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This sample business plan has been made available to users of Business Plan Pro , business planning software published by Palo Alto Software. Names, locations and numbers may have been changed, and substantial portions of text may have been omitted from the original plan to preserve confidentiality and proprietary information. You are welcome to use this plan as a starting point to create your own, but you do not have permission to reproduce, publish, distribute or even copy this plan as it exists here. Requests for reprints, academic use, and other dissemination of this sample plan should be emailed to the marketing department of Palo Alto Software at marketing@paloalto.com. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526. Copyright Palo Alto Software, Inc., 1995-2002
Confidentiality Agreement
The undersigned reader acknowledges that the information provided by _________________________ in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of _________________________. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to _________________________. Upon request, this document is to be immediately returned to _________________________. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Company History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Company Locations and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.1 Product Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.2 Competitive Comparison . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3 Sales Literature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.4 Sourcing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.5 Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.6 Future Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.1 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.2 Market Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2.3 Market Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Industry Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Industry Participants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.2 Distribution Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.3 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.4 Main Competitors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Strategy Pyramids . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Value Proposition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.1 Positioning Statement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.2 Pricing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.3 Promotion Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.4 Distribution Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4.5 Marketing Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5.2 Sales Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6 Strategic Alliances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.1 Organizational Structure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.2 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.3 Management Team Gaps . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.4 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.2 Key Financial Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.3 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 2 3 3 3 3 5 5 5 6 7 7 7 7 8 8 9 10 10 10 11 11 12 12 13 14 14 14 14 15 15 16 16 16 16 17 18 20 20 21 22 22 22 23 23 24 24 25 26
2.0
3.0
4.0
5.0
6.0
7.0
Table of Contents
7.4 7.5 7.6 7.7 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 29 31 31
Highlights
$4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 1998 1999 2000
1.1 Objectives
1. 2. 3. 4. To To To To increase sales to $1.9 million in 1999 and $3.8 million in 2000. increase gross margin to 70% and net profit margin to more than 9.75%. hold personnel to 1 full-time person for every $250K in revenues. maintain at least 30% market share of Product X, as measured by PC Data.
1.2 Mission
Sample Software develops, publishes, and markets business tools and business know-how together in a software product including software and documentation. It makes business techniques accessible to millions of business users who would otherwise not have the knowledge to use them. It makes a profit and generates cash. It provides a rewarding work environment and fair compensation to its employees, a fair return to its owners, and a fair royalty to its authors.
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Past Performance
$700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $0 ($100,000) 1995 1996 1997
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3.0 Products
Our products are prescriptive software, more than just tools, because they instruct and empower the user with know-how as well as tools. Our best-selling flagship, Product X, is the key. We are also shipping Product Y for Windows. People don't buy these products for the software itself. They buy them for the benefit they provide, the step-by-step solution to a problem. They buy them for the reassurance that they've covered all the bases, that the job is done right, that they won't be embarrassed when they show the plan to banker, boss, or partner. They don't want the software, they want the task completed. They want it done and done well. The company name is well known and its products are respected. We have sold more than 70,000 units through distribution, and we have names and address of more than 40,000 direct buyers and registered users. Our products are sold through several major mail order houses, several computer retail chains, and listed in most available product databases. We are now distributed through the major distributors who reach the most important retail channels. Throughout, Sample Software has maintained a high professional standard and a reputation as the quality provider.
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3.4 Sourcing
This detailed discussion of vendors of packaging, programming, disk duplication and assembly has been omitted.
3.5 Technology
Both Product X and Product Y are enhancements of previous products, copyrighted since the 1980s by Ralph Smith and Sample Software. We have a software development engine, that we own, that brings together guided text, spreadsheet tables, and charts in a user-friendly environment with wizards, help files, and online coaching. This is a powerful competitive edge. This discussion omitted. It deals with product and company specifics not useful for sample purposes. This discussion omitted. It deals with product and company specifics not useful for sample purposes.
