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Cover Page
Promote and be Profitable
This sample business plan has been made available to users of Business Plan Pro®, business
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This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary.....................................................................................................................1
Chart: Highlights...........................................................................................................................2
1.1 Objectives....................................................................................................................................2
1.2 Mission...........................................................................................................................................2
1.3 Keys to Success.........................................................................................................................2
2.0 Company Summary......................................................................................................................2
2.1 Company Ownership................................................................................................................2
2.2 Start-up Summary....................................................................................................................3
Table: Start-up Funding..............................................................................................................3
Chart: Start-up..............................................................................................................................4
Table: Start-up...............................................................................................................................4
2.3 Company Locations and Facilities.......................................................................................4
3.0 Services.............................................................................................................................................5
3.1 Service Description...................................................................................................................5
3.2 Competitive Comparison........................................................................................................5
3.3 Sales Literature..........................................................................................................................5
3.4 Fulfillment....................................................................................................................................5
3.5 Technology...................................................................................................................................5
3.6 Future Services..........................................................................................................................5
4.0 Market Analysis Summary.........................................................................................................5
Chart: Market Analysis (Pie).....................................................................................................6
Table: Market Analysis................................................................................................................6
5.0 Strategy and Implementation Summary.............................................................................7
5.1 Competitive Edge......................................................................................................................7
5.2 Sales Strategy............................................................................................................................7
5.3 Sales Forecast............................................................................................................................7
Table: Sales Forecast...................................................................................................................7
Chart: Sales Monthly...................................................................................................................8
Chart: Sales by Year....................................................................................................................8
5.4 Milestones....................................................................................................................................9
Table: Milestones...........................................................................................................................9
Chart: Milestones..........................................................................................................................9
6.0 Management Summary.............................................................................................................10
6.1 Personnel Plan..........................................................................................................................10
Table: Personnel..........................................................................................................................10
6.2 Management Team.................................................................................................................10
6.3 Management Team Gaps......................................................................................................10
7.0 Financial Plan................................................................................................................................11
7.1 Important Assumptions........................................................................................................11
Table: General Assumptions...................................................................................................11
7.2 Key Financial Indicators........................................................................................................12
Chart: Benchmarks....................................................................................................................12
7.3 Break-even Analysis...............................................................................................................13
Table: Break-even Analysis.....................................................................................................13
Page 1
Table of Contents
Chart: Break-even Analysis....................................................................................................13
7.4 Projected Profit and Loss.....................................................................................................14
Chart: Profit Monthly.................................................................................................................14
Chart: Profit Yearly.....................................................................................................................14
Chart: Gross Margin Monthly.................................................................................................15
Chart: Gross Margin Yearly.....................................................................................................15
Table: Profit and Loss................................................................................................................16
7.5 Projected Cash Flow...............................................................................................................17
Chart: Cash...................................................................................................................................17
Table: Cash Flow.........................................................................................................................18
7.6 Projected Balance Sheet......................................................................................................19
Table: Balance Sheet.................................................................................................................19
7.7 Business Ratios........................................................................................................................20
7.7 Business Ratios........................................................................................................................20
Table: Ratios.................................................................................................................................20
Table: Personnel....................................................................................................................................1
Table: General Assumptions.............................................................................................................2
Table: General Assumptions.............................................................................................................2
Table: Profit and Loss..........................................................................................................................3
Table: Profit and Loss..........................................................................................................................3
Table: Cash Flow...................................................................................................................................4
Table: Cash Flow...................................................................................................................................4
Table: Balance Sheet...........................................................................................................................5
Table: Balance Sheet...........................................................................................................................5
Table: Sales Forecast...........................................................................................................................6
Table: Sales Forecast...........................................................................................................................6
Page 2
MarketCamp
1.0 Executive Summary
MarketCamp is a Mexico City based start-up business that provides local businesses with worldclass qualified traffic generation and lead closures for Internet businesses. MarketCamp will
offer a wide range of services including: detailed research, internet targeting, mini-site
development, search engine submissions, and statistical reporting.
