February 2001

12 Market Street, Suite 290

Salt Lake City, Utah 84101

Phone: 801.531.4200
Fax: 801.531.0404
Toll free: 800.694.4888

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 Table of Contents

1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.0 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
2.3 Company Locations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5

3.0 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.1 Service Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.2 Competitive Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.3 Sales Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.4 Fulfillment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.5 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.6 Future Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.0 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.1 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.2.2 Market Growth and Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
4.3.1 Business Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.2 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
4.3.3 Main Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

5.0 Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

5.1 Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.2 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.3 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3.1 Positioning Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3.2 Pricing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3.3 Promotion Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.3.4 Marketing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.4 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4.2 Sales Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
5.5 Strategic Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

6.0 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17

6.1 Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.2 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.3 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

7.0 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

7.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Key Financial Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
7.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
 Panache Travel Group

1.0 Executive Summary

Panache Travel Group (PTG) is a company which specializes in small, escorted luxury tour
packages for discriminating clients. It will operate from two bases to better serve customers
across the country: one in Salt Lake City, Utah; the other in New York, New York. The
founders and employees of Panache Travel Group are experienced travelers and travel
professionals who are knowledgeable, capable and passionate about the services Panache
Travel Group will promote and offer.

Within the growing travel industry, PTG will focus on the niche market of luxury travel. Its
primary clients are individuals, couples and affinity groups of high-net-worth who travel for
leisure at least once per year. Seeking the ultimate travel experience, the target clients
demand the finest quality activities and accommodations accompanied by a superior level of
service. PTG will have a competitive advantage over others in this market by providing
smaller, more exclusive package tours enabling the clients of these intimate groups to receive
personal attention from the travel hosts. PTG will cultivate this niche with one-to-one contact
with potential clients; personal contact with sophisticated travel agencies whose primary
clientele targets our market; broad out-reach programs through various media; special
events; and an inter-active, full-service website. We have all aspects of travel technology
available to us through Panache Services. The founders and personnel of PTG have experience
of their own with travel, luxury retailing, personal services to high-net-worth individuals,
history of travel destinations and local languages.

To broaden market share and increase brand recognition, the luxury tour packages initially will
be offered at slightly below market rate. As a result, short-term operating profit margins are
projected to be between 17-18%. When PTG has established a loyal core clientele and
increased brand recognition, allowing the company to increase the price of the tour packages
to the market rate, operating profit margin is anticipated to rise to between 23-25%.

Highlights (Planned)

$4,500,000

$4,000,000

$3,500,000

$3,000,000
Sales
$2,500,000
Gross Margin
$2,000,000
Net Profit
$1,500,000

$1,000,000

$500,000

$0
2001 2002 2003

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 Panache Travel Group

1.1 Objectives

1. Achieve sales of $500,00 thousand in 2001; $1.5 million by 2002; and $4.5 million by 2003,
with corresponding increases in profitability.

2. Develop the Panache Travel Group brand to facilitate customer retention, maintain mind-
share of Panache resellers and increase pricing power.

3. Establish and maintain strategic alliances with service providers nationally, internationally,
and with travel professionals to create additional PTG sales channels.

4. Produce the highest levels of client satisfaction in the industry.

Sales by Year (Planned)

$4,500,000

$4,000,000

$3,500,000

$3,000,000

$2,500,000 Journeys
$2,000,000 Services
$1,500,000

$1,000,000

$500,000

$0
2001 2002 2003

1.2 Mission

The mission of Panache Travel Group is to provide unique, luxury tours and travel experiences,
for a niche market of discriminating clients, which results in their satisfaction, evidenced by
repeat bookings as well as favorable word-of-mouth comments. PTG seeks to distinguish itself
as a specialist in the field of luxury travel and to be recognized for offering exceptional service
and anticipating the needs and desires of its clients. An efficiently run operation, handled by
smart individuals, will enable not only those who receive service, but those who give it, to
enjoy the experience and the product, and for everyone to be pleased with the professional,
first-class service of PTG.

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 Panache Travel Group

1.3 Keys to Success

1. Segment and target luxury travelers within the larger travel market.

2. Position and promote Panache Travel Group as specialists in the luxury travel segment
of the travel industry.

3. Communicate the unique aspects and quality of PTG offerings through personal
interaction, media and other branding activities.

4. Develop repeat business from a base of loyal, satisfied customers.

2.0 Company Summary

Panache Travel Group (PTG) will be the parent company of Panache Journeys and Panache
Services.

• Panache Journeys is a luxury tour company which specializes in providing the ultimate
in fully-arranged, small, private tours (escorted).

• Panache Services is a general, full-services travel provider able to meet the basic needs
of both the corporate as well as the leisure travel markets. These services include
arranging air, land transportation, cruise and hotel bookings, as well as consulting and
custom travel arrangements. Panache Services specializes in FITs, or Free and
Independent Tours (unescorted).

2.1 Company Ownership

Panache Travel Group will form as a private, Limited Liability Corporation (LLC) organized in
the State of Utah by its principal founders (see below). Alternative legal corporate structures
may be used once principal investors have been located and investment funding has been
secured. Company stock will be apportioned as follows:

• 55% Panache Travel Group founders' ownership:

• George Raymond 25%;
• Dominque Pascal 15%;
• Alica Marques 15%

• 25% Investor(s) ownership.

• 20% Future employees' pool ownership.

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 Panache Travel Group

2.2 Start-up Summary

The initial start-up capital requirement for Panache Travel Group is $100,000.

• $25,000 to purchase the assets and liabilities of Panache European Journeys and
Barkley Roberts Travel.
• $75,000 to finance start-up costs and payroll expenses for the first 12-months of
operation, i.e.
• Legal fees related to new filings in the state of Utah.
• Expenses related to rent, office supplies, insurance, utilities, etc.
• Salaries for key managers and personnel.
• Miscellaneous costs involved in formulation and execution of strategic plan.

Initial venture capital or individual investment, to be obtained by June of 2001.

Table: Start-up

Start-up

Requirements

Start-up Expenses
Legal $500
Stationery etc. $600
Brochures $0
Consultants $0
Insurance $0
Rent $0
Research and Development $0
Expensed Equipment $0
Other $0
Total Start-up Expense $1,100

Start-up Assets Needed

Cash Balance on Starting Date $100,000
Other Short-term Assets $0
Total Short-term Assets $100,000

Long-term Assets $0
Total Assets $100,000
Total Requirements $101,100

Funding

Investment
Investor 1 $100,000
Investor 2 $0
Other $0
Total Investment $100,000

Short-term Liabilities
Accounts Payable $0
Current Borrowing $1,100
Other Short-term Liabilities $0
Subtotal Short-term Liabilities $1,100

Long-term Liabilities $0
Total Liabilities $1,100

Loss at Start-up ($1,100)

Total Capital $98,900

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 Panache Travel Group

Total Capital and Liabilities $100,000

Start-up

$100,000
$90,000
$80,000
$70,000
$60,000
$50,000
$40,000
$30,000
$20,000
$10,000
$0
Expenses Assets Investment Loans

2.3 Company Locations and Facilities

Panache Travel Group has two locations from which it will conduct business:
1. The main office address is 129 Market Street, Suite 600, Salt Lake City, Utah 84103.
This is a commercial building that can accommodate walk-in customers.
2. The East Coast office address is 150 Broadway, Suite 1200, New York, New York
10019.

