even Analysis
7.3
Projected Profit and Loss
7.4
Projected Cash Flow
7.5
Projected Balance Sheet
7.6
Business Ratios
19
19
20
21
23
24
26
5
11
12
14
15

6. 2.0
Company Summary
Sweet Papaya will create, develop and market premium, gourmet, organic chocolate
through multiple distribution channels both foreign and domestic. The company will
start primarily with distribution through the Internet while building a regional presence
through retail outlets. Growth strategies will include marketing to large mass retailers
and global distribution through increased Internet sales. The company is dedicated to
creating a fantasy for its customers through romantic packaging and euphoric-tasting
chocolate.
2.1
Company Ownership
The company will be organized as an “S” Corporation organized by Taylor Delacourt,
President. The company logo will be trademarked through the U.S. Department of
Commerce Patent and Trade Mark Office.
Taylor’s experience consists of 22 years of business management, two years of property
management, three years as Chief Financial Officer, and 40 years as a dedicated
chocolate connoisseur. As a business manager, Taylor gained experience in all aspects of
running a business including finance and accounting, marketing, sales, office
management, new business start-up, and venture capital.
2.2
Start-Up Summary
Sweet Papaya will be based upon Taylor working full-time with no other initial
employees. Taylor’s primary responsibilities during the beginning phase of the start-up
operation are to get the business licenses, begin office operations, purchase necessary
equipment, design packaging, get the web site designed and online. The initial costs to
get the primary functions of the business operational are $21,150.
The beginning inventory necessary to begin is $500. A short-term, non-interest bearing
loan has been secured for $2,500 and a long-term investor is secured for $5,000 with no
interest accruing. The remaining start-up expenses and operational costs will be secured
with a long-term small business loan.
6

7. Table 2.2: Start-Up Expenses
Start-Up Expenses
Legal
Office Supplies
Furniture
Insurance
Rent
Software
Marketing Materials
Web Site Development
Search Engine Placement
Expensed Equipment
Other
Total Start-Up Expenses
$250
$300
$150
$500
$50
$150
$3,000
$10,000
$1,250
$3,500
$2,000
$21,150
Start-Up Assets Needed
Cash Requirements
Start-up Inventory
Other Short-term Assets
Total Short-term Assets
Long-term Assets
Total Start-up Requirements:
Left to Finance:
$0
$500
$0
$500
$0
$21,650
$21,150
Start-Up Funding Plan
Investment
Investor I
Other
Total Investment
$5,000
$2,500
$7,500
Short-term Liabilities
Unpaid Expenses
Short-term Loans
Interest-free Short-term Loans
Subtotal Short-term Liabilities
Long-term Liabilities
Total Liabilities
$0
$0
$2,500
$2,500
$5,000
$7,500
Loss at Start-up
Total Capital
Total Capital and Liabilities
Checkline
-$7,500
$0
$0
$0
7

8. $25,000
$20,000
$15,000
$10,000
$5,000
$0
Expenses
2.3
Assets
1
Investment
Loan
Company Locations and Facilities
Taylor will be utilizing 300 sq. ft. in the kitchen and 400 square sq. ft. in the designated
office of her home. The kitchen will be utilized for design and production, and the office
will be utilized for marketing, office functions, sales, and accounting functions.
3.0
Products
Changing consumer demographics, healthy eating, and economic issues will all directly
impact the future of confections in the United States. Both non-chocolate and chocolate
confections will be highly influenced by the American consumer’s changing preferences.
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All products are 100% organic and made of premium chocolate.
All products are packaged in jewel toned boxes with the primary color being
purple. The boxes are trimmed with lace and jewels/pearls for a romantic touch.
1.5 – 3.5 chocolate bars in milk, white, and dark organic chocolate and many
exotic flavors.
Clam shells made with milk chocolate mousse filling.
Truffles made with milk and dark chocolate and many exotic flavors.
Chocolate sauces in milk and dark chocolate.
Vitamin-enriched chocolate bars.
Twist chocolates in milk, white, and dark chocolate. Individually wrapped
chocolates.
8

9. 3.1
Competitive Comparison
Dagoba
Moonstruck
Euphoria
Endangered
Species
Founded
Location
2001
1993
1985
1995
Ashland, OR
Portland, OR
Eugene, OR
Specialty
Organic
Truffles
Truffles
12 bars for $36
$33 for 10 Crescent Moon
Truffles
$27.95 for 12 Assorted
Truffles
Packaging
Ecologically friendly
Red, midnight blue, silver
foil boxes
Gold boxes
Talent, OR
Endangered
Species
$27 for 12-3.25
oz Belgian
chocolate bars
Wrappers feature
close-ups and
information about
wild animals
Other
Offerings
Chocolate bars,
drinking chocolate,
chocolate coffee
beans, gifts
Chocolate cafes, espresso
drinks
Chocolate sauces,
specialty chocolate
made with local wines,
chocolate fountains,
gifts
Trading cards,
endangered
species named
candies
Strengths
First 100% certified
chocolate company,
strong brand
recognition,
developed distribution
channels, numerous
awards
Unique flavors, multiple box
sizes, offered in the
Academy Awards gift
baskets
Strong brand
recognition, excellent
reputation, customer
loyalty, developed
distribution channels
Limited product line
Limited distribution
Limited distribution
dagobachocolate.com
moonstruckchocolateco.com
Internet, mass
retailers
Internet, Chocolate Cafes,
Wild Oats, other specialty
grocers
euphoriachocolate.com
Internet, companyowned stores, Made in
Oregon stores,
regional grocers
Prices
Weaknesses
Website
Distribution
3.2
Unique product
line,
environmental
and charitable
hook
Limited
distribution,
limited product
line
chocolatebar.com
Internet, New
Seasons, Wild
Oats
Sales Literature
Sweet Papaya will develop sales brochures listing their product line and prices. Included
in the literature will be the history of the company, the dedication to creating the fantasy
and producing a quality product, and contact information. These brochures will be used
for direct marketing as well as included in orders placed online.
3.3
Future Products
Sweet Papaya will be continually creating new products to hold and gain market share.
Product lines including:
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Bath & Body products
Gourmet cooking items
Cooking sauces
Specialty lines catering to specific market groups such as couples, women, and
children.
9

