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1.0 Executive Summary
Todd, West, and Associates specializes in modifications to inventory management systems of all types. The company's connectivity and network engineering expertise assures a complete wireless solution to warehouse management issues. Todd, West, and Associates has over fifteen years of experience within the ADC (Automated Data Collection) marketplace.
Prior to starting this new company, the staff of Todd, West, and Associates worked within the industry's major companies performing special wireless modification for customers. Their unique perspective has already led to two of the industry leaders, Symbol and CDS, outsourcing special modification orders to Todd, West, and Associates.
1.1 Objectives
The objectives of Todd, West, and Associates are as follows:
- Establish the company as a leader in warehouse wireless connectivity.
- Increase client base by 20% each year.
- Develop packaged solutions for warehouse management systems.
1.2 Mission
The mission of Todd, West, and Associates is to work directly with customers to improve their warehouse management systems. The development, modification, and/or improvement of warehouse data infrastructure will assure that the business will function efficiently and successfully.
2.0 Company Summary
Todd, West, and Associates is a new start-up engineering contracting firm. Co-owners, Mary Todd and John West have over fifteen years of experience in connectivity and network engineering. The country's economic growth over the last several years has resulted in increased opportunity for the installation of high-end warehouse management systems. Todd, West, and Associates is positioned to capitalize on the growing need of companies to better manage their inventory.
From 1996 to 2001, Mary Todd was senior engineer for the Special Modification Services unit of CDS, one of the country's leading producers of Automatic Data Collection (ADC) products. Her primary responsibility was to travel to the customer's warehouse site and perform custom wireless network modifications using CDS products.
John West has been a senior engineer for Symbol's system installation services unit for the past five years. John's responsibilities included custom wireless installation of Symbol networking equipment and ADC products at the customer's warehouse site.
Todd, West, and Associates has signed outsourcing agreements with both CDS and Symbol to provide custom network installation services to their customers. Currently, these agreements represent $100,000 in scheduled assignments.
2.1 Company Ownership
Mary Todd and John West are co-owners of Todd, West, and Associates.
2.2 Start-up Summary
Mary Todd and John West will each equally invest in Todd, West, and Associates. In addition, they will secure a long-term loan. The following table and chart show projected initial start-up costs for Todd, West, and Associates.
START-UP FUNDING
| |
Start-up Expenses to Fund
|
$9,000
|
Start-up Assets to Fund
|
$61,000
|
TOTAL FUNDING REQUIRED
|
$70,000
|
Assets
| |
Non-cash Assets from Start-up
|
$0
|
Cash Requirements from Start-up
|
$61,000
|
Additional Cash Raised
|
$0
|
Cash Balance on Starting Date
|
$61,000
|
TOTAL ASSETS
|
$61,000
|
Liabilities and Capital
| |
Liabilities
| |
Current Borrowing
|
$0
|
Long-term Liabilities
|
$50,000
|
Accounts Payable (Outstanding Bills)
|
$0
|
Other Current Liabilities (interest-free)
|
$0
|
TOTAL LIABILITIES
|
$50,000
|
Capital
| |
Planned Investment
| |
Mary Todd
|
$10,000
|
John West
|
$10,000
|
Additional Investment Requirement
|
$0
|
TOTAL PLANNED INVESTMENT
|
$20,000
|
Loss at Start-up (Start-up Expenses)
|
($9,000)
|
TOTAL CAPITAL
|
$11,000
|
TOTAL CAPITAL AND LIABILITIES
|
$61,000
|
Total Funding
|
$70,000
|
START-UP
| |
Requirements
| |
Start-up Expenses
| |
Legal
|
$1,000
|
Stationery etc.
|
$1,000
|
Rent
|
$1,000
|
Expensed Equipment
|
$6,000
|
TOTAL START-UP EXPENSES
|
$9,000
|
Start-up Assets
| |
Cash Required
|
$61,000
|
Other Current Assets
|
$0
|
Long-term Assets
|
$0
|
TOTAL ASSETS
|
$61,000
|
Total Requirements
|
$70,000
|
3.0 Services
Todd, West, and Associates' services include the following:
- Automated data collection installation
- Database engineering/conversions (MS Access/SQL/Oracle)
- Data imports/exports
- Database links to accounting system (MAS-90/Solomon/Peachtree)
- Wireless networking
- Portable data terminal programming
- LAN/WAN infrastructure
- System consulting
The prices for services are as follows:
- On-site System Requirements Study: $1,000 a day plus travel and expenses.
