Business Solutions Consulting Business Plan
Content
January 2001
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 [email protected]. For product information visit our Website: www.paloalto.com or call: 1-800-229-7526.
Copyright Palo Alto Software, Inc., 1995-2002
Confidentiality Agreement
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Table of Contents
1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 1.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Keys To Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Start-Up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 4 4 5 6 6 6 6
2.0 3.0 4.0 5.0
6.0
Strategy and Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6.2 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 11 12 13 14
7.0 8.0
Business Solutions Consulting
1.0 Executive Summary
Introduction Business Solutions Consulting (BSC) is a start-up consulting firm focused on serving the comprehensive needs of businesses in the full range of the business cycle. With a core staff of experienced professionals and a team approach to most consulting projects, BSC will be able to offer a more balanced quality service than many of its competitors. The Company Business Solutions Consulting is a team of six business consultants. Each consultant specializes in a particular discipline, including finance, sales and marketing, technology, management, operations, and human resources. BSC offers a list of services for business owners to choose from, depending on their particular business needs. This includes; business and marketing plan preparation, financial search and procurement, IT consulting services, management development, human resources advising, and etc. BSC will have a focus on start-up businesses, preferably in the earlier stages of operation. Small and mid-sized businesses make up a sizable majority of U.S. and international markets. BSC prefers to establish a relationship with a younger operation and continue to nurture that relationship over the long term. BSC will be established as an Oregon based LLC with two principal partners, each of whom owns a 50% share in the company. Mr. Andrew B. Christiansen has extensive experience in business planning and finance, including CFO positions with ABC Conglomerate and DEF International. Mr. David E. Fields brings in experience in the area of marketing, advertising, and communications. The Market The business consulting industry is very fragmented. Several large multinational companies dominate the industry while many smaller (and often more specialized) firms occupy their market niches. Major management consulting companies, such as McKinsey, Bain, and Boston Consulting Group, have established their dominant position by providing services to the leading companies in various industries. Consulting practices of the major accounting firms (a.k.a. the Big Five) have established worldwide presence and sell their packaged services to companies of different sizes and industries. At the same time, numerous firms and individual business consultants prosper in the market niches that bigger players consider unprofitable to enter. Start-up companies are the target market of this firm. BSC intends to stay on the pulse of new business activity within the local area. Additionally, business contacts, referrals from among the group, and Internet marketing efforts will be made in pursuit of new clients. Startup companies are attractive because owners often lack the broad range of knowledge and expertise required to launch a new business. There is a serious need in the marketplace, and certainly a significant demand for, these types of start-up consulting services. Competitors in the forefront of the marketplace typically offer many of the services that BCS has. These services include information-based consulting, integration and management services. Services are designed to increase clients' operations effectiveness through reduced cost, improved customer service, enhanced quality of current product lines and services, and a more rapid introduction of new products and services. Competitors also offer industryspecific expertise to objectively evaluate, select, develop, implement, and manage information systems, networks, and applications. Consulting firms BSC is competing with include regional and specialty consulting firms, as Page 1
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well as the consulting groups of international accounting forms such as KPMG LLP, Ernst & Young LLP, Deloitte & Touche LLP, PricewaterhouseCoopers LLP, and Andersen Consulting. In its managmeent and IT consulting services, BSC competes with information system vendors such as HBO & Company, Inc., Integrated Systems Solution Corporation, Electronic Data Systems Corporation, Perot Systems Corporation, SAIC, CAP Gemini America, Inc., and Computer Sciences Corporation. In e-commerce-related services, BSC competes with the traditional competitors, as well as newer, Internet product and service companies such as Razorfish, Scient, TriZetto, and Viant. Financial BSC's co-owners, Andrew B. Christiansen and David E. Fields, will each provide $50,000 that will cover the bulk of the start-up expenses. The rest of the required financing will come from the Small Business Administration (SBA) 10-year loan in the amount of $100,000. Combined, these funds will be sufficient to cover the company's expenses throughout the first year of operations, which is the most critical from the cash flow standpoint. BSC's Break-even Analysis is based on the average of the first-year figures for total sales by salaries, bonuses costs, and all other operating expenses. Such analysis shows that BSC will break-even by the tenth month of operations.
Highlights
$4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2001 2002 2003
Sales Gross Margin Net Profit
1.1 Mission
Business Solutions Consulting aims to offer comprehensive consulting services. BSC will focus on providing personal and specialized services to meet each client's specific needs.
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1.2 Keys To Success
BSC's keys to success include: 1. 2. 3. 4. A group of professionals with a broad range of specialty areas that complement each other. A high level of experience in these specialty areas. A team approach on most consulting projects. Many business contacts among the consultant group.
2.0 Company Summary
Business Solutions Consulting is a startup firm, which will focus on providing a wide range of business consulting services to other startups and companies in early stages of their operations. Business Solutions Consulting is a team of six Business Consultants. Each consultant specializes in a particular discipline, including finance, sales and marketing, technology, management, operations, and human resources.
2.1 Company Ownership
Business Solutions Consulting was registered in September, 2000 as an Oregon LLC, equally owned by Andrew B. Christiansen and David E. Fields.
3.0 Start-Up Summary
BSC's co-owners, Andrew B. Christiansen and David E. Fields, will each provide $50,000 that will cover the bulk of the start-up expenses. The rest of the required financing will come from the Small Business Administration (SBA) 10-year loan in the amount of $100,000. Combined, these funds will be sufficient to cover the company's expenses throughout the first year of operations, which is the most critical from the cash flow standpoint. The following chart and table contain projected initial start-up cost data.
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Start-up
$200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Expenses Assets Investment Loans
4.0 Service Description
BSC offers a list of services for business owners to choose from, depending on their particular business needs. Start-up services include business plan preparation, marketing plan preparation, and financing search and procurement. Ongoing services include business plan updates, marketing plan updates, search and procurement of additional rounds of financing, management development, IT consulting services, e-commerce consulting services, operational advising, and human resources advising. BSC is flexible, working with its clients in the fashion preferred by the client, be it on-site, remotely, or a combination of both. BSC typically works on a project in a team fashion to assist the client in all areas of the business simultaneously. This allows for all parties involved to be in sync in terms of understanding the interconnections of all functional areas of the business.
5.0 Market Analysis
BSC will have a focus on start-up businesses, preferably in the earlier stages of operation. Small and mid-sized businesses make up a sizable majority of U.S. and international markets. BSC prefers to establish a relationship with a younger operation and continue to nurture that relationship for the long term. The following chart and table show BSC's projected target markets and their growth for the first three years of this plan.
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Market Analysis (Pie)
Start-Up Companies 1-3 Year Old Companies 3 + Year Old Companies Other
Table: Market Analysis Market Analysis Potential Customers Start-Up Companies 1-3 Year Old Companies 3 + Year Old Companies Other Total Growth 10% 8% 6% 0% 8.96% 2001 1,900,000 900,000 400,000 0 3,200,000 2002 2,090,000 972,000 424,000 0 3,486,000 2003 2,299,000 1,049,760 449,440 0 3,798,200 2004 2,528,900 1,133,741 476,406 0 4,139,047 2005 2,781,790 1,224,440 504,990 0 4,511,220 CAGR 10.00% 8.00% 6.00% 0.00% 8.96%
5.1 Market Segmentation
Start-Ups Start-up companies often are in need of expert advice and planning in initiating a successful start-up. It is believed that a majority of start-ups actually seek out consulting assistance. Those that do typically are searching for a comprehensive area of services. 1-3 Year Old Companies Young companies, between 1 and 3 years old are less likely to be searching for expert business consulting services. Typically, they have already secured financing and have developed a satisfactory level of security. However, these businesses are still in the beginnings of their overall cycle and in most cases need the broad expertise of a team of expert consultants. 3 + Year-Old Companies Established companies make up the final segment, and is significantly smaller than the startup segment. The established company segment typically has a need for a less comprehensive range of services. These entities are in need of specialized services in one or two disciplines, e.g., operational planning or human resources.
