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Table of Contents
1.0 Executive Summary.............................................................................................................................1 1.1 Objectives ...................................................................................................................................2 1.2 Mission........................................................................................................................................2 1.3 Keys to Success ........................................................................................................................2 2.0 Company Summary.............................................................................................................................3 2.1 Company Ownership .................................................................................................................3 2.2 Start-up Summary ......................................................................................................................4 2.3 Company Locations and Facilities ..........................................................................................5 3.0 Services................................................................................................................................................5 3.1 Service Description ...................................................................................................................6 3.2 Competitive Comparison..........................................................................................................6 3.3 Sales Literature ..........................................................................................................................6 3.4 Fulfillment ....................................................................................................................................7 3.5 Technology..................................................................................................................................7 3.6 Future Services ..........................................................................................................................7 4.0 Market Analysis Summary..................................................................................................................7 4.1 Market Segmentation ................................................................................................................8 4.2 Target Market Segment Strategy.............................................................................................8 4.3 Service Business Analysis........................................................................................................9 4.3.1 Competition and Buying Patterns .........................................................................................9 4.3.2 Main Competitors .................................................................................................................10 4.3.3 Distributing a Service...........................................................................................................11 4.3.4 Business Participants ..........................................................................................................11 5.0 Strategy and Implementation Summary..........................................................................................11 5.1 Pricing Strategy .......................................................................................................................11 5.2 Sales Strategy..........................................................................................................................12 5.3 Milestones ................................................................................................................................14 5.4 Strategic Alliances...................................................................................................................14 6.0 Management Summary ....................................................................................................................15 6.1 Organizational Structure..........................................................................................................15 6.2 Management Team .................................................................................................................15 6.3 Personnel Plan.........................................................................................................................16 7.0 Financial Plan ....................................................................................................................................17 7.1 Key Financial Indicators ..........................................................................................................17 7.2 Important Assumptions............................................................................................................17 7.3 Break-even Analysis................................................................................................................18 7.4 Projected Profit and Loss .......................................................................................................19 7.5 Projected Cash Flow ...............................................................................................................22 7.6 Projected Balance Sheet ........................................................................................................24 7.7 Business Ratios .......................................................................................................................25
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Acme Consulting
1.0 Executive Summary
Ac me Consulting will be a consulting company specializing in marketing of high-technology products in international markets. The company offers high-tech manufac turers a reliable, highquality alternative to in-house resources for business development, market development, and channel development. Ac me Consulting will be created as a California C corporation based in Santa Clara County, owned by its principal investors and principal operators. The initial office will be established in Aquality office space in the Santa Clara County "Silicon Valley" area of California, the heart of the U.S. high tec h industry. Within the US and European high tec h firms that Ac me plans to target,we will foc us on large manufac turer corporations such as HP, IBM & Microsoft. Our secondary target will be the medium-sized companies in high growth areas such as multimedia and software. One of Ac me's challenges will be establishing itself as a real consulting company, positioned as a relatively riskfree corporate purchase. Industry competition comes in several forms, the most significant being companies that choose to do business development and market research in-house. There are also large, well known management consulting firms such as Arthur Anderson, Boston Consulting Group, etc. These companies are generalist in nature and do not foc us on a niche market. Furthermore, they are often hampered by a flawed organizational structure that does not provide the most experienced people for the client's projec ts. Another competitor is the various market research c ompanies, such as Dataquest and Stanford Research Institute. Ac me Consulting's advantage over such companies as these is that Ac me provides high level consulting to help integrate market research data with the companies goals. Ac me Consulting will be priced at the upper edge of what the market will bear, competing with the name-brand consultants. The pricing fits with the general positioning of Ac me as providing high-level expertise. The company's founders are former marketers of consulting services, personal computers, and market research, all in international markets. They are founding Ac me to formalize the consulting services they offer. Ac me should be managed by working partners, in a structure taken mainly from Smith Partners. In the beginning we assume 3-5 partners. The firm estimates profits of approximately $65,000 by year 3 with a net profit margin of 6%. The company plans on taking on approximately $130,000 in c urrent debt and raise and additional $50,000 in long-term debt to invest in long-term assets by 1998. The company does not anticipate any cash flow problems arising.
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Acme Consulting
1.1 Objectives
1. Sales of $550,000 in 1996 and $1 million by 1998. 2. Gross margin higher than 70%. 3. Net income more than 5% of sales by 1998.
