Gold Cup Bowling Centers

BUSINESS PLAN

Business Plan Prepared By

David Rutherford

Chief Financial Officer

3720 Pio Nono Avenue

Macon, Georgia 31206

(912) 781-2096

Date Prepared

April 14, 1999

Business Plan

Table of Contents
EXECUTIVE SUMMARY ............................................................................................................. 4

MANAGEMENT AND ORGANIZATION ....................................................................................... 5

Management Team .................................................................................................................. 5
Compensation and Ownership................................................................................................... 5
Contracts and Franchise Agreements.......................................................................................... 5
Board of Directors/Advisory Council.......................................................................................... 6
Infrastructure ......................................................................................................................... 6
Insurance............................................................................................................................... 6
Employee Stock Option Plan and Other Incentives......................................................................... 6
Organization Charts ............................................................................................................... 7
PRODUCT AND SERVICE PLAN ................................................................................................. 8
Purpose of the Product/Service .................................................................................................. 8
Unique Features ..................................................................................................................... 8
Stage of Development............................................................................................................... 8
Future Research and Development.............................................................................................. 8
Trademarks, Patents, Copyrights, Licenses, Royalties................................................................... 8
Government Approvals ............................................................................................................. 9
Product/Service Limitations ...................................................................................................... 9
Product Liability .................................................................................................................... 9
Related Services and Spin-offs ................................................................................................... 9
Facilities............................................................................................................................... 9
Environmental Factors............................................................................................................. 9
MARKETING PLAN .................................................................................................................. 10
Industry Profile .................................................................................................................... 10
Current Size ..................................................................................................................................................................................1 0
Growth Potential........................................................................................................................................................................1 0
Geographic Location.................................................................................................................................................................1 1
Industry Trends ...........................................................................................................................................................................1 1
Seasonality Factors ....................................................................................................................................................................1 1
Profit Characteristics .................................................................................................................................................................1 1
Distribution Networks .............................................................................................................................................................1 1
Basis of Competition..................................................................................................................................................................1 1
Competition Profile............................................................................................................... 11
Customer Profile .................................................................................................................. 12
Target Market Profile............................................................................................................ 12
Gross Margin on Products ..................................................................................................... 12
OPERATING AND CONTROL SYSTEMS .................................................................................. 14
Administrative Policies, Procedures, and Controls ..................................................................... 14
Receiving Orders ........................................................................................................................................................................1 4
Paying the Suppliers .................................................................................................................................................................1 4
Reporting to Management ........................................................................................................................................................1 4
Staff Development .......................................................................................................................................................................1 4
Inventory Control.......................................................................................................................................................................1 4
Handling Warranties and Returns .........................................................................................................................................1 5
Monitoring the Company Budgets........................................................................................................................................1 5
Security Systems .........................................................................................................................................................................1 5

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Business Plan

Planning Chart .................................................................................................................... 15

Product Development................................................................................................................................................................1 5
Financial Requirements.............................................................................................................................................................1 5
Marketing Flow Chart ...............................................................................................................................................................1 5
Market Penetration.....................................................................................................................................................................1 6
Management and Infrastructure ...............................................................................................................................................1 6
Risk Analysis........................................................................................................................ 16
Salvaging Assets................................................................................................................... 16
GROWTH PLAN........................................................................................................................ 17
New Offerings to Market ........................................................................................................ 17
Capital Requirements ............................................................................................................ 17
Personnel Requirements ......................................................................................................... 17
Exit Strategy ........................................................................................................................ 17
FINANCIAL PLAN ..................................................................................................................... 18
Assumptions......................................................................................................................... 18
Sales................................................................................................................................................................................................1 8
Accounts Receivable .................................................................................................................................................................1 8
Inventory Purchases ..................................................................................................................................................................1 8
Accounts Payable.......................................................................................................................................................................1 8
Marketing Expenses...................................................................................................................................................................1 8
Administrative Expenses..........................................................................................................................................................1 8
Capital Expenditures .................................................................................................................................................................1 9
Depreciation/Amortization......................................................................................................................................................1 9
Cash Required..............................................................................................................................................................................1 9
Interest Rates................................................................................................................................................................................1 9
Income Tax.....................................................................................................................................................................................1 9
Break-even Analysis..................................................................................................................................................................1 9
First Year Cash Flow Projections .................................................................................. Exhibit 1
First Year Projected Profit and Loss Statement................................................................. Exhibit 3
First Year Pro forma Balance Sheet................................................................................ Exhibit 4
Three Year Cash Flow/Projected Profit and Loss Statement................................................ Exhibit 5
Three Year Pro forma Balance Sheet ............................................................................... Exhibit 6
Financial Analysis/Ratios.............................................................................................. Exhibit 7
SUPPORTING DOCUMENTS ........................................................................................APPENDIX
Census informationÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ.A 1-3
Most Popular SportsÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ B 1
Service Industries Ð Bowling CentersÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ.C 1-
3
Payment Schedule of proposed loanÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ...D 1-
2
Floor PlanÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉÉ... E
1

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Business Plan

Executive Summary
February 8, 1999

Dr. Terry Noel

Center for Entrepreneurship
1845 Fairmount
Wichita, Kansas 67260

Dear Dr. Noel:

