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Table of Contents
Table of Contents
Page 2
PC Repair
Page 1
PC Repair
Chart: Highlights
1.2 Mission
Our goal is to set the standard for on-site computer solutions through fast, on-site service and
response. Our customers will always receive one-on-one personal attention at a very affordable
price. Our customers will receive the highest quality of customer service available. Our
employees will receive extensive training, a great place to work, fair pay and benefits, and
incentives to use their own good judgement to solve customers' problems.
1.3 Keys to Success
Page 2
PC Repair
operations of the company as we expand the personnel to 5 within the next three years, lease a
separate space for offices, and purchase company vehicles and cell phones.
The owner, Jack Hacker, has 10 years of experience in the fields of technical support,
networking, and computer training and repair. Jack has also spent the last three years as the
manager of a custom computer building and repair store, and understands the computer needs
of small businesses.
2.2 Start-up Summary
Total start-up expenses include initial expenses for establishing our website, setting up the
business, and doing our pre-opening advertising. Exact allocations are shown in the table.
The bulk of our start-up requirements are asset needs: we need diagnostic and repair
equipment, half of which will be contributed to the business by the owner from his own
materials. We are treating this equipment as assets because we expect it to last at least three
years, and to have some resale value when we are through with it; we will buy additional
expensed equipment in years two and three. We also need start-up inventory which includes
RAM, spare hard drives, cables, and cases. Although we will keep expenses to a minimum for
the first three months, before we move, we will also need cash at start-up, to see us through
the next several months with a positive cash balance.
We plan to fund our total start-up requirements direct owner investment (including the
contributed assets), and a three-year loan secured with the owner's collateral (his home
equity). We should be able to easily repay this loan within three years, even with a much lower
sales revenue than projected. (See the Cash Flow table for projected repayment.)
Table: Start-up
Start-up
Requirements
Start-up Expenses
Legal
Website
Business Cards
Insurance
Uniforms
CPA
Advertisement
Total Start-up Expenses
$650
$350
$100
$150
$300
$275
$1,200
$3,025
Start-up Assets
Cash Required
Start-up Inventory
Other Current Assets
Long-term Assets
Total Assets
$28,000
$1,200
$10,000
$0
$39,200
Total Requirements
$42,225
Page 3
PC Repair
Start-up Funding
Start-up Expenses to Fund
Start-up Assets to Fund
Total Funding Required
$3,025
$39,200
$42,225
Assets
Non-cash Assets from Start-up
Cash Requirements from Start-up
Additional Cash Raised
Cash Balance on Starting Date
Total Assets
$11,200
$28,000
$0
$28,000
$39,200
$19,225
$0
$0
$0
$19,225
Capital
Planned Investment
Owner
Investor
Additional Investment Requirement
Total Planned Investment
$23,000
$0
$0
$23,000
($3,025)
$19,975
$39,200
Total Funding
$42,225
Page 4
PC Repair
Chart: Start-up
3.0 Services
PC Repair will offer computer repairs, training, networking and upgrade service to clients in two
major categories: home PC users and small business users. As PC Repair and the client
demands grow, we will offer software development to our business clients.
From the very first day, we will offer on-site repair and consulting services, so that our clients
don't need to take time out of their busy days to haul a computer in to our workshop. This is
the single biggest frustration Jack has seen among small business owners needing computer
help. Much of our diagnostic equipment is portable, and we will remove a PC to our workshop
only when the problem requires more detailed diagnosis or repair. We will also offer free pick-up
and delivery of PCs needing repair. To meet the growing demand for this service, we will
purchase a company vehicle in the third month.
We will also offer extended maintenance contracts, so that business clients can deal with
technical support and repair needs as a single line-item expense, rather than having to plan for
unexpected crashes and problems with a rainy-day fund they may never use. Maintenance
contracts yield a high gross margin for us, and provide peace of mind for the customer.
We will offer limited software support (installation and compatibility issues), and focus on
hardware and networking support - this is a vital distinction, since software is evolving much
more rapidly than hardware, and our clients will have such diverse software needs that we
couldn't possibly keep up with all of them. We will encourage clients to register their software
and use the software's own support options to their full potential. We will, however, keep up to
date with multiple operating systems and networking developments, working with clients to
make sure they have the most appropriate combinations of hardware, OS, networking, backup
systems, and software. Backup and security are becoming higher priorities for all our potential
customers, as internet usage (and its pitfalls) becomes more common, and as more and more
daily records are stored electronically.