- On-site Database/Network Engineering/Training: $1,000 a day plus travel and expenses.
- Phone Training/Assistance: $120 an hour.
- Database Modifications: Quoted based on job specifics.
- General Data Imports/Exports: $120 an hour.
4.0 Market Segmentation
Automated Data Collection (ADC) products and services is a $3 billion industry. The products are used in numerous companies with significant inventory and warehouse space. Approximately, 30% of the market is in wireless products and services but the demand is growing. It is estimated that wireless ADC products will dominate the market by 2005. Two of the industry leaders, Symbol and CDS, exceeded $600 million in sales for FY 2000. Wireless products represented 28% of their total sales.
Typically, with the installation of wireless products, there are associated costs for networking and connectivity issues. Most companies in the industry offer these additional services to their customers or outsource the service to engineering firms with expertise in their product line.
Todd, West, and Associates has extensive experience with both Symbol and CDS products. The company's focus is to first meet the demands of the Symbol and CDS referred customers. Todd, West, and Associates will establish relationships with these companies and will work to receive referral business from them over time. The company estimates that 80% of revenues will come from outsourced clientele and 20% from new business. Over the next three years, Todd, West, and Associates estimates that new business will constitute 40% of revenue.
MARKET ANALYSIS
| |||||||
Year 1
|
Year 2
|
Year 3
|
Year 4
|
Year 5
| |||
Potential Customers
|
Growth
|
CAGR
| |||||
Outsourced Customers
|
10%
|
2,000
|
2,200
|
2,420
|
2,662
|
2,928
|
10.00%
|
New Customers
|
5%
|
10,000
|
10,500
|
11,025
|
11,576
|
12,155
|
5.00%
|
Total
|
5.88%
|
12,000
|
12,700
|
13,445
|
14,238
|
15,083
|
5.88%
|
5.0 Strategy and Implementation Summary
Todd, West, and Associates will focus on companies utilizing Symbol and CDS wireless ADC products to manage their inventories. The targeted customer will have ten or more warehouse staff members using ADC wireless systems.
Initially, the company will receive 80% of its clients through Symbol and CDS outsource referrals. The remaining 20% will come from direct marketing.
Over the past five years, both Mary and John have built an extensive network of contacts with companies utilizing wireless ADC products. Todd, West, and Associates will market its services directly to these companies.
After its first three months of operation, the company expects to begin to receive installation contracts from new customers.
5.1 Competitive Edge
Todd, West, and Associates will sustain its competitive advantages to steadily gain market share. The first advantage is based on extensive knowledge of Symbol and CDS wireless ADC products. The second advantage is an established network of contacts among numerous companies that utilize wireless ADC products.
Todd, West, and Associates' competitive edge is the five years Mary and John have spent installing Symbol and CDS wireless ADC systems. Both have excellent reputations with customers for quality work and effective communication skills. These established relationships create a trust bond that is significant when it comes to generating new referrals.
5.2 Sales Strategy
Todd, West, and Associates estimates that about 80% of revenues will come from outsourced clientele and 20% from new business. Over the next three years, Todd, West, and Associates estimates that new business will grow to eventually constitute 40% of revenue.
5.2.1 Sales Forecast
The following is the sales forecast for the next three years.
