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Table of Contents
1.0 Executive Summary ..............................................................................................................1
1.1 Mission .........................................................................................................................2
1.2 Keys to Success ...........................................................................................................2
1.3 Objectives ....................................................................................................................2
Chart: Highlights ........................................................................................................2
2.0 Company Summary ..............................................................................................................2
2.1 Start-up Summary ........................................................................................................3
Table: Start-up Funding .............................................................................................4
Chart: Start-up ...........................................................................................................5
Table: Start-up ...........................................................................................................5
2.2 Company Ownership ....................................................................................................5
3.0 Services ................................................................................................................................5
4.0 Market Analysis Summary ....................................................................................................7
4.1 Market Segmentation ...................................................................................................7
Table: Market Analysis ..............................................................................................7
Chart: Market Analysis (Pie) ......................................................................................8
4.2 Target Market Segment Strategy .................................................................................8
4.3 Service Business Analysis ...........................................................................................8
4.3.1 Competition and Buying Patterns .....................................................................9
5.0 Strategy and Implementation Summary ...............................................................................9
5.1 Competitive Edge .........................................................................................................9
5.2 Marketing Strategy .....................................................................................................10
5.3 Sales Strategy ............................................................................................................10
5.3.1 Sales Forecast ................................................................................................11
Table: Sales Forecast .....................................................................................11
Chart: Sales Monthly .......................................................................................11
Chart: Sales by Year .......................................................................................12
5.4 Milestones ..................................................................................................................12
Table: Milestones.....................................................................................................12
Chart: Milestones .....................................................................................................13
6.0 Web Plan Summary ...........................................................................................................14
6.1 Website Marketing Strategy .......................................................................................14
6.2 Development Requirements .......................................................................................14
7.0 Management Summary ......................................................................................................14
7.1 Personnel Plan ...........................................................................................................15
Table: Personnel......................................................................................................15
8.0 Financial Plan .....................................................................................................................15
8.1 Important Assumptions ..............................................................................................15
Table: General Assumptions ...................................................................................15
8.2 Break-even Analysis...................................................................................................15
Chart: Break-even Analysis .....................................................................................16
Table: Break-even Analysis .....................................................................................16
8.3 Projected Profit and Loss ...........................................................................................17
Table: Profit and Loss ..............................................................................................17
Chart: Profit Monthly ................................................................................................18
Chart: Profit Yearly ..................................................................................................18
Chart: Gross Margin Monthly ...................................................................................19
Page 1
Table of Contents
Chart: Gross Margin Yearly .....................................................................................19
8.4 Projected Cash Flow ..................................................................................................19
Table: Cash Flow .....................................................................................................20
Chart: Cash..............................................................................................................21
8.5 Projected Balance Sheet ............................................................................................21
Table: Balance Sheet ..............................................................................................22
8.6 Business Ratios .........................................................................................................23
Table: Ratios............................................................................................................23
Table: Sales Forecast .................................................................................................................1
Table: Personnel ........................................................................................................................2
Table: General Assumptions ......................................................................................................3
Table: Profit and Loss.................................................................................................................4
Table: Cash Flow ........................................................................................................................5
Table: Balance Sheet .................................................................................................................6
Page 2
Borrow My Tools
1.0 Executive Summary
Borrow My Tools is a start-up company serving the San Mateo, CA community with home
improvement tools for lease or rental. The business has been formed as a California S
Corporation with Josh Taylor as the primary shareholder. Borrow My Tools will offer customers a
range of common home improvement tools with benchmarked levels of customer service.
The Market
San Mateo has two distinct market segments that are Borrow My Tools' most attractive customers.
The first segment is individuals who are undertaking a home improvement project on their
house. While some of these customers know exactly what they need in terms of tools, many of
them are coming to Borrow My Tools specifically for the expertise and guidance for the home
improvement project. The individuals have 54,050 potential group members. The annual growth
rate of this segment is 5%. The second segment of customers are handymen who have been
hired to complete a project for a client. Because the cost of purchasing tools is so high and there
are so many tools to lease available, handymen are attracted to Borrow My Tools because of
their plentiful leasing and rental options. The handymen have 1,200 potential segment member
and a 4% growth rate.
