SamplePlan1 924
SAMPLE PLAN 1 BUS I N E SS PLA N
Mr. John Jones Phone: 1-800-555-1212 www.sampleplans1.com
Table of Contents Executive Summary ........................................................................................ 4 Loan Analysis .................................................................................................... 5 Financial Highlights ......................................................................................... 5 Startup Summary ............................................................................................. 6 Industry at a Glance ......................................................................................... 8 Projected Industry Growth ............................................................................. 9 Key External Drivers .......................................................................................10 Objectives .........................................................................................................10 SWOT Analysis ..................................................................................................11 Marketing...........................................................................................................11 Management Summary .................................................................................12 FInancial Indicators .........................................................................................13 Revenue Forecast ............................................................................................14 Break-Even Analysis .......................................................................................15 Profit and Loss Statement .............................................................................16 Projected Cash Flow .......................................................................................17 Projected Balance Sheet ................................................................................18 Year 1 Personnel Forecast ..............................................................................19 Year 1 Revenue Forecast.................................................................................19 Year 1 Profit & Loss .........................................................................................20 Year 1 Balance Sheet .......................................................................................21
Executive Summary Sample Plan 1 will be an innovative online e-commerce portal offering a variety of products to consumers throughout the globe. Founded by Mr. John Jones, a seasoned business visionary with an eye towards profit and achievement, the organization is set to enter the market during 2012. The timing of market entry is nothing less than exceptional as consumers throughout the globe have begun releasing pent-up spending that was held as a result of the global recession. Online shopping is at an all-time high with new consumer mindsets calling for them to shop for the types of deals and bargains that will be so much a part of the Sample Plan 1 business model. While the market has a great deal of potential and is filled with incredible opportunities, in order to capitalize on them, a strong infusion of working capital must be acquired. Working capital will be used in a variety of areas including marketing, logistics, insurance, management as well as the financing of the day to day operations of a business of this type. The founder projects needing a working capital sum of 100K for his venture with repayment of this sum coming from profits made through the website. Marketing for Sample Plan 1 will be done primarily through the Internet. The founder will develop a strong online presence that is user-friendly, easy to navigate and encourages consumers to engage in longer stays that increase the probability of a purchase. In addition to the home website, plans also call for the organization to develop a strong social media presence using Facebook.com and Twitter.com; the world’s premier social networks with over 1 billion persons in their combined communities. The social media pages will be updated on a daily basis with information that will drive the marketing message and allow it to resonate with the members of the core audience. Long-term plans call for the founder to possibly explore mass media marketing including print, radio and television but at this time, those mediums simply will not yield an optimal return on investment. For this reason, the founder has decided to forego them but does reserve the right to revisit them as the needs and resources of the business allow. Financials for Sample Plan 1 are strong and show patterns of consistent growth over the course of the next five years. Overhead costs are extremely low and do not in any way threaten the projected profit position of the organization in any of the five years that are outlined in the financials. There are no large salaries involved in the financial mix as the founder does not project to immediately need to hire a staff of any type as the majority of the functions can be handled alone. All of these factors bode extremely well for Sample Plan 1 as the organization looks to become one of the online commerce’s signature brands and a true market leader.
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Loan Analysis Loan Analysis Interest Rate: Years of Loan: Loan Amount:
8.50% 15 $100,000.00
Monthly Payment: Total Payment: Total Interest:
$984.74 $177,253.12 $77,253.12
The projected loan analysis for Sample Plan 1 is shown in the table above. The organization projects to have a monthly loan payment of $984.74 with a total loan payment of $177,253.12 over the 15 year life of the loan.
Financial Highlights $2,500,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $0.00 Year 1
Year 2 Revenue
Direct Costs
Year 3
Year 4
Operating Expenses
Year 5 Net Profit
The financial highlights for Sample Plan 1 are shown in the chart above. The organization projects to have strong growth trends over the course of the next five years.
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Startup Summary Start-up Expenses Payroll Rent Deposits Permits
$10,000 $5,000 $6,500
License Web Development
$3,500 $25,000
Total Start-up Expenses
$50,000
Start-up Assets
$50,000
Working Capital Inventory
$10,000 $12,500
Materials Miscellaneous
$1,000 $1,500
Total Start-up Assets
$27,100
Total Requirements
$50,000
$25,000
$0
Total Requirements Total Start-up Expenses Total Start-up Assets
Startup Figures
Expenses
Assets
Investment
Current Loans
$50,000 $50,000 $100,000
Start-up Investments
6
IInvestment Owner
$25,000
Investor Total Planned Investment
$0 $25,000
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Mission Statement The mission of Sample Plan 1 is to provide a reliable online marketplace for consumers that offer quality products at a reasonable price that drives profits for the parent company while adding value to our brand constituents.
Company Ownership John Jones is the sole owner of Sample Plan 1. There are no other parties with the ability to claim an ownership stake in this venture. It should however be noted that Mr. Jones is currently soliciting offers from investors or investment groups that share in his long-term vision for profit and success.
Business Location Sample Plan 1 will be located in San Diego, California with the ability to serve clients throughout the globe. Long-term plans are for this to remain the base of operations due to the familiarity of the founder with the area and the reach that the Internet provides.
Products and Services Sample Plan 1 will offer a security online marketplace for consumers looking to transact purchases for reduced cost items. The organization will have a drop shipping approach which will greatly enhance the appeal and lower the overall overhead costs that are incurred.
About the Founder Mr. John Jones is the founder of Sample Plan 1. Mr. Jones is a seasoned business professional with the ability to develop strategies that yield optimal financial results. His background in architecture will be invaluable as he looks to meticulously create a business model and approach that allow Sample Plan 1 to become recognized as a true market leader.
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Industry at a Glance Key Statistics Snapshot
Revenue
Annual Growth 06-11
Annual Growth 11-16
$186.4bn
8.4%
9.4%
Profit
Wages
Business
$12.7bn
$7.8bn
50,973
Products and services segmentation (2011)
5.5% Office equipment and supplies
4.5% Food, beverages and pet food
6.5% Medication and cosmetics
24.3% Computers and TVs
7.2% Furniture and home appliances
13.8% Sporting goods, toys, hobby items and games
23.2% Other merchandise
15% Clothing, footware, accessories and jewelry SOURCE: WWW.IBISWORLD.COM
Every year, more than 100 million Americans purchase goods from the online retail marketplace, one of the fastest-growing industries in the United States. Since the start of the decade, revenue for the E-Commerce and Online Auctions industry has grown at an exceptional rate, outperforming most retail industries in the country.
CDs, DVDs, books, clothing, footwear and groceries. Hard-to-find niche products or products that are no longer being produced have also found homes online. As product ranges have grown, so has the number of industry operators. The number of enterprises has grown at an average annual rate of 2.4% in the five years to 2011 to 50,973.
Despite the brief recession-induced slump in 2008 and 2009, industry revenue is expected to increase at an average annual rate of 8.4% in the five years to 2011, including a 10.0% jump in 2011 to bring revenue to $186.4 billion. Because of steady growth, industry margins have also improved, increasing from about 5.0% in 2006 to an estimated 6.8% in 2011.
In the coming years, continued economic recovery will contribute to the industry’s strong growth. Increases in per capita income and employment will improve consumer sentiment, increasing consumers’ likelihood to buy. Also, broadband internet adoption will grow in the next five years, boosting online retailers’ accessibility. IBISWorld forecasts that these factors will cause industry revenue to grow at an average annual rate of 9.4% over the five years to 2016 to total $291.9 billion.
