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Venia Bar Café Inc. 1245 Kensington Road NW Calgary, Alberta April 11, 2011
ENTI 201 L01: FINAL BUSINESS PLAN Prof. Leo Donlevy
Astrid Holmgren
Scott Kosasih Despina (Dena) Southas
Stefano Vriliotis
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Contents
Executive Summary ....................................................................................................................................... 1 Venia Fact Sheet: .......................................................................................................................................... 2 General Strategy, Objectives, and Criteria for Success ................................................................................. 4
General Description of the Business Idea ................................................................................................. 4 Marketing Objectives ................................................................................................................................ 4 Operating Objectives ................................................................................................................................ 4 Organizational/Human Resource Objectives ............................................................................................ 4 Financial Objectives .................................................................................................................................. 5 Criteria for Success .................................................................................................................................... 5 Financing Start-Up .................................................................................................................................... 5
Industry Profile .............................................................................................................................................. 6 Industry Description .................................................................................................................................. 6 Industry Issues .......................................................................................................................................... 6 Trends ....................................................................................................................................................... 6 Knowledge and Resources Needed to Succeed ........................................................................................ 7 Peculiarities of the Industry ...................................................................................................................... 7 Industry Associations ................................................................................................................................ 8
Competitive Analysis ..................................................................................................................................... 9 The Competition ....................................................................................................................................... 9 Risks and Opportunities .......................................................................................................................... 10 Competitive Matrix ................................................................................................................................... 9
Target Market Analysis ............................................................................................................................... 10 Sales and Size .......................................................................................................................................... 10 Potential Customers ................................................................................................................................ 10 General Market Characteristics .............................................................................................................. 11 Customer Profiles .................................................................................................................................... 11 STEP Trends ............................................................................................................................................. 13
Marketing Plan ............................................................................................................................................ 15 Products .................................................................................................................................................. 15 Pricing Strategies .................................................................................................................................... 15 Promotions .............................................................................................................................................. 15 Advertising .............................................................................................................................................. 15 Image, Concept, and Logo....................................................................................................................... 18 Sales Promotion ...................................................................................................................................... 19
Location Selection ....................................................................................................................................... 20 Finance ........................................................................................................................................................ 21
Cash Flow ................................................................................................................................................ 21 Credit and Equity..................................................................................................................................... 22 Insurance ................................................................................................................................................. 22 Wages ...................................................................................................................................................... 22 Lease ....................................................................................................................................................... 23 Advertising .............................................................................................................................................. 23
Income Statements and Balance Sheets ..................................................................................................... 25 Financial Analysis ........................................................................................................................................ 28
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Strengths and Weaknesses ..................................................................................................................... 29 Organization and Human Resources ........................................................................................................... 30 Recruitment, Selection, and Training Processes ......................................................................................... 34 Production and Operations Management .................................................................................................. 37 Legal ............................................................................................................................................................ 40 Regulatory Compliance ............................................................................................................................... 40 Risk Minimization Strategies ....................................................................................................................... 41 General Legal Information .......................................................................................................................... 41 Social Responsibilities ................................................................................................................................. 41 Threats ........................................................................................................................................................ 44 Opportunities .............................................................................................................................................. 45
Management ........................................................................................................................................... 48 Second Location ...................................................................................................................................... 48 Unprofitable Marketing Strategy ............................................................................................................ 48 Blank Questionnaire ................................................................................................................................ 49
Appendix A .................................................................................................................................................. 50 QUESTIONNAIRE TABULATION ............................................................................................................... 50
Appendix B .................................................................................................................................................. 51 VENIA’S MENU ........................................................................................................................................ 51
Appendix C .................................................................................................................................................. 52 COSTS TO PREPARE MENU ITEMS ........................................................................................................... 52
Appendix D .................................................................................................................................................. 53 OPENING-DAY BALANCE SHEET .............................................................................................................. 53
Appendix E .................................................................................................................................................. 54 YEAR 1 MONTHLY CASH FLOW STATEMENT ........................................................................................... 54
Appendix F .................................................................................................................................................. 55 YEAR 1 QUARTERLY INCOME STATEMENTS AND BALANCE SHEETS ....................................................... 55
Appendix G .................................................................................................................................................. 59 YEAR 2 QUARTERLY CASH FLOW AND INCOME STATEMENTS ............................................................... 59
Appendix H .................................................................................................................................................. 63 YEAR 3 QUARTERLY CASH FLOW AND INCOME STATEMENTS ............................................................... 63
Appendix I ................................................................................................................................................... 66 SATISFACTION SURVEY ........................................................................................................................... 66
Appendix J ................................................................................................................................................... 68 VENIA CAFÉ BAR INC. FLOOR PLAN ......................................................................................................... 68
Appendix K .................................................................................................................................................. 69 VENIA CAFÉ BAR INC. WORST-CASE SCENARIO COSTS TO PREPARE MENU ITEMS AND ESTIMATED TURNOVER .............................................................................................................................................. 69
Appendix L ................................................................................................................................................... 70 VENIA CAFÉ BAR INC. WORST-CASE SCENARIO CASH FLOW STATEMENTS, INCOME STATEMENTS, AND BALANCE SHEETS .................................................................................................................................... 70
Appendix M ................................................................................................................................................. 74 VENIA CAFÉ BAR INC. BEST-CASE SCENARIO COSTS TO PREPARE MENU ITEMS AND ESTIMATED TURNOVER .............................................................................................................................................. 74
Appendix N .................................................................................................................................................. 75 VENIA CAFÉ BAR INC. BEST-CASE SCENARIO CASH FLOW STATEMENTS, INCOME STATEMENTS, AND BALANCE SHEETS .................................................................................................................................... 75
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Executive Summary
Simple, elegant, affordable, and delicious. Venia is a European-style café that serves coffee, wine, and
chocolate from around the world. Our commitment to superior customer service, divine indulgences,
and a welcoming atmosphere will make the Venia experience addictive for our customers. Calgary is
quickly becoming known for its ever-improving and -expanding cuisine experiences. With Venia, we
have identified an opportunity to capitalize on the growing trend of wine bars, and at the same time
create a new experience that offers delicious coffee and chocolate treats to enjoy with your wine.
Europe has long embraced the idea of drinking coffee and wine throughout the day. Now it is time for
Calgary to have that same opportunity with the establishment of Venia.
Located in the trendy neighbourhood of Kensington at 1245 Kensington Road NW, Calgary, Venia is
conveniently accessible to corporate Calgary, neighbourhood locals, and all Calgarians who enjoy year-
round walks by the river. Venia intends to draw a variety of customers throughout the entire day,
including morning, afternoon, evening, and late night. Venia will be open seven days per week, and on
Fridays and Saturdays will remain open until 1:00am.
Venia’s target markets are corporate Calgarians, neighbourhood locals, and visitors to Kensington. Our
aim is to entice new customers to become regulars, and to give our regulars the type of experience they
will talk about to others. Word travels fast. With our passion for indulgence, marketing plan, and
determination to succeed, Venia will be a profitable and fulfilling business endeavour.
Venia Café Bar Inc. (“Venia” or the “Corporation”) will be incorporated as an Alberta corporation
pursuant to the Business Corporations Act (Alberta). Astrid (Charlotte) Holmgren, Scott Kosasih, Despina
(Dena) Southas, and Stefano Vriliotis (the “shareholders”) will each invest $25,000 in exchange for 100
common shares of the Corporation. Each of the shareholders has been appointed as a director and an
officer of Venia. The anticipated start-up date is January 1, 2012.
-$15
-$10
-$5
$0
$5
$10
Q1 '12
Q2 '12
Q3 '12
Q4 '12
Q1 '13
Q2 '13
Q3 '13
Q4 '13
Q1 '14
Q2 '14
Q3 '14
Q4 '14
Tho
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Venia Quarterly Projected Profits (3 years)
Profit
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Venia Fact Sheet:
Type of Business: Food services and drinking places.
Legal Structure: Private corporation. Provincially incorporated business under Alberta laws.
Location: 1245 Kensington Road NW, Calgary, Alberta
Name of Founders: Astrid (Charlotte) Holmgren Scott Kosasih Despina (Dena) Southas Stefano Vriliotis
Experience: All founders are food, coffee, and wine lovers and are completing the Introduction to Business Ventures Course at University of Calgary. Individually, Charlotte is a European expert, being a Swedish exchange student; Dena is a corporate refugee who has worked in corporate law and investor/shareholder communications for over seven years; Stefano is an up-and-coming economist who enjoys evaluating companies; and Scott is organized and enjoys making money. Educated, ambitious, and passionate are the best descriptors for our team.
Staffing: 1 shift manager and 3 to 5 staff members for each shift depending on the statistics we obtain from our first couple of months in business.
Primary Target Market: We aim to capture all corporate Calgarians, neighbourhood locals, and visitors to Kensington. More details with respect to our target market are set forth in our Customer Profiles below.
Objectives: To offer exceptional, palate-pleasing coffee, wine, and chocolate; To ensure all of our products are fairly traded and globally conscious; To attract customers and create regulars; To provide fresh, preservative-free foods; To provide reasonably priced products; To be conveniently located; To provide knowledgeable and patient staff; To provide a welcoming European atmosphere; and To offer clean washrooms.
Capital Requirements: $26,782.78 equipment costs $10,000.00 legal and accounting fees (first year) $35,948.48 inventory (first month) $37,439.87 operating expenses (1st month) $113,671.14 total capital requirements
Projected Sources of Financing:
$25,000 from each of the shareholders of Venia
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Legal Counsel: Larry Heald, Barrister & Solicitor
Financial Counsel and Mentor:
Canadian Youth Business Foundation and Leo Donlevy, Entrepreneurship Educator, University of Calgary
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General Strategy, Objectives, and Criteria for Success
General Description of the Business Idea
Venia is a European-style café that serves coffee, wine, and chocolate from around the world. Our
indulgent offerings are to be enjoyed in a clean, pleasant atmosphere and are to be priced reasonably to
entice our customers to treat themselves more frequently. Venia will be open seven days per week for
customers to enjoy our treats in the morning, afternoon, and evening. On Fridays and Saturdays, we will
have extended late evening hours for those of us who desire late-night treats. Our menu is simple and
decadent, making order decisions easy for guests. Most importantly, our staff will be knowledgeable and
patient, creating a memorable customer service experience. Venia is about the experience.
Marketing Objectives
Venia aims to create customer awareness and loyalty through delicious food and drinks and impeccable
customer service. We offer our guests a unique and memorable experience. We will employ a number
of marketing strategies to draw attention to Venia, including competitive pricing, promotional nights,
and our soon-to-be infamous chocolate and cheese fondues. Venia will also support organic and fairly
traded coffee.
Operating Objectives
To provide exceptional, palate-pleasing coffee, wine, and chocolate;
To ensure that all of our products are fairly traded and globally conscious;
To attract customers and create regulars;
To provide fresh, preservative-free foods;
To provide knowledgeable and patient staff;
To provide reasonably priced products;
To be conveniently located;
To provide a welcoming European atmosphere; and
To offer clean washrooms.
Organizational/Human Resource Objectives
Great customer service starts with hiring great employees. We will seek out the best suited employees
for Venia and our initiatives. Our employees will treat our customers like guests, will be knowledgeable
about the menu in its entirety, and, most importantly, will be coffee, wine, and food lovers. You can’t
make customer recommendations if you don’t know what you are recommending. Our wages will be
competitive and a loyalty bonus will be paid every quarter to retain quality employees. With our quality
employees, we will endeavour to be one of Calgary’s favourite café bars.
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Financial Objectives
Venia hopes to develop into a business that will operate autonomously and settle all debts within two
years, generating profit within the third year.
Criteria for Success
In order to be one of Calgary’s favourite café and wine bars, Venia will offer consistency in excellent
customer service and delicious coffee, wine, chocolate, and food. Venia will be successful if it can attain
the objectives stated under our operating objectives and break even within two years of commencing
operations. Customer satisfaction and our dedication to consistency and our objectives are key in
determining our success.
Financing Start-Up
Each of the shareholders will each invest $25,000 in exchange for 100 common shares of the
Corporation, thus creating $100,000 in equity.
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Industry Profile
Industry Description
Venia falls under the NAICS code 722110. The NAICS definition of our sector as “Food Services and Drinking Places.”1
The subsector comprises establishments primarily engaged in preparing meals, snacks, and beverages to customer order, for immediate consumption on and off the premises. This subsector does not include food service activities that occur within establishments such as hotels, civic and social associations, and amusement and recreation parks.2
Industry Issues
The Canadian Restaurant and Foodservices Association website identified some of the following items as
industry issues for consideration:
Debit and credit fees
Flu pandemic
Food safety training
Nutrition
Restaurant inspections
Food suppliers (i.e., dairy farmers, meat processing plants, poor crops, etc.)
Liquor licences, liability, etc.
Labour
Music royalties
Small business
Financing
Taxes
It is integral to Venia’s success that it follow these industry issues very closely to remain competitive
with its peers by being able to adjust its short-term and long-term business plan to accommodate for
any industry changes.
Trends
Profits are expected to increase gradually to $481 million by 20113
1 North American Classification System (NAICS) (2007) Statistics Canada. Retrieved from http://stds.statcan.gc.ca/naics-scian/2007/cs-rc-eng.asp?criteria=722 2 North American Classification System (NAICS) (2007). Statistics Canada. Retrieved from http://stds.statcan.gc.ca/naics-scian/2007/cs-rc-eng.asp?criteria=722
3 CNASIM, Food and Housing Industry (2010). Statistics Canada. Retrieved from http://dc.chass.utoronto.ca.ezproxy.lib.ucalgary.ca/cgi-
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Sales growth expected to stay at 1.9% annually between 2007 and 20114
Canadian foodservice/drinking places sector achieved higher growth rate in 2010 than its U.S.
counterpart5
Knowledge and Resources Needed to Succeed
Understanding our industry and actively being aware of all industry changes will allow Venia to
anticipate and adjust our daily, monthly, and yearly planning as we see fit. As such, Venia will become a
member of the Canadian Restaurant and Foodservices Association to help us grow our business and cut
costs where we can. We believe that the right knowledge and resources will enable and ensure our
success. Each of us has taken the “Intro to Business Ventures” course at the University of Calgary and is
completing an undergrad. Two of Venia’s owners grew up in successful family-owned restaurants in
urban city locations, and each of us is very aware what we look for in a great dining experience.
Professor Leo Donlevy has generously offered to mentor our group as we are not as seasoned in our
industry as we should be. We have also asked the families of the students who have owned successful
restaurants to provide mentorship. With our industry awareness, education, and mentorship, we feel
we have the necessary means to be successful.
Peculiarities of the Industry
After conducting some research on the Canadian Restaurant and Foodservices Association website, we
have identified the following industry peculiarities for Venia to consider:
The average annual turnover rate for an hourly paid employee is 104.8% at a quick-service
restaurant and 62.5% at a casual/family dining restaurant;6
The average foodservice operator realized annual sales of $611,143 in 2009 with a pre-tax profit of
$26,890;7
New accommodation and foodservice entrants have a 60% chance of surviving beyond their second
year and a 22% chance of surviving beyond eight years.8
bin/cansimdim/c2_retrieveData.pl?seriescart=1596780&lang=&actionreq=&a=&bdate=2000&edate=2010&display=timeseries&orient_tm=cols&format=plain&onegraph=0&data_quality=no
4 Food Services and Drinking Places (2007). Statistics Canada. Retrieved from www.statcan.gc.ca/pub/63-243-x/2010001/part-partie1-eng.htm
5 Canada’s Food Service Industry: Industrial Outlook, Winter 2007 (2007). The Conference Board of Canada. Retrieved from www.conferenceboard.ca/documents.aspx?did=1921
6 Research, Canadian Restaurant and Foodservices Association. Retrieved May 1, 2011, from www.crfa.ca/research
7 Ibid.
8 Ibid.
8
Industry Associations
CRFA—Canadian Restaurant and Foodservices Association AFPA—Alberta Food Processors Association CAC—Coffee Association of Canada ARFA—Alberta Restaurant & Foodservice Association
9
Competitive Analysis
The Competition
Venia faces fierce competition being located in Kensington. Through Urban Spoon’s website9 and our in-
field market research, we have identified over 10 direct and indirect competitors in Kensington. Director
competitors for Venia are Higher Grounds Café, Starbucks, Wine Bar, Second Cup, The House Coffee
Sanctuary, and The Roasterie. Our indirect competitors are Nellie’s, Elixir Fine Teas, Niko’s Bistro, Naked
Leaf Tea Shop, Bernard Callebaut, and Crave Cupcakes. For comparison purposes, we have selected six
direct and indirect competitors that we view as most threatening according to their respective size,
menu, atmosphere, and relative location compared to that of Venia. Please see our Competitive Matrix
set forth on page 10 of this Business Plan.
Location, location, location. Kensington is located at the junction of 10th Street and Kensington Road
NW, just across the Bow River and from the downtown core. 10Kensington is close to the heart of Calgary
and easily accessible by most of the city’s major access routes.11 Kensington is an ideal location for
downtown commuters, and for those walking along the river or going out for the evening. Venia is
conveniently located at 1245 Kensington Road NW, Calgary, and is right in the core of Kensington.
