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Table of Contents
1.0 Executive Summary.............................................................................................................................1
Chart: Highlights ......................................................................................................................1
1.1 Mission........................................................................................................................................1
1.2 Objectives ...................................................................................................................................1
1.3 Keys to Success ........................................................................................................................2
2.0 Company Summary.............................................................................................................................2
2.1 Company Ownership .................................................................................................................2
2.2 Start-up Summary ......................................................................................................................2
Table: Start-up Funding ..........................................................................................................3
Table: Start-up .........................................................................................................................4
Chart: Start-up .........................................................................................................................4
3.0 Services................................................................................................................................................4
4.0 Market Analysis Summary..................................................................................................................5
4.1 Market Segmentation ................................................................................................................5
Chart: Market Analysis (Pie) ..................................................................................................5
Table: Market Analysis ...........................................................................................................6
4.2 Market Needs .............................................................................................................................6
4.3 Target Market Segment Strategy.............................................................................................6
4.4 Service Business Analysis........................................................................................................6
4.5 Competition and Buying Patterns ............................................................................................6
5.0 Strategy and Implementation Summary ............................................................................................7
5.1 Competitive Edge ......................................................................................................................7
5.2 Sales Strategy............................................................................................................................7
5.2.1 Sales Forecast ..............................................................................................................8
Chart: Sales Monthly......................................................................................................8
Table: Sales Forecast ...................................................................................................8
6.0 Management Summary.......................................................................................................................9
Table: Personnel .....................................................................................................................9
7.0 Financial Plan ......................................................................................................................................9
7.1 Important Assumptions............................................................................................................10
Table: General Assumptions ...............................................................................................10
7.2 Break-even Analysis................................................................................................................11
Chart: Break-even Analysis .................................................................................................11
Table: Break-even Analysis .................................................................................................11
7.3 Projected Profit and Loss .......................................................................................................12
Table: Profit and Loss ..........................................................................................................12
7.4 Projected Cash Flow...............................................................................................................13
Chart: Cash ...........................................................................................................................13
Table: Cash Flow..................................................................................................................14
7.5 Projected Balance Sheet ........................................................................................................15
Table: Balance Sheet ...........................................................................................................15
7.6 Business Ratios .......................................................................................................................16
Table: Ratios .........................................................................................................................17
Table: Sales Forecast ...............................................................................................................................1
Table: Personnel ........................................................................................................................................2
Table: General Assumptions ....................................................................................................................3
Table: Profit and Loss ...............................................................................................................................4
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Table of Contents
Table: Cash Flow .......................................................................................................................................5
Table: Balance Sheet ................................................................................................................................6

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1.0 Executive Summary
Buy the Time will be a shopping service that allows customers to purchase gifts and
nec essities of life at little inconvenience to their sc hedule and workday. We will do this with
the aid of a shopping consultant to provide eac h c ustomer with quality solutions to their
shopping concerns at reasonable prices. The owner has had years of experience in the retail
market and is aware of trends and the shopping environment. In time, this service will evolve to
incorporate a larger market instead of a luxury for the more wealthy customers.

1.1 Mission
The mission of Buy the Time is to offer custom goods for all oc casions with minimal interruptions
into our clients' daily ac tivities. We want our customers to be able to give special gifts to their
loved ones without it being a stressful event. We will strive to provide expert consultants in
order to guide the client from start to finish with low-cost, reliable information in a timely
fashion.

1.2 Objectives
The objectives for the company are outlined below:

Obtain and service clients with a knowledgeable sales team offering purchases of goods
based on desires and needs.
For a low charge, allow people to obtain c ustom items with minimal interruption into
their day and life.
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Grow into a large franchise with a reputation for getting the desired item at a
reasonable cost.

1.3 Keys to Success


In order to ensure a healthy profit and low customer turnover, Buy the Time will have to:

Provide a significantly easier, more convenient, and customized shopping experience


than c an be found in high-end stores.
Ensure 100% customer satisfac tion.
Establish close ties with the clients to ensure repeat business, encourage customer
feedback to enhance further customized service, and promote word-of-mouth marketing.

2.0 Company Summary


Buy the Time is a shopping service which allows the client to purchase custom items without
stress. With our expert staff, we intend to grow into a larger market where we can still be
personable, yet offer greater choices.
Our ideal larger market will expand from the Seattle area to include New York, San Francisc o, Los
Angeles, Chicago, and Miami.

