MODELOS PLANES DE NEGOCIOS

Aureliano Fernández B.,MBA [email protected] 786-473-6731 1

Aureliano Fernández B.,MBA [email protected] 786-473-6731 2

Aureliano Fernández B.,MBA [email protected] 786-473-6731 3

Aureliano Fernández B.,MBA [email protected] 786-473-6731 4

Aureliano Fernández B.,MBA [email protected] 786-473-6731 5

Aureliano Fernández B.,MBA [email protected] 786-473-6731 6

Aureliano Fernández B.,MBA [email protected] 786-473-6731 7

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Company Summary Houses On The Lake offers vacation-houseboat rentals on The marina where Houses On The Lake will set up will have Lake Shasta, California to large families and groups of docking space for 3 houseboats and the 3 ski boats, courtesy families. The business was incorporated in 2009 and will ramps, gas and ice, and other basic facilities. launch in 2010 upon funding. Houses On The Lake was founded by Robert Hopkins, a previous bed and breakfast Legal and Permits includes legal consultation for the business owner who relocated to California after twenty years and related to financing agreements, building permits from running his business in Vermont. local authorities and the US Forest Service, a business license, Company Ownership and motor vehicle rental permits. Robert Hopkins established Houses On The Lake as an LLC. Rent is for the marina space for one month of set-up before Robert will retain 100% of the company and will receive a loan launch at $1000 per month. The security deposit of one to make up additional required capital. month is part of current assets. Start-up Summary Insurance will be liability both for the marina usage and the boats when in use by Houses On The Lake renters. Houses On The Lake will invest in the establishment of an To limit liability, the renter (captain) must be at least 25 years office/small store at an existing marina (for light renovations, of age and have a valid driver's license. adding signage, office equipment and furniture, setting up Internet and phone, shelves and displays) and for the purchase The website, brochure, and advertisements will be detailed in of three ski boats ($5,000 each). the marketing strategy section and Web plan. 8

Aureliano Fernández B.,MBA [email protected] 786-473-6731 START-UP REQUIREMENTS Houseboats will not be purchased, but will be provided by Start-up Expenses current owners under contract with Houses On The Lake to provide use of the boats for up to 90% of the year, including Legal and Permits $5,000 some use during peak periods. These owners are provided with Stationery etc. $3,000 a share of revenue as well as moorage and maintenance on their boats. Insurance $10,000 Rent $2,000 The cash required will see the business through the first year's losses until it has achieved the scale needed to support itself Office Equipment $5,000 with positive cash flows. Website Development $5,000 Print Advertisements $10,000 Brochures $5,000 TOTAL START-UP EXPENSES $45,000 Start-up Assets Cash Required $69,000 Other Current Assets $6,000 Long-term Assets $30,000 TOTAL ASSETS $105,000 Total Requirements $150,000 9

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Services The standard House On The Lake houseboat will vary in its  Moorage and courtesy docks amenities, as it will be used under contract from an owner and not purchased new. The type of houseboat sought out will  Launch ramp include the following features: Basic rental rates will depend on the specifications of a specific boat and the season:  Sleeps a total of 6, with at least one private room Summer Season (June 1 - August 31)  1 full bathroom  Fully equipped kitchen (refrigerator, freezer, range/oven,  Weekly - $1650 etc.)  4 Days - $1400  Central air and heat  3 Days - $1200  Gas barbecue Spring/Fall Seasons (May and September)  Generator The Houses On The Lake marina will offer:  Weekly - $1400  4 Days - $1200  Ski boats  3 Days - $1000  Gas and ice (through existing marina facilities) Off Season (October 1 to April 30)  Small convenience store within the office facility (sells bait and tackle, other basic items)  Weekly - $1100 10

Aureliano Fernández B.,MBA [email protected] 786-473-6731  4 Days - $650 The market is primarily segmented by age and family status, as these different groups have different preferences when looking  3 Days - $600 at vacation houseboats. These groups are broken into younger Seasonal rates are based on peak usage times at Lake Shasta. couples, older couples, and families. Single individuals are Prices are competitive with other small houseboat rentals on generally not interested in renting houseboats. The most Lake Shasta. economical houseboat rentals sleep 14 to 18 or more Services for houseboat owners include:Renting out the boat individuals and are rented by 2, 3, or 4 families at a time (or up when it is not in use by the owner to create an additional to 9 pairs of couples). Generally, these families organize revenue stream themselves into groups and plan vacations together, although  Providing basic maintenance and upkeep of the boat (basic some services assist with matching groups to share rentals. standards must be met by the houseboat owner)  Providing insurance and proper licensing to rent out the Research and Markets writes that \"vacation rentals represent a boat legally and limit the owner's liability more than $24 billion opportunity in the US - that's more than  Scheduling commercial vehicle inspections as required by one fifth of all hotel room revenue and 8% of the total US travel the state market. And vacation rental consumers are a market to covet.  Providing moorage for the boat They're well-off, well-educated, and they travel - a lot. Nine in Market Analysis Summary 10 take at least four leisure trips a year.\" The U.S. vacation houseboat market includes vacationers who The market discussed is based on vacationers to Northern are both local and from afar, including other countries. Renters California. However, vacationers who do not travel to Northern are interested in rental periods of up to a week and use the California or consider houseboats an option can be converted houseboat to travel within inland lakes for activities both on through exposure to Houses On The Lake's marketing and the boat and in the surrounding area. collective marketing for the industry. The estimated growth 11