Whether you are walking, cycling, taking the LRT or the bus, or driving and parking, Kensington is
convenient. There are several parking lots, parkades, and over 250 meters in the district to help guests
spend a full day in Kensington. In addition, there is free on-street parking evenings after 6 and all day
Sunday.
Venia will be open competitive hours in relation to its competitors to ensure that our café bar is always
an option for visitors. Our hours will be Monday to Thursday: 7am to 11pm, Friday and Saturday:
8:00am to 1:00am, and Sunday: 8am to 10pm.
With respect to staffing, we aim to have two to five employees present for each shift, one of whom will
be predetermined as the shift manager and paid a slight premium to take on those responsibilities
associated with the title. Our wages need to be competitive; however, the competition would not
disclose estimated wages of their employees to our market research team. We will further determine
wage rates during the financial analysis portion of our business plan.
9 Urban Spoon, for initial competitor research (2011). Urbanspoon.com. Retrieved from www.urbanspoon.com/nf/15/1413/1409/Calgary/Kensington/Coffee-Tea-Restaurants 10 “Visit Kensington” (2011). Visitkensington.com. Retrieved from
www.visitkensington.com/kensington-number-one-shopping-district 11 “Visit Kensington” (2011). Visitkensington.com. Retrieved from
www.visitkensington.com/kensington-number-one-shopping-district
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Based on our field research, we have competitively priced our menu to be comparable to and in some
cases less expensive than our competition. Please see Appendix B for Venia’s menu. Our menu and
prices are based on our market research.
Risks and Opportunities
Venia’s strongest competitive opportunity is its unique combination of being a café bar that offers
coffee, wine, and chocolate. In addition, Venia offers organic, fairly traded coffee and fresh, made-on-
site daily foods with no preservatives or fillers, which is a tremendous competitive advantage for those
who are conscious globally and in terms of health. Our most unique competitive advantage is our
chocolate fondue, which is something new to the Kensington area and is sure to become the next trendy
experience to indulge in. Customers want fresh, health-conscious options and Venia offers just that.
More importantly, customers want exceptional customer service, great food and unique experiences all
bundled into one; this is what Venia aims to achieve through its objectives.
Another opportunity Venia has identified is with respect to its decision to be located in Kensington. Not
only does Kensington have a high volume of foot traffic and is known as Calgary’s “Village in the City,”
but also has been named one of Calgary’s nine Business Revitalization Zones (BRZ) by the City of Calgary.
The role of a BRZ as defined by the Municipal Government Act is to enhance the economic development
of a shopping district through promotion and marketing, to improve the physical environment of public
spaces, and to develop, improve and maintain parking. Kensington being part of the City’s BRZ is
exceptionally great news for our new business venture because not only are the local business owners
working on enhancing the economic development, but so is the City of Calgary.
Venia also faces a number of risks in proceeding with this new venture. We will first discuss the risks we
have identified and then provide our insight as to how we might proceed to mitigate such risks. Perhaps
the greatest risk for Venia is the number of competitors that already exist in Kensington and the
potential for more competitors to trickle in over time. Because we have a large number of competitors,
it is likely that our competitor target markets are similar, leaving Venia with the burden of being
exceptional in every aspect of the objectives we endeavour to achieve. To keep our costs minimal, we
will have to reach out to suppliers and create solid and reliable relationships to ensure availability and
affordability. It is also essential for Venia to create strong relationships with its neighbours—Nikos’
Bistro, Elixir Fine Teas, and the Kensington Wine Market. Each of these neighbours is unique in
comparison to Venia in its offerings, but still are competitors. In an ideal circumstance, for example,
Kensington wine market would recommend that any of their shoppers pop into Venia to test out the
wine they are considering purchasing and, in return, we would use the Kensington Wine Market as our
sole supplier. Venia aims to mitigate the risks we have identified by ensuring our café bar is attractive,
incomparable, and irresistible. Another large risk factor to consider is the limited parking in Kensington.
We plan to take an active role in working with the city to improve the limited parking situation. We also
feel that because Kensington is considered a BRZ, that contingency plans may already to assist our
community’s business owners with parking availability. Venia will continually evaluate the relative risks
and opportunities faced by the business and develop the appropriate contingency plans to capitalize on
opportunities and mitigate risks.
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Our macro-environment considerations are set forth in our STEP Analysis on page 13 of this business
plan.
Competitive Matrix
Venia Café Bar Inc. Higher Grounds Café Nellie’s Starbucks Wine Bar Niko’s Bistro Elixir Fine Tea
LOCATION 1245 Kensington Road
NW, Calgary 1126 Kensington Road
NW, Calgary 1414 Kensington Road
NW, Calgary 1122 Kensington Road
NW, Calgary 1131 Kensington Road
NW, Calgary 1243 Kensington Road
NW, Calgary 1247 Kensington Road
NW, Calgary
SIZE 800 square feet
(seats approximately 32 people)
Approximately 2,200 (seats 99 people)
1,000 square feet (seats approximately
40 people)
800 square feet (seats approximately
32 people)
1,000 square feet (seats approximately
40 people)
800 square feet (seats approximately
32 people)
800 square feet (seats approximately
32 people)
OPERATION HOURS
Monday to Thursday: 7am to 11pm
Friday and Saturday: 8:00am to 1:00am
Sunday: 8am to 10pm
Sunday to Thursday: 7am to 11pm
Friday and Saturday: 7am to 12am
Monday to Friday: 7am to 3:30pm Saturdays and
holidays: 7:30am – 4pm
Sundays: 8am to 4:30pm
Hours not posted
Sunday and Monday: 4pm to 12am
Tuesday to Thursday: 4pm to 1am
Friday: 3pm to 2am Saturday: 2pm to 2am
7 days per week open from 11:30 to 2pm
Sunday to Thursday: 5pm to 9pm
Friday and Saturday: 5pm to 10pm
Tuesday to Thursday and Saturday:
10:30am to 8pm Monday and Friday:
10:30 to 7pm Sunday: 12pm to 5pm
ESTIMATED# OF EMPLOYEES
2 to 5 (depending on time of
day) 2 to 3 people 3 people 3 people 4 people 2–4 people 1 person
WAGE OF EMPLOYEES $10-$20/hour N/A N/A N/A N/A N/A N/A
PRODUCT LINE Coffee, wine,
chocolate, and specialty food items
Coffee, tea, various food items, and a
couple of different types of wine
Coffee, breakfast, brunch, and lunch
foods
Coffees, teas, frappuccinos, and
bakery treats
Wine, unique and exotic wine pairings,
desserts
Italian-influenced cuisine
Speciality tea items
PRICES*
Regular Coffee—$2.00 Regular Latte—$3.95
Glass of wine—$6 Average price of
Chocolate desserts—$7
Regular Coffee—$1.95 Regular Latte—$4.05 Glass of wine—price
not posted Average price of
Chocolate desserts—$5.00
Regular Coffee—$2.75 Regular Latte—N/A Glass of wine—N/A
Average price of Chocolate desserts—
$4.50
Regular Coffee—$2.00 Regular Latte—$4.00 Glass of wine—N/A
Average price of Chocolate desserts—
$3.00
Regular Coffee—N/A Regular Latte—N/A Glass of wine—$11
Average price of Chocolate desserts—
$9.00
Regular Coffee—$2.00 Regular Latte—$4.00 Glass of wine—$7.50
Average price of Chocolate desserts—
$7.50
Regular Coffee—N/A Regular Latte—N/A Glass of wine—N/A
Average price of Chocolate desserts—
N/A
DISTRIBUTION In-store In-store and catering In-store In-store and takeout In-store In-store In-store and takeout
METHOD OF PAYMENT Cash, Credit, and Debit Cash, Credit, and Debit Cash, Credit, and Debit Cash, Credit, and Debit Cash, Credit, and Debit Cash, Credit, and Debit Cash, Credit, and Debit
10
Target Market Analysis
Sales and Size
Number of participants in industry increased from 888,963 people in 2000 to 1,062,454 in 201012 In 2006, average household spent $3,279 on food and alcohol offered in the food services and
drinking places sector13 In 2008, industry represented 4% of Canadian GDP14 The operating profit margin was up from 4.0% in 2007 to 4.4% in 200815 Sales of food and nonalcoholic beverages were responsible for the majority of operating revenue in
the industry (82.9%), while the sales of alcoholic beverages generated 14.4% revenue16 Total operating revenue within the food services and drinking places industry was $45.6 billion
in 2008, up 6.2% from 200717
Potential Customers
In general, we intend to target corporate Calgary, neighbourhood locals, and all visitors to Kensington. More specific information related to our customer profiles is set forth below. With respect to corporate Calgary, the Calgary Downtown Association confirmed that in June 2010 approximately 140,000 people work in downtown Calgary.18 Downtown Calgary being a major Canadian business hub, there are a large number of dining business meetings that take place. Kensington is conveniently located just outside downtown, so Venia is walking distance or a quick drive for corporate Calgarians before work, during lunch, and after work. Word spreads fast in corporate Calgary, so there is a large amount of potential that exists in targeting this market. With respect to visitors to Kensington, Calgary’s population is just
12 Key Small Business Statistics 2010. Industry Canada. Retrieved from www.ic.gc.ca/eic/site/sbrp-rppe.nsf/vwapj/KSBS-PSRPE_July-Juillet2010_eng.pdf/$FILE/KSBS-PSRPE_July-Juillet2010_eng.pdf
13 Canada’s Food Service Industry: Industrial Outlook, Winter 2007 (2007). The Conference Board of Canada. Retrieved from www.conferenceboard.ca/documents.aspx?did=1921 14 “Canadian Foodservice Industry Outpaces U.S; Technomic Names Leading Trends Driving Growth” (December 14, 2010). Yahoo Finance. Retrieved from http://finance.yahoo.com/news/Canadian-Foodservice-Industry-bw-3837275852.html?x=0 15 Ibid. 16 Ibid. 17 Ibid. 18 Calgary Metropolitan Area Community Profile (2006). Statistics Canada. Retrieved from www.statcan.gc.ca/pub/63-243-x/2010001/part-partie1-eng.htm
11
over 1.3 million according to Calgary Economic Development (CED).19 Based on our target age groups (ages 20–64) and CED’s population distribution by age for the Calgary economic region, there are approximately 767,500 potential customers in Calgary. 20 Market research indicates that every participant who completed our survey visits Kensington at least once per year. By applying this research to our target age group, we anticipate that approximately 767,500 people will potentially walk by Venia during their visit to Kensington in a given year. Our potential for exposure to new customers and visitors is exciting; however, competition is fierce in Kensington so it is essential for us maintain our objectives to ensure the best customer satisfaction achievable.
General Market Characteristics
Venia targets any individual who is looking for a unique café bar experience; great customer service; and delicious coffee, wine, and chocolate. The majority of our market will live in the City of Calgary and will be over the age of 20 and generally have middle- to upper-class incomes. Busy metropolitan lifestyles encourage all city dwellers to indulge and treat themselves, and Venia intends to capitalize on this need to treat. Customers of Venia will have a particular interest in: Delicious, quality coffee, wine, and chocolate (see our menu in Appendix B); Friendly, knowledgeable, and patient staff Simple, elegant, and clean atmosphere Reasonably priced indulgences.
Customer Profiles
New Grads Age Range: 22–26 Income Range: $55,000–$65,000 This group includes interns, new grads, and entry-level workers who are starting their careers. Members of this segment are spenders, and active and health conscious; they will surely enjoy our beverages and desserts. We will work to make Venia trendy with reasonably priced menu items and drinks to attract this crowd. Professional Women Age range: 30 to 65 Income range: $90,000+ This segment has the disposable income and the maturity to understand the benefits of enjoying high-quality products. Professional Men Age range: 30 to 65 Income range: $100,000+
19 “Live, Work Demographics” (2011). Downtown Calgary. Retrieved from
www.calgaryeconomicdevelopment.com/live-work-play/live/demographics 20 Ibid.
12
This segment has the disposable income and the maturity to understand the benefits of enjoying high-quality products. Visitors to Kensington Age range: (25-60) Income range: $45,000–$65,000 Kensington is an ideal location for in-town and out-of-town visitors as it possesses attributes that truly reflect the Canadian multicultural mosaic. Visitor accessibility is key as the Calgary C-train runs straight through Kensington via the Sunnyside Station. For the ninth year in a row, Kensington has been voted #1 shopping district in Calgary.21 More than 100,000 people visit Kensington every year due to events such as the popular Sub&Salsa Festival.22 Each year Calgary’s “Village in the City” draws Calgarians and out-of-towners to this unique and one-of-a kind neighbourhood to enjoy the over 250 shops ranging from clothing stores to wine bars. We aim to make Venia the must-stop cafe bar in Kensington.
21 “Visit Kensington” (2011). Visitkensington.com. Retrieved from www.visitkensington.com/kensington-number-one-shopping-district 22 Ibid.
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STEP Analysis
Social Canadian crime rate fell by 17% in 201023 Postsecondary enrolment increased in Alberta from 550,000 (1990) to 650,000+ in 201024 The increasing number of women entering the Canadian labour force could lead to increased
demand for healthy prepared-meal solutions25“Dining out is one of the top three tourist activities in Canada” 26
Technological Credit/debit card theft protection and restaurant owner liability27 “Open Table”—customers are now able to make reservations online Music royalties for background music28 Point of purchase systems (debit/credit) Restaurant software products for taking orders and enabling staff to communicate clearly with the
kitchen Economic Inflation rate within target range at 2.34% (2010)29 Overnight target rate increase from 0.25% (2009) to 1.00% (201030) Consumer confidence index at 88.7 points (2011), an increase of 14% from the 2010 lows31 Unemployment rate decrease from 8.7% (2009) to 7.8% (2011)32
23 “10 Crucial Consumer Trends for 2010” (January 2010). Trendwatching.com. Retrieved from http://trendwatching.com/trends/10trends2010 24 Ibid. 25 “Women’s participation and economic downturns” (May 2010). Statistics Canada. Retrieved from
http://www.statcan.gc.ca/pub/75-001-x/2010105/article/11160-eng.htm 26 Research. Canadian Restaurant and Foodservices Association. Retrieved May 1, 2011, from www.crfa.ca/research 27 Ibid. 28 Ibid. 29 “Inflation Calculator” (2010). Bank of Canada. Retrieved from www.bankofcanada.ca/en/rates/inflation_calc.html 30 Ibid. 31 “Canada Consumer Confidence” (2011). Trading Economics.Retrieved from www.tradingeconomics.com/Economics/Consumer-Confidence.aspx?Symbol=CAD 32 “Canada Unemployment Rate” (2011). Trading Economics. Retrieved from www.tradingeconomics.com/Economics/Unemployment-rate.aspx?Symbol=CAD
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“Canada’s restaurant and foodservice industry directly employs more than one million people, generates $60 billion in annual sales and accounts for 4% of the national economy.”33
“Another 210,000 people are indirectly employed as product and service providers.”33 “Every one million dollars in restaurant sales creates nearly 27 jobs, making foodservice one of the
top five job creators in Canada.”34 “Every dollar spent at a restaurant generates an additional $1.85 in spending in the rest of the
economy—well above the average for all industries in Canada.”35 “Over a 10-year period from 2000 to 2009, Canada’s accommodation and foodservices industry
created more than 140,000 jobs. In contrast, employment fell in agriculture, forestry, fishing, mining and manufacturing.”36
Political Opposition parties in Ottawa attack Harper government’s policy of business tax relief and demand a
business tax increase37 Canadian Taxpayers Federation (CTF) is putting pressure on federal government to speed up plans
for a balanced federal budget38 Canadian Taxpayers Federation (CTF) released new payroll tax hike that will result in increases in
employment insurance (EI) and Canada Pension Plan (CPP)39
33 Research. Canadian Restaurant and Foodservices Association. Retrieved May 1, 2011, from www.crfa.ca/research 34 Ibid. 35 Ibid. 36 Ibid. 37 “Taxpayers’ Federation Releases Balanced Budget Plan” (February 3, 2011). Canada Free Press. Retrieved from http://canadafreepress.com/index.php/article/32217 38 Ibid. 39 “CFT Releases Federal and Provincial Tax Changes for New Year” (December 28, 2010). Canada Free Press. Retrieved from http://canadafreepress.com/index.php/article/31528
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Marketing Plan
Venia offers an in-store experience; therefore, the following strategies will discuss only product, pricing, and promotional strategies.
Products
Venia offers coffee, chocolate, and wine, as well as other light dishes to further complement your coffee and/or wine experience. To best serve our target market, we have developed a simple and reasonably priced menu. Please see Appendix B for our full menu. We also have selected a convenient location in Kensington for our target market to have easy access to Venia. However, the most important aspect of our product strategy will be the customer service experience that comes along with the product. Venia will be a clean, simple, and elegant European-style café bar that provides knowledgeable and patient staff to assist customers. A smile and a pleasant and welcoming attitude can go a long way. Our guests will not only experience great food and beverages in a convenient location, but also receive memorable customer service that will in turn create strong customer relationships. We believe that strong customer relationships are integral to our success.
Pricing Strategies
At this point in our research project, our prices have been developed based on our competitor menus and market research. Market research indicated that the average customer is willing to spend no more than $50 for a unique dining experience. As such, this also weighed heavily on our pricing strategy. It is crucial for Venia to stay competitive in its pricing because of all of the direct and indirect competitors that exist in Kensington. Furthermore, it is integral for Venia to create a customer experience that encourages our guests to treat themselves more often than they currently do. We feel that setting our prices higher than our competitors will deter our guests from indulging more often than they currently do, and this could potentially have a negative effect on our break-even objectives.
