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Confidentiality Agreement
The undersigned reader acknowledges that the information provided by Austin Kinetic in this business plan is confidential; therefore, reader agrees not to disclose it without the express written permission of an Austin Kinetic officer. It is acknowledged by reader that information to be furnished in this business plan is in all respects confidential in nature, other than information which is in the public domain through other means and that any disclosure or use of same by reader, may cause serious harm or damage to Austin Kinetic. Upon request, this document is to be immediately returned to any Austin Kinetic officer. ___________________ Signature ___________________ Name (typed or printed) ___________________ Date This is a business plan. It does not imply an offering of securities.
Table of Contents
1.0 Executive Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 Objectives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.2 Mission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 Keys to Success . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 2 2 2
2.0
Company Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.1 Company Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2.2 Start-up Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Market Analysis Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1 Market Segmentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.2 Target Market Segment Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3 Service Business Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3.1 Competition and Buying Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Strategy and Implementation Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1 Competitive Edge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2 Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3 Sales Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.3.1 Sales Forecast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.4 Milestones . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 8 9 9 9 9 9 10 10 10 12
3.0 4.0
5.0
6.0
Web Plan Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 6.1 Website Marketing Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 6.2 Development Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Management Summary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 7.1 Personnel Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 Financial Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Important Assumptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2 Break-even Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.3 Projected Profit and Loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.4 Projected Cash Flow . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.5 Projected Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6 Business Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.7 Long-term Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 14 15 16 19 20 21 23 24
7.0
8.0
Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Austin Kinetic
1.0 Executive Summary
Austin Kinetic is an information technology consulting firm serving the Austin Metro area with top quality engineers who have a keen interest in customer satisfaction. The time is right for consulting companies to flourish. With the recent gains in the stock market, capital is again becoming available for IT infrastructure improvements. Austin Kinetic will position itself to win a good deal of that emerging business. The company has been incorporated in Nevada and has acquired an operating permit for Texas. Austin Kinetic anticipates a cumulative net profit of over $1M by the end of FY2008. The Market Austin is known as "little Silicon valley" due to its high percentage of technology companies. With its relatively low cost of living and ample space for expansion, Austin promises to be a strong market into the foreseeable future. There are currently over 7,000 companies that fit the aim of Austin Kinetic in the Austin Metro area, with only four major competitors. This combination provides a rich opportunity, bolstered by the current up-turn in the area and national economy. The Business Model Austin Kinetic will leverage the industry knowledge of its founding members to provide outstanding service to its customers. The company will initially have as little overhead as possible with its founders working out of their own homes, using their own transportation means to reach clients. The company will be developed with a "customer service and satisfaction first" mentality in an effort to build acceptance and a positive reputation in the local industry. The Management Team In order for the company to be successful, Austin Kinetic must fully leverage the experience and insight of its management team, which includes Adam Authortisement, Bob Borgware, Cary Curry, Dean Dri, and Edgar Extension. The team has over forty-eight cumulative years of experience in service operations management and information technology support. They currently hold multiple technology industry vendor certifications crossing several disciplines including both logical and physical network structure and management. Over the course of their careers, the team has served in various technical roles with Fortune 500 companies and has been successful in both large and small environments.
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Highlights
$2,500,000
$2,000,000
$1,500,000
$1,000,000
Net Profit
$500,000
1.1 Objectives
Austin Kinetic's objectives for the first five years: 1. 2. 3. Establish and maintain at least twenty-four full time service contract customers. Establish an office in Austin, TX. Break the $1M revenue mark.
1.2 Mission
Austin Kinetic is an innovative business technology company that was founded on the belief that one company can make more than a difference, it can change the whole face of business as we know it.
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Austin Kinetic
2.0 Company Summary
Austin Kinetic is incorporated in Nevada with an operating office in Austin, Texas. Initial staff will consist of a small group of experienced computer engineers who's skills and experience collectively cover a very broad segment of the open systems' distributed client/server field. The company's initial focus will be installation and configuration projects which will be developed into ongoing support contracts.
