January 2001

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Table of Contents
Page 1
1.0 Executive Summary.............................................................................................................................1
1.1 Mission ........................................................................................................................................2
1.2 Objectives ...................................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................2
2.2 Start-up Summary ......................................................................................................................3
3.0 Services................................................................................................................................................5
4.0 Market Analysis Summary ..................................................................................................................5
4.1 Market Segmentation ................................................................................................................6
4.2 Target Market Segment Strategy .............................................................................................7
4.3 Service Business Analysis........................................................................................................7
5.0 Strategy and Implementation Summary ............................................................................................7
5.1 Sales Strategy ............................................................................................................................8
5.1.1 Sales Forecast........................................................................................................................8
5.2 Competitive Edge ......................................................................................................................9
5.3 Milestones ................................................................................................................................10
6.0 Management Summary ....................................................................................................................10
6.1 Personnel Plan .........................................................................................................................11
7.0 Financial Plan ....................................................................................................................................11
7.1 Important Assumptions............................................................................................................11
7.2 Projected Cash Flow ...............................................................................................................12
7.3 Break-even Analysis................................................................................................................14
7.4 Projected Profit and Loss .......................................................................................................15
7.5 Projected Balance Sheet ........................................................................................................18
7.6 Business Ratios .......................................................................................................................19
Advanced Linguistic Pontificators
Page 1
1.0 Executive Summary
Advanced Linguistic Pontificators is a leading seminar and training program company led by best-
selling author Daug Matisim. Advanced Linguistic Pontificators will be targeting medium- and
large-size companies/corporations. Pontificators will quickly reach profitability and achieve
$79,000 of net profit by year two.
Services
Advanced Linguistic Pontificators will provide medium- to large-size companies with training
programs and seminars covering the subjects of advanced reading, stress management, and time
management. The advanced reading course will teach speed reading with increased
comprehension and memory. Stress management will teach techniques to better deal with
stress, and time management will teach methods to become more efficient with the limited
amount of time that we all have. The subjects will be taught in either seminar format or training
program format. The seminar format is a presentation that concentrates on a specific topic. For
the seminars, the audience just observes. A training program is like a seminar except the
attendees participate in the entire process.
Marketing
Advanced Linguistic Pontificators will utilize a three-prong strategy to generate a 15% increase
in clients each year. The first prong is the use of free public seminars. The public seminars are
an excellent method of bringing together a diverse crowd of people that would not have
otherwise heard of Pontificators before. The second prong is the dissemination of printed
material and the promotion of Daug's published books. The last prong is the use of networking
and word of mouth advertising. Daug recognizes the "small universe" of seminars and training
programs and will leverage this element to generate significant business from network contacts.
Management
Daug Matism is the organization and an expert in the field he teaches. He has written two best-
selling topical books, "Read Fast, Comprehend More, Remember Lots, and Ignore the Fluff," and
Efficiency Gains in Time and Stress Management: Why the Snail is Faster than the Hare." Having
published in the area that he teaches gives Daug instant respect and notoriety. This expert level
of knowledge is based on a foundation of a communications degree as well as a Master in
Education. In addition to this incredible C.V., Daug is bubbling with enthusiasm that is contagious
to the various seminar participants.
Advanced Linguistic Pontificators will fully utilize Daug's expert knowledge and notoriety to take
the seminar company to profitability. Pontificators has conservatively forecasted sales of
$181,000 by year two.
Advanced Linguistic Pontificators
Page 2
1.1 Mission
Advanced Linguistic Pontificators' mission is to provide companies with high-quality training
seminars. We exist to attract and maintain customers. When we adhere to this maxim,
everything else will fall into place. Our services will exceed the expectations of our customers.
1.2 Objectives
The objectives for the first three years of operation include:
To create a service-based company whose primary goal is to exceed customer's
expectations.
The utilization of Advanced Linguistic Pontificators in at least five of the top 100 companies
as ranked by Forbes Magazine.
To increase the number of clients by 15% per year.
To develop a sustainable home business, surviving off of its own cash flow.
2.0 Company Summary
Advanced Linguistic Pontificators, based in Portland, OR, offers training programs and seminars
for medium to large corporations. The programs are based on advanced reading, stress
management, and time management. All programs are presented by Daug Matisim, an expert in
those fields. While the office of Advanced Linguistic Pontificators will be located in Daug's home,
the seminars and programs will take place around the country.