Page 5
PC Repair
Page 6
PC Repair
quality repairs and support are available in a crisis. Their hardware needs will include the same
items as home users, plus servers, backup systems, data storage, and wireless networking.
The portion of the small business market we are targeting is growing at around 2% a year.
Table: Market Analysis
Market Analysis
Potential Customers
Growth
Home PC Users
Small Business Users
Other
Total
7%
2%
0%
5.39%
Year 1
Year 2
Year 3
Year 4
Year 5
25,000
10,000
0
35,000
26,750
10,100
0
36,850
28,623
10,201
0
38,824
30,626
10,303
0
40,929
32,770
10,406
0
43,176
CAGR
7.00%
1.00%
0.00%
5.39%
Page 7
PC Repair
as frustrated clients waited for days or weeks for their critical components to be returned to full
capacity, with no inexpensive alternative to the existing computer repair shops. All of our clients
need technical assistance, but we are also selling peace of mind: our clients will know that
friendly, efficient help is just a phone call away. As more and more companies switch their
support services to automated call centers or touch-tone menus, the simple reassurance of
hearing another human voice on the phone within a few rings is immeasurable. Even better is
knowing that within a few hours, someone will show up and take care of their problem.
Both the software and hardware side of the computer industry continue to turn out new and
revised computer components at alarming rates. For PC Repair this means job security well into
the future. As reported by the Wall Street Journal, there seems to be no end to the
development of the computer market. Business Week expects the computing industry to grow
at a rate of 12% and the processor speeds to continue to expand for years to come.
4.3 Service Business Analysis
Secondary market research shows computer service customers tend to be very loyal to
providers that do good work and satisfy their needs. An analysis of PC Repair's main
competitors shows no overwhelming strengths that would be significant barriers to entry into
the market, as our local competitors have serious weaknesses.
The computer maintenance and repair industry is fragmented, with a few large, national players
and hundreds of small, local stores. While most computers are actually repaired in-store, near
the customer, parts for the repair come from major manufacturers and distributors; delays in
receiving necessary parts can significantly slow down the repair process. Large chains have
solved this problem by keeping vast amounts of inventory in stock at all times, while local
stores offer customers the trade-off of personal interaction and trust that may make up for
some delay.
PC Repair has established a relationship with a local distributor to do rapid special-ordering;
although this capability is more expensive than normal channels, it will enable us to quickly
establish a reputation as efficient and responsive to customer needs, particularly for our small
business users. We will leverage this customer loyalty into great word of mouth marketing and
steady growth.
4.3.1 Competition and Buying Patterns
Customers choose computer repair and assistance services based on reputation, previous
experience, and price. They may choose to return to a mediocre provider with whom they're
familiar, rather than try out a new unknown company about whom they've heard nothing. Large
stores, especially the service departments of national chains, have a great advantage simply in
their affiliation with an established brand. Establishing our brand identity and a great reputation
in the first few months is critical to our success. Once we have broken in to the local market,
our great service will turn new clients into permanent clients.
Our services will be second to no one and our prices will be very reasonable for the high quality
service we offer. By providing superior service, word of mouth alone will bring in many new
clients. The satisfaction our consumers find will keep them coming back. There are two main
competitors for the computer upgrade and repair business in this area:
1. Competitor A. They are a well established provider of computer upgrades and services,
and do quick work. However, they have a high staff turnover, a young and inexperienced
Page 8
PC Repair
staff, and are more interested in selling new components than in maintaining existing
machines or finding custom solutions. They do not offer any kind of pick-up and drop-off
service, and do not offer on-site help. They really only offer hardware support.
2. Competitor B. Smaller and less known then A, B provides many services for residents
living in east and south parts of town. They are more willing to spend time with a client,
figuring out exactly what his or her needs are, and suggesting new options than competitor
A. However, they have an inefficient ordering system and an unkempt shop, which deters
potential customers and can turn existing customers to the competition. They also do not
offer on-site services, although they are considering instituting a trial pick-up/drop-off
service. They are in the best position to copy our innovations and steal customers, but their
management is complacent and may not respond to competition.