Aureliano Fernández B.,MBA [email protected] 786-473-6731 rates given show this expected growth in Northern California fishing, light hiking, etc. Some cannot use a boat that requires vacationers over the next few years. Due to an aging a great deal of physical exertion to operate. population, the market for older couples is expected to grow faster than other segments. Families: Couples or individuals with children. They require a mix of relaxation for parents and high-energy activities for Market Segmentation children. They may also require creature comforts for the children, such as entertainment centers, which couples can do The key market segments for houseboat rentals are described without on a vacation. Sometimes a few large families band more fully below: together to rent a large houseboat. Other families are less inclined to do this and more interested in being alone with their Young Couples: Aged 21 to 39, young couples without nuclear unit. children look for romantic getaways as well as high-energy activities (ski boats, hiking, diving, etc.). While some may be wealthy enough to rent a luxurious houseboat with all the extras, many have to stretch to rent a basic houseboat. It is more difficult for these young couples to put together a group large enough to afford a large houseboat, but they may be able to use smaller houseboats with fewer amenities. Older Couples: Aged 40 and up, although some within this age bracket will still be very active and self-identify with young couples, older couples without children look for romance and relaxation. They seek quieter activities such as 12

Aureliano Fernández B.,MBA [email protected] 786-473-6731 MARKET ANALYSIS YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 Potential Customers Growth CAGR Young Couples 5% 25,000 26,250 27,563 28,941 30,388 5.00% Older Couples 7% 30,000 32,100 34,347 36,751 39,324 7.00% Families 5% 45,000 47,250 49,613 52,094 54,699 5.00% Total 5.61% 100,000 105,600 111,523 117,786 124,411 5.61% 13

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Target Market Segment Strategy reserved for their owner's use. These boats are checked to meet the state's safety requirements and carry proper insurance to Houses On The Lake will focus specifically on families with cover their use. children and young couples at the lower end of the market. With each boat sleeping up to 6, a couple or family will Research and Markets writes in January, 2009 that \"the be very comfortable on these boats. By avoiding the market for older couples, there is more leeway as to the type of boat that majority of bookings are done the old-fashioned way, at a time can be rented and marketing can be more focused. Also, by when nearly $100 billion in leisure travel will be booked online offering only houseboats on the smaller side (compared to in 2008. Many property managers have yet to leverage the emerging business models, technologies and services that are those that sleep 14 to 18) the business can better stand out among the options for houseboat rentals on Lake Shasta. spurring change.\" Offering lower price rentals without luxurious accommodations means that costs can be limited as well. That is to say that Web services and bookings are still not prevalent in the industry. Most rentals are made over the phone, Service Business Analysis even if the customer first learns about the business on the Internet. The vacation houseboat rental industry is comprised of Competitors in the Lake Shasta region include: hundreds of independent businesses in the United States, as well as owners of individual boats who rent out their boat for  Shasta Marina Resort: Offering ski boats, and three 14 or weeks without meeting the state requirements for commercial 16 sleeper houseboats, they offer dock hands and full vehicles. Legal vacation houseboat businesses include those services. Marketing for their business focuses on a mix of which own their own boats and those which create networks of older groups, twenty-somethings, and children. independent owners and rent out those boats when they are not 14

Aureliano Fernández B.,MBA [email protected] 786-473-6731  Antlers Resort and Marina: Offers 8 houseboats, cabin be swayed to a different geographic area based on the rentals, and other watercraft. The business is forty years company. old and is the largest of the small resorts on Lake Shasta.  Availability and promotion of appropriate  Holiday Harbor: Also offers 7 houseboats, toy rentals, activities: Families and couples are all looking for rental camping & RVs. Offers much the same information on its companies which make activities easy to find and take part website as the others, with little differentiation. in, either by providing them directly or providing resources and help to access those activities. Competition and Buying Patterns  Boat amenities: For customers at the high end of the market, luxurious accommodations and creature comforts The vacation houseboat industry is an asset-intensive business on the boats are extremely important. For those new to the for some players who must purchase expensive houseboats and market, \"roughing it\" somewhat is more important. set up marinas to serve them. However, small players can enter It is the latter group which Houses On The Lake will focus the market with just one boat or by managing the rentals for on. existing owners. With reduced barriers to entry, an opportunity  Price: For customers at the lower end of the market, price exists for boat rentals at the low end of the market. is more important than amenities.  For most groups, houseboat rentals can be much less When choosing a vacation houseboat, vacationers look at the following: expensive than hotel accommodations for the same sized group. Like cruise tickets, houseboat rentals can offer some  Location: Most vacationers will choose the geographic luxury at prices which most vacationing Americans find area they intend to visit first and then look at the houseboat reasonable, assuming they can assemble a group of enough rental companies available there. They will generally not passengers for the boat. 15

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Web Plan Summary Development Requirements The website for Houses On The Lake will offer a great deal of The website will provide the following information: information both for potential renters/vacationers and for houseboat owners interested in supplying their houseboats to  Services offered by Houses On The Lake for renters the company. The site will inform these parties about the (descriptions and photos) offering of Houses On The Lake and availability of boats and  Basic Rates allow them to move forward by using a simple reservation form  Activities on Lake Shasta (links, photos and more to make reservations online. information)  Contact information (email only as phone is withheld to Website Marketing Strategy reduce time spent on phone by Hopkins)  About Us - Robert Hopkins background, business values, The website will target young couples and families interested vision in Lake Shasta vacations and current houseboat owners on  Services for houseboat owners (moorage, revenue sharing, Lake Shasta. The site will be marketed through the tactics: maintenance, etc.)  Policies and procedures for rental  Banner ads on travel-related websites  FAQs - How to pack, details on other rules, etc.  Google AdWords text ads  Availability Calendar (updated by Robert Hopkins as rentals are entered into and owners reserve the boats)  Listing in houseboat rental databases for Lake Shasta  Reservation request form (with credit card payment)  Search engine optimization undertaken by the initial Web All copy will be produced by Robert Hopkins and the coding developer and an ongoing SEO firm and design of the website will be through a Web design firm for $5,000. 16