The concept behind Gold Cup Bowling Centers is to purchase, renovate, and operate
bowling centers long-term in small to medium markets beginning in the Southeastern United
States. The object is to buy foreclosed and run-down bowling alleys and leverage against the
existing cash flows to renovate and increase cash flows. The real potential of a bowling alley
is realized after ten years unless refinanced to seed growth. The reason to enter small and
medium markets is to avoid direct competition with other bowling centers. Increasing cash
flows is easier without competition nearby.
Bowling is a popular form of family entertainment throughout the United States.
However, bowling in the Southeast is not as profitable as the North. This is mainly due to
the mild winters in the South and many actually lose money during the summer. This may
seem like a detriment, but actually allows us to buy bowling alleys at a discount compared to
alleys in the North. Bowling alleys also become available because newcomers to the business
do not understand the inconsistency of cash flows. Experienced operators can turn a failing
bowling alley into a profitable venture.
The required capital to enter the market is high and provides a competitive advantage
for the existing alley. The risk when adding a center to a market is more burdensome to the
new center because of debt. The new center will have typically two to three times the debt
of existing alleys. Bowling centers do not provide a high return on equity unless leveraged.
The return on bowling centers is found in the equity. The first ten years may show a modest
profit, but the ability to leverage against the equity can fuel growth.
We are bowlers, we understand bowlers. We understand bowling centers therefore we
operate only bowling centers. That is all we do.

Respectfully sumitted,

David Rutherford, Chief Financial Officer

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Business Plan

Management and Organization

Management Team

There are three key management personnel that are also the entrepreneurs for the
acquisition of Magnolia Lanes. They include Dallas Rutherford, Sr., Dallas Rutherford, Jr.,
and David Rutherford.
Dallas Rutherford, Sr. is the Chief Executive Officer of Gold Cup Bowling Centers with
over thirty years of experience in the bowling industry. He was a member of the Professional
Bowlers Association from 1969-1978. He has been a member of the Bowling ProprietorÕs
Association of America since 1975, and has served as Vice President and President of the
Georgia BPAA.
Dallas Rutherford, Jr. is currently leasing Magnolia Lanes with the option to buy. He is
in charge of day to day operations in Griffin. Dallas has fourteen years of experience in
bowling center operation. He has completed BrunswickÕs mechanics school and Management
school.
David Rutherford is the CFO and is responsible for preparing, presenting, and getting a
loan for this acquisition. He has a degree in Entrepreneurship with an emphasis in finance
from Wichita State University (May 99). He has in the past planned and presented a
restructuring of Gold Cup debt and obtained consolidated loan saving the company
considerable cash flow.

Compensation and Ownership

Currently the compensation package is salary with no stock options. The ownership
depends on the current shareholders of Gold Cup. The management team will give them an
opportunity to purchase Dallas Rutherford, Jr.Õs option to buy. If they approve the
acquisition then Dallas will receive a premium above the price in the contract. If shareholders
reject this proposal then the Rutherford family will purchase Magnolia Lanes independently
of Gold Cup.
Gold Cup is currently a sub S, and a form has not been decided if Magnolia purchase is
independent of Gold Cup. Compensation packages are dependent upon final purchaser.

Contracts and Franchise Agreements

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Business Plan

Currently managers do not have contracts or noncompete agreements with either Gold
Cup or Magnolia Lanes.

Board of Directors/Advisory Council

Currently Gold Cup has a small rubber stamp of a board. The board includes Dallas
Rutherford Sr. as Chairman with other seats being held by stockholders. Gold Cup does not
have any outside board members and does not pay or give stock options to the Board of
Directors. Most of the Board is not involved in day to day operations or have a background
in the bowling industry.

Infrastructure

The key advisors of Gold Cup include:

Greg Allen Ð banker

Mr. Allen is in charge of Gold CupÕs account with SunTrust bank.
Gene Harrington Ð attorney
Mr. Harrington has been the attorney of Gold Cup since 1984.
Wilbur Lister Ð accountant
Mr. Lister is the CPA for Gold Cup.

Insurance

Gold Cup does not have a functional buy-sell agreement in place. A functional buy-sell
agreement will be in effect upon approval by stockholders. The corporation does not insure
any stockholders or key management personnel.

Employee Stock Option Plan and Other Incentives

Gold Cup and Magnolia Lanes do not have an employee stock option plan or
incentive plan other than employee discounts.

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Business Plan

Organization Charts

Gold Cup Structure

Dallas Rutherford, Sr.

CEO
75 employees

Willis Ward Tom Shimek Jimmy Allen Joe Patterson

Center Manager Center Manager Center Manager Center Manager
Russell Parkway Pio Nono North Houston Macon Bowl
Warner Robins Macon Warner Robins Macon

Magnolia Lanes

Dallas Rutherford, Jr.

Manager

Wanda Pat
Assistant Manager Head Mechanic

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Business Plan

Product and Service Plan

Purpose of the Product/Service

The products and services provided by Gold Cup satisfy the needs of consumers for a
safe, indoor, all-season, all-weather recreation facility. The properties include bowling lanes
equipped with bumper bowling for children, automatic scoring, automatic pinsetters, video
arcade, snack bar and bar under one roof.
Bowling is unique in that participation may be individually or with a group. Bowling is
enjoyed as a competitive sport and as recreation for millions of people every year.
Bowling competes for the same disposable income that movie theaters, miniature golf
and other non-essential recreation.

Unique Features

Bowling allows men, women, the young and the old to enjoy competing on a level
playing field in a relaxed environment. Bowling can be enjoyed no matter what the weather is
like outside.

Stage of Development

Bowling has reached maturity in terms of product cycle. The main changes are in
environment. Bowling centers built today have higher ceilings and bright colors. This is more
appealing to customers.

Future Research and Development

There is currently no research and development by bowling centers. Typically

independent centers follow the lead of Brunswick and AMF.

Trademarks, Patents, Copyrights, Licenses, Royalties

There are no trademarks, patents, copyrights, licenses, or royalties for our operation.

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Business Plan

Government Approvals

We will need approval for a business license, liquor license, and food service license.
We will also need tax identification number and workersÕ compensation coverage.

