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Table of Contents
Table of Contents
Page 2
1.0
Executive Summary
Phaethon's Chariot is a start-up auto restoration shop. The company is engaged in the
restoration of old American cars, and the designing and building of hot rods, and street
rods. Body work and rust repair is the majority of our work. Phaethon's Chariot has recently
rented a new state-of-the-art restoration shop, located at 510 W. 200th Terrace Circle
Boulevard, Centerton, Ohmstate. The company is dedicated to providing the highest quality
workmanship. Phaethon's Chariot keeps up on all the latest tools and techniques of the
trade to perform the highest quality work possible today.
Phaethon's Chariot is located in Centerton, Ohmstate. Our company and employees are
dedicated to doing each job right the first time, and retaining each car owner as a lifetime
customer of our shop.
The company is a state chartered corporation in Ohmstate, owned by Isoroku
Tarnmaclahan. The has owner worked for other shops in the Highland Valley area for the
past 20 years, and is committed to excellence every day. This new space allows the
company retain more work. The office area is comprised of 500 square feet and the shop
area where the day-to-day work on the cars is performed is 5,000 sq.ft.
The population of the seven communities in close proximity to Phaethon's Chariot
Restorations is estimated at 918,279. Roughly, this would mean that this area comprises a
total restoration market in excess of $2.0 million annually. The company's goal is to a
acquire a comfortable minority share of this nearby market.
The marketing research and tailored marketing strategy described in this business plan will
result in modest after-tax profits of in year 1, quadrupling after-tax profits within three
years. It is estimated that by year 3, revenues will reflect a healthy market share of the
local restoration market.
Within the next twelve months it is the objective of the company to market to the local area
to promote our business in the Highland Valley and surrounding areas. Our market
segment will be 30- to 65-year old owners of old American cars. After year three we plan to
expand our business to the Carahge City, Mythtate area. Our studies indicate that
the Carahge area doesn't have a lot of competition for our business.
Page 1
Chart: Highlights
Highlights
$600,000
$500,000
$400,000
Sales
Gross Margin
$300,000
Net Profit
$200,000
$100,000
$0
Year 1
Year 2
Year 3
1.1 Objectives
1. Penetrate the automotive restoration market here in the Highland Valley. Within the next
twelve months, it is the objective of the company to market to the local area to promote
our business in the Highland Valley and surrounding areas, our market segment will be
30 to 65 years old men and women who own old American cars. After year two we plan
to expand our business to the Carahge City, Mythtate area. Our studies indicate that the
Carahge City area doesn't have a lot of competition for our business.
2. Substantially increase profitability. We will encourage price-sensitive jobs to go
elsewhere by normalizing the pricing structure. This will allow for more high-end custom
work to be performed for the less price-sensitive restoration market sector. This pricing
will insure a quadrupling of net profits during the third year.
3. To improve the administrative processes of the company. This will allow a reduction in
the owner's involvement in simple administrative tasks from 50% of his time to 20%,
thereby allowing him more time for sales and marketing tasks.
1.2 Mission
Our mission at Phaethon's Chariot is to always perform the highest quality work at the best
price around.
We can achieve this by only using the best of everything to do our restoration.
We produce high-quality work using the best parts and supplies available in the market
place today.
We only employ the most knowledgeable people to work for our shop.
Page 2
We have a metal fabricator who will build any part that we can't locate for your car.
All of our restoration technicians go through a rigorous application process before we
hire them. We employ only the best people to do our work.
At Phaethon's Chariot Restorations you will get only the best quality work done on your car.
1.3 Keys to Success
Keys to success for the company will include:
1.
2.
3.
4.
Some of the heavy equipment long-term assets that will be acquired include:
Inventory will consist of restoration materials. Custom panels, parts, seats, fabrics,
instruments, etc. will be purchased either by the car owners, or by Phaethon's Chariot on a
just-in-time, as needed basis.
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Logo Design - Artwork
Stationery etc.
Sales Literature
Insurance
Rent
Utilities
Computer Network - Office/Shop
Website Development
Office Furniture
Fixtures
Total Start-up Expenses
$1,000
$3,000
$500
$4,000
$1,500
$1,800
$1,200
$6,000
$700
$3,000
$800
$23,500
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
$10,000
$2,000
$30,000
$100,000
$142,000
Total Requirements
$165,500
Page 4
Chart: Start-up
Start-up
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Expenses
Assets
Investment
Loans
Page 6
The other shop has been in business 15 years. They currently have a wait of 160 days for
any new work. However most of their work is new business (first time customers) as their
reputation in the community is not good and they rarely have repeat business.