Both of these companies charge rates in excess of PC Repair; we will be able to attract the
price-sensitive market without much work.
5.0 Strategy and Implementation Summary
Our Strategy and Implementation turn on three points:
1. A value proposition of timely and practical solutions, at a reasonable rate, coupled with a
100% guarantee.
2. Exploiting our competitors weaknesses: a competitive edge based on quick, effective, and
sympathetic customer service, which meets the customer where his needs are, rather than
trying to fit him into an existing box.
3. Quickly establishing a brand identity and developing a great reputation among local
customers to generate word of mouth advertising.
5.1 Competitive Edge
Quick response: PC Repair will provide same day and after hours service.
A flat rate policy: This undermines the competition, who charge by the hour. The pricing
has been set to reflect the average amount of time it takes to perform the task. With this
strategy we can undercut most competitors and gain local market power.
On-site and pick-up/drop-off services: This will minimize the time and effort a customer
needs to put into dealing with his computer problem.
Suprisingly, our small size is an advantage: customers will recognize me (and future
employees), and will know they will get the same great service every time they call.
Page 9
PC Repair
We will follow up on these opening ads with a smaller direct-marketing campaign to small
business owners, with lists drawn from the local Chamber of Commerce. Jack will use his
contacts with business customers from his years as a manager to create a "buzz" about this
new business.
We will continue periodic advertisements, including several promotions (discounts, free
diagnosis, etc.) throughout the first year. We expect a small but steady response from home PC
users who see our ads elsewhere, but will also run monthly ads in sections other than the
business one.
We will offer a promotion during the first 90 days of business to generate business traffic and
word of mouth. Our promo is Spyware removal on any desktop PC for $70 including tax and
software. Spyware is a huge problem for a lot of residential and small business customers, and
the offer should draw a lot of interest.
5.3 Sales Strategy
Our marketing strategy will generate customer inquiries. We will close the deals by offering an
outstanding service and a very reasonable price. Happy customers generate repeat business
and word of mouth. Our toll free number is operational 24 hours a day, seven days a week, and
from 8am to 9pm, I will be available to answer calls. At other times, or when I am on the
phone, an answering service we have hired will catch callers and give them an estimated wait
time for a call-back; this is another step towards delivering a complete solution to our
customers.
Sales forecast figures are based on industry figures for the typical growth of a start-up and
reflect repeat business generated through meeting customer needs.
5.3.1 Sales Forecast
The sales strategy is a prediction of controllable growth for the first year. PC Repair will focus on
quality and attention to detail to avoid some potential pitfalls encountered by many new
businesses. The predicted growth is moderate in the home PC market and in the small business
arena. However, with aggressive advertising and word of mouth, this will increase. Our
agressive TV advertising will increase our residential and small business customer base as well
as word of mouth within the first year. Within a few months we will have the need for additional
employees to handle the work load. At that time, we will move into a leased space with
additional square footage, and buy a company vehicle to help with the on-site calls.
Our competitors average 75+ calls a month. Given that our advertising will be aggressive, we
expect the same results. The sales forecast is conservative, which gives us a chance to gauge
our experience and adjust the plan accordingly.
We will service all of Ramsford-on-Bitstream, and the surrounding area. We expect that the
majority of our jobs will be performed in the immediate town area. A service technician can
perform an average of 3 jobs per day. Our sales forecast predictions are less than that. With
our agressive advertising campaign we expect nominal growth. We predict it will take a few
weeks for the marketing to settle in with customers. However, we are going to offer a promo for
our services which should generate some substantial results.
The one element of sales not represented in the table below is direct costs for our maintenance
contracts. We estimate these costs at 12% of sales revenue, but expect a delayed occurrence -
Page 10
PC Repair
that is, we will sell maintenance contracts starting in February, but do not expect to actually
perform maintenance on computers guaranteed under them for the first few months. We will
incur more and more costs from these as time goes on, and the computers age - most of the
service in a maintenance contract is performed within the last quarter of the specified period.
Projections for the direct costs for these contracts can be found in the Profit and Loss Table, as
other costs of sales.