SALES FORECAST
| |||
Year 1
|
Year 2
|
Year 3
| |
Sales
| |||
Symbol and CDS Customers
|
$283,377
|
$310,000
|
$330,000
|
New Customers
|
$57,200
|
$78,000
|
$100,000
|
TOTAL SALES
|
$340,577
|
$388,000
|
$430,000
|
Direct Cost of Sales
|
Year 1
|
Year 2
|
Year 3
|
Symbol and CDS Customers
|
$0
|
$0
|
$0
|
New Customers
|
$0
|
$0
|
$0
|
Subtotal Direct Cost of Sales
|
$0
|
$0
|
$0
|
6.0 Management Summary
Todd, West, and Associates will be managed jointly by Mary Todd and John West. Initially, the company will have only three additional employees.
6.1 Personnel Plan
The personal plan for Todd, West, and Associates is as follows:
- Mary Todd
- John West
- Installation consultants (wireless installations)
- Office manager
PERSONNEL PLAN
| |||
Year 1
|
Year 2
|
Year 3
| |
Mary Todd
|
$60,000
|
$63,000
|
$66,000
|
John West
|
$60,000
|
$63,000
|
$66,000
|
Installation Consultants
|
$96,000
|
$100,000
|
$104,000
|
Office Manager
|
$36,000
|
$38,000
|
$40,000
|
TOTAL PEOPLE
|
4
|
4
|
4
|
Total Payroll
|
$252,000
|
$264,000
|
$276,000
|
7.0 Financial Plan
The following is the financial plan for Todd, West, and Associates.
7.1 Break-even Analysis
The monthly break-even point is shown in the table and chart below.
BREAK-EVEN ANALYSIS
| |
Monthly Revenue Break-even
|
$25,450
|
Assumptions:
| |
Average Percent Variable Cost
|
0%
|
Estimated Monthly Fixed Cost
|
$25,450
|
7.2 Projected Profit and Loss
The following table and charts highlight the projected profit and loss for the next three years.
PRO FORMA PROFIT AND LOSS
| |||
YEAR 1
|
YEAR 2
|
YEAR 3
| |
Sales
|
$340,577
|
$388,000
|
$430,000
|
Direct Cost of Sales
|
$0
|
$0
|
$0
|
Other Production Expenses
|
$0
|
$0
|
$0
|
TOTAL COST OF SALES
|
$0
|
$0
|
$0
|
Gross Margin
|
$340,577
|
$388,000
|
$430,000
|
Gross Margin %
|
100.00%
|
100.00%
|
100.00%
|
Expenses
| |||
Payroll
|
$252,000
|
$264,000
|
$276,000
|
Sales and Marketing and Other Expenses
|
$0
|
$0
|
$0
|
Depreciation
|
$0
|
$0
|
$0
|
Leased Equipment
|
$0
|
$0
|
$0
|
Utilities
|
$3,600
|
$3,600
|
$3,600
|
Insurance
|
$0
|
$0
|
$0
|
Rent
|
$12,000
|
$12,000
|
$12,000
|
Payroll Taxes
|
$37,800
|
$39,600
|
$41,400
|
Other
|
$0
|
$0
|
$0
|
Total Operating Expenses
|
$305,400
|
$319,200
|
$333,000
|
Profit Before Interest and Taxes
|
$35,177
|
$68,800
|
$97,000
|
EBITDA
|
$35,177
|
$68,800
|
$97,000
|
Interest Expense
|
$2,883
|
$2,676
|
$2,460
|
Taxes Incurred
|
$9,688
|
$19,837
|
$28,362
|
Net Profit
|
$22,606
|
$46,287
|
$66,178
|
Net Profit/Sales
|
6.64%
|
11.93%
|
15.39%
|
7.3 Projected Cash Flow
The following table and chart highlight the projected cash flow for the next three years.