As online shopping becomes more popular, retailers are expanding the products they carry to include common household goods like
8
Projected Industry Growth
In the 10 years to 2016, industry value added, which measures the E-Commerce and Online Auctions industry’s contribution to the US economy, is expected to increase by an average annual rate of 11.0%, while US GDP is forecast to rise by an average annual rate of 2.0% over this same period. This indicates that the industry is in growth phase of its life cycle, as its growth rate outpaces GDP over a 10-year period. Rising industry participation and new forms of businesses also indicate a growing industry. Over the five years to 2011, the number of online retailers and auction sites has increased at an average annual rate of 2.4% to 50,973 businesses. This growth in industry participation can be attributed to an increase in e-commerce demand, mainly driven by the rising prevalence of broadband connections and other high-speed internet services. Such services have allowed more consumers to surf the net and buy products without experiencing any lag time; consequently, more consumers have been able to make purchases online with added convenience. Furthermore, the industry’s low barriers to entry and skill requirements has allowed
for companies to enter the industry without much difficulties, leading to higher participation. In the five years to 2016, the number of operators is expected to further rise with higher demand for e-commerce websites. Total number of players is forecast to increase by 2.4% annually to total 57,428 businesses. In recent years, a relatively new form of e-commerce known as social commerce has emerged within the industry. Unlike traditional e-tailers, social commerce involves using social media, online media that encourages online interaction and user contribution, to assist in the online buying and selling of goods. This subset of e-commerce retailers has gained wide acceptance to consumers in the five years to 2011, by providing engaging content and discounted (or wholesale) prices through user interaction (i.e. sharing information and purchasing as groups). IBISWorld expects more form of social media or new e-commerce businesses to arise in the next five years to 2016, further contributing to the growth stage designation of the industry.
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Key External Drivers Per capita disposable income Disposable income is a deciding factor in determining the quantity and quality of online purchases. Changes in income can occur because of movements in wages, government benefits, unemployment and tax rates and returns on assets. This driver is expected to increase over 2011, making it a potential opportunity for industry growth. The E-Commerce and Online Auctions industry is sensitive to the penetration rate of PCs. If the rate of computer ownership increases, then a larger proportion of the population has access to e-tailers. Additionally, increased computer and internet use will likely raise confidence, leading to greater computer activity and sales. This driver is expected to increase over 2011.
4
% Change
3 2 1 0 -1 Year
05
07
09
11
13
15
17
During periods of low economic growth, consumer sentiment declines; as a result, consumers limit their expenditure. This factor subsequently affects demand for products online. This driver is expected to rise over 2011, but because of high unemployment, it remains a threat to industry growth. When more households have access to broadband internet as opposed to dial-up, they are more likely to make online purchases because of the speed gains derived from a broadband connection. This driver is expected to increase over 2011.
Percentage of households with at least one computer 85 80 75 % 70 65 60 Year 03
05
07
09
11
13
15
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Objectives What follows is a listing of the core objectives for Sample Plan 1.
1. Develop a strong customer base. Developing a strong customer base will be the first priority. To achieve this end the founder will create an effective customer service model that adequately addresses all of the unique needs of the online consumer.
2. Create a broad marketplace. Having a broad marketplace with a variety of goods will be another of the core objectives. From furniture to electronics to kitchen and fashion, the founder is intent on creating a marketplace that is as broad as the consumers taste.
3. Online security. As the online shopping industry has continued to grow, so too has the need for online security. With that being said the founder will look to develop a secure environment that protects the consumer on all levels.
4. Drive profits. Driving profits will be the final objective for Sample Plan 1 as the founder will look to grow the revenue and profit streams exponentially over the course of the coming years.
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SWOT Analysis What follows is an analysis of the core strengths and weaknesses of the Sample Plan 1 business model as well as the opportunities and threats that currently exist within the marketplace.
Strengths
Opportunities
1. Knowledge of the founder. Sample Plan 1 founder Mr. John
2. Low overhead costs. Sample Plan 1 will have extremely low
1. Increase in online activity among minorities. Minorities are beginning to turn to the Internet for their shopping needs in large quantities. Research conducted via IBISworld.com shows that appealing to this segment of the market will be one of the keys to success for companies like Sample Plan 1 that are looking for long-term sustainability.
overhead costs due to the fact that the business will not carry inventory or need office space to operate effectively.
Threats
3. Growth of the industry. The growth of the industry is
1. Larger competitors. Larger competitors such as Ebay.
another of the core strengths of the Sample Plan 1 business model. With more and more shopping traffic going online, the long-term prospects for Sample Plan 1 are nothing less than promising.
com and Amazon.com pose a threat as they are already firmly entrenched in the marketplace and have acquired a large share of the online shopping market.
Jones is a seasoned business professional who is well attuned to the e-commerce and Internet driven marketplace. His broad skill set will be invaluable during all phases of business growth and evolution.
Weaknesses 1. Lack of funding. Lack of funding is the primary weakness for Sample Plan 1 as all of the other components of the business model and approach are extremely sound.
Marketing Sample Plan 1 will rely primarily on the Internet to drive the marketing efforts. Planned marketing efforts include the creation of a user friendly website developed using all of the latest in design and online technologies. The website will also feature SEO (Search Engine Optimization) which will allow it to rank higher with popular search engines including Yahoo.com and Google.com among others. Social networking using Facebook.com and Twitter.com will round out the Sample Plan 1 marketing model and approach with each being used extensively throughout the course of each calendar year.
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Management Summary Personnel Forecast Year 1
Year 2
Year 3
Year 4
Year 5
Personnel Count Founder Operations Total Personnel
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
Personnel Wage Founder Operations
$60,000 $78,000
$63,000 $81,900
$66,150 $85,995
$69,458 $90,295
$72,930 $94,809
Personnel Costs Founder Operations Total Payroll
$60,000 $156,000 $216,000
$63,000 $163,800 $226,800
$66,150 $171,990 $238,140
$69,458 $180,590 $250,047
$72,930 $189,619 $262,549
The projected management and personnel summary for Sample Plan 1 is shown in the table above.
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11
Financial Indicators PersonnelIndicators Financial Forecast ProfitabilityCount Personnel %’s: Joseph GrossSerrone Margin Brandon Net Profi Bueno t Margin Vickie EBITDA Bueno-Serrone to Revenue Total Personnel Leverage Ratios: Personnel Debt to Wage Equity Joseph Debt to Serrone Assets Ratio Brandon InterestBueno Coverage Ratio Vickie Bueno-Serrone Liquidity Ratios: Personnel Current Costs Ratio Joseph Current Serrone Debt to Total Assets Ratio Brandon Bueno Vickie Bueno-Serrone Additional Indicators: Total Revenue Payrollto Equity Ratio
Year 1
Year 2
Year 3
Year 4
Year 5
192.50% 13.55% 1 26.91% 1 3
192.50% 116.63% 132.78% 3
192.50% 120.39% 138.13% 3
192.50% 123.82% 142.99% 3
92.50% 1 126.95% 147.41% 3
0.24 $11,196 17.88% $11,196 3.59 $11,196
0.29 $11,756 21.63% $11,756 4.65 $11,756
0.30 $12,344 22.37% $12,344 5.75 $12,344
0.29 $12,961 21.82% $12,961 6.90 $12,961
0.27 $13,609 20.71% $13,609 8.09 $13,609
20.91 $11,196 4.58% $11,196 $11,196 $33,588 2.41
31.74 $11,756 3.07% $11,756 $11,756 $35,267 1.89
45.94 $12,344 2.14% $12,344 $12,344 $37,031 1.51
64.12 $12,961 1.54% $12,961 $12,961 $38,882 1.23
86.93 $13,609 1.14% $13,609 $13,609 $40,826 1.02
Financial Indicators 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1
2 Gross Margin
3 Net Profit Margin
4
5
EBITDA to Revenue
The financial indicators for Sample Plan 1 are shown in the table above and graph. The organization projects to have a favorable growth in profit margin in each of the first five years of operations.
