Chart: Sales Monthly

100%

90%

80%

70%

60%
Series 3
50% Series 2
Series 1
40%

30%

20%

10%

0%
Category 1 Category 2 Category 3 Category 4

Table: Sales Forecast

Sales Forecast
Year 1 Year 2 Year 3
Sales
Dessert Sales $144,000 $216,000 $280,800
POP Sales $2,650 $3,445 $5,167
Carry Out $5,100 $6,240 $9,360
Weekly Lessons $14,400 $15,840 $17,424
Total Sales $166,150 $241,525 $312,751

Direct Cost of Sales Year 1 Year 2 Year 3

Dessert Sales $28,800 $43,200 $56,160
POP Sales $398 $936 $775
Carry Out $765 $936 $1,404
Weekly Lessons $2,160 $2,160 $2,160
Subtotal Direct Cost of Sales $32,123 $47,232 $60,499

Milestones
Rutabaga Sweets plans to be profitable within the first year of operation.  Our goal is to reinvest
in the company and expand to three stores by the third year.  From that point we hope to
establish partnerships with each store's chef; similar to Outback's proprietor program.  They will
each invest in their store and be directly rewarded for its profitability.
Management Summary
Rutabaga Sweets will be slow to hire people in the first few years of operation, but very loyal to
those who are hired.  Initially all employees will be part-time as the majority of the work will be
done by the chef-proprietor.  As the company grows, new employees will be trained and
supervised by original employees who have been promoted to a leadership position.  It is our
belief that employees who are dedicated to the success of Rutabaga Sweets should be rewarded. 
They will be leaders in our future store developments.

Personnel Plan
Our Personnel Plan begins at ground zero with the founder being the only employee.  Wendi
James, the chef and proprietor, will initially serve as the only dessert bar chef, as well as
the store manager and the instructor for the weekly lessons.  Being a graduate of Le Cordon Bleu
in Paris, France with experience in three five-star restaurants she is well prepared for the jobs of
chef and instructor.  In addition, her degree from the University of Illinois, C-U in Restaurant
Management equally prepares her for the managerial aspects of the business.

Rutabaga Sweets intends to promote from within and reward the best employees with leadership
roles. Our opening employment goal is 4 with a goal to increase to 7 by the end of the first
year, 10 the second year and 12 the third year. We realize that this is very aggressive staffing, but
intend to hire culinary professionals who are used to the demands of the restaurant business. By
this hiring philosophy, we will be able to operate with fewer, but more productive employees and
reward them accordingly. From that point we intend to increase the responsibilities of each
employee as opposed to hiring more people.  Thereby rewarding those who have worked hard to
establish Rutabaga Sweets as a superior dessert shop. These people will then be vital in our
expansion as we open new stores.

Table: Personnel

Personnel Plan
Year 1 Year 2 Year 3
Chef/Proprietor $28,800 $31,680 $34,848
Baker $3,920 $4,312 $6,720
Host $4,347 $4,347 $4,347
Dessert Bar Assistants $7,200 $7,920 $8,712
Dishwasher/Busser $5,796 $5,760 $5,760
Total People 7 10 12

Total Payroll $50,063 $54,019 $60,387

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Financial Plan
It is key to our financial success to grow Rutabaga Sweets not just as a dessert bar, but as a
company.  We are looking for an investment of $300,000 seed money with the hopes of
eventually selling an established chain of dessert bars or establishing our company as a gourmet
franchise.  This means we must always be reinvesting in the future of Rutabaga Sweets.

Important Assumptions
The financial plan depends on important assumptions, most of which are shown in the following
table. The key underlying assumptions are:

 We assume a slow-growth economy, without major recession.

 We assume of course that there are no unforeseen changes in technology to make
products immediately obsolete.
 We assume access to equity capital and financing sufficient to maintain our financial plan
as shown in the tables.

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

Projected Cash Flow

Being a quick-service oriented business, our cash flow depends on sales assumptions.  It is
critical to keep our food cost low. We also need to be careful to balance slow (non-holiday)
months with busy months with big holidays such as Christmas, Valentine's Day and Mother's
Day.