1.2 Mission
Ac me Consulting offers high-tech manufac turers a reliable, high-quality alternative to in-house resources for business development, market development, and channel development on an international sc ale. A true alternative to in-house resources offers a very high level of prac tical experience, know-how, contac ts, and confidentiality. Clients must know that working with Acme is a more professional, less risky way to develop new areas even than working completely inhouse with their own people. Ac me must also be able to maintain financial balance, charging a high value for its services, and delivering an even higher value to its clients. Initial foc us will be development in the European and Latin American markets, or for European c lients in the United States market.
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Acme Consulting
2.0 Company Summary
Ac me Consulting is a new company providing high-level expertise in international high-tech business development, channel development, distribution strategies, and marketing of high-tech products. It will foc us initially on providing two kinds of international triangles: Providing United States clients with development for European and Latin American markets. Providing European c lients with development for the United States and Latin American markets. As it grows it will take on people and consulting work in related markets, such as the rest of Latin America, the Far East, and similar markets. It will also look for additional leverage by taking brokerage positions and representation positions to create percentage holdings in product results.
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Acme Consulting
2.2 Start-up Summary
Total start-up expense (including legal costs, logo design, stationery and related expenses) comes to $18,350. Start-up assets required include $7,000 in short-term assets (office furniture, etc.) and $25,000 in initial cash to handle the first few months of consulting operations as sales and ac counts rec eivable play through the cash flow. The details are included in Table 2-2.
Table: Start-up
Start-up Requirements Start-up Expenses Legal Stationery etc. Brochures Consultants Insurance Expensed equipment Other Total Start-up Expenses Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements
$0 $0 $0 $0 $0 $0 $0 $0
$0 $0 $0 $0 $0
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Acme Consulting
Table: Start-up Funding
Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets $0 $0 $0
Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities (interest-free) Total Liabilities Capital Planned Investment Investor 1 Investor 2 Other Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital $0 $0 $350 $0 $350
$50,350 $50,350
3.0 Services
Ac me offers the expertise a high-technology company needs to develop new product distribution and new market segments in new markets. This can be taken as high-level retainer consulting, market research reports, or projec t-based consulting.
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Acme Consulting
3.1 Service Description
1. Retainer consulting: We represent a client company as an extension of its business development and market development functions. This begins with c omplete understanding of the client company's situation, objec tives, and constraints. We then represent the client company quietly and confidentially, sifting through new market developments and new opportunities as is appropriate to the client, representing the client in initial talks with possible allies, vendors, and channels. 2. Project consulting: Proposed and billed on a per-projec t and per-milestone basis, projec t consulting offers a client company a way to harness our specific qualities and use our expertise to solve specific problems, develop and/or implement plans, and develop specific information. 3. Market research: Group studies available to selec ted clients at $5,000 per unit. A group study is a pac kaged and published complete study of a specific market, channel, or topic. Examples might be studies of developing consumer channels in Japan or Mexico, or implications of changing margins in software.
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Acme Consulting
3.4 Fulfillment
1. The key fulfillment and delivery will be provided by the principals of the business. The real core value is professional expertise, provided by a combination of experience, hard work, and education (in that order). 2. We will turn to qualified professionals for freelance bac k-up in market research and presentation and report development, which are areas that we can afford to sub-contrac t without risking the core values provided to the clients.
3.5 Technology
Ac me Consulting will maintain the latest Windows and Mac intosh c apabilities including: 1. Complete e-mail fac ilities on the Internet, Compuserve, America-Online, and Applelink, for working with c lients direc tly through e-mail delivery of drafts and information. 2. Complete presentation fac ilities for preparation and delivery of multimedia presentations on Mac intosh or Windows mac hines, in formats including on-disk presentation, live presentation, or video presentation. 3. Complete desktop publishing fac ilities for delivery of regular retainer reports, projec t output reports, marketing materials, and market research reports.
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Acme Consulting
4.1 Market Segmentation
Large manufac turer corporations: Our most important market segment is the large manufac turer of high-technology products, such as Apple, Hewlett-Packard, IBM, Microsoft, Siemens, or Olivetti. These companies will be calling on Ac me for development functions that are better spun off than managed in-house, for market research, and for market forums. Medium-sized growth c ompanies: particularly in software, multimedia, and some related highgrowth fields, Ac me will offer an attrac tive development alternative to the company that is management constrained and unable to address opportunities in new markets and new market segments.