The offices in both locations are fully-equipped and staffed.

3.0 Services

The mission of Panache Travel Group is service and luxury for discerning travelers. An
observation well-known in the travel and hospitality industry is that achieving a reputation for
excellence relies on word of mouth. We want the Panache brand to be synonymous with
service and luxury. When the conversation turns to travel, we want our clients to say, "I travel
with Panache!"

For the current year, 2001, Panache Journeys has planned and described twelve escorted
tours:
1. French Portfolio (French Riviera/ Provence);
2. Historic France (Paris/ Loire Valley/ Normandy);
3. Cosmopolitan Europe (Amsterdam/ Paris/ London);
4. Timeless Italy (Italian Riviera/ Tuscany);
5. Italian Glory (Rome/ Florence/ Venice);
6. Portuguese Discovery (Estoril Coast/ Lisbon/ Algarve);
7. Escape to Morocco (Fez/ Casablanca/ Marrakesh);
8. Alpine Luxury (Austria/ Germany);

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 Panache Travel Group
9. Heart of Europe (Germany/ Czech Republic/ Austria);
10. Orient Express (Venice/ Paris/ London);
11. Panache Explorer-Burma; and
12. Panache Explorer-Iran.

To handle the myriad details involved, we will rely on the technology afforded by Panache
Services, the World Wide Web and the focused attention of our founders and staff who will
make all plans and arrangements.

3.1 Service Description

Panache Journeys provides luxury escorted travel packages. Pre-trip services include
assistance with arranging airfare, trip insurance, passports, as well as making suggestions
regarding packing, etc. Carefully planned itineraries, superior accommodations, lodgings, food
and entertainment opportunities are communicated before the trip. Contacts are lined-up,
should medical, diplomatic or financial emergencies arise. To familiarize clients with the locales
they'll be visiting, a fine guidebook will be mailed to each client several weeks before the
beginning of each Journey.

Well-known luxury hotels engaged for these journeys include, to name just a few: The
Splendido, in Portofino; The Carlton, in Cannes; The Ritz in London; and The Gritti Palace in
Venice. Arrangements for notable dining experiences of equal caliber have been made in
Michelin two-and-three-star restaurants.

Local subject experts have been engaged to impart their invaluable knowledge and perspective
to our clients. For example, the services of Professore Marco di Navo, native Venetian, author
of Venice, retired professor of art history, University of Padova, and a former head of the
Venetian Tour Guide association have been reserved to give everyone new eyes with which to
see the glories of Venice.

Of equal importance to everything mentioned above are the Panache hosts who accompany
each Journey. Each is excellent and is prepared to give the utmost personal attention to clients
on the road. Each host has a broad background of knowledge, experience and the all-
important quality of a sense of humor. Each host understands the luxury field is unique unto
itself; each client is unique, and the care, feeding and transporting of this demanding clientele
requires him to be ever-ready to serve.

The goal of everyone at Panache Journeys is not only to meet the travel needs of its clients: it
is to anticipate them. We want our service to be exceptional, not simply friendly. Panache
Services provides complementary travel services for Panache Journeys clients, as well as
corporate and general leisure travelers. In addition, unescorted FITs, or Free and Independent
Tours, are happily arranged for clients for whom a Panache Journey is not quite right.

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 Panache Travel Group

3.2 Competitive Comparison

Panache Journeys has addressed these issues by positioning itself as a luxury travel company,
offering exceptionally small groups (none larger than ten) and delivering an exceptionally high
level of service. It understands that these aspects are highly valued, cannot be discounted,
reduced or otherwise cheapened. Panache Journeys has not identified a direct competitor in
this particular niche of the luxury travel market when aspects of service, group size, quality of
accommodations and quantity of personal attention are included. Other luxury tour operators
will be discussed under a separate topic in the market analysis and analyzed with a
comparison of strengths and weaknesses.

3.3 Sales Literature

A handsome, full-color brochure describes the Panache Journeys, which includes prices and
terms. They were printed by The Printing of Salt Lake City and will be mailed to potential
customers upon request. Additional brochures will be used in direct mail campaigns and as
sales promotional material. Panache Travel Group will maintain, and regularly add to, its
database of previous customers/contacts/potential clients information. Notes, additions and
revisions will be made on a continuous basis. The website of PTG at
www.panachetravelgroup.com gives information about Panache, its hosts, journeys offered
with dates, prices, terms and booking information. An e-mail address is given for a Panache
Journeys representative to respond to inquiries from prospective travelers. The site is
adequate for the 2001 season, but will be thoroughly redesigned and developed for the 2002
season. Money has been allocated in the 2002 marketing budget for this project by an expert,
outside firm.

3.4 Fulfillment

The key fulfillment and delivery will be provided by the acquisition of both Panache European
Journeys and Barkley Roberts Travel. The core value of these companies is professional
expertise, achieved through the combination of travel experience, hard work and educational
background.

Panache European Journeys established relationships with providers of travel-related products

and services. Extensive market research enabled them to identify and create working
relationships with numerous service providers around the world. Panache European Journeys
identified opportunities to capture markets with great growth potential. They continually
sought and evaluated new sources. Panache European Journeys took advantage of trade
shows, travel industry personnel and publications and other sources of industry-related
information as it monitored the quality of its offering. They have a history of three successful
years providing tours, virtually identical, to those which will be offered by Panache Travel
Group.

Barkley Roberts Travel is a full service travel agency. It is a member of the Airline Reporting
Corporation (ARC), International Airlines Travel Agent Network (IATAN), Association of Travel
Agencies (ASTA), along with many other groups and trade associations. It is also a member of
www.vacation.com that is one of the largest consortium for obtaining additional commission
and discounts prices on airline, hotel room, rental car and cruise line bookings. In addition,
Barkley Roberts Travel has a large client base of both corporate and leisure clients, many of
whom travelled with Panache European Journeys. Barkley Roberts Travel is staffed with two
full-time certified travel professionals.

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 Panache Travel Group
The bi-coastal offices staffed with the knowledgeable founders and personnel of PTG will
facilitate attracting clients both to and within the luxury travel market though one-on-one
meetings with potential clients, personal contact with sophisticated travel agencies which
target up-scale consumers, and broad out-reach programs including travel conferences and
media and special events.

