Start-up | |
Requirements | |
Start-up Expenses | |
Legal | $500 |
Stationery etc. | $300 |
Sales Campaign | $5,000 |
Dynamic Communications fees | $4,200 |
Phone Lines | $800 |
Rent | $800 |
Hardware | $23,500 |
Software | $25,000 |
Total Start-up Expenses | $60,100 |
Start-up Assets | |
Cash Required | $52,500 |
Other Current Assets | $5,000 |
Long-term Assets | $0 |
Total Assets | $57,500 |
Total Requirements | $117,600 |
The company recognizes that it is subject to both market and industry risks. We believe our risks are as follows, and we are addressing each as indicated.
Web Applications has developed an Internet-based application called Online Office Manager, for which a patent is pending. Online Office Manager allows businesses and individuals to keep in touch effectively even with a distance factor. Online Office Manager provides applications which replace the physical office. With Online Office Manager, your office moves with you at all times and you have 24-hour access to it. Users can get Online Office Manager by subscribing to our server on the Internet. There is no need to buy any software or upgraded versions of the software.
Main Features
Secondary Features
Online Office Manager comes in three packages and customers can choose the one with the applications that best suit their needs.
In the future, we will implement Phase 2 of our plan. Our research and development (R&D) will yield innovation with input from customers and the marketplace. Given below is a detailed look at the future applications that will be a part of the Phase 2 program. The biggest and most complex application of Phase 2 will be the telephone/fax service.
Telephone/Fax services .
Other Future Applications
We expect to compete as a thriving company in the computer applications software industry. Applications software are computer programs designed to accomplish user tasks, such as word processing, graphic design, desktop publishing, inventory control, and more. The software industry consists of three general market segments: application solutions, application tools, and systems software. The software market has long been one of the computer industry’s fastest growing segments. Revenues for the worldwide software market reached $122 billion in 1997, up about 15% from 1996 according to estimates by IDC. Revenues continued to show robust growth in 1998. IDC projects that revenues will grow at a compound annual rate of approximately 12% for the next several years, surpassing $220 billion by 2002.
Applications software can be either developed by outside vendors and sold in packaged form, or custom-made by users themselves. Many computer users don’t have the time or desire to write their own computer programs or to hire a software developer; they can choose from thousands of quality packaged programs ready for use with little or no modification. The proliferation of computers has increased the number of people who use computers relative to those who can program them, increasing the packaged software’s importance. Custom software is tailored to the needs of a specific individual or organization.
In just five years, the Internet has undergone a major metamorphosis. From an obscure network used by a limited number of academics and researchers, the Internet has been transformed into a global Web of more than 100 million interconnected computers encompassing users from all walks of life. Described below are the various segments of the Internet:
In the first six months of 1997, a total of 37 million personal computers (PC) were shipped worldwide. That figure rose to 40 million during the same time period in 1998 and, according to IDC, this figure is expected to rise by 16% in 1999. PC growth in 1997 and 1998 was boosted by the introduction of the sub-$1,000 PC. This price point is due in large part to the sharp drop in prices of the major components that go into the PC. Another way PC makers have addressed lower price points is through cost-reduction efforts made possible by new manufacturing and distribution strategies. Two important initiatives are underway:
In both cases, the building or configuring occurs when an order is received. By using these methods, indirect PC vendors hope to keep inventories lower and, through the cost savings achieved, offer more competitive prices to customers. Compaq, Dell, IBM, and Hewlett Packard dominate the computer industry.
A review of all of our markets is given below:
Market Analysis | |||||||
Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||
Potential Customers | Growth | CAGR | |||||
Small Business | 10% | 500,000 | 550,000 | 605,000 | 665,500 | 732,050 | 10.00% |
Individuals | 35% | 1,000,000 | 1,350,000 | 1,822,500 | 2,460,375 | 3,321,506 | 35.00% |
Corporations | 10% | 500,000 | 550,000 | 605,000 | 665,500 | 732,050 | 10.00% |
Telecommuters | 25% | 750,000 | 937,500 | 1,171,875 | 1,464,844 | 1,831,055 | 25.00% |
Total | 24.55% | 2,750,000 | 3,387,500 | 4,204,375 | 5,256,219 | 6,616,661 | 24.55% |
One of the more pressing issues facing the computer industry is the Year 2000 problem, also referred to as “Y2K” and “the millennium bug.” Unless addressed properly, this problem will cause many computers worldwide to stop functioning properly. Y2K arises from the fact that until the mid-1980s or so, programmers used two-digit numbers to represent years. For example, “97” was used to represent the year 1997. While this design saved computer storage space, which was expensive and in limited supply, it also produced the situation in which all dates input in these computers refer to the twentieth century. The Gartner Group, a Connecticut-based information technology (IT) consulting firm, estimates the worldwide repair bills in the $300 billion – $600 billion range, but this includes only the cost of fixing programs written in Cobol. Software Productivity Research, a Massachusetts based software-consulting firm, has made a broader estimate that includes repairs, damages, and litigation. This group estimates that the total cost from 1994 to 2005 will top $3.6 trillion.