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Acme Consulting
4.3 Service Business Analysis
The consulting "industry" is pulverized and disorganized, with thousands of smaller consulting organizations and individual consultants for every one of the few dozen well-known companies. Consulting participants range from major international name-brand consultants to tens of thousands of individuals. One of Ac me's challenges will be establishing itself as a real consulting company, positioned as a relatively risk-free corporate purchase.
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Acme Consulting
4.3.2 Main Competitors
1. The high-level prestige management consulting: Strengths: International loc ations managed by owner-partners with a high level of presentation and understanding of general business. Enviable reputations which make purchase of consulting an easy dec ision for a manager, despite the very high prices. Weaknesses: General business knowledge doesn't substitute for the specific market, channel, and distribution expertise of Ac me, foc using on high-technology markets and products only. Also, fees are extremely expensive, and work is generally done by very junior-level consultants, even though sold by high-level partners. 2. The international market research company: Strengths: International offices, specific market knowledge, permanent staff developing market research information on permanent basis, good relationships with potential client companies. Weaknesses: Market numbers are not marketing, not channel development nor market development. Although these companies compete for some of the business Ac me is after, they cannot really offer the same level of business understanding at a high level. 3. Market specific or function specific experts: Strengths: Expertise in market or functional areas. Ac me should not try to compete with Nomura or Selec t in their markets with market research, or with ChannelCorp in c hannel management. Weaknesses: The inability to spread beyond a specific foc us, or to rise above a specific foc us, to provide ac tual management expertise, experience, and wisdom beyond the specifics. 4. Companies do in-house research and development: Strengths: No incremental cost except travel; also, the general work is done by the people who are entirely responsible, the planning is done by those who will implement it. Weaknesses: Most managers are terribly overburdened already, unable to find incremental resources in time and people to apply to incremental opportunities. Also, there is a lot of additional risk in market and channel development done in-house from the ground up. Finally, retainer-based antenna consultants can greatly enhance a company's reach and extend its position into conversations that might otherwise never have taken plac e.
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Acme Consulting
4.3.3 Distributing a Service
Consulting is sold and purchased mainly on a word-of-mouth basis, with relationships and previous experience being, by far, the most important fac tor. The major name-brand houses have loc ations in major cities and major markets, and exec utivelevel managers or partners develop new business through industry associations, business associations, chambers of commerce and industry, etc., and in some cases social associations such as country clubs. The medium-level houses are generally area specific or function specific, and are not easily able to leverage their business through distribution.
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Acme Consulting
5.2 Sales Strategy
The sales forec ast monthly summary is included in the appendix. The annual sales projec tions are included here in Table 5.2.
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Acme Consulting
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Acme Consulting
5.3 Milestones
Our detailed milestones are shown in the following table and chart. The related budgets are included with the expenses shown in the projec ted Profit and Loss statement, which is in the financial analysis that comes in Chapter 7 of this plan.
Table: Milestones
Milestones Milestone Business plan Logo design Retainer contracts Stationary Brochures Financial backing presentation Initial mailing Office location Office equipment Other Totals Start Date 10/1/1995 1/1/1996 2/1/1996 3/1/1996 3/1/1996 4/1/1996 6/1/1996 1/15/1996 1/15/1996 1/1/1996 End Date 11/19/1995 2/1/1996 12/31/1996 4/15/1996 4/15/1996 9/15/1996 7/1/1996 2/9/1996 2/19/1996 12/31/1996 Budget $5,000 $2,000 $10,000 $500 $2,500 $10,000 $5,000 $5,000 $12,500 $10,000 $62,500 Manager HM TAJ HM JD TAJ HM HM JD JD ABC Department Devpt Marketing Sales G&A Marketing Devpt Sales G&A G&A Department
Acme Consulting
6.0 Management Summary
The initial management team depends on the founders themselves, with little bac k-up. As we grow, we will take on additional consulting help, plus graphic/editorial, sales, and marketing.
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Acme Consulting
6.3 Personnel Plan
The detailed monthly personnel plan for the first year is included in the appendix. The annual personnel estimates are included here.
Table: Personnel
Personnel Plan Partners Consultants Editorial/graphic VP Marketing Sales people Office Manager Secretarial Total People Total Payroll 1996 $144,000 $0 $18,000 $20,000 $0 $7,500 $5,250 7 $194,750 1997 $175,000 $50,000 $22,000 $50,000 $30,000 $30,000 $20,000 14 $377,000 1998 $200,000 $63,000 $26,000 $55,000 $33,000 $33,000 $22,000 20 $432,000
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Acme Consulting
7.0 Financial Plan
Our financial plan is based on conservative estimates and assumptions. We will need to plan on initial investment to make the financials work.