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Strategy and Implementation of an upscale bed and breakfast to his vacation houseboat Summary business. This will be manifested in the marketing, sales experience, and operations of the business. The effect of this The basic strategy for Houses On The Lake is to target families edge will be a high customer retention rate. Customers who and young couples interested in small, private houseboats on think of the houseboat as \"their\" house on Lake Shasta will the inexpensive side for Lake Shasta. The business will offer return to Lake Shasta, allowing marketing and sales efforts to additional activities and recommendations, but will be perfect be reduced due to the lower expense of keeping an existing for vacationers who can do without some creature comforts as customer than finding new ones. This will build the customer they enjoy Lake Shasta. retention rate to 50% from the second to third full years of operation. Key elements of the strategy implementation include: Marketing Strategy  Website advertising Marketing for Houses On The Lake will focus in on the target  Awareness of and relationships with travel agents who will markets of families and young couples. Materials will show be offered discounted rates to bundle with packages for families and couples having fun together, both together and in their clients separate activities (waterskiing, fishing, slides, hiking,  Reaching houseboat owners whose houseboats are not in camping, swimming, using the spa, etc). Upon the launch, use 90% of the time. images will be provided by the manufacturers of the houseboats and other sources, as they will not yet be photos of Competitive Edge actual customers using Houses On The Lake. Houses On The Lake has a competitive edge in the hospitality experience of Robert Hopkins, who can bring the experience Marketing will include: 17

Aureliano Fernández B.,MBA [email protected] 786-473-6731  Local advertising in California vacation and travel reserving. As an owner, Robert Hopkins will be paid a base magazines salary and compensated for sales through the profits of the business. He will have the authority to vary from the advertised  Website creation and promotion (see Web plan) prices, but will use this at his discretion to book dates which  Direct mail to travel agents across the U.S. and Northern are unlikely to be used otherwise (i.e., off season or last-minute California tourism bookings). Special higher rates for holidays and certain  Partnerships with travel agents. These will be sought over weekends in the spring, summer, and fall are expected to time, not expected until year 3 or later balance out these discounted dates. He will update the rates offered on the website and the availability calendar as needed. The marketing to vacationers will also be seen by owners, alerting them to this opportunity to rent out their boats. An additional sales strategy exists to establish relationships Sales Strategy with houseboat owners. Robert Hopkins will contact owners directly to advertise the services of Houses On The Lake to Houses On The Lake's sales will be managed entirely by these \"suppliers.\" Robert Hopkins. He will receive reservation requests from interested customers, approve them by email, respond by This work will begin well before the business's launch in order phone to answer specific questions raised, and pursue business to have a roster of at least three houseboats to rent for the first through partnerships with travel agents. This will include year. offering a discount to travel agents so they can bundle the rentals with travel packages to their customers. Sales will Sales Forecast depend in large part on the online reservation request form to close business. The website will prepare customers with a great The business will seek to launch in October, to allow a full deal of information so they are better informed before winter to promote the upcoming summer rental period. 18

Aureliano Fernández B.,MBA [email protected] 786-473-6731 In the first year of operation, the average price for a week-long maintenance, and discounted services at the Houses On The summer rental will be $1650, $1400, for a spring/fall rental, Lake marina. and $1100 for an off season rental. Rentals for fewer days are available at a lower price. Additional fees and services purchased are estimated to average $400 for summer rentals, $300 for spring/fall, and $200 for off-season. Sales Forecast These additional fees include ski boat rentals, convenience store purchases, added fees to bring pets on-board. The prices listed reflect these totals and will be increased roughly with inflation in future years. Direct cost of sales includes post-rental cleaning (generally $75 per houseboat) and basic amenities (shampoo, soap, tissue paper, etc.) to stock the boats for each rental ($25 per rental). These costs are expected to grow with inflation as well. Other costs of sales include gas and ice which is anticipated to cost 8% of sales as each rental will start with a boat fully stocked with both. An additional 20% of sales will be payment to the houseboat owners. This cost of sales would be higher, but houseboat owners will benefit from free moorage, 19

Aureliano Fernández B.,MBA [email protected] 786-473-6731 SALES FORECAST YEAR 1 YEAR 2 YEAR 3 Unit Sales Summer Rentals 60 90 135 Spring/Fall Rentals 30 45 68 Off Season Rentals 47 71 106 Additional Fees/Services - Summer Rentals 60 90 135 Additional Fees/Services - Spring/Fall Rentals 30 45 68 Additional Fees/Services - Off Season Rentals 47 71 106 TOTAL UNIT SALES 274 411 617 Unit Prices Year 1 Year 2 Year 3 Summer Rentals $1,650.00 $1,716.00 $2,230.80 Spring/Fall Rentals $1,400.00 $1,456.00 $1,892.80 Off Season Rentals $1,100.00 $1,144.00 $1,487.20 Additional Fees/Services - Summer Rentals $400.00 $416.00 $540.80 Additional Fees/Services - Spring/Fall Rentals $300.00 $312.00 $321.36 Additional Fees/Services - Off Season Rentals $200.00 $208.00 $214.24 20

