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The Business PlanASUSmall BusinessDevelopment CenterRevised November 2008This document was developed as an instructional aide for usewith “The Business Plan” workshop.Quick Mart is ahypothetical business operation presented only as a casestudy.

Personalized Cover LetterQUICK MART, LLCHighway 3 and Main StreetA Convenience Store in 200X Stanley and Virginia Smith, Owners123 Any StreetFortsville, Texas 55555(512) 555-5555(512) 123-4567(As our services are always CONFIDENTIAL and free of charge, the names and addresses, financialinformation, etc. is fictional and not based upon anyone or real financial circumstances.)Today’s DateMr. John Loansalot, Vice President Commercial LendingYour Personal Bank123 Main StreetBoulder, Texas 55555Dear Mr. Loansalot:Quick Mart, LLC requires 200,000 to renovate and begin operating a full-service convenience store. Of thisamount, 60,000 will be invested by Stanley and Virginia Smith. A SBA guaranteed loan of 140,000 is requestedfor a period of fifteen years. The collateral to secure the loan will be the real estate, inventory, furniture, fixtures,and equipment belonging to the business. Personal assets are available for negotiation as additional collateral.The enclosed financial proposal shows this to be a profitable business venture. There is a market for this serviceand the future growth is promising. Sufficient owner investment and collateral is provided and the financialstatements show the ability to repay the loan. We have the experience, knowledge and desire to make Quick Marta success!We will contact you next week after you have had the opportunity to review this financial proposal. Thank you inadvance for your time and interest.Sincerely,Stanley SmithVirginia SmithStanley SmithVirginia Smith2

Cover SheetBUSINESS PLANANDFINANCIAL PROPOSALQuick Mart, LLCSubmitted by:Stanley A. and Virginia M. Smith123 Fourth StreetFortsville, Texas 55555(512) 123-4567Today’s Date3

TABLE OF CONTENTSMISSION STATEMENT AND EXECUTIVE SUMMARY – Outline --------------- 6MISSION STATEMENT -----------6EXECUTIVE ------------------6FINANCIAL OVERVIEW ----------6BUSINESS DESCRIPTION – Outline ------------------------------------------------ 8NAME AND LOCATION OF BUSINESS PAL OWNERS -------------8LEGAL STRUCTURE (Sole proprietor, Partnership, LLC, Sub-S or C-Corporation) ---------------------------------------8STATUS AND TYPE ---------------8DEFINITION OF PRODUCTS/SERVICES -----------------------------------------8MAJOR STRENGTHS AND CHALLENGES ----------------------------------------8STRATEGIC GOALS & -------8OPERATIONS PLAN – Outline --- 10LOCATION ------------------------ 10PHYSICAL FACILITY ------------ 10LABOR ----------------------------- 10SUPPLIERS ----------------------- 10MARKET ANALYSIS – Outline ---- 12INDUSTRY TRENDS ------------- 12DESCRIPTION OF TOTAL MARKET -------------------------------------------- 12TARGET MARKET --------------- 12ANALYSIS OF COMPETITION - 12PRODUCT/SERVICE DIFFERENTIATION ------------------------------------- 12SALES STRATEGY – Outline ------ 14PRICING ----------------------- 14DISTRIBUTION ------------------ 15PROMOTIONAL EFFORTS ----- 154

MANAGEMENT PROFILE – Outline ---------------------------------------------- 16PERSONAL HISTORY OF KEY PARTICIPANTS ------------------------------- 16DUTIES AND RESPONSIBILITIES OF KEY PARTICIPANTS ---------------- 16COMPENSATION ---------------- 16AVAILABLE RESOURCES ------ 17FINANCIAL ANALYSIS – Outline -------------------------------------------------- 18STARTUP COSTS ---------------- 18SOURCE and USE of FUNDS --- 18CAPITAL EQUIPMENT LIST --- 18INCOME STATEMENT PROJECTION ------------------------------------------- 18MONTHLY CASH FLOW PROJECTION and ASSUMPTIONS ---------------- 18BALANCE SHEET PROJECTION ------------------------------------------------- 18PERSONAL FINANCIAL STATEMENT ----------------------------------------- 18PERSONAL INCOME TAX RETURNS ------------------------------------------- 185