The business is expected to reach profitability early on.
2.1 Company Ownership
Advanced Linguistic Pontificators will be an Oregon corporation owned by Daug Matisim.
Advanced Linguistic Pontificators
Page 3
2.2 Start-up Summary
Advanced Linguistic Pontificators will incur the following start-up costs:
Desk, chair, filing cabinet.
Computer (including printer, and CD-RW) with Internet access.
Fax machine, copier.
Pager and cell phone.
Laptop computer.
LCD computer projector.
Microsoft Office Suite and QuickBooks Pro.
Additional land phone line.
Please note that all items that are assets to be used for more than one year will be considered a
long-term asset and will be depreciated using the straight-line method.
Table: Start-up
Start-up
Requi rements
Start-up Expenses
Legal $500
Stati onery etc. $300
Brochures $300
Consul tants $500
Web devel opment costs $1,000
Rent $0
Research and devel opment $0
Expensed equi pment $0
Other $0
Total Start-up Expenses $2,600
Start-up Assets
Cash Requi red $7,900
Other Current Assets $0
Long-term Assets $11,500
Total Assets $19,400
Total Requi rements $22,000
Advanced Linguistic Pontificators
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Table: Start-up Funding
Start-up Fundi ng
Start-up Expenses to Fund $2,600
Start-up Assets to Fund $19,400
Total Fundi ng Requi red $22,000
Assets
Non-cash Assets from Start-up $11,500
Cash Requi rements from Start-up $7,900
Addi ti onal Cash Rai sed $0
Cash Bal ance on Starti ng Date $7,900
Total Assets $19,400
Li abi l i ti es and Capi tal
Li abi l i ti es
Current Borrowi ng $0
Long-term Li abi l i ti es $0
Accounts Payabl e (Outstandi ng Bi l l s) $0
Other Current Li abi l i ti es (i nterest-free) $0
Total Li abi l i ti es $0
Capi tal
Pl anned Investment
Daug $22,000
Investor 2 $0
Other $0
Addi ti onal Investment Requi rement $0
Total Pl anned Investment $22,000
Loss at Start-up (Start-up Expenses) ($2,600)
Total Capi tal $19,400
Total Capi tal and Li abi l i ti es $19,400
Total Fundi ng $22,000
Advanced Linguistic Pontificators
Page 5
3.0 Services
Advanced Linguistic Pontificators will provide medium- to large-size companies with training
programs and seminars covering the subjects of advanced reading, stress management, and time
management. The advanced reading course will teach speed reading with increased
comprehension and memory. Stress management will teach techniques to better deal with
stress, and time management will teach methods to become more efficient with the limited
amount of time that we all have.
The subjects will be taught in either seminar format or training program format. The seminar
format is a presentation that concentrates on a specific topic. For the seminars, the audience
just observe. A training program is like a seminar except the attendees participate in the entire
process.
Additionally, Daug will offer seminars to the public. This will not be a targeted segment, but will
be used to increase awareness of Advanced Linguistic Pontificators to drum up future business.
4.0 Market Analysis Summary
Advanced Linguistic Pontificators' market is Corporate America. The Pontificators will be targeting
medium- and large-size companies who typically have a steady need for seminars and training
programs. Advanced Linguistic Pontificators will reach these customers through public seminars,
word-of-mouth referrals, and through recognition of expertise because of publications on the
subject.
Advanced Linguistic Pontificators
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4.1 Market Segmentation
Advanced Linguistic Pontificators is targeting two separate segments:
Large corporations (100< employees): typically purchases training seminars through specific
divisions in the company. Usually a specific manager will have money in their budget and they
will choose to have their department trained.
Medium size companies (100> employees): typically purchases the training seminars through
the HR manager or the training manager. Medium-size companies will often have the training
applied to the entire organization, not just a certain section of the company.
These segments are good customers because companies of these sizes to have earmarked
money for training. These companies recognize the value that they hold in intellectual capital
and the need for future investments to maintain the intellectual equity. This recognition of value
in training makes them ideal customers. Economic downturns do not seem to effect business
from these sources because of the recognition that it is more cost effective to have training
done by a third party then to try to have a solution crafted in-house.
