Casa Domina Retirement Villa

Business Plan

Small Business Management 42.360

Submitted to Prof. J.Callahan and Prof. B.Firestone

Carleton University

Michele Cooper 261536

Sara Domina 195662
Tina Terpstra 233696

December 8, 2000
 Casa Domina Retirement
Villa
TABLE OF CONTENTS
I. Summary………………………………………………1

II. Company Description…………………………………2

III. Industry/Market Analysis………………………….…8

IV. The Target Market……………………………………9

V. Competition and Competitive Advantages…………..12

VI. Marketing Plan ……………………………………….16

VII. Operations Plan……………………………………….18

VIII. Implementation Schedule…………………………….19

IX. Critical Risks and Assumptions…………..20

X. Long Term Development and Exit Plan… 22

XI. Financial Data and Projections……………………….23

XII. Appendix A:
Pro Forma Cash Flow Statement (quarterly)
Pro Forma Cash Flow (monthly)
Pro Forma Income Statement
Break Even Analysis
Pro Forma Balance Sheet
Bank Loan
 Casa Domina Retirement Villa
I. Summary

As the population of seniors continues to grow at an exponential rate, the

retirement residence market presents unlimited opportunities. Casa Domina has noticed

this opportunity and has decided to focus on a niche in this market. The demand today for

a luxury retirement residence is so great that these residences continuously have waiting

lists. Once established, their advertising becomes almost obsolete because they constantly

have individuals waiting for available rooms. There is a lack of luxury retirement living

within Norwood and the surrounding areas. With a strong marketing plan, sound

implementation schedule and a focus on long term development as well as customer care,

Casa Domina is in a viable position to not only provide a service to the surrounding

communities but to make a profit while doing so.

The unique aspect of Casa Domina is its size, with only 15 residents, a cozy

environment provides the residents with a sense of being part of a family. Not only will

Casa Domina be a luxury residence, but its location is the key. Casa Domina Retirement

Villa, is located on over 100 acres of land which offers its residents a peaceful retreat to a

country haven. Forests, streams and fields present a quiet backdrop to elite country living

at Casa Domina. Each resident is catered to and treated like a member of a unique family,

for life has just begun at Casa Domina.

1
Key Elements

The following key elements will establish Casa Domina as a profitable retirement

residence in the Peterborough market:

 Location: quiet, serene country living, close to several towns

 Individual attention and treatment due to only 15 residents

 24 hour superior care, owner is Registered Nurse

 All the luxuries of life are provided

 Residents can furnish their own room, allowing them to feel at home

 Daily activities and programs with an emphasis on living life to the fullest

II. Company Description

Casa Domina Retirement Villa, will be located just minutes from Norwood, Ontario on

the Terpstra’s 140 acre property and it will be owned and operated by George and Linda

Terpstra (705) 639-5527, via e-mail casadomina@hotmail.com. Operating as a

corporation this small luxury villa will specialize in offering high quality service to each

of its 15 residents.

2
 The Owner’s contributed capital in the amount of $200,000 will be contributed to

the start up costs. A grant from the Government of Canada in the amount of $12,000

will also finance start up costs. A bank loan in the amount of $611,000, has been

arranged with Mr. Jim Marshall of the Bank of Nova Scotia to finance 100% of the

renovation expenses. The loan will be used during the first year of operations with a

repayment schedule for 15 years.

Mr. & Mrs. Terpstra will be the co-owners and managers of Casa Domina. They

will be bringing 25 years of small business management experience to Casa Domina as

they have just sold their business Terpstra Broilers Inc. Mr. Terpstra will be able to do all

maintenance activities; snow clearing, lawn mowing, small household repairs, etc. Mrs.

Terpstra will be able to handle all the accounting for Casa Domina, as she has had

extensive experience in this area with Terpstra Broilers Inc.

