The Travelling Cork - A business feasibility report by Torben Nielsen

Prepared by Chris Ament Karim Fawzy Torben Nielsen Steph Reiley For Rob Sloan, Business Feasibility II July 20, 2009

EXECUTIVE SUMMARY The strategic mission of The Travelling Cork is to become the first true wine bar located in the heart of Toronto’s arts and culture Mecca, The Distillery District. The Travelling Cork will capitalize on the success of trendy upscale wine bars that have gained popularity over the years with prestigious food and drink critics in cities such as San Francisco and New York. Our business will differentiate itself through representation as a wine bar first and a restaurant second. Currently, Toronto offers little to compete against this and we feel the projected growth of The Distillery District as a tourist and culture centre will make us a unique and successful destination. Our international theme showcases international wines paired with international cuisine that creates a unique and diverse experience for customers, promoting return business. We want to offer a unique customer experience that truly represents variety. The Travelling Cork’s wine list will begin with 70 different varieties of wine from world renowned wine producing countries. Using the LCBO as a distributor will allow us instant access to the world’s finest wine makers with the added benefit and option to adjust and increase varieties easily and quickly. Social trends in North America point favorably in our direction based on the increased popularity of wine as a healthier alternative to other alcoholic beverages. The increased consumption of wine by younger generations and the success of the lounge style food and drink establishments such as Starbucks makes the wine bar business model an easy transition to the legal drinking population. The popular lounge style that Starbucks successfully brought to the mainstream market has spilled into that same generation’s grown‐up palate in the form of wine bars as an alternative to noisy and crowded establishments that offer alcoholic beverages. Our location in the fastest growing arts and culture sector of Toronto allows us to attract customers who desire a food and drink establishment of this nature that will suit their needs. i

The city of Toronto’s effort to develop and promote The Distillery District to tourists and business people as a culture hub and fine dining centre puts our business in the position to capture and sustain the business of multiple markets year round. Our goal is to position ourselves as not merely a destination but also as a pre‐ and post‐event destination, such as business luncheons, a pre‐drink before a show or game or an after work debriefing of the day’s events. Total required start up funds for The Travelling Cork is $985,285. $322,222 represents the total one‐time cash requirements and the balance is recurring monthly expenses. The four partners will contribute $160,000 collectively, $145,000 will be taken as a loan from the bank, a venture capitalist will invest $500,000 for 35% stake in the new wine bar. Monthly gross sales and net profit before taxes in the first year amount to approximately $285,500 and just over $68,000, respectively. The first year’s gross sales are approximately $18,000 short of $3,000,000, yielding an annual net profit after taxes of just under $400,000. The Travelling Cork’s growth will be demonstrated by a 20% growth from Year 1 to Year 3 and a 24% growth from Year 1 to Year 5. The Travelling Cork will meet the minimum cash balance throughout all three years. The venture capitalists will begin benefits from a return on their initial investment at the end of year 2. To break even, this new venture must achieve gross sales of $1,434,995 which will be attained after almost six months of operation. The Travelling Cork will tap into a business model that has yet to be truly emulated to this degree in The Distillery District, or all of Toronto for that matter. Our unique product and service offerings will differentiate us from the competition in The District and present a unique, fresh, and exciting food and drink establishment that will generate long term success.

TABLE OF CONTENTS Executive Summary ............................................................................................................................... i. The Travelling Cork ............................................................................................................................... 1 Vision Statement ......................................................................................................................... 1 Mission Statement ...................................................................................................................... 1 Business Goals ............................................................................................................................. 1 The Concept .............................................................................................................................................. 2 Company Name ........................................................................................................................... 2 Hours of Operations .................................................................................................................... 2 A Typical Customer Experience ................................................................................................... 2 Key Success Factors ..................................................................................................................... 3 Product & Service Offering ................................................................................................................. 5 Wine & Food ................................................................................................................................ 5 Services ........................................................................................................................................ 6 Market Analysis ...................................................................................................................................... 7 Problem Identification ................................................................................................................. 7 Market Opportunity .................................................................................................................... 7 Addressable Market Size ............................................................................................................. 7 Defined Trading Area & Geographical Location .......................................................................... 8 Total Industry Revenues .............................................................................................................. 9 Projected Market Share ............................................................................................................ 10 After 1 Year ....................................................................................................................... 10 After 3 Years ...................................................................................................................... 10 Marketing Plan ..................................................................................................................................... 11 Price & Value Proposition ......................................................................................................... 11 Integrated Marketing Communications Plan ............................................................................ 12 Theme ........................................................................................................................................ 14 Target Market Segmentation .................................................................................................... 14 Development Plan ............................................................................................................................... 14

Productions & Operations Plan ...................................................................................................... 15 Supply Chain .............................................................................................................................. 15 Production Costs ....................................................................................................................... 16 Labour ........................................................................................................................................ 16 Licenses ..................................................................................................................................... 17 Location ..................................................................................................................................... 17 Facilities & Equipment ............................................................................................................... 17 Daily Operations ........................................................................................................................ 19 Environmental Scan ........................................................................................................................... 21 Current North American Trends ................................................................................................ 21 External Competitive Analysis ................................................................................................... 22 Top Three Competitors ..................................................................................................... 22 The Travelling Cork’s Strategic Competitive Advantages ......................................................... 24 Management Team ............................................................................................................................. 25 Structure of Business ................................................................................................................. 25 Owner‐Managers....................................................................................................................... 25 Professional Advisors ................................................................................................................ 25 Implementation Schedule ................................................................................................................ 26 Financial Feasibility ........................................................................................................................... 26 Cash Required for Start‐Up ....................................................................................................... 26 ProForma Revenue, Growth & Profits ...................................................................................... 26 Year One ............................................................................................................................ 26 Year Three ......................................................................................................................... 27 Year Five ............................................................................................................................ 28 Price Value Relationships .......................................................................................................... 28 ProForma Balance Sheet ........................................................................................................... 29 Break‐Even for Year 1 ................................................................................................................ 29 Potential Growth ....................................................................................................................... 29 Break‐Even & Profitability ......................................................................................................... 30 Primary Research ...................................................................................................................... 30 Uses for Financing ............................................................................................................................... 31 Terms ......................................................................................................................................... 31 Uses ........................................................................................................................................... 31

THE TRAVELLING CORK Vision Statement The Travelling Cork will constantly work towards becoming the most prestigious wine bar in Canada, offering a diverse selection of wines to visitors to the Distillery District and Torontonians alike.

Mission Statement The Travelling Cork intends to become the first true wine bar in the Distillery District and to become the leader in the wine bar industry. Our goal is to offer tourists and Torontonians a unique wining and lounging experience that will focus on customer service, expertise, a diverse selection of wines, as well as a unique lounging atmosphere.

Business Goals Our goal is to maintain a single location and place an emphasis on rarity and uniqueness. The Travelling Cork intends to become the first true wine bar in the Distillery District and to become the leader in the wine bar industry. Our goal is to offer tourists and Torontonians a unique wining and lounging experience with the potential to grow services and product offerings in the future. The Travelling Cork will focus on customer service, expertise, a diverse selection of wines, as well as a unique lounging atmosphere.

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THE CONCEPT Company Name The Travelling Cork will be a service oriented wine bar that encourages experimentation of wines from around the world. Our goal is to provide our patrons with: high quality service, knowledgeable staff, gourmet foods, a sophisticated atmosphere, and above everything else, a one of a kind experience. The name The Travelling Cork embodies and provides an image of what we want to offer our patrons – a variety of different wines from around the world.

Hours of Operation

Day of Week Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Open 11 am 11 am 11 am 11 am 11 am 11 am 11 am

Kitchen Close 11 pm 11 pm 11 pm 12 am 12 am 12 am 10 pm

Wine Bar Close 12 am 12 am 12 am 2 am 2 am 2 am 11 pm

A Typical Customer Experience Upon arriving at The Distillery District, customers will be able to walk down the cobble stone streets within The District, taking in the sights and sounds before making their way to our location. Once our customers enter, they will be greeted by a maitre’d that will ask the customer if they would like to be seated in the dining or lounge area. The interior space will be comprised of exposed wood and brick that is original to the building. We want to mix the old warehouse style with a more modern feel to create a unique, sophisticated space that is appealing to our customers. The entire area will be an open concept, with high ceilings and large windows to allow light in during the day. At night, specific lighting treatments will shed enough light on customers so that they can see, however the room will have a darker more calming feel. The focal point of the wine bar will be a semi‐circle bar with a round wine bottle tower enclosed in glass behind. This tower will stretch from the ceiling to the floor, giving a stunning visual as well as a conversation piece for our customers to enjoy with their wine. Page | 2

During dinner, music will be played as ambience to add to the customer experience. Depending on the time of week the music will either be played over speakers or live. Those customers who just want to have a few drinks and a meal with some friends will be seated in the lounge area located on the main floor. This area will have a number of leather couches and chairs with tables that are grouped together so that customers are able to have conversations with friends and family. For those customers who want a private area for a party or gathering can choose to sit in our VIP section which will be located in a raised section of the lounge area. Once seated, the customers will then be greeted by a server who will introduce them to the wine list and menu. From there the customer can talk to the server to determine which wine they would like to try first. The server will also help the customer determine which dish would go best with their wine if they choose to purchase something to eat. After their meal, the server will offer them a dessert menu, as well as after dinner beverages, such as coffee, tea and/or ice wine. Please refer to Appendix A for an example of the wine bar layout for The Travelling Cork.