MISSION STATEMENT AN D EXECUTIVE SUMMARY – OUTLINEMISSION STATEMENTEXECUTIVE SUMMARYFINANCIAL OVERVIEWNOTES:6

MISSION STATEMENT – Case StudyQuick Mart’s mission is to provide residents, visitors, and commuters of the Fortsville area with convenienceitems and gasoline at competitive prices. Company policy firmly supports the delivery of quality products andsuperior customer service while working towards maximum profitability.EXECUTIVE SUMMARY – Case StudyQuick Mart, LLC requires 200,000 to renovate and operate a full-service convenience store in Fortsville, Texas. A 60,000 owner injection is being pledged by the husband and wife team of Stanley and Virginia Smith. Thebusiness will be operated as a Limited Liability Company (LLC), and will offer grocery, household, pharmaceutical,and novelty items, as well as operating a snack bar and fuel island.Mr. Smith’s extensive industry experience includes ten years in the operations and management of 7-11 Stores inSouth Texas. Mrs. Smith has several years of experience in accounting support services and will play an active rolein the financial management of the business.Extensive primary and third-party research indicates that, given the seasonal nature of this geographic area, QuickMart’s projected base of residential customers will be complemented by an influx of winter tourists and hunters.Further, Quick Mart’s highway location and billboard marketing campaign will attract commuters in this rapidlydeveloping economic area. Direct competition is limited to Fred’s Corner Store, a small business offering freshfruit, vegetables, and a variety of canned goods. Indirect competition is found with H.E.B. and Super S in theneighboring community of Boulder.Mr. and Mrs. Smith anticipate that their success will be furthered by offering goods and services not available atany other store in Fortsville: novelty tourist items, pharmaceuticals, and Senior Citizen discounts. The Smith’sability and willingness to invest substantial cash in the launching of this business is further strengthened by thelack of personal financial dependence on business profits during the early years of the business.Financial Overview – Case StudyA review of this financial proposal shows Quick Mart to be sound, low-risk investment. Cash flow is more thansufficient to service the debt and profit margins are better than RMA Industry standards. First year sales areprojected at 300,000 with only 199,765 required to break even. The debt to equity ratio is reasonable at 2.33:1and reflects the owners’ personal commitment to the business. The bank’s risk would be limited with collateralvalued at 1.21 times the loan amount and the loan backed by an SBA guarantee. In addition to the above,management’s industry experience and personal credit are outstanding. Considering the above information, a 140,000 SBA-guaranteed loan to Quick Mart would be a sound investment.7

BUSINESS DESCRIPTION – OUTLINENAME AND LOCATION OF BUSINESSPRINCIPAL OWNERSLEGAL STRUCTURE (SOLE PROPRIETOR, PARTNERSHIP, LLC, SUB-S OR C-CORPORATION)STATUS AND TYPENew start, expansion, acquisitionManufacturing, retail, wholesale, service, or a combinationDEFINITION OF tive comparisonMAJOR STRENGTHS AND CHALLENGESSTRATEGIC GOALS & OBJECTIVESNOTES:8

BUSINESS DESCRIPTION – Case StudyOverview: Quick Mart, a full service convenience store with Fuel Island, will be located at Highway 3 and MainStreet in Fortville, Texas. Located near the county’s largest city of Boulder, Fortsville is a small, home-towncommunity and popular hunting and winter tourist resort. Quick Mart will be owned and operated by the husbandand wife team of Stanley A. and Virginia M. Smith, residents of Fortsville for the last five years. The business will beoperated as a Limited Liability Corporation (LLC), and will offer grocery, household, pharmaceutical, and noveltyitems, as well as operating a snack bar and fuel island.Mr. Smith has been involved in convenience store operations and management for the past ten years. Afteranalyzing the community during his residency, has decided to take an abandoned gas station and renovate it tobecome a full-service convenience store catering to local residents, commuter, and winter hunters and tourists. Asthere are no convenience stores located in the community other than Fred’s Fruit Stand at the corner of 4th andMain, most residents, commuters, and winter visitors in the nearby recreational vehicle park purchaseconvenience items in neighboring Boulder.Products and Services: Quick Mart will provide local residents an array of much needed products and services.The Grocery section will include canned juices, fruits and vegetables, dog food, baby food, chips, and other variousdry-storage goods. Cigarettes, beer, publications, and snacks will compliment the Grocery section. The Frozensection will include ice cream, dairy products, and chilled wine. Pharmaceuticals such as first aid products,diapers, non-prescription cold medicines and ointments, pantyhose, toys, and other related products will comprisethe Personal Item section. The Home and Auto section will include insecticides, cleansers, paper products, andsmall automotive supplies like oil, transmission fluid, fuses, and funnels. The Snack Bar (popcorn, hotdogs, deliitems, and fresh produce) and Fuel Island will be additional customer conveniences that will truly make Quick Marta full-service convenience store (SIC 5411.)Quick Mart will focus on carrying a wider variety of products than competitors and will offer them at competitiveprices. Floor space larger than competitors, efficient inventory storage, and creative displays will allow Quick Martto provide items not available in the local market.Major Strengths and Challenges: Fortsville, with a current population of 950, will not generate adequatecustomer traffic during the May to August off-season. However, a highly visible, accessible location will help QuickMart enter the market and capitalize on increased traffic during the fall and winter hunting and tourist seasonwhen, according to the South Texas Chamber of Commerce, traffic increases by 175%. During the first year ofoperation, owner salaries are limited due to a stable personal financial situation. (See Financial Analysis –Personal Financial Statement.)Strategic Goals and Objectives:1. Increase sales at a rate of 15% per year to reach a level of 400,000 by the third year.2. Improve overall gross margin by 1% per year to a level of 29% (from 27.3%) over the current productline and maintain that level.3. Add products and services to meet market demand, again at 29% margin or above.4. Improve inventory turnover to 10% over industry standards; reduce th