The Market
Mexico City's business community will be the primary market for our company. The business
size that we service can be relatively small because the cost per month is only $1,000, but
services can be scaled up to meet the needs of huge clients due to the focus and expertise of
the business. Internet connectivity in Mexico, in comparison with the U.S., is currently low, but
interest is growing. Though far behind the major industrial countries, Mexico maintains one of
the fastest growth rates on the Internet with thousands of users and thousands of WWW sites.
Mexican WWW sites have been growing at the rate of 200-300 per month this year.
CompuServe Mexico, the largest commercial Internet service provider in Mexico has 30,000
subscribers, while Spin Internet has 28,000 Mexican members.
Competitive Edge
MarketCamp has the competitive edge of experience and market expertise in a complicated
field. This is truly an advantage as the founder and principal Paul Berry has spent the last five
years in the United States honing his e-business skills. Paul received his MBA from the
University of Oregon in 1992 and worked at a local software company for a few years. Wanting
to see the East Coast, Paul moved to Boston and worked at Forrester Research, the premier
Internet marketing research company. It was Paul's work at Forrester Research that provided
him with the experience and insight that he will leverage for MarketCamp.
MarketCamp has conservatively forecasted sales for year onewith sales more than doubling in
year three. Profitability will be reached by year one. MarketCamp's profit margin will steadily
increase from year one to year three.
Page 1
MarketCamp
Chart: Highlights
1.1 Objectives
The following are the objectives for the company:
To be self sufficient within three months.
Healthy sales in Year 1, steadily growing in Year 2 and Year 3.
1.2 Mission
MarketCamp will provide full-service Internet marketing campaigns, focusing directly on
keyword combination search results, targeted advertising and mini-sites that deliver an offer in
a clean, statistically monitored environment.
1.3 Keys to Success
1. Keeping existing clients to develop repeat business.
2. Clients must make money, and know it.
3. Start with easily-demonstratable simple module, and build up from there.
2.0 Company Summary
MarketCamp is a Web marketing business based in Mexico City. The company will start up as a
simple consulting business billing directly in the founder's name.
2.1 Company Ownership
This company is owned 100% by its founder, Paul Berry.
Page 2
MarketCamp
2.2 Start-up Summary
Start-up costs are detailed in the chart and table below.
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$3,500
$20,000
$23,500
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$0
$20,000
$0
$20,000
$20,000
Liabilities and Capital
Liabilities
Current Borrowing
Long-term Liabilities
Accounts Payable (Outstanding Bills)
Other Current Liabilities (interest-free)
Total Liabilities
$0
$0
$0
$0
$0
Capital
Planned Investment
Paul Berry
Other
Additional Investment Requirement
Total Planned Investment
$23,500
$0
$0
$23,500
Loss at Start-up (Start-up Expenses)
Total Capital
($3,500)
$20,000
Total Capital and Liabilities
$20,000
Total Funding
$23,500
Page 3
MarketCamp
Chart: Start-up
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Stationery etc.
Brochures
Insurance
Other
Total Start-up Expenses
$1,000
$1,000
$1,000
$500
$0
$3,500
Start-up Assets
Cash Required
Other Current Assets
Long-term Assets
Total Assets
$20,000
$0
$0
$20,000
Total Requirements
$23,500
2.3 Company Locations and Facilities
MarketCamp will begin as a home-office business in the founder's apartment in Mexico City.
After six months of operation it will expand to a formal office space in Mexico City.
Page 4
MarketCamp
3.0 Services
Detailed Research.
Internet Targeting Proposal.
Focused Mini-Site Development.
Top Search Results on Keywords.
Advertising Creative Design.
Monthly Statistical Reporting.
Campaign Maintenance.
3.1 Service Description
**Details and a description of services have been omitted from this published plan because
they were strategic and proprietary.
3.2 Competitive Comparison
Competition isn't the most important factor at this time, there is plenty of need and potential
customers out there.
3.3 Sales Literature
Our website will serve as sales literature.
3.4 Fulfillment
For the present time, until there is real growth, services will be delivered by the founder.
3.5 Technology
**Details have been omitted from this published plan because they were strategic and
proprietary.
3.6 Future Services
**Details have been omitted from this published plan because they were strategic and
proprietary.
4.0 Market Analysis Summary
Mexico City's business community will be the primary market for our company. We will attempt
to work with business models that attract customers and sign contracts. The business size can
be relatively small because the cost per month is only $1,000, but services can be scaled up to
meet the needs of huge clients due to the focus and expertise of the business.