Casa Domina will be hiring the following personnel:

- 3 aides for housekeeping and nursing care

- 1 Activity Coordinator

- 3 Chefs

Service

The service that the Terpstra’s propose to offer is a private senior’s residence. Casa

Domina would be a small facility housing no more than 15 residents at one time. Each

resident would enjoy his or her own luxury suite equipped with a large private bathroom,

bedroom and sitting area. All meals and snacks would be made fresh daily by the

3
gourmet chef. Casa Domina housekeeping staff would take care of all cleaning,

maintenance and laundry duties leaving residents free to enjoy all that our great facility

has to offer. From relaxing by the fire, lounging by the pool, surfing the net and strolling

on our extensive nature trails, Casa Domina has something to offer all of its residents.

The in-house activity coordinator will organize weekly activities and outings for residents

desiring to participate. A key feature of Casa Domina would be its small size, which

would create a home-like atmosphere and permit staff to cater to its resident’s needs. On

a wooded hundred-acre lot, Casa Domina’s location allows residents to enjoy the

tranquility of nature while remaining close to family friends and the center of town.

Facilities

Situated on a 140-acre country property, Casa Domina presents a unique exclusive

getaway for seniors. The property boasts rolling hills, forests with nature trails, three

duck ponds and a picturesque view of the sunset. Country living, fresh air and enjoying

life are accentuated at Casa Domina. Casa Domina is located just 3 miles north of all

shops and attractions of the friendly town of Norwood.

Healthy Living and Nursing Care

Mrs.. Terpstra is a Registered Nurse and will be available for 24 hour nursing care.

Three aides have been hired to ensure that residents are comfortable, healthy and

enjoying life at Casa Domina. The nearest Doctor is a short five-minute drive from Casa

Domina and the nearest hospital 20 minutes. Each room is equipped with an electronic

call device to
 4

notify the aides and an alarm system will notify Emergency Medical Services of any

problem at Casa Domina.

Each resident is able to choose from 2 warm meal options at each dinner. Emphasis is

placed on healthy-eating, residents are also encouraged to cook their favorite meal and

offer suggestions to the chefs. Dietary restrictions are catered to and dinner theme nights

make dining enjoyable.

Exercise is also an important part of living at Casa Domina. Residents are encouraged to

enjoy the country air while walking, biking or swimming in the pool. Croquet, lawn darts

and horseshoes are also available for their gaming pleasure.

The Suites

Casa Domina is a farmhouse that has been reconstructed to accommodate 15 special

members. Each family member of Casa Domina is welcome to furnish their room to their

liking. Individual controlled heating, alarm systems and private 3 piece bathrooms are

among the many features of each suite at Casa Domina. Soft, plush, wall-to-wall carpet,

bright windows overlooking green fields and a flare of Italian décor compliment each

suite.

The Family Room

The size of Casa Domina allows each resident to feel like part of our family. The family

room is the center of the house. Quiet reading by the fireplace, a game of checkers, a
melody on the piano and movie night every Friday night are among some of the pleasures

that can be found in the family room. 5

The Dining Room

A majestic antique Italian dinning table is the center of this fantastic room. To increase

the feeling of family, the dining room is large enough to hold all 15 members of Casa

Domina at one table. Whether it be, Italian Feast night, murder mystery dinner night or a

fun Sunday brunch, the dining room creates an atmosphere of warmth and invites many

tales to be told over deliciously prepared meals.

The Kitchen

The kitchen has all the amenities of a modern kitchen and is open to Casa Domina’s

members to indulge their baking and cooking skills when they please.

The Activity Room

This large room contains tables and chairs for developing arts and crafts and even a small

stage for local performers who come to entertain the members of Casa Domina. The

activity room opens up onto the pool area which is available for use 4 months out of the

year for avid swimmers.

The Tea Room

The elegant tea-room is a bright solarium with access to the patio and veranda. Whether

sipping English tea on a warm summers night or relaxing in the fresh country air, the tea-

room and patio offer a refreshing atmosphere. 6

Laundry Services

A weekly or bi-weekly laundry service is available at Casa Domina for all residents.

Housekeeping

Housekeeping is done on a daily basis.

Activities

Daily activities are arranged by Casa Domina’s activity coordinator. These include arts

and crafts, games, bingo nights, daily exercises, cooking classes and a book club.