Venia will accept all major credit cards, debit, and cash. In ideal circumstances, we would wait to allow credit card use to avoid additional costs at start-up, but all of our competitors accept credit cards so we need to offer what our competitors offer at a minimum.
Promotions
Venia has a unique competitive advantage in that it serves coffee, wine, chocolate, food, and fondue. In our market research, we discovered that no place quite like it currently exists in Kensington. To create customer awareness of Venia, we will be relying on a blend of advertising, sales promotion, and word-of-mouth recommendations.
Advertising
Venia will advertise through NUTV, The Calgary Herald, and eservus, as well as have an attractive and inviting website. In addition, we have identified an opportunity to further promote Venia through social networking (for example, using Facebook), and through free local television channel coverage. Advertising will be done in three stages, Introduction, Growth, and Maturity. Stage 1: Introduction Awareness of Venia’s function and location will be promoted during Venia’s Introduction.
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Google-listed website Facebook ads for Calgary users Newspaper and online ads in The Calgary Herald Arrange for an appearance on Breakfast Television (BTV) to cook the cast and crew a Venia-style
breakfast Arrange for an appearance on Shaw TV to showcase Venia’s location and atmosphere
Stage 2: Growth Promoting a Venia as a trendy place visit will be introduced into the advertisement strategy during the growth period. A Facebook page Twitter Redesigned website Advertisement and promotion through eservus Newspaper and online ads in The Calgary Herald Arrange for an appearance on Breakfast Television (BTV) pre-Stampede to cook the cast a Venia-
style breakfast and announce a Stampede breakfast event at Venia—chocolate pancakes Arrange for an appearance on Shaw TV to remind customers of Venia’s location and atmosphere
Stage 3: Maturity Institutional advertising will be the entire focus in advertisement at the maturity of Venia. Advertisement and promotion through eservus Newspaper and online ads in The Calgary Herald Facebook and Twitter updates Google-listed website Arrange for an appearance on Breakfast Television (BTV) pre-Stampede to cook the cast a Venia-
style breakfast and announce a Stampede breakfast event at Venia—chocolate crepes Arrange for an appearance on Shaw TV to remind customers of Venia’s location and atmosphere
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Media Description Target Market Rates Total Estimated Annual Costs
Facebook Ad Small corner ad, only for Calgary users
689,940 Facebook users in Calgary
$1.76/click $3,000/ad lifetime; ad renewed yearly
$3,000.00
Facebook Page Venia Page, allowing people to like and comment on possible new menu items
689,940 Facebook users in Calgary
free $0
The Calgary Herald
28 Day “Essential” Merchandise Package—28 days in print and online
All Calgarians who read The Calgary Herald in print or online
$100 for 28 days in print and online
$1,300.00
NUTV 90-second static ad
33,000 full- and part-time students
$1,175.68/year
$1,175.68
eservus Promotional gift certificates. A large number buildings downtown offer tenants eservus membership, which provides a variety of services at a discount to tenants and their employees. https://www.eservusconcierge.com/online/Index.asp
140,000 downtown employees
200 $25 gift certificates (they charge us $5.00 per certificate) Note: Every quarter we will issue another 200 $25 dollar gift certificates.
$5,000.00
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Media Description Target Market Rates Total Estimated Annual Costs
Breakfast Television
CityTv’s local television week-day morning show will allow Venia to come down to the studio and showcase our business free of charge
Research not freely available
Free Free
Shaw TV Shaw TV’s in- studio and on- location what, where, when, and how program that keeps Calgarians connected with what Calgary has to offer. Venia will coordinate appearances to inform and remind its Calgarian customers about Venia.
Research not freely available
Free Free
TOTAL ESTIMATED ANNUAL ADVERTISITNG COSTS $10,475.68
Image, Concept, and Logo
Venia’s image is modern, simple, and elegant. Our sleek logo and menu echo our image; our café bar décor plans will also echo that same image. Our target market age range is quite large, so we feel that this approach is best suited for the majority. For Venia, modern means fresh and inspirational; simple means we do a couple of things really well—namely, food, beverages, and customer service; and, elegant reflects the beauty of the indulgences we offer to our guests. Our staff will be easily identifiable dressed in all black with a turquoise and chocolate brown name tag. We want our guests to be on a first-name basis with our staff.
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Sales Promotion
Venia aims to promote itself through the advertising strategies mentioned above, as well as through Fondue Fridays and Happy Hour Wine. Fondue Fridays will promote the fondue experience and draw customers to Venia by offering a $5 discount on our regular-priced chocolate fondues. We also intend to have Happy Hour Wine on Friday from 5pm to 6pm, offering our selection of two wines for $5/glass.
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Location Selection
The location we have selected is 1245 Kensington Road. This location is available for lease and the Kensington area is zoned for commercial business. Kensington is located at the junction of 10th Street and Kensington Road NW, just across the Bow River
and north west of Calgary’s downtown core. Kensington is close to the heart of Calgary and easily
accessible by most of the city’s major access routes. Kensington is an ideal location for downtown
commuters, or for those walking along the river or going out for the evening. Whether you are walking,
cycling, taking the LRT or the bus, or driving and parking, Kensington is convenient. There are several
parking lots and parkades to help guest spend a full day in Kensington with over 250 meters in the
district. In addition, there is free on-street parking evenings after 6pm and all day Sunday. (Information
provided by “Visit Kensington website).
1245 Kensington Road NW Calgary, Alberta
*Venia’s location is to the right of Niko’s Bistro where Maggie’s Shortbread and Cookies currently is.
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Finance
The following sections provide an overview of the assumptions and calculations used in compiling the
first three years of pro forma financial statements for Venia Café Bar Inc. (“Venia”). For full financial
statements and additional information used to prepare cash flow statements, please refer to
Appendices “C” through “I.”
Cash Flow
Venia will be open year-round with the exception of certain statutory holidays. Our fiscal year will run
from January 1 to December 31. Venia’s customers will have the option to pay with cash, debit card, or
credit card at point of purchase, so all sales will be cash sales. In generating our cash flow statements,
we have assumed the following:
General and Year 1
Each customer of Venia will order one starter, one light plate, one dessert, one hot or cold beverage
and one glass of wine;
Each food item and beverage will cost a predetermined amount to prepare as set forth in Appendix
“C”;
Our costs and revenue from the brunch we will offer on Saturdays and Sundays will not be
determined until after we open for business and therefore are not included in our cash flow
worksheet;
There are 4.3333 weeks in a month;
Corporate tax rate, CPP, and EI deductions have not been considered in our projections;
For the purpose of this assignment, seasonality will not be considered when generating our monthly
cash flow projections. Based on our experience, seasonal high-sales months and seasonal low-sales
months will average out to our typical monthly projections;
We have negotiated paying our WCB premium at the end of our first operating year, and will
continue to pay our WCB premiums at the end of every operating year going forward;
Overhead expenses, including electricity, heat, paper napkins, order placing software, restaurant
system software, etc. will vary with sales at a rate of 5%;
All accounting fees and legal fees will be paid at the beginning of each fiscal year based on our
previously negotiated flat rate yearly agency fees.
Year 2 assumptions
Sales and inventory costs will increase by 10%;
Equipment additions/repairs will be conducted in January each year and 5% of January’s sales will be
allocated to allow for such additions/repairs;
Overhead expenditures will increase to vary at a rate of 6% of sales each month;
Our lease payments will increase by 5%;
Our wage expenses will increase by 5% to account for inflation and employment loyalty raises;
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Legal fees will decrease in year two as we will require only corporate maintenance and lease
renewal assistance.
Year 3 assumptions
Sales and inventory costs will increase by 10%;
Equipment additions/repairs will be conducted in January of every year and 5% of January’s sales
will be set aside to allow for such additions/repairs;
Overhead expenditures will remain the same (at a rate of 6% of sales);
Our lease payments will increase by 5%;
Our wage expenses will increase by 5% to account for inflation and loyalty raises.
Credit and Equity
In January of Year 1, the four owners inject a total of $100,000 ($25,000 each) equity into the business.
No further equity is invested in the business during the first three years of operations; however, our
team has assumed that Venia has access to a $100,000 line of credit, which may be used periodically in
$5,000 increments to ensure the business has enough cash available. In addition, Venia has a company
credit card with a $20,000 borrowing limit.
Insurance
Venia has engaged State Farm Insurance to provide general liability insurance and property insurance at
a rate of $2,100 per year. State Farm’s insurance plan includes coverage for items such as sewage back-
up coverage, fire, and theft. Our yearly insurance premium is included in our cash flow statements as
part of our overhead costs. We have identified our WCB industry code as 87503 and anticipate that our
WCB premium will be $0.93 per $100 of all insurable earnings.
Wages
As a small operation, Venia does not offer benefits to its employees. Therefore, a competitive wage is
necessary to recruit and retain employees. Based on our research set forth under the heading
“Organization and Human Resources—Job Descriptions,” we have generated the following assumptions
for our monthly wage costs:
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Lease
Venia has entered into a yearly lease agreement with a party (the “landlord”) that we are unable to
disclose due to confidentiality. The lease agreement allows Venia to occupy the location and conduct
business for the fiscal year (January 1–December 31). Lease payments are due at the beginning of each
month in the amount of $3,500. Venia is responsible for paying its utilities; all other costs including city
permits, property taxes, etc. are paid by the landlord. Venia has negotiated no damage deposit as the
landlord is a good friend of one of our owners. Thus, no damage deposit has been included in our cash
flow statements for Year 1.
Advertising
Advertising costs for Venia amount to approximately $10,475.68/year (see “Advertising” under the
heading “Marketing Plan” above). Venia will continue its yearly advertising and budgeting plans
throughout years 2 and 3 to ensure that we continue to bring as many new customers to our location as
possible. We anticipate that our most successful advertising feature will be the $25 dollar gift
certificates that will be made available through eservus on a quarterly basis.
Overhead
Venia’s estimated overhead is approximately 5% of sales. This includes our utilities and items such as
napkins, paper to-go cups and wrapping, and other miscellaneous items.
Accounting Services
Hours of Operation Total Hours Open
7am to 11pm 16
8am to 1am 17
8am to 10 pm 14
Cook Chef's Aid Bartender Busser Server Total Wages/hour Total Wages/day
Monday 16 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $951.68
Tuesday 16 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $951.68
Wednesday 16 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $951.68
Thursday 16 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $951.68
Friday 17 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $1,011.16
Saturday 17 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $1,011.16
Sunday 14 $17.70 $13.69 $9.74 $8.80 $9.55 $59.48 $832.72
$6,661.76
Manager Yearly Salary $45,000.00
Monthly Cost
(4.3333 weeks) $28,867.40
Monthly Cost $3,750.00
Manager
Monthly Cost $3,750.00
Total Monthly
Wage Costs $32,617.40
Wage/hour
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We have engaged an accountant to provide advisory services throughout the year including payroll, GST
payments, our year-end reporting, and income tax filing. The terms of our engagement include a flat-
rate fee payable at the beginning of each fiscal year in the amount of $5,000.
Legal Services
Venia has engaged Larry Heald, barrister and solicitor, to act as our corporate secretary and legal
adviser. Mr. Heald has been engaged to incorporate Venia Café Bar Inc., set up the minutes book, issue
share certificates, and draft the necessary resolutions to appoint officers and directors. Mr. Heald will
also provide advisory services for the review and negotiation of our lease agreement. We have
negotiated a flat fee for the above referenced services in the amount of $5,000 payable in January 2012.
Mr. Heald has further agreed to provide corporate maintenance services and certain advisory services
for Years 2 and 3 for a flat fee of $2,000 per year. Any additional services required outside the terms of
our engagement agreement will be billed to Venia accordingly.
Interest/Loan Payments
The injection of $100,000 of equity by the owners of Venia offsets the start-up costs, and therefore does
not warrant the use of a long-term loan. As such, there is no interest to be paid.
Equipment
Venia estimates the following equipment requirements and costs for start-up set forth below.
Fortunately, our location is currently set up with a fully functional kitchen and bar, so we will not be
required to incur any significant improvement/addition costs.
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Leasehold Improvements
As previously mentioned, Venia does not need to make any substantial improvements to the location
selected. The addition of the wine rack/storage addition has been negotiated in our lease as cost that
Venia will incur.
Income Statements and Balance Sheets
Please note that although seasonality will affect the month-to-month sales and cost of goods sold
(COGS) of Venia, we have assumed that, for the purpose of this assignment, seasonal highs and lows of
sales and COGS over the course of the fiscal year will average out. Therefore, we have proceeded to
generate our monthly sales and COGS projections based on such assumptions.
Income Statements
Venia requires food and beverage inventory to prepare the items set forth in their menu in Appendix B.
Thus the total COGS is equal to the food and beverage inventory required and varies with sales. The
wages necessary to run Venia (see “Wages”) are also included in our income statements.
Overhead costs are calculated as 5% of sales in Year 1, increasing to 6% of sales in Years 2 and 3, and
therefore increase or decrease with the sales forecast. Licences will need to be obtained and renewed at
the beginning of each year, and, as such, licensing expenses have been accounted in January of years 1,
2, and 3. Lease payments and advertising costs maintain the same pattern over the first three years of
operation. Certain accounting tasks have been outsourced. Management has the responsibility of
handling payroll and general book keeping. However, our accountant has been engaged to conduct
Equipment Cost Quantity Total Cost
Espresso Maker $4,990.00 1 $4,990.00
Refrigerator $2,022.00 1 $2,022.00
Cups (small) $2.50 15 $37.50
Cups (medium) $3.00 30 $90.00
Cups (large) $4.00 30 $120.00
Plates (dessert) $40.00 30 $1,200.00
Plates (food) $40.00 30 $1,200.00
Cuttlery (sets) $60 35 $2,100.00
Frothing Pitcher $8.99 2 $17.98
Milk Frother $14.75 1 $14.75
Espresso Tamper $13.95 1 $13.95
Tables $174.95 16 $2,799.20
Chairs $138.79 16 $2,220.64
Linen $1,699 1 $1,699.00
Décor, art work and centrepiece for tables $2,258 1 $2,257.76
Estimated cost for Wine Rack/Storage Addition $6,000 1 $6,000.00
Total Cost for Equipment $26,782.78
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monthly reconciliations of our books and will complete all GST and income tax filings on our behalf for
the previously negotiated flat fee of $5,000 per year. Legal fees will be incurred at the start-up of the
business and at the beginning of each fiscal year. Legal fees in Year 1 will be substantially more than
years 2 and 3 as a result of incorporation costs, and therefore appear as $5,000 in Year 1’s quarterly
income statements (Appendix F) and decrease to $2,000 in years 2 and 3 (Appendix G and H,
respectively). General liability insurance and property insurance through State Farm has been included
in our monthly overhead costs as it is paid on a monthly basis. WCB premiums are paid at the end of
each fiscal year and vary with sales, so the premium varies each year.
In the first quarter of 2012 (March 31) of Year 1, Venia experiences a net loss of $13,521.44, largely due
to start-up cost and higher than normal expenses. In the second quarter (June 30), these expenses are
reduced, and sales result in an improved net loss of $3,024.44. During the third (September 30) and
fourth (December 31) quarters, Venia once again experiences a net losses of $3,024.44 and $6,664.54.
Venia’s losses throughout the year are largely attributable to wages and overhead. Venia’s Year 1
quarterly income statement can be found in Appendix F.
In Year 2, sales are expected to increase by 10% compared to Year 1, largely due to our extensive
marketing plan, repeat customers, and new customers. In Year 2, we no longer have start-up costs, but
have allotted 0.3% of our project yearly sales in January to any necessary equipment upgrades and
maintenance. Due to our successful marketing campaign, we have decided to continue using the same
advertising avenues to promote Venia in Calgary. Our overhead expenses have increased to 6% from 5%
in Year 1 because we felt our budget was a little stretched for Year 1. Our monthly lease payments have
increased by 5% in Year 2, as we have renegotiated and entered into a new lease for 2013. Wages has
also increased by 5% to account for inflation, cost-of-living increases, and any employee loyalty raises.
Year 2 income statements can be found in Appendix G.
In Year 3, sales are expected to again increase by 10% compared to Year 2, largely due to our extensive
marketing plan, repeat customers, and new customers. Due the continued success of our marketing
campaign, we have decided to continue using the same advertising avenues to promote Venia in Calgary
for the remainder of Year 3 and have decided that at the close of the fiscal year we will re-evaluate our
marketing objectives and plans for the ensuing year. Our overhead expenses have remained the same in
Year 3 compared to Year 2, as our increase in Year 2 provided the room we needed to meet our
overhead requirements. Our monthly lease payments have increased by 5% in Year 3, as we have re-
negotiated and entered into a new lease for 2014. Wages has also increased by 5% to account for
inflation, cost-of-living increases, and any employee loyalty raises. Year 3 income statements can be
found in Appendix G.
Balance Sheets
Opening Day Balance Sheet
The opening-day balance sheet provides a snapshot of our firm’s financial position on opening day. Cash
is equal to the money has been invested into the company ($100,000 from the five partners) less the
first week’s inventory, equipment, and prepaid expenses required to prepare Venia for opening day.
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There are no accounts receivable as Venia pays for all expenses by cheque within 48 hours of receipt.
