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Business Financial Plan

Washington State Elizabeth Chen, Grace Wang

International Community School

2016-2017

BUSINESS FINANCIAL PLAN 2016-2017 1

Table of Contents

1.0 Executive Summary……………………………………………………...2 2.0 Company Description…………………..………………………………3

2.1 Mission Statement 2.2 Legal Form of Business 2.3 Company Governance 2.4 Company Location 2.5 Short-Term Goals 2.6 Long-Term Goals

3.0 Operations and Management………………………………………..4 3.1 Business Facility 3.2 Operating Hours

4.0 Personnel Plan…………………………………………………………….5 4.1 Workforce

5.0 Marketing and Sales Strategy……….…………………………………6 5.1 Online Website 5.2 Party Packages 5.3 Social Media 5.4 Partnerships

6.0 Industry Analysis…………………………..………………………………8 6.1 Target Market

6.1.1 Guest Experience 6.2 Company Growth 6.3 Competition Analysis 6.4 Risk Analysis

7.0 Legal Operations……………………………………………………….10 7.1 Financial Institution 7.2 Loan Request 7.3 Loan Collateral

8.0 Financials…………………………………………………………………11 8.1 Itemized Planned Expenditures 8.2 Annual Income Statement 8.3 Cash Flow Statement 8.4 Monthly Income Statement 8.5 Loan Amortization

9.0 Works Cited……………………………………………………………...15


1.0 Executive Summary

In a world where technology has ruled nearly every facet of human living, the concepts of entertainment and connection between

people have been transformed. It seems that today’s youth spends more time talking with one another through text than in real life.

Video games, online chatting, and videos have replaced traditional forms of interaction and leisure. However, by combining modern

entertainment platforms with traditional recreational activities, Riptide Fun Center is geared to give people of all ages the belief that

while technology offers a convenient pastime, fun in its purest form is enjoying the company of one another.

Riptide Fun Center is a family entertainment center located in Bellevue, Washington. Housed in a 30,000-square foot facility, Riptide

features numerous zones of entertainment with varying age ranges, from toddlers and small children to an adult-exclusive zone. With

these facets, it is ensured that anybody, regardless of background or taste, will find Riptide to be a place of true fun. In addition, by

offering private rooms as part of Riptide’s party packages, customers can hold parties, events, or simply a private place to enjoy

themselves. This gives the option of both a public or private dynamic for customers.

The city of Bellevue establishes itself as an ideal city to support a family entertainment center due to its rising population, moderately

wealthy demographic, and age spectrum. In the 2010 census, over 63.8% of households were families, with 28.7% of citizens having

children under the age of 18. With nearby schools and a substantial residential community, Bellevue gives Riptide the greatest

opportunity to experience success and continued growth.

Because there are several entertainment centers nearby Riptide’s location, we will be dependent on the facility’s modern, aesthetic

design and significant market outreach to gain customers. Riptide will diverge from traditional stereotypes of fun centers being stuffy,

loud, and solely for younger children. By including a sleek design lined with large built-in fish tanks, the facility will have a modern,

appealing structure with a slightly mature vibe to ensure customers that Riptide is fit for all ages, not just children. Furthermore, by

utilizing social media networks, mobile applications, and the Internet, Riptide will be able to reach out to a large spectrum of potential

customers, and will be easily accessible to a target market of teenagers to young adults.

Throughout Riptide’s operation, the company will assume that the employees and partnerships of the company will remain reliable

and will be a part of Riptide’s community for a substantial amount of time. This will help to create a family feeling and to preserve

relationships within the company and our customers. Riptide will assume that the population in the surrounding Bellevue area will

steadily increase and that the average household income and population remains constant. This will aid the company’s customer flow

within the facility, allowing Riptide’s revenue to increase and likewise employee’s wages as well.

Due to the unique needs of Riptide’s financing, two loans must be attained to supplement the company’s start-up costs. A CDC/504

loan from the United States Small Business Administration will provide the majority of Riptide’s financial needs. The 504 loan covers

the rent and renovation of the center, and the purchase of appliances and equipment. The loan in its entirety, principal and interest,

will have a maturity period of 10 years. A secondary loan, an SBA microloan, will account for the furniture and inventory for Riptide’s

opening months. The microloan has a maturity period of 108 months, although Riptide plans to repay this loan in a single payment in

the 13th month after acquiring the loan, as allowed by the loan plan.