Product/Service Limitations

We will not have any service limitations other than operating at full capacity which would be
a welcome problem.

Product Liability

We carry general insurance and liability insurance. There have been numerous lawsuits
filed against bowling operations. There have been very few successful. In addition there has
never been a successful lawsuit when Remo Picchietti was called as a defense expert witness.
Picchietti is a lawyer that has represented bowling throughout his career and has strong ties to
help the bowling industry.
Our operations will not provide a nursery service for our bowlers because of liability
concerns.

Related Services and Spin-offs

We will not have any spin-offs. We will open a bowling supply operation when we
have enough centers. The bowling supply will provide pro shop equipment such as bowling
balls, shoes, and bowling bags.

Facilities
The facilities are contained within a 21,684 square foot building. The building
includes 24 lanes for bowling, game room, restaurant, and bar. (floorplan attached)

Environmental Factors

We will have very little impact on the environment short-term. The main concern is
that the grease in the grease traps in the kitchen area are disposed of properly. We also have
special recycling centers located within the bowling center. The aluminum cans are sold to a
recycling company with the proceeds going to support youth bowlers in the center.

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Business Plan

Marketing Plan

Industry Profile

Current Size

The U.S. bowling center industry is highly fragmented, and consists of two relatively
large bowling center operators, AMF (which had 370 U.S. centers as of December 31, 1997)
and Brunswick Corporation (which had approximately 111 U.S. centers as of December 31,
1997), four medium-sized chains, which together account for 70 bowling centers, and over
5,300 bowling centers owned by single-center and small-chain operators, which typically
own four or fewer centers. The top six operators account for less than 10% of the total
number of U.S. bowling centers.(SEC Filing AMF).
From 1982 to 1992 revenues nationwide were 2.8 billion dollars (service industries
USA, 2nd Edition). I estimate that revenues are currently about 3.0 billion dollars.
The state of Georgia has approximately seventy centers statewide. Approximate
revenues for bowling is 35.5 million.
Locally in Spalding County there is one Bowling center operating. This center is the
proposed acquisition.

Growth Potential

In the United States, the operation of bowling centers is a mature industry characterized
by slightly decreasing lineage (games per lane per day) offset by increasing average price per
game and revenue from food and beverage and other sources.
The growth potential is acquisitions. The bowling industry is fragmented with aging
facilities. Most operators are doing so for income, but few have the ability to borrow money
to upgrade facilities to extend the life of the location. There are currently few new centers
opening nationwide. The operators of bowling centers rarely have an exit strategy. There is
the growth potential of buying locations at a discount because a bowling center is illiquid.
There are very few buyers, therefore bowling centers sell at a discount based on cash flows.

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Business Plan

Geographic Location

Most centers are located in the North and retirement states. These states have more bowling
centers per capita than the south. There are bowling centers in every state in the United
States.(Services Industries USA, 2nd Edition)

Industry Trends

The trends in the industry are modernizing facilities similar to new movie theatres. Glow
bowling is a new fad that allows bowlers to bowl with the lights out using glow in the dark
lanes, balls, pins with loud music playing in a dance-like atmosphere.

Seasonality Factors

Seasonality in Georgia causes most centers to actually lose money through the summer.
We have two league seasons. Fall season September through April and Summer season June
through August.

Profit Characteristics

Bowling centers have an average profit margin of about 3 percent. However Gold Cup
Bowling Centers have a (net income + interest expense + depreciation)/sales=26%. That
three percent is only that low while paying off large amounts of debt. Bowling centers are
considered cash cows when debt is retired.

Distribution Networks

The distribution network is only available to customers that visit our location. Bowling
is a service that can only be enjoyed on the property.

Basis of Competition

The bowling industry can be very competitive especially during the summer in Georgia.
This is why we locate in smaller markets that can only support one operation. This
consumer monopoly of bowling allows us to avoid price-cutting competitors.

Competition Profile

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Business Plan

Our competitive advantage is being the only bowling center available to an area. We
understand the wants and needs of bowlers and cater to them. The nearest bowling center is
about thirty miles away in Newnan, Georgia.

Customer Profile

The intended profiles of our customers are people looking to go out and have a good
time. We try to get 15-25 year olds of either gender to bowl. We try to establish a
connection to bowling. We want them to bowl a lifetime. Most of our customers are blue
collar workers, senior citizens, and young adults. We want these young adults to have a
connection with bowling before they find other activities.

Target Market Profile

Our target market is Spalding County. Spalding County has a population of about
57,000 residents. (Appendix ) The target market is comprised mainly of blue-collar workers.
The population of blue-collar workers is expected to increase because a new plant providing
3000 new jobs is opening in late 1998. The market has already been penetrated by existing
bowling center.
Spalding County has 60% high school graduates and 11.1% college graduates. There
were 10,490 children enrolled in elementary or high school in 1990. Most of these children
would now fill our customer profile.
Spalding County may not experience tremendous growth, but this is to our advantage.
This lack of growth will be a barrier to entry for new competition. Spalding County can
support one bowling center, but not two.

Gross Margin on Products

Our pricing policies are consistent with the bowling industry.

Cost of Goods
Bowling 0%
Lounge 33%
Snack Bar 40%
ProShop 50%
Arcade 0%

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Business Plan

The costs associated with bowling are essentially fixed. The maintenance should be
the same whether you a full house operating or empty. The lanes and machines still need to
be oiled and taken care of appropriately. The better care you take care of these capital
expenditures the longer they will bring in income.
The lounge operates at approximately a 3-to1 markup. This is consistent with most
lounge operations. The snack bar has about a forty-percent cost of goods. There are
numerous products that vary in markup, but historically we have operated at this level
successfully.
The pro shop is where we sell things such as bowling balls, shoes, bags, and other
accessories. We have historically had a fifty-percent cost of goods, but this is beginning to
weaken. The reason for this is online distributors of bowling equipment. We can compensate
for this by charging a higher cost to customers that bring in bowling balls to be drilled.
The arcade has a cost of electricity. The bowling center contracts out to an
independent business. The business supplies arcade machines and the income is split fifty-
fifty. This allows the bowling center arcade income without maintaining and buying game
machines.