PRO FORMA CASH FLOW
| |||
YEAR 1
|
YEAR 2
|
YEAR 3
| |
Cash Received
| |||
Cash from Operations
| |||
Cash Sales
|
$85,144
|
$97,000
|
$107,500
|
Cash from Receivables
|
$209,420
|
$284,593
|
$316,826
|
SUBTOTAL CASH FROM OPERATIONS
|
$294,565
|
$381,593
|
$424,326
|
Additional Cash Received
| |||
Sales Tax, VAT, HST/GST Received
|
$0
|
$0
|
$0
|
New Current Borrowing
|
$0
|
$0
|
$0
|
New Other Liabilities (interest-free)
|
$0
|
$0
|
$0
|
New Long-term Liabilities
|
$0
|
$0
|
$0
|
Sales of Other Current Assets
|
$0
|
$0
|
$0
|
Sales of Long-term Assets
|
$0
|
$0
|
$0
|
New Investment Received
|
$0
|
$0
|
$0
|
SUBTOTAL CASH RECEIVED
|
$294,565
|
$381,593
|
$424,326
|
Expenditures
|
Year 1
|
Year 2
|
Year 3
|
Expenditures from Operations
| |||
Cash Spending
|
$252,000
|
$264,000
|
$276,000
|
Bill Payments
|
$60,773
|
$76,524
|
$86,991
|
SUBTOTAL SPENT ON OPERATIONS
|
$312,773
|
$340,524
|
$362,991
|
Additional Cash Spent
| |||
Sales Tax, VAT, HST/GST Paid Out
|
$0
|
$0
|
$0
|
Principal Repayment of Current Borrowing
|
$0
|
$0
|
$0
|
Other Liabilities Principal Repayment
|
$0
|
$0
|
$0
|
Long-term Liabilities Principal Repayment
|
$3,600
|
$3,600
|
$3,600
|
Purchase Other Current Assets
|
$0
|
$0
|
$0
|
Purchase Long-term Assets
|
$0
|
$0
|
$0
|
Dividends
|
$0
|
$0
|
$0
|
SUBTOTAL CASH SPENT
|
$316,373
|
$344,124
|
$366,591
|
Net Cash Flow
|
($21,809)
|
$37,469
|
$57,735
|
Cash Balance
|
$39,191
|
$76,661
|
$134,395
|
7.4 Projected Balance Sheet
The following table highlights the projected balance sheet for the next three years.
PRO FORMA BALANCE SHEET
| |||
YEAR 1
|
YEAR 2
|
YEAR 3
| |
Assets
| |||
Current Assets
| |||
Cash
|
$39,191
|
$76,661
|
$134,395
|
Accounts Receivable
|
$46,013
|
$52,419
|
$58,094
|
Other Current Assets
|
$0
|
$0
|
$0
|
TOTAL CURRENT ASSETS
|
$85,204
|
$129,080
|
$192,489
|
Long-term Assets
| |||
Long-term Assets
|
$0
|
$0
|
$0
|
Accumulated Depreciation
|
$0
|
$0
|
$0
|
TOTAL LONG-TERM ASSETS
|
$0
|
$0
|
$0
|
TOTAL ASSETS
|
$85,204
|
$129,080
|
$192,489
|
Liabilities and Capital
|
Year 1
|
Year 2
|
Year 3
|
Current Liabilities
| |||
Accounts Payable
|
$5,198
|
$6,387
|
$7,218
|
Current Borrowing
|
$0
|
$0
|
$0
|
Other Current Liabilities
|
$0
|
$0
|
$0
|
SUBTOTAL CURRENT LIABILITIES
|
$5,198
|
$6,387
|
$7,218
|
Long-term Liabilities
|
$46,400
|
$42,800
|
$39,200
|
Total Liabilities
|
$51,598
|
$49,187
|
$46,418
|
Paid-in Capital
|
$20,000
|
$20,000
|
$20,000
|
Retained Earnings
|
($9,000)
|
$13,606
|
$59,893
|
Earnings
|
$22,606
|
$46,287
|
$66,178
|
TOTAL CAPITAL
|
$33,606
|
$79,893
|
$146,071
|
TOTAL LIABILITIES AND CAPITAL
|
$85,204
|
$129,080
|
$192,489
|
Net Worth
|
$33,606
|
$79,893
|
$146,071
|
7.5 Business Ratios
Business ratios for the years of this plan are shown below. Industry profile ratios based on the NAISC code 541614, Process, Physical Distribution, and Logistics Consulting, are shown for comparison.