With a growing young population in the city of Seattle, and the unique amenities that Riptide offers, we are confident that Riptide can

quickly secure financial stability, and establish itself as a leader in the entertainment industry in restoring what it means to connect with

other people.


2.0 Company Description

2.1 Mission Statement

Riptide Family Fun Center strives to provide a safe, fun environment for adults and kids of all ages to enjoy themselves in the presence

of staff who genuinely care about the experience of those who choose to spend time with us.

2.2 Legal Form of Business

Riptide will take the legal form of a limited liability company (LLC). This form of business will be most ideal for our company, as it

provides the limited liability features of a corporation and the tax efficiencies and operational flexibility of a partnership. We will not be

required to pay more than what we have paid or agreed to have paid towards settling debts. In doing so, we risk avoidance of being

liable for all debts of business.

2.3 Company Governance

Riptide Fun Center will be a limited liability company (LLC) between the three owners, in which the owners will be exempt from any

personal liability. They will serve as the chief officers of the company. Grace Wang will be the Chief Financial Officer (CFO) and oversee

all financial aspects of the company. Elizabeth Chen will be the Chief Operations Officer (COO) and will work to recruit and hire

employees, oversee daily operations, and execute Riptide’s business plans according to our business model.

She will also be the Chief Executive Officer (CEO) and will integrate the company’s strategic direction, oversees all aspects of Riptide,

and makes all the final decisions for the company.

2.4 Company Location

Riptide Fun Center will be located at the address of 13640 Bel Red Rd, Bellevue, WA 98005. Because Riptide places itself in a clean,

respectable area within proximity to numerous middle to upper-class neighborhoods, we will attract local residents who live within a

convenient distance from the facility.

2.5 Short - Term Goals

Within the first 1 – 5 years of business operations, Riptide aims to accomplish the following immediate development goals:

Pay off 50% of the initial loan granted.

Further develop advertising and marketing strategies through outreach to the community and the use of social media

platforms.

Raise the opening employee salary by 10%.

Partner with a locally owned restaurant to provide food for Fin’s Fish Shop.

2.6 Long - Term Goals

To remain competitive following the first five years, Riptide will continue to expand its horizons through inclusion of innovative

technology. From years 5 and beyond, Riptide will hope to accomplish financial advancement, company expansion, and increased

partnership within the initial ten years of operation:


Terminate all pending loans

Open an additional franchise location in the Pacific Northwest

Increase staff count to escalate company productivity

Partner with more restaurants to add diversity to the menu

Partner with new innovative tech company to aid the development of Riptide

3.0 Operations and Management

3.1 Business Facility

Riptide Fun Center’s facility will be a 30,000 square foot single story structure located in suburban Bellevue. The facility will serve as a

family fun center compartmentalized into different layers of the ocean, or zones. This serves as a creative way to optimize operations

of the different amenities featured within the entertainment center.

Entrance A receptionist’s table greets customers and

light-up tiles grant an underwater feel. These

tiles are motion censored and are essentially a

touch screen on the floor. When pressed upon,

ripples will be made on the screen, and fish will

swim underfoot.

Coral Reef The Coral Reef, Riptide’s climbing structure, will

include monkey bars, slides, ropes, various

levels, and different nooks and crannies, suited

for children under the age of 18.

Deep Sea Zone A reclusive area just for adults, the Deep Sea

Zone incorporates a bar and lounge for older

customers, where both alcoholic and non-

alcoholic beverages are available for sale.

Fin’s Fish Shop Riptide provides guests with unique dining options from Fin’s Fish Shop whether it be a substantial meal or a light snack.

Kelp Forest The Kelp Forest is Riptide’s indoor ropes course. A height requirement will be installed for participants as safety is Riptide’s main

concern. Once situated, guests can scale the heights of the facility while focusing on their balancing skills and upper body strength.

Midnight Zone The Midnight Zone is Riptide’s multi-level laser tag field. Each player will be given a laser gun and vest to participate in the activity.

While in the arena and during the game, players can supplement their score by shooting other team’s home bases.