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5.2 Target Market Segment Strategy
Start-up companies are the target market of this firm. BSC intends to stay on the pulse of new business activity within the local area. Additionally, business contacts, referrals from among the group, and Internet marketing efforts will be made in pursuit of new clients.
5.3 Market Needs
Start-up company owners often lack the broad range of knowledge and expertise required to launch a new business. There is a serious need in the marketplace, and certainly a significant demand for, these types of start-up consulting services.
5.4 Service Business Analysis
The business consulting industry is very fragmented. Several large multi-national companies dominate the industry while many smaller (and often more specialized) firms occupy their market niches. Major management consulting companies, such as McKinsey, Bain, and Boston Consulting Group, have established their dominant position by providing services to the leading companies in various industries. Consulting practices of the major accounting firms (a.k.a. the Big Five) have established worldwide presence and sell their packaged services to companies of different sizes and industries. At the same time, numerous firms and individual business consultants prosper in the market niches that bigger players consider unprofitable to enter.
5.5 Competition and Buying Patterns
Competitors in the forefront of the marketplace typically offer information-based consulting, integration and management services. Services are designed to increase clients' operations effectiveness through reduced cost, improved customer service, enhanced quality of current product lines and services, and a more rapid introduction of new products and services. Competitors also offer industry-specific expertise to objectively evaluate, select, develop, implement, and manage information systems, networks, and applications. Consulting services are becoming more focused on technology-based solutions to help clients improve cost management, quality, service, and research and development to obtain differentiation and competitive advantage. E-strategy services are being provided to business and IT executives with education, insights, and strategies to utilize the power of the Internet to improve their performance. E-strategy services include executive visioning, business strategy, planning for e-business initiatives, user design, and intellectual capital formation. IT strategy consulting services are focusing on the use of IT to support business goals, and to leverage the power of the Internet to transform the way products and services are distributed and retailed. Strategic planning consulting services typically consist of strategic alignment (which includes IT strategic planning and governance, alignment of IT and process, and future focus and regulartory requirements), IT department operational excellence (which includes fiscal responsibility, infrastructure, IT department processes, data center operations, and IT human resources management), and IT value realization (which consists of performance measurement, business integration (people, process and technology), change management Page 6
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and application investment). Performance improvement services consist of process redesigning to reducing administrative costs, improving financial performance, engaging and retaining customers, and improving accountability and reporting. Other commonly found services among competitors include long-term IT management expertise, as well as a wide range of management services including assessment/due diligence, program management, discrete outsourcing, and full IT outsourcing services. Consulting firms BSC is competing with include regional and specialty consulting firms, as well as the consulting groups of international accounting forms such as KPMG LLP, Ernst & Young LLP, Deloitte & Touche LLP, PricewaterhouseCoopers LLP, and Andersen Consulting. In its managmeent and IT consulting services, BSC competes with information system vendors such as HBO & Company, Inc., Integrated Systems Solution Corporation, Electronic Data Systems Corporation, Perot Systems Corporation, SAIC, CAP Gemini America, Inc., and Computer Sciences Corporation. In e-commerce-related services, BSC competes with the traditional competitors, as well as newer, Internet product and service companies such as Razorfish, Scient, TriZetto, and Viant.
6.0 Strategy and Implementation
BSC intends to succeed by offering companies a comprehensive range of multi-cycle business planning solutions.
6.1 Competitive Edge
Our competitive edge is the team approach of consultants who are each focused in one or two business disciplines.
6.2 Sales Strategy
BSC intends to succeed by offering companies a comprehensive range of multi-cycle business planning solutions. The company will strive to optimize its billing hours. The following table outlines the sales forecast for the next three years.
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Sales by Year
$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2001 2002 2003
Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting
Table: Sales Forecast Sales Forecast Unit Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Unit Sales Unit Prices Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Sales Direct Unit Costs Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Direct Cost of Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Subtotal Direct Cost of Sales 2001 191 175 223 223 812 2001 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $286,508 $262,633 $222,840 $334,260 $1,106,240 2001 $0.00 $0.00 $0.00 $0.00 2001 $0 $0 $0 $0 $0 2002 397 364 464 464 1,688 2002 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $595,937 $546,276 $463,507 $695,260 $2,300,980 2002 $0.00 $0.00 $0.00 $0.00 2002 $0 $0 $0 $0 $0 2003 763 699 890 890 3,242 2003 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $1,144,199 $1,048,850 $889,933 $1,334,899 $4,417,881 2003 $0.00 $0.00 $0.00 $0.00 2003 $0 $0 $0 $0 $0
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7.0 Management Team
Andrew B. Christiansen has extensive experience in business planning and finance, including CFO positions with ABC Conglomerate and DEF International. David E. Fields brings in experience in the area of marketing, advertising, and communications.
7.1 Personnel Plan
The following table illustrates the personnel plan for the next three years. No major changes in headcount are planned.
Table: Personnel Personnel Plan Owner / Consultants Other Total People Total Payroll 2001 $600,000 $0 6 $600,000 2002 $660,000 7 $660,000 2003 $726,000 8 $726,000
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8.0 Financial Plan
BSC expects to raise $100,000 as its own capital, and to borrow $100,000 guaranteed by the SBA as a 10-year loan. This provides the bulk of the current financing required.
8.1 Break-even Analysis
BSC's Break-even Analysis is based on the average of the first-year figures for total sales by salaries, bonuses costs, and all other operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk. Such analysis shows that BSC will break-even by the tenth month of operations.
Break-even Analysis
$80,000 $60,000 $40,000 $20,000 $0 ($20,000) ($40,000) ($60,000) ($80,000) 0 20 40 60 80 100
Monthly break-even point
Break-even point = where line intersects with 0
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 56 $76,150 $1,362.36 $0.00 $76,150
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8.2 Projected Profit and Loss
As the profit and loss table shows, BSC expects to continue its steady growth in profitability over the next three years of operations.
Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Utilities Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes 2001 $1,106,240 $0 $0 -----------$0 $1,106,240 100.00% $600,000 $216,600 $6,000 $1,200 $90,000 $0 -----------$913,800 $192,440 $10,000 $45,610 $136,830 12.37% TRUE 2002 $2,300,980 $0 $0 -----------$0 $2,300,980 100.00% 2003 $4,417,881 $0 $0 -----------$0 $4,417,881 100.00%
$660,000 $726,000 $227,430 $238,802 $6,300 $6,615 $1,266 $1,336 $99,000 $108,900 $0 $0 ----------------------$993,996 $1,081,652 $1,306,984 $3,336,229 $9,661 $8,948 $324,331 $831,820 $972,992 $2,495,461 42.29% 56.49% TRUE TRUE
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8.3 Projected Cash Flow
As the cash flow statement illustrates, BSC expects to maintain a steady rate of cash flow over the next three years of operations.
Cash
$300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 ($50,000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Net Cash Flow Cash Balance
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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 2001 2002 2003
$1,106,240 $0 $1,106,240 $0 $0 $0 $0 $0 $0 $0 $0 $1,106,240 2001 $30,941 $905,234 $936,175 $0 $0 $0 $0 $0 $0 $36,000 $0 $972,175 $134,066 $284,066
$2,300,980 $0 $2,300,980 $0 $0 $0 $0 $0 $0 $0 $0 $2,300,980 2002 $60,769 $1,233,699 $1,294,468 $0 $0 $0 $0 $6,777 $0 $45,000 $0 $1,346,245 $954,735 $1,238,800
$4,417,881 $0 $4,417,881 $0 $0 $0 $0 $0 $0 $0 $0 $4,417,881 2003 $113,591 $1,754,012 $1,867,602 $0 $0 $0 $0 $7,486 $0 $55,000 $0 $1,930,088 $2,487,793 $3,726,593
8.4 Projected Balance Sheet
Following is a copy of the company's projected balance sheet.