Services
Borrow My Tools leases and rents a variety of tools. The tools have been categorized into three
large groups: wood, exterior, and assorted. All of the tools that Borrow My Tools leases or rents
are of the highest quality and are in outstanding condition. Borrow My Tools has developed a
strategic relationship with a premier leasing company to allow customers to lease tools from
them. Leasing is advantageous in many ways: the customer always has the nicest/newest
version to work with, precious capital is not tied up, lines of credit from banks are not effected by
leases, and certain tax advantages are conferred to the lessee.
Competitive Edge
Josh, a veteran of both the contractor industry and the tool rental/leasing industry is taking his
industry observations and carving out a niche in the industry by emphasizing two competitive
edges that will greatly assist Borrow My Tools in gaining market share:
Highest-quality product offerings: If customers are going to lease or rent tools they
want to use the best products. Borrow My Tools' procurement process only purchases the
finest tools in the respective category, ensuring that customers will be thrilled with the
selection. In addition to starting with the highest quality tools, the products are
meticulously maintained so that they continue to appear as new.
Benchmarked customer service: The function of Borrow My Tools sales assistants is to
help the customer in any way possible. This includes determining which tool is best for the
job, explaining the proper way to use the tool, as well as offering suggestion on how best to
complete the job. Every sales agent is the customer's personal expert. It is Borrow My
Tools' mission to ensure every customer has their expectations exceeded.
Borrow My Tools is an exciting new concept that recognizes the competitor's customer service
short comings and leverages Borrow My Tools' phenomenal customer support to address the
market niche that wants a positive experience and needs assistance with their lease or rental. By
adhering to a comprehensive rental business plan strategy, Borrow My Tools will quickly gain
market share and transform this start-up's business into a profitable venture.
Page 1
Borrow My Tools
1.1 Mission
Borrow My Tools' mission is to offer the finest selection of home improvement tools for the San
Mateo Community. Borrow My Tools will support the tools with the finest customer service. All
customers will have their expectations exceeded.
1.3 Objectives
Borrow My Tools
which may be rented for intervals of less than one month and leased for intervals of more than a
month. Tools will serve both individuals interested in improving their home as well as handymen.
Inventory equipment
Assorted range of all the tools that will be rented. For a current complete list of the available
tools please view the Services section.
Computer system
Repair area
Variety of tools for maintenance and repair of the tool inventory.
Page 3
Borrow My Tools
Table: Start-up Funding
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$8,400
$126,600
$135,000
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$60,000
$66,600
$0
$66,600
$126,600
$0
$70,000
$0
$0
$70,000
Capital
Planned Investment
Investor 1
Other
Additional Investment Requirement
Total Planned Investment
$65,000
$0
$0
$65,000
($8,400)
$56,600
$126,600
Total Funding
$135,000
Page 4
Borrow My Tools
Table: Start-up
Start-up
Requirements
Start-up Expenses
Attorney
Accountant
Brochures
Insurance
Rent
Total Start-up Expenses
$3,000
$4,000
$500
$150
$750
$8,400
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
$66,600
$0
$0
$60,000
$126,600
Total Requirements
$135,000
3.0 Services
Borrow My Tools offers the San Mateo community a wide range of tools that can be rented or
leased depending on the length of time needed. Borrow My Tools will offer a bright, cheerful
Page 5
Borrow My Tools
showroom. Customers will be greeted when they walk in and offered assistance. While Borrow
My Tools rents tools, the real service is the attention that the customer receives. This takes the
form of assistance in determining what tools are needed. The customer is then shown exactly
how to use the tool and given plenty of tips to make them as proficient as possible.
