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TITLE: Final Project - Business Plan for Vic Spanish Riviera Retirement Home.

PROFESSOR: Daniel Doiron

NAME: Victor Palomino ID # 3259445

University of New Brunswick, Saint John

COURSE: MBA 7010

DATE: September 30, 2011

1 Letter of Transmittal

September 23, 2011

Dear Investors:

My partner and I are pleased to submit our business plan for Vic Spanish Riviera Retirement Home to all potential investors. As a start up company we are seeking investments that can bring our plan into action. In return we guarantee an IRR in 5 years of 16% to our capital investors. Our business plan will be a strong indicator of our potential success and thus help you in reaching a conclusion.

The purpose of Vic Spanish Riviera is to bring the best quality service with all the nursing care capabilities that fusions family environment experience and a committed professional staff to improve the standard of life to our clients. As shown in the market analysis, the elder care industry is growing as the baby boomers start to retire. Vic Spanish Riviera sees the potential in targeting this expanding market with a competitive advantage of proving better nursing care service, luxury and more social and recreational activities. Certainly, throughout our business plan we have shown how successful and profitable can Vic Spanish Riviera be. Our business plan includes complete details of our marketing, development, operations and financial plans. The plan also outlines a market and competition analysis, exit strategy, break even analysis as well as sensitivity analysis and mitigation factors.

Vic Spanish Riviera is welcoming investors interested in taking advantage of this key potential opportunity. If you have any questions, my partner and I would be pleased to discuss these either at your convenience. We look forward to doing business with you.

2 Title Page

VIC SPANISH RIVIERA RETIREMENT HOME

Business Plan

To establish and operate a Retirement Home Facility

in Halifax, Nova Scotia.

September 23, 2011

Victor Palomino

[email protected]

100 Tucker Park Road PO Box 5050

Saint John, NB

(506) 653-2065

Table of Contents Table of Contents ......................................................................................................................... 4

1 Letter of Transmittal ......................................................................................................... 2 2 Title Page ............................................................................................................................ 3 3 Executive Summary and Fact Sheet ................................................................................. 5 4 Company Summary and Service Offering ...................................................................... 8 5 Market Analysis ................................................................................................................ 11 6 Competition Analysis ....................................................................................................... 14 7 Marketing Plan ................................................................................................................. 16 8 Development Plan ........................................................................................................... 19 9 Implementation Schedule ................................................................................................ 24 10 Operations Plan .............................................................................................................. 25 11 Management Team ......................................................................................................... 28 12 Risk and Mitigation Factors ......................................................................................... 30 13 Financial Plan ................................................................................................................. 32 14 Sensitivity Analysis and Mitigation Measures ............................................................. 36 15 Long Term Development and Exit Plan ....................................................................... 39

16 Appendix……………………………………………………………………………..41

3 Executive Summary and Fact Sheet

3.1 Executive Summary

Vic Spanish Riviera is a retirement home with nursing care capabilities that fusions family environment experience, recreation activities and committed professional staff to provide customers with high level of service, comfort and quality. Located in Halifax, Nova Scotia, Vic Spanish Riviera business model is focused around the customer. In Canada, seniors are the fastest growing population since the early 1980’s. With the high number of baby boomers turning 65 in this decade and the current shortage of nursery care services in the country, retirement homes with nursing capabilities is an outstanding market to enter to.

Coming from a family that has owned and managed businesses in Peru and the US I possess that entrepreneurial spirit to start up a business and successfully turn it around to a winner in a short time frame. Certainly, throughout my managerial career I have enhanced my leadership and analytical skills. I graduated with honors in business administration from Florida International University, US and I am a current MBA candidate from the University of New Brunswick. I have also been a member of a team that did a successful financial feasibility study and a marketing plan for a three star hotel for my last employer in Nazca city, Peru. My partner is in the nursing school at the University of New Brunswick and his expected graduation time is in December 2011. In addition, he comes from a family that has a medical practice background and he has always loved to help sick and needy people. Our Board of Advisors are both my partner's relatives. In Vancouver, BC his father is a neurosurgeon doctor and his uncle has been the director for a nursing home in the same city. While having summer recess in college for the last three years he has work as resident assistance in Heaven Sunrise Nursing Home in Vancouver, BC thus gaining valuable experience. We both like challenges and have the entrepreneurial dream and determination to make the business a success.

The senior population has been growing at a steady rate for the last decade in Canada as the baby boomers are reaching 65 in the early 2010’s. Furthermore, seniors aged 85 and over are the fastest growing segment of the overall senior population thus increasing the demand for elder care services.1 As they grow older, elders required a place where they can have human contact, activities and the immediate nursery care if is needed. Now as the demand for nursing homes increases there is current shortage of nursing homes in Halifax city. In addition there is also a shortage of optimal retirement homes for people who are in the middle ground not yet on the last stage of their lives in needing full time nursery care but do find hard to manage their lives for themselves thus needing some assistance. In fact, there is a current gap in this target market as the growing number of elders has trouble fulfilling their expectations when seeking a retirement place that has a family environment with recreation services and activities and has the professional and medical staff available 24/7. In addition the current waiting time in Halifax city

1 http://www.cbo-‐eco.ca/en/index.cfm/guides/how-‐to-‐start-‐a-‐personal-‐care-‐home-‐for-‐seniors-‐in-‐ontario/

for a retirement home is around 1.5 years.

By opening a retirement home with nursing care capabilities for 50 elders in Halifax, Nova Scotia, Vic Spanish Riviera will accomplish to meet elder’s demands for a differentiated service and quality care as well as create profit for the investors. My partner’s and my retirement home will offer a superior family experience with all the recreation amenities and activities but with the added valued of having a great nursery staff to attends elders 24/7. Vic Spanish Riviera will concentrate on the customers as their main priority. Our building will be a state of the art, with a pool, sauna, dancing room, fitness room and dining halls. Laundry and housekeeping services will be provided as well as dinning. Our competitive advantage is the highest quality of nursing care that we will provide due that we will have a 24/7 nursing staff that will provide personal assistance to our clients. We indeed will provide a specialized service to each and every client thus assuring customer satisfaction and a more enjoyable, happy and healthy life for our clients.

Vic Spanish Rivera’s IRR will be around 16% after 5 years for the original investment from our investors. In addition, at the end of 5 years the cumulative NPV will be $238,054 thus being a profitable capital investment for investors. The amount of capital that needs to be raised is $4 million dollars, around $800,000 for the land purchase in Halifax, $2.9 million in constructing the facility place with all the furniture and equipment plus permits, insurances and licenses and around $300,000 for 3 months operating expense. Vic Spanish Riviera capital structure will be financed 70% from debt by bank loans and 30% from equity by investors. Our forecast profit for the first year is $611,751. The time frame schedule to pay our debt is in 5 years. Thus at the end of 5 years, we would not only have paid all our deft but also our equity investors will have made more than $1.5 million in dividend payments made. The outlook of the industry is potentially growing and thus our goal is to open more retirement homes after that period.

This is the right time to enter this industry, with the shortage of nursing and retirement homes that will be capable to take the increasing influx number of elders that need personal and nursing assistance while demanding a family environment with full recreation services. Our medical and operating staff will be committed in providing the best professional quality service. Vic Spanish Riviera will have the competitive advantage in providing a more personalized nursing care, comfort and more recreational activities. Halifax is a growing city where baby boomers choose as their retirement place and currently there is a waiting list of about 1.5 years for a retirement home2. My partner has a deep knowledge and passion for the medical field. We also have the top board of advisors, Mr. Raj Gupta a director of a Nursing home in Vancouver, BC and a successful business man and Mr. Sanjeev Sodhi a neurosurgeon with over 20 years in medical experience. Vic Spanish Riviera will be profitable since the first year of operations and will repaid our debt within 5 years. The 16 % IRR is an outstanding indicator of our profit potential thus providing our investors with a great return. My partner and I have the leadership, entrepreneurial and professional skills and determination to make Vic Spanish Riviera a success. 2 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf

3.2 Fact Sheet Requested Funds: $ 4,000,000 $2,800,000 in Debt and $1,200,000 in Equity. Business Type: Retirement Home

Sector Trend: The number of seniors in Canada is projected to increase from 4.2 million to 9.8 million between 2005 and 2036.3 In Nova Scotia, 14.2% of the total population is seniors but by 2026 around 25% of the province population share will be seniors.4

Total Market %: The senior population in 2011 is around 65,000 in Halifax city and around 160,000 in the entire province of Nova Scotia.5

Current Situation: Shortage of Nursing and Retirement Homes in Halifax, Nova Scotia and the rest of Canada. 1.5 Years Waiting List for a Retirement Home in Halifax.6

Location: Halifax, Nova Scotia Projected Cash Flow – Year 1: $532,678 IRR after 5 Yr.: 16% NPV after 5Yr. (12): $238,054 Debt Payment Time: 5 years.

3 http://www.statcan.gc.ca/ads-‐annonces/89-‐519-‐x/index-‐eng.htm 4 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf 5 http://www.chsrf.ca/Libraries/Aging_roundtable_reports/CHSRF_Halifax_Roundtable-‐Web.sflb.ashx 6 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf

4 Company Summary and Service Offering

4.1 Company and the Industry

Vic Spanish Riviera will enter the elder care service industry by opening a Retirement Home in Halifax, Nova Scotia. Vic Spanish Riviera is a start up company that aims at providing high quality service and a family atmosphere to seniors. Vic Spanish Riviera will be an incorporated business entity and will be owned by Victor Palomino, Gangadeep Sodhi and capital investors. We will provide shares to capital investors and they can decide to sell their shares after a 5 year period. Victor Palomino will be the general manager and will also do all the accounting work while Gangadeep will in charge of the nursing staff and be available 24 hours a day as a RN for Vic Spanish Riviera’s residents. The company website is www.VicSpanishRiviera.com. Our business model is build around our clients needs.

Our Vision is to improve and enhance the quality of life of our clients.

The goals and objectives of Vic Spanish Riviera are as follows: “To deliver outstanding quality care and service, to care about the well being, safety and dignity of each client, to have accountability and a committed staff and to provide superior recreation amenities and activities for our clients.”

At Vic Spanish Riviera we believe that the customer is the core driver of our business. Certainly we must achieve excellence in our service to be successful and profitable as a business. Our core values define what Vic Spanish Riviera stands for. Core Values such as client first, accountability, respect, integrity and top quality service are the main structure for our business strategy. We will establish an intimate personal relationship with our clients and conduct surveys to ensure top client service quality management. Vic Spanish Riviera’s personnel staff will always be happy and smiling. Our operations strategy will be aligned with our objectives and core values and thus, Vic Spanish Riviera will bring a reasonable rate of return on the initial investments.