Table: Sales Forecast
Sales Forecast
Year 1
Year 2
Year 3
Home PC Unit
Small Business Unit
Promo
Maintenance Contracts
Total Unit Sales
166
264
235
32
697
200
300
0
60
560
225
350
0
85
660
Unit Prices
Home PC Unit
Small Business Unit
Promo
Maintenance Contracts
Year 1
$280.00
$500.00
$50.00
$400.00
Year 2
$300.00
$600.00
$0.00
$600.00
Year 3
$300.00
$600.00
$0.00
$600.00
Home PC Unit
Small Business Unit
Promo
Maintenance Contracts
Total Sales
$46,480
$132,000
$11,750
$12,800
$203,030
$60,000
$180,000
$0
$36,000
$276,000
$67,500
$210,000
$0
$51,000
$328,500
Year 1
$84.00
$105.00
$4.00
$0.00
Year 2
$90.00
$126.00
$0.00
$0.00
Year 3
$90.00
$126.00
$0.00
$0.00
$13,944
$27,720
$940
$0
$42,604
$18,000
$37,800
$0
$0
$55,800
$20,250
$44,100
$0
$0
$64,350
Unit Sales
Sales
Page 11
PC Repair
Page 12
PC Repair
5.4 Milestones
Our milestones, listed in the table below, outline the major events that will promote, as well as
insure the success of PC Repair and keep it a going concern well into the future. We will
measure our success in meeting these milestones every month, and adjust the plan to keep up
with our objectives. Name recognition, in particular, is very important to breaking into this
market - we will conduct a survey by calling 200 randomly selected small businesses from the
Chamber of Commerce listings on the specified dates and asking them whether they have heard
of PC Repair, and if so, what their impression is of our service. If any of the respondents have
actually used our services, we will elicit feedback on their experience with us, and suggestions
for improvement. We will also ask if they would recommend us to a colleague.
Table: Milestones
Milestones
Milestone
Procurement of materials for
opening
Start-up Ad Campaign
Get Loan Approved
Open Business
Name Recognition by 5% of
potential market
Meet with Leasing Agent
Interview potential Techs
Move into Leased Space
Sign on Leased Vehicle
Targeted Ads Begin
1st Tech Starts
2nd Round Tech Interviews
Direct marketing to Small
Businesses
Increase Name Recognition to
20%
2nd Tech Starts
Totals
Start Date
12/1/2004
End Date
2/1/2005
Budget
$1,200
Manager
JMH
Department
Department
12/15/2004
1/1/2005
2/7/2005
2/28/2005
2/6/2005
1/17/2005
2/8/2005
2/28/2005
$1,200
$0
$0
$0
JMH
JMH
JMH
JMH
Department
Department
Department
Department
3/1/2005
3/1/2005
4/1/2005
4/15/2005
4/15/2005
5/1/2005
7/1/2005
7/1/2005
3/10/2005
4/25/2005
4/10/2005
4/20/2005
5/15/2005
5/1/2005
7/31/2005
9/30/2005
$0
$0
$2,000
$6,000
$4,000
$0
$0
$8,000
JMH
JMH
JMH
JMH
JMH
JMH
JMH
JMH
Department
Department
Department
Department
Department
Department
Department
Department
8/1/2005
8/2/2005
$0
JMH
Department
8/1/2005
8/7/2005
$0
$22,400
JMH
Department
Page 13
PC Repair
Chart: Milestones
Within this framework, the techs can solve the customer's problem the best way they see fit Jack is not a micro manager.