Table: Market Analysis
Market Anal ysi s
2001 2002 2003 2004 2005
Potenti al Customers Growth CAGR
Medi um si ze compani es 10% 5,687 6,256 6,882 7,570 8,327 10.00%
Large corporati ons 9% 2,654 2,893 3,153 3,437 3,746 9.00%
Other 0% 0 0 0 0 0 0.00%
Total 9.69% 8,341 9,149 10,035 11,007 12,073 9.69%
Advanced Linguistic Pontificators
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4.2 Target Market Segment Strategy
Advanced Linguistic Pontificators has a three part strategy for targeting the two chosen
segments. The first part is through public seminars. A public seminar is a presentation on a
subject that is offered to the public. They are typically held in a library or some other public
building. While public seminars are not big money makers (and sometimes you will lose money),
they bring together a diverse audience to view the seminar. This is quite valuable because within
the diverse crowd are people that work in companies that would would otherwise have never
heard about Advanced Linguistic Pontificators. It becomes a wonderful advertising tool.
The second way the Pontificators will reach their target market is through visibility of printed
material, specifically books. Daug has published two books, one on advanced reading, the other
on stress and time management. Having the speaker published adds invaluable amounts of
credibility and authenticity. These books are typically toward managers so it is not unusual that
a manager will have read the book and then become inspired into having the author come and
provide a training session for the the company.
The last method of reaching the target market is word of mouth. Although the industry of
training programs and seminars is large, those that are good and concentrate on certain areas
form a group of well known service providers. This is quite intuitive. The experts in the field rise
to the top and people that are in the "know" are familiar with these people. Word of mouth
marketing is incredibly efficient once you have established yourself as one of the best.
4.3 Service Business Analysis
There are many different competitors in this space:
Seminar production companies that act only as producers of the events, they do not make
the actual presentation. These companies typically have a list of different presenters that
they use.
Independent seminar presenters.
Independent training program presenters.
Both presenter and promoter--just like Advanced Linguistic Pontificators.
The competition is on a national scale. Being local is insignificant in this industry. Companies will
fly in the speaker from wherever they are in the country.
Buying habits are based on word-of-mouth referrals, reputation, topic/skill needed, availability,
etc.
5.0 Strategy and Implementation Summary
Advanced Linguistic Pontificators will win sales by virtue of their service/product, in essence the
product will speak for itself. Daug Matisim is an expert in the field of advanced reading and time
and stress management. This expertise provides Pontificators a competitive advantage.
Prospective customers will be able to get a sampling of Daug's work from him book, from excerpts
of his writing, or excerpts of his presentations via streaming media from his website.
Advanced Linguistic Pontificators
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5.1 Sales Strategy
Advanced Linguistic Pontificators' sales strategy is relatively straight forward. Let the customer
see part of a presentation in addition to the information contained in Daug's book and the
product/service will sell it self. The customer will see examples of Daug's work through three
avenues.
1. Purchase a copy of Daug's book.
2. Receive an excerpt of the book from Advanced Linguistic Pontificators office.
3. View an example of one of Daug's presentations via streaming media from the Pontificators'
website.
These examples of Daug's work will speak for themselves. Once the customer is interested they
would only need to contact the office and determine availability, and set up an event.
5.1.1 Sales Forecast
The first month will be used to set up the office and schedule public seminars for month two.
There will be some sales activity during months three through seven. Starting with month eight,
things will begin to pick up nicely as word gets out that Daug is on the circuit.
Advanced Linguistic Pontificators
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Table: Sales Forecast
Sal es Forecast
2001 2002 2003
Sal es
Medi um-si ze compani es $49,925 $84,000 $90,000
Large corporati ons $57,200 $97,000 $100,000
Total Sal es $107,125 $181,000 $190,000
Di rect Cost of Sal es 2001 2002 2003
Medi um-si ze compani es $0 $0 $0
Large corporati ons $0 $0 $0
Subtotal Di rect Cost of Sal es $0 $0 $0
5.2 Competitive Edge
Advanced Linguistic Pontificators' competitive edge is simply expertise. Daug is a nationally
recognized expert in the fields that he presents. Much of the recognition was derived through
the publication of his books. As an expert and an engaging presenter/trainer, Daug is able to
offer presentations and training sessions that leave customers with the feeling that they've
learned a tremendous amount of information and they cannot wait to sign up for another one.
Advanced Linguistic Pontificators
Page 10
5.3 Milestones
Advanced Linguistic Pontificators will have several milestones early on:
1. Business plan completion. This will be done as a road map for the organization. While we do
not need a business plan to raise capital, it will be an indispensable tool for the ongoing
performance and improvement of the company.
