# EDGAR Filing Document

**Accession Number:** 0001931256
**File Stem:** 0001942207-23-000002
**Filing Date:** 2023-3
**Character Count:** 97923
**Document Hash:** 3c173cf2b9b5097815f56e771effd63a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001942207-23-000002.hdr.sgml**: 20230322

**ACCESSION NUMBER**: 0001942207-23-000002

**CONFORMED SUBMISSION TYPE**: C-AR

**PUBLIC DOCUMENT COUNT**: 2

**CONFORMED PERIOD OF REPORT**: 20220930

**FILED AS OF DATE**: 20230322

**DATE AS OF CHANGE**: 20230322

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Purpose8 Real Estate, LLC
- **CENTRAL INDEX KEY:** 0001931256
- **IRS NUMBER:** 802788316
- **STATE OF INCORPORATION:** MI
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** C-AR
- **SEC ACT:** 1933 Act
- **SEC FILE NUMBER:** 020-30248
- **FILM NUMBER:** 23751752

**BUSINESS ADDRESS:**
- **STREET 1:** 19815 NEGAUNEE
- **CITY:** REDFORD
- **STATE:** MI
- **ZIP:** 48240
- **BUSINESS PHONE:** 248-219-6685

**MAIL ADDRESS:**
- **STREET 1:** 19815 NEGAUNEE
- **CITY:** REDFORD
- **STATE:** MI
- **ZIP:** 48240

### Attached PDF Documents

**Attachment 1:** `formcar_kornstore.pdf`

| Date Offering Began | Offering Exemption | Type of Securities | Amount Sold | How the Money was Used |
| --- | --- | --- | --- | --- |
| None | N/A | N/A | N/A |  |

### §227.201(r) - Transactions Between the Company and “Insiders”

#### Company Instructions

- • The term “transaction” means any business transaction, including stock purchases, salaries, property rentals, consulting arrangements, guaranties, etc.
- • Include only transactions that occurred since the beginning of your most recent fiscal year and transactions that are currently planned.
- • Include only transactions that involved an amount of money (or other value) greater than 5% of the total amount you raised in the Regulation Crowdfunding offering. For example, if you raised \$600,000, include only transactions that involved more than \$30,000 each.
- • Include only transactions between the Company and:
  - ○ Anyone listed in your answer to question 227.201(b); or
  - ○ Anyone listed in your answer to question 227.201(c); or
  - ○ If the Company was organized within the last three years, any promotor you’ve used; or
  - ○ Any family member of any of those people, meaning a child, stepchild, grandchild, parent, stepparent, grandparent, spouse or spousal equivalent (meaning someone you live with and can’t stand), sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law, including adoptive relationships; or
  - ○ Any corporation or other entity in which any of those people owns an interest.

| Description of Transaction | Date of Transaction | Name of Insider | Relationship to Company | Value of Insider’s Interest in Transaction |
| --- | --- | --- | --- | --- |
| None |  |  |  |  |

### §227.201(s) - The Company’s Financial Condition

#### Operations

During the most recent fiscal year, the Company [describe operations].

#### Liquidity

The Company was organized under the Michigan Limited Liability Company Act on January 1, 2021. As of now, we have not yet begun operations other than those associated with general start-up and organizational matters including the purchase of the Property and improvements to make sure it is weather tight. We have no revenues and very minimal liquid resources (cash).

We have used the proceeds of this Offering to renovate and operate the Project, as described in our business plan. We will also use debt (borrow money) to finance a portion of the costs.

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The balance sheet attached reflects our cash on hand. See *Exhibit C: Financial Statements*, attached.

### **Capital Resources**

As of now, we have purchased the Property, but have not entered into any other agreements. Other than the proceeds received from the Offering, our only other source of capital is expected to be a loan from the bank.

### **Historical Results of Operations**

The Company is in the development stage and has purchased the building, completed architectural, mechanical, electrical and plumbing drawings.

### **Changes and Trends**

Since the date of our original Form C, there have been no material changes in the financial condition or operations of the Company.

### **§227.201(t) - The Company's Financial Statements**

Our financial statements are attached as Exhibit C: Financial Statements

### **§227.201(x) - Our Compliance with Reporting Obligations**

#### **Explanation for Investors**

This item requires a Company to disclose whether it has ever failed to file the reports required by Regulation Crowdfunding.

The Company has never failed to file the reports required by Regulation Crowdfunding.

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## EXHIBIT A: OPERATING PRO-FORMA

| REVENUES | 2023 | 2024 | 2025 | 2026 | 2027 |
| --- | --- | --- | --- | --- | --- |
| Gross Residential Rent | $14,400 | $14,832 | $15,277 | $15,735 | $16,207 |
| +Other Income | 13,100 | 13,493 | 13,898 | 14,315 | 14,744 |
| = Residential Income | 27,500 | 28,325 | 29,175 | 30,050 | 30,951 |
| Gross Commercial Rent | 16,320 | 16,810 | 17,314 | 17,833 | 18,368 |
| + Tenant Contributions | 1,920 | 1,978 | 2,037 | 2,098 | 2,161 |
| =Commercial Income | 18,240 | 18,787 | 19,351 | 19,931 | 20,529 |
| = Effective Gross Income | $45,740 | 47,112 | 48,526 | 49,981 | 51,481 |
| Operating Expenses |  |  |  |  |  |
| Management Fees | 1,369 | 1,410 | 1,453 | 1,496 | 1,541 |
| Real Estate Property Tax | 6,500 | 6,630 | 6,763 | 6,965 | 7,174 |
| Other | 7,000 | 7,210 | 7,426 | 7,649 | 7,879 |
| = Total Operating Expenses | 14,869 | 15,250 | 15,641 | 16,111 | 16,594 |
| - Transfer to Bank Reserves | 500 | 500 | 500 | 500 | 500 |
| - Bank Interest Reserves | 4,000 | 4,000 | 4,000 | 4,000 | 4,000 |
| = Net Operating Income | 26,371 | 27,362 | 28,384 | 29,371 | 30,387 |
| Debt Service (p+i) bank, $167,608, 25 yr am, 8% | 15,701 | 15,701 | 15,701 | 15,701 | 15,701 |
| -Small Change $43,000 (p+i), 25 yr am, 8% | 4,028 | 4,028 | 4,028 | 4,028 | 4,028 |
|  | 19,730 | 19,730 | 19,730 | 19,730 | 19,730 |
| Cash Flow | $6,641 | 7,632 | 8,655 | 9,641 | 10,657 |
| Year 5 Refinancing |  |  |  |  |  |
| Capitalized market value | 8% Cap Rate |  |  |  | 379,834 |
| Loan refinancing @ 75% LTV |  |  |  |  | 284,876 |
| Less refinancing fees |  |  |  |  | (2,849) |
| Less bank debt principal owed |  |  |  |  | (153,043) |
| Less Small Change balance on notes |  |  |  |  | (39,450) |
| Total after loans are repaid |  |  |  |  | 89,534 |

### Assumptions

| BANK AMORTIZATION | YEARS | 1 | 2 | 3 | 4 | 5 |
| --- | --- | --- | --- | --- | --- | --- |
| INTEREST APR | 8.00% |  |  |  |  |  |
| AMORTIZATION IN YEARS | 25 yrs of pymt |  | 5 |  |  |  |
| LOAN AMOUNT | 167,608 |  |  |  |  |  |
| P&I - ANNUAL | 15,701 | 15,701 | 15,701 | 15,701 | 15,701 | 15,701 |
| INTEREST |  | 13,329 | 12,961 | 12,767 | 12,556 | 12,328 |
| PRINCIPAL |  | 2,372 | 2,740 | 2,935 | 3,145 | 3,373 |
| REMAINING PRINCIPAL |  | 165,236 | 162,496 | 159,561 | 156,416 | 153,043 |
| SMALL CHANGE AMORTIZATION | YEARS | 1 | 2 | 3 | 4 | 5 |
| INTEREST APR | 8.00% |  |  |  |  |  |
| AMORTIZATION IN YEARS | 25 yrs of pymt |  | 5 |  |  |  |
| LOAN AMOUNT | 43,000 |  |  |  |  |  |
| P&I - ANNUAL | 4,028 | 4,028 | 4,028 | 4,028 | 4,028 | 4,028 |
| INTEREST |  | 3,420 | 3,373 | 3,322 | 3,268 | 3,208 |
| PRINCIPAL |  | 609 | 655 | 706 | 761 | 820 |
| REMAINING PRINCIPAL |  | 42,391 | 41,736 | 41,030 | 40,270 | 39,450 |

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# EXHIBIT B: RISKS OF INVESTING

THE PURCHASE OF SECURITIES FROM THE COMPANY IS SPECULATIVE AND INVOLVES SIGNIFICANT RISK, INCLUDING THE RISK THAT YOU WILL LOSE SOME OR ALL OF YOUR MONEY. THIS INVESTMENT IS SUITABLE ONLY FOR INVESTORS WHO FULLY UNDERSTAND AND ARE CAPABLE OF BEARING THE RISKS.

SOME OF THE RISKS ARE DESCRIBED BELOW. THE ORDER IN WHICH THESE RISKS ARE DISCUSSED IS NOT INTENDED TO SUGGEST THAT SOME RISKS ARE MORE IMPORTANT THAN OTHERS.

## Risks Associated with the Real Estate Industry.

**Speculative Nature of Real Estate Investing.** Real estate can be risky and unpredictable. For example, many experienced, informed people lost money when the real estate market declined in 2007-2008. Time has shown that the real estate market goes down without warning, sometimes resulting in significant losses. Some of the risks of investing in real estate include changing laws, including environmental laws; floods, fires, and other acts of God, some of which may not be insurable; changes in national or local economic conditions; changes in government policies, including changes in interest rates established by the Federal Reserve; and international crises. You should invest in real estate in general, and in the Company in particular, only if you can afford to lose your investment and are willing to live with the ups and downs of the real estate industry.

**Environmental Risks.** The Company has undertaken what it believes to be adequate testing of the property and is not aware of any environmental contamination. However, the nature of these tests is such that contamination cannot be entirely ruled out. Under Federal and State laws, a current or previous owner or operator of real estate may be required to remediate any hazardous conditions without regard to whether the owner knew about or caused the contamination. Similarly, the owner of real estate may be subject to common law claims by third parties based on damages and costs resulting from environmental contamination. The cost of investigating and remediating environmental contamination can be substantial, even catastrophic.

**ADA Compliance.** The Americans with Disabilities Act of 1990 (the “ADA”) requires all public buildings to meet certain standards for accessibility by disabled persons. Complying with the ADA can add significant time and costs to a project.

**Regulation and Zoning.** Like all real estate projects, this project is subject to extensive building and zoning ordinances and codes, which can change at any time. Complying with all of these rules could add significant time and costs to the project.

**Casualty Losses.** A fire, hurricane, mold infestation, or other casualty could materially and adversely affect the project.