2.1 Company Ownership


Buy the Time will be a Seattle, WA-based company. It will be formed as a simple sole
proprietorship. The company will operate as a home business until such time as expansion is
required.
Jade Kousky is the owner and sole proprietor. With many years of retail experience, she brings
a unique knowledge of disc overing solutions to personal needs at low cost. Many have known her
to have a personal flare for anticipating trends and an ability to match purchases to a client's
desires.
With growth, Ms. Kousky plans to convert the sole proprietorship into a corporation, still
maintaining major control. Each loc ation manager will operate as a key figure in the growth and
evolution of Buy the Time.

2.2 Start-up Summary


Originally, operation will be based out of the owner's residence. One-to-one service can be
provided by meeting the client at a time and plac e most convenient for them. This will cut
unnec essary costs while still providing superb service.

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Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required

$1,250
$3,650
$4,900

Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets

$2,400
$1,250
$0
$1,250
$3,650

Liabilities and Capital


Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)

$0
$0
$0

Other Current Liabilities (interest-free)


Total Liabilities

$0
$0

Capital
Planned Investment
Owner
Private Investor
Other
Additional Investment Requirement
Total Planned Investment

$3,250
$1,650
$0
$0
$4,900

Loss at Start-up (Start-up Expenses)


Total Capital

($1,250)
$3,650

Total Capital and Liabilities

$3,650

Total Funding

$4,900

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Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Consultants
Insurance
Rent
Research and development
Expensed equipment
Other
Total Start-up Expenses

$300
$150
$200
$0
$0
$0
$100
$500
$0
$1,250

Start-up Assets
Cash Required
Other Current Assets

$1,250
$400

Long-term Assets
Total Assets

$2,000
$3,650

Total Requirements

$4,900

3.0 Services
Buy the Time will offer an expert consultant for all oc casions. This consultant will spec ialize in
personal gifts and ideas for people who desire the latest fashions and/or gift solutions
for individuals who are hard to shop for. This service will provide insight, research, purchases,
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and delivery in c ustom pac kaging. The foc us of the company is the needs of the client. It is
the job of the consultant to translate those needs into low-cost solutions.

4.0 Market Analysis Summary


Buy the Time will target the middle-aged, busy executive. These individuals often have extremely
busy schedules, including a great deal of travel time. In addition, they possess a large proportion
of disposable income that allows them to afford custom services. This service will allow them
more concentration on work, while allowing them to obtain great products for personal and
business life.

4.1 Market Segmentation


The target market for Buy the Time is broken into three segments:
1.
2.
3.

Busy executives desiring to keep pac e with the trends, yet not having the time to
fac ilitate their needs.
Younger business persons who choose to have the luxury and convenience of a
personalized shopping service.
Those needing consultation in gifts and/or not wanting the pressures that are
assoc iated with finding custom gifts for special oc casions.

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Table: Market Analysis
Market Analysis
Year 1

Year 2

Year 3

Year 4

Year 5

Potential Customers
Executives

Growth
52%

500

900

1,300

4,000

6,400

CAGR
89.15%

Business Persons
Other
Total

32%
15%
96.16%

260
60
820

500
240
1,640

800
400
2,500

2,010
1,000
7,010

3,900
1,840
12,140

96.80%
135.32%
96.16%

4.2 Market Needs


Buy the Time's primary market, the executive or high-end professional individual, has certain
needs that are outlined below.

They often find that their image is very important, both professionally and personally.
They need advice or information on what the latest trends and fashions are.
They keep busy schedules that often involve a lot of travel. This leaves little time for
shopping that is time consuming, such as gift buying.
They have a desire to be pampered and willingly spend money as a symbol of status.

4.3 Target Market Segment Strategy


The best way to develop the company is to make our service nec essary and ac cessible to the
public. By fac ilitating their needs easily, we offer a great service at little inconvenience to them
in a time where convenience matters the most.
In its broadest definition, the American shopping market consists of every American who needs
to buy goods and services for themselves and their families. Although it is the aim of Buy the
Time to eventually reac h out to a wide range of shoppers, including middle income families,
busy professionals, and people looking for "hard to find" items, the company will foc us first on
the busy executive-type shopper.