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Table: Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash 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 2001 $28,236 $0 $0 $28,236 $100,000 $128,236 $99,500 ($5,500) $136,830 $230,830 $359,066 $230,830 2002 $55,455 $0 $0 $55,455 $93,223 $148,678 $99,500 $131,330 $972,992 $1,203,822 $1,352,500 $1,203,822 2003 $103,658 $0 $0 $103,658 $85,737 $189,395 $99,500 $1,104,322 $2,495,461 $3,699,283 $3,888,678 $3,699,283 2001 $284,066 $20,000 $304,066 $61,000 $6,000 $55,000 $359,066 2002 $1,238,800 $20,000 $1,258,800 $106,000 $12,300 $93,700 $1,352,500 2003 $3,726,593 $20,000 $3,746,593 $161,000 $18,915 $142,085 $3,888,678
8.5 Business Ratios
The following table outlines the important business ratios for Business Solutions Consulting, as determined by the Standard Industry Classification (SIC) Index. Ratios for the Business Consulting services industry (SIC 8748) are used as a benchmark in this table.
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Table: Ratios Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory 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 Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Business Vitality Profile Sales per Employee Survival Rate Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 2001 0.00% 0.00% 0.00% 5.57% 84.68% 15.32% 100.00% 0.00% 27.85% 27.85% 72.15% 100.00% 100.00% 87.63% 10.85% 17.40% 10.77 10.77 35.71% 79.04% 50.81% 2001 $184,373 2001 12.37% 59.28% 0.00 0 0.00 33.02 8 3.08 0.56 0.22 $275,830 19.24 0.32 8% 10.77 4.79 0.00 2002 108.00% 0.00% 0.00% 1.48% 93.07% 6.93% 100.00% 0.00% 6.89% 6.89% 93.11% 100.00% 100.00% 57.71% 5.48% 56.80% 22.70 22.70 10.99% 107.77% 95.92% 2002 $328,711 2002 42.29% 80.83% 0.00 0 0.00 22.74 145 1.70 0.12 0.37 $1,203,345 135.28 0.59 4% 22.70 1.91 0.00 2003 92.00% 0.00% 0.00% 0.51% 96.35% 3.65% 100.00% 0.00% 2.20% 2.20% 97.80% 100.00% 100.00% 43.51% 2.99% 75.52% 36.14 36.14 4.87% 89.94% 85.56% 2003 $552,235 2003 56.49% 67.46% 0.00 0 0.00 17.39 193 1.14 0.05 0.55 $3,642,935 372.85 0.88 3% 36.14 1.19 0.00 Industry Profile 12.40% 26.10% 3.70% 44.70% 74.50% 25.50% 100.00% 44.30% 16.00% 60.30% 39.70% 100.00% 0.00% 80.80% 1.30% 2.20% 1.75 1.38 60.30% 3.80% 9.70% Industry $0 0.00% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
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Appendix
Appendix Table: Sales Forecast Sales Forecast Unit Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Unit Sales Unit Prices Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Sales Direct Unit Costs Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Direct Cost of Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Subtotal Direct Cost of Sales Jan 12 11 14 14 51 Jan $1,500.00 $1,500.00 $1,000.00 $1,500.00 $18,000 $16,500 $14,000 $21,000 $69,500 Jan $0.00 $0.00 $0.00 $0.00 Jan $0 $0 $0 $0 $0 Feb 13 12 15 15 54 Feb $1,500.00 $1,500.00 $1,000.00 $1,500.00 $18,900 $17,325 $14,700 $22,050 $72,975 Feb $0.00 $0.00 $0.00 $0.00 Feb $0 $0 $0 $0 $0 Mar 13 12 15 15 56 Mar $1,500.00 $1,500.00 $1,000.00 $1,500.00 $19,845 $18,191 $15,435 $23,153 $76,624 Mar $0.00 $0.00 $0.00 $0.00 Mar $0 $0 $0 $0 $0 Apr 14 13 16 16 59 Apr $1,500.00 $1,500.00 $1,000.00 $1,500.00 $20,837 $19,101 $16,207 $24,310 $80,455 Apr $0.00 $0.00 $0.00 $0.00 Apr $0 $0 $0 $0 $0 May 15 13 17 17 62 May $1,500.00 $1,500.00 $1,000.00 $1,500.00 $21,879 $20,056 $17,017 $25,526 $84,478 May $0.00 $0.00 $0.00 $0.00 May $0 $0 $0 $0 $0 Jun 15 14 18 18 65 Jun $1,500.00 $1,500.00 $1,000.00 $1,500.00 $22,973 $21,059 $17,868 $26,802 $88,702 Jun $0.00 $0.00 $0.00 $0.00 Jun $0 $0 $0 $0 $0 Jul 16 15 19 19 68 Jul $1,500.00 $1,500.00 $1,000.00 $1,500.00 $24,122 $22,112 $18,761 $28,142 $93,137 Jul $0.00 $0.00 $0.00 $0.00 Jul $0 $0 $0 $0 $0 Aug 17 15 20 20 72 Aug $1,500.00 $1,500.00 $1,000.00 $1,500.00 $25,328 $23,217 $19,699 $29,549 $97,793 Aug $0.00 $0.00 $0.00 $0.00 Aug $0 $0 $0 $0 $0 Sep 18 16 21 21 75 Sep $1,500.00 $1,500.00 $1,000.00 $1,500.00 $26,594 $24,378 $20,684 $31,027 $102,683 Sep $0.00 $0.00 $0.00 $0.00 Sep $0 $0 $0 $0 $0 Oct 19 17 22 22 79 Oct $1,500.00 $1,500.00 $1,000.00 $1,500.00 $27,924 $25,597 $21,719 $32,578 $107,817 Oct $0.00 $0.00 $0.00 $0.00 Oct $0 $0 $0 $0 $0 Nov 20 18 23 23 83 Nov $1,500.00 $1,500.00 $1,000.00 $1,500.00 $29,320 $26,877 $22,805 $34,207 $113,208 Nov $0.00 $0.00 $0.00 $0.00 Nov $0 $0 $0 $0 $0 Dec 21 19 24 24 87 Dec $1,500.00 $1,500.00 $1,000.00 $1,500.00 $30,786 $28,221 $23,945 $35,917 $118,869 Dec $0.00 $0.00 $0.00 $0.00 Dec $0 $0 $0 $0 $0
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Appendix
Appendix Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Calculated Totals Payroll Expense New Accounts Payable Jan 1 10.00% 10.00% 25.00% 0.00% $50,000 $72,601 Feb 2 10.00% 10.00% 25.00% 0.00% $50,000 $73,383 Mar 3 10.00% 10.00% 25.00% 0.00% $50,000 $74,204 Apr 4 10.00% 10.00% 25.00% 0.00% $50,000 $75,066 May 5 10.00% 10.00% 25.00% 0.00% $50,000 $75,971 Jun 6 10.00% 10.00% 25.00% 0.00% $50,000 $76,922 Jul 7 10.00% 10.00% 25.00% 0.00% $50,000 $77,919 Aug 8 10.00% 10.00% 25.00% 0.00% $50,000 $78,967 Sep 9 10.00% 10.00% 25.00% 0.00% $50,000 $80,067 Oct 10 10.00% 10.00% 25.00% 0.00% $50,000 $81,223 Nov 11 10.00% 10.00% 25.00% 0.00% $50,000 $82,436 Dec 12 10.00% 10.00% 25.00% 0.00% $50,000 $83,709
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Appendix
Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Utilities Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes Jan $69,500 $0 $0 -----------$0 $69,500 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 ($6,650) $833 ($1,871) ($5,613) -8.08% Feb $72,975 $0 $0 -----------$0 $72,975 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 ($3,175) $833 ($1,002) ($3,006) -4.12% Mar $76,624 $0 $0 -----------$0 $76,624 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $474 $833 ($90) ($270) -0.35% Apr $80,455 $0 $0 -----------$0 $80,455 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $4,305 $833 $868 $2,604 3.24% May $84,478 $0 $0 -----------$0 $84,478 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $8,328 $833 $1,874 $5,621 6.65% Jun $88,702 $0 $0 -----------$0 $88,702 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $12,552 $833 $2,930 $8,789 9.91% Jul $93,137 $0 $0 -----------$0 $93,137 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $16,987 $833 $4,038 $12,115 13.01% Aug $97,793 $0 $0 -----------$0 $97,793 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $21,643 $833 $5,203 $15,608 15.96% Sep $102,683 $0 $0 -----------$0 $102,683 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $26,533 $833 $6,425 $19,275 18.77% Oct $107,817 $0 $0 -----------$0 $107,817 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $31,667 $833 $7,708 $23,125 21.45% Nov $113,208 $0 $0 -----------$0 $113,208 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $37,058 $833 $9,056 $27,169 24.00% Dec $118,869 $0 $0 -----------$0 $118,869 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $42,719 $833 $10,471 $31,414 26.43%
5% 6% 15%
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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
$69,500 $0 $69,500 $0 $0 $0 $0 $0 $0 $0 $0 $69,500 Jan $2,011 $56,103 $58,115 $0 $0 $0 $0 $0 $0 $3,000 $0 $61,115 $8,385 $158,385
$72,975 $0 $72,975 $0 $0 $0 $0 $0 $0 $0 $0 $72,975 Feb $2,098 $72,627 $74,725 $0 $0 $0 $0 $0 $0 $3,000 $0 $77,725 ($4,750) $153,635
$76,624 $0 $76,624 $0 $0 $0 $0 $0 $0 $0 $0 $76,624 Mar $2,189 $73,410 $75,600 $0 $0 $0 $0 $0 $0 $3,000 $0 $78,600 ($1,976) $151,659
$80,455 $0 $80,455 $0 $0 $0 $0 $0 $0 $0 $0 $80,455 Apr $2,285 $74,233 $76,518 $0 $0 $0 $0 $0 $0 $3,000 $0 $79,518 $937 $152,596