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Business Plan

Operating and Control Systems

Administrative Policies, Procedures, and Controls

Receiving Orders

Customers are served on a fist come first served basis. The customer is issued a lane
and shoes if needed. The customer is allowed to bowl and pays for the number of games
bowled upon completion. We will also have league bowlers that participate at the same time
and day every week for a slightly discounted rate. There is not a database to track open play
customers, but we offer secretarial duties to keep track of the league standings and therefore
have access to all of our league bowlers addresses and phone numbers.

Paying the Suppliers

Suppliers are paid in a timely fashion. We have set up with suppliers to send one
monthly invoice for us to pay. Currently we match our invoices with all our receipts. This
is really not that difficult considering the limited number of suppliers we deal with. All
alcohol deliveries are paid by check upon delivery. This is necessary by state law.

Reporting to Management

Employees are responsible for reporting any and all incidents to a supervisor or
manager. Management meetings will be weekly between center manager, assistant manager
and corporate representative. The meetings will be used to relay ideas and problems to and
from parties present.

Staff Development
Training is provided in-house with majority of training as on the job training.
Promotions to management are possible, but rare due to low turnover of management.

Inventory Control

Magnolia lanes utilize a manual inventory system. The bowling industry in the
Southeast is very seasonal with large fluctuations in bar and grill inventories. Reorder points
are constantly changing throughout the year.

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Business Plan

Handling Warranties and Returns

We only provide warranties on pro shop equipment. We do not accept returns because
bowling balls are custom fit. We will replace product if we are at fault. We are not
responsible for damage done to balls thrown down the lane. The reason is bowling balls are
composed of softer materials like urethane and reactive resins. The ball returns were designed
to send back hard rubber bowling balls not these state of the art concepts.

Monitoring the Company Budgets

We currently budget by percentages of sales. The information is updated monthly.

Large deviation in the budget are quickly investigated to resolve potential continuation of
problem.

Security Systems
We have off-duty police officers in uniform patrol the property on Friday and Saturday
nights from 9:00p.m. to 3:00a.m. Magnolia lanes have a well-lit parking lot with windows
looking out over the parking lot.

Planning Chart

Product Development

Magnolia Lanes is currently operating in Griffin, Georgia. The building and interior will
be upgraded upon obtaining financing.

Financial Requirements
The financing will be needed by November 1, 1999. The necessary loan will be
$900,000. Gold Cup will put $300,000 into the operation. $780,000 to purchase the
business and $420,000 to upgrade the facilities. Gold Cup, Inc. would like an interest rate
swap. The swap should provide us with a fixed rate at November 1,1999 prime with monthly
payments retiring the note on November 1, 2009. The bank will hold a first on the Griffin
property and a personal guarantee of Dallas Rutherford, Sr.

Marketing Flow Chart

Magnolia Lanes will continue current advertising until completion of upgrades to the
property.

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Business Plan

Market Penetration
Magnolia Lanes is the only bowling center in Griffin. Market penetration is set until
renovations can be made to improve customer satisfaction.

Management and Infrastructure

Management team is hired and in place.

Risk Analysis

The risk for our business would be another bowling center enter the market. The
market is not large enough for two bowling centers. Neither center would make any money.
We would sell our center to the person that wanted a bowling center in Griffin, Georgia that
bad.
Our sales projections are based on actual figures of past performance of this center
with historical costs of Gold Cup Centers. We are capable of operating more efficiently than
previous management. Gold Cup is able to get better financing and better insurance than
individual centers. Our experience and knowledge allow us to improve profitability.
Salvaging Assets

The market is at a low for pinsetters and the fixtures would bring very little. The
building and property would bring about $450,000. The bank could get about $550,000 for
everything.

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Business Plan

Growth Plan

New Offerings to Market

Currently we are looking at building a new center in North Macon. Projected revenues
are approximately $600,000 per year at an initial cost of 2.2 million dollars

Capital Requirements

The 2.2 million will buy the property, build the bowling center, and buy fixtures.
Equipment and lanes will be provided by Gold Cup.

Personnel Requirements

The operation will need approximately 16 employees and an assistant manager. Joe
Patterson is already employed by Gold Cup and would be the center manager.

Exit Strategy

The company would have the option of going public or be acquired by a national chain
of bowling centers (AMF or Brunswick).

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Business Plan

Financial Plan
Assumptions

Sales

I am basing sales off of existing figures. We will have better figures because Dallas
Rutherford, Jr. is currently operating the business, which will show cash flows without
renovations. These numbers will be accurate and determine if the opportunity is feasible.

Accounts Receivable

Magnolia Lanes will not have accounts receivable.

Inventory Purchases

Inventories are based off of historical sales at the Griffin location.

Accounts Payable

Suppliers provide terms of net 30 except alcohol that must be paid upon delivery.

Marketing Expenses

The marketing expenses are expected to be incurred in May and August. May is the
beginning of summer for us and we utilize this time to build leagues that bowl in the summer.
August is the end of summer for our business and we finish building our fall leagues at this
time.

Administrative Expenses

Salaries and wages are somewhat fixed. We can cut hours if business slows, but we
always need at minimum a skeleton staff while open. These costs can also rise if minimum
wage rises. Many of our hourly employees work at minimum wage or slightly above. Our
payroll taxes are proportionate with payroll. Dues, Accounting and professional fees are
expected to be relatively fixed.