Key Success Factors The Travelling Cork’s large selection of wine, educated staff, historical location and unique lounging experience will set us apart from the competition and contribute to our overall success in this industry. Whether it be a night out on the town with friends or a business lunch with a client, our goal is to offer our customers a sophisticated, yet casual place to enjoy a glass of wine day or night. With our large selection of wine we will be able to appeal to a large group of people and offer a selection that no other wine bar or restaurant currently provides. We will also have a knowledgeable staff that will be able to educate our customers about wines and help them

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select the one that best suits their needs. This added service will create loyalty among our customers, which will contribute to repeat visits. Toronto’s Distillery District, “...a pedestrian ‐ only village that is entirely dedicated to arts, culture, and entertainment” 1 is an important key to our overall success. Located in Toronto’s downtown core, the Distillery District is accessible from the Gardiner Expressway, as well as bus and street car lines and is only steps away from numerous condo and apartment complexes in the neighbourhood. This district is also located minutes away from Toronto’s financial, entertainment, and fashion districts. This location will give The Travelling Cork a unique opportunity to reach our target audiences and provide them easy access to our establishment. This location also gives us the opportunity to target large corporations for business meetings. The Distillery District holds a number of unique festivals throughout the year which will draw numerous people to the area. We will be able to capitalize on this traffic and may have the opportunity to be featured on festival publications. Lastly, the style of the location itself will also contribute to our overall success. The Distillery District offers a style that isn’t offered anywhere else in the city. By incorporating the old with the new, we will be able to offer our customers a unique experience that isn’t currently offered with other establishments in Toronto. Also, offering our customers a lounge area, as well as a dining area, differentiates The Travelling Cork from other wine bar currently open. This will contribute to our overall differentiation and success in the industry.

http://www.thedistillerydistrict.com/frameset.html

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PRODUCT AND SERVICE OFFERING Wine & Food Wine will be the feature product at The Travelling Cork. To start, wines will be available from four main regions around the world in several grape varieties. The regions that will be showcased will be: North America (Canada and the United States), South America (Chile and Argentina), Europe (France, Italy and Spain) and Australia (Australia and New Zealand). Please refer to Appendix B for a list of wines that could be featured at The Travelling Cork. Because the focus is on wine, the menu will offer smaller dishes, which will be referred to as tapas. The menu will be exclusive and will include some of the following dishes: TAPAS Chilean Sea Bass Ceviche Escargot with Garlic Butter and Splash of Cognac

Antipasto Platter Salads – Garden, Caesar, Cobb and Greek Soup du Jour Machas (Chilean Razor Clams) in Salsa Verde Montreal Smoke Meat Sandwich Philly Cheesesteak Spanish Honey‐Cumin Roast Chicken with Apricots and Olives Grade “A” Hamburger with beet root/pineapple served on sour dough bread with sweet potato fries Authentic Italian Spaghetti Duck a L’Orange Paella Valenciana (meat) and/or Paella Marisco (seafood) Rainbow Trout BC Smoked Salmon We will also offer our patrons the opportunity to taste different wines by purchasing wine flights, which are essentially a wine tasting package. Customers will be offered a list of nine predetermined wines, with wines from each region, and they will be able to customize a wine Page | 5

flight to their choosing by picking three wines from the list of nine. This list of nine will be available for a period of two weeks and then will be replaced by a new list of nine. This cycle will continue and the list will be updated every two weeks. To decrease the amount of wine waste, several “Featured” wines will be offered. These wines will not be predetermined and will be chosen based on the bottles of wine that are already open and need to be used.

Services The Travelling Cork will operate within The Distillery District in Toronto. Our focus will be to provide our patrons superior customer service. Staff will be expertly trained and knowledgeable about anything wine related and will focus on relationship building and selling. These services will provide our customers with a fine wining and lounging experience. Another service that we will have available is to use our establishment for events. Customers will have the opportunity to rent our facilities or a section of our facilities to hold their corporate business events, wedding parties and so on. Services that we intend to offer in the future will include: providing wine for weddings; offering different classes to patrons, such as tasting and/or how to cook with wine; as well as providing a retail service to customers where they are able to buy bottles of wine through The Travelling Cork. The retail service will consist of customers being able to buy bottles directly from the inventory. If there aren’t enough bottles in the inventory that would allow one or more to be sold and still have enough to make sure that the inventory doesn’t fall short, the bottle(s) would be ordered for the patron and available for pick‐up when it arrives. This will be especially appealing once we offer wines from different wineries around the world that aren’t available through the LCBO.

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MARKET ANALYSIS Problem Identification The problem that The Travelling Cork desires to address is to give its target market segment a unique atmosphere and experience unlike that of a restaurant or conventional wine bar. The need that we intend to satisfy is the desire for a true wine bar that is a restaurant second. The Travelling Cork will be a wine bar with an extensive list of 70+ wines for wine tasting or a refined wining and lounging experience which includes appetizers and dishes that complement the wine. Also, The Travelling Cork is looking to add another unique food and drink establishment to The Distillery District.

Market Opportunity The top line marketing opportunity is to offer consumers a wine bar that simply lives up to its name. This means that the Travelling Cork will be a wine bar first and a restaurant second that serves international food and drink. By offering consumers the experience and atmosphere of a true wine bar The Travelling Cork will be a very unique establishment with a smart, comfortable and modern, yet refined style. The Travelling Cork will present consumers with a one of a kind wine experience by providing 70+ unique wines from different regions all over the world in assorted grape varieties that will suit every consumer. The Travelling Cork will also offer a lounging and dining experience with a professional and approachable staff that possesses extensive knowledge of the wines and dishes offered on a daily basis. Dishes that will be available will be from the four regions that The Travelling Cork’s wine selection showcases. The Travelling Cork’s wining and lounging experience will have something to suit every palate and pocket.

Addressable Market Size When addressing the market size for The Travelling Cork both Toronto’s populations and Toronto’s CMA populations must be considered. The total population for Toronto is 2,503,280 and 5,113,145 for the Toronto CMA. Page | 7

When addressing our potential market size by our target age segment there are 1,163,970 individuals between the ages of 25‐54 living in Toronto and 2,349,730 people between the ages of 25‐54 living in the Toronto CMA. Based on our target age segment there is quite a substantial market size for The Travelling Cork. Based on the occupations held by our target market there are 139,475 people holding management occupations and 271,815 employed in business, finance and administration occupations in Toronto. That’s a total of 411,290 individuals that are currently employed within the occupations desired for our target market. Within the Toronto CMA there are a total of 911,205 people employed in a management or business, finance and administration occupation. Finally, market size can be addressed by The Travelling Cork’s target markets’ industry from which they are employed. In Toronto there are 132,580 people working in the finance and real estate industry and 330,280 people working in the business services industry for a total market size of 462,860 people. Within the Toronto CMA the market size for the finance, real estate, and business service industry is significantly larger with 918,385 individuals employed within these industries. 2 This potential market size assessment gives us (The Travelling Cork) a general idea that whether basing our market size on age, occupation, or industry there is ample market for the establishment and successful operation of our business venture. Please refer to Appendix C for more information regarding the Addressable Market Size.

Defined Trading Area & Geographical Location The trading area will be within Toronto’s Distillery District where The Travelling Cork will primarily attract most of its customers. The Distillery District is a national historic site which 2

Statistics Canada Catalogue no. 92‐591‐XWE. Ottawa. Released March 13 2007. http://www12.statcan.ca/english/census06/data/profiles/community/index.cfm?Lang=E

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represents the largest and best preserved collection of Victorian Industrial Architecture. The Travelling Cork will take advantage of the traffic of Torontonians and visitors of The Distillery District, play a part in one of the largest and most unique festival line‐ups in the country, and fit into the art and culture of the district by offering wines, dishes and music from around the globe. The geographic location is Toronto which is situated on the shore of Lake Ontario, the most eastern of the great lakes. Toronto is home to over 2 million residents while the Greater Toronto Area (GTA) is occupied by approximately 4.5 million Canadians. The city is one of the most vibrant regions in North America and therefore a very popular tourist destination because of its diverse entertainment and culture. Toronto is home to everything from banking and financial services, film and television production, fashion and also possesses a thriving arts community.

Total Industry Revenues Total revenues for the Ontario wine industry were $529 million in 2007 compared to the $202 million in revenues in 1997 3 . Therefore over a period of 10 years the industry’s revenues have grown by almost 162%. These figures portray the growing popularity of wine for Ontarians which is a very positive sign for The Travelling Cork. Toronto also has the second largest food cluster in North America with annual sales of $15 billion 4 , which represents one half of all such activity in Ontario. This annual sales figure includes food processing, warehousing and distribution, retailing and food service. However it still gives a general thought of how large and thriving Toronto’s food industry is within Ontario, and more largely within North America which supports our decision to choose Toronto as the location for the Travelling Cork. 3 4

(http://winesofontario.org/PDFs/KPMGStudy08.pdf) http://www.toronto.ca/business_publications/pdf/omaftor_finalreport.pdf

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Projected Market Share To project the Travelling Cork’s market share we must find out how much competition exists for The Travelling Cork by assessing how many wine bars and restaurants there are in Toronto. For projection purposes the entire wine bar and restaurant market will be assumed to contain only those establishments that are located within Toronto. After 1 Year In Toronto there are 25 establishments that are considered to be wine bars and therefore in direct competition with The Travelling Cork. These 25 establishments are assumed to be the entire market, holding 100% of the market share as a group. For projection purposes it will be assumed that the market share is distributed evenly throughout all 25 establishments. Hence each establishment would hold 4% of the market share. The Travelling Cork will be the 26th wine bar to enter this market and after one year is projected to have 3.85% market share. After 3 Years To project The Travelling Cork’s market share after 3 years we will assume that every year one additional wine bar and restaurant will enter the market. Therefore, in The Travelling Cork’s second year of operation there will be 27 establishments in the market and in the third year there will be 28. As a result of these new entrants into the market, the Travelling Cork will lose 0.14% of its market share in year 2((100%/27)/27)) and 0.13% of its market share in year 3((100%/28)/28)). Because of the true wine bar experience that The Travelling Cork offers its market share will increase by 50% in year two and again by 50% in year three. After gaining 3.85% market share in its first year of operations, the Travelling Cork will gain 1.93% market share in year 2 and 2.89% market share in year 3 because of its sustainable competitive advantage of being a true wine bar and carrying such a large and distinct assortment of wines. Therefore the projected market share for The Travelling Cork in year 3 will be 8.39% (3.85% + 1.93% ‐ 0.14% + 2.89% ‐ 0.13%). Page | 10

MARKETING PLAN Price & Value Proposition The Travelling Cork will use a values based pricing system and will use a premium pricing strategy. This is reasonable because The Travelling Cork will be a sophisticated wining and dining establishment that will provide patrons will the highest quality of wine, food, service and experience. The perceived value of our products and services will be high allowing us to use a premium pricing strategy. The prices that we will charge will be within the following ranges: Product Tapas 5 Desserts Glass of Wine Wine Flights Facility Rental

Price (Low) $10 $8 $6 $13

Price (High) $19.50 $10 $15 $18 TBD

The following chart is a comparison of prices for a glass of wine and plate of food between The Travelling Cork and its three main competitors. Wine Bar The Travelling Cork Tappo Wine Bar & Restaurant The Boiler House Jamie Kennedy Wine Bar

Glass of Wine Price Ranges $6 to $15 N/A N/A $4 to $17.50

Food Price Ranges $7 to $16 $10 to $38 $9 to $35 $5 to $14

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Integrated Marketing Communications Plan We plan to use an integrated marketing communications program to make consumers aware of The Travelling Cork, as well as our products and service offerings. The objectives that will be used for this IMC campaign are to: 1. Create brand awareness utilizing: > Print; Online; TheTravellingCork.ca; Sponsorship; Public Relations; and Event Marketing mediums 2. Define position to target audience and communicate unique attributes of product/service utilizing: > Print; Online; TheTravellingCork.ca; and Public Relations mediums 3. Create awareness of, and draw traffic to TheTravellingCork.ca utilizing: > Print; Online; and Public Relations mediums 4. Convince 25% of target audience to visit location within the first 3 months: > Print; Online; TheTravellingCork.ca; Sponsorship; Public Relations; and Event Marketing mediums 5. Induce trial purchase of 25% of target audience within the first 3 months utilizing: > Print; Online; TheTravellingCork.ca; Sponsorship; Public Relations; and Event Marketing mediums 6. Capture 2% to 5% of market share within the first year utilizing: > Print; Online; TheTravellingCork.ca; Sponsorship; Public Relations; and Event Marketing mediums