3.5 Technology

Panache Travel Group will rely on the Computerized Reservation System (CRS) of Barkley
Roberts Travel. Barkley Roberts Travel is currently under contract to WorldSpan, a leader in
the CRS world. The CRS enables travel agents to identify what the customer is looking for and
to make that information available quickly. It increases the speed and efficiency with which
PTG can communicate with suppliers. In addition, the CRS simplifies customer data storage
and retrieval. PTG will make use of the latest computer technology and the Internet for market
research, communications, data storage and sales. PTG will also create working agreements
with other travel agencies in the Salt Lake City and New York areas that will enhance its
technological abilities and its financial profitability.

3.6 Future Services

Panache Travel Group will increase the geographical areas of the world in which it offers tours.
In addition, as the luxury travel market expands, PTG may develop business in additional
segments of the luxury travel market, i.e. tours with an architectural, music festival, golf or
local festival emphasis. PTG is researching the market to identify potential opportunities for
future sales. The long-term goal of PTG is to establish itself as an internationally recognized
provider of top-of-the-line luxury travel. This goal does not prohibit PTG from participating in
additional areas of the travel industry. It does, however, provide a corporate focus and a
differentiated offering.

4.0 Market Analysis Summary

Panache Travel Group will focus its initial efforts in obtaining clients in the United States
interested in the luxury travel market. Travel and tourism is the nation's largest services
export industry. U.S. resident travelers spent $81.4 billion on travel to foreign countries in
1999. The travel & tourism industry is expected to account for 5.1% of the U.S. Gross
Domestic Production (GNP) in 2000. The World Economic Forecast Association (WEFA)
forecasts travel & tourism to grow by 4.1% a year between 2000 and 2005 in terms of real
spending.

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 Panache Travel Group

4.1 Market Segmentation

The target customers of Panache Travel Group are couples and individuals, with median
household incomes in excess of $100,000 between the ages of 40-70 years of age. These
people are interested in adventure, history, gastronomy, travel culture and unique travel
experiences. Target groups are as follows:

1. Householders with incomes of $100,000 and over.

2. Travel agents and professionals with an established client base, particularly in the
luxury market.
3. Corporations, civic groups and nonprofit organizations, interested in incentives,
retreats, field trips and fund raisers.
4. Internet users seeking sites related to luxury travel.

Market Analysis (Pie)

USA Household Incomes Over $100K

Travel Agents & Professionals
Corporations, Civic Groups & Non-profit Organizations
Internet

Table: Market Analysis

Market Analysis
Potential Customers Growth 2001 2002 2003 2004 2005 CAGR
USA Household Incomes Over $100K 6% 2,000,000 2,120,000 2,247,200 2,382,032 2,524,954 6.00%
Travel Agents & Professionals 4% 300,000 312,000 324,480 337,459 350,957 4.00%
Corporations, Civic Groups & Non-profit 4% 250,000 260,000 270,400 281,216 292,465 4.00%
Organizations
Internet 5% 1,000,000 1,050,000 1,102,500 1,157,625 1,215,506 5.00%
Total 5.42% 3,550,000 3,742,000 3,944,580 4,158,332 4,383,882 5.42%

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 Panache Travel Group

4.2 Target Market Segment Strategy

Panache Travel Group is located in Salt Lake City and the New York City area. It will target and
develop relationships with satisfied clients who have traveled with the PTG with the idea of
capitalizing on their satisfaction by encouraging favorable word-of-mouth comments to their
friends and acquaintances. It will place a great emphasis on targeting key travel
agents/professionals, i.e. Virtuosi agents, who have established, luxury client bases. Luxury
trade shows, informational meetings, and contact of clients from elite agencies will also be
used to identify markets and clients.

4.2.1 Market Needs

Many potential customers have questions related to numerous aspects of foreign travel.
Experience travelers and travel professionals have invaluable knowledge about destinations,
accommodations, prices and the myriad questions that arise. General customers look to the
travel professional to provide them with sound advice on these matters.

However, luxury travelers look to and depend on the travel professional to an even greater
extent for an even greater number of things. Simply stated, they want someone to help them
with everything: "Please take care of it all!" Panache Travel Group is confident in its ability to
do just that. PTG saves the client time and money through their knowledge and travel
experience, and ensures that clients are worry-free and completely satisfied.

4.2.2 Market Growth and Trends

The travel industry is growing. Reasons for this growth include a healthy domestic economy
and the devaluation of currency in other parts of the world which has made travel less
expensive for U.S. residents. Leisure travel has increased each year since 1990 and luxury
travel, which is growing at an estimate 5% annually, is one of the fastest growing segments of
the travel industry. Additionally, there has been a dramatic increase in corporate participation
in the luxury travel market in the form of incentives and retreats.

4.3 Service Business Analysis

The U.S. travel and tourism industry is the nation's third largest retail industry, and according
to the U.S. Department of Commerce, indicators suggest it will be the leading industry in
2001. Revenues from travel have increased approximately 100% in the last decade. U.S.
travel agencies produce over $100 billion in revenues each year.

The travel market is separated into two categories: business and leisure. Each contributes
about 45% to total revenues. The remaining 10% of the revenue is generated from combined
business/leisure trips. The market is further separated into domestic and international travel.
Leisure travelers are classified according to the type of trip taken, income and/or age.

The leisure travelers are divided into the following groups (not being mutually exclusive):

1. Those focused on adventure, special-interest, rest and relaxation, honeymoons and/or

sightseeing.
2. High-income.

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 Panache Travel Group
3. Budget-conscious.
4. Families, students, groups with mutual affinity and seniors.

Lifestyle, age, and disposable income influence the decision to travel and the type of travel.
Luxury travelers make purchase decisions based upon their desire to combine many interests
with vacation time. Panache Travel Group will emphasize high-income travelers particularly
interested in special-interest, rest and relaxation, honeymoons and sightseeing trips who may
be families, groups with a mutual interest and/or seniors. When combined they form a very
significant, lucrative market from which to draw potential clients.

4.3.1 Business Participants

The travel industry is similar to other industries inasmuch as it has large national chains, small
home-based businesses, consolidators on the Internet, etc. Membership numbers in some of
the travel-related associations give some indication of the number of participants in this
market. The American Society of Travel Agents (ASTA) reports 25,000 members in 135
countries, most of whom are small businesses. The Association of Retail Travel Agencies
(ARTA) has another 3,000 members. In addition, many agencies are not affiliated with these
associations but rather with one or more of the approximately 35 other travel industry
organizations in the country.