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Table: Market Analysis Market Analysis Potential Customers Home office Small office Professionals Academic Other Total Growth 2% 5% 8% 0% 0% 3.00% 1998 22,000 15,000 10,000 12,000 10,000 69,000 1999 22,440 15,750 10,800 12,000 10,000 70,990 2000 22,889 16,538 11,664 12,000 10,000 73,091 2001 23,347 17,365 12,597 12,000 10,000 75,309 2002 23,814 18,233 13,605 12,000 10,000 77,652 CAGR 2.00% 5.00% 8.00% 0.00% 0.00% 3.00%
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Sales by Year
$4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 ($500,000) 1998 1999 2000
Product X Product Y Product Z Old version returns OEM & Customization Other
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Sales Monthly
$140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 ($20,000) ($40,000) ($60,000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Product X Product Y Product Z Old version returns OEM & Customization Other
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Milestones
ProdX V3 ProdY V2 ProdZ Beta ProdX Packaging ProdX V3 Release ProdY V2 Release Seminar Promotion Upgrade Promotion Year-end Promotion Channel Rebate Program Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Table: Milestones Milestones Milestone ProdX V3 ProdY V2 ProdZ Beta ProdX Packaging ProdX V3 Release ProdY V2 Release Seminar Promotion Upgrade Promotion Year-end Promotion Channel Rebate Program Totals Start Date 2/1/98 6/15/98 9/15/98 2/1/98 4/30/98 8/15/98 3/1/98 7/1/98 11/1/98 10/14/98 End Date 6/1/98 7/15/98 11/30/98 3/31/98 6/16/98 9/30/98 5/15/98 8/15/98 12/15/98 12/15/98 Budget $5,000 $15,000 $10,000 $15,000 $10,000 $5,000 $10,000 $50,000 $25,000 $5,000 $150,000 Manager ABC DEF DEF HIJ HIJ HIJ KLM KLM OPQ ABC Department ProdDev ProdDev ProdDev Marketing Marketing Marketing Sales Sales Sales Admin
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Of these, only the last two are flexible. We want to establish a mechanism for employees to acquire fair stock options that can become valuable as the company grows.
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Benchmarks
7.0 6.0 5.0 4.0 3.0 2.0 1.0 0.0
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Break-even Analysis
$30,000 $20,000 $10,000 $0 ($10,000) ($20,000) ($30,000) 0 200 400 600 800 1000
Table: Break-even Analysis Break-even Analysis: Monthly Units Break-even Monthly Revenue Break-even Assumptions: Average Per-Unit Revenue Average Per-Unit Variable Cost Estimated Monthly Fixed Cost 520 $29,019 $55.78 $7.73 $25,000
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$50,000 $100,000 $15,000 $100,000 ----------------------$65,000 $200,000 3.29% 5.19% ----------------------$1,061,395 $1,960,431 $320,088 $817,509 $245 $245 $79,961 $204,316 $239,882 $612,948 12.14% 15.91% TRUE TRUE
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Cash
$200,000
$150,000
$100,000
Cash Balance
$0
($50,000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
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$413,168 $682,964 $1,096,132 $0 $0 $20,000 $24,966 $0 $0 $0 $0 $1,141,099 1998 $71,142 $869,764 $940,907 $0 $0 $40,000 $34,453 $0 $0 $0 $0 $1,015,360 $125,739 $126,364
$790,200 $1,129,777 $1,919,977 $0 $0 $0 $0 $0 $0 $0 $0 $1,919,977 1999 $149,843 $1,556,983 $1,706,826 $0 $0 $0 $0 $0 $0 $50,000 $0 $1,756,826 $163,152 $289,516
$1,540,800 $2,200,665 $3,741,465 $0 $0 $0 $0 $0 $0 $0 $0 $3,741,465 2000 $295,334 $2,892,971 $3,188,305 $0 $0 $0 $0 $0 $0 $100,000 $0 $3,288,305 $453,160 $742,676
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Appendix