Page 14
PC Repair
Personnel Plan
Year 1
Year 2
Year 3
Owner
Tech1
Tech2
Part Time
Total People
$33,000
$21,600
$14,400
$0
3
$38,000
$30,000
$30,000
$12,000
5
$40,000
$30,000
$30,000
$15,000
5
Total Payroll
$69,000
$110,000
$115,000
General Assumptions
Plan Month
Current Interest Rate
Long-term Interest Rate
Tax Rate
Year 1
Year 2
Year 3
1
7.00%
10.00%
30.00%
2
70.00%
10.00%
30.00%
3
70.00%
10.00%
30.00%
Page 15
PC Repair
Other
Break-even Analysis
Monthly Units Break-even
Monthly Revenue Break-even
52
$15,110
Assumptions:
Average Per-Unit Revenue
Average Per-Unit Variable Cost
Estimated Monthly Fixed Cost
$291.29
$70.00
$11,479
Page 16
PC Repair
Page 17
PC Repair
Year 2
Year 3
Sales
Direct Cost of Sales
Costs of Fulfilling Maintenance Contracts
Total Cost of Sales
$203,030
$42,604
$1,488
$44,092
$276,000
$55,800
$4,320
$60,120
$328,500
$64,350
$6,120
$70,470
Gross Margin
Gross Margin %
$158,938
78.28%
$215,880
78.22%
$258,030
78.55%
$69,000
$28,000
$0
$10,000
$0
$3,150
$2,080
$200
$2,660
$13,200
$1,260
$5,000
$1,200
$2,000
$110,000
$6,000
$0
$12,000
$10,000
$1,200
$480
$2,400
$5,400
$15,000
$1,260
$6,000
$1,200
$0
$115,000
$12,000
$0
$12,000
$12,000
$1,200
$480
$2,400
$5,400
$17,000
$1,260
$7,000
$1,200
$0
$137,750
$170,940
$186,940
$21,188
$21,188
$1,097
$6,027
$44,940
$44,940
$6,570
$11,511
$71,090
$71,090
$2,139
$20,685
Net Profit
Net Profit/Sales
$14,064
6.93%
$26,859
9.73%
$48,266
14.69%
Expenses
Payroll
Marketing/Promotion
Depreciation
Lease
Expensed Equipment
Insurance
Website
Answering Service
Mileage
Vehicles
Cell Phones
Utilities
Internet
Moving Expenses
Total Operating Expenses
Page 18
PC Repair
Page 19
PC Repair
Chart: Cash
Page 20
PC Repair
Year 2
Year 3
$203,030
$203,030
$276,000
$276,000
$328,500
$328,500
$0
$0
$0
$0
$0
$0
$0
$203,030
$0
$0
$0
$0
$0
$0
$0
$276,000
$0
$0
$0
$0
$0
$0
$0
$328,500
Year 1
Year 2
Year 3
$69,000
$110,873
$179,873
$110,000
$142,543
$252,543
$115,000
$163,375
$278,375
$0
$6,564
$0
$0
$0
$0
$0
$186,437
$0
$6,550
$0
$0
$0
$0
$0
$259,093
$0
$6,111
$0
$0
$0
$0
$0
$284,486
$16,593
$44,593
$16,907
$61,500
$44,014
$105,514
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
Page 21
PC Repair
Table: Ratios
Ratio Analysis
Year 1
Year 2
Year 3
Industry Profile
n.a.
35.94%
19.02%
5.23%
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Total Assets
8.22%
16.81%
100.00%
0.00%
100.00%
9.07%
12.72%
100.00%
0.00%
100.00%
5.90%
8.15%
100.00%
0.00%
100.00%
2.79%
51.19%
75.09%
24.91%
100.00%
Current Liabilities
Long-term Liabilities
Total Liabilities
Net Worth
42.77%
0.00%
42.77%
57.23%
22.55%
0.00%
22.55%
77.45%
11.07%
0.00%
11.07%
88.93%
31.75%
18.48%
50.23%
49.77%
100.00%
78.28%
38.70%
0.00%
10.44%
100.00%
78.22%
65.72%
0.00%
16.28%
100.00%
78.55%
64.96%
0.00%
21.64%
100.00%
100.00%
80.06%
1.23%
1.95%
2.34
2.15
42.77%
59.02%
33.78%
4.43
4.03
22.55%
63.01%
48.80%
9.03
8.50
11.07%
63.16%
56.17%
1.53
1.24
57.27%
2.73%
6.39%
Sales Growth
Percent of Total Assets
Percent of Sales
Sales
Gross Margin
Selling, General & Administrative Expenses
Advertising Expenses
Profit Before Interest and Taxes
Main Ratios
Current
Quick
Total Debt to Total Assets
Pre-tax Return on Net Worth
Pre-tax Return on Assets
Additional Ratios
Year 1