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The following mediums and vehicles will be utilized:

Medium Print ‐ Newspaper Print ‐ Magazine

Online Advertising

Website Sponsorship

Public Relations

Event Marketing

> > > > > > > > > > > > > > > > > > > > > > > > > >

> > > >

Vehicles Globe and Mail (Beppi Crosariol – Wine Critic for G&M; Food & Wine section) Toronto Star (Gordon Stimmell – writes a column in the Food Section) Toronto Life Toronto Visitor Guide Toronto City Guide Now Magazine Wine Tidings TorontoTourism.com Now Toronto iMagazine OntarioTravel.net SeeTorontoNow.com DistilleryDistrict.com Toronto.ca Travellingcork.ca Summerlicious – promotes Toronto restaurant industry TIFF TUFF – Toronto Urban Film Festivals Distillery Arts Festivals Other Distillery District Festivals TD Canada Trust Toronto Jazz Festival Toronto Fringe Festival ‐ Theatre AGO Press releases Any media coverage that is going on in the Distillery District “Partnering” with boutique hotels in the area – providing them with a complimentary night out to experience our offerings. We will recommend their hotel to patrons, if they do the same for us Corporate events Wedding parties Special themed night Special guests – more famous musicians

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Theme The initial goal of our advertising will be to attract customers through simple, yet sophisticated marketing communications. Simplicity will be our most significant emphasis in our visual media advertisements and it will primarily highlight the prestige of the Travelling Cork. This aesthetic will be applied throughout all advertising to tie all mediums and vehicles together in one coherent campaign. With this theme, it is our intention to symbolize the Travelling Cork’s core offering of wine and also to create a bit of mystery that will incline the audience to visit the website or even better, our wine bar. Please refer to Appendix D:1 for a creative brief outlining how a magazine ad might be designed incorporating this theme and Appendix D:2 for an example of a magazine advertisement.

Target Market Segmentation The Travelling Cork’s target market can be segmented into two groups. The primary segment will be young, urban professionals and locals who visit The Distillery District, as well as those who want to go out for a glass of wine and/or a small meal before or after a night out on the town. This group will also include those who enjoy wine. Please refer to Appendix E:1 for a detailed description of this segment. The secondary segment will be tourists who are visiting the Toronto area. This group will be between the ages of 25‐54 and are frequent visitors of arts and cultural events. Please refer to Appendix E:2 for a detailed description of this segment.

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DEVELOPMENT PLAN The Travelling Cork is a wine bar and doesn’t have any technical developments or requirements and uses a business model that has been previously used, thus a complete development plan is unnecessary. There will however be a need to trademark our logo and name in order to protect the business from competition that might try to steal our design.

PRODUCTION & OPERATIONS PLAN The Travelling Cork will provide customers with a large selection of wines from around the world, but will also offer a casual and sophisticated place to spend time with friends, family or even business partners.

Supply Chain The Traveling Cork will get food supplied from a local downtown market, the St. Lawrence Market. Located only minutes from the Distillery District this market will be our main supplier of fresh fruits and vegetables, meat and poultry, seafood and dairy products. The executive chef will make regular trips to this market to purchase products that meet his or her standards. This will ensure that our customers are provided with the freshest quality ingredients in their dishes. Upon opening, The Traveling Cork will offer 70+ different wines from nine different countries including Canada, USA, Chile/Argentina, France, Italy, Spain and Australia/New Zealand. In order to keep costs and prices low, we have decided to purchase wines from the LCBO. The LCBO already has established relationships with wine suppliers in a number of countries throughout the world and is able to purchase these wines at a lower cost than if we were to go directly to the supplier’s ourselves. Another benefit of buying directly from the LCBO is that we will not have to worry about import tariffs and fluctuating currencies which we would if we were to purchase wines directly from suppliers. As the business continues to grow we would like to start importing specialty wines directly from wineries around the world to offer our Page | 15

customers wines that can’t be purchased from the LCBO or in any other establishment. Some of the wineries that we may choose to purchase from may be: Fox Creek Wines and Red Hill Estate in Australia; Maison Joseph Drouhin in France; TheFrench Farm in New Zealand; and Bava Winery or Adriano Adami in Italy.

Production Costs The Travelling Cork’s production costs will consist primarily of wine and secondly of food. Based on our decision to carry 70+ types of wine initially from the LCBO and food products from the St. Lawrence Market, we will incur a starting inventory cost of $40,127. Our starting inventory of food products will cost approximately $5000 and our starting wine stock will cost 35, 127. Inventory will then be replenished using an inventory management system. Based on our sales projections and the average food consumption per customer the food costs for first year of operations will be $728,238. There will be 22 wine inventory turnovers (35, 127.90 each) for a total annual cost of $772,813. Please refer to Appendix F for all production costs.

Labour Our front line staff of waiters (six full‐time waiters and four part‐time waiters) will be knowledgeable on all wines that we offer in order to educate our customers and help them select the wine that meets their needs. These waiters will add to the overall experience we want our customers to have which will then lead to repeat visits. All waiters will be paid hourly. Since our main focus is providing a large selection of wines, our food menu will be small and easy to produce relative to the menus of ‘normal’ restaurants. We will have one executive chef who will manage the day‐to‐day food preparation and will have some control regarding what foods will be offered on our menu. Our menu will consist of several small tapas. There will be one dish that will correspond with each of the seven regions in which we have purchased our wines. This will allow our customers to make easy selections of foods that will complement the wines in which they taste and not overwhelm them with too many selections. Assisting the executive chef will be two sous chefs who will also help with the day‐to‐day operations in the kitchen. One sous chef will be in charge of prep work in the morning and afternoon hours and Page | 16

the second sous chef will take the evening shift. The chefs will be paid by means of salary. Other support staff will include two part‐time dishwashers, one full‐time maitre’d, and two full‐time bartenders, all who will be paid hourly. There will also be a management team of four that will be paid by salary. This team will include Chris Ament, Karim Fawzy, Torben Nielsen and Steph Reiley. Please refer to the Appendix G:1 and G:2 for all labour costs.

Licenses The Travelling Cork will require a number of licenses and permits before being legally operational. Most of these permits are a onetime fixed payment. The total cost for all required licenses and permits for the first year of operation is $8,481. Please refer to the Appendix F for specific licenses and permits needed, as well as costs.

Location The Travelling Cork will be located in The Distillery District which is a national historic site that represents one of the largest and well preserved collections of Victorian Industrial Architecture. The Travelling Cork will take advantage of the traffic of Torontonians and visitors of The Distillery District, play a part in one of the largest and most unique festival line‐ups in the country, and fit into the art and culture of the district by offering wines, dishes and music from around the globe.

Facilities & Equipment We will rent an existing vacant spot that we will reconstruct. This size of this space will be of 3000 sq. ft. and will cost a total of $38.00/sq. ft. a month to lease. The building that will be rented to build and establish The Travelling Cork will cost $38.00/sq. ft./month and will be a total of 3000 sq. ft.. Page | 17

The following equipment will be required for The Travelling Cork opening: Kitchen Commercial Mixer Dishwasher Food Blender Heavy‐Duty Dish Boxes Convection Oven Duty Range with Oven Microwave Oven Steamer Refrigerator (2 doors) Work tables Knife set Double Boiler Bake/Roast pan Sheet Pans Brazior Pots Fry Pan Stock Pot Espresso/Coffee Machine

Dining and Lounge space Flatware Set 40 piece Teaspoon (8) Dinner fork (8) Salad fork (8) Soup Spoon (8) Dinner Knife (8) Tables (seats 2) Chairs Leather chairs Leather couches Foot Stool Coffee tables End table Wine glasses Cocktail Glasses Plates 12 per case Bowls 12 per case Cutlery Box Back bar cooler Hostess stand/Cash register

Wine cellar Wall mounted wine rack = Holds 12 Island display pack = Hold 234 Cooling Unit

Please refer to Appendix H for a complete list of required equipment and their respective costs.

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Daily Operations The following chart illustrates the breakdown of daily operations at The Travelling Cork: Time 7 am 9 am

11 am

Activity Buying ingredients for day Prep food for day Manager A arrives Prep operations for day Lunch server arrive at 10:30 to prep Open wine bar

12 pm

Regular lunch time service

1 pm

Regular lunch time service

2 pm

Regular lunch time service

3 pm

Regular lunch time service

4 pm

Sous chef A leaves Sous chefs B and C arrive and prep food for dinner Lunch server leaves Dinner servers arrive at 4:30 to prep Manager A leaves Manager B arrives

5 pm

Dinner begins

6 pm

Regular lunch dinner service

7 pm

Regular lunch dinner service

8 pm

Night server arrives Bartender arrives

10 am

Responsibility Exec Chef Sous Chef A Manager A Manager A Server A Manager A Manager A Server A Sous Chef A Manager A Server A Sous Chef A Manager A Server A Sous Chef A Manager A Server A Sous Chef A Sous Chef A Sous Chefs B, C Servers B, C Manager A Manager B Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Server D Bartender

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Time

Activity

9 pm

Regular lunch dinner service

10 pm

Regular lunch dinner service

11 pm

Regular lunch dinner service

12 am

Regular lunch dinner service

1 am

Regular lunch dinner service

2 am

Close wine bar

Responsibility Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B Exec Chef Sous Chef B,C Servers B,C Manager B

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ENVIRONMENTAL SCAN Current North American Trends The wine bar trend that has succeeded in the U.S. over the past few years is slowly but surely reaching trendier cities in Canada, Toronto most notably. “The growth reflects wine's long‐awaited coming of age in the country's cultural consciousness. The Adams Wine Handbook 2006, an industry marketing resource, reports that U.S. wine consumption rose 2.1 percent in 2005, continuing a decade‐long increase. More and more vintners use snazzy packaging and savvy marketing to promote their products. A steady stream of medical research has touted the benefits of drinking wine ‐‐ particularly red wine ‐‐ in moderation.” 5 Many wine industry analysts state side have also noticed the younger generations interest in not only wine, but the wine bar atmosphere. The popularity of wine bars is being attributed to the success of Starbucks’ lounge style atmosphere where millions of twenty to thirty‐year olds choose to spend their lunch and evening hours socializing. Aside from the tourist market, we can see many young professionals visiting our wine bar to either enjoy a small meal or to enjoy some appetizers and enjoy our lounge. Wine bars have become very successful in the downtown core of Toronto, located in the arts and sports sectors. However, The Distillery District has yet to house true wine bar style establishment. Our biggest direct competitor will be Tappo Wine Bar and Grill. While Tappo has a large variety of wines available, they offer primarily an Italian dine‐in experience with a small bar. We want to differ by sticking with the trend of a lounge atmosphere so patrons have the choice of either enjoying a meal or simply enjoying a few glasses of wine with some tapas to compliment.