Two weekly trips into Norwood are provided as well as transportation to any church

service on Sundays. A weekly trip to Peterborough is offered for shopping, visits to

museums, flea markets and area attractions. Two monthly excursions to local events are

also planned. This may be the Norwood Fair, the Peterborough festival of lights, Casino

Ramma or boat excursions on the Trent Severn Waterway. Local entertainers such as the

Norwood Public School choir, the Norwood High School theatre group and church choirs

will be invited to entertain Casa Domina’s members. Members are also invited to help the

owner with his small hobby farm and are welcome to grow their own private gardens in

the spacious fields of Casa Domina.

 7

III Industry/Market Analysis

Fact Sheet (Statistics Canada):

* Canadian average income after tax (1998)-Elderly families: $ 36,051

* Canadian average income after tax (1998)-Elderly male: $ 22,299
* Canadian average income after tax (1998)-Elderly female: $ 18,095
* Peterborough population (1997): 127,608
* Peterborough population age 65-74 (1997): 12,295
* Peterborough population age 75+ (1997): 9,145
* Amount of Assets Canadians held in trusteed pension funds (1999): over $550 Billion

Canada’s population is aging and there exists in the market a need for senior’s

residences. It is common for older men and women to reach an age where the

responsibilities of maintaining a household become overwhelming. When faced with this

situation, seniors have two options. They can seek help to come into their own homes or

move into a senior’s residence. Moving to a large senior’s residence is a difficult

decision to make. In today’s market, most seniors residences house a large number of

people, serve cafeteria-style food and are located out of its resident’s communities. Thus

a move to such a facility can be in many cases stressful and depressing. The other

alternative, remaining in one’s own home can be equally as harmful to a person’s health.

The aid that most seniors receive in their own home is in many cases insufficient. In

many cases, seniors in these types of situations, rarely leave their homes for fear of

falling, fatigue and due to difficulties finding adequate transportation. For these reasons,

the decision for a senior in this type of situation, to remain at home can be equally as
stressful and depressing. It is due to situations such as these that the Terpstra’s feel that

Casa Domina is an ideal solution. 8

After researching the retirement industry, Casa Domina has decided to become a

member of ORCA (Ontario Residential Care Association). The majority of retirement

residences in the Peterborough area are members of this association and Casa Domina

feels that by joining they will be recognized as a high quality retirement residence. When

elderly people research retirement residences, they look for ORCA members because this

is a standard that proves they meet the highest professional residential care standards in

the province. As a member of ORCA, Casa Domina will be required to pay a monthly

membership fee of $25.00 per bed per month. Once a member Casa Domina will be able

to display the Association Logo on all promotional material.

IV The Target Market

Casa Domina will be targeting elderly individuals in the Peterborough and

surrounding areas who are looking for a high quality, luxury retirement residence.

Consumer Profile:

* Man or Woman age 60 +

* High Income

* Does not require constant nursing care (must be able to walk, get out of bed, etc.)

* Active individuals who enjoy outings or simply pursuing current interests

* Individuals who do not want to/or cannot care for their own home any longer

* Individuals looking for companionship

* Individuals looking to relax and enjoy living in the country

 9

Geographically, Casa Domina is targeting the surrounding areas of Norwood

including Peterborough, Havelock, Campbelford, Hastings and Warkwarth. These cities

were chosen due to the fact that they are all within a 30 minute driving distance from

Norwood, meaning that the families of residents will be able to visit them frequently.

Also, residents will be able to visit their home-town to shop and see old friends on a

weekly basis. These communities are known to be in cottage-country which, attracts a lot

of wealthy outsiders from cities such as Toronto, Barrie and Buffalo. Many vacationers

plan to retire in Peterborough and the surrounding areas. As well, within these areas,

there is no established private residence facility of the same size and quality as Casa

Domina.

Casa Domina has contacted two potential residents to ask them what they will be

looking for when they choose to move to a retirement home or nursing home. Mrs.