PRICING
Phaethon's Chariot's labor rates will be $45 per hour. Both of the other shops charge $65
per/hr. Phaethon's Chariot feels that this is a competitive rate and will not impact the bottom
line in a negative manner.
ADVERTISING
Phaethon's Chariot has a modest program of marketing its services that include the
following:
1.
2.
3.
4.
5.
6.
7.
8.
Flyers
Discounts
Newspaper and magazines ads
Press releases and magazines articles
Car shows
Local radio stations
Website
Calendars
Each of these marketing approaches has the advantage of being low cost and creating
service awareness. The company is also considering the possibility of having a grand
opening program that would feature discounts, food, a local radio disc jockey and other
promotional ideas.
We feel that the company website is one of our best marketing strategies. It is linked to City
Search.com and many other classic car restoration oriented websites and portals. The site
has news about our business, answers to FAQ's and pictures of cars we've restored and
the process of the restoration.
4.1 Market Segmentation
The market for auto restoration reflects the buyer's income bracket and standard of living in
much the same way that the restoration market is segmented. Below are listed market
segments based on size of pocketbook and quality of production:
1. Material Outlets. Suppliers of auto body and paint supplies, interior supplies and
mechanical parts.
2. Simple jobs. Simple repair jobs and service are the next level in our sales chain.
3. Paint. Custom paint work such as murals and flames, will provide some income.
4. Restoration. Complete restoration jobs, and complete paint work.
5. Custom Work. Custom body work such as, top chops and channels, this would be
considered our high end of work.
Page 7
The average age of our customers is 30 to 65 years old with an average income is $60,000
per year, with most full restoration customers having incomes of over $100,000. The
gender is predominantly male, with a college education, and coming from Centerton county
and surrounding areas. Some of the more recent trends come from the increasing
coverage of our industry on television, with shows such as American Muscle Car, Dream
Car Garage and the like. These types of shows have helped auto restoration to grow to a
billion dollar a year industry in the United States.
Year 2
Year 3
Year 4
Year 5
Growth
CAGR
70%
20
34
58
99
168
70.24%
30%
57.58%
10
30
10
44
10
68
13
112
17
185
14.19%
57.58%
such as Hot Rod and Super Chevy magazines. These publications are distributed to a wide
variety of people who are all interested in old American cars, and muscle cars. Our strategy
includes using people's emotions to persuade them to restore an old car if they have one.
We're not limited to just a couple of different types of advertising, we also us flyers,
discounts, newspapers, press releases and magazine articles. Our website, which is a well
designed, and cost effective way to tell people about our shop and it's services, Phaethon's
Chariot will use every way within it's means to convey our message to the public.
Our market strategy is to flood the magazines and air waves with our shop's
advertisements, doing radio ads during morning and afternoon drive times. This is due to
the fact that more people listen to the radio during these time frames, so if you have a really
catchy ad during these time it's probable that you will gain some customers from it. The
magazine publications go out to hundreds of thousands of people every month, so all we
need is to convert a small percentage to sales and we'll achieve our success. But we don't
stop there, we are also joining the chamber of commerce to network our business. We will
use flyers at the car shows to promote or shop, and of course business cards.
4.3 Service Business Analysis
In setting a foundation on which to build a suitable market strategy for Phaethon's Chariot,
some of the other local industry players were contacted by phone. These players are
located in the greater Centerton area.
We called Classy Chassis and posed as a potential customer with a 1969 Z/28 Camaro for
a full restoration project, and from this call we discovered that their labor rate runs at $65
per hour, and it would take about 600 hours of labor to restore the car plus parts. The labor
before parts were added worked out to $39,000. This is for a frame off restoration,
rebuilding the entire car from ground up. We also discovered that it would take about 160
days to get the car into their shop to start the project.
We have also talked to Khamm Zhaapht from Car Barn Renewals, and have discovered
that he's running the same shop rates as Classy Chassis, but he has a three year waiting
list for his shop services, Khamm only does the highest quality work, having cars in most of
the shows at one time or another, Car Barn Renewals is very well known both in and out of
Ohmstate.
4.3.1 Competition and Buying Patterns
The general nature of competition in this business, and how the customers seem to choose
one shop over another can be measured by customer loyalty and positive word of mouth.