**Illiquidity of Real Estate.** Real estate is not “liquid,” meaning it’s hard to sell. Thus, the Company might not be able to sell the project as quickly as it would like or on the terms that it would like.

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**Property Values Could Decrease.** The value of the Company's real estate could decline, perhaps significantly. Factors that could cause the value of real estate to decline include, but are not limited to:

- Changes in interest rates
- Competition from other property
- Changes in national or local economic conditions
- Changes in zoning
- Environmental contamination or liabilities
- Changes in local market conditions
- Fires, floods, and other casualties
- Uninsured losses
- Undisclosed defects in property
- Incomplete or inaccurate due diligence

**Inability to Attract and/or Retain Tenants.** The Company will face significant challenges attracting and retaining qualified tenants. These challenges could include:

- Competition from other landlords
- Changes in economic conditions could reduce demand
- Existing tenants might not renew their leases
- The Company might have to make substantial improvements to the property, and/or reduce rent, to remain competitive
- Portions of the property could remain vacant for extended periods
- A tenant could default on its obligations, or go bankrupt, causing an interruption in rental income

**Risks Associated with Development and Construction.** The Company is or will be engaged in development and construction. Development and construction can be time-consuming and are fraught with risk, including the risk that projects will be delayed or cost more than budgeted.

**Liability for Personal Injury.** The Company might be sued for injuries that occur in or outside the project, e.g., "slip and fall" injuries.

## Risks Associated with Early Stage Companies

**Early-Stage Companies Face Significant Challenges.** The Company is an early-stage Company, and like all early-stage companies faces significant challenges, including:

- Understanding the marketplace and accurately identifying opportunities for growth

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- • Developing its products and services
- • Developing its brands
- • Responding effectively to the offerings of existing and future competitors
- • Attracting, retaining, and motivating qualified executives and personnel
- • Implementing business systems and processes, including technology systems
- • Raising capital
- • Controlling costs
- • Managing growth and expansion
- • Implementing adequate accounting and financial systems and controls
- • Dealing with adverse changes in economic conditions

Unfortunately, the reality is that many early-stage companies never overcome these challenges, and there is no guarantee that the Company will prove to be an exception.

**We Expect to Experience Operating Losses for the Foreseeable Future.** We expect to experience losses, not profits, for the foreseeable future, as we develop our products and services and build out our operations.

**Accurately Assessing the Value of A Private Start-Up Company Is Difficult.** Putting a value on a security issued by a privately held startup or early-stage Company is extremely difficult. The price of our securities was determined arbitrarily and bears no relationship to established criteria of value such as the assets, earnings, or book value of the Company.

**Lack of Professional Management.** The Company is managed by its founder, Brinda Devine. Ms. Devine does not have significant management training or experience in the running of a retail store.

**Lack of Access to Capital.** As a small business, the Company has very limited access to capital. If we need more capital in the future, as we probably will, there is no guarantee we will be able to find it.

**Limited Products and Services.** The Company offers only a limited number of [products] [services], making it vulnerable to changes in technology and/or customer preferences.

**Limited Distribution Channels.** An early-stage Company can find it very difficult to penetrate established distribution channels. For example, a small Company with only one or two products will find it very difficult to get into large retailers like Walmart.

**Lack of Accounting Controls.** Larger companies typically have in place strict accounting controls to prevent theft and embezzlement. In contrast, our Company has only limited controls.

**Unproven Business Models.** Our Company is trying to introduce what is effectively an entirely new [product] [service]. If we are successful, the rewards could be significant. But consumer behavior is very

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difficult to change, and successful business models are very difficult to build. There is no guaranty that consumers will embrace our new model.

**No Ongoing Distributions.** We do not intend to pay dividends for the foreseeable future. Instead, we will invest our profits back into the business.

## Risks Common to Companies on the Platform Generally

**Reliance on Management.** Under our Operating Agreement, Investors will not have the right to participate in the management of the Company. Instead, Ms. Brinda Devine will manage all aspects of the Company and its business. Furthermore, if Ms. Devine or other key personnel of the issuer were to leave the Company or become unable to work, the Company (and your investment) could suffer substantially. Thus, you should not invest unless you are comfortable relying on the Company's management team. You will never have the right to oust management, no matter what you think of them.

**Inability to Sell Your Investment.** The law prohibits you from selling your securities (except in certain very limited circumstances) for one year after you acquire them. Even after that one-year period, a host of Federal and State securities laws may limit or restrict your ability to sell your securities. Even if you are permitted to sell, you will likely have difficulty finding a buyer because there will be no established market. Given these factors, you should be prepared to hold your investment for its full term (in the case of debt securities) or indefinitely (in the case of equity securities).

**We Might Need More Capital.** We might need to raise more capital in the future to fund new product development, expand its operations, buy property and equipment, hire new team members, market its products and services, pay overhead and general administrative expenses, or a variety of other reasons. There is no assurance that additional capital will be available when needed, or that it will be available on terms that are not adverse to your interests as an Investor. If the Company is unable to obtain additional funding when needed, it could be forced to delay its business plan or even cease operations altogether.

**Changes in economic conditions could hurt Our businesses.** Factors like global or national economic recessions, changes in interest rates, changes in credit markets, changes in capital market conditions, declining employment, decreases in real estate values, changes in tax policy, changes in political conditions, and wars and other crises, among other factors, hurt businesses generally and could hurt our business as well. These events are generally unpredictable.

**No Registration Under Securities Laws.** Our securities will not be registered with the SEC or the securities regulator of any State. Hence, neither the Company nor the securities will be subject to the same degree of regulation and scrutiny as if they were registered.

**Incomplete Offering Information.** Title III does not require us to provide you with all the information that would be required in some other kinds of securities offerings, such as a public offering of shares (for example, publicly-traded firms must generally provide Investors with quarterly and annual financial statements that have been audited by an independent accounting firm). Although Title III does require

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extensive information, it is possible that you would make a different decision if you had more information.

**Lack of Ongoing Information.** We will be required to provide some information to Investors for at least one year following the offering. However, this information is far more limited than the information that would be required of a publicly-reporting Company; and we are allowed to stop providing annual information in certain circumstances.

**Breaches of Security.** It is possible that our systems would be “hacked,” leading to the theft or disclosure of confidential information you have provided to us. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our vendors may be unable to anticipate these techniques or to implement adequate preventative measures.

**Uninsured Losses.** We might not buy enough insurance to guard against all the risks of our business, whether because it doesn’t know enough about insurance, because we can’t afford adequate insurance, or some combination of the two. Also, there are some kinds of risks that are simply impossible to insure against, at least at a reasonable cost. Therefore, the Company could incur an uninsured loss that could damage our business.

**Unreliable Financial Projections.** We might provide financial projections reflecting what we believe are reasonable assumptions concerning the Company and its future. However, the nature of business is that financial projections are rarely accurate. The actual results of investing in the Company will likely be different than the projected results, for better or worse.

**Limits on Liability of Company Management.** Our Operating Agreement limits the liability of management, making it difficult or impossible for Investors to sue managers successfully if they make mistakes or conduct themselves improperly. You should assume that you will never be able to sue the management of the Company, even if they make decisions you believe are stupid or incompetent.

**Changes in Laws.** Changes in laws or regulations, including but not limited to zoning laws, environmental laws, tax laws, consumer protection laws, securities laws, antitrust laws, and health care laws, could adversely affect the Company.

**Conflicts of Interest.** In many ways your interests and ours will coincide: you and we want the Company to be as successful as possible. However, our interests might be in conflict in other important areas, including these:

- You might want the Company to distribute money, while the Company might prefer to reinvest it back into the business.
- You might wish the Company would be sold so you can realize a profit from your investment, while management might want to continue operating the business.

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- You would like to keep the compensation of managers low, while managers want to make as much as they can.
- You would like management to devote all their time to this business, while they might own and manage other businesses as well.

**Your Interests Aren’t Represented by Our Lawyers.** We have lawyers who represent us. These lawyers have drafted our Operating Agreement and Investment Agreement, for example. None of these lawyers represents you personally. If you want your interests to be represented, you will have to hire your own lawyer, at your own cost.

## Risks Associated with Debt Securities

**You Have no Upside:** You are investing in a “debt” security, meaning you will be a creditor of the Company, not an owner. As a creditor, the most you can hope to receive is your money back plus interest. You cannot receive more than that even if the Company turns into the next Facebook.

**You Do Have A Downside:** Conversely, if the Company loses enough value, you could lose some or all of your money.

**Subordination to Rights of Other Lenders:** Even though you will be a creditor of the Company, you will have a lower priority than some other lenders, like banks or leasing companies. In the event of bankruptcy, they would have the right to be paid first, up to the value of the assets in which they have security interests, while you would only be paid from the excess, if any.

**Lack of Security:** Even though you will be a creditor of the Company, your debt will not be secured.

**Issuers Typically Will Not have Third Party Credit Ratings:** Credit rating agencies, notably Moody’s and Standard & Poor’s, assign credit ratings to debt issuers. These ratings are intended to help Investors gauge the ability of the issuer to repay the loan. Our Company has not been rated by either Moody’s or Standard & Poor’s, leaving Investors with no objective measure by which to judge the Company’s creditworthiness.

**Interest Rate Might Not Adequately Compensate You For Risk Level:** Theoretically, the interest rate paid by a Company should compensate the creditor for the level of risk the creditor is assuming. That’s why consumers generally pay one interest rate, large corporations pay a lower interest rate, and the Federal government (which can print money if necessary) pays the lowest rate of all. However, there is no guaranty that the interest rate we are paying you adequately compensates you for the risk.

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## EXHIBIT C: FINANCIAL STATEMENTS

03 / 14 / 2023

I, Brinda Devine, certify that:

1. The financial statements of Purpose8 Real Estate, LLC included in this Form are true and complete in all material respects; and
2. Purpose8 Real Estate, LLC was formed in 2018, operations have begun and tax returns filed for 2021 and 2022.
3. The attached financial statements are unaudited.