The tools are available for rent if the borrowing period is less than one month and are available
for lease for periods beyond one month. Tools that will be leased/rented are grouped into three
broad categories:
Wood
Assorted
Industrial cordless drill. This unit is rented with several battery packs
Nail gun
Air compressor. For use with the nail gun, paint sprayer, and pressure washer
Exterior products
Pressure washer
Paint sprayer. Also included is a roller attachment
Roto tiller
While this selection may seem eclectic, it touches upon the most demanded tools within a specific
genre. While many different rental facilities have a wider selection, Borrow My Tools believes that
they can better serve their customers by reducing the selection of leases and rentals and offering a
far more knowledgeable and helpful staff regarding the specific tool. As the selection of the tools
increase, staff members knowledge and skill of each individual tool decreases exponentially.
Borrow My Tools provides each customer with an instruction manual for each tool which includes
how best to use it, maintenance instructions, and ideal applications for the tool. While customers
are likely to find this printed information useful, the knowledge communicated by the sales staff
will be even more helpful.
For leasing customers, Borrow My Tools has developed a strategic relationship with a premier
local leasing company that will assist with the financials aspect of leasing. Borrow My Tools is also
able to work with another leasing company if their preferred vendor is not able to assist the
customer. Several leases are available, some that that provide a $1 buyout for the customer at the
end of the term. Others leases keep the buy out price higher, effectively reducing the money
payments. Leasing equipment for many different people is a very useful option. Leasing provides
the following benefits:
Page 6
Borrow My Tools
4.0 Market Analysis Summary
Borrow My Tools has identified two distinct customer segments that will be the most attractive. The
first segment is individuals who will be performing home improvement work themselves. The
second is the handyman who will be performing a job in a client's house and need to use tools
which he/she does not own. The Market Segmentation section provides additional detail about
the market segment including useful demographic data. This section is also supported by a table
with additional detail about the two markets.
The individuals have typically owned the home for one to three years, or for more than
ten years.
Ages 30-45
76% have undergraduate schooling
59% perform other forms of home improvements around the house
Only 16% will be coming to Borrow My Tools for their very first home improvement project
43% will be having one of their more experienced friends assisting them with the project on
hand
Handymen: This is the market segment of service providers who perform a wide range of home
improvement services for customers. The average handyman does not have all the tools needed to
complete a job. There are so many different tools out there and the industrial quality ones cost
so much that is often not cost effective for a handyman to own all of the tools that he may need.
Borrow My Tools will serve the handyman market well with high quality, good condition industrial
offerings.
Growth
5%
4%
4.98%
Year 1
Year 2
Year 3
Year 4
Year 5
54,050
1,200
55,250
56,753
1,248
58,001
59,591
1,298
60,889
62,571
1,350
63,921
65,700
1,404
67,104
CAGR
5.00%
4.00%
4.98%
Page 7
Borrow My Tools
Borrow My Tools
The tool/equipment rental/leasing industry is a large, disperse industry. Some companies only
lease high-end expensive equipment, such as equipment that is in excess of $100K. For lower
priced equipment you see leasing as well as rentals as an option. Most companies in this industry
compete on selection. Their philosophy is the greater the selection, the more competitive they
are. This tends to serve a specific type of customer, someone who knows exactly what they want
or need. When a customer enters the retail space of one of these companies they are shown a long
list of available equipment and are asked to make a choice.
Borrow My Tools has decided to compete on different terms. Selection is not of primarily
importance, but customer service and support are. Through a careful selection of the most
important or used tools, Borrow My Tools has chosen a good selection of popular tools that
are supported with a knowledgeable staff.
The following Competition and Buying Patterns section details the specific competitors that
Borrow My Tools faces in the San Mateo market and provides the pro and cons of the different
competitors.
Pros: Rents a wide range of tools and equipment including wood tools, machining tools,
catering supplies, even pianos.
Cons: The staff is not able to provide support for products.
High quality products: Borrow My Tools will only rent the highest-quality tools. For so
many customers the decision of who to lease/rent from comes down to the tools that
they have to use. Are the tools high end, industrial quality? What is the condition of the
Page 9
Borrow My Tools
Page 10
Borrow My Tools
5.3.1 Sales Forecast
The sales forecast will be tracked by the different tool categories that Borrow My Tools offers.