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2006/11/17/WIGTRMBVR01.DTL

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External Competitive Analysis Toronto’s Distillery District was developed to bring culture and excitement to a once forgotten area of the city. Today the district has been refurbished to offer a premiere art, culture and heritage site for tourists from around the world. “The Distillery restaurants offer many exceptional dining opportunities. Restaurants range from intimate to grand and specialize in everything from tasting menus to casual fare. Whether you are looking for fine dining, a specialty sandwich, fresh seafood, traditional Italian or succulent steak, The Distillery has something for you.” 6 Top Three Competitors The Travelling Cork’s top three competitors were chosen based on their direct competition with respect to business model and geographic proximity. The main competitor will be Tappo Wine Bar & Grill. Tappo will directly compete with us in terms of geographic location and international wine offering. Tappo specializes in offering a full dining experience with a menu emphasizing Italian and Mediterranean dishes. Tappo has excellent reviews in atmosphere, wine selection, customer service and dish quality. The strategic competitive advantage appears to lie in being the only Italian‐Mediterranean establishment in The Distillery District. Their wine list also compliments this with a variety of International and local wines. The chef’s specialty menu also weighs heavily on the seafood end. However, Tappo does not advertise any special catering or event services on their website. The restaurant is open Sunday and Tuesday from 5 pm to 10 pm; Wednesday from 12 pm to 10 pm; Thursday from 12 pm to 11 pm; and Friday and Saturday from 12 pm to 12 am. The second largest competitor will be The Boiler House, also located in The Distillery District. The Boiler House’s focus is on dining with a large menu for both brunch and dinner. They will be a large competitor in regards to the corporate and private events element of the business model, especially with their large patio that can accommodate up to 700 guests. The Boiler 6

http://www.thedistillerydistrict.com/frameset.html

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House can also accommodate up to 450 people for a cocktail event and 200 for a seated dinner. It appears that The Boiler House’s SCA revolves around its large presence and ability to accommodate large groups of people, which in turn makes it ideal for corporate and private events, market share we will be competing for. The Boiler House does not offer a wine list online and therefore we will assume they are not competing with us on the wine offering. The restaurant is open Tuesday to Saturday at 5 pm and Sunday at 11 am. Their website also doesn’t specify a closing time. Our third largest competitor in terms of similarity to our business model and product offering is The Jamie Kennedy Wine Bar, located outside of the Distillery District. The Jamie Kennedy Wine Bar will compete with The Traveling Cork on a number of factors including the use of locally grown and purchased foods, a variety of international wines, private catering services and a knowledgeable staff. To add to that, Jamie Kennedy is a well known and praised chef, popular among critics in Canada. While the Jamie Kennedy Wine Bar and restaurant will compete closely with our business, our location will help deter their business from stealing our market share and vice versa. The restaurant is open from 11:30 am to 11 pm, 7 days a week. The threat of substitute products or services has the potential to be a challenge for us. While we will primarily be concerned with direct and indirect competition, they represent alternatives to the products and services we offer. In The Distillery District, we will need to be wary of The Mill Street Brew Pub. This beer alternative may appeal to some customers more than wine. The threat of substitutes is high in the restaurant industry and The Distillery District offers seven in addition to our business not to mention the numerous other Toronto Area fine dining establishments.

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The Travelling Cork’s Strategic Competitive Advantages The Traveling Cork will hold its own position as a unique addition to the seven food and drink establishments located in The Distillery District. The Traveling Cork will centre itself around a casual lounge and dining atmosphere that encourages intimate conversation to compliment fine wines and international cuisine. While the competition has positioned themselves to act primarily as restaurants, we have taken a different approach. The Traveling Cork is looking to capitalize on the true wine bar trend that has taken over many cities in the United States – a trendy yet toned down place to get a drink and a small meal without the noise and distractions that most bar experiences entail. Our competitive advantage lies in our ability to provide extensive knowledge on our wines and dishes paired with superior service. Our aim is to provide a relaxing lounge‐style environment for our customers will also be part of our competitive advantage. This puts us in the position to be a place where patrons can sit down, relax and enjoy a glass of wine, possibly an appetizer or dessert and enjoy a good conversation. We will be able to support customers looking to stay for under or over an hour with our lounge and dining sections. Strengths Lounge/dining atmosphere – unique to Distillery District Knowledgeable staff Distribution deals with wineries Quality of service Locally purchased and imported food High traffic area In the heart of a festival and culture centre Special dishes created to compliment international wine selections Wine sample packs Marketing ability Will become a leader in The Distillery District, our concept is part of a growing trend Premium liquor and wine

Weaknesses Walking distance to direct competition Start‐up costs Wine selection Page | 24

MANAGEMENT TEAM Structure of Business The Travelling Cork will be a partnership and will have a functional structure. Capital investment financing will be obtained by pooling the financial resources of each founder and additional financing will be obtained through long‐term debt and our own investments. If we are able to acquire the financial assistance from a Venture Capitalist, they will hopefully invest approximately $500,000 into The Travelling Cork will benefit from 35% stake in the company. This venture capitalist will act as a silent partner that will not be involved in the day to day operations of the business. They will however have say in all major decisions of the company.

OwnerManagers There are four owners in total. Two owner‐managers will oversee all day‐to‐day operations and supervise all staff. They will be in charge of making executive decisions, keeping financials in order, ordering inventory, payroll, hiring, etc. The other two owners will act as silent partners who will oversee major decision of the business however will not be involved with day‐to‐day operations. These managers will be responsible for building and maintaining relationships with vineyards around the world. This will help us build our SCA by bringing in unique one of a kind wines that are not available anywhere else.

Professional Advisors We will benefit from professional advice from Professor Rob Sloan and business entrepreneurs including Steve Macdonald and Andy Kyprianou. The four Managers also pride themselves on the knowledge that they have gained from their marketing studies at Conestoga College.

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IMPLEMENTATION SCHEDULE In order to keep expenses low we have allotted a total of 5 months to complete all start‐up operations. Within this time span we will need to complete the construction of the kitchen, wine storage, washroom, and dining areas, as well as, the installation of major kitchen equipment and the inventory management system. During this time we will also need to decorate the dining area as well as hire and train the staff to make sure they are familiar with our wines. Please refer to Appendix I for a complete outline of the implementation plan.

FINANCIAL FEASIBILITY Cash Required for StartUp The start up funds allocated for the established and opening of The Travelling Cork include monthly recurring costs totalling $663,063.80 and total onetime cash requirements totalling $322,222.18 which are comprised of capital costs and soft costs. Therefore the total estimated cash to start this business is $985,285.98. Please refer to Appendix J for a complete breakdown of cash required to start this business.

Pro Forma Revenue, Growth & Profits Year One The method we used to project revenues is based on an average amount of money spent by every customer. Afternoon customers are estimated to spend an average of $25 ($14 on a glass of wine and $15 on food) at one time while evening customers are estimated to spend an average of $35 ($10 on a glass of wine and $25 on food). We assumed that customers would spend less in the afternoon than they would in the evening because it is our observation that one typically will eat less and spend less in the afternoon than they do in the evening (lunch vs. dinner). To determine how much revenue we would make in a week we estimated the amount of customers we would get an hour and multiplied that by the amount of hours in which we are open per week and per year. In the afternoon (12 pm to 4pm) we estimated that we would get Page | 26

an average of three customers per hour Sunday through Wednesday and five customers per hour Thursday through Saturday. In the evening (4pm to midnight) we estimated that we would get an average of 11 customers per hour Sunday through Wednesday and 40 customers per hour Thursday through Saturday for an eight hour period. We estimated that 2.5% of our customers will purchase one wine package. Therefore, 36 customers will purchase one wine package during normal business weeks and 65 customers will purchase wine packages during festival business weeks. Please refer to Appendix K for revenues. Consequently, annual gross sales will amount to just under $3,000,000. Less fixed expenses and variable expenses net profit after tax is exceedingly positive and amounts to almost $400,000 following the first year of operations. Please refer to Appendix G.1 for all fixed and variable expense figures. Year Three Revenue projections were done by increasing all customer levels by 16.0% in Year Two and 20% cumulatively in Year Three. We chose to increase the number of patrons who visit The Travelling Cork by 16.0 %and 20% respectively because consumers will tell their family and friends about The Travelling Cork and their personal experiences. This will provide us with a free form of advertising that is more trusted that any advertising campaign because the information is coming from a trusted source. Aside from the increase in customers, all projections stayed constant from Year One. This includes normal and festival afternoon and evening projections and package sales projections. Please refer to Appendix L for revenue projections. Subsequently, annual gross sales will be equal approximately $3,600,000. After taking away fixed expenses and variable expenses net profit after tax is very positive and equals almost $530,000 after the third year of business. Please refer to Appendix L for all fixed and variable expense figures. Page | 27

Year Five Revenue projections were done by increasing all customer levels by 22% in Year Four and 24% cumulatively in Year Five. We chose to increase the number of patrons who visit The Travelling Cork by 22% and 24% respectively because consumers will tell their family, friends, and colleagues about their continuing satisfaction with the overall experience that The Travelling Cork offers. Aside from the increase in customers, all projections stayed constant from Year One. This includes normal and festival afternoon and evening projections and package sales projection. Please refer to Appendix L for revenue projections. Accordingly, annual gross sales will total to almost $3,700,000. Minus fixed expenses and variable expenses net profit after tax is at its peak totalling just about $560,000 subsequent to the fifth year of establishment. Please refer to Appendix L for all fixed and variable expense figures.

Price Value Relationships The method we use to project revenues is based on an average amount of money spent by one customer. Afternoon customers spend an average of $25 and evening customers spend an average of $35. Based on this method, if the prices of our products were to increase then our customers would spend the same amount of money, however they would likely buy fewer products. This would result in The Travelling Cork’s overall costs going down. Likewise, if our prices were to go down our customers would spend the same amount of money and would likely purchase more products. This would result in our overall costs going up. Whether the prices of our products increase or decrease our revenues would stay constant based on our projection method. In our industry, our target market is generally less prices sensitive. They don’t mind paying a higher price because they will come to The Travelling Cork for the high quality experience and service that we provide. Therefore, if a customer visits The Traveling Cork to enjoy a glass of wine they will not sacrifice that wine if the price is more than the expected. Page | 28

Pro Forma Balance Sheet Upon opening The Travelling Cork will have assets totalling approximately $325,000 and total liabilities and net worth totalling $645,000. When the third year of operations comes to an end The Travelling Cork will have acquire just under $3,100,000 in total assets disproportionately outweighing the total liabilities and net worth of just over $530,000. Please refer to Appendix M for all other figures including figures for the end of Year 1 and Year 2.