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Business Plan

Capital Expenditures

The capital expenditures will include security deposits, but the bulk of expenses will be
purchasing the business and improvements made to the facilities. Improvements will be made
without closing the business down. The figures shown include improvements as if they have
been completed.

Depreciation/Amortization

The building will be depreciated straight-line for thirty years. The equipment will be
depreciated straight-line for ten years and the furniture and fixtures straight-line for five
years.

Cash Required

The cash required to purchase Magnolia Lanes and make improvements will need 1.2 million
dollars. Gold Cup will invest 300,000 dollars with the remainder being financed by debt.

Interest Rates

The last loan obtained by Gold Cup in August of 1998 was fixed at 8.5%. Rates have
fallen slightly since that time. The figures used in this business plan is based off of 8.5%
fixed.

Income Tax

Gold Cup is a S-corporation and shareholders are taxed based upon their tax bracket and
their portion of the companies net income or net loss. This allows Gold Cup stockholders to
be taxed once instead of twice while retaining limited liability. Stockholders are able to write
off any paper losses that may occur.

Break-even Analysis

The breakeven point will be $402,000 considering cost of $357,000 and a gross margin
of 89%.

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 REVENUE BUDGET

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR

Sales (Cash) 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000
Sales (Credit Cards) -
Sales (Credit) -
Returns and Allowances (Cash) -
Monthly Gross Sales 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000

Other Income -
Total Income 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000

CREDIT MANAGEMENT

Received on Account (ROA) -

Bad Debt Expense -
Balance of Accounts Receivable - - - - - - - - - - - -

SALES BREAKDOWN

Open Bowling 14,783 13,441 12,100 10,750 8,062 8,062 9,405 9,405 10,750 10,750 10,750 10,750 129008
League 13,305 12,100 10,890 9,670 7,256 7,256 8,465 8,465 9,670 9,670 9,670 9,670 116087
Other Bowling 5,420 4,929 4,437 3,940 2,956 2,956 3,448 3,448 3,940 3,940 3,940 3,940 47294
Shoe Rental 2,217 2,016 1,815 1,611 1,209 1,209 1,410 1,410 1,611 1,611 1,611 1,611 19341
Snack Bar 4,435 4,032 3,630 3,223 2,418 2,418 2,821 2,821 3,223 3,223 3,223 3,223 38690
Bar 5,174 4,704 4,235 3,761 2,821 2,821 3,291 3,291 3,761 3,761 3,761 3,761 45142
Pro Shop 1,971 1,792 1,613 1,432 1,075 1,075 1,253 1,253 1,432 1,432 1,432 1,432 17192
Other 1,971 1,792 1,613 1,432 1,075 1,075 1,253 1,253 1,432 1,432 1,432 1,432 17192
Monthly Gross Sales 49,276 44,806 40,333 35,819 26,872 26,872 31,346 31,346 35,819 35,819 35,819 35,819 429,946

Notes & Explanations: Bowling is a cash business. No Receivables.

Bowling is seasonal with summer being the weakest and winter being the strongest.
Bowling makes up the major portion of our revenues (73%).
Other bowling includes tournaments and specials that we offer
Other is comprised of Arcade and Locker Rentals

Budget Form #2 Financial Plan

 INVENTORY BUDGET

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC YEAR

Cost of Goods Sold: Product 5,390 4,950 4,400 3,960 2,970 2,970 3,410 3,410 3,960 3,960 3,960 3,960 47,300
Cost of Goods Sold: Production - - - - - - - - - - - - -
Cost of Goods Sold 5,390 4,950 4,400 3,960 2,970 2,970 3,410 3,410 3,960 3,960 3,960 3,960 47,300
Gross Margin 43,610 40,050 35,600 32,040 24,030 24,030 27,590 27,590 32,040 32,040 32,040 32,040 382,700
Gross Margin Percentage 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0% 89.0%

INVENTORY MANAGEMENT

Inventory Purchases (Cash) 5,400 5,000 4,450 4,000 2,950 2,950 3,400 3,400 4,000 3,900 4,000 3,900 47,350
Inventory Purchases (Credit) -
Paid on Account (Suppliers) -
Balance of Inventory (Purchased) 10 60 110 150 130 110 100 90 130 70 110 50

PRODUCTION EXPENSES

Salaries & Wages

Employee Benefits
Payroll Taxes
Subcontracting
Repairs & Maintenance
Freight-in & Trucking
Rent
Utilities
Insurance
Rework
Other Production Expenses
Production Expenses (Total) - - - - - - - - - - - - -
Balance of Inventory (Production) - - - - - - - - - - - -

Balance of Inventory (Total) 10 60 110 150 130 110 100 90 130 70 110 50

Inventory will be comprised of food items for the snack bar, alcohol for the bar and chips and drinks for vending machines
Gross Margin Percentage is figured using historical data from other bowling centers we operate

Budget Form #3 Financial Plan

 EXPENSE BUDGET
MARKETING EXPENSES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Salaries & Commissions - Sales

Employee Benefits
Payroll Taxes - Sales
Advertising - Broadcast
Advertising - Print
Advertising - Direct Mail
Advertising - Other 2000 2000 4000
Marketing - Print
Marketing - Samples/Trade Shows
Other Marketing Expenses

Marketing Expenses (Total) 0 0 0 0 2000 0 0 2000 0 0 0 0 4000

Notes & Explanations: Advertising a bowling alley in a small market gives very small results. One can receive better results by a charity fundraiser.
We will have advertising in May to promote summer leagues and in August to promote winter leagues