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Sales Summer Rentals $99,000 $154,440 $301,158 Spring/Fall Rentals $42,000 $65,520 $127,764 Off Season Rentals $51,700 $80,652 $157,271 Additional Fees/Services - Summer Rentals $24,000 $37,440 $73,008 Additional Fees/Services - Spring/Fall Rentals $9,000 $14,040 $21,692 Additional Fees/Services - Off Season Rentals $9,400 $14,664 $22,656 TOTAL SALES $235,100 $366,756 $703,549 Direct Unit Costs Year 1 Year 2 Year 3 Summer Rentals $562.00 $584.48 $607.86 Spring/Fall Rentals $492.00 $511.68 $532.15 Off Season Rentals $408.00 $424.32 $441.29 Additional Fees/Services - Summer Rentals $100.00 $104.00 $108.16 Additional Fees/Services - Spring/Fall Rentals $75.00 $78.00 $81.12 Additional Fees/Services - Off Season Rentals $50.00 $52.00 $54.08 Direct Cost of Sales Summer Rentals $33,720 $52,603 $82,061 Spring/Fall Rentals $14,760 $23,026 $35,920 Off Season Rentals $19,176 $46,667 $29,915 Additional Fees/Services - Summer Rentals $6,000 $9,360 $14,602 Additional Fees/Services - Spring/Fall Rentals $2,250 $3,510 $5,476 Additional Fees/Services - Off Season Rentals $2,350 $3,666 $5,719 Subtotal Direct Cost of Sales $78,256 $122,079 $190,444 21

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Milestones The milestones table illustrates the key marketing activities around the launch of the business. Before the business officially opens in October 2010, the marketing campaign will begin with the development of the website, brochure, and print ads. Internet advertising, direct mail, and the running of those print ads will occur after October 2010. 22

Aureliano Fernández B.,MBA [email protected] 786-473-6731 MILESTONES Milestone Start Date End Date Budget Manager Department Build Out Marina & Purchase 8/1/2010 9/30/2010 $50,000 RH Operations Equipment Create Brochure 9/1/2010 9/30/2010 $5,000 RH Marketing Create Website 8/1/2010 9/30/2010 $5,000 RH Marketing Create and Buy Print Ads 9/1/2010 RH Marketing 9/30/2010 $10,000 Direct Mail to Travel Agents & 10/1/2010 10/31/2010 $3,000 RH Marketing Tourism Groups Web Advertising 10/1/2010 5/31/2011 $7,000 RH Marketing Print Advertising Runs 10/1/2010 3/31/2010 $0 RH Marketing $80,000 Totals 23

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Management Summary Personnel Plan Houses On The Lake will be directed and managed by Robert PERSONNEL PLAN Hopkins. He will be personally responsible for sales and YEAR 1 YEAR 2 YEAR 3 marketing (working with designers where necessary), provide all copy for ads, the website, and brochures, and the launch of Robert Hopkins $60,000 $69,000 $79,350 the business. Robert will sell additional services to renters who Boat Assistants $0 $12,000 $24,000 arrive and personally greet them all to find out how he can help them with recommendations. TOTAL PEOPLE 1 2 3 Total Payroll $60,000 $81,000 $103,350 Hopkins will also run operations. Specifically, he will run the marina, provide renter orientations and support, schedule and Boating assistants will be hired for the second summer. Before supervise boat cleanings by a contracted cleaning service, that point, Hopkins will fulfill their role of supporting the repair, and maintenance. He will establish operations renters during their stays. procedures and renter policies and procedures. One boating assistant will be brought on for the second summer Hopkins will work out of the office at the marina which will be and two for the third summer. The boating assistants will not equipped with a phone, computer with Internet, cash register, work year-round, but will work from June to August to handle and credit card reader. the peak season. 24

Aureliano Fernández B.,MBA [email protected] 786-473-6731 START-UP FUNDING Start-up Expenses to Fund $45,000 Start-up Assets to Fund $105,000 Financial Plan TOTAL FUNDING REQUIRED $150,000 Assets Start – Up Funding Non-cash Assets from Start-up $36,000 Cash Requirements from Start-up $69,000 Additional Cash Raised $0 The business is expected to grow through additional Cash Balance on Starting Date $69,000 relationships with houseboat owners. These relationships do TOTAL ASSETS $105,000 not require investments of capital, just the work of Robert Liabilities and Capital Hopkins. The business will grow from three boats offered in Liabilities the first year to eight offered in the third year. This can be done Current Borrowing $10,000 Long-term Liabilities $60,000 without expanding the marina, as these will all be relatively Accounts Payable (Outstanding Bills) $0 small boats. Other Current Liabilities (interest-free) $0 TOTAL LIABILITIES $70,000 Robert Hopkins will provide the bulk of the equity investment Capital from the proceeds of the sale of his bed and breakfast business. Planned Investment Robert Hopkins $80,000 Credit cards will provide a small amount of current borrowing. Investors $0 Additionally, a three-year loan will be taken out for the Additional Investment Requirement $0 remaining required financing. TOTAL PLANNED INVESTMENT $80,000 Loss at Start-up (Start-up Expenses) ($45,000) TOTAL CAPITAL $35,000 TOTAL CAPITAL AND LIABILITIES $105,000 Total Funding $150,000 25