Internet connectivity in Mexico, in comparison with the U.S., is currently low, but interest is
growing. Though far behind the major industrial countries, Mexico maintains one of the fastest
growth rates on the Internet with thousands of users and thousands of WWW sites. Mexican
WWW sites have been growing at the rate of 200-300 per month this year. CompuServe Mexico,
the largest commercial Internet service provider in Mexico has 30,000 subscribers, while Spin
Page 5
MarketCamp
Internet has 28,000 Mexican members. Microsoft Mexico, a division of Microsoft's recentlylaunched online service named Microsoft Network, will charge $4.95 per month (about one half
of CompuServe's $9.95 per month rate) and will offer local telephone access in Mexico City,
Guadalajara, Monterrey, and three other cities. The service will be English-only and U.S.oriented for at least the first six months, but will eventually include local content.
Many companies in Mexico City currently have Internet access and more are realizing the
importance of presence on the Web in order to attract international business. For this
reason, our Market Analysis table predicts rapid growth amongst potential small businesses and
marketing managers for medium-sized businesses to grow in-line with the growth of Internet
usage.
We will try to work with other more established marketing companies, giving up some of the
margin in order to get access to more clients more quickly.
We will need to make a decision on pricing, whether to keep rates at an attractive sign-up rate
or focus on the more successful clients and raise rates.
Chart: Market Analysis (Pie)
Table: Market Analysis
Market Analysis
Potential Customers
Small Business Start-up
Entrepreneurs
Medium Business Marketing
Managers
Established Marketing
Companies
Year 1
Year 2
Year 3
Year 4
Year 5
100%
475
950
1,900
3,800
7,600
100.00%
80%
684
1,231
2,216
3,989
7,180
80.00%
20%
97
116
139
167
200
19.83%
Growth
CAGR
Page 6
MarketCamp
Total
85.84%
1,256
2,297
4,255
7,956
14,980
85.84%
5.0 Strategy and Implementation Summary
We will obtain our first clients through word-of-mouth from the board of directors and board of
advisors as well as the previous connections of Paul Berry's freelance business. Each mini-site
will contain a small "powered by MarketCamp" logo which will lead to information about us.
Because of the quality of our work, and the desirability of our expertise, we expect to add a
number of clients in the near future.
5.1 Competitive Edge
The strongest competitive edge that MarketCamp has is our expertise in a very
complicated field. Obtaining high click-through and top placement in search engines is a fine art
that our founder has tremendous, world-class experience in. Because Mexico is somewhere
between three and five years behind the American Internet, the expertise of the founder has
huge leverage. We will essentially be the first to market this service in Mexico City, and we will
be years ahead of competitors.
5.2 Sales Strategy
The beauty of this business is in the subscription model and the commissions based earnings.
Once we sign a client, most will stay for a long period of time, possibly for the lifetime of the
business. We feel 30% to 60% growth rates are very modest, therefore we could potentially
sign many clients more quickly.
5.3 Sales Forecast
We expect that a 30% to 60% growth rate throughout the first year is very modest. If we find
more clients signing up we can scale the team quickly to reach those expectations. The backend of the business will be built by the founder and a network of top programmers.
Table: Sales Forecast
Sales Forecast
Year 1
Year 2
Year 3
$210,550
$86,760
$297,310
$290,000
$130,000
$420,000
$410,000
$200,000
$610,000
Year 1
$39,831
$17,352
$57,183
Year 2
$54,860
$26,000
$80,860
Year 3
$77,561
$40,000
$117,561
Sales
Monthly Revenue
Commission Sales
Total Sales
Direct Cost of Sales
Monthly Revenue
Commission Sales
Subtotal Direct Cost of Sales
Page 7
MarketCamp
Chart: Sales Monthly
Chart: Sales by Year
Page 8
MarketCamp
5.4 Milestones
The specific milestones are shown in the following chart and table.