Budget Form #4 Financial Plan

 EXPENSE BUDGET
ADMINISTRATIVE EXPENSES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Salaries & Wages 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 10000 120000
Employee Benefits
Payroll Taxes 800 800 800 800 800 800 800 800 800 800 800 800 9600
Meals & Entertainment
Dues & Subscriptions 175 175 175 175 175 175 175 175 175 175 175 175 2100
Professional Fees 200 200 200 200 200 200 200 200 200 200 200 200 2400
Accounting/Bookkeeping 200 200 200 200 200 200 200 200 200 200 200 200 2400
Travel/Automobile
Other Admin Expenses

Administrative Expenses (Total) 11375 11375 11375 11375 11375 11375 11375 11375 11375 11375 11375 11375 136500

Notes & Explanations: Salaries and wages are based off of current levels. These may be lower during the summer.
Payroll taxes are based off of historical figures.
Dues will be paid to have sanctioned lanes, BPAA membership, Better Business Bureau and Spalding County Chamber of Commerce

Budget Form #5 Financial Plan

 EXPENSE BUDGET
GENERAL EXPENSES

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Bank Charges 50 50 50 50 50 50 50 50 50 50 50 50 600

Interest Expense 6375 6341 6306 6272 6238 6203 6168 6132 6097 6061 6025 5988 74206
Insurance 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 14400
Office Supplies 150 25 25 25 25 25 25 150 25 25 25 25 550
Other Supplies 150 150 150 150 150 150 150 150 150 150 150 150 1800
Postage 50 50 50 50 50 50 50 50 50 50 50 50 600
Telephone 225 225 225 225 225 225 225 225 225 225 225 225 2700
Utilities 2500 2500 2300 2300 2800 3000 3100 3200 3000 2800 2800 2600 32900
Rent
Repairs & Maintanence 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 1100 13200
Taxes & Licenses 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 1200 14400
Other General Expenses

General Expenses (Total) 13000 12841 12606 12572 13038 13203 13268 13457 13097 12861 12825 12588 155356

Notes & Explanations: 900,000 dollar note at 8.5% interest rate for a period of 10 years. Pmt of 12398.57/month
Repairs and Maintenance costs are to keep machines operating. This cost will drop after our mechanics have gotten them back to standard
Utility bills will fluctuate based upon time of year

Budget Form #6 Financial Plan

 CAPITAL BUDGET

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Owner's Capital/Stock -
Owner's Draw/Distributions -

Investor's Capital/Stock 300,000 300,000

Investor's Draw/Distributions -
Dividends Paid -

Loans (Cash Borrowed) 900,000 900,000

Loan Principal Payments 4,783 4,817 4,851 4,886 4,920 4,955 4,990 5,026 5,061 5,097 5,133 5,169 59,688

Security Deposits 6,000 6,000

Start-up Expenses 25,000 25,000
Amortization -

Equipment 240,000 240,000

Equipment Depreciation 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Furniture 60,000 60,000
Furniture Depreciation 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000
Leasehold Improvements -
Leasehold Depreciation -
Vehicles -
Vehicles Depreciation -
Building 720,000 720,000
Building Depreciation 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 2,000 24,000
Land 150,000 150,000

Notes & Explanations: investor's capital is a 300,000 equity position

Loans is the 900,000 dollars requested to buy business
start-up expenses are to buy current inventories, and operating cash
Equipment is the amount paid for the Equipment for depreciation purposes. 10 year depreciation schedule
Furniture is the amount paid for the Furniture for depreciation purposes. 5 year depreciation schedule
Building is the amount paid for the building for depreciation purposes. 30 year depreciation schedule

Budget Form #7 Financial Plan

 GOLD CUP BOWLING
CASH-FLOW STATEMENT

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Cash Receipts:
Sales (Cash) 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000
Sales (Credit Cards) - - - - - - - - - - - - -
Received on Account (ROA) - - - - - - - - - - - - -
Other Income - - - - - - - - - - - - -
Owner's Capital/Stock - - - - - - - - - - - - -
Investor's Capital/Stock 300,000 - - - - - - - - - - - 300,000
Loans (Cash Borrowed) 900,000 - - - - - - - - - - - 900,000
Total Cash Receipts 1,249,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 1,630,000
Cash Disbursements:
Returns and Allowances (Cash) - - - - - - - - - - - - -
Inventory Purchases (Cash) 5,400 5,000 4,450 4,000 2,950 2,950 3,400 3,400 4,000 3,900 4,000 3,900 47,350
Paid on Account (Suppliers) - - - - - - - - - - - - -
Production Expenses (Total) - - - - - - - - - - - - -
Marketing Expenses (Total) - - - - 2,000 - - 2,000 - - - - 4,000
Administrative Expenses (Total) 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 136,500
General Expenses (Total) 13,000 12,841 12,606 12,572 13,038 13,203 13,268 13,457 13,097 12,861 12,825 12,588 155,356
Owner's Draw/Distributions - - - - - - - - - - - - -
Investor's Draw/Distributions - - - - - - - - - - - - -
Dividends Paid - - - - - - - - - - - - -
Loan Principal Payments 4,783 4,817 4,851 4,886 4,920 4,955 4,990 5,026 5,061 5,097 5,133 5,169 59,688
Start-up Expenses 25,000 - - - - - - - - - - - 25,000
Security Deposits 6,000 - - - - - - - - - - - 6,000
Equipment 240,000 - - - - - - - - - - - 240,000
Furniture 60,000 - - - - - - - - - - - 60,000
Leasehold Improvements - - - - - - - - - - - - -
Vehicles - - - - - - - - - - - - -
Building 720,000 - - - - - - - - - - - 720,000
Land 150,000 - - - - - - - - - - - 150,000
Total Cash Disbursed 1,235,558 34,033 33,282 32,833 34,283 32,483 33,033 35,258 33,533 33,233 33,333 33,032 1,603,894