4.3.2 Competition and Buying Patterns

There are many activities and types of travel available to people contemplating a luxury
vacation. Moreover, potential customers do not have to vacation: they may elect to spend the
discretionary portion of their budget in any number of ways, or invest the money they would
otherwise have spent on a vacation.

However, if they are disposed to a luxury vacation, direct competition for Panache Services
can come from virtually any agency. That being said, however, these same agencies can be
direct sales agents of Panache Journeys. They are valued and are to be sought out. The
average luxury traveler engages in one grand travel vacation every twelve months.

4.3.3 Main Competitors

As mentioned above there are competitors for Panache Services, but the market of potential
clients is truly vast. On the other hand, Panache Journeys has found a very nice niche with
limited direct competition.

Several luxury tour companies compete directly with Panache Journeys for the luxury travel
dollar. Three competitors are listed below with their strengths and weakness:

• Abercrombie & Kent: Based in Oak Brook, Illinois, is the most well-known and largest
luxury tour company in the world. They have been providing luxury travel packages for
over 40 years. They have the advantage of an established reputation, economies of
scale, and strategic alliances. However, their packages are over-priced, and their group
size is larger than 24 people per trip as opposed to 10, the maximum for Panache
Journeys.

• Travacoa: Based in Newport Beach, California, is the second leading luxury tour
operator in the United States. Again they have advantages of size and length of

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operation. However, their tours lack imagination, have large group size, 24, and we
have been told by our clients who have experienced both Travacoa and Abercrombie &
Kent, that Panache Journeys was by far their best traveling experience. They cited
hotels, meals, group size, and guides among their reasons for preferring the Panache
Journeys traveling experience.

• Butterfield & Robinson: Based in Toronto, Canada, is an excellent travel company

specializing in walking and biking tours throughout the world. They offer a superior
product to an up-scale clientele. We, quite frankly, have adapted some of their
business practices. But our target group does not want to walk from place to place.

5.0 Strategy and Implementation Summary

In order to reach its goal of becoming one of the premiere luxury tour operators and travel
planners, Panache Travel Group will adopt the following strategy:

1. Establish the reputation of PTG as a differentiated, specialty provider of luxury travel.

This will be accomplished through a diverse marketing communications program
directed at the target market of PTG utilizing various media.

2. Provide unparalleled service to clients in order to gain repeat business and referrals.
This will include providing superior service in all phases of the Panache experience,
including timely follow-through.

3. Aggressively promote the Panache brand of luxury travel and, in particular, small group
travel through Panache Journeys which will be promoted as "the ultimate in luxurious
small group travel."

5.1 Value Proposition

The value proposition of Panache Travel Group comes from the personal knowledge and love
of travel of its founders and employees. They are confident of their ability to meet the needs of
their customers because they share the enthusiasm of the clients for the travel experience
they offer. Their confidence and ability translates into confidence for the client. It is basis for
developing a long-term, trusting relationship.

5.2 Competitive Edge

The competitive edge of Panache Travel Group is its focus, passion, experience, and in its
superior product with Panache Journeys. PTG provides a differentiated offering with creative
management and commitment.

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5.3 Marketing Strategy

Panache Travel Group adheres to the theory that the goal of business is to create and keep
customers. Its marketing strategy will reflect this goal as it builds its reputation to clients
throughout the United States.

5.3.1 Positioning Statement

Our aim is directed at individuals, corporations, civics groups and charitable organizations who
wish to participate in luxury travel, and towards travel agents who want to sell the finest small
group luxury tours on the market.

5.3.2 Pricing Strategy

Much of the pricing of Panache Travel Group is determined by market standards. It will
attempt to maintain margins of 10% on Panache Services and 25% on Panache Journeys. PTG
will make every effort to maintain a competitive pricing policy and keep the price of Panache
Journeys 10-15% below the price of other luxury tours for the first three years. However, as
Panache Journeys builds its reputation as a premier small group luxury tour operator, it
expects to earn the ability to charge comparable rates to other luxury tour companies.

5.3.3 Promotion Strategy

The image we are promoting:

"Panache: from Late Latin (pinnaculum): small feather;

from Old Italian (pennachio): ornamental tuft of feathers, often on a helmet; a tassel;
from Middle French (pennache): flamboyantly or stylish confident manner."
---Oxford English Dictionary

This is the meaning of PANACHE, and this is the message we want to promote!

We seek to project our company's name, and subtleties of its meaning, to the luxury traveler!

The luxury traveler travels with Panache -- therefore he/she has panache!

We aim to convey the myriad benefits the luxury client will receive by traveling with Panache!

A Panache client will have an experience evoked by these phrases:

• Top-of-the-line, top-drawer care-free leisure.

• Worry-free and problem-free, all-details-handled without hassle.
• Personally tailored, friendly expert guidance, seamless operations, attention to details.
• Pampered and "spoiled", luxurious and permeated with stylish confidence.
• Irreplaceable memories, not astronomically priced.

Therefore, we have addressed the Five F's a customer wants:

Function. Our service meets their concrete needs and desires.

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 Panache Travel Group

Finances. Our prices are somewhat under market-rate.

Freedom. We make purchase very convenient, thereby freeing the client's time and
mind.

Feelings. We provide a service that makes the clients feel pleased with themselves for
their acumen in selecting such a superior product.

Future. The service creates great satisfaction. The client's only longing is for another
Journey!

The brochures are sleekly elegant. The logo printed on business cards and stationery is
sophisticated and unusual: acid green and black dramatically create attention and the
elegance of the Romanesque Panache script is eye-catching. Our sales representatives and
Panache hosts are experienced, knowledgeable, cosmopolitan, polished and poised. Our
website reinforces these images and messages.

How our image and services will be promoted:

During the first year, Panache Travel Group will continue a relationship begun with the Guild of
Ballet West, a professional, nonprofit ballet company located in Salt Lake City, in affiliation
with the San Francisco Ballet Company, with a membership of 354. Two journeys will be
offered as the grand prize for their annual fund-raising extravaganza given by the Guild in
April 28, 2001. This will create buzz and publicity for Panache Journeys, build interest for
others to join the prize-winners to travel together, and give back to the community in which
PTG is based.

An East-coast based promotion will be participation in the fund-raising auction of educational,

public television station WLIW, Channel 21, based on Long Island, New York. The auction will
take place June 1-3, 2001. One journey will be auctioned. We will create a 30-second spot with
WLIW's production team. The spot will be aired ten times; print acknowledgement will be
made in a Newsday newspaper ad; we'll receive promotion on WLIW's auction website and link
access to our website; and we have an on-air guest auctioneer opportunity and live interview
about Panache Journeys. WLIW has a viewership in New York, New Jersey and Connecticut of
more than 1.9 million households weekly and we will be publicized before this vast audience.