10. 4.0
Market Analysis Summary
The NCA estimates chocolate sales reached $15.1 billion in 2004 (up 3.9%) while the
sales of non-chocolate confections witnessed only a slight increase of 1.6% to $7.8
billion in 2004. The majority of those sales occurred in supermarkets; they reported sales
of $4.2 billion. When holidays occur on Saturdays or when there is a shorter shopping
season, chocolate sales will decrease. There will be a longer shopping season of 32 days
in 2006.
Everyone loves chocolate. But ever-growing concerns among consumers about their
health and the increasing incidence of obesity have kept consumption levels flat, even as
marketer competition and innovation have been dampened by a sluggish economy,
market consolidation, and rising costs. Even Hershey raised wholesale prices on its
product line in December 2004. Packaged Facts reports that along with caloric and carb
concerns, demographics conspire against any near-future surge in market growth.
Chocolate candy product introductions over the studied 2000-2004 period reveal three
key market drivers: Upscale/gourmet, no or low carb/sugar, and natural-related/organic
claims. Packaged Facts reports other important trends include functional/fortified
chocolates and a continued focus on only-for-kids candies. The company further states,
“Smaller, bit-size, easy-open/resealable, and portable candies remain the growth area in
the market because they provide extra convenience for impulse and grab-and-go eating.”
An important aspect for our market aside from niche products, such as sugar free and low
carb, is the fact that nearly 10% of the chocolate market is regarded as premium.
Packaged Facts estimates U.S. sales of premium chocolates approached $1.5 billion in
2004. U.S. retail sales of gourmet chocolates more strictly defined are estimated at $1.1
billion. Sales growth in organic chocolates, which have emerged as an important niche
within the gourmet market, are estimated at 30% annually. According to a Productscan
report on package tags (featured products claims) on 200 premium chocolate candy
products or product lines introduced in 2004, dark chocolate (with 91 tags) is nipping at
the heels of milk chocolate (104 tags), although bittersweet chocolate (13) remains less
common than white chocolate (36). Nuts (172 tags overall, including praline), led by
almond (42), are even more popular as inclusions than fruit (116), led by raspberry (22).
Gourmet chocolate consumers favor products with higher cocoa content percentages and,
as is the case with wine and gourmet coffee, varietals and origins. As consumer tastes
become more educated, marketers are introducing many dark chocolate products with
cocoa contents of 50% or more and, conversely, with less sugar content and minimal if
any fillings and inclusions. Packaged Facts notes “a trend extension that similarly has
best-seller potential is the trickle down of the cocoa content craze to milk chocolates,
represented by creamy but less sweet products.”
10

11. 4.1
Market Segmentation
Researchers estimate that about 2/3 of U.S. adults indulge in the consumption of
chocolate candy, while ¼ eat non-chocolate candy. Chocolate candy is so popular that no
major demographic group stands out for significantly higher-than-average usage rates. In
the premium category, however, the attitudes and demographics are distinctive.
Packaged Facts reports premium chocolate consumers are only slightly more likely than
average to frequently eat sweets at an index of 106, compared with an index of 116 for
chocolate candy consumers overall (and of 136 for heavy consumers of chocolate candy).
Premium chocolate users are also less likely than average to indulge in unhealthy treats
(index of 90) or to often snack between meals (index of 94), and conversely are more
likely than average to snack on health foods (index of 128) and to try new health foods
(index of 149). In addition, women are much more likely than average (index of 124) to
most often use premium chocolate brands (index of 124), though they are only somewhat
more likely than average to use chocolate candy overall (index of 106). Moreover,
Northeasterners are prime users of premium chocolates (index of 137), though they are
slightly below average for chocolate candy overall (index of 95), a pattern that also
applies to those with residences valued at over $300,000 (at indexes of 149 and 94,
respectively).
Hispanics are overall significantly less likely than average (index of 72) to indulge a
sweet tooth – only 33% frequently eat sweets, according to Simmons, compared with
41% of Asians, 43% of blacks, and 47% of non-Hispanic whites. Correspondingly, only
45% of Hispanics frequently snack, compared with 63% of non-Hispanic whites and 65%
of blacks. At the same time, the population aged five to 24, the prime consumers of
chocolate products, will grow by only 10% over the 2005-2010 period, against a 28%
share of the total population, with the 10-14 age bracket posting a decline in total
numbers. Population growth will center in the Boomer-heavy 50-69 age bracket, which
rank slightly below average even among adults in frequent consumption of sweets or
snacks.
4.1.1 SWOT Analysis
An analysis of Sweet Papaya’s strengths, weaknesses, opportunities and threats
concluded the following:
Strengths:
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Sweet Papaya’s reputation for premium quality products and competitive pricing.
Excellent customer service.
The ability to customize products to meet the needs of our clients.
An online store for easy access to our products and staff.
Minimal capital investment because of small start-up costs and the home-based
facilities.
Management’s knowledge of the product and industry.
11