Table: Milestones
Milestones
Milestone
Site Finished, Company Emails
Set
First Client Signs
Second Client Signs
Third Client Signs
Official Investment and Equity
Transactions
10th Client Signs
Second Marketing Push
Totals
Start Date
1/1/2001
End Date
3/1/2001
Budget
$0
Manager
Paul Berry
Department
Founder
4/1/2001
4/15/2001
5/1/2001
6/1/2001
4/30/2001
5/15/2001
6/1/2001
8/31/2001
$0
$0
$0
$0
Paul Berry
Paul Berry
Paul Berry
Paul Berry
Founder
Founder
Founder
Founder
8/1/2001
11/1/2001
10/31/2001
1/31/2001
$0
$0
$0
Paul Berry
Paul Berry
Founder
Founder
Chart: Milestones
Page 9
MarketCamp
6.0 Management Summary
Paul Berry will be president, responsible for decisions on all hires and expenses. Paul will also
do the work behind the scenes, structuring a system that will enable other future employees to
scale the business as clients are added.
Carlos Silva will be an initial investor, possibly also a co-founder and part of the board of
directors.
Gabriela Lopez will be one of the first employees, contracted part-time for her expertise in
design and knowledge of the Web.
Raul Garcia will be another of the first employees, contracted part-time for his expertise as
a sales person and junior executive in Mexico City.
6.1 Personnel Plan
Paul will be paid somewhere between $3,000 and $5,000 in the initial months, depending on
the amount of clients signed, and the nature of those contracts.
Gabriela Lopez will be contracted for $1,000 to $2,000 depending on the load of work and her
availability. She will be responsible for the corporate identity and all stationery and brochures.
Raul Garcia will be contracted for $1,000 to $2,000 depending on his involvement with the
company and he will also receive a commission structure for additional clients beyond the
expected ones.
Table: Personnel
Personnel Plan
Year 1
Year 2
Year 3
Paul Berry
Commission
Programmers
Total People
$43,000
$17,352
$19,900
0
$60,000
$26,000
$27,000
0
$75,000
$40,000
$43,000
0
Total Payroll
$80,252
$113,000
$158,000
6.2 Management Team
**Details have been omitted from this published plan because they were strategic and
proprietary.
6.3 Management Team Gaps
**Details have been omitted from this published plan because they were strategic and
proprietary.
Page 10
MarketCamp
7.0 Financial Plan
MarketCamp will finance growth mainly through cash flow. We recognize that this means we will
have to grow more slowly than we might like.
The most important factor to our success is collection days. We can't push our clients hard on
collection days, because they are in larger companies and will normally have marketing
authority, not financial authority. Therefore, we need to develop a permanent system of
receivables financing, using one of the established financial companies in that business.
We are also assuming start-up capital which will be more than enough to cover salaries, artwork
and other expenses while the business begins to produce more cash.
We may take more financing than we originally planned to be able to bring in some very key
investors as equity partners, more for their connections to potential clients in Mexico City than
for the investment itself.
7.1 Important Assumptions
The Financial Plan depends on important assumptions, most of which are shown in the following
table as annual assumptions. The monthly assumptions are included in the appendix. From the
beginning, we recognize that collection days are critical, but are not a factor we can influence
easily. Interest rates, tax rates, and personnel burden are based on conservative assumptions.
Some of the more important underlying assumptions are:
We assume an economy slightly crippled by the George W. Bush administration in the U.S.
and by the skepticism caused by the fall of the dot-coms with terrible business models.
We assume that we can communicate the service to Mexican business owners.
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Year 1
Year 2
Year 3
1
10.00%
10.00%
25.42%
0
2
10.00%
10.00%
25.00%
0
3
10.00%
10.00%
25.42%
0
Page 11
MarketCamp
7.2 Key Financial Indicators
The Benchmarks chart shows our projections on an index basis for key financial indicators.
Chart: Benchmarks
Page 12
MarketCamp
7.3 Break-even Analysis
The following chart and table summarize our Break-even Analysis showing fixed costs in U.S.
dollars per month at the outset (a bare minimum), and what we need to bill to cover our costs.
We don't really expect to reach break-even until a few months into the business operation.
Table: Break-even Analysis
Break-even Analysis
Monthly Revenue Break-even
$17,510
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
19%
$14,142
Chart: Break-even Analysis
Page 13
MarketCamp
7.4 Projected Profit and Loss
Projected Profit and Loss is presented in the following table and charts.