Prepaid expenses are equal to the expenses for the licences, the lease payment, advertising, legal fees,
and accounting fees. Our accrued expenses are our wages and overhead costs, which are not yet
payable. Please refer to Appendix D for the Opening Day Balance Sheet.
Quarterly Balance Sheets
Quarterly balance sheets are similar to the opening-day balance sheet; however, cash for each quarter is
now equal to the ending cash amount of the final month of the applicable quarter in the cash flow
forecast statement. The same assumptions used to generate cash flow statements and income
statements have been used to generate the quarterly balance sheets. Venia does not extend credit to
clients; all services are paid for at the time they are received; therefore, there are no accounts
receivable.
As previously indicated, Venia has access to a $100,000 line of credit. When money is withdrawn from
the line of credit it is repaid as soon as profits allow the business to do so, which is generally within the
same quarter it was borrowed. However, throughout the first three years of business Venia has not
been in a position where that line of credit was necessary. Current retained earnings fluctuate over each
quarter and slowly improve over the course of Years 1 and 2 to be positive in Year 3. This aspect of the
balance sheets is the link to the net income of the appropriate year and quarter on the income
statements. Ending retained earnings are equivalent to current retained earnings plus beginning
retained earnings. The ending retained earnings of one quarter become the beginning retained earnings
of the subsequent quarter. Throughout Year 1, the business operates at an overall loss, with total
retained earnings equalling –$6,664.53 by the end of the fourth quarter. In the fourth quarter of Year 2,
the business has improved slightly, retaining profits of –$2,605.14. In Year 3, Venia enjoys profitable
retained earnings for all four quarters, with the fourth quarter yielding $4,638.75 in retained earnings.
Please refer to Appendices F, G and H for the quarterly balance sheets of years 1, 2, 3, respectively. In all
cases, total assets are equal to total debt and equity.
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Financial Analysis
The following section details Venia’s liquidity, profitability, debt, and return on equity ratios in
comparison to the industry average.
Financing Ratios
Return on Equity
ROE Year 1 = –9% ROE Year 2 = 0% ROE Year 3 = 0% Industry Norm = 20.82% Return on equity is usually calculated for the full fiscal year, before dividends are paid to common
shareholders but after dividends are paid to preferred shareholders. It measures the amount of net
income that was returned as a percentage of shareholders equity. In year 1, Venia had –9% return on
equity. Therefore, in the first year, Venia’s shareholders did not see a positive return on their
investment. In years 2 and 3, the return on equity amounted to zero, as all of the equity was used up to
fund year 1 operations. The industry norm is 20.82%. This implies that Venia is not as profitable as the
industry benchmark, which is mainly due to the fact that Venia is incurring very high start-up costs as
well slow but steady growth in revenue.
Current Ratio Year 1: 2.1 Year 2: 0.0 Year 3: 0.0 Industry Norm: 0.9 The current ratio measures the company’s ability to pay back its short-term liabilities (debts and other
payables) with its short-term assets (cash, receivables). Generally, the higher the ratio, the increased
capability of a company to pay off its obligations. During year 1, Venia’s current ratio is 2.1, which
implies that Venia is able to pay back its short-term obligations in a very efficient manner. During years 2
and 3, the current ratio is zero. This is due to the fact that most of the financing was done though the
injection of equity rather than debt. While examining the industry norm, the current ratio is at 0.9. This
is sufficient evidence to conclude that in year one, Venia outperforms the industry benchmark in terms
of paying of its short-term liabilities with its short-term assets; however, in years 2 and 3, Venia tends to
lag behind the industry average due to start-up inefficiencies, high costs, and equity-based financing.
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Net Profit Margin Year 1: 1% Year 2: 0% Year 3: 3% Industry Norm: 14% Profit margin is useful when comparing companies in order to distinguish each company’s profitability
by putting an emphasis on which company has better control over its costs. In year 1, Venia has 1%
profit margin. This implies that in year 1, Venia had a net income of $1.00 for each dollar of sales. In year
2, the profit margin was 1.40% followed by $3.64 for each dollar of sales in year 3. The industry norm is
$3.94 for each dollar of sales. This implies that overall the industry tends to be more profitable than
Venia. This is mainly due to high start-up costs as well as the relatively small economic profit generated
by Venia’s operations during its start-up period.
Debt-to-equity ratio Year 1: 0.89 Year 2: 0 Year 3: 0 Industry Norm: 0.97
The debt-to-equity ratio measures a company’s financial leverage position. It usually involves long-term
debt and shareholders equity. The higher the debt-to-equity ratio, the riskier the business as it is
vulnerable to interest rate hikes caused by inflationary expectations. The higher the interest rate, the
higher the price that the company has to pay for the amount borrowed. Usually, if the ratio is greater
than 1, the majority of the company’s assets are financed through debt. In year 1, Venia had a debt-to-
equity ratio of 0.89. This implies that the majority of Venia’s operations were financed through equity
and not debt. In years 2 and 3, the ratio was zero as all of Venia’s operations were financed solely
through equity. The industry benchmark is 0.97. This implies that as a start-up company, Venia tends
take a more conservative approach when looking to expand operations. This is accomplished through
minimizing its exposure to leverage by financing most of its operations with equity.
Strengths and Weaknesses
In the first year of operations, there were significant losses and slow returns on equity to investors. By
the second and third year of operation, the business became more profitable, thus slowly increasing the
profit margin. This is viewed as a positive sign as Venia’s operations are generating enough revenue to
pay off any start-up debts as well as return some of the equity injected by its initial shareholders.
Venia’s slow but steady growth is also a feature that attracts potential investors. With a break-even
point anticipated within the near future, a strong management team, and unique service and products,
Venia makes for a successful venture.
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Organization and Human Resources
The following section details the structure of our organization, job descriptions, management leadership
styles, and compensation and incentive plans, in addition to recruitment, selection, and training
strategies.
Organizational Chart
Stefano Vriliotis,Senior Vice President
Operations
Charlotte Holmgren,President and Chief
Executive Officer
Scott Kosashi,Chief Financial Officer
Dena Southas,Vice President,Marketing and
Business Development
VACANT,Manager
Supervisor
Server Bartender Chef
Chef’s AidBusser
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Job Descriptions
MANAGER Full Time Wage: $45,000 Primary function: To oversee general operations and work closely with Venia’s employees to ensure profitability and a good reputation for the restaurant. Supervision received: None Supervision exercised: Supervisor, cook, chef’s aide, bartender, server and busser Hours: The manager must be contactable during all operating hours, in case of emergencies. The manager must deliver supplies whenever necessary; this may be irregular. Managers also must make regular visits to the store to ensure proper workflow. Description: Recruit, select, hire, dismiss, and provide training for employees Preparation of the weekly schedule Responsibility for inventory ordering Design and implementation of company policies and quality standards Observation of work flow to ensure quality and efficiency Conduct monthly human resources meetings with management and staff Required Skills and Qualifications: Bachelor’s degree with business focus Proserve training Fluent spoken and written English High level of organization Ability to handle cash
SUPERVISOR Full Time—40 hours+ Wage: $25/hr Primary function: Supervisors assist the manager and are responsible for training employees and ensuring that the work flow is efficient Supervision received: Manager Supervision exercised: Servers, busser, bartender, chef, chef’s aide Hours: A supervisor must be present during all open hours. Description: Required to know how to perform each role at the restaurant Assisting with new employee training Reporting inventory checks to managers Ensuring that each of the jobs is staffed for all operating hours Enforcement of employment rights within workplace; for example, ensuring that all employees get
breaks and paid overtime when required
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Requirements: High school diploma Proserve training Fluent spoken and written English High level of organization Ability to handle cash CHEF Full time Wage: $17.70/hr Primary function: Provide high quality food for Venia Supervision received: Manager and supervisor Supervision exercised: Chef’s aide Hours: A chef must be present during all operating hours.
Description: Responsible for the kitchen, including ordering the appropriate inventory and supplies required Responsible for all food preparation Allowed to make recipe changes to daily specials as desired, but all menu items are fixed Required to stay until all customers have been served and the kitchen is cleaned and ready for the
following day. Requirements: High school diploma Culinary training or experience Knowledge, enthusiasm, commitment, and passion for food CHEF’S AIDE Part time or Full time Wage: $13.69/hr Primary function: Supervision received: Chef Supervision exercised: None Hours: An assistant chef is required during all operating hours. The assistant chef is not required to show up before opening. Description Assisting the chef in preparation of food and any other necessary kitchen tasks Requirements: High school diploma Ability to use cook (under instruction) Knowledge, enthusiasm, commitment, and passion for food
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BARTENDER Full or Part time Wage: $9.74/hr (+tips) Primary function: Preparing drink orders, both nonalcoholic and alcoholic for customers in the lounge or coffee/hot items for takeout Supervision received: Supervisor, manager Supervision exercised: None Hours: At least one bartender is necessary during operating hours. Description In charge of preparing drink orders May be required to act as a cashier for customers Requirements: High school diploma Proserve training Fluent spoken and written English Ability to handle cash BUSSER Full or Part time Wage: $8.80/hr Primary function: Cleaning tables and washing dishes Supervision received: Cook, supervisor, manager Supervision exercised: None Hours: At least one busser must be working during operating hours Description: Required to clean tables and wash dishes used by customers and cook Responsible for organizing cleaned dishes for use Requirements: Working toward or already obtained high school diploma Spoken English
SERVER Full or Part time Wage: $9.55/hr (+tips) Primary function: Hosting, seating, and serving customers Supervision received: Supervisor, manager Supervision exercised: None Hours: At least one server must be present during operating hours; two is ideal Description: Serve as host, seating customers
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Serving customers Responsible for taking orders and serving food to customers Responsible for bringing out food and presenting final bill at the customer’s request Be service minded Knowledgeable about menu Requirements: High school diploma Proserve training Fluent spoken and written English Ability to handle cash
Accountant
As mentioned previously, our accountant has been engaged to act for Venia for the next three years. He
or she will prepare necessary financial statements and prepare and submit taxes for the company. The
accountant may occasionally advise the managers and owners on financial matters.
Lawyer
This position will be outsourced to Mr. Larry Heald, barrister and solicitor, who will assist the manager
and/or owner with the incorporation documents to establish Venia Café Bar Inc., as well as assist with
the negotiation and entering into of the lease for Venia’s location. Mr. Heald will also provide legal
guidance regarding confidentiality agreements and offer letters for employees and insurance issues such
as WCB and EI.
Marketer
Venia’s marketer will be Dena Southas, who is also a part owner of Venia. Dena has over three years of
marketing experience and is majoring in Communications at the University of Calgary. Ms. Southas has
generously offered to donate her time to successfully implement Venia’s marketing plan. Ms. Southas
will continue to evaluate the microenvironmental and macroenvironmental factors and make any
necessary adjustments to our plans as she sees fit.
Recruitment, Selection, and Training Processes
Recruitment
Initially management would be filled by owner/partners of the business to ensure that there is a
personal interest in the company. But managers may be hired based on experience. Hiring is done at the
discretion of the manager or owners. Managers, who aren’t owners or partners, would have the ability
to hire/release workers, but owners and partners would have final say.
Job postings for the chef, chef’s aide, bartender, server, and busser would be advertised by help-wanted
signs in store windows and on bulletins at the University of Calgary, Mount Royal University, and SAIT.
35
Selection
The manager will receive applications and résumés of potential candidates and review them. The
screening process of résumés involves using relatively basic cues such as experience and minimal
education. Candidates who pass the screening process will be called for an interview conducted by the
manager/managers. The candidates who are called for an interview will be requested to bring a list of
references. During the interview, the manager will ask the candidate behaviour-based questions as well
industry-related questions. When the interviews are completed the best candidate’s references will be
examined. After the selection process those selected candidates will be required to participate in a paid
trial workday in that particular position at Venia. For example the candidate(s), for the chef position will
need to come in and prepare each item on the menu with the assistance of the manager. After
successful completion of the trial workday, the candidate will be asked to join the Venia team.
Training
Venia’s most important attributes are its customer service and quality food. To ensure that customers
visiting Venia receive service of the highest quality, all employers at Venia will receive both initial and
continuing education.
New trainees will need to fully understand their responsibilities and function within the team, Venia’s
menu and mission statement, and workplace safety and tolerance policies. Venia has a zero-tolerance
policy for theft and harassment. Any form of questionable or unsafe behaviour in the workplace or
discrimination against any customer will be taken very seriously and could lead to dismissal. During
training the new employee will be given a copy of our mission statement (see “Operating Objectives”)
and a workplace safety memorandum. Both the supervisor and the manager will have open–door
policies and will make it their responsibility to help maintain a safe, enjoyable, and rewarding workplace
for all employees.
Trainees will be oriented into their new position at their trial workday as mentioned above and during
the first month of employment. The manager is responsible for introducing the new trainee to other
staff members and ensuring the ease of new employee integration.
Compensation and Incentive Plans
Compensation for employees working at Venia is between $8.80 and $25 per hour, with the exception
of the manager, who will be paid a yearly salary of $45,000. These wages are generally fixed, but can be
negotiated with the manager and the officer/owners. Yearly reviews will be completed in December and
loyalty/inflation raises will be awarded as determined by the manager and officer/owners. Tips will be
collected each night and divided among all employees working during that shift. Employees working less
than one year will not have vacation pay. To reduce employee sick time, a bonus may be paid out at the
end of year if profits warrant such a bonus. Note: Employees do not receive pay for sick days taken.
Each of the appointed officers/owner of Venia, with the exception of Farshid Bayat who has been
appointed as the manager and will be paid for his role in that position, have decided to generously
36
donate their time in their respective roles at Venia. Namely, Charlotte Holmgren, president and chief
executive officer, Dena Southas, vice president marketing and business development, Stefano Vriliotis,
senior vice president, Operations and Scott Kosashi, chief financial officer. Their investment in Venia is in
addition to their already well-developed professional careers. At such time that Venia breaks even,
these owners/officers will revisit their compensation.
Management Leadership Style
At Venia, the manager will operate as a coach to the Venia team of staff to ensure all questions can be
answered and workflow organized. The manager will ensure that all procedures are being enforced and
that workflow remains efficient. Once the restaurant is more established, the supervisor may take over
some of the responsibility to ensure that workflow is functioning and that employee questions are
answered.
To maintain a healthy cash flow for the year, the manager is responsible for monthly budget planning.
The manager will be responsible for interviewing and hiring staff.
The supervisor will be responsible for planning for the weekly duty schedule for all employees and
ensure that all employees attend their shifts. The supervisor requires an overseeing of organizational
tasks as well. The supervisor will further need to call in staff when necessary to fill positions of sick
employees.
The manager and supervisor will work closely and talk daily to ensure the business is working. If any
issues arise in the workplace, both the supervisor and the manager will be required to take immediate
action. It will also be the responsibility of the manager and supervisor to implement and enforce a team-
minded environment to ensure that the business is functional and runs smoothly and that employees
are motivated to provide high-quality service.
Staff meetings will be held at the beginning of every month to let employees know how the business is
performing and what to expect in the coming months. This monthly staff meeting will also give
employees a chance to discuss any problems or concerns they might have.
Monthly incentives such as employee-of-the-month awards and the possibility of promotion may be
used to motivate staff at the discretion of the manager.
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Production and Operations Management
The following section provides an overview of Venia’s scheduling, typical workflow, floor layout, and
control and information systems.
Work Flow Diagram
Work Flow Behind the Scenes
Venia is a full-service restaurant that provides a takeout service. This style of service requires Venia to have a minimum of six staff members during operating hours. As such, Venia will need a chef, chef’s aide, bartender, busser, server(s), and supervisor to be present during all hours of operation. In the future, if money and sales warrant it, an additional server may be hired for peak hours of operation.
Customer enters Venia and is greeted
by staff
Customer proceeds to “quick” bar for
takeout
Customer‘s order is taken and paid for
Customer’s order is delivered and either
“Thank you” or “Enjoy” will be said
upon delivery
Customer leaves Venia excited about purchase and great
customer service experience
Customer is seated
Customer’s drink order is taken
and delivered by server
Food order is taken and
entered into the order software
Kitchen receives the order and
prepares as instructed
Kitchen notifies server as soon as
the order is ready with a bell/pager
Server bring dishes to table
and asks if there is anything else
they need
3 minutes into eating, server
asks if everything is tasting okay
Drinks are refreshed
When customer is finished
eating, dishes are to be cleared promptly from
table
Server asks if customer would
like dessert/coffee/
more drinks
When customer is finished server
brings the bill
Customer pays the bill with debit/credit/
cash and customer is
thanked
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Daily Preparation The chef arrives at 7am each day and throughout the day will cook as necessary and conduct inventory
checks and report any shortages or excess supplies to the manager. The supervisor will also arrive at
7am each day and take an inventory check of the coffee, milk, alcohol, and all other liquids. The rest of
the employees will arrive at 7:30. The chef’s aide will fill display shelves with food for takeout. The
busser will clean all dishes, if any are left over and do any last-minute cleaning necessary to make the
place look clean and sharp. The supervisor, servers, and bartender clean the floors and tables and
ensure that tables and chairs are where they belong at open.
After Hours The chef’s aide and busser are responsible for washing all dishes left over and cloths used for tables. The
supervisor, server, and bartender are responsible for wiping tables and stacking chairs. The supervisor
will be the last to leave.