The cost of goods sold will be based on the time it takes for the service department to review
each pice of leased/rented equipment and bring it back to like new specifications for the next
customer.
The sales forecast is a conservative prediction of sales. It is broken down by month for year one
and tracks yearly totals for years two and three. Preceding the following table are graphical
representations of the forecast by month as well as year.
Year 2
Year 3
Sales
Wood
Assorted
Exterior
Total Sales
$26,550
$23,099
$20,178
$69,827
$81,080
$70,540
$61,621
$213,240
$94,400
$82,128
$71,744
$248,272
Year 1
$2,655
$3,927
$3,834
$10,416
Year 2
$8,108
$11,992
$11,708
$31,808
Year 3
$9,440
$13,962
$13,631
$37,033
Page 11
Borrow My Tools
5.4 Milestones
Borrow My Tools has identified several milestones that will assist the organization in reaching preidentified goals. Milestones were chosen to be realistic, achievable, yet lofty. The following table
details the specific milestones, what department is responsible and the time frame for
accomplishment.
Table: Milestones
Milestones
Milestone
Business Plan Completion
Start Date
1/1/2004
End Date
2/1/2004
Budget
$0
Manager
Josh
2/1/2004
3/1/2004
$0
Josh
3/1/2004
3/15/2004
$0
Josh
3/15/2004
4/1/2004
$0
$0
Josh
Department
Business
Develpment
Business
Develpment
Business
Develpment
Operations
Page 12
Borrow My Tools
Page 13
Borrow My Tools
6.0 Web Plan Summary
A website will be developed to allow customers to view a lease/rental catalog at their
convenience. The site will offer descriptions of the different tools as well as tips on proper use.
When the tool selection changes the site will be updated.
Submission to search engines: The site will be submitted to various search engines so when
someone enters a common keyword into the search engine, Borrow My Tools' site comes up
on the list of "hits."
The Web address will be printed on all forms of literature: This includes all invoices,
advertisements, and other promotional material.
Page 14
Borrow My Tools
7.1 Personnel Plan
The following people/positions will be needed for Borrow My Tools:
Josh: Will play the manager position, but will also be doing a little bit of everything.
Sales: There will be a total of three sales assistants.
Accounting/bookkeeper: This is a part-time position.
Service technicians: There will be two technicians who are responsible for the
maintenance and preparation of the various tools.
Table: Personnel
Personnel Plan
Josh
Sales
Sales
Bookkeeper
Service
Service
Total People
Year 1
$20,000
$14,400
$11,200
$9,000
$16,200
$14,400
6
Year 2
$24,000
$19,200
$19,200
$12,000
$21,600
$21,600
6
Year 3
$30,000
$19,200
$19,200
$12,000
$21,600
$21,600
6
Total Payroll
$85,200
$117,600
$123,600
Year 1
1
10.00%
10.00%
30.00%
0
Year 2
2
10.00%
10.00%
30.00%
0
Year 3
3
10.00%
10.00%
30.00%
0
Page 15
Borrow My Tools
$11,869
Assumptions:
Average Percent Variable Cost
Estimated Monthly Fixed Cost
15%
$10,098
Page 16
Borrow My Tools
8.3 Projected Profit and Loss
The following table and charts will indicate projected profit and loss.