Chart: Profit Monthly
Page 14
MarketCamp
Chart: Profit Yearly
Chart: Gross Margin Monthly
Page 15
MarketCamp
Chart: Gross Margin Yearly
Page 16
MarketCamp
Table: Profit and Loss
Pro Forma Profit and Loss
Year 1
Year 2
Year 3
Sales
Direct Cost of Sales
Other
Total Cost of Sales
$297,310
$57,183
$39,581
$96,763
$420,000
$80,860
$44,000
$124,860
$610,000
$117,561
$48,000
$165,561
Gross Margin
Gross Margin %
$200,547
67.45%
$295,140
70.27%
$444,439
72.86%
$80,252
$41,372
$0
$15,832
$1,800
$2,400
$12,000
$16,050
$0
$113,000
$48,000
$0
$17,000
$2,000
$3,000
$24,000
$22,600
$0
$158,000
$61,000
$0
$19,000
$2,000
$3,000
$26,000
$31,600
$0
$169,707
$229,600
$300,600
Profit Before Interest and Taxes
EBITDA
Interest Expense
Taxes Incurred
$30,840
$30,840
$667
$7,420
$65,540
$65,540
$3,000
$15,635
$143,839
$143,839
$3,500
$35,669
Net Profit
Net Profit/Sales
$22,753
7.65%
$46,905
11.17%
$104,669
17.16%
Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other
Total Operating Expenses
Page 17
MarketCamp
7.5 Projected Cash Flow
Cash flow is going to rely on the time to collect from account receivables. Carlos Silva, Raul
Garcia and others who have more experience working with Mexican businesses will be able to
help us estimate both the collection and payment times. We are working on an assumption of
30 days to collect. Clients will pay at the beginning of each month except when this is
impossible for them.
The present cash flow projection assumes sacrificed salaries taken as equity contribution for the
first few months. The inputs for capital input are actually "sweat equity" contributions from the
founder.
Chart: Cash
Page 18
MarketCamp
Table: Cash Flow
Pro Forma Cash Flow
Year 1
Year 2
Year 3
$0
$197,360
$197,360
$0
$378,754
$378,754
$0
$546,126
$546,126
$0
$20,000
$0
$0
$0
$0
$14,000
$231,360
$0
$40,000
$0
$0
$0
$0
$0
$418,754
$0
$0
$0
$0
$0
$0
$0
$546,126
Year 1
Year 2
Year 3
$80,252
$159,263
$239,515
$113,000
$273,759
$386,759
$158,000
$340,161
$498,161
$0
$0
$0
$0
$0
$0
$0
$239,515
$0
$20,000
$0
$0
$0
$0
$0
$406,759
$0
$10,000
$0
$0
$0
$0
$0
$508,161
($8,155)
$11,845
$11,995
$23,840
$37,965
$61,805
Cash Received
Cash from Operations
Cash Sales
Cash from Receivables
Subtotal Cash from Operations
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
New Other Liabilities (interest-free)
New Long-term Liabilities
Sales of Other Current Assets
Sales of Long-term Assets
New Investment Received
Subtotal Cash Received
Expenditures
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Sales Tax, VAT, HST/GST Paid Out
Principal Repayment of Current Borrowing
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
Page 19
MarketCamp
7.6 Projected Balance Sheet
The Balance Sheet in the following table shows managed but sufficient growth of net worth, and
a sufficiently healthy financial position. The monthly estimates are included in the appendix.
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1
Year 2
Year 3
$11,845
$99,950
$0
$111,795
$23,840
$141,196
$0
$165,036
$61,805
$205,070
$0
$266,875
$0
$0
$0
$111,795
$0
$0
$0
$165,036
$0
$0
$0
$266,875
Year 1
Year 2
Year 3
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$35,041
$20,000
$0
$55,041
$21,378
$40,000
$0
$61,378
$28,548
$30,000
$0
$58,548
Long-term Liabilities
Total Liabilities
$0
$55,041
$0
$61,378
$0
$58,548
$37,500
($3,500)
$22,753
$56,753
$111,795
$37,500
$19,253
$46,905
$103,658
$165,036
$37,500
$66,158
$104,669
$208,327
$266,875
$56,753
$103,658
$208,327
Assets
Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
Net Worth
Page 20
MarketCamp
7.7 Business Ratios
Business Ratios for the years of this plan are shown below. Industry profile ratios based on the
Standard Industrial Classification (SIC) code 8742, Management Consulting Services, are shown
for comparison.