Our products will not be affected by the Y2K problem.
Competition There is one major company with whom we will be competing and that is HotOffice Technology. Its product, HotOffice, is a low-end business planner that focuses on the basic business structure. Other companies compete in the industry, but they only specialize on one of the many features we offer.
HotOffice Technology HotOffice Technologies, Inc. is a Web-based Intranet Service provider for small business, especially those with collaboration needs, multiple offices, mobile workers, telecommuters, and virtual offices. HotOffice offers small businesses an affordable, secure Intranet solution at a fraction of the cost of purchasing and maintaining a traditional Intranet or Extranet. This subscription service provides a large, powerful suite of collaboration and communication tools in one simple, easy-to-use interface accessible anytime, anywhere. From any PC with Internet access, HotOffice provides instant connection via the Web to email, calendar, documents, bulletin boards, online conference rooms, business centers, and more.
Strengths Large penetration to the main channels. At the time of this writing, they have the first entry to market. We plan on taking a significant part of that market share within a few months by providing additional features that will be more attractive for users.
Barriers to Entry Web Applications will benefit from several significant barriers to entry which include:
We intend to become the leader and most creative provider of Web-based business management applications on the market. We aim to create a user-friendly application that will be an integral component in any personal or business environment. We will do this by developing an innovative and progressive development and management team. We will also accomplish our goal by using customer input to further develop our products and services.
We will leverage this new product in the computer software industry to dominate the growing Web-based applications market, especially the small businesses. We have a premium, value-added product with three different packages from which the user can choose the one that best suits their needs. These strategic product lines will enable domination of the target market. The products all share the core applications but differ in range of services.
As a company, we feel that there are a number of opportunities we can capitalize on and they include:
Small Businesses
Individuals
We will outsource all sales operations to a company to be named.
We are confident that our Online Office Manager will be eagerly embraced by mobile computer using businesses and e-commerce businesses. We are forecasting a 10-fold revenue increase over the years covered in this plan, as shown in the table and charts below.
Sales Forecast | |||
Year 1 | Year 2 | Year 3 | |
Sales | |||
Online Office Manager | $200,000 | $1,500,000 | $2,200,000 |
Other | $0 | $0 | $0 |
Total Sales | $200,000 | $1,500,000 | $2,200,000 |
Direct Cost of Sales | Year 1 | Year 2 | Year 3 |
Online Office Manager | $100,000 | $300,000 | $400,000 |
Other | $0 | $0 | $0 |
Subtotal Direct Cost of Sales | $100,000 | $300,000 | $400,000 |
The message associated with our product is value-added applications. Dynamic Communication Solutions has identified a brief promotional plan that is diverse and will include a range of marketing communications including the few listed below.
Circulation | Target Audience | Space | Cost | Est. Sales | |
Creative Loafing | 750,000 | Individuals | .5 page | $5,000 | $200,000 |
Belleview Business Chronicle | 1 million | Businesses | .5 page | $10,000 | $250,000 |
Buckhead Local Paper | 750,000 | Businesses | .5 page | $10,000 | $250,000 |
We plan to set our pricing based on competitors’ pricing. Prices will also be based on market prices for similar off-the-shelf products. The automatic upgrade and product enhancement features do not affect the price of any of the services. The figure below shows our tentative pricing schedule, these are monthly rates. We will work in conjunction with Dynamic Communication Solutions to come up with a working pricing schedule. Users will have three payment options:
Gold | Silver | Bronze |
$29.95 | $25.95 | $12.95 |
Web Applications offers the following value propositions for customers.
The company plans to form strategic alliances with Dynamic Communication Solutions, For Sale By Internet, and a sales company to be announced. The company may develop research alliances to further refine the product and adapt it to new markets in different industries. Below is an explanation of key relationships:
Our management philosophy is based on responsibility and mutual respect. At Web Applications, we have an environment that encourages creativity and achievement. Web Applications management is highly experienced and qualified. Its key management team includes Mr. Lester Andrews and Mr. Dwight Austin.