$84,478 $0 $84,478 $0 $0 $0 $0 $0 $0 $0 $0 $84,478 May $2,386 $75,096 $77,482 $0 $0 $0 $0 $0 $0 $3,000 $0 $80,482 $3,996 $156,592
$88,702 $0 $88,702 $0 $0 $0 $0 $0 $0 $0 $0 $88,702 Jun $2,491 $76,003 $78,494 $0 $0 $0 $0 $0 $0 $3,000 $0 $81,494 $7,207 $163,799
$93,137 $0 $93,137 $0 $0 $0 $0 $0 $0 $0 $0 $93,137 Jul $2,602 $76,955 $79,557 $0 $0 $0 $0 $0 $0 $3,000 $0 $82,557 $10,580 $174,379
$97,793 $0 $97,793 $0 $0 $0 $0 $0 $0 $0 $0 $97,793 Aug $2,719 $77,954 $80,673 $0 $0 $0 $0 $0 $0 $3,000 $0 $83,673 $14,120 $188,499
$102,683 $0 $102,683 $0 $0 $0 $0 $0 $0 $0 $0 $102,683 Sep $2,841 $79,004 $81,845 $0 $0 $0 $0 $0 $0 $3,000 $0 $84,845 $17,838 $206,337
$107,817 $0 $107,817 $0 $0 $0 $0 $0 $0 $0 $0 $107,817 Oct $2,969 $80,106 $83,075 $0 $0 $0 $0 $0 $0 $3,000 $0 $86,075 $21,742 $228,080
$113,208 $0 $113,208 $0 $0 $0 $0 $0 $0 $0 $0 $113,208 Nov $3,104 $81,263 $84,367 $0 $0 $0 $0 $0 $0 $3,000 $0 $87,367 $25,841 $253,921
$118,869 $0 $118,869 $0 $0 $0 $0 $0 $0 $0 $0 $118,869 Dec $3,245 $82,478 $85,724 $0 $0 $0 $0 $0 $0 $3,000 $0 $88,724 $30,145 $284,066
0.00%
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Appendix
Appendix Table: Personnel Personnel Plan Owner / Consultants Other Total People Total Payroll Jan $50,000 6 $50,000 Feb $50,000 6 $50,000 Mar $50,000 6 $50,000 Apr $50,000 6 $50,000 May $50,000 6 $50,000 Jun $50,000 6 $50,000 Jul $50,000 6 $50,000 Aug $50,000 6 $50,000 Sep $50,000 6 $50,000 Oct $50,000 6 $50,000 Nov $50,000 6 $50,000 Dec $50,000 6 $50,000
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Appendix
Appendix Table: Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash 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 $1,000 $0 $0 $1,000 $100,000 $101,000 $99,500 ($5,500) $0 $94,000 $195,000 $94,000 Jan $17,498 $0 $0 $17,498 $100,000 $117,498 $99,500 ($5,500) ($5,613) $88,388 $205,885 $88,388 Feb $18,254 $0 $0 $18,254 $100,000 $118,254 $99,500 ($5,500) ($8,619) $85,381 $203,635 $85,381 Mar $19,047 $0 $0 $19,047 $100,000 $119,047 $99,500 ($5,500) ($8,888) $85,112 $204,159 $85,112 Apr $19,881 $0 $0 $19,881 $100,000 $119,881 $99,500 ($5,500) ($6,285) $87,715 $207,596 $87,715 May $20,756 $0 $0 $20,756 $100,000 $120,756 $99,500 ($5,500) ($664) $93,336 $214,092 $93,336 Jun $21,674 $0 $0 $21,674 $100,000 $121,674 $99,500 ($5,500) $8,125 $102,125 $223,799 $102,125 Jul $22,639 $0 $0 $22,639 $100,000 $122,639 $99,500 ($5,500) $20,240 $114,240 $236,879 $114,240 Aug $23,652 $0 $0 $23,652 $100,000 $123,652 $99,500 ($5,500) $35,847 $129,847 $253,499 $129,847 Sep $24,715 $0 $0 $24,715 $100,000 $124,715 $99,500 ($5,500) $55,122 $149,122 $273,837 $149,122 Oct $25,832 $0 $0 $25,832 $100,000 $125,832 $99,500 ($5,500) $78,248 $172,248 $298,080 $172,248 Nov $27,004 $0 $0 $27,004 $100,000 $127,004 $99,500 ($5,500) $105,416 $199,416 $326,421 $199,416 Dec $28,236 $0 $0 $28,236 $100,000 $128,236 $99,500 ($5,500) $136,830 $230,830 $359,066 $230,830 Starting Balances $150,000 $20,000 $170,000 $25,000 $0 $25,000 $195,000 Jan $158,385 $20,000 $178,385 $28,000 $500 $27,500 $205,885 Feb $153,635 $20,000 $173,635 $31,000 $1,000 $30,000 $203,635 Mar $151,659 $20,000 $171,659 $34,000 $1,500 $32,500 $204,159 Apr $152,596 $20,000 $172,596 $37,000 $2,000 $35,000 $207,596 May $156,592 $20,000 $176,592 $40,000 $2,500 $37,500 $214,092 Jun $163,799 $20,000 $183,799 $43,000 $3,000 $40,000 $223,799 Jul $174,379 $20,000 $194,379 $46,000 $3,500 $42,500 $236,879 Aug $188,499 $20,000 $208,499 $49,000 $4,000 $45,000 $253,499 Sep $206,337 $20,000 $226,337 $52,000 $4,500 $47,500 $273,837 Oct $228,080 $20,000 $248,080 $55,000 $5,000 $50,000 $298,080 Nov $253,921 $20,000 $273,921 $58,000 $5,500 $52,500 $326,421 Dec $284,066 $20,000 $304,066 $61,000 $6,000 $55,000 $359,066
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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 [email protected]. 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 1.1 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 1.2 Keys To Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Start-Up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Service Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Market Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Market Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.5 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 3 3 4 4 5 6 6 6 6
2.0 3.0 4.0 5.0
6.0
Strategy and Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6.2 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Management Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 10 11 12 13 14
7.0 8.0
Business Solutions Consulting
1.0 Executive Summary
Introduction Business Solutions Consulting (BSC) is a start-up consulting firm focused on serving the comprehensive needs of businesses in the full range of the business cycle. With a core staff of experienced professionals and a team approach to most consulting projects, BSC will be able to offer a more balanced quality service than many of its competitors. The Company Business Solutions Consulting is a team of six business consultants. Each consultant specializes in a particular discipline, including finance, sales and marketing, technology, management, operations, and human resources. BSC offers a list of services for business owners to choose from, depending on their particular business needs. This includes; business and marketing plan preparation, financial search and procurement, IT consulting services, management development, human resources advising, and etc. BSC will have a focus on start-up businesses, preferably in the earlier stages of operation. Small and mid-sized businesses make up a sizable majority of U.S. and international markets. BSC prefers to establish a relationship with a younger operation and continue to nurture that relationship over the long term. BSC will be established as an Oregon based LLC with two principal partners, each of whom owns a 50% share in the company. Mr. Andrew B. Christiansen has extensive experience in business planning and finance, including CFO positions with ABC Conglomerate and DEF International. Mr. David E. Fields brings in experience in the area of marketing, advertising, and communications. The Market The business consulting industry is very fragmented. Several large multinational companies dominate the industry while many smaller (and often more specialized) firms occupy their market niches. Major management consulting companies, such as McKinsey, Bain, and Boston Consulting Group, have established their dominant position by providing services to the leading companies in various industries. Consulting practices of the major accounting firms (a.k.a. the Big Five) have established worldwide presence and sell their packaged services to companies of different sizes and industries. At the same time, numerous firms and individual business consultants prosper in the market niches that bigger players consider unprofitable to enter. Start-up companies are the target market of this firm. BSC intends to stay on the pulse of new business activity within the local area. Additionally, business contacts, referrals from among the group, and Internet marketing efforts will be made in pursuit of new clients. Startup companies are attractive because owners often lack the broad range of knowledge and expertise required to launch a new business. There is a serious need in the marketplace, and certainly a significant demand for, these types of start-up consulting services. Competitors in the forefront of the marketplace typically offer many of the services that BCS has. These services include information-based consulting, integration and management services. Services are designed to increase clients' operations effectiveness through reduced cost, improved customer service, enhanced quality of current product lines and services, and a more rapid introduction of new products and services. Competitors also offer industryspecific expertise to objectively evaluate, select, develop, implement, and manage information systems, networks, and applications. Consulting firms BSC is competing with include regional and specialty consulting firms, as Page 1