Appendix Table: Sales Forecast Sales Forecast Unit Sales Product X Product Y Product Z Old version returns OEM & Customization Other Total Unit Sales Unit Prices Product X Product Y Product Z Old version returns OEM & Customization Other Sales Product X Product Y Product Z Old version returns OEM & Customization Other Total Sales Direct Unit Costs Product X Product Y Product Z Old version returns OEM & Customization Other Direct Cost of Sales Product X Product Y Product Z Old version returns OEM & Customization Other Subtotal Direct Cost of Sales 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Jan 500 325 110 0 3 1 939 Jan $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $17,500 $14,625 $35,750 $0 $3,000 $1,500 $72,375 Jan $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Jan $3,910 $2,727 $0 $0 $0 $0 $6,637 Feb 1,600 365 110 0 0 1 2,076 Feb $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $56,000 $16,425 $35,750 $0 $0 $1,500 $109,675 Feb $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Feb $12,512 $3,062 $0 $0 $0 $0 $15,574 Mar 1,100 325 110 0 0 1 1,536 Mar $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $38,500 $14,625 $35,750 $0 $0 $1,500 $90,375 Mar $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Mar $8,602 $2,727 $0 $0 $0 $0 $11,329 Apr 900 295 110 0 0 1 1,306 Apr $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $31,500 $13,275 $35,750 $0 $0 $1,500 $82,025 Apr $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Apr $7,038 $2,475 $0 $0 $0 $0 $9,513 May 2,500 315 110 0 0 1 2,926 May $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $87,500 $14,175 $35,750 $0 $0 $1,500 $138,925 May $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 May $19,550 $2,643 $0 $0 $0 $0 $22,193 Jun 1,800 285 110 0 3 1 2,199 Jun $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $63,000 $12,825 $35,750 $0 $3,000 $1,500 $116,075 Jun $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Jun $14,076 $2,391 $0 $0 $0 $0 $16,467 Jul 1,500 285 110 0 0 1 1,896 Jul $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $52,500 $12,825 $35,750 $0 $0 $1,500 $102,575 Jul $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Jul $11,730 $2,391 $0 $0 $0 $0 $14,121 Aug 900 235 110 (450) 0 1 796 Aug $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $31,500 $10,575 $35,750 ($42,750) $0 $1,500 $36,575 Aug $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Aug $7,038 $1,972 $0 $0 $0 $0 $9,010 Sep 1,100 145 110 (300) 0 1 1,056 Sep $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $38,500 $6,525 $35,750 ($28,500) $0 $1,500 $53,775 Sep $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Sep $8,602 $1,217 $0 $0 $0 $0 $9,819 Oct 1,400 145 110 (150) 3 1 1,509 Oct $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $49,000 $6,525 $35,750 ($14,250) $3,000 $1,500 $81,525 Oct $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Oct $10,948 $1,217 $0 $0 $0 $0 $12,165 Nov 1,300 145 110 0 0 1 1,556 Nov $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $45,500 $6,525 $35,750 $0 $0 $1,500 $89,275 Nov $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Nov $10,166 $1,217 $0 $0 $0 $0 $11,383 Dec 500 111 110 0 0 1 722 Dec $35.00 $45.00 $325.00 $95.00 $1,000.00 $1,500.00 $17,500 $4,995 $35,750 $0 $0 $1,500 $59,745 Dec $7.82 $8.39 $0.00 $0.00 $0.00 $0.00 Dec $3,910 $931 $0 $0 $0 $0 $4,841
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Appendix
Appendix Table: Personnel Personnel Plan Production Personnel Technical support Mgr. Technical Support Other Subtotal Sales and Marketing Personnel Marketing Manager Other Subtotal General and Administrative Personnel President Office Mgmt Other Subtotal Other Personnel Development Other Subtotal Total People Total Payroll Jan $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Feb $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Mar $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Apr $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 May $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Jun $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Jul $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Aug $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Sep $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Oct $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Nov $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800 Dec $2,775 $0 $0 $2,775 $4,000 $0 $4,000 $5,000 $2,500 $0 $7,500 $2,525 $0 $2,525 5 $16,800