RATIO ANALYSIS
| ||||
YEAR 1
|
YEAR 2
|
YEAR 3
|
INDUSTRY PROFILE
| |
Sales Growth
|
0.00%
|
13.92%
|
10.82%
|
7.23%
|
Percent of Total Assets
| ||||
Accounts Receivable
|
54.00%
|
40.61%
|
30.18%
|
19.37%
|
Other Current Assets
|
0.00%
|
0.00%
|
0.00%
|
50.13%
|
Total Current Assets
|
100.00%
|
100.00%
|
100.00%
|
70.99%
|
Long-term Assets
|
0.00%
|
0.00%
|
0.00%
|
29.01%
|
TOTAL ASSETS
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
Current Liabilities
|
6.10%
|
4.95%
|
3.75%
|
34.21%
|
Long-term Liabilities
|
54.46%
|
33.16%
|
20.36%
|
15.24%
|
Total Liabilities
|
60.56%
|
38.11%
|
24.11%
|
49.45%
|
NET WORTH
|
39.44%
|
61.89%
|
75.89%
|
50.55%
|
Percent of Sales
| ||||
Sales
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
Gross Margin
|
100.00%
|
100.00%
|
100.00%
|
23.92%
|
Selling, General & Administrative Expenses
|
93.80%
|
88.49%
|
85.02%
|
11.77%
|
Advertising Expenses
|
0.00%
|
0.00%
|
0.00%
|
0.57%
|
Profit Before Interest and Taxes
|
10.33%
|
17.73%
|
22.56%
|
0.85%
|
Main Ratios
| ||||
Current
|
16.39
|
20.21
|
26.67
|
1.60
|
Quick
|
16.39
|
20.21
|
26.67
|
1.31
|
Total Debt to Total Assets
|
60.56%
|
38.11%
|
24.11%
|
56.90%
|
Pre-tax Return on Net Worth
|
96.10%
|
82.77%
|
64.72%
|
2.82%
|
Pre-tax Return on Assets
|
37.90%
|
51.23%
|
49.11%
|
6.54%
|
Additional Ratios
|
Year 1
|
Year 2
|
Year 3
| |
Net Profit Margin
|
6.64%
|
11.93%
|
15.39%
|
n.a
|
Return on Equity
|
67.27%
|
57.94%
|
45.31%
|
n.a
|
Activity Ratios
| ||||
Accounts Receivable Turnover
|
5.55
|
5.55
|
5.55
|
n.a
|
Collection Days
|
57
|
62
|
63
|
n.a
|
Accounts Payable Turnover
|
12.69
|
12.17
|
12.17
|
n.a
|
Payment Days
|
27
|
27
|
28
|
n.a
|
Total Asset Turnover
|
4.00
|
3.01
|
2.23
|
n.a
|
Debt Ratios
| ||||
Debt to Net Worth
|
1.54
|
0.62
|
0.32
|
n.a
|
Current Liab. to Liab.