Customer loyalty and shop preference come from developing a trust between the customer
and the business. To be successful in the automotive restoration business, one must truly
believe in the old American cars and love them. The customer must truly be made to feel
welcome and cared for. The trust that a customer feels, is based upon the business' ability
to recognize what it takes to please a customer, and then is built upon by continuously
delivering to that customer at, or above, the that they expect.
Page 9
The level of attention and care that our staff bestow upon our customers sets us far above
our competition. We also have extremely high standards for professionalism in the shop.
Cleanliness, adherence to all shop rules, and efficiency are constantly applied. Prices are
reasonable, and are perceived as being an exceptional value. Our shop offers the highest
quality restoration work available today, we use only the highest quality parts and supplies
on all of our jobs. All of this can be found in a professional shop environment, and very
comfortable for our customers.
5.0 Strategy and Implementation Summary
Image is a key factor in making inroads into the higher echelons of auto
restoration. Phaethon's Chariot's strategy is to lift its image, through advertising in
prestigious trade publications, networking with a Chamber of Commerce membership, and
actively marketing to a select group of people located in and around the company's target
market area.
5.1 Competitive Edge
The company seeks to establish a competitive edge in its new target market segment by
increasing the level of customer contact and service that other competitors seem to
oftentimes lack. Additionally, Phaethon's Chariot Restorations possesses the necessary
skills to produce the high quality restorations that are needed in this field. The
establishment of the previously mentioned work processes that will ensure greater service
will strengthen the contacts that promote word-of-mouth marketing and networking.
Our competitive edge will come from hard work and customer satisfaction, we will only
produce top quality work that is show ready when it leaves the shop. This will spawn good
word of mouth, which will in turn generate work from past and present customers of our
shop.
5.2 Marketing Strategy
As mentioned in the previous section, it is important to the marketing strategy to develop an
attractive image to the trade. This can be done in a number of ways:
1. Advertising. Most restoration shops interviewed suggested Hemmings Motor News as
the best place to advertise. In the regional telephone directory Yellow Pages two
classification are possible: Auto Restoration--Antique & Classic, or Auto Body Repair &
Paint. These two publications both have directories. In Hemmings, a color 1/4 page ad
would run $1,700 per month for a year if signed by December 1, 2004, which provides a
15% discount. This averages out to $1,411 per insertion, even less for black and white.
A quarter page ad in the Yellow Pages runs $1,200 a year.
2. Join The Chamber of Commerce. The image of Phaethon's Chariot
Restorations would be elevated by joining the Chamber of Commerce. This would cost
only $300 per year. Advertising on their electronic sign alongside the Interstate is free
for 90 days. At present the sign would give 100 impressions per day to the shop. We
Page 10
expect this to increase Phaethon's income by about 10% during that 90-day period.
3. Advertising. Development of a top quality logo and photography which can be used in
ads, brochures, name cards, etc. Not counting printing costs, which vary by quantity and
quality of paper chosen, the design costs for this would run about $1,500. A day's
photography would be an additional $850-$1,600.
4. Participation in Car Shows. Another image-building marketing tactic is participating in
local car shows. These car shows are held just for the fun of it. This would require time
and effort, but not much in the way of money. This should be coordinated to
insure compatibility with the show's concept and our image. If we attend a show out of
the local area, costs would increase due to the expense of food, lodging, and protected
transportation of a finished car to the show. A photo album can never compete with the
real hardware.
In addition to the above-mentioned activities designed to elevate the company's image, it is
essential to market directly to the selected target clients who all go to local car shows.
Success in making inroads into these names would set the stage for entry into the more
prestigious auto restorers guild.
Marketing these prime prospects must be carried out in a thoughtful organized way. Color
literature including the newly designed logo should be completed as a first step. When
marketing these prospects it will be important to present a portfolio of Phaethon's
Chariot's most innovative work. A relaxed face-to-face meeting, resulting in good
communication between Phaethon's Chariot and the project car's owners, should be all
that's needed to generate a first order.
Networking is also very useful. It is important, once the logo and artwork materials have
been completed, for the owner to make a point of introducing herself to important players in
the restoration world surrounding Centerton. Good contacts include hot rod businesses,
parts stores, custom car clubs, suppliers of paint, etc.
5.3 Sales Strategy
The marketing strategy discussed previously in this business plan will generate the desired
sales. These sales will begin with our website, and the Chamber of Commerce. It is a
stated objective to transfer the administrative burden away from the owner, freeing up his
time to meet with clients, to network at car shows and events, and to market the shop to
prospective clients. This means that someone else will be answering the incoming calls.