Table: Ratios
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
n.a.
41.27%
45.24%
8.60%
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
89.40%
0.00%
100.00%
0.00%
100.00%
85.55%
0.00%
100.00%
0.00%
100.00%
76.84%
0.00%
100.00%
0.00%
100.00%
24.40%
46.70%
74.90%
25.10%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
49.23%
0.00%
49.23%
50.77%
37.19%
0.00%
37.19%
62.81%
21.94%
0.00%
21.94%
78.06%
42.80%
17.20%
60.00%
40.00%
100.00%
67.45%
59.84%
1.01%
10.37%
100.00%
70.27%
59.10%
1.43%
15.60%
100.00%
72.86%
55.60%
2.46%
23.58%
100.00%
0.00%
83.50%
1.20%
2.60%
2.03
2.03
49.23%
53.17%
26.99%
2.69
2.69
37.19%
60.33%
37.89%
4.56
4.56
21.94%
67.36%
52.59%
1.59
1.26
60.00%
4.40%
10.90%
Sales Growth
Percent of Total Assets
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
Additional Ratios
Year 1
Year 2
Year 3
Net Profit Margin
Return on Equity
7.65%
40.09%
11.17%
45.25%
17.16%
50.24%
n.a
n.a
2.97
54
5.55
27
2.66
2.97
105
12.17
40
2.54
2.97
104
12.17
26
2.29
n.a
n.a
n.a
n.a
n.a
0.97
1.00
0.59
1.00
0.28
1.00
n.a
n.a
$56,753
46.26
$103,658
21.85
$208,327
41.10
n.a
n.a
0.38
49%
0.22
5.24
0.39
37%
0.39
4.05
0.44
22%
1.06
2.93
n.a
n.a
n.a
n.a
Activity Ratios
Accounts Receivable Turnover
Collection Days
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
Page 21
MarketCamp
Dividend Payout
0.00
0.00
0.00
n.a
Page 22
Appendix
Table: Personnel
Personnel Plan
Paul Berry
Commission
Programmers
Total People
Total Payroll
0%
0%
0%
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$3,000
$50
$0
0
$3,000
$400
$0
0
$3,000
$623
$0
0
$3,000
$911
$0
1
$3,000
$1,019
$1,200
1
$3,000
$1,559
$1,400
1
$4,000
$1,163
$1,800
2
$4,000
$1,163
$2,500
0
$4,000
$1,703
$3,000
0
$4,000
$2,547
$3,000
0
$4,000
$3,035
$3,300
0
$5,000
$3,179
$3,700
0
$3,050
$3,400
$3,623
$3,911
$5,219
$5,959
$6,963
$7,663
$8,703
$9,547
$10,335
$11,879
Page 1
Appendix
Table: General Assumptions
General Assumptions
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
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
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
10.00%
Tax Rate
30.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
25.00%
0
0
0
0
0
0
0
0
0
0
0
0
Plan Month
Other
Month 12
Page 2
Appendix
Table: Profit and Loss
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
$5,250
$10,000
$10,650
$13,890
$16,230
$22,530
$20,050
$22,450
$32,250
$42,470
$47,710
$53,830
Direct Cost of Sales
$1,300
$1,600
$2,063
$2,639
$3,093
$4,047
$4,149
$4,746
$6,003
$7,707
$9,227
$10,609
$1,000
$2,300
$1,200
$2,800
$1,440
$3,503
$1,728
$4,367
$2,074
$5,166
$2,488
$6,536
$2,986
$7,135
$3,583
$8,329
$4,300
$10,303
$5,160
$12,867
$6,192
$15,418
$7,430
$18,039
Other
Total Cost of Sales
10%
Gross Margin
$2,950
$7,200
$7,147
$9,523
$11,064
$15,994
$12,915
$14,121
$21,947
$29,603
$32,292
$35,791
Gross Margin %
56.19%
72.00%
67.11%
68.56%
68.17%
70.99%
64.41%
62.90%
68.05%
69.70%
67.68%
66.49%
Payroll
$3,050
$3,400
$3,623
$3,911
$5,219
$5,959