Venia is a team-oriented work environment and we encourage everyone to chip in where necessary to
get the job done. If any employee is without work, it is expected that he or she will help other team
members. That said, it is also expected that if any team member recognizes another employee swamped
with work that she or he will pitch in and help.
Control and Information Systems
Customer Satisfaction
Satisfaction surveys will be randomly presented to customers at the manager’s discretion as well as
available at the cashier for patrons to fill out as they deem necessary. Satisfaction surveys will ensure
the sustainability of Venia’s quality food, efficiency, cleanliness, and impeccable customer service. An
example of such survey can be seen in Appendix J.
Accounting and Operations
Venia’s chief financial officer, with the assistance of the supervisor and manager, will maintain the
following: a general ledger, accounts payable, payroll, bank reconciliation, inventory control, recipe
control, sales analysis, and management reports. Venia’s management team is currently looking into
software called “Foodservice Management Information System V (FMIS V),” which provides assistance
with tracking and reconciling this information.
Managers will communicate with the supervisor in person, as well as via email or phone. The manager,
the supervisor, and one employee for each shift will have the key and security code to open the store.
Tips will be pooled and divided among everyone who worked the shift at the end of each shift.
The manager will be on-site for at least two hours a day, and can be reached by phone at anytime if
there is cause for concern. The manager will organize and lead monthly meetings with summaries to be
provided to the owners/officers of Venia. These will provide a venue for problem resolution and also for
recognition of exemplary work. Each day’s business will be entered our communication journal by the
39
supervisor to recognize accomplishments and challenges. The manager will compile a brief report about
activities during shift, peak, and low hours; issues that arose; recognition that should be provided, etc.
These reports may be discussed at monthly meetings. The meetings will be scheduled by the manager
and supervisor and are mandatory for all employees. Supervisors and employees will be paid for one
hour to attend each meeting.
All employees will be required to fill out time cards and obtain supervisor sign-off at the end of their
shift. If any issues arise with respect to work hours or overtime pay, the supervisor must report the issue
to management for further handling.
Floor Layout and Interior Design
Venia’s design will need to incorporate three different sections to provide efficient service: a section for
takeout/bar service, seated service, and a kitchen for food storage and preparation. The dining area will
be approximately 400 square feet, the quick services area will be approximately 200 square feet, and
the kitchen will be the already-determined 200 square feet. Our total square footage is 800.
The quick service/bar seating area will be at the front of the store, by the entrance. Directly behind this
will be a service counter. Behind this counter will be the kitchen and full-service dining room. The bar
will separate the kitchen and dining room. The maximum capacity of the store will be 32 seated guests.
Quick Service/Bar Area:
Seating: 10
The quick service/bar area will have three high tables, six tall chairs, two couches, and a coffee table.
The quick service area will also have a counter space with a cash register and queue area.
Dining Room:
Seating: 18
The dining room will have 7 dining tables and 14 dinner chairs. The dining room will also have a bar with
four bar stools. At the bar will be a coffee maker and espresso maker. The dining room will also have a
small, but handicap-accessible bathroom.
Kitchen:
Due to the limited size of the store, the kitchen will serve as storeroom and cleaning room in addition to
being a kitchen. The storage will be in the form of cupboards and shelving. Dishes will be washed in the
back corner of the kitchen and a closet for cleaning supplies will also be kept in the kitchen. The kitchen
has two entrances to the rest of the store. One opens into the dining room; the other opens behind the
front counter, so orders can be brought to customers. There will be a kitchen workspace to the left of
the stove and to the left of the oven/microwave combo.
40
Legal
Regulatory Compliance
Venia will comply with all sections and regulations of the Government of Alberta Employment Standards
Code of Safe and Fair Workplaces.40 Our employees will be paid wages above minimum wage and any
employee who is called in to work during a busy time will be paid for a minimum of three hours of work
as per the Standards Code.41 We will strive to provide a workplace that is safe and free from harassment
and discrimination. In the event of any such occurrences, appropriate reports will be filed and brought
to the immediate attention of management, who will address any and all issues promptly and fairly. All
employees of Venia will comply with Alberta’s Personal Information Protection Act (PIPA). Information
about Venia’s customers will not be collected, used, or disclosed without consent.42 All information
gathered by Venia will not be used for any purpose other than those uses that arise in the normal course
of business. Venia must also address food safety issues by complying with all sections and regulations of
the Food Retail and Food Services Code of Alberta.43 Venia will train all employees as required and
ensure that on each shift at least one employee or manager has TrainCan ADVANCED certification and
the necessary ServSafe certificates.44 The legislation requires that any food service place must have at
least one person educated as indicated above, if five or fewer food handlers are working on the
premises.
40 Employment Standards Code (November 10, 2010). Government of Alberta. Retrieved March
25, 2011, from
www.qp.alberta.ca/574.cfm?page=e09.cfm&leg_type=Acts&isbncln=9780779755035
41 “Minimum Pay for Reporting to Work” (October 15, 2010). Government of Alberta. Retrieved March
25, 2011, from http://employment.alberta.ca/SFW/5927.html
42 Personal Information Protection Act (July 2004). Government of Alberta. Retrieved March 25, 2011,
from Private Sector Privacy: http://pipa.alberta.ca
43 Food Retail and Foodservices Code (October 2003). Government of Alberta. Retrieved March 25,
2011, from ,www.health.alberta.ca/health-info/food-safety-code.html
44 ”Food Safety Training and Certification in Canada” (March 25, 2011). TRAINCAN. Retrieved March 25,
2011, from www.traincan.com/ProvincialLegislation.pdf
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Risk Minimization Strategies
Employee confidentiality agreements will be essential for ensuring the privacy of Venia customers. Once
successful candidates are hired by Venia, they will be required to sign a confidentiality agreement upon
which their employment with the firm is contingent. This agreement will set out strict guidelines
defining the confidential information, such as customer credit cards and debit cards and phone numbers
are to be handled, as well as other employees’ confidential information is to be handled during and after
employment with Venia. Our law firm will assist in drafting this important confidentiality contract.
Insurance is an important operational requirement for Venia. Worker’s compensation is a mandatory
insurance for Canadian employers. Its purpose is to protect employees from workplace injuries and
illnesses. Venia will subscribe for Workers’ Compensation Board—Alberta insurance coverage to ensure
that in the event of a workplace injury our employees are protected against loss of income and receive
comprehensive medical and rehabilitation services, and that Venia is protected against any lawsuit that
may result from the injury.45 We will also subscribe for general liability insurance to provide protection
for Venia employees in the case of negligence if they cause injury or damage to a third party or a third-
party’s property, as well as protect the corporation in the event of fire, sewage backup, etc. We feel that
these forms of insurance, along with the employee confidentiality agreements, will minimize the risk of
legal actions taken against Venia in the case of negligence, accidents, or criminal activity.
General Legal Information
Venia is an Alberta Corporation as defined in the Business Corporations Act (Alberta). Each of the
shareholders (as defined above) contributed $25,000 in exchange for 100 common shares of the
corporation. Each owner has been appointed a director of the corporation and has accepted an officer
appointment as set out in the organizational chart above to assist Venia with its development. Each
owner has also agreed to foregoing salary and dividend payments until Venia has the means to provide
same. Venia’s minute book will be maintained and stored at our lawyer’s office.
Venia will require a permit to operate a business in Calgary. The price of the permit is included in our
yearly licence fees. We will also obtain a small business licence. According to the City of Calgary website,
the fee for a small business licence in Calgary is $140 for a new business and $107 payable each year for
renewal.
Social Responsibilities
Through the socioeconomic model of social responsibility, Venia aims to be a very ethically and socially
responsible employer and business. Venia’s goal is to have a secure and enjoyable working environment
for its employees. We also to ensure customers receive the best service possible and that we create the
best value for the purchase of our products and services. Another important aspect of being an ethical
45
“2011 Premiums” (March 25, 2011). Workers’ Compensation Board—Alberta. Retrieved March 25, 2011, from www.wcb.ab.ca/employers/2011_rates.asp
42
and socially responsible business is to give back to the community in which we operate; therefore, we
will strive to be socially responsible to the community of Kensington, the City of Calgary, and the
environment.
Internally
Knowledge, compliance, and full support of legal practices, such as the Alberta Employment Standards
Codes, Alberta’s Personal Information and Privacy Act, and the Food Retail and Food Safety Code is
critical. Complying with these regulations will establish a safe environment for both employees and
customers. To Venia, it is essential that the employees have ethics and, as outlined in under the heading
“Training” above, as employees will be presented with challenging scenarios throughout their time as a
Venia employee.
To facilitate our internal responsibility with our employees, Venia will create and enforce a Code of
Ethics for all management and employees, so everyone will know what is expected from them. Some
activities considered unethical by Venia behavioural model are:
Stealing cash or inventory
Abusing/harassing another person
Taking advantage of others when delegating work responsibilities
Bias against customers or other employees
For Venia, it is important that every employee is treated with respect. We believe that it is key to our
success to provide a working environment where all employees feel respected and treat others with
respect. Enforcing this ethic will decrease absenteeism and increase productivity and retention.
Employees who act ethically will receive positive feedback from management, which will encourage
them to continue their behaviour and prompt others to follow.
Externally
Due to the fact that business activities have a significant influence on society and environment, it is
essential for Venia to act responsibly.
To ensure the success of Venia, we will deliver what we promise to our customers: quality food, drinks,
and customer service in a welcoming atmosphere. Doing this will encourage customers to return to
Venia and give word-of-mouth recommendations.
The main interaction between governments and companies is the payment of taxes, EI, and CPP. Venia
will be honest and accountable for any taxes that are owed to the government, whether corporate
taxes, GST, or employee taxes.
The City of Calgary is extremely important to Venia because this is the location of our business. In an
effort to give back to the community, Venia hopes to establish a program to help homeless people in
Calgary by donating a percentage of sales to the Calgary Homeless Foundation each year following the
break-even point. This action will foster goodwill between Venia and the City of Calgary, as well as
43
provide both a presence in the community and a responsible image of the corporation in the eyes of its
customers.
Venia offers organic, fairly traded coffee and fresh, made-on-site daily foods with as many local
ingredients as possible. This practice ensures that are not only being ethically responsible for our
purchases, but also being conscientious of the ingredients we use and where they come from.
Venia also recognizes that the state of the environment is increasingly affected by garbage waste every
day; therefore, we will have an advanced garbage waste system where plastic, cans, and other garbage
will be recycled properly.
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Threats, Opportunities, and Contingency Plans
The following section outlines additional threats and opportunities faced by Venia, and its efforts to
mitigate these risks.
Threats
Venia faces several threats as a small service business operating in Calgary, Alberta. These threats come
primarily from the macro environment.
New competitors (10 currently)
There is a good chance that new competitors will come to the Kensington area. Venia has no control
over this possibility, but will continue to deliver quality food, drinks, customer services, and atmosphere
to ensure that we retain our regulars and continue to receive new customers by word-of-mouth
recommendations and through our advertising strategy.
Decrease in parking availability and/or changes in parking rates
Parking in Kensington is scarce as it is. If parking availability was to decrease and/or parking rates
increase, this would pose a significant problem for Venia. We hope that through our active involvement
in the community and keeping ourselves “in the know” about Kensington and City of Calgary plans that
we will be able to mitigate this risk. Less parking availability and an increase in parking rates affects not
only Venia but also all other Kensington businesses. We feel that any changes would act as a deterrent
for people to visit Kensington and defeat the purpose of the City of Calgary declaring Kensington a
Business Revitalization Zone. However, in the unlikely event that parking availability decreases and
parking rates increase, Venia would give discounts on certain products for customers who provided a
current-day bus fare to help offset the inconvenience of not being able to park. This promotion would
not only encourage visitation, but also act as encouragement for Venia customers to use city transit as
opposed to driving, which is far better for the environment.
Employee turnover (students graduating and/or new opportunities)
While Venia strives to be an ethical and rewarding employer, high employee turnover in the restaurant
industry is normal as a majority of our wait staff are likely to be postsecondary students. We feel that
we can best prepare for this turnover by always advertising positions at all postsecondary institutions in
Calgary. In addition, we will make every effort to be accommodating of student schedules and provide
lenience wherever possible.
Inability to accommodate all customers during peak times
During the first year of operations, it will be difficult to determine the appropriate number of staff to
have during a shift. It is integral to our success that we quickly find the right number of staff to have on
each shift to ensure that customers are provided with a quality experience in an efficient and
memorable manner. Trends will be monitored closely, particularly throughout the first year of
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operations, via shift reports given to the manager by the supervisor. This will allow the manager to
better schedule staff in subsequent weeks, and to have a better understanding of the expected
customers at certain times of the day and year for subsequent years.
Loss of the manager
The management position requires a very diverse range of knowledge including marketing, accounting,
human resources, and administrative experience. Our manager recently resigned from his position and
withdrew his investment in the company. We are actively searching for a new manager to fill this
important role in our company. In the event that we are unable to find the ideal candidate for our grand
opening, Dena Southas, one of the owners, is prepared to step into the managerial position. This
situation has brought to light the importance of mandatory records and plans (e.g., marketing plans,
shift data, etc.) to be kept to ensure that the business can operate smoothly in the manager’s absence.
Opportunities
The following scenarios may increase Venia’s profitability and brand image.
Create word-of-mouth recognition for consistent quality food, drinks, service, and atmosphere
We believe that our unique coffee, chocolate, and wine bar, and impeccable customer service will not
only entice our new customers to become repeat customers, but also encourage word-of-mouth
recognition. Once the word gets out in Calgary that there is something new, exciting, and delicious to
try, we believe Venia fever will set in and create many customers. This will result in an overall increase in
potential market share, and could result in increased profit. Profits could be further increased by slightly
raising prices to capitalize on the increase in demand.
Create solid, reliable supplier relationships
In order to manage our customer relationships profitably, it is just as essential to build solid, reliable
supplier relationships. Venia will always treat its suppliers with the utmost respect and consideration, by
striving to pay all invoices promptly and placing orders in a timely manner. We feel that managing our
supplier relationships in this manner will ensure that we always receive the freshest and most affordable
products for our customers.
Create an enjoyable, professional, and desirable workplace for employees
Our employees are our key assets. Venia will treat and pay our employees fairly and strive to provide a
safe, enjoyable, and rewarding workplace. It is our hope that valuing our employees and rewarding
them for their contributions will be directly reflected in how our employees treat our customers. If our
customers feel taken care of and respected when they visit Venia, it will add that much more value to
their experience.
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Second Location
If Venia does well enough in its first few years of business, we will definitely consider a second location,
perhaps in a location where parking is easier to come by, but window-shopping walkers are still
frequent. However, we feel that to maintain the trendy vibe of Venia, it would be integral to the success
of our second location to be in a trendy area of Calgary. This might be a little costly, but we believe that
if we are going to do something, we are going to do it right so the extra cost to be in a trendy location
will be worth the investment.
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Sensitivity Analysis
The following section presents an optimistic and pessimistic analysis of sales estimates. It should be
noted that overhead costs vary with changes in sales. As a service business, wages also fluctuate with
inflation. Please see Cash Flow above. (See also Appendices K–N).
While all efforts were made to ensure a valid estimate sales and costs without any professional
knowledge, there is a chance that these numbers will vary from those seen on the Venia balance sheets.
It is also possible that Venia may face increased equipment and overhead costs.
For the purposes of this assignment, depreciation and taxes have been ignored; however, if included,
these factors could significantly impact Venia’s assets and retained earnings.
Pessimistic Analysis
Our expected estimates for a worst-case scenario are based on possible turnovers in a given operating
day. In the worst-case scenario, we anticipate only 14 customers will visit Venia each day. In this
scenario, we have provided only quarterly cash flow statements, income statements and balance sheets
for the first year of business. At this rate of sales/turnover, by the end of the first operating year, Venia
will have used all of all its equity and exhausted all sources of debt, including a $100,000 loan and
$15,000 of a $20,000 limit credit card. To mitigate the situation, Venia reduced staff by half, therefore
reducing the cost of wages by half of the original amount, but it still wasn’t enough to sustain the
company. In this scenario, with that much debt and no increased sales over the course of the year, we
feel that it would be in the best interest of our shareholders to forego the opportunity or seek
professional assistance to increase sales.
Optimistic Analysis
Our expected estimates for a best-case scenario are based on possible turnovers in a given operating
day. In the best-case scenario, we anticipate serving between 64 and 96 customers per day. In this
scenario, we have generated quarterly cash flow statements, income statements, and balance sheets for
the first three years of business. At this rate of sales, we would break even within the first month, which
is highly unlikely. We also determined that if Venia was received this positively and generated such
sales, by the end of the third year Venia would have $921,111.64 in equity. Such equity would yield a
return on investment of 821% for each shareholder based on their initial investment of $25,000.
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Second- and Third-Year Plans
Venia was designed to host 28 patrons at a time, but if the customer base were to increase in the
second and third year of operation as anticipated, Venia may need to streamline its service to either be
dedicated to fast-food café and bar services or to a full-serve restaurant/lounge. If more profit is made
off the quick-serve portion of the restaurant, this section may be expanded and the dining centre
reduced or eliminated. If the quick service is to be expanded, the menu items and layout would also be
designed with quick service in mind and prepared for fast ordering. If the full service is to be expanded,
the menu items and layout could also change for a more upscale dining experience and the quick service
may be eliminated completely.