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Revenue Forecast PersonnelForecast Revenue Forecast Units Personnel Count Products Joseph Serrone Brandon Total Units Bueno Vickie Bueno-Serrone TotalPrice Unit Personnel Products Personnel Wage Revenue Joseph Serrone Brandon Bueno Products VickieRevenue Total Bueno-Serrone Direct UnitCosts Personnel Cost Products Joseph Serrone Brandon Bueno Vickie Cost Direct Bueno-Serrone of Revenue Total Payroll Products Subtotal Cost of Revenue
Year 1
Year 2
Year 3
Year 4
Year 5
16,876 6,876 1 1 3 $175.00
17,908 1 7,908 1 3 $175.00
19,094 9,094 1 1 3 $175.00
110,458 10,458 1 1 3 $175.00
112,027 12,027 1 1 3 $175.00
$11,196 $1,203,335 $11,196 $1,203,335 $11,196
$11,756 $11,756 $1,383,835 $11,756 $1,383,835
$12,344 $12,344 $1,591,410 $12,344 $1,591,410
$12,961 $12,961 $1,830,122 $12,961 $1,830,122
$13,609 $13,609 $2,104,640 $13,609 $2,104,640
$11,196 $85.00 $11,196 $11,196 $33,588 $584,477 $584,477
$11,756 $85.00 $11,756 $11,756 $35,267 $672,148 $672,148
$12,344 $85.00 $12,344 $12,344 $37,031 $772,971 $772,971
$12,961 $85.00 $12,961 $12,961 $38,882 $888,916 $888,916
$13,609 $85.00 $13,609 $13,609 $40,826 $1,022,254 $1,022,254
Total Revenue $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0
Year 1
Year 2
Year 3
Year 4
Year 5
Total Revenue
The projected revenue forecast for Sample Plan 1 is shown in the chart and graph above. The organization projects to have strong revenue growth that is commensurate with research conducted via IBISworld.com.
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Break-Even Analysis Income Chart $1,400,000 $1,200,000
Sales Revenue 100.0%
$1,000,000
Cost of Sales 48.6%
$800,000
Gross Profit 51.4%
$600,000
Fixed Expenses 2.4%
$400,000
Income Before Tax 35.0%
$200,000 $0
Break-even Revenue
$1,400,000 $1,200,000
REVENUE
$1,000,000
FIXED COSTS $800,000 $600,000 $400,000 $200,000 $0
0
1
2
3
4
5
6
7
8
9
10 11
12
Months The projected break-even analysis for Sample Plan 1 is shown in the table above. The organization projects to have first year average monthly revenues of $100,278 with costs of $77,373.
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Profit and Loss Statement Personnel Pro FormaForecast Profit and Loss Revenue Count Personnel Total Joseph Cost Serrone of Revenue Brandon Bueno Vickie Margin Gross Bueno-Serrone Total Personnel Gross Margin/Revenue
Year 1 $1,203,335 1$584,477 1 1$618,858 51.43% 3
Year 2 $1,383,835 1$672,148 1 1$711,687 51.43% 3
Year 3 $1,591,410 1$772,971 1 1$818,440 51.43% 3
Year 4 $1,830,122 $888,916 1 1 1$941,205 51.43% 3
Year 5 $2,104,640 $1,022,254 1 1 1$1,082,386 51.43% 3
Expenses Wage Personnel Supplies Joseph Serrone Brandon Bueno Rent Vickie Bueno-Serrone Marketing Insurance Personnel Costs Miscellaneous Payroll JosephTaxes Serrone Brandon Total Personnel Bueno VickieOp. Total Bueno-Serrone Expenses Total Payroll Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred
$18,000 $11,196 $11,196 $36,000 $26,400 $11,196 $2,400 $4,800 $32,400 $11,196 $11,196 $216,000 $336,000 $11,196 $33,588 $282,858 $282,858 $8,000 $83,401
$11,756 $18,900 $11,756 $37,800 $11,756 $27,720 $2,520 $5,040 $11,756 $34,020 $11,756 $226,800 $352,800 $11,756 $35,267 $358,887 $358,887 $8,000 $122,810
$12,344 $19,845 $12,344 $39,690 $12,344 $29,106 $2,646 $5,292 $12,344 $35,721 $12,344 $238,140 $12,344 $370,440 $37,031 $448,000 $448,000 $8,000 $154,000
$12,961 $20,837 $12,961 $41,675 $12,961 $30,561 $2,778 $5,557 $12,961 $37,507 $12,961 $250,047 $12,961 $388,962 $38,882 $552,243 $552,243 $8,000 $190,485
$13,609 $21,879 $13,609 $43,758 $13,609 $32,089 $2,917 $5,834 $13,609 $39,382 $13,609 $262,549 $13,609 $408,410 $40,826 $673,976 $673,976 $8,000 $233,092
Net Profit Net Profit/Revenue
$191,457 15.91%
$228,076 16.48%
$286,000 17.97%
$353,758 19.33%
$432,885 20.57%
Year 1 17% 30%
Year 2 Total Cost of Revenue
53%
18%
Total Op. Expenses
28%
Year 3
54%
Net Profit
Total Op. Expenses
26%
22%
Total Cost of Revenue
54%
54%
23% 22%
Total Op. Expenses Net Profit
Year 5
Total Op. Expenses Net Profit
16
Total Cost of Revenue
Net Profit
Year 4
24%
20%
Total Cost of Revenue
Total Cost of Revenue
55%
Total Op. Expenses Net Profit
Projected Cash Flow Personnel Pro FormaForecast Cash Flow Year 1
Year 2
Year 3
Year 4
Year 5
Cash Received Personnel Count Revenue Joseph Serrone Brandon New Current Bueno Borrowing VickieLong-term New Bueno-Serrone Liabilities TotalofPersonnel Sale Other Current Assets Sale of Long-term Assets Personnel New Investment Wage Received Total Joseph Cash Serrone Received Brandon Bueno Vickie Bueno-Serrone Expenditures Operating Expenses & Direct Costs Personnel Current Borrowing Costs Repay. L-T Joseph Liabilities Serrone Principal Repay. Brandon Bueno Purchase Other Current Assets Vickie Bueno-Serrone Purchase Long-term Assets Total Payroll Dividends Total Expenditures
$1,203,335 1 1$0 1$0 3$0 $0 $0 $1,203,335 $11,196 $11,196 $11,196 $1,011,878 $0 $11,196 $11,817 $11,196 $11,196 $33,588 $1,023,695
1$1,383,835 1$0 1$0 3$0 $0 $0 $11,756 $1,383,835 $11,756 $11,756 $1,155,759 $0 $11,756 $11,817 $11,756 $0 $11,756 $0 $35,267 $0 $1,167,576
1$1,591,410 1$0 1$0 3$0 $0 $0 $12,344 $1,591,410 $12,344 $12,344 $1,305,411 $0 $12,344 $11,817 $12,344 $0 $12,344 $0 $37,031 $0 $1,317,228
1$1,830,122 1$0 1$0 3$0 $0 $0 $12,961 $1,830,122 $12,961 $12,961 $1,476,364 $0 $12,961 $11,817 $12,961 $0 $12,961 $0 $38,882 $0 $1,488,181
1$2,104,640 1$0 1$0 3$0 $0 $0 $13,609 $2,104,640 $13,609 $13,609 $1,671,755 $0 $13,609 $11,817 $13,609 $0 $13,609 $0 $40,826 $0 $1,683,572
Net Cash Flow Cash Balance
$179,640 $204,640
$216,259 $420,899
$274,183 $695,082
$341,941 $1,037,023
$421,068 $1,458,091
Pro Forma Cash Flow $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0
Year 1
Year 2 Total Cash Received
Year 3 Total Expenditures
Year 4
Year 5
Cash Balance
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Projected Balance Sheet Personnel Pro FormaForecast Balance Sheet Assets Count Personnel Current Joseph Assets Serrone Brandon Bueno Cash Vickie Current Other Bueno-Serrone Assets Total Current Personnel Assets
Year 1
Year 2
Year 3
Year 4
Year 5
1 $204,640 1 1$0 $204,640 3
1 1$420,899 1$0 3$420,899
1 1$695,082 1$0 3$695,082
1 1$1,037,023 1$0 3$1,037,023
1 1$1,458,091 1$0 3$1,458,091
Long-termWage Personnel Assets Long-term Joseph Serrone Assets Brandon Bueno Accumulated Depreciation VickieLong-term Total Bueno-Serrone Assets Total Assets Personnel Costs Liabilities Joseph Serrone and Capital BrandonLiabilities Current Bueno Vickie Bueno-Serrone Current Borrowing Total Payroll Other Current Liabilities Subtotal Current Liabilities
$11,196 $0 $11,196 $0 $11,196 $0 $204,640
$11,756 $0 $11,756 $0 $11,756 $0 $420,899
$12,344 $0 $12,344 $0 $12,344 $0 $695,082
$12,961 $0 $12,961 $0 $12,961 $0 $1,037,023
$13,609 $0 $13,609 $0 $13,609 $0 $1,458,091
$11,196 $11,196 $11,196 $100,000 $33,588 $0 $100,000
$11,756 $11,756 $11,756 $100,000 $35,267 $0 $100,000
$12,344 $12,344 $12,344 $100,000 $37,031 $0 $100,000
$12,961 $12,961 $12,961 $100,000 $38,882 $0 $100,000
$13,609 $13,609 $13,609 $100,000 $40,826 $0 $100,000
Long-term Liabilities Total Liabilities
($11,817) $88,183
($23,634) $76,366
($35,451) $64,549
($47,268) $52,732
($59,085) $40,915
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital
$25,000 ($50,000) $191,457 $166,457 $254,640
$25,000 $141,457 $228,076 $394,533 $470,899
$25,000 $369,533 $286,000 $680,533 $745,082
$25,000 $655,533 $353,758 $1,034,291 $1,087,023
$25,000 $1,009,291 $432,885 $1,467,176 $1,508,091
Net Worth
$116,457
$344,533
$630,533
$984,291
$1,417,176
Pro Forma Balance Sheet $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0
Year 1
Year 2 Total Assets
18
Year 3 Total Liabilities
Year 4 Net Worth
Year 5
$5,000 $13,000 $18,000
Personnel Costs Founder Operations Total Payroll
432 432
$175.00
$75,600 $75,600
$85.00
$36,720 $36,720
Units Products Total Units
Unit Price Products
Revenue Products Total Revenue
Direct Unit Cost Products
Direct Cost of Revenue Products
Subtotal Cost of Revenue
Month 1
$5,000 $6,500
Personnel Wage Founder Operations
Year 1 Revenue Forecast
1 2 3
Personnel Count Founder Operations Total Personnel
Month 1
Year 1 Personnel Forecast
19
$38,556
$38,556
$85.00
$79,380 $79,380
$175.00
454 454
Month 2
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 2
$40,484
$40,484
$85.00
$83,349 $83,349
$175.00
476 476
Month 3
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 3
$42,508
$42,508
$85.00
$87,516 $87,516
$175.00
500 500
Month 4
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 4
$44,633
$44,633
$85.00
$91,892 $91,892
$175.00
525 525
Month 5
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 5
