PLAN OUTLINE1.0 Executive Summary1.1 Mission1.2 Keys to Success1.3 Objectives2.0 Company Summary3.0 Products and Services4.0 4.0 Market Analysis Summary5.0 5.0 Strategy and Implementation Summary6.0 6.0 Management Summary7.0 7.0 Financial Plan8.0 Appendix

Executive Summary

The Spot is a new night club that will focus onattractingthe students of Technical University of Mombasa, with a student population that exceeds 22,000andgrowing by 15% each year. Thenight clubwill be located one block away from the main campus.The area already hasthree bars that have been thriving for the past 10 years.Each establishment has long lines waiting for entry each weekend. Recently, commercial space has become available next to the campus whentwo adjacent businesses relocated.The Spot will consolidate this space into a 5,000 square foot night club. The location is on the main street most often used by students.Once opened, the Spot will have the exceptional management team to guide its success. The Spot's three owners, Hope Mwarome, Jill Morse, and Zadock Odhioambo, have over 5 years of night club management experience between them. Hope has been the manager of Tom's Landing, the most popular bar in the university area, for the pastfive years.Jill and Zadock are co-owners of Olympus, a popular downtown night club that has dominated the city's club scene for the pastfour years.

1.1 MissionIt's not the lights; it's not the liquor; and it's not the sound. It's the people!And its the FUN! Successful nightclubs are based on an accurate understanding ofthe corecustomers. The mission of the Spot is to create a nightclub environment that satisfies the changing tastes and expectations of our core customers; i.e. college-age women. If the women come, the men will follow. In order to achieve this goal, we must constantly improve our response to the customers' entertainment needs.

1.2 Keys to Success Provide exceptional service that leaves an impressionwith our core customers. Consistent entertainment atmosphere and product quality. Managing our internal finances and cash flow to enable upward capital growth. Strict control of all costs, at all times, without exception.1.3 Objectives Capitalize on excellent location opportunity. Launch the venue with a highly publicized grand opening event in thespring ofYear 1. Maintain tight control of costs, operations, and cash flow through diligent management and automated computer control. Maintain food costs below 33% of food revenue. Maintain total beverage costs below 25% of beverage revenue. Exceed Kshs1 million in annual sales by the third year of plan implementation.

Company Summary

The key elements of The Spot are:1. Focus on attracting college-age women.The company will focus on design and musical themes that have mass appeal to college-age women.2. Location.One of the major advantages that the Spot will have over its competition will be its location next to the university campus.3. Exceptional service.In order to reach and maintain a unique image of quality, the Spot will provide attentive and friendly service.

2.1 Start-up SummaryThe Spot has three owners Hope Mwarome, Jill Morse, and Zadock Odhiambo, whowill each invest Kshs70,000.

Start-up Funding

Start-up Expenses to FundKshs112,500

Start-up Assets to FundKshs97,500

Total Funding RequiredKshs210,000

Assets

Non-cash Assets from Start-upKshs20,000

Cash Requirements from Start-upKshs77,500

Additional Cash RaisedKshs0

Cash Balance on Starting DateKshs77,500

Total AssetsKshs97,500

Liabilities and Capital

Liabilities

Current BorrowingKshs0

Long-term LiabilitiesKshs0

Accounts Payable (Outstanding Bills)Kshs0

Other Current Liabilities (interest-free)Kshs0

Total LiabilitiesKshs0

Capital

Planned Investment

Hope MwaromeKshs70,000

Jill MorseKshs70,000

Zadock OdhiamboKshs70,000

OtherKshs0

Additional Investment RequirementKshs0

Total Planned InvestmentKshs210,000

Loss at Start-up (Start-up Expenses)(Kshs112,500)