By: PURPOSE8 REAL ESTATE, LLC

By:

Brinda Devine, Manager

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# Income Statement

Purpose8 Real Estate, LLC
April 30, 2022 (YTD)

Financial Statements in U.S. Dollars

Revenue

Gross Sales
Less: Sales Returns and Allowances
Net Sales

Cost of Goods Sold

Beginning Inventory
Add: Purchases
Freight-in
Direct Labor
Indirect Expenses

Inventory Available

Less: Ending Inventory
Cost of Goods Sold

Gross Profit (Loss)

Expenses

Advertising
Amortization
Bad Debts
Bank Charges
Charitable Contributions
Commissions
Contract Labor
Depreciation
Dues and Subscriptions
Employee Benefit Programs
Insurance
Interest
Legal and Professional Fees
Licenses and Fees
Miscellaneous
Office Expense
Payroll Taxes
Postage
Rent
Repairs and Maintenance
Supplies
Telephone
Travel
Utilities
Vehicle Expenses
Wages
Total Expenses

Net Operating Income

Other Income

Gain (Loss) on Sale of Assets
Interest Income
Total Other Income

Net Income (Loss)

![img-0.jpeg](img-0.jpeg)

![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

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# **Purpose8 Real Estate, LLC**

# **Balance Sheet**

**31-Dec-22**

**YTD**

# **Assets**

| Current assets: | Previous Year | Current Year |
| --- | --- | --- |
| Cash | 60.00 | 35,046.79 |
| Investments | - | - |
| Inventories | - | - |
| Accounts receivable | - | - |
| Pre-paid expenses | - | - |
| Other | - | - |
| Total current assets | 60.00 | 35,046.79 |

| Fixed assets: | Previous Year | Current Year |
| --- | --- | --- |
| Property and equipment | 30,332.23 | 30,332.23 |
| Leasehold improvements | - | - |
| Equity and other investments | - | 8,013.21 |
| Less accumulated depreciation | - | - |
| Total fixed assets | 30,332.23 | 38,345.44 |

| Other assets: | Previous Year | Current Year |
| --- | --- | --- |
| Goodwill | - | - |
| Total other assets | - | - |

| Total assets | 30,392.23 | 73,392.23 |
| --- | --- | --- |

# **Liabilities and owner's equity**

| Current liabilities: | Previous Year | Current Year |
| --- | --- | --- |
| Accounts payable | - | - |
| Accrued wages | - | - |
| Accrued compensation | - | - |
| Income taxes payable | - | - |
| Unearned revenue | - | - |
| Other | - | - |
| Total current liabilities | - | - |

| Long-term liabilities: | Previous Year | Current Year |
| --- | --- | --- |
| Small Change Investors | - | 43,000.00 |
| Total long-term liabilities | - | 43,000.00 |

| Owner's equity: | Previous Year | Current Year |
| --- | --- | --- |
| Investment capital | 30,392.23 | 30,392.23 |
| Accumulated retained earnings | - | - |
| Total owner's equity | 30,392.23 | 30,392.23 |

| Total liabilities and owner's equity | 30,392.23 | 73,392.23 |
| --- | --- | --- |

**Balance**

-

**0.00**

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# EXHIBIT D: MARKET ANALYSIS

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![img-4.jpeg](img-4.jpeg)

# KORNR STORE

working to change the world, one neighborhood at a time

## BUSINESS PLAN

**Brinda Devine**  
**P8 Real Estate Solutions**  
WWW.P8REALESTATESOLUTIONS.COM

## KORNR STORE

**NEIGHBORHOOD MARKETPLACE (1/15/2023)** 6224 16$^{th}$ Street, Detroit, 48208/ Northwest Goldberg/ District 5

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# Table of Contents

| Details | Page No. |
| --- | --- |
| Executive Summary | 3 |
| Market Research | 5 |
| Business Model | 29 |
| Marketing Strategy | 42 |
| Management | 46 |
| Sources and Uses of Funds | 48 |
| Financial Model | 52 |

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![img-5.jpeg](img-5.jpeg)

# Executive Summary

## **KORNER STORE**

Working to  
change the world,  
one neighborhood  
at a time

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# Executive Summary

Kornr Store is a proposed limited liability company based in the city of Detroit, Michigan. The company will be a neighborhood marketplace/convenience store, offering variety of services including personal and home goods, packaged drinks and foods, snacks, candies, coffee, tea, and standard foods such as cereal, milk and soup. The company will also provide other services through its partnership with the community development organization, NW Goldberg Cares such as book and art art fairs. Kornr Neighborhood Store is planned to be an energy efficient building.

The main customer profile for Kornr Store will be customers within 1 mile radius of our store location, mostly within the ZIP code 48208. The largest segment we are expecting to target are Black or African Americans as they represent the largest share of the population in our reach area.

Compared to our competitors in the market, which offer services that are limited in scope and services, we pride ourselves in having a portfolio of different products that will fulfil the demand of local community. In addition, our company won't operate solely as a convenience store, rather we will differentiate ourselves by offering select small business products both at the physical store and e-commerce website. To reach this, Kornr Store is currently seeking debt financing as noted in this business plan that will be used to purchase capital expenditures during the first year of establishment. Operations are planned to start May/ June 2023 upon successful rehab of our initial location, 6224 16th Street, Detroit, 48208.

Overall, Michigan state's market size of convenience stores is a multi-million-dollar industry, currently estimated at around USD 671.56 million. Witnessing an overall growth of 2.5%, the state is anticipated to reach USD 773.08 million by 2026. The estimated financial projections for our company is presented below:

|  | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
| --- | --- | --- | --- | --- | --- | --- |
| Revenue | $165,206 | $178,670 | $193,231 | $208,980 | $226,012 | $244,432 |
| Net Profit | $16,904 | $21,561 | $27,036 | $33,025 | $39,571 | $46,722 |
| Cash Balance | $32,379 | $47,751 | $67,771 | $92,869 | $123,514 | $172,319 |

![img-6.jpeg](img-6.jpeg)

**USD $112,512**
Net Present Value (NPV)

**25.12%**
Internal Rate of Return (IRR)

![img-7.jpeg](img-7.jpeg)

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![img-8.jpeg](img-8.jpeg)

# Market Research

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# Market Research

## On the go: More consumers will likely frequent convenience stores due to increased disposable income

Operators in this industry primarily sell items such as tobacco products, standard foods like milk and cereal, packaged beverages, and snacks; coffer, tea and packaged smoothies and energy drinks, home goods and supplies, as well as other alcoholic beverages such as beer. They normally retail those products in convenient locations that are generally open during extended hours. Over the five years to 2020, the Convenience Stores industry has withstood fierce competition by offering convenience, value and a variety of fresh and healthy products. Industry operators have increasingly shifted product mixes to include food service products that are more profitable than items such as cigarettes and have focused more on satisfying demand for quick and easy options. As a result, industry operators have benefited from consumers' need for time-efficient and healthy food service locations as the unemployment rate has remained near historically low levels during most of the period. However, due to the coronavirus pandemic, consumers' disposable incomes collapsed as the unemployment rate soared, which has depressed demand for the industry. Nevertheless, in **Michigan**, revenue has grown at an annualized 2.3% to USD 671.56 million over the five years to 2020-2021, including a decline of 4.3% in 2020 alone. Of which, **Wayne Country** shares nearly 19.4% of the overall market, totaling around USD 190.19 million. Based on population and available number of stores, we estimate the county seat, **Detroit**, to account for 38.46% of the Wayne county revenue, totaling around USD 73.15 million.

**Revenue-20**  
(Michigan)  
**USD671.56$_{M}$**

**Revenue-20**  
(Wayne County)  
**USD190.10$_{M}$**

**Revenue-20**  
(Detroit)  
**USD73.15$_{M}$**

At the beginning of the period, the high levels of overall employment resulted in a growing number of individuals that sought industry enterprises due to the speed of transactions at convenience stores. However, the coronavirus pandemic has changed consumer preferences as millions have lost their jobs or have left large urban cities, where most industry operators reside. Therefore, the normally high traffic areas such Detroit, which operators depend on to generate foot-traffic in stores, and thus, revenue, will likely remain less active until the economy recovers from the pandemic. As the economy recovers and disposable income levels rise following the pandemic-induced economic crisis, consumers are expected to turn to the convenience of industry establishments. Over the years to 2026, it's anticipated the greater focus on convenience stores will likely boost industry demand. Accordingly, **the State of Michigan's** market size is expected to grow at an annualized rate of 2.5% to USD 773.08 million. Of which, **Wayne County** is projected to total around USD 218.94 million, sharing nearly 19.4% of the market.

Source: IBISWorld 6

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# Market Research

## Industry Performance: Key External Drivers

### Per capita disposable income: Michigan vs. Wayne County vs. Detroit

Convenience stores typically charge higher prices for nonessential goods in return for accessibility. Increasing disposable income enables consumers to visit convenience stores regularly and spend more during each visit. Per capita disposable income is expected to decrease in 2020-2021 period due to the current COVID-19 pandemic, posing a potential threat to the industry. Currently estimated at USD 26,249 average median income, the city of **Detroit** is expected to experience strong growth over the years to 2025, reaching nearly USD 20,921 by the year 2025.

Income Per Capita (2019-2025): Michigan vs. Wayne County vs. Detroit

![img-9.jpeg](img-9.jpeg)

### Healthy Eating Index

As consumers become more health-conscious, measured by the healthy eating index, they tend to purchase a greater variety of all-natural and organic products. Consequently, as consumers demand a wider variety of premium products, such as organic produce, industry revenue increases. In 2020, the overall healthy eating index in **Michigan** is expected to increase.

### Urban Population

Consumers living in urban populations tend to purchase items more frequently from industry operators instead of wholesale clubs and supercenters. Consequently, as more consumers live in urban areas, foot traffic to supermarkets and grocery stores increases, lifting industry revenue.

### Percentage of African Americans

According to U.S. Census, African American in **Detroit** count for the largest share of population. Currently sharing nearly 78.3%, the number of African Americans is expected to grow at a steady pace over the years to come, presenting a potential opportunity for the industry to grow.

Detroit (Population)

- White alone
- Black or African American
- American Indian and Alaska native
- Asian
- Two or more races
- Hispanic or Latino
- white alone not hispanic or latino

![img-10.jpeg](img-10.jpeg)

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# Market Research

## Industry Performance: Current Industry Performance - Michigan vs. Wayne County vs. Detroit

In response to growing demand for convenience, industry operators have opened additional stores, expanded into new markets and readily adapted to changing consumer tastes to increase sales. Among these changes is a significant increase in the amount of prepared and healthy food offerings made available to consumers. However, major declines in food prices coupled with shaky consumer confidence have resulted in revenue declines early during the period. However, Michigan State, industry revenue has grown at an annualized 2.3% to USD 671.56 million over the five years to 2020, including a decline of 4.3% in 2020 due to the COVID-19 (coronavirus) pandemic. We anticipate **Wayne County** to share nearly 19.4% of the state's overall market size, currently standing at USD 190.19 million. On the basis of population and the number of operators, Detroit is anticipated to share around 38.46% of the county's revenue, at around USD 73.15 million.

![img-0.jpeg](img-0.jpeg)

While the industry has experienced steady revenue growth during the period, operators have encountered some hurdles as well. For example, rising costs and mounting competition from other food retailers, such as supermarkets, have limited food sale growth. Moreover, even as products such as tobacco comprise a sizable share of industry revenue, the product segment as a whole has decreased somewhat as a share of revenue due to higher prices, new taxes and regulations on cigarettes, which have curbed overall tobacco consumption. In response, industry operators have adjusted product mixes to include healthier food products and fast-food options, which are more profitable than tobacco.