$46,865
$46,865
$85.00
$96,487 $96,487
$175.00
551 551
Month 6
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 6
$49,208
$49,208
$85.00
$101,311 $101,311
$175.00
579 579
Month 7
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 7
$51,669
$51,669
$85.00
$106,377 $106,377
$175.00
608 608
Month 8
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 8
$54,252
$54,252
$85.00
$111,696 $111,696
$175.00
638 638
Month 9
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 9
$56,965
$56,965
$85.00
$117,280 $117,280
$175.00
670 670
Month 10
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 10
$59,813
$59,813
$85.00
$123,144 $123,144
$175.00
704 704
Month 11
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 11
$62,804
$62,804
$85.00
$129,302 $129,302
$175.00
739 739
Month 12
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 12
Month 1 $75,600 $36,720 $38,880 51.43%
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000 $10,880 $10,880 $667 $0 $10,213 13.51%
Revenue Total Cost of Revenue
Gross Margin Gross Margin/Revenue
Expenses Supplies Rent Marketing Insurance Miscellaneous Payroll Taxes Total Personnel Total Op. Expenses
Profit Before Int. and Tax EBITDA Interest Expense Taxes Incurred
Net Profit Net Profit/Revenue
Year 1 Profit & Loss
20 $12,157 15.32%
$12,824 $12,824 $667 $0
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$40,824 51.43%
Month 2 $79,380 $38,556
$14,199 17.04%
$14,865 $14,865 $667 $0
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$42,865 51.43%
Month 3 $83,349 $40,484
$10,622 12.14%
$17,008 $17,008 $667 $5,720
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$45,008 51.43%
Month 4 $87,516 $42,508
$12,085 13.15%
$19,259 $19,259 $667 $6,507
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$47,259 51.43%
Month 5 $91,892 $44,633
$13,621 14.12%
$21,622 $21,622 $667 $7,334
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$49,622 51.43%
Month 6 $96,487 $46,865
$15,234 15.04%
$24,103 $24,103 $667 $8,203
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$52,103 51.43%
Month 7 $101,311 $49,208
$16,927 15.91%
$26,708 $26,708 $667 $9,114
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$54,708 51.43%
Month 8 $106,377 $51,669
$18,705 16.75%
$29,443 $29,443 $667 $10,072
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$57,443 51.43%
Month 9 $111,696 $54,252
$20,572 17.54%
$32,316 $32,316 $667 $11,077
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$60,316 51.43%
Month 10 $117,280 $56,965
$22,532 18.30%
$35,331 $35,331 $667 $12,133
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$63,331 51.43%
Month 11 $123,144 $59,813
$24,590 19.02%
$38,498 $38,498 $667 $13,241
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$66,498 51.43%
Month 12 $129,302 $62,804
$0 $0 $0 $34,229
Long-term Assets Accum. Depreciation Total Long-term Assets Total Assets
$100,000 $0 $100,000 ($985) $99,015 $25,000 ($50,000) $10,213 ($14,787) $84,229 ($64,787)
Current Borrowing Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities Total Liabilities
Paid-in Capital
Retained Earnings Current Retained Earnings
Total Capital Total Liabilities and Capital
Net Worth
Current Liabilities
$34,229 $0 $34,229
Month 1
Current Assets Cash Other Current Assets Total Current Assets
Year 1 Balance Sheet
21
($52,629)
($2,629) $95,401
($50,000) $22,371
$25,000
($1,969) $98,031
$100,000
$100,000 $0
$0 $0 $0 $45,401
$45,401 $0 $45,401
Month 2
($38,431)
$11,569 $108,615
($50,000) $36,569
$25,000
($2,954) $97,046
$100,000
$100,000 $0
$0 $0 $0 $58,615
$58,615 $0 $58,615
Month 3
($27,809)
$22,191 $118,252
($50,000) $47,191
$25,000
($3,939) $96,061
$100,000
$100,000 $0
$0 $0 $0 $68,252
$68,252 $0 $68,252
Month 4
($15,724)
$34,276 $129,353
($50,000) $59,276
$25,000
($4,924) $95,076
$100,000
$100,000 $0
$0 $0 $0 $79,353
$79,353 $0 $79,353
Month 5
($2,103)
$47,897 $141,989
($50,000) $72,897
$25,000
($5,908) $94,092
$100,000
$100,000 $0
$0 $0 $0 $91,989
$91,989 $0 $91,989
Month 6
$13,131
$63,131 $156,238
($50,000) $88,131
$25,000
($6,893) $93,107
$100,000
$100,000 $0
$0 $0 $0 $106,238
$106,238 $0 $106,238
Month 7
$30,058
$80,058 $172,180
($50,000) $105,058
$25,000
($7,878) $92,122
$100,000
$100,000 $0
$0 $0 $0 $122,180
$122,180 $0 $122,180
Month 8
$48,763
$98,763 $189,900
($50,000) $123,763
$25,000
($8,863) $91,137
$100,000
$100,000 $0
$0 $0 $0 $139,900
$139,900 $0 $139,900
Month 9
$69,334
$119,334 $209,487
($50,000) $144,334
$25,000
($9,847) $90,153
$100,000
$100,000 $0
$0 $0 $0 $159,487
$159,487 $0 $159,487
Month 10
$91,866
$141,866 $231,034
($50,000) $166,866
$25,000
($10,832) $89,168
$100,000
$100,000 $0
$0 $0 $0 $181,034
$181,034 $0 $181,034
Month 11
$116,457
$166,457 $254,640
($50,000) $191,457
$25,000
($11,817) $88,183
$100,000
$100,000 $0
$0 $0 $0 $204,640
$204,640 $0 $204,640
Month 12
Mr. John Jones Phone: 1-800-555-1212 www.sampleplans1.com
Table of Contents Executive Summary ........................................................................................ 4 Loan Analysis .................................................................................................... 5 Financial Highlights ......................................................................................... 5 Startup Summary ............................................................................................. 6 Industry at a Glance ......................................................................................... 8 Projected Industry Growth ............................................................................. 9 Key External Drivers .......................................................................................10 Objectives .........................................................................................................10 SWOT Analysis ..................................................................................................11 Marketing...........................................................................................................11 Management Summary .................................................................................12 FInancial Indicators .........................................................................................13 Revenue Forecast ............................................................................................14 Break-Even Analysis .......................................................................................15 Profit and Loss Statement .............................................................................16 Projected Cash Flow .......................................................................................17 Projected Balance Sheet ................................................................................18 Year 1 Personnel Forecast ..............................................................................19 Year 1 Revenue Forecast.................................................................................19 Year 1 Profit & Loss .........................................................................................20 Year 1 Balance Sheet .......................................................................................21
Executive Summary Sample Plan 1 will be an innovative online e-commerce portal offering a variety of products to consumers throughout the globe. Founded by Mr. John Jones, a seasoned business visionary with an eye towards profit and achievement, the organization is set to enter the market during 2012. The timing of market entry is nothing less than exceptional as consumers throughout the globe have begun releasing pent-up spending that was held as a result of the global recession. Online shopping is at an all-time high with new consumer mindsets calling for them to shop for the types of deals and bargains that will be so much a part of the Sample Plan 1 business model. While the market has a great deal of potential and is filled with incredible opportunities, in order to capitalize on them, a strong infusion of working capital must be acquired. Working capital will be used in a variety of areas including marketing, logistics, insurance, management as well as the financing of the day to day operations of a business of this type. The founder projects needing a working capital sum of 100K for his venture with repayment of this sum coming from profits made through the website. Marketing for Sample Plan 1 will be done primarily through the Internet. The founder will develop a strong online presence that is user-friendly, easy to navigate and encourages consumers to engage in longer stays that increase the probability