BreakEven for Year 1 Lastly, for the break‐even analysis total operating costs for year 1 total just over $700,000 and the contribution margin is just under 50% giving a break even gross sales point of approximately $1,400,00 Please refer to Appendix N for precise figures.

Potential Growth The Travelling Cork will experience growth levels of 16.7% in Year Two and 22% in Year Three. The Travelling Cork’s growth will be due to existing customers who have become loyal to our establishment by making it their top of mind wind bar choice and sharing their positive experience with friends and family.

BreakEven & Profitability For our break‐even analysis we chose to do a separate analysis for food and wine. This way we can understand how many bottles of wine we need to sell in order to cover our wine inventory costs and how much food we need to sell to cover our food inventory. Please refer to and Appendix M for the break‐even analysis for Years 1 and 3, respectively.

Primary Research On Sunday, July 26, 2009 Karim Fawzy, travelled to the Mediterraneao restaurant to do some primary research. The Mediterraneao restaurant isn’t a “true wine bar” or a wine bar‐ Page | 29

restaurant combination. However, it is an upscale restaurant that offers a unique traditional Mediterranean culture and atmosphere with the focus on a quality and authentic Greek cuisine. The restaurant is owned, managed and operated by an experienced Cypriot chef named Andy Kyprianou. The main purpose of conducting primary research at this restaurant was to research and forecast liability insurance expenses, insurance coverage, and verify our liquor license estimate. Our estimate for the liquor license was correct and we were also able to obtain the figures for forecast liability insurance ($4,500/year) and insurance coverage (up to $1,500,000.00). Lastly, we wanted to get an idea for pricing strategy for glasses of wine from the least expensive glass to the most expensive glass however we had to keep in mind that this establishment didn’t carry more than 10 types of wine. The cheapest glass of wine on the menu was $4.25 and the most expensive was only $8.00. Aside from the figures that we’ve gained from this primary research this brief yet meaningful meeting reiterated the fact that The Travelling Cork must carry wine that can be offered by glass for less than $9.00 a glass.

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USES FOR FINANCING After analyzing the costs associated with creating the business of The Travelling Cork, we are ready to ask for $500,000 to cover these costs.

Terms Because we’re asking for a $500,000 investment we propose that the investors will own a 35% stake in our business. The founders will have full ownership and control over operations of the business and the investors will play the role of a silent partner with the right to profit sharing, in proportion to their percentage of ownership.

Uses This initial investment will cover the costs associated with launching this venture. The planned uses for this money will include: •

Building refurbishment/construction

•

Inventory

•

Marketing

•

Start‐up Operations

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APPENDIX A The Travelling Cork Wine Bar Layout

Appendix B Wine List Ontario Wines White Sawmill Creek Dry Hochtaler Bib Botticelli Peller Estates French Cross Chardonnay Crtn Sawmill Creek White Reserve Bib Red Sawmill Creek Dry Red Botticelli Domaine D'Or Red Bib Peller Estates French Cross Shiraz Crtn Moving Mountains Shiraz‐Cabernet Sparkling Wine (Ontario) White Brights President Dry Sparkling Andres Champagne Peller Estates Ice Cuvee Vqa Trius Brut Vqa Rose Henry Of Pelham Cuvee Catherine Brut Rose Vqa Peller Estates French Cross Sparkling Rose France White Remy Pannier Blanc De France B & G Cuvee Speciale Blanc Bouchard Pere & Fils Pouilly‐Fuisse Jaffelin Pouilly‐Fuisse Jaffelin Pouilly Fuisse Pierre Sparr Gewurztraminer Red Le Piat D'Or Rouge Patriarche Rouge Mouton Cadet Rouge Georges Duboeuf Beaujolais‐Villages La Vieille Ferme Cotes Du Ventoux Argentina White Trapiche Astica Sauvignon/Semillon Argento Chardonnay Los Arboles Chardonnay Red Trapiche Cabernet Sauvignon Bodega Norton Cabernet Sauvignon La Puerta Shiraz Chile White Cono Sur Viognier Santa Carolina Chardonnay Concha Y Toro Frontera Chardonnay Errazuriz Estate Chardonnay Red Concha Y Toro Frontera Cab/Sav Merlot Santa Carolina Cabernet Sauvignon/Merlot Santa Carolina Cabernet Sauvignon Reserva Cono Sur Shiraz Italy White Velletri Le Contrade White Doc Fontana Di Papa Colli Albani Fontana Di Papa Colli Albani

Size

Price/Per Bottle

Quantity needed

Price

4000 4000 1500 100 20000

$28.75 $33.95 $12.95 $10.15 $150.95

18 18 30 30 12

$517.50 $611.10 $388.50 $304.50 $1,811.40

4000 1500 4000 1000 2000

$29.75 $12.95 $33.95 $11.45 $24.95

18 30 18 30 18

$535.50 $388.50 $611.10 $343.50 $449.10

1500 1500 750 750

$18.50 $12.95 $29.95 $24.95

30 30 18 18

$555.00 $388.50 $539.10 $449.10

750 750

$29.95 $9.95

18 30

$539.10 $298.50

1500 1500 750 750 750

$13.85 $15.45 $27.90 $25.95 $25.95 $16.10

30 30 30 18 30

$415.50 $463.50 $837.00 $467.10 $483.00

1500 1500 1500 1500 1500

$15.95 $13.95 $26.45 $24.95 $20.80

30 30 18 18 18

$478.50 $418.50 $476.10 $449.10 $374.40

750 750 750

$7.45 $9.85 $12.95

30 30 30

$223.50 $295.50 $388.50

750 750 750

$8.65 $10.95 $9.90

30 30 30

$259.50 $328.50 $297.00

750 750 750 750

$10.00 $8.50 $7.95 $11.90

30 30 30 30

$300.00 $255.00 $238.50 $357.00

750 750 750 750

$8.45 $9.50 $12.85 $10.05

30 30 30 30

$253.50 $285.00 $385.50 $301.50

2000 2000

$15.90 $16.35

30 30

$477.00 $490.50

Lamberti Donini Trebbiano Chardonnay Velletri Torrescura Pinot Grigio Giovello Sauvignon Blanc Carton Folonari Pinot Grigio Giovello Pinot Grigio Citra Trebbiano D'Abruzzo Doc Red Ruffino Chianti Antinori Toscana Igt Ruffino Aziano Chianti Classico. Bertani Valpolicella Valpantena Ripasso Fontanafredda Barolo Negrar Valpolicella Negrar Amarone Classico Masi Costasera Amorone Classico Spain White Marques De Riscal White Rene Barbier Classic White Red Marques De Riscal Reserva Marques De Caceres Crianza Red Rocamar Red Osborne Solaz Tempranillo Cabernet Sauvignon Australia White Yellow Tail Chardonnay Tempus Two Copper Wilde Chardonnay Wolf Blass Yellow Label Riesling Long Flat White Semillon/Sauvignon Blanc Long Flat White Semillon/Sauvignon Blanc Red Jacob's Creek Shiraz/Cabernet Long Flat Cabernet/Merlot Carton Tempus Two Copper Cabernet Merlot Rosemount Diamond Shiraz New Zealand White Stoneleigh Marlborough Chardonnay Matua Valley Hawkes Bay Sauvignon Blanc Monkey Bay Sauvignon Blanc Red Stoneleigh Marlborough Pinot Noir USA California White Beringer Founders Estate Pinot Grigio Smoking Loon Chardonnay Parducci Chardonnay Lic Wente Chardonnay J.Lohr Riverstone Chardonnay California Red Napa Valley Vineyards Cabernet Sauvignon Black Box Paso Robles Cabernet Sauvignon Crtn Smoking Loon Cabernet Sauvignon Sonoma Vineyards Merlot Carlo Rossi California Red

Price and list taken from LCBO http://www.lcbo.com/main/en.shtml

1500 1500 1500 750 1500 1500

$13.95 $16.85 $17.50 $14.75 $35.95 $12.95

30 30 30 30 18 30

$418.50 $505.50 $525.00 $442.50 $647.10 $388.50

750 750 750 750 750 1500 750 750

$15.65 $24.90 $18.35 $16.80 $28.25 $17.50 $35.05 $37.45

30 30 30 30 18 30 18 18

$469.50 $747.00 $550.50 $504.00 $508.50 $525.00 $630.90 $674.10

750 750

$12.75 $9.95

30 30

$382.50 $298.50

750 750 1500 1500

$25.30 $16.95 $12.95 $20.00

30 30 30 30

$759.00 $508.50 $388.50 $600.00

1500 750 750 750

$21.95 $18.95 $15.95 $10.95 $10.95

18 30 30 30

$395.10 $568.50 $478.50 $328.50

1500 1000 750 750

$22.95 $12.95 $18.95 $15.95

18 30 30 30

$413.10 $388.50 $568.50 $478.50

750 750 750

$16.95 $15.95 $14.95

30 30 30

$508.50 $478.50 $448.50

750

$19.95

$598.50

750 750 750 750 750

$17.95 $20.55 $14.05 $16.20 $20.80

30 18 30 30 18

$538.50 $369.90 $421.50 $486.00 $374.40

30 30 30 30 18 1830

$544.50 $304.50 $618.00 $508.50 $431.10

750 $18.15 1000 $10.15 750 $20.60 750 $16.95 3000 $23.95 TOTAL BOTTLES TOTAL COST

$39,452.40

AppendixÂ C Age Characteristics of the Population Total population 0 to 4 years 5 to 9 years 10 to 14 years 15 to 19 years 20 to 24 years 25 to 29 years 30 to 34 years 35 to 39 years 40 to 44 years 45 to 49 years 50 to 54 years 55 to 59 years 60 to 64 years 65 to 69 years 70 to 74 years 75 to 79 years 80 to 84 years 85 years and over Median age of the population % of the population aged 15 and over Occupation Total experienced labour force 15 years and over A Management occupations B Business; finance and administration occupations C Natural and applied sciences and related occupations D Health occupations E Occupations in social science; education; government F Occupations in art; culture; recreation and sport G Sales and service occupations H Trades; transport and equipment operators and related I Occupations unique to primary industry Occupations unique to processing; manufacturing and utilit Industry Total experienced labour force 15 years and over Agriculture and other resource-based industries Construction Manufacturing Wholesale trade Retail trade Finance and real estate Health care and social services Educational services Business services Other services