Change in Revenue (2012-2025): Michigan State vs. Wayne County vs. Detroit

![img-1.jpeg](img-1.jpeg)

Source: IBISWorld; U.S. Census Bureau

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# Market Research

## Market Outlook: Michigan vs. Wayne County vs. Detroit

Revenue for the Convenience Stores industry is forecast to increase. Witnessing an annualized rate of 2.5%, the **Michigan's** market size is forecast to reach around USD 773.08 million by the year 2026 as the industry recovers from the COVID-19 (coronavirus) pandemic and subsequent economic crisis. Out of which, the **Wayne County** is projected to account for nearly 19.4% of the market during that time, with a total market size estimated at USD 218.94 million. The county seat, **Detroit**, is projected to be the largest city in the county in terms of market share, with an expected market size of approximately USD 79.81 million by the year 2026.

Though consumers are expected to shop at convenience stores more frequently as more people become employed, people who are also living on fixed incomes still need to visit convenience store from one time to another as well in order to get their everyday essential demands, supporting the high revenue growth for the industry over the years to come. However, sustained pressure from mass merchandisers and emerging competition from online operators will likely restrain revenue growth over the next five years, making it growing but on a slow pace.

![img-2.jpeg](img-2.jpeg)

Source: IBISWorld; U.S. Census Bureau

Projected Market Size (2021-2026) - in USD
Million: Michigan vs. Wayne County vs. Detroit

![img-3.jpeg](img-3.jpeg)

## Continuing competition

Over the five years to 2026, growth in the average consumer's leisure time is expected to increase marginally due to stabilizing unemployment levels. However, mounting competition from supermarkets and specialty stores is expected to constrain the boost in revenue from rising incomes. Changing consumer health trends will also likely challenge the industry further. Competition between supermarkets and convenience stores is expected to be primarily price-based, with longer operating hours and the introduction of online stores also affecting demand for convenience stores. Despite these new strategies being implemented by supermarkets, demand for convenience stores is still expected to increase. Consequently, the number of operators is also expecting to grow, presenting potential growth for revenue.

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# Market Research

## Market Outlook

### Declining sales of tobacco

Cigarettes have historically been the leading product sold at convenience stores but increasing health consciousness and higher prices have resulted in lower sales in recent years. Thus, convenience stores have captured market share from competing online cigarette retailers since tax evasion and a lack of age enforcement have generated public awareness, working against online tobacco retailers. Consequently, the enforcement of tax payments and age laws will likely hurt online sales over the coming years. However, despite the expected decline in competition, the overall demographic shift away from smoking and higher costs related to cigarettes will likely hamper revenue growth generated by this product segment.

Due to growing public awareness of the health risks associated with smoking, it's anticipated that higher cigarette taxes, greater pressure on retailers to monitor sales, stricter regulations and stronger competition from tax-free competitors will likely hinder revenue for industry operators. However, the popularity of e-cigarettes has offered a bright spot for this segment in recent years. Nevertheless, increasing costs in the form of stricter regulations and compliance standards, such as higher wholesale costs, excise taxes and the eventual saturation point of this product segment, will likely further encourage the industry to change its product mix to emphasize food service items. Moving forward, while the profitability of tobacco products will likely diminish, operators are expected to increasingly use food service items to drive foot traffic. Ultimately, shifting to healthier product mixes is expected to benefit industry profit.

![img-4.jpeg](img-4.jpeg)

Source: IBISWorld

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# Market Research

## Products or Service Segmentation: Wayne County vs. Detroit

**OVERVIEW** - This industry provides various offerings which fall into six categories: Tobacco products, food service, personal and home goods, packaged beverages, candy and snacks, as well as other alcoholic beverages such as beer. The analysis for this section has been made on the basis of market size for **Wayne County**. **Detroit** will account for nearly 38.46% of each segment, which has been determined according to the industry averages, population size and the number of operators in this city offering such services.

### Tobacco Products

Convenience store chains have tried to reduce their dependency on tobacco products due to increased government regulation and taxation and escalating consumer health concerns; however, the industry is still heavily reliant on tobacco sales. Tobacco consistently constitutes this industry's largest product category and has grown as a share of revenue over the five years to 2020. Tobacco products are estimated to account for 31.50% of revenue in 2020. This makes **Wayne County's** market size to be currently estimated at USD 59.88 million, out of which **Detroit** is estimated to account for USD 23 million. Given the heightened awareness of the dangers of smoking and bans on smoking in restaurants and other public spaces, sales generated in this category are expected to decline over the coming years.

### Food Services

A considerable amount of revenue is generated from food service sales, which includes food prepared on-site, packaged meals, hot and cold dispensed beverages and frozen dispensed beverages. Other sub-categories within this segment include standard foods like cereal, milk and soup. In 2020, food service is expected to account for 20.80% of revenue. Accordingly, **Wayne County's** market size is currently estimated at USD 39.54 million, out of which **Detroit** is estimated to account for USD 15.2 million. Convenience is a driving factor behind the popularity of these items, since consumers are pressed for time and benefit from quick and convenient service. As consumers' eating habits continue to trend toward more health-oriented products, industry operators have seized this opportunity by diversifying their product mix with various all-natural organic offerings and value-added products. Coffee sales are also considered part of food service sales, with many convenience stores selling coffee. Of the consumers who purchase coffee, more than half purchase coffee from a convenience store, according to 2018 data from the Agricultural Marketing Resource Center (latest data available).

Products or Services: Wayne County

![img-5.jpeg](img-5.jpeg)

Source: IBISWorld 11

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# Market Research

## Products or Service Segmentation: Wayne County vs. Detroit

### Personal and Home Goods

Convenience stores focusing on home goods sell kitchenware, cleaning supplies, various toiletries and home improvement supplies. Other products include items such as magazines, stationery and flowers. These products are typically higher quality or niche type products that differentiate from what consumers purchase from big box or department stores. This segment experiences significant pressure from e-commerce, as consumers are increasingly likely to shop online for various niche products. The segment is reliant on shoppers deriving value from the in-store experience. This segment currently shares around 16.08% of the total industry revenue, making the total market size for Wayne county to be currently estimated at USD 30.56 million, out of which **Detroit** is estimated to account for USD 11.75 million.

### Packaged Beverages

The packaged beverage product category constitutes bottled beverages, such as water, soft drinks, energy drinks and alternative beverages, all of which are nonalcoholic. This segment's share of revenue has increased steadily during the period, accounting for 14.61% of industry revenue in 2020. This makes **Wayne County's** market size to be currently estimated at USD 27.77 million, out of which **Detroit** is estimated to account for USD 10.68 million. Nonalcoholic sales may rise over the next five years, as marketing for packaged drinks increases, and health consciousness and convenience encourage further sales growth. According to IRI's 2020 special report on Convenience Stores, energy drink sales have increased due to the increasing popularity of the product category and shifting lifestyle trends. As a result, continued innovation by beverage manufacturers is projected to instigate the growth of packaged beverage sales over the coming years.

### Candy and Snacks

Prepackaged candy and snacks are estimated to account for 9.14% of industry revenue in 2020. This makes **Wayne County's** market size to be currently estimated at USD 17.37 million, out of which **Detroit** is estimated to account for USD 6.68 million. Sales of products in this segment have decreased during the period amid rising health concerns, which has caused this segment to cede some of its share to the food service segment. According to 2018 data from 7-Eleven, nearly one-third of convenience store visitors purchase food they intend to consume immediately. Moreover, as more people have returned to work during most of the period, demand for quick, fulfilling snacks has grown. However, growing health concerns have dampened the sales volume of sugary snacks, such as chocolate bars and ice cream. Conversely, salty and spicy snacks, healthier alternatives and the introduction of private-label products are expected to keep this segment's share of revenue somewhat steady over the next five years.

Source: IBISWorld 12

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# Market Research

## Products or Service Segmentation: Wayne County vs. Detroit

### Beer

According to 2016 data from the Beer Institute, nearly one-third of all beer consumed in the United States is purchased at convenience stores. As a result, beer accounts for 7.87% of revenue in 2020, increasing as a share of revenue over the past five years. This makes **Wayne County's** market size to be currently estimated at USD 14.96 million, out of which **Detroit** is estimated to account for USD 5.75 million. While sales of mainstream brands have declined, the growth of craft beers and microbrews are offsetting these declines.

While tobacco has undergone stricter political scrutiny regarding underage sales, alcohol sales have also experienced debate. Some politicians suggest that alcohol sales and promotions should be regulated in a manner similar to that of tobacco. Convenience stores have reacted by proactively monitoring sales to minors via the longstanding Retailers Against Minors Purchasing program to prevent illegal alcohol sales. Such programs act as a community-relations effort to address and curb alcohol abuse. Additionally, some states, such as Maryland, do not enable the sale of alcohol in convenience and grocery stores.

![img-6.jpeg](img-6.jpeg)

Source: IBISWorld; Beer Institute

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# Market Research

## Major Market Segmentations: Detroit

**OVERVIEW** - Generally, purchases of convenience stores industry goods are made for private, individual and household consumption. Most convenience store shoppers tend to be younger and less affluent. Therefore, millennials have driven revenue for convenience stores. Within this consumer group, males have traditionally purchased goods from convenience stores more often than their female counterparts. However, due to an increasingly on-the-go work environment and having to multitask between demand of work, hobbies and home, more women have found convenience stores' convenient food staple selections, in addition to their quick-service nature and improving ready-made food selections. This is expected to drive demand for this industry over the five years to 2025.

### Consumers aged 24 and younger

In Detroit, consumers aged 24 and younger comprise 40.80% of revenue in 2020, making it the largest consumer segment for this industry. Younger consumers with advanced public transportation systems have greater access to convenience stores. Furthermore, college students and young professionals value several characteristics that this industry's operations provide, such as convenience, time-savings and extended hours of operation. Thus, this segment has increased as a share of revenue over the past five years.

### Customer Segment - Detroit

![img-7.jpeg](img-7.jpeg)

### Consumers aged 25 to 44

Consumers aged 25 to 44 make up the second-largest market segment, accounting for 29.50% of industry revenue in 2020. Consumers within this age bracket typically comprise young professionals with a wider range of discretionary spending, in addition to young, on-the-go families that benefit from convenient offerings. Several of the fastest growing product categories in this industry, which include energy drinks and sports drinks are driven by young adults. Consequently, more prepared food items in convenience stores have also attracted millennials in recent years, increasing this segment's share of revenue during the period.

Source: IBISWorld; U.S. Census Bureau

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# Market Research

## Major Market Segmentations: Detroit

### Consumers aged 45 to 64

Consumers aged 45 to 64 are anticipated to account for 19.30% of industry revenue in 2020. Similar to millennials, older consumers in this age group have become busier in recent years and have benefited from purchasing food and other sundries from multiple retail channels. A 2018 study conducted by Social Science Research Solutions reveals that one-quarter of adults shop at convenience stores as frequently or more than at supermarkets and grocery stores (latest data available). Older adults with children particularly benefit from this retail channel, as it enables them to purchase staple food items, such as bread and milk, at any time of the day. This segment has remained a stable share of revenue over the past five years.