Management
Venia’s management in the second and third year of operations may change based on the success and
the financial health of the corporation. If Venia is financially healthy, management could be hired out
rather than the owners acting in management positions. If Venia is not doing well, management would
have to remain to ensure operations can continue.
Second Location
After two years of operation, a second location could be opened to increase our customer base by being more accessible to another community. The second location could take a different format than the original. It may offer only part of the menu, such as only the café items in a fast-food format or only the wines and chocolates in a full-serve restaurant.
Unprofitable Marketing Strategy
Due to the competition in Kensington, Venia would continually evaluate its marketing plan. If Venia’s marketing plan proved to be unprofitable, the product, place, distribution, price, or promotion may need to change to ensure survivability. Venia’s menu, price, interior design, and advertising are currently based on our marketing strategy and target market. If we find we have not identified our target market properly, we may need to revamp our strategy to ensure profitability.
49
Blank Questionnaire
Dear Recipient,
I am conducting market research for a group project at the University of Calgary and would like your
input. Please complete the below questionnaire and return same to my attention via reply email.
Thank you in advance for your time and efforts; we sincerely appreciate your contribution.
Best regards,
Founders of Venia Café Bar Inc.
1. Do you drink coffee?
2. What regions of the world do you prefer your coffee from?
3. Do you drink wine? If so, red or white or both?
4. Do you enjoy fruit and chocolate?
5. How old are you? (optional)
6. How often do you go out for wine? (ie. once per week, once per month, etc.)
7. How often do you go out for coffee? (ie. once per week, once per month, etc.)
8. How often do you go out for dessert? (ie. once per week, once per month, etc.)
9. How often do you visit Kensington?
10. What are you will to spend for a unique beverage and dining experience?
50
Appendix A
QUESTIONNAIRE TABULATION
Each founder emailed a group of friends/family the above questionnaire. The results from the responses
we received are tabulated below. With respect to the question regarding age, it is important to note
that the data is not representative of our target market age range, as 35 of the 40 responses were from
respondents between the ages of 18 and 30.
1. Do you drink coffee?
Yes: 32 No: 8
2. What regions of the world do you prefer your coffee from?
South-America: 20 Africa: 5 Arabic: 6 Don’t Care: 9
3. Do you drink wine? If so, red or white or both?
Red: 7 White: 10 Both: 17 Don’t drink wine: 6
4. Do you enjoy fruit and chocolate?
Yes: 40 No: 0
5. How old are you? (optional)
<18: 0 18–30: 35 30–50: 2 >50: 3
6. How often do you go out for wine? (i.e., once per week, once per month, etc.)
Daily: 0 Once a week: 10 Once a month: 20 Less often: 10
7. How often do you go out for coffee? (i.e., once per week, once per month, etc.)
Daily: 6 Once a week: 35 Once a month: 4 Less often: 1
8. How often do you go out for dessert? (i.e., once per week, once per month, etc.)
Daily: 1 Once a week: 7 Once a month: 23 Less often: 10
9. How often do you visit Kensington?
Daily: 0 Once a week: 7 Once a month: 7 Less often: 26
10. What are you will to spend for a unique beverage and dining experience?
<$50: 12 $50–$150: 26 $150–$300: 2 >$300: 0
51
Appendix B
VENIA’S MENU
ATTACHED HERETO
52
Appendix C
COSTS TO PREPARE MENU ITEMS
TYPICAL SCENARIO
Item Sold Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Number of Dishes Sold Per Week Estimated Cost to Prepare Dish Sale Price Profit Per Dish Estimated Weekly Costs Estimated Weekly Sales Per Dish
3 Cheese 6 6 6 6 13 13 6 56 $11.35 $20.00 $8.65 $635.60 $1,120.00
4 Cheese 6 6 6 6 13 13 6 56 $14.02 $27.00 $12.98 $785.12 $1,512.00
Camembert 6 6 6 6 13 13 6 56 $10.34 $15.00 $4.66 $579.04 $840.00
Pita tray 6 6 6 6 13 13 6 56 $4.64 $13.00 $8.36 $259.84 $728.00
Cheese Fondue 8 8 8 8 12 12 8 64 $14.54 $18.00 $3.46 $930.56 $1,152.00
TG Salad 4 4 4 4 9 9 4 38 $3.76 $16.00 $12.24 $142.88 $608.00
with Chicken 4 4 4 4 9 9 4 38 $6.66 $23.00 $16.34 $253.08 $874.00
with Salmon 4 4 4 4 9 9 4 38 $7.59 $23.00 $15.41 $288.42 $874.00
PF Salad 4 4 4 4 9 9 4 38 $7.30 $16.00 $8.70 $277.40 $608.00
with Chicken 4 4 4 4 9 9 4 38 $9.70 $23.00 $13.30 $368.60 $874.00
with Salmon 4 4 4 4 9 9 4 38 $10.63 $23.00 $12.37 $403.94 $874.00
Panini 6 6 6 6 10 10 6 50 $7.02 $14.00 $6.98 $351.00 $700.00
Chocolate Fondue 6 6 6 6 13 13 6 56 $12.00 $15.00 $3.00 $672.00 $840.00
White Chocolate Cheesecake 6 6 6 6 13 13 6 56 $4.00 $10.00 $6.00 $224.00 $560.00
Chocolate Divine 6 6 6 6 13 13 6 56 $5.51 $10.00 $4.49 $308.56 $560.00
Belgium Crepe 6 6 6 6 13 13 6 56 $3.84 $8.00 $4.16 $215.04 $448.00
Cholcate Bar 8 8 8 8 12 12 8 64 $2.75 $6.00 $3.25 $176.00 $384.00
Coffee 5 5 5 5 11 11 5 47 $0.14 $2.00 $1.86 $6.58 $94.00
Latte 5 5 5 5 11 11 5 47 $1.10 $3.50 $2.40 $51.70 $164.50
Cappucino 5 5 5 5 11 11 5 47 $0.93 $3.50 $2.57 $43.71 $164.50
Mocha 5 5 5 5 11 11 5 47 $2.31 $4.00 $1.69 $108.57 $188.00
Hot Chocolate 5 5 5 5 11 11 5 47 $2.17 $3.50 $1.33 $101.99 $164.50
Tea 7 7 7 7 12 12 7 59 $1.00 $2.50 $1.50 $59.00 $147.50
Sparkling Water 16 16 16 16 32 32 16 144 $1.33 $3.00 $1.67 $191.52 $432.00
Still Water 16 16 16 16 32 32 16 144 $1.33 $4.00 $2.67 $191.52 $576.00
Pino Grigio ($6.00) 5 5 5 5 11 11 5 47 $2.25 $6.00 $3.75 $105.75 $282.00
Cab. Sav. ($7.00) 5 5 5 5 11 11 5 47 $2.17 $7.00 $4.83 $101.99 $329.00
Red Zinfandel ($7.00) 5 5 5 5 11 11 5 47 $2.67 $7.00 $4.33 $125.49 $329.00
Pinot Noir ($6.50) 5 5 5 5 11 11 5 47 $2.25 $6.50 $4.25 $105.75 $305.50
Merlot ($7.00) 5 5 5 5 11 11 5 47 $2.33 $6.00 $3.67 $109.51 $282.00
Shiraz ($8.00) 7 7 7 7 12 12 7 59 $2.17 $8.00 $5.83 $128.03 $472.00
$8,302.19 $17,486.50
Number of Turnovers:
Turnover being 32 people 1 1 1 1 2 2 1
Number of People: 32 32 32 32 64 64 32
Estimated Yearly Sales $909,298.00
Estimated COGS $431,713.88
Estimated Monthly Sales
Based on 4.33 weeks in a month $75,716.55
Estimated Monthly Costs
Based on 4.33 weeks in a month $35,948.48
53
Appendix D
OPENING-DAY BALANCE SHEET
VENIA CAFÉ BAR INC.
Opening Day Pro Forma Balance Sheet - Typical Case Scenario
BALANCE SHEET
ASSETS
Current Assets
Cash $59,135.33
Inventory $35,948.48
Prepaid Expenses 14,536.64$
Total Current Assets $109,620.45
Fixed Assets
Equipment $26,782.78
Total Fixed Assets
TOTAL ASSETS $136,403.23
LIABILITIES
Current Liabilities $0.00
Accrued Expenses $36,403.23
Total Current Liabilities $36,403.23
EQUITY
Common Equity $100,000.00
Retained Earnings $0.00
Total Equity $100,000.00
TOTAL LIABILITIES & EQUITY $136,403.23
54
Appendix E
YEAR 1 MONTHLY CASH FLOW STATEMENT
ITEM JANUARY FEBRUARY MARCH APRIL MAY JUNE JULY AUGUST SEPTEMBER OCTOBER NOVEMBER DECEMBER
OPENING CASH -$ 62,045.41$ 61,370.60$ 59,695.78$ 59,020.97$ 58,346.16$ 56,671.35$ 55,996.53$ 55,321.72$ 53,646.91$ 52,972.10$ 52,297.28$
CASH SALES 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$
Total Operating Cash in 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$ 75,716.55$
EQUITY 100,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
LOANS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
LINE OF CREDIT -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
Total Non-Operating
Cash 100,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL CASH AVAIL 175,716.55$ 137,761.95$ 137,087.14$ 135,412.33$ 134,737.52$ 134,062.70$ 132,387.89$ 131,713.08$ 131,038.27$ 129,363.45$ 128,688.64$ 128,013.83$
OPERATING CASH OUT
INVENTORY 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$ 35,948.48$
WAGES $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40 $32,617.40
WCB -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ 3,640.10$
LICENCES 497.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
LEASE PAYMENTS 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$ 3,500.00$
ADVERTISING 539.64$ 539.64$ 1,539.64$ 539.64$ 539.64$ 1,539.64$ 539.64$ 539.64$ 1,539.64$ 539.64$ 539.64$ 1,539.64$
OVERHEAD 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$ 3,785.83$
LEGAL FEES 5,000.00$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
ACCOUNTING FEE 5,000.00$
INTEREST -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL OPER.CASH 86,888.36$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 81,031.46$
NON-OPERATING CASH OUT
LOAN PAYMENTS -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
EQUIPMENT 26,782.78$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
LEASEHOLD IMPRO -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL NON-OP CASH OUT26,782.78$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$ -$
TOTAL CASH OUT 113,671.14$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 77,391.36$ 76,391.36$ 76,391.36$ 81,031.46$
ENDING CASH 62,045.41$ 61,370.60$ 59,695.78$ 59,020.97$ 58,346.16$ 56,671.35$ 55,996.53$ 55,321.72$ 53,646.91$ 52,972.10$ 52,297.28$ 46,982.37$
YEAR 1 MONTHLY CASH FLOW STATEMENT
VENIA CAFÉ BAR INC.
55
Appendix F
YEAR 1 QUARTERLY INCOME STATEMENTS AND BALANCE SHEETS
For period ended March 31, 2012 For period ended June 30, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 227,149.64$ Sales 227,149.64$
COGS ($107,845.45) COGS ($107,845.45)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 21,451.97$ GROSS PROFIT 21,451.97$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($11,357.49) OVERHEAD ($11,357.49)
LEGAL FEES ($5,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA (13,521.44)$ EBITDA (3,024.44)$
NET INCOME ($13,521.44) NET INCOME ($3,024.44)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 59,695.78$ Cash 56,671.35$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $59,695.78 Total Current Assets $56,671.35
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $86,478.56 TOTAL ASSETS $83,454.13
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $100,000.00 Common Equity $86,478.56
Retained Earnings ($13,521.44) Retained Earnings ($3,024.44)
Total Equity $86,478.56 Total Equity $83,454.13
TOTAL LIABILITIES & EQUITY $86,478.56 TOTAL LIABILITIES & EQUITY $83,454.13
Q2 Pro Forma Balance Sheet and Income Statement - Typical Case Scenario
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement - Typical Case Scenario
56
For period ended March 31, 2012 For period ended June 30, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 227,149.64$ Sales 227,149.64$
COGS ($107,845.45) COGS ($107,845.45)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 21,451.97$ GROSS PROFIT 21,451.97$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($11,357.49) OVERHEAD ($11,357.49)
LEGAL FEES ($5,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA (13,521.44)$ EBITDA (3,024.44)$
NET INCOME ($13,521.44) NET INCOME ($3,024.44)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 59,695.78$ Cash 56,671.35$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $59,695.78 Total Current Assets $56,671.35
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $86,478.56 TOTAL ASSETS $83,454.13
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $100,000.00 Common Equity $86,478.56
Retained Earnings ($13,521.44) Retained Earnings ($3,024.44)
Total Equity $86,478.56 Total Equity $83,454.13
TOTAL LIABILITIES & EQUITY $86,478.56 TOTAL LIABILITIES & EQUITY $83,454.13
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Typical Case Q2 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
57
For period ended September 30, 2012 For period ended December 31, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 227,149.64$ Sales 227,149.64$
COGS ($107,845.45) COGS ($107,845.45)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 21,451.97$ GROSS PROFIT 21,451.97$
WCB $0.00 WCB ($3,640.10)
LICENCES $0.00 LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($11,357.49) OVERHEAD ($11,357.49)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA ($3,024.44) EBITDA (6,664.54)$
NET INCOME ($3,024.44) NET INCOME ($6,664.54)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 53,646.91$ Cash 46,982.37$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $53,646.91 Total Current Assets $46,982.37
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $80,429.69 TOTAL ASSETS $73,765.15
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $83,454.13 Common Equity $80,429.69
Retained Earnings ($3,024.44) Retained Earnings ($6,664.54)
Total Equity $80,429.69 Total Equity $73,765.15
TOTAL LIABILITIES & EQUITY $80,429.69 TOTAL LIABILITIES & EQUITY $73,765.15
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Typical Case Q4 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
58
For period ended September 30, 2012 For period ended December 31, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 227,149.64$ Sales 227,149.64$
COGS ($107,845.45) COGS ($107,845.45)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 21,451.97$ GROSS PROFIT 21,451.97$
WCB $0.00 WCB ($3,640.10)
LICENCES $0.00 LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($11,357.49) OVERHEAD ($11,357.49)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA ($3,024.44) EBITDA (6,664.54)$
NET INCOME ($3,024.44) NET INCOME ($6,664.54)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 53,646.91$ Cash 46,982.37$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $53,646.91 Total Current Assets $46,982.37
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $80,429.69 TOTAL ASSETS $73,765.15
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $83,454.13 Common Equity $80,429.69
Retained Earnings ($3,024.44) Retained Earnings ($6,664.54)
Total Equity $80,429.69 Total Equity $73,765.15
TOTAL LIABILITIES & EQUITY $80,429.69 TOTAL LIABILITIES & EQUITY $73,765.15
Q3 Pro Forma Balance Sheet and Income Statement - Typical Case Scenario Q4 Pro Forma Balance Sheet and Income Statement - Typical Case Scenario
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
59
Appendix G
YEAR 2 QUARTERLY CASH FLOW AND INCOME STATEMENTS
60
ITEM Q1 Q2 Q3 Q4
OPENING CASH 120,598.43$ 112,966.51$ 116,617.42$ 120,268.33$
CASH SALES 249,864.63$ 249,864.63$ 249,864.63$ 249,864.63$
Total Operating Cash in 249,864.63$ 249,864.63$ 249,864.63$ 249,864.63$
EQUITY
LOANS
LINE OF CREDIT
Total Non-Operating
Cash
TOTAL CASH AVAIL 370,463.06$ 362,831.14$ 366,482.05$ 370,132.96$
OPERATING CASH OUT
INVENTORY 118,629.96$ 118,629.96$ 118,629.96$ 118,629.96$
WAGES $102,744.81 $102,744.81 $102,744.81 $102,744.81
WCB -$ -$ -$ 3,822.11$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 11,025.00$ 11,025.00$ 11,025.00$ 11,025.00$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 13,628.97$ 13,628.97$ 13,628.97$ 13,628.97$
