Financial Plans and Projection

Fund requirements
Before we discuss the financials of the business, we must say that all numbers will be in
Canadian dollars, the exchange rate on November 21st, 2022, is 2.73 for every Canadian dollar.

In our first year, Lokma will have some expenses with a cost of $100,000, it’s shown on
the income statement in Appendix B. Each of the co-founders will contribute $25,000 out of
their personal money, and the business will take a loan from Qatar National Bank (QNB), the
largest commercial bank in Qatar and the largest financial institution in the Middle East, the loan
is for $100,000 with a 0.4% interest. The operating expenses covered by this fund will cover all
overhead costs represented on the income statement covering our salaries, start-up equipment,
and fees.

Sources of Repayment

We believe that when entering a new market, the first thing we should work on is
building a good reputation for our business, and that includes not only customers but also,
building a good reputation among the financial institutions in the market especially those that
helped us start-up our business. Thus, the first thing Lokmah planning on doing is repaying the
loan of $100,000 we received from QNB (Qatari National Bank), and that will take us about 4
years as Lokmah will be paying $20,000 per year, also, based on the economic state of the
business, we will start repaying the $25,000 each of the co-founders had contributed into the
business. This step will take us another two years which will be done in the 6th year.

Funding Assumptions

Income Statement. As we talk about our projected revenue, the management team found
that our daily sales would be around 50kg. The packs come in 10pc, 20pc, and 40pc, and each
piece weighs 25g, based on our market research, we think Lokmah will sell around the
equivalent of 100 orders of 40pc packs, totaling 100kg per day. It’s reflected in the income
statement. (See Appendix A)

Lokmah calculated the cost of goods sold by finding the ingredients needed to make the
product, and since Lokmah deals with local suppliers, thus, the price of the ingredients will not
be changing dramatically even if we had to switch suppliers. Each kg of Lokmah with the
toppings will cost us around $2 to $2.50 make, while some toppings will cost more than others,
all flavors will be sold at the same price.
For the overhead cost, Lokmah has listed and calculated the price of all the equipment
needed to start the business and deliver our products to customers. Lokmah will need a fryer
machine, we found Migali - C-F75-NG, Commercial 75Lbs Deep Fryer 5 Burners 1 Fry Pot
Natural Gas BTU170000 is listed for $1806 plus shipping and tariffs we will be looking at
$2100. And the business will also need a fridge to store the raw materials, management team
decided to go with HUBERT® 48 cu ft 2 Door Merchandiser / Refrigerator - 54"L x 31 15/16"W
x 79 1/2"H which has two doors that help us make sure everything is stored properly, and also
it’s a well-known quality company that stands behind their products, this will help us make sure
we will not be incurring maintenance issues with the fridge that could slow the business or
incurred an additional cost. Also, it has a longer warranty and thus a longer depreciation period.
This fridge is being sold on Hubert ® for $3484. Which will go up to $3700 after shipping and
tariffs.

As for our office supplies, which is everything Lokmah will need in order to run the
business and operate. This will include everything from chairs and tables for customers that are
waiting on their order, this will be bought from the Swedish IKEA store in Qatar as we can save
the shipping cost of heavy and big items. We decided to go with MELLTORP / JANINGE table
and 4 chairs for $445x2 equals around $1000. Displaying screen for a modern way to display the
menu, the management team decided to go with an LG LED Monitor for $1200.00. For the
checkout system, management decided to go the modern way and choose the square register,
which is for $900 as it has free shipping. Finally, management decided to count another $1000
for miscellaneous expenses the store might need to start such as cleaning kits and other various
expenses. And after year 1, all equipment is still going to be under warranty, so the only expense
left is the restock on office supplies such as receipts papers and cleaning supplies, and other
minor items.
For salaries, Lokmah’s management team decided to set a wage of $15/hr (40.95 Qatari
Rial) according to our study of the market in Qatar and other competing companies management
sees that this wage will be a motivational one to encourage a friendly work environment a
customer can feel as a guest. For our management team, each manager will receive $50,000 Per
year with an increase of 5% for every year plus a very motivational bonus program. We will start
the store with 5 part-time employees each working 15-20hrs a week. And a reassessment of the
economic state of business and a study of the demand will occur after that to discuss needed
changes.
Lokmah will rent a store located in Doha, the capital city of Qatar. Priced at $5000
(13,650 QR) Which is $60000 per year.
The depreciation expense will be on equipment and depreciable office supplies such as
furniture. Management assumed that 10% will be the depreciation each year making the number
showing on the income statement.
Balance sheet. The balance sheet can be found in appendix C. Our current assets
comprised of the cash after year 1, which is the net profit on the income statement on year 1,
Appendix A). And, $2000 of raw material. Then our balance sheet indicates the non-current
assets representing our equipment and office supplies with 10% depreciation on them for the
year.
For liability, we have a long-term bank loan from QNB, plus the interest of the first year.
Equity is $75,000 which is the 3 managers invested, and the retained earnings.
Break-Even Analysis
Lokmah offers multiple different toppings, but overall, the 1 kg of Lokmah cost $2 to
make. while all the different topping kinds cost the same to make, they are sold for the same
price of $20.00 per kg (40pc pack), 13.00 for the 20pc pack, and $8.00 for the 10pc pack. So, we
will use the weighted average method to calculate the break-even analysis.