This person must be carefully trained to recognize who must be called back immediately by
the owner. The shop owner needs--and expects--close contact with the shop foreman.
The shop is under pressure to produce the highest quality work possible, for example, a car
that's going to shows is going to foster sales. The owner must be armed with a cell phone
and a pager. The important caller should be told that the owner will "call right back." The
more successful the marketing strategy is in making inroads into our share of
the restoration market, the more important this communication response will become.
Page 11
Restoration Work
$30,000
Paint Work
$25,000
Parts
$20,000
Service
$15,000
$10,000
$5,000
Month 12
Month 11
Month 10
Month 9
Month 8
Month 7
Month 6
Month 5
Month 4
Month 3
Month 2
Month 1
$0
Page 12
$600,000
$500,000
Restoration Work
$400,000
Paint Work
$300,000
Parts
Service
$200,000
$100,000
$0
Year 1
Year 2
Year 3
Year 1
Year 2
Year 3
$145,008
$49,236
$72,399
$44,400
$311,044
$250,000
$64,007
$108,599
$48,800
$471,406
$324,000
$83,209
$162,899
$53,600
$623,707
Year 1
$26,717
$9,063
$13,000
$17,760
$66,540
Year 2
$50,000
$12,801
$19,548
$19,520
$101,869
Year 3
$64,800
$16,642
$29,322
$21,440
$132,203
5.4 Milestones
The milestone table is set up as a flow-chart. The milestone table is specific in detail,
allowing for the smooth flow of functions that are necessary to set up the restoration
shop on schedule for the Grand Opening. Each function is timed to coincide with the proper
execution and time needed to complete each task. Each manager has specific duties
Page 13
assigned specifically to his area of expertise. The end of the milestone table also shows the
beginning of the 2005 marketing plan.
Chart: Milestones
Milestones
Company Identity
Advertising
Car Show s
Employee Hired
Grand Opening
Q3
Q4
Q1 `05
Q2
Q3
Q4
Q1 `06
Page 14
Table: Milestones
Milestones
Milestone
Company Identity
Business Plan
Review
Advertising
Car Shows
Employee Hired
Grand Opening
Totals
Start Date
7/10/2004
5/1/2004
End Date
9/15/2004
8/1/2004
Budget
$7,500
$0
Manager
Isoroku
Isoroku
Department
Marketing
Finance
12/1/2004
11/1/2004
11/20/2004
8/30/2004
12/1/2005
5/1/2006
11/16/2005
10/15/2004
$42,000
$4,800
$20,800
$1,000
$76,100
Isoroku
Isoroku
Jane
Jane
Marketing
Marketing
HR
Marketing
Page 15
Year 1
$21,000
$17,400
$12,831
$15,162
$6,750
$9,000
6
Year 2
$40,000
$22,400
$45,000
$52,000
$24,000
$20,800
8
Year 3
$45,000
$30,000
$50,000
$58,000
$27,000
$22,800
8
Total Payroll
$82,143
$204,200
$232,800
Page 16
$23,500
$142,000
$165,500
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$132,000
$10,000
$0
$10,000
$142,000
$0
$119,000
$6,000
$5,500
$130,500
Capital
Planned Investment
Owner
Investor
Additional Investment Requirement
Total Planned Investment
$35,000
$0
$0
$35,000
($23,500)
$11,500
$142,000
Total Funding
$165,500
conservative assumptions make for a more accurate estimate of real risk, showing that we
need to have the monthly sales shown in the table and chart below.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$20,506
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
21%
$16,120
$6,000
$3,000
$9,000
$12,000
$18,000
$24,000
$30,000
$15,000
$21,000
$27,000
$33,000
Page 18
$500,000
$450,000
$400,000
$350,000
$300,000
$250,000
$200,000
$150,000
$100,000
$50,000
$0
Year 1
Year 2
Year 3
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
Year 1
$311,044
$66,540
$0
$66,540
Year 2
$471,406
$101,869
$0
$101,869
Year 3
$623,707
$132,203
$0
$132,203
Gross Margin
Gross Margin %
$244,504
78.61%
$369,537
78.39%
$491,504
78.80%
$82,143
$22,500
$19,992
$21,600
$15,200
$24,000
$0
$8,000
$204,200
$22,500
$20,000
$15,200
$24,000
$0
$0
$0
$232,800
$22,500
$20,000
$24,000
$0
$0
$0
$0
$193,435
$285,900
$299,300
$51,069
$71,061
$6,672
$13,319
$83,637
$103,637
$5,852
$23,335
$192,204
$212,204
$4,720
$56,245
Net Profit
Net Profit/Sales
$31,078
9.99%
$54,449
11.55%
$131,239
21.04%
Expenses
Payroll
Marketing/Promotion
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Fixtures
Total Operating Expenses
Page 20
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10
Month 12
$140,000
$120,000
$100,000
$80,000
$60,000
$40,000
$20,000
$0
Year 1
Year 2
Year 3
company's cash account. Because it is the company's policy that the clients to provide
the parts for the the restoration, the company has a very low cost of goods sold account
and therefore a high gross margin. Clients can purchase the parts themselves, or if they
prefer to have us make the purchase, we will locate the part, charge the customer's credit
card, and then purchase the part from the supplier/vendor.