of a purchase. In addition to the home website, plans also call for the organization to develop a strong social media presence using Facebook.com and Twitter.com; the world’s premier social networks with over 1 billion persons in their combined communities. The social media pages will be updated on a daily basis with information that will drive the marketing message and allow it to resonate with the members of the core audience. Long-term plans call for the founder to possibly explore mass media marketing including print, radio and television but at this time, those mediums simply will not yield an optimal return on investment. For this reason, the founder has decided to forego them but does reserve the right to revisit them as the needs and resources of the business allow. Financials for Sample Plan 1 are strong and show patterns of consistent growth over the course of the next five years. Overhead costs are extremely low and do not in any way threaten the projected profit position of the organization in any of the five years that are outlined in the financials. There are no large salaries involved in the financial mix as the founder does not project to immediately need to hire a staff of any type as the majority of the functions can be handled alone. All of these factors bode extremely well for Sample Plan 1 as the organization looks to become one of the online commerce’s signature brands and a true market leader.
4
Loan Analysis Loan Analysis Interest Rate: Years of Loan: Loan Amount:
8.50% 15 $100,000.00
Monthly Payment: Total Payment: Total Interest:
$984.74 $177,253.12 $77,253.12
The projected loan analysis for Sample Plan 1 is shown in the table above. The organization projects to have a monthly loan payment of $984.74 with a total loan payment of $177,253.12 over the 15 year life of the loan.
Financial Highlights $2,500,000.00 $2,000,000.00 $1,500,000.00 $1,000,000.00 $500,000.00 $0.00 Year 1
Year 2 Revenue
Direct Costs
Year 3
Year 4
Operating Expenses
Year 5 Net Profit
The financial highlights for Sample Plan 1 are shown in the chart above. The organization projects to have strong growth trends over the course of the next five years.
5
Startup Summary Start-up Expenses Payroll Rent Deposits Permits
$10,000 $5,000 $6,500
License Web Development
$3,500 $25,000
Total Start-up Expenses
$50,000
Start-up Assets
$50,000
Working Capital Inventory
$10,000 $12,500
Materials Miscellaneous
$1,000 $1,500
Total Start-up Assets
$27,100
Total Requirements
$50,000
$25,000
$0
Total Requirements Total Start-up Expenses Total Start-up Assets
Startup Figures
Expenses
Assets
Investment
Current Loans
$50,000 $50,000 $100,000
Start-up Investments
6
IInvestment Owner
$25,000
Investor Total Planned Investment
$0 $25,000
5
Mission Statement The mission of Sample Plan 1 is to provide a reliable online marketplace for consumers that offer quality products at a reasonable price that drives profits for the parent company while adding value to our brand constituents.
Company Ownership John Jones is the sole owner of Sample Plan 1. There are no other parties with the ability to claim an ownership stake in this venture. It should however be noted that Mr. Jones is currently soliciting offers from investors or investment groups that share in his long-term vision for profit and success.
Business Location Sample Plan 1 will be located in San Diego, California with the ability to serve clients throughout the globe. Long-term plans are for this to remain the base of operations due to the familiarity of the founder with the area and the reach that the Internet provides.
Products and Services Sample Plan 1 will offer a security online marketplace for consumers looking to transact purchases for reduced cost items. The organization will have a drop shipping approach which will greatly enhance the appeal and lower the overall overhead costs that are incurred.
About the Founder Mr. John Jones is the founder of Sample Plan 1. Mr. Jones is a seasoned business professional with the ability to develop strategies that yield optimal financial results. His background in architecture will be invaluable as he looks to meticulously create a business model and approach that allow Sample Plan 1 to become recognized as a true market leader.
7
Industry at a Glance Key Statistics Snapshot
Revenue
Annual Growth 06-11
Annual Growth 11-16
$186.4bn
8.4%
9.4%
Profit
Wages
Business
$12.7bn
$7.8bn
50,973
Products and services segmentation (2011)
5.5% Office equipment and supplies
4.5% Food, beverages and pet food
6.5% Medication and cosmetics
24.3% Computers and TVs
7.2% Furniture and home appliances
13.8% Sporting goods, toys, hobby items and games
23.2% Other merchandise
15% Clothing, footware, accessories and jewelry SOURCE: WWW.IBISWORLD.COM
Every year, more than 100 million Americans purchase goods from the online retail marketplace, one of the fastest-growing industries in the United States. Since the start of the decade, revenue for the E-Commerce and Online Auctions industry has grown at an exceptional rate, outperforming most retail industries in the country.
CDs, DVDs, books, clothing, footwear and groceries. Hard-to-find niche products or products that are no longer being produced have also found homes online. As product ranges have grown, so has the number of industry operators. The number of enterprises has grown at an average annual rate of 2.4% in the five years to 2011 to 50,973.
Despite the brief recession-induced slump in 2008 and 2009, industry revenue is expected to increase at an average annual rate of 8.4% in the five years to 2011, including a 10.0% jump in 2011 to bring revenue to $186.4 billion. Because of steady growth, industry margins have also improved, increasing from about 5.0% in 2006 to an estimated 6.8% in 2011.
In the coming years, continued economic recovery will contribute to the industry’s strong growth. Increases in per capita income and employment will improve consumer sentiment, increasing consumers’ likelihood to buy. Also, broadband internet adoption will grow in the next five years, boosting online retailers’ accessibility. IBISWorld forecasts that these factors will cause industry revenue to grow at an average annual rate of 9.4% over the five years to 2016 to total $291.9 billion.
As online shopping becomes more popular, retailers are expanding the products they carry to include common household goods like
8
Projected Industry Growth
In the 10 years to 2016, industry value added, which measures the E-Commerce and Online Auctions industry’s contribution to the US economy, is expected to increase by an average annual rate of 11.0%, while US GDP is forecast to rise by an average annual rate of 2.0% over this same period. This indicates that the industry is in growth phase of its life cycle, as its growth rate outpaces GDP over a 10-year period. Rising industry participation and new forms of businesses also indicate a growing industry. Over the five years to 2011, the number of online retailers and auction sites has increased at an average annual rate of 2.4% to 50,973 businesses. This growth in industry participation can be attributed to an increase in e-commerce demand, mainly driven by the rising prevalence of broadband connections and other high-speed internet services. Such services have allowed more consumers to surf the net and buy products without experiencing any lag time; consequently, more consumers have been able to make purchases online with added convenience. Furthermore, the industry’s low barriers to entry and skill requirements has allowed
for companies to enter the industry without much difficulties, leading to higher participation. In the five years to 2016, the number of operators is expected to further rise with higher demand for e-commerce websites. Total number of players is forecast to increase by 2.4% annually to total 57,428 businesses. In recent years, a relatively new form of e-commerce known as social commerce has emerged within the industry. Unlike traditional e-tailers, social commerce involves using social media, online media that encourages online interaction and user contribution, to assist in the online buying and selling of goods. This subset of e-commerce retailers has gained wide acceptance to consumers in the five years to 2011, by providing engaging content and discounted (or wholesale) prices through user interaction (i.e. sharing information and purchasing as groups). IBISWorld expects more form of social media or new e-commerce businesses to arise in the next five years to 2016, further contributing to the growth stage designation of the industry.