12. 
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Dedication to providing an experience when the customer consumers the product
rather than just a consumable product.
A creative staff and philosophy that will drive a philosophy of trendsetting
through market research, customer knowledge, and listening.
Weaknesses:
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Limited resources in the preliminary growth stages.
Limited brand awareness.
Steep learning curve as new entrant into the market
Lack of relationship with the wholesale market.
Lack of automated production equipment until cash flow improves.
Poor market penetration.
Lack of networking/working relationship with mass retailers and global network.
Limited specific expertise/resources in the confectionery industry.
Opportunities:
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Baby Boomer market is the fastest growing segment of the market. This segment
of the market prefers premium, organic chocolate to other confections.
Growing belief in the health benefits of organic products and dark chocolate.
Asian markets are largely unserved by this product and provide a large market
opportunity when the company expands into the global market.
A product catering to women through targeted packaging and flavors.
Very few organic competitors in a growing segment of the confectionery market.
Threats:
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4.2
Lack of automated production and packaging equipment.
Lack of sales/marketing force.
Increased cocoa bean prices.
Scientific studies that may sway consumer’s tastes and health concerns.
Difficulty is establishing brand awareness and consumer interest.
Industry Analysis
There were 358 new product lines in 2004, up from 264 in 2000. One year’s crop of new
SKUs is several times the assortment typically carried by chain retailers, who can stock
only two to three percent of the available products. Prioritizing linear-foot profits over
depth of selection, chain retailers – particularly Wal-Mart, which jettisons up to 20% of
its products each year, according to BusinessWeek, are pressuring marketers to weed out
slower-moving brands and SKUs.
12

13. Confectionary Overview:
The overall U.S. candy market is largely mature, and health and diet concerns (including
childhood obesity) dampen the prospects or internal growth.
Given the maturity of the market, health concerns, and unfavorable demographic factors
on the one hand and the continued growth in premium chocolates on the other, Packaged
Facts projects that U.S. retail sales of chocolate candy will grow at 4% annually over the
upcoming five-year period. At this rate, the market will approach $17.8 billion by 2009.
Annual sales growth for organic chocolates is estimated at 3% annually. According to
Productscan data on package tags (featured product claims), the number of organic
chocolate candy introductions climbed from nine in 2000 to 18 in 2004, while the number
of natural chocolate candy introductions rose from 20 to 51.
Private label is somewhat weak in chocolate candy compared to other food categories, at
9.3% of dollar sales in chocolates versus 14% for food categories overall. Nonetheless,
store brands have weighed in very respectably for gift box (18.7%) and seasonal (13.5%)
chocolates.
Nutrition-related claims, including low sugar, low card and organic, are among the most
important new product appeals. The household group also tends to have more flexibility
toward the brand they purchase, which means if a store is out of the brand they intend to
buy, they will buy another brand that is on sale and/or looks good to them.
The self-purchase group, on the other hand, is willing to go to another store to get the bar
they consider their favorite “everyday” chocolate bar.
Regarding category trends, the survey respondents say low-fat and fat-free products
aren’t as good tasting as regular chocolate. The respondents also mentioned concerns
about such products’ ingredients and whether they might be some ingredient in the
reformulated chocolate that is equally bad for them.
Demand for Cocoa:
The demand for cocoa is influenced by several factors:
 Price – a rise in cocoa prices leads to a fall in demand.
 Income – the income of individuals has a significant effect on their purchase of
chocolate and so impacts on demand. Countries with high GDP are also high
cocoa consumers.
 Population and population structure – the size of a country’s population affects its
demand for cocoa. The structure of its population is also important as young
people tend to eat more chocolate than older people.
 Taste and preferences – Climate and cultural differences can affect demand for
cocoa. Those in warmer climates tend to eat less chocolate than those in colder
climates. Culture and preferences can sometimes explain low consumption
figures.
13

14. Asia offers strong growth potential for the chocolate industry because of the sheer size of
the market which includes highly populous China, India and Indonesia. Despite its size,
Asia only accounts for around 10% of the world chocolate confectionary consumption.
Per capita consumption of chocolate confectionery in Asia is very low so there is plenty
of scope to boost it. In the 2001-2002 cocoa year, world consumption was around 0.530
kilograms per head (or 0.967 kilograms per head excluding China, India and Indonesia
whose large populations have a disproportionate effect on world per capita consumption).
There are, however, wide variations in consumption levels between the regions.
Countries in Europe consume on average around 1.868 kilos per head, the America 1.197
kilos, Asia and Oceania 0.106 kilos, and Africa 0.134 kilos.
The global confectionery market reached as estimated value of $73.2 billion in 2001, an
increase of 21% since 1996. The European market is the world’s largest, accounting for
42% of revenues for confectionery worldwide, followed by the Americas. Though
chocolate has reached all regions of the world, 60% of all chocolate is still consumed in
the mature chocolate markets of the U.S. and European Union, representing only 20% of
the world population. Volume growth is difficult to achieve in the traditional markets of
the US and EU, but there are opportunities for value growth with the introduction of
premium chocolates, snack products and functional foods.
4.2.1 Industry Participants
The table below is lists the top ten global confectionery companies that manufacture
some form of chocolate by total confectionery sales value in 2003:
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Mars Inc
Nestle Sa
Cadbury Schweppes PLC
Ferreroa SpA
Hershey Food Corp
Kraft Foods
Wm. Wrigley Jr. Co.
Barry Callebaut AG
Perfetti Van Melle SpA
Lindt & Sprungli
$ 8,145 millions
$ 7,771 millions
$ 5,890 millions
$ 4,769 millions
$ 4,120 millions
$ 3,122 millions
$ 2,746 millions
$ 2,547 millions
$ 1,599 millions
$ 1,212 millions
4.2.2 Distribution Patterns
Distribution patterns in the gourmet chocolate industry as such that small, independent
manufacturers can compete in the niche market successfully through the Internet and
retailers that specialize in the gourmet and organic market. Developing a loyal customer
base is the key element in distribution in this industry. When brand awareness and
customer loyalty have started to take hold, distribution through local and regional
markets becomes more readily accessible.
14