Furthermore, the custom nature of the business means that there is no inventory cost to
speak of or accounts payable. With the ability to generate so much cash flow, it is assumed
that the company will seek to use this asset to expand its markets and production capacity
in the near future.
Chart: Cash
Cash
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
Cash Balance
$10,000
$5,000
$0
($5,000)
Month 1
Month 3
Month 5
Month 7
Month 9
Month 11
Month 2
Month 4
Month 6
Month 8
Month 10 Month 12
Page 22
Year 2
Year 3
$311,044
$311,044
$471,406
$471,406
$623,707
$623,707
$20,716
$5,000
$0
$0
$0
$0
$0
$336,759
$31,396
$7,500
$0
$0
$0
$0
$0
$510,301
$41,539
$5,000
$0
$0
$0
$0
$0
$670,246
Year 1
Year 2
Year 3
$82,143
$176,173
$258,316
$204,200
$207,975
$412,175
$232,800
$238,889
$471,689
$20,716
$3,500
$0
$16,476
$0
$2,400
$9,000
$310,408
$31,396
$6,000
$0
$17,492
$0
$4,000
$0
$471,063
$41,539
$7,500
$0
$18,570
$0
$4,000
$0
$543,298
$26,352
$36,352
$39,239
$75,590
$126,949
$202,539
Cash Received
Expenditures
Page 23
Year 2
Year 3
$36,352
$17,818
$30,000
$84,170
$75,590
$26,083
$30,000
$131,674
$202,539
$28,695
$30,000
$261,233
$102,400
$19,992
$82,408
$166,578
$106,400
$39,992
$66,408
$198,082
$110,400
$59,992
$50,408
$311,641
Year 1
Year 2
Year 3
$23,476
$1,500
$5,500
$30,476
$16,522
$3,000
$5,500
$25,022
$19,913
$500
$5,500
$25,913
Long-term Liabilities
Total Liabilities
$102,524
$133,000
$85,032
$110,054
$66,462
$92,375
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$35,000
($32,500)
$31,078
$33,578
$166,578
$35,000
($1,422)
$54,449
$88,027
$198,082
$35,000
$53,027
$131,239
$219,266
$311,641
$33,578
$88,027
$219,266
Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
Net Worth
Page 24
Year 1
Year 2
Year 3
n.a.
51.56%
32.31%
Industry
Profile
1.55%
10.70%
18.01%
50.53%
49.47%
100.00%
13.17%
15.15%
66.47%
33.53%
100.00%
9.21%
9.63%
83.83%
16.17%
100.00%
9.44%
29.30%
52.30%
47.70%
100.00%
18.30%
61.55%
79.84%
20.16%
12.63%
42.93%
55.56%
44.44%
8.32%
21.33%
29.64%
70.36%
20.70%
28.94%
49.64%
50.36%
100.00%
78.61%
68.62%
100.00%
78.39%
66.84%
100.00%
78.80%
57.76%
100.00%
100.00%
73.48%
6.43%
16.42%
1.40%
17.74%
1.40%
30.82%
1.33%
0.60%
2.76
2.18
79.84%
132.22%
26.65%
5.26
4.22
55.56%
88.36%
39.27%
10.08
8.97
29.64%
85.51%
60.16%
1.95
1.31
55.95%
1.18%
2.67%
Year 1
9.99%
92.55%
Year 2
11.55%
61.86%
Year 3
21.04%
59.85%
n.a
n.a
Activity Ratios
Page 25
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
5.98
8.25
28
1.87
4.64
12.17
36
2.38
4.83
12.17
27
2.00
n.a
n.a
n.a
n.a
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
3.96
0.23
1.25
0.23
0.42
0.28
n.a
n.a
$53,694
7.65
$106,651
14.29
$235,320
40.72
n.a
n.a
0.54
18%
2.18
9.26
0.29
0.42
13%
4.22
5.36
0.00
0.50
8%
8.97
2.84
0.00
n.a
n.a
n.a
n.a
n.a
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
Page 26