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Break-even Analysis An average of 11 four-week rentals is projected to produce the monthly break even revenue per month. At first this will be difficult with three boats in the off season, although it will be possible once the first summer arrives. BREAK-EVEN ANALYSIS Monthly Units Break-even 22 Monthly Revenue Break-even $18,574 Assumptions: Average Per-Unit Revenue $858.03 Average Per-Unit Variable Cost $285.61 Estimated Monthly Fixed Cost $12,392 26

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Projected Profit and Loss Most costs are expected to rise at least with inflation. Important Assumptions For the purpose of simplifying projections, Houses On The Based on these projections, the business will have a loss in the Lake projects that an average rental length will be a four-day first year and move to profit in the second, with significant period and that the houseboats will be filled with an average profit in the third for Hopkins as the number of boats under of three individuals per boat. Gross margins will improve in management increases. the summers and in future years as cost of sales are a lower rate during summer when rates and prices are higher. Print marketing includes additional brochure printing and press kits for travel agents as needed. Marketing will increase as efforts intensify to market an increased number of boats and to market to owners. Depreciation is for the depreciable assets of the marina (~$25,000) over a five year period. Website marketing includes $1000 per month for ongoing search engine marketing, $750 per month for search engine optimization, and $250 per month for website hosting and maintenance. Rent is set at $2,000 per month and utilities (electricity, phone, Internet for the office/store space) at $150 per month in the first year. Rent will increase based on increased space for moorage of boats at the marina. Payroll burden includes payroll taxes and insurance/benefits for employees. Office and boat maintenance covers light maintenance of the office/store and boats and general supplies. 27

Aureliano Fernández B.,MBA [email protected] 786-473-6731 PRO FORMA PROFIT AND LOSS YEAR 1 YEAR 2 YEAR 3 Sales $235,100 $366,756 $703,549 Direct Cost of Sales $78,256 $122,079 $190,444 Other Costs of Sales $0 $0 $0 TOTAL COST OF SALES $78,256 $122,079 $190,444 Gross Margin $156,844 $244,677 $513,105 Gross Margin % 66.71% 66.71% 72.93% Expenses Payroll $60,000 $81,000 $103,350 Marketing/Promotion $6,500 $8,000 $10,000 Depreciation $5,000 $6,667 $8,333 Website Marketing $24,000 $24,960 $25,958 Rent $24,000 $30,000 $37,500 Utilities $1,800 $1,872 $1,947 Insurance $10,000 $15,000 $20,000 Payroll Burden $15,000 $20,250 $25,838 Office/Boat $2,400 $2,496 $2,596 Maintenance/Supplies Total Operating Expenses $148,700 $190,245 $235,522 Profit Before Interest and Taxes $8,144 $54,432 $277,583 EBITDA $13,144 $61,099 $285,917 Interest Expense $5,729 $3,000 $1,000 Taxes Incurred $724 $15,430 $82,975 Net Profit $1,690 $36,002 $193,608 Net Profit/Sales 0.72% 9.82% 27.52% 28

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Projected Cash Flow PRO FORMA CASH FLOW The business will continue to invest in some YEAR 1 YEAR 2 YEAR 3 equipment for the marina in years 2 and 3 ($5000 per Cash Received year). The business loan will be repaid over three Cash from Operations years with 10% interest. Dividends can be paid to the Cash Sales $235,100 $366,756 $703,549 owner starting in the third year and will be withdrawn SUBTOTAL CASH FROM OPERATIONS $235,100 $366,756 $703,549 with the goal of keeping approximately $40,000 in Additional Cash Received cash in the business to see it through off season Sales Tax, VAT, HST/GST Received $23,510 $36,676 $70,355 months and to fund needs for renovation or repair to New Current Borrowing $0 $0 $0 the marina or boats as needed. The credit card New Other Liabilities (interest-free) $0 $0 $0 borrowing will be paid off over the first year. New Long-term Liabilities $0 $0 $0 Sales of Other Current Assets $0 $0 $0 Sales of Long-term Assets $0 $0 $0 New Investment Received $0 $0 $0 SUBTOTAL CASH RECEIVED $258,610 $403,432 $773,904 Expenditures Year 1 Year 2 Year 3 Expenditures from Operations Cash Spending $60,000 $81,000 $103,350 Bill Payments $152,477 $239,040 $385,504 SUBTOTAL SPENT ON OPERATIONS $212,477 $320,040 $488,854 Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out $23,510 $36,676 $70,355 Principal Repayment of Current Borrowing $10,000 $0 $0 Other Liabilities Principal Repayment $0 $0 $0 $20,000 $20,000 $20,000 Long-term Liabilities Principal Repayment Purchase Other Current Assets $0 $0 $0 Purchase Long-term Assets $0 $5,000 $5,000 Dividends $0 $0 $50,000 SUBTOTAL CASH SPENT $265,987 $381,715 $634,209 Net Cash Flow ($7,377) $21,716 $139,695 29 Cash Balance $61,623 $83,339 $223,035