Table: Start-up Start-up Requirements Start-up Expenses Legal Stationery etc. Voice Mail Service Website development Computers Cell Phones Total Start-up Expenses Start-up Assets Cash Required Other Current Assets Long-term Assets Total Assets Total Requirements $800 $100 $150 $1,000 $5,000 $500 $7,550 $4,550 $0 $0 $4,550 $12,100
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Table: Start-up Funding Start-up Funding Start-up Expenses to Fund Start-up Assets to Fund Total Funding Required Assets Non-cash Assets from Start-up Cash Requirements from Start-up Additional Cash Raised Cash Balance on Starting Date Total Assets Liabilities and Capital Liabilities Current Borrowing Long-term Liabilities Accounts Payable (Outstanding Bills) Other Current Liabilities Total Liabilities Capital Planned Investment John Butler Eddie Hodges Sidney Johnson Darren Galatas Johnathan & Grace Panepinto Additional Investment Requirement Total Planned Investment Loss at Start-up (Start-up Expenses) Total Capital
$0 $0 $0 $0 $0
$4,550 $12,100
Start-up
$14,000 $12,000 $10,000 $8,000 $6,000 $4,000 $2,000 $0 Expenses Assets Investment Loans
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3.0 Services
Austin Kinetic will offer several support options, including hourly support services, with the option to buy in blocks of 40 hours at a discounted rate. Blocks purchased will be valid for 180 days from date of purchase. Additionally, semi-annual service contracts will be available. Contract pricing will be negotiated on a per-contract basis. Project work will be billed and estimated on a per-project basis. Web and ASP hosting will be billed on a per-system basis. Operating systems supported (limited to current and three previous revisions): Windows Novell NetWare Solaris Red Hat Linux
Hardware supported (hardware configurations must be validated by OEM): All open desktop, server, storage, and network systems. Dell, ADIC, Storagetech, and HP tape drives and libraries. Additional hardware will have to be reviewed on a per-case basis. Software packages supported (Restricted to implementation and initial configuration): Microsoft Exchange Lotus Notes/Domino SUS Messaging Center Microsoft SQL server Oracle DBS Veritas Backup Exec / Net Backup Legato Networker Arcserve Site Scope SMS Additional packages will have to be reviewed on a per-cases basis.
Service offerings: Austin Kinetic has several pre-set packages available for general monitoring of a customer's network equipment and applications. The packages are categorized by the type and use of equipment to be monitored. An initial one-time setup fee of $500 will be required per physical site at the onset of any service agreement. This amount is not affected by the number of systems to be monitored at the designated physical site. The customer will be required to provide Internet access to the monitoring server. Out-of-band notification can be added for an additional $50 per month plus a one-time, per-physical-site, $150 initial setup fee.
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Basic Server Management*$350 per month Austin Kinetic provides professional management of operating systems, including Windows, NetWare, Red Hat Linux, and Solaris. This service is perfect for companies that want to manage their own applications, but not deal with the ongoing hassle of tuning, securing, and maintaining the operating system. We will take the burden of ensuring you get the proper services for your specific server and operating system. A system audit to document your architecture and suggest improvements 24/7 technical support of the server and operating system from experienced engineers Security and bug patch notification for the operating system, and when approved, a service call will be scheduled for installation.* Monitoring the network availability of one IP. Monitoring the server's disk usage, processor usage and load average Visibility into Austin Kinetic's trouble ticket system via a secure portal * Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Application Server Management Services* $450 per month. Ensuring your applications are available and running at peak efficiency is a 24/7 responsibility. Austin Kinetic offers comprehensive application monitoring and management so your customers and employees will be able to use your applications without significant unscheduled interruption. We offer a complete range of management services tailored to remove the burden of ensuring your applications are up and getting the proper maintenance. A system audit to document your architecture and suggest improvements 24/7 technical support of the server, operating system and applications from experienced engineers Security and bug patch notification for the operating system and applications, and when approved, installation Monitoring application and network availability Monitoring application response time Monitoring the server's disk usage, processor usage, and load average Visibility into Austin Kinetic's trouble ticket system via a secure portal Periodic activity reports * Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Database Server Management Services* $500 per month. Ensuring your Oracle, MySQL, and MS SQL 2000 databases are configured and maintained properly is a time-consuming task for IT departments. Austin Kinetic can augment your internal skill set with comprehensive database server management. We offer a broad range of management services and will take the burden of ensuring you get the proper services for your specific server and databases. Typical database services offered by Austin Kinetic include: A system audit to document your architecture and suggest improvements 24/7 technical support of the server, operating system and database from experienced engineers Security and bug patch notification for the operating system and database, and when approved, installation Monitoring database and network availability Monitoring database response time Monitoring the server's disk usage, processor usage and load average Visibility into Austin Kinetic's trouble ticket system via a secure portal Periodic activity reports