The elder care service industry trend is growing as more baby boomers in Canada start to retire in the 2010’s. In fact, according to Statistics Canada the senior share of the total population is expected to almost double from 4.2 million in 2005 to 8 million in 2026.7 As they grow older, elders require more human contact, social activities and immediate nursery care. In Canada, there is a current shortage in the number of nursing and retirement homes to receive the growing influx

7 http://www.statcan.gc.ca/daily-‐quotidien/070227/dq070227b-‐eng.htm

number of seniors.8 Other factors to consider are that life expectancy, literacy rate, income level and education have increased among todays elders.9 Thus, seniors expect more social and recreation activities, family experience and higher quality care services than before.

4.2 Service and Product Offering

The service that Vic Spanish Riviera will offer is a private retirement home for seniors. Vic Spanish Riviera will be located on a 5 acre land property in Halifax, Nova Scotia and will be housing 50 elder residents. Our building will be a state of the art with a pool, sauna, dancing room, activity room, computer room, fitness room as well as dining halls. Each resident will enjoy their own luxury bedroom suite with their private bathroom and sitting area. Vic Spanish Riviera will take care of all major tasks chores so that our clients remain free of worries and thus concentrate on enjoying their lives in our facilities. All meals and snacks would be made fresh daily by our gourmet chef. Our housekeeping staff will perform all cleaning and laundry duties. Once a week we will have a dietician came to our facility. In addition, our maintained person will take care of any repairs, lawn services and any other required chores. Vic Spanish Riviera will also provide the highest quality of nursing care to our residents and our professional staff will be available to provide personal assistance 24 hours a day 7 days a week.

Certainly, at Vic Spanish Riviera our goal is to enhance the life of our clients. So besides comfort, safety and health care factors we will focus on recreation activities for our residents. A full time activity coordinator will organize weekly activities inside and outside the facilities. Our clients will feel pampered and thus satisfied by all the fun recreational activities that we provide such as bingo nights, daily exercises, cooking classes, games among others more.

Here is a detailed explanation of our service value proposal.

Facilities Vic Spanish Riviera will be on a 5 acre property in Halifax, Nova Scotia presenting an unique exclusive getaway for seniors. The property boasts a forest with nature trail, a duck pond with a marvelous and picturesque view of the sunset. Vic Spanish Riviera is also located just 5 miles from the center of downtown Halifax.

Nursing Staff and Medical Equipment My partner Mr. Sodhi will become a Registered Nurse and will be available 24 hours for nursing care assistance. Vic Spanish Riviera will provide 2 LPN’s (Licensed Practical Nurses) and 3 RA’s (Restorative Nursing Aides) to ensure top quality nursing care service for our residents. The LPN will perform resident’s test assessments such as recording blood pressure, heart rate, glucose among others and report the results to Mr. Sodhi (RN). The RA will assist patients with exercises to maintain their mobility as well as provide with nursing care and services according

8 http://www.cbc.ca/news/canada/new-‐brunswick/story/2011/01/24/nb-‐nursing-‐homes-‐beds-‐shortage.html 9 http://www.statcan.gc.ca/ads-‐annonces/89-‐519-‐x/index-‐eng.htm

to the schedule provided by Mr. Sodhi (RN). When needed the RA will do also assist residents with daily living programs such as providing baths and massages. The nearest Doctor is a 5 minute drive from Vic Spanish Riviera and the nearest hospital is 15 minutes away. Each room is equipped with an electronic device to notify the aides of any emergency or assistance that residents might request.

Vic Spanish Riviera has invested around $42,000 in Medical Furniture and Equipment such as Hemoglobin, Glucose and Cholesterol Test Machines, Vital Signs, Blood Pressure and Defibrillator Monitors, Wheelchairs, Safety Benches, Shower Chair, Audiometer, Spirometer, Speculum, First Aid Kit, and among others to provide outstanding nursing care service and test assessment to our residents and thus increasing their standard of living. See Appendix 7 for a list of our medical equipment.

Dinning, Dinning Halls Our two gourmet chef will provide three healthy and warm meals options at each dinner. At Vic Spanish Riviera we want to bring excellence cuisine with an emphasis on healthy eating and also our residents are encouraged to offer suggestions to the chef. Also we have an open kitchen with all the amenities available for our residents to indulge their baking and cooking skills when they please. Also, we have 2 Dinning Halls with modern furniture where our residents will enjoy their meals while having a nice time in our bright atmosphere with their fellow residents.

Fitness Room, Fitness Trainer, Dietician and Outdoor Equipment. We have an equipped fitness room to encourage personal fitness for our members. We believe that exercise is a key part to maintain optimal health condition for our residents. A part time Fitness Trainer will be in charge of the cardio, therapy and muscle resistance programs in the fitness room. The programs will include fitness dance exercises, bicycle class, abdominal and stretching and muscle resistance training. See Appendix 8 for a list of our fitness equipment. A dietician will come once a week to check the improvement of our resident’s fitness health and provide healthy recipes according to each personal needs and requirements. In addition, residents are also encouraged to enjoy the country air while walking or biking around our 5 acre compound. We have 15 bicycles for residents in our facility.

The Suites Vic Spanish Riviera has new luxury suites with a private bathroom with safety handrails and sitting area. In addition, each member is welcome to accommodate their rooms as they wish. Individual controlled heating, electronic device and alarm system are among the features at Vic Spanish Riviera.

The Living Room and Activity Room Our family room is the center of the building and reflects our goal of establishing a family experience among our residents. Residents can have quiet reading by the fireplace, a game of chess or checkers or perhaps play a melody on the piano. It also 3 Plasma TV’s where we play

daily night movies. The activity room is equipped with all the tools and appliances to make arts and crafts. It also has tables, chairs and a small stage where they practice acting lessons or entertain other members. It also has a big sliding door that opens to the outside patio and to the swimming pool. The rooms include new comfortable and stylish furniture.

Housekeeping and Laundry Services Our 4 housekeeping staff will do cleaning on a daily basis and laundry duties will be done by our staff twice a week for our residents. Our goal is for our residents to relax and not worry about any chores because that is why we are there for. We have brand new washers and dryers machines.

Swimming Pool, Pool Patio Furniture and Sauna Vic Spanish Riviera includes a pool to provide a healthy and fun facility service to our residents who enjoy doing exercise in the pool water. We have also bough new Patio Furniture where residents can sit and relax in the shadows of the umbrellas. Furthermore, residents can choose to enter our sauna room to relax while reading a newspaper.

Computer Room and Game and Recreation Equipment We have 12 computers equipped with furniture in the computer room for our residents to navigate and socialize on the web, perhaps talk to friends who are far away. In addition we also have pool and ping pong tables, dominos, chess and bingo for our residents to play at anytime. Activities and Mini Bus Daily activities are arranged by Vic Spanish Riviera’s activity coordinator. These include arts and crafts, games, bingo nights, daily exercises, cooking classes and a book club. Also our activity coordinator will schedule recreational events inside and outside the facility for our residents and we own a Toyota Mini Bus for 30 passengers to transport residents to field trips, social events or shopping. See Appendix 9 for a projected activity sample for January 2013 at Vic Spanish Riviera.

5 Market Analysis

5.1 Target market and customer base

Vic Spanish Riviera will be targeting elderly individuals who want a family environment experience with recreation activities and high quality nursing care service in a retirement home compound. Our target clients might be from Halifax city and the surrounding areas.

Consumer Profile:

Man or Woman age 65 and over

Medium to Upper Income level

Active individuals who might need nursing care service assistance with a 24 hour staff on duty

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

Individuals who want to relax, live in a family and fun environment with daily activities

Vic Spanish Riviera is targeting Halifax city because is a growing city with a rising number of seniors who are currently seeking for a retirement home facility.10 The location compound that we have chosen is close to Halifax’s downtown area and is accessible to the surrounding cities so that the family of the residents could be able to visit them as they wish. Since Halifax is a city with a sizeable influx of immigrant seniors this location is an outstanding place to set our retirement home facility.

5.2 Market size and potential

The number of elders in Canada is growing exponentially as the baby boomers start to retire in this decade. In fact the senior share of the total population is expected to almost double from 2005 to 2026 from 4.2 million to almost 8 million.11 According to Statistics Canada, Nova Scotia has the highest share of seniors 65 and over by province at the rate of 16.1% in 2011. By the year 2026 the percentage of seniors over the total population in Nova Scotia will rise to 25.3%.12 Moreover, according to Statistics Canada it is forecasted that in 2011 the senior population will be around 65,000 in Halifax city and around 160,000 in the entire province of Nova Scotia.13 The Canadian average income after tax in 2009 for elderlies was $32,300 for males and $28,400 for females.14

As they grow older, elders require more human contact, social activities and immediate nursery care. In addition, is common for elders to find the responsibilities of maintaining a household overwhelming after reaching a certain age. In Halifax city and well as the rest of Canada, there is a current shortage in the number of nursing and retirement homes to receive the growing influx number of seniors. According to Statistics Canada the current waiting time for residents in Halifax city is around 1.5 years and after doing extensive research we have found out that some of our competitors in Halifax have a two year waiting list for seniors wanting to join their facility.15

The following graphs show the current senior population in share percentages and in numbers by province in Canada. The graphs also show their growing potential up to the years 2026 and 2031.

10 http://www.nsarda.ca/images/populationforum/2011/PopForum2011_FinalReport_standardres.pdf 11 http://www.gov.ns.ca/seniors/pub/StatProfile05.pdf 12 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf 13 http://www.chsrf.ca/Libraries/Aging_roundtable_reports/CHSRF_Halifax_Roundtable-‐Web.sflb.ashx 14 http://www40.statcan.ca/l01/cst01/famil21a-‐eng.htm 15 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf

5.3 Expected Sales and Market Share

Our expected number of clients at Vic Spanish Riviera forecasted in this growing industry is up to our maximum capacity at the number of 50 clients. Certainly, after carefully studying all the factors and assessing the current shortage of retirement homes that provide high quality nursing care service with a family experience with recreational activities we are convinced that our capacity will be fulfill when opening the facility.

With the growing number of new seniors throughout the following years our market share will be small. Although there is a huge advantage of opening more facilities to cater the new influx of potential clients seeking for a retirement home in the future.