LEGAL FEES 2,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 256,144.66$ 248,647.66$ 248,647.66$ 252,469.77$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 3,785.83$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 3,785.83$ -$ -$ -$
TOTAL CASH OUT 259,930.49$ 248,647.66$ 248,647.66$ 252,469.77$
ENDING CASH 110,532.57$ 114,183.48$ 117,834.39$ 117,663.19$
QUARTERLY CASH FLOW STATEMENTS FOR YEAR 2
YEAR 2 QUARTERLY CASH
FLOW STATEMENT
61
For period ended March 31, 2013 For period ended June 30, 2013
INCOME STATEMENT INCOME STATEMENT
Sales 249,864.63$ Sales 249,864.63$
COGS ($118,629.96) COGS ($118,629.96)
Wages ($102,744.81) Wages ($102,744.81)
GROSS PROFIT 28,489.86$ GROSS PROFIT 28,489.86$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($11,025.00) LEASE PAYMENTS ($11,025.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($13,628.97) OVERHEAD ($13,628.97)
LEGAL FEES ($2,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA ($6,280.03) EBITDA 1,216.97$
NET INCOME ($6,280.03) NET INCOME 1,216.97$
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 36,916.51$ Cash 38,133.48$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets 36,916.51$ Total Current Assets $38,133.48
Fixed Assets Fixed Assets
Equipment $30,568.61 Equipment $30,568.61
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS 67,485.12$ TOTAL ASSETS $68,702.09
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $73,765.15 Common Equity $67,485.12
Retained Earnings ($6,280.03) Retained Earnings 1,216.97$
Total Equity $67,485.12 Total Equity $68,702.09
TOTAL LIABILITIES & EQUITY $67,485.12 TOTAL LIABILITIES & EQUITY $68,702.09
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
62
For period ended September 30, 2013 For period ended December 31, 2013
INCOME STATEMENT INCOME STATEMENT
Sales 249,864.63$ Sales 249,864.63$
COGS ($118,629.96) COGS ($118,629.96)
Wages ($102,744.81) Wages ($102,744.81)
GROSS PROFIT 28,489.86$ GROSS PROFIT 28,489.86$
WCB $0.00 WCB ($3,822.11)
LICENCES $0.00 LICENCES -$
LEASE PAYMENTS ($11,025.00) LEASE PAYMENTS ($11,025.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($13,628.97) OVERHEAD ($13,628.97)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $1,216.97 EBITDA ($2,605.14)
NET INCOME $1,216.97 NET INCOME ($2,605.14)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 39,350.45$ Cash 36,745.31$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $39,350.45 Total Current Assets $36,745.31
Fixed Assets Fixed Assets
Equipment $30,568.61 Equipment $30,568.61
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $69,919.06 TOTAL ASSETS $67,313.92
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $68,702.09 Common Equity $69,919.06
Retained Earnings $1,216.97 Retained Earnings ($2,605.14)
Total Equity $69,919.06 Total Equity $67,313.92
TOTAL LIABILITIES & EQUITY $69,919.06 TOTAL LIABILITIES & EQUITY $67,313.92
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
63
Appendix H
YEAR 3 QUARTERLY CASH FLOW AND INCOME STATEMENTS
ITEM Q1 Q2 Q3 Q4
OPENING CASH 95,732.20$ 109,610.23$ 135,566.11$ 161,521.99$
CASH SALES 274,851.09$ 274,851.09$ 274,851.09$ 274,851.09$
Total Operating Cash in 274,851.09$ 274,851.09$ 274,851.09$ 274,851.09$
EQUITY
LOANS
LINE OF CREDIT
Total Non-Operating
Cash
TOTAL CASH AVAIL 370,583.29$ 384,461.32$ 410,417.20$ 436,373.08$
OPERATING CASH OUT
INVENTORY 130,492.95$ 130,492.95$ 130,492.95$ 130,492.95$
WAGES $107,882.04 $107,882.04 $107,882.04 $107,882.04
WCB -$ -$ -$ 4,013.21$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 11,576.25$ 11,576.25$ 11,576.25$ 11,576.25$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 13,628.97$ 13,628.97$ 13,628.97$ 13,628.97$
LEGAL FEES 2,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 273,696.13$ 266,199.13$ 266,199.13$ 270,212.34$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 4,580.85$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 4,580.85$ -$ -$ -$
TOTAL CASH OUT 278,276.98$ 266,199.13$ 266,199.13$ 270,212.34$
ENDING CASH 92,306.31$ 118,262.19$ 144,218.07$ 166,160.74$
YEAR 3 MONTHLY/QUARTERLY
CASH FLOW STATEMENT QUARTERLY CASH FLOW STATEMENTS FOR YEAR 3
64
For period ended March 31, 2014 For period ended June 30, 2014
INCOME STATEMENT INCOME STATEMENT
Sales 274,851.09$ Sales 274,851.09$
COGS ($130,492.95) COGS ($130,492.95)
Wages ($107,882.04) Wages ($107,882.04)
GROSS PROFIT 36,476.10$ GROSS PROFIT 36,476.10$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($11,576.25) LEASE PAYMENTS ($11,576.25)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($13,628.97) OVERHEAD ($13,628.97)
LEGAL FEES ($2,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $1,154.96 EBITDA 8,651.96$
NET INCOME $1,154.96 NET INCOME 8,651.96$
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 33,319.42$ Cash 41,971.38$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets 33,319.42$ Total Current Assets $41,971.38
Fixed Assets Fixed Assets
Equipment $35,149.49 Equipment $35,149.49
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS 68,468.91$ TOTAL ASSETS $77,120.87
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $67,313.92 Common Equity $68,468.88
Retained Earnings $1,154.96 Retained Earnings 8,651.96$
Total Equity $68,468.88 Total Equity $77,120.84
TOTAL LIABILITIES & EQUITY $68,468.88 TOTAL LIABILITIES & EQUITY $77,120.84
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
65
For period ended September 30, 2014 For period ended December 31, 2014
INCOME STATEMENT INCOME STATEMENT
Sales 274,851.09$ Sales 274,851.09$
COGS ($130,492.95) COGS ($130,492.95)
Wages ($107,882.04) Wages ($107,882.04)
GROSS PROFIT 36,476.10$ GROSS PROFIT 36,476.10$
WCB $0.00 WCB ($4,013.21)
LICENCES $0.00 LICENCES -$
LEASE PAYMENTS ($11,576.25) LEASE PAYMENTS ($11,576.25)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($13,628.97) OVERHEAD ($13,628.97)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $8,651.96 EBITDA $4,638.75
NET INCOME $8,651.96 NET INCOME $4,638.75
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 50,623.34$ Cash 55,262.09$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $50,623.34 Total Current Assets $55,262.09
Fixed Assets Fixed Assets
Equipment $35,149.49 Equipment $35,149.49
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $85,772.83 TOTAL ASSETS $90,411.58
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $77,120.84 Common Equity $85,772.80
Retained Earnings $8,651.96 Retained Earnings $4,638.75
Total Equity $85,772.80 Total Equity $90,411.55
TOTAL LIABILITIES & EQUITY $85,772.80 TOTAL LIABILITIES & EQUITY $90,411.55
Q3 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Typical Case Scenario
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
66
Appendix I
SATISFACTION SURVEY (adapted from www.statpac.com/online-surveys/Resturaunt_Customer_Satisfaction.htm)
How did we do?
Thank you for indulging in Venia. We’re conducting a short survey to find out about your dining experience and what
we might do to improve it. Please help us by completing this short survey.
Please indicate your level of agreement or disagreement with the following statements.
Strongly
Disagree
Strongly
Agree
1 2 3 4 5
The food was served hot and fresh.
The menu had an excellent selection of items.
The quality of food was excellent.
The food was very tasty and flavourful.
Did you have a reservation?
Yes
No
Approximately how many minutes did you wait before you were seated?
The waiting time was:
About what I expected
A little longer that I expected
Much longer than I expected
Please indicate your level of agreement or disagreement with the following statements.
Strongly
Strongly
67
Disagree Agree
1 2 3 4 5
We were seated promptly.
A server was there to take our order quickly.
The server was friendly and patient when taking our order.
Our server coordinated the timing of the courses perfectly.
The server was able to answer all our questions.
Overall, the service was excellent.
Considering everything, our dining experience was a good value.
Would you recommend our restaurant to a friend?
No
Yes
How would you describe our restaurant to someone who has never been here?
68
Appendix J
VENIA CAFÉ BAR INC. FLOOR PLAN
69
Appendix K
VENIA CAFÉ BAR INC. WORST-CASE SCENARIO COSTS TO PREPARE MENU ITEMS AND ESTIMATED TURNOVER
WORST CASE SCENARIO
Item Sold Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Number of Dishes Sold Per Week Estimated Cost to Prepare Dish Sale Price Profit Per Dish Estimated Weekly Costs Estimated Weekly Sales Per Dish
3 Cheese 3 3 3 3 3 3 3 21 $11.35 $20.00 $8.65 $238.35 $420.00
4 Cheese 3 3 3 3 3 3 3 21 $14.02 $27.00 $12.98 $294.42 $567.00
Camembert 3 3 3 3 3 3 3 21 $10.34 $15.00 $4.66 $217.14 $315.00
Pita tray 3 3 3 3 3 3 3 21 $4.64 $13.00 $8.36 $97.44 $273.00
Cheese Fondue 4 4 4 4 4 4 4 28 $14.54 $18.00 $3.46 $407.12 $504.00
TG Salad 2 2 2 2 2 2 2 14 $3.76 $16.00 $12.24 $52.64 $224.00
with Chicken 2 2 2 2 2 2 2 14 $6.66 $23.00 $16.34 $93.24 $322.00
with Salmon 2 2 2 2 2 2 2 14 $7.59 $23.00 $15.41 $106.26 $322.00
PF Salad 2 2 2 2 2 2 2 14 $7.30 $16.00 $8.70 $102.20 $224.00
with Chicken 2 2 2 2 2 2 2 14 $9.70 $23.00 $13.30 $135.80 $322.00
with Salmon 2 2 2 2 2 2 2 14 $10.63 $23.00 $12.37 $148.82 $322.00
Panini 4 4 4 4 4 4 4 28 $7.02 $14.00 $6.98 $196.56 $392.00
Chocolate Fondue 3 3 3 3 3 3 3 21 $12.00 $15.00 $3.00 $252.00 $315.00
White Chocolate Cheesecake 3 3 3 3 3 3 3 21 $4.00 $10.00 $6.00 $84.00 $210.00
Chocolate Divine 3 3 3 3 3 3 3 21 $5.51 $10.00 $4.49 $115.71 $210.00
Belgium Crepe 3 3 3 3 3 3 3 21 $3.84 $8.00 $4.16 $80.64 $168.00
Cholcate Bar 4 4 4 4 4 4 4 28 $2.75 $6.00 $3.25 $77.00 $168.00
Coffee 3 3 3 3 3 3 3 21 $0.14 $2.00 $1.86 $2.94 $42.00
Latte 3 3 3 3 3 3 3 21 $1.10 $3.50 $2.40 $23.10 $73.50
Cappucino 3 3 3 3 3 3 3 21 $0.93 $3.50 $2.57 $19.53 $73.50
Mocha 3 3 3 3 3 3 3 21 $2.31 $4.00 $1.69 $48.51 $84.00
Hot Chocolate 2 2 2 2 2 2 2 14 $2.17 $3.50 $1.33 $30.38 $49.00
Tea 2 2 2 2 2 2 2 14 $1.00 $2.50 $1.50 $14.00 $35.00
Sparkling Water 8 8 8 8 8 8 8 56 $1.33 $3.00 $1.67 $74.48 $168.00
Still Water 8 8 8 8 8 8 8 56 $1.33 $4.00 $2.67 $74.48 $224.00
Pino Grigio ($6.00) 3 3 3 3 3 3 3 21 $2.25 $6.00 $3.75 $47.25 $126.00
Cab. Sav. ($7.00) 3 3 3 3 3 3 3 21 $2.17 $7.00 $4.83 $45.57 $147.00
Red Zinfandel ($7.00) 3 3 3 3 3 3 3 21 $2.67 $7.00 $4.33 $56.07 $147.00
Pinot Noir ($6.50) 3 3 3 3 3 3 3 21 $2.25 $6.50 $4.25 $47.25 $136.50
Merlot ($7.00) 2 2 2 2 2 2 2 14 $2.33 $6.00 $3.67 $32.62 $84.00
Shiraz ($8.00) 2 2 2 2 2 2 2 14 $2.17 $8.00 $5.83 $30.38 $112.00
Brunch ($20) 0 $0.00 $0.00 $0.00 $0.00 $0.00
$3,245.90 $6,779.50
Number of Turnovers:
Turnover being 32 people 0.5 0.5 0.5 0.5 0.5 0.5 0.5
Number of People: 16 16 16 16 16 16 16
Estimated Yearly Sales $352,534.00
Estimated COGS $168,786.80
Estimated Monthly Sales
Based on 4.33 weeks in a month $29,355.24
Estimated Monthly Costs
Based on 4.33 weeks in a month $14,054.75
70
Appendix L
VENIA CAFÉ BAR INC. WORST-CASE SCENARIO CASH FLOW STATEMENTS, INCOME STATEMENTS, AND BALANCE SHEETS
71
ITEM Q1 Q2 Q3 Q4
OPENING CASH 56,967.50$ (48,731.12)$ (28,223.83)$ (14,864.32)$
CASH SALES 88,065.72$ 88,065.72$ 88,065.72$ 88,065.72$
Total Operating Cash in 88,065.72$ 88,065.72$ 88,065.72$ 88,065.72$
EQUITY
CREDIT CARD -$ -$ -$ 15,000.00$
LINE OF CREDIT -$ 55,000.00$ 35,000.00$ 10,000.00$
Total Non-Operating
Cash 100,000.00$ 55,000.00$ 35,000.00$ 25,000.00$
TOTAL CASH AVAIL 245,033.22$ 94,334.60$ 94,841.89$ 98,201.40$
OPERATING CASH OUT
INVENTORY 42,164.25$ 42,164.25$ 42,164.25$ 42,164.25$
WAGES $97,852.21 $97,852.21 $48,926.10 $48,926.10
WCB -$ -$ -$ 3,640.10$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 10,500.00$ 10,500.00$ 10,500.00$ 10,500.00$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 4,403.28$ 4,403.28$ 4,403.28$ 4,403.28$
LEGAL FEES 5,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 168,035.66$ 157,538.66$ 108,612.55$ 112,252.65$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 26,782.78$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 26,782.78$ -$ -$ -$
TOTAL CASH OUT 194,818.44$ 157,538.66$ 108,612.55$ 112,252.65$
ENDING CASH 50,214.77$ (63,204.06)$ (13,770.66)$ (14,051.25)$
YEAR 1 MONTHLY CASH
FLOW STATEMENT QUARTERLY CASH FLOW STATEMENTS FOR YEAR 1
72
YEAR 1
For period ended March 31, 2012 For period ended June 30, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 88,065.72$ Sales 88,065.72$
COGS ($42,164.25) COGS ($42,164.25)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT (51,950.74)$ GROSS PROFIT (51,950.74)$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($4,403.28) OVERHEAD ($4,403.28)
LEGAL FEES ($5,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA (79,969.94)$ EBITDA (69,472.94)$
NET INCOME ($79,969.94) NET INCOME ($69,472.94)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash (6,752.72)$ Cash (21,225.67)$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets ($6,752.72) Total Current Assets ($21,225.67)
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $20,030.06 TOTAL ASSETS $5,557.11
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $55,000.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $55,000.00
EQUITY EQUITY
Common Equity $100,000.00 Common Equity $20,030.06
Retained Earnings ($79,969.94) Retained Earnings ($69,472.94)
Total Equity $20,030.06 Total Equity ($49,442.89)
TOTAL LIABILITIES & EQUITY $20,030.06 TOTAL LIABILITIES & EQUITY 5,557.11$
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Worst-Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Worst-Case Scenario
73
YEAR 1
For period ended September 30, 2012 For period ended December 31, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 88,065.72$ Sales 88,065.72$
COGS ($42,164.25) COGS ($42,164.25)
Wages ($48,926.10) Wages ($48,926.10)
GROSS PROFIT ($3,024.63) GROSS PROFIT (3,024.63)$
WCB $0.00 WCB ($3,640.10)
LICENCES $0.00 LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($4,403.28) OVERHEAD ($4,403.28)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA ($20,546.83) EBITDA (24,186.93)$
NET INCOME ($20,546.83) NET INCOME ($24,186.93)
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash ($6,772.50) Cash (5,959.43)$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets ($6,772.50) Total Current Assets ($5,959.43)
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $20,010.28 TOTAL ASSETS $20,823.35
LIABILITIES LIABILITIES
Current Liabilities $90,000.00 Current Liabilities $115,000.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $90,000.00 Total Current Liabilities $115,000.00
EQUITY EQUITY
Common Equity ($49,442.89) Common Equity ($69,989.72)
Retained Earnings ($20,546.83) Retained Earnings ($24,186.93)
Total Equity ($69,989.72) Total Equity ($94,176.65)
TOTAL LIABILITIES & EQUITY $20,010.28 TOTAL LIABILITIES & EQUITY $20,823.35
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Worst-Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Worst-Case Scenario