City of Toronto Total Male Female 2,503,280 1,205,370 1,297,915 134,975 69,095 65,885 133,595 68,655 64,940 141,045 72,755 68,290 146,200 74,975 71,230 172,450 84,465 87,985 190,255 90,355 99,900 195,670 94,030 101,640 203,025 99,440 103,580 212,595 105,745 106,850 193,980 94,525 99,460 168,445 80,170 88,270 148,120 70,215 77,905 109,465 51,385 58,080 93,835 42,515 51,315 85,160 38,300 46,865 74,900 32,210 42,690 56,450 22,070 34,380 43,100 14,465 28,635 38.4 37.4 39.3 83.6 82.5 84.7

Toronto CMA Total Male Female 5,113,145 2,486,250 2,626,895 298,390 152,725 145,665 311,925 160,400 151,525 339,625 175,205 164,420 339,935 174,900 165,035 344,005 171,920 172,080 347,370 165,340 182,030 372,310 177,220 195,085 412,315 199,095 213,220 451,270 221,665 229,600 414,700 202,405 212,295 351,765 169,795 181,970 304,370 147,410 156,965 218,140 105,260 112,875 175,440 82,285 93,155 149,865 69,015 80,855 124,075 54,135 69,940 89,985 35,090 54,895 67,660 22,380 45,280 37.5 36.7 38.2 81.4 80.4 82.4

City of Toronto Total Male 1,311,695 680,190 139,475 84,195 271,815 96,590 105,835 80,380 64,655 17,060 125,300 44,490 70,275 35,380 299,150 138,150 134,190 124,290 7,815 6,375 93,185 53,265

Female 631,510 55,280 175,225 25,450 47,590 80,810 34,895 160,995 9,900 1,440 39,915

Toronto CMA Total Male Female 2,758,700 1,440,020 1,318,680 320,600 202,160 118,440 590,605 195,290 395,315 224,410 171,595 52,815 124,080 29,720 94,365 230,610 73,900 156,710 107,530 51,965 55,565 611,410 279,445 331,965 327,850 303,220 24,630 26,265 20,635 5,635 195,330 112,090 83,245

City of Toronto Total Male 1,311,695 680,190 10,530 7,180 63,225 56,815 153,705 98,865 61,540 38,375 130,405 61,200 132,580 62,950 116,975 25,960 88,325 31,390 330,280 191,585 224,125 105,870

Female 631,510 3,350 6,410 54,840 23,165 69,210 69,630 91,020 56,940 138,690 118,255

Toronto CMA Total Male Female 2,758,700 1,440,020 1,318,680 30,410 20,570 9,840 148,895 129,925 18,970 371,275 240,510 130,765 166,325 100,985 65,340 293,465 135,550 157,915 259,875 119,630 140,245 222,135 43,450 178,690 172,990 55,775 117,215 658,510 386,240 272,270 434,805 207,380 227,430

Statistics Canada Catalogue no. 92-591-XWE. Ottawa. Released March 13 2007. http://www12.statcan.ca/english/census06/data/profiles/community/index.cfm?Lang=E

APPENDIX D:1

Creative Brief: Magazine Advertisement Problem Statement Lack of awareness of the Travelling Cork’s presence in the downtown Toronto competitive environment requires us to seek our target market through print advertising. Target Audience The target for this ad will be represented by our primary target – young urban professionals/locals (emerging elite with respect to Generation 5 data). Demographic attributes of this target include age ranges between 20 ‐39 years, single or unmarried couples with medium to heavy purchase behaviour in urban social, night lounges and classical music/theatre. Incomes tend to range above average with many members of this target currently in their first or second jobs. Key media influences include internet, television and magazine (in which this ad shall be placed). Primary external influences come from close peer or social groups, social media with many also referring to review and blog sites for information on products/services. Communication Objectives The goal of this advertisement will be to generate awareness of our product/service offering through traditional print media that targets “young urban professionals” in the GTA. Key Promise or Benefit Statement The ad will symbolize our focus primarily on the sale of wine, our number one key success factor and differentiation from the competition. Supporting the “Benefit Statement” The copy within the ad will provide insight into the benefits The Travelling Cork offers through expert service, knowledge and quality products, as well as Toronto’s most unique and diverse selection of wines. Personality of the Ad Simple and Sophisticated will be the premise of this advertisement. We want the wine to be the key focal point of the ad which will in turn symbolize the key focal point of the business: wine. Creative Strategy & Execution The ad will be developed around a centrally placed wine glass on a white background. The wine glass will contain a strong coloured red wine to grab attention. The copy of the ad will wrap around the glass and will reveal the essence of the Travelling Cork and essentially what it’s all about. The ad will incorporate the use of the lifestyle appeal that ties in with the psyche of our target market.

APPENDIX D:2

Example of a Magazine Advertisement

APPENDIX E:1 Age: 20‐39 Household: Singles, couples and roommates – often no dependents Marital Status: Single or in relationships Region: Primarily urban Purchase Occasion: Medium‐Heavy Sensitivity: Urban social, night lounges, fine dining, classical music Primary Influences: Peer groups, trendy media Key Media: Internet, television, magazine Income: Above average Benefits: A social hub to get together and socialize; heavy consumers of premium or niche brand wine/spirits Young Urban Professionals and Locals This is an extremely social, image conscious young urban group. It consists of mostly singles and roommates – one and two person households mainly aged 20‐39 in their first or second job after graduating university. This group has the lowest presence of children. They rent high or low rise apartments in downtown locations such as Toronto. Incomes are slightly above average but with no family to support this often results in a rather comfortable lifestyle. A significant minority are already making over $100,000 a year. Occupations are similar to those of a white collar high income group which these people will no doubt become as they age and move up in their careers. They prefer to be out with friends in the urban social scenes. For such a young group there is a high degree of sophistication about them – they will often listen to classical and jazz music, watch the Bravo! channel, read about international news, make confident fashion choices and patronize museums, the fine arts and theatre. They are the most likely group to become immersed in the movie premieres and parties of the Toronto International Film Festival. Expenditures and habits are among the narrowest, most clearly defined and distinctive. They tend to be heavy smokers and drinkers, particularly of premium or niche brands. Brad Rogers, Senior Manager of Direct & Digital Marketing at Scotiabank further confirms this segment as one in which we should target as he states, “The Travelling Cork would be a great addition to The District and something I could see myself going to in the future”.

APPENDIX E:2 Age: 45 ‐ 64 Household: Children of high school or post secondary Marital Status: Married or divorced in new relationships Region: Toronto, Vancouver, Calgary Purchase Occasion: Medium ‐ Heavy Sensitivity: Arts, culture and outdoors Primary Influences: Reference groups, traditions, travel guides Key Media: Magazine, newspaper, some television Income: Upper middle to high income/retired Benefits: Time and money to spend on tourist attractions and enriching their lives Out of Towners These are established wealthy married couples owning expensive older homes in posh urban cities throughout Canada, including Toronto, Calgary and Vancouver. Families consist predominantly of university educated parents typically aged 45‐64 in senior management and professional occupations with children of secondary and post‐secondary school age. These households exhibit very high levels of activity in most areas due to high disposable income, large household size, and a certain zest for life and energy that propelled them in their successful careers. Media engagement skews to more sophisticated vehicles such as magazines and the business and news sections of newspapers. Spending on all categories of household and durable goods is high; quality and style is sought after with these purchases. Members of the family enjoy culture and the arts but also outings to pop and rock music concerts, movies, bars, restaurants and family oriented venues such as amusement parks and zoos. They also enjoy visiting foreign destinations such as Hong Kong, Italy and France. They attempt to stay healthy through their diet and activities which include strenuous physical fitness activities, gardening and club‐based sports such as golf, sailing, and racquet sports. They usually own at least two cars, typically sedans, mini‐vans and SUV’s.

Appendix F All Expenses & Overall Income Capital and Expenditures Notes Start up Cost Construction Equipment Extra décor Wine and food inventory Inventory Management System Permits Sign Approval of blueprints and designs Food Handler certification Liquor sales licences HVAC Commerical kitchen permit Advertising fee permit ESA certification of inspection Fire alarm letter Occupany letter Fuel safety compliance Musical permit

One time charge to stock inventory

Fixed cost at $29.35 per sq. meter Fixed cost Full course for 7 employees ($73.50 each) New application $1,055. Valid for 2 years $1.49 per sq. meter. Total space is 2302 sq. meters

$ .12 per sq. foot to play background music

Income Notes Estimate Costs $ 100,000.00 $ 113,612.47 $ 50,000.00 $ 40,127.90 $ 10,000.00 $ 313,740.37 $ 205.00 $ 2,283.90 $ 514.50 $ 1,055.00 $ 3,429.98 $ 361.43 $ 60.00 $ 71.00 $ 67.00 $ 67.00 $ 67.00 $ 300.00

TOTAL PERMIT COSTS

$ 8,481.81

TOTAL START UP COST

$ 322,222.18

Operational cost per year Leasing Utilities

$38 X 3000 sq. feets (8 dollars for taxes and 30 for leasing) $38 X 3000 sq. feets (8 dollars for taxes and 30 for leasing) $6,666.66 per month

$ $ 114,000.00 $ 80,000.00

Wages Managers Executive Chef Sous Chefs Servers Servers Dishwashers Bartender Hosts

4 Full‐time/Salary 1 Full‐time/Salary 2 Full‐time/Salary 6 Full‐time/Hourly 4 Part‐time/Hourly 2 Part‐time/Hourly 2 Part‐time/Hourly 1 Full‐time/Hourly

$ 80,000.00 $ 55,000.00 $ 78,000.00 $ 120,000.00 $ 41,600.00 $ 14,976.00 $ 24,960.00 $ 17,000.00

Supplies Food Wine

Yearly cost 22 inventory turnovers a year ($35,127.90 each time)

$ 728,238.00 $ 772,813.80

Marketing and Advertising

$ 25,000.00

TOTAL VARIABLE COST

$ 2,151,587.80

TOTAL COST IN FIRST YEAR

$ 2,473,809.98

Number of weeks a year

Gross revenue per week

Estimate Revenue

Normal Busines Week Afternoon Evening Package sales

Hours 12pm‐4pm Hours 4pm‐12am Hours 12pm‐12am

37 37 37

$ 2,700.00 $ 99,900.00 $ 46,200.00 $ 1,709,400.00 $ 535.50 $ 19,813.50

Afternoon Evening Package sales

Hours 12pm‐4pm Hours 4pm‐12am Hours 12pm‐12am

13 13 13

$ 7,100.00 $ 92,300.00 $ 80,640.00 $ 1,048,320.00 $ 970.50 $ 12,616.50

TOTAL YEARLY REVENUES

$ 2,982,350.00

ESTIMATED FIRST YEAR PROFIT

$ 508,540.02

AppendixÂ G:1 Pro Forma Income Statement for The Travelling Cork for the Year Ending 2010 Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

TOTAL

1. Gross Sales 2. Less: Cash Discounts

$248,529.21 $0.00

$2,982,350.52 $0.00

A. NET SALES

$248,529.21

$2,982,350.52

Cost of Goods Sold: 3. Beginning Inventory 4. Plus: Net Purchases 5. Total Available for Sale 6. Less: Ending Inventory