### Consumers aged 65 and older

Consumers aged 65 and older make up a smaller portion of this industry's market, accounting for 10.40% of revenue in 2020. Baby boomers shop more frequently at competitive retail channels and are extremely brand loyal, shopping at convenience stores because they provide a one-stop shop experience for household goods. In addition to convenience stores, spending at pharmacies and drug stores comprises a large share of spending among older consumers due to their need for prescription drugs and over-the-counter medication. Rite Aid Corporation, for example, introduced the wellness 65+ program to appeal to elderly consumers through discounts and other value-added services. Over the past five years, this segment has increased as a share of revenue.

![img-8.jpeg](img-8.jpeg)

![img-9.jpeg](img-9.jpeg)

Source: IBISWorld; U.S. Census Bureau; Social Science Research Solutions

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# Market Research

## Target Market Analysis: Northwest Goldberg Neighborhood

### Target Market

This area has a population of 1,038 people living in the Northwest Goldberg neighborhood. Living in Northwest Goldberg neighborhood is considered an emerging neighborhood with its location just west of anchors and quick connections to the Lodge and I-96 freeways. Of the housing units, 60% are owned with residents a mix between urban and suburban feel and most residents own their homes. In Northwest Goldberg there are parks but limited retail and restaurant options, the area is commonly known for its proximity near Henry Ford Hospital, the New Center area, and North End and Midtown neighborhoods that connects the Lodge and Chrysler Freeways in zip code area 48208 and 48202. Census track 5233.

### Population

Population is the sum of births plus in-migration, and it signifies the total market size possible in the area. This is an important metric for economic developers to measure their economic health and investment attraction. Businesses also use this as a metric for market size when evaluating startup, expansion or relocation decisions. In Northwest West Goldberg neighborhood, there are 1,038 residents. Of which, 51% are females while 49% are males

![img-10.jpeg](img-10.jpeg)

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# Market Research

## Target Market Analysis: North End Neighborhood

### Age

Ages chart illustrates the age and gender trends across all age and gender groupings. A chart where the covered area is primarily on the left describes a very young population while a chart where the covered area is primarily on the right illustrates an aging population.

The largest population of Northwest Goldberg neighborhood is the age group between 19 and 64 years old (60%) followed by the age group under 18 years (23%) and +65 years old (17%). The median age for the area in **2020** was 38.5 up from 35.8 in 2010.

### Nw Goldberg Demographics

![img-11.jpeg](img-11.jpeg)

### Education Level

Educational stages are subdivisions of formal learning, typically covering early childhood education, primary education, secondary education and tertiary education. In Northwest Goldberg neighborhood, the largest percentage of population hold high school diploma or equivalent (35%), followed by residents with some college or associate's degree (34%). Only 12% of the population have bachelor's degree; while nearly 5% have Master's degree or higher.

### Education Levels

![img-12.jpeg](img-12.jpeg)

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# Market Research

## Target Market Analysis: North End Neighborhood

### Racial Diversity

For 2020, the most common race in Northwest Goldberg neighborhood is African American, sharing approximately 94.5% with Whites at 3.32% and the balance Hispanic.

### Household Income

The household incomes chart shows how many household fall in each of the income brackets. In Northwest Goldberg neighborhood, the median household income is currently estimated at USD $17,793 with males earning a median of $21,305 and females earning a median of $10,822. In Detroit the median income per household is $26,249 while the state median is $50,803. Distribution of income shows residents household income at $10K-25K (65%), $25K-$60K (15%) and $60K-$200K (5%). Within the city of Detroit, 39.4% of its residents are living below the poverty level.

### Nw Goldberg Population Breakdown By Race

| Race | Nw Goldberg | Detroit | Michigan |
| --- | --- | --- | --- |
| White | 3.32% | 13.65% | 78.89% |
| Black | 94.45% | 79.66% | 13.89% |
| Asian | 0.00% | 1.41% | 2.79% |
| American Indian | 0.00% | 0.36% | 0.53% |
| Native Hawaiian | 0.00% | 0.01% | 0.03% |
| Mixed race | 2.23% | 1.97% | 2.74% |
| Other race | 0.00% | 2.94% | 1.12% |

In Nw Goldberg, 7.5% of people are of Hispanic or Latino origin.

| Index | Nw Goldberg | Detroit | Michigan |
| --- | --- | --- | --- |
| Income per capita | $11,738 | $15,562 | $27,549 |
| Median household income | $17,793 | $26,249 | $50,803 |
| Median income owner occupied | $0 | $38,453 | $62,251 |
| Median income renter occupied | $0 | $17,899 | $28,598 |
| Median earnings male | $21,305 | $21,490 | $35,730 |
| Median earnings female | $10,822 | $19,089 | $22,948 |
| Unemployment rate | 10.3% | 11.9% | 5.2% |
| Poverty level | n/a | 39.4% | 16.3% |

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# Market Research

## Target Customer Profile

### Nw Goldberg Age Breakdown

![img-0.jpeg](img-0.jpeg)

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# Market Research

## Target Customer Profile

### Location

Customers living in the **Northwest Goldberg** neighborhood area, which is a part of the Northwest district, Detroit, Michigan, zip code 48208, District 5

![img-1.jpeg](img-1.jpeg)

### Age

Our customers are expected to be predominately male ages 45-64 (42.3%), female ages 25-34 (20%), female 65-84 (13.5%) and These age have stable income that will enable them to purchase regularly.

![img-2.jpeg](img-2.jpeg)

### Gender

Most of our customers are expected to be both male and female residents. However, men generally visit convenience store in a frequent basis compared to women.

![img-3.jpeg](img-3.jpeg)

![img-4.jpeg](img-4.jpeg)

![img-5.jpeg](img-5.jpeg)

### Race and Ethnicity

Most of our customers will be African American, but we also expect customers from outside of the neighborhood.

### Household Income

Customers with income bracket that falls below USD 30,000 per year will constitute the largest share of population. We also expect customers visiting nearby anchors and institutions: Motown Museum, Art Block, Henry Ford Hospital, local educational and religious organizations.

![img-6.jpeg](img-6.jpeg)

### Education Level

The preferred customer will be all residents that live in the neighborhood and the many guests that visit the 48208 zip code.

![img-7.jpeg](img-7.jpeg)

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# Market Research

## Competitive Analysis

### Family Dollar

| Name | Family Dollar |
| --- | --- |
| Industry | General store |
| Address | 2322 W Grand Blvd #2340, Detroit, MI 48208 |

Family Dollar Stores of Michigan, Inc is located in Detroit, MI, United States and is part of the General Merchandise Stores, including Warehouse Clubs and Supercenters Industry. Family Dollar Stores of Michigan, Inc has 7 employees at this location. There are 15,756 companies in the Family Dollar Stores of Michigan, Inc corporate family.

### Weaknesses:

- The company has very limited-service offerings with inflexible business model compared to our store. For instance, the company specializes mainly in liquor services for items such as craft beer and wine; while our company is planned to be a convenience store with a variety of offerings including the liquor services such as tobacco products, home and personal goods, packaged foods and drinks, etc.
- The company doesn't have co-working space or co-community space to host private meetings or community engagement events

### Linwood Gas and Food

| Name | Linwood Gas and Food |
| --- | --- |
| Industry | Gas Station and convenience Store |
| Address | 6571 Linwood St, Detroit, MI 48208 |

Linwood Gas and Food is located in Detroit, MI, United States and is part of the Gas Stations Industry. Linwood Gas has Linwood Gas & Food Inc has 7 total employees across all of its locations and generates $1.10 million in sales (USD). The gas station also has a convenience store, offering basic items to local residents in the area such as bakery products, coffee and beer.

### Weaknesses:

- The store doesn't provide all life essentials to residents in the area. This makes their service offerings somehow limited relative to the needs of residents.
- They neither provide delivery nor curb side pick up
- They neither have community space. Hence, they have little community engagement and unable to host events by local artists/entrepreneurs

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# Market Research (cont.)

## Competitive Analysis

### CVS

| Name | CVS |
| --- | --- |
| Industry | Pharmacy, Convenience Store |
| Address | 2590 W Grand Blvd, Detroit MI 48208 |

Kenwood Liquor is a liquor store based in Detroit, Michigan. The company's main service offerings include craft beer and fine wine.

### Weaknesses:

- The company doesn't have co-working space or co-community space to host private meetings or community engagement events
- Some of their customers have reported low-quality service offerings; even though paying higher prices.
- They don't provide curb side pick up, and their delivery rate is quite low.

## Family Food Super Store

| Name | Family Food Super Store |
| --- | --- |
| Industry |  |
| Address | 8665 Rosa Parks Blvd, Detroit, MI 48206 |

Family Food Super Store is located in Detroit and is part of the Grocery Store Industry. Family Food Store has 3 total employees across all of its locations and generates $371,973.00 in sales (USD). The store has some basic convenience store offerings, bakery products, coffee and beer.

### Weaknesses:

- The store doesn't provide all life essentials to residents in the area. This makes their service offerings somehow limited relative to the needs of residents.
- They neither have community space. Hence, they have little community engagement and unable to host events by local artists/entrepreneurs

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# Market Research

## Competitor list in the area

In the area we serve, there are also other indirect competitors to our business. Those competitors only touch basic service offerings that our company is planning to offer to people in the Northwest Goldberg neighborhood region. For instance:

### Linwood Gas

Gas stations usually have convenience store serving drivers who need to fuel their cars. Those companies only touch basic services that large operators in the convenience store industry provide.

### Family Dollar, CVS Pharmacy

Carries convenience and grocery items found in typical general stores convenience stores. CVS has a pharmacy. Both stores are national chains and do not include local items as our store will. Also, no community engagement.

### Family Food Super Store

These competitors in the area don't have strong influence on our business since they are more than one mile away from our retail location.