Year 2
Year 3
6.93%
41.32%
9.73%
44.10%
14.69%
44.21%
n.a
n.a
10.25
9.67
27
3.41
9.29
12.17
32
3.51
8.96
12.17
28
2.68
n.a
n.a
n.a
n.a
0.75
1.00
0.29
1.00
0.12
1.00
n.a
n.a
$34,039
19.32
$60,898
6.84
$109,163
33.24
n.a
n.a
0.29
43%
2.15
5.96
0.00
0.28
23%
4.03
4.53
0.00
0.37
11%
8.50
3.01
0.00
n.a
n.a
n.a
n.a
n.a
Activity Ratios
Inventory Turnover
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
Page 22
PC Repair
Year 2
Year 3
$44,593
$4,890
$10,000
$59,482
$61,500
$7,129
$10,000
$78,629
$105,514
$7,239
$10,000
$122,753
$0
$0
$0
$59,482
$0
$0
$0
$78,629
$0
$0
$0
$122,753
Year 1
Year 2
Year 3
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$12,783
$12,661
$0
$25,444
$11,620
$6,111
$0
$17,731
$13,590
$0
$0
$13,590
Long-term Liabilities
Total Liabilities
$0
$25,444
$0
$17,731
$0
$13,590
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$23,000
($3,025)
$14,064
$34,039
$59,482
$23,000
$11,039
$26,859
$60,898
$78,629
$23,000
$37,898
$48,266
$109,163
$122,753
Net Worth
$34,039
$60,898
$109,163
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
Liabilities and Capital
Current Liabilities
Page 23
Appendix
Table: Sales Forecast
Sales Forecast
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Home PC Unit
15
18
20
20
20
17
15
10
20
10
25
35
40
45
50
15
10
25
Promo
10
30
40
40
40
40
35
Maintenance Contracts
17
57
86
58
103
109
111
33
24
84
Unit Sales
Unit Prices
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Home PC Unit
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$280.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$500.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$50.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$400.00
$840
$1,400
$840
$4,200
$5,040
$5,600
$5,600
$5,600
$4,760
$4,200
$2,800
$5,600
$1,500
$1,500
$1,500
$5,000
$12,500
$17,500
$20,000
$22,500
$25,000
$7,500
$5,000
$12,500
$1,750
Promo
Maintenance Contracts
Sales
Home PC Unit
Small Business Unit
Promo
$0
$0
$500
$1,500
$2,000
$0
$2,000
$2,000
$2,000
$0
$0
Maintenance Contracts
$0
$400
$400
$800
$1,200
$1,200
$1,200
$1,600
$1,600
$1,200
$1,600
$1,600
$2,340
$3,300
$3,240
$11,500
$20,740
$24,300
$28,800
$31,700
$33,360
$12,900
$9,400
$21,450
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
$84.00
$105.00
$4.00
$0.00
Home PC Unit
$252
$420
$252
$1,260
$1,512
$1,680
$1,680
$1,680
$1,428
$1,260
$840
$1,680
$315
$315
$315
$1,050
$2,625
$3,675
$4,200
$4,725
$5,250
$1,575
$1,050
$2,625
Promo
$0
$0
$40
$120
$160
$0
$160
$160
$160
$0
$0
$140
Maintenance Contracts
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$567
$735
$607
$2,430
$4,297
$5,355
$6,040
$6,565
$6,838
$2,835
$1,890
$4,445
Total Sales
Direct Unit Costs
Home PC Unit
Small Business Unit
Promo
Maintenance Contracts
30.00%
21.00%
8.00%
12.00%
Page 1
Appendix
Table: Personnel
Personnel Plan
Owner
Tech1
Tech2
Part Time
Total People
Total Payroll
0%
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
$2,000
$0
$0
$0
1
$2,000
$0
$0
$0
1
$2,500
$0
$0
$0
1
$2,500
$2,400
$0
$0
2
$3,000
$2,400
$0
$0
2
$3,000
$2,400
$0
$0
2
$3,000
$2,400
$2,400
$0
3
$3,000
$2,400
$2,400
$0
3
$3,000
$2,400
$2,400
$0
3
$3,000
$2,400
$2,400
$0
3
$3,000
$2,400
$2,400
$0
3
$3,000
$2,400
$2,400
$0
3
$2,000
$2,000