2. Set up office.
3. Finish the fifth public seminar.
4. Finish the tenth seminar/training program.
5. Profit exceeding $50,000.
Table: Milestones
Mi l estones
Mi l estone Start Date End Date Budget Manager Department
Busi ness pl an compl eti on 1/1/2001 2/1/2001 $0 ABC Marketi ng
Set up offi ce 3/1/1999 2/1/2001 $0 ABC Department
Fini sh the fi fth publ i c semi nar 2/1/2001 3/1/2001 $0 ABC Department
Fini sh the tenth semi nar/ trai ni ng
program
2/1/2001 5/1/2001 $0 ABC Department
Profi t exceedi ng $50,000 1/1/2001 3/1/2002 $0 ABC Department
Total s $0
6.0 Management Summary
Advanced Linguistic Pontificators is owned and operated by Daug Matisim. Daug was a degree in
communications from Reed College. Following college, Daug pursued his Master's in Education
from the University of California, Berkeley. Following graduate school Daug moved back to Oregon
to begin working on his first of two books. The first book, "Read Fast, Comprehend More,
Remember Lots, and Ignore the Fluff" was a top seller in the market of advanced reading for
eleven straight months. This book brought Daug notoriety and was the catalyst for his second
book "Efficiency Gains in Time and Stress Management: Why the Snail is Faster Than the Hare."
After completing the books and spending five months on the road promoting them, Daug decided
he needed a change in his life. He moved down to Costa Rica for two months to develop a
comprehensive seminar and training program offering. Once completed, he began Advanced
Linguistic Pontificators.
Advanced Linguistic Pontificators
Page 11
6.1 Personnel Plan
Advanced Linguistic Pontificators will be a one man show. Daug will be responsible for arranging
and performing all seminars. Things such as PowerPoint presentations and travel arrangements
will be outsourced and the client will cover the costs of all travel arrangements.
Table: Personnel
Personnel Pl an
2001 2002 2003
Daug Mati sm $24,000 $36,000 $50,000
Other $0 $0 $0
Total Peopl e 0 0 0
Total Payrol l $24,000 $36,000 $50,000
7.0 Financial Plan
The following sections will outline the important financial data.
7.1 Important Assumptions
The following table details important financial assumptions for Advanced Linguistic Pontificators.
Table: General Assumptions
General Assumpti ons
2001 2002 2003
Pl an Month 1 2 3
Current Interest Rate 10.00% 10.00% 10.00%
Long-term Interest Rate 10.00% 10.00% 10.00%
Tax Rate 25.42% 25.00% 25.42%
Other 0 0 0
Advanced Linguistic Pontificators
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7.2 Projected Cash Flow
The following chart and table will indicate projected cash flow.
Table: Cash Flow
Pro Forma Cash Fl ow
2001 2002 2003
Cash Recei ved
Cash from Operati ons
Cash Sal es $107,125 $181,000 $190,000
Subtotal Cash from Operati ons $107,125 $181,000 $190,000
Addi ti onal Cash Recei ved
Sal es Tax, VAT, HST/GST Recei ved $0 $0 $0
New Current Borrowi ng $0 $0 $0
New Other Li abi l i ti es (i nterest-free) $0 $0 $0
New Long-term Li abi l i ti es $0 $0 $0
Sal es of Other Current Assets $0 $0 $0
Sal es of Long-term Assets $0 $0 $0
New Investment Recei ved $0 $0 $0
Subtotal Cash Recei ved $107,125 $181,000 $190,000
Expendi tures 2001 2002 2003
Expendi tures from Operati ons
Cash Spendi ng $24,000 $36,000 $50,000
Bi l l Payments $23,153 $45,002 $43,397
Subtotal Spent on Operati ons $47,153 $81,002 $93,397
Addi ti onal Cash Spent
Sal es Tax, VAT, HST/GST Pai d Out $0 $0 $0
Pri nci pal Repayment of Current Borrowi ng $0 $0 $0
Other Li abi l i ti es Pri nci pal Repayment $0 $0 $0
Long-term Li abi l i ti es Pri nci pal Repayment $0 $0 $0
Purchase Other Current Assets $0 $0 $0
Purchase Long-term Assets $0 $0 $0
Di vi dends $0 $0 $0
Subtotal Cash Spent $47,153 $81,002 $93,397
Net Cash Flow $59,972 $99,998 $96,603
Cash Bal ance $67,872 $167,869 $264,473
Advanced Linguistic Pontificators
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Advanced Linguistic Pontificators
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7.3 Break-even Analysis
The Break-even Analysis is shown below.