|
0.10
|
0.13
|
0.16
|
n.a
|
Liquidity Ratios
| ||||
Net Working Capital
|
$80,006
|
$122,693
|
$185,271
|
n.a
|
Interest Coverage
|
12.20
|
25.71
|
39.43
|
n.a
|
Additional Ratios
| ||||
Assets to Sales
|
0.25
|
0.33
|
0.45
|
n.a
|
Current Debt/Total Assets
|
6%
|
5%
|
4%
|
n.a
|
Acid Test
|
7.54
|
12.00
|
18.62
|
n.a
|
Sales/Net Worth
|
10.13
|
4.86
|
2.94
|
n.a
|
Dividend Payout
|
0.00
|
0.00
|
0.00
|
n.a
|
Appendix
SALES FORECAST
| |||||||||||||
MONTH 1
|
MONTH 2
|
MONTH 3
|
MONTH 4
|
MONTH 5
|
MONTH 6
|
MONTH 7
|
MONTH 8
|
MONTH 9
|
MONTH 10
|
MONTH 11
|
MONTH 12
| ||
Sales
| |||||||||||||
Symbol and CDS Customers
|
0%
|
$20,000
|
$20,000
|
$20,785
|
$21,890
|
$21,400
|
$24,200
|
$24,302
|
$25,000
|
$27,400
|
$28,900
|
$27,500
|
$22,000
|
New Customers
|
0%
|
$0
|
$0
|
$0
|
$0
|
$6,000
|
$7,500
|
$8,000
|
$9,700
|
$6,000
|
$7,000
|
$7,000
|
$6,000
|
TOTAL SALES
|
$20,000
|
$20,000
|
$20,785
|
$21,890
|
$27,400
|
$31,700
|
$32,302
|
$34,700
|
$33,400
|
$35,900
|
$34,500
|
$28,000
| |
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
| |
Symbol and CDS Customers
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
New Customers
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Subtotal Direct Cost of Sales
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
PERSONNEL PLAN
| |||||||||||||
MONTH 1
|
MONTH 2
|
MONTH 3
|
MONTH 4
|
MONTH 5
|
MONTH 6
|
MONTH 7
|
MONTH 8
|
MONTH 9
|
MONTH 10
|
Month 11
|
Month 12
| ||
Mary Todd
|
0%
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
John West
|
0%
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
$5,000
|
Installation Consultants
|
0%
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
$8,000
|
Office Manager
|
0%
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
$3,000
|
TOTAL PEOPLE
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
4
|
4
| |
Total Payroll
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
| |
GENERAL ASSUMPTIONS
| |||||||||||||
MONTH 1
|
MONTH 2
|
MONTH 3
|
MONTH 4
|
MONTH 5
|
MONTH 6
|
MONTH 7
|
MONTH 8
|
MONTH 9
|
MONTH 10
|
MONTH 11
|
MONTH 12
| ||
Plan Month
|
1
|
2
|
3
|
4
|
5
|
6
|
7
|
8
|
9
|
10
|
11
|
12
| |
Current Interest Rate
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
|
10.00%
| |
Long-term Interest Rate
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
|
6.00%
| |
Tax Rate
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
|
30.00%
| |
Other
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
|
0
| |
PRO FORMA PROFIT AND LOSS
| |||||||||||||
MONTH 1
|
MONTH 2
|
MONTH 3
|
MONTH 4
|
MONTH 5
|
MONTH 6
|
MONTH 7
|
MONTH 8
|
MONTH 9
|
MONTH 10
|
MONTH 11
|
MONTH 12
| ||
Sales
|
$20,000
|
$20,000
|
$20,785
|
$21,890
|
$27,400
|
$31,700
|
$32,302
|
$34,700
|
$33,400
|
$35,900
|
$34,500
|
$28,000
| |
Direct Cost of Sales
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Other Production Expenses
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
TOTAL COST OF SALES
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Gross Margin
|
$20,000
|
$20,000
|
$20,785
|
$21,890
|
$27,400
|
$31,700
|
$32,302
|
$34,700
|
$33,400
|
$35,900
|
$34,500
|
$28,000
| |
Gross Margin %
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
|
100.00%
| |
Expenses
| |||||||||||||
Payroll
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
| |
Sales and Marketing and Other Expenses
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Depreciation
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Leased Equipment