$6,963
$7,663
$8,703
$9,547
$10,335
$11,879
Sales and Marketing and Other
Expenses
Depreciation
$1,000
$1,175
$1,393
$1,663
$2,001
$2,422
$2,950
$3,610
$4,439
$5,481
$6,792
$8,445
Expenses
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$400
$150
$200
$0
$610
$0
$480
$150
$200
$0
$680
$0
$576
$150
$200
$0
$725
$0
$691
$150
$200
$0
$782
$0
$829
$150
$200
$0
$1,044
$0
$995
$150
$200
$0
$1,192
$0
$1,194
$150
$200
$2,000
$1,393
$0
$1,433
$150
$200
$2,000
$1,533
$0
$1,720
$150
$200
$2,000
$1,741
$0
$2,064
$150
$200
$2,000
$1,909
$0
$2,477
$150
$200
$2,000
$2,067
$0
$2,972
$150
$200
$2,000
$2,376
$0
$5,410
$6,085
$6,666
$7,398
$9,443
$10,919
$14,850
$16,589
$18,953
$21,351
$24,021
$28,022
Profit Before Interest and Taxes
($2,460)
$1,115
$481
$2,125
$1,621
$5,076
($1,935)
($2,469)
$2,995
$8,252
$8,271
$7,769
EBITDA
($2,460)
$1,115
$481
$2,125
$1,621
$5,076
($1,935)
($2,469)
$2,995
$8,252
$8,271
$7,769
$0
$0
$0
$0
$0
$0
$0
$0
$167
$167
$167
$167
($738)
$279
$120
$531
$405
$1,269
($484)
($617)
$707
$2,021
$2,026
$1,900
Leased Equipment
Utilities
Insurance
Rent
Payroll Taxes
Other
Total Operating Expenses
Interest Expense
Taxes Incurred
10%
10%
10%
10%
20%
Net Profit
($1,722)
$836
$361
$1,594
$1,216
$3,807
($1,451)
($1,851)
$2,121
$6,064
$6,078
$5,701
Net Profit/Sales
-32.80%
8.36%
3.39%
11.48%
7.49%
16.90%
-7.24%
-8.25%
6.58%
14.28%
12.74%
10.59%
Page 3
Appendix
Table: Cash Flow
Pro Forma Cash Flow
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash Received
Cash from Operations
Cash Sales
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Cash from Receivables
$0
$175
$5,408
$10,022
$10,758
$13,968
$16,440
$22,447
$20,130
$22,777
$32,591
$42,645
Subtotal Cash from Operations
$0
$175
$5,408
$10,022
$10,758
$13,968
$16,440
$22,447
$20,130
$22,777
$32,591
$42,645
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$20,000
$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
$7,000
$4,000
$3,000
$0
$0
$0
$0
$0
$0
$0
$0
$0
Subtotal Cash Received
$7,000
$4,175
$8,408
$10,022
$10,758
$13,968
$16,440
$22,447
$40,130
$22,777
$32,591
$42,645
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
$3,050
$3,400
$3,623
$3,911
$5,219
$5,959
$6,963
$7,663
$8,703
$9,547
$10,335
$11,879
$131
$3,983
$5,794
$6,724
$8,432
$9,894
$12,823
$14,608
$16,798
$21,607
$27,007
$31,462
$3,181
$7,383
$9,417
$10,635
$13,651
$15,853
$19,786
$22,271
$25,501
$31,154
$37,342
$43,341
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
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Other Current Assets
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Purchase Long-term Assets
$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
$3,181
$7,383
$9,417
$10,635
$13,651
$15,853
$19,786
$22,271
$25,501
$31,154
$37,342
$43,341
Net Cash Flow
$3,819
($3,208)
($1,009)
($613)
($2,893)
($1,885)
($3,346)
$176
$14,629
($8,377)
($4,751)
($697)
Additional Cash Received
Sales Tax, VAT, HST/GST Received
New Current Borrowing
0.00%