Beginning Cash Balance $0 13,442 24,409 31,127 34,294 27,011 21,528 19,495 15,237 17,704 20,471 23,138 26,106
Net Cash Flow 13,442 10,967 6,718 3,167 (7,283) (5,483) (2,033) (4,258) 2,467 2,767 2,667 2,968 26,106
Ending Cash Balance 13,442 24,409 31,127 34,294 27,011 21,528 19,495 15,237 17,704 20,471 23,138 $26,106

Exhibit 1 Financial Plan

 GOLD CUP BOWLING
PROJECTED MONTHLY INCOME STATEMENT

JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC TOTAL

Revenue:
Gross Sales 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000
Less: Returns and Allowances - - - - - - - - - - - - -
Net Sales 49,000 45,000 40,000 36,000 27,000 27,000 31,000 31,000 36,000 36,000 36,000 36,000 430,000
Cost of Sales 5,390 4,950 4,400 3,960 2,970 2,970 3,410 3,410 3,960 3,960 3,960 3,960 47,300
Gross Profit 43,610 40,050 35,600 32,040 24,030 24,030 27,590 27,590 32,040 32,040 32,040 32,040 382,700

Expenses:
Marketing Expenses - - - - 2,000 - - 2,000 - - - - 4,000
Administrative Expenses 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 11,375 136,500
General Expenses 13,000 12,841 12,606 12,572 13,038 13,203 13,268 13,457 13,097 12,861 12,825 12,588 155,356
Amortization - - - - - - - - - - - - -
Bad Debt Expense - - - - - - - - - - - - -
Depreciation 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 60,000
Total Operating Expenses 29,375 29,216 28,981 28,947 31,413 29,578 29,643 31,832 29,472 29,236 29,200 28,963 355,856

Net Operating Income (Loss) 14,235 10,834 6,619 3,093 (7,383) (5,548) (2,053) (4,242) 2,568 2,804 2,840 3,077 26,844
Other Income - - - - - - - - - - - - -
Net Income (Loss) Before Taxes 14,235 10,834 6,619 3,093 (7,383) (5,548) (2,053) (4,242) 2,568 2,804 2,840 3,077 26,844

Notes and Explanations: Gross Sales are adjusted for typical seasonality.
Cost of sales takes into account the percentage and type of revenue
Depreciation was straight line and will be constant until year 6 or other capital improvements have been made
The summer months are scheduled to have a loss

Exhibit 2 Financial Plan

 GOLD CUP BOWLING
PROJECTED PROFIT AND LOSS STATEMENT
Year Ending December 31, 1999

Revenue
Gross Sales $430,000
Less: Returns & Allowances -
Net Sales 430,000 100.0%
Cost of Sales 47,300 11.0%
Gross Profit 382,700 89.0%

Operating Expenses
Marketing Expenses
Salaries & Commissions - Sales - 0.0%
Employee Benefits - 0.0%
Payroll Taxes - Sales - 0.0%
Advertising - Broadcast - 0.0%
Advertising - Print - 0.0%
Advertising - Direct Mail - 0.0%
Advertising - Other 4,000 0.9%
Marketing - Print - 0.0%
Marketing - Samples/Trade Shows - 0.0%
Other Marketing Expenses - 0.0%
Administrative Expenses
Salaries & Wages 120,000 27.9%
Employee Benefits - 0.0%
Payroll Taxes 9,600 2.2%
Meals & Entertainment - 0.0%
Dues & Subscriptions 2,100 0.5%
Professional Fees 2,400 0.6%
Accounting/Bookkeeping 2,400 0.6%
Travel/Automobile - 0.0%
Other Admin Expenses - 0.0%
General Expenses
Bank Charges 600 0.1%
Interest Expense 74,206 17.3%
Insurance 14,400 3.3%
Office Supplies 550 0.1%
Other Supplies 1,800 0.4%
Postage 600 0.1%
Telephone 2,700 0.6%
Utilities 32,900 7.7%
Rent - 0.0%
Repairs & Maintanence 13,200 3.1%
Taxes & Licenses 14,400 3.3%
Other General Expenses - 0.0%
Amortization - 0.0%
Bad Debt Expense - 0.0%
Depreciation 60,000 14.0%
Total Operating Expenses 355,856 82.8%

Net Operating Income (Loss) $26,844 6.2%

Other Income -
Net Income (Loss) Before Taxes $26,844

Exhibit 3 Financial Plan

 GOLD CUP BOWLING
PRO FORMA BALANCE SHEET
Year Ending December 31, 1999

Assets
Current Assets
Cash and Equivalents $26,106
Accounts Receivable -
net of allowance for bad debts -
Inventory 50
Prepaid Expenses 31,000
Total Current Assets $57,156

Fixed Assets
Equipment 240,000
Equipment Depreciation 24,000
Furniture 60,000
Furniture Depreciation 12,000
Leasehold Improvements -
Leasehold Depreciation -
Vehicles -
Vehicles Depreciation -
Building 720,000
Building Depreciation 24,000
Land 150,000

Total Fixed Assets 1,170,000

Less: Accumulated Depreciation 60,000
Total Fixed Assets, Net 1,110,000

Total Assets $1,167,156

Liabilities
Current Liabilities
Accounts Payable (Suppliers) -

Long Term Liabilities

Loans Outstanding/Other Payables 840,312

Total Liabilities $840,312

Equity
Capital 300,000
Retained Earnings 26,844
Total Equity $326,844

Total Liabilities and Equity $1,167,156

Exhibit 4 Financial Plan

 GOLD CUP BOWLING
THREE-YEAR BUDGET

1999 2000 2001

Sales (Cash & Credit Cards) 430,000 440,000 450,000

Sales (Credit) -
Returns and Allowances (Cash) -
Received on Account (ROA) -
Yearly Gross Sales $430,000 $440,000 $450,000