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Utilities
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
| |
Insurance
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Rent
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
|
$1,000
| |
Payroll Taxes
|
15%
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
$3,150
|
Other
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Total Operating Expenses
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
|
$25,450
| |
Profit Before Interest and Taxes
|
($5,450)
|
($5,450)
|
($4,665)
|
($3,560)
|
$1,950
|
$6,250
|
$6,852
|
$9,250
|
$7,950
|
$10,450
|
$9,050
|
$2,550
| |
EBITDA
|
($5,450)
|
($5,450)
|
($4,665)
|
($3,560)
|
$1,950
|
$6,250
|
$6,852
|
$9,250
|
$7,950
|
$10,450
|
$9,050
|
$2,550
| |
Interest Expense
|
$249
|
$247
|
$246
|
$244
|
$243
|
$241
|
$240
|
$238
|
$237
|
$235
|
$234
|
$232
| |
Taxes Incurred
|
($1,710)
|
($1,709)
|
($1,473)
|
($1,141)
|
$512
|
$1,803
|
$1,984
|
$2,704
|
$2,314
|
$3,065
|
$2,645
|
$695
| |
Net Profit
|
($3,989)
|
($3,988)
|
($3,437)
|
($2,663)
|
$1,195
|
$4,206
|
$4,629
|
$6,308
|
$5,399
|
$7,151
|
$6,172
|
$1,623
| |
Net Profit/Sales
|
-19.94%
|
-19.94%
|
-16.54%
|
-12.16%
|
4.36%
|
13.27%
|
14.33%
|
18.18%
|
16.17%
|
19.92%
|
17.89%
|
5.79%
| |
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 Received
| |||||||||||||
Cash from Operations
| |||||||||||||
Cash Sales
|
$5,000
|
$5,000
|
$5,196
|
$5,473
|
$6,850
|
$7,925
|
$8,076
|
$8,675
|
$8,350
|
$8,975
|
$8,625
|
$7,000
| |
Cash from Receivables
|
$0
|
$500
|
$15,000
|
$15,020
|
$15,616
|
$16,555
|
$20,658
|
$23,790
|
$24,286
|
$25,993
|
$25,113
|
$26,890
| |
SUBTOTAL CASH FROM OPERATIONS
|
$5,000
|
$5,500
|
$20,196
|
$20,492
|
$22,466
|
$24,480
|
$28,733
|
$32,465
|
$32,636
|
$34,968
|
$33,738
|
$33,890
| |
Additional Cash Received
| |||||||||||||
Sales Tax, VAT, HST/GST Received
|
0.00%
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
New Current Borrowing
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
New Other Liabilities (interest-free)
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
New Long-term Liabilities
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Sales of Other Current Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Sales of Long-term Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
New Investment Received
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
SUBTOTAL CASH RECEIVED
|
$5,000
|
$5,500
|
$20,196
|
$20,492
|
$22,466
|
$24,480
|
$28,733
|
$32,465
|
$32,636
|
$34,968
|
$33,738
|
$33,890
| |
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
| |
Expenditures from Operations
| |||||||||||||
Cash Spending
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
|
$21,000
| |
Bill Payments
|
$100
|
$2,989
|
$2,996
|
$3,233
|
$3,608
|
$5,248
|
$6,500
|
$6,697
|
$7,379
|
$7,026
|
$7,735
|
$7,263
| |
SUBTOTAL SPENT ON OPERATIONS
|
$21,100
|
$23,989
|
$23,996
|
$24,233
|
$24,608
|
$26,248
|
$27,500
|
$27,697
|
$28,379
|
$28,026
|
$28,735
|
$28,263
| |
Additional Cash Spent
| |||||||||||||
Sales Tax, VAT, HST/GST Paid Out
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Principal Repayment of Current Borrowing
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Other Liabilities Principal Repayment
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Long-term Liabilities Principal Repayment
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
|
$300
| |