9
Key External Drivers Per capita disposable income Disposable income is a deciding factor in determining the quantity and quality of online purchases. Changes in income can occur because of movements in wages, government benefits, unemployment and tax rates and returns on assets. This driver is expected to increase over 2011, making it a potential opportunity for industry growth. The E-Commerce and Online Auctions industry is sensitive to the penetration rate of PCs. If the rate of computer ownership increases, then a larger proportion of the population has access to e-tailers. Additionally, increased computer and internet use will likely raise confidence, leading to greater computer activity and sales. This driver is expected to increase over 2011.
4
% Change
3 2 1 0 -1 Year
05
07
09
11
13
15
17
During periods of low economic growth, consumer sentiment declines; as a result, consumers limit their expenditure. This factor subsequently affects demand for products online. This driver is expected to rise over 2011, but because of high unemployment, it remains a threat to industry growth. When more households have access to broadband internet as opposed to dial-up, they are more likely to make online purchases because of the speed gains derived from a broadband connection. This driver is expected to increase over 2011.
Percentage of households with at least one computer 85 80 75 % 70 65 60 Year 03
05
07
09
11
13
15
17
Objectives What follows is a listing of the core objectives for Sample Plan 1.
1. Develop a strong customer base. Developing a strong customer base will be the first priority. To achieve this end the founder will create an effective customer service model that adequately addresses all of the unique needs of the online consumer.
2. Create a broad marketplace. Having a broad marketplace with a variety of goods will be another of the core objectives. From furniture to electronics to kitchen and fashion, the founder is intent on creating a marketplace that is as broad as the consumers taste.
3. Online security. As the online shopping industry has continued to grow, so too has the need for online security. With that being said the founder will look to develop a secure environment that protects the consumer on all levels.
4. Drive profits. Driving profits will be the final objective for Sample Plan 1 as the founder will look to grow the revenue and profit streams exponentially over the course of the coming years.
10
SWOT Analysis What follows is an analysis of the core strengths and weaknesses of the Sample Plan 1 business model as well as the opportunities and threats that currently exist within the marketplace.
Strengths
Opportunities
1. Knowledge of the founder. Sample Plan 1 founder Mr. John
2. Low overhead costs. Sample Plan 1 will have extremely low
1. Increase in online activity among minorities. Minorities are beginning to turn to the Internet for their shopping needs in large quantities. Research conducted via IBISworld.com shows that appealing to this segment of the market will be one of the keys to success for companies like Sample Plan 1 that are looking for long-term sustainability.
overhead costs due to the fact that the business will not carry inventory or need office space to operate effectively.
Threats
3. Growth of the industry. The growth of the industry is
1. Larger competitors. Larger competitors such as Ebay.
another of the core strengths of the Sample Plan 1 business model. With more and more shopping traffic going online, the long-term prospects for Sample Plan 1 are nothing less than promising.
com and Amazon.com pose a threat as they are already firmly entrenched in the marketplace and have acquired a large share of the online shopping market.
Jones is a seasoned business professional who is well attuned to the e-commerce and Internet driven marketplace. His broad skill set will be invaluable during all phases of business growth and evolution.
Weaknesses 1. Lack of funding. Lack of funding is the primary weakness for Sample Plan 1 as all of the other components of the business model and approach are extremely sound.
Marketing Sample Plan 1 will rely primarily on the Internet to drive the marketing efforts. Planned marketing efforts include the creation of a user friendly website developed using all of the latest in design and online technologies. The website will also feature SEO (Search Engine Optimization) which will allow it to rank higher with popular search engines including Yahoo.com and Google.com among others. Social networking using Facebook.com and Twitter.com will round out the Sample Plan 1 marketing model and approach with each being used extensively throughout the course of each calendar year.
119
Management Summary Personnel Forecast Year 1
Year 2
Year 3
Year 4
Year 5
Personnel Count Founder Operations Total Personnel
1 2 3
1 2 3
1 2 3
1 2 3
1 2 3
Personnel Wage Founder Operations
$60,000 $78,000
$63,000 $81,900
$66,150 $85,995
$69,458 $90,295
$72,930 $94,809
Personnel Costs Founder Operations Total Payroll
$60,000 $156,000 $216,000
$63,000 $163,800 $226,800
$66,150 $171,990 $238,140
$69,458 $180,590 $250,047
$72,930 $189,619 $262,549
The projected management and personnel summary for Sample Plan 1 is shown in the table above.
12
11
Financial Indicators PersonnelIndicators Financial Forecast ProfitabilityCount Personnel %’s: Joseph GrossSerrone Margin Brandon Net Profi Bueno t Margin Vickie EBITDA Bueno-Serrone to Revenue Total Personnel Leverage Ratios: Personnel Debt to Wage Equity Joseph Debt to Serrone Assets Ratio Brandon InterestBueno Coverage Ratio Vickie Bueno-Serrone Liquidity Ratios: Personnel Current Costs Ratio Joseph Current Serrone Debt to Total Assets Ratio Brandon Bueno Vickie Bueno-Serrone Additional Indicators: Total Revenue Payrollto Equity Ratio
Year 1
Year 2
Year 3
Year 4
Year 5
192.50% 13.55% 1 26.91% 1 3
192.50% 116.63% 132.78% 3
192.50% 120.39% 138.13% 3
192.50% 123.82% 142.99% 3
92.50% 1 126.95% 147.41% 3
0.24 $11,196 17.88% $11,196 3.59 $11,196
0.29 $11,756 21.63% $11,756 4.65 $11,756
0.30 $12,344 22.37% $12,344 5.75 $12,344
0.29 $12,961 21.82% $12,961 6.90 $12,961
0.27 $13,609 20.71% $13,609 8.09 $13,609
20.91 $11,196 4.58% $11,196 $11,196 $33,588 2.41
31.74 $11,756 3.07% $11,756 $11,756 $35,267 1.89
45.94 $12,344 2.14% $12,344 $12,344 $37,031 1.51
64.12 $12,961 1.54% $12,961 $12,961 $38,882 1.23
86.93 $13,609 1.14% $13,609 $13,609 $40,826 1.02
Financial Indicators 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 1
2 Gross Margin
3 Net Profit Margin
4
5
EBITDA to Revenue
The financial indicators for Sample Plan 1 are shown in the table above and graph. The organization projects to have a favorable growth in profit margin in each of the first five years of operations.
13
Revenue Forecast PersonnelForecast Revenue Forecast Units Personnel Count Products Joseph Serrone Brandon Total Units Bueno Vickie Bueno-Serrone TotalPrice Unit Personnel Products Personnel Wage Revenue Joseph Serrone Brandon Bueno Products VickieRevenue Total Bueno-Serrone Direct UnitCosts Personnel Cost Products Joseph Serrone Brandon Bueno Vickie Cost Direct Bueno-Serrone of Revenue Total Payroll Products Subtotal Cost of Revenue
Year 1
Year 2
Year 3
Year 4
Year 5
16,876 6,876 1 1 3 $175.00
17,908 1 7,908 1 3 $175.00
19,094 9,094 1 1 3 $175.00
110,458 10,458 1 1 3 $175.00
112,027 12,027 1 1 3 $175.00
$11,196 $1,203,335 $11,196 $1,203,335 $11,196
$11,756 $11,756 $1,383,835 $11,756 $1,383,835
$12,344 $12,344 $1,591,410 $12,344 $1,591,410
$12,961 $12,961 $1,830,122 $12,961 $1,830,122
$13,609 $13,609 $2,104,640 $13,609 $2,104,640
$11,196 $85.00 $11,196 $11,196 $33,588 $584,477 $584,477
$11,756 $85.00 $11,756 $11,756 $35,267 $672,148 $672,148
$12,344 $85.00 $12,344 $12,344 $37,031 $772,971 $772,971
$12,961 $85.00 $12,961 $12,961 $38,882 $888,916 $888,916
$13,609 $85.00 $13,609 $13,609 $40,826 $1,022,254 $1,022,254
Total Revenue $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0
Year 1
Year 2
Year 3
Year 4
Year 5
Total Revenue
The projected revenue forecast for Sample Plan 1 is shown in the chart and graph above. The organization projects to have strong revenue growth that is commensurate with research conducted via IBISworld.com.