Mr. Lester Andrews – President and CEO Lester Andrews has over 10 years in the Information System field. In 1987, he attended the DeVry Institute of Technology where he graduated with a degree in Electronics Engineering. He went on to work for Vanstar (formally Computerland) in the networking department handling accounts such as Compaq, Intel, APC, HP, and various others. After leaving Vanstar, he pursed a career that included consulting designing, installing and setting up networks, and network maintenance. Mr. Andrews also worked as a Manager of Information Systems for the Medicare SMART program.
Mr. Dwight Austion – COO/CFO Mr. Austion graduated from Western Kentucky University with a degree in Sociology and has a vast amount of managerial experience. Between 1994 and 1995, he worked at Turner Broadcasting Systems (TBS) as a project manager. During this time, he was responsible for preparing and delivering presentations for proposals to sell new services. Mr. Austion also managed the daily operations with an annual budget of $320,000. Between 1995 and 1996, Mr. Austion was project manager at Taylor and Mathis/Beacon properties, a Belleview-based real estate company. He had the task of supervising a staff of 20 employees and 10 sub-contractors. He was also in charge of operations, which were run on an annual budget of $450,000. Mr. Austion also worked as project manager for Flower’s Baking Company, where he managed contract services and had an operating budget of $600,000. In December 1997, he took his managerial skills to Hospital Housekeeping Systems where he became operating manager for day staff. He worked closely with the chief operating officer and had an operating budget of $1.2 million.
Personnel Plan | |||
Year 1 | Year 2 | Year 3 | |
Lester Andrews | $34,788 | $43,478 | $52,174 |
Dwight Austion | $34,788 | $43,478 | $52,174 |
Service Manager | $26,076 | $32,609 | $34,788 |
Other | $0 | $46,087 | $95,647 |
Total People | 3 | 5 | 7 |
Total Payroll | $95,652 | $165,652 | $234,783 |
For Sale By Internet – Website Developer For Sale By Internet is led by Webmaster, Mr. Brian Taylor. Having attended the University of Washington between 1983 and 1987, Mr. Taylor graduated with a Bachelor of Science degree in Business Administration & Philosophy in the honors program. Altogether, Mr. Taylor has eight years of experience in the planning, creation, and management of website development. He started his computer career as a Microsoft Contractor at ComputerLand in 1983. As a PC Repair Assistant Manager, he designed and instigated innovative techniques of operation that would further satisfy the customer. As a Software Install Manager for Entex, Mr. Taylor managed the New Software Installation Group that consisted of 12 install technicians. Responsibilities included writing and investigating new databases, and operating parameters to speed up install and delivery time of new PCs. Between July, 1994 and December, 1995, Mr. Taylor was a top salesman for Microrim Software, selling relational databases and accounting software. He then went on to work for CARA testing Microsoft’s IE30 Web browser for JavaScript and VBscript bugs. From October, 1996 to this present day, Mr. Taylor has be a Webmaster for For Sale By Internet. Through this company, Mr. Taylor develops and manages websites on a contract basis.
Dynamic Communication Solutions – Marketing This is a company with over ten years of experience in marketing and marketing management. We will outsource all marketing operations to Dynamic Communication Solutions because we feel that they have stability and marketing channels that will be effective for our product.
To be announced – Sales We will outsource all sales operations to a company to be named.
To be announced – Customer service We will outsource this department to an answering service.
Funding Requirements and Uses Based on our projections, we feel an investment in our company is a sound investment. In order to proceed, we are requesting an investment of $101,600 by June, 1999. The funds will be used to purchase equipment and to cover initial operating expenses. The $101,600 will be used to implement Phase 1 of our operations. Once the company is in full operation, we will require an additional capital investment to fund Phase 2 of our operations.
Phase 2 We will be in discussion with developers on the best direction to take and what cost savings we can achieve. The specific details for Phase 2 are still to be determined, but three major areas (server, small PBX, and business development funds) will require approximately $30,000 by January, 2000.
Exit/Payback Strategy We can provide an exit for this investment within three years by a dividend of excess profits. The increase in profits generated by sales revenue will provide funds to repay the investment.
Conclusion Based on our projections, we feel an investment to Web Applications is a sound business investment. In order to proceed, we are requesting an investment of $101,600 as soon as possible.
With average first year fixed monthly costs and an average margin as shown below, Web Applications calculates it will break even at the sales volume presented in the table and chart. The company management plans to reach such level by the end of 2000.
Break-even Analysis | |
Monthly Revenue Break-even | $25,333 |
Assumptions: | |
Average Percent Variable Cost | 50% |
Estimated Monthly Fixed Cost | $12,667 |
The following chart contains assumptions important to the success of the company.