Table: Break-even Analysis
Break-even Anal ysi s
Monthl y Revenue Break-even $3,211
Assumpti ons:
Average Percent Vari abl e Cost 0%
Esti mated Monthl y Fi xed Cost $3,211
Advanced Linguistic Pontificators
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7.4 Projected Profit and Loss
The following table will indicate projected profit and loss.
Advanced Linguistic Pontificators
Page 16
Table: Profit and Loss
Pro Forma Profi t and Loss
2001 2002 2003
Sal es $107,125 $181,000 $190,000
Di rect Cost of Sal es $0 $0 $0
Other $0 $0 $0
Total Cost of Sal es $0 $0 $0
Gross Margi n $107,125 $181,000 $190,000
Gross Margi n % 100.00% 100.00% 100.00%
Expenses
Payrol l $24,000 $36,000 $50,000
Sal es and Marketi ng and Other Expenses $6,800 $7,800 $7,800
Depreci ati on $3,828 $3,828 $3,828
Leased Equi pment $0 $0 $0
Uti l i ti es $2,400 $2,400 $2,400
Insurance $1,500 $1,500 $1,500
Rent $0 $0 $0
Payrol l Taxes $0 $0 $0
Other $0 $0 $0
Total Operati ng Expenses $38,528 $51,528 $65,528
Profi t Before Interest and Taxes $68,597 $129,472 $124,472
EBITDA $72,425 $133,300 $128,300
Interest Expense $0 $0 $0
Taxes Incurred $17,010 $32,368 $31,637
Net Profi t $51,587 $97,104 $92,835
Net Profi t/Sal es 48.16% 53.65% 48.86%
Advanced Linguistic Pontificators
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7.5 Projected Balance Sheet
The following table will indicate the projected balance sheet.
Table: Balance Sheet
Pro Forma Bal ance Sheet
2001 2002 2003
Assets
Current Assets
Cash $67,872 $167,869 $264,473
Other Current Assets $0 $0 $0
Total Current Assets $67,872 $167,869 $264,473
Long-term Assets
Long-term Assets $11,500 $11,500 $11,500
Accumul ated Depreci ati on $3,828 $7,656 $11,484
Total Long-term Assets $7,672 $3,844 $16
Total Assets $75,544 $171,713 $264,489
Li abi l i ti es and Capi tal 2001 2002 2003
Current Li abi l i ti es
Accounts Payabl e $4,556 $3,622 $3,562
Current Borrowi ng $0 $0 $0
Other Current Li abi l i ti es $0 $0 $0
Subtotal Current Li abi l i ti es $4,556 $3,622 $3,562
Long-term Li abi l i ti es $0 $0 $0
Total Li abi l i ti es $4,556 $3,622 $3,562
Pai d-i n Capi tal $22,000 $22,000 $22,000
Retai ned Earni ngs ($2,600) $48,987 $146,091
Earni ngs $51,587 $97,104 $92,835
Total Capi tal $70,987 $168,091 $260,927
Total Li abi l i ti es and Capi tal $75,544 $171,713 $264,489
Net Worth $70,987 $168,091 $260,927
Advanced Linguistic Pontificators
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7.6 Business Ratios
The following table outlines some of the more important ratios from the Professional and
Management Development Training industry. The final column, Industry Profile, details specific
ratios based on the industry as it is classified by the NAICS code, 611430.