Teardrop Rooms Riptide provides groups with three exclusive areas, the Teardrop Rooms, in which each room contains a lounge area complemented

with television and movie access and various video gaming platforms.


Tidal Zone The Tidal Zone provides younger children a safe area to play while their parents likewise enjoy their time. This zone is only for children

under the age of 12 as it is an enclosed area fully supervised by employees.

Twilight Zone The Twilight Zone is the arcade of Riptide Fun Center. Individuals can purchase arcade points at the front desk, allowing them to receive

a card to be swiped in any desired arcade machine. The amount of points needed per machine varies.

Aquarium Tanks In order to attract a maximum number of customers, three floor to ceiling saltwater tanks in which guests can observe the colorful

and diverse sea creatures. These tanks are located in the entrance, the general amenities area, and the Deep Sea Zone.

3.2 Operating Hours

To ensure customer satisfaction and to maximize company revenue, Riptide Fun Center will operate from 12 p.m. to 11 p.m. on

weekdays and from 10 a.m. to 12 a.m. on weekends, well within the range of hours that school is not in session and adults are not

attending work, allowing a maximum number of potential customers to Riptide. Holiday hours vary depending on the occasion and

customers will need to check with the facility on those days. All parts of the center will be open for the total duration of the facility’s

operating hours.

Riptide will be closed from December 24th to January 3rd every year.

4.0 Personnel Plan

4.1 Workforce

Employees will be selected by the three chief officers of Riptide Fun Center. They will be selected based on their experiences and their

belief and dedication to the company’s future. All employees will have monthly evaluations with the three chief officers to certify that

both parties remain on the same page to ensure the successful running of the company.

Riptide will hire 24 employees to run company operations in its opening years. However, throughout the following years after the

company’s initiation, Riptide will hire more employees to accommodate the growing commands of our customers. Riptide hopes to

increase to 30 employees by the fifth year of the company’s operation. These additional employees will aid in the supervision of

activities and possibly the running of Fin’s Fish Shop. All employee’s base salary will confidently increase by 10% in the fifth year to

increase company loyalty. Within the following years, to optimize existing operations, Riptide will subsequently like to add employees

on a management level. These will include various positions for facility supervisors, activity managers, and an overall floor manager.

Chief Operations Officer (COO)

Activities Supervisers (Part-time)

Receptionist (Part-time) Chef / Server Bartender Custodian


5.0 Marketing and Sales Strategy

To enter into the entertainment market in the greater Seattle area, it is vital for Riptide to broaden the company’s advertising to its

target market on multiple marketing platforms in the opening months of operation. Riptide will not only use the growth in technology

over the past years to its benefit, but will also look to spread word of this facility through local newspapers and concrete advertisements

like bus benches and flyers. In initial advertising before opening day, Riptide will push to spread to the community the unique qualities

of this facility, particularly the colorful fish tanks exhibiting life under the sea. Also in the beginning stages of marketing, Riptide will

utilize advertisements in the newspaper to input a coupon which allows families to save on their first time visit to Riptide Fun Center.

Although initially this will cause a net loss for the company, in the long run, after Riptide’s reliability and customer service are known to

guests, we can expect a steady stream of income.

Placement of Point-of-Sale (POS) Systems

In order for the customer’s experience to run as smoothly and efficiently as possible, strategically placing our point-of-sale (POS)

systems to maximize convenience is critical. There will only be two points of sale in our general service. To enter the facility and have

access to amenities, an entrance fee will be applied to all customers at the front desk. This will serve as the primary source of revenue

for our company. However, a second fee will be applied to play games in the Twilight Zone (arcade room). Each arcade game will

require a certain amount of points to play; these points will be available for sale outside the arcade room.

For the point of sale system for party packages, refer to section 5.2.

Entrance Prices Base Fee (2 Hours) Additional Hours Adults $15.00 $5.00 / hour Children (under 18) Seniors (65+)

$10.00 $3.00 / hour

Toddlers (3 and under) $5.00 N/A Arcade Game Prices 1 cent per point Avg. game – 100 points

5.1 Online Website

The Internet is a critical opportunity to connect to a large population at a relatively low cost. This website provides users the essential

support need for first time Riptide customers. Users will be able to read about the founding of Riptide and a biography of its co-

founders. Furthermore, users will be able to look up entrance fees, menu items at Fin’s Fish Shop, and party packages. For those

interesting in hosting events at Riptide, one can find the schedule of Riptide’s events and see when the best time for theirs is.