$2,500
$4,900
$5,400
$5,400
$7,800
$7,800
$7,800
$7,800
$7,800
$7,800
Page 2
Appendix
Table: General Assumptions
General Assumptions
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
10
11
12
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
7.00%
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%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
30.00%
Plan Month
Current Interest Rate
Other
Month 12
Page 3
Appendix
Table: 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
$2,340
$3,300
$3,240
$11,500
$20,740
$24,300
$28,800
$31,700
$33,360
$12,900
$9,400
$21,450
$567
$735
$607
$2,430
$4,297
$5,355
$6,040
$6,565
$6,838
$2,835
$1,890
$4,445
$0
$0
$48
$96
$144
$144
$144
$192
$192
$144
$192
$192
$567
$735
$655
$2,526
$4,441
$5,499
$6,184
$6,757
$7,030
$2,979
$2,082
$4,637
Gross Margin
$1,773
$2,565
$2,585
$8,974
$16,299
$18,801
$22,616
$24,943
$26,330
$9,921
$7,318
$16,813
Gross Margin %
75.77%
77.73%
79.78%
78.03%
78.59%
77.37%
78.53%
78.68%
78.93%
76.91%
77.85%
78.38%
Payroll
$2,000
$2,000
$2,500
$4,900
$5,400
$5,400
$7,800
$7,800
$7,800
$7,800
$7,800
$7,800
Marketing/Promotion
$4,000
$1,000
$3,000
$2,000
$2,000
$3,000
$3,000
$2,000
$2,000
$2,000
$2,000
$2,000
Depreciation
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Lease
$0
$0
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
$1,000
Expenses
Expensed Equipment
Insurance
Website
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$150
$0
$300
$300
$300
$300
$300
$300
$300
$300
$300
$300
$200
$40
$40
$200
$200
$200
$200
$200
$200
$200
$200
$200
$200
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Mileage
$80
$85
$95
$100
$200
$300
$300
$300
$300
$300
$300
$300
Vehicles
$0
$0
$6,000
$800
$800
$800
$800
$800
$800
$800
$800
$800
Cell Phones
$0
$60
$120
$120
$120
$120
$120
$120
$120
$120
$120
$120
Utilities
$0
$0
$500
$500
$500
$500
$500
$500
$500
$500
$500
$500
$0
$0
$0
$0
$120
$2,000
$120
$0
$120
$0
$120
$0
$120
$0
$120
$0
$120
$0
$120
$0
$120
$0
$120
$0
$6,470
$3,185
$15,835
$10,040
$10,640
$11,740
$14,140
$13,140
$13,140
$13,140
$13,140
$13,140
($4,697)
($620)
($13,250)
($1,066)
$5,659
$7,061
$8,476
$11,803
$13,190
($3,219)
($5,822)
$3,673
EBITDA
($4,697)
($620)
($13,250)
($1,066)
$5,659
$7,061
$8,476
$11,803
$13,190
($3,219)
($5,822)
$3,673
$109
$106
$103
$99
$96
$93
$90
$87
$83
$80
$77
$74
($1,442)
($218)
($4,006)
($350)
$1,669
$2,090
$2,516
$3,515
$3,932
($990)
($1,770)
$1,080
($3,364)
($508)
($9,347)
($816)
$3,894
$4,878
$5,870
$8,201
$9,175
($2,309)
($4,129)
$2,519
-143.77%
-15.39%
-288.48%
-7.09%
18.78%
20.07%
20.38%
25.87%
27.50%
-17.90%
-43.93%
11.75%
Answering Service
Internet
Moving Expenses
Total Operating Expenses
Interest Expense
Taxes Incurred
Net Profit
Net Profit/Sales
15%
Page 4
Appendix
Table: Cash Flow
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Cash Sales
$2,340
$3,300
$3,240
$11,500
$20,740
$24,300
$28,800
$31,700
$33,360
$12,900
$9,400
$21,450
$2,340
$3,300
$3,240
$11,500
$20,740
$24,300
$28,800
$31,700
$33,360
$12,900
$9,400
$21,450
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$2,340
$3,300
$3,240
$11,500
$20,740
$24,300
$28,800
$31,700
$33,360
$12,900
$9,400
$21,450
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