PTG will continue calling on travel agencies, in person and by telephone, especially in areas
identified as having high levels of income. A select, edited list has been prepared for us by a
high-profiled, much-loved and respected, travel professional in New York City. Her stamp-of-
approval, gained at the Las Vegas Luxury Travel Expo held in December 2000, has opened
many doors. PTG will collaborate with up-scale travel agencies in joint promotions. For
example, we will co-sponsor a select mailing in Pittsburgh to high-net-worth individuals who
have been identified as interested in luxury travel.

PTG will co-host a kick-off cocktail party with an important agency as they launch their new
website. One hundred top local CEO's, clients of this agency, will be invited.

PTG is working with a Virginia agency and an important museum curator and lecturer to
customize an itinerary emphasizing architectural aspects of European cities for interested
museum members. PTG may develop an affiliation with the Great Books Program of the
University of Chicago, initially in Westchester County, New York. Members have expressed an
interest in having PTG tailor travel itineraries highlighting points of specific literary interest. An
offer has been made to link our website with that of the Great Books program as well.

PTG will participate in national and regional trade shows. The next one on the calendar is the
2001 Alliance of Westchester Travel Agencies (AWTA) to be held in Tarrytown, New York, April
2, 2001. It draws more than 400 owners, corporate managers and travel agents from

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Westchester and Rockland counties in New York, Connecticut and other surrounding areas.

Two nationally important trade shows held annually are the Luxury Travel Expo (LTE) in Las
Vegas and the Incentive Travel Marketing Expo (ITME) in Chicago. Both are worthwhile. We
will attend and exhibit.

Our website will be a very important avenue for reaching prospective clients not reached in
other ways. Casually speaking, "It's a way to put more feet on the street!" It is also an ideal
location to introduce tie-in products and services. For example, if we were to believe that a
particular Tumi piece of luggage was ideal, we might seek an affiliation with them and create a
link on our website. Additionally, if we created a reading list, we might profitably seek a tie-in
with one of the on-line book sellers such as Amazon.com.

Another marketing program contemplated is the publication of a chatty newsletter, perhaps

distributed quarterly. Its purpose would be to increase customer contact and serve as a vehicle
for exemplifying our dedicated, personal attention. We could also highlight new Journeys,
interesting travel tidbits, etc., etc. through this means.

Personal selling will also occur utilizing the extended networks of everyone affiliated with
Panache Travel Group.

5.3.4 Marketing Programs

Direct marketing methods may include the following:

• Advertising Specialties. Items, specifically, cotton T-shirts printed with Panache

Journeys & (destination), to be given to Panache Travel Group clients.
• E-Mail Mailings. Regular or infrequent mailings to lists with updated information and
special offers.
• Direct Mail. Brochures, newsletters.
• Sampling: Occasionally a discounted journey may be offered as a "trade-in-kind" to a
visible and vocal trend-setter who is otherwise unable to afford a Panache Journey.
Clear expectations would be established for what we would receive in exchange.

Informal Marketing/Networking. Activities such as joining organizations, public speaking, or

attending conferences will be explored. For example, an invitation has been extended to one of
the founders of PTG for membership in the "DOM professionals," club a charitable organization
for women engaged in the sale and or promotion of passenger transportation and travel in
New York City. Its membership is a who's who of the industry and is a valuable networking
organization.

Customer-Based Marketing may include the following:

• Emphasizing repeat sales by clients who have taken one Panache Journey.
• Exploring add-on sales to increase the total revenue per client through the sale of extra
products or services, such as additional, unescorted, trip planned through Panache
Services which might follow a Panache Journey or a domestic trip, business or leisure.
• Add-on sales facilitated by links to our website.
• Strategic Partnerships may include cooperative advertising, distribution agreements
and bundling.
• Special Offers and Promotions may include increased commissions or limited-time-only
offers to PTG representatives or travel agents for seasonal promotions.

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5.4 Sales Strategy

Panache Travel Group will sell the benefits of the services it promotes and the luxury tours it
offers. PTG will provide clients with all the arrangements which they can foresee, as well as
many they would not have contemplated. Our concern is not to maximize profits on any
individual sale, but to satisfy the client. We are confident that doing so will reduce costs and
increase profits in the long run. It is less expensive to maintain a relationship than it is to
create a new one. At PTG, we believe in the value of the travel we sell and we are confident
that we can satisfy the seasoned traveler and the newcomer as well. Sales projections are
detailed in the Yearly Sales chart in topic 1.1 Objectives.

5.4.1 Sales Forecast

Detailed projections are located in the sales chart and table below. Panache Travel Group
expects sales to double in the first three years of operation. We believe this is a conservative
estimate, given the nature of the vast market of potential clients and the market niche of
Panache Journeys.

Sales Monthly (Planned)

$80,000

$70,000

$60,000

$50,000

$40,000 Journeys
Services
$30,000

$20,000

$10,000

$0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Table: Sales Forecast (Planned)

Sales Forecast
Sales 2001 2002 2003
Journeys $310,000 $900,000 $2,700,000
Services $190,000 $600,000 $1,800,000
Total Sales $500,000 $1,500,000 $4,500,000

Direct Cost of Sales 2001 2002 2003

Journeys $202,800 $688,500 $2,025,000
Services $144,000 $534,000 $1,584,000
Subtotal Direct Cost of Sales $346,800 $1,222,500 $3,609,000

5.4.2 Sales Programs

Sales programs will include sales awards for the highest grossing sales representative and
customer service awards for those employees who best exemplify Panache Travel Group's
commitment to clients. On-site sales, telephone sales, on-line sales, off-site sales and third-
party sales will all be closely correlated with marketing promotions. Aspects of the sales
processes, which may include training, cold-calling, leads, productivity, order-fulfillment,
measurable and attainable goal-setting and follow-up efforts, will all be evaluated and clearly
described.

5.5 Strategic Alliances

Strategic alliances for promotions will be developed with travel agents, corporations, civic
groups and non-profit organizations. Some of these alliances have been established by
Panache Journeys and will continue and be expanded by Panache Travel Group.

6.0 Management Summary

The initial management team depends on the founders of Panache Travel Group and the
current employees of Barkley Roberts Travel. George Raymond will act as General Manager.
As PTG grows, a board of directors will be formed and additional employees will be added in
support, sales, field and marketing.

6.1 Organizational Structure

Panache Travel Group will begin operations with 4 full-time positions and employ independent
contractors where necessary for sales and field operations. It will use the service of the
certified public accounting firm of Terry Price & Wunderli for payroll, taxes, and accounting.
The positions are as follows.