General Assumptions | |||
Year 1 | Year 2 | Year 3 | |
Plan Month | 1 | 2 | 3 |
Current Interest Rate | 10.00% | 10.00% | 10.00% |
Long-term Interest Rate | 10.00% | 10.00% | 10.00% |
Tax Rate | 25.42% | 25.00% | 25.42% |
Other | 0 | 0 | 0 |
The projected income statement for Web Applications is shown below. The company is basing its revenue projections on anticipated sales of products.
Pro Forma Profit and Loss | |||
Year 1 | Year 2 | Year 3 | |
Sales | $200,000 | $1,500,000 | $2,200,000 |
Direct Cost of Sales | $100,000 | $300,000 | $400,000 |
Other | $5,000 | $10,000 | $15,000 |
Total Cost of Sales | $105,000 | $310,000 | $415,000 |
Gross Margin | $95,000 | $1,190,000 | $1,785,000 |
Gross Margin % | 47.50% | 79.33% | 81.14% |
Expenses | |||
Payroll | $95,652 | $165,652 | $234,783 |
Sales and Marketing and Other Expenses | $23,400 | $47,000 | $80,000 |
Depreciation | $0 | $0 | $0 |
Research and Development | $15,000 | $25,000 | $40,000 |
Utilities | $600 | $800 | $1,000 |
Insurance | $600 | $800 | $1,000 |
Rent | $2,400 | $3,000 | $5,000 |
Payroll Taxes | $14,348 | $24,848 | $35,217 |
Other | $0 | $0 | $0 |
Total Operating Expenses | $152,000 | $267,100 | $397,000 |
Profit Before Interest and Taxes | ($57,000) | $922,900 | $1,388,000 |
EBITDA | ($57,000) | $922,900 | $1,388,000 |
Interest Expense | $0 | $0 | $0 |
Taxes Incurred | $0 | $230,725 | $352,783 |
Net Profit | ($57,000) | $692,175 | $1,035,216 |
Net Profit/Sales | -28.50% | 46.15% | 47.06% |
The cash flow statement can be found in the chart and table below.
Pro Forma Cash Flow | |||
Year 1 | Year 2 | Year 3 | |
Cash Received | |||
Cash from Operations | |||
Cash Sales | $50,000 | $375,000 | $550,000 |
Cash from Receivables | $120,500 | $933,250 | $1,546,750 |
Subtotal Cash from Operations | $170,500 | $1,308,250 | $2,096,750 |
Additional Cash Received | |||
Sales Tax, VAT, HST/GST Received | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 |
New Other Liabilities (interest-free) | $0 | $0 | $0 |
New Long-term Liabilities | $0 | $0 | $0 |
Sales of Other Current Assets | $0 | $0 | $0 |
Sales of Long-term Assets | $0 | $0 | $0 |
New Investment Received | $36,000 | $0 | $0 |
Subtotal Cash Received | $206,500 | $1,308,250 | $2,096,750 |
Expenditures | Year 1 | Year 2 | Year 3 |
Expenditures from Operations | |||
Cash Spending | $95,652 | $165,652 | $234,783 |
Bill Payments | $147,562 | $604,177 | $906,344 |
Subtotal Spent on Operations | $243,214 | $769,829 | $1,141,127 |
Additional Cash Spent | |||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 |
Principal Repayment of Current Borrowing | $0 | $0 | $0 |
Other Liabilities Principal Repayment | $0 | $0 | $0 |
Long-term Liabilities Principal Repayment | $0 | $0 | $0 |
Purchase Other Current Assets | $0 | $0 | $0 |
Purchase Long-term Assets | $10,000 | $0 | $0 |
Dividends | $0 | $0 | $0 |
Subtotal Cash Spent | $253,214 | $769,829 | $1,141,127 |
Net Cash Flow | ($46,714) | $538,421 | $955,623 |
Cash Balance | $5,786 | $544,207 | $1,499,830 |
The projected balance sheet is provided below.