Personnel Wages Position # of

Employees Hourly Wage

Hours Worked (Weekdays)

Hours Worked (Weekends)

Days Worked

Annual Expenses

Activities Supervisor 12 $15.00 7 14 177 $287,280.00 Bartender 1 $20.00 7 14 354 $63,840.00

Chef 2 $20.00 7 14 354 $127,680.00 Custodian (Day) 2 $12.50 7 14 354 $79,800.00

Custodian (Night) 1 $12.50 3 3 354 $13,275.00 Receptionist 4 $15.00 7 14 177 $95,760.00

Server 2 $15.00 7 14 354 $95,760.00

Total Expenses: $763,395.00


5.2 Party Packages

Party packages at Riptide allow guests the opportunity to host events as simple as they want, up to the scale of a full-sized party. Our

packages are designed to suite birthday parties, holiday parties, or hangouts. To give customers flexibility with their events, we will offer

various party packages with varying levels of service to accommodate their style of event. All party packages will come with full access

to the Riptide facility, light snacks and a Teardrop room with all its amenities. Party packages must be purchased at least 24 hours in

advance, either through Riptide’s online website or at our center. Package

Deal Sand Dollar Package Sea Star Package Stingray Package Orca Package

Base Fee (2 hours)

$19.99 $29.99 $49.99 $69.99

Extra Costs +$25.00 per person

+$10.00 for each

additional hour, per

person

+$25.00 per person

+$10.00 for each


person

+$25.00 per person

+$10.00 for each


person

+$25.00 per person

+$10.00 for each additional hour,

per person

Features Small Teardrop Room

w/ television access

Video Game Access

Variety of Snacks from

Fin’s Fish Shop

Full access to facility

Small Teardrop Room

w/ television access

Video Game Access

Variety of Snacks from

Fin’s Fish Shop


1,000 Arcade Points

Access to unlimited

drink bar (no alcohol)

Choice of Small or Large

Teardrop Room w/

television access

Video Game Access

Variety of Snacks from Fin’s

Fish Shop


2,000 Arcade Points

Access to unlimited drink

bar, including alcohol

Unlimited movie access

Choice of Small or Large Teardrop

Room w/ television access

Video Game Access

Variety of Snacks from Fin’s Fish Shop


Choice of reserved activity areas

5,000 Arcade Points

Access to unlimited drink bar,

including alcohol

Unlimited movie access

Catered dining from Fin’s Fish Shop

5.3 Social Media

Riptide will integrate the use of assorted social media platforms such as Facebook,

Snapchat, Instagram, and Twitter. Riptide will use these platforms to announce

special events or promotions. By implementing a variety of social media platforms,

Riptide will spark interest in our target market, the young to middle-aged

consumer, as they spend a large amount of time on these platforms compared to

other means like watching TV or reading the paper.

5.4 Partnerships

Riptide Fun Center is home to three large saltwater fish tanks that serve as showpieces for the

center. We will establish a partnership with Denny’s Pet World in Kirkland, Washington to assist

with these tanks. Riptide will display a variety of sea creatures from Denny’s Pet World, as they

have an expansive collection of aquarium life. We will get fish food and habitats

complementary of Denny’s as well. In return, Riptide will advertise the pet store’s name to our

customers and will speak highly of the relationship with Denny’s and the large variety of animal

supplies available to its customers.


6.0 Industry Analysis

Unfortunately, family entertainment centers have taken a backseat to television, video games, and the Internet in recent years. These

platforms offer a convenient form of entertainment to keep families happy without having to leave their home. Without having a

national presence such as that of Disney theme parks, most family entertainment centers rely on repeat visitation by locals to drive the

success of business. According to data collected by IAAPA, the average North American family visits family amusement centers 3.2-4.6

times per year. Because of the expected reliance on repeat visitations, maintaining a strong reputation in the local community and

utilizing local media exposure is essential to ensure the success of Riptide.

However, by providing several amenities as well as a full-service restaurant, a unique underwater atmosphere, and economic prices,

Riptide will attract customers by providing services that home entertainment cannot: the convenience of a variety of activities and

already-prepared food, ensuring that the consumer can fully enjoy their experience in our center without worry.