74
Appendix M
VENIA CAFÉ BAR INC. BEST-CASE SCENARIO COSTS TO PREPARE MENU ITEMS AND ESTIMATED TURNOVER
BEST CASE SCENARIO
Item Sold Monday Tuesday Wednesday Thursday Friday Saturday Sunday Total Number of Dishes Sold Per Week Estimated Cost to Prepare Dish Sale Price Profit Per Dish Estimated Weekly Costs Estimated Weekly Sales Per Dish
3 Cheese 13 13 13 13 13 13 13 91 $11.35 $20.00 $8.65 $1,032.85 $1,820.00
4 Cheese 13 13 13 13 13 13 13 91 $14.02 $27.00 $12.98 $1,275.82 $2,457.00
Camembert 13 13 13 13 13 13 13 91 $10.34 $15.00 $4.66 $940.94 $1,365.00
Pita tray 13 13 13 13 13 13 13 91 $4.64 $13.00 $8.36 $422.24 $1,183.00
Cheese Fondue 12 12 12 12 12 12 12 84 $14.54 $18.00 $3.46 $1,221.36 $1,512.00
TG Salad 9 9 9 9 9 9 9 63 $3.76 $16.00 $12.24 $236.88 $1,008.00
with Chicken 9 9 9 9 9 9 9 63 $6.66 $23.00 $16.34 $419.58 $1,449.00
with Salmon 9 9 9 9 9 9 9 63 $7.59 $23.00 $15.41 $478.17 $1,449.00
PF Salad 9 9 9 9 9 9 9 63 $7.30 $16.00 $8.70 $459.90 $1,008.00
with Chicken 9 9 9 9 9 9 9 63 $9.70 $23.00 $13.30 $611.10 $1,449.00
with Salmon 9 9 9 9 9 9 9 63 $10.63 $23.00 $12.37 $669.69 $1,449.00
Panini 10 10 10 10 10 10 10 70 $7.02 $14.00 $6.98 $491.40 $980.00
Chocolate Fondue 13 13 13 13 13 13 13 91 $12.00 $15.00 $3.00 $1,092.00 $1,365.00
White Chocolate Cheesecake 13 13 13 13 13 13 13 91 $4.00 $10.00 $6.00 $364.00 $910.00
Chocolate Divine 13 13 13 13 13 13 13 91 $5.51 $10.00 $4.49 $501.41 $910.00
Belgium Crepe 13 13 13 13 13 13 13 91 $3.84 $8.00 $4.16 $349.44 $728.00
Cholcate Bar 12 12 12 12 12 12 12 84 $2.75 $6.00 $3.25 $231.00 $504.00
Coffee 11 11 11 11 11 11 11 77 $0.14 $2.00 $1.86 $10.78 $154.00
Latte 11 11 11 11 11 11 11 77 $1.10 $3.50 $2.40 $84.70 $269.50
Cappucino 11 11 11 11 11 11 11 77 $0.93 $3.50 $2.57 $71.61 $269.50
Mocha 11 11 11 11 11 11 11 77 $2.31 $4.00 $1.69 $177.87 $308.00
Hot Chocolate 11 11 11 11 11 11 11 77 $2.17 $3.50 $1.33 $167.09 $269.50
Tea 12 12 12 12 12 12 12 84 $1.00 $2.50 $1.50 $84.00 $210.00
Sparkling Water 32 32 32 32 32 32 32 224 $1.33 $3.00 $1.67 $297.92 $672.00
Still Water 32 32 32 32 32 32 32 224 $1.33 $4.00 $2.67 $297.92 $896.00
Pino Grigio ($6.00) 11 11 11 11 11 11 11 77 $2.25 $6.00 $3.75 $173.25 $462.00
Cab. Sav. ($7.00) 11 11 11 11 11 11 11 77 $2.17 $7.00 $4.83 $167.09 $539.00
Red Zinfandel ($7.00) 11 11 11 11 11 11 11 77 $2.67 $7.00 $4.33 $205.59 $539.00
Pinot Noir ($6.50) 11 11 11 11 11 11 11 77 $2.25 $6.50 $4.25 $173.25 $500.50
Merlot ($7.00) 11 11 11 11 11 11 11 77 $2.33 $6.00 $3.67 $179.41 $462.00
Shiraz ($8.00) 12 12 12 12 12 12 12 84 $2.17 $8.00 $5.83 $182.28 $672.00
Brunch ($20) 0 0 0 0 0 0 0 0 $0.00 $0.00 $0.00 $0.00 $0.00
$13,070.54 $27,769.00
Number of Turnovers:
(Turnover being 32 people) 2 2 2 2 3 3 3
Number of People: 64 64 64 64 96 96 96
Estimated Yearly Sales $1,443,988.00
Estimated COGS $679,668.08
Estimated Monthly Sales
Based on 4.33 weeks in a month $120,239.77
Estimated Monthly Costs
Based on 4.33 weeks in a month $56,595.44
75
Appendix N
VENIA CAFÉ BAR INC. BEST-CASE SCENARIO CASH FLOW STATEMENTS, INCOME STATEMENTS, AND BALANCE SHEETS
76
ITEM Q1 Q2 Q3 Q4
OPENING CASH 188,366.33$ 436,864.20$ 622,641.86$ 808,419.52$
CASH SALES 360,719.31$ 360,719.31$ 360,719.31$ 360,719.31$
Total Operating Cash in 360,719.31$ 360,719.31$ 360,719.31$ 360,719.31$
EQUITY
LOANS
LINE OF CREDIT
Total Non-Operating
Cash
TOTAL CASH AVAIL 649,085.64$ 797,583.51$ 983,361.17$ 1,169,138.83$
OPERATING CASH OUT
INVENTORY 169,786.32$ 169,786.32$ 169,786.32$ 169,786.32$
WAGES $97,852.21 $97,852.21 $97,852.21 $97,852.21
WCB -$ -$ -$ 3,640.10$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 10,500.00$ 10,500.00$ 10,500.00$ 10,500.00$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 18,035.97$ 18,035.97$ 18,035.97$ 18,035.97$
LEGAL FEES 5,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 309,290.42$ 298,793.42$ 298,793.42$ 302,433.52$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 26,782.78$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 26,782.78$ -$ -$ -$
TOTAL CASH OUT 336,073.20$ 298,793.42$ 298,793.42$ 302,433.52$
ENDING CASH 313,012.43$ 498,790.09$ 684,567.75$ 866,705.31$
YEAR 1 MONTHLY CASH
FLOW STATEMENT QUARTERLY CASH FLOW STATEMENTS FOR YEAR 1
77
YEAR 1—BEST-CASE SCENARIO
For period ended March 31, 2012 For period ended June 30, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 360,719.31$ Sales 360,719.31$
COGS ($169,786.32) COGS ($169,786.32)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 93,080.78$ GROSS PROFIT 93,080.78$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($18,035.97) OVERHEAD ($18,035.97)
LEGAL FEES ($5,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA 51,428.89$ EBITDA 61,925.89$
NET INCOME $51,428.89 NET INCOME $61,925.89
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 124,646.11$ Cash 186,571.99$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $124,646.11 Total Current Assets $186,571.99
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $151,428.89 TOTAL ASSETS $213,354.77
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $100,000.00 Common Equity $151,428.89
Retained Earnings $51,428.89 Retained Earnings $61,925.89
Total Equity $151,428.89 Total Equity $213,354.77
TOTAL LIABILITIES & EQUITY $151,428.89 TOTAL LIABILITIES & EQUITY $213,354.77
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
78
YEAR 1—BEST-CASE SCENARIO
For period ended September 30, 2012 For period ended December 31, 2012
INCOME STATEMENT INCOME STATEMENT
Sales 360,719.31$ Sales 360,719.31$
COGS ($169,786.32) COGS ($169,786.32)
Wages ($97,852.21) Wages ($97,852.21)
GROSS PROFIT 93,080.78$ GROSS PROFIT 93,080.78$
WCB $0.00 WCB ($3,640.10)
LICENCES $0.00 LICENCES $0.00
LEASE PAYMENTS ($10,500.00) LEASE PAYMENTS ($10,500.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($18,035.97) OVERHEAD ($18,035.97)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $61,925.89 EBITDA 58,285.79$
NET INCOME $61,925.89 NET INCOME $58,285.79
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 248,497.88$ Cash 306,783.66$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $248,497.88 Total Current Assets $306,783.66
Fixed Assets Fixed Assets
Equipment $26,782.78 Equipment $26,782.78
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $275,280.66 TOTAL ASSETS $333,566.44
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $213,354.77 Common Equity $275,280.66
Retained Earnings $61,925.89 Retained Earnings $58,285.79
Total Equity $275,280.66 Total Equity $333,566.44
TOTAL LIABILITIES & EQUITY $275,280.66 TOTAL LIABILITIES & EQUITY $333,566.44
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
79
YEAR 2—BEST-CASE SCENARIO
ITEM Q1 Q2 Q3 Q4
OPENING CASH 962,960.73$ 1,158,340.90$ 1,367,831.26$ 1,577,321.62$
CASH SALES 396,791.25$ 396,791.25$ 396,791.25$ 396,791.25$
Total Operating Cash in 396,791.25$ 396,791.25$ 396,791.25$ 396,791.25$
EQUITY
LOANS
LINE OF CREDIT
Total Non-Operating
Cash
TOTAL CASH AVAIL 1,359,751.98$ 1,555,132.15$ 1,764,622.51$ 1,974,112.87$
OPERATING CASH OUT
INVENTORY 186,764.94$ 186,764.94$ 186,764.94$ 186,764.94$
WAGES $102,744.81 $102,744.81 $102,744.81 $102,744.81
WCB -$ -$ -$ 3,822.11$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 11,025.00$ 11,025.00$ 11,025.00$ 11,025.00$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 23,807.46$ 23,807.46$ 23,807.46$ 23,807.46$
LEGAL FEES 2,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 334,458.13$ 326,961.13$ 326,961.13$ 330,783.24$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 6,613.19$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 6,613.19$ -$ -$ -$
TOTAL CASH OUT 341,071.32$ 326,961.13$ 326,961.13$ 330,783.24$
ENDING CASH 1,018,680.66$ 1,228,171.02$ 1,437,661.38$ 1,643,329.63$
YEAR 2 QUARTERLY CASH
FLOW STATEMENT QUARTERLY CASH FLOW STATEMENTS FOR YEAR 2
80
YEAR 2—BEST-CASE SCENARIO
For period ended March 31, 2013 For period ended June 30, 2013
INCOME STATEMENT INCOME STATEMENT
Sales 396,791.25$ Sales 396,791.25$
COGS ($186,764.94) COGS ($186,764.94)
Wages ($102,744.81) Wages ($102,744.81)
GROSS PROFIT 107,281.50$ GROSS PROFIT 107,281.50$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($11,025.00) LEASE PAYMENTS ($11,025.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($23,807.46) OVERHEAD ($23,807.46)
LEGAL FEES ($2,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $62,333.12 EBITDA 69,830.12$
NET INCOME $62,333.12 NET INCOME 69,830.12$
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 362,503.59$ Cash 432,333.71$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets 362,503.59$ Total Current Assets $432,333.71
Fixed Assets Fixed Assets
Equipment $33,395.97 Equipment $33,395.97
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS 395,899.56$ TOTAL ASSETS $465,729.68
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $333,566.44 Common Equity $395,899.56
Retained Earnings $62,333.12 Retained Earnings 69,830.12$
Total Equity $395,899.56 Total Equity $465,729.68
TOTAL LIABILITIES & EQUITY $395,899.56 TOTAL LIABILITIES & EQUITY $465,729.68
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
81
YEAR 2—BEST-CASE SCENARIO
For period ended September 30, 2013 For period ended December 31, 2013
INCOME STATEMENT INCOME STATEMENT
Sales 396,791.25$ Sales 396,791.25$
COGS ($186,764.94) COGS ($186,764.94)
Wages ($102,744.81) Wages ($102,744.81)
GROSS PROFIT 107,281.50$ GROSS PROFIT 107,281.50$
WCB $0.00 WCB ($3,822.11)
LICENCES $0.00 LICENCES -$
LEASE PAYMENTS ($11,025.00) LEASE PAYMENTS ($11,025.00)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($23,807.46) OVERHEAD ($23,807.46)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $69,830.12 EBITDA $66,008.01
NET INCOME $69,830.12 NET INCOME $66,008.01
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 502,163.83$ Cash 568,171.84$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $502,163.83 Total Current Assets $568,171.84
Fixed Assets Fixed Assets
Equipment $33,395.97 Equipment $33,395.97
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $535,559.80 TOTAL ASSETS $601,567.81
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $465,729.68 Common Equity $535,559.80
Retained Earnings $69,830.12 Retained Earnings $66,008.01
Total Equity $535,559.80 Total Equity $601,567.81
TOTAL LIABILITIES & EQUITY $535,559.80 TOTAL LIABILITIES & EQUITY $601,567.81
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
82
YEAR 3—BEST-CASE SCENARIO
ITEM Q1 Q2 Q3 Q4
OPENING CASH 1,755,826.24$ 1,987,890.37$ 2,236,180.90$ 2,484,471.43$
CASH SALES 436,470.36$ 436,470.36$ 436,470.36$ 436,470.36$
Total Operating Cash in 436,470.36$ 436,470.36$ 436,470.36$ 436,470.36$
EQUITY
LOANS
LINE OF CREDIT
Total Non-Operating
Cash
TOTAL CASH AVAIL 2,192,296.60$ 2,424,360.73$ 2,672,651.26$ 2,920,941.79$
OPERATING CASH OUT
INVENTORY 205,441.44$ 205,441.44$ 205,441.44$ 205,441.44$
WAGES $107,882.04 $107,882.04 $107,882.04 $107,882.04
WCB -$ -$ -$ 4,013.21$
LICENCES 497.00$ -$ -$ -$
LEASE PAYMENTS 11,576.25$ 11,576.25$ 11,576.25$ 11,576.25$
ADVERTISING 2,618.92$ 2,618.92$ 2,618.92$ 2,618.92$
OVERHEAD 26,188.20$ 26,188.20$ 26,188.20$ 26,188.20$
LEGAL FEES 2,000.00$ -$ -$ -$
ACCOUNTING FEE 5,000.00$ -$ -$ -$
INTEREST -$ -$ -$ -$
TOTAL OPER. CASH 361,203.85$ 353,706.85$ 353,706.85$ 357,720.06$
NON-OPERATING CASH OUT
LOAN PAYMENTS
EQUIPMENT 8,729.40$ -$ -$ -$
LEASEHOLD IMPRO
TOTAL NON-OP CASH OUT 8,729.40$ -$ -$ -$
TOTAL CASH OUT 369,933.25$ 353,706.85$ 353,706.85$ 357,720.06$
ENDING CASH 1,822,363.35$ 2,070,653.88$ 2,318,944.41$ 2,563,221.73$
YEAR 3 MONTHLY/QUARTERLY
CASH FLOW STATEMENT QUARTERLY CASH FLOW STATEMENTS FOR YEAR 3
83
YEAR 3—BEST-CASE SCENARIO
For period ended March 31, 2014 For period ended June 30, 2014
INCOME STATEMENT INCOME STATEMENT
Sales 436,470.36$ Sales 436,470.36$
COGS ($205,441.44) COGS ($205,441.44)
Wages ($107,882.04) Wages ($107,882.04)
GROSS PROFIT 123,146.88$ GROSS PROFIT 123,146.88$
WCB $0.00 WCB $0.00
LICENCES ($497.00) LICENCES $0.00
LEASE PAYMENTS ($11,576.25) LEASE PAYMENTS ($11,576.25)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($26,188.20) OVERHEAD ($26,188.20)
LEGAL FEES ($2,000.00) LEGAL FEES -$
ACCOUNTING FEE ($5,000.00) ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $75,266.51 EBITDA 82,763.51$
NET INCOME $75,266.51 NET INCOME 82,763.51$
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 634,708.95$ Cash 717,472.46$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets 634,708.95$ Total Current Assets $717,472.46
Fixed Assets Fixed Assets
Equipment $42,125.37 Equipment $42,125.37
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS 676,834.32$ TOTAL ASSETS $759,597.83
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $601,567.81 Common Equity $676,834.32
Retained Earnings $75,266.51 Retained Earnings 82,763.51$
Total Equity $676,834.32 Total Equity $759,597.83
TOTAL LIABILITIES & EQUITY $676,834.32 TOTAL LIABILITIES & EQUITY $759,597.83
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q1 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q2 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
84
YEAR 3—BEST-CASE SCENARIO
For period ended September 30, 2014 For period ended December 31, 2014
INCOME STATEMENT INCOME STATEMENT
Sales 436,470.36$ Sales 436,470.36$
COGS ($205,441.44) COGS ($205,441.44)
Wages ($107,882.04) Wages ($107,882.04)
GROSS PROFIT 123,146.88$ a 123,146.88$
WCB $0.00 WCB ($4,013.21)
LICENCES $0.00 LICENCES -$
LEASE PAYMENTS ($11,576.25) LEASE PAYMENTS ($11,576.25)
ADVERTISING ($2,618.92) ADVERTISING ($2,618.92)
OVERHEAD ($26,188.20) OVERHEAD ($26,188.20)
LEGAL FEES $0.00 LEGAL FEES $0.00
ACCOUNTING FEE $0.00 ACCOUNTING FEE $0.00
INTEREST $0.00 INTEREST $0.00
EBITDA $82,763.51 EBITDA $78,750.30
NET INCOME $82,763.51 NET INCOME $78,750.30
BALANCE SHEET BALANCE SHEET
ASSETS ASSETS
Current Assets Current Assets
Cash 800,235.97$ Cash 878,986.27$
Inventory $0.00 Inventory $0.00
Prepaid Expenses $0.00 Prepaid Expenses $0.00
Total Current Assets $800,235.97 Total Current Assets $878,986.27
Fixed Assets Fixed Assets
Equipment $42,125.37 Equipment $42,125.37
Total Fixed Assets Total Fixed Assets
TOTAL ASSETS $842,361.34 TOTAL ASSETS $921,111.64
LIABILITIES LIABILITIES
Current Liabilities $0.00 Current Liabilities $0.00
Accrued Expenses $0.00 Accrued Expenses $0.00
Total Current Liabilities $0.00 Total Current Liabilities $0.00
EQUITY EQUITY
Common Equity $759,597.83 Common Equity $842,361.34
Retained Earnings $82,763.51 Retained Earnings $78,750.30
Total Equity $842,361.34 Total Equity $921,111.64
TOTAL LIABILITIES & EQUITY $842,361.34 TOTAL LIABILITIES & EQUITY $921,111.64
VENIA CAFÉ BAR INC. VENIA CAFÉ BAR INC.
Q3 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario Q4 Pro Forma Balance Sheet and Income Statement: Best-Case Scenario
85
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