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Acme Consulting
7.3 Break-even Analysis
Table 7.3 summarizes the break-even analysis, including monthly sales break-even points.
27% $33,029
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Acme Consulting
7.4 Projected Profit and Loss
The detailed monthly pro-forma income statement for the first year is included in the appendix. The annual estimates are included here.
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Acme Consulting
Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$194,750 $162,000 $0 $6,000 $12,000 $3,600 $18,000 $0 $0 $396,350 $36,650 $36,650 $7,222 $8,828 $20,600 3.48%
$377,000 $137,000 $0 $7,000 $12,000 $2,000 $52,780 $0 $0 $587,780 $68,220 $68,220 $10,940 $17,184 $40,096 4.58%
$432,000 $195,000 $0 $7,000 $12,000 $2,000 $60,480 $0 $0 $708,480 $102,520 $102,520 $10,940 $27,474 $64,106 5.83%
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Acme Consulting
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Acme Consulting
7.5 Projected Cash Flow
Cash flow projec tions are critical to our success. The monthly cash flow is shown in the illustration, with one bar representing the cash flow per month and the other representing the monthly balance. The annual cash flow figures are included here as Table 7.5. Detailed monthly numbers are included in the appendix.
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Acme Consulting
Table: Cash Flow
Pro Forma Cash Flow 1996 Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance 1997 1998
$0 $495,000 $495,000
$0 $828,630 $828,630
$0 $1,063,133 $1,063,133
$0 $0 $0 $0 $0 $0 $0 $1,063,133 1998
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Acme Consulting
7.6 Projected Balance Sheet
The balance sheet shows healthy growth of net worth, and strong financial position. The monthly estimates are included in the appendix.
$0 $0 $0 $190,719 1996
$0 $0 $0 $295,731 1997
$0 $0 $0 $311,837 1998
$32,720 $30,000 $0 $62,720 $49,400 $112,120 $58,000 $0 $20,600 $78,600 $190,719 $78,600
$37,636 $100,000 $0 $137,636 $39,400 $177,036 $58,000 $20,600 $40,096 $118,696 $295,731 $118,696
$49,635 $50,000 $0 $99,635 $29,400 $129,035 $58,000 $60,696 $64,106 $182,802 $311,837 $182,802
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Acme Consulting
7.7 Business Ratios
The following table shows the projec ted business ratios. We expec t to maintain healthy ratios for profitability, risk, and return. The industry comparisons are for SIC 8742, management consulting services.
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Acme Consulting
Table: Ratios
Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 1996 0.00% 1997 47.80% 1998 25.71% Industry Profile 6.98%
n.a n.a
1.43 0.56
1.49 0.78
0.71 0.77
n.a n.a
$128,000 5.07
$158,096 6.24
$212,202 9.37
n.a n.a
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Appendix
Table: Sales Forecast
Sales Forecast Jan Sales Retainer Consulting Project Consulting Market Research Strategic Reports Total Sales Direct Cost of Sales Retainer Consulting Project Consulting Market Research Strategic Reports Subtotal Direct Cost of Sales 0% 0% 0% 0% $10,000 $0 $0 $0 $10,000 Jan $2,500 $0 $0 $0 $2,500 Feb $10,000 $0 $0 $0 $10,000 Feb $2,500 $0 $0 $0 $2,500 Mar $10,000 $10,000 $0 $0 $20,000 Mar $2,500 $1,500 $0 $0 $4,000 Apr $10,000 $20,000 $4,000 $0 $34,000 Apr $2,500 $3,500 $2,000 $0 $8,000 May $20,000 $30,000 $8,000 $0 $58,000 May $2,500 $5,000 $6,000 $0 $13,500 Jun $20,000 $40,000 $15,000 $0 $75,000 Jun $2,500 $6,500 $10,000 $0 $19,000 Jul $20,000 $20,000 $10,000 $0 $50,000 Jul $2,500 $3,500 $6,000 $0 $12,000 Aug $20,000 $10,000 $5,000 $0 $35,000 Aug $2,500 $1,500 $4,000 $0 $8,000 Sep $20,000 $30,000 $20,000 $0 $70,000 Sep $2,500 $5,000 $14,000 $0 $21,500 Oct $20,000 $45,000 $20,000 $0 $85,000 Oct $2,500 $7,500 $14,000 $0 $24,000 Nov $20,000 $50,000 $20,000 $0 $90,000 Nov $2,500 $8,500 $14,000 $0 $25,000 Dec $20,000 $15,000 $20,000 $0 $55,000 Dec $2,500 $2,500 $14,000 $0 $19,000