Doreen Perritt is a retired teacher, who lives in Peterborough and has an annual income of

$43,000 plus savings. Mrs. Vivian Wood is a retired bank Manager who lives in

Norwood and has an annual income of $52,000. When asked what would they be

looking for in a retirement facility they gave the following requirements:

• Would not pay higher than $4100 per month

• Must be extremely private and emphasis on personal care

• 24 hour nursing care

• Transportation must be provided and activities planned

• Freedom to do what they wanted

 • Quality, nutritious meals

• Clean facilities

• Friendly, helpful staff

• An atmosphere unlike other retirement homes and nursing homes

• Encourage family visits

Based on the conversations held with these potential clients, Casa Domina has

developed its strategy to provide quality, luxury care with a focus on enjoying living in

the countryside. They also realize that continued efforts must be undertaken in order to

understand their clients changing requirements and adapt the facility to each individual’s

requests.

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V. Competition and Competitive Advantages

The competition in Norwood and surrounding area for Casa Domina are listed below:

NAME LOCATION FEATURES PRICE NUMBER

OF
ROOMS
Mapleview Norwood - 3 meals per day -One bedroom: -60 rooms
- lounge, chapel, piano room, $1900 per month
planned activities 3 days per week -Two bedroom:
- laundry, housekeeping $1500 per month
-24 hour nursing care

Applewood Peterborough - 3 meals per day -Studio: -75 rooms

Manor -fireplace, patio, games room, $2100 per month
lounge area -One Bedroom:
-24 hour nursing care $2800 per month
-located downtown Peterborough
-hairdresser, activities coordinator,
recreational tours
-housekeeping, laundry
Empress Peterborough -3 home cooked meals per day -Studio: -110 rooms
Gardens -fireplace, patio, library room, $1900 per month
games room, tea room -one bedroom
-planned daily activities deluxe: $2550 per
-hairdresser twice a week month
-24 nursing care
-located downtown Peteborough,
close to shops
-housekeeping, laundry
-nurse call system
Princess Peterborough -tea room, fireplace, indoor atrium, -Studio: -133 rooms
Gardens bar, lounge, activities room $3000 per month
-activity director, recreational van, -one bedroom
craft room deluxe:
$4100 per month
Peterborough Peterborough -24 hour nursing care -Studio: $2100 per -73 rooms
Manor -tv room, lounge area, games month
room, patio -One bedroom:
-3 meals per day and 2 tea times $2700 per month
-located on river
-laundry, housekeeping

12
SWOT Analysis of Competition :

Strengths:

The strengths of the competition are as follows:

• Most are located downtown close to shops and activities

• 24 hour nursing care

• established history

• Prices are reasonable

Weaknesses:

The weaknesses of the competition are as follows:

• Large facilities

• No personal care

• Lack of family feeling

• Lack of open space and grounds

Opportunities:

The opportunities for the competition are as follows:

• Increased number in elderly presents an opportunity to expand

• Charge more per room as waiting lists arise

Threats:

The threats to the competition are as follows:

• As the population ages, more facilities will arise to compete for their business

• Competition from nursing homes, long term care facilities

13
Casa Domina SWOT Analysis:

Strengths:

Casa Domina’s strengths are considered the following:

• Small number of rooms, close knit feeling

• Personalized care for small number of patients

• Atmosphere is family like

• 140 acres for activities and fresh country air

• Catered to the upscale senior, unlike any other facility around

• Owner is Registered Nurse, constantly on facility

Weaknesses:

Casa Domina’s weaknesses are considered the following:

• Located out of town, have to drive to shops

• Difficult to increase number of occupants without loosing the close-knit family

feeling

• Can not purchase items in large bulk amounts

Opportunities:

The opportunities for Casa Domina are as follows:

• Capitalize on the upper class elderly who are want luxury services

• Provide a service to residents of local areas that is currently not available

• Expand franchises across Ontario, focusing on small knit retirement homes

14
Threats:

The threats for Casa Domina are as follows:

• Competition from new retirement homes

• Lack of history and experience running a retirement home

• Decrease in pension plans, retirement funds could lead to a lower income for the

elderly

Competitive Advantages:

Casa Domina feels that it has the following competitive advantages:

• Due to the size of the facility able to offer personalized care

• Own land, do not have to rent space

• Able to grow a lot of their own food

• Established members of the community with respectable reputation

• Emphasis on living life to the fullest

• Land available for expanding facilities

• No other facility exists in surrounding area with the same quality of luxury living

15
VI. Marketing Plan

Mission:

To provide top quality care and create an atmosphere of relaxation and comfort for

elderly people who want to enjoy living in a country setting

Objectives:

To receive the highest recognition for providing top quality living facilities for elderly

people.