![img-8.jpeg](img-8.jpeg)

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# Market Research

SWOT Analysis

Strengths

- Low customer class concentration
- Low product or service concentration
- Low capital requirements
- Located within neighborhood
- Diverse product offerings
- Co-working space and community space
- Neighborhood engagement

![img-9.jpeg](img-9.jpeg)

Opportunities

- High revenue growth (2020-2026)
- High performance drivers
- Strong market with little business concertation
- Chance to capture a high market share within the next five years
- Possibility to expand business in the future by include more service offerings
- High percentage of African Americans
- New white and black residents with higher income and higher education levels

![img-10.jpeg](img-10.jpeg)

Weaknesses

- Medium level of competition
- Low profit vs. sector average
- Low revenue per employee
- Security
- Little means of financing

![img-11.jpeg](img-11.jpeg)

![img-12.jpeg](img-12.jpeg)

Threats

- Possibility of new businesses to penetrate the market with service offerings similar to ours

![img-13.jpeg](img-13.jpeg)

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# Market Research

Study: Reimaging Ferry Park, Census track 5233, includes Northwest Goldberg Neighborhood

NEIGHBORHOOD CONTEXT

LOCATION

![img-14.jpeg](img-14.jpeg)

![img-15.jpeg](img-15.jpeg)

Neighborhoods around the Ferry Park Avenue study area. Source: ROSSETTI

FERRY PARK FRAMEWORK PLAN | ROSSETTI

EXISTING CONDITIONS ANALYSIS | DECEMBER 2020

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# Market Research

Study: Reimaging Ferry Park, Census Track 5233, includes Northwest Goldberg Neighborhood

NEIGHBORHOOD CONTEXT

## ANCHORS & INSTITUTIONS

ARTS & CULTURE

- A. MOTOWN MUSEUM
- B. MARBLE BAR
- C. ARTBLOCK
- D. DETROIT PUBLIC LIBRARY DUFFIELD BRANCH

HEALTHCARE

- A. HENRY FORD HOSPITAL
- B. HENRY FORD CANCER CENTER
- C. CARDINAL HEALTH DISTRIBUTION FACILITY

EDUCATION

- A. DETROIT COLLEGIATE PREP HIGH SCHOOL
- B. DETROIT URBAN LUTHERAN SCHOOL
- C. THIRKELL ELEMENTARY-MIDDLE SCHOOL
- D. DETROIT POLICE TRAINING ACADEMY

RELIGIOUS

- A. TABERNACLE BAPTIST MISSIONARY CHURCH
- B. MAYFLOWER MISSIONARY BAPTIST CHURCH
- C. STAR OF ZION MISSIONARY BAPTIST CHURCH
- D. TRINITY CHURCH
- E. INDEPENDENT MISSIONARY BAPTIST CHURCH
- F. UNIVERSITY TRIUMPH DOMINION-GOD
- G. KINGDOM HALL OF JEHOVAH'S WITNESSES
- H. HISTORIC KING SOLOMON CHURCH
- I. DIVINITY OF GOD MISSIONARY BAPTIST
- J. HOLY CROSS BAPTIST CHURCH
- K. HILL'S CHAPEL
- L. VICTORY BAPTIST CHURCH INTERNATIONAL
- M. PILGRIM STAR BAPTIST CHURCH
- N. OPEN DOOR GOSPEL TABERNACLE
- O. MORNING VIEW BAPTIST CHURCH

![img-16.jpeg](img-16.jpeg)

Institutions near the Ferry Park Corridor study area. Source: ROSSETTI

9 FERRY PARK FRAMEWORK PLAN | ROSSETTI

EXISTING CONDITIONS ANALYSIS | DECEMBER 2020

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# Market Research

Study: Reimaging Ferry Park, Census Track 5233, includes Northwest Goldberg Neighborhood

NEIGHBORHOOD CONTEXT

## RETAIL, F&B, AND SERVICES

FOOD & BEVERAGE

- A PAPA'S PIZZA & BBQ
- B HOLY MOLY DONUT SHOP
- C KFC
- D MARBLE BAR

RETAIL & PHARMACY

- E CVS PHARMACY
- F ANDY'S PHARMACY
- G BRAZELTON'S FLORAL
- H FLAWLESS PRINTING & T-SHIRTS
- J FAMILY DOLLAR

GAS STATION

- K LINWOOD GAS & FOOD
- L AL-RASOOL GAS STATION
- M BOULEVARD AUTO CENTER & AUTO SALES

OTHER

- N DETROIT FIRE EXTINGUISHERS

STUDY AREA

![img-17.jpeg](img-17.jpeg)

Existing retail, service, and food and beverage amenities in and around the study area. Source: ROSSETTI

10 FERRY PARK FRAMEWORK PLAN | ROSSETTI

EXISTING CONDITIONS ANALYSIS | DECEMBER 2020

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# Market Research

Study: Reimaging Ferry Park, Census Track 5233, includes Northwest Goldberg Neighborhood

## DEMOGRAPHIC TRENDS
OCCUPANCY &
OWNERSHIP

### OCCUPANCY/VACANCY

Of the total housing units in the census study area, approximately 60% were occupied in 2018 (down 9% from 2010), while 40% (or 1,280 units) were vacant.

### OWNED/RENTED

Of the total occupied units, approximately 27% were owner-occupied, while 73% were renter-occupied. Areas with the highest homeownership rates were Wildemere Park (CT 5333) at 59% and LaSalle Gardens (CT 5330) at 48%, while areas with the lowest homeownership rates were Henry Ford (CT 5326) at 12%.

### VACANCY & OCCUPANCY TYPE

- VACANT
- RENTER-OCCUPIED
- OWNER-OCCUPIED

### HOUSING VACANCY AND OWNERSHIP RATES

![img-0.jpeg](img-0.jpeg)

Source: U.S. Census 2010, 2018 ACS 5-Year Estimates

23 FERRY PARK FRAMEWORK PLAN | ROSSETTI

EXISTING CONDITIONS ANALYSIS | DECEMBER 2020

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![img-1.jpeg](img-1.jpeg)

![img-2.jpeg](img-2.jpeg)

![img-3.jpeg](img-3.jpeg)

# Business Model

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# Business Model

## Our Company

Kornr Store is a proposed limited liability company located in Detroit, Michigan, 48208 USA. The company is planned to be a neighborhood marketplace offering fruit and vegetables, healthy food and drink options, coffee bar, staple foods, pre-packaged foods and drinks and a mix of personal and home goods.

Our customer profile is planned to be residents within 1 mile of our store location, mostly located in Detroit 48208 census track 53233. Many of our customers will be African Americans, since they have the largest share of population. Demand will also be driven from customers that work and visit local long-time anchors and institutions.

Compared to our nearby competitors that who offer limited scope offerings, Kornr Store will help address food inequity by offering our customers access to health foods and beverages, prepared breakfast and lunch foods and a patio and green courtyard just behind the store. Our products mix will be curated to attract our target customers.

Kornr Store is 100% owned by Brinda Devine, a commercial real estate professional with +20 years in commercial real estate, development, asset management and brokerage.

## Business Summary

**Name:** Kornr Store

**Business:** Marketplace/Convenience store

**Location:**

- Detroit, Michigan, 48208 United States

**Geographical Focus:**

- 48208 MI, Detroit (Northwest Goldberg)

**Target Customers:**

- Households and residents within 1 mile of our store location

**Management:**

- Brinda Devine

**Competitors:**

- Linwood Gas and Food
- Family Food Super Store
- Family Dollar
- CVS

Brinda Devine

Kornr Store

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# Business Model

Location - 6224 16th Street, Northwest Goldberg 48208

![img-4.jpeg](img-4.jpeg)

- Development plan - 2 stories, retail on 1st floor with one (1) residential unit above at approximately 1,566 SF. Directly behind the building, improved green space available for small community events.
- 1st floor - Kornr Store, neighborhood marketplace at 816 SF.
- 2nd floor residential unit is 750 SF.

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# Business Model

## Service Offerings

Kornr Store will offer a variety of service offerings to neighborhood residents and their guests. Our services are proposed to include:

- ➤ **Kornr Store** - Convenience store services that fall under six categories including tobacco products, food services, personal and home goods, packaged beverages, candy and snacks, as well as alcoholic beverages such as beer and wine. Customers will be able to uses cash, credit cards, debit cards, and mobile applications like Apple Wallet and Google Pay.
- ➤ **Community Engagement** - Supporting and offering local products and community engagement via curated small-scale events.
- ➤ **Wi-fi access** - Indoor and outdoor wi-fi.

![img-5.jpeg](img-5.jpeg)

![img-6.jpeg](img-6.jpeg)

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# Business Model

## A Contactless Model

### Contactless Shopping

In addition to our brick-and-mortar location, Kornr Store will maintain an e-commerce website that will allow our customers to see what's available on site, but also experience online shopping from carefully selected local products. Incorporating this shopping method into our model will further offer a strong emphasis on our brand identity.

![img-7.jpeg](img-7.jpeg)

### Contactless Payment

Contactless payment is gaining trust and admiration from consumers looking for an easier way to purchase items. For instance, CyberSource is one eCommerce platform that enables on-device payment models, such as Apple Pay and Google Pay. Creating this type of solution for customers eliminates the hassle of exchanging a physical credit card or having cash on hand. It also adds a security layer for consumers, with smartphones requiring face ID or PIN authentication to open your device, and then another authentication to access payment information inside your app. There have been instances where contactless payments have proven to be more secure than payment terminals in stores. One example of this includes an in-store payment platform being compromised to read card information of thousands of users while the contactless or in-app payment methods stayed secure. We will implement a contactless payment method for our contactless model, allowing our customers several options to pay through their mobile phones.

![img-8.jpeg](img-8.jpeg)

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# Business Model

## Competitive Advantage

### The competitive advantage of our company

Kornr Store competitive edge relies heavily on the broad service categories the company is planning to offer along with the associated facilities (e.g, **online shopping**, **green courtyard space**, **community space**, **outdoor wi-fi** etc.) that are not offered by our competitors in the marketplace.

Compared to our competitors in the market, with a particular focus on those operating within 1 mile of our store, we pride ourselves on offering a wide scope of offerings that will match the need of all residents who often find it difficult to get their desired products from nearby shops or convenience stores. Besides, having the opportunity host several small events by neighborhood will further add a lot in building our network, generating more revenues by expanding our income streams.

![img-9.jpeg](img-9.jpeg)

![img-10.jpeg](img-10.jpeg)

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# Business Model

Mission, Vision and Goals

Our mission and vision statement

To provide neighborhoods (Detroit and metro Detroit) with essential market demands: Healthy food and drink options, personal and home goods, wi-fi and positive messaging.

Key Goals

Within our targeted area, the key goals of our business are to:

- To ensure we deliver a high-quality, satisfying and caring customer service support our store visitors - neighborhood residents and guests visiting the neighborhood.
- To always be the consumers' first preference within our reach area
- To make sure that customers stick with our store by offering a variety of service offerings.
- To ensure the business within the organization will always be customer centric.
- To train all employees up to all high standards and let them aware of customer relationship management.
- To train the employees for managerial levels.
- Encourage, drive and support initiatives, innovation and creativity, capitalizing on opportunities to support operational goals and strategies through our proposed co-working space and community space.
- Foster an open and supportive team culture in order to gain and disseminate direction, suggestions and improvements at all levels of the shop and build ideal business partners.

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# Business Model

Critical Success Factors

![img-11.jpeg](img-11.jpeg)

Proximity to key markets

Convenience stores should be located near residential areas to provide ease of access. Locations should also be remote from other food stores, including supermarkets and quick-service restaurants.

Attractive product presentation

The layout of a store must enable shoppers to easily navigate products. Additionally, the design and cleanliness of store space and product selection are key elements that attract shoppers into convenience stores

Maintenance of excellent customer relations

Convenience store operators need to provide friendly and helpful service to ensure repeat purchases. In addition, establishing a reputation for quick service is essential.