4.4 Service Business Analysis


Buy the Time offers the service of shopping advice/expertise in trends, fashions, and emerging
products, along with the purchasing and delivery of such items to the customer's residence. It is
assumed that most of the items purchased will be in single or small quantities. The primary
attrac tion of such a service is that it significantly cuts down on shopping time for busy
customers who wish to utilize their time for other purposes. With the advent of computers and
the Internet, it is believed that this service can be offered at a low cost, and can be enhanced
through the use of an established-customer database to trac k individual preferences.

4.5 Competition and Buying Patterns


This is a luxury service. An affordable cost will be needed to maintain c lients and keep their
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needs constant. This requires being aware of economic changes, as well as alterations in trends.
At the moment, there are few services like this in the Seattle area. Therefore, there is a
tremendous opportunity to build and retain significant market share. Customers choose and
retain services like this often through word-of-mouth, when the company is able to ac hieve a
high level of customer satisfac tion. Although it is the aim of Buy the Time to significantly lower
costs of this luxury service, at this time, cost does not play a significant fac tor in how
customers choose a shopping service. The bottom line is establishing a strong intimate
relationship with c ustomers to capture the long-term profits through repeat business and
create the enthusiasm among customers that will spur on word-of-mouth marketing.

5.0 Strategy and Implementation Summary


Buy the Time will concentrate on expanding in metropolitan areas that have significant growth of
young business persons and executives. Starting in Seattle, it will grow down the west coast
to San Francisc o and Los Angeles. From there we will target the east coast with loc ations in
New York City, Miami, and Chicago.
The target customer is a busy business person unable to find time for purchasing custom
goods. We will provide this tailored service to work around their schedules, while maintaining a
low cost.

5.1 Competitive Edge


Our competitive edge lies in our expert service at a reasonable price. We will transform this
service from a luxury into a demand service. We will provide a database for remembering
oc casions and dates, this will allow the client to remain stress-free. Buy the Time was created
by an expert shopper who knows trends, prices, and details, such as fabrics and colors.
We are aware that there will be others trying to offer such a service, but only we will be able
to provide such services at a low cost, with friendly consultants, and an ability to find exac tly
what our clients desire.

5.2 Sales Strategy


Our sales will be generated from repeat clients. This service will be established as an easy and
friendly way to shop without the hassle. We will offer low introductory costs for our services. To
ensure that all purchases will be worthwhile for the consultant, all of our orders will have a
minimal amount required to cover any expenses incurred. This will be minimal, allowing for our
services to be affordable.
Ms. Kousky has enough contac ts in the Seattle area who have expressed interest in the
service that no advertising will be needed for the first year of operation. Subsequent
advertising (which may not start until year four or five) will depend on word-of-mouth, a
website, telephone directory ads, loc al newspaper ads and articles, and broc hures.

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5.2.1 Sales Forecast
The following chart and table document forecasted sales.
In both April and May we expec t a two percent growth eac h month. From June to September,
eac h month should reflect a growth of five percent, since many ac tivities oc cur during the
summer months. October will show approximately four percent, since this is usually a time of
transitions. November and December will show an increase to seven percent, with many people
buying for the holidays. January through April will be an increase of one percent eac h month,
since this is a slow retail period.
This will result in a growth of 68% after the first year. From that, sales in 2002 will see a
growth of 57% as we develop our team of consultants. By 2003, sales will show a 78% growth.
By the end of the third year, we will be able to move into markets outside the Seattle area.

Table: Sales Forecast


Sales Forecast
Year 1

Year 2

Year 3

Sales
Jade Kousky - Owner

$32,365

$41,000

$50,000

Retail Consultant 1
Total Sales

$0
$32,365

$25,000
$66,000

$33,000
$83,000

Direct Cost of Sales


Jade Kousky - Owner
Retail Consultant 1
Subtotal Direct Cost of Sales

Year 1
$11,250
$0
$11,250

Year 2
$18,750
$9,000
$27,750

Year 3
$22,500
$15,000
$37,500

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6.0 Management Summary
As Buy the Time grows, we will add consultants so that we may continue to offer personalized
service in a timely fashion. Originally, it will start with the owner as the sole employee. By the
end of the first year, another consultant will be added. From that point we will add a
consultant when we choose to grow into different markets. We will shape our team depending on
sales and growth.
Marketing and public relations will be handled mainly by the owner. If there is a greater need,
a marketing consultant will be used.