6.1 Target Market

Riptide intends to establish itself as the preferred entertainment center of Bellevue,

Washington, home to an estimated population of 139,820 in 2016, a 14.27%

increase from 2010. Furthermore, the area consists of the younger generation,

with 30% of the population having children under the age of 18. Consequently,

residents under the age of 18 consists of 21.2% of the city’s population. By

including numerous video games and a unique, technology-implemented

modern atmosphere, Riptide appeals to the younger population, who will

encourage older family members to go to the center.

Bellevue provides the ideal location for a fun center facility as the weather conditions attract customers to indoor facilities. Bellevue

receives about 25 inches of rain a year and precipitation for more than half of a year. As a result, an indoor facility will provide the most

ideal solution for entertainment. The city of Bellevue is also home to a majority of middle class families, with an average household

income of $92,524. Large corporate offices like Microsoft, Google, and Amazon are all nearby. Therefore, Riptide can be assured price

will not be a concern for our customers. With such rapid population growth in the target area, this area is an already established market

with long-term benefits.

6.11 Guest Experience

The family entertainment center industry is driven by repeat visitations by guests. With a limited number of individuals within

the Bellevue area, visitations by the same individuals, multiple times a year is necessary to ensure success. To reach this

objective, Riptide will ensure a pleasurable experience to its guests through exceptional customer service and a clean facility.

In addition, employees serve as an integral part of meeting guests’ expectations, and thus, must be properly trained in dealing

with a multitude of situations. Thus, Riptide will like to focus on employee retention to allow employees to develop a

relationship with the company as well as returning customers. The maturation of these relationships will cause returning guests

to feel that their needs are met, leaving them a desire to return to Riptide’s facilities. An increase in guest visitation by returning

guests will spark an increase in activity of Riptide and an overall increase in revenue for the company.


6.2 Company Growth

As the Eastside community continues to grow, we will be able to outreach to more people to bring to our center. Given that kids in the

area are raised on the newest technology, they will appreciate our use of the newest video game consoles mixed with the traditional

activities of a family fun center, Riptide is confident in the ability to attract substantial amounts of the nearby families to our fun center.

Riptide will put flyers out in the community and buy a few advertisements to branch out to those not reached through word of mouth.

6.3 Competition Analysis

Pump it up (11605 NE 116th St, Kirkland, WA 98034)

Recently awarded the 2015 Golden Teddy For Birthday Venues by Parent Map magazine, the Pump It Up location in Kirkland,

Washington will be Riptide’s top competitor. They have been recognized by Ruby Slipper, the Seattle Times and other organizations

as a popular spot for parties and group events. To compete with this venue, Riptide will work to outreach to the community early on

in our development in order to establish a reputation of fun, reliable service. While Pump It Up consists of inflatable activities for both

younger and older children, Riptide will focus not only on children but adults too, incorporating activities to allow parents to relax while

their children have fun.

Chuck E. Cheese’s (2239 148th Ave NE, Bellevue, WA 98007)

Chuck E. Cheese’s is located right down the street from Riptide. Consisting of arcade games and party friendly food, the amenities of

Chuck E. Cheese’s will be on par with Riptide’s. A large complaint of customers of Chuck E. Cheese’s comprises of a too rowdy

environment for families. However, to gain the upper hand, Riptide will work to create a more inviting atmosphere allowing parents to

leave their children to a child care service to ensure the entire family gains the most out of their time at Riptide. Furthermore, Riptide

will extend its services by having private party rooms, allowing a more secluded group environment for parties.

Family Fun Center and Bullwinkle’s Restaurant (7300 Fun Way, Tukwila, WA 98188)

Family Fun Center consists of attractions including bowling, bumper cars, batting cages, go karting, and laser tag. They also have a

partnership with Bullwinkle’s Family Food ‘n Fun Restaurant, in which Bullwinkle the Moose has become a cartoon character affectionate

towards both adults and children. To combat this competition, Riptide will partner with a catering restaurant as well; if not initially, in

the near future. This will hopefully increase our outreach to the community with both parties advertising this new venue.