Total CapitalKshs97,500

Total Capital and LiabilitiesKshs97,500

Total FundingKshs210,000

Start-up

Requirements

Start-up Expenses

LegalKshs2,000

Stationery etc.Kshs500

ConsultantsKshs0

InsuranceKshs1,000

RentKshs4,000

Research and DevelopmentKshs0

Interior RefitKshs30,000

Expensed EquipmentKshs20,000

Air Cond. UpgradeKshs5,000

Audio/LightingKshs10,000

Bar Equipment/SupplyKshs10,000

Fees and PermitsKshs7,000

Bathroom UpgradesKshs5,000

Initial MarketingKshs3,000

Opening Salaries DepositsKshs15,000

OtherKshs0

Total Start-up ExpensesKshs112,500

Start-up Assets

Cash RequiredKshs77,500

Start-up InventoryKshs0

Other Current AssetsKshs0

Long-term AssetsKshs20,000

Total AssetsKshs97,500

Total RequirementsKshs210,000

2.2 Company OwnershipThe Spot has three owners, Hope Mwarome, Jill Morse, and Zadock Odhiambo.Hope Mwarome has a BS in business administration from State University.She successfully managedthree bars over the past 10 years. She is currently in his fifth year as manager of Tom's Landing, the most popular bar in the university area.Jill Morse holds a BA in marketing. She has held marketing positions with Nike and Sony before starting the Olympus nightclub with Zadock Odhiambo in 2009.Zadock Odhiambo has aBS in business administration. Before co-owning the Olympus, Zadock managed two successful nightclubs, the Arena and the Power Plant, over a 10 year period.Products and Services

The Spot represents a unique opportunity;create ahigh energy, dance-theme venue that will cater to college-age women. The development's central location, demographics, and lack of direct competition are major advantages to this project. The new venue will specialize in high-energy themes and will offer beer, wine and an array of liquors and mixed drinks. In addition, the venue will sell nonalcoholic beverages such as soft drinks, juices and bottled water. A "casual" food menu consisting mostly of appetizers and small entrees ranging in cost from 300 to 500kshs will also be available. The initial hours of operation will be 6:00 P.M. to 5:00 A.M., seven nights a week. The establishment will draw primarily from the student population at TUM while attracting guests and visitors from outside the area as well.Market Analysis SummaryThe Spot will focus on college-age women who are looking for a high energy, fun nightclub environment to socialize and dance. Of course, we are also focused on college-age men but it has been our observation that the club scene is driven by where women choose to spend their money when they go out with friends. At present, none of the local bars create an environment that is responsive to the entertainment demands of this core customer group. This also extends to the areas surrounding theuniversity that we expect will attract new customers to the Spot.4.1 Market SegmentationOur target market segmentation is divided between college-age women and men in and around the State University.

Market Analysis

Year 1Year 2Year 3Year 4Year 5

Potential CustomersGrowthCAGR

College-age Women15%22,00025,30029,09533,45938,47815.00%

College-age Men10%20,00022,00024,20026,62029,28210.00%

Other0%000000.00%

Total12.70%42,00047,30053,29560,07967,76012.70%

Strategy and Implementation SummaryOur strategy is simple; we intend to succeed by giving our core customers (college-age women)exactly what they want in a nightclub.5.1 Competitive EdgeThere are three elements to The Spot's competitive edge.The first is the location which is in easy walking distancefor the entire university community. The area around The Spot is already a regular place students gather to socialize in the evening.The second is the exceptional management team that has extensive experience and success managing nightclubs and bars.The third is our focus on attracting our core customer in every aspect of our planning. The Spot will have the following to attract and retain our core customers: A larger ladiesroom area.Beyond its traditional uses, it's also a place of social gathering and conversation. As a result, wewill add additional square footage to this part of the venue including a couch, TV, music, and plenty of social space.

Floor design.No doubt, females are more observant of design, and the impression it conveys, than males are. Therefore, careful considerationwillbe put into everything from colors, to fabrics, and materials.