6 Competition Analysis

The main competitors of Vic Spanish Riviera that we have identified in the retirement home industry in Halifax city are the following four companies:

6.1 Core Competitors

Shannex With locations in Halifax, Dartmouth and Truro, Shannex is one of the most successful retirement resident facilities available for seniors. It has a membership with Accreditation Canada since 2007, a not for profit group that sets quality standards for service performance. In the facility in Halifax, Shannex provides a Traditional Retirement Living Suite that provides two meals per day, laundry and housekeeping services and a staff presence 24 hours a day. Also, organized recreational activities are scheduled regularly and personal assistance and medication management are provided. The Halifax residence at Parkland Living has 154 rooms and the monthly price for a suite that has all the added benefits is between the ranges from $4,000 to $4,455 depending on the size of the unit and the amount of personal assisted care needed.16

The Berkeley The company has residences in Halifax, Dartmouth, Bedford and Gladstone Ridge. The Berkeley is an approved member of ORCA (Ontario Retirement Communities Association) which credits quality service and excellence in customer satisfaction. The Berkeley residence in Halifax provides comfort and security, health care staff onsite 24 hours a day and recreation activities such as card clubs, exercise classes and craft and board games among others. It also provides two meals per day. The Berkeley residence for additional fees provides medication administration, personal care assistance, blood work and personal laundry services. The facility has a total of 52

16 http://www.shannex.com/inner.php?page=142&region=18&site=10&type=retirement

rooms and the monthly fee for a personal suite with all the added benefits is $3,360 and $5,125 for a personal suite with exclusive assisted care.17

The Melville Heights The company has an independent living facility located in Halifax. NS. Melville Heights frees residents from the daily chores and isolation of living alone. The bedroom suites come with a full kitchen where residents can make their own breakfast and lunch. The dinner is provided by the house in the dinning room. In addition, health care staff is on duty 24 hours ready to provide care and activities are organized for the residents on a regularly basis. Melville Heights has a whirlpool and sauna, a fully equipped room, a movie theater, a fitness room and a library with computers where internet classes are provided. The company has also the Melville Heights bus where residents are taken on scheduled outings. The facility has a total of 101 rooms and the monthly fee is $3,100 for a personal suite with all benefits such as two meals a day, recreation activities, 24 hour staff on duty, once a week housekeeping and laundry services. However as the residents request more assisted personalized care, they will be charged extra on a per hour basis.18

Northwood With facilities in Halifax and Bedford, Northwood provides a service called Assisted Living in their Apartments with Retirement Living. For additional charges Northwood Retirement Assisted Living provides medication management and on site nurse/LPN. It also provides three meals a day served in their dinning room, weekly housekeeping and laundry services. The facility in Halifax includes a beauty salon, a fitness center, a gathering place and a health center. However, their building apartment facility is more for active seniors who still can be independent and thus do not promote too much emphasis on social and recreational activities on a regular basis. The facility in Halifax for Retirement Living has more than 200 rooms in 3 independent buildings. The assisted living monthly fee of $2,050 includes three meals a day, weekly housekeeping and laundry services. However, any nursing or LPN calls require an extra charge per hour of service acquired. 19

6.2 SWOT Analysis on the Competition

Strengths The competition has the strengths that they offer a 24 hour nursing care on duty, enjoy an established history throughout years of being successful in the industry and provide most chores for their residents thus leaving them to enjoy their living experience with programed activities. Another strength is that two out of our four major rivals are part of an organized membership association such as Accreditation Canada and ORCA. Also, our competitors’ price is reasonable and competitive. 17 http://www.theberkeley.com/halifax.html 18 http://www.melvilleheights.com/living-‐suites.html 19 http://www.nwood.ns.ca/ways-‐to-‐live-‐at-‐northwood/living-‐with-‐care/halifax-‐location

Weaknesses The weaknesses of the competition are that they operate on large facilities of more than 100 suite residences thus decreasing the quality of their personal care service. With their large housing there is also a lack of family feeling and environment.

Opportunities The major opportunities for our competition is that the increasing number of elderlies in the Halifax area and in Canada presents a good supply of potential future clients thus presenting them with an opportunity to expand and open new facilities. Also, companies can charge more per suite as the demands increases and the waiting list rises.

Threats

The threats to the competition are new retirement home facilities that might enter this growing industry. Also there is always the risk that the government decreases the pension funds thus leaving residents with a lower income.

6.3 Competitive Advantage

After studying the competitive environment, Vic Spanish Riviera feels that our retirement home facility has the following advantages:

• We have a smaller number of suites of only 50 thus creating a better family environment and superior personal care.

• We would provide a greater ratio of nursing staff available 24/7 to provide a higher quality and a more personalized assisted care.

• We will provide a better recreational environment for our clients because we will have a brand new state of the art facility with all the amenities and activities to provide an enhanced quality of life.

• Our schedule will have more social and recreational activities than our main competitors. • We will provide excellence cuisine with an emphasis on healthy eating.

7 Marketing Plan

7.1 Mission

“To deliver outstanding quality care and service, to care about the well being, safety and dignity of each client, to have accountability and a committed staff and to provide superior recreation amenities and activities for our clients.”

7.2 Marketing Strategy

Vic Spanish Riviera‘s marketing strategy centers on differentiating our quality service and living experience from the competition and on creating and developing a company philosophy where our business model will be client focus driven. Our target market are seniors 65 and over in the middle to upper income brackets. Vic Spanish Riviera understands clearly what the needs and expectations of our target market are. The Marketing Mix will seek to explain our value and benefits that Vic Spanish Riviera will bring to our potential customers. Certainly we want to emphasize our competitive advantages as the key reasons why clients should choose our company as their best decision in a retirement home.

7.3 Service Offering

Vic Spanish Riviera will offer a private retirement home for seniors, located on a 5 acre land property in Halifax, Nova Scotia and will be housing 50 elder residents. Our top quality service with nursing care staff 24 hours a day is our key differentiator from our main competitors. At Vic Spanish Riviera we have built a company identity that puts client’s satisfaction and needs as our top priority. We will have a greater ratio of nursing care staff than our main competitors thus providing better personal assistance to each resident. At Vic Spanish Riviera we also understand that seniors want a place where they can feel like home and have fun activities.

7.4 Marketing Mix

Pricing

Vic Spanish Riviera will use a premium price strategy. The price charged of $4,000 per month to its residents is slightly above most of our competitors. Thus our target customers are medium to upper income seniors who are price insensitive when choosing their retirement home. Certainly, Vic Spanish Riviera wants our clients to understand that at our facility they will receive a greater personalized care, family experience with fun activities and quality service than our competitors. In addition, customers will associate the price higher as an indicator of excellence in quality and service offered. By charging a premium price Vic Spanish Riviera will seek to differentiate itself from our top competitors as well as create a greater IRR for our investors. At full capacity the yearly revenues will allow us to recuperate the initial funds invested at around only 5 years. Overall, our 5 acre facility with a state of the art building, amenities and services provided make our price proposal competitive and reasonable in the retirement home market.

Place

Vic Spanish Riviera will be located in a 5 acre land in Halifax, Nova Scotia. Most of our target potential customers are from Halifax city, although many are from the surrounding towns in the province where at this time the senior share over the total population is at 16.1% in Nova

Scotia.20 This is the highest among all provinces in Canada. In addition our residents will pay us once a month, usually before the fifth day of each month. Either though a credit card, debit card, check or cash and their principal relative can also make the payments for them after they sign their names in the contract. For the two quarters prior to opening our facility, we will hire two sales persons who will be in charge of reaching potential clients and sign them up with our service. Sales persons will earn up to $6,000 in commissions.

Promotion

Promotion at Vic Spanish Riviera will not be very extensive since there is a high demand in the province for retirement homes. In fact, many retirement homes have a waiting list and the trend is going to exponentially increase as more seniors start looking for retirement places in this decade. Vic Spanish Riviera will apply advertisement in the Halifax Daily News and The Chronicle Herald newspapers for the last 2 quarters prior to opening since our research shows that a great percentage of residents read one of those two major newspapers thus making this a viable and effective way to get our name in the market at a relatively low price. Marketing costs have been set at $1,800 ($75 per week for 24 weeks) for the Halifax Daily News and $2,040 ($85 per week for 24 weeks) for The Chronicle Herald. Our company information will also be listed in the yellow pages book. Vic Spanish Riviera will also employ radio advertisement for the six months prior to the grand opening at the estimated cost of $4,000. Also, 2 quarters prior to opening Vic Spanish Riviera will perform publicity by forming alliances with local hospitals, clinics, therapy centers and senior community associations and thus, promote our services and benefits. Certainly by using special events in the Hospitals and having senior community involvement we will achieve to reach a bigger potential target market and build our brand recognition. Our company website at www.vicspanishriviera.com will also inform our potential clients about our facility amenities and services. Here potential clients will be able to see our facility rooms by pictures and videos as well as read our major benefits and all the recreational facilities and activities that we provide. The website will be developed around 7 months prior to opening the store at a projected cost of $12,000. Direct marketing will also be employ as any other start up business that wants to enter a new market. Vic Spanish Riviera will design and print flyers, business cards and company brochures to add another means of marketing promotion. We will send our flyers to potential client’s home addresses and place our brochures and flyers in strategic places that seniors often frequent so that they can read our brochures and thus call us if they are interested in finding more about our company. Word of mouth will be another means of building our recognition since current clients

20 http://www.statcan.gc.ca/pub/89-‐519-‐x/89-‐519-‐x2006001-‐eng.pdf

will be able to tell their friends about the outstanding service and activities that we provide at Vic Spanish Riviera.

7.5 Marketing Tactics and Budget

Our marketing mix will effectively inform potential customers about our company service value proposal and benefits. Our goal is to have all the 50 rooms full prior to opening the facility. Through our marketing strategy employ we are confident that Vic Spanish Riviera will be able to meet this goal. Moreover, there is a rising demand of retirement homes in Halifax city and a shortage of current facilities thus increasing our success percentage of meeting our initial goal. After the opening of the facility we will focus on positioning our company with advertising in the radio and in maintaining public relations with hospitals, therapy centers and seniors associations. Another major goal that we want to achieve is to build and maintain a waiting list of seniors who have contacted us and thus will be waiting for an open spot to take our services. By this way Vic Spanish Riviera will assure the full capacity of its 50 resident rooms per time and build a cushion in case instances when few clients decide to leave us.

Our total marketing cost prior to opening the facility will be $18,840. $3,840 in Advertising in local newspapers and $4,000 in local radio. $5000 in direct marketing and $6,000 in sales commissions. In addition, we are investing $12,000 in a company website which is assessed as a fixed asset and not as a marketing expense. After that we plan to invest around $12,000 per year in marketing cost with the purpose of building brand recognition in the province and in not only maximizing our 50 resident capacity but in creating a waiting list of seniors seeking to join our facility.