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Projected Balance Sheet PRO FORMA BALANCE SHEET YEAR 1 YEAR 2 YEAR 3 Assets Current Assets Cash $61,623 $83,339 $223,035 Other Current Assets $6,000 $6,000 $6,000 TOTAL CURRENT ASSETS $67,623 $89,339 $229,035 The business will not be asset-intensive, as shown, as the Long-term Assets houseboats themselves will be used through contract Long-term Assets $30,000 $35,000 $40,000 and revenue sharing with their owners. The office Accumulated Depreciation $5,000 $11,667 $20,000 furnishings and the ski boats are the main assets of the TOTAL LONG-TERM ASSETS $25,000 $23,333 $20,000 business, and could be sold if the business folded. The TOTAL ASSETS $92,623 $112,673 $249,035 liabilities of the business will decrease as the debts are paid off, improving the net worth of the business. Liabilities and Capital Year 1 Year 2 Year 3 Current Liabilities Accounts Payable $15,932 $19,980 $32,733 Current Borrowing $0 $0 $0 Other Current Liabilities $0 $0 $0 SUBTOTAL CURRENT LIABILITIES $15,932 $19,980 $32,733 Long-term Liabilities $40,000 $20,000 $0 TOTAL LIABILITIES $55,932 $39,980 $32,733 Paid-in Capital $80,000 $80,000 $80,000 Retained Earnings ($45,000) ($43,310) ($57,307) Earnings $1,690 $36,002 $193,608 TOTAL CAPITAL $36,690 $72,693 $216,301 TOTAL LIABILITIES AND CAPITAL $92,623 $112,673 $249,035 Net Worth $36,690 $72,693 $216,301 30

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Business Ratios The ratios for Houses On The Lake are compared here to those for the Recreational Goods Rental - Houseboat Rental industry; NAICS code 532292/SIC code 7999, for businesses with less than $500,000 in sales. The gross margins for the business will not be as high as industry averages due to the revenue sharing that the Houses On The Lake business model requires with the boat owners. This also leads to a much reduced level of assets in the business. 31

RATIO ANALYSIS YEAR 1 YEAR 2 YEAR 3 INDUSTRY PROFILE Aureliano Fernández B.,MBA n.a. 56.00% 91.83% 2.79% [email protected] 786-473-6731 Sales Growth Percent of Total Assets Other Current Assets 6.48% 5.33% 2.41% 22.84% 73.01% 79.29% Total Current Assets 25.52% 91.97% . Long-term Assets 26.99% 20.71% 8.03% 74.48% 100.00% TOTAL ASSETS 100.00% 100.00% 100.00% Current Liabilities 17.20% 17.73% 13.14% 8.80% Long-term Liabilities 43.19% 17.75% 0.00% 84.68% Total Liabilities 60.39% 35.48% 13.14% 93.49% NET WORTH 39.61% 64.52% 86.86% 6.51% Percent of Sales Sales 100.00% 100.00% 100.00% 100.00% Gross Margin 66.71% 66.71% 72.93% 84.56% Selling, General & Administrative Expenses 65.99% 56.90% 45.41% 23.13% Advertising Expenses 2.76% 2.18% 1.42% 2.22% Profit Before Interest and Taxes 3.46% 14.84% 39.45% 9.37% Main Ratios Current 4.24 4.47 7.00 1.45 Quick 4.24 4.47 7.00 1.37 Total Debt to Total Assets 60.39% 35.48% 13.14% 93.49% Pre-tax Return on Net Worth 6.58% 70.75% 127.87% 73.67% Pre-tax Return on Assets 2.61% 45.65% 111.06% 4.80% Additional Ratios Year 1 Year 2 Year 3 Net Profit Margin 0.72% 9.82% 27.52% n.a Return on Equity 4.61% 49.53% 89.51% n.a Activity Ratios Accounts Payable Turnover 10.57 12.17 12.17 n.a Payment Days 27 27 24 n.a Total Asset Turnover 2.54 3.26 2.83 n.a Debt Ratios Debt to Net Worth 1.52 0.55 0.15 n.a Current Liab. to Liab. 0.28 0.50 1.00 n.a Liquidity Ratios Net Working Capital $51,690 $69,359 $196,301 n.a Interest Coverage 1.42 18.14 277.58 n.a 32 Additional Ratios Assets to Sales 0.39 0.31 0.35 n.a Current Debt/Total Assets 17% 18% 13% n.a Acid Test 4.24 4.47 7.00 n.a

Aureliano Fernández B.,MBA [email protected] 786-473-6731 PROFORMA FIRST YEAR 12 MONTHS MONTH MONTH 2 MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 3 4 5 6 7 8 9 10 11 12 UNIT SALES Summer Rentals 0 0 0 0 0 0 0 0 19 20 21 0 Spring/Fall Rentals 0 0 0 0 0 0 0 15 0 0 0 15 Off Season Rentals 6 6 5 5 7 8 10 0 0 0 0 0 Additional 0 0 0 0 0 0 0 0 19 20 21 0 Fees/Services - Summer Rentals Additional 0 0 0 0 0 0 0 15 0 0 0 15 Fees/Services - Spring/Fall Rentals Additional 6 6 5 5 7 8 10 0 0 0 0 0 Fees/Services - Off Season Rentals TOTAL UNIT SALES 12 12 10 10 14 16 20 30 38 40 42 30 UNIT PRICES Summer Rentals $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.0 $1,650.00 Spring/Fall Rentals $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.0 $1,400.00 33