$40,127.90 $125,087.65 $165,215.55 $40,127.90

$40,127.90 $1,501,051.80 $1,541,179.70 $40,127.90

B. COST OF GOODS SOLD

$125,087.65

$1,501,051.80

C. GROSS MARGIN

$123,441.56

$1,481,298.72

Less: Variable Expenses 7. Owner's Salary 8. Employee's Wages and Salaries 9. Supplies and Postage 10. Advertising and Promotion 11. Delivery Expense 12. Bad Debt Expense 13. Travel 14. Legal and Accounting Fees 15. Vehicle Expense 16. Maintenance Expense 17. Miscellaneous Expenses

$10,000.00 $29,294.66 $0.00 $2,083.33 $0.00 $0.00 $0.00 $250.00 $0.00 $100.00 $100.00

$120,000.00 $351,535.92 $0.00 $24,999.96 $0.00 $0.00 $0.00 $3,000.00 $0.00 $1,200.00 $1,200.00

D. TOTAL VARIABLE EXPENSES

$41,827.99

$501,935.88

$9,500.00 $6,666.66 $169.00 $856.82 $0.00 $0.00 $375.00 $0.00

$114,000.00 $79,999.92 $2,028.00 $10,281.84 $0.00 $0.00 $4,500.00 $0.00 $210,809.76

Less: Fixed Expenses 18. Rent 19. Utilities (Heat, Light, Power) 20. Telephone 21. Taxes and Licenses 22. Depreciation 23. Interest 24. Insurance 25. Other Fixed Expenses E. TOTAL FIXED EXPENSES

$17,567.48

F. TOTAL OPERATING EXPENSES

$59,395.47

$712,745.64

G. NET OPERATING PROFIT (LOSS)

$64,046.09

$768,553.08

H. INCOME TAXES (estimated)

$368,905.48

I. NET PROFIT (LOSS) AFTER INCOME TAX

$399,647.60

Appendix G:2 Wages Number of Staff

Salary

Hourly Rate

Dishwashers Bartender Hosts

Full‐time Part‐time Part‐time Part‐time Full‐time

6 4 2 2 1

‐ ‐ ‐ ‐ ‐

$ 10.00 $ 10.00 $ 8.00 $ 10.00 $ 8.50

40 20 18 24 40

$ 2,400.00 $ 800.00 $ 288.00 $ 480.00 $ 340.00

2 weeks No vacation No vacation No vacation 2 weeks

$ 120,000.00 $ 41,600.00 $ 14,976.00 $ 24,960.00 $ 17,000.00

Manager Executive Chef Sous Chef

Full‐time Full‐time Full‐time

2 1 2

$ 40,000.00 $ 55,000.00 $ 39,000.00

‐ ‐ ‐

40 40 40

$ 769.23 $ 1,057.69 $ 750.00

2 weeks 2 weeks 2 weeks

$ 80,000.00 $ 55,000.00 $ 78,000.00

YEARLY WAGES TOTAL YEARLY WAGES

$ 431,536.00 $

Employee Type

Server

Salary and hourly averages from http://www.payscale.com/research/CA/Job=Cook,_Restaurant/Hourly_Rate

Hours Worked Total Weekly per Week Wages

Vaction Yearly Wages (not paid)

Appendix G:3 Food Expenses Normal week

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Afternoon Average spent on Amount of food only visitors 15 12 15 12 15 15 15 15 15

12 20 20 20 12 TOTAL

Evening Average spent Amount of Total Revenue on food only visitors 25 90 2,250.00 25 90 2,250.00

Total revenue 180.00 180.00 180.00 300.00 300.00 300.00 180.00 $ 1,500.00

25 25 25 25 25

90 320 320 320 90 TOTAL

Total normal 2,250.00 business weeks 8,000.00 8,000.00 8,000.00 2,250.00 Total in one week $ 33,000.00 34,500.00

Yearly Total $ 1,276,500.00

Festival week

Monday Tuesday Wednesday Thursday Friday Saturday Sunday

Afternoon Average spent on Amount of food only visitors 15 32 15 32 15 15 15 15 15

32 52 52 52 32 TOTAL

Total revenue 480.00 480.00 480.00 780.00 780.00 780.00 480.00 $ 4,260.00

Evening Average spent Amount of Total Revenue on food only visitors 25 192 4,800.00 25 192 4,800.00 25 25 25 25 25

192 512 512 512 192 TOTAL

Total normal 4,800.00 business weeks 13 12,800.00 12,800.00 12,800.00 4,800.00 Total in one week Yearly Total $ 57,600.00 $ 61,860.00 $ 804,180.00 YEARLY TOTAL Yearly Food Cost

Yearly expenditure is based of an average of 35% of total revenues in one year. 35% was taken from the following website: http://restaurants.about.com/od/menu/a/foodcost.htm

$ 2,080,680.00 $ 728,238.00

Appendix H Equipment Cost Cost per 1 item

Quantity Needed

Total Cost

$ 658.14 $ 8,327.44 $ 1,394.85 $ 12.59 $ 6,417.94 $ 2,526.33 $ 715.50 $ 4,203.33 $ 3,116.22 $ 257.71 $ 568.87 $ 182.03 $ 91.91 $ 14.81 $ 99.87 $ 37.00 $ 115.05 $ 799.00

1 1 1 10 1 2 1 1 1 2 3 1 2 5 2 5 2 1

$ 658.14 $ 8,327.44 $ 1,394.85 $ 125.90 $ 6,417.94 $ 5,052.66 $ 715.50 $ 4,203.33 $ 3,116.22 $ 515.42 $ 1,706.61 $ 182.03 $ 183.82 $ 74.05 $ 199.74 $ 185.00 $ 230.10 $ 799.00

Kitchen Commercial Mixer Dishwasher Food Blender Heavy‐Duty Dish Boxes Convection Oven Duty Range with Oven Microwave Oven Steamer Refrigerator (2 doors) Work tables Knife set Double Boiler Bake/Roast pan Sheet Pans Brazior Pots Fry Pan Stock Pot Espresso/Coffee Machine Dining and Lounge space Flatware Set 40 piece Teaspoon (8) Dinner fork (8) Salad fork (8) Soup Spoon (8) Soup Spoon (8) Dinner Knife (8) Tables (seats 2) Chairs Leather chairs Leather couches Foot Stool Coffee tables End table Wine glasses Cocktail Glasses Plates 12 per case Bowls 12 per case Cutlery Box Back bar cooler Hostess stand/Cash register

$ 52.06

$ 624.72

$ 199.00 $ 169.00 $ 699.00 $ 1,399.00 $ 299.00 $ 69.99 $ 69.99 $ 92.82 $ 113.69 $ 96.94 $ 58.49 $ 15.13 $ 2,193.51 $ 1,241.57

12 24 20 10 10 10 20 100 86 8 8 3 2 1

$ 2,388.00 $ 4,056.00 $ 13,980.00 $ 13,990.00 $ 2,990.00 $ 699.90 $ 1,399.80 $ 9,282.00 $ 9,777.34 $ 775.52 $ 467.92 $ 45.39 $ 4,387.02 $ 1,241.57

Wine cellar Wall mounted wine rack = Holds 12 Island display pack = Hold 234 Cooling Unit

$ 72.99 $ 599.00 $ 1,565.00

146 2 1

$ 10,656.54 $ 1,198.00 $ 1,565.00

TOTAL COSTS * Prices where taken from the following websites http://www.webstaurantstore.com/restaurant‐tabletop‐supplies.html http://www.shopatstop.com/site/home/ http://www.ikea.com/ca/en/ http://www.customcellars.ca/wine‐accessories.html

$ 113,612.47

APPENDIX I

AppendixÂ J Required Start-Up Funds Estimated Monthly Expenses Column 1

Column 2

Number of Months Your Estimate of Monthly of Cash Required to Expenses Based on Sales Cover Expenses* of $_________ Per Year

Item Salary of Owner-Managers (4) All Other Salaries and Wages Rent (leasing based on $38/sq. feet) Advertising (estimated) Delivery Expense/Transportation Supplies Telephone, Fax, Internet Service Other Utilities Insurance Taxes Including Employment Insurance Interest Maintenance Legal and Other Professional Fees Miscellaneous

$6,666.67 $29,294.66 $9,500.00 $2,083.33 $0.00 $0.00 $169.00 $6,666.66 $375.00 $150.00 $0.00 $0.00 $250.00 $100.00

12 12 12 12 0 0 12 12 12 12 0 0 12 12

Total Cash Requirements for Monthly Recurring Expenses: (A)

Column 3 Cash Required To Start Business (Column 1 X Column 2)*

$80,000.00 $351,535.92 $114,000.00 $24,999.96 $0.00 $0.00 $2,028.00 $79,999.92 $4,500.00 $1,800.00 $0.00 $0.00 $3,000.00 $1,200.00 $663,063.80

Start-up Costs You Only Have to Pay Once Cash Required to Start Business

Capital Costs Equipment (includes inventory management system) Decorating and Contruction Starting Inventory

$123,612.47 $150,000.00 $40,127.90

Soft Costs Deposits with Public Utilities Legal and Other Professional Fees Licenses and Permits Advertising and Promotion for Opening Accounts Receivable Cash Miscellaneous

$0.00 $0.00 $8,481.81 $0.00 $0.00

Total One-Time Cash Requirements: (B)

$322,222.18

Total Estimated Cash Required to Start Business: (A) + (B)

$985,285.98

$0.00

* You Will Have to Decide For Your Particular Business How Many Months You Expect Your Expenses to Exceed Your Revenue So That You Will Have a Shortfall of Cash. This Should Somewhat Overestimate Your Overall Cash Requirements and Provide You With a Safety Cushion In Case Sales Don't Materialize As Rapidly As You Expected.