6.4 Risk Analysis

Riptide’s understanding of possible risks present in our business operation will allow us to overcome any challenges that may arise and

adapt to the changing economic environment.

Aquarium Failures: With three floor to ceiling fish tanks, the maintenance of these structures will be crucial to the success of

Riptide Fun Center. It is understood that difficulties can arouse within the first few months of operation with the constant need of

supervision of these tanks. As a result, to eliminate any possible damage these structures may cause, Riptide will require weekly checks

of all functioning systems necessary in the maintenance of these tanks. This will ensure the safety of our customers, employees, and

most importantly, the sea creatures.

Employee Liability: As a small run business, Riptide will be affected by the decisions made by our employees. To reduce the

possibility of personnel liability, Riptide will ensure our employees fully understand the guidelines set by management and Riptide will


work to keep our employees safe in the workplace either from physical structures or customers’ actions. If a case were to arise regarding

the occurrence of an accident, Riptide will work diligently with the employee to provide a solution benefiting both parties as the

management of Riptide truly do care about both our customers’ and employees’ well being.

Partnership Dependence: Riptide relies on the proper upkeep of our partnerships, including our suppliers for Fin’s Fish Shop

and supplies from Denny's Pet World. If these partnerships were to fall through, Riptide’s overall revenue will suffer. Thus, Riptide will

work to find either a new partnership with other companies or will work to find a quick solution to ensure customer flow remains fluid

to prevent significant decrease in revenue.

Elasticity of the Market: Entertainment centers can be a difficult market to manage. Depending on the season or the most recent

trends, business for entertainment centers can vary drastically. Entertainment centers located outdoors have most of their business

during the summer seasons, whereas indoor facilities will be more popular in the cooler months. Riptide Fun Center takes this into

account and will benefit from being an indoor facility during colder weather, commonly experienced by the Seattle area. To compete

with outdoor facilities in the warmer seasons, we will consistently advertise our service to the community and possibly partner with

other companies to further ourselves to the public.

Natural Disasters: Although the greater Seattle area including Bellevue does not experience catastrophic events on a yearly basis,

this area is still prone to quite a few natural disasters. Riptide Fun Center will do its best to prepare for these disasters through spending

the funds to strengthen the overall structure of the current building, preparing safety routes out of the building, providing backup

equipment in case of damage to the overall structure, and investing in insurance.

7.0 Legal Operations

To ensure successful and legal operation, several requirements must be met by Riptide Fun Center. This includes a Washington States

Business License ($19.00), which is necessary to open a business in Washington State and allows businesses to hire employees. In

addition, we must obtain a King County Amusement Devices license ($500.00) to permit our use of novelty amusement devices.

Furthermore, Riptide will acquire a City of Bellevue Cabaret License ($400.00) necessary for serving food and liquor where entertainment

is permitted as well as a Joint City Business License ($87.00) so Riptide can register with multiple cities at the same time and file our

taxes through the same portal for a more convenient service.

7.1 Financial Institution

Riptide’s two chief officers, Elizabeth Chen, and Grace Wang will inquire two loans from the United States Small Business Administration

(SBA). The SBA itself will not provide Riptide with the loans, but will instead facilitate the loan transactions with SBA-approved lenders.

These loans include a CDC/504 loan, in which the business owners need to contribute a 10% equity, and a conventional lender will

lend 50% of the loan at their own rate and term. However, because Riptide with a new business established within 2 years, and is

purchasing a single purpose property, an owner equity injection of 15% is required.

A Certified Development Company (CDC) will supplement the remaining 40% of the loan. For this loan, we have selected Ameritrust

CDC in Seattle, WA as our CDC, based on their commitment and efficiency in loan transactions. The chief officers have also chosen

Bellevue’s Bank of America to serve as the company’s commercial lender. This bank is not only SBA-approved, but also offers various

programs created by the SBA. The secondary loan is an SBA Microloan. This loan will also be transacted with Bank of America. In

compliance with the policies for a Limited Liability Company, Riptide Fun Center’s owners personally guarantee repayment of the

principal loans to the LLC.