Appendix
Table: Sales Forecast
Sales
Forecast
Sales
Restoration
Work
Paint Work
Parts
Service
Total Sales
Direct Cost
of Sales
Restoration
Work
Paint Work
Parts
Service
Subtotal
Direct
Cost of
Sales
Month
1
Month
2
Month
3
Month
4
Month
5
0%
$5,000
$5,750
$6,613
$7,604
$8,745
0%
0%
0%
$1,500 $1,755 $2,053 $2,402 $2,811 $3,289 $3,848 $4,502 $5,267 $6,163 $7,210 $8,436
$3,000 $3,360 $3,763 $4,215 $4,721 $5,287 $5,921 $6,632 $7,428 $8,319 $9,318 $10,436
$3,600 $3,600 $3,000 $3,900 $3,900 $3,600 $3,600 $3,900 $3,900 $3,900 $3,900 $3,600
$13,100 $14,465 $15,429 $18,122 $20,176 $22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $45,734
0%
0%
0%
0%
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Month
12
Month
1
$675
Month
2
$810
Month
3
$972
Month
4
$1,166
Month
5
$1,400
Month
6
$1,680
Month
7
$2,016
Month
8
$2,419
Month
9
$2,902
Month
10
$3,483
Month
11
$4,179
Month
12
$5,015
$313
$0
$1,440
$2,428
$359
$3,000
$1,440
$5,609
$413
$1,000
$1,200
$3,585
$475
$1,000
$1,560
$4,202
$547
$1,000
$1,560
$4,506
$629
$1,000
$1,440
$4,748
$723
$1,000
$1,440
$5,178
$831
$1,000
$1,560
$5,810
$956
$1,000
$1,560
$6,418
$1,099
$1,000
$1,560
$7,142
$1,264
$1,000
$1,560
$8,004
$1,454
$1,000
$1,440
$8,909
Page 1
Appendix
Table: Personnel
Personnel Plan
Owner
Foreman
Sheet Metal &
Body
Technician(s)
Automotive
Mechanic(s)
Painting
Technician
Admin Asst.
Total People
Total Payroll
Month
9
$2,000
$2,000
$1,833
Month
10
$2,000
$2,000
$1,833
Month
11
$2,000
$2,000
$1,833
Month
12
$2,000
$2,000
$1,833
0%
$0
$0
$0
$0
$0
$2,166
$2,166
$2,166
$2,166
0%
$0
$0
$0
$0
$0
$0
$1,500
$1,500
$1,750
$2,000
0%
$0
1
$0
2
$0
2
$1,000
6
$1,000
6
$1,000
6
$1,000
6
$0
$1,000 $2,000 $2,000 $4,000 $4,500 $8,499 $8,699 $8,699 $10,499 $10,499 $10,749 $10,999
Page 2
Appendix
Table: Profit and Loss
Pro Forma Profit
and Loss
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
Month
1
$13,100
$2,428
$0
$2,428
Gross Margin
Gross Margin %
$10,673 $8,856
81.47% 61.22%
$1,000
$0
$2,000
$1,000
$2,000
$1,000
$4,000
$1,500
$4,500
$1,500
$8,499
$2,500
$8,699
$2,500
$8,699
$2,500
$1,666
$1,800
$2,000
$2,000
$0
$1,000
$1,666
$1,800
$1,200
$2,000
$0
$1,000
$1,666
$1,800
$1,200
$2,000
$0
$1,200
$1,666
$1,800
$1,200
$2,000
$0
$300
$1,666
$1,800
$1,200
$2,000
$0
$300
$1,666
$1,800
$1,200
$2,000
$0
$300
$1,666
$1,800
$1,200
$2,000
$0
$300
$1,666
$1,800
$1,200
$2,000
$0
$300
$1,666
$1,800
$1,200
$2,000
$0
$300
Total Operating
Expenses
$9,466
$10,666 $10,866 $12,466 $12,966 $17,965 $18,165 $18,165 $19,965 $20,665 $20,915 $
$1,207
($1,810)
$978
$1,454
$2,704
($481)
$1,591
$4,359
$5,507
$8,164
$11,737 $
$2,873
$588
$185
($144)
$590
($720)
$2,644
$587
$117
$3,120
$572
$264
$4,370
$561
$643
$1,185
$554
($311)
$3,257
$548
$313
$6,025
$549
$1,143
$7,173
$534
$1,492
$9,830
$527
$2,291
$13,403 $
$536
$3,360
Expenses
Payroll
Marketing/Promotio