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Austin Kinetic
* Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Network Device Management Services* $450 per month. Network devices - firewalls, load balancer, routers, switches and hubs - must be properly configured and maintained to ensure network security and reliable operation. Austin Kinetic offers a broad range of network management services and will take the burden of ensuring you get the proper services for your specific network. A network audit to document your topology and addressing scheme 24/7 technical support of the network devices from experienced engineers Security and bug patch notification, and when approved, installation Maintaining the security of firewalls Monitoring bandwidth usage Monitoring network device availability and performance Visibility into Austin Kinetic's trouble ticket system via a secure portal
* Except for the initial system audit, service time to repair or otherwise service the monitored system is not included in this monitoring agreement. Benefits of Security Management Services (Priced determined on a per-site basis.) Maintaining the security of your Internet-based systems is more important and more time consuming that ever. Austin Kinetic removes the burden of protecting your systems by offering 24/7 security management that combines intrusion detection and vulnerability scanning. We also will not burden your existing hardware as a pre-configured 1U server is installed in your network to handle the intrusion detection and vulnerability task. Identify misconfigured firewalls Catch attacks that firewalls legitimately allow through (such as attacks against Web servers) Document hacker attempts that fail Watch for insider hacking Identify users installing unsecured software on their machines Recognize unauthorized machines using the network See incorrect IP space utilization Austin Kinetic will ensure your intrusion detection and vulnerability scanning system is properly installed and maintained. This includes configuring the system, testing the pattern matching, updating scanning profiles, monitoring 24/7, reporting suspicious activities or vulnerability, and providing a monthly report. Data Backup* $50 plus a one-time setup fee of $150 per backup server. There will be an additional $100 per-site, per-month charge if tapes are required to be kept off-site. Protecting your organization's data is critical. Austin Kinetic will manage your data protection system to ensure that your data is protected by tape backup. While Austin Kinetic cannot be held responsible for lost data, we will ensure that validated and tested backups occur on a regularly scheduled basis. The customer will be responsible for procuring and installing the necessary hardware. Austin Kinetic will configure and monitor the backup software, monitor and test backup jobs, and perform needed file restoration. * This service does not require the $500 site setup fee.
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4.0 Market Analysis Summary
The Information and Technology Service industry is expected to grow at 8.58% per year through 2010. --U.S. Department of Labor (2003) http://www.bls.gov/iag/iag.services.htm We will be primarily focusing on mid-sized companies with 500 or fewer employers. These companies typically do not have large internal IT departments and could benefit the greatest from our offerings.
Table: Market Analysis Market Analysis 2004 Potential Customers Retail trade Professional, scientific, & technical services Health care & social assistance Total Growth 8% 8% 8% 8.00% 2,925 3,128 1,705 7,758 2005 3,159 3,378 1,841 8,378 2006 3,412 3,648 1,988 9,048 2007 3,685 3,940 2,147 9,772 2008 3,980 4,255 2,319 10,554 CAGR 8.00% 8.00% 7.99% 8.00%
Retail trade Professional, scientific, & technical services Health care & social assistance
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Austin Kinetic
4.2 Target Market Segment Strategy
Austin Kinetic is interested in servicing companies that are large enough to show direct P&L benefit from information technology investment, but not large enough to maintain their own permanent IT staff. The business groups targeted in the market analysis table represent the largest groups in our target area that fit our interests.
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Austin Kinetic
5.2 Marketing Strategy
Austin Kinetic's initial marketing strategy will be largely word-of-mouth and industry group networking. Our biggest initial challenge will be to get our name known in the local market. We will become involved in several industry specific organizations in the local community which will give us direct access to potential customers.