Table: Personnel
Personnel Plan
Owner
Other
Total People

Year 1
$15,000
$0
0

Year 2
$30,000
$0
0

Year 3
$37,000
$0
0

Total Payroll

$15,000

$30,000

$37,000

7.0 Financial Plan


Growth will oc cur ac cording to the number of clients and cash flow.
With approximately half of our services provided on credit, collection will be essential. With this
still being a service that is not essential to everyday living, we will show that payments are
nec essary immediately. With a concrete system for cash flow, we will be able to keep debt to
a minimum, while still providing a high level of sales.

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7.1 Important Assumptions
The following assumptions are made responding to growth, and are based on economic trends
from the preceding two years.

A strong economy is expec ted to continue in the future.


Many people have annual dates on which purchases are made.
It is assumed that people are willing to pay for a service if it is an agreeable and
convenient experience.

The table below outlines some business assumptions that are the basis for Buy The Time's
growth, including tax rate and payment days.

Table: General Assumptions


General Assumptions
Plan Month
Current Interest Rate

Year 1
1
10.00%

Year 2
2
10.00%

Year 3
3
10.00%

Long-term Interest Rate


Tax Rate
Other

10.00%
25.42%
0

10.00%
25.00%
0

10.00%
25.42%
0

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7.2 Break-even Analysis
Our break-even analysis is shown in further detail in the following chart and table.
This is a conservative figure since contac ts have been made, and have already generated
many orders for our services. Buy the Time's goal is to generate twice as much as the breakeven point for a monthly standard.

Table: Break-even Analysis


Break-even Analysis
Monthly Revenue Break-even

$1,916

Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost

35%
$1,250

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7.3 Projected Profit and Loss
Buy the Time's projected profit and loss is indicated in the following table. Gross margin should
remain between 50-70% the first year, with highest profits due near the end of the year. This
should prove to be ac curate, since that is a time when many clients increase their spending.

Table: Profit and Loss


Pro Forma Profit and Loss
Sales
Direct Cost of Sales
Other
Total Cost of Sales

Year 1
$32,365
$11,250
$0
$11,250

Year 2
$66,000
$27,750
$0
$27,750

Year 3
$83,000
$37,500
$0
$37,500

Gross Margin
Gross Margin %

$21,115
65.24%

$38,250
57.95%

$45,500
54.82%

Expenses
Payroll

$15,000

$30,000

$37,000

Sales and Marketing and Other Expenses


Depreciation
Leased Equipment

$0
$0
$0

$0
$0
$0

$0
$0
$0

Utilities
Insurance
Rent
Payroll Taxes
Other

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$0
$0
$0
$0
$0

$15,000

$30,000

$37,000

Profit Before Interest and Taxes

$6,115

$8,250

$8,500

EBITDA
Interest Expense
Taxes Incurred

$6,115
$0
$1,528

$8,250
$0
$2,063

$8,500
$0
$2,160

Net Profit
Net Profit/Sales

$4,587
14.17%

$6,188
9.38%

$6,340
7.64%

Total Operating Expenses

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7.4 Projected Cash Flow
The following chart and table outline the cash flow for fisc al years 2002, 2003, and 2004. For
a monthly analysis, please see the attac hed appendix.

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Table: Cash Flow
Pro Forma Cash Flow
Year 1

Year 2

Year 3

Cash from Operations


Cash Sales
Cash from Receivables
Subtotal Cash from Operations

$17,801
$11,759
$29,560

$36,300
$26,785
$63,085

$45,650
$35,877
$81,527

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

$0
$0
$0
$0
$0
$0
$0
$29,560

$0
$0
$0
$0
$0
$0
$0
$63,085

$0
$0
$0
$0
$0
$0
$0
$81,527

Year 1

Year 2

Year 3

$15,000
$11,630
$26,630

$30,000
$28,509
$58,509

$37,000
$38,851
$75,851

Additional Cash Spent


Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
Other Liabilities Principal Repayment
Long-term Liabilities Principal Repayment

$0
$0
$0
$0

$0
$0
$0
$0

$0
$0
$0
$0

Purchase Other Current Assets


Purchase Long-term Assets
Dividends

$0
$0
$0

$0
$0
$0

$0
$0
$0

$26,630

$58,509

$75,851

$2,929
$4,179

$4,575
$8,755

$5,676
$14,430

Cash Received

Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations

Subtotal Cash Spent


Net Cash Flow
Cash Balance

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7.5 Projected Balance Sheet
The Balance Sheet table for fisc al years 2002, 2003, and 2004 follows. For a monthly analysis,
please see the attac hed appendix.