Music.This is a critical one. We will hire DJs who have the best satisfaction rate with the female clientele.5.2 Sales StrategyThere will bea grand opening weekend May 2015, which the cover charge will be waved for all women customers.We will then establish a traditional Ladies Night, every wednesday.The cover charge will be Kshs150. This is cheaper than the downtown clubs.Our sales strategy is to open earlier and provide entertainment to bring in an early crowd before 10 P.M. Comedians and Comedy Acts will be booked into the early evening time slot. We will also have contests sponsored by businesses and products that are marketing to our core customers.5.2.1 Sales ForecastAs the followingtable shows, we intend to deliver sales of Kshs550K in the first year, and double that by the third year of the plan.

Sales Forecast

Year 1Year 2Year 3

Unit Sales

Cover19,50036,00042,000

Drinks56,00068,00075,000

Food14,00025,00033,000

Entertainment13,60017,00022,000

Total Unit Sales103,100146,000172,000

Unit PricesYear 1Year 2Year 3

CoverKshs10.00Kshs10.00Kshs10.00

DrinksKshs3.00Kshs3.00Kshs3.00

FoodKshs7.00Kshs7.00Kshs7.00

EntertainmentKshs8.00Kshs8.00Kshs8.00

Sales

CoverKshs195,000Kshs360,000Kshs420,000

DrinksKshs168,000Kshs204,000Kshs225,000

FoodKshs98,000Kshs175,000Kshs231,000

EntertainmentKshs108,800Kshs136,000Kshs176,000

Total SalesKshs569,800Kshs875,000Kshs1,052,000

Direct Unit CostsYear 1Year 2Year 3

CoverKshs0.00Kshs0.00Kshs0.00

DrinksKshs0.75Kshs0.80Kshs0.86

FoodKshs2.45Kshs2.62Kshs2.81

EntertainmentKshs4.00Kshs4.28Kshs4.58

Direct Cost of Sales

CoverKshs0Kshs0Kshs0

DrinksKshs42,000Kshs54,570Kshs64,401

FoodKshs34,300Kshs65,538Kshs92,565

EntertainmentKshs54,400Kshs72,760Kshs100,751

Subtotal Direct Cost of SalesKshs130,700Kshs192,868Kshs257,717

Management SummaryThe management team is a strong one.Together we share a single vision: to provide a unique and entertaining experience through exceptional service.6.1 Personnel PlanThe followingtable shows forecasted personnel needs for the first three years.Personnel Plan

Year 1Year 2Year 3

ManagerKshs50,000Kshs68,000Kshs72,000

BartendersKshs120,000Kshs120,000Kshs120,000

CooksKshs65,000Kshs70,000Kshs73,000

CleaningKshs38,000Kshs40,000Kshs42,000

DJKshs25,000Kshs30,000Kshs35,000

Serving StaffKshs50,000Kshs60,000Kshs70,000

OtherKshs0Kshs0Kshs0

Total People01212

Total PayrollKshs348,000Kshs388,000Kshs412,000

7.1 Important AssumptionsThe table below presents the assumptions used in the financial calculations of this business plan.

General Assumptions

Year 1Year 2Year 3

Plan Month123

Current Interest Rate10.00%10.00%10.00%

Long-term Interest Rate10.00%10.00%10.00%

Tax Rate0.00%30.00%30.00%

Other000

7.2 Break-even AnalysisOur Break-even Analsysis is shown in the following table and chart.

Break-even Analysis

Monthly Units Break-even10,220

Monthly Revenue Break-evenKsh56,482

Assumptions:

Average Per-Unit RevenueKsh5.53

Average Per-Unit Variable CostKsh1.27

Estimated Monthly Fixed CostKsh43,527

7.3 Projected Profit and LossThe following table and chart will show the projected profit and loss for The Spot.

Pro Forma Profit and Loss

Year 1Year 2Year 3

SalesKsh569,800Ksh875,000Ksh1,052,000

Direct Cost of SalesKsh130,700Ksh192,868Ksh257,717

Other Production ExpensesKsh0Ksh0Ksh0

Total Cost of SalesKsh130,700Ksh192,868Ksh257,717

Gross MarginKsh439,100Ksh682,133Ksh794,283

Gross Margin %77.06%77.96%75.50%

Expenses

PayrollKsh348,000Ksh388,000Ksh412,000

Sales and Marketing and Other ExpensesKsh22,900Ksh25,000Ksh27,300

DepreciationKsh2,618Ksh2,856Ksh2,856

Leased EquipmentKsh33,000Ksh40,000Ksh40,000

UtilitiesKsh3,600Ksh3,600Ksh3,600

InsuranceKsh12,000Ksh12,000Ksh12,000

RentKsh48,000Ksh40,000Ksh40,000

Payroll TaxesKsh52,200Ksh58,200Ksh61,800

OtherKsh0Ksh0Ksh0

Total Operating ExpensesKsh522,318Ksh569,656Ksh599,556

Profit Before Interest and Taxes(Ksh83,218)Ksh112,477Ksh194,727

EBITDA(Ksh80,600)Ksh115,333Ksh197,583

Interest ExpenseKsh42Ksh250Ksh0

Taxes IncurredKsh0Ksh33,668Ksh58,418

Net Profit(Ksh83,260)Ksh78,559Ksh136,309

Net Profit/Sales-14.61%8.98%12.96%

7.4 Projected Cash FlowThe following table and chart are the projected cash flow for three years.

Pro Forma Cash Flow

Year 1Year 2Year 3

Cash Received

Cash from Operations

Cash SalesKsh512,820Ksh787,500Ksh946,800

Cash from ReceivablesKsh45,082Ksh81,127Ksh101,504

Subtotal Cash from OperationsKsh557,902Ksh868,627Ksh1,048,304

Additional Cash Received

Sales Tax, VAT, HST/GST ReceivedKsh0Ksh0Ksh0

New Current BorrowingKsh5,000Ksh0Ksh0

New Other Liabilities (interest-free)Ksh0Ksh0Ksh0

New Long-term LiabilitiesKsh0Ksh0Ksh0

Sales of Other Current AssetsKsh0Ksh0Ksh0

Sales of Long-term AssetsKsh0Ksh0Ksh0

New Investment ReceivedKsh0Ksh0Ksh0

Subtotal Cash ReceivedKsh562,902Ksh868,627Ksh1,048,304

ExpendituresYear 1Year 2Year 3

Expenditures from Operations

Cash SpendingKsh348,000Ksh388,000Ksh412,000

Bill PaymentsKsh289,115Ksh407,976Ksh500,717

Subtotal Spent on OperationsKsh637,115Ksh795,976Ksh912,717

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid OutKsh0Ksh0Ksh0

Principal Repayment of Current BorrowingKsh0Ksh5,000Ksh0

Other Liabilities Principal RepaymentKsh0Ksh0Ksh0

Long-term Liabilities Principal RepaymentKsh0Ksh0Ksh0

Purchase Other Current AssetsKsh0Ksh0Ksh0

Purchase Long-term AssetsKsh0Ksh0Ksh0

DividendsKsh0Ksh0Ksh0

Subtotal Cash SpentKsh637,115Ksh800,976Ksh912,717

Net Cash Flow(Ksh74,213)Ksh67,651Ksh135,587

Cash BalanceKsh3,287Ksh70,938Ksh206,525

7.5 Projected Balance SheetThe following is the projected balance sheet for the three years.

Pro Forma Balance Sheet

Year 1Year 2Year 3

Assets

Current Assets

CashKsh3,287Ksh70,938Ksh206,525

Accounts ReceivableKsh11,898Ksh18,271Ksh21,967

InventoryKsh15,593Ksh23,009Ksh30,746