Table: Sales Forecast Sales Forecast FY 2005 Sales Project related Service contract Total Sales Direct Cost of Sales Technician Salary Other Subtotal Direct Cost of Sales $309,600 $30,000 $339,600 FY 2005 $0 $0 $0 FY 2006 $705,600 $108,000 $813,600 FY 2006 $0 $0 $0 FY 2007 $1,051,200 $180,000 $1,231,200 FY 2007 $0 $0 $0 FY 2008 $1,396,800 $252,000 $1,648,800 FY 2008 $0 $0 $0 FY 2009 $1,742,400 $324,000 $2,066,400 FY 2009 $0 $0 $0
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Austin Kinetic
Sales Monthly
$50,000 $45,000 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Sales by Year
$2,500,000
$2,000,000
$1,500,000
Project related
$1,000,000
Service contract
$500,000
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Austin Kinetic
5.4 Milestones
Austin Kinetic will have very simple marketing milestones geared toward industry networking and beginning to build name recognition.
Table: Milestones Milestones Milestone Join Austin's chamber of commerce Register with Austin Business Journal Obtain first service contract Open Office Totals Start Date 2/1/2004 2/1/2004 5/30/2004 2/1/2004 End Date 3/1/2004 3/1/2004 6/5/2004 2/1/2005 Budget $0 $0 $0 $3,500 $3,500 Manager Adam Adam Bob and Dean Edgar Department Marketing Marketing All Operations
Milestones
Open Office
Feb Mar
Apr
May
Jun
Jul
Aug
Sep
Oct
Nov Dec
Jan
Feb
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Austin Kinetic
6.1 Website Marketing Strategy
Austin Kinetic's Web presence will be utilized as a tool to assist the company's overall marketing strategy. It will serve as a point of reference for information about the company and its services, and in a small part, lend credibility to the marketing message.
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Austin Kinetic
Table: Personnel Personnel Plan Profit Sharing - 5% net profits Adam Authortisement (CEO) Edgar Extension (COO) Cary Curry (CIO) Dean Dri (CFO) Bob Borgware (CTO) Secretary Sales/Marketing Technician-1 Technician-2 Technician-3 Technician-4 Technician-5 Technician-6 Technician-7 Technician-8 Technician-9 Total People Total Payroll FY 2005 $0 $14,400 $14,400 $14,400 $14,400 $14,400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $72,000 FY 2006 $7,923 $55,000 $55,000 $55,000 $55,000 $55,000 $30,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 6 $312,923 FY 2007 $12,464 $63,000 $63,000 $63,000 $63,000 $63,000 $31,500 $0 $13,750 $0 $0 $0 $0 $0 $0 $0 $0 7 $372,714 FY 2008 $23,621 $73,000 $73,000 $73,000 $73,000 $73,000 $33,000 $70,000 $55,688 $55,000 $55,000 $55,000 $55,000 $55,000 $45,833 $9,167 $0 15 $877,309 FY 2009 $16,616 $83,600 $83,600 $83,600 $83,600 $83,600 $34,700 $73,500 $58,472 $57,750 $57,750 $57,750 $57,750 $57,750 $57,292 $55,458 $36,667 16 $1,039,455
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Austin Kinetic
Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other FY 2005 1 10.00% 10.00% 30.00% 0 FY 2006 2 10.00% 10.00% 30.00% 0 FY 2007 3 10.00% 10.00% 30.00% 0 FY 2008 4 10.00% 10.00% 30.00% 0 FY 2009 5 10.00% 10.00% 30.00% 0
Table: Break-even Analysis Break-even Analysis Monthly Revenue Break-even Assumptions: Average Percent Variable Cost Estimated Monthly Fixed Cost $9,435
0% $9,435
Break-even Analysis
$15,000 $10,000 $5,000 $0 ($5,000) ($10,000) $0 $4,000 $8,000 $12,000 $16,000 $20,000
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Austin Kinetic
8.3 Projected Profit and Loss
In the first year, we will be based out of the founders' homes. Adam Authortisement has renovated his garage for use as a meeting space and general office, when we need to get together as a group. Utilities in the first year represent the cost of home high-speed Internet access for all five employees ($45 each per month). This access is necessary for communications between personnel and for file transmission for all project and service work. After the first year, it will be more cost-effective and attuned to our growth to rent a space in downtown Austin, where we can consolidate equipment, combine utilities, and have a central location for our work and our secretary. Office space rented beginning FY2006 is forecast to be $2,500 per month. The Profit and Loss also includes a provision for charity donations, which we have deemed important to our mission, as well as to marketing and outreach in the community. Starting in the second year, 5% of net profits each will be set aside for charity on an annual basis based upon the previous year's performance. After the first month, Marketing and Promotion expenses are set at 5% of the previous month's and year's sales.
Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % FY 2005 $339,600 $0 $0 -----------$0 $339,600 100.00% FY 2006 $813,600 $0 $0 -----------$0 $813,600 100.00% FY 2007 $1,231,200 $0 $0 -----------$0 $1,231,200 100.00% FY 2008 $1,648,800 $0 $0 -----------$0 $1,648,800 100.00% FY 2009 $2,066,400 $0 $0 -----------$0 $2,066,400 100.00%
Expenses Payroll Marketing/Promotion Depreciation Rent Moving Expenses Utilities Insurance Payroll Taxes Expensed Computer Equipment Charity (5% of previous year net profit) Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
$72,000 $14,720 $0 $0 $5,000 $2,700 $3,000 $10,800 $5,000 $0 -----------$113,220 $226,380 $0 $67,914 $158,466 46.66%
$312,923 $16,980 $714 $45,000 $0 $2,000 $10,000 $46,938 $15,000 $7,923 -----------$457,479 $356,121 $0 $106,836 $249,285 30.64%
$372,714 $40,680 $2,038 $45,000 $0 $2,500 $10,000 $55,907 $15,000 $12,464 -----------$556,304 $674,896 $0 $202,469 $472,427 38.37%
$877,309 $61,560 $2,464 $50,000 $0 $2,500 $10,000 $131,596 $15,000 $23,621 -----------$1,174,051 $474,749 $0 $142,425 $332,324 20.16%
$1,039,455 $82,440 $3,540 $50,000 $0 $3,000 $10,000 $155,918 $15,000 $16,616 -----------$1,375,970 $690,430 $0 $207,129 $483,301 23.39%
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Austin Kinetic
Profit Monthly
$25,000
$20,000
$15,000
$10,000
$5,000
$0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
Profit Yearly
$500,000 $450,000 $400,000 $350,000 $300,000 $250,000 $200,000 $150,000 $100,000 $50,000 $0 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009
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Austin Kinetic
$2,000,000
$1,500,000
$1,000,000
$500,000
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Austin Kinetic
8.4 Projected Cash Flow
We have no sales on credit; all service accounts and projects are paid in advance, in installments. We anticipate no problems with our cash flow. By staying debt free and keeping expenses down, we expect a cash balance over $180,000 by the end of the first year.