General Manager, LC Partner and President: George Raymond

Marketing Director, LC Partner and Vice President: Dominque Pascal

Travel Director, LC Partner and Vice President: Alica Marques

Office Manager and 2nd Travel Agent: Suzy Brown

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6.2 Management Team

General Manager and Development Director

George Raymond, 47, B.A. History, M.A. Comparative Literature, University of California,
PhD.Comparative Literature, University of Utah. Seven years as Adjunct Professor of French
and Comparative Literature at the University of Utah. A life-long world traveler and
sophisticated bon vivant who speaks French fluently and can make himself understood in
myriad other languages. So well-traveled there isn't a silver/gold/platinum metal precious
enough to indicate the millions of frequent-flyer air miles he has flown around the world.

Marketing and Sales Director

Dominque Pascal 48, B.S. History, English, Yale University. Twenty-five years of experience
with Morgan Stanley & Co., Inc., Junior League of Westchester, and personal family offices of
financiers Willam Dupont Jr., and marketing director of Deluxe World Tours. Mother of an 3
adult sons, an accomplished cook and an avid reader, she has lived in New York for over thirty
years and led many lives.

Travel Director

Alica Marques, 39. Twenty years experience in the travel business, including two years as
managing partner of Barkley Roberts Travel. With extensive travel experience she has first-
hand knowledge of many locations. An expert on CRS and other travel-related computer
applications, Alica has many contacts in the industry, knowledge of critical daily operations,
and speaks Spanish.

Office Manager and Travel Agent

Suzy Brown, 26. Five years experience in travel, including her work as the current office
manager of Barkley Roberts Travel. Not only familiar with the CRS system, she is a wizard
with TRAMS, a back-office accounting program designed specifically for the travel business.

6.3 Personnel Plan

The personnel plan of Panache Travel Group depicts anticipated head count for the start-up
year. The following table provides more detailed information. PTG anticipates the need to
increase personnel in the first 2-3 years, but will need to significantly increase independent
contractors for sales reps and tour guides, who will be paid on a commission basis.

*Positions marked with an asterisk, in addition to their base salaries, also receive commission
from sales and hosting tours. The cost of paying these commissions is built into the cost of the
sale.

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Table: Personnel (Planned)

Personnel Plan
2001 2002 2003
President and Development Dir. * $14,000 $25,000 $40,000
Marketing & Advertising Dir. * $14,000 $20,000 $35,000
Office Manager * $14,000 $20,000 $35,000
Accounting $3,500 $9,000 $12,000
Travel Dir. * $7,000 $13,000 $14,000
Travel Agent $0 $0 $0
Sales Reps. $0 $0 $0
Tour Guides $0 $0 $0
Additional Office Support $0 $0 $13,000
Total Payroll $52,500 $87,000 $149,000

Total Headcount 10 14 20
Payroll Burden $2,625 $4,350 $7,450
Total Payroll Expenditures $55,125 $91,350 $156,450

7.0 Financial Plan

The financial plan of Panache Travel Group is detailed in the following sections. Preliminary
estimates suggest that PTG will experience rapid growth and will increase in gross margin and
sales volume. This is partly due to the vast market, but will be facilitated by increased
marketing. Income estimates are based, in part, on anticipated revenues from accounts and
clients that are secured by PTG prior to its acquisition of both Barkley Roberts Travel and
Panache European Journeys. PTG will need sufficient cash to allow for a possible negative cash
flow during start-up. It will also need investment to acquire the assets and liabilities of Barkley
Roberts Travel and Panache European Journeys. Thus, the overall financial plan presents a
conservative, but realistic, depiction of the financial position of PTG.

7.1 Important Assumptions

Panache Travel Group assumes the following:

1. Market growth projections for the travel industry and for luxury travel are accurate.
2. National economic conditions, which are favorable to the travel industry, will not
experience significant decline in the next three years.
3. International conditions will remain favorable for service providers and PTG will be able
to maintain those relationships.

7.2 Key Financial Indicators

The following chart indicates key financial indicators for the first three years for Panache Travel
Group. Growth is expected in sales and a proportional increase in operating expenses during
expansion.

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 Panache Travel Group

Benchmarks (Planned)

6
2001
5
2002
4
2003
3

0
Sales Gross OpEx

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7.3 Projected Profit and Loss

The profit picture of Panache Travel Group improves as operations move into the second year.
PTG anticipates improving its profitability dramatically by 2003. The annual estimates are
included in the table below.

Table: Profit and Loss (Planned)

Pro Forma Profit and Loss

2001 2002 2003
Sales $500,000 $1,500,000 $4,500,000
Direct Cost of Sales $346,800 $1,222,500 $3,609,000
Other $0 $0 $0
------------ ------------ ------------
Total Cost of Sales $346,800 $1,222,500 $3,609,000
Gross Margin $153,200 $277,500 $891,000
Gross Margin % 30.64% 18.50% 19.80%
Operating Expenses:
Marketing $7,000 $25,000 $50,000
Development $4,000 $12,000 $24,000
Miscellaneous $0 $0 $0
Payroll Expense $52,500 $87,000 $149,000
Payroll Burden $2,625 $4,350 $7,450
Depreciation $0 $0 $0
Leased Equipment $0 $0 $0
Utilities $875 $1,574 $1,653
Insurance $700 $1,200 $1,200
Rent $2,100 $3,600 $3,600
FedEx/Mailing $350 $800 $1,000
Office Supplies $350 $800 $1,000
------------ ------------ ------------
Total Operating Expenses $70,500 $136,324 $238,903
Profit Before Interest and Taxes $82,700 $141,176 $652,097
Interest Expense Short-term $110 $110 $110
Interest Expense Long-term $0 $0 $0
Taxes Incurred $20,648 $35,267 $162,997
Extraordinary Items $0 $0 $0
Net Profit $61,943 $105,800 $488,990
Net Profit/Sales 12.39% 7.05% 10.87%

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7.4 Projected Cash Flow

Cash flow projections are critical to our success. The monthly cash flow for 2001 is shown in
the illustration, with one bar representing the cash flow per month and the other representing
the monthly balance. The annual cash flow figures are included here in the following table.