Business Solutions Consulting
well as the consulting groups of international accounting forms such as KPMG LLP, Ernst & Young LLP, Deloitte & Touche LLP, PricewaterhouseCoopers LLP, and Andersen Consulting. In its managmeent and IT consulting services, BSC competes with information system vendors such as HBO & Company, Inc., Integrated Systems Solution Corporation, Electronic Data Systems Corporation, Perot Systems Corporation, SAIC, CAP Gemini America, Inc., and Computer Sciences Corporation. In e-commerce-related services, BSC competes with the traditional competitors, as well as newer, Internet product and service companies such as Razorfish, Scient, TriZetto, and Viant. Financial BSC's co-owners, Andrew B. Christiansen and David E. Fields, will each provide $50,000 that will cover the bulk of the start-up expenses. The rest of the required financing will come from the Small Business Administration (SBA) 10-year loan in the amount of $100,000. Combined, these funds will be sufficient to cover the company's expenses throughout the first year of operations, which is the most critical from the cash flow standpoint. BSC's Break-even Analysis is based on the average of the first-year figures for total sales by salaries, bonuses costs, and all other operating expenses. Such analysis shows that BSC will break-even by the tenth month of operations.
Highlights
$4,500,000 $4,000,000 $3,500,000 $3,000,000 $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0 2001 2002 2003
Sales Gross Margin Net Profit
1.1 Mission
Business Solutions Consulting aims to offer comprehensive consulting services. BSC will focus on providing personal and specialized services to meet each client's specific needs.
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Business Solutions Consulting
1.2 Keys To Success
BSC's keys to success include: 1. 2. 3. 4. A group of professionals with a broad range of specialty areas that complement each other. A high level of experience in these specialty areas. A team approach on most consulting projects. Many business contacts among the consultant group.
2.0 Company Summary
Business Solutions Consulting is a startup firm, which will focus on providing a wide range of business consulting services to other startups and companies in early stages of their operations. Business Solutions Consulting is a team of six Business Consultants. Each consultant specializes in a particular discipline, including finance, sales and marketing, technology, management, operations, and human resources.
2.1 Company Ownership
Business Solutions Consulting was registered in September, 2000 as an Oregon LLC, equally owned by Andrew B. Christiansen and David E. Fields.
3.0 Start-Up Summary
BSC's co-owners, Andrew B. Christiansen and David E. Fields, will each provide $50,000 that will cover the bulk of the start-up expenses. The rest of the required financing will come from the Small Business Administration (SBA) 10-year loan in the amount of $100,000. Combined, these funds will be sufficient to cover the company's expenses throughout the first year of operations, which is the most critical from the cash flow standpoint. The following chart and table contain projected initial start-up cost data.
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Business Solutions Consulting
Start-up
$200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Expenses Assets Investment Loans
4.0 Service Description
BSC offers a list of services for business owners to choose from, depending on their particular business needs. Start-up services include business plan preparation, marketing plan preparation, and financing search and procurement. Ongoing services include business plan updates, marketing plan updates, search and procurement of additional rounds of financing, management development, IT consulting services, e-commerce consulting services, operational advising, and human resources advising. BSC is flexible, working with its clients in the fashion preferred by the client, be it on-site, remotely, or a combination of both. BSC typically works on a project in a team fashion to assist the client in all areas of the business simultaneously. This allows for all parties involved to be in sync in terms of understanding the interconnections of all functional areas of the business.
5.0 Market Analysis
BSC will have a focus on start-up businesses, preferably in the earlier stages of operation. Small and mid-sized businesses make up a sizable majority of U.S. and international markets. BSC prefers to establish a relationship with a younger operation and continue to nurture that relationship for the long term. The following chart and table show BSC's projected target markets and their growth for the first three years of this plan.
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Business Solutions Consulting
Market Analysis (Pie)
Start-Up Companies 1-3 Year Old Companies 3 + Year Old Companies Other
Table: Market Analysis Market Analysis Potential Customers Start-Up Companies 1-3 Year Old Companies 3 + Year Old Companies Other Total Growth 10% 8% 6% 0% 8.96% 2001 1,900,000 900,000 400,000 0 3,200,000 2002 2,090,000 972,000 424,000 0 3,486,000 2003 2,299,000 1,049,760 449,440 0 3,798,200 2004 2,528,900 1,133,741 476,406 0 4,139,047 2005 2,781,790 1,224,440 504,990 0 4,511,220 CAGR 10.00% 8.00% 6.00% 0.00% 8.96%
5.1 Market Segmentation
Start-Ups Start-up companies often are in need of expert advice and planning in initiating a successful start-up. It is believed that a majority of start-ups actually seek out consulting assistance. Those that do typically are searching for a comprehensive area of services. 1-3 Year Old Companies Young companies, between 1 and 3 years old are less likely to be searching for expert business consulting services. Typically, they have already secured financing and have developed a satisfactory level of security. However, these businesses are still in the beginnings of their overall cycle and in most cases need the broad expertise of a team of expert consultants. 3 + Year-Old Companies Established companies make up the final segment, and is significantly smaller than the startup segment. The established company segment typically has a need for a less comprehensive range of services. These entities are in need of specialized services in one or two disciplines, e.g., operational planning or human resources.
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5.2 Target Market Segment Strategy
Start-up companies are the target market of this firm. BSC intends to stay on the pulse of new business activity within the local area. Additionally, business contacts, referrals from among the group, and Internet marketing efforts will be made in pursuit of new clients.
5.3 Market Needs
Start-up company owners often lack the broad range of knowledge and expertise required to launch a new business. There is a serious need in the marketplace, and certainly a significant demand for, these types of start-up consulting services.