14
Break-Even Analysis Income Chart $1,400,000 $1,200,000
Sales Revenue 100.0%
$1,000,000
Cost of Sales 48.6%
$800,000
Gross Profit 51.4%
$600,000
Fixed Expenses 2.4%
$400,000
Income Before Tax 35.0%
$200,000 $0
Break-even Revenue
$1,400,000 $1,200,000
REVENUE
$1,000,000
FIXED COSTS $800,000 $600,000 $400,000 $200,000 $0
0
1
2
3
4
5
6
7
8
9
10 11
12
Months The projected break-even analysis for Sample Plan 1 is shown in the table above. The organization projects to have first year average monthly revenues of $100,278 with costs of $77,373.
15
Profit and Loss Statement Personnel Pro FormaForecast Profit and Loss Revenue Count Personnel Total Joseph Cost Serrone of Revenue Brandon Bueno Vickie Margin Gross Bueno-Serrone Total Personnel Gross Margin/Revenue
Year 1 $1,203,335 1$584,477 1 1$618,858 51.43% 3
Year 2 $1,383,835 1$672,148 1 1$711,687 51.43% 3
Year 3 $1,591,410 1$772,971 1 1$818,440 51.43% 3
Year 4 $1,830,122 $888,916 1 1 1$941,205 51.43% 3
Year 5 $2,104,640 $1,022,254 1 1 1$1,082,386 51.43% 3
Expenses Wage Personnel Supplies Joseph Serrone Brandon Bueno Rent Vickie Bueno-Serrone Marketing Insurance Personnel Costs Miscellaneous Payroll JosephTaxes Serrone Brandon Total Personnel Bueno VickieOp. Total Bueno-Serrone Expenses Total Payroll Profit Before Interest and Taxes EBITDA Interest Expense Taxes Incurred
$18,000 $11,196 $11,196 $36,000 $26,400 $11,196 $2,400 $4,800 $32,400 $11,196 $11,196 $216,000 $336,000 $11,196 $33,588 $282,858 $282,858 $8,000 $83,401
$11,756 $18,900 $11,756 $37,800 $11,756 $27,720 $2,520 $5,040 $11,756 $34,020 $11,756 $226,800 $352,800 $11,756 $35,267 $358,887 $358,887 $8,000 $122,810
$12,344 $19,845 $12,344 $39,690 $12,344 $29,106 $2,646 $5,292 $12,344 $35,721 $12,344 $238,140 $12,344 $370,440 $37,031 $448,000 $448,000 $8,000 $154,000
$12,961 $20,837 $12,961 $41,675 $12,961 $30,561 $2,778 $5,557 $12,961 $37,507 $12,961 $250,047 $12,961 $388,962 $38,882 $552,243 $552,243 $8,000 $190,485
$13,609 $21,879 $13,609 $43,758 $13,609 $32,089 $2,917 $5,834 $13,609 $39,382 $13,609 $262,549 $13,609 $408,410 $40,826 $673,976 $673,976 $8,000 $233,092
Net Profit Net Profit/Revenue
$191,457 15.91%
$228,076 16.48%
$286,000 17.97%
$353,758 19.33%
$432,885 20.57%
Year 1 17% 30%
Year 2 Total Cost of Revenue
53%
18%
Total Op. Expenses
28%
Year 3
54%
Net Profit
Total Op. Expenses
26%
22%
Total Cost of Revenue
54%
54%
23% 22%
Total Op. Expenses Net Profit
Year 5
Total Op. Expenses Net Profit
16
Total Cost of Revenue
Net Profit
Year 4
24%
20%
Total Cost of Revenue
Total Cost of Revenue
55%
Total Op. Expenses Net Profit
Projected Cash Flow Personnel Pro FormaForecast Cash Flow Year 1
Year 2
Year 3
Year 4
Year 5
Cash Received Personnel Count Revenue Joseph Serrone Brandon New Current Bueno Borrowing VickieLong-term New Bueno-Serrone Liabilities TotalofPersonnel Sale Other Current Assets Sale of Long-term Assets Personnel New Investment Wage Received Total Joseph Cash Serrone Received Brandon Bueno Vickie Bueno-Serrone Expenditures Operating Expenses & Direct Costs Personnel Current Borrowing Costs Repay. L-T Joseph Liabilities Serrone Principal Repay. Brandon Bueno Purchase Other Current Assets Vickie Bueno-Serrone Purchase Long-term Assets Total Payroll Dividends Total Expenditures
$1,203,335 1 1$0 1$0 3$0 $0 $0 $1,203,335 $11,196 $11,196 $11,196 $1,011,878 $0 $11,196 $11,817 $11,196 $11,196 $33,588 $1,023,695
1$1,383,835 1$0 1$0 3$0 $0 $0 $11,756 $1,383,835 $11,756 $11,756 $1,155,759 $0 $11,756 $11,817 $11,756 $0 $11,756 $0 $35,267 $0 $1,167,576
1$1,591,410 1$0 1$0 3$0 $0 $0 $12,344 $1,591,410 $12,344 $12,344 $1,305,411 $0 $12,344 $11,817 $12,344 $0 $12,344 $0 $37,031 $0 $1,317,228
1$1,830,122 1$0 1$0 3$0 $0 $0 $12,961 $1,830,122 $12,961 $12,961 $1,476,364 $0 $12,961 $11,817 $12,961 $0 $12,961 $0 $38,882 $0 $1,488,181
1$2,104,640 1$0 1$0 3$0 $0 $0 $13,609 $2,104,640 $13,609 $13,609 $1,671,755 $0 $13,609 $11,817 $13,609 $0 $13,609 $0 $40,826 $0 $1,683,572
Net Cash Flow Cash Balance
$179,640 $204,640
$216,259 $420,899
$274,183 $695,082
$341,941 $1,037,023
$421,068 $1,458,091
Pro Forma Cash Flow $2,500,000 $2,000,000 $1,500,000 $1,000,000 $500,000 $0
Year 1
Year 2 Total Cash Received
Year 3 Total Expenditures
Year 4
Year 5
Cash Balance
17
Projected Balance Sheet Personnel Pro FormaForecast Balance Sheet Assets Count Personnel Current Joseph Assets Serrone Brandon Bueno Cash Vickie Current Other Bueno-Serrone Assets Total Current Personnel Assets
Year 1
Year 2
Year 3
Year 4
Year 5
1 $204,640 1 1$0 $204,640 3
1 1$420,899 1$0 3$420,899
1 1$695,082 1$0 3$695,082
1 1$1,037,023 1$0 3$1,037,023
1 1$1,458,091 1$0 3$1,458,091
Long-termWage Personnel Assets Long-term Joseph Serrone Assets Brandon Bueno Accumulated Depreciation VickieLong-term Total Bueno-Serrone Assets Total Assets Personnel Costs Liabilities Joseph Serrone and Capital BrandonLiabilities Current Bueno Vickie Bueno-Serrone Current Borrowing Total Payroll Other Current Liabilities Subtotal Current Liabilities
$11,196 $0 $11,196 $0 $11,196 $0 $204,640
$11,756 $0 $11,756 $0 $11,756 $0 $420,899
$12,344 $0 $12,344 $0 $12,344 $0 $695,082
$12,961 $0 $12,961 $0 $12,961 $0 $1,037,023
$13,609 $0 $13,609 $0 $13,609 $0 $1,458,091
$11,196 $11,196 $11,196 $100,000 $33,588 $0 $100,000
$11,756 $11,756 $11,756 $100,000 $35,267 $0 $100,000
$12,344 $12,344 $12,344 $100,000 $37,031 $0 $100,000
$12,961 $12,961 $12,961 $100,000 $38,882 $0 $100,000
$13,609 $13,609 $13,609 $100,000 $40,826 $0 $100,000
Long-term Liabilities Total Liabilities
($11,817) $88,183
($23,634) $76,366
($35,451) $64,549
($47,268) $52,732
($59,085) $40,915
Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital
$25,000 ($50,000) $191,457 $166,457 $254,640
$25,000 $141,457 $228,076 $394,533 $470,899
$25,000 $369,533 $286,000 $680,533 $745,082
$25,000 $655,533 $353,758 $1,034,291 $1,087,023
$25,000 $1,009,291 $432,885 $1,467,176 $1,508,091
Net Worth
$116,457
$344,533
$630,533
$984,291
$1,417,176