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Off Season Rentals $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.0 $1,100.00 Additional $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 $400.00 Fees/Services - Summer Rentals Additional $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 $300.00 Fees/Services - Spring/Fall Rentals Additional $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 $200.00 Fees/Services - Off Season Rentals Sales Summer Rentals $0 $0 $0 $0 $0 $0 $0 $0 $31,350 $33,000 $34,650 $0 Spring/Fall Rentals $0 $0 $0 $0 $0 $0 $0 $21,000 $0 $0 $0 $21,000 Off Season Rentals $6,600 $6,600 $5,500 $5,500 $7,700 $8,800 $11,000 $0 $0 $0 $0 $0 Additional $0 $0 $0 $0 $0 $0 $0 $0 $7,600 $8,000 $8,400 $0 Fees/Services - Summer Rentals Additional $0 $0 $0 $0 $0 $0 $0 $4,500 $0 $0 $0 $4,500 Fees/Services - Spring/Fall Rentals Additional $1,200 $1,200 $1,000 $1,000 $1,400 $1,600 $2,000 $0 $0 $0 $0 $0 Fees/Services - Off Season Rentals 34

Aureliano Fernández B.,MBA [email protected] 786-473-6731 TOTAL SALES $7,800 $7,800 $6,500 $6,500 $9,100 $10,400 $13,000 $25,500 $38,950 $41,000 $43,050 $25,500 Direct Unit Costs MONTH MONTH 2 MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 3 4 5 6 7 8 9 10 11 12 Summer Rentals $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 $562.00 Spring/Fall Rentals $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 $492.00 Off Season Rentals $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 $408.00 Additional $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 $100.00 Fees/Services - Summer Rentals Additional $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 $75.00 Fees/Services - Spring/Fall Rentals Additional $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 $50.00 Fees/Services - Off Season Rentals Direct Cost of Sales MONTH MONTH 2 MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 3 4 5 6 7 8 9 10 11 12 Summer Rentals $0 $0 $0 $0 $0 $0 $0 $0 $10,678 $11,240 $11,802 $0 Spring/Fall Rentals $0 $0 $0 $0 $0 $0 $0 $7,380 $0 $0 $0 $7,380 Off Season Rentals $2,448 $2,448 $2,040 $2,040 $2,856 $3,264 $4,080 $0 $0 $0 $0 $0 Additional $0 $0 $0 $0 $0 $0 $0 $0 $1,900 $2,000 $2,100 $0 Fees/Services - Summer Rentals 35

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Additional $0 $0 $0 $0 $0 $0 $0 $1,125 $0 $0 $0 $1,125 Fees/Services - Spring/Fall Rentals Additional $300 $300 $250 $250 $350 $400 $500 $0 $0 $0 $0 $0 Fees/Services - Off Season Rentals Subtotal Direct Cost $2,748 $2,748 $2,290 $2,290 $3,206 $3,664 $4,580 $8,505 $12,578 $13,240 $13,902 $8,505 of Sales PERSONNEL PLAN MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 2 3 4 5 6 7 8 9 10 11 12 Robert $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Hopkins Boat Assistants $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL PEOPLE 1 1 1 1 1 1 1 1 1 1 1 1 Total Payroll $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 PRO FORMA PROFIT AND LOSS MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 2 3 4 5 6 7 8 9 10 11 12 Sales $7,800 $7,800 $6,500 $6,500 $9,100 $10,400 $13,000 $25,500 $38,950 $41,000 $43,050 $25,500 36

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Direct Cost of Sales $2,748 $2,748 $2,290 $2,290 $3,206 $3,664 $4,580 $8,505 $12,578 $13,240 $13,902 $8,505 Other Costs of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 TOTAL COST OF $2,748 $2,748 $2,290 $2,290 $3,206 $3,664 $4,580 $8,505 $12,578 $13,240 $13,902 $8,505 SALES Gross Margin $5,052 $5,052 $4,210 $4,210 $5,894 $6,736 $8,420 $16,995 $26,372 $27,760 $29,148 $16,995 Gross Margin % 64.77% 64.77% 64.77% 64.77% 64.77% 64.77% 64.77% 66.65% 67.71% 67.71% 67.71% 66.65% Expenses Payroll $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Marketing/Promotion $1,000 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 $500 Depreciation $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 $417 Website Marketing $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Rent $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Utilities $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 $150 Insurance $0 $0 $0 $0 $0 $0 $0 $0 $0 $10,000 $0 $0 Payroll Burden 25% $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 $1,250 Office/Boat $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 Maintenance/Supplies Total Operating $12,017 $11,517 $11,517 $11,517 $11,517 $11,517 $11,517 $11,517 $11,517 $21,517 $11,517 $11,517 Expenses Profit Before Interest ($6,965) ($6,465) ($7,307) ($7,307) ($5,623) ($4,781) ($3,097) $5,478 $14,855 $6,243 $17,631 $5,478 and Taxes EBITDA ($6,548) ($6,048) ($6,890) ($6,890) ($5,206) ($4,364) ($2,680) $5,895 $15,272 $6,660 $18,048 $5,895 Interest Expense $611 $597 $571 $544 $518 $492 $465 $439 $413 $386 $360 $333 Taxes Incurred ($2,273) ($2,119) ($2,363) ($2,355) ($1,842) ($1,582) ($1,069) $1,512 $4,333 $1,757 $5,181 $1,543 Net Profit ($5,303) ($4,943) ($5,514) ($5,496) ($4,299) ($3,691) ($2,493) $3,528 $10,110 $4,100 $12,090 $3,601 37