Cash (Planned)

$250,000

$200,000

$150,000

$100,000 Net Cash Flow

Cash Balance
$50,000

$0

($50,000)
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

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Table: Cash Flow (Planned)

Pro Forma Cash Flow 2001 2002 2003

Cash Received
Cash from Operations:
Cash Sales $500,000 $1,500,000 $4,500,000
From Receivables $0 $0 $0
Subtotal Cash from Operations $500,000 $1,500,000 $4,500,000

Additional Cash Received

Extraordinary Items $0 $0 $0
Sales Tax, VAT, HST/GST Received $0 $0 $0
New Current Borrowing $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0
New Long-term Liabilities $0 $0 $0
Sales of other Short-term Assets $0 $0 $0
Sales of Long-term Assets $0 $0 $0
Capital Input $0 $0 $0
Subtotal Cash Received $500,000 $1,500,000 $4,500,000

Expenditures 2001 2002 2003

Expenditures from Operations:
Cash Spent on Costs and Expenses $38,293 $130,285 $385,456
Wages, Salaries, Payroll Taxes, etc. $55,125 $91,350 $156,450
Payment of Accounts Payable $307,071 $1,082,315 $3,218,764
Subtotal Spent on Operations $400,489 $1,303,950 $3,760,670

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0
Purchase Other Short-term Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Dividends $0 $0 $0
Adjustment for Assets Purchased on Credit $0 $0 $0
Subtotal Cash Spent $400,489 $1,303,950 $3,760,670

Net Cash Flow $99,511 $196,050 $739,330

Cash Balance $199,511 $395,560 $1,134,890

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7.5 Projected Balance Sheet

The balance sheet indicates sustained and planned growth. Net worth improves considerably in
years two and three and will provide Panache Travel Group with a strong financial position.

Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

Assets
Short-term Assets 2001 2002 2003
Cash $199,511 $395,560 $1,134,890
Other Short-term Assets $0 $0 $0
Total Short-term Assets $199,511 $395,560 $1,134,890
Long-term Assets
Long-term Assets $0 $0 $0
Accumulated Depreciation $0 $0 $0
Total Long-term Assets $0 $0 $0
Total Assets $199,511 $395,560 $1,134,890

Liabilities and Capital

2001 2002 2003
Accounts Payable $37,568 $127,818 $378,158
Current Borrowing $1,100 $1,100 $1,100
Other Short-term Liabilities $0 $0 $0
Subtotal Short-term Liabilities $38,668 $128,918 $379,258

Long-term Liabilities $0 $0 $0
Total Liabilities $38,668 $128,918 $379,258

Paid-in Capital $100,000 $100,000 $100,000

Retained Earnings ($1,100) $60,843 $166,642
Earnings $61,943 $105,800 $488,990
Total Capital $160,843 $266,642 $755,632
Total Liabilities and Capital $199,511 $395,560 $1,134,890
Net Worth $160,843 $266,642 $755,632

7.6 Business Ratios

The following table shows the projected business ratios. Panache Travel Group expects to
maintain healthy ratios for profitability, risk and return. Industry Profile ratios are also shown,
based on Standard Industry Classification (SIC) code 4724, Travel Agencies.

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Table: Ratios (Planned)

Ratio Analysis
2001 2002 2003 Industry Profile
Sales Growth 0.00% 200.00% 200.00% 4.00%

Percent of Total Assets

Accounts Receivable 0.00% 0.00% 0.00% 25.20%
Inventory 0.00% 0.00% 0.00% 0.70%
Other Short-term Assets 0.00% 0.00% 0.00% 38.10%
Total Short-term Assets 100.00% 100.00% 100.00% 64.00%
Long-term Assets 0.00% 0.00% 0.00% 36.00%
Total Assets 100.00% 100.00% 100.00% 100.00%

Other Short-term Liabilities 0.00% 0.00% 0.00% 39.60%

Subtotal Short-term Liabilities 19.38% 32.59% 33.42% 34.00%
Long-term Liabilities 0.00% 0.00% 0.00% 16.30%
Total Liabilities 19.38% 32.59% 33.42% 50.30%
Net Worth 80.62% 67.41% 66.58% 49.70%

Percent of Sales
Sales 100.00% 100.00% 100.00% 100.00%
Gross Margin 30.64% 18.50% 19.80% 38.30%
Selling, General & Administrative Expenses 18.25% 11.45% 8.93% 27.50%
Advertising Expenses 1.40% 1.67% 1.11% 0.40%
Profit Before Interest and Taxes 16.54% 9.41% 14.49% 1.30%

Main Ratios
Current 5.16 3.07 2.99 1.44
Quick 5.16 3.07 2.99 1.13
Total Debt to Total Assets 19.38% 32.59% 33.42% 55.90%
Pre-tax Return on Net Worth 51.49% 52.99% 86.31% 3.20%
Pre-tax Return on Assets 41.51% 35.72% 57.47% 7.20%

Business Vitality Profile 2001 2002 2003 Industry

Sales per Employee $50,000 $107,143 $225,000 $0
Survival Rate 0.00%

Additional Ratios 2001 2002 2003

Net Profit Margin 12.39% 7.05% 10.87% n.a
Return on Equity 38.51% 39.68% 64.71% n.a

Activity Ratios
Accounts Receivable Turnover 0.00 0.00 0.00 n.a
Collection Days 0 0 0 n.a
Inventory Turnover 0.00 0.00 0.00 n.a
Accounts Payable Turnover 9.17 9.17 9.17 n.a
Total Asset Turnover 2.51 3.79 3.97 n.a

Debt Ratios
Debt to Net Worth 0.24 0.48 0.50 n.a
Short-term Liab. to Liab. 1.00 1.00 1.00 n.a

Liquidity Ratios
Net Working Capital $160,843 $266,642 $755,632 n.a
Interest Coverage 751.82 1283.42 5928.15 n.a

Additional Ratios
Assets to Sales 0.40 0.26 0.25 n.a
Current Debt/Total Assets 19% 33% 33% n.a
Acid Test 5.16 3.07 2.99 n.a
Sales/Net Worth 3.11 5.63 5.96 n.a
Dividend Payout $0 0.00 0.00 n.a

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 Appendix

Appendix Table: Sales Forecast (Planned)

Sales Forecast
Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Journeys $0 $0 $0 $0 $0 $50,000 $50,000 $50,000 $50,000 $50,000 $30,000 $30,000
Services $0 $0 $0 $0 $0 $30,000 $30,000 $30,000 $30,000 $30,000 $20,000 $20,000
Total Sales $0 $0 $0 $0 $0 $80,000 $80,000 $80,000 $80,000 $80,000 $50,000 $50,000

Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Journeys $0 $0 $0 $0 $0 $0 $39,000 $39,000 $39,000 $39,000 $23,400 $23,400
Services $0 $0 $0 $0 $0 $0 $27,000 $27,000 $27,000 $27,000 $18,000 $18,000
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $66,000 $66,000 $66,000 $66,000 $41,400 $41,400

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 Appendix

Appendix Table: Personnel (Planned)

Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
President and Development Dir. * $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Marketing & Advertising Dir. * $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Office Manager * $0 $0 $0 $0 $0 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Accounting $0 $0 $0 $0 $0 $500 $500 $500 $500 $500 $500 $500
Travel Dir. * $0 $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Travel Agent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Reps. $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Tour Guides $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Additional Office Support $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Payroll $0 $0 $0 $0 $0 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500