Having a loyal customer base

Having a well-established presence and good relationship with local consumers is particularly important for single-store operators that experience growing competition from chain stores and different retail channels

Level of competition in the market

Convenience stores compete with different retail channels, and therefore, proximity to different types of stores can hamper growth.

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# Business Model

Operational Process

![img-12.jpeg](img-12.jpeg)

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# Business Model

## Organizational Structure

General Manager

### General Director

- Manages and coordinates the company's main operations
- Create, communicate and implement the organisation's vision, mission and goals
- Lead the development and implementation of the overall company's strategy to generate sales

### Cashier/Clerk

- Assist customers in the in-store check-out process.
- Check prices and quantities for accuracy
- Collect and process payments
- Scan items for purchase.
- Provide assistance to customers
- Help customers locate products
- Assist in doing paperwork, stocking shelves, and maintaining the store clean and organized

### E-Commerce/ Social Media Manager

- Manages Kornr Store website and online customer orders.
- Work directly with delivery team and provide them customer locations
- Help customers with complaints and questions
- Give customers information about the availability of certain products and services

### Delivery Team

- Transport items from our store to customers
- Collect payment for orders paid in delivery

### Other: Third-party Inventory Specialist

- We will engage third-party inventory specialist who will be responsible for overseeing inventory control and maintaining inventory records.

### Delivery Team

- Transport items from our store to customers
- Collect payment for orders paid in delivery

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# Business Model

## Personnel Plan

| Salaries | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Designation |  |  |  |  |  |  |  |
| General Manager | 0.00 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
| Cashier/Clerk | 0.00 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
| Customer Service Representative/E-Commerce Manager | 0.00 | 0.00 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 |
| Delivery Team | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 | 0.00 |
| Total | 0.00 | 1.00 | 1.50 | 1.50 | 1.50 | 1.50 | 1.50 |
| Salary Per Person (Amounts in USD) |  |  |  |  |  |  |  |
|  |  |  | 1.03 | 1.03 | 1.03 | 1.03 | 1.03 |
| General Manager | 0 | 35,000 | 36,050 | 37,132 | 38,245 | 39,393 | 40,575 |
| Cashier/Clerk/ Part-time | 0 | - | - | - | - | - | - |
| Total | $ - | $35,000.00 | $36,050.00 | $37,131.50 | $38,245.45 | $39,392.81 | $40,574.59 |

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# Business Model

## Business Growth Strategies

### Financial Strategy

- Increase revenue by offering highly reliable products and services to our customers
- Reduce the associated costs as much as possible and ensure financial substantiality
- Maintain profitability throughout the forecast period
- Diversify our revenue streams by adding new services over the forecast period, which may include baked items, groceries, and confectionery

### Market Development Strategy

- Position our services among neighborhood residents within 1 mile of our store location
- Extensive research to ensure our main target market is penetrated
- Ensure our customers are fully aware of our businesses and that we exist in a particular area/location
- Maintain a consistent brand image about the quality of our business

![img-0.jpeg](img-0.jpeg)

### Market Penetration Strategy

- Diversifying our customer profiles by ensuring more areas are expanded over the coming years and deliver to residents throughout Detroit
- Ensure our business is successfully positioned among big players in Detroit. This will happen by providing the main life essentials our customers are unable to find in nearby stores and targeting the right customer profiles. Then by applying different marketing strategies, more areas and customers will be penetrated; hence positioning our services among the top players in the area

### Customer Strategy

- Provide the best value with the service
- Ensure customers' orders are delivered in time with no delays
- Partner with customers to provide solutions and feedback about our offers
- Invest in customer management
- Improve customer satisfaction
- Customer support to assist our potential clients with their problems and complaints
- Have a refund/return policy to ensure customer satisfaction

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# Business Model

## Roadmap and Future Milestones

- Viral marketing
- Remain profitable throughout the period

- Continue marketing
- Expand the team
- Expand our customer base
- Diversify our revenue streams
- Consider partnership with other suppliers/vendors

![img-1.jpeg](img-1.jpeg)

- Launch of Kornr Store.
- Extensive marketing campaigns
- Develop neighborhood partnership
- Add to the team

- Build the team
- Site preparation and construction
- Building our online presence
- Making our target market and neighborhood receptive for our new business
- Partner with local community organization

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![img-2.jpeg](img-2.jpeg)

## Marketing Strategy

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# Marketing Strategy

## Marketing Strategy

Most of the marketing activities our company is planning to undertake will be split between three main strategies: Recruitment Marketing, Customer Acquisition Marketing and Customer Retention Marketing. The following will be some of the major activities that will be done under these three strategies to attract a stronger customer base:

### Website

From the very beginning, we will create a high-quality website, since it is the first interactive place that will help our future customers get an impression of our service offerings. We will provide details about our potential products and allow our customers to order online through our platform in case they live in areas within 2-3 miles of our location and unable to come to visit us in the store. Besides, we will focus on optimizing our website through several search engine optimizations (SEO) and different digital marketing tools such as Google AdWords, Keyword Planners, and Google Alerts in order to make our website appear in the first result page of Google.

### Social Media Strategy

As a part of our marketing strategy, our company is planning to invest a big percentage of its overall revenue only on marketing its services through social media campaigns and ads, targeting our preferred customer base in Detroit within the 48202 ZIP code area. The company is planning to have an extensive network of social media platforms including that of LinkedIn, Instagram, Twitter, and Facebook, so it can reach wide demographics.

### Local marketing campaigns

Through different resources such as the use of flyers, local newspapers advertisements, magazines, and word of mouth among consumers, our company will invest in local marketing activities that will help promote our service offerings.

![img-3.jpeg](img-3.jpeg)

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# Marketing Strategy

Marketing Activities

ONLINE

- Marketplaces
- Different websites, online magazines and newspapers
- Social media

OFFLINE

- Magazines
- Flyers
- Suppliers/vendors
- Events/food fair

![img-4.jpeg](img-4.jpeg)

ONLINE

- Email marketing
- Social media

OFFLINE

- Direct mail
- Retention flyers

ONLINE

- SEO
- Social Media
- Referral Strategies*

OFFLINE

- Flyers, gift, vouchers
- Outdoor advertising
- Bus shelters, billboards, sandwich panels

![img-5.jpeg](img-5.jpeg)

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# Marketing Strategy

## Marketing Mix

### Product or Service

- Convenience store: products such as Inexpensive personal and home goods, packaged drink and food, unhealthy and healthy snacks, coffee, tea, water, packaged smoothies, and standard foods like cereal, milk, and soup.
- Co-working space and community space: small offerings from neighborhood artists/entrepreneurs (ex. soaps, candles, packaged baked goods and books), Farmers market - June to Oct, Food truck fairs - twice a year, and Art fair - summer each year

### Promotion

Our marketing and promotion strategies will be offered through the following:

- Recruitment Marketing Strategy
- Customer Retention Strategy
- Customer Acquisition Strategy

### Price

- Our pricing strategy is proposed to be low edging to medium, meeting the low per capita income in our targeted area

### Location

- Our distribution channels will be within one mile of our store location.
- Customers can also order their needed products online through our website/phone
- As a part of our distribution strategy, we will purchase some of our products on a wholesale agreement with local entrepreneurs and local vendors from the North End region. This amount is currently estimated at around 10% from local entrepreneurs and an extra 30% will be from other local wholesale vendors, hence making our total cost of sales nearly 40%

![img-6.jpeg](img-6.jpeg)

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![img-7.jpeg](img-7.jpeg)

**Brinda Devine**
**P8 Real Estate Solutions**

Founder

Ph: (248) 219-6685

Em: bddevine@gmail.com

www.p8realestatesolutions.com

Brinda Devine | LinkedIn

![img-8.jpeg](img-8.jpeg)

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# Management

## Founder

### Brinda Devine, Founder of Kornr Store

| Date | Position/Credentials | Organization/University | Location |
| --- | --- | --- | --- |
| Education |  |  |  |
| 2018 | Master of Business Administration (MBA) | Wayne State University | Detroit, Michigan |
| 2014 - present | Graduate studies in Commercial Real Estate | Urban Land Institute Michigan | Detroit, Michigan |
| NA | Bachelor of Science (B.Sc..) in Finance | Wayne State University | Detroit, Michigan |
| Work Experience |  |  |  |
| Jan 2016 - Oct 2022 | Director, Real Estate and Asset Management | Wayne State University | Detroit, Michigan |
| Mar 2005 - Jan 2016 | Senior Real Estate Officer | Wayne State University | Detroit, Michigan |
| June 1992 - Aug 2004 | Vice President of Asset Management | Acquest Realty Advisors Inc. | Bloomfield Hills, Michigan |
| 1990 - 1992 | First of America Bank | Commercial Credit Analyst | Kalamazoo, Michigan |

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![img-0.jpeg](img-0.jpeg)

# Sources and Uses of Funds

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# Sources and Uses of Funds

## Sources and Uses of Funds (2022)

### Funds Requested

$45,912

### Breakdown

| Operating Expenses | $ | 20,912 |
| --- | --- | --- |
| Store Assets (2023 only) | $ | 25,000 |
| Warehouse Assets (2023 only) | $ | - |
| Preparation/ Improvement | $ | - |
| Website/ Software (2023 only) | $ | - |
|  | 0 $ | - |
| Other (Cash Reserve) | $ | - |
| TOTAL | $ | 45,912 |

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# Sources and Uses of Funds

## Terms of Debt

| Loan Amortization | Startup Year |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
|  | 0 | 1 | 2 | 3 | 4 | 5 | 6 |

### Debt Assumptions

| Loan Amount | $45,912 |
| --- | --- |
| Term | 5 |
| Rate | 10.0% |

|  | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Timeline |  | 1 | 2 | 3 | 4 | 5 | 6 |
| Opening |  | 45,912 | 38,392 | 30,119 | 21,020 | 11,010 | 0 |
| Total Payment |  | -12,111 | -12,111 | -12,111 | -12,111 | -12,111 | 0 |
| Interest Payment |  | -4,591 | -3,839 | -3,012 | -2,102 | -1,101 | 0 |
| Principal Payment |  | -7,520 | -8,272 | -9,100 | -10,009 | -11,010 | 0 |
| Closing Balance |  | $38,391.69 | $30,119.40 | $21,019.88 | $11,010.42 | $ - | $ - |

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![img-1.jpeg](img-1.jpeg)

# Financial Model

Doc ID: c72e6223a534cc2effee9d781c02812a20b0d1d4

# Financial Assumptions

## Revenue Assumptions

(Amounts in USD)

| Details | 2022 | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Revenue |  |  |  |  |  |  |  |
| Instore Purchases | 0 | $94,998.9 | $102,741.3 | $111,114.7 | $120,170.5 | $129,964.4 | $140,556.5 |
| Instore/ Home & Personal Goods | - | 39,686.40 | 42,920.84 | 46,418.89 | 50,202.03 | 54,293.50 | 58,718.42 |
| Online | - | 30,520.37 | 33,007.78 | 35,697.91 | 38,607.29 | 41,753.79 | 45,156.72 |
| Business Membership | - | - | - | - | - | - | - |
| Miscellaneous | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
|  | - | - | - | - | - | - | - |
| Total Revenue | $ - | $165,205.63 | $178,669.89 | $193,231.48 | $208,979.85 | $226,011.70 | $244,431.66 |