15. 4.2.3 Competition and Buying Patterns
Large, established companies in the industry have economies of scale that will not be
possible for a small, start-up company. Large manufacturers, however, traditionally
compete at a different price point than smaller, more specialized manufacturers.
Research shows the main difference between mass market consumers is that respondents
who bought chocolate candy primarily for themselves were driven by personal cravings
for chocolate, but respondents who bought mainly for their household were concerned
with pleasing the entire family. Household purchase groups make brand decisions based
on chocolate candies that will make themselves and their families feel good, indicating
chocolate is a comfort food for them and they buy it when they want to do something
nice for their families. They base their brand purchase decisions on chocolate candies
that they liked as children, but are not as loyal to the type of chocolate they purchase.
They are more willing to buy a variety that is on sale or a variety for which they have a
coupon.
5.0
Strategy and Implementation Summary
Sweet Papaya will pursue local, regional, national and global markets through different
distribution channels primary centering on Internet sales. We will use our unique product
packaging and corporate dedication to creating a romantic, euphoric product to propel
sales and direct marketing into key outlets.
Initial revenues will be generated by Internet sales and local distribution.
Regional and national sales will follow.
Women will be targeted first.
5.1
Marketing Strategy
A product launch of chocolate bars, which continue to dominate the candy category
despite growing competition and consumer interest in “healthful” alternatives, would
combine two popular categories of organic and chocolate bars. 1.5 to 3.5-ounce candy
bars are still the 800-pound gorilla of the candy industry.
There are four general trends in the candy bar world: increasing variety in product shapes
and packaging; research into untapped sales venues; continuing consumer acceptance of
reduced-fat items; and more promotional co-branding with partners from other industries.
Adding vitamin-enriched bars would also be a good addition to the product line. This
would address consumer concerns about chocolate contributing to obesity while also
servicing a segment of the market less inclined to eat organic chocolate, the five-14 year
olds.
15

16. The growing trend toward low-cal, low-fat products appears to have benefited the
premium chocolate market. The increase in awareness about calories and related health
concerns has created a backlash effect among some consumers who still want to treat
themselves regardless of calorie or fat concerns being expressed by other consumers.
Many people who won’t buy health products if they don’t taste great will restrict their
frequency of consumption, saying: “If I’m going to eat less chocolate, what I eat is going
to be top-quality chocolate.” In addition, fat content is a non-issue in Europe, which
means future European imports will not be low-fat. This fact supports our drive towards
top-quality, premium chocolate products that strive for euphoric taste without an
emphasis on calorie content. Sugar Free and Low Carb bars will be offered, as they are a
growing segment of the market.
We will introduce a broad assortment of chocolate gift boxes in romantic packaging, as
well as Twist products, which are individually wrapped chocolates that can be sold
individually. Proprietary product lines of truffles, clam shells, and chocolate sauces will
be the base product line.
Using a batch process, the company will devote nearly 65% of its output to base product
line. By retaining the integrity of the chocolate-making process while simultaneously
investing in high-end automation and technology, the company can deliver premium
products at affordable price points. It all revolves around the company’s triple bottomline mission, which focuses on delivering creativity, quality and price to an everexpanding circle of chocolate –loving consumers.
5.1.1 Pricing Strategy
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Product will be sold as a premium product while attempting to make the product
affordable.
1.5 ounce chocolate bars will be sold at $1.75 a piece
3.5 ounce chocolate bars will be sold at $2.50 a piece
Truffles will sell for $2.00 a piece.
A 2-truffle box will sell for $3.95.
A 4-truffle box will sell for $7.75.
A 6-truffle box will sell for $11.50.
An 8-truffle box will sell for $15.50.
A 12-truffle box will sell for $23.50.
Clam shells will sell for $9.50 per pound.
Chocolate sauces sell for $7.50 for a 4 ounce jar.
The vitamin-enriched chocolate bars sell for $5.00 a piece.
Twist chocolate sell for .50 each.
Bulk discounts will start at 5% on orders over $500.
Credit terms will be extended to retailers.
Internet customers will pay shipping costs.
Retailers will pay shipping costs.
16

17. 5.2
Sales Strategy
Sweet Papaya’s sales strategy is to start with limited capitol on the Internet to keep startup costs low while building a product following. While building the Internet sales, local
and regional retailers will be contacted for increased outlets by the first quarter of 2007.
The projection is for 20% of sales to be achieved in the local/regional market by the first
quarter of 2007.
As brand awareness, economies of scale, customer loyalty, and industry knowledge
increase during 2007, a move into the national market will be coordinated for 2008
growth projections of 10% of sales in the national market.
A global growth projection of 5% will be the forecast for 2009.
5.2.1 Sales Forecast
Sweet Papaya projects revenues of $50,000 for the first year. The first quarter of 2007
will see movement into the local and regional markets, projected to be 10% of annual
sales. Increased brand awareness and distribution channels should produce stellar growth
rates for the first five years as revenues increase steadily in the Internet market.
Expanding distribution into the national and global markets will produce revenues of
almost $1.2 million by the year 2010. The national market is projected to be 10% of
annual sales in the year 2008, and 5% for the international market in the year 2009. The
Direct Cost of sales is projected to be 10% of annual sales.
The following chart and graph reflect the realistic goals we have set.
Table 5.2.1 Sales Forecast
Sales
Internet
Local/Regional
Market
National Market
Global Market
Total Sales
Direct Cost of
Sales
Internet
Local/Regional
Market
National Market
Global Market
Subtotal Cost of
Sales
2006
2007
2008
2009
$50,000 $150,000 $262,500 $459,375
2010
$803,906
$0 $15,000 $45,000 $90,000
$0
$0 $25,000 $50,000
$0
$0
$0 $45,000
$50,000 $165,000 $332,500 $644,375
$180,000
$100,000
$90,000
$1,173,906
$5,000
$15,000
$26,250
$45,938
$80,391
$0
$0
$0
$1,500
$0
$0
$4,500
$2,500
$0
$9,000
$5,000
$4,500
$18,000
$10,000
$9,000
$5,000
$16,500
$33,250
$64,438
$117,391
17