$2,000
$2,000
$2,500
$4,900
$5,400
$5,400
$7,800
$7,800
$7,800
$7,800
$7,800
$7,800
$105
$3,102
$2,353
$10,424
$8,954
$13,556
$15,209
$15,896
$16,290
$16,282
$4,550
$4,152
$2,105
$5,102
$4,853
$15,324
$14,354
$18,956
$23,009
$23,696
$24,090
$24,082
$12,350
$11,952
Cash Received
Cash from Operations
0.00%
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$547
$547
$547
$547
$547
$547
$547
$547
$547
$547
$547
$547
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
Dividends
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$2,652
$5,649
$5,400
$15,871
$14,901
$19,503
$23,556
$24,243
$24,637
$24,629
$12,897
$12,499
($312)
($2,349)
($2,160)
($4,371)
$5,839
$4,797
$5,244
$7,457
$8,723
($11,729)
($3,497)
$8,951
Cash Balance
$27,688
$25,340
$23,179
$18,809
$24,647
$29,444
$34,688
$42,145
$50,868
$39,139
$35,642
$44,593
Page 5
Appendix
Table: 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
$28,000
$1,200
$10,000
$39,200
$27,688
$633
$10,000
$38,321
$25,340
$898
$10,000
$36,238
$23,179
$1,291
$10,000
$34,470
$18,809
$2,673
$10,000
$31,482
$24,647
$4,727
$10,000
$39,374
$29,444
$5,891
$10,000
$45,335
$34,688
$6,644
$10,000
$51,332
$42,145
$7,222
$10,000
$59,366
$50,868
$7,522
$10,000
$68,390
$39,139
$4,687
$10,000
$53,826
$35,642
$2,797
$10,000
$48,439
$44,593
$4,890
$10,000
$59,482
$0
$0
$0
$39,200
$0
$0
$0
$38,321
$0
$0
$0
$36,238
$0
$0
$0
$34,470
$0
$0
$0
$31,482
$0
$0
$0
$39,374
$0
$0
$0
$45,335
$0
$0
$0
$51,332
$0
$0
$0
$59,366
$0
$0
$0
$68,390
$0
$0
$0
$53,826
$0
$0
$0
$48,439
$0
$0
$0
$59,482
Month 1
Month 2
Month 3
Month 4
Month 5
Month 6
Month 7
Month 8
Month 9
Month 10
Month 11
Month 12
Starting Balances
Current Assets
Cash
Inventory
Other Current Assets
Total Current Assets
Long-term Assets
Long-term Assets
Accumulated Depreciation
Total Long-term Assets
Total Assets
Liabilities and Capital
Current Liabilities
Accounts Payable
Current Borrowing
Other Current Liabilities
Subtotal Current Liabilities
$0
$19,225
$0
$19,225
$3,033
$18,678
$0
$21,711
$2,004
$18,131
$0
$20,135
$10,130
$17,584
$0
$27,714
$8,505
$17,037
$0
$25,542
$13,050
$16,490
$0
$29,540
$14,680
$15,943
$0
$30,623
$15,354
$15,396
$0
$30,750
$15,733
$14,849
$0
$30,582
$16,130
$14,302
$0
$30,432
$4,422
$13,755
$0
$18,177
$3,711
$13,208
$0
$16,919
$12,783
$12,661
$0
$25,444
Long-term Liabilities
Total Liabilities
$0
$19,225
$0
$21,711
$0
$20,135
$0
$27,714
$0
$25,542
$0
$29,540
$0
$30,623
$0
$30,750
$0
$30,582
$0
$30,432
$0
$18,177
$0
$16,919
$0
$25,444
Paid-in Capital
Retained Earnings
Earnings
Total Capital
Total Liabilities and Capital
$23,000
($3,025)
$0
$19,975
$39,200
$23,000
($3,025)
($3,364)
$16,611
$38,321
$23,000
($3,025)
($3,872)
$16,103
$36,238
$23,000
($3,025)
($13,219)
$6,756
$34,470
$23,000
($3,025)
($14,035)
$5,940
$31,482
$23,000
($3,025)
($10,141)
$9,834
$39,374
$23,000
($3,025)
($5,263)
$14,712
$45,335
$23,000
($3,025)
$607
$20,582
$51,332
$23,000
($3,025)
$8,809
$28,784
$59,366
$23,000
($3,025)
$17,983
$37,958
$68,390
$23,000
($3,025)
$15,674
$35,649
$53,826
$23,000
($3,025)
$11,544
$31,519
$48,439
$23,000
($3,025)
$14,064
$34,039
$59,482
Net Worth
$19,975
$16,611
$16,103
$6,756
$5,940
$9,834
$14,712
$20,582
$28,784
$37,958
$35,649
$31,519
$34,039
Page 6