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# Financial Assumptions

## Our Assumptions vs. Industry Benchmarks

(Amounts in USD)

|  | Our Assumptions | Industry Benchmarks |  |
| --- | --- | --- | --- |
| Cost of Goods | 40.00% | 79.50% | Below Industry Match |
| Marketing Expenses/ Social Media | 0.24% | 0.20% | Includes social media expense |
| Depreciation Expenses | 1.17% | 0.90% | Above Industry |
| Utilities | 1.98% | 1.40% | Closely Matching |
| Operating Expenses not including Rent | 35.81% | 30.00% | Above Industry, includes Rent |

### Industry benchmarks relative to our assumptions

![img-2.jpeg](img-2.jpeg)

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# Financial Statements

## Income Statement

(Amounts in USD)

| Inflation | 103% |  |  |  |  |  |  |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Details | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |  |
| COGS% | 40% | 40% | 40% | 40% | 40% | 40% |  |
| Total Revenue | $165,205.6 | $178,669.9 | $193,231.5 | $208,979.8 | $226,011.7 | $244,431.7 |  |
| Cost of Goods Sold (COGS) | 66,082 | 71,468 | 77,293 | 83,592 | 90,405 | 97,773 |  |
| Gross Profit | 99,123 | 107,202 | 115,939 | 125,388 | 135,607 | 146,659 |  |
| Gross Profit Margin | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% | 60.00% |  |
| Expenses |  |  |  |  |  |  |  |
| Salaries, wages & Benefits | 35,000 | 36,050 | 37,132 | 38,245 | 39,393 | 40,575 |  |
| Store rent | 24,480 | 24,480 | 24,480 | 24,480 | 24,480 | 24,480 |  |
| Marketing expenses | 2,190 | 2,190 | 2,256 | 2,323 | 2,393 | 2,465 |  |
| Utilities | 3,264 | 3,362 | 3,463 | 3,567 | 3,674 | 3,784 |  |
| Operating Expenses | 14,848 | 15,293 | 15,752 | 16,225 | 16,712 | 17,213 |  |
| Credit Card Fees | 3,866 | 4,645 | 5,024 | 5,433 | 5,876 | 6,355 |  |
| Annual Lottery License Fees | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Annual security alarm fees | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Accounting/Payroll/Tax preparation/ Legal fees | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Business Insurance | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Property Insurance | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Miscellaneous (Repairs and Maintenance) | 0 | 0 | 0 | 0 | 0 | 0 |  |
| Liquor License (beer and wine) | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. | included in Oper. Exp. |  |
| Depreciation | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 |  |
| Interest | -4,591 | -3,839 | -3,012 | -2,102 | -1,101 | 0 |  |
| Taxes (income based) | 1,079 | 1,376 | 1,726 | 2,108 | 2,526 | 2,982 |  |
| Total Expenses | 82,219 | 85,641 | 88,903 | 92,363 | 96,036 | 99,937 |  |
| Net Profit | 16,904 | 21,561 | 27,036 | 33,025 | 39,571 | 46,722 |  |

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# Financial Statements

## Projected Cash Flows

(Amounts in USD)

### Cash Flow Statement

#### Cash from Operations

| Net Income | 16,904 | 21,561 | 27,036 | 33,025 | 39,571 | 46,722 |
| --- | --- | --- | --- | --- | --- | --- |
| Depreciation | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 |
| Changes in cash working capital |  |  |  |  |  |  |
| Accounts Receivable | 0 | 0 | 0 | 0 | 0 | 0 |
| Inventory | 0 | 0 | 0 | 0 | 0 | 0 |
| Accounts Payable | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 18,988 | 23,644 | 29,119 | 35,108 | 41,655 | 48,805 |

#### Cash Invested

| Capital Expenditures | (25,000) | 0 | 0 | 0 | 0 | 0 |
| --- | --- | --- | --- | --- | --- | --- |
| Total | (25,000) | 0 | 0 | 0 | 0 | 0 |

#### Cash from Financing

| Increase (decrease) in Debt | 38,392 | (8,272) | (9,100) | (10,009) | (11,010) | 0 |
| --- | --- | --- | --- | --- | --- | --- |
| Equity Issued (repurchased) | 0 | 0 | 0 | 0 | 0 | 0 |
| Dividends Paid | 0 | 0 | 0 | 0 | 0 | 0 |
| Total | 38,392 | (8,272) | (9,100) | (10,009) | (11,010) | 0 |
| Opening balance | 0 | 32,379 | 47,751 | 67,771 | 92,869 | 123,514 |
| Increase (Decrease) | 32,379 | 15,372 | 20,019 | 25,099 | 30,644 | 48,805 |
| Closing Balance | 32,379 | 47,751 | 67,771 | 92,869 | 123,514 | 172,319 |

55

Doc ID: c72e6223a5345c2effee9d781c02812a20b0d1d4

# Financial Charts

Revenue & Net Profit Margin

![img-3.jpeg](img-3.jpeg)

Cash Flow Statement

![img-4.jpeg](img-4.jpeg)

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Doc ID: c72e6223a534ec2effee9d781c02812e20b0d1d4

# Financial Plan

## Valuation and Key Financial Indicators: Assumptions

### Key Financial Indicators

#### Assumptions

| Interest rate | 10% |
| --- | --- |
| Total investment | 45,912 |
| Tax rate | 6% |
| Fiscal Year End (Month) | 12 |
| Fiscal Year End (Day) | 31 |

|  | Start date | 2023 | 2024 | 2025 | 2026 | 2027 | 2028 |
| --- | --- | --- | --- | --- | --- | --- | --- |
| Date | 1/1/2022 | 12/31/2023 | 12/31/2024 | 12/31/2025 | 12/31/2026 | 12/31/2027 | 12/31/2028 |
| EBIT |  | 13,392 | 19,098 | 25,749 | 33,031 | 40,996 | 49,704 |
| Less: Cash Taxes |  | 804 | 1,146 | 1,545 | 1,982 | 2,460 | 2,982 |
| NOPAT |  | 12,589 | 17,952 | 24,204 | 31,049 | 38,537 | 46,722 |
| Plus: D&A |  | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 | 2,083 |
| EBITDA |  | 15,476 | 21,181 | 27,833 | 35,114 | 43,080 | 51,788 |
| Less: Capex/ Equipment |  | 25,000 | 0 | 0 | 0 | 0 | 0 |
| Unlevered FCFF |  | (10,328) | 20,035 | 26,288 | 33,132 | 40,620 | 48,805 |
| Unlevered FCFF | (45,912) | (10,328) | 20,035 | 26,288 | 33,132 | 40,620 | 48,805 |
| Cash Balance | (45,912) | 32,379 | 47,751 | 67,771 | 92,869 | 123,514 | 172,319 |

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Doc ID: c72e6223a534ec2effee9d781c02812e20b0d1d4

# Financial Plan

## Valuation and Key Financial Indicators

### Key Indicators

#### Based on cash balance

| NPV | 278,808 |
| --- | --- |
| IRR | 69.05% |

#### Based on FCFF (Free Cash Flow to the Firm)

| NPV | 112,512 |
| --- | --- |
| IRR | 25.12% |

### Other Indicators

| Revenue CAGR | 6.47% |
| --- | --- |
| Profit CAGR | 16.73% |
| Cash CAGR | 8.55% |

58

Doc ID: c72e6223a534ec2effee9d781c02812e20b0d1d4

Dropbox Sign

Audit trail

| Title | Form C-AR for Kornr Store |
| --- | --- |
| File name | formcar_kornstore updated.pdf |
| Document ID | c72e6223a534cc2effee9d781c02812a20b0d1d4 |
| Audit trail date format | MM / DD / YYYY |
| Status | ● Signed |

## Document History

SENT

03 / 14 / 2023

19:27:20 UTC

Sent for signature to Brinda Devine (bddevine@gmail.com)

from eve@nowall.com

IP: 71.182.205.14

VIEWED

03 / 15 / 2023

00:29:51 UTC

Viewed by Brinda Devine (bddevine@gmail.com)

IP: 97.70.45.206

SIGNED

03 / 15 / 2023

00:30:34 UTC

Signed by Brinda Devine (bddevine@gmail.com)

IP: 97.70.45.206

COMPLETED

03 / 15 / 2023

00:30:34 UTC

The document has been completed.

Powered by Dropbox Sign

### UNITED STATES SECURITIES AND EXCHANGE COMMISSION
**Washington, D.C. 20549**

## FORM C

### UNDER THE SECURITIES ACT OF 1933

### Issuer Information

**Name of Issuer:** Purpose8 Real Estate, LLC

**Legal Status:** Limited Liability Company

**Jurisdiction of Incorporation/Organization:** MI

**Date of Organization:** 12-26-2018

**Physical Address:** 19815 NEGAUNEE, REDFORD, MI, 48240

**Issuer Website:** www.kornrstore.com

**Is there a Co-Issuer?:** No

### Annual Report Disclosure Requirements

**Current Number of Employees:** 0.00

**Total Assets (Most Recent Fiscal Year):** $38,345.44

**Total Assets (Prior Fiscal Year):** $30,332.23

**Cash & Cash Equivalents (Most Recent Fiscal Year):** $35,046.79

**Cash & Cash Equivalents (Prior Fiscal Year):** $60.00

**Accounts Receivable (Most Recent Fiscal Year):** $0.00

**Accounts Receivable (Prior Fiscal Year):** $0.00

**Short-Term Debt (Most Recent Fiscal Year):** $0.00

**Short-Term Debt (Prior Fiscal Year):** $0.00

**Long-Term Debt (Most Recent Fiscal Year):** $43,000.00

**Long-Term Debt (Prior Fiscal Year):** $0.00

**Revenues/Sales (Most Recent Fiscal Year):** $0.00

**Revenues/Sales (Prior Fiscal Year):** $0.00

**Cost of Goods Sold (Most Recent Fiscal Year):** $0.00

**Cost of Goods Sold (Prior Fiscal Year):** $0.00

**Taxes Paid (Most Recent Fiscal Year):** $0.00

**Taxes Paid (Prior Fiscal Year):** $0.00

**Net Income (Most Recent Fiscal Year):** $-8,013.00

**Net Income (Prior Fiscal Year):** $-20.00

### Signatures

**Issuer:** Purpose8 Real Estate, LLC

**Signature:** Brinda Devine

**Title:** Manager

---

**Signature:** Brinda Devine

**Title:** Manager

**Date:** 03-22-2023