Pro Forma Balance Sheet | |||
Year 1 | Year 2 | Year 3 | |
Assets | |||
Current Assets | |||
Cash | $5,786 | $544,207 | $1,499,830 |
Accounts Receivable | $29,500 | $221,250 | $324,500 |
Other Current Assets | $5,000 | $5,000 | $5,000 |
Total Current Assets | $40,286 | $770,457 | $1,829,330 |
Long-term Assets | |||
Long-term Assets | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $0 | $0 | $0 |
Total Long-term Assets | $10,000 | $10,000 | $10,000 |
Total Assets | $50,286 | $780,457 | $1,839,330 |
Liabilities and Capital | Year 1 | Year 2 | Year 3 |
Current Liabilities | |||
Accounts Payable | $14,786 | $52,781 | $76,438 |
Current Borrowing | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 |
Subtotal Current Liabilities | $14,786 | $52,781 | $76,438 |
Long-term Liabilities | $0 | $0 | $0 |
Total Liabilities | $14,786 | $52,781 | $76,438 |
Paid-in Capital | $152,600 | $152,600 | $152,600 |
Retained Earnings | ($60,100) | ($117,100) | $575,075 |
Earnings | ($57,000) | $692,175 | $1,035,216 |
Total Capital | $35,500 | $727,675 | $1,762,892 |
Total Liabilities and Capital | $50,286 | $780,457 | $1,839,330 |
Net Worth | $35,500 | $727,675 | $1,762,892 |
The following table outlines some of the more important ratios from the Computer Programming Services industry. The final column, Industry Profile, details specific ratios based on the industry as it is classified by the Standard Industry Classification (SIC) code, 7371.
Ratio Analysis | ||||
Year 1 | Year 2 | Year 3 | Industry Profile | |
Sales Growth | 0.00% | 650.00% | 46.67% | 10.40% |
Percent of Total Assets | ||||
Accounts Receivable | 58.66% | 28.35% | 17.64% | 24.10% |
Other Current Assets | 9.94% | 0.64% | 0.27% | 42.90% |
Total Current Assets | 80.11% | 98.72% | 99.46% | 71.10% |
Long-term Assets | 19.89% | 1.28% | 0.54% | 28.90% |
Total Assets | 100.00% | 100.00% | 100.00% | 100.00% |
Current Liabilities | 29.40% | 6.76% | 4.16% | 47.80% |
Long-term Liabilities | 0.00% | 0.00% | 0.00% | 19.10% |
Total Liabilities | 29.40% | 6.76% | 4.16% | 66.90% |
Net Worth | 70.60% | 93.24% | 95.84% | 33.10% |
Percent of Sales | ||||
Sales | 100.00% | 100.00% | 100.00% | 100.00% |
Gross Margin | 47.50% | 79.33% | 81.14% | 0.00% |
Selling, General & Administrative Expenses | 76.00% | 33.19% | 33.82% | 82.10% |
Advertising Expenses | 9.00% | 2.67% | 3.18% | 1.20% |
Profit Before Interest and Taxes | -28.50% | 61.53% | 63.09% | 2.00% |
Main Ratios | ||||
Current | 2.72 | 14.60 | 23.93 | 1.30 |
Quick | 2.72 | 14.60 | 23.93 | 1.03 |
Total Debt to Total Assets | 29.40% | 6.76% | 4.16% | 66.90% |
Pre-tax Return on Net Worth | -160.56% | 126.83% | 78.73% | 3.10% |
Pre-tax Return on Assets | -113.35% | 118.25% | 75.46% | 9.30% |
Additional Ratios | Year 1 | Year 2 | Year 3 | |
Net Profit Margin | -28.50% | 46.15% | 47.06% | n.a |
Return on Equity | -160.56% | 95.12% | 58.72% | n.a |
Activity Ratios | ||||
Accounts Receivable Turnover | 5.08 | 5.08 | 5.08 | n.a |
Collection Days | 57 | 41 | 60 | n.a |
Accounts Payable Turnover | 10.91 | 12.17 | 12.17 | n.a |
Payment Days | 27 | 19 | 25 | n.a |
Total Asset Turnover | 3.98 | 1.92 | 1.20 | n.a |
Debt Ratios | ||||
Debt to Net Worth | 0.42 | 0.07 | 0.04 | n.a |
Current Liab. to Liab. | 1.00 | 1.00 | 1.00 | n.a |
Liquidity Ratios | ||||
Net Working Capital | $25,500 | $717,675 | $1,752,892 | n.a |
Interest Coverage | 0.00 | 0.00 | 0.00 | n.a |
Additional Ratios | ||||
Assets to Sales | 0.25 | 0.52 | 0.84 | n.a |
Current Debt/Total Assets | 29% | 7% | 4% | n.a |
Acid Test | 0.73 | 10.41 | 19.69 | n.a |
Sales/Net Worth | 5.63 | 2.06 | 1.25 | n.a |
Dividend Payout | 0.00 | 0.00 | 0.00 | n.a |
Sales Forecast | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | |||||||||||||
Online Office Manager | 0% | $5,000 | $10,000 | $10,000 | $15,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 |
Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Sales | $5,000 | $10,000 | $10,000 | $15,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | |
Direct Cost of Sales | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Online Office Manager | $2,500 | $5,000 | $5,000 | $7,500 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Direct Cost of Sales | $2,500 | $5,000 | $5,000 | $7,500 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
Personnel Plan | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Lester Andrews | 0% | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 |
Dwight Austion | 0% | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 | $2,899 |
Service Manager | 0% | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 | $2,173 |
Other | 0% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total People | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | 3 | |
Total Payroll | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 |