18. $1,200,000
$1,100,000
$1,000,000
$900,000
$800,000
$700,000
$600,000
$500,000
$400,000
$300,000
$200,000
$100,000
$0
2006
2007
2008
Sales
6.0
2009
2010
Direct Cost of Sales
Management Summary
As stated earlier in 2.1 Company Ownership, the management of the company will be
handled by Taylor Delacourt. As President of Sweet Papaya., Taylor brings 22 years of
management experience to the position. Taylor holds a Bachelor of Science degree in
finance. Taylor’s education and experience in the candy and confectionary industry
comes from years of baking and non-profit catering provided through referral. Taylor
began her office management experience in 1982 while working for a start-up general
contractor until 1993. This was the first small business start-up company she managed.
From 1994 until 1999, Taylor was the President of Jubilee, another start-up small
business. As President of Jubilee, Taylor started a manufacturing and distribution
company that grew to a $1.3 million company before selling to a larger manufacturer in
1999. In 1999, Taylor finished her undergraduate studies. Taylor will handle all aspects
of the start-up and daily operations.
6.1
Personnel Plan
The following table illustrates the Personnel Plan for Sweet Papaya Specific needs,
compensation, and timing are indicated for each position.
18

19. Table 6.1: Personnel Plan
Personnel
2006
2007
2008
2 Production Workers
1 Office Assistant
7.0
$0
$0
$25,000
$0
$25,000
$25,000
Total Payroll
F
iTotal Headcount
n
ancial Plan
$0
$25,000
$50,000
0
2
3
The financial plan for Sweet Papaya is presented in detail in the following sections. The
business will be financed mainly through cash flow. The main investment is for initial
equipment, inventory, and operating expenses.
7.1
Important Assumptions
The financial plan depends on financial assumptions, most of which are shown in the
following table. Current short-term interest rates are calculated at a rate of 0%. If future
short-term loans are used, the assumed interest rate will be used. During the first year of
business, all sales will be via Internet and paid upon order so no Collection Days
estimation or Sales on Credit % has been calculated. There is no payroll until the second
year of business so no Personnel Burden % has been calculated during the first year.
Table 7.1: General Assumptions
2006
2007
2008
Short-Term Interest Rate
0.00%
10.00%
10.00%
Long-Term Interest Rate
10.00%
10.00%
10.00%
Payment Days Estimator
35
35
35
0
30
30
Tax Rate %
20.00%
20.00%
20.00%
Expenses in Cash %
25.00%
25.00%
25.00%
Sales on Credit %
0.00%
10.00%
15.00%
Personnel Burden %
0.00%
15.00%
15.00%
Collections Days Estimator
19

20. 7.2
Break-even Analysis
Proposed Break-even
The following table and chart summarize our break-even analysis. With fixed costs of
$13,411 per year and variable costs of $0.11 per 3.5 ounce chocolate bar, we need to bill
$14,028 to cover our costs at a price point of $2.50 per chocolate bar. Break-even, based
upon fixed initial market overheads, will be attained prior to the end of year one. An
expanded product line, economies of scale, increased market share, cost control,
investments in equipment, and market maturation will accelerate profitability.
Break-even should be attained by month five figuring sales of 50 bars per day using a 23day month. 5611 - 3.5 ounce chocolate bars divided by 50 bars per day equals 112 days
divided by 23 days per month equals 4.88 months until break-even.
Table 7.2: Break-even Analysis
NET
UNITS
NET
REVENUE
FIXED COST
VARIABLE
COST
TOTAL
COST
TOTAL PROFIT
0
$15
$938
$1,875
$2,813
$3,750
$4,688
$5,625
$6,563
$7,500
$8,438
$9,375
$10,313
$11,250
$12,188
$13,125
$14,063
$15,000
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$13,411
$0
$42
$83
$125
$167
$209
$250
$292
$334
$376
$417
$459
$501
$543
$584
$626
$668
$13,411
$13,453
$13,494
$13,536
$13,578
$13,620
$13,661
$13,703
$13,745
$13,787
$13,828
$13,870
$13,912
$13,954
$13,995
$14,037
$14,079
($13,396)
($12,515)
($11,619)
($10,724)
($9,828)
($8,932)
($8,036)
($7,141)
($6,245)
($5,349)
($4,453)
($3,558)
($2,662)
($1,766)
($870)
$25
$921
375
750
1,125
1,500
1,875
2,250
2,625
3,000
3,375
3,750
4,125
4,500
4,875
5,250
5,625
6,000
FIXED COST
VARIABLE COST
$
$
NUMBER OF UNITS
UNIT PRICE
20
$
13,411
0.11
375
2.50

21. Breakeven Analysis
$16,000
$15,500
$15,000
COST-SALES-PROFIT
$14,500
$14,000
$13,500
$13,000
$12,500
$12,000
$11,500
$11,000
$10,500
6000
5625
5250
4875
4500
4125
3750
3375
3000
2625
2250
1875
1500
1125
750
375
0
$10,000
NET UNITS (000)
Per Unit
Revenue
$
$
$
2.39
=
Total
%
=
$ 13,411
95.60%
0.11
Contribution Margin
Volume
2.50
Variable Expenses
x
x
5,611.3
Fixed Expenses
$ 13,411
Operating Income
$
5,611.3 units
Volume in units at break even =
$14,028.24
Total revenues at break even =
7.3
-
Projected Profit and Loss
Our projected profit and loss is shown in the following table, with revenue increasing
from $50,000 in the first year to $332,500 in the third year. This is attained by expanding
marketing efforts from Internet only in the first year to the regional wholesale market in
the second year, to national and global sales by year five. It is also attained by investing
in commercial production equipment; lower input costs through more efficient, high
quantity purchasing; and movement into the wholesale market.
21