Purchase Other Current Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Purchase Long-term Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
Dividends
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
| |
SUBTOTAL CASH SPENT
|
$21,400
|
$24,289
|
$24,296
|
$24,533
|
$24,908
|
$26,548
|
$27,800
|
$27,997
|
$28,679
|
$28,326
|
$29,035
|
$28,563
| |
Net Cash Flow
|
($16,400)
|
($18,789)
|
($4,099)
|
($4,041)
|
($2,441)
|
($2,067)
|
$933
|
$4,468
|
$3,958
|
$6,642
|
$4,702
|
$5,327
| |
Cash Balance
|
$44,600
|
$25,811
|
$21,712
|
$17,671
|
$15,229
|
$13,162
|
$14,095
|
$18,563
|
$22,521
|
$29,163
|
$33,865
|
$39,191
| |
PRO FORMA BALANCE SHEET
| |||||||||||||
MONTH 1
|
MONTH 2
|
MONTH 3
|
MONTH 4
|
MONTH 5
|
MONTH 6
|
MONTH 7
|
MONTH 8
|
MONTH 9
|
MONTH 10
|
MONTH 11
|
MONTH 12
| ||
Assets
|
Starting Balances
| ||||||||||||
Current Assets
| |||||||||||||
Cash
|
$61,000
|
$44,600
|
$25,811
|
$21,712
|
$17,671
|
$15,229
|
$13,162
|
$14,095
|
$18,563
|
$22,521
|
$29,163
|
$33,865
|
$39,191
|
Accounts Receivable
|
$0
|
$15,000
|
$29,500
|
$30,089
|
$31,487
|
$36,420
|
$43,640
|
$47,209
|
$49,444
|
$50,208
|
$51,140
|
$51,903
|
$46,013
|
Other Current Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
TOTAL CURRENT ASSETS
|
$61,000
|
$59,600
|
$55,311
|
$51,801
|
$49,157
|
$51,650
|
$56,802
|
$61,304
|
$68,007
|
$72,728
|
$80,303
|
$85,767
|
$85,204
|
Long-term Assets
| |||||||||||||
Long-term Assets
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
Accumulated Depreciation
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
TOTAL LONG-TERM ASSETS
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
TOTAL ASSETS
|
$61,000
|
$59,600
|
$55,311
|
$51,801
|
$49,157
|
$51,650
|
$56,802
|
$61,304
|
$68,007
|
$72,728
|
$80,303
|
$85,767
|
$85,204
|
Liabilities and Capital
|
Month 1
|
Month 2
|
Month 3
|
Month 4
|
Month 5
|
Month 6
|
Month 7
|
Month 8
|
Month 9
|
Month 10
|
Month 11
|
Month 12
| |
Current Liabilities
| |||||||||||||
Accounts Payable
|
$0
|
$2,889
|
$2,888
|
$3,115
|
$3,434
|
$5,031
|
$6,277
|
$6,451
|
$7,145
|
$6,767
|
$7,491
|
$7,084
|
$5,198
|
Current Borrowing
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
Other Current Liabilities
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
$0
|
SUBTOTAL CURRENT LIABILITIES
|
$0
|
$2,889
|
$2,888
|
$3,115
|
$3,434
|
$5,031
|
$6,277
|
$6,451
|
$7,145
|
$6,767
|
$7,491
|
$7,084
|
$5,198
|
Long-term Liabilities
|
$50,000
|
$49,700
|
$49,400
|
$49,100
|
$48,800
|
$48,500
|
$48,200
|
$47,900
|
$47,600
|
$47,300
|
$47,000
|
$46,700
|
$46,400
|
TOTAL LIABILITIES
|
$50,000
|
$52,589
|
$52,288
|
$52,215
|
$52,234
|
$53,531
|
$54,477
|
$54,351
|
$54,745
|
$54,067
|
$54,491
|
$53,784
|
$51,598
|
Paid-in Capital
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
$20,000
|
Retained Earnings
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
($9,000)
|
Earnings
|
$0
|
($3,989)
|
($7,977)
|
($11,414)
|
($14,077)
|
($12,882)
|
($8,675)
|
($4,047)
|
$2,262
|
$7,661
|
$14,812
|
$20,983
|
$22,606
|
TOTAL CAPITAL
|
$11,000
|
$7,011
|
$3,023
|
($414)
|
($3,077)
|
($1,882)
|
$2,325
|
$6,953
|
$13,262
|
$18,661
|
$25,812
|
$31,983
|
$33,606
|
TOTAL LIABILITIES AND CAPITAL
|
$61,000
|
$59,600
|
$55,311
|
$51,801
|
$49,157
|
$51,650
|
$56,802
|
$61,304
|
$68,007
|
$72,728
|
$80,303
|
$85,767
|
$85,204
|
Net Worth
|
$11,000
|
$7,011
|
$3,023
|
($414)
|
($3,077)
|
($1,882)
|
$2,325
|
$6,953
|
$13,262
|
$18,661
|
$25,812
|
$31,983
|
$33,606
|