7.2 Loan Request

Because of the varying proceeds needed to start up, Riptide must apply for two separate loans. An SBA CDC/504 Real Estate and

Equipment loan of $1,180,296.82 will be used to fund the initial rent and renovation of the building, as well as the purchase of appliances

and equipment. Large play structures used within the facility will also be purchased through this loan, as such structures are classified

as equipment. The CDC/504 loan implements an interest rate based on

current market values for 5-year and 10-year US Treasury issues, which

presently stand at 1.87% and 2.36%, respectively. Because the loan will be

used primarily to finance the acquisition of the facility, the loan will have a

maturity period of 10 years, to be paid in annual installments. Riptide’s

monetary projections forecast that the entirety of the loan, principal and

interest, will be paid back within 10 years of operation.

In addition, an SBA Microloan of $47,657.20 will be used for the purchase

of furniture and inventory to supply Riptide in the opening months of

operation. The loan has a maturity period of 108 months, to be paid in

monthly installments beginning 13 months after the loan acquisition. An

interest rate of 7.62% is also applied. However, with Riptide’s financial

projections, the company plans to pay back the entirety of the loan in just

12 months. A quick repayment allows us to retain most of our earnings as

quickly as possible.

7.3 Loan Collateral

To obtain a secure loan, we must give loan collateral equal or greater to the loan amount requesting. This will make it easier for our

loan to get improved, as there will be less risk involved. For the CDC/504 SBA loan, the project assets being financed are used as

collateral, which includes furniture, machinery and equipment, and everything else we are asking for in the loan. It also includes the

personal guarantees of the principal owners.

8.0 Financials

8.1 Itemized Planned Expenditures

Loan Components CDC/504 Loan Components Action Expense Property Rent – 1 year $75,000.00

Facility Renovation $475,000.00

Machinery and Equipment $17,994.49

Personnel Expenses $763,395.00

Utilities $36,000.00

Advertising $20,000.00

Legal Fees $1,195.00

Shareholder Injection $(208,207.67)

Total: $1,180,296.82 Microloan Components Furniture and Inventory $47,657.20

Total: $47,657.20 Total Loan Amount: $1,227,954.02


8.2 Annual Income Statement

8.3 Cash Flow Statement

Looking at our cash flow, we calculated how much profit and expenses we expect to have in each month of 2018. From operating

activities, we would gain profit from the sales of entry fee, food, party plans, etc. We will have incurred costs from inventory

purchases and personnel expenses each month. For financing activities, we would take a loan once we are open and pay fees for

advertising per month. Additionally, we would pay back the SBA loan monthly. Lastly, once we are open, we will pay for renovations,

legality fees, furniture, and equipment/machinery. Rent of the warehouse will also be paid each month.


8.4 Monthly Income Statement


8.5 Loan Amortization

Principal Amount: 1,180,296.82$ Rate of Interest: 2.36%Maturity Period: 10 Years

CDC 504 Loan

27,855.00$

118,029.68$

1-Jan-19 Starting Balance: 1,062,267.14$

1-Jan-1831-Dec-1831-Dec-18

31-Dec-18

Starting Balance: Interest Accured:

Interest Paid: Installment Paid: 31-Dec-23 Installment Paid:

Starting Balance: 1-Jan-2327,855.00$

1,180,296.82$

31-Dec-19 Installment Paid: 118,029.68$

1-Jan-20 Starting Balance: 944,237.46$

31-Dec-19 Interest Accured: 27,855.00$ 31-Dec-19 Interest Paid: 27,855.00$

590,148.42$ 31-Dec-23 Interest Accured: 27,855.00$ 31-Dec-23

31-Dec-22 Interest Accured: 27,855.00$




31-Dec-20 Installment Paid:

Interest Paid: 27,855.00$

118,029.68$



31-Dec-22 Interest Paid: 27,855.00$

118,029.68$






31-Dec-25 Installment pPaid: 118,029.68$






-$ 31-Dec-27 Installment Paid: 118,029.70$


Starting Balance 1-Jan-28


9.0 Works Cited "Apply For A Business License Bellevue, Washington." Bellevue Business License Applications.

N.p., 1 Jan. 2013. Web. 28 Jan. 2017. “Apply For A Business License Bellevue, WA” describes in depth the process needed to obtain licenses in the city of Bellevue. This source was used as a guide to comprehend the necessary measured needed to be taken in order to fully comply with the guidelines of the state.