Service Offering:

Casa Domina provides top quality, personal care for 15 elderly people at one time. 3

meals a day are provided, along with 2 tea breaks. Laundry, housekeeping and assistance

are provided. Activities and outings are also arranged.

Pricing:

Casa Domina’s pricing strategy to use market-skimming pricing. The price of $3500 per

month is slightly above most of their competitors. This price was set in relation to the

value of personalized care and villa country living, which will be emphasized at Casa

Domina. Consumers will associate the slightly higher price as an indication of high

quality and superior service.

16
Promotion:

Casa Domina will run ads in the local Norwood Register and Peterborough Examiner.

According to Mr. Bill Freeman of the Norwood Register, 1100 residents read the paper

weekly. According to Phil Tyson of the Peterborough Examiner, 76,500 residents of

Peterborough and surrounding areas read the paper. Marketing costs have been set at

$360.00 ($15 per week for 24 weeks) for the Norwood Register and $3,600 ($150 per

week for 24 weeks) for the Peterborough Examiner.

Local retirement homes have waiting lists and therefore there exists a demand for Casa

Domina’s services. As a result, promotion will not be extensive, but will convey the high

quality and services availble by choosing Casa Domina. Promotion will be carried out

during the last two quarters of the first year before the facility begins operations. After

this, Casa Domina feels that promotion will not be needed as extensively since it plans on

filling the 15 rooms for extended periods of time.

Probe:

Casa Domina will continue to monitor and assess the needs of its residents. There is a

strong commitment to understanding their client’s needs and fulfilling their every wish.

Casa Domina will adjust its services to the changing requirements of its residents.

17
VII. Operations

Casa Domina will be located near Norwood, Ontario on a 140-acre lot. Major renovations

will be necessary, as 15 new bedrooms complete with a bathroom each will be needed.

Other renovations include kitchen renovations to meet with commercial kitchen

standards. Casa Domina will open in September 2001.

Degree of control over price- Casa Domina’s monthly charge will remain stable, with a

growing elderly population, problems finding individuals who are willing to pay a high

price does not seem to present a problem.

Degree of control over costs- With regards to set-up costs, Casa Domina will have

limited control. Renovations often run into problems or unforeseen costs and thus Casa

Domina may end up having renovation costs much higher than expected. Once the

establishment is in full operation, Casa Domina will have more control over costs. On

average, monthly expenses will not change dramatically. Unforeseen costs, such as truck

repairs, house repairs, etc., can be expected and worked into the budgeting schedule.

Degree of control over wages- Casa Domina will be offering wages slightly above

average in hopes of a low turnover rate of employees, as Casa Domina employees will

also be members of this close knit-family.

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VIII Implementation Schedule

First Year:

• Application and approval for the rezoning of the land, as well as setting up the

corporation will be undertaken. A provincial license, building permit, commercial

permit, and entrance permit will be purchased.

• Within the first year of existence, Casa Domina plans to make $611,000 of

renovations to the existing house and property. These renovations include the

addition of 15 bedrooms and bathrooms, addition of a larger dining room,

tearoom, games room and extensive decorations. A second septic bed will also be

installed. The kitchen will be reformatted with industrial kitchen appliances and

the grounds walkways and trails will be upgraded. Office supplies, entertainment

and supplies for the facility will also be purchased.

• Advertising of the facility will also be undertaken during the last two quarters.