5.4 Service Business Analysis
The business consulting industry is very fragmented. Several large multi-national companies dominate the industry while many smaller (and often more specialized) firms occupy their market niches. Major management consulting companies, such as McKinsey, Bain, and Boston Consulting Group, have established their dominant position by providing services to the leading companies in various industries. Consulting practices of the major accounting firms (a.k.a. the Big Five) have established worldwide presence and sell their packaged services to companies of different sizes and industries. At the same time, numerous firms and individual business consultants prosper in the market niches that bigger players consider unprofitable to enter.
5.5 Competition and Buying Patterns
Competitors in the forefront of the marketplace typically offer information-based consulting, integration and management services. Services are designed to increase clients' operations effectiveness through reduced cost, improved customer service, enhanced quality of current product lines and services, and a more rapid introduction of new products and services. Competitors also offer industry-specific expertise to objectively evaluate, select, develop, implement, and manage information systems, networks, and applications. Consulting services are becoming more focused on technology-based solutions to help clients improve cost management, quality, service, and research and development to obtain differentiation and competitive advantage. E-strategy services are being provided to business and IT executives with education, insights, and strategies to utilize the power of the Internet to improve their performance. E-strategy services include executive visioning, business strategy, planning for e-business initiatives, user design, and intellectual capital formation. IT strategy consulting services are focusing on the use of IT to support business goals, and to leverage the power of the Internet to transform the way products and services are distributed and retailed. Strategic planning consulting services typically consist of strategic alignment (which includes IT strategic planning and governance, alignment of IT and process, and future focus and regulartory requirements), IT department operational excellence (which includes fiscal responsibility, infrastructure, IT department processes, data center operations, and IT human resources management), and IT value realization (which consists of performance measurement, business integration (people, process and technology), change management Page 6
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and application investment). Performance improvement services consist of process redesigning to reducing administrative costs, improving financial performance, engaging and retaining customers, and improving accountability and reporting. Other commonly found services among competitors include long-term IT management expertise, as well as a wide range of management services including assessment/due diligence, program management, discrete outsourcing, and full IT outsourcing services. Consulting firms BSC is competing with include regional and specialty consulting firms, as well as the consulting groups of international accounting forms such as KPMG LLP, Ernst & Young LLP, Deloitte & Touche LLP, PricewaterhouseCoopers LLP, and Andersen Consulting. In its managmeent and IT consulting services, BSC competes with information system vendors such as HBO & Company, Inc., Integrated Systems Solution Corporation, Electronic Data Systems Corporation, Perot Systems Corporation, SAIC, CAP Gemini America, Inc., and Computer Sciences Corporation. In e-commerce-related services, BSC competes with the traditional competitors, as well as newer, Internet product and service companies such as Razorfish, Scient, TriZetto, and Viant.
6.0 Strategy and Implementation
BSC intends to succeed by offering companies a comprehensive range of multi-cycle business planning solutions.
6.1 Competitive Edge
Our competitive edge is the team approach of consultants who are each focused in one or two business disciplines.
6.2 Sales Strategy
BSC intends to succeed by offering companies a comprehensive range of multi-cycle business planning solutions. The company will strive to optimize its billing hours. The following table outlines the sales forecast for the next three years.
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Sales by Year
$5,000,000 $4,000,000 $3,000,000 $2,000,000 $1,000,000 $0 2001 2002 2003
Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting
Table: Sales Forecast Sales Forecast Unit Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Unit Sales Unit Prices Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Sales Direct Unit Costs Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Direct Cost of Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Subtotal Direct Cost of Sales 2001 191 175 223 223 812 2001 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $286,508 $262,633 $222,840 $334,260 $1,106,240 2001 $0.00 $0.00 $0.00 $0.00 2001 $0 $0 $0 $0 $0 2002 397 364 464 464 1,688 2002 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $595,937 $546,276 $463,507 $695,260 $2,300,980 2002 $0.00 $0.00 $0.00 $0.00 2002 $0 $0 $0 $0 $0 2003 763 699 890 890 3,242 2003 $1,500.00 $1,500.00 $1,000.00 $1,500.00 $1,144,199 $1,048,850 $889,933 $1,334,899 $4,417,881 2003 $0.00 $0.00 $0.00 $0.00 2003 $0 $0 $0 $0 $0
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7.0 Management Team
Andrew B. Christiansen has extensive experience in business planning and finance, including CFO positions with ABC Conglomerate and DEF International. David E. Fields brings in experience in the area of marketing, advertising, and communications.
7.1 Personnel Plan
The following table illustrates the personnel plan for the next three years. No major changes in headcount are planned.
Table: Personnel Personnel Plan Owner / Consultants Other Total People Total Payroll 2001 $600,000 $0 6 $600,000 2002 $660,000 7 $660,000 2003 $726,000 8 $726,000
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8.0 Financial Plan
BSC expects to raise $100,000 as its own capital, and to borrow $100,000 guaranteed by the SBA as a 10-year loan. This provides the bulk of the current financing required.
8.1 Break-even Analysis
BSC's Break-even Analysis is based on the average of the first-year figures for total sales by salaries, bonuses costs, and all other operating expenses. These are presented as per-unit revenue, per-unit cost, and fixed costs. These conservative assumptions make for a more accurate estimate of real risk. Such analysis shows that BSC will break-even by the tenth month of operations.
Break-even Analysis
$80,000 $60,000 $40,000 $20,000 $0 ($20,000) ($40,000) ($60,000) ($80,000) 0 20 40 60 80 100
Monthly break-even point
Break-even point = where line intersects with 0
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 56 $76,150 $1,362.36 $0.00 $76,150
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8.2 Projected Profit and Loss
As the profit and loss table shows, BSC expects to continue its steady growth in profitability over the next three years of operations.
Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Utilities Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes 2001 $1,106,240 $0 $0 -----------$0 $1,106,240 100.00% $600,000 $216,600 $6,000 $1,200 $90,000 $0 -----------$913,800 $192,440 $10,000 $45,610 $136,830 12.37% TRUE 2002 $2,300,980 $0 $0 -----------$0 $2,300,980 100.00% 2003 $4,417,881 $0 $0 -----------$0 $4,417,881 100.00%
$660,000 $726,000 $227,430 $238,802 $6,300 $6,615 $1,266 $1,336 $99,000 $108,900 $0 $0 ----------------------$993,996 $1,081,652 $1,306,984 $3,336,229 $9,661 $8,948 $324,331 $831,820 $972,992 $2,495,461 42.29% 56.49% TRUE TRUE
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8.3 Projected Cash Flow
As the cash flow statement illustrates, BSC expects to maintain a steady rate of cash flow over the next three years of operations.
Cash
$300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 ($50,000) Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Net Cash Flow Cash Balance
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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 2001 2002 2003
$1,106,240 $0 $1,106,240 $0 $0 $0 $0 $0 $0 $0 $0 $1,106,240 2001 $30,941 $905,234 $936,175 $0 $0 $0 $0 $0 $0 $36,000 $0 $972,175 $134,066 $284,066
$2,300,980 $0 $2,300,980 $0 $0 $0 $0 $0 $0 $0 $0 $2,300,980 2002 $60,769 $1,233,699 $1,294,468 $0 $0 $0 $0 $6,777 $0 $45,000 $0 $1,346,245 $954,735 $1,238,800
$4,417,881 $0 $4,417,881 $0 $0 $0 $0 $0 $0 $0 $0 $4,417,881 2003 $113,591 $1,754,012 $1,867,602 $0 $0 $0 $0 $7,486 $0 $55,000 $0 $1,930,088 $2,487,793 $3,726,593
8.4 Projected Balance Sheet
Following is a copy of the company's projected balance sheet.