Appendix K Revenue Normal Week Afternoon Customers Monday Tuesday Wednesday Thursday Friday Saturday Sunday TOTALS

Amount of Visitors

Average Price Spent by One Customer

12 12 12 20 20 20 12 108

$ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00

Totals

Amount of Visitors

$ 300.00 $ 300.00 $ 300.00 $ 500.00 $ 500.00 $ 500.00 $ 300.00 $ 2,700.00

90 90 90 320 320 320 90 1320

Evening Average Price Spent by One Customer $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00

Wine Revenues per Week Totals

$ 3,150.00 $ 3,150.00 $ 3,150.00 $ 11,200.00 $ 11,200.00 $ 11,200.00 $ 3,150.00 $ 46,200.00 WEEKLY TOTAL $ 49,435.50 YEARLY TOTAL $ 1,829,113.50

Average Price of Package

Package Sales Total Weekly Visitors 1428 Percentage that will order at least one package 2.5% Total Visitors who order a package 36 Total Weekly revenues from packages $ 535.50

Weekly Totals

Weighted wine sales average 20/60 = 33%

$ 15.00

Total Daily Revenue $ 3,450.00 $ 3,450.00 $ 3,450.00 $ 11,700.00 $ 11,700.00 $ 11,700.00 $ 3,450.00 $ 48,900.00

Wine Revenue $ 1,138.50 $ 1,138.50 $ 1,138.50 $ 3,861.00 $ 3,861.00 $ 3,861.00 $ 1,138.50 $ 16,137.00

Daily Package Total Daily Wine Revenue Revenue $ 76.50 $ 1,215.00 $ 76.50 $ 1,215.00 $ 76.50 $ 1,215.00 $ 76.50 $ 3,937.50 $ 76.50 $ 3,937.50 $ 76.50 $ 3,937.50 $ 76.50 $ 1,215.00 $ 535.50 $ 16,672.50

Total Revenue on Food Sales

$ 32,227.50

Wine revenues per week Wine Daily package Total daily revenue revenue revenue $ 7,520.00 $ 2,481.60 $ 138.64 $ 7,520.00 $ 2,481.60 $ 138.64 $ 7,520.00 $ 2,481.60 $ 138.64 $ 19,220.00 $ 6,342.60 $ 138.64 $ 19,220.00 $ 6,342.60 $ 138.64 $ 19,220.00 $ 6,342.60 $ 138.64 $ 7,520.00 $ 2,481.60 $ 138.64 $ 87,740.00 $ 28,954.20 $ 970.50

Total Daily Wine Revenue $ 2,620.24 $ 2,620.24 $ 2,620.24 $ 6,481.24 $ 6,481.24 $ 6,481.24 $ 2,620.24 $ 29,924.70

Festival Week

Monday Tuesday Wednesday Thursday Friday Saturday Sunday TOTALS

Afternoon Amount of Visitors 32 32 32 52 52 52 32 284

Package Sales Total Weekly Visitors 2588 Percentage that will order at least one package 2.5% Total Visitors who order a package 65 Total Weekly revenues from packages $ 970.50

Average Price Spent by One Customer $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00 $ 25.00

Totals $ 800.00 $ 800.00 $ 800.00 $ 1,300.00 $ 1,300.00 $ 1,300.00 $ 800.00 $ 7,100.00

Amount of Visitors 192 192 192 512 512 512 192 2304

Evening Average Price Spent by One $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00 $ 35.00

Totals $ 6,720.00 $ 6,720.00 $ 6,720.00 $ 17,920.00 $ 17,920.00 $ 17,920.00 $ 6,720.00 $ 80,640.00 WEEKLY TOTAL $ 88,710.50 YEARLY TOTAL $ 1,153,236.50

Weekly Totals

Total revenue on food sales

Average price of package $ 15.00

YEARLY TOTAL

$ 2,982,350.00

$ 58,785.80

AppendixÂ L Pro Forma Income Statement for The Travelling Cork for the Year Ending 2015 End of Year 1

End of Year 2

End of Year 3

End of Year 4

End of Year 5

1. Gross Sales 2. Less: Cash Discounts

2,982,350.52 0.00

3,480,403.06 0.00

3,578,820.62 0.00

3,638,467.63 0.00

3,698,114.64 0.00

A. NET SALES

2,982,350.52 16% growth

3,480,403.06 20 % growth (from 1st year)

3,578,820.62 22% growth (from 1st year)

3,638,467.63 24% growth( from 1st year)

3,698,114.64

Cost of Goods Sold: 3. Beginning Inventory 4. Plus: Net Purchases 5. Total Available for Sale 6. Less: Ending Inventory

0.52 40,127.90 1,501,051.80 1,541,179.70 40,127.90

0.52 40,127.90 1,809,809.59 1,849,937.49 40,127.90

0.52 40,127.90 1,860,986.72 1,901,114.62 40,127.90

0.52 40,127.90 1,892,003.17 1,932,131.07 40,127.90

0.52 40,127.90 1,923,019.62 1,963,147.52 40,127.90

B. COST OF GOODS SOLD

1,501,051.80

1,809,809.59

1,860,986.72

1,892,003.17

1,923,019.62

C. GROSS MARGIN

1,481,298.72

1,670,593.47

1,717,833.90

1,746,464.46

1,775,095.03

120,000.00 351,535.92 0.00 24,999.96 0.00 0.00 0.00 3,000.00 0.00 1,200.00 1,200.00

D. TOTAL VARIABLE EXPENSES

501,935.88

Less: Fixed Expenses 18. Rent 19. Utilities (Heat, Light, Power) 20. Telephone 21. Taxes and Licenses 22. Depreciation 23. Interest 24. Insurance 25. Other Fixed Expeses

114,000.00 79,999.92 2,028.00 10,281.84 0.00 0.00 4,500.00 0.00

114,000.00 79,999.92 2,082.00 0.00 0.00 0.00 4,500.00 0.00

114,000.00 79,999.92 2,082.00 1,055.00 0.00 0.00 4,500.00 0.00

114,000.00 79,999.92 2,082.00 0.00 0.00 0.00 4,500.00 0.00

114,000.00 79,999.92 2,082.00 1,055.00 0.00 0.00 4,500.00 0.00

E. TOTAL FIXED EXPENSES

210,809.76

200,581.92

201,636.92

200,581.92

201,636.92

F. TOTAL OPERATING EXPENSES

712,745.64

702,517.80

703,572.80

702,517.80

703,572.80

G. NET OPERATING PROFIT (LOSS) (G = C - F)

768,553.08

968,075.67

1,014,261.10

1,043,946.66

1,071,522.23

H. INCOME TAXES (estimated)

368,905.48

464,676.32

486,845.33

501,094.40

514,330.67

I. NET PROFIT (LOSS) AFTER INCOME TAX

399,647.60

503,399.35

527,415.77

542,852.27

557,191.56

AppendixÂ M

Pro Forma Cash Flow Forecast for The Travelling Cork 12 - Month Cash Flow Projections Minimum Cash Balance Required =

Total Sales Cash Flow From Operations (during month) 1. Cash Sales 2. Payments for Credit Sales 3. Investment Income 4. Other Cash Income A. TOTAL CASH FLOW ON HAND

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

YEAR 1 TOTAL

$248,529.21

YEAR 2 TOTAL

YEAR 3 TOTAL

$2,982,350.52

$3,480,403.06

$3,578,820.62

124,264.61 0.00 0.00 0.00

124,264.61 124,264.61 0.00 0.00

1,491,175.26 1,491,175.26 0.00 0.00

1,740,201.53 1,740,201.53 0.00 0.00

1,789,410.31 1,789,410.31 0.00 0.00

124,264.61

248,529.21

2,858,085.92

3,480,403.06

3,578,820.62

$165,215.55

$10,000.00

$125,087.65 $10,000.00

$29,294.66

$0.00

$2,083.33

$0.00 $0.00 $250.00 $0.00 $0.00 $9,500.00 $6,666.66 $169.00 $856.82 $0.00 $375.00 $0.00 $224,411.02

$0.00 $0.00 $250.00 $0.00 $0.00 $9,500.00 $6,666.66 $169.00 $856.82 $0.00 $375.00 $0.00 $184,283.12

1,541,179.70 120,000.00 351,535.92 0.00 24,999.96 0.00 0.00 3,000.00 0.00 0.00 114,000.00 79,999.92 2,028.00 10,281.84 0.00 4,500.00 0.00 2,251,525.34

1,798,556.71 120,000.00 351,535.92 0.00 24,999.96 0.00 0.00 0.00 0.00 0.00 114,000.00 79,999.92 0.00 1,800.00 0.00 4,500.00 0.00 2,495,392.51

1,880,239.23 120,000.00 351,535.92 0.00 24,999.96 0.00 0.00 0.00 0.00 0.00 114,000.00 79,999.92 0.00 2,855.00 0.00 4,500.00 0.00 2,578,130.03

0.00 0.00 0.00

4,166.67

Less Expenses Paid (during month) 5. Inventory or New Material 6. Owner's Salary 7. Employee's Wages and Salaries 8. Supplies and Postage 9. Advertising and Promotion 10. Delivery Expense 11. Travel 12. Legal and Accounting Fees 13. Vehicle Expense 14. Maintenance Expense 15. Rent 16. Utilities 17. Telephone 18. Taxes and Licenses 19. Interest Payments 20. Insurance 21. Other Cash Expenses B. TOTAL EXPENDITURES Capital Purchase of Fixed Assets Sale of Fixed Assets C. CHANGE IN CASH FROM PURCHASE OR SALE OF ASSETS Financing Payment of Principal of Loan

4,166.67

50,000.04

145,000.00

0.00

145,000.00

0.00

Issuance of Equity Positions

0.00

Repurchase of Outstanding Equity

0.00

149,166.67

4,166.67

195,000.04

50,000.04

Inflow of Cash From Bank Loan

D. CHANGE IN CASH FROM FINANCING

0.00

E. INCREASE (DECREASE) IN CASH F. CASH AT BEGINNING OF PERIOD

49,020.26 0.00

68,412.76 49,020.26

68,412.76 117,433.02

68,412.76 185,845.78

68,412.76 254,258.54

68,412.76 322,671.30

68,412.76 391,084.06

68,412.76 459,496.82

68,412.76 527,909.58

68,412.76 596,322.34

68,412.76 664,735.10

68,412.76 733,147.86

801,560.62 0.00

1,035,010.59 801,560.62

1,050,690.63 1,836,571.20

G. CASH AT END OF PERIOD

49,020.26

117,433.02

185,845.78

254,258.54

322,671.30

391,084.06

459,496.82

527,909.58

596,322.34

664,735.10

733,147.86

801,560.62

1,836,571.20

2,887,261.84

MEET MINIMUM CASH BALANCE

ACCEPTABLE

AppendixÂ N Break-even Point for First Year Operating Expenses Owner's Salary Employee's Wages Supplies and Postage Advert. and Promotion Delivery Expense Bad Debt Allowance Travel Professional Fees Vehicle Expense Maintanance Expense Other Varaible Expenses Rent Utilities Telephone Taxes & Licenses Depreciation Interest Insurance Other Fixed Expenses TOTAL OPERATING EXPENSES CONTRIBUTION MARGIN =

BREAKEVEN POINT ($Sales) =

120,000 351,536 0 25,000 0 0 0 3,000 0 1,200 1,200 114,000 80,000 2,028 10,282 0 0 4,500 0 $712,746 Gross Margin Net Sales

Total Operating Expenses Contribution Margin $1,434,995.72

49.67%

AppendixÂ O Return on Investment Net Income (before Taxes) [from Schedule 4]

$768,553

Net Worth

$406,398

[from Schedule 6]

R.O.I. =

Net Income (before taxes) Net Worth =

189.11% %