Marketing Expense $ Budget Start Date End Date Develop company website. $12,000 06/01/2012 Continuously Perform Advertising in the Halifax Daily News and The Chronicle Herald newspapers

$3,840 07/01/2012 12/31/2012

Local Radio Advertising $4,000 07/01/2012 12/31/2012 Perform Direct Marketing by mail (business brochures and flyers) and in strategic locations.

$5,000 07/01/2012 12/31/2012

Hire two sales people who will be in charge of reaching potential clients and sign them up with our company.

Commissions Up to $6,000

07/01/2012 12/31/2012

Achieve Publicity and Public Relations by forming alliances with hospitals and senior citizens associations.

---------------- 07/01/2012 Continuously

8 Development Plan

In order for Vic Spanish Riviera to start operations, certainly there are certain elemental steps that must be first approved or implemented. The investment funds must be approved and available to start the development phase. In the location and facility factor, the site must be approved and purchased and then the construction facility built. A provincial license, building permit, commercial permit and entrance permit must be acquired. The building facility must be finished thus meeting the required safety and legal guidelines. In addition, insurance for liability, theft, fire, crime and commercial general must be purchased prior to open business operations.

Two quarters prior to opening the facility, Vic Spanish Riviera must execute advertisement in the Halifax Daily News and The Chronicle Herald newspapers. We would also do direct marketing by sending our flyers by mail to potential clients and will perform radio advertisement as well. Also, we will start to do publicity by forming alliances with local hospitals and senior community associations thus promoting our services and benefits. Another major element for the two quarters prior to opening our facility, will be to hire two sales persons that will be in charge of reaching potential clients and sign them up with our service. He or she will get a commission per each client that joins Vic Spanish Riviera.

Staff personal must be hired after an intensive selection process by the partners. Moreover, Vic Spanish Riviera must find and approve contracts to our different suppliers of food provisions for our chefs to prepare daily fresh meals. All required furniture and equipment must also be acquired prior to opening the retirement home facility. Also the company website must be developed to start marketing our business in the web and an IT Software Program must be purchased to integrate our company computers thus raising productivity and allowing us to reach clients’ previous medical records.

Here is greater detailed information of the start up costs needed to open Vic Spanish Riviera retirement home.

Land After spending several months searching for a convenient location, we found a five acre terrain in the suburbs of Halifax City for $800,000. The land in the beginning was appraised for more by the real estate entity but we were successful on lowering and thus agreeing at that final sale price.

Facility Construction and Fixed Assets Built According to the Perry’s construction company the building construction project with all labor, permits and material included is projected to cost around $2,400,000. We have consulted and reviewed different construction companies in the Atlantic Canada area and have decided to choose Perry’s because it brings more years of expertise, reliability on the time frame agreed, offer price competitiveness and quality.21 After acquiring the rights for the property area our company building will be constructed with all the necessary lodging amenities, activity and dining areas as well as suite and office rooms. In addition, a pool will also be constructed to 21 http://www.perrysconstruction.com/

provide a healthy and fun facility service to our residents who enjoy doing exercise in the pool water. The pool will cost $25,000. Vic Spanish Riviera will also build a sauna room to provide a comfort, relax and luxury environment for our residents at a cost of $10,000. Also for accounting purposes we have assigned the Building Compound, Pool and Sauna as 20 Years of depreciation life time.

Company Set Up and Initiation Legal Fees Vic Spanish Riviera will incur legal fees for corporation set up fees and legal consulting fee on company shares provided to capital investors. Ernst and Young will provide the legal and accounting services needed to set up and start the business and share issued at a cost of $5,000.22 Provincial License and Commercial Building Permit In order to operate the business a provincial business license from Nova Scotia is needed at a cost of $600 and a Municipal License from Halifax city at a cost of $100.23 In addition, a building permit and a commercial building will be purchased at a cost of $1300.24 An entrance permit is also needed at a cost of $600 and Septic Bed Permit at a cost of $400. The total cost for licenses and permits needed is $3,000. Fixed Assets Purchased Vic Spanish Riviera will purchase required Transportation Vehicle, Furniture and Equipment to start the business always with the goal of providing clients with the best amenities and top comfort and quality facility environment. *A Mini Bus for 30 passengers will be purchased one month prior to the Grand Opening to transport residents to field trips, social events or shopping. After doing price comparison we have decided to buy a new Toyota Mini Bus for 30 passengers at a cost of $70,000. *An IT Software Program is needed as well to operate our business and has an expected cost of $11,000 and is projected to be acquired two months prior to the Grand Opening. The IT Software Program will be the key system that will unite our company resources, data, residents past medical record, human resources, financial and staff information and other required data to increase the business productivity and management capabilities. *In addition, a website will be developed by an engineer from India 6 months prior to the Grand Opening at a projected cost of $12,000. The website is fundamental in informing about our service proposal, values, benefits and vision to potential clients on the web as well as showing our pictures and videos. The website www.vicspanishriviera.com will bring formal assurance about our company service and values to our potential clients and will also seek to encourage them to contact us to find more about our services.

22 http://www.gov.ns.ca/snsmr/paal/rjs/paal265.asp#price 23 http://www.gov.ns.ca/snsmr/paal/health/paal454.asp 24 http://www.gov.ns.ca/snsmr/paal/lae/paal239.asp

Also we would purchase the following required furniture and equipment two and a half months prior to the Grand Opening: *Office Furniture: 6 Office Desk, 6 Chairs and 6 Lamps. *Office Equipment: 4 Computers and 1 Printer-Scanner and Fax. *Suite’s Furniture: 100 Night Tables, 50 Queen Bed, 50 Sofas, 50 Chairs and 50 Lamp. *Suite Equipment: 50 Bathroom Safety Handrails and 50 Electric Communicator Devices. *Telephone: 60 Cordless Phones and a Telephone System Integrator for the Building. *Dinning Room Furniture: 6 Dinning Table Sets, 2 Furniture Cabinets and Dinning Dinnerware. *Living and Activity Room Furniture: 4 Coach Furniture, 12 Sofas, 4 Game Tables, 4 Coffee Tables, 8 Side Tables and 25 Chairs. *Entertainment Electric Equipment: 5 Plasma TV 60 inches, 5 DVD Player and 3 Home Stereo System. *Laundry Appliance Equipment: 4 Washers and 5 Dryer Machines. *Kitchen Furniture: 8 Cabinets, 3 Compartment Sinks, Kitchenware, 1 6x8ft Freezer, 3 Counters and 4 Kitchen Shelf Sets. *Kitchen Appliance Equipment: 3Refrigator, 3Stoves, 5 Microwaves, 2 Dishwashers, 2 Coffee Makers, 2 Milk Shake Machines, 3 Extractor Hood and Filters, 2 Blenders and 3 Toasters. *Computer Room Equipment: 12 Computers and 1 Printer-Scanner. *Computer Room Furniture: 12 Desks and 12 Chairs. *Medical Equipment: Hemoglobin, Glucose and Cholesterol Test Machines, Vital Signs, Blood Pressure and Defibrillator Monitors, Wheelchairs, Safety Benches, Shower Chair, Audiometer, Spirometer, Speculum, First Aid Kit, and any other required equipment. *Fitness Equipment: Cardio Machines, Resistance and Muscle Builder High Performance Machines, Dumbbells Sets, Gym Exercise Balls and Exercise Mats. *Game Recreation Equipment: 4 Pool Tables, 8 Wood Chess and Chinese Checkers Board Games, 3 Ping Pong Tables, 8 Domino Sets, 2 Bingo Set Game and 3 Poker Game Table. *Piano: 1 Piano *Outdoor Bicycle and Equip: 15 Bicycles and 15 Safety Helmets. *Pool Patio Furniture: 10 Lounges, 5 Chair and Table Sets, 1 BBQ Grill, 10 Folding Pool Chair and 5 Pool Umbrellas. *Art and Deco: 12 Art Painting Frames, 3 Art Statues, 6 Rugs and Antique Object Decoration. Following is a list for each category of fixed assets with its total cost and depreciated time value for accounting purposes. Fixed Asset Acquired Total Cost Depreciation

Years Pool $25,000 20 Yr. Sauna $10,000 20 Yr. Mini Bus $70,000 10 Yr. Website $12,000 5 Yr.

IT Software Program $11,000 5 Yr. Office Furniture $2,580 5 Yr. Office Equipment $3,600 5 Yr. Suite Furniture $60,000 5 Yr. Suite Equipment $24,000 10 Yr. Telephone ( System and Phones) $46,000 10 Yr. Dinning Room Furniture $24,600 5 Yr. Living and Activity Room Furniture $19,970 5 Yr. Entertaining Electric Equip $7,800 5 Yr. Piano $2,000 5 Yr. Laundry Electric Appliance Equip $5,000 5 Yr. Kitchen Electric Appliance Equip $18,600 5 Yr. Kitchen Furniture $15,600 5 Yr. Computer Room Equipment $8,600 5 Yr. Computer Room Furniture $3,600 5 Yr. Medical Equipment $42,000 5 Yr. Fitness Equipment $20,700 10 Yr. Game Recreation Equipment $9,000 10 Yr. Outdoor Bicycle and Equip $3,120 10 Yr. Pool Patio Furniture $4,850 10 Yr. Art and Deco $18,000 10 Yr.

Marketing in the Development Stage Like it’s mentioned in the Marketing Plan, two quarters prior to opening the business Vic Spanish Riviera will perform several marketing strategies to reach our potential clients in an efficient and effective way. Advertising ads in local newspapers will be purchased. The Halifax Daily News newspaper will have a cost of $1,800 ($75 per week for 24 weeks) and The Chronicle Herald’s cost is $2,040 ($85 per week for 24 weeks). Local Radio advertisement will be also employed at a cost of $4,000. Flyers will be ordered, printed and sent by mail to Halifax residents or placed in strategic places in the surrounding area at an expected cost of $5,000. Vic Spanish Riviera will perform Publicity by establishing alliances with local hospitals, clinics, therapy centers and senior community associations. Another strategy employ will be to hire 2 sales people and paid them commission if they sign a client. The budget for commission is up to $6,000 and the total development cost for marketing is $18,840.