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Appendix
Table: Personnel
Personnel Plan Partners Consultants Editorial/graphic VP Marketing Sales people Office Manager Secretarial Total People Total Payroll 140% 125% 120% 110% 110% 110% 110% Jan $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Feb $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Mar $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Apr $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 May $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Jun $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Jul $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Aug $12,000 $0 $0 $0 $0 $0 $0 3 $12,000 Sep $12,000 $0 $0 $5,000 $0 $0 $0 5 $17,000 Oct $12,000 $0 $6,000 $5,000 $0 $2,500 $1,750 7 $27,250 Nov $12,000 $0 $6,000 $5,000 $0 $2,500 $1,750 7 $27,250 Dec $12,000 $0 $6,000 $5,000 $0 $2,500 $1,750 7 $27,250
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Appendix
Table: Profit and Loss
Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Jan $10,000 $2,500 $0 $2,500 $7,500 75.00% Feb $10,000 $2,500 $0 $2,500 $7,500 75.00% Mar $20,000 $4,000 $0 $4,000 $16,000 80.00% Apr $34,000 $8,000 $0 $8,000 $26,000 76.47% May $58,000 $13,500 $0 $13,500 $44,500 76.72% Jun $75,000 $19,000 $0 $19,000 $56,000 74.67% Jul $50,000 $12,000 $0 $12,000 $38,000 76.00% Aug $35,000 $8,000 $0 $8,000 $27,000 77.14% Sep $70,000 $21,500 $0 $21,500 $48,500 69.29% Oct $85,000 $24,000 $0 $24,000 $61,000 71.76% Nov $90,000 $25,000 $0 $25,000 $65,000 72.22% Dec $55,000 $19,000 $0 $19,000 $36,000 65.45%
Expenses Payroll Marketing/Promotion Depreciation Leased Equipment Utilities Insurance Rent Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 ($21,300) ($21,300) $417 ($6,515) ($15,202) -152.02%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 ($21,300) ($21,300) $416 ($6,515) ($15,201) -152.01%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 ($12,800) ($12,800) $583 ($4,015) ($9,368) -46.84%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 ($2,800) ($2,800) $582 ($1,015) ($2,367) -6.96%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 $15,700 $15,700 $582 $4,536 $10,583 18.25%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 $27,200 $27,200 $665 $7,961 $18,575 24.77%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 $9,200 $9,200 $664 $2,561 $5,975 11.95%
$12,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $28,800 ($1,800) ($1,800) $664 ($739) ($1,725) -4.93%
$17,000 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $33,800 $14,700 $14,700 $663 $4,211 $9,826 14.04%
$27,250 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $44,050 $16,950 $16,950 $663 $4,886 $11,401 13.41%
$27,250 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $44,050 $20,950 $20,950 $663 $6,086 $14,201 15.78%
$27,250 $13,500 $0 $500 $1,000 $300 $1,500 $0 $0 $44,050 ($8,050) ($8,050) $662 ($2,613) ($6,098) -11.09%
0% 14%
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Appendix