Year 1
$69,827
$10,416
$0
$10,416
Year 2
$213,240
$31,808
$0
$31,808
Year 3
$248,272
$37,033
$0
$37,033
Gross Margin
Gross Margin %
$59,411
85.08%
$181,433
85.08%
$211,239
85.08%
Expenses
Payroll
Sales and Marketing and Other Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
$85,200
$0
$12,000
$7,500
$2,200
$1,500
$12,780
$117,600
$0
$12,000
$9,000
$2,640
$1,800
$17,640
$123,600
$0
$16,000
$9,000
$2,640
$1,800
$18,540
$121,180
$160,680
$171,580
($61,769)
($49,769)
$6,394
$0
$20,753
$32,753
$5,317
$4,631
$39,659
$55,659
$4,219
$10,632
Net Profit
Net Profit/Sales
($68,163)
-97.62%
$10,805
5.07%
$24,808
9.99%
Page 17
Borrow My Tools
Page 18
Borrow My Tools
Page 19
Borrow My Tools
Table: Cash Flow
Pro Forma Cash Flow
Year 1
Year 2
Year 3
$69,827
$69,827
$213,240
$213,240
$248,272
$248,272
$0
$0
$0
$0
$0
$0
$0
$69,827
$0
$0
$0
$0
$0
$0
$0
$213,240
$0
$0
$0
$0
$0
$0
$0
$248,272
Year 1
Year 2
Year 3
$85,200
$38,101
$123,301
$117,600
$79,195
$196,795
$123,600
$78,378
$201,978
$0
$0
$0
$11,359
$0
$0
$0
$134,660
$0
$0
$0
$10,938
$0
$0
$0
$207,733
$0
$0
$0
$11,029
$0
$20,000
$0
$233,007
($64,833)
$1,767
$5,507
$7,274
$15,265
$22,539
Cash Received
Expenditures
Page 20
Borrow My Tools
Page 21
Borrow My Tools
Table: Balance Sheet
Pro Forma Balance Sheet
Year 1
Year 2
Year 3
$1,767
$1,683
$0
$3,450
$7,274
$10,372
$0
$17,646
$22,539
$4,604
$0
$27,143
$60,000
$12,000
$48,000
$51,450
$60,000
$24,000
$36,000
$53,646
$80,000
$40,000
$40,000
$67,143
Year 1
Year 2
Year 3
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$4,372
$0
$0
$4,372
$6,701
$0
$0
$6,701
$6,419
$0
$0
$6,419
$58,641
$63,013
$47,703
$54,404
$36,674
$43,093
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$65,000
($8,400)
($68,163)
($11,563)
$51,450
$65,000
($76,563)
$10,805
($758)
$53,646
$65,000
($65,758)
$24,808
$24,050
$67,143
Net Worth
($11,563)
($758)
$24,050
Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Long-term Liabilities
Total Liabilities
Page 22
Borrow My Tools
8.6 Business Ratios
The following table represents ratios specific to Borrow My Tools as well as industry average ratios.
Table: Ratios
Ratio Analysis
Year 1
n.a.
Year 2
205.39%
Year 3
16.43%
Industry Profile
7.07%
3.27%
0.00%
6.70%
93.30%
100.00%
19.33%
0.00%
32.89%
67.11%
100.00%
6.86%
0.00%
40.43%
59.57%
100.00%
3.96%
44.65%
76.22%
23.78%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
8.50%
113.98%
122.47%
-22.47%
12.49%
88.92%
101.41%
-1.41%
9.56%
54.62%
64.18%
35.82%
33.47%
16.23%
49.70%
50.30%
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
100.00%
85.08%
182.70%
0.00%
-88.46%
100.00%
85.08%
80.02%
0.00%
9.73%
100.00%
85.08%
75.09%
0.00%
15.97%
100.00%
100.00%
84.88%
1.01%
1.94%
0.79
0.40
122.47%
589.49%
-132.49%
2.63
1.09
101.41%
-2035.50%
28.77%
4.23
3.51
64.18%
147.36%
52.78%
1.73
1.33
3.77%
57.72%
8.92%
Year 1
-97.62%
0.00%
Year 2
5.07%
0.00%
Year 3
9.99%
103.15%
n.a
n.a
Activity Ratios
Inventory Turnover
Accounts Payable Turnover
Payment Days
Total Asset Turnover
9.37
9.72
27
1.36
5.28
12.17
25
3.97
4.95
12.17
31
3.70
n.a
n.a
n.a
n.a
Debt Ratios
Debt to Net Worth
Current Liab. to Liab.