Table: Balance Sheet


Pro Forma Balance Sheet
Year 1

Year 2

Year 3

Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets

$4,179
$2,805
$400
$7,385

$8,755
$5,721
$400
$14,875

$14,430
$7,194
$400
$22,024

Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets

$2,000
$0
$2,000
$9,385

$2,000
$0
$2,000
$16,875

$2,000
$0
$2,000
$24,024

Liabilities and Capital

Year 1

Year 2

Year 3

Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities

$1,147
$0
$0

$2,450
$0
$0

$3,260
$0
$0

Subtotal Current Liabilities

$1,147

$2,450

$3,260

Long-term Liabilities
Total Liabilities

$0
$1,147

$0
$2,450

$0
$3,260

Assets

Paid-in Capital

$4,900

$4,900

$4,900

($1,250)
$4,587
$8,237

$3,337
$6,188
$14,425

$9,525
$6,340
$20,764

Total Liabilities and Capital

$9,385

$16,875

$24,024

Net Worth

$8,237

$14,425

$20,764

Retained Earnings
Earnings
Total Capital

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7.6 Business Ratios
The following table provides significant ratios for the personal services industry. The final
column, Industry Profile, shows ratios for this industry as it is determined by the Standard
Industrial Classification (SIC) Index 7299, "misc ellaneous personal services."

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Table: Ratios
Ratio Analysis
Year 1
n.a.

Year 2
103.92%

Year 3
25.76%

Industry Profile
-8.50%

29.89%
4.26%
78.69%
21.31%
100.00%

33.90%
2.37%
88.15%
11.85%
100.00%

29.95%
1.66%
91.68%
8.32%
100.00%

6.70%
26.40%
43.50%
56.50%
100.00%

12.23%
0.00%
12.23%
87.77%

14.52%
0.00%
14.52%
85.48%

13.57%
0.00%
13.57%
86.43%

19.50%
21.40%
40.90%
59.10%

100.00%
65.24%
51.07%
0.00%
18.89%

100.00%
57.95%
54.26%
0.00%
12.50%

100.00%
54.82%
47.14%
0.00%
10.24%

100.00%
50.80%
34.40%
0.20%
1.50%

Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth

6.44
6.44
12.23%
74.24%

6.07
6.07
14.52%
57.19%

6.76
6.76
13.57%
40.94%

2.09
1.03
40.90%
1.10%

Pre-tax Return on Assets

65.16%

48.89%

35.38%

1.90%

Additional Ratios

Year 1

Year 2

Year 3

Net Profit Margin


Return on Equity

14.17%
55.69%

9.38%
42.90%

7.64%
30.53%

n.a
n.a

5.19
57

5.19
52

5.19
63

n.a
n.a

11.14
27
3.45

12.17
22
3.91

12.17
26
3.45

n.a
n.a
n.a

Debt Ratios
Debt to Net Worth

0.14

0.17

0.16

n.a

Current Liab. to Liab.

1.00

1.00

1.00

n.a

$6,237
0.00

$12,425
0.00

$18,764
0.00

n.a
n.a

Additional Ratios
Assets to Sales
Current Debt/Total Assets

0.29
12%

0.26
15%

0.29
14%

n.a
n.a

Acid Test
Sales/Net Worth
Dividend Payout

3.99
3.93
0.00

3.74
4.58
0.00

4.55
4.00
0.00

n.a
n.a
n.a

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

Activity Ratios
Accounts Receivable Turnover
Collection Days
Accounts Payable Turnover
Payment Days
Total Asset Turnover

Liquidity Ratios
Net Working Capital
Interest Coverage

Page 17

Appendix
Table: Sales Forecast
Sales Forecast
Sales
Jade Kousky - Owner
Retail Consultant 1
Total Sales
Direct Cost of Sales
Jade Kousky - Owner
Retail Consultant 1
Subtotal Direct Cost of Sales