Table: Cash Flow Pro Forma Cash Flow FY 2005 Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance $339,600 $339,600 $813,600 $813,600 $1,231,200 $1,231,200 $1,648,800 $1,648,800 $2,066,400 $2,066,400 FY 2006 FY 2007 FY 2008 FY 2009
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Austin Kinetic
Cash
$200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
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Austin Kinetic
Table: Balance Sheet Pro Forma Balance Sheet FY 2005 Assets Current Assets Cash Other Current Assets Total Current Assets $1,408,14 $1,806,83 6 8 $0 $0 $1,408,14 $1,806,83 6 8 $20,000 $30,000 $5,216 $8,756 $14,784 $21,244 $1,422,93 $1,828,08 0 2 FY 2008 $205,878 $0 $0 $205,878 $0 $205,878 $12,100 FY 2009 $127,728 $0 $0 $127,728 $0 $127,728 FY 2006 FY 2007 FY 2008 FY 2009
$180,559 $0 $180,559
$584,750 $0 $584,750
$993,997 $0 $993,997
Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets
$0 $0 $0 $180,559 FY 2005 $17,543 $0 $0 $17,543 $0 $17,543 $12,100 ($7,550) $158,466 $163,016 $180,559 $163,016
$5,000 $714 $4,286 $589,036 FY 2006 $176,735 $0 $0 $176,735 $0 $176,735 $12,100 $150,916 $249,285 $412,301 $589,036 $412,301
$15,000 $2,752 $12,248 $1,006,245 FY 2007 $121,517 $0 $0 $121,517 $0 $121,517 $12,100 $400,201 $472,427 $884,728 $1,006,245 $884,728
Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital
$12,100 $1,204,95 2 $332,324 $483,301 $1,217,05 $1,700,35 2 4 $1,422,93 $1,828,08 0 2 $872,628 $1,217,05 $1,700,35 2 4
Net Worth
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Austin Kinetic
Table: Ratios Ratio Analysis FY 2005 Sales Growth Percent of Total Assets Other Current Assets Total Current Assets Long-term Assets Total Assets Current Liabilities Long-term Liabilities Total Liabilities Net Worth Percent of Sales Sales Gross Margin Selling, General & Administrative Expenses Advertising Expenses Profit Before Interest and Taxes Main Ratios Current Quick Total Debt to Total Assets Pre-tax Return on Net Worth Pre-tax Return on Assets Additional Ratios Net Profit Margin Return on Equity Activity Ratios Accounts Payable Turnover Payment Days Total Asset Turnover Debt Ratios Debt to Net Worth Current Liab. to Liab. Liquidity Ratios Net Working Capital Interest Coverage Additional Ratios Assets to Sales Current Debt/Total Assets Acid Test Sales/Net Worth Dividend Payout 0.00% FY 2006 139.58% FY 2007 51.33% FY 2008 33.92% FY 2009 25.33% Industry Profile 5.93%
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Austin Kinetic
8.7 Long-term Plan
Austin Kinetic anticipates maintaining a steady profit percentage and plans to build cash reserves to an amount which would cover operating expenses for twelve months should any catastrophic event occur. This will be a moving target and be recalculated on an annual basis as the business cash flow changes. There has been no pre-set limit placed upon Austin Kinetic. Its founders see the possibility of expanding the company into a global force ranked equal to today's top Fortune 500 companies.
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Appendix
Appendix Table: Sales Forecast Sales Forecast Feb Sales Project related Service contract Total Sales Direct Cost of Sales Technician Salary Other Subtotal Direct Cost of Sales 0% 0% $2,400 $0 $2,400 Feb $0 $0 $0 Mar $4,800 $0 $4,800 Mar $0 $0 $0 Apr $9,600 $0 $9,600 Apr $0 $0 $0 May $19,200 $0 $19,200 May $0 $0 $0 Jun $24,000 $0 $24,000 Jun $0 $0 $0 Jul $26,400 $3,000 $29,400 Jul $0 $0 $0 Aug $31,200 $3,000 $34,200 Aug $0 $0 $0 Sep $33,600 $4,000 $37,600 Sep $0 $0 $0 Oct $36,000 $4,000 $40,000 Oct $0 $0 $0 Nov $38,400 $5,000 $43,400 Nov $0 $0 $0 Dec $40,800 $5,000 $45,800 Dec $0 $0 $0 Jan $43,200 $6,000 $49,200 Jan $0 $0 $0