Total Headcount 10 10 10 10 12 14 14 14 12 10 10 10
Payroll Burden $0 $0 $0 $0 $0 $375 $375 $375 $375 $375 $375 $375
Total Payroll Expenditures $0 $0 $0 $0 $0 $7,875 $7,875 $7,875 $7,875 $7,875 $7,875 $7,875

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 Appendix

Appendix Table: Profit and Loss (Planned)

Pro Forma Profit and Loss

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $0 $0 $0 $0 $0 $80,000 $80,000 $80,000 $80,000 $80,000 $50,000 $50,000
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $66,000 $66,000 $66,000 $66,000 $41,400 $41,400
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Cost of Sales $0 $0 $0 $0 $0 $0 $66,000 $66,000 $66,000 $66,000 $41,400 $41,400
Gross Margin $0 $0 $0 $0 $0 $80,000 $14,000 $14,000 $14,000 $14,000 $8,600 $8,600
Gross Margin % 0.00% 0.00% 0.00% 0.00% 0.00% 100.00% 17.50% 17.50% 17.50% 17.50% 17.20% 17.20%
Operating Expenses:
Marketing $0 $0 $0 $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000
Development $0 $0 $0 $0 $0 $1,000 $500 $500 $500 $500 $500 $500
Miscellaneous $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Expense $0 $0 $0 $0 $0 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500 $7,500
Payroll Burden $0 $0 $0 $0 $0 $375 $375 $375 $375 $375 $375 $375
Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $0 $0 $0 $0 $0 $125 $125 $125 $125 $125 $125 $125
Insurance $0 $0 $0 $0 $0 $100 $100 $100 $100 $100 $100 $100
Rent $0 $0 $0 $0 $0 $300 $300 $300 $300 $300 $300 $300
FedEx/Mailing $0 $0 $0 $0 $0 $50 $50 $50 $50 $50 $50 $50
Office Supplies $0 $0 $0 $0 $0 $50 $50 $50 $50 $50 $50 $50
------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------ ------------
Total Operating Expenses $0 $0 $0 $0 $0 $10,500 $10,000 $10,000 $10,000 $10,000 $10,000 $10,000
Profit Before Interest and Taxes $0 $0 $0 $0 $0 $69,500 $4,000 $4,000 $4,000 $4,000 ($1,400) ($1,400)
Interest Expense Short-term $9 $9 $9 $9 $9 $9 $9 $9 $9 $9 $9 $9
Interest Expense Long-term $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($2) ($2) ($2) ($2) ($2) $17,373 $998 $998 $998 $998 ($352) ($352)
Extraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Net Profit ($7) ($7) ($7) ($7) ($7) $52,118 $2,993 $2,993 $2,993 $2,993 ($1,057) ($1,057)
Net Profit/Sales 0.00% 0.00% 0.00% 0.00% 0.00% 65.15% 3.74% 3.74% 3.74% 3.74% -2.11% -2.11%

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 Appendix

Appendix Table: Cash Flow (Planned)

Pro Forma Cash Flow Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Cash Received
Cash from Operations:
Cash Sales $0 $0 $0 $0 $0 $80,000 $80,000 $80,000 $80,000 $80,000 $50,000 $50,000
From Receivables $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash from Operations $0 $0 $0 $0 $0 $80,000 $80,000 $80,000 $80,000 $80,000 $50,000 $50,000

Additional Cash Received

Extraordinary Items $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Capital Input $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $0 $0 $0 $80,000 $80,000 $80,000 $80,000 $80,000 $50,000 $50,000

Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures from Operations:
Cash Spent on Costs and Expenses $1 $1 $1 $1 $1 $2,001 $6,913 $6,913 $6,913 $6,913 $4,318 $4,318
Wages, Salaries, Payroll Taxes, etc. $0 $0 $0 $0 $0 $7,875 $7,875 $7,875 $7,875 $7,875 $7,875 $7,875
Payment of Accounts Payable $0 $6 $6 $6 $6 $606 $19,480 $62,219 $62,219 $62,219 $61,440 $38,864
Subtotal Spent on Operations $1 $7 $7 $7 $7 $10,482 $34,268 $77,007 $77,007 $77,007 $73,633 $51,057

Additional Cash Spent

Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-term Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Adjustment for Assets Purchased on Credit $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $1 $7 $7 $7 $7 $10,482 $34,268 $77,007 $77,007 $77,007 $73,633 $51,057

Net Cash Flow ($1) ($7) ($7) ($7) ($7) $69,518 $45,732 $2,993 $2,993 $2,993 ($23,633) ($1,057)
Cash Balance $99,999 $99,992 $99,985 $99,978 $99,972 $169,490 $215,222 $218,215 $221,208 $224,201 $200,568 $199,511

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 Appendix

Appendix Table: Balance Sheet (Planned)

Pro Forma Balance Sheet

Assets
Short-term Assets Starting Balances Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash $100,000 $99,999 $99,992 $99,985 $99,978 $99,972 $169,490 $215,222 $218,215 $221,208 $224,201 $200,568 $199,511
Other Short-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Short-term Assets $100,000 $99,999 $99,992 $99,985 $99,978 $99,972 $169,490 $215,222 $218,215 $221,208 $224,201 $200,568 $199,511
Long-term Assets
Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Accumulated Depreciation $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Assets $100,000 $99,999 $99,992 $99,985 $99,978 $99,972 $169,490 $215,222 $218,215 $221,208 $224,201 $200,568 $199,511

Liabilities and Capital

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Accounts Payable $0 $6 $6 $6 $6 $6 $17,406 $60,145 $60,145 $60,145 $60,145 $37,568 $37,568
Current Borrowing $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100 $1,100
Other Short-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Short-term Liabilities $1,100 $1,106 $1,106 $1,106 $1,106 $1,106 $18,506 $61,245 $61,245 $61,245 $61,245 $38,668 $38,668

Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $1,100 $1,106 $1,106 $1,106 $1,106 $1,106 $18,506 $61,245 $61,245 $61,245 $61,245 $38,668 $38,668

Paid-in Capital $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000 $100,000
Retained Earnings ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100) ($1,100)
Earnings $0 ($7) ($14) ($21) ($28) ($34) $52,084 $55,077 $58,070 $61,063 $64,056 $62,999 $61,943
Total Capital $98,900 $98,893 $98,886 $98,879 $98,873 $98,866 $150,984 $153,977 $156,970 $159,963 $162,956 $161,899 $160,843
Total Liabilities and Capital $100,000 $99,999 $99,992 $99,985 $99,978 $99,972 $169,490 $215,222 $218,215 $221,208 $224,201 $200,568 $199,511
Net Worth $98,900 $98,893 $98,886 $98,879 $98,873 $98,866 $150,984 $153,977 $156,970 $159,963 $162,956 $161,899 $160,843

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