22. Table 7.3: Projected Profit and Loss
Sales
Direct Costs
Depreciation
Total Cost of Goods Sold
Gross Profit
$
$
$
$
$
2006
50,000
5,000
565
5,565
44,435
Expenses:
Advertising
Charitable Contributions
Credit Card Fees
Delivery Expenses
Dues and Subscriptions
Insurance
Maintenance
Miscellaneous
Office Expenses
Operating Supplies
Payroll Taxes
Permits and Licenses
Postage
Professional Fees
Repairs
Telephone
Travel
Wages
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
1,000
250
50
450
25
525
100
250
2,500
5,000
25
156
250
100
480
2,250
-
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
3,300
825
165
1,485
40
550
250
500
8,250
16,500
2,760
100
246
3,000
2,500
504
4,700
25,000
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
$
13,411
$
70,675
$ 136,833
Income (Loss) Before Taxes
$
31,024
$
75,075
$ 156,767
Taxes
$
6,205
$
15,015
$
Net Income (Loss)
$
24,819
$
60,060
$ 125,414
36.40%
37.72%
Total Expenses:
Net Profit/Sales
49.64%
22
$
$
$
$
$
2007
165,000
16,500
2,750
19,250
145,750
$
$
$
$
$
2008
332,500
33,250
5,650
38,900
293,600
6,650
1,663
333
2,994
55
575
400
750
16,625
33,250
5,520
125
516
5,000
4,500
528
7,350
50,000
31,353

23. 7.4
Projected Cash Flow
Initially cash flow will be supported by the personal savings accounts of the head officer
along with a $2,500 short-term loan and a $5,000 long-term loan. Both loans are interest
free.
$29,000
$26,500
$24,000
$21,500
$19,000
$16,500
$14,000
$11,500
$9,000
$6,500
$4,000
$1,500
$(1,000)
Jan Feb Mar April May June July Aug Sept Oct Nov Dec
Cash Flow Cash Balance
23

24. Table 7.4: Projected Cash Flow
2006
2007
2008
Cash Flows From Operating Activities
Net Income (Loss)
$
24,819 $
60,060 $
125,414
Depreciation
$
565 $
2,750 $
5,650
Short Term Investments (Increase) Decrease
$
Inventory (Increase) Decrease
$
Income Tax Payable Increase (Decrease)
Net Cash Provided From Operating
Activities
Plus:
(2,500)
$
-
$
-
1,750 $
500 $
-
$
6,205 $
8,810 $
16,338
$
30,839 $
72,120 $
147,402
$
(5,650)
Cash Flows From Investing Activities
Investment in Equipment
$
(21,850)
$
(29,000)
Cash Flows From Financing Activities:
Long Term Borrowings
$
5,000 $
-
$
-
Payment(s) on Long Term Debts
$
1,000 $
1,000 $
1,000
Total Financing Activities
$
4,000 $
Increase (Decrease) in Cash
$
Cash Balance at the Beginning of the Period
7.5
Projected Balance Sheet
Projected Balance Sheets follows:
24
$
(1,000)
29,189 $
49,270 $
117,402
$
- $
29,189 $
78,459
$
Cash Balance at the End of the Period
(1,000)
29,189 $
78,459 $
195,861

25. Table 7.5: Projected Balance Sheet
Assets
Starting
Balance
$ 5,000
2,500
-
2006
$ 29,189
1,750
2007
$ 78,459
2,250
2008
$ 195,861
2,250
7,500
30,939
80,709
198,111
Plant & Equipment
Tools
Equipment
Office Equipment
Total Equipment
Accumulated Depreciation
-
2,000
3,500
150
5,650
565
4,000
18,500
5,000
27,500
3,315
8,000
33,500
15,000
56,500
8,965
Undepreciated Cost of Equipment
-
5,085
24,185
47,535
7,500
$ 36,024
$ 104,894
$ 245,646
Liabilities
Current Liabilities
Income Tax Payable
Notes Payable - Short-Term
2,500
6,205
-
15,015
-
31,353
-
Notes Payable - Current Maturities
of Long Term Debt
Total Current Liabilities
2,500
6,205
1,000
16,015
1,000
32,353
Notes Payable - Long Term Debt
5,000
5,000
4,000
3,000
7,500
11,205
20,015
35,353
Owner's Equity
Retained Earnings-Beginning of Year
Dividends Paid
Current Year Net Income/(Loss)
-
24,819
-
84,879
-
210,293
-
Total Owner's Equity
-
24,819
84,879
210,293
7,500
$ 36,024
$ 104,894
$ 245,646
Current Assets
Cash and Cash Equivalents
Short Term Investments
Inventory
Total Current Assets
$
Total Assets
Total Liabilities
Total Liabilities and Owner's Equity
25
$