Hiring, Selection and Training of Staff Around 3 months prior to opening the facility Vic Spanish Riviera will start the interviewing process for 2 LPN(Licensed Practical Nurses), 3 RA (Restorative Nursing Aide), 1 Activity Coordinator, 2 Chefs, 4 Housekeeping personnel, 1 Personal Trainer, 1 Maintenance Person and 1 Dietician. We would select the best staff members from a large pool of valuable applicants. Our personnel strategy will include modern management techniques to select, hire and motivate employees. After having our staff vacancies filled we would train our new hired staff through an

intensive 2 weeks session. The training session around December 2012 (less than 1 month prior to open) will be conducted by human resource professionals and their mission will seek to enhance customer and quality service, productivity, motivation and teamwork skills. The hiring, selection and training for our personnel staff will have a projected total cost of $12,000.

Providers Selection for (Food Provision and Medical Supplies) Three months prior to the Grand Opening, Vic Spanish Riviera will start to search and select providers for Food Provision. We would select our providers on factors such as quality, reliability, price and business continuity. Food provision’s quality is essential as we want to serve our residents with fresh made nourishments. Reliability and price competitiveness is important as well as will try to manage our expenses by having reliable providers. The amount projected to be spend in meals and snacks per day on each resident are $12.

Vic Spanish Riviera will search and select providers for medical supplies three months prior to the Grand Opening. Like Food Provision providers, we would make our selection on the basis of reliability, quality products and price competitiveness. Is projected that we spend $4 in medical and nursing supplies per day on each resident.

9 Implemented Schedule At Vic Spanish Riviera we have developed a milestone with the estimated budget and schedule timelines for each critical activity that is required to launch our company. INPLEMENTATION SCHEDULE Milestone Start Date End Date Budget Approval Application for Investment funds from Venture Capitalist.

09/23/2011 12/31/2012 -------------

Setting up the Partnership Company and Legal Documents.

09/23/2011 12/31/2012 $5,000

Land site must be acquired and construction permits processed and approved.

11/30/2011 01/30/2012 $800,000

Construction of the building facility.

01/30/2012 08/30/2012 $2,400,000

Construction of the swimming pool

05/30/2012 06/30/2012 $25,000

Develop company website and design and print orders for company brochures, flyers and business cards.

06/01/2012 06/30/2012 $12,000

Construction of sauna room.

06/15/2012 07/15/2012 $10,000

Perform Advertising in the Halifax Daily News and The Chronicle Herald newspapers and local radio.

07/01/2012 12/31/2012 $7,840

Perform Direct Marketing by mail (business brochures 07/01/2012 12/31/2012 $5,000

and flyers) and in strategic locations. Hire two sales people who will be in charge of reaching potential clients and sign them up with our company.

07/01/2012 12/31/2012 Commission Up to $6,000

Achieve Publicity and Public Relations by forming alliances with hospitals and senior citizens associations.

07/01/2012 Continuously --------------

Purchase provincial license, building permit, commercial permit and entrance permit.

09/01/2012 11/01/2012 $3,000

Buy furniture, equipment, electric appliances, fitness machines, nursing equipment, activity equipment and among other fixed assets.

09/15/2012 11/30/2012 $350,000

Performs Interviews, select and staff training for 2 weeks (LPN, RA, Activity Coordinator, Chefs, Housekeeping, Maintenance person, Dietician).

10/01/2012 12/30/2012 $12,000

Selection and approval of food provision providers for our Dinning Service.

10/01/2012 12/30/2012 $12 Daily per Resident

Selection and approval of medical suppliers for our nursing daily services.

10/01/2012 12/30/2012 $ 4 Daily per Resident

Purchase of IT Software Program

11/01/2012 11/30/2012 $11,000

Purchase insurance for liability, theft, fire, crime and commercial general.

12/01/2012 12/30/2012 $100,000

Purchase of Mini Bus for 30 Passengers

12/01/2012 12/30/2012 $70,000

Grand Opening and start Operations (50 residents will move in to Vic Spanish Riviera)

01/01/2013 Continuously ---------------

10 Operations Plan

The following section will identify our proposed operations plan for Vic Spanish Riviera.

10.1 General

Vic Spanish Riviera will operate 24 hours a day and throughout the entire calendar year. Certainly, our industry demands that we have a nursing staff available the 24 hours of the day to bring more personalized care assistance. In addition, we expect to start our business operations by January 2013.

10.2 Location and Building Facility

Vic Spanish Riviera will operate its facility on a 5 acre compound located in the suburbs of Halifax city. The land area has a worth value of $800,000 on the market. At the start of operations in January 2013 the facility will be ready with all the rooms furnished, equipment

acquired and licenses and permits purchased. Vic Spanish Riviera will have a swimming pool to provide a healthy and relaxing way of therapy to our residents who enjoy doing exercise in the pool water. In addition, the facility will also include a sauna room in our quest to provide greater comfort and luxury service to our residents.

10.3 Furniture and Equipment

Like it is mentioned in the development stage, Vic Spanish Riviera will include all the required Furniture and Equipment for the daily operations of our business.

*Suites: The residents’ suites will include all the necessary furniture and equipment for the comfort, safety and happiness of our residents.

*Dining Room, Living and Activity Room, Game Room and Computer Room: All the required furniture and equipment will be purchased prior to the opening day to provide excellent service amenities, hospitable and relaxing environment to our clients.

*Office: Our offices will own comfortable furniture and latest technology equipment so that our management and staff can achieve a greater level of productivity and service quality.

*Kitchen Furniture and Equipment: We will boast all the necessary kitchen furniture and equipment so that our chefs can operate and provide our healthy and tasty meals.

*Medical Furniture and Equipment: We would own the required furniture and equipment to provide outstanding nursing care service and test assessment to our residents and thus increasing their standard of living.

*Fitness and Outdoor Equipment: Our Goal is for our residents to maintain a healthy life and by having the exercise equipment we are on the path of increasing their cardio and resistance health.

10.4 Transportation

Vic Spanish Riviera will own a brand new Toyota Mini Bus for 30 passengers worth $70,000. The Mini Bus will be used to transport our residents to activity field trips, malls and any other recreation events scheduled by our activity coordinator.

10.5 Personnel

Vic Spanish Riviera will have already selected, hired and trained our personnel staff prior to the Grand Opening. Our personnel will be motivated and thus reflect our corporate philosophy of bringing top quality service and always putting the client first. Our staff members will have the following job functions: *2 LPN (Licensed Practical Nurses): The 2 full time LPN’s will perform resident’s test assessments such as recording blood pressure, heart rate, glucose among others and report results

to Mr. Sodhi (RN) and founding partner. Others functions will include administering injections, enemas, providing therapeutic massages and keeping the medical records of our residents. *3 RA (Restorative Nursing Aides): The job functions of the 3 full time RA’s are to assist patients with exercises to maintain the mobility of our residents as well as provide with nursing care and services according to the schedule provided by the RN. When needed the RA will also assist residents with daily living programs such as providing baths, massages or any other activity that residents requested. *1 Activity Coordinator: The tasks of the full time activity coordinator will include scheduling recreational events inside and outside the facility for our residents. These include arts and crafts, games, bingo nights, daily exercises, cooking classes and a book club as well as fieldtrips. *1 Fitness Trainer: A part time Fitness Trainer will be in charge of the cardio and muscle resistance programs in the fitness room. The programs will include fitness dance exercises, bicycle class, abdominal and stretching and muscle resistance training. *1 Dietician: A dietician will come once a week to check the improvement of our resident’s fitness health and provide healthy recipes according to each personal needs and requirements. *2 Chefs: 2 full time chefs will prepare daily healthy and tasty food for our residents. Once a week also 1 chef will provide cooking classes to residents interested in this activity. *4 Housekeeping: 4 full time housekeeping personnel will be in charge of the daily cleaning of the facility, resident’s laundry chores, and assist chefs with washing the dishes. *1 Maintenance Person: Will come twice a week to perform maintenance work in the facility such as cleaning the pool, cutting the grass, fixing damage property and any other miscellaneous needed task. Here is a list of the staff team positions, hours per week and rate per hour. Staff Position $ Rate per Hour Total Combined

Hours per Week Total Projected Cost per Year 1

2 LPN $22.00 80 hr. $107,078 3 RA $18.00 120 hr. $131,414 1 Dietician $20.00 8 hr. $9,734 1 Fitness Trainer $18.00 20 hr. $21,902 2 Chefs $16.00 80 hr. $77,875 1 Activity Coordinator $18.00 40 hr. $43,805 4 Housekeeping $13.00 160 hr. $126,547 1 Maintenance $12.00 16 hr. $11,681 TOTAL $530,038 In addition to salaries, an important bonus will be given to employees at the end of the year that will be used to reward their performance thus increasing productivity and maintaining strong employee commitment and motivation to attain measurable business targets. At Vic Spanish Riviera, our goal is for our staff team to meet or exceed our customers' expectations.

10.6 Food provisions and Medical and Nursing supplies Having already chosen our food provision and medical nursing supplies providers prior to opening the facility, we would focus on controlling the quality of the supplies. We want to provide the best nourishments available to our chefs so that they can prepare fresh, nutritive and delicious cuisine plates. The medical and nursing suppliers would have to remain reliable and price competitive otherwise we can end their contract and change suppliers. The expected daily cost per resident is $12 on food provision and $4 on medical and nursing supplies. 10.7 Operating Expenses Vic Spanish will have to incur several operational expenses to operate the facility. From laundry, cleaning and cooking supplies to repair and maintenance and utilities expenses. Here is a table of the each category of expenses with the projected monthly and year 1 costs: Operating Expense Monthly Cost $ Annual Cost $ Telephone $600 $7,200 Internet $500 $6,000 Utilities $2,000 $24,000 Insurance $8,333 $100,000 Office Supplies $500 $6,000 Cleaning Supplies $1,000 $12,000 Recreational Activities Supplies $1,333 $16,000 Cooking Supplies $367 $4,400 Laundry Supplies $100 $1,200 Marketing Expense $1,000 $12,000 Fieldtrip Events $1,000 $12,000 Mini Bus Gasoline Expense $1,000 $12,000 Repair and Maintenance Exp. $1,200 $14,400 TOTAL $227,200 10.8 Insurance Vic Spanish Riviera will purchased business liability, theft, fire, crime and commercial general insurance. The estimated cost for this requirement is $100,000 per year.