n
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Fixtures
15%
Month
Month
Month
Month
Month
Month
Month
Month
Month
Month
2
3
4
5
6
7
8
9
10
11
$14,465 $15,429 $18,122 $20,176 $22,232 $24,935 $28,334 $31,890 $35,971 $40,656 $
$5,609 $3,585 $4,202 $4,506 $4,748 $5,178 $5,810 $6,418 $7,142 $8,004
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$5,609 $3,585 $4,202 $4,506 $4,748 $5,178 $5,810 $6,418 $7,142 $8,004
$1,666
$1,800
$1,200
$2,000
$0
$1,000
$1,666
$1,800
$1,200
$2,000
$0
$1,000
Page 3
Appendix
Net Profit
Net Profit/Sales
$433
3.30%
($1,680)
11.62%
$273
1.77%
$617
3.41%
$1,500
7.43%
($725)
-3.26%
$731
2.93%
$2,667
9.41%
$3,481
10.92%
$5,346
14.86%
$7,840 $
19.28%
Page 4
Appendix
Table: Cash Flow
Pro Forma
Cash Flow
Month
1
Month
2
$13,100
$13,100
$14,465
$14,465
$872
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
Month
9
Month
10
Month
11
Mon
1
Cash
Received
Cash from
Operations
Cash Sales
Subtotal
Cash from
Operations
Additional
Cash
Received
Sales Tax,
VAT,
HST/GST
Received
New Current
Borrowing
New Other
Liabilities
(interestfree)
New Longterm
Liabilities
Sales of
Other
6.66%
$963
$1,028
$1,207
$1,344
$1,481
$1,661
$1,887
$2,124
$2,396
$2,708
$3,04
$0
$1,000
$1,000
$0
$0
$0
$0
$1,000
$0
$0
$2,000
$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
Page 5
Appendix
Current
Assets
Sales of
Long-term
Assets
New
Investment
Received
Subtotal
Cash
Received
Expenditures
Expenditures
from
Operations
Cash
Spending
Bill
Payments
Subtotal
Spent on
Operations
Additional
Cash Spent
Sales Tax,
VAT,
HST/GST
Paid Out
Principal
Repayment
of Current
Borrowing
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$13,972
$16,428
Month
1
Month
2
Month
3
Month
4
Month
5
Month
6
Month
7
Month
8
$1,000
$2,000
$2,000
$4,000
$4,500
$8,499
$8,699
$8,699
$6,429
$13,056
$18,478
$8,061
$12,625
$7,429
$15,056
$872
$963
$1,028
$1,207
$1,344
$1,481
$1,661
$1,887
$2,124
$2,396
$2,708
$3,04
$0
$0
$500
$1,000
$500
$0
$0
$0
$1,000
$0
$0
$50
Month
9
Month
10
Month
11
Mon
1
Page 6
Appendix
Other
Liabilities
Principal
Repayment
Long-term
Liabilities
Principal
Repayment
Purchase
Other
Current
Assets
Purchase
Long-term
Assets
Dividends
Subtotal
Cash Spent
Net Cash
Flow
Cash
Balance
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$1,336
$1,342
$1,349
$1,356
$1,363
$1,370
$1,376
$1,383
$1,390
$1,397
$1,404
$1,41
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$200
$200
$200
$200
$200
$200
$200
$200
$200
$200
$200
$20
$0
$9,837
$0
$17,561
$4,135
($1,133 ($6,098)
)
$13,003 $6,904
$14,135
$0 $1,000 $1,000
$23,555 $16,824 $21,532
$2,504
$9,409
($12) ($1,961)
$9,397
$7,435
$336
$7,772
$3,290
$1,206
$5,333
$9,321
Mont
h2
Mont
h3
Mont
h4
Mont
h5
Mont
h6
Mont
h7
$9,42
Mont
h8
Mont
h9
Mont
h 10
Mont
h 11
Mont
h 12
Starting
Balances
Current Assets
Page 7
Appendix
Cash
Inventory