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Appendix
Appendix Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Sales on Credit % Other Calculated Totals Payroll Expense Sales on Credit New Accounts Payable Inventory Purchase Jan 1 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $43,425 $54,293 $0 Feb 2 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $65,805 $76,429 $9,163 Mar 3 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $54,225 $88,387 $7,083 Apr 4 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $49,215 $79,364 $7,697 May 5 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $83,355 $120,129 $34,873 Jun 6 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $69,645 $79,487 $10,741 Jul 7 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $61,545 $75,825 $11,775 Aug 8 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $21,945 $41,267 $3,898 Sep 9 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $32,265 $53,397 $10,627 Oct 10 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $48,915 $73,857 $14,511 Nov 11 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $53,565 $71,357 $10,601 Dec 12 10.50% 11.00% 25.00% 60.00% 0.00% $16,800 $35,847 $47,745 $0
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Appendix
Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Costs of Goods Production Payroll Freight Royalties Cost of Goods Sold Gross Margin Gross Margin % Operating Expenses: Sales and Marketing Expenses: Sales and Marketing Payroll Advertising Sales commissions Graphics and collaterals Printing Public relations Research Tollfree Telephone Trade Shows and Events Meals Travel Miscellaneous Total Sales and Marketing Expenses Sales and Marketing % General and Administrative Expenses: General and Administrative Payroll Sales and Marketing and Other Expenses Depreciation Depreciation Depreciation Depreciation Depreciation Depreciation Depreciation Depreciation Professional fees Telephone Rent Other Payroll Taxes Other General and Administrative Expenses Total General and Administrative Expenses General and Administrative % Other Expenses: Other Payroll Product Development Total Other Expenses Other % Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Jan $72,375 $6,637 $2,775 $1,201 $7,238 -----------$17,851 $54,525 75.34% $4,000 $10,000 $4,343 $1,000 $2,200 $1,200 $0 $500 $2,000 $650 $2,000 $1,000 -----------$28,893 39.92% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 17.77% $2,525 $100 -----------$2,625 3.63% -----------$44,381 $10,144 $195 $2,487 Feb $109,675 $15,574 $2,775 $2,056 $10,968 -----------$31,373 $78,302 71.39% $4,000 $20,000 $6,581 $1,000 $500 $1,200 $0 $500 $0 $250 $400 $1,000 -----------$35,431 32.30% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 11.73% $2,525 $100 -----------$2,625 2.39% -----------$50,919 $27,383 $195 $6,797 Mar $90,375 $11,329 $2,775 $1,651 $9,038 -----------$24,793 $65,583 72.57% $4,000 $20,000 $5,423 $30,000 $500 $1,200 $0 $500 $0 $250 $400 $1,000 -----------$63,273 70.01% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 14.23% $2,525 $100 -----------$2,625 2.90% -----------$78,761 ($13,178) $195 ($3,343) Apr $82,025 $9,513 $2,775 $1,479 $8,203 -----------$21,969 $60,056 73.22% $4,000 $20,000 $4,922 $2,000 $18,000 $1,200 $0 $500 $0 $250 $400 $1,000 -----------$52,272 63.73% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 