Cosper, Alex. "Industry Analysis for Family Entertainment Centers." Chron.com. Chron.com, 23 Apr. 2012. Web. 2 Mar. 2017. “Industry Analysis for Family Entertainment Centers” provided a brief overview of the various aspects that needs to be considered regarding the industry of an entertainment center. Cosper’s article was used in the competition analysis as it provided the four aspects needed to be considered, and the article was used in looking at the nearby area of Riptide specifically, and how the area can either aid or hurt the business of Riptide.

Overview of the Family Entertainment Industry. N.p.: Frazier Capital, 14 Feb. 2015. PDF. Overview of the Family Entertainment Center Industry is of the first chapter of the book. It provides a macro overview how a company’s industry and the local economy can impact the value of an analysis. This source further discusses the importance of entertainment facilities in today’s age and the aspect that need to be addressed when considering this industry. This source helped to determine the different parts of our company that needed to be expanded upon and the parts of the entertainment industry that needs to be taken into account.

"Taxes and Licenses." City of Bellevue. City of Bellevue, n.d. Web. 20 Dec. 2016. The “Taxes and Licenses” site provides knowledge of the different taxes and licenses supplied and required by the city of Bellevue. In particular, it listed the necessary licenses that an entertainment facility needs. In addition, this source was used as part of the loan request analysis and the financial institution consideration as the fees of taxes and licenses were taken into account for Riptide’s future finances.

"Wild Waves Theme & Water Park | Home." Wild Waves Theme & Water Park | Home. Webmonster, 2016. Web. 12 Jan. 2017. “Wild Waves Theme & Water Park” website describes the various elements of the Theme park. The information gained off of this site provided an overview for the creation of Riptide as Riptide was able to develop an idea of the needs of an entertainment center. Furthermore, the site aided in the development of the competition analysis as prices, themes, and amenities could be compared.

Principal Amount: 47,657.20$ Rate of Interest: 1.87%Maturity Period: 108 Months

Microloan

1,124.71$

4,765.70$

1-Feb-18 Starting Balance: 42,891.50$

1-Jan-18

31-Dec-1831-Dec-18

31-Dec-18

Starting Balance: Interest Accured:

Interest Paid: Installment Paid: 30-Jun-18 Installment Paid:

Starting Balance: 1-Jun-18

1,124.71$

47,657.20$

28-Feb-18 Installment Paid: 4,765.70$

1-Mar-18 Starting Balance: 38,125.80$

28-Feb-18 Interest Accured: 1,124.71$ 28-Feb-18 Interest Paid: 1,124.71$

23,828.70$

30-Jun-18 Interest Accured: 1,124.71$ 30-Jun-18

31-May-18 Interest Accured: 1,124.71$

30-Apr-18 Installment Paid: 4,765.70$

1-May-18 Starting Balance: 28,594.40$

30-Apr-18 Interest Accured: 1,124.71$

30-Apr-18 Interest Paid: 1,124.71$

31-Mar-18 Installment Paid:

Interest Paid: 1,124.71$

4,765.70$

1-Jul-18 Starting Balance: 19,063.00$

31-May-18 Installment Paid: 4,765.70$

31-May-18 Interest Paid: 1,124.71$

4,765.70$

1-Apr-18 Starting Balance: 33,360.10$

31-Mar-18 Interest Accured: 1,124.71$

31-Mar-18 Interest Paid: 1,124.71$

31-Jul-18 Installment Paid: 4,765.70$

1-Aug-18 Starting Balance: 14,297.30$

31-Jul-18 Interest Accured: 1,124.71$ 31-Jul-18 Interest Paid: 1,124.71$

31-Aug-18 Installment pPaid: 4,765.70$

1-Sep-18 Starting Balance: 9,531.60$

31-Aug-18 Interest Accured: 1,124.71$

31-Aug-18 Interest Paid: 1,124.71$

30-Sep-18 Installment Paid: 4,765.70$

1-Oct-18 Starting Balance: 4,765.90$

30-Sep-18 Interest Accured: 1,124.71$

30-Sep-18 Interest Paid: 1,124.71$

-$ 31-Oct-18 Installment Paid: 4,765.90$

31-Oct-18 Interest Accured: 1,124.71$ 31-Oct-18 Interest Paid: 1,124.71$

Starting Balance 1-Jan-19

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