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Appendix
Appendix Table: Personnel Personnel Plan Profit Sharing - 5% net profits Adam Authortisement (CEO) Edgar Extension (COO) Cary Curry (CIO) Dean Dri (CFO) Bob Borgware (CTO) Secretary Sales/Marketing Technician-1 Technician-2 Technician-3 Technician-4 Technician-5 Technician-6 Technician-7 Technician-8 Technician-9 Total People Total Payroll 5% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% Feb $0 $100 $100 $100 $100 $100 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $500 Mar $0 $200 $200 $200 $200 $200 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $1,000 Apr $0 $400 $400 $400 $400 $400 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $2,000 May $0 $800 $800 $800 $800 $800 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $4,000 Jun $0 $1,000 $1,000 $1,000 $1,000 $1,000 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $5,000 Jul $0 $1,250 $1,250 $1,250 $1,250 $1,250 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $6,250 Aug $0 $1,450 $1,450 $1,450 $1,450 $1,450 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $7,250 Sep $0 $1,600 $1,600 $1,600 $1,600 $1,600 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $8,000 Oct $0 $1,700 $1,700 $1,700 $1,700 $1,700 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $8,500 Nov $0 $1,850 $1,850 $1,850 $1,850 $1,850 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $9,250 Dec $0 $1,950 $1,950 $1,950 $1,950 $1,950 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $9,750 Jan $0 $2,100 $2,100 $2,100 $2,100 $2,100 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 5 $10,500
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Appendix
Appendix Table: General Assumptions General Assumptions Plan Month Current Interest Rate Long-term Interest Rate Tax Rate Other Feb 1 10.00% 10.00% 30.00% 0 Mar 2 10.00% 10.00% 30.00% 0 Apr 3 10.00% 10.00% 30.00% 0 May 4 10.00% 10.00% 30.00% 0 Jun 5 10.00% 10.00% 30.00% 0 Jul 6 10.00% 10.00% 30.00% 0 Aug 7 10.00% 10.00% 30.00% 0 Sep 8 10.00% 10.00% 30.00% 0 Oct 9 10.00% 10.00% 30.00% 0 Nov 10 10.00% 10.00% 30.00% 0 Dec 11 10.00% 10.00% 30.00% 0 Jan 12 10.00% 10.00% 30.00% 0
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Appendix
Appendix Table: Profit and Loss Pro Forma Profit and Loss Sales Direct Cost of Sales Other Costs of Sales Total Cost of Sales Gross Margin Gross Margin % Feb $2,400 $0 $0 -----------$0 $2,400 100.00% Mar $4,800 $0 $0 -----------$0 $4,800 100.00% Apr $9,600 $0 $0 -----------$0 $9,600 100.00% May $19,200 $0 $0 -----------$0 $19,200 100.00% Jun $24,000 $0 $0 -----------$0 $24,000 100.00% Jul $29,400 $0 $0 -----------$0 $29,400 100.00% Aug $34,200 $0 $0 -----------$0 $34,200 100.00% Sep $37,600 $0 $0 -----------$0 $37,600 100.00% Oct $40,000 $0 $0 -----------$0 $40,000 100.00% Nov $43,400 $0 $0 -----------$0 $43,400 100.00% Dec $45,800 $0 $0 -----------$0 $45,800 100.00% Jan $49,200 $0 $0 -----------$0 $49,200 100.00%
Expenses Payroll Marketing/Promotion Depreciation Rent Moving Expenses Utilities Insurance Payroll Taxes Expensed Computer Equipment Charity (5% of previous year net profit) Total Operating Expenses Profit Before Interest and Taxes Interest Expense Taxes Incurred Net Profit Net Profit/Sales
5%
15% 0% 5%
$500 $200 $0 $0 $0 $225 $250 $75 $0 $0 -----------$1,250 $1,150 $0 $345 $805 33.54%
$1,000 $120 $0 $0 $0 $225 $250 $150 $0 $0 -----------$1,745 $3,055 $0 $917 $2,139 44.55%