Chart: Cash
 Cash

$32,000

$28,000

$24,000

$20,000

$16,000 Net Cash Flow

$12,000 Cash Balance

$8,000

$4,000

$0

($4,000)

($8,000)
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12

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Table: Cash Flow

Pro Forma Cash Flow

Year 1 Year 2 Year 3
Cash Received

Cash from Operations

Cash Sales $166,150 $241,525 $312,751
Subtotal Cash from Operations $166,150 $241,525 $312,751

Additional Cash Received

Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of Other Current Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
New Investment Received $0 $0 $0
Subtotal Cash Received $166,150 $241,525 $312,751
 Expenditures Year 1 Year 2 Year 3

Expenditures from Operations

Cash Spending $50,063 $54,019 $60,387
Bill Payments $104,118 $146,921 $172,515
Subtotal Spent on Operations $154,181 $200,940 $232,902

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current $0 $0 $0
Borrowing
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal $0 $0 $0
Repayment
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Subtotal Cash Spent $154,181 $200,940 $232,902

Net Cash Flow $11,969 $40,585 $79,849

Cash Balance $30,969 $71,554 $151,403

Break-even Analysis
For our break-even analysis, we assume running costs including our full payroll, rent, and
utilities, and an estimation of other running costs. Payroll alone, at our present run rate, is only
about $4,000.

Margins are harder to assume that far in the future.

Chart: Break-even Analysis

Break-even Analysis
$8,000

$6,000

$4,000

$2,000

$0

($2,000)

($4,000)

($6,000)

($8,000)

($10,000)
$0 $4,000 $8,000 $12,000 $16,000 $20,000
$2,000 $6,000 $10,000 $14,000 $18,000 $22,000
Table: Break-even Analysis

Break-even Analysis

Monthly Revenue Break-even $13,251

Assumptions:
Average Percent Variable Cost 19%
Estimated Monthly Fixed Cost $10,689

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Projected Profit and Loss

An important assumption when calculating our P&L is the increase in sales from year to year. 
We are basing our assumptions on the financial success of Finale Dessertery in Boston,
Massachusetts.  They reported a 50% increase in sales the second year of business followed by a
30% increase the next year.  We feel Rutabaga Sweets can match, if not beat those sales,
considering the National Restaurant Association's analysis of the Bureau of Labor Statistics
Consumer Expenditure Survey states that Washington DC households spend the most at
restaurants per year.

It is also vital that we hold our food cost at 20% and 15% respectively for dine-in desserts and
POP, carry-out and weekly lessons.  That will assure our gross margin remains high.

Table: Profit and Loss

Pro Forma Profit and Loss

Year 1 Year 2 Year 3
Sales $166,150 $241,525 $312,751
Direct Cost of Sales $32,123 $47,232 $60,499
Other Production Expenses $0 $0 $0
Total Cost of Sales $32,123 $47,232 $60,499

Gross Margin $134,028 $194,293 $252,252

Gross Margin % 80.67% 80.44% 80.66%

Expenses
Payroll $50,063 $54,019 $60,387
Sales and Marketing and Other $2,300 $2,500 $2,500
Expenses
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $6,000 $6,000 $6,000
Insurance $2,400 $2,400 $2,400
Rent $60,000 $60,000 $60,000
Payroll Taxes $7,509 $8,103 $9,058
Other $0 $0 $0
 Total Operating Expenses $128,272 $133,022 $140,345

Profit Before Interest and Taxes $5,755 $61,271 $111,907

EBITDA $5,755 $61,271 $111,907
Interest Expense $0 $0 $0
Taxes Incurred $1,727 $18,381 $33,572

Net Profit $4,029 $42,890 $78,335

Net Profit/Sales 2.42% 17.76% 25.05%

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Chart: Profit Monthly

Profit Monthly

$3,000

$2,500
$2,000

$1,500

$1,000
$500

$0

($500)
($1,000)

($1,500)

($2,000)

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

Month 2 Month 4 Month 6 Month 8 Month 10 Month 12
Chart: Profit Yearly
Profit Yearly

$80,000

$70,000

$60,000

$50,000

$40,000

$30,000

$20,000

$10,000

$0
Year 1 Year 2 Year 3

Chart: Gross Margin Monthly

Gross Margin Monthly

$16,000

$14,000

$12,000

$10,000

$8,000

$6,000

$4,000

$2,000

$0
Month 1 Month 3 Month 5 Month 7 Month 9 Month 11
Month 2 Month 4 Month 6 Month 8 Month 10 Month 12
Chart: Gross Margin Yearly
Gross Margin Yearly

$240,000

$210,000

$180,000

$150,000

$120,000

$90,000

$60,000

$30,000

$0
Year 1 Year 2 Year 3