Advanced Linguistic Pontificators
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Table: Ratios
Rati o Anal ysi s
2001 2002 2003 Industry Profi l e
Sal es Growth 0.00% 68.96% 4.97% 9.50%
Percent of Total Assets
Other Current Assets 0.00% 0.00% 0.00% 45.60%
Total Current Assets 89.84% 97.76% 99.99% 62.40%
Long-term Assets 10.16% 2.24% 0.01% 37.60%
Total Assets 100.00% 100.00% 100.00% 100.00%
Current Li abi l i ti es 6.03% 2.11% 1.35% 43.30%
Long-term Li abi l i ti es 0.00% 0.00% 0.00% 17.30%
Total Li abi l i ti es 6.03% 2.11% 1.35% 60.60%
Net Worth 93.97% 97.89% 98.65% 39.40%
Percent of Sal es
Sal es 100.00% 100.00% 100.00% 100.00%
Gross Margi n 100.00% 100.00% 100.00% 0.00%
Sel l i ng, General & Admi ni strati ve Expenses 68.78% 56.30% 62.71% 73.80%
Adverti si ng Expenses 1.68% 0.99% 0.95% 5.00%
Profi t Before Interest and Taxes 64.03% 71.53% 65.51% 3.20%
Mai n Rati os
Current 14.90 46.35 74.25 1.33
Qui ck 14.90 46.35 74.25 1.11
Total Debt to Total Assets 6.03% 2.11% 1.35% 60.60%
Pre-tax Return on Net Worth 96.63% 77.02% 47.70% 5.50%
Pre-tax Return on Assets 90.80% 75.40% 47.06% 14.00%
Addi ti onal Rati os 2001 2002 2003
Net Profi t Margi n 48.16% 53.65% 48.86% n.a
Return on Equi ty 72.67% 57.77% 35.58% n.a
Acti vi ty Rati os
Accounts Payabl e Turnover 6.08 12.17 12.17 n.a
Payment Days 34 34 30 n.a
Total Asset Turnover 1.42 1.05 0.72 n.a
Debt Rati os
Debt to Net Worth 0.06 0.02 0.01 n.a
Current Li ab. to Li ab. 1.00 1.00 1.00 n.a
Li qui di ty Rati os
Net Worki ng Capi tal $63,315 $164,247 $260,911 n.a
Interest Coverage 0.00 0.00 0.00 n.a
Addi ti onal Rati os
Assets to Sal es 0.71 0.95 1.39 n.a
Current Debt/Total Assets 6% 2% 1% n.a
Aci d Test 14.90 46.35 74.25 n.a
Sal es/Net Worth 1.51 1.08 0.73 n.a
Di vi dend Payout 0.00 0.00 0.00 n.a
Appendix
Page 1
Table: Sales Forecast
Sales Forecast
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales
Medium-size companies 0% $0 $0 $2,000 $3,500 $4,000 $4,100 $4,200 $5,200 $6,000 $6,500 $7,025 $7,400
Large corporations 0% $0 $0 $2,000 $4,000 $5,000 $4,500 $4,700 $6,000 $7,000 $7,500 $8,000 $8,500
Total Sales $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Direct Cost of Sales Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Medium-size companies $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Large corporations $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Appendix
Page 2
Table: Personnel
Personnel Plan
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Daug Matism 0% $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Other 0% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total People 0 0 0 0 0 0 0 0 0 0 0 0
Total Payroll $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Appendix
Page 3
Table: General Assumptions
General Assumptions
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Plan Month 1 2 3 4 5 6 7 8 9 10 11 12
Current Interest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Long-termInterest Rate 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00% 10.00%
Tax Rate 30.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00% 25.00%
Other 0 0 0 0 0 0 0 0 0 0 0 0
Appendix
Page 4
Table: Profit and Loss
Pro Forma Profit and Loss
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Sales $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Direct Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Cost of Sales $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Gross Margin $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Gross Margin % 0.00% 0.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Expenses
Payroll $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Sales and Marketing and Other
Expenses
$150 $150 $650 $650 $650 $650 $650 $650 $650 $650 $650 $650
Depreciation $319 $319 $319 $319 $319 $319 $319 $319 $319 $319 $319 $319
Leased Equipment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Utilities $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200 $200
Insurance $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125 $125
Rent $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Payroll Taxes 15% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Operating Expenses $2,794 $2,794 $3,294 $3,294 $3,294 $3,294 $3,294 $3,294 $3,294 $3,294 $3,294 $3,294
Profit Before Interest and Taxes ($2,794) ($2,794) $706 $4,206 $5,706 $5,306 $5,606 $7,906 $9,706 $10,706 $11,731 $12,606
EBITDA ($2,475) ($2,475) $1,025 $4,525 $6,025 $5,625 $5,925 $8,225 $10,025 $11,025 $12,050 $12,925