Cost of Goods Sold 47,300 48,246 49,211

Gross Margin 382,700 391,754 400,789
Gross Margin Percentage 89.0% 89.0% 89.1%

Marketing Expenses 4,000 4,100 4,200

Administrative Expenses 136,500 133,881 136,558
General Expenses 155,356 153,695 149,647
Amortization -
Bad Debt Expense -
Depreciation 60,000 88,400 71,000
Total Expenses 355,856 380,076 361,405
Net Operating Income (Loss) Before Taxes $26,844 $11,678 $39,384
Other Income -
Net Income (Loss) Before Taxes $26,844 $11,678 $39,384
Income Tax 7,516 3,270 11,028
Net Income (Loss) After Taxes $19,328 $8,408 $28,356

Inventory/Raw Material Purchases (Cash) 47,350 48,246 49,211

Inventory/Raw Material Purchases (Credit) -
Value Added by Production -
Paid on Account (Suppliers) -
Owner's Capital/Stock -
Owner's Draw/Distributions -
Investor's Capital/Stock 300,000
Investor's Draw/Distributions -
Dividends Paid -
Loans (Cash Borrowed) 900,000
Loan Principal Payments 59,688 64,971 70,714
Equipment 240,000
Furniture 60,000
Leasehold Improvements -
Vehicles -
Building 720,000
Land 150,000
Cumulative Cash Flow 18,590 50,427 79,069

General expenses will drop because interest expense will more than offset rise of other general expenses

Exhibit 5 Financial Plan


Sales (Cash & Credit Cards)
Sales (Credit)
Returns and Allowances (Cash)
Received on Account (ROA)
Cost of Goods Sold
Marketing Expenses
Administrative Expenses
General Expenses
Depreciation
Income Tax
Inventory Purchases (Cash)
Inventory Purchases (Credit)
Paid on Account (Suppliers)
Owner's Capital/Stock
Owner's Draw/Distributions
Loans (Cash Borrowed)
Loan Principal Payments
Equipment
Furniture
Leasehold Improvements
Vehicles
Building
Land
Exhibit 5b
GOLD CUP BOWLING
NOTES FOR THREE YEAR BUDGET
2000 2001
all cash sales
no credit sales
should remain constant should remain constant
very little advertising in small market
assume 2% rise yearly
assume 2% rise yearly
3 separate depreciation schedules for furniture, equipment, and building
assume 28 % tax rate
all purchases have been cash
no draws or dividends
borrowed @ 8.5% for 10 years
64971 70714
Depreciated at 10 year straight line
depreciated at 5 year straight line
depreciated at 30 year straight
listed at Historical
Financial Plan
 GOLD CUP BOWLING
THREE-YEAR PRO FORMA BALANCE SHEET

1999 2000 2001

Assets
Current Assets
Cash and Equivalents 26,106 50,427 79,069
Accounts Receivable - - -
net allowance for bad debts - - -
Inventory 50 50 50
Prepaid Expenses 31,000 31,000 31,000
Total Current Assets $57,156 $81,477 $110,119

Fixed Assets
Equipment 240,000 240,000 240,000
Furniture 60,000 60,000 60,000
Leasehold Improvements - - -
Vehicles - - -
Building 720,000 720,000 720,000
Land 150,000 150,000 150,000

Total Fixed Assets 1,170,000 1,170,000 1,170,000

Less: Accumulated Depreciation 60,000 148,400 219,400
Total Fixed Assets, Net 1,110,000 1,021,600 950,600

Total Assets $1,167,156 $1,103,077 $1,060,719

Liabilities
Current Liabilities
Accounts Payable (Suppliers) - - -

Long Term Liabilities

Loans Outstanding/Other Payables 840,312 775,341 704,627

Total Liabilities $840,312 $775,341 $704,627

Equity
Capital 300,000 300,000 300,000
Retained Earnings 26,844 27,736 56,092
Total Equity $326,844 $327,736 $356,092

Total Liabilities and Equity $1,167,156 $1,103,077 $1,060,719

Exhibit 6 Financial Plan

 GOLD CUP BOWLING
FINANCIAL RATIOS

1999 2000 2001

Profit Ratios

Profit to Sales Net Operating Income 0.06 0.03 0.09

Yearly Gross Sales

Profit on Net Worth Net Operating Income 0.08 0.04 0.11

Total Equity

Return on Total Capital Employed Net Operating Income 0.02 0.01 0.04
Total Assets

Current Position or Liquidity Ratios

Current Ratio Current Assets 0.00 0.00 0.00

Current Liabilities

Acid Test Ratio Cash and Equivalents 0.00 0.00 0.00

Current Liabilities

Accounts Receivable to Sales Accounts Receivable 0.00 0.00 0.00

Yearly Gross Sales

Inventory Cost of Goods Sold 946.00 964.92 984.22

Inventory

Capital Structure Ratios

Fixed Asset to Net Worth Fixed Assets 3.40 3.12 2.67

Total Equity

Total Debt to Net Worth Total Liabilities 2.57 2.37 1.98

Total Equity

Operating Activity Ratios

Sales to Net Worth Yearly Gross Sales 1.32 1.34 1.26

Total Equity

Sales to Total Assets Yearly Gross Sales 0.37 0.40 0.42

Total Assets

Exhibit 7 Financial Plan