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Net Profit/Sales -67.99% -63.38% -84.83% -84.55% -47.24% -35.49% -19.18% 13.83% 25.96% 10.00% 28.08% 14.12% PRO FORMA CASH FLOW MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 1 2 3 4 5 6 7 8 9 10 11 12 Cash Received Cash from Operations Cash Sales $7,800 $7,800 $6,500 $6,500 $9,100 $10,400 $13,000 $25,500 $38,950 $41,000 $43,050 $25,500 SUBTOTAL CASH FROM $7,800 $7,800 $6,500 $6,500 $9,100 $10,400 $13,000 $25,500 $38,950 $41,000 $43,050 $25,500 OPERATIONS Additional Cash Received Sales Tax, VAT, HST/GST 10.00% $780 $780 $650 $650 $910 $1,040 $1,300 $2,550 $3,895 $4,100 $4,305 $2,550 Received New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Other Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 (interest-free) New Long-term Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Sales of Other Current Assets Sales of Long-term Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 SUBTOTAL CASH RECEIVED $8,580 $8,580 $7,150 $7,150 $10,010 $11,440 $14,300 $28,050 $42,845 $45,100 $47,355 $28,050 EXPENDITURES 38

Aureliano Fernández B.,MBA [email protected] 786-473-6731 Expenditures from MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH Operations 1 2 3 4 5 6 7 8 9 10 11 12 Cash Spending $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 $5,000 Bill Payments $256 $7,674 $7,302 $6,597 $6,626 $8,005 $8,721 $10,293 $16,785 $23,692 $31,285 $25,241 SUBTOTAL SPENT ON $5,256 $12,674 $12,302 $11,597 $11,626 $13,005 $13,721 $15,293 $21,785 $28,692 $36,285 $30,241 OPERATIONS Additional Cash Spent Sales Tax, VAT, HST/GST Paid $780 $780 $650 $650 $910 $1,040 $1,300 $2,550 $3,895 $4,100 $4,305 $2,550 Out Principal Repayment of $0 $0 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 $1,000 Current Borrowing Other Liabilities Principal $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Repayment Long-term Liabilities $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 $1,667 Principal Repayment Purchase Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Assets 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 SUBTOTAL CASH SPENT $7,703 $15,121 $15,619 $14,914 $15,203 $16,712 $17,687 $20,509 $28,346 $35,459 $43,257 $35,458 Net Cash Flow $877 ($6,541) ($8,469) ($7,764) ($5,193) ($5,272) ($3,387) $7,541 $14,499 $9,641 $4,098 ($7,408) Cash Balance $69,877 $63,336 $54,867 $47,103 $41,911 $36,639 $33,252 $40,793 $55,291 $64,933 $69,031 $61,623 39

Aureliano Fernández B.,MBA [email protected] 786-473-6731 PROFORMA MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH BALANCE SHEET 1 2 3 4 5 6 7 8 9 10 11 12 Assets Starting Balances Current Assets Cash $69,000 $69,877 $63,336 $54,867 $47,103 $41,911 $36,639 $33,252 $40,793 $55,291 $64,933 $61,623 Other Current $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 $6,000 Assets TOTAL CURRENT $75,000 $75,877 $69,336 $60,867 $53,103 $47,911 $42,639 $39,252 $46,793 $61,291 $70,933 $67,623 ASSETS Long-term Assets Long-term Assets $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 $30,000 Accumulated $0 $417 $833 $1,250 $1,667 $2,083 $2,500 $2,917 $3,333 $3,750 $4,167 $5,000 Depreciation TOTAL LONG- $30,000 $29,583 $29,167 $28,750 $28,333 $27,917 $27,500 $27,083 $26,667 $26,250 $25,833 $25,000 TERM ASSETS TOTAL ASSETS $105,000 $105,460 $98,503 $89,617 $81,437 $75,828 $70,139 $66,335 $73,459 $87,541 $96,766 $92,623 LIABILITIES AND MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH 9 MONTH MONTH MONTH CAPITAL 1 2 3 4 5 6 7 8 10 11 12 rrent Liabilities Accounts Payable $0 $7,430 $7,082 $6,378 $6,360 $7,716 $8,385 $9,741 $16,004 $22,643 $30,434 $15,932 Current Borrowing $10,000 $10,000 $10,000 $9,000 $8,000 $7,000 $6,000 $5,000 $4,000 $3,000 $2,000 $0 Other Current $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Liabilities 40

Aureliano Fernández B.,MBA [email protected] 786-473-6731 SUBTOTAL $10,000 $17,430 $17,082 $15,378 $14,360 $14,716 $14,385 $14,741 $20,004 $25,643 $32,434 $15,932 CURRENT LIABILITIES Long-term $60,000 $58,333 $56,667 $55,000 $53,333 $51,667 $50,000 $48,333 $46,667 $45,000 $43,333 $40,000 Liabilities TOTAL LIABILITIES $70,000 $75,763 $73,749 $70,378 $67,693 $66,382 $64,385 $63,074 $66,671 $70,643 $75,767 $55,932 Paid-in Capital $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 $80,000 Retained Earnings ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) ($45,000) Earnings $0 ($5,303) ($10,246) ($15,761) ($21,256) ($25,555) ($29,246) ($31,739) ($28,211) ($18,101) ($14,001) $1,690 TOTAL CAPITAL $35,000 $29,697 $24,754 $19,239 $13,744 $9,445 $5,754 $3,261 $6,789 $16,899 $20,999 $36,690 TOTAL LIABILITIES $105,000 $105,460 $98,503 $89,617 $81,437 $75,828 $70,139 $66,335 $73,459 $87,541 $96,766 $92,623 AND CAPITAL Net Worth $35,000 $29,697 $24,754 $19,239 $13,744 $9,445 $5,754 $3,261 $6,789 $16,899 $20,999 $36,690 41

Aureliano Fernández B.,MBA [email protected] 786-473-6731 42