Interest Expense $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Taxes Incurred ($838) ($699) $177 $1,052 $1,427 $1,327 $1,402 $1,977 $2,427 $2,677 $2,933 $3,152
Net Profit ($1,956) ($2,096) $530 $3,155 $4,280 $3,980 $4,205 $5,930 $7,280 $8,030 $8,798 $9,455
Net Profit/Sales 0.00% 0.00% 13.24% 42.06% 47.55% 46.27% 47.24% 52.94% 56.00% 57.35% 58.56% 59.46%
Appendix
Page 5
Table: Cash Flow
Pro Forma Cash Flow
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Cash Received
Cash fromOperations
Cash Sales $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Subtotal Cash fromOperations $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Additional Cash Received
Sales Tax, VAT, HST/GST Received 0.00% $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Other Liabilities (interest-free) $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Long-termLiabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Sales of Long-termAssets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
New Investment Received $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Received $0 $0 $4,000 $7,500 $9,000 $8,600 $8,900 $11,200 $13,000 $14,000 $15,025 $15,900
Expenditures Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Expenditures fromOperations
Cash Spending $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 $2,000
Bill Payments ($363) ($575) ($178) $1,181 $2,039 $2,398 $2,304 $2,396 $2,967 $3,410 $3,660 $3,915
Subtotal Spent on Operations $1,637 $1,425 $1,822 $3,181 $4,039 $4,398 $4,304 $4,396 $4,967 $5,410 $5,660 $5,915
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Principal Repayment of Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Liabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Long-termLiabilities Principal Repayment $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Purchase Long-termAssets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Dividends $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Cash Spent $1,637 $1,425 $1,822 $3,181 $4,039 $4,398 $4,304 $4,396 $4,967 $5,410 $5,660 $5,915
Net Cash Flow ($1,637) ($1,425) $2,178 $4,319 $4,961 $4,202 $4,596 $6,804 $8,034 $8,590 $9,365 $9,985
Cash Balance $6,263 $4,838 $7,015 $11,335 $16,296 $20,498 $25,094 $31,898 $39,931 $48,522 $57,887 $67,872
Appendix
Page 6
Table: Balance Sheet
Pro Forma Balance Sheet
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Assets Starting Balances
Current Assets
Cash $7,900 $6,263 $4,838 $7,015 $11,335 $16,296 $20,498 $25,094 $31,898 $39,931 $48,522 $57,887 $67,872
Other Current Assets $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Current Assets $7,900 $6,263 $4,838 $7,015 $11,335 $16,296 $20,498 $25,094 $31,898 $39,931 $48,522 $57,887 $67,872
Long-termAssets
Long-termAssets $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500 $11,500
Accumulated Depreciation $0 $319 $638 $957 $1,276 $1,595 $1,914 $2,233 $2,552 $2,871 $3,190 $3,509 $3,828
Total Long-termAssets $11,500 $11,181 $10,862 $10,543 $10,224 $9,905 $9,586 $9,267 $8,948 $8,629 $8,310 $7,991 $7,672
Total Assets $19,400 $17,444 $15,700 $17,558 $21,559 $26,201 $30,084 $34,361 $40,846 $48,560 $56,832 $65,878 $75,544
Liabilities and Capital Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Current Liabilities
Accounts Payable $0 $0 $351 $1,680 $2,526 $2,889 $2,792 $2,864 $3,420 $3,855 $4,097 $4,345 $4,556
Current Borrowing $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Other Current Liabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Subtotal Current Liabilities $0 $0 $351 $1,680 $2,526 $2,889 $2,792 $2,864 $3,420 $3,855 $4,097 $4,345 $4,556
Long-termLiabilities $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0
Total Liabilities $0 $0 $351 $1,680 $2,526 $2,889 $2,792 $2,864 $3,420 $3,855 $4,097 $4,345 $4,556
Paid-in Capital $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000 $22,000
Retained Earnings ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600) ($2,600)
Earnings $0 ($1,956) ($4,051) ($3,522) ($367) $3,912 $7,892 $12,096 $18,026 $25,305 $33,335 $42,133 $51,587
Total Capital $19,400 $17,444 $15,349 $15,878 $19,033 $23,312 $27,292 $31,496 $37,426 $44,705 $52,735 $61,533 $70,987
Total Liabilities and Capital $19,400 $17,444 $15,700 $17,558 $21,559 $26,201 $30,084 $34,361 $40,846 $48,560 $56,832 $65,878 $75,544
Net Worth $19,400 $17,444 $15,349 $15,878 $19,033 $23,312 $27,292 $31,496 $37,426 $44,705 $52,735 $61,533 $70,987