26. 7.6
Business Ratios
The following are generated business ratios.
Table 7.6: Projected Business Ratios
2006
88.9%
62.0%
62.0%
49.6%
125.0%
100.0%
620.5%
496.4%
86.1%
68.9%
100.3%
Liquidity ratios
Current ratio
Quick ratio
Cash ratio
Inventory turnover
Cash to total assets
Current assets to total assets
Quick assets to total assets
Inventory to working capital
Inventory to current assets
Working capital turnover
Debt ratios
Times interest earned
Total debt to total assets
Debt to equity
Debt to total invested capital
Common equity to total invested capital
Total equity to total assets
Funded debt to working capital
26
2007
88.3%
45.5%
45.5%
36.4%
88.4%
70.8%
1876.9%
1501.5%
71.6%
57.3%
92.8%
2008
88.3%
47.1%
47.1%
37.7%
74.5%
59.6%
5225.6%
4180.5%
63.8%
51.1%
75.7%
5.0
4.7
4.7
3.2
0.8
0.9
0.8
0.1
0.1
2.0
Ratio
Gross margin
Operating margin
Pretax margin
After-tax profit margin
Pretax ROE
After-tax ROE
Return on invested capital before tax
Return on invested capital after tax
ROA before interest and tax
ROA after tax
Return on working capital
5.0
4.9
4.9
8.6
0.7
0.8
0.7
0.0
0.0
2.6
6.1
6.1
6.1
17.3
0.8
0.8
0.8
0.0
0.0
2.0
13.9%
20.1%
100.0%
0.0%
68.9%
20.2%
3.8%
4.7%
100.0%
0.0%
80.9%
6.2%
1.2%
1.4%
100.0%
0.0%
85.6%
1.8%

27. Other ratios
Asset turnover
Retained earnings to net income
Sales to net worth
Fixed asset turnover
1.4
1.0
2.0
9.8
Computed values
Operating income
Owner's equity / Net worth / Book value
Working capital
Cash and equivalents
Quick assets
Total invested capital
Net fixed assets
Net receivables
Average sales per day
Average cost of goods sold per day
Days' sales in inventory
Days' sales in receivables
Net sales (sales to use in computations)
Other current assets
Long-term assets
Long-term debt
Other long-term liabilities
Primary shares
Effective tax rate
27
1.6
1.4
1.9
6.8
1.4
1.7
1.6
7.0
31,024
24,819
24,734
29,189
29,189
5,000
5,085
1,666.7
185.5
9.4
50,000
5,000
5,000
75,075
84,879
64,694
78,459
78,459
4,000
24,185
5,500.0
641.7
3.5
165,000
4,000
4,000
156,767
210,293
165,758
195,861
195,861
3,000
47,535
11,083.3
1,296.7
1.7
332,500
3,000
3,000
20%
20%
20%

28. Appendix A
Table 7.5: Projected Balance Sheet
Assets
Current Assets
Starting
Balances
Cash
$
5,000
$
5,000
$
7,215
$
8,297
$
9,542
Short-Term Investments
$
2,500
$
2,500
$
-
$
-
$
Inventory
$
-
$
500
$
675
$
742
$
Total Current Assets
$
7,500
$
8,000
$
7,890
$
9,040
$ 10,358
$ 11,871
$ 13,607
$ 15,599
$ 17,884
$ 20,507
$ 23,517
$ 26,973
$ 30,939
Plant & Equipment
$
-
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
$
5,650
Accumulated Depreciation
$
-
$
565
$
565
$
565
$
565
$
565
$
565
$
565
$
565
$
565
$
565
$
565
$
565
Total Long-Term Assets
$
-
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
$
6,215
Total Assets
$
7,500
Jan
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec
$ 10,973
$ 12,619
$ 14,512
$ 16,689
$ 19,192
$ 22,071
$ 25,381
$ 29,189
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
817
$
898
$
988
$
1,087
$
1,196
$
1,315
$
1,447
$
1,591
$
1,750
Long-Term Assets
$ 13,085
$ 12,975
$ 14,125
$ 15,443
$ 16,956
$ 18,692
$ 20,684
$ 22,969
$ 25,592
$ 28,602
$ 32,058
$ 36,024
Jan
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec
Liabilities and Owner's Equity
Income Tax Payable
$
-
$
1,600
$
1,578
$
1,808
$
2,072
$
2,374
$
2,721
$
3,120
$
3,577
$
4,101
$
4,703
$
5,395
$
6,205
Notes Payable – Short-Term
$
2,500
$
2,500
$
2,500
$
2,500
$
2,500
$
2,500
$
2,500
$
2,500
$
2,500
$
-
$
-
$
-
$
-
Total Current Liabilities
$
2,500
$
4,100
$
4,078
$
4,308
$
4,572
$
4,874
$
5,221
$
5,620
$
6,077
$
4,101
$
4,703
$
5,395
$
6,205
Notes Payable - Long Term Debt
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
$
5,000
Total Liabilities
$
7,500
$
9,100
$
9,078
$
9,308
$
9,572
$
9,874
$ 10,221
$ 10,620
$ 11,077
$
9,101
$
9,703
$ 10,395
$ 11,205
Retained Earnings
$
-
$
2,068
$
4,137
$
6,205
$
8,273
$ 10,341
$ 12,410
$ 14,478
$ 16,546
$ 18,614
$ 20,683
$ 22,751
$ 24,819
Total Owner's Equity
$
-
$
2,068
$
4,137
$
6,205
$
8,273
$ 10,341
$ 12,410
$ 14,478
$ 16,546
$ 18,614
$ 20,683
$ 22,751
$ 24,819
Total Liabilities and Owner's Equity
$
7,500
$ 17,845
$ 20,216
$ 22,631
$ 25,098
$ 27,623
$ 27,716
$ 30,386
$ 33,145
$ 36,024
$ 11,168
$ 13,214
$ 15,513
28