Table: Cash Flow
Pro Forma Cash Flow Jan Cash Received Cash from Operations Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash Spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $0 $0 $0 $0 $0 $0 $0 $12,790 $37,210 $87,560 $0 $0 $0 $50 $0 $0 $0 $25,252 ($19,918) $67,642 $0 $0 $0 $50 $0 $0 $0 $25,390 $4,610 $72,251 $0 $0 $0 $50 $0 $0 $0 $29,651 ($14,318) $57,934 $0 $0 $0 $50 $0 $0 $0 $36,786 ($1,319) $56,615 $0 $0 $0 $50 $0 $0 $0 $47,767 $9,033 $65,647 $0 $0 $0 $50 $0 $0 $0 $56,062 $11,005 $76,652 $0 $0 $0 $50 $0 $0 $0 $43,832 $17,835 $94,487 $0 $0 $0 $50 $0 $0 $0 $42,390 ($390) $94,097 $0 $0 $0 $50 $0 $0 $0 $70,580 ($16,913) $77,184 $0 $0 $0 $50 $0 $0 $0 $73,722 $4,278 $81,462 $0 $0 $0 $100 $0 $0 $0 $75,409 $12,258 $93,719 $12,000 $790 $12,790 $12,000 $13,202 $25,202 $12,000 $13,340 $25,340 $12,000 $17,601 $29,601 $12,000 $24,736 $36,736 $12,000 $35,717 $47,717 $12,000 $44,012 $56,012 $12,000 $31,782 $43,782 $17,000 $25,340 $42,340 $27,250 $43,280 $70,530 $27,250 $46,422 $73,672 $27,250 $48,059 $75,309 0.00% $0 $0 $0 $50,000 $0 $0 $0 $50,000 Jan $0 $0 $0 $0 $0 $0 $0 $5,333 Feb $0 $20,000 $0 $0 $0 $0 $0 $30,000 Mar $0 $0 $0 $0 $0 $0 $0 $15,333 Apr $0 $0 $0 $0 $0 $0 $8,000 $35,467 May $0 $10,000 $0 $0 $0 $0 $0 $56,800 Jun $0 $0 $0 $0 $0 $0 $0 $67,067 Jul $0 $0 $0 $0 $0 $0 $0 $61,667 Aug $0 $0 $0 $0 $0 $0 $0 $42,000 Sep $0 $0 $0 $0 $0 $0 $0 $53,667 Oct $0 $0 $0 $0 $0 $0 $0 $78,000 Nov $0 $0 $0 $0 $0 $0 $0 $87,667 Dec Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$0 $0 $0
$0 $5,333 $5,333
$0 $10,000 $10,000
$0 $15,333 $15,333
$0 $27,467 $27,467
$0 $46,800 $46,800
$0 $67,067 $67,067
$0 $61,667 $61,667
$0 $42,000 $42,000
$0 $53,667 $53,667
$0 $78,000 $78,000
$0 $87,667 $87,667
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Appendix
Table: Balance Sheet
Pro Forma Balance Sheet Jan Assets Current Assets Cash Accounts Receivable Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth $350 $0 $0 $350 $0 $350 $50,000 $0 $0 $50,000 $50,350 $50,000 $12,762 $0 $0 $12,762 $50,000 $62,762 $50,000 $0 ($15,202) $34,798 $97,560 $34,798 $12,761 $0 $0 $12,761 $49,950 $62,711 $50,000 $0 ($30,403) $19,597 $82,308 $19,597 $16,789 $20,000 $0 $36,789 $49,900 $86,689 $50,000 $0 ($39,771) $10,229 $96,918 $10,229 $23,555 $20,000 $0 $43,555 $49,850 $93,405 $50,000 $0 ($42,138) $7,862 $101,267 $7,862 $34,237 $20,000 $0 $54,237 $49,800 $104,037 $58,000 $0 ($31,555) $26,445 $130,481 $26,445 $42,944 $30,000 $0 $72,944 $49,750 $122,694 $58,000 $0 ($12,981) $45,019 $167,714 $45,019 $30,957 $30,000 $0 $60,957 $49,700 $110,657 $58,000 $0 ($7,006) $50,994 $161,652 $50,994 $23,900 $30,000 $0 $53,900 $49,650 $103,550 $58,000 $0 ($8,730) $49,270 $152,820 $49,270 $41,735 $30,000 $0 $71,735 $49,600 $121,335 $58,000 $0 $1,095 $59,096 $180,431 $59,096 $44,804 $30,000 $0 $74,804 $49,550 $124,354 $58,000 $0 $12,496 $70,496 $194,851 $70,496 $46,930 $30,000 $0 $76,930 $49,500 $126,430 $58,000 $0 $26,698 $84,698 $211,128 $84,698 $32,720 $30,000 $0 $62,720 $49,400 $112,120 $58,000 $0 $20,600 $78,600 $190,719 $78,600 $0 $0 $0 $50,350 $0 $0 $0 $97,560 Jan $0 $0 $0 $82,308 Feb $0 $0 $0 $96,918 Mar $0 $0 $0 $101,267 Apr $0 $0 $0 $130,481 May $0 $0 $0 $167,714 Jun $0 $0 $0 $161,652 Jul $0 $0 $0 $152,820 Aug $0 $0 $0 $180,431 Sep $0 $0 $0 $194,851 Oct $0 $0 $0 $211,128 Nov $0 $0 $0 $190,719 Dec Starting Balances Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$50,350 $0 $0 $50,350
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