Other Current AssetsKsh0Ksh0Ksh0

Total Current AssetsKsh30,778Ksh112,218Ksh259,238

Long-term Assets

Long-term AssetsKsh20,000Ksh20,000Ksh20,000

Accumulated DepreciationKsh2,618Ksh5,474Ksh8,330

Total Long-term AssetsKsh17,382Ksh14,526Ksh11,670

Total AssetsKsh48,160Ksh126,744Ksh270,908

Liabilities and CapitalYear 1Year 2Year 3

Current Liabilities

Accounts PayableKsh28,919Ksh33,945Ksh41,800

Current BorrowingKsh5,000Ksh0Ksh0

Other Current LiabilitiesKsh0Ksh0Ksh0

Subtotal Current LiabilitiesKsh33,919Ksh33,945Ksh41,800

Long-term LiabilitiesKsh0Ksh0Ksh0

Total LiabilitiesKsh33,919Ksh33,945Ksh41,800

Paid-in CapitalKsh210,000Ksh210,000Ksh210,000

Retained Earnings(Ksh112,500)(Ksh195,760)(Ksh117,201)

Earnings(Ksh83,260)Ksh78,559Ksh136,309

Total CapitalKsh14,240Ksh92,799Ksh229,108

Total Liabilities and CapitalKsh48,160Ksh126,744Ksh270,908

Net WorthKsh14,240Ksh92,799Ksh229,108

7.6 Business RatiosThe Ratios table below outlines important ratios for this night club. The last column, Industry Profile, is derived from the Standard Industrial Classification (SIC) Index code 5813, for Drinking Places.

Ratio Analysis

Year 1Year 2Year 3Industry Profile

Sales Growth0.00%53.56%20.23%1.90%

Percent of Total Assets

Accounts Receivable24.71%14.42%8.11%4.60%

Inventory32.38%18.15%11.35%3.10%

Other Current Assets0.00%0.00%0.00%44.60%

Total Current Assets63.91%88.54%95.69%52.30%

Long-term Assets36.09%11.46%4.31%47.70%

Total Assets100.00%100.00%100.00%100.00%

Current Liabilities70.43%26.78%15.43%28.20%

Long-term Liabilities0.00%0.00%0.00%23.10%

Total Liabilities70.43%26.78%15.43%51.30%

Net Worth29.57%73.22%84.57%48.70%

Percent of Sales

Sales100.00%100.00%100.00%100.00%

Gross Margin77.06%77.96%75.50%42.30%

Selling, General & Administrative Expenses91.67%68.98%62.55%23.40%

Advertising Expenses3.86%2.74%2.47%2.40%

Profit Before Interest and Taxes-14.60%12.85%18.51%2.80%

Main Ratios

Current0.913.316.201.14

Quick0.452.635.470.74

Total Debt to Total Assets70.43%26.78%15.43%51.30%

Pre-tax Return on Net Worth-584.67%120.94%84.99%5.20%

Pre-tax Return on Assets-172.88%88.55%71.88%10.60%

Additional RatiosYear 1Year 2Year 3

Net Profit Margin-14.61%8.98%12.96%n.a

Return on Equity-584.67%84.65%59.50%n.a

Activity Ratios

Accounts Receivable Turnover4.794.794.79n.a

Collection Days576370n.a

Inventory Turnover10.919.999.59n.a

Accounts Payable Turnover11.0012.1712.17n.a

Payment Days272827n.a

Total Asset Turnover11.836.903.88n.a

Debt Ratios

Debt to Net Worth2.380.370.18n.a

Current Liab. to Liab.1.001.001.00n.a

Liquidity Ratios

Net Working Capital(Ksh3,142)Ksh78,273Ksh217,438n.a

Interest Coverage-1,997.23449.910.00n.a

Additional Ratios

Assets to Sales0.080.140.26n.a

Current Debt/Total Assets70%27%15%n.a

Acid Test0.102.094.94n.a

Sales/Net Worth40.019.434.59n.a

Dividend Payout0.000.000.00n.a