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Table: Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash 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 2001 $28,236 $0 $0 $28,236 $100,000 $128,236 $99,500 ($5,500) $136,830 $230,830 $359,066 $230,830 2002 $55,455 $0 $0 $55,455 $93,223 $148,678 $99,500 $131,330 $972,992 $1,203,822 $1,352,500 $1,203,822 2003 $103,658 $0 $0 $103,658 $85,737 $189,395 $99,500 $1,104,322 $2,495,461 $3,699,283 $3,888,678 $3,699,283 2001 $284,066 $20,000 $304,066 $61,000 $6,000 $55,000 $359,066 2002 $1,238,800 $20,000 $1,258,800 $106,000 $12,300 $93,700 $1,352,500 2003 $3,726,593 $20,000 $3,746,593 $161,000 $18,915 $142,085 $3,888,678
8.5 Business Ratios
The following table outlines the important business ratios for Business Solutions Consulting, as determined by the Standard Industry Classification (SIC) Index. Ratios for the Business Consulting services industry (SIC 8748) are used as a benchmark in this table.
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Table: Ratios Ratio Analysis Sales Growth Percent of Total Assets Accounts Receivable Inventory 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 Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Business Vitality Profile Sales per Employee Survival Rate Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Receivable Turnover Collection Days Inventory Turnover Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 2001 0.00% 0.00% 0.00% 5.57% 84.68% 15.32% 100.00% 0.00% 27.85% 27.85% 72.15% 100.00% 100.00% 87.63% 10.85% 17.40% 10.77 10.77 35.71% 79.04% 50.81% 2001 $184,373 2001 12.37% 59.28% 0.00 0 0.00 33.02 8 3.08 0.56 0.22 $275,830 19.24 0.32 8% 10.77 4.79 0.00 2002 108.00% 0.00% 0.00% 1.48% 93.07% 6.93% 100.00% 0.00% 6.89% 6.89% 93.11% 100.00% 100.00% 57.71% 5.48% 56.80% 22.70 22.70 10.99% 107.77% 95.92% 2002 $328,711 2002 42.29% 80.83% 0.00 0 0.00 22.74 145 1.70 0.12 0.37 $1,203,345 135.28 0.59 4% 22.70 1.91 0.00 2003 92.00% 0.00% 0.00% 0.51% 96.35% 3.65% 100.00% 0.00% 2.20% 2.20% 97.80% 100.00% 100.00% 43.51% 2.99% 75.52% 36.14 36.14 4.87% 89.94% 85.56% 2003 $552,235 2003 56.49% 67.46% 0.00 0 0.00 17.39 193 1.14 0.05 0.55 $3,642,935 372.85 0.88 3% 36.14 1.19 0.00 Industry Profile 12.40% 26.10% 3.70% 44.70% 74.50% 25.50% 100.00% 44.30% 16.00% 60.30% 39.70% 100.00% 0.00% 80.80% 1.30% 2.20% 1.75 1.38 60.30% 3.80% 9.70% Industry $0 0.00% n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a n.a
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Appendix
Appendix Table: Sales Forecast Sales Forecast Unit Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Unit Sales Unit Prices Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Total Sales Direct Unit Costs Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Direct Cost of Sales Business Plans Start-Up Consulting Annual Reviews Other Ongoing Business Consulting Subtotal Direct Cost of Sales Jan 12 11 14 14 51 Jan $1,500.00 $1,500.00 $1,000.00 $1,500.00 $18,000 $16,500 $14,000 $21,000 $69,500 Jan $0.00 $0.00 $0.00 $0.00 Jan $0 $0 $0 $0 $0 Feb 13 12 15 15 54 Feb $1,500.00 $1,500.00 $1,000.00 $1,500.00 $18,900 $17,325 $14,700 $22,050 $72,975 Feb $0.00 $0.00 $0.00 $0.00 Feb $0 $0 $0 $0 $0 Mar 13 12 15 15 56 Mar $1,500.00 $1,500.00 $1,000.00 $1,500.00 $19,845 $18,191 $15,435 $23,153 $76,624 Mar $0.00 $0.00 $0.00 $0.00 Mar $0 $0 $0 $0 $0 Apr 14 13 16 16 59 Apr $1,500.00 $1,500.00 $1,000.00 $1,500.00 $20,837 $19,101 $16,207 $24,310 $80,455 Apr $0.00 $0.00 $0.00 $0.00 Apr $0 $0 $0 $0 $0 May 15 13 17 17 62 May $1,500.00 $1,500.00 $1,000.00 $1,500.00 $21,879 $20,056 $17,017 $25,526 $84,478 May $0.00 $0.00 $0.00 $0.00 May $0 $0 $0 $0 $0 Jun 15 14 18 18 65 Jun $1,500.00 $1,500.00 $1,000.00 $1,500.00 $22,973 $21,059 $17,868 $26,802 $88,702 Jun $0.00 $0.00 $0.00 $0.00 Jun $0 $0 $0 $0 $0 Jul 16 15 19 19 68 Jul $1,500.00 $1,500.00 $1,000.00 $1,500.00 $24,122 $22,112 $18,761 $28,142 $93,137 Jul $0.00 $0.00 $0.00 $0.00 Jul $0 $0 $0 $0 $0 Aug 17 15 20 20 72 Aug $1,500.00 $1,500.00 $1,000.00 $1,500.00 $25,328 $23,217 $19,699 $29,549 $97,793 Aug $0.00 $0.00 $0.00 $0.00 Aug $0 $0 $0 $0 $0 Sep 18 16 21 21 75 Sep $1,500.00 $1,500.00 $1,000.00 $1,500.00 $26,594 $24,378 $20,684 $31,027 $102,683 Sep $0.00 $0.00 $0.00 $0.00 Sep $0 $0 $0 $0 $0 Oct 19 17 22 22 79 Oct $1,500.00 $1,500.00 $1,000.00 $1,500.00 $27,924 $25,597 $21,719 $32,578 $107,817 Oct $0.00 $0.00 $0.00 $0.00 Oct $0 $0 $0 $0 $0 Nov 20 18 23 23 83 Nov $1,500.00 $1,500.00 $1,000.00 $1,500.00 $29,320 $26,877 $22,805 $34,207 $113,208 Nov $0.00 $0.00 $0.00 $0.00 Nov $0 $0 $0 $0 $0 Dec 21 19 24 24 87 Dec $1,500.00 $1,500.00 $1,000.00 $1,500.00 $30,786 $28,221 $23,945 $35,917 $118,869 Dec $0.00 $0.00 $0.00 $0.00 Dec $0 $0 $0 $0 $0
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Appendix Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Calculated Totals Payroll Expense New Accounts Payable Jan 1 10.00% 10.00% 25.00% 0.00% $50,000 $72,601 Feb 2 10.00% 10.00% 25.00% 0.00% $50,000 $73,383 Mar 3 10.00% 10.00% 25.00% 0.00% $50,000 $74,204 Apr 4 10.00% 10.00% 25.00% 0.00% $50,000 $75,066 May 5 10.00% 10.00% 25.00% 0.00% $50,000 $75,971 Jun 6 10.00% 10.00% 25.00% 0.00% $50,000 $76,922 Jul 7 10.00% 10.00% 25.00% 0.00% $50,000 $77,919 Aug 8 10.00% 10.00% 25.00% 0.00% $50,000 $78,967 Sep 9 10.00% 10.00% 25.00% 0.00% $50,000 $80,067 Oct 10 10.00% 10.00% 25.00% 0.00% $50,000 $81,223 Nov 11 10.00% 10.00% 25.00% 0.00% $50,000 $82,436 Dec 12 10.00% 10.00% 25.00% 0.00% $50,000 $83,709
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Appendix
Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Total Cost of Sales Gross Margin Gross Margin % Expenses: Payroll Sales and Marketing and Other Expenses Depreciation Utilities Payroll Taxes Other Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales Include Negative Taxes Jan $69,500 $0 $0 -----------$0 $69,500 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 ($6,650) $833 ($1,871) ($5,613) -8.08% Feb $72,975 $0 $0 -----------$0 $72,975 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 ($3,175) $833 ($1,002) ($3,006) -4.12% Mar $76,624 $0 $0 -----------$0 $76,624 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $474 $833 ($90) ($270) -0.35% Apr $80,455 $0 $0 -----------$0 $80,455 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $4,305 $833 $868 $2,604 3.24% May $84,478 $0 $0 -----------$0 $84,478 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $8,328 $833 $1,874 $5,621 6.65% Jun $88,702 $0 $0 -----------$0 $88,702 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $12,552 $833 $2,930 $8,789 9.91% Jul $93,137 $0 $0 -----------$0 $93,137 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $16,987 $833 $4,038 $12,115 13.01% Aug $97,793 $0 $0 -----------$0 $97,793 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $21,643 $833 $5,203 $15,608 15.96% Sep $102,683 $0 $0 -----------$0 $102,683 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $26,533 $833 $6,425 $19,275 18.77% Oct $107,817 $0 $0 -----------$0 $107,817 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $31,667 $833 $7,708 $23,125 21.45% Nov $113,208 $0 $0 -----------$0 $113,208 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $37,058 $833 $9,056 $27,169 24.00% Dec $118,869 $0 $0 -----------$0 $118,869 100.00% $50,000 $18,050 $500 $100 $7,500 $0 -----------$76,150 $42,719 $833 $10,471 $31,414 26.43%
5% 6% 15%
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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
$69,500 $0 $69,500 $0 $0 $0 $0 $0 $0 $0 $0 $69,500 Jan $2,011 $56,103 $58,115 $0 $0 $0 $0 $0 $0 $3,000 $0 $61,115 $8,385 $158,385
$72,975 $0 $72,975 $0 $0 $0 $0 $0 $0 $0 $0 $72,975 Feb $2,098 $72,627 $74,725 $0 $0 $0 $0 $0 $0 $3,000 $0 $77,725 ($4,750) $153,635
$76,624 $0 $76,624 $0 $0 $0 $0 $0 $0 $0 $0 $76,624 Mar $2,189 $73,410 $75,600 $0 $0 $0 $0 $0 $0 $3,000 $0 $78,600 ($1,976) $151,659
$80,455 $0 $80,455 $0 $0 $0 $0 $0 $0 $0 $0 $80,455 Apr $2,285 $74,233 $76,518 $0 $0 $0 $0 $0 $0 $3,000 $0 $79,518 $937 $152,596
$84,478 $0 $84,478 $0 $0 $0 $0 $0 $0 $0 $0 $84,478 May $2,386 $75,096 $77,482 $0 $0 $0 $0 $0 $0 $3,000 $0 $80,482 $3,996 $156,592
$88,702 $0 $88,702 $0 $0 $0 $0 $0 $0 $0 $0 $88,702 Jun $2,491 $76,003 $78,494 $0 $0 $0 $0 $0 $0 $3,000 $0 $81,494 $7,207 $163,799
$93,137 $0 $93,137 $0 $0 $0 $0 $0 $0 $0 $0 $93,137 Jul $2,602 $76,955 $79,557 $0 $0 $0 $0 $0 $0 $3,000 $0 $82,557 $10,580 $174,379
$97,793 $0 $97,793 $0 $0 $0 $0 $0 $0 $0 $0 $97,793 Aug $2,719 $77,954 $80,673 $0 $0 $0 $0 $0 $0 $3,000 $0 $83,673 $14,120 $188,499
$102,683 $0 $102,683 $0 $0 $0 $0 $0 $0 $0 $0 $102,683 Sep $2,841 $79,004 $81,845 $0 $0 $0 $0 $0 $0 $3,000 $0 $84,845 $17,838 $206,337
$107,817 $0 $107,817 $0 $0 $0 $0 $0 $0 $0 $0 $107,817 Oct $2,969 $80,106 $83,075 $0 $0 $0 $0 $0 $0 $3,000 $0 $86,075 $21,742 $228,080
$113,208 $0 $113,208 $0 $0 $0 $0 $0 $0 $0 $0 $113,208 Nov $3,104 $81,263 $84,367 $0 $0 $0 $0 $0 $0 $3,000 $0 $87,367 $25,841 $253,921
$118,869 $0 $118,869 $0 $0 $0 $0 $0 $0 $0 $0 $118,869 Dec $3,245 $82,478 $85,724 $0 $0 $0 $0 $0 $0 $3,000 $0 $88,724 $30,145 $284,066
0.00%
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Appendix Table: Personnel Personnel Plan Owner / Consultants Other Total People Total Payroll Jan $50,000 6 $50,000 Feb $50,000 6 $50,000 Mar $50,000 6 $50,000 Apr $50,000 6 $50,000 May $50,000 6 $50,000 Jun $50,000 6 $50,000 Jul $50,000 6 $50,000 Aug $50,000 6 $50,000 Sep $50,000 6 $50,000 Oct $50,000 6 $50,000 Nov $50,000 6 $50,000 Dec $50,000 6 $50,000
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Appendix
Appendix Table: Balance Sheet Pro Forma Balance Sheet Assets Current Assets Cash 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 $1,000 $0 $0 $1,000 $100,000 $101,000 $99,500 ($5,500) $0 $94,000 $195,000 $94,000 Jan $17,498 $0 $0 $17,498 $100,000 $117,498 $99,500 ($5,500) ($5,613) $88,388 $205,885 $88,388 Feb $18,254 $0 $0 $18,254 $100,000 $118,254 $99,500 ($5,500) ($8,619) $85,381 $203,635 $85,381 Mar $19,047 $0 $0 $19,047 $100,000 $119,047 $99,500 ($5,500) ($8,888) $85,112 $204,159 $85,112 Apr $19,881 $0 $0 $19,881 $100,000 $119,881 $99,500 ($5,500) ($6,285) $87,715 $207,596 $87,715 May $20,756 $0 $0 $20,756 $100,000 $120,756 $99,500 ($5,500) ($664) $93,336 $214,092 $93,336 Jun $21,674 $0 $0 $21,674 $100,000 $121,674 $99,500 ($5,500) $8,125 $102,125 $223,799 $102,125 Jul $22,639 $0 $0 $22,639 $100,000 $122,639 $99,500 ($5,500) $20,240 $114,240 $236,879 $114,240 Aug $23,652 $0 $0 $23,652 $100,000 $123,652 $99,500 ($5,500) $35,847 $129,847 $253,499 $129,847 Sep $24,715 $0 $0 $24,715 $100,000 $124,715 $99,500 ($5,500) $55,122 $149,122 $273,837 $149,122 Oct $25,832 $0 $0 $25,832 $100,000 $125,832 $99,500 ($5,500) $78,248 $172,248 $298,080 $172,248 Nov $27,004 $0 $0 $27,004 $100,000 $127,004 $99,500 ($5,500) $105,416 $199,416 $326,421 $199,416 Dec $28,236 $0 $0 $28,236 $100,000 $128,236 $99,500 ($5,500) $136,830 $230,830 $359,066 $230,830 Starting Balances $150,000 $20,000 $170,000 $25,000 $0 $25,000 $195,000 Jan $158,385 $20,000 $178,385 $28,000 $500 $27,500 $205,885 Feb $153,635 $20,000 $173,635 $31,000 $1,000 $30,000 $203,635 Mar $151,659 $20,000 $171,659 $34,000 $1,500 $32,500 $204,159 Apr $152,596 $20,000 $172,596 $37,000 $2,000 $35,000 $207,596 May $156,592 $20,000 $176,592 $40,000 $2,500 $37,500 $214,092 Jun $163,799 $20,000 $183,799 $43,000 $3,000 $40,000 $223,799 Jul $174,379 $20,000 $194,379 $46,000 $3,500 $42,500 $236,879 Aug $188,499 $20,000 $208,499 $49,000 $4,000 $45,000 $253,499 Sep $206,337 $20,000 $226,337 $52,000 $4,500 $47,500 $273,837 Oct $228,080 $20,000 $248,080 $55,000 $5,000 $50,000 $298,080 Nov $253,921 $20,000 $273,921 $58,000 $5,500 $52,500 $326,421 Dec $284,066 $20,000 $304,066 $61,000 $6,000 $55,000 $359,066
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