$2,000 $240 $0 $0 $0 $225 $250 $300 $0 $0 -----------$3,015 $6,585 $0 $1,976 $4,610 48.02%
$4,000 $480 $0 $0 $0 $225 $250 $600 $0 $0 -----------$5,555 $13,645 $0 $4,094 $9,552 49.75%
$5,000 $960 $0 $0 $0 $225 $250 $750 $0 $0 -----------$7,185 $16,815 $0 $5,045 $11,771 49.04%
$6,250 $1,200 $0 $0 $0 $225 $250 $938 $0 $0 -----------$8,863 $20,538 $0 $6,161 $14,376 48.90%
$7,250 $1,470 $0 $0 $0 $225 $250 $1,088 $0 $0 -----------$10,283 $23,918 $0 $7,175 $16,742 48.95%
$8,000 $1,710 $0 $0 $0 $225 $250 $1,200 $0 $0 -----------$11,385 $26,215 $0 $7,865 $18,351 48.80%
$8,500 $1,880 $0 $0 $0 $225 $250 $1,275 $0 $0 -----------$12,130 $27,870 $0 $8,361 $19,509 48.77%
$9,250 $2,000 $0 $0 $0 $225 $250 $1,388 $5,000 $0 -----------$18,113 $25,288 $0 $7,586 $17,701 40.79%
$9,750 $2,170 $0 $0 $0 $225 $250 $1,463 $0 $0 -----------$13,858 $31,943 $0 $9,583 $22,360 48.82%
$10,500 $2,290 $0 $0 $5,000 $225 $250 $1,575 $0 $0 -----------$19,840 $29,360 $0 $8,808 $20,552 41.77%
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Appendix
Appendix Table: Cash Flow Pro Forma Cash Flow Feb Cash Received Cash from Operations Cash Sales Subtotal Cash from Operations Additional Cash Received Sales Tax, VAT, HST/GST Received New Current Borrowing New Other Liabilities (interest-free) New Long-term Liabilities Sales of Other Current Assets Sales of Long-term Assets New Investment Received Subtotal Cash Received Expenditures Expenditures from Operations Cash spending Bill Payments Subtotal Spent on Operations Additional Cash Spent Sales Tax, VAT, HST/GST Paid Out Principal Repayment of Current Borrowing Other Liabilities Principal Repayment Long-term Liabilities Principal Repayment Purchase Other Current Assets Purchase Long-term Assets Dividends Subtotal Cash Spent Net Cash Flow Cash Balance Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
$2,400 $2,400
$4,800 $4,800
$9,600 $9,600
$19,200 $19,200
$24,000 $24,000
$29,400 $29,400
$34,200 $34,200
$37,600 $37,600
$40,000 $40,000
$43,400 $43,400
$45,800 $45,800
$49,200 $49,200
0.00%
$0 $0 $0 $0 $0 $0 $0 $2,400 Feb
$0 $0 $0 $0 $0 $0 $0 $4,800 Mar
$0 $0 $0 $0 $0 $0 $0 $9,600 Apr
$0 $0 $0 $0 $0 $0 $0 $19,200 May
$0 $0 $0 $0 $0 $0 $0 $24,000 Jun
$0 $0 $0 $0 $0 $0 $0 $29,400 Jul
$0 $0 $0 $0 $0 $0 $0 $34,200 Aug
$0 $0 $0 $0 $0 $0 $0 $37,600 Sep
$0 $0 $0 $0 $0 $0 $0 $40,000 Oct
$0 $0 $0 $0 $0 $0 $0 $43,400 Nov
$0 $0 $0 $0 $0 $0 $0 $45,800 Dec
$0 $0 $0 $0 $0 $0 $0 $49,200 Jan
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Appendix
Appendix Table: Balance Sheet Pro Forma Balance Sheet Feb Assets Current Assets Cash Other Current Assets Total Current Assets Long-term Assets Long-term Assets Accumulated Depreciation Total Long-term Assets Total Assets Liabilities and Capital Current Liabilities Accounts Payable Current Borrowing Other Current Liabilities Subtotal Current Liabilities Long-term Liabilities Total Liabilities Paid-in Capital Retained Earnings Earnings Total Capital Total Liabilities and Capital Net Worth Starting Balances Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan
$4,550 $0 $4,550
$6,414 $0 $6,414
$9,100 $0 $9,100
$14,994 $0 $14,994
$27,115 $0 $27,115
$40,414 $0 $40,414
$56,283 $0 $56,283
$74,411 $0 $74,411
$93,769 $0 $93,769
$113,994 $0 $113,994
$136,005 $0 $136,005
$155,698 $0 $155,698
$180,559 $0 $180,559
$0 $0 $0 $4,550
$0 $0 $0 $6,414 Feb
$0 $0 $0 $9,100 Mar
$0 $0 $0 $14,994 Apr
$0 $0 $0 $27,115 May
$0 $0 $0 $40,414 Jun
$0 $0 $0 $56,283 Jul
$0 $0 $0 $74,411 Aug
$0 $0 $0 $93,769 Sep
$0 $0 $0 $113,994 Oct
$0 $0 $0 $136,005 Nov
$0 $0 $0 $155,698 Dec
$0 $0 $0 $180,559 Jan
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