General Assumptions | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Plan Month | 1 | 2 | 3 | 4 | 5 | 6 | 7 | 8 | 9 | 10 | 11 | 12 | |
Current Interest Rate | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | 10.00% | |
Long-term Interest Rate | 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% | |
Other | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
Pro Forma Profit and Loss | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Sales | $5,000 | $10,000 | $10,000 | $15,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | |
Direct Cost of Sales | $2,500 | $5,000 | $5,000 | $7,500 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 | |
Other | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $400 | $600 | |
Total Cost of Sales | $2,900 | $5,400 | $5,400 | $7,900 | $10,400 | $10,400 | $10,400 | $10,400 | $10,400 | $10,400 | $10,400 | $10,600 | |
Gross Margin | $2,100 | $4,600 | $4,600 | $7,100 | $9,600 | $9,600 | $9,600 | $9,600 | $9,600 | $9,600 | $9,600 | $9,400 | |
Gross Margin % | 42.00% | 46.00% | 46.00% | 47.33% | 48.00% | 48.00% | 48.00% | 48.00% | 48.00% | 48.00% | 48.00% | 47.00% | |
Expenses | |||||||||||||
Payroll | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | |
Sales and Marketing and Other Expenses | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | $1,950 | |
Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Research and Development | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | $1,250 | |
Utilities | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | |
Insurance | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | $50 | |
Rent | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | $200 | |
Payroll Taxes | 15% | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 | $1,196 |
Other | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Total Operating Expenses | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | $12,667 | |
Profit Before Interest and Taxes | ($10,567) | ($8,067) | ($8,067) | ($5,567) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,267) | |
EBITDA | ($10,567) | ($8,067) | ($8,067) | ($5,567) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,267) | |
Interest Expense | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Taxes Incurred | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Net Profit | ($10,567) | ($8,067) | ($8,067) | ($5,567) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,067) | ($3,267) | |
Net Profit/Sales | -211.33% | -80.67% | -80.67% | -37.11% | -15.33% | -15.33% | -15.33% | -15.33% | -15.33% | -15.33% | -15.33% | -16.33% |
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 | $1,250 | $2,500 | $2,500 | $3,750 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | |
Cash from Receivables | $0 | $125 | $3,875 | $7,500 | $7,625 | $11,375 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | $15,000 | |
Subtotal Cash from Operations | $1,250 | $2,625 | $6,375 | $11,250 | $12,625 | $16,375 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | $20,000 | |
Additional Cash Received | |||||||||||||
Sales Tax, VAT, HST/GST Received | 0.00% | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
New Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Other Liabilities (interest-free) | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Other Current Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Sales of Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
New Investment Received | $0 | $0 | $0 | $0 | $0 | $6,000 | $0 | $30,000 | $0 | $0 | $0 | $0 | |
Subtotal Cash Received | $1,250 | $2,625 | $6,375 | $11,250 | $12,625 | $22,375 | $20,000 | $50,000 | $20,000 | $20,000 | $20,000 | $20,000 | |
Expenditures | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Expenditures from Operations | |||||||||||||
Cash Spending | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | $7,971 | |
Bill Payments | $1,253 | $7,679 | $10,096 | $10,179 | $12,679 | $15,096 | $15,096 | $15,096 | $15,096 | $15,096 | $15,096 | $15,102 | |
Subtotal Spent on Operations | $9,224 | $15,650 | $18,067 | $18,150 | $20,650 | $23,067 | $23,067 | $23,067 | $23,067 | $23,067 | $23,067 | $23,073 | |
Additional Cash Spent | |||||||||||||
Sales Tax, VAT, HST/GST Paid Out | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Principal Repayment of Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Other Liabilities Principal Repayment | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Long-term Liabilities Principal Repayment | $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 | $10,000 | $0 | $0 | $0 | $0 | |
Dividends | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | |
Subtotal Cash Spent | $9,224 | $15,650 | $18,067 | $18,150 | $20,650 | $23,067 | $23,067 | $33,067 | $23,067 | $23,067 | $23,067 | $23,073 | |