15.68% $2,525 $100 -----------$2,625 3.20% -----------$67,760 ($7,704) $195 ($1,975) May $138,925 $22,193 $2,775 $2,694 $13,893 -----------$41,554 $97,371 70.09% $4,000 $30,000 $8,336 $0 $5,000 $1,200 $0 $500 $2,000 $750 $2,000 $1,000 -----------$54,786 39.44% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 9.26% $2,525 $100 -----------$2,625 1.89% -----------$70,274 $27,097 $195 $6,725 Jun $116,075 $16,467 $2,775 $2,146 $11,608 -----------$32,996 $83,079 71.57% $4,000 $20,000 $6,965 $0 $0 $1,200 $0 $500 $0 $450 $1,000 $1,000 -----------$35,115 30.25% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 11.08% $2,525 $100 -----------$2,625 2.26% -----------$50,603 $32,477 $370 $8,027 Jul $102,575 $14,121 $2,775 $1,921 $10,258 -----------$29,075 $73,500 71.65% $4,000 $20,000 $6,155 $0 $0 $1,200 $0 $500 $0 $250 $500 $1,000 -----------$33,605 32.76% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 12.54% $2,525 $100 -----------$2,625 2.56% -----------$49,093 $24,408 $370 $6,009 Aug $36,575 $9,010 $2,775 $1,434 $3,658 -----------$16,876 $19,699 53.86% $4,000 $10,000 $2,195 $500 $500 $1,200 $0 $500 $0 $250 $500 $1,000 -----------$20,645 56.44% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 35.17% $2,525 $100 -----------$2,625 7.18% -----------$36,133 ($16,433) $20 ($4,113) Sep $53,775 $9,819 $2,775 $1,516 $5,378 -----------$19,487 $34,288 63.76% $4,000 $10,000 $3,227 $0 $500 $1,200 $0 $500 $0 $250 $1,700 $1,000 -----------$22,377 41.61% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 23.92% $2,525 $100 -----------$2,625 4.88% -----------$37,865 ($3,577) $20 ($899) Oct $81,525 $12,165 $2,775 $1,741 $8,153 -----------$24,833 $56,692 69.54% $4,000 $20,000 $4,892 $0 $500 $1,200 $0 $500 $2,000 $250 $1,700 $1,000 -----------$36,042 44.21% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 15.78% $2,525 $100 -----------$2,625 3.22% -----------$51,530 $5,162 $20 $1,285 Nov $89,275 $11,383 $2,775 $1,666 $8,928 -----------$24,751 $64,524 72.28% $4,000 $20,000 $5,357 $500 $500 $1,200 $0 $500 $0 $450 $500 $1,000 -----------$34,007 38.09% $7,500 $0 $0 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$12,863 14.41% $2,525 $100 -----------$2,625 2.94% -----------$49,495 $15,029 $20 $3,752 Dec $59,745 $4,841 $2,775 $1,041 $5,975 -----------$14,632 $45,113 75.51% $4,000 $10,000 $3,585 $0 $500 $1,200 $2,000 $500 $0 $250 $1,700 $1,000 -----------$24,735 41.40% $7,500 $0 $1,000 $300 $25 $50 $500 $150 $100 $200 $500 $750 $900 $250 $1,638 $0 -----------$13,863 23.20% $2,525 $100 -----------$2,625 4.39% -----------$41,223 $3,891 $20 $968
$0
$0
10%
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Appendix
Net Profit Net Profit/Sales Include Negative Taxes $7,461 10.31% $20,391 18.59% ($10,030) -11.10% ($5,924) -7.22% $20,176 14.52% $24,080 20.74% $18,028 17.58% ($12,340) -33.74% ($2,698) -5.02% $3,856 4.73% $11,257 12.61% $2,903 4.86%
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Appendix
Appendix Table: Cash Flow Pro Forma Cash Flow Cash Received Cash from Operations: Cash Sales Cash from Receivables Subtotal Cash from Operations Additional Cash Received Non Operating (Other) Income 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 Payment of Accounts Payable Subtotal Spent on Operations Additional Cash Spent Non Operating (Other) Expense 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 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
$28,950 $82,704 $111,654 $0 $0 $0 $2,132 $0 $0 $0 $0 $113,786 Jan $3,984 $56,190 $60,174 $0 $0 $0 $0 $0 $0 $0 $0 $60,174 $53,612 $54,237
$43,870 $50,728 $94,598 $0 $0 $0 $6,313 $0 $0 $0 $0 $100,912 Feb $6,443 $55,031 $61,474 $0 $0 $0 $0 $0 $0 $0 $0 $61,474 $39,437 $93,674
$36,150 $69,145 $105,295 $0 $0 $0 $0 $0 $0 $0 $0 $105,295 Mar $7,772 $76,828 $84,600 $0 $0 $0 $20,000 $0 $0 $0 $0 $104,600 $695 $94,369