0.00
0.07
0.00
0.12
1.79
0.15
n.a
n.a
($922)
-9.66
$10,945
3.90
$20,724
9.40
n.a
n.a
0.74
8%
0.40
0.00
0.00
0.25
12%
1.09
0.00
0.00
0.27
10%
3.51
10.32
0.00
n.a
n.a
n.a
n.a
n.a
Sales Growth
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
Liquidity Ratios
Net Working Capital
Interest Coverage
Additional Ratios
Assets to Sales
Current Debt/Total Assets
Acid Test
Sales/Net Worth
Dividend Payout
Page 23
Appendix
Table: Sales Forecast
Sales Forecast
Sales
Wood
Assorted
Exterior
Total Sales
Direct Cost of Sales
Wood
Assorted
Exterior
Subtotal Direct Cost of Sales
0%
0%
0%
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$0
$0
$0
$0
$0
$0
$0
$350
$305
$266
$921
$800
$696
$608
$2,104
$1,350
$1,175
$1,026
$3,551
$1,800
$1,566
$1,368
$4,734
$3,100
$2,697
$2,356
$8,153
$3,500
$3,045
$2,660
$9,205
$3,750
$3,263
$2,850
$9,863
$3,900
$3,393
$2,964
$10,257
$4,100
$3,567
$3,116
$10,783
$3,900
$3,393
$2,964
$10,257
Month 1
$0
$0
$0
$0
Month 2
$0
$0
$0
$0
Month 3
$35
$52
$51
$137
Month 4
$80
$118
$116
$314
Month 5
$135
$200
$195
$530
Month 6
$180
$266
$260
$706
Month 7
$310
$458
$448
$1,216
Month 8
$350
$518
$505
$1,373
Month 9
$375
$555
$542
$1,471
Month 10
$390
$577
$563
$1,530
Month 11
$410
$606
$592
$1,608
Month 12
$390
$577
$563
$1,530
Page 1
Appendix
Table: Personnel
Personnel Plan
Josh
Sales
Sales
Bookkeeper
Service
Service
Total People
Total Payroll
0%
0%
0%
0%
0%
0%
Month 1
$0
$0
$0
$0
$0
$0
0
Month 2
$0
$0
$0
$0
$0
$0
0
Month 3
$2,000
$0
$0
$0
$0
$0
1
Month 4
$2,000
$1,600
$0
$1,000
$1,800
$0
4
Month 5
$2,000
$1,600
$0
$1,000
$1,800
$1,800
5
Month 6
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 7
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 8
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 9
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 10
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 11
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
Month 12
$2,000
$1,600
$1,600
$1,000
$1,800
$1,800
6
$0
$0
$2,000
$6,400
$8,200
$9,800
$9,800
$9,800
$9,800
$9,800
$9,800
$9,800
Page 2
Appendix
Table: General Assumptions
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Other
Month 1
1
10.00%
10.00%
30.00%
0
Month 2
2
10.00%
10.00%
30.00%
0
Month 3
3
10.00%
10.00%
30.00%
0
Month 4
4
10.00%
10.00%
30.00%
0
Month 5
5
10.00%
10.00%
30.00%
0
Month 6
6
10.00%
10.00%
30.00%
0
Month 7
7
10.00%
10.00%
30.00%
0
Month 8
8
10.00%
10.00%
30.00%
0
Month 9
9
10.00%
10.00%
30.00%
0
Month 10
10
10.00%
10.00%
30.00%
0
Month 11
11
10.00%
10.00%
30.00%
0
Month 12
12
10.00%
10.00%
30.00%
0
Page 3
Appendix
Table: Profit and Loss
Pro Forma Profit and Loss