11 Management Team 11.1 Organization Structure

Vic Spanish Riviera is an incorporated entity formed by the partners Victor Palomino and Gagandeep Sodhi. Both of the partners along the capital investors will own shares of the company. The organization structure at Vic Spanish Riviera will be a traditional hierarchical structure, however we will empowered staff members to go out of their way to make decisions on problems solving thus meeting customers needs within a shorter time frame. 11.2 Management Team – The Leaders Executive Director: Victor Palomino This position will be held by Victor Palomino, one of the founder partners. The executive director is in charge of the daily operations, marketing, human resources and accounting at Vic Spanish Riviera. Victor Palomino has 4 years of experience in retail management at Walgreens’ in the US and 3 years as marketing director at a tourism company in Peru. Victor Palomino has a BA in Business Administration with a major in Finance from Florida International University in Miami, Florida and a MBA from the University of New Brunswick in Saint John, NB. Mr. Palomino qualities as a manager are of a leader, analytical, result oriented and in fact, he has professional success in streamlining procedures and business profitability. Highly organized, motivated, with a strong marketing and management background. Mr. Palomino has played a key role in the building of a financial feasibility study and a market analysis to build a 3 star hotel in a Nazca city, Peru. Mr. Palomino will earn a salary of $50,000 per year. Director of Nursing: Gangadeep Sodhi Gangadeep Sodhi, a RN and the second founder partner member, will be in charge of the health care service, supervise the LPNs and RAs and thus ensure that residents get top quality care at Vic Spanish Riviera. Mr. Sodhi will graduate from the nursing school at the University of New Brunswick in December 2011. He comes from parents with a medical practice background. His father, Mr. Sanjeev Sodhi is a neurosurgeon at Vancouver General Hospital and his mother is a RN over 20 years in experience. In addition his uncle Mr. Raj Gupta has been a director of a Nursing Home in Vancouver, BC and has owned two nursing homes in his native India. Mr. Gangadeep Sodhi loves to help sick and needy people, and has three year experience as a RA in Heaven Sunrise Nursing Home in Vancouver, BC during his summer studies recess at UNB. He possesses management and leadership qualities and has the determination on bringing outstanding nursing care service at Vic Spanish Riviera. He is passionate in the medical field with strong problem solving, communication and entrepreneurial skills. Mr. Gangadeep Sodhi will earn a salary of $50,000 per year. 11.3 Board of Advisors Raj Gupta

Mr. Raj Gupta is the uncle and mentor of Mr. Gangadeep Sodhi and has been the executive director of Heaven Sunrise Nursing Home in Vancouver, BC. Mr. Raj Gupta is a recognized businessman who currently owns a Motel in the US, four Burger King Restaurants in BC and has owned successfully in the past two nursing homes in Florida, US. Mr. Gupta holds a BA in Industrial Engineering from New Delhi Institute of Technology and a MBA from Simon Frasier University in BC. Sanjeev Sodhi Mr. Sanjeev Sodhi is a neurosurgeon at Vancouver General Hospital. He holds over 20 years of experience in the medical field. Mr. Sanjeev Sodhi has always encouraged his son to open his own business and will satisfactorily be a member of the board of advisors at Vic Spanish Riviera. Mr. Sodhi holds a MD degree from University of British Columbia.

12 Risk and Mitigation Factors 12.1 Assumptions The Business Plan at Vic Spanish Riviera is based on the following assumptions: * Able to acquire all the construction and building permits and commercial licenses. * Able to obtain all required financing. 12.2 Risk and Mitigation Factors Our management team is responsible for constantly evaluating risks and taking corrective actions to provide adequate control and prevention measures. At Vic Spanish Riviera, we have identified the top 5 risks associated with our business project and have thus developed efficient and effective mitigation factors for each potential risk. 1 New Competition The risk of new competition is high in the Halifax area as new entities can seek to enter this growing market. The risk impact will depend on how differentiated the new entrants’ services are from our service. Vic Spanish Riviera will develop a continuous improvement management strategy to elevate the level of care and recreational service that we provide to achieve a high degree of customer satisfaction and loyalty. Our goal is to differentiate from our current and future competitors by providing an enhanced and superior quality service. Our higher ratio of motivated nurse staff, a state of the art facility and the coolest activities that we organize will gives us a competitive advantage to potential entrants. 2 Change of Government funded pension plans and laws

There is always the risk that the Government of Canada will decrease the senior’s pension funds or change the laws thus reducing the amounts that our clients are willing to spend on luxury retirement homes. To minimize this risk we are catering our services towards the upper medium and higher income levels that are in a better position to withstand any negative changes in their government funds. Our target niche market has income from investments funds, bank accounts and from selling their homes so they are capable to manage and pay our monthly fees even if government policy changes regarding pension funds. 3 Liability Incident Another major risk to our company is that a safety incident could happen inside our facilities and thus the resident might decide to sue us. To minimize this risk, we are taking operational measures to ensure the safety of our residents and staff members by establishing guidelines and by training our employees to follow these rules and to be on the look out if any our residents have any issues that might require attendance within a quick time frame to prevent any major incidents. Vic Spanish Riviera also will purchase a liability insurance thus protecting our company in the instance that a major incident happened. Another way to minimize this risk is to install safety equipment such as handrails in the suite‘s bathrooms and an emergency electronic communicator in every residents’ suite to press it if they need any assistance. 4 Hiring and maintaining quality employee staff Another risk that we might encounter is hiring quality staff that is committed and able to provide top quality care and maintain their loyalty. In the Halifax area, there are a many skilled LPN’s and RA’s, chefs and activity coordinators and thus we will be able to select the best candidates from a large number of valuable applicants. To tackle the risk, our personal strategy at Vic Spanish Riviera includes modern management techniques that will be applied to select, hire, motivate and reward employees. We will offer competent hourly wages, and an end of the year bonus according to their performance. We will also communicate and share our company goals and objectives with our employees thus increasing their motivation, loyalty and productivity. 5 Economy Recession With all the current financial problems and economic recession occurring in the US is highly probable that it will impact the investment funds of elders here in Canada. If the US recession spreads and initiates an economic recession in Canada our potential clients can be vulnerable and in turn be more picky and thoughtful when choosing a retirement home to live in. The value of their investment funds can inversely fluctuate and their values of their home can decrease at the time they are seeking to sell them to move to a retirement home. To mitigate this risk, at Vic Spanish Riviera we are positioning as a high end provider and attract the higher income seniors who can withstand a potential Canadian economic recession. In addition, we want to maintain a client waiting list that will be waiting for a place in our facility thus always assuring the 50

residents full capacity at Vic Spanish Riviera. Also, we are performing a sensibility analysis to better access and react to potential economic problems that might affect our revenue.

13 Financial Plan Vic Spanish Riviera expects to maintain a healthy financial position over the next five years. As it can be seen in our financial statements we will start making profits from the first operating year. The following plan outlines the financial development of our company. Our Startup cost will be $4 million dollars and our capital structure will be financed 70% from debt by bank loans and 30% from equity by investors. The source of paying the debt loans will be by the cash flow generated from operations. The following chart shows our profits for the first five years.

13.1 Projected Income Statement We expect to be profitable in the first year of operations, with profits increasing as the interest payments of our debt goes down in the next four years. Operating at a full capacity of 50 residents Vic Spanish Riviera will have profits of $611,751 in the first year. In addition, an income tax rate will be applied of 27% to our earnings, as Vic Spanish Riviera is incorporated and therefore it falls in this corporate tax category. See Appendix 1 table that will show in detail our projected Income Statement for five years. The following chart is a preview of our revenue, expenses and profits for five years.

$100,000

$200,000

$300,000

$400,000

$500,000

$600,000

$700,000

$800,000

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Yearly Profits

Profits

13.2 Projected Balance Sheet We expect to have a healthy financial position and will not encounter any real problems meeting our debt obligations and meeting our objectives. The declining balance method of depreciation is used for all our assets. Vic Spanish Riviera will also pay dividends to the shareholders. The table in Appendix 2 will show our projected balance sheet for five years. 13.3 Projected Cash Flow At Vic Spanish Riviera we understand that cash flow deficiencies is a real concern for many companies that is why we will have sufficient cash on hand to meet our payment obligations and thus be prepared for any unexpected needs of cash. In Appendix 3, our projected Cash Flow Statement table shows our cash flow for the first year at $532,678 and how we focus on maintaining $40,000 in cash reserves for operations and contingences. The following chart is a preview of our cash flows for five years.

$500,000

$1,000,000

$1,500,000

$2,000,000

$2,500,000

$3,000,000

FY 2013 FY 2014 FY 2015 FY 2016 FY 2017

Financials

Revenue Variable Exp Fixed Exp Net Profit

13.4 Debt Schedule Our Debt Schedule chart shows that we will pay our debt of $2,800,000 within 5 years at the rate of 10% that is the current capital market rate that banks are willing to lend for. For five years, we would make principal payments of $560,000. In the first year an interest payment for $224,000 will be made and by the fifth year our interest payment and debt ending balance will be 0 as our debt becomes fully repaid. See Appendix 4 for our Debt Schedule at Vic Spanish Riviera. 13.5 Capital Structure All of Vic Spanish Riviera’s assets will be depreciated on a declining balance method. The building, pool and sauna facility will be depreciated on a 20 years basis. Others assets will be depreciated for accounting purposes according to their life market value usage either on a 5 or 10 year basis. The Appendix 5 shows our Capital Schedule for 5, 10 and 20 years depreciation assets. The following table indicates which assets are categorized on 5 years and on a 10 years life depreciation basis: 5 Year Depreciation Value 10 Year Depreciation Value Suite Furniture Suite Equipment Office Furniture and Office Equipment Telephone System Computer Room Furniture and Equipment Fitness Equipment Dining Room Furniture Game Recreation Equipment Living and Activity Room Furniture Outdoor Bicycle and Equip Piano and Enter. Electric Equipment Pool Patio Furniture Kitchen Furniture and Electric Appliance Equip Art and Decor Laundry Appliance Equip Mini Bus

$0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000

Year 2013

Year 2014

Year 2015

Year 2016

Year 2017

Cash Flow

Website and IT Software Program Medical Equipment 13.6 Break-Even Analysis Vic Spanish Riviera’s Break-Even Analysis indicates that about 30 residents are needed to break even in the first year in our facility. Certainly, due to the high demand for retirement homes and the current long waiting lists for retirement homes in Halifax city we expect to operate at the full capacity of 50 residents and easily reach and maintain profitability. We are assuming annual fixed costs for year 1 of $1,269,985 composed of operating expenses, depreciation and interest payments. In addition, the analysis will assess variable expenses cost such as food provision and medical and laboratory supplies that are directly related to the number of residents living in our facilities. See table in Appendix 6 to evaluate how lower number of residents will affect our profitability in our Break-Even Analysis.