$32,810 $59,629 $92,439 $0 $0 $0 $0 $0 $0 $0 $0 $92,439 Apr $6,770 $88,087 $94,856 $0 $0 $0 $0 $0 $0 $0 $0 $94,856 ($2,417) $91,952
$55,570 $51,553 $107,123 $0 $0 $0 $6,146 $0 $0 $0 $0 $113,269 May $11,299 $80,723 $92,022 $0 $0 $0 $0 $0 $0 $0 $0 $92,022 $21,247 $113,200
$46,430 $67,423 $113,853 $0 $0 $20,000 $0 $0 $0 $0 $0 $133,853 Jun $6,783 $118,775 $125,558 $0 $0 $0 $0 $0 $0 $0 $0 $125,558 $8,295 $121,495
$41,030 $76,043 $117,073 $0 $0 $0 $5,546 $0 $0 $0 $0 $122,619 Jul $6,376 $79,364 $85,741 $0 $0 $0 $0 $0 $0 $0 $0 $85,741 $36,878 $158,373
$14,630 $65,325 $79,955 $0 $0 $0 $0 $0 $0 $0 $0 $79,955 Aug $2,537 $74,673 $77,209 $0 $0 $40,000 $4,453 $0 $0 $0 $0 $121,662 ($41,707) $116,666
$21,510 $40,425 $61,935 $0 $0 $0 $0 $0 $0 $0 $0 $61,935 Sep $3,884 $41,672 $45,556 $0 $0 $0 $10,000 $0 $0 $0 $0 $55,556 $6,379 $123,045
$32,610 $27,449 $60,059 $0 $0 $0 $866 $0 $0 $0 $0 $60,925 Oct $6,158 $54,079 $60,237 $0 $0 $0 $0 $0 $0 $0 $0 $60,237 $688 $123,732
$35,710 $41,145 $76,855 $0 $0 $0 $3,327 $0 $0 $0 $0 $80,182 Nov $5,880 $73,774 $79,654 $0 $0 $0 $0 $0 $0 $0 $0 $79,654 $529 $124,261
$23,898 $51,395 $75,293 $0 $0 $0 $636 $0 $0 $0 $0 $75,929 Dec $3,256 $70,570 $73,826 $0 $0 $0 $0 $0 $0 $0 $0 $73,826 $2,104 $126,364
0.00%
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Appendix
Appendix Table: Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash Accounts Receivable Inventory Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital 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 $36,557 $22,336 $25,526 $84,419 $0 $84,419 $76,960 $36,668 ($32,982) $80,646 $165,065 $80,646 Jan $34,660 $22,336 $27,658 $84,654 $0 $84,654 $76,960 $3,686 $7,461 $88,107 $172,761 $88,107 Feb $56,058 $22,336 $33,971 $112,365 $0 $112,365 $76,960 $3,686 $27,852 $108,498 $220,864 $108,498 Mar $67,618 $22,336 $13,971 $103,925 $0 $103,925 $76,960 $3,686 $17,822 $98,468 $202,393 $98,468 Apr $58,895 $22,336 $13,971 $95,202 $0 $95,202 $76,960 $3,686 $11,898 $92,544 $187,746 $92,544 May $98,302 $22,336 $20,118 $140,755 $0 $140,755 $76,960 $3,686 $32,074 $112,720 $253,475 $112,720 Jun $59,014 $42,336 $20,118 $121,467 $0 $121,467 $76,960 $3,686 $56,154 $136,800 $258,267 $136,800 Jul $55,474 $42,336 $25,664 $123,473 $0 $123,473 $76,960 $3,686 $74,182 $154,828 $278,301 $154,828 Aug $22,068 $2,336 $21,211 $45,615 $0 $45,615 $76,960 $3,686 $61,841 $142,487 $188,102 $142,487 Sep $33,794 $2,336 $11,211 $47,341 $0 $47,341 $76,960 $3,686 $59,144 $139,790 $187,130 $139,790 Oct $53,572 $2,336 $12,076 $67,984 $0 $67,984 $76,960 $3,686 $63,000 $143,646 $211,630 $143,646 Nov $51,155 $2,336 $15,403 $68,894 $0 $68,894 $76,960 $3,686 $74,256 $154,902 $223,796 $154,902 Dec $28,330 $2,336 $16,040 $46,705 $0 $46,705 $76,960 $3,686 $77,159 $157,805 $204,511 $157,805 Starting Balances $625 $124,056 $28,623 $431 $153,735 $35,577 $24,247 $11,330 $165,065 Jan $54,237 $84,777 $21,986 $431 $161,431 $35,577 $24,247 $11,330 $172,761 Feb $93,674 $99,854 $15,574 $431 $209,533 $35,577 $24,247 $11,330 $220,864 Mar $94,369 $84,934 $11,329 $431 $191,063 $35,577 $24,247 $11,330 $202,393 Apr $91,952 $74,520 $9,513 $431 $176,416 $35,577 $24,247 $11,330 $187,746 May $113,200 $106,322 $22,193 $431 $242,145 $35,577 $24,247 $11,330 $253,475 Jun $121,495 $108,544 $16,467 $431 $246,937 $35,577 $24,247 $11,330 $258,267 Jul $158,373 $94,046 $14,121 $431 $266,971 $35,577 $24,247 $11,330 $278,301 Aug $116,666 $50,666 $9,010 $431 $176,772 $35,577 $24,247 $11,330 $188,102 Sep $123,045 $42,506 $9,819 $431 $175,800 $35,577 $24,247 $11,330 $187,130 Oct $123,732 $63,972 $12,165 $431 $200,300 $35,577 $24,247 $11,330 $211,630 Nov $124,261 $76,392 $11,383 $431 $212,466 $35,577 $24,247 $11,330 $223,796 Dec $126,364 $60,844 $6,541 $431 $194,180 $35,577 $25,247 $10,330 $204,511
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