Month 1
$0
$0
$0
$0
Month 2
$0
$0
$0
$0
Month 3
$921
$137
$0
$137
Month 4
$2,104
$314
$0
$314
Month 5
$3,551
$530
$0
$530
Month 6
$4,734
$706
$0
$706
Month 7
$8,153
$1,216
$0
$1,216
Month 8
$9,205
$1,373
$0
$1,373
Month 9
$9,863
$1,471
$0
$1,471
Month 10
$10,257
$1,530
$0
$1,530
Month 11
$10,783
$1,608
$0
$1,608
Month 12
$10,257
$1,530
$0
$1,530
$0
0.00%
$0
0.00%
$783
85.08%
$1,790
85.08%
$3,021
85.08%
$4,028
85.08%
$6,937
85.08%
$7,832
85.08%
$8,391
85.08%
$8,727
85.08%
$9,175
85.08%
$8,727
85.08%
$0
$0
$0
$0
$2,000
$0
$6,400
$0
$8,200
$0
$9,800
$0
$9,800
$0
$9,800
$0
$9,800
$0
$9,800
$0
$9,800
$0
$9,800
$0
$1,000
$0
$0
$0
$0
$1,000
$0
$0
$0
$0
$1,000
$750
$220
$150
$300
$1,000
$750
$220
$150
$960
$1,000
$750
$220
$150
$1,230
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$750
$220
$150
$1,470
$1,000
$1,000
$4,420
$9,480
$11,550
$13,390
$13,390
$13,390
$13,390
$13,390
$13,390
$13,390
($1,000)
$0
$576
$0
($1,000)
$0
$568
$0
($3,637)
($2,637)
$561
$0
($7,690)
($6,690)
$553
$0
($8,529)
($7,529)
$545
$0
($9,362)
($8,362)
$537
$0
($6,453)
($5,453)
$529
$0
($5,558)
($4,558)
$521
$0
($4,999)
($3,999)
$513
$0
($4,663)
($3,663)
$505
$0
($4,215)
($3,215)
$497
$0
($4,663)
($3,663)
$489
$0
Net Profit
Net Profit/Sales
($1,576)
0.00%
($1,568)
0.00%
($4,197)
-455.99%
($8,243)
-391.76%
($9,074)
-255.57%
($9,899)
-209.11%
($6,982)
-85.64%
($6,079)
-66.04%
($5,512)
-55.89%
($5,168)
-50.39%
($4,712)
-43.70%
($5,152)
-50.23%
Sales
Direct Cost of Sales
Other Costs of Sales
Total Cost of Sales
Gross Margin
Gross Margin %
Expenses
Payroll
Sales and Marketing and Other
Expenses
Depreciation
Rent
Utilities
Insurance
Payroll Taxes
Total Operating Expenses
15%
15%
Page 4
Appendix
Table: Cash Flow
Pro Forma Cash Flow
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$0
$0
$0
$921
$921
$2,104
$2,104
$3,551
$3,551
$4,734
$4,734
$8,153
$8,153
$9,205
$9,205
$9,863
$9,863
$10,257
$10,257
$10,783
$10,783
$10,257
$10,257
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$921
$0
$0
$0
$0
$0
$0
$0
$2,104
$0
$0
$0
$0
$0
$0
$0
$3,551
$0
$0
$0
$0
$0
$0
$0
$4,734
$0
$0
$0
$0
$0
$0
$0
$8,153
$0
$0
$0
$0
$0
$0
$0
$9,205
$0
$0
$0
$0
$0
$0
$0
$9,863
$0
$0
$0
$0
$0
$0
$0
$10,257
$0
$0
$0
$0
$0
$0
$0
$10,783
$0
$0
$0
$0
$0
$0
$0
$10,257
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$19
$19
$0
$576
$576
$2,000
$649
$2,649
$6,400
$2,969
$9,369
$8,200
$2,675
$10,875
$9,800
$3,903
$13,703
$9,800
$4,135
$13,935
$9,800
$4,370
$14,170
$9,800
$4,658
$14,458
$9,800
$4,682
$14,482
$9,800
$4,693
$14,493
$9,800
$4,773
$14,573
$0
$0
$0
$904
$0
$0
$0
$923
$0
$0
$0
$911
$0
$0
$0
$1,487
$0