Net Cash Flow | ($7,974) | ($13,025) | ($11,692) | ($6,900) | ($8,025) | ($692) | ($3,067) | $16,933 | ($3,067) | ($3,067) | ($3,067) | ($3,073) | |
Cash Balance | $44,526 | $31,501 | $19,809 | $12,909 | $4,884 | $4,193 | $1,126 | $18,059 | $14,993 | $11,926 | $8,859 | $5,786 |
Pro Forma Balance Sheet | |||||||||||||
Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | ||
Assets | Starting Balances | ||||||||||||
Current Assets | |||||||||||||
Cash | $52,500 | $44,526 | $31,501 | $19,809 | $12,909 | $4,884 | $4,193 | $1,126 | $18,059 | $14,993 | $11,926 | $8,859 | $5,786 |
Accounts Receivable | $0 | $3,750 | $11,125 | $14,750 | $18,500 | $25,875 | $29,500 | $29,500 | $29,500 | $29,500 | $29,500 | $29,500 | $29,500 |
Other Current Assets | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 | $5,000 |
Total Current Assets | $57,500 | $53,276 | $47,626 | $39,559 | $36,409 | $35,759 | $38,693 | $35,626 | $52,559 | $49,493 | $46,426 | $43,359 | $40,286 |
Long-term Assets | |||||||||||||
Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
Accumulated Depreciation | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Long-term Assets | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $10,000 | $10,000 | $10,000 | $10,000 | $10,000 |
Total Assets | $57,500 | $53,276 | $47,626 | $39,559 | $36,409 | $35,759 | $38,693 | $35,626 | $62,559 | $59,493 | $56,426 | $53,359 | $50,286 |
Liabilities and Capital | Month 1 | Month 2 | Month 3 | Month 4 | Month 5 | Month 6 | Month 7 | Month 8 | Month 9 | Month 10 | Month 11 | Month 12 | |
Current Liabilities | |||||||||||||
Accounts Payable | $1,000 | $7,342 | $9,759 | $9,759 | $12,176 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,786 |
Current Borrowing | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Other Current Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Subtotal Current Liabilities | $1,000 | $7,342 | $9,759 | $9,759 | $12,176 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,786 |
Long-term Liabilities | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 | $0 |
Total Liabilities | $1,000 | $7,342 | $9,759 | $9,759 | $12,176 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,592 | $14,786 |
Paid-in Capital | $116,600 | $116,600 | $116,600 | $116,600 | $116,600 | $116,600 | $122,600 | $122,600 | $152,600 | $152,600 | $152,600 | $152,600 | $152,600 |
Retained Earnings | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) | ($60,100) |
Earnings | $0 | ($10,567) | ($18,633) | ($26,700) | ($32,267) | ($35,333) | ($38,400) | ($41,467) | ($44,533) | ($47,600) | ($50,667) | ($53,733) | ($57,000) |
Total Capital | $56,500 | $45,933 | $37,867 | $29,800 | $24,233 | $21,167 | $24,100 | $21,033 | $47,967 | $44,900 | $41,833 | $38,767 | $35,500 |
Total Liabilities and Capital | $57,500 | $53,276 | $47,626 | $39,559 | $36,409 | $35,759 | $38,693 | $35,626 | $62,559 | $59,493 | $56,426 | $53,359 | $50,286 |
Net Worth | $56,500 | $45,933 | $37,867 | $29,800 | $24,233 | $21,167 | $24,100 | $21,033 | $47,967 | $44,900 | $41,833 | $38,767 | $35,500 |
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7 business plan examples: section by section. The business plan examples in this article follow this template: Executive summary. An introductory overview of your business. Company description. A more in-depth and detailed description of your business and why it exists. Market analysis.
Strategize your marketing plan. Create a sales plan. Outline legal notes and financial considerations. 1. Give an executive summary. An executive summary is a one-to-two-page overview of your business. The purpose of an executive summary is to let stakeholders know what the business plan will contain.
Common items to include are credit histories, resumes, product pictures, letters of reference, licenses, permits, patents, legal documents, and other contracts. Example traditional business plans. Before you write your business plan, read the following example business plans written by fictional business owners.
Why You Should Create a Business Plan. We know that starting an ecommerce business is exciting, and it can be tempting to jump right in without constructing a business plan. READ: PLEASE DON'T DO THIS. If you haven't put your ideas, questions and concerns on paper, then you haven't given your business model enough thought.. Taking the time to write a business plan might seem like a lot ...
The business model canvas is a one-page template designed to demystify the business planning process. It removes the need for a traditional, copy-heavy business plan, in favor of a single-page outline that can help you and outside parties better explore your business idea. The structure ditches a linear format in favor of a cell-based template.