Other Current
Assets
Total Current
Assets
Long-term Assets
Long-term Assets
Accumulated
Depreciation
Total Long-term
Assets
Total Assets
$10,000
$2,000
$30,000
$42,000
$100,000
$0
$100,000
$142,000
Liabilities and
Capital
Current Liabilities
Accounts Payable
$6,000
Current Borrowing
$0
Other Current
Liabilities
Subtotal Current
Liabilities
Long-term
Liabilities
Total Liabilities
$5,500
$11,500
$119,000
$130,500
$14,1
35
$4,85
5
$30,0
00
$48,9
90
$13,0
03
$11,2
19
$30,0
00
$54,2
21
$6,90
4
$7,63
3
$30,0
00
$44,5
38
$9,40
9
$8,40
3
$30,0
00
$47,8
12
$9,39
7
$9,01
2
$30,0
00
$48,4
09
$7,43
5
$9,49
6
$30,0
00
$46,9
32
$7,77
2
$10,3
57
$30,0
00
$48,1
28
$11,0
62
$11,6
20
$30,0
00
$52,6
82
$12,2
68
$12,8
37
$30,0
00
$55,1
05
$17,6
01
$14,2
84
$30,0
00
$61,8
86
$26,9
22
$16,0
07
$30,0
00
$72,9
29
$36,3
52
$17,8
18
$30,0
00
$84,1
70
$100,
200
$1,66
6
$98,5
34
$147,
524
$100,
400
$3,33
2
$97,0
68
$151,
289
$100,
600
$4,99
8
$95,6
02
$140,
140
$100,
800
$6,66
4
$94,1
36
$141,
948
$101,
000
$8,33
0
$92,6
70
$141,
079
$101,
200
$9,99
6
$91,2
04
$138,
136
$101,
400
$11,6
62
$89,7
38
$137,
866
$101,
600
$13,3
28
$88,2
72
$140,
954
$101,
800
$14,9
94
$86,8
06
$141,
911
$102,
000
$16,6
60
$85,3
40
$147,
226
$102,
200
$18,3
26
$83,8
74
$156,
803
$102,
400
$19,9
92
$82,4
08
$166,
578
Mont
h1
Mont
h2
Mont
h3
Mont
h4
Mont
h5
Mont
h6
Mont
h7
Mont
h8
Mont
h9
Mont
h 10
Mont
h 11
Mont
h 12
$12,4
28
$0
$7,64
1
$1,50
0
$5,50
0
$14,6
41
$12,1
88
$500
$12,6
82
$0
$12,8
33
$0
$14,2
09
$0
$19,2
44
$0
$5,50
0
$18,1
88
$5,50
0
$18,1
82
$5,50
0
$18,3
33
$5,50
0
$19,7
09
$16,0
13
$1,00
0
$5,50
0
$22,5
13
$16,8
79
$0
$5,50
0
$17,9
28
$18,2
15
$1,00
0
$5,50
0
$24,7
15
$5,50
0
$22,3
79
$5,50
0
$24,7
44
$21,3
86
$2,00
0
$5,50
0
$28,8
86
$23,4
76
$1,50
0
$5,50
0
$30,4
76
$117,
664
$135,
592
$116,
322
$141,
037
$114,
973
$129,
614
$113,
617
$131,
805
$112,
254
$130,
436
$110,
884
$129,
217
$109,
508
$129,
217
$108,
125
$130,
638
$106,
735
$129,
114
$105,
338
$130,
082
$103,
934
$132,
820
$102,
524
$133,
000
Page 8
Appendix
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and
Capital
Net Worth
$35,000
$35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0 $35,0
00
00
00
00
00
00
00
00
00
00
00
00
($23,500) ($23,5 ($23,5 ($23,5 ($24,5 ($25,5 ($26,5 ($27,5 ($28,5 ($29,5 ($30,5 ($31,5 ($32,5
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
00)
$0
$433 ($1,24 ($974) ($357) $1,14 $418
$1,14 $3,81 $7,29 $12,6 $20,4 $31,0
7)
3
9
6
7
43
84
78
$11,500
$11,9 $10,2 $10,5 $10,1 $10,6 $8,91 $8,64 $10,3 $12,7 $17,1 $23,9 $33,5
33
53
26
43
43
8
9
16
97
43
84
78
$142,000
$147, $151, $140, $141, $141, $138, $137, $140, $141, $147, $156, $166,
524
289
140
948
079
136
866
954
911
226
803
578
$11,500
$11,9
33
$10,2
53
$10,5
26
$10,1
43
$10,6
43
$8,91
8
$8,64
9
$10,3
16
$12,7
97
$17,1
43
$23,9
84
$33,5
78
Page 9