13.7 Potential Return to Investors: IRR, NPV and Payback Period. IRR (Internal Rate of Return) According to our conservative estimates, after assessing an initial capital investment of $1,200,000 and adding our cash flows for the next 5 years lead us to achieve an IRR of 15.9%. The level of 15.9% measures the estimated performance of the capital investment and highlights the potential return on the cash flows. Year 1 Year 2 Year 3 Year 4 Year 5

($500,000)

($400,000)

($300,000)

($200,000)

($100,000)

$100,000

$200,000

$300,000

$400,000

$500,000

20 22 24 26 28 30 32 34 36 38 40

Break-‐Even Analysis -‐ Residents

Initial Investment

($1,200,000)

Cash Flows

$532,678

$260,979

$296,137

$328,487

$363,540

IRR = 15.9% NPV (Net Present Value) The NPV evaluates our capital investment by discounting at 12% rate its future cash to their present value and subtracting the initial investment of $1,200,000. Vic Spanish Riviera will realize a projected NPV of $238,054. If the lending rate on debt goes up to 12% thus attaining an outstanding performance on our potential cash flow returns. 12% Discount Rate Cash Flow Year 1 $532,678 Year 2 $260,979 Year 3 $296,137 Year 4 $328,487 Year 5 $363,540 Initial Investment ($1,200,000) Total $581,822 NPV $238,054 Payback Period The Minimum time to recover the investment for the investor’s initial contribution of $1,200,000 is short, only 3.34 years or 3 years and 4 months, computed as follows: Initial Investment ($1,200,000) Less Projected Cash Flow Year 1 $532,678 Year 2 $260,979 Year 3 $296,137 Year 4 (33.55% of $328,487) $110,206 Payback Period 3.34 Years or 3 Years and 4 Months

14 Sensitivity Analysis and Mitigation Strategies

At Vic Spanish Riviera we have build 5 sensitivity analysis case scenarios seeking to access better any potential inaccurate forecasting calculations and risks that can negatively affect our

profits, cash flows, IRR and NPV, therefore our investors’ investment returns. After having successfully build our financial statements we will concentrate on lesser than expected scenarios such as on monthly fees paid by residents and the number of residents that joined our facility. In addition, we will access what happens if the startup costs turn to be greater than projected, or if the banks increase our borrowing debt rate and if the operating expenses increases more than forecasted. Case Scenario 1: If the Price that customers are willing to pay goes down to $3,800 per month? Vic Spanish Riviera is very sensitive to changes in the monthly fees because of our expenses to provide quality amenities and services. Although our profits and cash flows remain positive our NPV is negative and the IRR decreases from 15.9% to 4.2% now. For the IRR to be at 0, the minimum monthly price charged will be $3,735. Year 1 Year 2 Year 3 Year 4 Year 5 Profit $524,151 $548,632 $582,790 $615,940 $649,394 Cash Flow $445,078 $173,379 $208,537 $240,887 $275,940 Break Even 32 5 Yr. IRR 4.20% 5 Yr. NPV (12%)

($77,724)

Risk Mitigation Measures: *Possible mitigation factors would be on cutting on some operating expenses such as cooking and recreational activity supplies and marketing expenses, thus increasing our operating income, IRR and NPV. *Another strategy that we can use is to pay our debt in 8 years instead of 5 thus achieving higher profits, cash flows, IRR and NPV. *In addition, we might have to reduce residents' benefits hours from nursing services and fitness training.

Case Scenario 2: If only 46 Residents join our facility? A lower number of residents in our facility have a strong impact in our capital investors' returns. As it can be seen a change of 4 residents brings our IRR from 15.9% to 0. Also our NVP gets a harsh hit thus now being negative. In addition, Vic Spanish Riviera needs to have a least 48 residents to have a positive NPV. Year 1 Year 2 Year 3 Year 4 Year 5 Profit $488,883 $513,645 $548,004 $581,361 $615,026

Cash Flow $404,788 $139,209 $174,569 $207,126 $242,390 Break Even 30 5 Yr. IRR -0.91% 5 Yr. NPV (12%)

($204,045)

Risk Mitigation Measures: *Possible strategies will be to increase our marketing expenses and to hire sales people on commission seeking to increase our client residents to 50 (full capacity). *Another measure can be to lower operating expenses and personnel staff hours to generate greater operating income, IRR and NPV. *In addition, we must achieve to have a 5 client waiting list to enter our facility at times thus minimizing the chance of operating with less than 50. Case Scenario 3: If the facility construction costs rises to $2,600,000? If the construction costs increases to $2,600,000 then we would have to ask for more funds ($200,000) otherwise we would not have enough funds to start operations. Our IRR decreases from 15.9% to 10% and NPV from $238,054 to $76,885 showing the potential impact in our investor's returns. Year 1 Year 2 Year 3 Year 4 Year 5 Profit $596,275 $622,800 $659,002 $694,196 $729,694 Cash Flow $499,202 $229,547 $266,749 $301,143 $338,240 Break Even 30 5 Yr. IRR 9.99% 5 Yr. NPV (12%)

$76,885

Risk Mitigation Measures: *Vic Spanish Riviera must convince and guarantee additional investment funds from capital investors in the case of any unexpected increase in the start up costs. * In addition, we must effectively assess early and throughout the facility construction any potential problems or behind schedule time scenarios that might later turn into a major problem. * We can also restructure our debt into 8 years instead of 5 to generate a greater IRR and NPV. Case Scenario 4: If the Debt borrowing rate goes up to 12%?

If the Debt Rate increases from 10% to 12%, we would earn slightly less profits, generate less cash flow available and raise our break even point to 31. In addition our IRR will decrease from 15.9% to 13.55% and our NPV from $238,054 to $172,466. Year 1 Year 2 Year 3 Year 4 Year 5 Profit $579,047 $611,704 $654,038 $695,364 $736,994 Cash Flow $499,974 $236,451 $279,785 $320,311 $363,540 Break Even 31 5 Yr. IRR 13.55% 5 Yr. NPV (12%)

$172,466

Risk Mitigation Measures: *To prevent the banks to raise their rates we must do a better task on lowering our perceived risk and assuring the institutions the repayment of their debt on time (punctual). * In addition, we can extend the debt schedule to 8 years to generate greater profits, cash flows, IRR and NPV. * Vic Spanish Riviera can also increase our equity financing and lower our debt borrowing. Case Scenario 5: If daily Food Provisions cost increases to $15 per resident? If the daily Food Provision expense increases from $12 to $15 per resident our profits and cash flow decreases by an average of $40,000 per year. In addition our IRR will decrease from 15.9% to 10.54% and the NPV from $238,054 to $89,295. Year 1 Year 2 Year 3 Year 4 Year 5 Profit $571,224 $595,045 $628,528 $660,987 $693,731 Cash Flow $503,923 $217,876 $252,359 $284,017 $318,362 Break Even 31 5 Yr. IRR 10.54% 5 Yr. NPV (12%)

$89,295

Risk Mitigation Measures: * To prevent this to happen we will work with different suppliers thus minimizing the probability of having a big supplier from raising their prices at anytime. * Also we can only provide 2 meals a day with a third optional meal at an extra charge to lower our variable expenses and increasing operating income.

15 Long Term Development and Exit Plan

15.1 Long Term Development Vic Spanish Riviera long term goal is to build an established image of quality, family oriented and top care service in our luxury retirement residence. We expect that Vic Spanish Riviera will have gained a respectable reputation in approximately 4 to 5 years. As the market for this business is growing steadily as baby boomers start to retire throughout Canada, Vic Spanish Riviera will look forward to expand and open another retirement residence compound in a strong city that has the same characteristics such as Halifax. Certainly, this can only be done after our company has reached a comfortable profit position in the Halifax area. In addition, Vic Spanish Riviera can also license (Franchise) new residences that want to use our brand name and offer the same benefits and quality as our company. 15.2 Exit Plan At Vic Spanish Riviera, we recognize that investors in our start-up company ultimately need an exit vehicle after a 5 year period. Our purpose is to provide the best alternatives to protect investor's interest, while maintaining the profitability, the liquidity and potential growth of our company. Here we will describe a couple of exit alternatives for our investors to recoup their initial investments after a 5 year period. * IPO (Initial Public Offering): Vic Spanish Riviera can pursue an IPO thus selling shares to public buyers and acquire the funds to pay back our initial investors after 5 years. * Trade Acquisition: Selling our company to a potential rival can be lucrative for our investors and Vic Spanish Riviera. A potential rival might want to use our brand reputation, assets and business potential and leave us in a god position to negotiate a buy out price. * Merger: We can also merge with a major retirement home but retain an interest in the business. The purpose is to combine resources that will enable future growth and allow us to generate greater profits and funds to pay back our initial investors. * Franchise: Another exit strategy is to franchise our business concept to new retirement home that want to use our brand name. This will generate potential cash flows that will be use toward paying back our initial investors. * Initial Investors right of refusal of the next round of investment: Our Initial Investors can opt out of investing any more funds in our expansion project and in turn demand their initial investment back. We will use part of the next round of funds to pay back our initial investors.