29. Appendix B
Table 7.4: Projected Cash Flow
Jan
Net Income
Feb
Mar
2,068
$
April
2,068
$
May
2,068
$
June
2,068
$
July
2,068
$
Aug
2,068
$
Sept
2,068
$
Oct
2,068
$
Nov
2,068
$
Dec
$
2,068
$
2,068
$
2,068
Depreciation
$
565
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Short-Term Investments (Increase) Decrease
$ (2,500)
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Inventory (Increase) Decrease
$
-
$
-
$
-
$
-
$
-
$
-
$
290
$
292
$
292
$
292
$
292
$
292
Income Tax Payable Increase (Decrease)
$
(396)
$
3
$
39
$
81
$
156
$
240
$
358
$
529
$
747
$
987
$
1,453
$
2,008
Net Cash Provided From Operating Activities
$
(263)
$
2,071
$
2,108
$
2,149
$
2,224
$
2,309
$
2,716
$
2,889
$
3,108
$
3,348
$
3,813
$
4,368
$ (5,650)
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Long-Term Borrowings
$
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Payment(s) on Long-Term Debts
$
$
1,000
Total Financing Activities
$
5,000
$
Increase (Decrease) in Cash
$
(913)
$
2,071
$
2,108
$
2,149
$
2,224
$
2,309
$
2,716
$
Cash Balance at the Beginning of the Period
$
-
$
(913)
$
1,158
$
3,265
$
5,415
$
7,638
$
9,947
$ 12,663
$ 15,552
$ 18,660
$ 22,008
$ 25,821
Cash Balance at the End of the Period
$
(913)
$
1,158
$
3,265
$
5,415
$
7,638
$
9,947
$ 12,663
$ 15,552
$ 18,660
$ 22,008
$ 25,821
$ 29,189
Plus:
Cash Flows From Investing Activities
Investment in Equipment
Cash Flows From Financing Activities:
5,000
-
$
-
$
$
-
$
$
-
$
$
29
-
$
$
-
$
$
-
$
$
2,889
$
$
$
3,108
$
$
$
3,348
$
$
$
3,813
$ (1,000)
$
3,368

30. Appendix C
Table 7.3: Projected Profit and Loss
Jan
Sales
$
Direct Costs
Depreciation
Total Cost of Goods Sold
Gross Profit
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec
500
$
673
$
906
$
1,219
$
1,641
$
2,209
$
2,973
$
4,002
$
5,387
$
7,272
$
9,854
$ 13,364
$
50
$
67
$
91
$
122
$
164
$
221
$
297
$
400
$
539
$
727
$
985
$
$
565
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
$
615
$
67
$
91
$
122
$
164
$
221
$
297
$
400
$
539
$
727
$
985
$
$
(115)
$
606
$
815
$
1,097
$
1,477
$
1,988
$
2,676
$
3,602
$
4,848
$
6,545
$
8,868
Advertising
$
500
$
45
$
45
$
45
$
45
$
45
$
45
$
45
$
45
$
45
$
45
$
Charitable Contributions
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Credit Card Fees
$
Delivery Expenses
$
Dues and Subscriptions
$
-
Insurance
$
525
Maintenance
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
Miscellaneous
$
21
$
21
$
21
$
21
$
21
$
21
$
21
$
21
$
21
$
21
$
21
$
21
Office Expenses
$
208
$
208
$
208
$
208
$
208
$
208
$
208
$
208
$
208
$
208
$
208
$
208
Operating Supplies
$
50
$
67
$
91
$
122
$
164
$
221
$
297
$
400
$
539
$
727
$
985
$
1,336
Payroll Taxes
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Permits and Licenses
$
25
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Postage
$
39
$
-
$
-
$
39
$
-
$
-
$
39
$
-
$
-
$
39
$
-
$
-
Professional Fees
$
250
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Repairs
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
$
8
Telephone
$
40
$
40
$
40
$
40
$
40
$
40
$
40
$
40
$
40
$
40
$
40
$
40
Travel
$
188
$
188
$
188
$
188
$
188
$
188
$
188
$
188
$
188
$
188
$
188
$
188
Wages
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
$
-
Total Expenses
$
1,867
$
593
$
618
$
692
$
699
$
787
$
885
$
959
$
1,111
$
1,608
$
1,603
$
Income Before Taxes
$ (1,982)
$
13
$
197
$
405
$
778
$
1,201
$
1,791
$
2,643
$
3,737
$
4,937
$
7,266
$ 10,039
Taxes
$
(396)
$
3
$
39
$
81
$
156
$
240
$
358
$
529
$
747
$
987
$
1,453
$
Net Income
$ (1,586)
$
10
$
157
$
324
$
622
$
961
$
1,433
$
2,114
$
2,989
$
3,950
$
5,813
$
1,336
1,336
$ 12,027
Expenses:
Net Income/Sales
1
$
5
$
$
-317.17%
1
6
$
$
-
1.53%
250
$
-
$
-
$
1
$
2
$
2
$
3
$
4
$
5
$
7
$
10
$
13
8
$
$
1
$
-
45
$
11
$
15
$
20
$
27
$
36
$
48
$
65
$
89
$
120
$
-
$
-
$
25
$
-
$
-
$
-
$
-
$
-
$
-
-
$
-
17.39%
$
-
26.60%
$
-
$
37.91%
30
-
43.51%
$
-
48.19%
$
-
52.83%
$
-
55.50%
$
-
54.31%
$
-
58.99%
$
-
1,989
2,008
8,031
60.09%

31. Appendix D
Table 7.1: General Assumptions
Jan
Feb
Mar
April
May
June
July
Aug
Sept
Oct
Nov
Dec
Short-Term Interest Rate
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Long-Term Interest Rate
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Payment Days Estimator
35
35
35
35
35
35
35
35
35
35
35
35
0
0
0
0
0
0
0
0
0
0
0
0
Tax Rate %
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
20.00%
Expenses in Cash %
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
Sales on Credit %
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Personnel Burden %
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
0.00%
Collections Days Estimator
31

32. Appendix E
Loan and Reference Information:
Key Executives:
Business:
Sweet Papaya
Form of Ownership:
S Corporation
Loan Purpose:
To purchase equipment, inventory, and provide cash flow for first
year of operating expenses.
Loan Amount:
$35,000
Lending Institution:
Legal Consultant:
Accountant:
32

33. Appendix F
PRINCIPAL’S RESUMES
33