• Insurance will be purchased

• Employees will be hired and trained

Second Year

• First 15 residents of Casa Domina will move in

• Set up of personal gardens, programs and activities

• Purchase of van for transportation of residents

• Commence repaying of loan

• Feedback from residents on their requirements and living at Casa Domina

19
Third Year

• Continued operations

• Adapting to residents needs

• Changing activities and offering more trips

Fourth Year

• Continued operations

• Receiving continued feedback from residents

• Offering more activities and travel excursions

Fifth Year and Beyond

• Continued operations

• Possible expansion and building of recreation hall

IX. Critical Risks and Assumptions

Critical Risks

The critical risks for Casa Domina are seen as the following:

- Change of Government funded pension plans, reducing amount seniors receive

- Providing quality service all the time, living up to expectations

- Inflation rates decreasing value of seniors income

- Recession will impact willingness of seniors to spend money on luxurious living

20
 - Renovation plans must be completed on time

- Hiring quality staff who are committed and able to provide top quality care

- Ensuring safety of residents in facility

To address risks that are possible to project into the future, a sensitivity analysis was

performed to predict a possible increase or a possible decrease in demand for our

services. It was found that if Casa Domina experiences a 25% increase or a 25%

decrease in projected revenues it will still be cash flow positive in year 1. The risk of

unforeseen renovation costs is addressed through our loan. Although Casa Domina

requires only $450,000 for the planned renovations, we have planned for a loan of

$611,000 to cover any type of unforeseen cost in this area.

Assumptions for Financials

The business plan for Casa Domina is based on the following assumptions:

- Approval of commercial zoning

- Able to obtain all licenses

- Able to obtain financing

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X. Long Term Development and Exit Plan

Goals: Casa Domina Retirement Villa will offer its residents a comfortable lifestyle and

welcoming atmosphere. The market for this type of business is growing and Casa

Domina’s luxury residence will be widely accepted in this market. It is expected that

Casa Domina will have gained a respectable reputation in approximately 3-5 years and

throughout this time more and more activities will be available to its residents, as plans

for renovations of the two barns on sight will allow for new and exciting opportunities.

As Casa Domina grows, it will establish an image of a high quality, luxury retirement

residence.

Expansion/Alternatives: Once operations in Norwood have reached a comfortable

profit position, the owners of Casa Domina may look into expanding into other areas

outside of Peterborough. One possibility would be to license these new residences, which

would offer the same benefits and quality of the original Casa Domina. Having already

gained a highly respectable reputation, customers will be aware of what is being offered

and setting up operations would be easier for the new establishments.

Exit Plan: With the projected success of Casa Domina, the Terpstra’s hope to sell their

business in approximately 7-10 years. Currently the Terpstra’s are retired and are looking

to start a business, however in approximately 10 years time they do not want to have this

responsibility. A buy-out from a larger retirement residence, or simply selling the

business to a new owner are possibilities for the future. The Terpstra’s currently own

another piece of land in Lakefield, ON where they will eventually retire once Casa

Domina has been sold.

22
XI. Financial Data

Casa Domina will operate with a starting capital $ 212,005. Using conservative

estimates, Casa Domina will realize 630,000 per year starting in year 1 when our first

residents move in. In year two Casa Domina will have a positive cash flow and be

profitable by year 2. A complete financial summary is located in appendix A.

Financial Summary

A five-year profit and loss summary is found below. The equity investment will see a

compound return on investment of 15% for years two through five, year one is

disregarded due to the high costs of business set-up.

Year 2001 2002 2003 2004 2005

Net Profit ($83,419) $203,554 $204,233 $206,832 $209,015

(Loss)

23
Pro Forma Income Statement

It is important to note that profitability in year-two is directly related to when the first

residents of Casa Domina will move in and revenue begins to be realized. Revenue,

expenses and profits remain stable after year-two as Casa Domina can house no more

than 15 residents at a time. In year two, Casa Domina surpasses its $66,372 breakeven

point with net profits of $203,554. The declining balance method of depreciation is used

for all assets. In addition, an income tax rate of 24% is applied to profits, as Casa

Domina is a corporation and therefore taxed at a lower rate.

Casa Domina Financials

700000

600000

500000

400000 Sales
Amount

Variable Expense
300000
Fixed Expense
Net Profit
200000

100000

0
1 2 3 4 5
-100000
Year

24
Proforma Cash Flow Explanations

Cash Sales:

Based on renting 15 single rooms at $3,500 per month = $630,000 per year starting the

second year.

Credit Sales:

There will be no revenue from credit sales.

Investment Income:

After the first five years, Casa Domina will begin to invest their profits in GIC’s. They

will commence this activity after the initial five years in case of any occurrence of

unforeseen costs.