Expenditures from Operations
Cash Spending
Bill Payments
Subtotal Spent on Operations
Additional Cash Spent
Page 4
Appendix
Cash Balance
$23,819
$20,611
$19,602
$18,989
$16,096
$14,211
$10,865
$11,041
$25,670
$17,293
$12,541
$11,845
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$20,000
$0
$0
$20,000
$23,819
$5,250
$0
$29,069
$20,611
$15,075
$0
$35,686
$19,602
$20,317
$0
$39,919
$18,989
$24,185
$0
$43,174
$16,096
$29,657
$0
$45,753
$14,211
$38,219
$0
$52,430
$10,865
$41,829
$0
$52,694
$11,041
$41,832
$0
$52,873
$25,670
$53,952
$0
$79,622
$17,293
$73,645
$0
$90,938
$12,541
$88,764
$0
$101,306
$11,845
$99,950
$0
$111,795
$0
$0
$0
$20,000
$0
$0
$0
$29,069
$0
$0
$0
$35,686
$0
$0
$0
$39,919
$0
$0
$0
$43,174
$0
$0
$0
$45,753
$0
$0
$0
$52,430
$0
$0
$0
$52,694
$0
$0
$0
$52,873
$0
$0
$0
$79,622
$0
$0
$0
$90,938
$0
$0
$0
$101,306
$0
$0
$0
$111,795
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Starting Balances
Current Assets
Cash
Accounts Receivable
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$0
$0
$0
$0
$3,791
$0
$0
$3,791
$5,572
$0
$0
$5,572
$6,444
$0
$0
$6,444
$8,105
$0
$0
$8,105
$9,469
$0
$0
$9,469
$12,339
$0
$0
$12,339
$14,053
$0
$0
$14,053
$16,084
$0
$0
$16,084
$20,712
$20,000
$0
$40,712
$25,964
$20,000
$0
$45,964
$30,254
$20,000
$0
$50,254
$35,041
$20,000
$0
$55,041
Long-term Liabilities
Total Liabilities
$0
$0
$0
$3,791
$0
$5,572
$0
$6,444
$0
$8,105
$0
$9,469
$0
$12,339
$0
$14,053
$0
$16,084
$0
$40,712
$0
$45,964
$0
$50,254
$0
$55,041
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$23,500
($3,500)
$0
$20,000
$20,000
$30,500
($3,500)
($1,722)
$25,278
$29,069
$34,500
($3,500)
($886)
$30,114
$35,686
$37,500
($3,500)
($525)
$33,475
$39,919
$37,500
($3,500)
$1,069
$35,069
$43,174
$37,500
($3,500)
$2,284
$36,284
$45,753
$37,500
($3,500)
$6,091
$40,091
$52,430
$37,500
($3,500)
$4,640
$38,640
$52,694
$37,500
($3,500)
$2,789
$36,789
$52,873
$37,500
($3,500)
$4,910
$38,910
$79,622
$37,500
($3,500)
$10,974
$44,974
$90,938
$37,500
($3,500)
$17,052
$51,052
$101,306
$37,500
($3,500)
$22,753
$56,753
$111,795
Net Worth
$20,000
$25,278
$30,114
$33,475
$35,069
$36,284
$40,091
$38,640
$36,789
$38,910
$44,974
$51,052
$56,753
Page 5
Appendix
Table: Sales Forecast
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
$5,000
$250
$5,250
$8,000
$2,000
$10,000
$7,535
$3,115
$10,650
$9,335
$4,555
$13,890
$11,135
$5,095
$16,230
$14,735
$7,795
$22,530
$14,235
$5,815
$20,050
$16,635
$5,815
$22,450
$23,735
$8,515
$32,250
$29,735
$12,735
$42,470
$32,535
$15,175
$47,710
$37,935
$15,895
$53,830
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
Monthly Revenue
$1,250
$1,200
$1,440
$1,728
$2,074
$2,488
$2,986
$3,583
$4,300
$5,160
$6,192
$7,430
$50
$400
$623
$911
$1,019
$1,559
$1,163
$1,163
$1,703
$2,547
$3,035
$3,179
$1,300
$1,600
$2,063
$2,639
$3,093
$4,047
$4,149
$4,746
$6,003
$7,707
$9,227
$10,609
Sales
Monthly Revenue
Commission Sales
Total Sales
Commission Sales
Subtotal Direct Cost of Sales
40%
50%
Page 6