16 Appendix

Appendix 1

VIC SPANISH RIVIERA

INCOME STATEMENT

Year 1 Year 2 Year 3 Year 4 Year 5

Operating Revenue

Residents Charge for Services

2,400,000

Cost of service Provided

2% Food Provision Expenses

219,000

223,380

227,848

232,405

237,053

2% Medical Supplies Expense

73,000

74,460

Total

292,000

297,840

302,308

306,865

311,513

Gross Margin

2,108,000

2,102,160

2,097,692

2,093,135

2,088,487

88% 88% 87% 87% 87%

Operating Expenses

2% Management Salary 100000 102000 104040 106121 108243 3% Staff Payroll 530038 540639 540639 540639 540639 3% Office Supply 6000 6120 6304 6493 6687 3% Laundry Supply 1200 1224 1261 1299 1337 3% Cleaning Supply 12000 12240 12607 12985 13375

3% Recreational Activity Supplies 16000 16320 16320 16320 16320

3% Cooking Supplies 4400 4488 4488 4488 4488

Telephone 7200 7200 7200 7200 7200

Internet 6000 6000 6000 6000 6000

3% Utilities 24000 24720 25462 26225 27012

Insurance 100000 100000 100000 100000 100000

3% Travel Gasoline Expense 12000 12360 12731 13113 13506

2% Marketing Expense 12000 12360 12360 12360 12360 3% Fieldtrip Events 12000 12360 12360 12360 12360

3% Repair and Maintenance 14400 14832 14832 14832 14832

Total Expenses

857,238

872,863

876,603

880,434

884,360

Operating Income

1,250,762

1,229,297

1,221,090

1,212,701

1,204,127

Depreciation

188,747

189,747

190,747

192,947

194,547

Interest

224,000

168,000

112,000

56,000

-‐

Earnings Before Taxes

838,015

871,550

918,343

963,754

1,009,580

27 % Taxes on Earnings

226,264

235,319

247,953

260,214

272,587

Profit $611,751 $636,232 $670,390 $703,540 $736,994

Appendix 2

VIC SPANISH RIVIERA

BALANCE SHEET

Balance Sheet

Opening Balance

Sheet Year 1 Year 2 Year 3 Year 4 Year 5

Assets

Cash 332,180

40,000

A/R -

Property Equipment and Furniture

432,820

437,820

442,820

450,820

458,820

less Depreciation -

66,997

134,994

203,991

275,188

347,985

Property Building 2,435,000

2,435,000

less Depreciation -

121,750

243,500

365,250

487,000

608,750

Net Property and Equipment

2,867,820

2,679,073

2,494,326

2,308,579

2,123,632

1,937,085

Land 800,000

800,000

Total Assets $4,000,000 $3,519,073 $3,334,326 $3,148,579 $2,963,632 $2,777,085

Liabilities

A/P -

Debt 2,800,000

2,240,000

1,680,000

1,120,000

560,000

Owners Equity 1,200,000

1,200,000

Retained Earnings -

611,751

1,247,983

1,918,373

2,621,913

3,358,907

Dividends to Shareholders

(532,678)

(793,657)

(1,089,794)

(1,418,282)

(1,781,822)

Total Liabilities & Equity $4,000,000 $3,519,073 $3,334,326 $3,148,579 $2,963,632 $2,777,085

Appendix 3

VIC SPANISH RIVIERA

CASH FLOW STATEMENT

Cash Flow Statement Year 1 Year 2 Year 3 Year 4 Year 5

Open Balance

332,180

40,000

Income

611,751

636,232

670,390

703,540

736,994

Non-Cash Items

Depreciation

188,747

189,747

190,747

192,947

194,547 Change in Working Capital

(Less Debt payments)

560,000

(Less capital expenditures)

5,000

8,000

(Dividend payments) $532,678 $260,979 $296,137 $328,487 $363,540

Ending Balance $40,000 $40,000 $40,000 $40,000 $40,000

Appendix 4

VIC SPANISH RIVIERA

DEBT SCHEDULE

Initial Debt $2,800,000

Interest Rate 10%

Year 1 Year 2 Year 3 Year 4 Year 5

Starting Balance $2,800,000 $2,240,000 $1,680,000 $1,120,000 $560,000

Principle Payments $560,000.07 $560,000.07 $560,000.07 $560,000.07 $560,000.07

Ending Balance $2,240,000 $1,680,000 $1,120,000 $560,000 $0

Interest Costs $224,000.03 $168,000.02 $112,000.01 $56,000.01 $0.00 Appendix 5

VIC SPANISH RIVIERA

CAPITAL SCHEDULE

Depreciable Life

5 years

Year 1 Year 2 Year 3 Year 4 Year 5

Starting Assets 237,150

Annual Capital Additions

5,000

8,000

Total Assets 237,150

242,150

247,150

255,150

263,150

Depreciation

47,430

1,000

1,600

Annual Depreciation 47,430

48,430

49,430

51,630

53,230

Cumulative Depreciation

47,430

95,860

145,290

196,920

250,150

Beginning Balance 237,150

194,720

151,290

109,860

66,230

Ending Balance 189,720

146,290

101,860

58,230

13,000

Depreciable Life

10 years

Year 1 Year 2 Year 3 Year 4 Year 5

Starting Assets 195,670

Annual Capital Additions

Total Assets 195,670

195,670

Depreciation

19,567

Annual Depreciation 19,567

19,567

Cumulative Depreciation

19,567

39,134

58,701

78,268

97,835

Beginning Balance

195,670 176,103 156,536 136,969 117,402

Ending Balance 176,103

156,536

136,969

117,402

97,835

Depreciable Life

20 years

Year 1 Year 2 Year 3 Year 4 Year 5

Starting Assets 2,435,000

Annual Capital Additions

Total Assets 2,435,000

2,435,000

Depreciation

121,750

Annual Depreciation 121,750

121,750

Cumulative Depreciation

121,750

243,500

365,250

487,000

608,750

Beginning Balance 2,435,000

2,313,250

2,191,500

2,069,750

1,948,000

Ending Balance 2,313,250

2,191,500

2,069,750

1,948,000

1,826,250

Appendix 6

VIC SPANISH RIVIERA

BREAK-EVEN ANALYSIS

Monthly

Residents 20

Revenue 80,000

88,000

96,000

104,000

112,000

120,000

128,000

136,000

144,000

152,000

160,000

Yearly

Revenue 960,000

1,056,000

1,152,000

1,248,000

1,344,000

1,440,000

1,536,000

1,632,000

1,728,000

1,824,000

1,920,000

Expenses

Variable 116,800

128,480

140,160

151,840

163,520

175,200

186,880

198,560

210,240

221,920

233,600

Fixed 1,269,985

1,269,985

Total Expenses 1,386,785

1,398,465

1,410,145

1,421,825

1,433,505

1,445,185

1,456,865

1,468,545

1,480,225

1,491,905

1,503,585

Income $426,785 $342,465 $258,145 $173,825 $89,505 $5,185 $79,135 $163,455 $247,775 $332,095 $416,415

Appendix 7 Medical Equipment Assets Home Oxygen Therapy Products 3100 3 $9,300 Back Therapy Massage Couch Bed 2500 2 $5,000 Respiratory Medication Nebulizers Equip 140 3 $420 Automatic Blood Pressure Monitor 180 3 $540 Cholesterol Testing Machine 185 3 $555 Glucose Monitor 190 3 $570 Vital Signs Monitor 420 2 $840 Spirometer 95 2 $190 Speculum 65 2 $130 Penlight 55 2 $110 Hemoglobin Test Machine 110 2 $220 Clinic Bed Set 450 2 $900 Recovery Couch 230 3 $690 Diagnostic Station 220 2 $440 Electrocardiogram (ECG) Machine and Equip 360 1 $360 Pulse Oximeter 140 2 $280 Audiometer 160 2 $320 Stethoscope 140 2 $280 Reflex Hammers and Pinwheels 155 2 $310 Every Day Kit (Scissor, Instruments and Syringes) Equip Kit 150 3 $450 Defibrillator Machine and Equip 1100 1 $1,100 Compression Diabetic Pump Therapy 1800 1 $1,800 Sleep Therapy Equip Device 800 4 $3,200 Blood Test Device 140 2 $280 Trolley, Storage and Cabinet Set 400 4 $1,600 Urine Test Device 145 2 $290 First Aid and CPR Kit 270 3 $810 Clinic Blanket Set 135 3 $405 Hot and Cold Pack 50 8 $400 Clinical Thermometer 180 4 $720 Water Distiller Machine 180 2 $360 Scale 90 2 $180 Wheelchair 320 5 $1,600 Walker 120 6 $720 Safety Bench 80 60 $4,800 Toilet Seat Frame 45 6 $270 Shower Chair 260 6 $1,560 Total $42,000

Appendix 8 Fitness Equipment Assets Treadmills 700 7 $4,900 Exercise Spin Bike 400 8 $3,200 Step Stair Machine 350 5 $1,750 Rowing Machines 280 3 $840 Super Weight Bench Set 700 1 $700 Multi Lever Bench 500 1 $500 Leg Extension Machine 450 2 $900 Leg Pull Machine 350 2 $700 Seated Calf Machine 250 2 $500 Bicep and Triceps Corm Arm Machine 350 2 $700 Back Seated Row Machine 450 1 $450 Let Pull Down Machine 400 2 $800 3 Station Let Pull-‐down and Crossover 1150 1 $1,150 Shoulder Press Machine 350 2 $700 AB Abdominal Crush Machine 350 2 $700 Plates and Bar Set 300 2 $600 Dumbbells Set 400 2 $800 Gym Exercise Ball 45 6 $270 Exercise Mat Set 90 6 $540 Total $20,700

Appendix 9 Sample Vic Spanish Riviera Activity Schedule

JANUARY 2013 Sunday

Monday Tuesday Wednesday Thursday Friday Saturday

1 10:00AM Cardio 7:00PM Bingo Night

2 4:00PM Computer Classes 8:00PM Movie Night

3 10:00AM Cardio 7:00PM Bingo Night

4 5:00PM Cooking Classes 8:00PM Movie Night

5 10:00AM Cardio 4:00PM Trip to Mall 7:00PM Bingo Night

6 3:00PM Trip to the Zoo 7:00PM Tea Party

7 9:00AM Dietician Sched 5:00PM Art&Craft Classes 8:00PM Movie Night

8 10:00AM Cardio 7:00PM Bingo Night

9 4:00PM Computer Classes 8:00PM Movie Night

10 10:00AM Cardio 7:00PM Bingo Night

11 5:00PM Cooking Classes 8:00PM Movie Night

12 10:00AM Cardio 4:00PM Trip to Mall 7:00PM Bingo Night

13 3:00PM Trip to the Museum 7:00PM Tea Party

14 9:00AM Dietician Sched 5:00PM Art&Craft Classes 8:00PM Movie Night

15 10:00AM Cardio 7:00PM Bingo Night

16 4:00PM Computer Classes 8:00PM Movie Night

17 10:00AM Cardio 7:00PM Bingo Night

18 5:00PM Cooking Classes 8:00PM Movie Night

19 10:00AM Cardio 4:00PM Trip to Mall 7:00PM Bingo Night

20 3:00PM Trip to Art Gallery 7:00PM Tea Party

21 9:00AM Dietician Sched 5:00PM Art&Craft Classes 8:00PM Movie Night

22 10:00AM Cardio 7:00PM Bingo Night

23 4:00PM Computer Classes 8:00PM Movie Night

24 10:00AM Cardio 7:00PM Bingo Night

25 5:00PM Cooking Classes 8:00PM Movie Night

26 10:00AM Cardio 4:00PM Trip to Mall 7:00PM Bingo Night

27 3:00PM Trip to Casino 7:00PM Tea Party

28 9:00AM Dietician Sched 5:00PM Art&Craft Classes 8:00PM Movie Night

29 10:00AM Cardio 7:00PM Bingo Night

30 4:00PM Computer Classes 8:00PM Movie Night

3110:00AM Cardio 7:00PM Bingo Night