Pro Forma Balance Sheet $1,400,000 $1,200,000 $1,000,000 $800,000 $600,000 $400,000 $200,000 $0
Year 1
Year 2 Total Assets
18
Year 3 Total Liabilities
Year 4 Net Worth
Year 5
$5,000 $13,000 $18,000
Personnel Costs Founder Operations Total Payroll
432 432
$175.00
$75,600 $75,600
$85.00
$36,720 $36,720
Units Products Total Units
Unit Price Products
Revenue Products Total Revenue
Direct Unit Cost Products
Direct Cost of Revenue Products
Subtotal Cost of Revenue
Month 1
$5,000 $6,500
Personnel Wage Founder Operations
Year 1 Revenue Forecast
1 2 3
Personnel Count Founder Operations Total Personnel
Month 1
Year 1 Personnel Forecast
19
$38,556
$38,556
$85.00
$79,380 $79,380
$175.00
454 454
Month 2
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 2
$40,484
$40,484
$85.00
$83,349 $83,349
$175.00
476 476
Month 3
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 3
$42,508
$42,508
$85.00
$87,516 $87,516
$175.00
500 500
Month 4
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 4
$44,633
$44,633
$85.00
$91,892 $91,892
$175.00
525 525
Month 5
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 5
$46,865
$46,865
$85.00
$96,487 $96,487
$175.00
551 551
Month 6
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 6
$49,208
$49,208
$85.00
$101,311 $101,311
$175.00
579 579
Month 7
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 7
$51,669
$51,669
$85.00
$106,377 $106,377
$175.00
608 608
Month 8
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 8
$54,252
$54,252
$85.00
$111,696 $111,696
$175.00
638 638
Month 9
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 9
$56,965
$56,965
$85.00
$117,280 $117,280
$175.00
670 670
Month 10
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 10
$59,813
$59,813
$85.00
$123,144 $123,144
$175.00
704 704
Month 11
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 11
$62,804
$62,804
$85.00
$129,302 $129,302
$175.00
739 739
Month 12
$5,000 $13,000 $18,000
$5,000 $6,500
1 2 3
Month 12
Month 1 $75,600 $36,720 $38,880 51.43%
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000 $10,880 $10,880 $667 $0 $10,213 13.51%
Revenue Total Cost of Revenue
Gross Margin Gross Margin/Revenue
Expenses Supplies Rent Marketing Insurance Miscellaneous Payroll Taxes Total Personnel Total Op. Expenses
Profit Before Int. and Tax EBITDA Interest Expense Taxes Incurred
Net Profit Net Profit/Revenue
Year 1 Profit & Loss
20 $12,157 15.32%
$12,824 $12,824 $667 $0
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$40,824 51.43%
Month 2 $79,380 $38,556
$14,199 17.04%
$14,865 $14,865 $667 $0
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$42,865 51.43%
Month 3 $83,349 $40,484
$10,622 12.14%
$17,008 $17,008 $667 $5,720
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$45,008 51.43%
Month 4 $87,516 $42,508
$12,085 13.15%
$19,259 $19,259 $667 $6,507
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$47,259 51.43%
Month 5 $91,892 $44,633
$13,621 14.12%
$21,622 $21,622 $667 $7,334
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$49,622 51.43%
Month 6 $96,487 $46,865
$15,234 15.04%
$24,103 $24,103 $667 $8,203
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$52,103 51.43%
Month 7 $101,311 $49,208
$16,927 15.91%
$26,708 $26,708 $667 $9,114
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$54,708 51.43%
Month 8 $106,377 $51,669
$18,705 16.75%
$29,443 $29,443 $667 $10,072
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$57,443 51.43%
Month 9 $111,696 $54,252
$20,572 17.54%
$32,316 $32,316 $667 $11,077
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$60,316 51.43%
Month 10 $117,280 $56,965
$22,532 18.30%
$35,331 $35,331 $667 $12,133
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$63,331 51.43%
Month 11 $123,144 $59,813
$24,590 19.02%
$38,498 $38,498 $667 $13,241
$1,500 $3,000 $2,200 $200 $400 $2,700 $18,000 $28,000
$66,498 51.43%
Month 12 $129,302 $62,804
$0 $0 $0 $34,229
Long-term Assets Accum. Depreciation Total Long-term Assets Total Assets
$100,000 $0 $100,000 ($985) $99,015 $25,000 ($50,000) $10,213 ($14,787) $84,229 ($64,787)
Current Borrowing Other Current Liabilities
Subtotal Current Liabilities
Long-term Liabilities Total Liabilities
Paid-in Capital
Retained Earnings Current Retained Earnings
Total Capital Total Liabilities and Capital
Net Worth
Current Liabilities
$34,229 $0 $34,229
Month 1
Current Assets Cash Other Current Assets Total Current Assets
Year 1 Balance Sheet
21
($52,629)
($2,629) $95,401
($50,000) $22,371
$25,000
($1,969) $98,031
$100,000
$100,000 $0
$0 $0 $0 $45,401
$45,401 $0 $45,401
Month 2
($38,431)
$11,569 $108,615
($50,000) $36,569
$25,000
($2,954) $97,046
$100,000
$100,000 $0
$0 $0 $0 $58,615
$58,615 $0 $58,615
Month 3
($27,809)
$22,191 $118,252
($50,000) $47,191
$25,000
($3,939) $96,061
$100,000
$100,000 $0
$0 $0 $0 $68,252
$68,252 $0 $68,252
Month 4
($15,724)
$34,276 $129,353
($50,000) $59,276
$25,000
($4,924) $95,076
$100,000
$100,000 $0
$0 $0 $0 $79,353
$79,353 $0 $79,353
Month 5
($2,103)
$47,897 $141,989
($50,000) $72,897
$25,000
($5,908) $94,092
$100,000
$100,000 $0
$0 $0 $0 $91,989
$91,989 $0 $91,989
Month 6
$13,131
$63,131 $156,238
($50,000) $88,131
$25,000
($6,893) $93,107
$100,000
$100,000 $0
$0 $0 $0 $106,238
$106,238 $0 $106,238
Month 7
$30,058
$80,058 $172,180
($50,000) $105,058
$25,000
($7,878) $92,122
$100,000
$100,000 $0
$0 $0 $0 $122,180
$122,180 $0 $122,180
Month 8
$48,763
$98,763 $189,900
($50,000) $123,763
$25,000
($8,863) $91,137
$100,000
$100,000 $0
$0 $0 $0 $139,900
$139,900 $0 $139,900
Month 9
$69,334
$119,334 $209,487
($50,000) $144,334
$25,000
($9,847) $90,153
$100,000
$100,000 $0
$0 $0 $0 $159,487
$159,487 $0 $159,487
Month 10
$91,866
$141,866 $231,034
($50,000) $166,866
$25,000
($10,832) $89,168
$100,000
$100,000 $0
$0 $0 $0 $181,034
$181,034 $0 $181,034
Month 11
$116,457
$166,457 $254,640
($50,000) $191,457
$25,000
($11,817) $88,183
$100,000
$100,000 $0
$0 $0 $0 $204,640
$204,640 $0 $204,640
Month 12