Tips on Writing a Business Plan. 1. Be clear and concise: Keep your language simple and straightforward. Avoid jargon and overly technical terms. A clear and concise business plan is easier for investors and stakeholders to understand and demonstrates your ability to communicate effectively. 2.
Business Glossary. Definitions for common terminology and acronyms that every small business owner should know. Bplans offers free business plan samples and templates, business planning resources, how-to articles, financial calculators, industry reports and entrepreneurship webinars.
Try Now. Apply our simple business plan template. to give you a head start. Our business plan software lights the way as you sort through the important elements of creating a business plan. Inject your own creativity into your presentation using our vast library of icons, photos and animations, or keep it simple and clean.
To write a simple one-page business plan, follow the same core sections as a traditional plan. But instead of lengthy paragraphs and multiple pages covering each area of your business, stick with single sentences and bulleted lists. If a one-page plan sounds like a better option, download our free simple business plan template to get started.
767 templates. Create a blank Business Plan. Beige Aesthetic Modern Business Plan A4 Document. Document by Rise & Roar Design. Green Professional Strategic Business Plan Executive Summary. Document by Antler. Restaurant Business Plan in Green White Minimal Corporate Style. Document by Canva Creative Studio.
Looking at real business plan examples can help you visualize what a successful plan looks like. With LivePlan you'll have access to over 550 free example business plans to use as a starting point. Browse real sample plans covering a broad range of businesses to see how others have written effective executive summaries, planned marketing ...
1. Create Your Executive Summary. The executive summary is a snapshot of your business or a high-level overview of your business purposes and plans. Although the executive summary is the first section in your business plan, most people write it last. The length of the executive summary is not more than two pages.
8. Panda Doc's Free Business Plan Template. PandaDoc's free business plan template is one of the more detailed and fleshed-out sample business plans on this list. It describes what you should include in each section, so you don't have to come up with everything from scratch.
Point 2: Your Business Description. Describe your business from your own point of view and discuss how you plan to grow. Explain where your profits will come from. Explain what kinds of customers you're going to target and how your products or services are going to help them specifically.
Using Asana's free business plan template is simple. Start by creating a new project with our free template. From there, add relevant information for your specific business plan in the sections provided in our template. If there's more information you want to include in your business plan, you're free to add sections, custom fields, or ...
1. Create a free Venngage account using your email, Google or Facebook profiles. 2. Select the perfect business plan template from our library of professionally designed templates. 3. Use our online Business Plan Creator to add your information, data and more to your business plan template.
Describe Your Services or Products. The business plan should have a section that explains the services or products that you're offering. This is the part where you can also describe how they fit ...
The Bplans Weekly. Subscribe now for weekly advice and free downloadable resources to help start and grow your business. A business plan is the backbone of a successful business. Learn to write, use, and improve your business plan with exclusive guides, templates, and examples.
Identifying Key Elements. Reading business plan examples of similar businesses can help you identify the key elements and information to include in your plan. You can keep note of these and ensure everything necessary for investors to consider is present in your final draft. 6. Crafting Financial Projections.
It's proven, companies that plan and track against their plan grow 30% faster than those that don't. No matter your industry, location, or size — LivePlan helps you get your business off the ground and grow. "It wasn't my intention to be an entrepreneur or a business person. My intention was to work with dogs.
This section of your simple business plan template explores how to structure and operate your business. Details include the type of business organization your startup will take, roles and ...
Eric Butow, CEO of online marketing ROI improvement firm Butow Communications Group, has teamed up with Entrepreneur Media to update the second edition of our best-selling book Write Your Business ...
Most business plans also include financial forecasts for the future. These set sales goals, budget for expenses, and predict profits and cash flow. A good business plan is much more than just a document that you write once and forget about. It's also a guide that helps you outline and achieve your goals. After completing your plan, you can ...
A business plan sells the viability of a business venture, outlining why it will be profitable. It includes details on the business concept, market analysis, operations, financial projections, and strategies for success. What are the 3 main purposes of a business plan? 1.To clarify your plans for growth 2.To understand your financial needs 3.To ...
Savings with $20 monthly bill credit. Limited-time offer; subject to change. Qualifying credit; Go5G Business Plus, Business Unlimited Ultimate, or equivalent voice line; and new Business Internet line required. If you have cancelled Internet lines in past 90 days, you may need to reactivate them first.
Web Applications is a start-up company that is designed to offer Web-based business management applications. Web Applications has developed an Internet-based application called Online Office Manager, for which a patent is pending. Online Office Manager allows businesses and individuals to keep in touch even when working in different locations.