$0
$0
$919
$0
$0
$0
$3,568
$0
$0
$0
$927
$0
$0
$0
$10,296
$0
$0
$0
$934
$0
$0
$0
$11,809
$0
$0
$0
$942
$0
$0
$0
$14,645
$0
$0
$0
$950
$0
$0
$0
$14,885
$0
$0
$0
$958
$0
$0
$0
$15,128
$0
$0
$0
$966
$0
$0
$0
$15,424
$0
$0
$0
$974
$0
$0
$0
$15,457
$0
$0
$0
$982
$0
$0
$0
$15,475
$0
$0
$0
$990
$0
$0
$0
$15,563
($923)
$65,677
($1,487)
$64,190
($2,647)
$61,543
($8,192)
$53,351
($8,259)
$45,092
($9,911)
$35,181
($6,732)
$28,449
($5,923)
$22,526
($5,561)
$16,965
($5,200)
$11,765
($4,692)
$7,073
($5,306)
$1,767
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
0.00%
Page 5
Appendix
Table: Balance Sheet
Pro Forma Balance Sheet
Assets
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$66,600
$0
$0
$66,600
$65,677
$0
$0
$65,677
$64,190
$0
$0
$64,190
$61,543
$863
$0
$62,405
$53,351
$549
$0
$53,900
$45,092
$1,019
$0
$46,111
$35,181
$1,313
$0
$36,494
$28,449
$1,338
$0
$29,787
$22,526
$1,510
$0
$24,036
$16,965
$1,618
$0
$18,583
$11,765
$1,683
$0
$13,448
$7,073
$1,769
$0
$8,842
$1,767
$1,683
$0
$3,450
$60,000
$0
$60,000
$126,600
$60,000
$1,000
$59,000
$124,677
$60,000
$2,000
$58,000
$122,190
$60,000
$3,000
$57,000
$119,405
$60,000
$4,000
$56,000
$109,900
$60,000
$5,000
$55,000
$101,111
$60,000
$6,000
$54,000
$90,494
$60,000
$7,000
$53,000
$82,787
$60,000
$8,000
$52,000
$76,036
$60,000
$9,000
$51,000
$69,583
$60,000
$10,000
$50,000
$63,448
$60,000
$11,000
$49,000
$57,842
$60,000
$12,000
$48,000
$51,450
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$0
$0
$0
$0
$557
$0
$0
$557
$549
$0
$0
$549
$2,881
$0
$0
$2,881
$2,545
$0
$0
$2,545
$3,765
$0
$0
$3,765
$3,990
$0
$0
$3,990
$4,215
$0
$0
$4,215
$4,502
$0
$0
$4,502
$4,526
$0
$0
$4,526
$4,533
$0
$0
$4,533
$4,622
$0
$0
$4,622
$4,372
$0
$0
$4,372
$70,000
$70,000
$69,096
$69,653
$68,185
$68,734
$67,265
$70,147
$66,339
$68,884
$65,404
$69,169
$64,462
$68,452
$63,512
$67,727
$62,554
$67,056
$61,588
$66,114
$60,614
$65,147
$59,632
$64,254
$58,641
$63,013
$65,000
($8,400)
$0
$56,600
$126,600
$65,000
($8,400)
($1,576)
$55,024
$124,677
$65,000
($8,400)
($3,144)
$53,456
$122,190
$65,000
($8,400)
($7,341)
$49,259
$119,405
$65,000
($8,400)
($15,584)
$41,016
$109,900
$65,000
($8,400)
($24,658)
$31,942
$101,111
$65,000
($8,400)
($34,557)
$22,043
$90,494
$65,000
($8,400)
($41,540)
$15,060
$82,787
$65,000
($8,400)
($47,619)
$8,981
$76,036
$65,000
($8,400)
($53,131)
$3,469
$69,583
$65,000
($8,400)
($58,299)
($1,699)
$63,448
$65,000
($8,400)
($63,012)
($6,412)
$57,842
$65,000
($8,400)
($68,163)
($11,563)
$51,450
$56,600
$55,024
$53,456
$49,259
$41,016
$31,942
$22,043
$15,060
$8,981
$3,469
($1,699)
($6,412)
($11,563)
Starting Balances
Page 6