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

0%

$2,168

$2,181

$2,290

$2,404

$2,524

$2,650

$2,703

$2,891

$3,092

$3,123

$3,154

$3,185

0%

$0
$2,168

$0
$2,181

$0
$2,290

$0
$2,404

$0
$2,524

$0
$2,650

$0
$2,703

$0
$2,891

$0
$3,092

$0
$3,123

$0
$3,154

$0
$3,185

Month 1
$938
$0
$938

Month 2
$938
$0
$938

Month 3
$938
$0
$938

Month 4
$938
$0
$938

Month 5
$938
$0
$938

Month 6
$938
$0
$938

Month 7
$938
$0
$938

Month 8
$938
$0
$938

Month 9
$938
$0
$938

Month 10
$938
$0
$938

Month 11
$938
$0
$938

Month 12
$938
$0
$938

Page 1

Appendix
Table: Personnel
Personnel Plan
Month 1
$1,250
$0

Month 2
$1,250
$0

Month 3
$1,250
$0

Month 4
$1,250
$0

Month 5
$1,250
$0

Month 6
$1,250
$0

Month 7
$1,250
$0

Month 8
$1,250
$0

Month 9
$1,250
$0

Month 10
$1,250
$0

Month 11
$1,250
$0

Month 12
$1,250
$0

Total People

Total Payroll

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

Owner
Other

0%
0%

Page 2

Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate

Month 1
1
10.00%

Month 2
2
10.00%

Month 3
3
10.00%

Month 4
4
10.00%

Month 5
5
10.00%

Month 6
6
10.00%

Month 7
7
10.00%

Month 8
8
10.00%

Month 9
9
10.00%

Month 10
10
10.00%

Month 11
11
10.00%

Month 12
12
10.00%

Long-term 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%

Tax Rate
Other

30.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

25.00%
0

Page 3

Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$2,168
$938

Sales
Direct Cost of Sales
Other
Total Cost of Sales
Gross Margin
Gross Margin %

Month 2
$2,181
$938

Month 3
$2,290
$938

Month 4
$2,404
$938

Month 5
$2,524
$938

Month 6
$2,650
$938

Month 7
$2,703
$938

Month 8
$2,891
$938

Month 9
$3,092
$938

Month 10
$3,123
$938

Month 11
$3,154
$938

Month 12
$3,185
$938

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$938

$938

$938

$938

$938

$938

$938

$938

$938

$938

$938

$938

$1,231
56.76%

$1,244
57.02%

$1,353
59.06%

$1,467
61.00%

$1,587
62.86%

$1,713
64.62%

$1,766
65.32%

$1,954
67.57%

$2,155
69.68%

$2,186
69.98%

$2,217
70.28%

$2,248
70.57%

Expenses
Payroll

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

Sales and Marketing and Other


Expenses
Depreciation
Leased Equipment

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Utilities
Insurance
Rent

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0
$0
$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

$1,250

Profit Before Interest and Taxes

($20)

($7)

$103

$217

$337

$463

$516

$704

$905

$936

$967

$998

EBITDA
Interest Expense

($20)
$0

($7)
$0

$103
$0

$217
$0

$337
$0

$463
$0

$516
$0

$704
$0

$905
$0

$936
$0

$967
$0

$998
$0

Taxes Incurred

($6)

($2)

$26

$54

$84

$116

$129

$176

$226

$234

$242

$249

($14)
-0.63%

($5)
-0.22%

$77
3.36%

$162
6.75%

$252
10.00%

$347
13.09%

$387
14.30%

$528
18.25%

$678
21.94%

$702
22.47%

$725
22.98%

$748
23.49%

Payroll Taxes
Other
Total Operating Expenses

Net Profit
Net Profit/Sales

10%

Page 4

Appendix
Table: Cash Flow
Pro Forma Cash Flow
Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash from Operations


Cash Sales
Cash from Receivables

$1,192
$0

$1,200
$33

$1,260
$976

$1,322
$983

$1,388
$1,032

$1,458
$1,084

$1,487
$1,138

$1,590
$1,193

$1,701
$1,219

$1,718
$1,304

$1,735
$1,392

$1,752
$1,406

Subtotal Cash from Operations

$1,192

$1,232

$2,235

$2,305

$2,420

$2,541

$2,624

$2,783

$2,920

$3,022

$3,127

$3,158

Cash Received

Additional Cash Received


Sales Tax, VAT, HST/GST Received

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Current Borrowing


New Other Liabilities (interest-free)