Other Cash Income:

The Terpstra’s are able to commit $200,000 of personal savings into the business in the

first year in quarterly installments of $50,000. Please note that the Terpstra’s have just

retired and sold their business Terpstra Broilers Inc. This sale of chicken quota was very

substantial and this is why they are able to commit $200,000 of their own money in the

first year. They also intend to receive $1000 per month for the first year from the Ontario

Governments self-employment assistance program. *This amount does not need to be

paid back.

Inventory or New Material:

Casa Domina will not have any inventory.

25
Renovation Costs:

The existing house is 2700 sq feet. Renovations will include:

• An addition of 3300 sq feet.

• All contractors fees

• Fifteen bedrooms, fifteen washrooms and decorating

• Addition of a second septic bed on premises (there is already one on the

existing property)

• Additions to existing alarm system and sprinkler system to be included in

every room

• Note there are two existing wells on the property

TOTAL = $450,000 to be spread out over the first year

Owner’s Salary:

The owner expects to make $100,000 starting the second year.

Employee’s wages and Salaries:

• Maintenance will be done on a regular basis by Mr. Terpstra who has

experience doing maintenance on a farm for over 25 years

• Linda Terpstra is a RN and therefore will be available 24 hours a day

• 3 aides that work 40 hours a week at $17.00 hour = $106,080 / year

• 77 hours of food preparation split by 3 chefs at $20.00/hour = $80,080 /year

• Activity coordinator 20 hours a week at $15.00 hour = $15,600 / year

• Training fourth quarter: 3 aides at 3 days = $1,224 and 3 chefs at one week

(40 hours each) = $2,400 = $3,624

26
Supplies and Postage:

Food: $12.00day * 15 people= $64,800 per year

Computer (1st quarter only) = $2,0001st quarter

Internet ($20/month) = $240per year

Toiletries/Cleaning supplies = $2400 per year

Office Supplies = $360 per year

Postage (1st year) = $480 1st year

Postage (years 2-5) = $240 (years 2-5)

Entertainment (4th quarter) = $500

Books (4th quarter) = $200

Ent./books every year = $200

Advertising and Promotion:

Ads will be run in:

• The local Norwood Newspaper: Weekly ad for 6 months beginning 3rd

quarter = ($15 per week at 24 weeks = $360.00)

• The Peterborough Examiner: Weekly half page ad for 6 months beginning

3rd quarter = ($150 per week at 24 weeks = $3,600)

Delivery Expense:

Casa Domina anticipates a delivery expense of $375 for delivery of all new appliances

and furniture within the first year.

27
Travel:

$100.00 per month on gas for the van = $1200.00

Legal and Accounting Fees:

Mrs. Terpstra is able to do all of the accounting having had 25 years experience as an

accountant for Terpstra Broilers Inc. The legal firm to be used is Wilkinson and

Company Inc. Anticipated legal fees are $3200 per year including the processing of

income taxes. For the first year, there will be extra-incurred legal fees of $2,000 for

corporation set up fees and commercial application fees.

Vehicle Expense:

Purchase of a van for transporting group of seniors = $20,000 in second year, anticipate

$2480 worth of extra vehicle expenses for tune ups etc per year after second year.

Maintenance Expense:

For maintenance expenses requiring a plumber, electrician, etc. allocations have been

made for $1500 per year starting the second year.

Rent:

There will be no rent fee since the property and buildings are owned by the Terpstra’s.

Note that there is no existing mortgage on the property.

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Utilities:

For the first year:(Based on equal billing)

Monthly hydro bills: $105.00 , Heat (propane tank on site): $700.00 per month

Total per quarter: $2,415

2-5 year (assuming inflation rate of 1%)s:

Hydro bills: $535.00/month Heat: $1,050 per month

Total for year 2 = $19,020 year 3 = $19,211 year 4 = $19,402 year 5 =$19,417

Telephone:

Monthly cost of $60.00(2 lines) residents will be responsible for purchasing and payment

for their own personal line

Taxes and Licenses:

Taxes: First year based on residential zoning and present value of house before

renovations ($189,000): $2,100

2-5 years: Based on commercial zoning and tax rate of multi residential =

0.030227 and value of house after renovations and property ($600,000) – not

including property = $18,137

Licenses: Purchase of the following Licenses within the first year:

• Provincial License: $700.00

• Building permit and commercial permit: $2,000

• Septic bed permit: $700

• Commercial septic bed from Ministry of Environment: $1,000

• Entrance Permit: $800

TOTAL: $5,200 29
Interest Payments:

Please see attached payment schedule. Interest payments are based on a rate of prime + 1

for the first year. For years 2-5, Mr. Jim Marshall of the Bank of Nova Scotia has quoted

Casa Domina with interest rates according to those listed in the attached sheet.

Insurance:

Insurance will be purchased for:

• Liability, theft, fire, commercial auto, contents in building, business

interruption, crime, money/securities, office equipment, commercial

general, errors and admissions, non owners automobile, bonding

employees

• Allen Insurance Ltd. of Warkworth ON, gave us the following quote per

year based on the above insurance: $5,500

Other Cash Expense:

Membership to ORCA $25 per bed per month =

15 beds * 25 = $375 per month * 12 = $4500

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Capital:

Purchase of Fixed Assets:

Equipment to be purchased 4th quarter in anticipation of opening for Second year:

• Kitchen: counters $2000

Microwave (x 2) $400
Fridge $3000
Stove $2500
Dishwasher $1000
Cooking supplies $1100
Total $10,000
• Dining Room: $2500
• Living Room: Couch $3000
Sofa $1400
Chairs $1600
Tables $400
TV/VCR $2000
Total $8400
• Washer and Dryer: $1200
• Benches $800
TOTAL $22,900

* Residents are required and encouraged to furnish their own rooms

Anticipate purchasing $500 worth of furniture every year after first year.

Sale of Fixed Assets:

Casa Domina does not intend to sell any fixed assets

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Financing:

The Terpstra’s anticipate approval of a long-term commercial loan from the Bank of

Nova Scotia. Their current property and house are valued at $400,000 (before

renovations). Mr. Jim Marshall of the Bank of Nova Scotia in Ottawa calculated the

loan:

Collateral = $400,000 + $540,000 for renovations = $940,000

NOTE: Original renovation costs are set at $450,000 however; the bank requires that

this amount be increased by 20% for the purpose of forecasting the loan. This is to

cover any unseen renovation costs.

Therefore, according to Mr. Jim Marshall of the Bank of Nova Scotia, the bank is

willing to lend the Terpstra’s 65% of this amount which = $611,000

Payment of Principal Loan:

The loan will be paid back in equal monthly installments over the course of 15 years.

This amount is $3,394 per month

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Inflow of Cash from Bank Loan:

The $611,000 is to be distributed within the first year according to renovation

requirements per quarter. By the fourth quarter any extra cash from the bank loan will be

distributed in the case of any unforeseen renovation costs.

Issuance of Equity Positions:

In order to be registered as a corporation and receive an income tax rate of 24% instead

of 48% for a proprietorship, Casa Domina will issue 5 shares at $1.00 a share in the 4th

quarter of the first year.

Repurchase of Outstanding Equity

There will be no repurchase of outstanding equity within the first five years.

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 Appendix A : Sample Activity Schedule

September 2001
Sunday Monday Tuesday Wednesday Thursday Friday Saturday

1.
1:00 Trip to
Peterborough

2 3 4 5 6 7 8
10:00 2:00 1:00 6:00 1:00 Trip to
Norwood Trip Boat excursion Norwood Trip Movie night Peterborough

9 10 11 12 13 14 15
10:00 1:00 6:30 1:00 Trip to
Norwood Trip Norwood Trip Singalong with Peterborough
Norwood Choir

16 17 18 19 20 21 22
3:00 10:00 2:00 Visit from 1:00 1:00 Trip to
Tea Party Norwood Trip SPCA pets Norwood Trip Peterborough

23 24 25 26 27 28 29
10:00 1:30 1:00 6:30 Bingo 1:00 –5:00 Trip
Norwood Trip Monthly craft: Norwood Trip to Peterborough
Thanksgiving
baskets

30