0.00%

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

New Long-term Liabilities


Sales of Other Current Assets

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Sales of Long-term Assets

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

New Investment Received


Subtotal Cash Received

$0
$1,192

$0
$1,232

$0
$2,235

$0
$2,305

$0
$2,420

$0
$2,541

$0
$2,624

$0
$2,783

$0
$2,920

$0
$3,022

$0
$3,127

$0
$3,158

Expenditures

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Cash Spending
Bill Payments

$1,250
$31

$1,250
$932

$1,250
$937

$1,250
$964

$1,250
$993

$1,250
$1,023

$1,250
$1,054

$1,250
$1,068

$1,250
$1,115

$1,250
$1,164

$1,250
$1,172

$1,250
$1,179

Subtotal Spent on Operations

$1,281

$2,182

$2,187

$2,214

$2,243

$2,273

$2,304

$2,318

$2,365

$2,414

$2,422

$2,429

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


Other Liabilities Principal Repayment

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Long-term Liabilities 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-term Assets


Dividends

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$1,281

$2,182

$2,187

$2,214

$2,243

$2,273

$2,304

$2,318

$2,365

$2,414

$2,422

$2,429

Net Cash Flow

($89)

($950)

$49

$91

$178

$268

$321

$465

$555

$608

$705

$728

Cash Balance

$1,161

$212

$260

$351

$529

$798

$1,118

$1,584

$2,138

$2,746

$3,451

$4,179

Expenditures from Operations

Subtotal Cash Spent

Page 5

Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Starting Balances

Current Assets
Cash
Accounts Receivable

$1,250
$0

$1,161
$976

$212
$1,925

$260
$1,979

$351
$2,078

$529
$2,182

$798
$2,290

$1,118
$2,369

$1,584
$2,477

$2,138
$2,649

$2,746
$2,750

$3,451
$2,778

$4,179
$2,805

Other Current Assets


Total Current Assets

$400
$1,650

$400
$2,537

$400
$2,536

$400
$2,639

$400
$2,829

$400
$3,111

$400
$3,488

$400
$3,887

$400
$4,460

$400
$5,187

$400
$5,897

$400
$6,629

$400
$7,385

Long-term Assets
Long-term Assets

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$2,000

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$2,000
$3,650

$2,000
$4,537

$2,000
$4,536

$2,000
$4,639

$2,000
$4,829

$2,000
$5,111

$2,000
$5,488

$2,000
$5,887

$2,000
$6,460

$2,000
$7,187

$2,000
$7,897

$2,000
$8,629

$2,000
$9,385

Month 1

Month 2

Month 3

Month 4

Month 5

Month 6

Month 7

Month 8

Month 9

Month 10

Month 11

Month 12

Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable

$0

$901

$905

$931

$959

$988

$1,018

$1,031

$1,076

$1,125

$1,132

$1,140

$1,147

Current Borrowing
Other Current Liabilities

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

$0
$0

Subtotal Current Liabilities

$0

$901

$905

$931

$959

$988

$1,018

$1,031

$1,076

$1,125

$1,132

$1,140

$1,147

Long-term Liabilities

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

$0

Total Liabilities

$0

$901

$905

$931

$959

$988

$1,018

$1,031

$1,076

$1,125

$1,132

$1,140

$1,147

Paid-in Capital

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

$4,900

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

($1,250)

Earnings
Total Capital

$0
$3,650

($14)
$3,636

($19)
$3,631

$58
$3,708

$221
$3,871

$473
$4,123

$820
$4,470

$1,207
$4,857

$1,734
$5,384

$2,413
$6,063

$3,114
$6,764

$3,839
$7,489

$4,587
$8,237

Total Liabilities and Capital

$3,650

$4,537

$4,536

$4,639

$4,829

$5,111

$5,488

$5,887

$6,460

$7,187

$7,897

$8,629

$9,385

Net Worth

$3,650

$3,636

$3,631

$3,708

$3,871

$4,123

$4,470

$4,857

$5,384

$6,063

$6,764

$7,489

$8,237

Retained Earnings

Page 6

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